Metropolitan News-Enterprise


Wednesday, March 15, 2017


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Court of Appeal Rejects Privilege Claim in Libel Suit by Charles Schwab

Panel Says Communications Not Protected Where Shared With Publicist


By a MetNews Staff Writer


Communications among a lawyer, his client, and a public relations consultant were not privileged because there was no showing that communication with the publicist was a necessary part of the attorney’s representation, the Court of Appeal for this district ruled yesterday.

Div. Seven upheld Los Angeles Superior Court Judge John P. Doyle’s ruling that Charles and Michael Schwab are entitled to discover communications among Nicholas Behunin; attorney Leonard Steiner and the firm of Steiner & Libo; and Levick Strategic Communications.

Charles Schwab, founder of the eponymous investment firm, and his son Michael Schwab are plaintiffs in libel suits against Behunin, who previously sued the Schwabs in connection with a failed real estate project, and Steiner. The Schwabs claim that Behunin and/or Steiner, through the website, defamed them by falsely accusing them of complicity in human rights violations and other crimes by the Indonesian dictator Suharto, who died in 2008, and members of his family.

Behunin filed anti-SLAPP motions in both of the suits brought by the Schwabs, who responded by moving for discovery. The statute provides that the filing of an anti-SLAPP motion stays all discovery, subject to the discretion of the trial judge to allow limited discovery related to the motion.

Doyle granted the Schwabs leave to depose Steiner, Behunin, and Levick, and to seek documents, including communications among them. Discovery was limited to the issues of who published the Suharto allegations and, if Behunin and/or Steiner did so, whether he/they acted with actual malice.

After deposition notices and requests for production were served, Behunin and Steiner objected on grounds that the discovery sought exceeded the scope of the judge’s order, and that the Schwabs were seeking attorney-client communications and work product. A discovery referee, who examined 21 documents in camera, concluded that it was unclear whether Levick was actively involved in litigation strategy or was hired solely to create content for

 The defendants, he said, failed to make a prima facie showing “that their communications with Levick were for the purposes of giving or receiving advice directed at handling the prosecution of” Behunin’s underlying lawsuit.

Doyle ruled that 11 communications to which Levick was a party had to be produced, leading to Behunin’s writ petition, which the Court of Appeal denied yesterday after having previously stayed the discovery.

Justice John Segal, writing for the court, acknowledged that a public relations consultant may share the attorney-client privilege under certain circumstances, at least according to federal case law.  But the courts cannot create a “public relations privilege,” he wrote, adding that the situations in which federal courts have found a publicist’s involvement in attorney-client communication to be protected have been narrow.

He cited a district court ruling in former Syracuse University basketball coach Bernie Fine’s suit against ESPN, Inc., relating to the network’s reporting of allegations that he had molested two ball boys. The court held that New York’s “agency” exception to the rule that disclosure to a third party destroys the privilege did not apply, where a public relations consultant was hired to provide support that was “merely helpful, but not necessary to the provision of legal advice.”

Behunin, Segal said, offered nothing to show why he or his lawyer had to communicate with Levick regarding litigation or settlement strategies. Nor was there evidence that Levick was a participant in Steiner’s representation, he said.

“To the contrary, according to Behunin, Steiner had little involvement with Levick:  All Steiner did was act as a liaison in hiring the public relations firm,” the justice wrote. Statements by Behunin and Steiner that Levick was hired for purposes related to the litigation, and that they intended their communications with the publicist to be confidential, were “just conclusions,” for which no evidence, nor any explanation as to why the lawyer needed the assistance of a public relations firm, was offered, Segal said.

Attorneys in the Court of Appeal were Douglas E. Mirell of Harder Mirell & Abrams, and Regina Ashkinadze of Elkin Gamboa & Ashkinadze for Behunin; Robert Moore of Allen Matkins Leck Gamble Mallory & Natsis for Charles Schwab, and David H. Schwartz and Michael Stepanian for Michael Schwab.

The case is Behunin v. Superior Court (Schwab), 17 S.O.S. 1330.


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