In re California Bail Bond Antitrust Litigation

Background

This putative antitrust class action alleges that 20 bail bond surety companies and William B. Carmichael, ASC’s President and CEO, participated in a decades-long conspiracy to maintain a 10% bail bond premium rate and suppress rebates. The claims arise under the California Cartwright Act, California’s Unfair Competition Law, and Section 1 of the Sherman Antitrust Act.

The present dispute concerned 29 documents produced by Lexington National Insurance Corporation and American Surety Company during discovery and later clawed back under the parties’ stipulated electronic-discovery agreement. Plaintiffs Shonetta Crain and Kira Monterrey challenged the attorney-client privilege claim. The court reviewed the documents privately and held a hearing on February 13, 2025.

Attorney-Client Privilege Standard

The attorney-client privilege protects confidential communications between a lawyer and client made for the purpose of giving or receiving legal advice. The party claiming the privilege must prove that it applies. For communications serving both legal and nonlegal purposes, the court applied the Ninth Circuit’s “primary purpose” test: the privilege applies only if the primary purpose was legal advice, rather than business advice. The court also emphasized that communications intended to be shared with third parties generally are not confidential.

Primary Purpose of the Communications

Most of the documents concerned advice from Robert W. Hogeboom, a regulatory lawyer jointly retained by Lexington, ASC, and Bankers Insurance Company. The defendants argued that Hogeboom primarily advised them about responding to the California Department of Insurance’s inquiry into their bail bond rates and potential regulatory action. Plaintiffs argued that the communications primarily coordinated an industry response intended to protect the companies’ 10% rate.

After reviewing the documents, the court found that Hogeboom’s advice was primarily and explicitly aimed at coordinating an industry-wide response to the Department of Insurance’s inquiry. The court pointed to communications among the sureties and with the American Bail Coalition, a trade association, as well as the “Bail Coalition Working Group White Paper” submitted to the Department of Insurance. The paper addressed the bail industry as a whole rather than the individual companies’ data.

The court rejected the defendants’ argument that advice became legal merely because it concerned regulatory activity or came from an attorney. It concluded that Hogeboom’s advice about persuading the regulator and coordinating an industry advocacy campaign was lobbying advice, not legal advice. The defendants therefore did not meet their burden to show that most communications were primarily for obtaining or providing legal advice.

Waiver and Common Interest

The court identified a few documents that might contain legal advice, including Lexington Exhibits 11, 19, and 21 and ASC Exhibit 7. It then considered whether the common interest doctrine prevented waiver. That doctrine can preserve an existing privilege when parties with a common legal interest share privileged information to further that legal effort.

The court found sufficient evidence that Lexington, ASC, and Bankers agreed to jointly retain Hogeboom. But it concluded that their shared interest was commercial, not legal. The companies sought to influence how the Department of Insurance regulated the bail bond industry generally; each company had received its own inquiry and independently submitted its own data. The court found no indication that the companies would be co-defendants in a Department of Insurance proceeding or that one company had a legal interest in another company’s rate inquiry.

Because the companies lacked a common legal interest, sharing the potentially privileged communications among them waived any privilege. The court therefore held that no privilege protected those communications either.

Disposition

The court denied the Moving Defendants’ clawback motion. It ordered Lexington and ASC to produce the 29 documents in full. The order stated that the defendants could decide whether to appeal the order to Judge Tigar; if they filed a timely appeal, the court would provide Judge Tigar with an unredacted copy of the order and the lodged exhibits.