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Electronically Filed Supreme Court SCAP-XX-XXXXXXX 05-APR-2023 08:31 AM Dkt. 23 OP
IN THE SUPREME COURT OF THE STATE OF HAWAIʻI
---o0o---
THE OFFICE OF HAWAIIAN AFFAIRS and THE BOARD OF TRUSTEES OF THE OFFICE OF HAWAIIAN AFFAIRS, Plaintiffs-Appellees,
vs.
LESLIE H. KONDO, in his official capacity as State Auditor, and STATE OF HAWAIʻI OFFICE OF THE STATE AUDITOR, Defendants-Appellants.
SCAP-XX-XXXXXXX
CERTIORARI TO THE INTERMEDIATE COURT OF APPEALS (CAAP-XX-XXXXXXX; CASE NO. 1CCV-XX-XXXXXXX)
APRIL 5, 2023
RECKTENWALD, C.J., NAKAYAMA, McKENNA, AND EDDINS, JJ., AND WILSON, J., ASSIGNED BY REASON OF VACANCY
OPINION OF THE COURT BY EDDINS, J.
In this declaratory action, two constitutionally created
state agencies square off over two major laws, Hawaiʻi Revised *** FOR PUBLICATION IN WEST’S HAWAI‘I REPORTS AND PACIFIC REPORTER ***
Statutes (HRS) § 23-5 (2009 & Supp. 2014) and the attorney-
client privilege, codified in HRS Chapter 626.
The Office of the Auditor believes HRS § 23-5 empowers it
to receive all records of an auditee, even attorney-client
communications. The Office of Hawaiian Affairs, the subject of
an audit, sued. It argues HRS § 626-1, Rule 503 (2016), the
lawyer-client privilege, overcomes the auditor’s authority and
preserves the confidentiality of attorney-client communications.
We hold that the Office of the Auditor lacks authority to
pierce the attorney-client privilege and obtain an auditee’s
confidential communications.
We also reject the Office of the Auditor’s jurisdiction and
non-justiciability bars to the Office of Hawaiian Affairs’ suit.
I.
In 2019 the Hawaiʻi Legislature directed an audit of the
Office of Hawaiian Affairs. Act 37, the Office of Hawaiian
Affairs Appropriations Act of 2019, conditioned the release of
OHA’s 2020-2021 general funds upon the legislature’s receipt of
an audit report “no later than twenty days prior to the
convening of the regular session[] of 2020.” 2019 Haw. Sess.
Laws Act 37, § 9 at 97.
Per this legislative directive, Defendants Leslie H. Kondo,
in his official capacity as State Auditor, and the State of
Hawai‘i Office of the Auditor, began an audit of Plaintiffs, the
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Office of Hawaiian Affairs and the Board of Trustees of the
Office of Hawaiian Affairs (collectively, OHA).
The Auditor asked OHA to hand over lots of records. One
tranche requested OHA’s unredacted executive sessions minutes
from 2006-2019. Because the executive session minutes contained
privileged attorney-client communications, OHA proposed giving
the Auditor redacted minutes.
This dissatisfied the Auditor. The Office of the Auditor
has unlimited power to access all OHA records, he told OHA. The
Auditor’s authority extends to OHA’s privileged attorney-client
communications. In an email to OHA, Kondo outlined his stance:
“It is our position that section 23-5, HRS, provides us with the
authority to access all records maintained by an auditee,
including attorney-client communication[s] and other records
that are not accessible by the public, like minutes to executive
sessions.”
OHA resisted. Kondo repeated his position: per HRS § 23-5,
“we have access to all records, with no exception[s].” In turn,
OHA recapped its position: the law lets the Auditor access
records, but attorney-client communications are off-limits. OHA
gave the Auditor all requested executive session minutes with
redactions for confidential attorney-client privileged
information.
A stalemate ensued.
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Then the Auditor packed up his audit, explaining in a late
December 2020 letter to OHA that he could not finish the audit
without OHA’s attorney-client communications. Unless he had
access to the unredacted executive session minutes, Kondo wrote,
there was “an unreasonable risk” that the Office of the
Auditors’ “findings, conclusions, and recommendations may be
based on improper or incomplete information.”
Before suspending the audit, Kondo told OHA that he had
“the ability to if necessary to subpoena records, or subpoena
people” but that “I don’t believe we ever need to pull that
trigger for a State Agency. I believe a State Agency must
cooperate.” Ultimately, Kondo chose not to use his subpoena
power.
No audit report was prepared. So OHA did not receive its
2020-2021 general funds. Later though, in 2021, the legislature
amended Act 37 to remove the audit precondition and released the
previous year’s general funds allocation to OHA. See 2021 Haw.
Sess. Laws Act 29, § 8 at 50.
After the suspension of the audit, but before OHA received
the funds, OHA sued Kondo and the Office of the Auditor. In
February 2020, OHA filed a two-count complaint for declaratory
relief in the Circuit Court of the First Circuit.
Count 1 sought a declaratory judgment that the Auditor
violated Act 37 by failing to submit an audit report. Later, by
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stipulation, the circuit court dismissed this count in October
2021.
As to Count 2, OHA sought a declaratory judgment “that
neither HRS Chapter 23 nor the Hawai‘i State Constitution
requires OHA to disclose to the State Auditor privileged
attorney-client communications protected from disclosure.”
OHA moved for summary judgment. OHA argued that HRS § 23-5
does not allow the Auditor to look at its privileged attorney-
client communications.
The Office of the Auditor moved for judgment on the
pleadings. It argued that HRS § 23-5 gave the Auditor authority
to access all auditee records. Kondo also moved to dismiss
based on lack of jurisdiction and several non-justiciability
doctrines: standing, mootness, no advisory opinions, and
political question.
Before ruling on the motions, Circuit Court Judge Jeffrey
Crabtree reviewed OHA’s redacted and unredacted executive
sessions minutes in camera. The court “saw the issue of in
camera review as related to defendant’s motion to dismiss” for
lack of jurisdiction, explaining that “by actually determining
the factual and legal status of the redacted documents as
attorney-client privileged material, the court has resolved an
important issue and can move forward without risk of issuing a
hypothetical ruling based on ‘if’ or ‘assuming’ the redacted
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documents are protected by the attorney-client privilege.”
Nearly all the redactions were attorney-client communications,
the court found.
The circuit court sided with OHA, granting its motion for
summary judgment and denying the Auditor’s motion for judgment
on the pleadings. HRS § 626-1, Rule 503 controlled, not HRS
§ 23-5, the court ruled:
[T]he key legal issue here is whether HRS [§] 23-5 or Chapter 626, and in particular Rule 503, wins if it’s an arm wrestle match between those two statutes. . . . [T]here’s good arguments on both sides, but I’m siding in favor of Rule 503 being more specific and more controlling than 23-5 is . . . . I think there’s true value in protecting the attorney-client privilege.
In September 2020, the circuit court issued a minute order
and short-form orders that granted OHA’s motion and denied the
Auditor’s motion. The minute order detailed the court’s
document review and explained its decision:
There is no question whatsoever that the vast majority of the redactions are attorney-client communications. The un-redacted portions show Board members discussing all manner of legal issues with their counsel present. This includes but is not limited to items on the Board’s public agenda, including updates from counsel about ongoing litigation, confidential personnel issues, legal authority necessary or helpful to guide Board decision-making, and much more. The redacted information is confidential by law (e.g., OHA is entitled to move into Executive Session to discuss it), and clearly covered by the attorney-client privilege as well.
The court entered a final judgment for OHA in November 2021.
The Office of the Auditor appealed. Then OHA applied for
transfer to this court, and we accepted.
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Kondo argues there is no subject matter jurisdiction and
offers his non-justiciability arguments.
About the merits, Kondo says HRS § 23-5 empowers him to
review all OHA records. He acknowledges that OHA’s executive
session minutes contain privileged attorney-client
communications. But all has no exceptions: “There is no carve-
out for privileged records.[]” Kondo also maintains that
disclosure to the Office of the Auditor does not waive the
attorney-client privilege because it is “mandatory, not
voluntary.” Kondo asks us to reverse the circuit court’s orders
and judgment.
OHA counters that the circuit court got it right. OHA may
seek judicial relief and has the right to shield its attorney-
client communications from the Auditor’s prying eyes. OHA
rejects the Auditor’s waiver of privilege position. Handing
over its privileged communications without a court order
constitutes a voluntary disclosure and waives the attorney-
client privilege, asserts OHA.
II.
First, we address the Office of the Auditors’ non-
justiciability arguments. We hold that our courts have
jurisdiction, and there are no justiciability barriers to OHA’s
case.
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Hawaiʻi has a declaratory action framework that advances
access to the justice system. HRS Chapter 632’s purpose is to
“afford relief from the uncertainty and insecurity attendant
upon controversies over legal rights . . . with a view to making
the courts more serviceable to the people.” HRS § 632-6 (2016).
Our declaratory action laws are “liberally interpreted and
administered.” Id.
In declaratory actions, HRS § 632-1(a) (2016) covers
subject matter jurisdiction, and HRS § 632-1(b) covers standing.
See Tax Found. of Hawaiʻi v. State, 144 Hawaiʻi 175, 186–88, 439
P.3d 127, 138–40 (2019).
Declaratory actions require an “actual controversy.” HRS
§ 632-1(a). Otherwise, there is no subject matter jurisdiction.
Tax Found., 144 Hawai‘i at 192-94, 439 P.3d at 144-46. A party
cannot simulate a dispute or make-up a hypothetical. Id. at
196, 439 P.3d at 148.
The Office of the Auditor asserts that OHA’s “real
controversy” involves others. “If the funds were not released,
it was because of the way the Legislature wrote the provisos in
Act 37, or because the executive branch exercised its authority
on the release, non-release, or partial release of funds, and
not due to the suspension of the audit.” Also, because OHA just
wanted the general funds, and ultimately got the money, there is
no jurisdiction, the Auditor says.
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The Auditor overlooks count 2. The parties stipulated to
dismiss count 1. The case no longer concerns the Auditor’s
suspension of the audit and OHA’s general funds.
Count 2 remains. OHA and the Auditor’s quarrel concerns
statutory interpretation, classic fare for declaratory actions.
“Controversies involving the interpretation of . . . statutes”
may be determined by the courts. HRS § 632-1(a). Hawaiʻi’s
declaratory action law also broadly allows declaratory relief
“in other situations involving other antagonistic assertions or
denial of rights.” See Tax Found., 144 Hawaiʻi at 193, 439 P.3d
at 145.
OHA’s suit involves the Office of the Auditor’s statutory
power under HRS § 23-5 and Hawaiʻi Rules of Evidence (HRE) Rule
503, the lawyer-client privilege, codified in HRS Chapter 626.
The dispute is real, not conjectural. Count 2 presents a
prototypical declaratory action. There is an actual
controversy. Our courts have jurisdiction.
Next, standing. Standing is about the role of courts in a
democratic society – a service to our tripartite system that
favors the courtroom as a space to resolve controversy. Life of
the Land v. Land Use Comm’n, 63 Haw. 166, 172, 623 P.2d 431, 438
(1981). Standing has a prudential spirit. Tax Found., 144
Hawaiʻi at 196, 439 P.3d at 148.
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HRS § 632-1(b) covers standing in declaratory actions. Id.
This court has detailed when a party has standing to bring an
action for declaratory relief:
(1) . . . antagonistic claims exist between the parties
(i) that indicate imminent and inevitable litigation, or
(ii) where the party seeking declaratory relief has a concrete interest in a legal relation, status, right, or privilege that is challenged or denied by the other party, who has or asserts a concrete interest in the same legal relation, status, right, or privilege; and
(2) a declaratory judgment will serve to terminate the uncertainty or controversy giving rise to the proceeding.
Id. at 201, 439 P.3d at 153.
OHA’s complaint satisfies both the “imminent and
inevitable” and “concrete interest” paths to standing.
OHA has a concrete interest in safeguarding its attorney-
client communications. And it has an interest to see if its
privilege claim stands up against the Auditor’s interest that
HRS § 23-5 requires disclosure. The controversy is real.
Turning to the law’s “imminent and inevitable” disjunctive,
because he never issued a subpoena duces tecum, the Auditor
argues that litigation was not inevitable. Litigation is only
imminent and inevitable, if he “pulls the trigger” and uses his
subpoena power, Kondo claims. And because he didn’t, OHA lacks
standing.
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OHA’s complaint anticipates the Auditor’s argument:
This action is justiciable because litigation is imminent and inevitable either because the State Auditor will attempt to exercise his subpoena power under HRS section 23-5(c)and OHA will move to quash, or OHA will file an action to prospectively enjoin the State Auditor from exercising his subpoena power to obtain OHA’s attorney- client privileged communications.
OHA says that if the Auditor issues a subpoena duces tecum for
its unredacted executive session minutes, then it will counter
with a Hawaiʻi Rules of Civil Procedure (HRCP) Rule 45 motion to
quash. See HRS § 23-5(c) (“Upon application by the auditor”
circuit court may enforce subpoena “in the same manner as a
subpoena issued by the clerk of the circuit court.”). OHA’s
complaint also signals it will seek declaratory and injunctive
relief. OHA satisfies both HRS § 632-1(b)(1) disjunctives.
The Auditor’s decision not to subpoena OHA’s records is
odd. The legislature has given the Auditor subpoena power. See
HRS § 23-5(c) (auditor may issue a subpoena duces tecum
“compelling the production of accounts, books, records, files,
papers, documents, or other evidence, which the auditor
reasonably believes may relate to an audit or other
investigation being conducted under this chapter.”). If, as the
Auditor asserts, the audit “may be based on improper or
incomplete information” and cannot be prepared unless he views
OHA’s privileged attorney-client communications, then there is
no good reason for the Office of the Auditor to ditch the very
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tool that might pry information from OHA. The Auditor gives no
explanation.
Ultimately, the Auditor’s choice left OHA with only one
option. OHA sued for declaratory relief. A declaratory
judgment will terminate the uncertainty underlying the legal
issue. OHA has standing.
Turning to mootness, a case becomes moot when “it has lost
its character as a present, live controversy of the kind that
must exist if courts are to avoid advisory opinions on abstract
propositions of law.” Kaho‘ohanohano v. State, 114 Hawai‘i 302,
332, 162 P.3d 696, 726 (2007).
The Office of the Auditor argues that the case became moot
once “OHA decided to withhold the unredacted minutes and the
Auditor suspended the audit.” We disagree.
Because OHA’s requested relief focuses on its attorney-
client privilege - not the suspension of the audit or the
appropriation and release of funds – the case is live, not moot.
The Auditor packing up the audit, or the legislature reinstating
the funds, has nothing to do with count 2. Since OHA asks for a
declaratory judgment about the confidentiality of its privileged
communications, the effective remedy remains and has not been
compromised. Wong v. Bd. of Regents, Univ. of Hawaiʻi, 62 Haw.
391, 394, 616 P.2d 201, 203–04 (1980).
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The case is not moot. But we address an exception to the
mootness doctrine. OHA satisfies each step of the “public
interest exception.”
The public interest exception applies when the issue
“affects the public interest and an authoritative determination
is desirable for the guidance of public officials.” See
Kaho‘ohanohano, 114 Hawai‘i at 333, 162 P.3d at 727. This court
applies the public interest exception when (1) public, not
private, interests are affected; (2) guidance for public
officers is sensible; and (3) the issue is apt to repeat. Id.
Here, the exception applies. First, this is a clash
between two constitutionally created state government agencies.
Article XII section 5 of the Hawaiʻi Constitution established the
Office of Hawaiian Affairs, and article VII, section 10
established the Office of the Auditor. Not only does the public
have an interest in resolving a dispute between these two state
heavyweights, but the issue presented – interpretation of major
statutes – also has public importance.
Second, this case offers a chance to guide public officers.
It will clarify how the Office of the Auditor and an auditee
tread when disclosure of privileged communications is at stake.
Third, this issue is apt to resurface. The Auditor
regularly conducts audits of agencies and issues reports.
Because the Office of the Auditor maintains that it has
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authority to review attorney-client communications, the
Auditor’s authority will likely arise in future audits.
OHA and the Office of the Auditor are themselves likely to
tangle again. At least every four years they interact. “The
auditor shall conduct an audit of [OHA] at least once every four
years.” HRS § 10-14.55 (2009). There is no reason to think the
stalemate will not repeat.
Mootness and the no advisory opinion doctrine are closely
related non-justiciability doctrines. Here we conclude that
there is no advisory opinion about an abstract proposition of
law. Kaho‘ohanohano, 114 Hawaiʻi at 332, 162 P.3d at 726.
Next, we address the argument that the case concerns a
A non-justiciable political question involves an issue that
is more appropriate for the executive or legislative branch.
Baker v. Carr, 369 U.S. 186, 210 (1962) (“[t]he
nonjusticiability of a political question is primarily a
function of the separation of powers”). The political question
doctrine bars issues that are too political to embroil the
judiciary. Trustees of the Office of Hawaiian Affairs v.
Yamasaki, 69 Haw. 154, 172, 737 P.2d 446, 456-57 (1987).
We reject Kondo’s argument that there are no “judicially
discoverable and manageable standards” to evaluate the case.
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Baker, 369 U.S. at 217 (detailing this standard and five more
criteria to govern the wisdom of judicial intervention.)
OHA asks us to decide whether HRS § 23-5 allows the Auditor
access to OHA’s privileged attorney-client communications.
Statutory interpretation is the judiciary’s forte, central to
its mission. A legal ruling does not intrude on another
governmental branch.
Also, the legislature outlines a process (issue subpoenas
duces tecum) to resolve disputes regarding materials withheld by
an audit’s subject. See HRS § 23-5(c). The statute itself
suggests there are judicially manageable standards to end the
dispute.
Lastly, the Office of the Auditor does not have sovereign
immunity.
“The State’s sovereign immunity does not bar actions
seeking prospective declaratory or injunctive relief.” Gold
Coast Neighborhood Ass’n v. State, 140 Hawaiʻi 437, 464, 403 P.3d
214, 241 (2017)). OHA’s relief is prospective. OHA’s complaint
asks for a ruling that Hawaiʻi law protects the disclosure of its
privileged communications during any state audit. Also, because
Count 2 asks for declaratory relief, not compensation, the
Office of the Auditor has no sovereign immunity. Pele Def. Fund
v. Paty, 73 Haw. 578, 609-10, 837 P.2d 1247, 1266 (1992).
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III.
We go to the merits.
OHA seeks a declaratory judgment that HRS § 23-5 does not
require it to “disclose to the State Auditor privileged
attorney-client communications protected from disclosure
pursuant to HRE 503 and common-law principles.”
The Office of the Auditor opposes declaratory relief. It
points to HRS § 23-5, titled “Auditor; powers” and claims it has
power to obtain an auditee’s privileged attorney-client
communications. The Auditor “may examine and inspect all
accounts, books, records, files, papers, and documents and all
financial affairs of every . . . agency.” HRS § 23-5(a).
Kondo believes those words – primarily one word, all –
confer “unlimited” power. He says HRS § 23-5 allows him to
review all auditee records in their entirety, even attorney-
client communications. No exceptions, all means all. Plus, the
Auditor insists, he does not need to use his subpoena power to
obtain the records. See HRS § 23-5(c)(2) (auditor may “compel[]
the production of accounts, books, records, files, papers,
documents or other evidence, which the auditor reasonably
believes may relate to an audit or other investigation being
conducted under this chapter.”)
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A.
The Auditor contends that HRS § 23-5 and HRE Rule 503 do
not conflict. And because there is no conflict, the Auditor’s
superior powers snap the attorney-client privilege. But “even
if the two statutes did conflict,” the Auditor adds, HRS § 23-5
is “more specific” and prevails over HRE Rule 503 that way too.
We reject the Office of the Auditor’s position.
We hold that unless an audit’s subject waives the attorney-
client privilege, or a court orders disclosure, the Office of
the Auditor may not access an auditee’s privileged attorney-
Generally, two laws conflict when they “are explicitly
contrary to, or inconsistent with, each other.” Boyd v. Hawaii
State Ethics Comm’n, 138 Hawaiʻi 218, 227, 378 P.3d 934, 943
(2016) (cleaned up) (charter school employee subject to two
distinct statutory regimes as to standards involving conflicts
of interest). But if laws can be interpreted harmoniously,
there is no conflict. “Two statutes conflict where it is not
possible to give effect to both.” Carmichael v. Bd. of Land &
Nat. Res., 150 Hawaiʻi 547, 567, 506 P.3d 211, 231 (2022)
(cleaned up).
The two laws in this case do not conflict. The Auditor’s
powers and the attorney-client privilege can coexist. The laws
are not explicitly contrary or inconsistent. And courts (like
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the circuit court here) can read HRE Rule 503 and HRS § 23-5 in
harmony, giving effect to both statutes. The laws do not need
to incompatibly collide. HRS § 23-5 says so.
HRS § 23-5 has a buffer to address privileged
communications. HRS § 23-5(c) gives the Auditor subpoena duces
tecum power and directs a circuit court to enforce it “in the
same manner as a subpoena issued by the clerk of the circuit
court.” That is, per HRCP Rule 45, “the court, upon
motion . . . may (1) quash or modify the subpoena if it is
unreasonable and oppressive . . . .”
HRS § 23-5 anticipates challenges to a subpoena’s validity.
The law’s language foreshadows grounds - like privileges - that
may curb the auditor’s power to access records. The Auditor’s
authority “is hemmed by the constitution and the safeguards of
the statute itself.” In re KAHEA, 150 Hawaiʻi 43, 51, 497 P.3d
58, 66 (2021) (referring to the Attorney General’s subpoena
power). A subpoena that seeks an auditee’s privileged attorney-
client communications is an uncomplicated candidate for court
quashing or modifying. HRS § 23-5 and in the end, the court,
limit the Auditor.
This check also springs from the attorney-client
privilege’s centuries-long permanence. It “is the oldest of the
privileges for confidential communications known to the common
law.” Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)
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(citing 8 J. Wigmore, Evidence § 2290 (McNaughton rev. 1961)).
HRE Rule 503, the “Lawyer-client privilege,” codifies the common
law attorney-client privilege. A client may invoke that
privilege to prevent disclosure of “confidential communications
made for the purpose of facilitating the rendition of
professional legal services . . . .” HRS § 626-1, Rule 503.
The privilege’s singular value means that only waiver, see
HRE Rule 511 (2016), or a lawyer-client privilege exception, see
HRE Rule 503(d) (2016), may allow a court to disclose privileged
attorney-client communications. For government lawyers and
their agency clients, the Sunshine Law’s narrower attorney-
client exception may also result in disclosure. See HRS § 92-
5(a)(4) (2012) (closed board meeting allowed “[t]o consult with
the board’s attorney on questions and issues pertaining to the
board’s powers, duties, privileges, immunities, and
liabilities”); Civ. Beat L. Ctr. for the Pub. Int., Inc. v. City
& Cnty. of Honolulu, 144 Hawaiʻi 466, 489, 445 P.3d 47, 70 (2019)
(closed meeting must strictly conform to an exception and
“executive sessions must be purposeful and unclouded by
pretext”).
The Auditor claims the court failed to consider whether
OHA’s invocation of the attorney-client privilege also satisfied
HRS § 92-5(a)(4). He contends the circuit court “completely
glossed over whether a member of the public making the same
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request would have been allowed to see what the Auditor asked to
see.” Contrary to Kondo’s assertion, the parties submitted
supplemental briefing that covered HRS § 92-5(a)(4). Then,
after reviewing the redacted materials, the court ruled that
both § 92(5)(a)(4) and HRE 503 protected OHA’s executive session
minutes: “The redacted information is confidential by law (e.g.,
OHA is entitled to move into Executive Session to discuss it),
and clearly covered by the attorney-client privilege as well.”
Returning to the statutes’ interplay, HRS § 23-5 simply
does not give the Auditor superpower to pop the attorney-client
privilege. The Auditor offers no case law to support his
stance.
The Auditor also argues that HRS § 23-5 prevails because it
is more specific. But a specificity argument is mostly
unhelpful when there is no conflict and the laws can be
harmonized. Mahiai v. Suwa, 69 Haw. 349, 356–57, 742 P.2d 359,
366 (1987) (courts favor a specific law over a general law when
there is an irreconcilable conflict, however, when the statutes
“overlap in their application, effect will be given to both if
possible”) (citing State v. Kuuku, 61 Haw. 79, 82, 595 P.2d 291,
294 (1979)).
Some laws are powerhouses. Here, even if the laws are
inconsistent, HRS § 626-3’s direct language supports the
attorney-client privilege’s supremacy. “If any other provision
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of law, including any rule promulgated by the supreme court, is
inconsistent with this chapter, this chapter shall govern unless
this chapter or such inconsistent provision of law specifically
provides otherwise.” HRS § 626-3 (2016) (emphasis added).
Nothing in chapter 626 allows the Auditor (or anyone) to
bulldoze HRE Rule 503. And nothing in HRS § 23-5 provides an
express override of the lawyer-client privilege. So, if the
statutes conflict, HRS § 626-1, Rule 503 pins HRS § 23-5.
Kondo says that reliance on HRS § 626-3 is misplaced. He
argues the attorney-client privilege only applies to
adjudicative proceedings. The privilege, though, covers
“confidential communications made for the purpose of
facilitating the rendition of professional legal services,” HRE
Rule 503(b). Naturally, these communications may precede an
adjudicative proceeding or court case: the lawyer-client
privilege applies when an individual seeks legal advice “from a
professional legal advisor in [their] capacity as such.” Sapp
v. Wong, 62 Haw. 34, 38, 609 P.2d 137, 140 (1980) (cleaned up)).
B.
We turn to the Auditor’s position that OHA does not waive
its lawyer-client privilege if it discloses confidential
communications during an audit.
Society values the secrecy of attorney-client
communications. A compact guides these exchanges. Business,
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government, and the legal system operate within a trusty
framework that shelters “confidential communications made for
the purpose of facilitating the rendition of professional legal
services” between lawyer and client. HRE Rule 503(b). Absent
an understanding that words remain confidential, they may not be
spoken at all. “The privilege recognizes that sound legal
advice or advocacy serves public ends and that such advice or
advocacy depends upon the lawyer’s being fully informed by the
client.” Upjohn, 449 U.S. at 389.
A public entity must be able to freely and fully consult
legal counsel. A government agency is a client worthy of the
privilege’s protections. See United States v. Jicarilla Apache
Nation, 564 U.S. 162, 170 (2011) (quoting Restatement (Third) of
the Law Governing Lawyers § 74 (2000)) (“[G]overnmental agencies
and employees enjoy the same privilege as nongovernmental
counterparts”).
Like any holder of the privilege, a government client may
waive the lawyer-client privilege. “A person upon whom these
rules confer a privilege against disclosure waives the privilege
if, while holder of the privilege, the person or the person’s
predecessor voluntarily discloses or consents to disclosure of
any significant part of the privileged matter.” HRE Rule 511.
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OHA refuses to waive its privilege. OHA maintains that if
it caves to the Auditor without a court order, it waives the
attorney-client privilege.
The Auditor insists that OHA does not waive the privilege
if OHA gives him what he wants. He points to HRS § 23-9.5
(2009): “[t]he auditor shall not be required to disclose any
working papers.” If Kondo promises OHA he won’t tell anybody,
his argument seems to run, then OHA hasn’t waived the privilege
and should hand over its attorney-client communications. The
Auditor also claims that complying with his demands make OHA’s
disclosure “involuntary,” and thus OHA does not waive its
privilege.
Not so. Just because the auditor “shall not be required to
disclose” records, does not mean the Auditor will not or cannot
disclose records containing privileged communications, or will
not mention privileged communications in an audit report. Also,
HRS § 23-5 gives no assurance that any “involuntary” disclosure
will withstand challenge and remain confidential. With no
protection, OHA’s counsel made the right call – the only one
consistent with a lawyer’s professional and ethical obligations.
See Hawaiʻi Rules of Professional Conduct Rule 1.6(a) (“A lawyer
shall not reveal confidential information relating to the
representation of a client unless the client consents after
consultation.”).
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IV.
We affirm the Circuit Court of the First Circuit’s
September 10, 2020 Orders.
Douglas S. Chin /s/ Mark E. Recktenwald (Patricia Ohara, Robyn B. Chun, /s/ Paula A. Nakayama Kukui Claydon on the briefs) for appellants /s/ Sabrina S. McKenna /s/ Todd W. Eddins Kurt W. Klein (Robert G. Klein, David A. /s/ Michael D. Wilson Robyak, James M. Yuda on the briefs) for appellees