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A white Christmas of sorts arrived Tuesday for several major recording companies when the California Supreme Court agreed to hear a significant attorney-client case involving the Bing Crosby estate. The companies had petitioned for review after Los Angeles’ Second District Court of Appeal ruled in September that HLC Properties Ltd., which handles Crosby’s entertainment kingdom, qualified under the state Evidence Code for the deceased crooner’s attorney-client privilege. The recording companies had made a demand for documents after HLC sued them in 2000, alleging at least $16 million in underpaid royalties on several recording contracts Crosby had entered into before his 1977 death. HLC had refused, saying it qualified as a successor to Crosby’s attorney-client privilege. The Second District agreed, saying that “organizations” are listed along with guardians, conservators, successors and others that the state Evidence Code defines as the holder of a deceased person’s attorney-client privilege. “We hold that Bing Crosby Enterprises constituted an ‘organization,’ and therefore HLC, as successor to that business ‘organization,’ is the holder of the privilege,” Justice Richard Mosk wrote for the court. In seeking review with the high court, attorneys for MCA Records Inc., GRP Records Inc., UMG Recordings Inc., MCA Inc. and Universal Studios Inc. argued that the appeal court ruling has “revolutionized” the law in California and has “radically” expanded the concept of a successor. Gregory Smith, a partner at L.A.’s Irell & Manella, wrote that the court of appeal has “held that an individual, by taking the simple step of carrying on personal business activities with the assistance of others, may transform him or herself into an alter ego ‘organization’ that separately is the holder of what otherwise would be the individual’s attorney-client privilege.” Smith further argued that the issue takes on even more importance because the U.S. Supreme Court ruled in 1998 that under federal law an individual’s attorney-client privilege continues indefinitely after death. “The court of appeal’s decision,” he wrote, “essentially conforms California law to federal law notwithstanding California’s diametrically opposite statutory scheme.” HLC’s lawyers opposed review by the Supreme Court by arguing that the recording companies had magnified the importance of the lower court ruling — which, they said, was “narrowly tailored to the facts of this case.” “All the court decided was [that] HLC Properties Ltd., an organization, was the successor in interest to the Bing Crosby Enterprises, the Bing Crosby organization,” Howard Miller, a partner in L.A.’s Girardi & Keese, wrote. “That the attorney-client privilege may pass from one organization to a successor organization is not contested by the petition for review. “And whether any entity is an organization,” he added, “is inherently a question of fact unique to each case.” The Supreme Court’s justices granted review unanimously.

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