Keffer: Privacy Limits on Subpoenaing Third-Party Settlement Records

In Keffer v. Kaiser Steel Corp., No. ADJ13909512 (Cal. Workers’ Comp. Appeals Bd. Mar. 17, 2026), the Appeals Board confronted a narrow but consequential discovery demand. The Self Insurers’ Security Fund sought confidential documents from civil asbestos settlements involving a deceased worker and members of his family. His dependents were pursuing a separate workers’ compensation death-benefits claim. The question was whether a possible third-party credit or a general desire to test liability justified compelling the law firm that held those settlement documents to produce them.

The civil settlements and the death-benefits claim were not the same demand

The worker had pursued civil asbestos litigation during his lifetime. In the later compensation case, his alleged dependents sought death benefits. The record did not establish precisely who received each civil settlement or whether the withheld documents concerned only persons outside the compensation proceeding. That uncertainty mattered: The Board did not decide every possible privilege question or announce that a settlement is always immune from discovery. It assessed the actual reasons given for this subpoena on the record before it. Keffer, slip op. at 2–4, 8–11.

The workers’ compensation judge had concluded that broad discovery favored production and that the applicants had not proved their privilege claims. Although the applicants filed a petition for removal, the Board treated it as a petition for reconsideration because the WCJ's decision also resolved threshold issues. It applied the removal standard to the challenged interlocutory discovery ruling, asking whether disclosure would cause significant prejudice or irreparable harm that later reconsideration could not adequately remedy. The Board accepted that all nonprivileged responsive materials had already been produced, then focused on the withheld settlement documents identified in the joint exhibit. It granted reconsideration, rescinded the production order, and denied the petition to compel the law firm’s compliance with the subpoena. Id. at 6–8, 11–12.

Broad WCAB discovery still requires a relevant, nonprivileged target

Labor Code section 5708 gives the WCAB latitude to inquire in the manner best calculated to ascertain the parties’ substantial rights. It does not erase statutory privileges or third-party privacy. The Board explained that confidential financial affairs may carry constitutional privacy protection and that a party seeking protected material must make a threshold showing of direct relevance to a claim or defense. The purpose of the request, its effects, the objections, and narrower forms of disclosure all bear on the balance. Id. at 7–9.

That distinction is practical. A demand for a particular settlement agreement needs a theory connecting its terms or payments to an issue actually pending in the compensation case. Calling a document “potentially useful” or invoking broad discovery does not supply the missing connection when nonparties’ confidential financial terms are at stake. For the mechanics of a subpoena for medical or employment records, see the firm's separate WCAB records guide; the third-party settlement and dependency-credit issue here requires its own analysis.

The proposed credit had no developed connection to dependent benefits

The Fund said it wanted to evaluate settlement value and a possible Labor Code section 3861 credit. Yet no petition for third-party credit was pending, and the Fund had not shown how a civil payment to the decedent or other family members would overlap with the death benefits claimed by the applicants. No inter vivos workers’ compensation claim had been filed for the decedent, making overlap less likely even if a credit petition were later filed. The law firm alleged that only the decedent’s son and daughter, neither an applicant in the death-benefits case, received settlement proceeds, although the record did not establish who participated in every settlement. The Board emphasized the distinction between compensation for the worker’s injury and death benefits that belong independently to qualifying dependents. A future credit theory would need evidence that the applicants received civil damages on a similar basis to their claimed death benefits. The Board did not hold that a civil recovery can never matter; it found no demonstrated nexus on this record. Id. at 9–11.

The alternative liability theory also failed to explain why the confidential settlements themselves were needed. The Board pointed to medical records and the medical-legal process for compensability issues, and to financial evidence of the decedent and alleged dependents for dependency issues. Civil-case depositions, interrogatories, and other available records offered further leads without first compelling the private agreements. Id. at 10–11.

The Board left several privilege questions open

The applicants invoked attorney-client privilege, work product, mediation confidentiality, and trade-secret protection. The Board rejected a trade-secret theory unsupported by evidence and noted that the record did not establish whether the agreements came from mediation or contained protected mediation communications. It also recognized that attorney-client privilege may survive a client’s death, but declined to resolve its application to these documents on an incomplete record. The actual disposition rested on the failure to justify compelling private documents, not a blanket ruling that every asserted privilege applied. Id. at 8–11.

What to establish before seeking or resisting comparable records

A party seeking a third-party settlement should identify the pending issue, the specific compensation or credit theory, who received the civil recovery, and why the requested terms bear directly on that theory. A party resisting disclosure should identify the document holder and affected nonparties, state each privilege with its factual basis, and explain the concrete privacy interest and available narrower sources. Both sides should preserve the subpoena, objections, any proposed protective limits, and a record of what the WCJ actually decided. Those are applications of the Board’s reasoning, not additional holdings in Keffer.

Keffer is a WCAB panel decision. Panel decisions are citable for their persuasive reasoning but do not bind other panels or workers’ compensation judges. Its result turned on an undeveloped credit theory, an incomplete record concerning the agreements, and viable alternative sources of proof; a different record may require a different balance.

Questions about settlement-record discovery

Does a civil settlement automatically reduce a dependent’s workers’ compensation death benefits?

No. Keffer required a demonstrated connection between the civil recovery and the compensation at issue. The Board found none on the record before it; it did not foreclose every properly supported credit claim.

Did the Board decide that all withheld documents were attorney-client privileged?

No. The Board discussed the possible survival of the privilege after death but said the record was incomplete and did not decide its application to the documents at issue.

Can a party subpoena a nonparty law firm for settlement records?

A subpoena is possible, but Keffer shows that a petition to compel contested, confidential terms requires a concrete relevance showing and attention to privilege, privacy, and narrower alternatives.