We Produced Privileged Documents; Now What?By Andrew P. MacArthur, Gibbons
The production of a party's privileged documents is every lawyer's--and client's--worst nightmare because it provides additional facts (and avenues for discovery) as well as legal analysis of those facts that may not have existed. In layman's terms, it is a game changer. A recent decision plays out this very scenario and shows that despite the production of privileged documents, they can be salvaged if the producing party acted properly before and after the disclosure.
In Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., 2:07-CV-116 (N.D. Ohio), the Court found the attorney-client ("A/C") privilege was waived for 347 emails inadvertently produced, where the producing party, Medex, failed to provide any evidence of its review prior to production and failed to specifically identify the alleged privilege communications in a log as required under Federal Rule of Civil Procedure 26(b)(5)(B).
In a breach of contract lawsuit, Medex produced 7,500 hard copy pages (without any marked confidential under the protective order) of which 347 emails involved legal personnel as sender or recipient. These 7,500 pages represented a small amount relative to the 85,000 pages produced in the case by both sides. Medex did not assert any privilege on the 347 emails until Inhalation Plastics, Inc. ("IPI") sought to depose those legal personnel. IPI brought a motion for a determination that the documents are not privileged and submitted them for in camera review.
As part of the Court's analysis, it evaluated five factors under federal Ohio law to determine whether the attorney-client privilege was waived for documents containing alleged legal communications. (The Court's review of the e-mails suggested that attorney-client communications were implicated.)
Under the first factor, the Court found that Medex did not take reasonable precautions to prevent disclosure because it failed to provide a privilege log and failed to state "who reviewed the production . . . [and] what steps were taken to review the documents for privilege or whether the production was different in form from prior productions." The number of inadvertent disclosures by Medex was also of concern to the Court under the second factor, given that over 4% (347/7,500) of the production represented inadvertent disclosures. Because the documents were relevant to IPI's claims as well as not marked confidential (and not listed in a privilege log as discussed above), the Court found that the magnitude of disclosure was high under the third factor.
The fourth factor, like the previous three, favored waiver because Medex did not "follow the procedure in Federal Rule of Civil Procedure 26(b)(5)(B)" as it did not "identify any particular documents covered by the privilege, did not provide a proper privilege log and, beyond conclusory statements, Medex did not state a basis for the claimed privilege." Under the last factor, the interests of justice, the Court relied on many of the same grounds discussed above as well as stating that Medex provided a "relatively weak response" and IPI relied on the disclosures. In sum, the Court found waiver and thus the emails produced would remain as such.
Discovery, and particularly document review, is one of the most expensive parts of litigation, and especially patent litigation. And, even with proper document review standards in place, as the name implies, inadvertent disclosures sometimes do occur. What does this all mean for practitioners?
A party needs not only to have a document review procedure in place that shows a sufficient review, but also to immediately provide a privilege log (but not a generic one), and seek to "claw back" any document(s) if inadvertent disclosure does occur. In litigation, each party is constantly working hard to discover that one document or obtain that one deposition quote or other advantage that will alter each party's legal position vis-à-vis the other. For lawyers -- and clients -- it is tough to accept any such game changer based on something that could have been prevented with a little more factual and/or legal investigation.
Andrew P. MacArthur, Associate
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