Check for Privilege Before Turning Over Your Database: The Lesson in Thorncreek Apartments

Before you give opposing counsel the keys to your production database, run at least one check on the privilege field to see if any of your documents are marked “privileged.” That is the lesson a federal judge taught a hapless defense counsel in Thorncreek Apartments III v. Village of Park Forest, 2011 U.S. Dist. Lexis 88281 (N.D. Ill August 9,2011). If you don’t, you may be deemed to waive the privilege. I hate when that happens!

“What’s going on here?” you might ask. Can anyone be that sloppy? “Maybe,” I say in response. At least that’s what it seemed like here. Counsel literally made a production database available for more than seven months without once checking to see if it included privileged documents. A waiver is not inadvertent if you were hopelessly sloppy about it. Here is the story.

The Facts

The plaintiffs filed a motion before the District Court arguing that privilege was waived for six documents included in a production database provided by defendant Village of Park Forest. The Village argued that the documents were inadvertently produced in a production database hosted by its online vendor Kroll Ontrack. (I don’t think Kroll did anything wrong here.)

Defense counsel went through what seemed like a reasonable process in pulling files off of a number of tape backups. First, they conducted a key word search to pull back documents that might be responsive. The key words had been agreed upon by opposing counsel and in some cases ordered by the court. (Looks like there may have been some controversy around the key words and no, people weren’t talking about predictive coding in this case.)

As a second step, Kroll put the potentially responsive documents in an online database for defense counsel to review. They did so, marking documents as responsive, non-responsive and privileged.

The third step was to place the documents released by defense counsel in another online database made accessible to plaintiffs’ counsel. As the court noted, documents that the Village elected to withhold from production were not placed in this database. So far it all makes sense.

Producing the Privilege Documents

Here is where the rub came. At some point, plaintiffs complained that they were not able to see the documents returned from the agreed-upon searches but marked non-responsive. The Village had previously said it would include non-responsive documents in the production database in order to show how many its review had identified. In an attempt to be magnanimous, the Village elected to begin placing all of the documents in the production database—responsive and non-responsive.

As the court noted, the parties’ briefs left it a bit “murky” as to how the Village intended to handle the documents counsel had reviewed and marked “privileged.” Why they were not pulled out of the population before the production database was marked live is simply beyond me.

But they were not and 159 privileged documents went online, easily available to plaintiffs’ counsel. Even more surprising, during the seven months the production database was live, Village counsel did not bother to produce a privilege log. At one point, counsel claimed that there were no privileged documents to withhold. Somebody tell me how that happened.

So, as you probably guessed by now, depositions started and some wiseacre slapped two of the juicy privileged documents in front of a witness. Village counsel erupted, claiming privilege and inadvertent production. The game was on.

Game On: Reel Those Privileged Documents Back In

Actually, the game was over, at least for defense counsel. It appears that the parties came to agreement with respect to most of the privileged documents (probably the non-important ones) but disagreed with respect to six of them. Quickly concluding that at least some of the six were privileged, the court thus was required to review the doctrine of inadvertent waiver.

The test for inadvertent waiver is pretty simple, made more so by the recent amendments to F.R.E 502:

  1. Were the documents privileged?
  2. Was the production inadvertent?
  3. Should privilege be waived nonetheless?

The privilege discussion didn’t interest me much. I did all that in law school. So, my attention was focused on the second and third prongs of the test.

Was the Disclosure Inadvertent?

As the court noted, this issue could be wrapped up with the third element, which goes to the heart of forgiveness. Rather than do that, the court espoused a simple analysis for this element.

It simply presumed based on the evidence before it that counsel didn’t really mean to include all of those privileged documents in the production database. And who would?

Certainly counsel wasn’t using those documents in an affirmative way, which was the original reason courts held that the full privilege would be waived. The old, “I did it because counsel told me to do it,” was a key way to waive privilege for that entire subject matter. That didn’t happen here.

Nor did the Village sit silent as opposing counsel was cramming those two juicy privileged documents down their witness’s throat. They got up and objected, allowing the deposition to go forward only under protest.

Surprisingly—and this seemed important to the court—it then took more than four months before Village counsel came up with a proper privilege log to join the dispute. While the court stated this as a dispositive fact, you can just tell it didn’t like counsels’ lackadaisical approach. Neither would I; I wonder what happened there.

Anyway, the court let them off the hook and ruled that the production of privileged documents were inadvertent. On to the next step in the test. (But don’t you take four months to produce your privilege log.)

Reasonable Steps to Prevent Disclosure?

Once the court concluded the production was inadvertent, the Village had two more hurdles to cross:

  1. Did the holder of the privilege take reasonable steps to prevent production of privileged documents?
  2. Did the holder of the privilege promptly attempt to rectify the error after it became known?

This case was about the first prong of that test. The court complained that the Village provided “precious little” about the steps taken to find and isolate privileged documents. Counsel for the Village wrote an email stating that he spent “countless hours” reviewing a “relatively large amount” of documents to find those with privileged content. Why, the court asked, was there no affidavit to support this allegation? Why indeed.

The court had no sympathy for the next argument—counsel thought that marking the document “privileged” would keep it out of the Kroll database. As the court astutely pointed out:

It would have been a simple matter for the Village to check the production database created by Kroll—before it went live online and became available to [plaintiffs]—to verify that privileged documents were not disclosed.

Duh! I am not privy to the Kroll software but I bet there was a simple way to search to see if anything was privileged—either by privilege tag, if that was included in the production database, or by the reference number given to the privileged documents. What happened here?

In a somewhat gratuitous fashion, the court piled on by noting that not a single privileged document was withheld and that no privilege log was produced.

I confess that I am puzzled myself as to how this happened. Counsel went to the trouble of marking 159 documents privileged. Why in the seven months that followed did counsel not ask for a printout from the Kroll system sufficient to produce a simple privilege log? Alas, we case readers don’t get to ask these questions.

As the court concluded—ironically citing yet another case as precedent for the point:

It is axiomatic that a screening procedure that fails to detect confidential documents that are actually listed as privileged is patently inadequate.

Sorry Charlie. You lose on that one.

Failing to Notice and Rectify

The court didn’t stop there. It went on to fail the Village on the second element of the test. It held that the Village failed to rectify the error in a timely way. Again, ignorance in using the Kroll database seemed to be at the heart of the finding.

For starters, the court forgave the Village for taking another four months after the deposition to issue the privilege log. Methinks the court didn’t like that fact at all but just didn’t want to say so.

Instead, the court jumped on counsel for failing to find its own error for over nine months—the period from March to December 2009 when the production database was available to the plaintiffs. According to the court, defense counsel should have logged-in and run a privilege search during this period. The 150+ hits that came back would have been a dead giveaway.

As the court said:

Yet for some none months, the Village apparently had no inkling that the production database contained documents that the Village wished to withhold as privileged, or that [plaintiffs] were reviewing and obtaining those documents. If that is true (and we accept that it is), that means the Village as not paying any attention whatsoever to what documents its opponent in the litigation was selecting from the database. Perhaps [plaintiff] simply selected all of them; the parties’ briefs do not tell us if this is so.  But, even if that were the case, a single visit to the production database could have alerted the Village to the problem.

This seems like piling on to me. Counsel clearly didn’t know much about databases or pay much attention to the process. The process was sloppy or non-existent. The client paid the price.

The court did go on to make one last point that brings us full circle. It noted that the problem might have come to light earlier had Village counsel provided a privilege log, which was its duty in the first place. Doing that might have forced plaintiff’s counsel to acknowledge what it knew—that the database had a bunch of privileged documents. But with no privilege log and a seeming statement that there were no documents being withheld on privilege grounds, all bets were off. Plaintiffs’ counsel could sit quietly until the deposition and then drop the bombshell on a hapless witness.

What Can We Learn From This?

This is a simple-enough case with a simple-enough message: Don’t produce documents in an online database without doing some basic checking first. Assuming, as the case does, that there was a field containing a privilege designation, it would take counsel milliseconds to realize that something bad was about to happen. If lead counsel wasn’t comfortable running the search, how about that tech-savvy associate or legal assistant? If not them, how about your friendly vendor? If asked, the Kroll people could have spotted the mistake. Some might say they should have but not me.

We built an automated production system that can be run by our clients with no Catalyst intervention. Rather than allow these kinds of mistakes to happen, we added a QC rule-set that will not allow a document marked “privileged” or “potentially privileged” to be produced without a specific override. Even if foldered for production, these documents are pulled out into a special folder that must be addressed by the client before a production can go through.

These rules are just another step in trying to make the process easier and more foolproof for lawyers who are not comfortable with technology. It doesn’t guaranty that a privileged document will never be produced—we have seen cases where the documents are marked privileged after they are produced—but it can cut down on mistakes. With the stakes (and the volumes) this high, you have to do everything you can to avoid an inadvertent waiver.

This is not a case where counsel took dozens of steps to avoid privilege yet something slipped through, as I have written about before. (See, Bad Facts Make Bad Law: ‘Mt. Hawley’ A Step Backward for Rule 502(b).) Rather, it is about a simple mistake that anyone could have caught with just a smidgen of effort. I don’t feel as bad for Village counsel as I do for some of the other victims. This case is no “derelict on the waters of the law,” it is a fair ruling on somewhat extreme circumstances. Counsel were sleeping on the job (or so it seems to me) and paid the price.

So, the lesson here? Don’t produce those documents without checking to see if privileged files might have snuck through. Run some searches, sample some documents and for God’s sake check the privilege field. You will sleep better, and pay lower malpractice premiums, if you do.

 

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About John Tredennick

A nationally known trial lawyer and longtime litigation partner at Holland & Hart, John founded Catalyst in 2000. Over the past four decades he has written or edited eight books and countless articles on legal technology topics, including two American Bar Association best sellers on using computers in litigation technology, a book (supplemented annually) on deposition techniques and several other widely-read books on legal analytics and technology. He served as Chair of the ABA’s Law Practice Section and edited its flagship magazine for six years. John’s legal and technology acumen has earned him numerous awards including being named by the American Lawyer as one of the top six “E-Discovery Trailblazers,” named to the FastCase 50 as a legal visionary and named him one of the “Top 100 Global Technology Leaders” by London Citytech magazine. He has also been named the Ernst & Young Entrepreneur of the Year for Technology in the Rocky Mountain Region, and Top Technology Entrepreneur by the Colorado Software and Internet Association. John regularly speaks on legal technology to audiences across the globe. In his spare time, you will find him competing on the national equestrian show jumping circuit or playing drums and singing in a classic rock jam band.