Second Time’s No Charm: Privilege Lost When Party Twice Produces Same Privileged Documents

Everybody makes mistakes, and in e-discovery, a mistake that is sometimes made is the inadvertent production of privileged material. But what should happen when a party inadvertently produces privileged material, realizes its mistake, and then inadvertently produces the exact same material a second time?

This is exactly what happened in a recent case in the U.S. District Court for the Southern District of Ohio. Despite the existence of a clawback agreement, the court ruled that the second time was no charm for the party that made the inadvertent production. By making the same mistake twice, the court held, the party waived its privilege in the materials.

For the reasons that the production was deemed completely reckless—that defendant had months to review the documents before they were first produced, the self-evident nature of the privileged documents, the careless review process during the first production for a minimal number of documents, and the lack of oversight shown by defense counsel in producing the privileged documents a second time—the Court finds that Defendant did not take reasonable steps in preventing the disclosure of the forty-three documents at issue.

The Discovery Dispute

The parties to this case agreed to various terms governing discovery, including clawback of privileged information. The clawback agreement stated:

Privilege Clawback

The parties agreed that a formal court order under Fed. R. Evid. 502(d) was not necessary based on the scale of the case, but that the parties would agree among themselves as follows:

  • If a producing party discovers that it has inadvertently produced a document that is privileged, the producing party will promptly notify the receiving party of the inadvertent production.
  • The receiving party will promptly destroy or return all copies of the inadvertently-produced document.
  • Inadvertent production of privileged documents does not operate as a waiver of that privilege.

After plaintiff served defendant a request for production of documents, defendant requested and plaintiff agreed to a 30-day extension of the production deadline. Ten days after the extended deadline, still having received no production, plaintiff emailed defendant asking about the status. Defendant did not reply, but roughly two weeks later sent a partial production.

The production consisted of 2,200 pages of documents, of which 1,400 were readable. Despite maintaining that it had reviewed the documents for privilege prior to producing them, defendant subsequently realized that the production included 43 privileged documents. When she realized this, defendant’s counsel contacted plaintiff’s counsel requesting a clawback of the 43 documents.

Plaintiff refused to return or destroy the documents. It maintained that, by the time the inadvertent production was realized, it had thoroughly reviewed the privileged documents. Further, it disputed that the production was, in fact, inadvertent, given that defendant’s counsel had taken three months to review the documents and were from a large and reputable firm.

Defendant sought an order from the court to enforce the clawback agreement. At a hearing on the defendant’s request, the court seemed somewhat incredulous, noting that several of the inadvertently produced documents contained red-flag terms such as “legal” and “counsel.”

Six weeks later, and as that request was pending, defendant made a second production to plaintiff. This production consisted of the same 2,200 pages, only this time all of them were readable. And within those 2,200 pages, defendant included 146 pages of the exact same privileged documents. “Thus, in the midst of arguing to this Court that it should protect Defendant’s attorney-client communications and award it fees and costs, defense counsel again produced the privileged documents,” the court wrote.

The Court’s Ruling

If you read the full opinion, then by the time you finish reading the court’s recitation of the facts, you will probably share my sense that the judge was not happy with defendant’s attorneys’ handling of these productions. Even so, the judge — U.S. Magistrate Judge Kimberly A. Jolson — wrote a lengthy and thoughtful analysis of the legal issues surrounding the inadvertent disclosure and the clawback agreement.

Judge Jolson noted that it is rare for inadvertence to be challenged in a case because it is usually a given. But here, plaintiff argued that what defendant characterized as inadvertence was “in fact nothing short of a negligent, if not reckless, production of allegedly privileged communications.”

But Rule 502 of the Federal Rules of Civil Procedure do not distinguish between negligent and inadvertent disclosures, the court noted. Rather, the language of Rule 502 allows for only two options: either the disclosure was intentional or it was unintentional and inadvertent. Given this, Judge Jolson concluded that the disclosures were inadvertent.

The judge then turned her analysis to the clawback agreement. She noted that the Sixth Circuit, which includes Ohio, has not decided on the standard for evaluating the interplay between a clawback agreement and Rule 502. Courts elsewhere in the country have taken one of three approaches:

  1. If a clawback is in place, it always trumps Rule 502(b).
  2. A clawback agreement trumps Rule 502(b) unless the document production itself was completely reckless.
  3. A clawback agreement trumps Rule 502(b) only if the agreement provides concrete directives regarding each prong of Rule 502(b).

After discussing each of these approaches in detail, Judge Jolson rejected the first approach as inconsistent with the underpinnings of Rule 502 and the attorney-client privilege. She then went on to find that under either the second or third approach, waiver had occurred.

Both the second and third approach appeal to this Court … but the Court need not choose because Defendant has waived privilege under either. Because, when taking into account the careless privilege review, coupled with the brief and perfunctory clawback agreement, following either approach leads to the same result: Defendant has waived the privilege.

With regard to the second approach, the judge held that, even recognizing the power of a clawback agreement, waiver will result from a completely reckless production. That, she said, was the case here. In support of this conclusion, she specifically cited the fact that, although defendant claimed to have performed two levels of privilege review prior to the first production, “the documents contain obviously privileged material on their face.”

For example, despite defense counsel’s representation that it was unaware an employee of Defendant’s was in-house counsel, several of her emails contain her signature line, in which the title of “Counsel” is prominently displayed. Moreover, almost one-third of the contested documents contain the word “legal.” Any layperson who understands the basic concepts of privilege would at least have identified these documents as suspect. Further, the utilization of any basic keyword search would have flagged these documents for additional review.

With regard to the third approach, the judge said, if the clawback agreement does not include express terms explaining what precautions must be taken to meet the reasonableness standard of Rule 502, then the court must rely on the rule to fill in the gaps.

The remaining issue is whether Defendant took reasonable steps to prevent disclosure in the first place. For the reasons that the production was deemed completely reckless—that defendant had months to review the documents before they were first produced, the self-evident nature of the privileged documents, the careless review process during the first production for a minimal number of documents, and the lack of oversight shown by defense counsel in producing the privileged documents a second time—the Court finds that Defendant did not take reasonable steps in preventing the disclosure of the forty-three documents at issue.

Given these findings, the court concluded that defendant had waived the attorney-client privilege in these documents and that plaintiff was not required to give them back.

The case is Irth Solutions LLC v. Windstream Communications LLC, Civil Action 2:16-cv-219 (S.D. Ohio 8/2/17).  Download the full opinion.

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About Bob Ambrogi

A lawyer and veteran legal journalist, Bob advises Catalyst on strategic communications and marketing matters. He is also a practicing lawyer in Massachusetts and is the former editor-in-chief of The National Law Journal, Lawyers USA and Massachusetts Lawyers Weekly. A fellow of the College of Law Practice Management, he also writes the blog LawSites.

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