Court Enforces Clawback Agreement, Denies Motion to Compel
Bro-Tech Corp. v. Thermax, Inc., 2008 WL 5210346 (E.D. Pa. Dec. 11, 2008)
On the eve of trial in this case in which plaintiffs alleged trade secret theft, the court granted an extension “on urgent party request” so that additional discovery could be accomplished. The discovery proved to be complex, and the court appointed a special master to manage the electronic discovery issues. Thereafter, the parties negotiated a stipulation, approved by the court, which included a clawback procedure (“the Clawback Agreement”) to handle the return of privileged documents. The Clawback Agreement provided that in the event of disclosure of a privileged document, the document was to be returned upon written demand. If the recipient of the document wished to challenge the privilege claim, they were required to do so in writing, within five days of receipt of the demand for the document’s return. The special master would then resolve the dispute following an in camera review.