Archive: January 18, 2011

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Production of Servers without Review Waives Privilege and so Might Storage of Privileged Materials on Servers Shared with Other Entities

Production of Servers without Review Waives Privilege and so Might Storage of Privileged Materials on Servers Shared with Other Entities

In re Fontainebleau Las Vegas Contract Litig., 2011 WL 65760 (S.D. Fla. Jan 7, 2011)

In this case, the court found that privilege had been waived as a result of a third party’s voluntary production of servers believed to contain privileged materials without review.

The Term Lenders sought production of documents related to the financing of the construction of the Fontainebleau Resort and Casino in Las Vegas from the third-party parent of Fontainebleau Las Vegas, Fontainebleau Resort, LLC (“FBR”).  FBR resisted production of its documents, albeit without formal motions, until approximately six months after receipt of the subpoena.  During that time, FBR initially alleged that production would be delayed because of the shared status of the servers on which its information was stored and the need to separate its documents from those of other entities by allowing those entities to review all documents stored thereon to determine ownership, privileged status, etc.  FBR had previously raised this issue in the context of an unsuccessful motion to quash similar subpoenas from other banks.  The court’s footnote regarding the shared servers is illuminating:

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