Inadvertent Production Results in Waiver of Attorney-Client Privilege as to 347 Pages of Emails

Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483 (S.D. Ohio Aug. 28, 2012)

In this case, the court held that privilege had been waived as to 347 pages of inadvertently produced emails where, among other things, Defendant failed to establish the reasonableness of the precautions taken to prevent the disclosure and “failed to take adequate measures to rectify or mitigate the damage of the disclosure.”

During the course of discovery, Defendant produced a batch of 7500 pages of email in hard copy, despite prior productions in electronic format.  (The format of production was a point of disagreement between the parties, but the court appears to have adopted Plaintiff’s assertion that the production was in hard copy.)  None of the pages were stamped confidential as provided by the parties’ stipulated protective order and as had been done for prior productions.  Upon learning of the inadvertent production, Defendant claimed that all emails involving any of three employees (2 attorneys and 1 paralegal) were privileged and had been inadvertently produced.  Later, when Plaintiff attempted to use 14 of the inadvertently produced documents at a deposition, Defendant once again claimed that the documents were inadvertently produced and sought to claw them back.  Subsequently, Plaintiff moved for a determination from the court on whether the documents were protected as privileged.  Upon its determination, after in camera review, that many of the documents were “within the ambit of attorney-client privilege,” the court turned to its analysis of waiver.

The court found that privilege had been waived.  Before making this determination, the court first identified the controlling law surrounding the question of waiver, citing the three-factor analysis set out in Fed. R. Evid. 502(b) and a five-factor test “generally consider[ed]” by courts to determine whether a party is entitled to the return of its documents.  Those factors are: “(1) the reasonableness of precautions taken in view of the extent of document production, (2) the number of inadvertent disclosures, (3) the magnitude of the disclosure, (4) any measures taken to mitigate the damage of the disclosures, and (5) the overriding interests of justice.”

As to the first factor, which mirrors closely the second factor under FRE 502(b), the court determined that Defendant failed to establish that it took reasonable precautions to prevent the inadvertent disclosure.  In reaching this conclusion, the court cited Defendant’s lack of specificity as to who conducted the review or how (noting Defendant’s general assertion that the production was reviewed by “several layers of attorneys”) and as to "whether the production was different in form from prior productions."  The court also noted Defendant’s failure to address the “alleged inconsistencies” between the at-issue and former productions and took issue with Defendant’s failure to produce a privilege log, particularly “if, as asserted” a review was conducted by “several layers of attorneys.”

Turning to the second factor, the court noted that 4.6 percent of the production was inadvertently produced and concluded that the number was “relatively high” in light of the small number of documents in the production and the claim that they were reviewed by “several layers of attorneys.”  As to the third factor, the court concluded that the magnitude of the disclosure was high for reasons including that the documents appeared relevant to Plaintiff’s claims and that Plaintiff had already attempted to use the documents at deposition.

As to the fourth factor—a factor which the court explained “looks to the promptness of measures taken to rectify the disclosure” and which therefore closely resembles the third factor under FRE 502(b)—the court acknowledged Defendant’s “immediate” assertions that the documents had been inadvertently produced (upon learning of the production) and its attempt to claw them back, but took issue with Defendant’s failure to follow the procedure for inadvertent production pursuant to Fed. R. Civ. P. 26(b)(5)(B).  As a result, the court found that Defendant failed to take adequate measures to mitigate the damages.

Finally, the court found that the interests of justice weighed in favor of the plaintiff.

Concluding its opinion, the court summarized its findings:

After balancing the required factors, the Court concludes that Medex waived the attorney client privilege otherwise applicable to the 347 documents in the May 30 production.  To summarize, the Court finds that Medex did not take reasonable precautions to protect its privileged information, the number of documents disclosed is significant, no privilege log was provided at the time of disclosure, the contents of some of the documents may be relevant to the heart of the dispute, and Medex made insufficient attempts to mitigate its damage even after it learned of the disclosure.

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