Archive for August 2017

Supervision Trumps Speculation: Court Denies Motion to Compel Additional Search

Mirmina v. Genpact LLC, No. 3:16CV00614, 2017 WL 3189027 (D. Conn. July 27, 2017)

In this case, Plaintiff sought to compel Defendant to conduct an additional search for ESI.  Plaintiff asserted that he was “concerned” that responsive communications were withheld from production and argued “in essence, that defendant’s search for ESI was insufficient because counsel relied upon an employee directly involved in the underlying claims of the suit to search her own emails for responsive documents.” Defendant opposed the motion and argued that Plaintiff’s concerns were “unfounded because the search for responsive records was coordinated and overseen by counsel.”  In support of that position, Defendant’s in-house counsel provided an affidavit outlining the approach:

In-house counsel: (1) issued a timely and detailed litigation hold to potential custodians of ESI, directing the preservation of any records and documents that might pertain to plaintiff’s claims; (2) gave instructions to the ESI custodians regarding searches and specific search parameters; (3) explained the importance of a thorough search to the ESI custodians; and (4) provided guidance when questions arose during the search. See id. In-house counsel affirms that he forwarded the results of the searches to outside counsel, who in turn conducted a review for processing and production. See id. Counsel for defendant has represented that a comprehensive search was conducted for all documents subject to production under the Initial Discovery Protocols, and all responsive documents have been disclosed.

In light of these representations, the Court was “satisfied that proper steps were taken and that counsel ha[d] appropriately assumed responsibility for ensuring that a comprehensive search was conducted.” The Court further reasoned that Plaintiff’s concerns appeared to be “based on nothing but speculation” and concluded that “[w]ithout any evidence to support plaintiff’s contention that defendant has ‘deliberately or by neglect, withheld communications[,]’ the Court [would] not require defendant to conduct an additional search for ESI.”

A full copy of the Court’s brief opinion is available here.

“Reckless” Production, Inadequate Clawback Agreement Result in Waiver of Privilege

Irth Sols. LLC v. Windstream Commc’ns LLC, No. 2:16-CV-219, 2017 WL 3276021 (S.D. Ohio Aug. 2, 2017)

In this case, despite the existence of a clawback agreement (not an order) indicating that “[i]nadvertent production of privileged documents does not operate as a waiver of that privilege,” the court found that privilege was waived by the inadvertent but “completely reckless” production of privileged materials … twice. In so concluding, the court rejected the notion that a clawback agreement always protects against waiver, regardless of its terms, and instead indicated its support for courts that have precluded protection from a clawback agreement when the disclosure was “completely reckless” and for a framework that allows a court to rely on Fed. R. Evid. 502(b) when a clawback agreement fails to provide sufficiently concrete terms.

The parties in this case “agreed that a formal court order under Fed. R. Evid. 502(d) was not necessary based on the scale of the case” but nonetheless entered into a short clawback agreement, which included a provision that “[i]nadvertent production of privileged documents does not operate as a waiver of that privilege.”

Despite defense counsel’s assertion that the documents were subjected to two levels of attorney review prior to production, Defendant made a late production of 2200 hundred pages which inadvertently included 43 privileged documents totaling 146 pages. 12 days later, while preparing a privilege log, defense counsel realized the mistake and immediately sought to claw the documents back. Plaintiff’s counsel challenged the request and disputed the inadvertence of the production, among other things.

At the hearing on the issue, the court noted that many of the documents contained clear indicia of possible privilege (e.g., 14 of the 43 documents contained the word “legal” and several identified a previously unknown attorney as such, including by way of her signature block: “Counsel to Director of Government Contract Compliance”).  Nonetheless, defense counsel reaffirmed that the documents had been reviewed for privilege.

Unfortunately, “even as the dispute ensued,” Defendant produced the at-issue privileged documents a second time. In that instance, defense counsel claimed the production was the result of an attempt to re-produce the prior set in a searchable form and that a mistake by her litigation support team resulted in the re-production of the privileged materials, despite her efforts to ensure they were withheld, including conducting a “spot check” of the production prior to transmission.

Taking up the issue, the court discussed the question of what constitutes inadvertence and ultimately indicated that in this instance it would assume arguendo that Defendant had established inadvertence.  The court then turned to the “impact” of the parties’ clawback agreement on the question of waiver, citing three frameworks applied by other courts: “(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; and (3) a clawback agreement trumps Rule 502(b) only if the agreement provides concrete directives regarding each prong of Rule 502(b)” otherwise, Rule 502(b) fills “the silent gaps.”

Summarizing broadly, the court rejected the first approach, reasoning in part that to approve it “would undermine the lawyer’s responsibility to protect the sanctity of the attorney-client privilege” and “runs the risk of undermining contract principles.”  Turning to frameworks two and three, the court reasoned it “need not choose” between them 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.”  Under the second framework, the court ultimately concluded that the number of privileged documents produced (more than 10% of the total production), the time taken for the review (“Defendant had months to produce the first production”), and the fact that the mistake was not “the result of a technical error or mistake born from hours and hours of review” (rather the attorneys “reviewed a limited number of documents and made critical and reckless mistakes”) demonstrated a level of recklessness that supported waiver.  The court explained:

Make no mistake, the Court is sympathetic that in this day and age privileged documents will inevitably fall through the cracks and be produced inadvertently. Yet, as the “guardian” of the attorney-client privilege, it is a lawyer’s responsibility to minimize the cracks through which privileged material might slip. The Court believes the second approach adequately recognizes an attorney’s responsibility to guard that privilege, and holds an attorney accountable when normal cracks become chasms—as was the case here. (Citation omitted.)

Under the third framework, which the court viewed as “appreciating the power of clawback agreements but providing an analytical mechanism for the court to revert back to 502(b)’s requirements if an agreement is so perfunctory that its intentions are not clear,” the court characterized the parties’ agreement as “cursory” and assessed the reasonableness of Defendant’s steps to prevent disclosure—the focus of Rule 502(b)(2)—and found that reasonable steps were not taken and that privilege protections were therefore waived.

A full copy of the court’s opinion is available here.