E-Discovery Alert

Mt Hawley Insurance Company v. Felman Production, Inc.
2010 WL 1990555 (S.D. WV May 18, 2010)

Plaintiff did not take reasonable precautions to avoid the disclosure of privileged documents.

In responding to a discovery request, Plaintiff Felman engaged in document dumping. As a result 30% of the material that they produced was irrelevant. As it happened they also produced privileged documents including one especially critical email dated May 14, 2008. The Plaintiff sought to have the email returned and all copies destroyed. Defendants declined to return the email, arguing that Felman failed to take reasonable precautions to avoid disclosure of privileged information. For its analysis, the Court relied heavily on the five factor test articulated in Victor Stanley , Inc v. Creative Pipe. The court concluded that privilege had been waived saying, "The Court will apply the five-factor test discussed above in the context of these findings and the commentary to the Rules. First, the precautions taken to prevent inadvertent disclosure were not reasonable. As warned in Victor Stanley, 250 F.R.D. at 257, the failure to test the reliability of keyword searches by appropriate sampling is imprudent. Second, the number of inadvertent disclosures is large, more than double the number discussed in Victor Stanley, a number which underscores the lack of care taken in the review process. The May 14 email resonates throughout this case-a bell which cannot be unrung. Its content has had great influence on Defendants' discovery requests and deposition questions. Confidentiality cannot be restored to that document. Third, the extent of the disclosures is not known to the Court because the 377 documents have not been submitted in camera. Fourth, there has been delay in measures taken to rectify the disclosure of the documents. It is an important fact that identification of privileged documents which were disclosed to Defendants was made by the Defendants, not Felman or its counsel. Finally, as in Victor Stanley, id. at 263, Felman has 'pointed to no overriding interests in justice that would excuse them from the consequences of producing privileged/protected materials.'"

MtHawley.pdf

MVB Mortgage Corporation v. Federal Deposit Insurance Corporation
(S. D. OH February 11, 2010)

Emails that were inadvertently sent to an expert witness were subject to disclosure.

Trial counsel for FDIC exchanged emails with an in-house attorney for FDIC. Some of the emails were accidentally sent to an expert witness as well. MVB Mortgage made a discovery request for the emails. FDIC argued that the emails were privileged and wanted to redact some of the information. After noting that any document provided to a testifying expert, privileged or otherwise is ordinarily subject to disclosure, the Court said, " Once an expert sees information, even if it is the product of an inadvertent disclosure of something otherwise privileged, that information becomes part of the expert's mental database, and the opposing party is entitled to test how, if at all, knowing that information may have influenced the expert's opinion. Even in a case like this, where the Court, after reviewing the information, thinks it unlikely that the withheld information made a significant difference in the expert's ultimate opinions or conclusions, it is not the Court's job to sift through the universe of information supplied to the expert and to make that determination. The drafters of the Rule assigned that responsibility to counsel. The Court's job is to make sure that counsel get what they need to discharge that responsibility, and it does so most effectively by concluding that a claim of inadvertent waiver cannot be used to withhold information from opposing counsel once it has found its way into the expert's hands-however unintentional that may have been. Consequently, MVB is entitled to the unredacted versions of these five emails."

Securities and Exchange Commission v. Badian
2009 WL 222783 (S. D. NY Jan 26, 2009)

Defendant who took no precaution to prevent the production of privileged documents and who waited five years to attempt to rectify the inadvertent production waived its privilege.

Rhino, one of the defendants, sought to claw back approximately 260 documents out of 67,000 documents produced. They claimed that the 260 documents were produced inadvertently. Although the production cover letter included a general claw back statement, neither Rhino nor its law firm took any precautions to prevent the production of privileged documents. In addition it took Rhino five years to attempt to rectify the error. After weighing four factors to determine whether privilege had been waived, the court found that Rhino had waived any privilege that it migh