Use a Fine-Tooth Comb Before and After Document Production

February 9, 2010

Authored By: Mike G

Citation: U.S. v. Sensient Colors, Inc., 2009 WL 2905474 (D. N.J. Sept. 9, 2009).

Employee/Employer Implicated: Outside Counsel

e-Lesson Learned: To avoid waiver of attorney-client and work-product protections when producing significant amounts of data, it’s important for producing attorneys to (1) establish reasonable document review methods geared towards minimizing the amount of inadvertently produced privileged documents, and (2) conduct a prompt re-review of all produced documents upon notification that privileged documents may have been inadvertently produced.

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The document reviewing attorney is charged with an unenviable task: Review thousands of documents to ensure that no privileged information is produced to opposing counsel. Given the fact that document productions may consist of thousands or even millions of pages of documents, it is not surprising that privileged documents will slip by the watchful, often weary, eye of reviewing attorneys – it is inevitable.

Not to worry, the Federal Rules of Evidence are sympathetic to those tired eyes. Inadvertently produced privileged documents do not automatically lose their privilege protection. However, it is important to note that although FRE 502 allows some wiggle room for error, the attorney for the producing party must be careful. Failing to take reasonable steps to prevent inadvertent disclosure, or failing to promptly identify privileged documents that had been produced mistakenly can result in the waiver of highly privileged documents, oftentimes a deathblow to an otherwise winnable case.

Essentially, FRE 502(b) says: If you mistakenly produce a privileged document, privilege is not waived so long as (1) the disclosure was inadvertent, (2) you conducted a reasonable document review, and (3) you took reasonable steps to identify similar mistakes once you were put on notice that a privileged document had been inadvertently produced. Attorneys risk waiver of privileges when they produce documents without a document review system in place. Further, even those who take great care in reviewing documents prior to production may accidentally waive privilege if they are slow to respond to notification that they may have produced privileged documents.

In Sensient, plaintiff (the United States) produced 45,000 documents (135,000 pages). On August 29, 2008, defendant returned 81 documents that appeared to be inadvertently produced by plaintiff. Plaintiff responded on September 10, 2008, confirming that 80 of the 81 documents were in fact privileged and had been inadvertently produced.

In October, defendant returned another set of documents thought to have been inadvertently produced. Plaintiff responded on November 21, 2008, claiming that most of those documents had been inadvertently produced and were protected by attorney-client or work-product protections.

Finally, after contesting that a deposition exhibit was privileged and had been inadvertently produced, plaintiff conducted a full scale “re-review of its entire 47,000 document database.” As a result of the re-review, between June and August 2009, plaintiff identified 100 additional inadvertently produced documents that it claimed were subject to protection.

The court was asked to decide whether plaintiff had waived its privilege with respect to the inadvertently produced documents. In addressing this issue, the court divided the documents identified by plaintiff as privileged into three categories: The September documents, the November documents, and the June and August documents. Ultimately, the court held that privilege had not been waived with respect to the September documents because they were identified a mere eight work days after defendant notified plaintiff that privileged documents might have been inadvertently produced. On the other hand, plaintiff was deemed to have waived its privilege with respect to the November and June and August documents.

So what did the plaintiff do that was wrong? Why was the privilege not waived regarding the documents identified in September, while the documents identified in November, June, and August lost their privilege protection? The court addressed the three FRE 502(b) factors in reaching its conclusion

First, the court explained that the documents had been produced inadvertently. In holding the first prong established, the court noted the breadth of the production (135,000 pages) and opined that mistakes were bound to occur. Second, the court held that plaintiff conducted a reasonable document review; and it emphasized these three facts: Plaintiff utilized a sophisticated computer program to assist in the document review, plaintiff employed no less than 12 professionals throughout the document review, and plaintiff performed quality control to ensure completeness of the review. The waiver issue boiled down to the third prong.

The third prong – promptly taking reasonable steps to rectify error – is where plaintiff ran into trouble. The documents identified in September as privileged did not lose their protection because waiting eight days after being notified of the error to confirm privileged status was reasonable. In contrast, waiting three months before rectifying an inadvertent production, is not reasonable.

Where plaintiff went wrong was in its reliance on defendants to continue to identify potentially privileged documents for it. According to the court, once plaintiff was notified that privileged documents may have been inadvertently produced, the reasonableness clock began to run. Not only was plaintiff responsible for re-reviewing the specific documents defendant brought to its attention, but also plaintiff was put on notice that other privileged information may have been inadvertently produced. Plaintiff should have re-reviewed all produced documents after the first notice.

eLesson: One way to avoid similar problems is to agree on a “claw back” provision in the joint discovery plan. The claw back provision may “undo” the document production. In other words, a producing party does not waive privileges associated with any documents that are inadvertently produced irrespective of the care taken by the disclosing party.

Without a claw back provision, an attorney must implement sufficiently reasonable methods of document review prior to production; as well as set in place a prompt re-review system once notified that inadvertent production may have taken place.

Article posted on February 9, 2010 at 2:00 AM |