Court Articulates Analysis Under FRE 502, Finds No Waiver of Inadvertently Produced Email

Coburn Group, LLC v. Whitecap Advisors, LLC, 640 F. Supp. 2d 1032 (N.D. Ill. 2009)

In this case, defendant, Whitecap Advisors LLC (“Whitecap”), sought to compel the return of one privileged email and to strike deposition testimony regarding the same.  Plaintiff, Coburn Group, LLC (“Coburn”), resisted returning the email arguing that it was not protected work product, that privilege was waived by production, and that Coburn was “entitled” to the email because it revealed that Whitecap had mislead the court.  Finding that the email was protected as work product and that no waiver occurred, the court granted Whitecap’s motion.

In responding to Coburn’s discovery requests, Whitecap provided its counsel with approximately 72,000 pages of potentially responsive documents.  Counsel assigned two experienced paralegals to review the documents and to separate them into categories, including privileged materials. 40,000 pages were eventually produced.  Counsel learned of the inadvertent production only when Coburn’s counsel began to question the author of the email about it at deposition.  Counsel for Whitecap objected at that time and re-stated his objection in following days, including in writing.  Coburn resisted returning the email and the parties agreed to allow Coburn time to research the issue.  Coburn agreed to “quarantine” the email in the interim.  Resolution could not be reached, and Whitecap filed a motion to compel the email’s return.

The court first determined that the email was indeed work product and was thus subject to protection absent a showing of “substantial need.”  The court then turned to Fed. R. Evid. 502 to determine if the protection was waived by production.

Addressing the threshold issue of whether the email was in fact produced inadvertently, the court distinguished it’s analysis from a prior decision in Heriot v. Byrne in which the court considered “‘factors such as the total number of documents reviewed, the procedures used to review the documents before they were produced, and the actions of producing party after discovering that the documents had been produced’” and “also applied the first two of these factors to the analysis under subpart (b)(2), considering whether the producing party took reasonable steps to prevent disclosure.” 2009 WL 742769 (N.D. Ill. Mar. 20, 2009).  The court stated:

In this court’s view, the structure of Rule 502 suggests that the analysis under subpart (b)(1) is intended to be much simpler, essentially asking whether the party intended a privileged or work-product protected document to be produced or whether the production was a mistake.  To start, the parallel structure of subparts (a)(1) and (b)(1) of Rule 502 contrasts a waiver that is intentional with a disclosure that is inadvertent. [FN5] More importantly, subparts (b)(2) and (b)(3) separately address the reasonableness of the privilege holder’s steps to prevent disclosure and to rectify the error.  That they are set out as separate subparts distinct from the question of inadvertent disclosure strongly suggests that the drafters did not intend the court to consider for subpart (b)(1) facts such as the number of documents produced only to repeat the consideration of those same facts for subparts (b)(2) and (b)(3).

The court determined that production of the email was inadvertent.

The court turned next to Whitecap’s reasonable steps to prevent inadvertent disclosure, noting that, “[a]ccording to the Judicial Conference Rules Committee…. [C]onsiderations bearing on the reasonableness of a producing party’s efforts include the number of documents to be reviewed and the time constraints for production.’”  The court began its analysis with “the scope of discovery,” “a logical starting point in many cases because ‘[w]here discovery is extensive, mistakes are inevitable and claims of inadvertence are properly honored so long as precautions are taken.’”  [Citation omitted.]  Accordingly, the court pointed to the size of the production (40,000 pages) and noted that such a production exceeded the number of documents characterized by other courts as “large.”  The court went on to discuss the protocol implemented for review of the approximately 72,000 pages identified as potentially responsive, including review by experienced paralegals under specific direction of counsel and the length of the process – approximately five weeks.

Rejecting Coburn’s criticism of the use of paralegals, especially contentions that it was “unreasonable” to expect paralegals to identify work production that was not apparent on the face of a document (as was the case for the email at issue), the court acknowledged the difficulties asserted but stated, “[t]he document review can not be deemed unreasonable solely because a document slipped through which in close examination and with additional information turns out to be privileged or work product. If that were the standard, Rule 502(b) would have no purpose; the starting point of the Rule 502(b) analysis is that a privileged or protected document was, in fact, turned over.”

After pointing out that only three documents “slipped through the review” (only one remained at issue in this opinion), the court also rejected Coburn’s reliance on Relion v. Hydra Fuel Cell Corp. in which the court held that privilege was waived as to two inadvertently produced emails (out of “40 feet” of documents that were produced) because of the party’s failure to take “all reasonable means” to preserve the privilege, specifically by failing to re-review documents selected by opposing counsel for copying prior to production.  2008 WL 5122828 (D. Or. Dec. 4, 2008).   The court stated:

This court respectfully disagrees with the Relion decision. The standard of Rule 502(b)(2) is not "all reasonable means," it is "reasonable steps to prevent disclosure."  Furthermore, the decision appears to be contrary to the view of the Judicial Conference Rules Committee that Rule 502 "does not require the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake."

The court then found Whitecap took reasonable steps to prevent disclosure.

Addressing next the issue of “reasonable steps to rectify the error,” the court first resolved the question of which time period was relevant to this question:

The Committee’s comment that Rule 502 does not require a post-production review supports this view that the relevant time under subpart (b)(3) is how long it took the producing party to act after it learned that the privileged or protected document had been produced.

Concluding that the time Whitecap took to file the motion to compel was not unreasonable, the court acknowledged that Whitecap was unaware of the inadvertent production until it came up in deposition, that counsel immediately objected to its use and requested its return, and that the delay was caused in part by agreement of both parties to allow time to investigate.  Accordingly, the court concluded that Whitecap did not waive the work-product protection of the email.

The court also found that Coburn did not establish a substantial need for the email such that the work product protection could be overcome.