Nonchalant Review Causes Attorney Client Privilege Waiver

See No Evil Privilege ReviewLegal counsel’s “nonchalant review” of electronic records acted to waive the attorney-client privilege as to four  inadvertently disclosed emails. Gragg v. International Management Group (UK) Inc., 2007 WL 1074894 (N.D. N.Y. April 2007).  The following facts were found to constitute a failure to take reasonable precautions to prevent inadvertent disclosure of privileged materials, justifying a waiver as to those documents.  Defendant’s outside counsel asked in-house counsel “to prepare and produce to him all documents relative to the proposed project.”  In-house counsel in turn delegated the task to a “non-attorney assistant.”  The assistant “then prepared and compiled in electronic format a disk containing those materials and forwarded them directly to defendant’s outside counsel who in turn, without first reviewing the documents, sent the disk to plaintiff’s attorney.” 

Defendants argued that it was reasonable for their outside counsel to rely upon in-house counsel to make the requisite privilege review, and to assume that it had been accomplished before the disk was sent to him.  The court was not inclined to accept this argument because there had been no discussions between the outside counsel and the non-attorney assistant who supposedly did the review, or the in-house counsel who supposedly supervised the assistant’s activities.  The court considered these facts and concluded:

Given the significance of the attorney-client privilege and the potential consequences associated with a waiver of that privilege, this nonchalance leads me to conclude that reasonable precautions were not taken to prevent the disclosure of privileged materials.

Id. at *6. As a secondary factor, the court noted that there were only 200 emails on the CD-ROM produced, and so the task of review prior to production “would not have been particularly onerous.”

Unfortunately for defendants, the four emails in question contained litigation strategy discussions.  The emails did not address the underlying transaction.  Defendants argued that for this reason it was especially unfair to find a waiver based on inadvertent disclosure.  The court considered fairness, but concluded that this argument was “far overshadowed by the defendant’s failure to implement reasonable measures to avoid inadvertent disclosure.”

Plaintiff argued that the waiver should be a full subject matter waiver, “opening the door to full disclosure including deposition of defendants’ litigation attorneys.”  Obviously the plaintiff was overreaching on that one, and so the Court instead accepted defendants’ argument for a “more reasoned, limited waiver” extending only to the materials at issue. 

Still, plaintiff pressed to take the deposition of defendants’ in-house counsel based on attorney-client privilege waiver.  The court rejected this request as an attempt to further probe defense counsel for information on their litigation strategy.  The court would not permit such an attorney deposition, even if limited to the four emails where the privilege had been waived, noting that such questioning would inevitably go beyond the four emails, and invade privileged attorney work product.

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