Ineffective Privilege Review Leads to Inadvertent Waiver in Rolling Document Production

Recently, a federal court in Illinois held in Thorncreek Apartments III, LLC v. Village or Park Forest that a defendant waived the attorney-client privilege when it inadvertently produced 159 documents that it later claimed were privileged. The defendant’s failure to take reasonably adequate measures to prevent such disclosure serves as a lesson for all attorneys, especially those who manage large, rolling document productions with the help of a vendor.

During its collection and production efforts, the defendant used a vendor to produce documents stored on back-up tapes according to a 3-step process: (1) a search of the back-up tapes using agreed-upon “search terms”; (2) a review of the yielded documents on a database accessible to defense counsel only; and (3) the placement of the yielded documents onto an online production database for the plaintiffs to review. The defendant produced over 250,000 pages of documents over a seven-month period. In the meantime, the defendant did not produce a privilege log and advised the plaintiffs that no privileged documents were withheld.

When the production was completed and the plaintiffs attempted to use certain documents at a deposition, the defendant immediately objected, claiming privilege and inadvertent disclosure, which objection counsel reaffirmed after the deposition. Defense counsel provided a privilege log four months after the deposition, which identified 159 previously-produced documents that were allegedly inadvertently disclosed. After resolving the waiver issue as to all but six of the 159 inadvertently produced documents, the plaintiffs sought the Court’s assistance, arguing that the six documents were not privileged or if they were, that the privilege was waived.

The Court concluded that the six documents, or at least portions of them, were privileged. Similarly, the Court found that the production was inadvertent based upon the circumstances surrounding the production, such as the defendant’s belief that the vendor would automatically withhold all documents tagged “privileged” from the online production database, and defense counsel’s immediate objection to the use of the documents immediately at the deposition and again thereafter.

Nonetheless, the Court ultimately found that the defendant failed to take reasonable steps to prevent disclosure, resulting in a waiver of the privilege under Federal Rule of Evidence 502(b) as to those six documents. The Court noted that the screening process was unreasonable because the defendant failed to check the online production database before it was “live online” to confirm that the privileged documents were withheld, which the Court characterized as a “strong [piece of] evidence of the inadequacy of the [defendant’s] precautions.” The Court also determined that the defendant failed to remedy the inadvertent disclosure in a timely fashion. In light of those factors, the Court found the screening process to be “completely ineffective” and without any “reasonable precautions.” For other blog articles related to inadvertent disclosure and inadvertent production under Rule 502(b), click here and here.

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