The burdens associated with a massive document review of electronically-stored information (“ESI”) will not, in and of themselves, preclude a court from finding that a party has waived the attorney-client privilege with respect to an inadvertently produced document. In Jacob v. Duane Reade, Inc., Magistrate Judge Katz of the United States District Court for the Southern District of New York held that a privileged, two-page email that was inadvertently produced during the review of over two million documents in less than one month did not have to be returned and that the privilege had been waived because the producing party, Duane Reade, had failed to timely request its return. Duane Reade had used an outside vendor and review team to conduct its review of this large volume of ESI. The document in question concerned a meeting among several individuals, including an in-house attorney at Duane Reade. Duane Reade argued that the email was inadvertently produced because it was neither from nor to an attorney, and only included advice received at a meeting from an in-house attorney, identified in the email only by the first name “Julie.”
After determining that the email was a privileged communication, the Court considered whether Duane Reade waived the privilege by producing it. Under the Second Circuit test for determining whether a party’s inadvertent disclosure constitutes a waiver of the privilege, the Court addressed the following factors: “(1) the reasonableness of the precautions to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) ‘the scope of the discovery;’ (4) the extent of the disclosure; and (5) an over [arching] issue of fairness.”
The Court determined that the production of the email was inadvertent and that Duane Reade had employed reasonable precautions— including drafting lists of attorney names, employing search filters and quality control reviews—to prevent inadvertent disclosures. However, the Court held that the privilege was waived because Duane Reade did not act “promptly to rectify the disclosure of the privileged email.” The email was produced on November 8, 2011 and was used as an exhibit at a deposition the following day. Duane Reade’s counsel did not object to questioning or the use of the email on the basis of privilege and did not ask the witness about the identity of “Julie.” Duane Reade argued that it was not until another attendee at the privileged meeting was noticed for deposition, two months later, that it discovered the privileged nature of the email and requested its return. The Court held that, because the email was the subject of deposition questions without objection to it being privileged, and because Duane Reade did not diligently work to identify the meeting attendees when the email was at least potentially privileged on its face, the privilege had been waived.
Duane Reade is not the first litigant to inadvertently produce a privileged email, resulting in waiver of the privilege. You can read about similar experiences involving other litigants here and here. Given the potential for inadvertent disclosure of privileged material in voluminous productions of ESI, litigators should employ various precautions to prevent such disclosure, such as those used by Duane Reade, and diligently protect the privilege when it is discovered that potentially privileged material has been produced. As we have previously discussed on this blog (in this post), parties should also seriously consider agreeing at the outset of litigation and requesting that the Court order, pursuant to Federal Rule of Evidence 502(d) and (e), that any disclosure of privileged material will not act as a waiver in the litigation. The rule specifically allows for this type of blanket protection, and properly drafted agreements can obviate any analysis of common law and FRE 502(b) multi-factor tests when disclosures occur.