A New York federal court has recently held that inadvertently produced privileged documents may be used by the receiving party for the limited purpose of challenging the claim of privilege to the extent that the receiving party became aware of the contents of those documents prior to the assertion of the privilege over those documents. In re Keurig Green Mt. Single Serve Coffee Antitrust Litig.
In that case, the parties had entered into a stipulated protective order with a Federal Rule of Evidence 502(d) clawback provision, but the parties relied on two different provisions of the same order to support their arguments concerning whether the privileged document could be relied upon in challenging the claim of privilege. The order stated that “[i]f a party has inadvertently or mistakenly produced Privileged Material, and if the party makes a written request for the return, … the receiving party will also make no use of the information contained in the Privileged Material … regardless of whether the receiving party disputes the claim of privilege.” However, the order also stated that “[t]he receiving party may not use the Privileged Material … for any purpose whatsoever other than moving the Court for an order compelling production of the Privileged Material…”
The Court relied on two prior decisions, both authored by Judge Sweet, in determining how to interpret the apparently conflicting language in the protective order. In Am. Express v. Accu-Weather, Inc., 91-cv-6485, 1996 U.S. Dist. LEXIS 8840 (S.D.N.Y. June 25, 1996), the Court held that the receiving party’s counsel had violated his ethical obligation by opening and viewing a FedEx package after he had already been advised that inadvertently produced privileged documents were contained in that package and that he should not open it. In Stinson v. City of New York, 10-cv-4228, 2014 U.S. Dist. LEXIS 145612 (S.D.N.Y. Oct. 10, 2014), however, Judge Sweet held that it was permissible to rely on the privileged information that was produced for the purpose of challenging the assertion of the privilege where those documents were reviewed prior to notification that the producing party was asserting a privilege. The Court also relied on the Association of the Bar of the City of New York opinion that the receiving party is not ethically prohibited from using information learned prior to being alerted, or having a reason to know, that the information was not intended to be produced to the non-disclosing party (while still finding that such documents should be returned or destroyed).
The Keurig Court also relied on the 2006 Advisory Committee Notes to Rule 26 that permit a receiving party “to use the content of the information only to the extent permitted by the applicable law or privilege, protection for trial-preparation material, and professional responsibility.” Finding that, “[b]ecause no law or rule of professional responsibility prevents a party from using inadvertently produced privileged material to challenge the assertion of a privilege or other production,” the Court held that the Federal Rules of Civil Procedure permit such use and, therefore, the protective order should be read to be consistent with that outcome.
At least in New York matters, parties ought to be mindful of this baseline rule when drafting any Rule 502 clawback provision, inadvertently produced privileged material may be used for the limited purpose of challenging the assertion of privilege to the extent the material was reviewed prior to notification that the producing party is claiming a privilege. Any material not yet reviewed at the time of notification may not thereafter be viewed and, thus, may not be used in challenging the assertion of the privilege (even if viewed in violation of New York’s ethics rules).