'Reckless' Production, Inadequate Clawback Agreement Result In Waiver Of Privilege

Author:K&L Gates
Profession:K&L Gates

Irth Sols. LLC v. Windstream Commc'ns LLC, No. 2:16-CV-219, 2017 WL 3276021 (S.D. Ohio Aug. 2, 2017)

In this case, despite the existence of a clawback agreement (not an order) indicating that "[i]nadvertent production of privileged documents does not operate as a waiver of that privilege," the court found that privilege was waived by the inadvertent but "completely reckless" production of privileged materials ... twice. In so concluding, the court rejected the notion that a clawback agreement always protects against waiver, regardless of its terms, and instead indicated its support for courts that have precluded protection from a clawback agreement when the disclosure was "completely reckless" and for a framework that allows a court to rely on Fed. R. Evid. 502(b) when a clawback agreement fails to provide sufficiently concrete terms.

The parties in this case "agreed that a formal court order under Fed. R. Evid. 502(d) was not necessary based on the scale of the case" but nonetheless entered into a short clawback agreement, which included a provision that "[i]nadvertent production of privileged documents does not operate as a waiver of that privilege."

Despite defense counsel's assertion that the documents were subjected to two levels of attorney review prior to production, Defendant made a late production of 2200 hundred pages which inadvertently included 43 privileged documents totaling 146 pages. 12 days later, while preparing a privilege log, defense counsel realized the mistake and immediately sought to claw the documents back. Plaintiff's counsel challenged the request and disputed the inadvertence of the production, among other things.

At the hearing on the issue, the court noted that many of the documents contained clear indicia of possible privilege (e.g., 14 of the 43 documents contained the word "legal" and several identified a previously unknown attorney as such, including by way of her signature block: "Counsel to Director of Government Contract Compliance").  Nonetheless, defense counsel reaffirmed that the documents had been reviewed for privilege.

Unfortunately, "even as the dispute ensued," Defendant produced the at-issue privileged documents a second time. In that instance, defense counsel claimed the production was the result of an attempt to re-produce the prior set in a searchable form and that a mistake by her litigation support team resulted in the re-production of the privileged materials, despite her efforts to ensure they...

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