In Victor Stanley, Inc. v. CreativePipe, Inc., __ F.Supp.2d __, 2008 WL 2221841 (D.Md. 2008), the court held that defendants waived any privilege that may have attached to 165 electronically stored documents, including communications between the defendants and their attorneys, which were mistakenly turned over to the plaintiff.
. Acknowledging the risk of inadvertent disclosure typically associated with large document productions, defendants initially sought the court’s approval of a “clawback agreement.” Despite the plaintiff’s cooperation, defendants abandoned their plans to effectuate such an agreement and decided to conduct a document by document privilege review. Defendants’ decision was based on the court’s extension of discovery time by four months.
After defendants had made a series of document productions over a period of several weeks, the plaintiff discovered the potential privileged/protected documents and immediately notified the defendants. The plaintiff then filed a motion seeking a ruling that any privilege associated with the electronic documents had been waived. The defendants argued that their production of the 165 electronic documents was inadvertent, and, therefore, no waiver had occurred.
In support of their argument, the defendants presented affidavits describing their efforts in conducting a pre-production privilege review. According to defendants, they employed a computer forensics expert who used approximately seventy search terms to locate privileged documents. All documents returned during the keyword search were then delivered to the defendants’ lawyers for a pre-production privilege review.
Documents that were not text-searchable were given to the defendants’ lawyers for manual privilege review. Due to time constraints, however, the lawyers only reviewed the title pages of these documents. Documents whose title page indicated that a privilege might apply were reviewed in their entirety.
Based on the limited information contained in the defendants’ affidavits, the court was left to infer that the text-searchable documents not flagged by the keyword search were produced to the plaintiff along with the non text-searchable files that defense lawyers had determined were not privileged.
The court described three different approaches that have been taken by courts when deciding whether the inadvertent production of privileged materials constitutes waiver. Under the lenient view, the court found that defendant’s conduct would not constitute a waiver because any such waiver requires a “knowing and intentional relinquishment of the privilege/protection.” Based on the decisions of other district courts within its circuit, however, the court found that the appropriate standard to apply was either the strict or intermediate approach.
The strict approach provides that waiver occurs once the privileged information is disclosed “because once disclosed there can no longer be any expectation of confidentiality.” The court found that there was “no legitimate doubt” that the defendants had waived any privilege attaching to the 165 documents at issue under the strict approach. The court further held that even under the intermediate approach, the result would be the same.
The intermediate approach considers the reasonableness of the precautions taken by the producing party to prevent inadvertent disclosure. The court found that the defendants had not met their burden of proving that their conduct was reasonable based on their failure to provide information regarding: “the keywords used; the rationale for their selection; the qualifications of defense counsel to design an effective and reliable search and information retrieval method; whether the search was a simple keyword search, or a more sophisticated one, such as one employing Boolean proximity operators; or whether they analyzed the results of the search to assess its reliability, appropriateness for the task, and the quality of its implementation.”
As to the non text-searchable documents, the court found that defendant’s assertion that time-constraints allowed a review only of the title pages was discredited by the fact that “defendants neither sought an extension of time from the court to complete an individualized review nor reinstated their request for a court-approved non-waiver agreement, despite their awareness of how it would have provided protection against waiver.”
Finally, the court pointed out that because many of the documents contained communications between defendants and their lawyers, “any order issued now by the court to attempt to redress these disclosures would be the equivalent of closing the barn door after the animals have already run away.”