Vendor's Mistake Results in Inadvertent Production, Court finds No Waiver

Heriot v. Byrne, 2009 WL 742769 (N.D. Ill. Mar. 20, 2009)

In this declaratory judgment action, the parties sought to settle the issue of copyright ownership over a made-for-television movie called The Secret. In the course of discovery, due to a mistake by their “document vendor,” plaintiffs inadvertently produced privileged information. Upon discovery of the inadvertent production, plaintiffs immediately sought to claw back the privileged material. Defendants resisted, arguing that privilege was waived. Undertaking an extensive analysis of recently passed FRE 502 and the previously existing tests to determine waiver, the court ruled in favor of plaintiffs and ordered any remaining copies of plaintiffs’ privileged documents in defendants’ possession returned or destroyed.

Upon receipt of defendants’ discovery requests, plaintiffs hired a document vendor and developed a multi-step process by which they would produce responsive materials. First, the vendors created a database of the documents provided to it from plaintiffs (“Master Database”). Second, paralegals and other non-lawyers conducted an initial review in the Master Database and assigned the documents general discovery codes, e.g., “immigration.” Third, plaintiffs searched for responsive documents in the Master Database and then coded them for inclusion in the Production Database. Additionally, plaintiffs assigned protective order designations, either “confidential” or “highly confidential.”

Several months into the litigation, plaintiffs’ document vendor made a processing mistake which resulted in the production of privileged materials. Nearly two months later, while preparing for depositions, plaintiffs learned of the inadvertent production. The next day, plaintiffs sent defendants a letter in which they identified the documents (the “Sequestered Documents”) and requested their destruction. Thereafter, defendants filed a motion to prevent plaintiffs from clawing back the Sequestered Documents.

The parties disagreed about the proper test to determine waiver. Defendants argued in favor of the Judson test, taken from case law pre-dating the passage of FRE 502. Plaintiffs argued in favor of applying recently enacted FRE 502. Calling the effect of the passage of FRE 502 “an issue of first impression,” the court analyzed the steps of both tests and adopted a combination of the two:

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Source: ediscoverylaw.com