Author: Victoria Ferenz
Case Citation: Irth Solutions LLC v. Windstream Communications LLC, No. 2:16-cv-219 (S.D. Ohio Aug. 2, 2017)
Employee/Personnel/Employer Implicated: In-house Counsel, litigation support staff
eLesson Learned: Keep up-to-date and complete privilege logs, be extremely careful when preparing and providing documents to opposing counsel, and be sure that any clawback agreements are clear and complete while understanding that they may not survive a Rule 502 analysis.

The case of Irth Solutions, LLC v. Windstream Communications, LLC explores attorney-client privilege waiver. Four weeks after the deadline for production of documents, defendants produced 2,200 pages of documents of which only 1,400 were in a readable format. Of these documents were 43 documents that defendants later realized were privileged. The defendants contacted plaintiff’s counsel and requested a clawback of those 43 documents. Plaintiff’s counsel sequestered the documents and did not show their client. Two months later, defendants again mistakenly produced these privileged documents to plaintiffs.

Many mistakes were made by the defendants over the course of document production. Their mistakes began when they initially produced the 43 privileged documents. The privileged nature of these documents was missed because counsel did not prepare a privilege log at the time of production, and did not recognize that the name of defendants was displayed on many of the documents.

The second mistake made by defendants was again producing the privileged documents only two months after the first incident. While defendants were responding to plaintiff’s request to make documents text-readable, they instructed litigation support staff to do the work. The support staff accessed, along with other documents, the 43 privileged documents and converted them. Defendants did not notice that the privileged documents were included with the rest.

The third mistake made by defendants was in the drafting of their clawback agreement. The defendants wrote the agreement in a way that they believed provided the parties with no duty to prevent disclosure, and although silent as to precautionary measures, also including inadvertent disclosures.

The magistrate found that the 43 documents were privileged and inadvertently disclosed on both occasions. She then applied the Federal Rule of Evidence 502(b) to determine whether the defendants waived the privilege through these disclosures. The magistrate reviewed the three different approaches that courts have taken on this matter: “…(1) that a clawback arrangement… requires the return of inadvertently produced documents, regardless of the care taken by the producing party; (2) that where there is a protective order with a clawback provision, inadvertent production of a document does not constitute waiver unless the document production itself was completely reckless; and (3) that the requirements of Rule 502 can be superseded by a clawback agreement only to the extent such an order or agreement provides concrete directives regarding each prong of Rule 502.” Id. at 9-11.

The magistrate found that waiver occurred under two of three different approaches. Under the second approach, she found that the defense counsel acted completely reckless by not recognizing the opposing counsel’s name on the documents, by producing the same exact documents a second time after the first incident, and by failing to provide privilege logs for documents withheld. Under the third approach, the magistrate found that the parties’ clawback agreement was cursory because the agreement did not define what constitutes inadvertence or precautionary measures that should be taken. The defense counsel did not take reasonable steps to prevent disclosure. “Rule 502 provides an important safeguard of the attorney-client privilege and if parties wish to remove that safeguard, their agreement must reflect such an understanding…the clawback agreement here lacked any language to support a finding that the parties came to an understanding that there would be no pre-production review.” Id. at 13.

In the end, the Court rejected all of defendant’s arguments. There are many important lessons to learn from the mistakes made by defendant’s counsel in this case. Most importantly, it is crucial to keep up-to-date and complete privilege logs, to make sure that privileged documents remain protected. All staff, not only the attorneys, must be extremely careful when preparing and providing documents, to be sure that they are providing the correct ones. Lastly, clawback agreements must be clear and complete, but attorneys should be aware that they do not always hold up when viewed through the lens of Rule 502.

Victoria Ferenz is a third year at Seton Hall University School of Law, focusing her studies in the area of Patent Law. She received her B.S. in BioMedical Science from Quinnipiac University. After graduation, Victoria will be clerking in the Superior Court of New Jersey.

Want to read more articles like this?  Sign up for our post notification newsletter, here.

Comments are closed.