The Northern District of Illinois ruled that a litigant was negligent throughout the discovery process and failed “to check the production database created by the [third party e-discovery vendor] before it went live online and became available to [opposing] counsel”. Thorncreek Apartments III, LLc v. Village of Park Forest (N.D. Ill, Aug. 9, 2011). Due to this negligence, the litigant waived privilege with respect to the inadvertently produced document. The court never questioned the conduct of the e-discovery vendor regarding the documents in question. In other words, attorneys who fail to double-check production databases and ensure that no privileged documents have been improperly included may be accidentally waiving privilege.
In the case at hand, a review of 250,000 documents yielded 159 documents with claims of privilege, all of which were produced inadvertently. Given the relatively small number of documents, the court concluded that a review of the privileged documents should have been easy to conduct.
The plaintiff requested (and the district court agreed) an Order finding that six of the 159 documents produced inadvertently by the defendant were not protected from disclosure and that privilege had thereby been waived.
E-Discovery Steps
Electronic discovery was conducted by an external vendor and followed the three major steps outlined below:
1. Both parties agreed to the parameters to search Backup tapes for documents.
2. Once discovered, the vendor placed the documents into an online database where they were secured for the defendant’s sole use. The defendant then reviewed the documents and designated them as privileged, responsive, or non-responsive.
3. The vendor placed those documents labeled for production into a database where the plaintiffs could review them.
Unfortunately, the production contained some documents that the defendant claimed were privileged, allowing the plaintiffs to view the documents. However, the defendant did not take the proper steps to secure the documents or claim the privilege and the court was not sympathetic.
Discovery took place over 7 months and the defendants did not contact the plaintiff to notify them that a set of privileged documents had been inadvertently produced. Additionally, the defendant did not produce a Privilege Log which would likely have identified that the intent was to not produce the particular documents in question.
To further complicate the defendants claim, the plaintiff’s counsel submitted an affidavit that there had at least three telephone conversations between counsel where the plaintiff had raised the issue about whether any documents were withheld from production. The affidavit stated that the defendants counsel had replied that it was not withholding any documents and therefore, no privilege log would be forthcoming.
Ten months after discovery began, the defendant did in fact produce its first privilege log. The log identified 159 documents that were placed in the production database even though they had been designated as privileged. The parties resolved all privilege disputes as to those documents except for the six documents that the plaintiff brought to the court’s attention
In rendering its opinion, the Court relied on Sixth and Seventh Circuit precedent, as well as the Federal Rule of Evidence 502, which deals with privilege disclosure. The court ruled that the plaintiffs bore the burden to prove that they had not waived privilege due to inadvertent disclosure. The court agreed that the disclosure was inadvertent, but not the waiver. The defendant pointed to the E-Discovery vendor as the cause of the production error because they had marked the documents as confidential. Pointing to Rule 502’s requirement that the holder of the privilege take reasonable steps to prevent disclosure, the court concluded that litigants waived privilege as to the contested documents because they did not conduct a simple check before production.
The court further concluded that it would have been very easy for the defendant to check the production database that was placed online before it was made available for plaintiff review to verify that privileged documents were not included. Since the defendants’ counsel did not take this rudimentary verification step, the court concluded that the counsel had not taken adequate precautions.
Since the documents had been produced over 9 months before the privilege log was ever produced, the court concluded, that the defendant had “no inkling” as to which documents were in the production set and further, defendant was “not paying any attention whatsoever” to which documents its opponent in the litigation was selecting, viewing or using from the database. Given all of this, privilege was waived.
The Takeaway
On this limited set of facts, it would appear that E-Discovery vendors might get a pass on liability for all similar errors. However, the fundamental lesson is that any e-discovery process should include steps to re-review the production of any database for documents that are marked privileged. As professionals, we should insist that our clients fulfill their obligations regarding productions and work together to help assure compliance. Ultimately it is the attorney that is likely to be held responsible by the court for any discovery issues involving privilege. It is not a task that can be completely outsourced to an E-Discovery vendor with no oversight. Both the attorneys and the vendor should make sure that the proper steps are in place to assure that document productions are checked and then re-checked before they are released to the opposition.
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