The Ethics of Inadvertent Disclosure of Privileged Documents

by Ellen Lockwood, CLA—Ethics Chair

Anyone who has ever been involved in the production of documents to opposing counsel, whether in litigation or transactional work, knows the fear of inadvertently producing a privileged document. No matter how many times everyone goes over the documents, there is always that nagging worry that a privileged document has been overlooked.

In Texas, there are two primary rules regarding inadvertent disclosure of privileged documents:

A party who produces material or information without intending to waive a claim of privilege does not waive that claim under these rules or the Rules of Evidence if—within ten days or a shorter time ordered by the court, after the producing party actually discovers that such production was made—the producing party amends the response, identifying the material or information produced and stating the privilege asserted. If the producing party thus amends the response to assert a privilege, the requesting party must promptly return the specified material or information and any copies pending any ruling by the court denying the privilege.

Tex. Rules of Civ. Prod. 193.3(d).

A person upon whom these rules confer a privilege against disclosure waives the privilege if:

(1) the person or a predecessor of the person while holder of the privilege voluntarily discloses or consents to disclosure of any significant part of the privileged matter unless such disclosure itself is privileged; or

(2) the person or representative of the person calls a person to whom privileged communications have been made to testify as to the person’s character or character trait insofar as such communications are relevant to such character or character trait.

Tex. Rules of Evid. 511.

It seems so simple, doesn’t it? If you accidently produce a privileged document, just amend your response to assert a privilege and request the document be returned. The requesting party has to return the document until the court rules otherwise. However, it’s not always that easy.

In, Granada Corp., et al. v. The Honorable First Court of Appeals, 844 S.W.2d 223, (Tex. 1992) rehearing overruled), the court stated that the producing party must do more than show that the document was produced inadvertently. "[T]he producing party has the burden of justifying preservation of privilege by showing that the circumstances demonstrate the involuntariness of the disclosure." Id. at 227. The court found that the producing party did not take advantage of all the possible opportunities to prevent involuntary disclosure. Specifically, the documents at issue weren’t segregated in the initial review of documents, the attorney who reviewed the documents prior to production did not remove the documents at issue, and the documents weren’t removed after the requesting party reviewed the documents and provided the list of documents it wanted to be copied. In addition, the production of the documents at issue wasn’t discovered until a year after they were produced, when the documents were marked as exhibits in a deposition. Therefore, the court ruled that the producing party waived any claim to privilege because the producing party failed to meet the burden of establishing that the disclosure was involuntary.

The federal rule regarding inadvertent production of privileged documents is Federal Rule of Evidence 501:

Except as otherwise required by the Constitution of the United States or provided by Act of Congress or in rules prescribed by the Supreme Court pursuant to statutory authority, the privilege of witness, person, government, State, or political subdivision thereof shall be governed by the principles of the common law as they may be interpreted by the courts of the United States in the light of reason and experience. However, in civil actions and proceedings, with respect to an element of a claim or defense as to which State law supplies the rule of decision, the privilege of a witness, person, government, State, or political subdivision thereof shall be determined in accordance with State law.

Federal courts have tended to follow a five-part test from Hartford Fire Insurance Co. v. Garvey, 109 F.R.D. 323 (N.D. Cal. 1985): (1) the reasonableness of precautions taken to prevent disclosure; (2) the amount of time taken to remedy the error; (3) the scope of discovery; (4) the extent of the disclosure; and (5) the overriding issue of fairness.

In Alldred, et al. v. City of Grenada, et al., 988 F.2d 1425 (5th Cir. 1993), the Fifth Circuit agreed with this approach and affirmed a lower court’s ruling. The court determined that even though the producing party hadn’t taken reasonable precautions to avoid disclosure, the producing party could have reasonably discovered the disclosure, and that there was complete disclosure because the requesting party had become aware of the contents of the privileged materials. Moreover, the court found that the fairness factor outweighed these factors and thus, the privileged materials were returned to the producing party.

In Apex Municipal Fund, et al. v. N-Group Securities, et al., 841 F.Supp. 1423 (S.D. Texas, 1993), the court ruled that the producing party had waived privilege when a former employee of the producing party’s client produced privileged documents. The former employee testified that when the Houston office of the producing party closed, the documents were effectively abandoned by the company. He then produced the documents to the requesting party in response to a subpoena. He also testified he was never contacted by his former employer’s attorneys and his former employer never attempted to retrieve the documents. In addition, the producing party took no action for a year after the documents were produced which the court determined to exemplify a careless attempt to preserve privilege.

The case that originally brought my attention to this issue is Amgen, Inc. v. Hoechst Marion Roussel, Inc., 190 F.R.D. 287 (D. Mass. 2000). In this case, the producing party (Hoechst) had identified four boxes of documents which contained only privileged documents. These documents were separated from the non-privileged, responsive documents, and put on a separate shelf. However, when the outside copy vendor came to collect the non-privileged, responsive documents to be numbered and copied for production, a paralegal accidentally also gave the copy vendor a box of privileged documents. The box of privileged documents (approximately 3800 pages) was produced to the requesting party along with more than twenty other boxes of documents.

Five days later, the attorney for the requesting party (Amgen) sent a letter to the attorney for the Hoechst asking whether the documents had been produced unintentionally. After the attorney for Hoechst reviewed the documents identified in the letter and determined they had been produced inadvertently because of a paralegal’s error, he then called Amgen’s attorney and asked that the documents be returned immediately. He also sent a letter making the same request.

The next day, the Amgen’s attorney sent a letter to Hoechst’s attorney stating that although Amgen wasn’t prepared to return the documents, they would segregate the documents and refrain from reviewing them further. The attorney for Amgen also requested a privilege log for the documents in question. A couple of weeks later, Hoechst provided a privilege log which identified each of the documents and the basis for the claim of privilege. After a few weeks, the attorney for Amgen sent a letter to Hoechst’s attorney informing him that Amgen would not return the documents. Hoechst then filed a motion to compel the return of the documents.

The court’s ruling was based on its consideration of five factors similar to those in Hartford Fire Insurance Co. v. Garvey, 109 F.R.D. 323 (N.D. Cal. 1985): (1) the reasonableness of the precautions taken to prevent disclosure; (2) the amount of time it took the producing party to recognize its error; (3) the scope of the production; (4) the extent of the disclosure; and (5) the overriding interest of fairness and justice.

Although the court found that the producing party had attempted to keep the privileged documents segregated by putting them in separate boxes on separate shelves, it also noted that these precautions were obviously not adequate and that there were additional precautions that easily could have been taken. For example, the court pointed out that when the documents were returned from copying by the outside vendor, an attorney or legal assistant should have reviewed the documents to ensure that the proper documents were copied. The court stated that since this disclosure could have been easily prevented, Hoechst’s precautions weren’t reasonable. The court also noted that the producing party took five days to recognize the error, and then only after it was pointed out by the requesting party.

In addition, the court pointed to the volume of the privileged documents produced and observed that an occasionally inadvertently produced document would be more understandable in a review of over 200,000 documents and production of over 70,000 documents in this case. However, the substantial release of privileged documents meant that little could be done to undo the damage. Although Amgen stopped its review of the documents pending the court’s ruling, other personnel besides the requesting attorney were involved in reviewing the documents. Therefore, the court concluded that the scope of the disclosure in this case was "dramatic." Amgen, 190 F.R.D. at 293.

The court acknowledged that although the producing party might be disadvantaged by the conduct of its attorneys,

"it would be unjust to reward such gross negligence by providing relief from waiver. In fact, if the Court does not hold that waiver has occurred under the egregious circumstances here presented, it might as well adopt the ‘never waived’ rule and preclude such a holding in all cases." Id.

Thus, whatever precautions you may be taking to prevent inadvertent disclosure of privileged documents, you should probably add additional steps. No matter how many people have reviewed the documents to make sure all privileged documents have been removed, go over them one more time. Keep privileged documents segregated. Check when the copies come back that no privileged documents have been produced. If you Bates number your privileged documents, you could use colored Bates labels, or copy privileged documents on colored paper. Colored paper would be easy to spot in a stack of documents.

You might also want to consider adding more documentation of each step of the production process. For example, a letter to the outside copy vendor listing the Bates ranges of documents to be copied and which are to be produced. You and the vendor could then check off the items in the letter before the documents are removed for copying and after they are returned. A letter to the requesting party listing the Bates ranges of documents that will be available for inspection and copying might also be a good idea. Then, if a privileged document is inadvertently produced, you will at least have documentation of the Bates numbers you intended to produce.

Despite the fact that we are often in a hurry to review and produce documents, remind yourself (and your attorneys) that you may be called upon to provide evidence that you took all reasonable steps to prevent inadvertent disclosure of privileged documents.


back to TPJ Online

© 2000, Legal Assistants Division State Bar of Texas