Think Fast—But Not Too Fast: Privilege Waived for Failure to Take Reasonable Steps to Prevent Disclosure
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First Tech. Capital, Inc. v. JPMorgan Chase N.A., No. 5:12-CV-289-KSF-REW, 2013 WL 7800409 (E.D. Ky. Dec. 10, 2013)
In this case, the court found that privilege was waived where First Technology Capital, Inc. (“FTC”*), through counsel, failed to take reasonable steps to prevent the inadvertent disclosure of privileged materials. The court’s determination that counsel’s efforts were unreasonable was based, in part, on the speed of the alleged page-by-page review (each document received, on average, only 9.84 seconds of review) and FTC’s failure to produce a privilege log, among other things.
Upon the defendant’s demand, FTC undertook efforts to supplement its prior production. Those efforts were led by counsel, who collected and reviewed additional material and produced 1500 more pages. At the time of production, there was no indication that privileged information had been identified and withheld. During her review of the materials produced, defense counsel noticed that many documents “carried hallmarks of privilege” and thus informed FTC and the court. Eventually, FTC asserted that 45 pages had been inadvertently produced and were protected by privilege.
The court analyzed the question of waiver pursuant to FRE 502(b). Initially, the court determined that the production was inadvertent and also noted that the defendant had “essentially conced[ed]” that 502(b)(3) (prompt steps to rectify the error) had been satisfied. Thus, “the case [came] down to 502(b)(2), whether FTC inadvertently disclosed but yet took ‘reasonable steps to prevent disclosure.’” The court determined that FTC, through counsel, had not.
Read original articleTags: Capital, First Technology Capital, inadvertent disclosure, Inc., JPMorgan Chase, privilege log
