Inadvertent Disclosure of 347 In-House Counsel Emails Waives Attorney-Client Privilege

Another federal court reminds companies and their in-house counsel that (1) the fact that in-house lawyers send or receive internal emails does not automatically render the emails privileged; and (2) the failure to take steps to prevent inadvertent disclosure will result in privilege waiver.

The federal court for the Southern District of Ohio, in Inhalation Plastics, Inc. v. Medex-Cardio-Pulmonary, Inc., 2012 WL 3731483 (S.D. Ohio Aug. 28, 2012), ruled that the attorney-client privilege covering 347 emails involving 3 in-house lawyers was waived through an inadvertent disclosure.  Medex Cardio-Pulmonary, Inc. produced 7500 documents that contained 347 emails either sent or received by in-house counsel.  When the plaintiff attempted to depose two of these lawyers based on the production, Medex asserted the attorney-client privilege and claimed the emails were inadvertently produced.

The court first questioned whether Medex met its burden of proving the emails were privileged, noting that “[t]he mere fact that [the in-house lawyer] was the sender or recipient of the documents at issue does not render them privileged.” The Court found that the burden was not met because Medex did not identify which of the 347 emails were privileged, did not provide a privilege log, and offered little factual evidence that the communications pertained to legal advice.

But the Court’s in camera review revealed that some emails were, in fact, privileged and evaluated whether the inadvertent disclosure of these documents constituted waiver. The Court considered the following 5 factors in its analysis: (1) the reasonableness of the precautions taken in view of the extent of document production; (2) the number of inadvertent disclosures; (3) the magnitude of the disclosure; (4) any measures taken to mitigate the damage of the disclosures; and (5) the overriding interests of justice.

The Court ruled that reasonable precautions were not proven because Medex did not specify who reviewed the documents pre-production or the steps taken to review for privilege, and did not provide a privilege log. The disclosure of 347 of 7500 privileged emails was significant and, although Medex acted promptly upon learning of the disclosure, it failed to comply with Fed. R. Civ. P. 26(b)(5)(B) to identify the privileged documents with specificity and explain why they are protected from disclosure.  And for these reasons, the Court found that the attorney-client privilege had been waived.

PoP Analysis.  The Inhalation Plastics decision reminds corporate and outside counsel that producing a significant number of documents requires diligent efforts on the front-end and back-end of the production.  In-house and outside counsel must not only conduct a pre-production privilege review, but must be able to specify the measures taken to prevent inadvertent disclosure. And while inadvertent disclosures may nevertheless occur in large productions, counsel must act swiftly to notify the other party and be disciplined in providing a detailed privilege log and detailing, in writing, the basis for the privilege claim.