The Seventh Circuit has issued an opinion in City of Greenville, Illinois, v. Syngenta Crop Protection LLC, which limits the presumption of public access to non-privileged documents filed with a court to only those documents that influenced or underpinned a judicial decision. 

In City of Greenville, environmental groups intervened to seek access to the defendant's internal emails and business deliberations that plaintiffs had filed in opposition to a motion to dismiss. A protective order entered by the district court did not apply to materials filed in connection with a dispositive motion. The Seventh Circuit refused to permit access to uncited documents that were not considered by the district court in ruling on the motion to dismiss explaining "the presumption of public access turns on what the judge did, not on what the parties filed."  Because the documents did not affect the district court's decision, the Seventh Circuit held they need not be disclosed to the public. 


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On May 29th the Illinois Supreme Court adopted rules relating to the discovery of electronically stored information for use in state court proceedings. The rules go into effect on July 1st.  Here is the link to an article which summarizes Illinois' new ediscovery rules.  This article will appear in the next edition of the Illinois Association of Defense Trial Counsel's quarterly publication. 

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Connick v. Thompson, 2011 U.S. LEXIS 2594 (U.S. March 29, 2011).

Introduction.

In Connick v. Thompson, the Supreme Court tightened the liability standards for §1983 claims involving the alleged failure to train governmental employees.  The plaintiff in Connick spent 18 years in prison, including 14 years on death row before his convictions were vacated because exculpatory evidence had been withheld by prosecutors at his original criminal trial.  The Court in Connick reversed a $14 million verdict against the District Attorney’s Office that had prosecuted the plaintiff. 

The plaintiff in Connick was initially tried and convicted of attempted armed robbery. The prosecutors in that case failed to disclose the existence of exculpatory scientific evidence.  Because of that conviction, the plaintiff did not testify in his own defense in a subsequent murder trial and was again convicted. One month before his scheduled execution, an investigator discovered the undisclosed evidence from his armed robbery trial.  A reviewing court determined that because the evidence was exculpatory, both of his convictions should be vacated.  Plaintiff then sued the New Orleans Parish District Attorney for his alleged failure to train prosecutors about their obligation to produce exculpatory evidence under Brady v. Maryland, 373 U.S. 83 (1963). 

To place the Connick decision in its proper context, two points bear mentioning.  First, absolute immunity is generally available to prosecutors for conduct that “is intimately associated with the judicial phase of the criminal process,” Imbler v. Patchman, 424 U.S. 409, 413-16 (1976), but that defense is not available to a governmental entity such as a district attorney’s office. Second, vicarious liability is not permitted under §1983.  A governmental entity cannot be held liable for its employee’s constitutional violations that occur in the course and scope of employment.  Rather,  governmental entities can only be held liable for their own illegal acts, which requires “action pursuant to an official municipal policy.”  Monell v. New York City Dept. of Social Servs., 436 U.S. 658, 691 (1978).  Official municipal policy “includes the decisions of a government’s lawmakers, the acts of policymaking officials, and practices so persistent and widespread as to practically have the force of law.” Connick, 2011 U.S. LEXIS 2594 at * 17-18.

Connick’s Analysis of the Failure to Train Issue.

The Supreme Court explained that governmental liability under §1983 “is at its most tenuous [point] where a claim turns on a failure to train.”  Connick, 2011 U.S. LEXIS at *18.  Training claims are “far more nebulous, and a good deal further removed from the constitutional violation” than the typical §1983 policy claim addressed under MonellOklahoma City v. Tuttle, 471 U.S. 808, 822-23 (1985).  Thus, §1983 liability can be triggered only when the alleged policy of failing to properly train employees amounts to “deliberate indifference” to the rights of those who come in contact with the inadequately trained employees.  City of Canton v. Harris, 489 U.S. 373, 388 (1989).

Deliberate indifference requires proof that a governmental official “disregarded a known or obvious consequence” of his or her action or decision.  Board of  Comm’rs of Bryan Cty. v. Brown, 520 U.S. 397, 410 (1997).  Deliberate indifference in this context can be established when governmental policymakers are on notice of an omission in their training program is allegedly causing constitutional violations and do nothing.   That “policy of inaction” is deemed to be “the functional equivalent of a decision by the [governmental entity] itself to violate the Constitution.”  Canton, 489 U.S. at 395. 

The Supreme Court in Canton recognized that §1983 training liability can arise in two potential scenarios.  The first is where a series of constitutional violations makes the need for training obvious.  489 U.S. at 395.  A pattern of constitutional violations is typically necessary to demonstrate that a governmental entity was “deliberately indifferent” to the constitutional rights of its citizens.  Bryan Cty., 520 U.S. at 409.  However, the Supreme Court in Canton also hypothesized that §1983 training liability could arise in the absence of a pattern of violations when the need for training on a particular issue was obvious at the outset.  The Court suggested a police officer’s use of deadly force was an example where training should be provided at the outset even in the absence of a pattern of constitutional violations.  Canton, 489 U.S. at 390, n. 10.

The plaintiff in Connick proceeded under that latter theory and the Court summarily rejected his claim.  2011 LEXIS at *22.  The Court in Connick observed that plaintiff’s claim did not fall “within the narrow range of . . . hypothesized single-incident liability” scenarios where the need for training at the outset was obvious.   Id. at *23.   The Court noted that armed police must make split-second decisions with life or death consequences, whereas prosecutors receive training in law school, have ongoing mandatory continuing legal education requirements and ethical duties with which they must comply.  Id. at *23-28.  In the Court’s view, this legal training “is what differentiated attorneys from average public employees.”  Id. at *24.

In the ten years preceding plaintiff’s prosecution, four other convictions had been set aside due to the failure by prosecutors in the District Attorney’s Office to produce exculpatory evidence.   In the Court’s view, this did not establish a pattern of violations sufficient to put the District Attorney on notice of the need for additional training.  None of those prior instances involved the failure to produce scientific evidence and none involved a failure similar to what occurred in plaintiff’s case.  Connick, 2011 U.S. LEXIS 2594 at *20-21.

Connick further explained that failure-to-train liability cannot be based upon “contemporaneous or subsequent” conduct.  Id. at *21, n.7.  The Court also observed that failure-to-train liability is concerned with the substance of the training, not its particular format, and rejected the notion that liability could be based on the theory that more or better training would have prevented the type of conduct in question from occurring.   Id. at *30.  The Supreme Court in Connick concluded that failure-to-train liability does not provide courts with carte blanche to micro-manage local units of government or their training programs.  Id. 

Impact of the Decision

The Supreme Court’s decision in Connick limits the circumstances in which failure-to-train liability can be imposed under §1983.  In most instances, a plaintiff will have to demonstrate a pattern of prior constitutional violations of a similar nature before liability can attach under this theory.  This should make pleading §1983 training claims more difficult because the Supreme Court requires complaints to assert enough facts to demonstrate a plausible entitlement to relief.  When a complaint fails to factually assert a pattern of similar constitutional violations, a motion to dismiss should be considered.   Moreover, liability cannot be premised upon assertions that specialized training, or more or better training should have been provided.  Thus, Connick may help to weed out §1983 training claims at an early stage of the proceedings.

While Connick will obviously be helpful in defending §1983 training claims, the decision’s impact may be limited by the Court’s acknowledgment that the legal training which prosecutors receive distinguishes them from other public employees. Nonetheless, in most instances, there can be no §1983 training liability following Connick, absent a pattern of prior constitutional violations of a similar nature.  

About the Author: Steven Puiszis is a partner in the Chicago office of Hinshaw & Culbertson LLP, and is a member of DRI’s Board of Directors.   He also is the Author of ILLINOIS GOVERNMENTAL TORT AND SECTION 1983 CIVIL RIGHTS LIABILITY, (Matthew Bender (Lexis/Nexis), 3d ed. 2009).

 

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DRI’s Judicial Task Force recently issued its report, Without Fear or Favor in 2011, which comprehensively addresses various challenges to judicial independence and threats to the fairness of our system of justice.  These threats are our legal system’s super virus, seemingly immune to any cure and constantly mutating into far more dangerous forms. The types of threats confronting our legal system include budget cuts to state court systems so severe that the periodic closing of courthouses has been required, to proposals to radically alter merit selection systems, including one that would require judges to periodically appear before their State Senate to explain their decisions and justify their continued position on the bench. There was a reason why our founding fathers adopted lifetime tenure for federal judges–to eliminate this type of bully pulpit approach to judicial retention.

DRI’s report does not express a preference for one type of judicial selection method over another. The task force recognizes that no judicial selection method is perfect. Both merit selection and judicial election systems have their pros and cons. Rather, DRI’s report explains that whatever selection method is used in a particular state, there are ways it can be improved, and the report provides a number of suggestions to improve the both types of selection methods. 

One the troubling problems with judicial elections is the torrent of money flowing into state judicial campaigns.  Recent public opinion polls of registered voters cited in DRI’s report demonstrate that the influx of money into judicial elections is viewed by the voting public as a problem.  Even many state court judges share that view. The report cites a poll of 2500 state court judges in which 46% of the judges polled felt that campaign donations have at least “a little influence” on judicial decision making, and 56% expressed the view that judges should be prohibited from presiding over a case when one of the sides has given money to their campaign. 

Therefore, it should come as no surprise that the task force recommends that State Supreme Courts adopt a rule requiring the automatic disqualification of judges who have received a campaign contribution above a specific threshold from any party or attorney appearing before the judge in any case.  As the report was heading to press, New York’s Chief Judge recently proposed that type of automatic disqualification rule based on campaign contributions, and it is hoped that other State Supreme Courts will adopt a similar rule in their respective states. The United States Supreme Court’s decision in Citizens United v. Federal Election Commission, which invalidated limits on campaign contributions makes state judicial disqualification rules more important than ever. If the public’s perception of fairness of our courts is ever lost, immeasurable damage will result to our legal system and the rule of law in America.  Thus, the time to act is now.

The report also recommends that an independent panel of judges be appointed to hear disqualification motions and that weak or nonexistent campaign disclosure laws prevalent in many states be strengthened.  Tougher disclosure rules will shine a light on those special interest groups targeting judicial elections. 

Because judges are being asked to address political or socially sensitive issues with increasing frequency, judicial decisions have become lightening rods for special interest groups on the losing side of those cases. As a result, single issue special interest groups are seeking to turn judicial elections into political referendums as exemplified by the November 2010 Iowa Supreme Court elections. In that retention election, three members of the Iowa Supreme Court were targeted by out of state groups seeking their ouster because of their vote in a controversial decision on same sex marriages. Judges, however, must have the independence to make an impartial decision based on a fair interpretation of the law in light of the facts presented to them even when their decision is politically unpopular. If judges must concern themselves with the latest public opinion polls on hot button issues, the judicial branch will lose its independence and cannot serve as an effective check on the excesses of the legislative and executive branches of state government.

With increased money devoted to judicial elections, the tone and tenor of judicial campaigns has also radically changed. Groups supporting or opposing a judicial candidate are now funding harsh attack ads that either focus on a controversial ruling on a politically sensitive decision or deliberately mischaracterize information about a judge running for election. DRI’s report mentions several notorious examples. 

DRI realizes that many attorneys are busy with their practices, and therefore, may be  unfamiliar with many of the challenges confronting the judiciary and threatening the fairness of our legal system. Thus, the report is intended to sound a rally call to the organized defense bar to become familiar with these issues and take the necessary steps to protect judicial independence and the integrity of our courts.  Thus, the report asks the reader:

• Will you become an advocate against unwarranted attacks on the judiciary or just hope that others will respond to those attacks?
• Will you support amendments to judicial codes requiring disqualification when campaign contributions in judicial elections exceed reasonable limits, or will you ignore the issue of judicial campaign contributions until it directly involves a case you are handling?
• Will you advocate for the development of a process to promptly and fairly resolve judicial recusal or disqualification motions in your state, or will you allow the public’s perception of our legal system’s fairness to be shaped by allowing judges to rule on motions seeking their own disqualification?
• Will you seek adequate funding for our court systems, or simply take a vacation on those days when courthouses around the country cannot afford to open their doors?
• Will you protect the right of an independent judiciary to make politically and popular decisions or stand idly by when special interests seek the roster?

In other words, will you defend our court systems so that the judicial branch can continue to independently uphold justice in your state?

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Why are Federal Judges Leaving the Bench?

Posted on February 9, 2011 01:20 by Steve Puiszis

One of the articles featured on DRI Today asks: Where Have All the Judges Gone?” The article notes that so far this year, federal judges have been leaving the bench at a rate of one per week and that the number of federal judicial vacancies has doubled in the last three years. The article attributes the rise in judicial vacancies to a “host of factors” including Senate Republicans, the White House and “a dysfunctional Senate confirmation system.” While those are factors that might explain delays in filling federal judicial vacancies, the article misses the basic reason why many federal judges are leaving the bench. Put bluntly, it is their compensation. When second and third year associates in some of our country’s largest law firms earn more than many federal judges, it should come as no surprise that more and more of them are leaving the bench and turning to employment in the private sector. 

Alexander Hamilton, in The Federalist No. 79 recognized: “In the general course of human nature, a power over a man’s subsistence amounts to a power over his will.” Federal judges have not received a raise in their base salary in well over a decade and also have been denied cost of living adjustments a number of times since then. Hamilton’s warning appears to be borne out by the spate of recent departures from the federal bench. 

The Framers of our Constitution wanted to ensure the independence of federal judges through the provision of lifetime tenure. However, the Framers’ goal of judicial independence is being frustrated by the failure to provide adequate compensation to federal judges. Chief Justice Roberts in his 2006 Year-End Report on the Federal Judiciary observed that federal judges “accept difficult work, public criticism and even threats to their personal safety,” and while they may be willing to accept less than what could be earned in the private sector, “[t]hey can rightfully expect, however, to be treated more fairly than they have been.” Justice Roberts also warned in his 2006 Report: “If judicial appointment ceases to be the capstone of a distinguished career and instead becomes a stepping stone to a lucrative position in private practice, the Framers’ goal of a truly independent judiciary will be placed in serious jeopardy.” We are seeing Justice Roberts’ warning now being played out before our eyes.

So, what can you do to protect the independence of our federal judges? Write to your elected representatives in Washington, D.C. and advocate pay increases for them. The maintenance of judicial independence at both the state and federal levels requires your support.  DRI, as the Voice of the Defense Bar, recognizes that our members have long been advocates of level playing fields and fairness to all parties in litigation. However, we must now also focus our attention on protecting the independence of our state and federal judges. 

Later this month, DRI will publish a report from its Judicial Task Force entitled: “Without Fear Or Favor In 2011, A New Decade Of Challenges To Judicial Independence And Accountability.” That report discusses a number of challenges to judicial independence, and outlines possible solutions to those issues. The challenges to judicial independence caused by inadequate compensation and a politicized appointment process noted above are two of the issues addressed in that report. However, achieving those solutions require your involvement and support.

ABOUT THE AUTHOR

Steven M. Puiszis is a partner in the Chicago offices of Hinshaw & Culbertson LLP.  He is a member of DRI’s Board of Directors, and is the Chair of DRI’s Judicial Task Force. He also is the editor of “Without Fear Or Favor In 2011, A New Decade Of Challenges To Judicial Independence And Accountability.”

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Rimkus Consulting Group, Inc. v. Cammarata, 2010 WL 645253 (S.D.Tex. February 19, 2010)

The Rimkus decision will likely prove to be one of the most important ediscovery decisions announced in 2010. The decision was written by Judge Lee H. Rosenthal, who chairs the Judicial Conference Committee on Rules of Practice and Procedure. It is a decision that merits the attention of any serious ediscovery practitioner.

The blogosphere has been all “a twitter” about Judge Shira Scheindlin’s recent opinion in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 2010 WL 184312 (S.D.N.Y. January 5, 2010). However, Rimkus may ultimately prove to have more lasting and widespread significance.

Pension Committee addressed when the failure to properly preserve and collect ESI justifies the sanction of an adverse inference instruction. In a recent blog post about the Pension Committee decision, we raised several concerns about the opinion’s analysis and conclusions. While Rimkus involved allegations of wilful misconduct, including the intentional destruction of emails and other ESI after a duty to preserve had been triggered, Judge Rosenthal noted that there were “some common analytical issues” between Rimkus and Pension Committee, which merited discussion. Judge Rosenthal’s discussion of those common analytical issues in Rimkus addressed several of the concerns we highlighted in our Pension Committee post.

 

Judge Rosenthal observed that the rules surrounding the duty to preserve ESI and spoliation are not controversial. However, she recognized that applying them “to determine when a duty to preserve arises in a particular case and the extent of that duty requires careful analysis of the specific facts and circumstances.” She then observed:

It can be difficult to draw bright-line distinctions between acceptable and unacceptable conduct in preserving information and in conducting discovery, either prospectively or with the benefit (and distortion) of hindsight. Whether preservation or discovery conduct is acceptable in a case depends on what is reasonable, and that in turn depends on whether what was done – or not done – was proportional to that case and consistent with clearly established applicable standards.

The Seventh Circuit’s Electronic Discovery Pilot Program recognizes that Rule 26(b)(2)(B)’s principle of proportionality applies to the duty to preserve ESI. Principle 2.04(a) of the Seventh Circuit’s Pilot Program provides that parties and their counsel “are responsible for taking reasonable and proportionate steps to preserve relevant ESI ‘within its possession custody or control.’” Judge Rosenthal endorses that approach to preservation efforts in Rimkus. She cites THE SEDONA PRINCIPLES: SECOND EDITION, BEST PRACTICES RECOMMENDATIONS & PRINCIPLES FOR ADDRESSING ELECTRONIC DOCUMENT PRODUCTION 17, cmt. 2.b. (2000), as support for her conclusion on this point. In that comment, the Sedona Principles explain “electronic discovery burdens should be proportional to the amount in controversy and the nature of the case. Otherwise, transaction costs due to electronic discovery will overwhelm the ability to resolve disputes fairly in litigation.”

Judge Rosenthal further recognized that applying a categorical approach to the issue of sanctions can be difficult for similar reasons. When determining if sanctions are warranted and the nature of any sanctions to be imposed “requires a court to consider both the spoliating parties’ culpability and the level of prejudice to the party seeking discovery.” In other words, a court’s response to the loss of ESI depends on both the degree of culpability involved and the extent of any prejudice that results. Even with the intentional destruction of potentially relevant information, if no prejudice to the opposing party results, that should influence the sanctions that are imposed. Judge Rosenthal also recognized that even with an inadvertent loss of ESI, severe prejudice to the opposing party will influence the appropriate response to a request for sanctions, assuming there is some degree of culpability involved.

As a result, even though the defendants in Rimkus intentionally destroyed ESI in bad faith and provided false testimony about the destruction of that evidence, Judge Rosenthal refused to impose terminating sanctions. She noted that between the information the defendants did produce and the records plaintiff obtained through the issuance of subpoenas to several internet service providers, plaintiff had extensive evidence to present at trial. While acknowledging that plaintiff had suffered some prejudice, it was far from irreparable, and the issuance of a terminating sanction (dismissal or a default judgment) is appropriate only if the spoliation of evidence results in “‘irreparable prejudice’ and no lesser sanction would suffice.” Judge Rosenthal did authorize the issuance of an adverse inference instruction, but unlike Pension Committee, the court made the preliminary findings necessary to submit the spoliation evidence and the adverse inference instruction to the jury.

Judge Rosenthal also noted that the Fifth, Seventh, Eighth, Tenth, Eleventh and D.C. Circuits all appear to require evidence of “bad faith” before an adverse inference instruction can issue. She further observed that while the First, Fourth and Ninth Circuits do not necessarily require bad faith if severe prejudice is demonstrated, decisions from those Circuits frequently emphasize bad faith. She further explained that in the Third Circuit, courts balance the level of fault against the resulting prejudice. Thus, Judge Rosenthal concluded that the circuit differences on the degree of culpability necessary to warrant the issuance of an adverse inference instruction, limits the applicability of the approach taken in Pension Committee. And, following the Supreme Court’s decision in Chambers v. NASCO, Inc., 501 U.S. 32, 43-46 (1991), something more than negligence may be required when sanctions are imposed under a district court’s inherent authority.

Intentional deletion of emails and ESI bars the application of issue and claim preclusion.

Several former employees left Rimkus to start their own competing company offering similar investigative and forensic engineering services. Shortly after the new startup company was formed, those former employees filed a declaratory judgment action in Louisiana claiming that the forum-election, choice-of-law, non-competition and non-solicitation provisions in the employment agreements they had signed with Rimkus were unenforceable. Subsequently, Rimkus sued those employees in two separate lawsuits in Texas (that were ultimately consolidated before Judge Rosenthal) alleging they breached the non-competition and non-solicitation covenants of their employment contracts and that they used trade secrets and proprietary information in setting up their competing company.

The former employees were successful in their Louisiana declaratory action. There the court concluded that the challenged provisions of the employment contracts were unenforceable under Louisiana law. In the subsequently filed Texas federal suits, the former employees argued that it should be dismissed based on the preclusive effect of the Louisiana state-court decision which invalidated the non-compete, non-solicitation, forum-election and choice-of-law provisions in the employment contracts. That motion was denied because even if those provisions were unenforceable in Louisiana under Louisiana law, that finding did not make them invalid in all states.

Subsequently however, in the Louisiana state-court action, Rimkus filed an answer and a “reconventional demand,” which is similar to a counterclaim, asserting claims for breach of the employment agreement, breach of fiduciary duty and disparagement, arguing those claims should be governed under Texas state law. The trial court in the Louisiana action granted summary judgment to the former employees on those claims, which set the stage for what came next. The former employees then moved for summary judgment in the Texas federal court action on the grounds of res judicata.

Judge Rosenthal denied that summary judgment motion based on the spoliation of evidence that had occurred. She noted that the Restatement (Second) of Judgments provides, “that fraud, concealment or misrepresentation provide a basis to depart from claim preclusion.” She explained: “Issue preclusion does not apply when one party ‘conceal[s] from the other information that would materially affect the outcome of the case.’ Restatement (Second) of Judgments, §28(f), cmt. j. As a result, after weighing the policies underlying the law of preclusion against the defendants spoliation of evidence relevant to Rimkus’ claims, Judge Rosenthal concluded that exceptional circumstances existed and ruled that neither issue nor claim preclusion could be applied.

The record on summary judgment clearly demonstrated that the defendants had not only deleted emails and other ESI after a duty to preserve had arose, they also delayed producing documents, which demonstrated that information had been taken from Rimkus that was used in setting up the competing company. The defendants also provided incomplete information about their discovery efforts, which would have revealed the spoliation. Because none of the destroyed evidence was available to Rimkus during the course of the Louisiana action, Judge Rosenthal concluded that Rimkus did not have a full and fair opportunity to litigate the misappropriation, breach of fiduciary duty, and disparagement claims in the Louisiana lawsuit.

Rule 37(e)’s “safe harbor” provision was inapplicable.

Judge Rosenthal concluded that a duty to preserve was triggered no later than “when the defendants were about to ‘preemptively’ sue Rimkus” in the Louisiana state-court action. At that point, the defendants had an obligation to preserve documents and information, including ESI, relevant to the dispute with their former employer.

Fed. R. Civ. P. 37(e) precludes the imposition of sanctions where the loss of information results from the routine operation of a party’s computer system, when operated in good faith. The court concluded that Rule 37(e) was inapplicable in Rimkus. One of the former employees testified that he and the others decided on a “policy” of deleting emails more than two weeks old. Such a policy, which was put into place after a duty to preserve had arisen, did not constitute the “routine, good-faith operation of a computer system,” thereby vitiating Rule 37(e)’s protection. Additionally, information presented to the court established that the defendants selectively deleted emails that would have disclosed their activities, which further precluded the potential application of Rule 37(e).

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Attached is an article written by Steve Puiszis, DRI's State Rep to Illinois, which originally appeared on Practical Ediscovery, a blog sponsored by Hinshaw & Culbertson LLP.  

Click here to view the orginal article

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Attached is an article written by Steve Puiszis, DRI's State Rep to Illinois, which originally appeared on Practical Ediscovery, a blog sponsored by Hinshaw & Culbertson LLP.  

Amobi v. District of Columbia Dept. of Corrections, 2009 WL 4609593 (D.D.C. Dec. 8, 2009)

Comrie v. Ipsco, Inc., 2009 WL 4403364 (N.D.Ill. Nov. 30, 2009)

Coburn Group, LLC v. Whitecap Advisors LLC, 640 F. Supp.2d 1032 (N.D.Ill. 2009)

Today’s “trifecta” addresses the proper framework for analyzing the application of Fed. R. Evid. 502(b) to claims of inadvertent waiver of attorney-client privilege and work-product protection. It also discusses the information that should be provided to a court when seeking Rule 502’s protection. In both Amobi and Comrie, defendants failed to establish that they took reasonable steps to prevent the disclosure of privileged information, and thus, failed to establish the elements of Rule 502(b), resulting in a finding of waiver. These decisions confirm that the reasonableness of the precautions taken by a party to protect its privileged and protected communications is an explicit consideration in determining whether a waiver occurred under Rule 502(b), no matter how inadvertent the disclosure.trifecta 

Notably, in Amobi Judge Facciola rejected the argument that if a “disclosure was made by a lawyer, then it clearly was not mistaken and not inadvertent.” He observed that if a lawyer’s mistake never qualified as an inadvertent disclosure, it “would vitiate the entire point of Rule 502(b)…. It would essentially reinstate the strict waiver rule in cases where lawyers reviewed documents, and would create a perverse incentive not to have attorneys review documents for privilege.” 2009 WL 4609593 at *8. Judge Facciola also jokingly noted that the premise of plaintiff’s argument was wrong because: “Lawyers make inadvertent mistakes; it is judges who never make mistakes.” Id.(emphasis in original). The court’s tongue-in-cheek comment in Amobi reminded of me of something my father frequently told me in my youth: “I may not always be right, but I’m never wrong.” I have remembered that sage advice throughout my legal career, especially when reflecting upon a court’s evidentiary rulings.

Proper test for determining whether a disclosure was inadvertent

Rule 502(b) addresses inadvertent disclosures and provides the test for determining whether a waiver has occurred. The rule, however, does not define the term “inadvertent.” Prior to the enactment of Rule 502, those courts that applied an intermediate balancing test to the issue of inadvertent waiver considered a variety of factors in determining “inadvertency,” such as the number of documents produced in discovery, the number of privileged or confidential documents disclosed, the procedures used to review the documents before they were produced and the actions of the producing party after learning that privileged or confidential information had been disclosed. See, e.g., Judson-Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 388 (7th Cir. 2008). Several district court decisions have continued that approach since the enactment of Rule 502, including one of today’s featured decisions, Comrie, 2009 WL 4403364 at *2, and Heriot v. Byrne, 257 F.R.D. 645, 654 (N.D. Ill. 2009), which was featured in one of our prior blog posts.

However, two of today’s featured decisions, Amobi and Coburn reject that approach, finding “the structure of Rule 502 suggests that the analysis under subpart (b)(1) is intended to be much simpler, essentially asking whether the party intended a privileged or work-product protected document to be produced or whether the production was a mistake.” Coburn, 640 F.Supp. 2d at 1038. Coburn noted that the “parallel structure of subparts (a)(1) and (b)(1) of Rule 502 contrasts a waiver that is intentional with a disclosure that is inadvertent.” Id. (emphasis in original). In Amobi, Judge Facciola found this interpretation “to be in line with one of the goals of the drafting committee: to devise a rule to protect privilege in the face of an innocent mistake.” 2009 WL 4609593 at *7. Additionally, he observed:

[P]ermitting ‘inadvertence’ to be a function of, for example, the amount of information that had to be reviewed or the time taken to prevent the disclosure melds two concepts, ‘inadvertant’ and ‘reasonable efforts,’ that should be kept distinct. One speaks to whether the disclosure was unintended while the other speaks to what efforts were made to prevent it.

Thus, so long as there is a showing that the documents in question were mistakenly disclosed, that should suffice to meet Rule 502(b)(1)’s requirements. That does not mean, however, those factors which courts had previously relied upon in determining whether a waiver was inadvertent play no role in Rule 502’s analysis. Both Amobi and Coburn explain those factors can properly be considered in connection with subpart (b)(2) of Rule 502, which examines whether the holder of the privilege took reasonable precautions to prevent the disclosure. Judge Facciola recalled in Amobi that the explanatory note to Rule 502(b) identifies several non-dispositive factors that a court may consider and explains the drafters of Rule 502 “consciously chose not to codify any factors in the rule because the analysis should be flexible and should be applied on a case-by-case basis.” 2009 WL 4609593 at *8.

Explain steps taken to prevent disclosure of privileged information

Rule 502(b)(2) specifically requires the party asserting privilege take reasonable steps to prevent the disclosure of protected information. The decision in Comrie explains that simply indicating the number of documents reviewed and produced will not suffice to establish that reasonable precautions were taken. The fact that a protective order was in place which describes how to designate documents confidential and explains the procedures for clawing back documents was also found to be insufficient in Comrie. The defendants failed to advise the court about any of the steps they took to review the documents prior to production. As a result, the court concluded that the defendants failed to meet their burden to show that they took reasonable steps to prevent the disclosure of privileged information.

A similar conclusion was reached in Amobi where the defendants only vaguely referred to several reviews of the documents they produced. Judge Facciola explained that he kept searching the defendant’s papers to find “what they did when they got the documents, how they segregated them so that the privileged documents were kept separate from the non-privileged, and how, despite the care they took, the privileged document(s) was inadvertently produced.” Forcing a court to speculate about the specific precautions taken will not meet a party’s burden under Rule 502(b). Judge Facciola observed that because the defendants failed to provide any evidence that they took reasonable efforts to prevent the disclosure, “the only injustice in this matter is that done by [d]efendants to themselves.” Amobi, 2009 WL 4609593 at *9.

Use of paralegals is not unreasonable under Rule 502(b)

In Coburn, plaintiff argued that the use of paralegals to screen documents for privilege and work product was unreasonable. While noting “the experience and training of the persons who conducted the review is certainly relevant to the reasonableness of the review,” the court in Coburn held that the use of experienced paralegals who were given specific direction and supervision by lead counsel in the case met Rule 502(b)’s reasonableness standard. 640 F.Supp.2d at 1039. The court also rejected the suggestion that simply because a confidential document was not identified during the course of the review meant that review was unreasonable. The court in Coburn observed: “If that were the standard, Rule 502(b) would have no purpose; the starting point of Rule 502(b) analysis is that a privileged or protected document was turned over.” 640 F.Supp.2d at 1040.

The protocol followed in Coburn also bears mentioning because the court implicitly found it to be reasonable. The protocol for that document review involved the following instructions:

  • Identify responsive documents by date;
  • Identify and mark for attorney review, any correspondence between defendant’s general counsel and any defendant employee;
  • Identify and mark as privileged, any correspondence between defendant’s employees and defendant’s outside counsel;
  • Identify and mark as privileged, documents prepared by any employee of defendant in anticipation of or in preparation for litigation pursuant to requests by defendant’s outside counsel;
  • Pursuant to a protective order, mark responsive documents relating to customers as ‘confidential material’ or ‘attorney’s eyes only; and
  • Segregate non-responsive documents, including documents relating to other matters.

So there you have our “trifecta” for the week. It may not win you anything at the racetrack, but following the holdings of these decisions can preserve your claim of attorney-client privilege. And, preserving privilege has become even more important than ever in light of the Supreme Court’s December 8th decision in Mohawk Industries v. Carpenter, that the privilege rulings of federal judges are not immediately appealable under the collateral order doctrine.

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Attached is an article written by Steve Puiszis, DRI's State Rep to Illinois, which originally appeared on Practical Ediscovery, a blog sponsored by Hinshaw & Culbertson LLP.    

Leor Exploration & Production, LLC v. Aguiar, 2009 WL 3097207 (S.D. Fla. Sept. 23, 2009)

The twentieth century Spanish philosopher and poet George Santayana once wrote: “Those who cannot learn from history are doomed to repeat it.” The Leor decision proves that philosophy is especially true when it comes to the realm of ediscovery. Leor is another example of a growing body of caselaw addressing whether emails sent or received by an employee through his employer’s email server are protected by attorney-client privilege. In a prior blog post we discussed several decisions that have addressed this issue and attempted to reconcile their holdings.

Guma Aguiar was the CEO and Vice Chairman of Leor Exploration & Production LLC (“Leor”). He retained a “trusts and estates attorney” to document his interests in certain entities. Subsequently, that attorney sent an email to Aguiar’s personal advisor and agent, Garrett Smith, who also happened to be the Vice President and In-House General Counsel of Leor, which memorialized a conversation involving the three of them. The email was sent to Mr. Smith’s work email address at Leor. After a series of lawsuits erupted between Aguiar, his uncle and related entities involved in oil and gas exploration, the attorney’s email surfaced in discovery and the issue presented to the court was whether it was protected by the attorney-client privilege.

Leor held that the attorney’s email to his client’s personal advisor and agent was not privileged because the client lacked a reasonable expectation of privacy in emails transmitted through his employer’s (the company’s) email server. In reaching that conclusion, the court identified four factors that should be considered in determining whether an employee has an expectation of privacy in email communications:

  • Does the corporation maintain a policy banning personal or objectionable use;
  • Does the corporation monitor the use of the employee’s computer or e-mail;
  • Do third parties have a right of access to the computer or e-mails; and
  • Did the corporation notify the employee or was the employee aware of the use and monitoring policies?

Because each of the four factors were present, the court in Leor had little difficulty in concluding that plaintiff did not meet his burden of establishing the applicability of the attorney-client privilege. However, the privilege belongs to the client not the lawyer, and the decision fails to address how an attorney can waive the privilege belonging to the client without the client’s consent. When the client sends an email to his attorney with knowledge of the four factors noted above, one can argue the client impliedly waived any right to assert the privilege, but the converse is not necessarily true. However, the decision follows the approach taken in Scott v. Beth Israel, and lawyers must take care not to run afoul of the decision.

In our prior blog post addressing this issue, we discussed how some courts have ruled that email communications retained their privileged character when they were encrypted or involved password protected web-based email notwithstanding the fact that they were sent or received via a company issued computer. While that post focused on the duties and responsibilities of a company’s attorney who receives or reviews employee emails, Leor highlights the responsibilities of any attorney communicating with his client via email.

Reasonable communication between an attorney and his or her client is necessary under Rule 1.4 of the Model Rules of Professional Conduct. Rule 1.6 of the Model Rules further requires that an attorney act competently to safeguard confidential information relating to the representation of a client against its inadvertent or unauthorized disclosure. Under Rule 1.6, a lawyer is obligated to take reasonable precautions to prevent information from coming into the hands of unintended recipients. That does not necessarily require that a lawyer use special security measures, such as encrypting emails, where the mode of communication affords a reasonable expectation of privacy. However, special circumstances can require that special precautions be taken.

While the decisions are not uniform in their holding, given the growing body of caselaw addressing the waiver of attorney-client privilege involving workplace email communications, an attorney should consider whether special precautions may be warranted in this scenario, especially if you practice in a jurisdiction where you would have reason to believe a court may find a waiver occurred. An attorney should consider addressing this issue at the outset of any representation with his client. Lawyers would be wise to follow the age-old adage: an ounce of prevention is worth a pound of cure. If the risk of privilege loss is to be avoided, then neither the attorney nor the client should communicate with one another through any email server or by any means in which they lack a reasonable expectation of privacy. While that does not mean that an attorney cannot communicate via email with his client, the attorney should endeavor to avoid emailing the client at the client’s place of business and should consider advising the client to not communicate with him through a company-issued computer, Blackberry or other communication device. Consider alternative methods of communication. While a client may consent to the use of a mode of communication that would be prohibited by Rule 1.6, that consent must be “informed.”

So before you send that next email to a client, stop and assess whether there are any privilege issues implicated by your communication. Don’t let convenience trump confidentiality. Where appropriate, clients should be advised of the risks of communication via company-issued computers or Blackberries in order to avoid a waiver of privilege as in Leor.

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Attached is an article written by Steve Puiszis, DRI's State Rep to Illinois, which originally appeared on Practical Ediscovery, a blog sponsored by Hinshaw & Culbertson LLP.    

United States v. Sensient Colors, Inc., 2009 WL 2905474 (D.N.J. Sept. 9, 2009)

"You’re traveling through another dimension, a dimension not only of sight and sound, but of mind; a journey into a wondrous land whose boundaries are that of imagination – Next stop, the Twilight Zone."

Any lawyer who inadvertently produces privileged information steps into a legal twilight zone. However, that legal twilight zone is not a "wondrous land," but one filled with sleepless nights and many questions. How did it happen? When and how do I tell the client? How do I get the materials back? Will I lose the client, my job, my career? With ediscovery, the risk that privileged or confidential information will be inadvertently produced geometrically increases. While the use of clawback or nonwaiver agreements and FRE 502(b) lessen that risk, they do not eliminate it. Sensient Colors establishes that point.

Sensient Colors involved the electronic production of 45,000 documents totaling 135,000 pages or 450 boxes of records by the United States ("government"). Several months after that production was completed, the defendant initially returned a group of documents that were privileged. Over the ensuing months, the defendant continued to identify additional documents that the government had produced but were privileged. Ultimately, the defendant sought a ruling that the government had waived its right to assert privilege over the documents it had produced.

The court in Sensient Colors concluded the privileged documents were inadvertently produced by the government and that the requirements of FRE 502(b) were met as to the first group of documents the defendant returned. However, as to the subsequently identified privileged documents, the court ruled that the government waived its right to assert privilege under Rule 502(b) as to those documents because it had failed to promptly take reasonable steps to rectify its error after being notified of the initial inadvertent production.

The explanatory note to FRE 502 provides: "The Rule does not require the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake." However, the court in Sensient Colors concluded that once a party has been put on notice that privileged information has been inadvertently produced, Rule 502(b)(3) requires the producing party take "prompt and reasonable steps to reassess its document production." The court in Sensient Colors concluded the government failed to act reasonably and diligently to correct its error and waived its privilege and work-product protection as a result.

Carefully draft non-waiver orders and agreements

Sensient Colors demonstrates the importance of carefully drafting any non-waiver orders or agreements. The parties included two provisions in their joint discovery plan which ultimately failed to protect the government against a waiver of privilege. The first provision specifically addressed the issue of waiver and provided:

Non-waiver: By exchanging documents or information with each other, the Parties do not waive any privilege, confidentiality or other protection from production that otherwise applies to such documents or information.

The discovery plan also included a provision on inadvertent production:

The Parties agree that the inadvertent production of privileged documents or information (including ESI) shall not, in and of itself, waive any privilege that would otherwise attach to the document or information produced.

Addressing these provisions of the parties’ joint discovery plan, the court initially observed that if the non-waiver provision was applied as written, it would render the inadvertent production provision superfluous. The court did not address how the defendant could challenge the terms of the joint discovery plan or why it should be allowed to make such a challenge, once it had agreed to its terms. At one time, a lawyer’s word was his bond. Lawyers seem to have forgotten that in today’s digital era.

The court further observed that the parties discovery plan did not provide that they were excused from the requirements of Rule 502(b). Reconciling these provisions, the court ruled that by including the phrase "in and of itself" in the inadvertent production provision of their joint discovery plan, the parties were merely agreeing that the unintentional production of privileged information did not result in a waiver. The court ruled the parties intended to incorporate a "flexible" standard when determining if a waiver occurred. As support for that conclusion, the court in Sensient Colors quoted a passage from Koch Materials Co. v. Shore Slurry Seal, Inc., 208 F.R.D. 109, 118 (D.N. J. 2002), which explains that courts "generally frown upon ‘blanket’ disclosure provisions" because they essentially immunize "attorneys from negligent handling of documents, [and] could lead to sloppy attorney review and improper disclosure which could jeopardize clients’ cases."

The court in Sensient Colors also noted the absence of any clawback provision in the discovery plan. It observed that if the parties had intended to implement a clawback procedure, they would have specifically mentioned a clawback provision in their discovery plan. However, Fed. R. Civ. P. 26(b)5(B), outlines the process parties are to follow when an inadvertent production occurs. The court did not clarify whether it was suggesting that the inclusion of a clawback agreement would trump Rule 26(b)5(B)’s procedures, but it never hurts to include a clawback in any FRE 502 non-waiver order.

The entry of a Rule 502 non-waiver order generally will not obviate the requirement that the producing party take reasonable steps to prevent an inadvertent disclosure from occurring. And, the court in Sensient Colors concluded that the parties joint discovery plan did not preclude a finding that attorney client privilege or work-product protection could be waived even though the parties agreed that by exchanging documents they did not waive privilege.

Sensient Colors is an example why many general counsel believe that the passage of Fed. R. Evid 502 will not materially lessen the costs of electronic discovery.

Re-review required once on notice that privileged documents were inadvertently produced

The court in Sensient Colors had little difficulty concluding that the first two prongs of Rule 502(b) were met. The court did not question that the government’s production was inadvertent in the sense that it was "not intended." It explained, however, that subjective intent is not controlling. Whether a production inadvertently occurred within the meaning of rule 502(b) is determined by examining if the producing party took reasonable precautions to the prevent an error from occurring. The court found the government readily satisfied the requirements of Rule 502(b)(1) and (b)(2).

The court recognized that the document production was substantial and that the volume of inadvertently produced documents were relatively minor (214 documents). Additionally, the government did not erroneously produce the same document on multiple occasions. The court found that the government took reasonable steps prior to production by using twelve attorneys and paralegals from the Department of Justice to review its documents. The court further acknowledged that the government made "a commendable effort to employ a sophisticated computer program to conduct its privilege review."

So what went wrong in Sensient Colors?

After being initially notified that it had inadvertently produced privileged information, eight days later the government confirmed its error and advised the defendant that the documents were indeed privileged. That was sufficient to meet Rule 502(b)(3)’s requirement as to the first group of documents returned by the defendant. The court noted that prior to that point in time, the government was not on notice of any problem with its document production.

Regarding the subsequently identified privileged documents, the court reached the opposite conclusion. Once the government was advised that it had produced privileged information, "it was on notice that something was amiss with its document production and privilege review." Thus, the court held the government should have promptly re-assessed its procedures and re-checked its production in order to comply with Rule 502(b)(3)’s requirement that the producing party promptly take reasonable steps to rectify its error. The court in Sensient Colors relied upon Preferred Care Partners Holding Corp. v. Humana, Inc., 2009 WL 982449 *14 (S.D. Fla. April 9, 2009), for the proposition that once a party is aware that it inadvertently produced privilege information, it has an obligation "to ensure that no additional privileged documents were divulged." Because the defendant continued to identify privileged documents it had received while the government took more than three months to confirm that it had inadvertently produc
ed additional privileged documents, the court ruled that the privilege had been waived.

The court in Sensient Colors also commented on a "glaring omission" in the government’s submissions to the defendant’s waiver arguments. The court noted that the government failed to provide any meaningful details regarding the steps it took immediately after being notified that it had inadvertently produced privileged information. All the government proffered was that it began to re-review the documents returned to it for privilege. The government’s declarations were silent as to what steps it took to assure the accuracy and completeness of its entire document production, not just the documents that the defendant had flagged as inadvertently produced.

So several practical points bear mentioning. First, once a party is notified that it has produced potentially privileged documents, do not delay in responding to your opponent’s notification. The third element of Rule 502(b) requires that a prompt response be made by the producing party. The producing party should promptly confirm whether the documents are in fact privileged, and if so, assert privilege over the inadvertently produced documents and demand their return.

Second, Rule 502(b) requires the producing party establish its reasonable care both before a production occurs and after receiving notice that it has inadvertently produced privileged information. So keep track of what steps were taken by you, the client and any ediscovery vendor both before the production occurred and afterwards so that you are in a position to adequately litigate the issue of privilege waiver. Don’t forget about Rule 502(b)(3)’s requirements, and be prepared to outline in detail what steps were taken and when they were taken to insure that no other privileged documents were produced.

Finally, once you have responded to opposing counsel and have confirmed the assertion of privilege over the inadvertently produced documents, you should also consider promptly reviewing all of the documents that had been originally produced to the opposing party to determine if any other privileged documents were inadvertently produced. After Sensient Colors, you can’t necessarily rely on a non-waiver agreement with your opponent to protect you and the client. If you discover additional documents that were inadvertently produced, immediately notify opposing counsel that you are asserting privilege as to those documents and demand their return. While your immediate focus should be the return of the privileged documents or data that you know are in the possession of your opponent, Sensient Colors teaches that you also need to promptly review the previously produced documents and how you screened them for privilege.

Conclusion

I wonder if Rod Serling were still alive how he would handle the attorney’s nightmare of inadvertently produced privileged information. One of my favorite Twilight Zone episodes was "Nightmare at 20,000 Feet." In that episode, a gremlin appeared on the wing of an airplane that could only be seen by one passenger. That episode was ultimately remade into the Twilight Zone movie. Borrowing heavily from "Nightmare at 20,000 Feet" the attorney’s episode would pan to a tired and distraught attorney and the opening narration for the episode would begin:

"Portrait of a frightened attorney: thirty-seven, partner at a reputable law firm, husband, and father of three who until recently had been in charge of defending a major lawsuit where privileged information was inadvertently produced to his client’s top competitor. Tonight, beset by insomnia, and questioning how this could have happened, he returns to the office and turns on the computer used to create the database containing the privileged information in an attempt to determine why and how the mistake occurred. His ultimate destination is one of the darkest corners of the Twilight Zone."

Perhaps Mr. Serling would have the gremlin take up residence in the computer system so that it could only be seen by that attorney when he looks at his computer screen.

When a party takes reasonable steps before a production occurs and after it has been notified of an inadvertent production, Rule 502(b) should prevent that gremlin from doing anymore dirty work. However, it is easier said than done.

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