Untimely review results in privilege waiver despite clawback agreement
In Re: Rembrandt Technologies, LP Patent Litigation, MDL Docket No. 07-1848-GMS-LPS, March 6, 2009.
Stark, M.J. Defendants’ motion to retain and use non-party’s purportedly privileged documents was granted where privilege was waived due to lack of diligence.
In response to a subpoena, non-party Zhone/Paradyne entered into an agreement regarding the production of documents which permitted the non-party to review the documents copied by defendants and claw back documents deemed to be privileged. Between August and November, 2008, about 500,000 pages of documents were copied. Days before deposition discovery was set to begin in February, 2009, plaintiff and the non-party notified defendants that hundreds of documents that had been produced and/or that had been referred to by plaintiff in its response to interrogatories were privileged and inadvertently produced. The Magistrate grants defendants’ request to retain and use those documents in the instant litigation finding that even if the documents are privileged, the non-party has waived the privilege by failing to act diligently to protect its documents. The agreement negotiated by the non-party created a risk that defendants would come into possession of documents that the non-party believed to be privileged. It also provided a mechanism by which the non-party could review the materials to be produced. The failure to conduct that review until the last minute was unreasonable as the non-party should have discovered this problem sooner.
