California Supreme Court Spells Out "Inadvertent Production" Duty

Posted on March 30, 2008 by Kevin McBride

In Rico v. Mitsubishi Motors Corp., (2007) 42 Cal.4th 807, the California Supreme Court recognized an affirmative duty of counsel who receive inadvertent productions that are obviously identifiable as confidential or privileged:

When a lawyer who receives materials that obviously appear to be subject to an attorney-client privilege or otherwise clearly appear to be confidential and privileged and where it is reasonably apparent that the materials were provided or made available through inadvertence, the lawyer receiving such materials should refrain from examining the materials any more than is essential to ascertain if the materials are privileged, and shall immediately notify the sender that he or she possesses material that appears to be privileged. 

 

The parties may then proceed to resolve the situation by agreement or may resort to the court for guidance with the benefit of protective orders and other judicial intervention as may be justified.

 

This is a critical requirement for counsel who receive productions that appear to be inadvertent and obviously privileged. 

 

It is also important to anticipate how this affirmative duty to return obviously privileged documents may be affected by the proposed California Rules governing electronic discovery currently under consideration by the California Judicial Counsel.

 

 Opinion Highlights:

 

 1.  The trial court ruled that plaintiff's counsel, Johnson, came into possession of notes taken at the direction of defense counsel, Yukevich, by inadvertence. 

 

2.  Johnson admitted that he knew within "a minute or two" that Yukevich did not intend to produce the document and that it would be a "powerful impeachment document."

 

3.  Johnson thereafter gave copies to his co-counsel and to his experts, all of whom studied the document.  Johnson specifically discussed the contents of the document with each expert.

 

4.  The trial court concluded that the notes were absolutely privileged by the work product rule, and that Johnson had acted unethically by examining the document more closely than was necessary to determine that its contents were confidential by failing to notify defense counsel that he had a copy of the document and by surreptitiously using it to gain maximum adversarial value from it.

 

6.  There is no distinction between the attorney-client privilege and the work product privilege in this context because the standard applies to documents that are plainly privileged and confidential regardless of whether they are privileged under the attorney-client privilege, the work product privilege, or any other similar doctrine that would preclude discovery based on the confidential nature of the document.

 

Discussion:

 

 In affirming the trial court's ruling disqualifying plaintiff's attorney and experts who had improper access to the privileged document, the California Supreme Court also reviewed, and adopted, an earlier holding by the California Court of Appeals in a similar matter, State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644 ("State Fund").

 

The Supreme Court emphasized that "[m]ere exposure to an adversary's confidences is insufficient, standing alone, to warrant an attorney's qualification. (State Fund, supra, 70 Cal.App.4th at 657.)"

 

The problem in the Rico case was that plaintiff's counsel made copies and disseminated them to plaintiff's experts and other attorneys.  

 

A question arises as to how the affirmative duty recognized in the Rico case may change, or be affected, by the proposed new rules governing electronic discovery currently under consideration for California state courts.

 

The proposed California Rules for electronic discovery do not impose an affirmative duty on counsel receiving an inadvertent production.  Rather, the proposed statutory change addresses the problem of inadvertent productions from the viewpoint of the party claiming privilege.

 

The proposed California Rules for electronic discovery add an entirely new section to the Civil Discovery Act, Code Civ. Proc. §2031.285, which can be summarized as follows:

 

• If privileged (or attorney work product protected) electronically stored information is discovered, the party making the claim may give notice of the privilege claim and the basis for the claim.


• After being notified, the receiving party shall “immediately sequester” the information and either return the information (and any copies) or, within 30 days present the information to the court conditionally under seal for a determination of the claim. Until resolution, the receiving party shall preserve the information and keep it confidential.


• Any receiving party shall be precluded from using or disclosing the specified information until the claim of privilege is resolved.


This kind of provision is known as as a “claw back” provision, since a party who inadvertently produces an electronic document can simply “claw” or take it back after production without regard to waiver issues.


It is important under the proposed rules that the receiving party move the court to address the privilege question within 30 days, or it will lose the ability to use that document.


The proposed California Rules for electronic discovery should be read in context of this duty spelled out by the California Supreme Court.  It is not always the case that inadvertent productions are obvious.  In fact, some companies seem to have an unspoken policy to include an attorney on many emails that are sensitive, but not necessarily privileged.


Under the proposed new California electronic discovery rules, it will be important for counsel to agree as part of the initial meet and confer conference precisely how all forms of privileged and confidential documents will be dealt with in discovery.
Tags: , ,

Proposed e-Discovery Rules for California Superior Court

Posted on February 28, 2008 by Kevin McBride

The California Judicial Counsel is considering legislative amendments to the California Civil Discovery Act to adopt electronic discovery rules in civil proceedings.  New court rules would also be added that integrate e-discovery into case management.


How different are the proposed California rules from the existing electronic discovery rules in federal court?


Overall, the proposed California rules are largely similar to the federal e-discovery rules embodied in the Federal Rules of Civil Procedure—with one noticeable exception: the way in which the responding party must respond to requests for documents that may be “not reasonably accessible.”

 

Under the proposed California rules, a responding party is expected to produce all requested (relevant) electronic information unless it seeks a protective order against production for reasons of undue cost or burden.  

 

This basic framework is, of course, the way discovery has always been conducted.

 

The federal rules take a different approach. 

 

Under FRCP Rule 26(b)(2), a responding party “need not provide" information “it identifies” as being "not reasonably accessible" because of undue burden or expense.  But it must identify by category or type the sources containing potentially responsive information it is neither searching nor producing.  If the requesting party disagrees with the designation  of sources that are "not reasonably accessible" it must file a motion to compel to receive more information.  

 

How different are these approaches? 

 

In a perfect world there should be no difference.  Should it really matter, after all, if legitimate discovery disputes reach the court through motions to compel or motions for protective order?   No, not really.

 

 But in our imperfect world, your preference of approach may depend a lot on the type of clients you represent. 

 

Larger companies (and their attorneys) may favor the federal approach, since it provides more control over which information is produced and which is not--a less transparent system that slightly favors the producing party.   Because of this, plaintiff's lawyers under the federal approach must often work harder to identify and gain access to discoverable information.

 

Smaller plaintiffs (and their attorneys) may favor the California approach, since it allows fewer opportunities for discovery gamesmanship--a more transparent system that slightly favors the requesting party.    Because of this, responding parties under the proposed California approach may be more likely to produce relevant information unless they have solid and defensible reasons not to.

 

 A reality of litigation under the federal "two-tier" approach is that responding parties sometimes provide vague or slanted summary information about their electronic data when responding to document productions, with the result that documents are not available for critical depositions or hearings.   This seems an almost unavoidable consequence of allowing a party to define its own discovery scope in adversarial system that has become increasingly competitive and demanding. 

 

The proposed  California rules avoid the potential unfairness of this two-tier system, placing instead an inherent burden on the responding party to accurately account for its electronic data at the initial moment of its responses. 

 

However, to be an effective discovery tool, the California rules will need to prevent undisciplined and over-reaching document requests from plaintiff's attorneys.  The system will become burdened if hearings on protective orders become the norm rather than the exception.

 

Will the California rules work efficiently?  I believe the answer is almost certainly “yes”—if courts require mandatory meet and confer obligations and strong case management orders.

 

Early meet and confer sessions can be used to mutually identify sources of electronic information, "litigation hold" procedures and basic discovery plans.   Exchange of this information will provide proper context to all subsequent discovery requests and will provide a center of gravity at the beginning of the case to facilitate discovery and resolve disputes.  Responding parties will have less power to unilaterally shape responses, while requesting parties will have less leeway to serve over-reaching or irresponsible requests.  Arguments for and against discovery should be inherently constrained by the limitations of the case management order.

 

The substance of the federal rules and proposed California rules have many similarities.   By requiring effective case management procedures to balance interests of requesting and producing parties, the proposed California rules promise to be workable and efficient.
Tags: , , , , , , , , , ,

About this Blog

Posted on February 27, 2008 by Kevin McBride

This blog analyzes e-discovery decisions and trends in Los Angeles area federal and state courts.  In particular, this forum is designed to help practicing litigaiton attorneys in the Los Angeles area be aware of new e-discovery decisions and practices as they evolve.

 

Electronic discovery rules and case law now require litigation lawyers (and general counsel) to manage e-discovery at a high level of expertise.  A well-known case from the California Southern District Court, Qualcomm v. Broadcom, shows that failure to follow electronic discovery protocols can carry serious consequences, including referral to the state bar on ethics charges.

 

In a less well known but equally important case for practice in California Central District Court, Housing Rights Center v. Sterling, CACD Judge Dale S. Fischer has ruled that an attorney’s failure to implement a proper “litigation hold” and indifference to a client’s destruction of documents in an electronic backup system was sufficient misconduct to impose sanctions in the form of an adverse jury instruction and attorneys fees. Judge Fischer observed: “Defense counsel's apparent failure, in this electronic age, to verify with appropriate representatives of their client whether there was an e-mail backup system, cannot be countenanced.” 

 

These cases (and others) serve as a wake-up call for litigation counsel to become aware of, and properly deal with, the new challenges posed by electronic discovery. But many litigation attorneys today do not fully grasp the proper way to preserve documents, impose a litigation hold or even communicate with clients about information technology. This blog forum is designed to help litigation attorneys understand and deal with these challenges. 

 

Why another e-discovery blog?

This blog site focuses on California e-discovery law, with particular emphasis on decisions by California Central District federal judges and Los Angeles Superior Court state judges—and the e-discovery trends that evolve from those decisions. It is intended to be a “go-to” resource for any litigation attorney with cases pending in LA Superior Court or US Central District of California.  By having a narrow focus we are able to follow the development of e-discovery law in California in detail, and track rulings and tendencies of specific judges in the US California Central District Courts and Los Angeles area Superior Courts in particular.  Also, this blog site approaches e-discovery as an important strategic component of litigation—not just a mechanical exchange of electronic data. 

 

But do e-discovery laws apply in California Superior Courts?

A proposed set of statutory amendments and rule changes is under consideration by the California Rules and Projects Committee on Electronic Discovery: Legislation and Rules (Item W08-01/Leg08-01). The period for public comment closed January 25, 2008. It is expected that new e-discovery rules will be proposed to the California Judicial Counsel shortly, and then presented to the legislature for adoption. But even before adoption of formal electronic discovery rules, e-discovery is a rapidly growing area of litigation practice in California Superior Courts. For example, as early as 2003, Los Angeles Superior Court Judge Charles W. McCoy issued an order in Knable v. Intuit requiring preservation of computer evidence and allowing forensic analysis of a mirror image computer hard drive; and Judge George H. Wu in Galvan v. Ford ordered inspection of a party’s electronic data in a personal injury case. Many LA Superior Court cases have followed suit in subsequent years, some of which will be the subject of articles in this blog. 

 

We have reached the point where the vast majority of business deals and personal communications involve email. Nowadays, you can usually know what someone is thinking through access to his or her emails. Are these emails properly treated as party admissions at trial? 

 

Nowadays, most documents are stored in computers, not filing cabinets. Are you entitled to access those computer files in discovery? All California courts say “yes,” but endless battles are now being fought over the scope of access. 

 

Even before adoption of electronic discovery rules by the legislature, ad hoc practices are developing all around California by Superior court judges.   If you practice in Superior Court, you need to be aware of these trends.

 

How are FRCP e-discovery rules being applied in the Central District of California?

Discovery rules under FRCP were amended effective December 1, 2006 to formally implement electronic discovery in federal courts.  There are currently so many e-discovery cases in US district courts across the country that it is difficult to effectively track all of them. Therefore, this blog focuses on the cases of greatest practical value to Los Angeles-area practitioners—those decisions by CACD judges, decisions from the Ninth Circuit and decisions from other California US District Court judges and magistrate judges.

 

So far, in some cases main-stream decisions have been followed.  For example, Judge Dale Fischer followed the landmark case of Zubulake v. UBS Warburg  IV in her ruling in Housing Rights Center v. Sterling, defining the "litigation hold" obligation.  But in another case, Columbia Pictures v. Bunnell, new ground was developed by a CACD judge in e-discovery law, when Magistrate Judge Jacqueline Chooljian defined computer "random access memory" (RAM) as “electronically stored information" (ESI) under FRCP 34(a). 

 

This blog will closely follow all CACD decisions to help identify trends and practice tips for particular judges in the Central District.

 

How can I make practical use of this blog?

This blog addresses the core problems of electronic discovery, topic by topic, as defined by statutes, rules and case law in California state courts and in federal courts. Where pertinent, differences between California and federal law and practices are addressed and discussed. 

 

Where available, analysis of rulings by specific judges currently on the bench in US California Central District Court or Los Angeles Superior Court are discussed. Hopefully this will provide useful information to practitioners to better understand and deal with new and evolving electronic discovery rules, arguments and practices.

 

If you have cases involving electronic discovery in the Central District Court or Los Angeles Superior Court and would like to share your insights and observations, please post! 
Tags: , , , , , , , , , , ,