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What happens in a lawsuit and attorney-client privileged information is accidentally disclosed to the other side? The information includes litigation strategies and embarrassing facts for your attorney to know that you do not want your opponent to know.
Are you screwed?
Waiver of Privilege if Disclose and then Fail to Claim the Privilege
The disclosure of privileged information can waive the attorney-client privilege. California Evidence Code Section 912(a) states:
[T]he right of any person to claim a privilege provided by Section 954 (lawyer-client privilege) ... is waived with respect to a communication protected by the privilege if any holder of the privilege, without coercion, has disclosed a significant part of the communication or has consented to disclosure made by anyone. Consent to disclosure is manifested by any statement or other conduct of the holder of the privilege indicating consent to the disclosure, including failure to claim the privilege in any proceeding in which the holder has legal standing and the opportunity to claim the privilege.
However, section 912 refers to a "failure to claim" the privilege, which does not necessarily mean disclosure results in an automatic waiver. A disclosure combined with a failure to immediately note a mistake and claim privilege can result in a waiver of the privilege.
Some courts have held that if privileged information is sent by mistake to the other attorney, that other attorney does not have return the material or let anyone know about the mistake. (Aerojet-General Corp. v. Transport Indem (1993) 18 Cal.App.4th 996, 1003.)
Demand the Return of Privileged Documents
Other courts, the ABA rules professional courtesy, and common decency, say if privileged documents are mistakenly provided the receiving attorney, once discovering the issue, should stop reviewing the information and immediately notify the sender. (State Comp. Ins. Fund v. WPS, Inc. (1999) 70 Cal.App.4th 644, 656-657.)
The California Supreme Court limited the Aerojet case to a situation where the information in the privileged documents is not privileged (such as the identity of witnesses) and adopted the State Fund rationale in Rico v. Mitsubishi Motors Corp (2007) 42 Cal.4th 807.
Further, the California Supreme Court said an attorney has obligations to other attorneys, the courts, and administration of justice. Using privileged documents results in not just disqualification from a case, but potentially bar discipline against the attorney's license.
But what if it is not obvious a document is privileged?
Special Clawback Statute for Privileged Electronic Documents
Or ... what if you produced 200,000 electronic documents (aka "ESI") easily distributed worldwide. How do you stop that from happening if a few privileged documents were mistakenly included in the mass production?
Enter Code of Civil Procedure section 2031.285
(a) If electronically stored information produced in discovery is subject to a claim of privilege or of protection as attorney work product, the party making the claim may notify any party that received the information of the claim and the basis for the claim.
(b) After being notified of a claim of privilege or of protection under subdivision (a), a party that received the information shall immediately sequester the information and either return the specified information and any copies that may exist or present the information to the court conditionally under seal for a determination of the claim.
(c) (1) Prior to the resolution of the motion brought under subdivision (d), a party shall be precluded from using or disclosing the specified information until the claim of privilege is resolved.
(2) A party who received and disclosed the information before being notified of a claim of privilege or of protection under subdivision (a) shall, after that notification, immediately take reasonable steps to retrieve the information.
(d) (1) If the receiving party contests the legitimacy of a claim of privilege or protection, he or she may seek a determination of the claim from the court by making a motion within 30 days of receiving the claim and presenting the information to the court conditionally under seal.
(2) Until the legitimacy of the claim of privilege or protection is resolved, the receiving party shall preserve the information and keep it confidential and shall be precluded from using the information in any manner.
Per this statute you can "clawback" or get reposession of the documents if (1) the information is stored in electronic form and (2) you notify the other side privileged information was mistakenly included in the production.
The other side must then protect the information and reasonably try to retrieve any copies disclosed to others, and either return the information or ask the court to decide if it really is privileged.
Tips:
1. Notify the recipient of the privileged information immediately after discovering the mistake.
2. Be clear in the notice that attorney-client privileged information was mistakenly disclosed, should not be reviewed, and immediately returned.
3. Refer to CCP section 2031.285 and Rico v. Mitsubishi Motors Corp (2007) 42 Cal.4th 807 in your notification.
4. If within 30 days the recipient has not returned the information, and all copies, or not filed a motion to have a judge decide if the material is privileged, file a motion for violation of the statute demanding the return of the documents.
Lawzilla Notes:
In Sorrento Pavilion, LLC v. East West Bank the defendant mistakenly produced 38 privileged emails. Per 2031.285 defendant was able to clawback the emails from plaintiff's counsel. Later, after returning the documents plaintiff brought a motion asking the judge to review the emails to determine if they were privileged. The judge said no, in this tentative ruling. That is prohibited by law. The importance is that if you receive allegedly privileged documents, a court can only review them under seal per 2031.285(b). If the documents are returned the judge may not later review them for privilege if their production is sought.
In Moshe Barkat vs. Medley Capital Corporation a Los Angeles Superior Court judge issued a tentative ruling indicating that failure to make a clawback request per section 2031.285 may preclude a sanctions motion because the opposing attorney is improperly using attorney-client privileged material. There, the judge also tentatively said sanctions would be imposed for filing a sanctions motion without first making a clawback demand. It is thus critical that if you have mistakenly produced privileged documents that your first step is to notify the recipient and demand their return.