Herzfeld & Rubin, P.C.- Publications

Products Liability *Inadvertent Receipt of Adversary's Privileged Materials* By Michael Hoenig - New York Law Journal - March 18, 2008	Print article

Let's say you are an attorney in a litigated matter and you receive privileged documents from your adversary through inadvertence. What should you do? Can you read the documents? Keep them? Make a copy and return the originals? Must you notify the other side? If you read them but return them, must you somehow expunge the knowledge gained by the reading? How? If you are a judge to whom this problem is presented, what should be done? Is disqualification of the attorney who kept a copy an option? If yes, under what circumstances?

Realistically, there likely will be some lawyers who would regard such documents as manna from heaven and celebrate their good fortune. Others might sense that continued possession of such documents, as if nothing untoward happened, is somehow wrong but may be in a quandary on precisely what to do. Still others might sneak a peek and, upon discovering clearly privileged matter within the materials, will notify the adversary.

Which kind of lawyer are you? Lest readers view the above scenario as mere fiction or some kind of moot court hypothetical, readers should study Rico v. Mitsubishi Motors Corp.,¹ a California Supreme Court decision issued in mid-December, presenting such a real-life controversy.

Rico was an automotive products liability case stemming from the rollover of a sport utility vehicle. Defendant Mitsubishi's representatives met with their lawyers Y and C and two designated defense experts to discuss their litigation strategy and vulnerabilities. Defendant's case manager R also attended. Y and R had worked on cases before so Y asked R to take notes at the meeting and indicated specific areas to be summarized. R typed the notes on Y's computer. At the end of the session, R returned the computer and never saw a printed version of the notes. Y printed only one copy of the notes which he later edited and annotated. He never intentionally showed the notes to anyone. The sole purpose of the document was to help Y defend the case.

Strategy Session

The notes were written in a dialogue style summarizing the conversations with the experts. They were dated but not labeled with the title "confidential" or "work product." About two weeks later Y deposed plaintiff's expert at the offices of plaintiff's counsel J. Y was waiting in a conference room with the court reporter and a codefendant counsel when he was advised that the witness would be late. Y went to the rest room leaving his briefcase, computer and case file in the room. While Y was away, plaintiff's attorney J entered the room with the deponent expert and asked the court reporter and other attorney to leave. Y returned to find the latter standing outside. After waiting five minutes, Y knocked and asked to retrieve his briefcase, computer and file. After a brief delay he was allowed to do so. Somehow J acquired Y's notes. J maintained they were accidentally given to him by the court reporter. Y insisted they were taken from his file when only J and the witness were in the room. As a result, Mitsubishi filed a motion to disqualify plaintiff's attorneys and experts. The trial court ordered an evidentiary hearing.

The court reporter was deposed and denied any specific recollection of the expert's deposition. She could only relate her general practice in which she collects exhibits and puts them in a plastic covering. She did not remember ever giving exhibits to an attorney. She also testified she had never seen the document in question. If documents other than exhibits remain on a conference table, she leaves them there. The deposition was document-intense and took about eight hours.

The trial court concluded that the defense failed to establish that J took the notes from Y's file. It thus ruled that J came into the document's possession through inadvertence. J admitted that he knew within a minute or two that the document related to the defendant's case. He knew it would be a "powerful impeachment document." Nevertheless, J made a copy, scrutinized it, made his own notes on it, gave copies to his cocounsel and experts, all of whom studied it, and discussed the contents with each of his experts. A week later, J used the notes as impeachment materials during the deposition of a defense expert. According to J, the notes purportedly indicated that defense experts made statements at the strategy session that were inconsistent with their deposition testimony.

The defense attorney attending the expert's deposition (not Y) asked J about the document's source to which J responded vaguely, "It was put in Dr. Sances' [plaintiff's expert] file." Defense counsel objected to the "whole line of inquiry with respect to an unknown document." After the deposition, J gave a copy of the document to defense counsel. When Y realized that J had his only copy of the strategy session notes and used it at the deposition, defense counsel wrote to J and demanded return of all duplicates. The next day a motion to disqualify plaintiff's legal team and experts was filed. The grounds: they had become privy to and had unethically used Y's work product irremediably prejudicing defendants.

The trial court concluded the notes were absolutely privileged by the work product rule; that J acted unethically by examining the document more closely than was necessary to determine its contents were confidential; that J failed to notify Y he had a copy; and that J surreptitiously used it to gain maximum adversarial value. As the trial court put it, "the bell cannot be 'unrung' by use of in limine orders." Violation of the work product rule had prejudiced the defense. Accordingly, the trial court ordered plaintiff's attorneys and experts disqualified. The intermediate appellate court affirmed.

Ethical Standard

The California Supreme Court affirmed issuing clear guidelines. The court noted the legislative policy purposes behind the work product rule. Privacy is necessary to encourage lawyers to prepare their cases thoroughly and to investigate not only the favorable but the unfavorable aspects of those cases. The Legislature also declared its intent to "prevent attorneys from taking undue advantage of their adversary's industry and efforts." The codified work product doctrine absolutely protects from discovery writings containing an "attorney's impressions, conclusions, opinions or legal research or theories." The protection extends to an attorney's written notes about a witness' statements. When a witness' statements and the attorney's impressions are inextricably intertwined, the work product doctrine provides that absolute protection is afforded to all of the attorney's notes.²

Plaintiffs contended that the document was not work product because it reflected the statements of declared experts. But the state high court rejected this argument. The document was not a transcript of the strategy session. It was not a verbatim record of the experts' own statements. It contained R's summaries of points from the strategy session, made at Y's direction. Y had edited the document to add his own thoughts and comments, "further inextricably intertwining his personal impressions with the summary." As the trial court stated, "The attorneys' impressions of the case were the filter through which all the discussions at the conference were passed on the way to the page."³

The document was absolutely protected work product because it contained the ideas of Y and his legal team about the case. So what should J have done? What are the ethical duties owed upon receipt of an adverse attorney's work product? A prior appellate decision had articulated the standard of expected conduct, a rule the California Supreme Court now declared to be a "fair and reasonable approach." The standard is as follows:

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.⁴

The foregoing rule does not only apply to materials protected by the attorney-client privilege but to work product as well. Indeed, 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 similar doctrine that would preclude discovery based on the confidential nature of the document."⁵ The court observed that inadvertent disclosure is a "practical problem . . . in the context of today's reality that document production may involve massive numbers of documents." A contrary ruling on the privilege issue "could severely disrupt the discovery process."

The California Supreme Court quoted from an amicus curiae brief by the Product Liability Advisory Council:

Even apart from the inadvertent disclosure problem, the party responding to a request for mass production must engage in a laborious, time consuming process. If the document producer is confronted with the additional prospect that any privileged documents inadvertently produced will become fair game for the opposition, the minute screening and re-screening that inevitably would follow not only would add enormously to that burden but would slow the pace of discovery to a degree sharply at odds with the general goal of expediting litigation.⁶

Given the explosion of the digital era and computer age, electronic discovery now facilitates more intrusive document requests. The limited time frames for response, however, make preproduction review by attorneys a challenging and formidable task. Arguably, litigants and their counsel should be allowed to rest easy in their expectation that inadvertent disclosure of privileged materials will not lead to punishment or exploitation because they attempted speedy compliance with onerous discovery burdens.

Disqualification Appropriate

Further, the court in Rico observed that an attorney has an obligation not only to protect his client's interests but also the legitimate interests of fellow members of the bar, the judiciary and the administration of justice. A reasonable standard of professional conduct must govern inadvertent disclosure of confidential or privileged materials. Nor did it matter that the notes were not clearly flagged as confidential. "The absence of prominent notations of confidentiality does not make them any less privileged." The test is an objective one. Courts must consider questions such as whether reasonably competent counsel, knowing the circumstances of the litigation, would have concluded the materials were privileged, how much review was reasonably necessary to draw that conclusion, and when counsel's examination should have ended.⁷

In the Rico case the standard was easily applied. Attorney J admitted that after a minute or two of review he realized the notes related to the case and that Y did not intend to reveal them. These admissions and J's subsequent conduct demonstrate violation of the standard. The court noted, however, that such admissions are not required to find a violation when applying the objective standard for evaluating an attorney's conduct.

Then the court turned to the question of a remedy. Was the trial court's disqualification of plaintiff's counsel and experts appropriate? While "mere exposure" to an adversary's confidences is insufficient, standing alone, to warrant disqualification, a failure of the attorney to conduct himself in the manner specified above, once the materials are or should be recognized to be confidential or privileged, may justify disqualification. J here not only failed to act as required, he "acted unethically in making full use of the confidential document." The trial court found "unmitigable damage." Use of the document undermined the defense experts' opinions and placed defendants at great disadvantage. Without the remedy of disqualification, the damage caused by J's use and dissemination of the notes was "irreversible."⁸

Plaintiff's justification was that defense experts were giving false testimony. The court rejected the argument. First, the experts never actually adopted as their own the statements attributed to them. The document was not a verbatim transcript of the strategy session but a summary of points Y directed R to note. Then the document was edited and supplemented with Y's own thoughts and comments. As the trial court observed, the document was an interpretation and summary of what others thought the experts were saying. Second, when a writing is protected as attorney work product, courts do not invade upon the attorney's thought processes by evaluating the content of the writing. Once it is apparent that the writing contains work product, "the reading stops and the contents of the document for all practical purposes are off limits. In the same way, once the court determines the writing is absolutely privileged, the inquiry ends. Courts do not make exceptions based on the content of the writing,"⁹ Thus, regardless of its impeachment value, Y's notes should never have been subject to J's scrutiny and use.

Conclusion

The California Supreme Court's standard is a clear, bright-line, "high-road" approach. In an era witnessing massive discovery burdens, a perception by many that work product and attorney-client protections are being eroded by some courts, and the promotion of efforts to ensure civility in litigation, the Rico decision is a refreshing declaration of ideals, of practical steps backed up by the threat of real sanctions.

Although it may not be entirely clear, given occasional variations in some states' protection of work product, that all courts would decide similarly, it nevertheless is likely that major features of Rico's rationale would be appealing and persuasive to many courts. In individual litigations throughout the country, attorneys routinely act upon a presumption that privileged information is protected.

Indeed, daily, many lawyers argue passionately and zealously in their discovery responses and motions that attorney-client, work product and confidential materials should not be disclosed. If lawyers wish to be secure regarding this hallowed cocoon of privacy, then they should not weaken the law's sanctified doctrine merely because their adversary inadvertently slips up. Attorneys beware: that perceived manna from heaven can be a poisonous morsel.

Michael Hoenig is a member of Herzfeld & Rubin.

Endnotes:
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1. 2007 WL 4335934, 2007 Cal. LEXIS 13892 (Cal. Sup. Ct., Dec. 13, 2007).
2. Rico, 2007 Cal. LEXIS 13892, at *10-*11.
3. Id., LEXIS at *12.
4. Rico, Id., LEXIS at *17 (quoting from State Comp. Fund v. WPS Inc., 70 Cal. App. 4th 644, 656-657, 82 Cal. Rptr. 2d 799 (Cal. App. 1999)).
5. Rico, Id., LEXIS at *18-*19 n. 9.
6. Rico, Id., LEXIS at *19.
7. Rico, Id., LEXIS at *20.
8. Rico, Id., LEXIS at *22.
9. Rico, Id., LEXIS at *24.