In Mt. Hawley Ins. Co. v. Felman Production, Inc., 2010 WL 1990555 (S.D. W. Va. May 18, 2010), Judge Mary E. Stanley of the United States District Court for the Southern District of West Virginia held that the Plaintiff waived its attorney-client privilege with respect to a key email for failing to take reasonable steps to prevent inadvertent disclosure. 

The Court detailed the steps taken by the Plaintiff to produce relevant information yet protect privileged information. Including the use of a vendor to collect 1,638 gigabytes of data from 29 custodians, examining methods to cull non-relevant materials, selecting search terms deemed responsive to the Defendants document requests, selecting privilege search terms, testing privilege search terms against the Plaintiff's emails and conducting "eyes-on" review of all responsive and potentially privileged documents.  Mt. Hawley, 2010 WL at 11-12.  Included in the final production was a purportedly privileged email to outside counsel implicating the Plaintiff in a fraudulent scheme. Id. at 1. 

In applying the claw-back provision of Fed.R.Evid. 502(b), the Court found that in order to prevent the disclosure from operating as a waiver, the disclosure must be inadvertent, the holder of the privilege must take reasonable steps to prevent disclosure, and the holder must promptly take reasonable steps to rectify the error.  Id.  Finding that both the disclosure was inadvertent and that the Plaintiff took reasonable steps to rectify the disclosure, the Court turned to whether the Plaintiff's initial steps to prevent disclosure were reasonable.  Id.  Although the Plaintiff provided a laundry list of efforts taken during the discovery phase, the Court held that such efforts were not reasonable where the Plaintiff (1) failed to test the reliability of keyword searches by appropriate sampling; (2) inadvertently produced 377 privileged documents, some listed on the privilege log and some not; and (3) failed to identify the privileged email personally, rather relying on the Defendant's identification of the document.  Id.  Accordingly, the Court held that protection for the email under attorney-client privilege was waived and ordered that the Defendants were not required to return it.  Id.

For a copy of the court's opinion, click here.