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Successful “Claw Back,” Expanded Expert Protection, and Stays of Discovery

Records Retention and Electronic Discovery Law Update

This update includes three cases relating to e-Discovery developments in Illinois. The first involves a party's ability to "claw-back" inadvertently disclosed privileged documents under Federal Rule of Evidence 502(b). The second addresses what constitutes protected communications between an attorney and expert under newly amended Rule 26, and the third deals with a request to stay discovery during a pending motion to dismiss.

Carlock v. Williamson, 2011 WL 308608 (C.D. Ill. Jan. 27, 2011)

Facts: Carlock is a prisoner's rights case. The defendants inadvertently disclosed attorney-client and work product information in e-Discovery. Defendants gave Plaintiff access to its computers after entering a protective order and Plaintiff uncovered the privileged information.

Law: A privilege may be waived if a party discloses privileged materials. Fed. R. Evid. 502(b). If a disclosure is inadvertent, it will not operate as a waiver so long as the attorney takes reasonable steps to prevent disclosure and promptly moves to rectify the error. Id.

Holding: Defendants could "claw-back" the privileged information because they took reasonable steps to prevent the disclosure and to rectify the inadvertent disclosure.

Reasonable steps to prevent

Defendants entered into a broad protective order, discussed with Plaintiff using key words to limit its search, and emphasized their concern over Plaintiff's handling of privileged information.

Reasonable steps to rectify

First and foremost, the parties had a protective order in place. Defendants also immediately asserted a claim for privilege when they learned of the disclosure and demanded a log of the communications. The parties then engaged in numerous meet and confer sessions over the course of the next six weeks. When Plaintiff filed a motion to compel and included the protected documents as exhibits, Defendants immediately moved to place the motion and exhibits under seal.

Takeaway Points: Attorneys must take affirmative steps to protect the attorney-client privilege and the work-product privilege. Certain procedural safeguards must be in place not only to protect the privilege, but to "claw-back" an inadvertent disclosure. If information is disclosed, attorneys should act quickly to rectify the error to preserve the privilege.

Access the full Carlock opinion here.

Contrast with, Kmart Corp. v. Foodstar, Inc., 2010 WL 4512337 (N.D. Ill. Nov. 2, 2010), where the disclosing party did not take reasonable steps to prevent the disclosure because it had no screening mechanisms in place. Click here to see the full discussion of Foodstar in the last e-Discovery update.

Sara Lee Corp. v. Kraft Foods, Inc., 2011 WL 1311900 (N.D. Ill. April 1, 2011)

Facts: Defendants retained a single expert as both a testifying expert for one survey and as a consulting expert for a second survey. Defendants also retained a testifying expert for the second survey for which it prepared a report and was deposed. Plaintiff brought a motion to compel when the expert refused to answer questions at his deposition about the second survey. The court ruled pursuant to newly amended Rule 26.

Law:

  1. Materials solely related to an expert's role as a non-testifying expert are not discoverable unless there exists "exceptional circumstances under which it is impracticable for the party to obtain facts or opinions on the same subject matter by other means." Fed.R.Civ.P. 26(b)(4)(D).
  2. Communications between the attorney and testifying expert are protected by the newly added work-product protection. Fed.R.Civ.P. 26(b)(4)(C). The work-product protection does not apply to communications that:

                      a.)   relate to compensation for the expert's study or testimony;

                      b.)   identify facts or data the attorney provided and the expert considered in forming opinions; or

                      c.)   identify assumptions that attorney provided and the expert relied on in forming opinions.

Communications receiving work-product protection are not discoverable unless the party seeking the materials "has substantial need for the materials to prepare its case and cannot, without undue hardship, obtain their substantial equivalent by other means."

Holding:

  1. The requested materials related to the expert's role as a consultant and were not discoverable. Plaintiff could not show "exceptional circumstances" because it obtained "facts or opinions on the same subject by other means."
  2. Even if the expert were testifying, the materials were not discoverable because they did not relate to "compensation," "facts or data," or "assumptions provided by the attorney." Further, Plaintiff could not show a "substantial need for the materials" and could obtain the materials "without undue hardship" by other means.

Takeaway Points: Rule 26 of the Federal Rules of Civil Procedure was recently amended to provide greater protection to attorney communications with testifying experts. As such, litigation costs should decline since clients will not have to bear the cost of two experts in some cases.

Access the full Sara Lee opinion here.

Tamburo v. Dworkin, 2010 WL 4867346 (N.D. Ill. Nov. 17, 2010)

Facts: After the Seventh Circuit affirmed the dismissal of most of Plaintiff's sixth amended complaint, Defendant brought a Rule 12(b)(6) motion to dismiss the surviving claims in Plaintiff's seventh amended complaint. Defendant moved to stay discovery during the pendency of the motion to dismiss.

Law: A stay of discovery is generally appropriate only if there is a challenge to a potentially dispositive threshold issue, such as standing. A "garden variety" 12(b)(6) motion to dismiss for failure to state a claim generally does not warrant a stay of discovery. However, the court does have discretion to limit discovery and may do so under Rule 26's proportionality test.

Holding: The court entered a phased discovery under Rule 26. In the first phase, the parties could only serve discovery on named parties. Non-party discovery was postponed until this phase was exhausted. The court also stressed the need to complete 26(a)(1) initial disclosures, to focus on issues that may go forward, and prioritize and minimize costs.

Takeaway Points: The Northern District has recently shown a willingness to enter a phased discovery plan in certain situations - in particular, when the Plaintiff has unsuccessfully brought a number of complaints. In such situations, attorneys may consider requesting a phased discovery plan to save clients' time and expense.

Access the full Tamburo opinion here.

If you have any questions, please contact your Quarles & Brady attorney.

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