Opinion
99 Civ. 9161 (WHP)(THK)
August 9, 2001
Jacob Shisha, Esq., Tabak Mellusi, for Plaintiff.
James H. Power, Esq., Haight Gardner Holland Knight, for Defendant.
MEMORANDUM OPINION AND ORDER
This is a Jones Act action by a seaman, Daniel L. Johnson, who claims that he was injured while employed by defendant, Sea-Land Service, Inc. ("Sea-Land"). The case has been scheduled for trial before the Hon. William H. Pauley, III, U.S.D.J., and there is one outstanding discovery dispute that remains to be resolved. Plaintiff brought a letter-motion on October 16, 2000, seeking to preclude defendant from using at trial an e-mail that is claimed to be privileged, and that was produced to defendant in discovery. See Letter from Jacob Shisha, Esq., dated October 16, 2000 ("Motion"). He claims that the production was inadvertent. Defendant opposes the motion, arguing that plaintiff waived any privilege with respect to the document, that the document does not contain a privileged communication, and that any claim of privilege is overcome because the document falls within the crime-fraud exception to the attorney-client privilege.
Because the instant motion involves an evidentiary preclusion issue that is relevant to the trial of this action, the Court held its resolution in abeyance because it was informed that defendant intended to file a motion for summary judgment. See Order, dated April 16, 2001. The Court was recently advised that rather than a motion for summary judgment, defendant submitted a motion to preclude the testimony of plaintiff's expert witness, and that Judge Pauley, the district judge who will preside over the trial, has now decided that motion and has set a pretrial submission schedule.
BACKGROUND
The document in issue is an e-mail that was sent from plaintiff to an attorney in the law firm of Tabak Mellusi, which was retained to represent plaintiff in this action two days before the transmittal of the e-mail. The e-mail describes, in plaintiff's words, certain information about plaintiff's physical condition given to him by his doctors, as well as plaintiff's reflections on how his employer had been treating him and its effect on his attitude about the litigation. See Exhibit A, attached to Motion. According to plaintiff's counsel, in order to accommodate defendant's request to have plaintiff's documentary discovery available at plaintiff's deposition, he and his client met on the eve or morning of plaintiff's deposition and rushed to review and organize the documents plaintiff had brought with him from Florida. More than three hundred pages of written documentation, in addition to pay stubs and sea discharges, were reviewed. At the commencement of the deposition, plaintiff produced copies of the responsive documents to defendant's attorney, and during the deposition plaintiff's attorney noticed that the e-mail in issue was contained in one of the documents plaintiff had brought with him from Florida. Counsel told his adversary that the document reflected a privileged attorney-client communication and that it had been inadvertently produced; after some colloquy between counsel about the sender and recipient of the document, plaintiff's attorney retrieved it from the pile of documents that had been provided to defendant. See Transcript of Deposition of Daniel Johnson, dated August 16, 2000, attached to Motion as Exhibit B.
Apparently, another copy of the e-mail had been disclosed with plaintiff's responses, and it escaped notice by plaintiff's attorney. Several weeks later, defendant's counsel advised plaintiff's attorney that another copy of the e-mail had been found and that defendant intended to submit the e-mail as part of the record with the motion for summary judgment that was contemplated. The instant motion followed.
DISCUSSION
I. The Communication is Privileged
The attorney-client privilege affords confidentiality to communications among clients, their attorneys, and the agents of both, for the purpose of seeking and rendering an opinion on law or legal services, or assistance in some legal proceeding, so long as the communications were intended to be, and were in fact, kept confidential. See In re Six Grand Jury Witnesses, 979 F.2d 939, 944 (2d Cir. 1992), cert. denied, 509 U.S. 905, 113 S.Ct. 2997(1993); In re John Doe Corp., 675 F.2d 482, 487-88 (2d Cir. 1982); Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 441 (S.D.N.Y. 1995) (citing United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass. 1950)). The privilege is among the oldest of the common law privileges and exists for the purpose of encouraging "full and truthful communication between an attorney and his client . . . ." In re von Bulow, 828 F.2d 94, 100 (2d Cir. 1987); accord United States v. Bilzerian, 926 F.2d 1285, 1292 (2d Cir.), cert. denied, 502 U.S. 813, 112 S.Ct. 63(1991); The privilege does not protect the client's knowledge of relevant facts, whether or not they were learned from his counsel, or facts learned by the attorney from independent sources. In re Six Grand Jury Witnesses, 979 F.2d at 944;Arkwright Mut. Ins. Co. v. National Union Fire Ins. Co. of Pittsburgh PA., No. 90 Civ. 7811 (AGS), 1994 WL 510043, at *5 (S.D.N.Y. Sept. 16, 1994) (citing Upjohn Co. v. United States, 449 U.S. 383, 395-96(1981));Allen v. West Point-Pepperell Inc., 848 F. Supp. 423, 427-28 (S.D.N Y 1994).
Defendant first contends that the e-mail in issue is not a privileged communication, because it has not been shown to have been made for the purpose of securing legal advice. Rather, defendant argues that the e-mail appears merely to convey the substance of non-privileged communications between the plaintiff and his doctor, and that the privilege protects only communications and not information. See Letter of James H. Power, Esq., dated October 24, 2000 ("Power Ltr.), at 2, 4-5.
If the e-mail merely communicated information from plaintiff's doctor to plaintiff's attorney, the Court agrees that the information provided by the doctor would not be privileged. Defendant, however, misperceives the nature of the communication. The document contains plaintiff's description and characterization of what his doctor told him, as well as his own impressions of his physical condition and the conduct of defendant. Moreover, the email was sent by plaintiff in response to counsel's inquiry for background information, two days after counsel was retained to represent plaintiff. While defendant's counsel is free to question plaintiff about facts and information he had at the time he filed this action, including information provided to him by his doctor, the description of some of those facts in a communication to his attorney is privileged. See In re Grand Jury Subpoena Duces Tecum Dated Sept. 15, 1983, 731 F.2d 1032, 1037 (2d Cir. 1984) ("[I]t is important to bear in mind that the attorney-client privilege protects communications rather than information; the privilege does not impede disclosure of information except to the extent that the disclosure would reveal confidential communications."). Contrary to defendant's suggestion, the document need not specifically elicit legal advice; it was sent in the course of representation to an attorney who was seeking information from his client to facilitate his representation of the client. See United States v. United Shoe Machinery Corp., 89 F. Supp. 357, 358-59 (D. Mass. 1950) (the privilege applies to facts of which the attorney was informed for the purpose of securing either an opinion on law, legal services or assistance in some legal proceeding); In re Copper Market Antitrust Litigation, 200 F.R.D. 213, 217-18 (S.D.N.Y. 2001) (confidential communication made to counsel for the purpose of facilitating the rendition of legal services is protected by the attorney-client privilege).
II. The Crime-Fraud Exception
Defendant further contends that portions of the e-mail are unprotected by the attorney-client privilege because they fall within the crime/fraud exception. Client communications with an attorney seeking legal advice in order to accomplish an ongoing or future fraud are not privileged. See United States v. Zolin, 491 U.S. 554, 563, 109 S.Ct. 2619, 2626(1989) ("It is the purpose of the crime-fraud exception to the attorney-client privilege to assure that the `seal of secrecy' . . . between lawyer and client does not extend to communications `made for the purpose of getting advice for the commission of a fraud' or crime.") (citations omitted); In re Richard Roe, Inc., 68 F.3d 38, 40 (2d Cir. 1995). The burden of proof is on the movant seeking to defeat the privilege. To do so, the movant must first show probable cause to believe that a fraud has been attempted or committed, and second, that the communications with counsel were intended in some way to facilitate or to conceal the fraud. See In re Richard Roe, Inc., 168 F.3d 69, 70 (2d Cir. 1999); In re Richard Roe, 68 F.3d at 40; In re Grand Jury Subpoenas Duces Tecum, 798 F.2d 32, 34 (2d Cir. 1986); United States v. Davis, 132 F.R.D. 12, 15 (S.D.N.Y. 1990). It is not sufficient that the document or communication merely have the potential of being relevant evidence of activity in furtherance of a fraud. See In re Richard Roe, 168 F.3d at 71; In re Richard Roe, 68 F.3d at 40.
Defendant's counsel argues that in the e-mail, plaintiff expresses a nefarious reason for his lawsuit — because defendant had not sufficiently acknowledged him or his injury, he got angry and thus stated: "I only wanted what was due to me, but now, I want the brass ring!" This statement on its face does not evidence any fraud or fraudulent intent with regard to this litigation. There can be many reasons for bringing a lawsuit, including animosity to the defendant. Such hostility does not render fraudulent the legal basis for the action. Plaintiff contends, and it is not seriously disputed in this action, that he sustained a back injury while working aboard defendant's vessel; he underwent back surgery and has been found unfit to return to work as a merchant seaman. Even if he is resentful toward the defendant company and hopes to secure a large recovery, that is not prima facie evidence of a fraud. Cf. In re Richard Roe, 168 F.3d at 71 ("Where the very act of litigating is alleged as being in furtherance of a fraud, the party seeking disclosure under the crime-fraud exception must show probable cause that the litigation or an aspect thereof had little or no legal or factual basis and was carried on substantially for the purpose of furthering the crime or fraud.").
The second statement in the e-mail that is argued to be evidence of a fraud is plaintiff's statement: "I not started trophy [therapy], as of yet, but, Dr. O in March 1 would go for an evaluation, then start. He will give a perm. Unfit, but, wants to wait to make it look good for all involved, for just to give it out this quickly wouldn't look right." See Motion, Exhibit A. Defendant contends that this statement pertains to an ongoing or contemplated fraud involving the falsification of medical records. Plaintiff's counsel asserts that the statement is simply an unfortunate paraphrasing by Mr. Johnson, who meant basically that his doctor told him that he was pretty sure he would never return to work after his back surgery, but that he could not give him a permanent unfit for duty until he completed his physical therapy and underwent a formal evaluation. Counsel states that no one from his office had any dealings with Dr. Oliver, the doctor referred to in the e-mail who performed surgery on the plaintiff. See Motion at 5-6. Moreover, there is no dispute that plaintiff suffered a massive disc herniation, and no evidence to suggest that plaintiff's surgery was unnecessary or that plaintiff could return to the work of a seaman. See Letter of Jacob Shisha, dated October 25, 2000, at 2. Defendant responds that counsel's explanation of his client's purported intent fails to adequately refute the prima facie evidence of a fraud. See Power Ltr. at 5.
The Court is unable to conclude that the e-mail demonstrates probable cause to believe that either plaintiff or his doctor had engaged in, or was prepared to engage in, a fraud. The first paragraph of the e-mail describes, in plaintiff's words, his doctor's views that he had sustained serious injury to his back. One doctor declined to operate on plaintiff's back because of the size of his herniated disc. Plaintiff goes on to say that Dr. Oliver, the doctor who did perform surgery on his back, said that it was the largest herniation that he had ever seen. Finally, plaintiff states that he will always walk with a limp and it is likely that he will never regain feeling in his foot.
The Court agrees that the one sentence of plaintiff's e-mail, about Dr. Oliver's willingness to declare plaintiff permanently unfit, although ambiguous, could give rise to the impression that Dr. Oliver may have been prepared to draw a conclusion about plaintiff's physical condition that was not supported by the then existing evidence. Nevertheless, when viewed in context, there is an at least equally plausible, legitimate explanation of the statement. Dr. Oliver had performed surgery on plaintiff's back for a serious herniation. Although he thought it likely that plaintiff would be permanently unfit for duty as a seaman, it would be more appropriate, and his conclusion would have greater weight, if he waited until a course of therapy was concluded to draw a final conclusion as to plaintiff's fitness. Plaintiff's inarticulate and ambiguous characterization of what his doctor might be prepared to say or conclude, without any evidence that his doctor actually did make an intentional misrepresentation as to his physical condition in an attempt to mislead defendant, does not demonstrate probable cause to believe that a fraud occurred or was attempted. Cf. In re Grand Jury Subpoena Duces Tecum, 731 F.2d at 1039 (requiring that a "prudent person have a reasonable basis to suspect the perpetration or attempted perpetration of a crime or fraud").
Additionally, there is nothing in plaintiff's e-mail to his attorney that suggests that it was a communication seeking advice on how to perpetuate or cover up a fraud, or that it in any way facilitated a fraud. "[T]he [crime-fraud] exception applies only when the court determines that the client communication . . . was itself in furtherance of the crime or fraud . . . . Second, the crime-fraud exception applies only where there is probable cause to believe that the particular communication with counsel . . . was intended in some way to facilitate or conceal the criminal activity." In re Richard Roe, 68 F.3d at 40 (citations omitted); In re Grand Jury Subpoenas, 798 F.2d at 34 (same).
III. Waiver of the Privilege A. Failure to Produce a Privilege Log
Defendant sets forth several reasons why plaintiff's conduct resulted in a waiver of the attorney-client privilege with respect to the e-mail. First, it is argued that since the e-mail was never identified on a privilege log, as required by Rule 26(b)(5), Fed.R.Civ.P., and Local Civil Rule 26.2 of the Southern District of New York, the privilege has been waived. While it is true that the unjustified failure to properly assert the privilege in compliance with Local Rule 26.2, by providing a privilege log, may result in a waiver of the privilege, see, e.g., A.I.A. Holdings. S.A. v. Lehman Brothers. Inc., No. 97 Civ. 4978 (LMM)(HBP), 2000 WL 1538003, at *3 (S.D.N.Y. Oct. 17, 2000), plaintiff asserts that the document was not identified on a privilege log because it was not responsive to any of defendant's discovery requests. Defendant has not argued otherwise and has not provided any document request as to which the e-mail would have been responsive.
In any event, plaintiff's document production was not due until the day of plaintiff's deposition, which is the same day on which the document was inadvertently provided, and the same day on which is was returned because plaintiff's counsel claimed it was privileged. The subsequent production of a privilege log would have served no additional purpose, since defendant's counsel had already seen the document, and defendant's attorney established at the deposition the identity of both the sender and recipient of the e-mail. No additional information would have been required in a privilege log. Accordingly, the failure to identify the document in a privilege log did not result in a waiver of the attorney-client privilege.
B. Inadvertent Production
Defendant further contends that any privilege with respect to the e-mail was waived because it was produced voluntarily and, in any event, even if it was produced inadvertently, there has been a waiver because defendant failed to take adequate precautions to preserve the privilege.
Plaintiff has set forth its explanation of how the document was produced by mistake in its Letter-Motion of October 16, 2001, which was affirmed on October 25, 2001, and supplemented in a reply letter of Jacob Shisha on October 25, 2001 ("Pl's Reply") Plaintiff flew to New York from Florida a day or two before his scheduled deposition. He brought with him whatever documentation he had that was relevant to his case. Although his documentary production was not required to be submitted to defendant until August 16, 2001, the date of the deposition, in an effort to facilitate the deposition, plaintiff's counsel agreed to produce the documents on the morning of the deposition. Counsel and his client reviewed more than 300 documents (it is unclear if this review took place on the day of the deposition or the day before), and at the commencement of the deposition, "plaintiff produced copies of three stacks of documents, which were copies of the Answers to Interrogatories and Request for Production of Documents." See Motion at 2. During the deposition, plaintiff's counsel noticed that the e-mail was contained in one of the documents that plaintiff had brought with him from Florida. After notifying defendant's counsel, at the deposition plaintiff's attorney removed the e-mail from the pile of documents that had been produced to defendant. He did not realize that another copy of the e-mail was elsewhere in the stack of documents. Id.
The voluntary disclosure of a document protected by the attorney-client privilege generally waives any claim of privilege as to that document. See In re von Bulow, 828 F.2d at 100-101; Fabelo v. Greiner, No. 97 Civ. 2988 (DC), 1999 WL 637233, at *7 (S.D.N.Y. Aug. 19, 1999); Aramony v. United Way of America, 969 F. Supp. 226, 235 (S.D.N.Y. 1997). However, if the disclosure is inadvertent, the privilege will not be waived unless the producing party's conduct was "so careless as to suggest that it was not concerned with the protection of the asserted privilege." Aramony, 969 F. Supp. at 235; see also Laquila Const. Inc. v. Travelers Indem. Co. of Ill., No. 98 Civ. 5920 (HB), 1999 WL 232901, at *1 (S.D.N.Y. Apr. 21, 1999); United States v. Gangi, 1 F. Supp.2d 256, 264 (S.D.N.Y. 1998);Lloyds Bank PLC v. Republic of Ecuador, No. 96 Civ. 1789 (DC), 1997 WL 96591, at *3 (S.D.N.Y. Mar. 5, 1997). "Under this rule the privilege is waived with respect to mistakenly produced documents only if the producing party failed to take reasonable steps to maintain their confidentiality." Bank Brussels Lambert, 160 F.R.D. at 443.
In this Court, the criteria consistently applied to assess the issue of waiver are: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of the discovery and the extent of the disclosure; and (4) overarching issues of fairness. See Lois Sportswear. U.S.A., Inc. v. Levi Strauss Company, 104 F.R.D. 103, 105 (S.D.N.Y. 1985); see also SEC v. Cassano, 189 F.R.D. 83, 85 (S.D.N.Y. 1999); Aramony, 969 F. Supp. at 235; Bank Brussels Lambert, 160 F.R.D. at 443. Under the circumstances of this case, the Court concludes that these factors weigh in plaintiff's favor, and that production of the e-mail was inadvertent and did not waive the attorney-client privilege.
Here, there is no real dispute that the e-mail was produced unintentionally. Disclosure by itself does not lead to the conclusion that the precautions undertaken to protect the privilege evidence indifference to the privilege. See Prescient Partners, L.P. v. Fieldcrest Cannon. Inc., No. 96 Civ. 7590(DAB) (JCF), 1997 WL 736726, at *5 (S.D.N.Y. Nov. 26, 1997); Bank Brussels, 160 F.R.D. at 443. Rather, the Court must assess whether "the procedure[s] followed in maintaining the confidentiality of the document[s] [were] . . . so lax, careless, inadequate or indifferent to consequences as to constitute a waiver."Martin v. Valley National Bank of Arizona, No. 89 Civ. 8361(PKL), 1992 WL 196798, at *2 (S.D.N.Y. Aug. 6, 1992) (internal citations and quotations omitted). Inadvertent production will not waive the privilege unless the conduct of the producing party or its counsel evinced such extreme carelessness as to suggest that it was not concerned with the protection of the privilege. See Lloyds Bank, 1997 WL 96591, at *3 (quoting Desai v. American Int'l Underwriters, No. 91 Civ. 7735(LBS) (MHD), 1992 WL 110731, at *1 (S.D.N.Y. May 12, 1992)).
This is not a case where the Court is called upon to assess the adequacy of document screening and review procedures in the context of complex corporate litigation, where a hierarchy of attorneys has been involved. Rather, plaintiff, an individual, is represented by a relatively small law firm. Plaintiff brought most of the documents responsive to defendant's discovery request with him on his flight to New York, in anticipation of his deposition. Plaintiff and his attorney reviewed the documents when they were together in New York, on the eve of his deposition. Although defendant claims that plaintiff's attorneys had the e-mail in their possession months before it was turned over to defendant, that fact does not evidence undue carelessness or haste in its production. The e-mail was addressed to plaintiff's counsel, so he obviously had it. Nevertheless, the document request was only issued thirty days earlier, and counsel did not view the e-mail as being responsive to the request. The e-mail was apparently mixed in with plaintiff's files and papers pertaining to his school records and medical bills. See Pl's Reply, at 2. While, of course, plaintiff could have sent the documents to his attorney before he came to New York, in a relatively modest, individual case such as this one, it is not surprising or particularly troubling that plaintiff brought his documents with him. There would have been no reason to expect that the documents would be so copious or complex as to require significant, advance time to review them for privilege. In the end, the failure to see and withhold the e-mail was, at most, careless, but its production does not evince such extreme carelessness as to suggest that plaintiff was not concerned with the protection of his privileged communications.
That there was a second copy of the e-mail which went undetected in the stack of documents which plaintiff produced, does not suggest a significantly higher degree of carelessness.
Although inordinate delay in claiming the privilege may result in a waiver, the length of delay in claiming the privilege should be measured from the time the producing party learns of the disclosure, not from the time of the disclosure itself. See Aramony, 969 F. Supp. at 237;Prescient Partners, 1997 WL 736726, at *6; Lloyds Bank, 1997 WL 96591, at *4. In the instant case, the privilege was asserted and the e-mail was reclaimed promptly on the same day it was produced to defendant.
The third factor to be considered focuses on the number of privileged documents disclosed in relation to the overall size of the document production. "Courts have routinely found that where a large number of documents are involved, there is more likely to be an inadvertent disclosure rather than a knowing waiver." Baker's Aid v. Hussmann Foodservice Co., No. 87 Civ. 0937, 1988 WL 138254, at *5 (E.D.N.Y. Dec. 19, 1988); see also Lloyds Bank, 1997 WL 96591, at *4. This factor weighs slightly in plaintiff's favor; Here, approximately three hundred documents were produced. Although this does not come close to the mammoth document productions that exist in much federal litigation, it is not an insignificant number. Moreover, the e-mail appears to have been the only privileged document that was produced.
Finally, the Court is unable to conclude that unfairness would result or that defendant would be prejudiced by restoring privilege to the e-mail and precluding its use at trial. Defendant has not relied on the e-mail in any fashion, and there is no claim that plaintiff has made strategic use of selective waiver of the privilege. Moreover, the e-mail is not critical to any material issue in the litigation. To the extent it reveals plaintiff's anger at his employer and one of his motivations for pursuing this litigation, that issue is ancillary to the merits of the case and not highly relevant. As to the truthfulness of plaintiff's expert's prognosis, there should certainly be better ways of exploring that issue than plaintiff's inarticulate description of what he believed his doctor thought.
CONCLUSION
For all of the above reasons, plaintiff's application to preclude defendant from using the e-mail at the trial of this action is granted.
So Ordered.