Opinion
17 CV 3044 (FB) (CLP)
2020-11-30
D'Eric SIMMIONS, et al., Plaintiffs, v. PIERLESS FISH CORP., et al., Defendants.
Andrew Joseph Mailhot, The Ottinger Firm, P.C., New York, NY, for Plaintiffs. Dove A.E. Burns, Stacey Lynn Pitcher, Obermayer Rebmann Maxwell & Hippel LLP, New York, NY, for Defendants.
Andrew Joseph Mailhot, The Ottinger Firm, P.C., New York, NY, for Plaintiffs.
Dove A.E. Burns, Stacey Lynn Pitcher, Obermayer Rebmann Maxwell & Hippel LLP, New York, NY, for Defendants.
MEMORANDUM AND ORDER
POLLAK, Chief United States Magistrate Judge:
On May 19, 2017, plaintiffs D'Eric Simmions and Gerald Coulter commenced this action on behalf of themselves and other similarly situated employees of defendants Pierless Fish Corp. and Robert DeMasco, alleging violations of the minimum wage and overtime requirements under the Fair Labor Standards Act ("FLSA"), 29 U.S.C. § 201 et seq., and New York Labor Law ("NYLL") § 650, along with allegations that defendants failed to pay spread-of-hours pay, took improper deductions from plaintiffs’ wages, and failed to provide proper wage statements under the NYLL.
On December 10, 2019, defendants filed a motion with this Court seeking a Protective Order and sanctions against plaintiffs’ counsel based on plaintiffs’ counsel's actions in connection with an email that was inadvertently sent to plaintiffs’ counsel and that revealed defendants’ settlement strategy in the case. (Defs.’ Mot. ).
Citations to "Defs.’ Mot." refer to the Defendants’ Motion for Protective Order and Sanction, dated December 10, 2019, ECF No. 86.
For the reasons stated below, the Court grants the motion for a protective order and disqualifies Mr. Ottinger and Mr. Weisenberg but denies the motion for sanctions and fees.
FACTUAL AND PROCEDURAL BACKGROUND
At 7:00 p.m. on September 10, 2019, counsel for defendants, Stacey Pitcher, Esq., sent an email intended for her client, defendant Robert DeMasco, detailing defendants’ counsel's damages analysis. (Defs.’ Mot. at 2, Ex. A). The email was addressed to "Bobby" and on its face appears to be directed to defendants’ counsel's client; indeed, the email requests a meeting with defendant DeMasco to explain the arguments that defendants’ counsel intended to make at the then upcoming mediation. (Defs.’ Mot., Ex. A). The fourth sentence of the email makes it clear that it was intended for the defendant in that counsel explicitly states an intention to pursue a certain strategy at the mediation. (Id. ) Attached to the September email was a second earlier email, dated June 18, 2019, addressed to defendant "Robert DeMasco" along with an attachment containing defendants’ counsel's detailed evaluation of liability and damages. (Id.; see also Defs.’ Mot., Ex. B).
Unfortunately, Ms. Pitcher inadvertently sent the September email and attachment to "Robert" Ottinger, counsel for plaintiffs, instead of "Robert" DeMasco. (Id. at 3). According to defendants’ counsel, when they realized the inadvertent disclosure, they attempted to recall the email and its attachment and alerted Mr. Ottinger by email to the inadvertent disclosure. They also called plaintiffs’ counsel's office to speak with Mr. Ottinger and left numerous messages with the firm. (Id. at 3). Defendants’ counsel eventually contacted Benjamin Weisenberg, Esq., also of the Ottinger Firm, P.C., to inform him of the inadvertent disclosure to Mr. Ottinger and asked him not to read the email if it had been forwarded to him. (Id. ) According to defendants, Mr. Weisenberg told defendants’ counsel that Mr. Ottinger had read the email, forwarded it to Mr. Weisenberg, and both had read the attachment. (Id. at 3-4). The two also allegedly discussed the contents of the email and its attachment. (Id. at 4).
On October 1, 2019, the parties appeared before the undersigned for a status conference. (See Minute Entry dated 10/2/2019). Benjamin Weisenberg and Robert Ottinger appeared for the plaintiffs at the conference; Dove Burns and Stacey Pitcher appeared for the defendants. A private mediation had been scheduled for mid-October and the focus of the status conference at that time was to address whether Mr. Weisenberg and Mr. Ottinger would participate in the upcoming mediation, given their review of defendants’ counsel's strategy and calculations. At the conference, the parties made many of the same arguments now advanced in their respective motion papers. (Defs.’ Mot., Ex. D). However, during the conference, Mr. Ottinger denied forwarding the email to Mr. Weisenberg, and instead claimed that the attachment had been uploaded to the firm's document management system, and that Mr. Weisenberg had reviewed the document uploaded to the system. (Id. at 12-14). Accordingly, it was plaintiffs’ counsel's contention that Mr. Weisenberg never read the email itself but only the attachment. (Defs.’ Mot. at 4).
At the conclusion of the conference, this Court found that, due to Mr. Weisenberg's and Mr. Ottinger's exposure to the confidential settlement documents inadvertently sent by defendants’ counsel and intended for their client, and the subsequent conversations between Weisenberg and Ottinger about those documents, neither attorney could participate in the mediation as it would unduly prejudice the defendants. (Id. at 27). The Court therefore Ordered another attorney from the Ottinger firm who had not been exposed to the email and attachment to appear on behalf of the plaintiffs at the mediation. (Id. ) The Court told the parties that if the case was not resolved by mediation, the parties could raise the arguments regarding the inadvertent disclosure at a later date. (Id. )
On October 31, 2019, the parties informed the Court that the mediation was unsuccessful and counsel for defendants indicated an intention to move to disqualify plaintiffs’ firm. (See Joint Status Report, ECF No. 79). At the next status conference held on November 18, 2019, the Court issued a schedule for defendants’ motion for disqualification. Defendants filed the motion at issue here on December 1, 2019. Plaintiffs did not respond.
Instead, on December 31, 2019 and January 2, 2020, the Court was alerted to the fact that Pierless Fish Corp. had filed for bankruptcy. (See ECF Nos. 87, 88). The United States District Judge presiding over this matter, the Honorable Frederick Block, entered an Order on January 7, 2020, staying the case "only as to defendant Pierless Fish Corp. until such time as this Court is notified that the bankruptcy action has been resolved." (Electronic Order, dated January 7, 2020). The case was not stayed as to the individual defendant, Robert DeMasco. (Id. ) Given that the case was stayed only as to the corporate defendant, see id., the Court must decide whether to grant the motion insofar as it was brought on behalf of the individual defendant, Robert DeMasco, and not just the corporate defendant. "It is well-established that stays pursuant to § 362(a) are limited to debtors and do not encompass non-bankrupt co-defendants." Teachers Ins. and Annuity Ass'n of America v. Butler, 803 F.2d 61, 65 (2d Cir. 1986).
DISCUSSION
I. Motion for Protective Order
Defendant DeMasco seeks a protective order declaring that the email and attachment inadvertently sent to plaintiffs’ counsel are privileged, and that defendants’ counsel did not waive that privilege through its inadvertent disclosure. (Defs.’ Mot. at 8). He also requests that the Court order the destruction of any and all copies of the email and its attachment; order any and all documents, notes, or internal communications discussing either document to be destroyed as well; and, enter an order precluding plaintiffs from using the information therein. (Id. )
As an initial matter, it does not appear that plaintiffs are disputing the intended privileged nature of the email and attachment, so for purposes of this decision, the Court assumes that the documents were in fact privileged. The question is whether defendants’ counsel's conduct was so careless as to constitute a waiver of the privilege, and if not, whether plaintiffs’ counsel's actions upon receipt of the inadvertent disclosure justify the imposition of sanctions and/or disqualification from further representation in this case.
It is well established that the voluntary disclosure of privileged communications amounts to a waiver of the attorney-client privilege and, where applicable, work product immunity. See Local 851 of Int'l Broth. of Teamsters v. Kuehne & Nagel Air Freight, Inc., 36 F. Supp. 2d 127, 132 (E.D.N.Y. 1998) (citing cases); see also United States v. Rigas, 281 F. Supp. 2d 733, 737 (S.D.N.Y. 2003) (holding "[a]s a general rule, the voluntary production of a privileged document waives any claim of privilege with respect to that document").
When a party inadvertently discloses privileged material, however, the privilege will not be deemed waived " ‘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.’ " Stoner v. New York City Ballet Co., No. 99 CV 0196, 2002 WL 31875404, at *2 (S.D.N.Y. Dec. 24, 2002). An inadvertent disclosure of privileged material will be deemed a waiver when the disclosing party has failed to take adequate precautions to maintain the confidentiality of the privileged communication. See United States v. Gangi, 1 F. Supp. 2d 256, 264 (S.D.N.Y. 1998) (holding that "[I]f a client wishes to preserve the privilege, it must treat the confidentiality of attorney-client communications like jewels if not crown jewels") (quoting In re Sealed Case, 877 F.2d 976, 980 (D.C. Cir. 1989) ); Fry v. McCall, No. 95 CV 1915, 1998 WL 273035, at *3 (S.D.N.Y. May 28, 1998). Whether a waiver has occurred may depend upon whether the disclosure resulted from excusable inadvertence or from a litigant's carelessness. See Prescient Partners LP v. Fieldcrest Cannon, Inc., No. 96 CV 7590, 1997 WL 736726, at *4 (S.D.N.Y. Nov. 26, 1997). Although open communication between counsel and client is encouraged by the courts, there is also "an incentive for counsel to engage in production carefully, since failure to take reasonable precautions will result in a waiver." Lloyds Bank PLC v. Republic of Ecuador, No. 96 CIV 1789, 1997 WL 96591, at *1, *3 (S.D.N.Y. Mar. 5, 1997).
To determine whether an inadvertent disclosure waives the privilege, courts in the Second Circuit balance four factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosures; (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. Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104 F.R.D. 103, 105 (S.D.N.Y. 1985).
As to the reasonableness of the precautions exercised by defendants’ counsel, "[t]he mere fact of an accidental disclosure does not automatically render the precautionary measures unreasonable at the time they were performed." United States v. Rigas, 281 F. Supp. 2d at 739. Some courts have focused on whether the inadvertently disclosed documents contained labels warning of the confidential nature of the document. While those courts weighed the lack of "privileged" and "confidential" labeling, see Local 851 of Int'l Broth. of Teamsters v. Kuehne & Nagel Air Freight, Inc., 36 F. Supp. 2d at 132, the majority of these cases involve public disclosure of confidential documents through filing with the court or production in discovery. See, e.g., Desouza v. Park West Apartments, Inc., No. 3:15-CV-01668, 2018 WL 625010, at *1 (D. Conn. Jan. 30, 2018), In re Natural Gas Commodity Litigation, 229 F.R.D. 82 (S.D.N.Y. 2005) ; Aramony v. United Way of America, 969 F. Supp. 226 (S.D.N.Y. 1997).
Unlike those cases, here, the disclosure occurred because of a common error that occurs frequently when using email; both the client and plaintiff's counsel have the same first name and invariably, a simple click of the mouse on the wrong entry resulted in the email being sent to the wrong person. It is completely understandable how the email could have been sent inadvertently to the wrong "Robert." Moreover, there were limited measures that defendants’ counsel could have taken in order to prevent the accidental emailing to opposing counsel in this instance. The inadvertent email, unlike an inadvertently publicly filed document, see, e.g., Desouza v. Park West Apartments, Inc., 2018 WL 625010, at *1, or an inadvertent disclosure as a result of an unsupervised document review process, see In re Natural Gas Commodity Litigation, 229 F.R.D. at 87, was not "so careless as to suggest that [counsel] was not concerned with the protection of the asserted privilege." Aramony v. United Way of America, 969 F. Supp. at 235. While labeling the email and attachment "privileged" and "confidential" might have alerted plaintiffs’ counsel to the sensitive nature of the documents sooner, it is doubtful that would have deterred them from reading further. As noted, after reading a few lines of the email itself, it should have been clear that it was not intended for plaintiffs’ counsel. The fourth sentence of the email discussing proposed payment terms was a red flag that plaintiffs’ counsel, upon reading, should have realized was not intended for Mr. Ottinger; defendants would not have suggested that plaintiffs’ counsel be afforded payment terms in the context of an FLSA settlement since plaintiffs’ counsel would never be assessed damages. Nonetheless, plaintiffs’ counsel not only proceeded to read the remainder of the September email, counsel reviewed and discussed the June email addressed to DeMasco, along with the confidential damages analysis. Although the circumstances of this case are a cautionary tale for all attorneys sending confidential privileged information by email, it does not appear that there was a clear disregard of the confidential nature of the documents on the part of defendants’ counsel.
The second Lois factor – the time taken to rectify the error – weighs strongly in favor of defendant here. Although "inordinate delay in claiming the privilege can prejudice the adversary and may be deemed a waiver," Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 445 (S.D.N.Y. 1995), there was no substantial delay here. After sending the email at 7:00 p.m., defendants’ counsel realized the error and reached out to plaintiffs’ counsel within the hour. (Defs.’ Mot. at 10). Not only did defendants’ counsel attempt to recall the email, but Ms. Pitcher later sent an email to Mr. Ottinger at 8:51 p.m., requesting that plaintiffs’ counsel not read, print, or forward the documents emailed and attached. (Defs.’ Mot., Ex. C). Counsel also tried to reach her adversary by telephone and by contacting another attorney in the firm, Mr. Weisenberg.
The third factor – the scope of discovery and the extent of the disclosure – must be weighed a bit differently than the average inadvertent disclosure case. Typically, the issue involved is the production of a large volume of documents during the course of standard discovery proceedings, and the question before the court upon an inadvertent disclosure is whether the process of disclosing discovery documents resulted in the production of numerous attorney-client privileged information, suggesting a carelessness in the overall discovery process. "A body of case law has developed with respect to whether the inadvertent disclosure of a document protected by the attorney-client or work product privilege results in a waiver of the privilege. These cases ... are civil cases involving the inadvertent production of a few pages of a privileged document during the course of the production of thousands of pages of documents in discovery." United States v. Gangi, 1 F. Supp. 2d 256, 265 (S.D.N.Y. 1998).
Here, of course, the disclosure did not occur as part of the larger discovery process: the inadvertent disclosure, instead, consisted of an email and an attachment. Thus, the scope of discovery was nowhere near the typical discovery process of thousands of documents, which must be manually reviewed before being disclosed. In that way, the scope of discovery does not weigh in defendants’ counsel's favor, as counsel should have been particularly careful with this single email. That is particularly true given the extremely sensitive nature of the document at issue here. However, to the extent that this document was a single email and single attachment, inadvertently disclosed to counsel's adversary, after a discovery process that resulted in the exchange of hundreds of documents, this factor – which appears to test the carelessness of the discovery process by quantifying the ratio of inadvertently disclosed documents as compared to those documents that were justifiably disclosed – conceivably also weighs in favor of defendants’ counsel.
Finally, the Court finds that the overarching issue of fairness favors defendants’ counsel as well. "The prejudice factor focuses only on whether the act of restoring immunity to an inadvertently disclosed document would be unfair, not whether the privilege itself deprives parties of pertinent information." Bank Brussels Lambert v. Credit Lyonnais (Suisse) S.A., 160 F.R.D. 437, 446 (S.D.N.Y. 1995). The extremely sensitive nature of these documents inadvertently emailed on the eve of mediation, coupled with defendants’ counsel's allegation that Mr. Ottinger failed to respond to their phone calls and emails in regard to the inadvertent disclosure (see Defs.’ Mot. at 5 ("I wasn't going to talk to you guys")), tilts the balance of equities towards defendants’ counsel. So too, the defendants’ counsel indicated in their email following the disclosure that plaintiffs’ counsel should "confirm that you have deleted it and that you haven't read, shown, forwarded, printed or otherwise duplicated or disclosed the e-mail or it's [sic] attachment." (Defs.’ Mot, Ex. C). Whether or not the preferable outcome was to save or immediately delete the inadvertent disclosure (see Defs.’ Mot., Ex. D at 22:19-23 (Stacey Pitcher: "Yeah, in fairness we were the ones that had told them to retain it because we didn't know whether the internal communications between Mr. Ottinger and Mr. Weisenberg may end up being relevant to this motion or any sanction, so we originally asked them to retain them")), at minimum, plaintiffs’ counsel – once the inadvertent disclosure was in their possession – had an obligation to notify the sender. See N.Y. Rule of Prof. Conduct 4.4(b). Actively avoiding the defendants’ counsel's phone calls is an altogether different (and inappropriate) response. As such, the Court finds that this factor also favors defendants’ counsel.
The Court recognizes that the New York Bar Association has stated that "Rule 4.4(b) imposes no obligations or restrictions on the receiving lawyer beyond requiring the lawyer to notify the sender." Committee Report, New York City Bar Association, Formal Opinion 2019-3: Obligations Regarding a Lawyer's Use of Information Inadvertently Sent by Another. Indeed, Rule 4.4's comments explain that the Rule "does not require that the receiving lawyer refrain from reading or continuing to read the document" nor does it "subject a lawyer to professional discipline for reading and using that information." Id. However, this Opinion is irrelevant as plaintiffs’ counsel failed the very first step: notifying the sending attorney of the inadvertent disclosure.
All of the relevant factors, then, militate to some degree in favor of holding that the disclosure to plaintiffs’ counsel of these documents did not constitute a waiver of the privilege. In conclusion, "[w]here, as here, inadvertent disclosures have been determined not to constitute a waiver, courts have directed that the documents be returned, and that they not be used in the subsequent course of the litigation." Hydraflow, Inc. v. Enidine Inc., 145 F.R.D. 626, 638 (W.D.N.Y. 1993). The Court hereby Orders plaintiffs to destroy the email and its attachment. In addition, plaintiffs shall destroy any and all documents, notes, or internal communications discussing either the email and its attachment, and plaintiffs are precluded from using the information therein.
II. Motion for Sanctions
Given that plaintiffs’ counsel "shar[ed] and review[ed] privileged materials," defendants seek sanctions in the form of fees and costs associated with the present motion. In addition, they seek to disqualify plaintiffs’ counsel's firm from further representation of plaintiffs in this case, or, in the alternative, an order directing that neither Mr. Weisenberg nor Mr. Ottinger have any future involvement in this case. The proposed Order also asks that Mr. Weisenberg and Mr. Ottinger be directed not to give or show the email or its attachment to Mr. Mailhot or anyone else, and that all employees of the Ottinger firm be alerted to these provisions. (Defs.’ Mot. at 10).
A. Disqualification
Defendants’ counsel argues that the Ottinger firm – or, in the alternative, Mr. Weisenberg and Mr. Ottinger – should be disqualified from representing the plaintiffs in this matter or any wage matter involving these defendants.
To begin, "[t]he objective of the disqualification rule is to ‘preserve the integrity of the adversary process.’ " Evans v. Artek, 715 F.2d at 791 (quoting Board of Education v. Nyquist, 590 F.2d 1241, 1246 (2d Cir. 1979) ). However, "the disqualification of an attorney upon the motion of an adversary is a serious sanction that ought not to be imposed lightly." Sea Tow Int'l, Inc. v. Pontin, No. 06 CV 3461, 2007 WL 4180679, at *1 (E.D.N.Y. Nov. 19, 2007) (quoting Shabbir v. Pakistan Int'l Airlines, 443 F. Supp. 2d 299, 304 (E.D.N.Y. 2005) ). Indeed, "[m]otions to disqualify opposing counsel are viewed with disfavor in this Circuit because they are ‘often interposed for tactical reasons’ and result in unnecessary delay." Bennett Silvershein Assocs. v. Furman, 776 F. Supp. 800, 802 (S.D.N.Y. 1991) (quoting U.S. Football League v. Nat'l Football League, 605 F. Supp. 1448, 1452 (S.D.N.Y. 1985) ). The Second Circuit has "been loathe to separate a client from his chosen attorney." Bohack Corp. v. Gulf & Western Indus., Inc., 607 F.2d 258, 263 (2d Cir. 1979). Thus, the party seeking disqualification bears a "heavy burden" of demonstrating that disqualification is warranted. See Evans v. Artek, 715 F.2d 788, 794 (2d Cir. 1983).
The decision to disqualify counsel is committed to the sound discretion of the district court. See Cresswell v. Sullivan & Cromwell, 922 F.2d 60, 72 (2d Cir. 1990). In deciding such a motion, the court must "balance ‘a client's right freely to choose his counsel’ against ‘the need to maintain the highest standards of the profession.’ " Hempstead Video, Inc. v. Incorporated Vill. of Valley Stream, 409 F.3d 127, 132 (2d Cir. 2005). The Second Circuit has therefore instructed that disqualification should only be imposed upon a finding that the presence of a particular attorney "poses a significant risk of trial taint." Glueck v. Jonathan Logan, Inc., 653 F.2d at 748. "Where the threat of tainting the trial does not exist ... the litigation should proceed, the remedy for unethical conduct lying in the disciplinary machinery of the state and federal bar." Bottaro v. Hatton Assocs., 680 F.2d 895, 896 (2d Cir. 1982) (citing Armstrong v. McAlpin, 625 F.2d 433, 444 (2d Cir. 1980), vacated on other grounds and remanded, 449 U.S. 1106, 101 S.Ct. 911, 66 L.Ed.2d 835 (1981) ). "Unless the ‘taint’ threshold has been crossed, precedent counsels reliance upon alternative institutional mechanisms for assessing the ethical propriety vel non of particular instances of questionable attorney conduct." European Cmty. v. RJR Nabisco, Inc., 134 F. Supp. 2d 297, 304 (E.D.N.Y. 2001) (citing Bottaro v. Hatton Assocs., 680 F.2d 895, 896 (2d Cir. 1982) ).
In New York, federal district courts are guided by the ABA Model Rules of Professional Conduct, the ABA Model Code of Professional Responsibility, and the New York Code of Professional Responsibility. Blue Planet Software, Inc. v. Games Int'l, LLC, 331 F. Supp. 2d 273, 275 (S.D.N.Y. 2004). However, "such rules merely provide general guidance and not every violation of a disciplinary rule will necessarily lead to disqualification." Board of Education v. Nyquist, 590 F.2d at 1246.
Defendants cite a variety of cases – some of which are not controlling and some of which are inapposite on the issue of attorney disqualification. To begin, many of the cases to which defendants’ counsel refer are cases in which a court ordered disqualification because of prior representation. (Defs.’ Mot. at 12-13 (citing Glueck v. Jonathan Logan, Inc., 653 F.2d 746, 748 (2d Cir. 1981) )). A large body of case law has developed around disqualification on the grounds of conflicts of interest – the analysis of which does not readily apply here. See, e.g., Murray v. Metropolitan Life Ins. Co., 583 F.3d 173, 179 (2d Cir. 2009).
Instead, defendants’ counsel asks the Court to apply the test set forth in In re Meador, 968 S.W.2d 346, 350 (Tex. Sup. Ct. 1998), in order to determine whether to disqualify counsel based upon the actions counsel took following the inadvertent receipt of privileged information from opposing counsel. (Defs.’ Mot. at 13). In Meador, the Texas Supreme Court had to decide whether the trial court had abused its discretion by failing to disqualify an attorney who had received privileged communications related to the opposing parties. Id. at 350. In deciding that issue, the Texas Supreme Court laid out some factors to consider in determining whether the interest of justice requires the disqualification of an attorney, who, "through no wrongdoing of his or her own, receives an opponent's privileged materials." Id. at 351. Those factors include: 1) whether the attorney knew or should have known that the material was privileged; 2) the promptness with which the attorney notifies the opposing side that he or she has received its privileged information; 3) the extent to which the attorney reviews and digests the privileged information; 4) the significance of the privileged information, i.e., the extent to which its disclosure may prejudice the movant's claim or defense, and the extent to which return of the documents will mitigate that prejudice; 5) the extent to which the movant may be at fault for the unauthorized disclosure; and 6) the extent to which the nonmovant will suffer prejudice from the disqualification of his or her attorney. Id. at 351-352. Although defendants refer to this multi-factored analysis from the Texas state court, they concede that Meador is not controlling here. (Defs.’ Mot. at 13). Defendants also cite the decision in Richards v. Jain, 168 F. Supp. 2d 1195, 1205 (W.D. Wash. 2001), which utilized the Meador test in its analysis of whether a paralegal's extensive review of thousands of attorney-client privileged documents belonging to the opposing side required disqualification of the paralegal's firm. As the court in Richards v. Jain noted, "the six factors [from Meador ] neatly incorporate the concepts of prejudice, bad faith, and knowledge elucidated by the Washington Supreme Court as elements to be weighed in evaluating a motion to disqualify." Id. The court there found that disqualification was warranted because, despite the paralegal's extensive review of thousands of privileged documents, the firm did not disclose its possession of those documents for eleven months. Id.; see United States v. Stewart, 294 F. Supp. 2d 490, 495 (S.D.N.Y. 2003).
Other courts have taken different approaches to the disqualification analysis. In Milford Power Ltd. P'ship v. New England Power Co., 896 F. Supp. 53, 58 (D. Mass. 1995), the court denied a motion for disqualification on the basis that it did not find any bad faith on the part of the receiving attorney. In that case, the court found that the receiving attorney, despite recognizing the privileged nature of the documents and reviewing them nonetheless, took measures to "secure the documents and prevent their widespread disclosure." Id. In addition, the court noted that the examination of the documents by the receiving attorney did not prejudice his adversary. Id.
In another example, the state court in California declared that "[w]hen a lawyer who receives materials that ... 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." Rico v. Mitsubishi Motors Corp., 42 Cal. 4th 807, 819, 68 Cal.Rptr.3d 758, 171 P.3d 1092, 1099-1100 (Cal. 2007). In disqualifying the attorney in that case, the Supreme Court of California found that the attorney had violated this rule, in a case very similar to this one: the attorney "admitted that after a minute or two of review he realized the notes related to the case and that [opposing counsel] did not intend to reveal them." Id.
By contrast, in United States v. Stewart, the court declined to disqualify counsel where the attorney reviewed certain documents that had been inadvertently disclosed by his adversary. 294 F. Supp. 2d at 494. The court stated: "Disqualification ... is reserved for situations of prior representation, conflicts of interest, prosecutorial misconduct, and other unethical attorney behavior." Id. The court noted that the inadvertent disclosure in that case involved factual work product, which is entitled to "less protection than work product that reveals the opinions, theories, or strategies of a lawyer." Id. The Stewart court also found that there were no "concrete allegations of taint," and the documents at issue did not provide substantial insight into ... the defense strategies." Id. (citing United States v. Chong, 58 F. Supp. 2d 1153, 1160 (D. Haw. 1999) ).
Here, of course, the inadvertent disclosure involved highly sensitive attorney work product that contained not only opinions and theories but specific litigation strategies. If there is indeed a requirement that there be allegations of trial taint, see Lorber v. Winston, No. 12 CV 3571, 2012 WL 5904522, at *15 (E.D.N.Y. Nov. 26, 2012) (citing United States v. Stewart for "requiring allegations of taint when disqualifying an attorney for having reviewed material protected by the work product privilege"), here, there are such allegations. Moreover, although the plaintiffs’ attorneys do not appear to have utilized the information contained therein, the highly privileged nature of this email and its attachment should have been readily apparent to plaintiffs’ counsel and the calls and emails from opposing counsel should have cautioned the attorneys before sharing the documents within the firm.
Although disqualification motions are viewed with disfavor and attorneys are only to be disqualified where there is significant chance of trial taint, any doubts are to be resolved in favor of disqualification. Hull v. Celanese Corp., 513 F.2d 568, 571 (2d Cir. 1975). As explained above, the Meador analysis, although non-controlling, looks at whether an attorney should have known the material was privileged, the promptness of notifying opposing counsel of the disclosure, the extent of that attorney's review of the material, the significance of the material, the degree of fault attributable to the attorney, and, the prejudice to the attorney's client in case of disqualification. These factors have also been used as a starting point in determining the prejudice and trial taint an inadvertent disclosure might have had when conducting the disqualification analysis. See, e.g., Maldonado v. New Jersey ex rel. Admin. Office of Courts-Prob. Div., 225 F.R.D. 120, 141 (D.N.J. 2004) (holding that "[t]he Court's decision ... rests more appropriately on the prejudicial effect that the disclosure" had). Here, the Court finds the Meador analysis useful to the question at hand. Defendants argue that only the fifth factor – the fault question – leans in plaintiffs’ favor. (Defs.’ Mot. at 17). The Court agrees that a majority of the factors favor disqualification.
First, plaintiffs’ counsel should have known by reading only the first few lines of the email that the material was privileged and not intended for their review. Even if the email, on first glance, would have required a bit more context, the opening of the attachment after the reading of the email is inexcusable. Second, the Ottinger firm never notified defendants’ counsel of the disclosure, despite N.Y. Rule of Prof. Conduct 4.4(b). Indeed, it appears the Ottinger firm deliberately avoided all communication with defendants’ counsel despite emails and phone calls from defendants’ attorneys. The failure of Mr. Ottinger to immediately notify defendants’ counsel that he had received the email and his decision to forward it to others in his firm falls squarely on plaintiffs’ counsel's shoulders. The third factor – the extent of review – also appears to favor disqualification: once he read the email and realized it was addressed to the defendants’ client, he should never have opened the attachment nor should it have been uploaded to the firm's document management system. Mr. Ottinger not only read the cover email, the detailed legal analysis, and counsel's suggested litigation strategy – he then shared it with other members of his firm. Finally, the email and its attachment were unquestionably significant material representing privileged communications and attorney work product. They were the defendants’ counsel's analysis of damages and a preliminary discussion of strategy for an upcoming mediation. Although both the fifth factor – fault – and the sixth factor – prejudice to the plaintiffs – in the Meador analysis weigh in favor of plaintiffs’ counsel here, and disqualification should be avoided to prevent the separation of plaintiffs from their chosen representation, these two factors do not overcome the significant risk of prejudice to defendants from the inadvertent disclosure of a litigation-strategy email intended for the individual defendant.
To the extent that counsel has claimed that the attachment was not shared with other members of the firm, but was reviewed because it was automatically uploaded to the firm's server, the Court finds this explanation wholly unsatisfactory and not particularly credible.
Having reviewed the various approaches taken in cases such as this, all support disqualification of plaintiffs’ counsel here. By forwarding the email to another member of the firm, and failing to prevent its widespread disclosure, the counsel knew – or should have known – that the dissemination of this email was likely to prejudice the defendants. Destruction of the email at this time will not remedy the damage that has been done and suggests that there is a high risk of trial taint because plaintiffs now possess defendants’ litigation strategy.
At the time the incident first came to light, the Court Ordered that another attorney from Mr. Ottinger and Mr. Weisenberg's firm represent the plaintiffs in their efforts at mediation last year. (See Defs.’ Mot, Ex. D). Defendants have not suggested that that attorney, Mr. Mailhot, had access to or used any of the inadvertently disclosed information in that mediation. Nor have defendants suggested that Mr. Mailhot had engaged in any unethical behavior with respect to the information disclosed to Mr. Ottinger and Mr. Weisenberg. Indeed, at the time, the Court found that disqualifying only Mr. Ottinger and Mr. Weisenberg was the most prudent middle-of-the-road approach, allowing for plaintiffs’ choice of firm to be honored while preventing Mr. Ottinger and Mr. Weisenberg from gaining an unfair advantage in the case based on their review of defendants’ litigation strategy. That approach recognized that disqualification is disfavored as a delay tactic, while attempting to protect defendants’ sensitive information from being used in further litigation. Now, however, the defendants argue that disqualifying only Mr. Ottinger and Mr. Weisenberg, and not the rest of the firm, will continue to taint the rest of this litigation. (See Defs.’ Mot. at 20-21 (citing Filippi v. Elmont Union Free Sch. Dist. Bd. of Educ., 722 F. Supp. 2d 295 (E.D.N.Y. 2010) )). Filippi v. Elmont Union Free Sch. Dist. Bd. of Educ. involved a rebuttable imputation of conflict. Id. at 299. Like other cases upon which the defendants have relied, this case is one in a long line of disqualification decisions based on conflicts of interest. Its relevance is circumscribed here. Nonetheless, the Court is convinced that the prejudice to defendants from this inadvertent disclosure, and the plaintiffs’ counsels’ actions after the disclosure, warrant the disqualification of Mr. Ottinger and Mr. Weisenberg from the case. Although the Court is sympathetic to defendants’ argument that the firm is too small to provide for proper screening of the other members of the firm, see, e.g., Energy Intelligence Group, Inc. v. Cowen & Co., LLC, 2016 WL 3920355, at *4 (S.D.N.Y. July 15, 2016) ("among small law firms, sufficient ethical screens are difficult, if not impossible, to maintain"), the Court finds that the prejudice resulting to plaintiffs by depriving them of their choice of counsel outweighs the alleged, but unconfirmed, risk that Mr. Mailhot or other attorneys at the Ottinger firm are exposed to the inadvertent disclosure. However, in an excess of caution, particularly in light of plaintiffs’ counsel's representation that the attachment was automatically uploaded to the firm's server and viewed by Mr. Weisenberg from the server, the Court Orders the other remaining attorneys at the Ottinger firm to submit Affidavits attesting to the fact that they have neither read nor discussed the email and attachment with anyone else in the firm. If any other attorney cannot provide such an Affidavit, they will also be disqualified from further representing plaintiffs in this manner.
As such, the Court Orders Mr. Ottinger and Mr. Weisenberg to remove themselves from this case and withdraw their notices of appearances. They are to delete the email and its attachment, as discussed supra, and they are to ensure that all remaining employees of the firm do not have access to or knowledge of the email and its attachment. If the other attorneys in the firm can provide the Affidavits described above, the firm may continue to represent the plaintiffs. However, if the other attorneys also reviewed and discussed the email and attachment, the Court has no alternative than to order the entire Ottinger firm to be disqualified.
B. Request for Costs
Defendants’ counsel requests that plaintiffs’ counsel pay the fees and costs associated "with defendants’ communications with plaintiffs’ counsel, all related court appearances, and preparation of the present motion and the preceding pre-filing motion" (Defs.’ Mot. at 11), related to their review of these privileged documents. Defendants’ counsel argues that sanctions in the form of fees and costs may be imposed pursuant to the Court's inherent authority. However, defendants rely on Shanchun Yu v. Diguojiaoyu, Inc., No. 18 CV 7303, 2019 WL 6174204, at *3 (S.D.N.Y. Nov. 20, 2019), in which Judge Furman noted that, in deciding whether sanctions are merited under Rule 16(f) or Rule 37(b)(2), a court "need find only that there is clear and convincing evidence that counsel disregarded a clear and unambiguous scheduling or other pretrial order." "[B]y contrast, to warrant an award of attorney's fees pursuant to the Court's inherent authority, the Court must find that the lawyer or party being sanctioned acted in bad faith or that he willfully disobeyed the Court's orders." Id. Unlike in Shanchun Yu v. Diguojiaoyu, Inc., plaintiffs’ counsel here did not violate a court order. Although they failed to comply with their ethical obligation to contact defendants’ counsel once they realized they had received confidential information and there were some discrepancies in defendants’ counsel's recounting of the conversation they had with plaintiffs’ counsel following the inadvertent disclosure and their affirmations before the Court when they appeared in December, there is no evidence that plaintiffs’ counsel deliberately sought out privileged information or attempted to use it to their benefit.
Defendants also rely on the decision in Reynolds v. American Airlines, No. 14 CV 2429, 2018 WL 351861, at *1 (E.D.N.Y. Jan. 9, 2018). However, in that case, plaintiffs’ counsel was found to have committed "egregious violations of this Court's Orders and the Federal Rules of Civil Procedure." Id. In contrast, while plaintiffs’ counsel may have violated some of the rules of professional conduct – by not immediately notifying defendants’ counsel of their receipt of the email (see discussion supra at ––––) – again, there is no showing that they violated a specific court order. Since it was defendants’ counsel's inadvertent disclosure that triggered the plaintiffs’ counsel exposure to the privileged documents, it is not clear to the Court that plaintiffs’ counsel's subsequent conduct was in bad faith such that the imposition of sanctions for the cost of these proceedings would be warranted.
CONCLUSION
For the reasons set forth above, defendants have not waived the attorney-client privilege in relation to the documents at issue. As such, the Court grants defendants’ motion for a protective order and hereby Orders the destruction of the email and its attachment; any and all documents, notes, or internal communications discussing either the email and its attachment must be destroyed; and, plaintiffs are prevented from using the information therein. Mr. Ottinger and Mr. Weisenberg are to remove themselves from this case going forward and they are prohibited from revealing the contents of either document to any other member of their firm. The other attorneys in the firm are directed to submit Affidavits attesting to the fact that they have not read or discussed with others the email and the attachment. Failure to produce such Affidavits will result in an Order disqualifying the Ottinger firm in its entirety.