Opinion
Civil Action No: 00-2301-DJW.
May 27, 2002
MEMORANDUM AND ORDER
Pending before the Court is Defendant's Motion to Compel (doc. 70). More specifically, Defendant seeks an order compelling Plaintiff to return privileged documents inadvertently disclosed in the discovery process. For the reasons stated below, Defendant's Motion is denied.
I. Relevant Facts
Plaintiff American Casualty ("American Casualty") brings this action seeking declaratory judgment regarding whether it has any duty of contribution or indemnity to Defendant Healthcare Indemnity, Inc. ("HCII") in conjunction with settlement by HCII of an underlying medical malpractice action captioned Keck v. Wesley Medical Center. Relevant to the motion currently pending, American Casualty served a request for documents upon HCII seeking production of HCII's claim file in the underlying Keck v. Wesley Medical Center case. HCII refused to produce the file on grounds that it was work product and thus protected from disclosure. American Casualty subsequently moved for compelled disclosure and, at the Court's direction, submitted to the Court a privilege log and each of the documents for in camera review by the Court.
Upon review of the materials provided, the Court ordered HCII to produce those documents within the file that were not protected work product and to provide American Casualty with a privilege log for those documents within the file that were protected work product. HCII asserts it sent the referenced documents and the privilege log to American Casualty on June 7, 2001.
On June 15, 2001, American Casualty served its Rule 26(a)(3) disclosures designating David Hauber as an expert witness and attaching Mr. Hauber's expert report. Within the report, Mr. Hauber refers to his review of a May 12, 2000 "Excess Report." In a letter dated June 20, 2001, counsel for HCII informed American Casualty that HCII inadvertently may have produced the May 12, 2000 Excess Report referenced by Mr. Hauber, but needed to review a copy of the document to verify its concern.
American Casualty sent a copy of the referenced report as requested, and HCII subsequently confirmed that its production of the report (bearing bates stamp numbers 185-188) was inadvertent. HCII then requested American Casualty "review, identify and return any and all copies of documents, including all copies of Bates stamped documents 185-188, which are identified in [HCII's] privilege logs." Exhibit F at ¶ 3, HCII's Memorandum in Support of Motion to Compel (doc. 71). American Casualty has refused to return the documents, asserting any protection based on work product has been waived. Accordingly, HCII now moves to compel American Casualty to return all documents inadvertently disclosed. In conjunction with its motion to compel, HCII also requests a protective order prohibiting American Casualty from using the documents as evidence.
II. Discussion
American Casualty justifies its refusal to return the documents identified as work product by HCII on the following three arguments: (1) HCII waived work product protection by disclosing the documents to American Casualty — regardless of whether the disclosure was inadvertent; (2) HCII waived any work product protection by affirmatively placing the documents "at issue" in this lawsuit; and (3) the referenced work product materials are discoverable pursuant to Fed.R.Civ.P. 26(b)(3) because American Casualty has substantial need of the materials in the preparation of its case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means. Because the Court finds HCII's inadvertent disclosure effects waiver of the documents at issue, the Court will not address the second and third grounds upon which American Casualty bases its opposition to returning the documents. This Court utilizes a five-factor test to determine whether inadvertent disclosure of privileged documents acts as a waiver of work product protection:
• Reasonableness of the precautions taken to prevent disclosure;
• Time taken to rectify the error;
• Scope of discovery;
• Extent of disclosure; and
• Overriding issue of fairness.
Wallace v. Beech Aircraft Corp., 179 F.R.D. 313, 314 (D.Kan. 1998) (citing Monarch Cement Co. v. Lone Star Indus., Inc., 132 F.R.D. 558 (D.Kan. 1990)); Zapata v. IBP, Inc., 175 F.R.D. 574, 577 (D.Kan. 1997) (citation omitted).
The first factor contemplates whether the party claiming work product protection was careful in its dissemination of the information, taking into account the number of documents produced and the time frame within which the party produced the documents. Zapata v. IBP, Inc., 175 F.R.D. at 577. In Zapata, the defendant inadvertently produced privileged information (the "Craypo Report") to plaintiffs' counsel. Id. Considering the volume of documents produced by defendant (over 1,000), the short time frame within which production was accomplished (seven days) and the fact that the Craypo Report was the only document inadvertently disseminated, the Zapata court found the precautions taken to prevent disclosure were reasonable and thus found waiver unjustified. Id.
Although HCII contends it took great care in separating the claims file into privileged and non-privileged documents to make certain only those non-privileged documents were produced, American Casualty asserts — and HCII does not dispute — that over ninety documents designated by HCII as protected from disclosure in its privilege log were produced to American Casualty. Exhibit C to American Casualty's Memorandum in Opposition (doc. 78). These facts are notably different than the facts presented in Zapata. As a preliminary matter, although the Court is uncertain as to exactly how many documents inadvertently were disclosed here, the evidence establishes the number is much greater than one. Morever, compared to the seven-day window of time afforded defendant for production of documents in Zapata, HCII had seventeen days to produce the documents to American Casualty. Based on these facts, the first factor weighs in favor of waiver.
HCII states it is unsure how many documents protected documents it produced to American Casualty. HCII's Memorandum in Support of Motion to Compel at ¶ 5 (doc. 71).
The second factor focuses on the time taken to rectify the error after the party claiming work product protection becomes aware of the inadvertence. The relevant time for rectifying an error begins when a party discovers, or with reasonable diligence should have discovered, the inadvertent disclosure. See, Kansas City Power Light Co. v. Pittsburgh Midway Coal Min. Co., 133 F.R.D. 171, 172 (D.Kan. 1989) (implementing same analysis used in work product inadvertent disclosure cases) (citing Hartford Fire Ins. Co. v. Garvey, 109 F.R.D. 323, 328 (N.D.Cal. 1985)).
In the Kansas City Power Light Co. case, the inadvertent disclosure was not discovered for fourteen months. Id. Notwithstanding this fact, Kansas City Power Light argued to the court that it addressed the mistake within two weeks of discovering the inadvertent production. Id. Because the court found Kansas City Power Light could not have taken action to remedy the mistake until it became aware of the error, the court ultimately held the error was corrected in a reasonable amount of time. Id. Here, counsel for HCII discovered a potential disclosure issue after receiving Mr. Hauber's report. HCII's counsel took action on the potential inadvertent disclosure six days later by requesting a copy of HCII's Excess Report. Approximately two weeks after receiving the report and verifying that it was privileged, HCII requested American Casualty return the Excess Report and any other privileged documents inadvertently produced. These facts suggest that HCII addressed the mistake within a reasonable amount of time; thus the second factor weighs against waiver.
The third factor deals with the scope of discovery. In Zapata, the court found the inadvertent disclosure of one document was minor relative to the overall number of documents produced. Zapata v. IBP, Inc., 175 F.R.D. at 577. Again, the facts in Zapata are significantly different than the facts presented here: although counsel for HCII is uncertain how many documents inadvertently were disclosed, there is undisputed evidence before the Court indicating that this number exceeds ninety. See Exhibit C to American Casualty's Memorandum in Opposition to Motion to Compel (doc. 78). These facts suggests the disclosure was not minor. The Court finds the third factor works in favor of waiver.
The fourth factor considers the extent to which the documents were disclosed. Meaningful use of the documents disclosed is often sufficient to find extensive disclosure. Id. at 578. In Zapata, the evidence established neither plaintiff's expert nor plaintiff's attorney meaningfully considered the one document inadvertently disclosed. Id. Conversely, it appears American Casualty disseminated at least some of the inadvertently disclosed documents to its expert, who appeared meaningfully to have considered them and then use them in his opinion and written report. In fact, HCII asserts it is the expert's use of the documents that brought the inadvertent disclosure to HCII's attention. The extent of disclosure, review and use of the referenced documents here works in favor of waiver.
The fifth and final factor is fairness. "Key to the court's consideration of [the fairness] factor is the relevancy of the documents." Wallace v. Beech Aircraft Corp., 179 F.R.D. at 314. The Court finds, and HCII does not dispute, that the documents at issue here are relevant. Thus, the fifth factor also weighs in favor of waiver.
The pre-December, 2000 version of Rule 26 governs this dispute with respect to relevancy, as the Scheduling Order in this case was issued prior to December 1, 2000. Thus, discovery is considered relevant if there is "any possibility" that the information sought may be relevant to the subject matter to the action. Scott v. Leavenworth Unified School Dist. No. 453, 190 F.R.D. at 585; Etienne v. Wolverine Tube, Inc., 185 F.R.D. 653, 656 (D.Kan. 1999). Discovery is relevant "unless it is clear that the information sought can have no possible bearing on the subject matter of the action." Scott, 190 F.R.D. at 585 (quoting Snowden v. Connaught Lab. , Inc., 137 F.R.D. 336, 341 (D.Kan. 1991)) (emphasis added by Scott).
III. Conclusion
Considering all the foregoing factors, the Court concludes the inadvertent disclosure of the documents disclosed to American Casualty constitutes a waiver of any work product protection previously afforded them. Accordingly, HCII's Motion to Compel and Enforce Protective Order is denied.
IT IS SO ORDERED.