Waste Connections of North Carolina, Inc. v. K.R. Drenth Trucking, Inc.
Filing
18
ORDER granting in part and denying in part 12 Motion for Determination Regarding the Waiver of Privilege for Documents Produced by Plaintiff by K.R. Drenth Trucking, Inc. Signed by Senior Judge Graham Mullen on 08/04/2015. (jlk)
IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
DOCKET NO. 3:14-CV-642
WASTE CONNECTIONS OF NORTH
CAROLINA, INC.,
Plaintiff,
v.
K.R. DRENTH TRUCKING, INC., D/B/A
KRD TRUCKING,
Defendant.
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ORDER
THIS MATTER is before the Court on Defendant’s Motion for Determination Regarding
the Waiver of Privilege for Documents Produced by Plaintiff Waste Connections of North
Carolina, Inc. (Doc. No. 12). The Motion arises out of a dispute over several emails produced by
Plaintiff during discovery in this case. For the reasons set forth below, the Motion is GRANTED
in part and DENIED in part.
I. BACKGROUND
Plaintiff filed the instant action against Defendant on October 14, 2014, in Mecklenburg
Superior Court. (Doc. No. 1-1). Defendant subsequently removed to this Court on November 20,
2014. (Doc. No. 1). On January 28, 2015, the Court ordered the parties to complete written
discovery and take one deposition per party. (Doc. No. 9). The parties served written discovery
requests on one another on February 3, 2015. (Doc. No. 16 at 3). Plaintiff and Defendant
simultaneously exchanged discovery responses and documents on March 10, 2015. (Id. at 5).
Plaintiff produced over 11,000 pages of emails and documents. (Id. at 6). Among the
produced materials are a disputed number of emails between Plaintiff’s Division Vice President
Tim Fadul and two of Plaintiff’s in-house counsel, Aaron Rubin and Robert Cloninger. (Doc. No.
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14 at 3–4). Defendant claims Plaintiff produced thirty-seven emails between Fadul and either
Rubin or Cloninger totaling 269 pages of documents, (id. at 4), while Plaintiff claims it produced
“four privileged email chains” totaling twenty unique pages of documents. (Doc. No. 16 at 7, n.8).
Fadul was the Plaintiff’s representative who negotiated the contract at issue between the parties in
2009. (Doc. No. 14 at 4). One of the disclosed emails, sent by Fadul to Rubin, contains a statement
indicating Fadul’s interpretation of one relevant provision of the contract at issue in this case. (Id.)
Defendant’s counsel deposed Fadul on April 8, 2015. (Id. at 12). He presented Fadul with
a copy of the email to Rubin regarding Fadul’s interpretation of the relevant provision of the
contract, and asked eighteen questions about the email without objection from Plaintiff’s counsel.
(See Doc. No. 14-39). The parties took a forty-nine minute lunch break shortly thereafter, and upon
resuming the deposition, Plaintiff’s counsel objected to the use of the email “based on the Consent
Protective Order.” (Doc. No. 14-40).1 Plaintiff’s counsel informed Defendant’s counsel that he
believed Plaintiff “mistakenly and inadvertently produced some documents” subject to attorneyclient privilege and that his staff was in the process of determining whether or not other emails
were inadvertently disclosed. (Id. at 1). Plaintiff’s counsel stated he would place on the record “by
the end of the day” if there were any other documents he needed to object to. (Id. at 2).
Defendant subsequently filed the instant Motion on April 28, 2015. (Doc. No. 12). On May
1, 2015, Plaintiff’s counsel provided Defendant with the bates-label numbers for the documents
allegedly inadvertently produced and protected by attorney-client privilege and/or work product
doctrine. (Doc. No. 40-41).
1
This Court did not enter the Consent Protective Order until May 7, 2015. (Doc. No. 15). It was not submitted by
the parties for entry until May 4, 2014. (Doc. No. 16 at 4, n.4). However, at the outset of the deposition on April 8,
2015, the parties explicitly agreed that the terms of the Consent Protective Order “governed the deposition and the
conduct of the parties.” (Id.) Thus it is binding on the conduct of the parties. See Federal Rule of Evidence 502(e).
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II. LEGAL STANDARD
When considering an issue related to attorney-client privilege, “[a] proper analysis . . . must
begin with a determination of the applicable law.” Hawkins v. Stables, 148 F.3d 379, 382 (4th Cir.
1998). Federal Rule of Evidence 501 addresses the issue:
Except as otherwise required by the Constitution of the United States or provided
by Act of Congress or in rules prescribed by the Supreme Court pursuant to
statutory authority, the privilege of a witness, person, government, State, or
political subdivision thereof shall be governed by the principles of the common law
as they may be interpreted by the courts of the United States in the light of reason
and experience. However, in civil actions and proceedings, with respect to an
element of a claim or defense as to which State law supplies the rule of decision,
the privilege of a witness, person, government, State, or political subdivision
thereof shall be determined in accordance with State law.
Fed. R. Evid. 501. Under North Carolina law, attorney-client privilege protects a communication
between a client and his attorney
if “(1) the relation of attorney and client existed at the time the communication was
made, (2) the communication was made in confidence, (3) the communication
relates to a matter about which the attorney is being professionally consulted, (4)
the communication was made in the course of giving or seeking legal advice for a
proper purpose, although litigation need not be contemplated, and (5) the client has
not waived the privilege.”
State v. McIntosh, 336 N.C. 517, 523–24, (1994) (quoting State v. Murvin, 304 N.C. 523, 531
(1981)); see also Evans v. United Servs. Auto. Ass'n, 142 N.C. App. 18, 32, (2001). “Although an
attorney may assert the privilege when necessary to protect the interests of the client, the privilege
belongs solely to the client.” In re Miller, 357 N.C. 316, 337 (2003).
Federal Rule of Evidence 502(b) dictates that disclosure of information protected by
attorney-client privilege or work-product privilege during a federal proceeding does not operate as
a waiver if: “(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took
reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify
the error.” Fed. R. Evid. 502(b). Federal Rule of Evidence 502(d) establishes that a federal court
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may order that privilege or protection is not waived by disclosure “connected with the litigation
pending before the court.” Fed. R. Evid. 502(d). Finally, Federal Rule of Evidence 502(f) notes
that the rule “applies even if state law provides the rule of decision.” Fed. R. Evid. 502(f).
Courts within the Fourth Circuit have held that to the extent court orders regarding
accidental disclosure of privileged documents are silent as to the three prongs of Federal Rule of
Evidence 502(b), the court will default to 502(b) to fill in the gaps of the controlling agreement.
See U.S. Home Corp. v. Settlers Crossing, LLC, 2012 WL 3025111, at *5 (D. Md. July 23, 2012).
Specifically, “if a court order or agreement does not provide adequate detail regarding what
constitutes inadvertence, what precautionary measures are required, and what the producing party's
post-production responsibilities are to escape waiver,” then the court will look to 502(b). Id.
III. DISCUSSION
A. Determination of Privilege
Because the rule of decision applied to the underlying case is state law, the Court finds that
North Carolina law governs the determination of whether material is privileged. See Fed. R. Evid.
501. Based on the Plaintiff’s description of the emails between Fadul and Plaintiff’s in-house
counsel, the Court finds that the emails are protected by attorney-client privilege. See McIntosh,
336 N.C. at 523–24.
B. Inadvertent Disclosure
Disclosure operates as a waiver of privilege unless Federal Rule of Evidence 502 applies.
Plaintiff made two disclosures that must be considered separately by the court. The first is the
production of the privileged emails during discovery, and the second is Fadul’s testimony
regarding the single email during deposition. Plaintiff contends both disclosures were inadvertent
and are therefore governed by the terms of the Consent Protective Order.
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The Consent Protective Order reads as follows:
Any party that mistakenly produces materials protected by the attorney/client
privilege, work product doctrine or other privilege, doctrine or right may obtain the
return of those materials by promptly notifying the recipient(s) of the produced
documents. The recipient shall then immediately cease all use of the privileged
material and gather and return all copies of the privileged material to the producing
party. Any inadvertent production of such privileged documents shall not be
deemed a waiver in whole or in part of that party’s claim of privilege, either as to
the specific information disclosed or as to any other information relating thereto or
on the same or related subject matter.
(Doc. No. 15 at 4, ¶ 12). The Consent Protective Order equates inadvertent production with
mistaken production. (Doc. No. 15 at 4, ¶ 12). It also requires the producing party to “promptly”
notify the receiving party when it learns it mistakenly disclosed privileged documents. (Id.)
However, the Order is silent as to precautionary measures that parties must take in order to avoid
mistakenly producing privileged documents. (See id.) As a result, 502(b) controls with regards to
determining whether Plaintiff took adequate precautions to prevent mistaken disclosure. See U.S.
Home Corp., 2012 WL 3025111, at *5.
1. Production of emails during discovery
The Court has reviewed the parties’ arguments on this issue. For the reasons stated in
Plaintiff’s response, it finds that the disclosure was inadvertent because it arose out of a mistake,
Plaintiff took adequate precautions to prevent inadvertent disclosure, and Plaintiff promptly
notified Defendant of the disclosure of the emails after gaining knowledge of its accidental
disclosure. As a result, the Court finds that Plaintiff did not waive the privilege as to the e-mails
between Fadul and Plaintiff’s in-house counsel with respect to this disclosure.
2. Testimony regarding the Fadul email
Defendant argues that the disclosures made during Fadul’s deposition do not meet the
criteria for an inadvertent disclosure under the Consent Protective Order or Federal Rule of
Evidence 502(b). (Doc. No. 17 at 5–6). According to Plaintiff’s counsel’s affidavit, when
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Defendant’s counsel presented Fadul with a copy of the email, Plaintiff’s counsel “immediately
saw that [the email] appeared on its face to be privileged.” (Doc. No. 16-4 at 3, ¶ 26). Plaintiff’s
counsel failed to object because “he was confused about why Defendant possessed it” and “felt
secure in the knowledge that the Consent Protective Order and FRE 502 provided protections in
the event of an inadvertent disclosure.” (Id.).
Plaintiff argues that objection to privileged materials during depositions does not need to
be “immediate.” However, it cites no cases to support its argument that objecting after allowing
eighteen questions about the privileged material constitutes a “prompt” objection. 2 The Court is
sympathetic with counsel, but does not believe he should be afforded greater protection than an
attorney at trial who does not object to evidence at the critical point when tendered.3 Thus the
Court finds that Plaintiff’s disclosure operates as a waiver of privilege with respect to the email
presented to Fadul at the deposition because Plaintiff failed to promptly notify Defendant when it
realized it had inadvertently produced a privileged document, rendering the disclosure outside the
bounds of the Consent Protective Order and Federal Rule of Evidence 502(b).
The Court does, however, wish to note the limited nature of its finding. The Court finds
only that because of the questions asked and answered in the deposition, privilege has been waived
with respect to the single email. This finding does not speak to the protection otherwise afforded
to inadvertently disclosed, protected material. For these reasons, and having reviewed the
2
Plaintiff cites King Pharmaceuticals v. Purdue Pharma as support for this argument. 2010 WL 2243872 (W.D. Va.
2010). However, that case is distinguishable from this case on its facts. There is no indication that the party in King
Pharmaceuticals answered questions regarding the inadvertently disclosed document before objecting.
3
While this issue is governed by the parties’ consent order and FRE 502, the Court finds instructive the Supreme
Court of North Carolina’s reasoning in State v. Tate, where the court held that a client may waive privilege
regarding a confidential communication between his attorney and himself “when he offers testimony concerning the
substance of the communication.” 294 N.C. 189, 193 (1978). It also takes note of Hulse v. Arrow Trucking Co.,
where the North Carolina Court of Appeals held that testimony regarding a written communication during
deposition waived attorney-client privilege and rendered said written communication discoverable. 161 N.C. App.
306, 310 (2003).
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arguments of the parties, the Court finds that Plaintiff did not waive privilege as to the other
documents referenced in the motion by this disclosure.
IV. CONCLUSION
IT IS THEREFORE ORDERED that Defendant’s Motion for Determination Regarding
the Waiver of Privilege (Doc. No. 12) is GRANTED in part and DENIED in part. The Court finds
that Plaintiff waived the attorney-client privilege regarding the email presented to Plaintiff’s
representative during deposition, and finds that it did not waive the privilege as to the other
documents referenced in the Motion.
SO ORDERED.
Signed: August 4, 2015
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