Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc.

Filing 236

OPINION AND ORDER granting 163 MOTION for Determination that Documents Produced by Medex Are Not Subject to Privilege by Plaintiff Inhalation Plastics, Inc. Signed by Magistrate Judge Norah McCann King on 8/28/12. (rew)

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF OHIO
EASTERN DIVISION

INHALATION PLASTICS, INC.,
Plaintiff,
vs.

Civil Action 2:07-CV-116
Judge Smith
Magistrate Judge King

MEDEX CARDIO-PULMONARY, INC.,
Defendant.
OPINION AND ORDER
This matter is before the Court on Plaintiff’s Motion for
Determination that Documents Produced by Medex are Not Subject to
Privilege (“Plaintiff’s Motion”), Doc. No. 163.

For the reasons that

follow, Plaintiff’s Motion is GRANTED.
I.

BACKGROUND
This motion concerns documents produced by defendant Medex

Cardio-Pulmonary, Inc., (“Medex”) to plaintiff Inhalation Plastics,
Inc., (“IPI”) on either May 28, 2011 or May 30, 2011. 1

The May 30

production was made in hard-copy format and contained approximately
7,500 pages, none of which was stamped “confidential” as provided by
the Stipulated Protective Order, Doc. No. 75., at 3.

Of the 7,500

pages produced in the May 30 production, 347 are emails with one or
more of the following people included as senders or recipients: Adam

1

The parties discuss the same document production, but Medex believes
that the production occurred on May 28, 2011; Defendant Medex CardioPulmonary, Inc.’s Memorandum in Opposition to Plaintiff’s Motion for
Determination That Documents Produced by Medex are Not Subject to Privilege
(“Medex’s Memorandum in Opposition”), Doc. No. 167, at 8; and IPI believes
that the production occurred on May 30, 2011. Plaintiff’s Motion, at 2. The
Court will refer to the production as the “May 30 production.”

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Jones, Smith Medical ASD’s Division General Counsel; Yvonne Nichols,
Smith Medical ASD’s in-house attorney; and Felicia Jones, Smith
Medical ASD’s paralegal.

Plaintiff’s Motion, Exhibit 1 at ¶ 3;

Medex’s Memorandum in Opposition, at 1.

Medex asserts that the

documents are protected by the attorney client privilege and
characterizes those documents as inadvertently produced; IPI asserts
that the documents are not privileged and that any privilege has been
waived.
After reviewing the May 30 production, IPI sought to depose Adam
Jones and Felicia Jones based on documents obtained in the production.
Plaintiff’s Motion, at 3.

Upon learning of this, Medex asserted that

emails with Adam Jones, Yvonne Nichols, or Felicia Jones listed as
senders or recipients were privileged and had been inadvertently
produced.
1-2.

Id., Exhibit 1 at ¶ 6; Medex’s Memorandum in Opposition, at

Medex requested that IPI provide the Bates numbers for the

documents containing the names of the three Smiths Medical ASD
employees listed above, but IPI refused and noted that it should not
have to disclose in advance documents that it intended to use at a
deposition.

Plaintiff’s Motion, Exhibit 1 at ¶ 8, 9, 11, Exhibit 2.

At the subsequent deposition of Barbara Law, IPI sought to show Ms.
Law fourteen documents from the May 30 production.
¶ 10.

Id., Exhibit 1 at

Medex again characterized the documents as inadvertently

produced, privileged communications and, sequestering the documents
during the deposition, sought to claw them back.

Id.; Medex’s

Memorandum in Opposition, at 4-5, Exhibit B at 123.
More than 85,000 pages of documents have been produced in this
case.

See Plaintiff’s Motion, Exhibit 2.

IPI has submitted all 347

pages at issue from the May 30 production to the Court, under seal,

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for the Court’s in camera inspection.
II.

DISCUSSION
A.

Attorney Client Privilege

Medex asserts that all 347 pages at issue from the May 30
production are protected by the attorney client privilege.

This is a

diversity action; therefore, it is Ohio's law of privilege that
applies.

Fed. R. Evid. 501.

See Jewell v. Holzer Hosp. Found., Inc.,

899 F.2d 1507, 1513 (6th Cir. 1990).

There is, however, no material

difference between Ohio's attorney client privilege and the federal
common law privilege.

See Ohio R.C. § 2317.02(A) (indicating that an

attorney shall not testify “concerning a communication made to the
attorney by a client in that relation or the attorney's advice to a
client”); Guy v. United Healthcare Corp., 154 F.R.D. 172, 177 n.3
(S.D. Ohio 1993).
The purpose of the attorney client privilege is to encourage
clients to communicate freely with their attorneys.

In re Grand Jury

Proceedings Oct. 12, 1995, 78 F.3d 251, 254 (6th Cir. 1996) (citing
Upjohn Co. v. United States, 449 U.S. 383, 389 (1981)).

However,

because the attorney client privilege operates to reduce the amount of
information discoverable, it is narrowly construed.

Id.

The party

invoking the protection of the attorney client privilege bears the
burden of establishing the following:
(1) Where legal advice of any kind is sought (2) from a
professional legal advisor in his capacity as such, (3) the
communications relating to that purpose, (4) made in
confidence (5) by the client, (6) are at his instance
permanently protected (7) from disclosure by himself or by his
legal advisor, (8) except the protection be waived.
Fausek v. White, 965 F.2d 126, 129 (6th Cir. 1992) (quoting Humphreys,
Hutcheson & Moseley v. Donovan, 755 F.2d 1211, 1219 (6th Cir. 1985)).
Medex has not identified to the Court any particular documents

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that it believes are privileged, nor has it provided IPI with a
privilege log.

Medex cites to Brown v. Voorhies, No. 2:07-cv-0013,

2010 WL 4384227 (S.D. Ohio Oct. 26, 2010), for the proposition that
the burden of proving privilege is not “onerous and can be satisfied
by a statement that the communication contained legal matters.”
Medex’s Memorandum in Opposition, at 2-3.

Voorhies, however, was

quoting Cooey v. Strickland, 269 F.R.D. 643, 649 (S.D. Ohio 2010),
which was specifically addressing the sufficiency of statements made
in a privilege log.

Voorhies is inapplicable to the dispute presently

before the Court because Medex has not provided IPI or the Court with
a privilege log regarding the May 30 production.
In support of its claim to the protections of the attorney client
privilege, Medex has submitted the depositions of two Medex employees,
Barbara Law and Vinc Ellerbrock.
Opposition, Exhibits B, C.

See Medex’s Memorandum in

Barbara Law testified in her deposition

that she communicated with Felicia Jones to obtain legal advice, and
Vinc Ellerbrock testified that he communicated with Adam Jones for the
purpose of obtaining legal advice.
C at 178.

See id., Exhibit B at 188, Exhibit

These two depositions are insufficient to support a claim

to the privilege.

The depositions of Barbara Law and Vinc Elelrbrock

do not refer to any specific communications with Adam Jones, Yvonne
Nichols, or Felicia Jones, and the depositions do not even mention
communications with Yvonne Nichols.

Additionally, many of the 347

pages at issue from the May 30 production do not involve Barbara Law
or Vinc Ellerbrock.

The mere fact that Adam Jones, Yvonne Nichols, or

Felicia Jones was the sender or recipient of the documents at issue
does not render them privileged.

See United States v. Bartone, 400

F.2d 459, 461 (6th Cir. 1968) (“The mere fact that a person is an

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attorney does not render privileged everything he does for and with a
client.”).

Accordingly, the Court concludes that Medex has failed to

carry its burden of establishing that the attorney client privilege
may be properly applied to the documents submitted under seal.
Nevertheless, the Court’s review of the documents submitted under
seal suggests that many of the documents fall within the ambit of the
attorney client privilege.

The Court will therefore analyze whether

the privilege has been waived by the production of those documents by
Medex.
B.

Waiver

Medex asserts that the 347 pages at issue from the May 30
production were inadvertently produced; IPI asserts that Medex has
waived its right to assert a claim of privilege.

Rule 502(b) of the

Federal Rules of Evidence provides that a disclosure of a
communication protected by the attorney client privilege 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, including (if applicable) following Federal Rule of
Civil Procedure 26(b)(5)(B).
Fed. R. Evid. 502(b).
“When a producing party claims inadvertent disclosure, it has the
burden of proving that the disclosure was truly inadvertent.”

Fox v.

Massey–Ferguson, Inc., 172 F.R.D. 653, 671 (E.D. Mich. 1995) (citing
Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D.
204, 207 (N.D. Ind. 1990)).

In determining whether an inadvertent

disclosure entitles the producing party to the return of the document,
courts generally consider the following five factors: “(1) the

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reasonableness of precautions taken in view of the extent of document
production, (2) the number of inadvertent disclosures, (3) the
magnitude of the disclosure, (4) any measures taken to mitigate the
damage of the disclosures, and (5) the overriding interests of
justice.”

Evenflo Co. v. Hantec Agents Ltd., No. 3-:05-CV-346, 2006

WL 2945440, *6 (S.D. Ohio Oct. 13, 2006) (citing Fox, 172 F.R.D. at
671); accord E.E.O.C. v. Honda of Am. Mfg,. Inc., No. 2:06-CV-0233,
2008 WL 440437, *4 (S.D. Ohio Feb. 13, 2008) (citing Nilavar v. Mercy
Health Sys.- W. Ohio, 2004 WL 5345311, *3-4 (S.D. Ohio March 22,
2004)).

This multi-factor test “is not mandatory and merely serves to

guide a court’s analysis when appropriate under the particular
circumstances of each case.”

N. Am. Rescue Prods., Inc., v. Bound

Tree Med., LLC, No. 2:08-cv-101, 2010 WL 1873291, *6 (S.D. Ohio May
10, 2010) (citing Fed. R. Evid. 502 advisory committee’s note).
1.

The reasonableness of precautions taken in view of the
extent of document production

In support of its motion, IPI provides a signed declaration by
Richard H. Lehman, counsel for IPI, stating that the May 30 production
was substantially different than all of Medex’s other productions.
Lehman specifically asserts that the May 30 production was made in
hard-copy format, whereas all other productions were electronic and
that, although “virtually every page” in prior productions was stamped
“confidential,” no page in the May 30 production reflected that stamp.
Plaintiff’s Motion, Exhibit 1 at ¶¶ 1, 2, 4.

Lehman also asserts that

Richard Pearl, Medex’s counsel, “stated that the May 30 production had
not been reviewed by anyone in his law firm prior to production, but
that an outside service had been used to cull responsive documents
electronically” for all of Medex’s productions.
7.

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Id., Exhibit 1 at ¶

In contrast, Medex asserts that the May 30 production “was
reviewed by several layers of attorneys who isolated the privileged
documents and prepared for electronic production in the same way as
each of Medex[]’s twelve other productions, prepared and sent its
documents in its customary way.”
7.

Medex’s Memorandum in Opposition, at

Medex does not specify, however, who reviewed the production, what

steps were taken to review the documents for privilege or whether the
production was different in form from prior productions.

In fact, an

August 3, 2011 email from Richard Pearl suggests that the production
was not in electronic format.

See Plaintiff’s Motion, Exhibit 2 (“And

while we are doing our part to locate any such documents, we cannot
say that we will find everything, because searches are done
electronically.

You actually have these documents in your hands.”).

It is also unclear why Medex did not produce a privilege log as
required by Rule 26(b)(5)(A) if, as asserted, “several layers of
attorneys . . . isolated the privileged documents.”

Medex has also

failed to adequately address the alleged inconsistencies between the
May 30 production and all prior productions.

Under these

circumstances, the Court concludes that Medex has failed to establish
that it took reasonable precautions to prevent an inadvertent
disclosure.
2.

The number of inadvertent disclosures

Medex claims that it inadvertently included 347 pages of
privileged documents in the May 30 production, which consisted of
approximately 7500 pages.

Thus, 4.6 percent of the production, or 1

in approximately every 22 pages produced, was inadvertently disclosed.
Given the relatively small number of documents in the production and
Medex’s assertion that “several layers of attorneys” worked on the May

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30 production, the number of inadvertent disclosures is relatively
high.

See Evenflo, 2006 WL 2945440 at *6 (inadvertent disclosure of

134 pages in a 10,085 page production waived privilege) (citing Dyson
v. Amway Corp., No. G88-CV-60, 1990 WL 290683 (W.D. Mich. Nov. 15,
1990) (inadvertent disclosure of 93 documents out of a total of 15,000
documents waived privilege)).
3.

The magnitude of the disclosure

The third factor looks to the extent of the disclosure and how
integrated the disputed documents have become in the litigation.
Nilavar, 2004 WL 5345311 at *5.

The documents disclosed in the May 30

production were essentially complete documents consisting of legal
memoranda, emails and email attachments.

The number of privileged

documents that were disclosed was significant, those documents were
not marked as confidential and no privilege log was provided with the
disclosed documents.

More importantly, the documents appear to be

relevant to IPI’s claims and IPI has attempted to use them in
depositions.

These considerations all suggest that the magnitude of

the disclosure was high.
4.

Measures taken to mitigate the damage of the
disclosures

This factor “looks to the promptness of measures taken to rectify
the disclosure.”

Id. at *6.

Upon learning of the disclosures, Medex

immediately invoked the privilege and asserted that the documents had
been inadvertently produced.

See Medex’s Memorandum in Opposition, at

1-2; Plaintiff’s Motion, Exhibit 1 at ¶ 6-8.

When IPI sought to show

fourteen of the documents to Barbara Law in a deposition, Medex again
immediately asserted that the documents were inadvertently produced,
privileged communications and it sought to claw back those documents.
Medex’s Memorandum in Opposition, at 4-5; Plaintiff’s Motion, Exhibit

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1 at ¶ 10.

In both instances, Medex took immediate measures to

prevent significant reliance by IPI on the documents.

Medex did not,

however, follow the procedure in Federal Rule of Civil Procedure
26(b)(5)(B), which provides as follows:
If information produced in discovery is subject to a claim of
privilege . . . the party making the claim may notify any
party that received the information of the claim and the basis
for it. After being notified, a party . . . may promptly
present the information to the court under seal for a
determination of the claim. The producing party must preserve
the information until the claim is resolved.
The 2006 advisory committee notes to Rule 26 of the Federal Rules of
further provide that
[a] party asserting a claim of privilege or protection after
production must give notice to the receiving party. That
notice should be in writing unless the circumstances preclude
it. . . . The notice should be as specific as possible in
identifying the information and stating the basis for the
claim. . . . [T]he notice should be sufficiently detailed so
as to enable the receiving party and the court to understand
the basis for the claim and to determine whether waiver has
occurred.
Fed. R. Civ. P. 26 advisory committee’s notes.
Medex provided IPI with notice that it intended to assert a claim
of privilege as to the 347 documents.
2.

See Plaintiff’s Motion, Exhibit

That notice, however, stated only that documents in IPI’s

possession might contain inadvertently produced, privileged
communications.

See id.

Medex did not identify any particular

documents covered by the privilege, did not provide a proper privilege
log and, beyond conclusory statements, Medex did not state a basis for
the claimed privilege.

See id., Exhibits 1, 2.

Consideration of

Medex’s inaction and failure to comply with Rule 26 leads to the
conclusion that Medex failed to take adequate measures to rectify or
mitigate the damage of the disclosures.
5.

The overriding interests of justice

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The interests of justice weigh in favor of IPI.

Despite a

relatively small production of documents and the relatively large
number of claimed inadvertent disclosures, Medex has not specified a
single particular document that it now claims is privileged, it has
not produced the privilege log required by Rule 26(b)(5)(A) and it has
not complied with Rule 26(b)(5)(B).

The extent of the disclosure, the

relevance of the information disclosed and IPI’s attempt to depose
Barbara Law, Adam Jones, and Felicia Jones regarding the disclosures
all indicate that IPI has relied on the disclosures.

These factors,

combined with Medex’s relatively weak response in its attempts to
rectify the claimed inadvertent disclosure, suggest that the interests
of justice militate in favor of IPI.
After balancing the required factors, the Court concludes that
Medex waived the attorney client privilege otherwise applicable to the
347 documents in the May 30 production.

To summarize, the Court finds

that Medex did not take reasonable precautions to protect its
privileged information, the number of documents disclosed is
significant, no privilege log was provided at the time of disclosure,
the contents of some of the documents may be relevant to the heart of
the dispute, and Medex made insufficient attempts to mitigate its
damage even after it learned of the disclosure.
Accordingly, Plaintiff’s Motion for Determination that Documents
Produced by Medex Are Not Subject to Privilege, Doc. No. 163, is
GRANTED.

August 28, 2012

s/ Norah McCann King
Norah M cCann King
United States Magistrate Judge

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