Plaintiffs' motion has been thoroughly briefed (see ECF docs. 148, 149, 154, 162, and 170), and the court has heard extensive oral argument by counsel. Pursuant to Fed. R. Evid. 502(d), and on the “clawback” terms set out in this and prior orders, plaintiffs' motion to compel is granted. Defendants shall produce all of the documents that are the subject of plaintiffs' motion by September 28, 2015, subject to only two exceptions: (1) as agreed by plaintiffs during the September 22 hearing, all “presumptively privileged documents” (as defined below) that involve communications with three outside law firms that have represented defendants in this case and in a related case, and a fourth law firm that was YRC's primary outside counsel during a significant portion of the proposed class period; and (2) any other presumptively privileged documents for which defendants provide plaintiffs a “detailed privilege log” (as defined below) by said September 28 deadline.
By way of background, the record reflects that, nearly three years ago, back on November 15, 2012, the court entered a stipulated protective order (ECF doc. 59). This protective order was entered before even the approximate volume of documents to be produced and/or which might be privileged really was known by the parties and counsel. With the benefit of hindsight, it's not entirely clear from paragraph 4 of that stipulated protective order whether it applies to the hundreds of thousands of documents now implicated by the pending motion to compel. But notably, the order does include very detailed non-waiver provisions and what clearly amount to clawback provisions in paragraphs 20-22, with regard to documents that might be subject to a claim of privilege, protection, or other immunity (albeit interestingly without any reference to Fed. R. Evid. 502(d) or (e)).
On February 11, 2015, the presiding U.S. District Judge, Kathryn H. Vratil, denied plaintiffs' second amended unopposed motion for preliminary approval of the parties' proposed class action settlement (see ECF doc. 93). On March 17, 2015, with no viable settlement in the works, the undersigned magistrate judge entered a second amended scheduling order (ECF doc. 99), establishing various deadlines and settings, including an October 1, 2015 deadline to complete fact discovery. In the court's recently filed third amended scheduling order (ECF doc. 145), that deadline was extended by two weeks, to October 15.
On July 15, 2015, after some negotiations, the parties filed a stipulated discovery protocol for the production and use of electronically stored information (“ESI”) (ECF doc. 132). In pertinent part, the ESI protocol sets out detailed procedures to identify documents within an agreed date range and that might be subject to a claim of privilege or protection, most notably, attorney-client privilege and so-called work product protection. The ESI protocol defines these as “presumptively privileged documents.”
*2 There's no claim by plaintiffs that defendants failed to properly apply the agreed upon search terms and privilege filters as called for by the parties' ESI protocol. Likewise, defendants' responsive brief does not challenge plaintiffs' assertions that, out of 817,000 documents yielded by the discovery protocol, 328,000 (or 37.4%) were caught by the privilege filter. By defendants' own assessment, based on a manual review of a randomly selected set of documents caught by the privilege filter, 42% of those documents are either irrelevant or not entitled to protection. During the September 22 hearing, defendants' lead ESI counsel candidly conceded she didn't know for sure, at least based on the sampling done to date, whether more than 42% of over 300,000 subject documents might have been subject to an incorrect assertion of privilege and/or protection. In any event, everyone seems to acknowledge that the privilege filter was too broad.
The court won't second guess the parties' lawyers and say that their ESI discovery protocol was poorly designed. Regardless, while perhaps due to time pressures imposed by the court's scheduling orders, or just a good, old fashioned failure to communicate, it appears the parties and counsel have not yet meaningfully used the “iterative process” they agreed to in paragraph 11 of their ESI protocol, specifically, by refining and rerunning the privilege filter based on the errors found in the random sample. Neither side has expressed any interest in doing so at this juncture. While the court could force the issue and make the parties do what they earlier agreed to do, for wholly practical reasons and in the hope of getting this train back on track, the court declines to do so.
The court has carefully reviewed the parties' briefs and their proposed orders to deal with this problem. Plaintiffs' proposed order is too simplistic and fails to address defendants' stated concerns. Defendants' proposed order is overly complicated and would only serve to make a bad situation worse.
The court believes the best course of action here is four-fold. First, regardless of what the parties may have agreed to earlier, this order modifies the protective order and the ESI protocol. Second, the court hereby makes clear, to the extent (if any) it wasn't already clear, that the non-waiver and clawback provisions in the broad-form protective order filed early in the case do apply to all of the documents produced under the ESI protocol. Third, defendant is entitled to all the benefits bestowed by Fed. R. Evid. 502(d). And finally, the court will endeavor to give the parties some legal and practical guidance on handling assertions of privilege or protection as this case moves down the final stretch of discovery when key witnesses are to be deposed.
More specifically, pursuant to Fed. R. Evid. 502(d) and Fed. R. Civ. P. 26(c)(1), the court orders that, due to the large volume of ESI in defendants' possession, custody, or control, defendants' stated concerns regarding attorney-client privilege and work product protection, and the practical impossibility of doing an “eyes-on” review of over 300,000 potentially privileged documents anytime soon, a clawback provision is hereby implemented to expedite and facilitate discovery and to protect against inadvertent disclosure of attorney-client privileged information or work-product material. The inadvertent disclosure or production of any information or document that is subject to an objection based on attorney-client privilege or work-production protection, including but not limited to information or documents that may be considered “confidential” under the protective order, will not be deemed to waive a party's claim to its privileged or protected nature or estop that party or the privilege holder from designating the information or document as attorney-client privileged or subject to the work-product doctrine at a later date.
During the motion hearing, plaintiffs' counsel stated that she probably would take no more than ten fact depositions and that no more than 50 exhibits probably would be used in any deposition. As earlier indicated, defendants must produce the requested documents, with certain exceptions, by September 28, 2015. By October 12, 2015, generally consistent with what's contemplated by paragraph 6(c) of the District of Kansas's published deposition guidelines, plaintiffs shall complete their review of those documents and then provide defendants a list of all exhibits the former will use during the upcoming fact depositions or in later proceedings in this case. By October 16, 2015, to the extent defendants object to plaintiffs using listed exhibits during the upcoming depositions or later proceedings in this case, defendants shall provide plaintiffs a detailed privilege log consistent with the legal principles set out below. By October 23, 2015, after the parties have completed a good faith meet-and-confer process, they shall file a joint motion, consisting of no more than a single paragraph, asking the court to conduct an in camera review of any disputed documents. Along with their joint motion, the parties must simultaneously file separate supporting legal briefs, with each side limited to five double-spaced pages; defendants may not submit any factual information (by declaration, affidavit, or otherwise) supplementing what they provided to plaintiffs in defendants' detailed privilege log. No replies or further briefing on the in camera submission will be allowed.
*3 To avoid problems down the road, in this order, the court will give both plaintiffs and defendants clear advance guidance about what the court considers legitimately privileged or protected. Further, to guard against overly aggressive assertions of privilege or protection, the court hereby orders that if more than 100 documents are submitted for in camera review, the court will select ten at random for review and ruling. If the court finds that fewer than three of that randomly selected sample are entitled to protection, then the undersigned will deem all privileges and protections waived for the remainder of the documents submitted for in camera review.
The court will endeavor to complete any in camera review of documents and issue its written rulings by November 13, 2015. This should allow depositions to move forward smoothly. Except as otherwise may be agreed to by the parties (e.g., the noticed deposition of Christina Wise on October 15, 2015, and the depositions of the named plaintiffs), no further fact depositions may be taken until November 16, 2015.
If defendants object to a particular document being used by plaintiffs for deposition or other purposes and request the return of the document pursuant to the clawback provision set out above, then that request must be accompanied by a detailed privilege log. Plaintiffs' counsel may retain but not use or disseminate in any way (including providing copies to their clients) such documents pending the court's ruling. And plaintiffs must return all documents ruled to be protected within one business day of any ruling in defendants' favor.
As discussed during the hearing, the undersigned's experience with past in camera reviews of purportedly privileged or protected documents suggests that lawyers, for a variety of reasons, tend to be far too aggressive with their privilege assertions –– seldom are more than 20% of those documents actually entitled to protection. So the following legal principles should be borne in mind as to what the court considers protected and what's contemplated by a detailed privilege log.
Because this litigation arises out of a federal statutory scheme, federal law governs the application of the attorney-client privilege and work-product doctrine.
Under federal common law, the essential elements of the attorney-client privilege are: (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 the legal advisor, (8) except if the protection is waived.
Although this description suggests that the privilege only operates to protect the client's communications to a lawyer, the Tenth Circuit recognizes that a lawyer's communication to a client is also protected if it is related to the rendition of legal services and advice.
The party asserting the privilege bears the burden of establishing that the elements are met.
Case law in this district provides a wealth of guidance as to what is–and is not–protected by the attorney-client privilege. First, it is important to note that “personal, confidential, [or] private information” is not necessarily privileged.
As this court has held repeatedly, “confidential” does not equate to “nondiscoverable” or “privileged.”
Second, it is clear that “[u]nderlying facts are not protected by the privilege.”
“Similarly, neither the acts or services performed by an attorney during the course of his representation, nor the scope of representation, are within the attorney-client privilege because they are not ‘communications.’ ”
Nor are “general topics of attorney-client discussions” or ultimate “legal conclusions” of counsel protected.
Thus, for example, this court has held that the subject matters of an in-house attorney's discussions with company executives are not privileged.
Finally, it bears mentioning that under the eighth element, absence of waiver, the party claiming the privilege must demonstrate that “the substance of an otherwise privileged communication” is not revealed to a third party.
*4 Like the attorney-client privilege, federal law governs the applicability of the work-product doctrine in this case.
The work-product doctrine, first recognized by the Supreme Court in Hickman v. Taylor
is governed by the uniform federal standard set forth in Fed. R. Civ. P. 26(b)(3). Rule 26(b)(3) provides:
Ordinarily, a party may not discover documents and tangible things that are prepared in anticipation of litigation or for trial by or for another party or its representative (including the other party's attorney, consultant, surety, indemnitor, insurer, or agent).
For documents to be protected under this doctrine, the party claiming the protection must demonstrate that “(1) the materials sought to be protected are documents or tangible things; (2) they were prepared in anticipation of litigation or for trial; and (3) they were prepared by or for a party or a representative of that party.”
The purpose of the doctrine is to allow attorneys to prepare for litigation with a “certain degree of privacy,” and without undue interference or fear of exploitation of one's work by an adversary.
Case law from this district also provides direction about the scope of work-product protection. This court has explained that “the doctrine is not intended to protect investigative work unless done so under the supervision of an attorney in preparation for the real and imminent threat of litigation or trial.”
“Although certain actions by an adverse party, such as submitting a reservation of rights letter, might be considered precursors to litigation, the work product doctrine requires more than a mere possibility of litigation.”
Finally, the parties are directed to review the extensive analysis of when a document is “prepared in anticipation of litigation” set out by U.S. Magistrate Judge Gerald L. Rushfelt in Marten v. Yellow Freight System, Inc.
Once a document is deemed initially subject to work-product protection, the parties must determine if it is nevertheless discoverable. “The privilege derived from the work-product doctrine is not absolute,” and may be waived.
In contrast to the attorney-client privilege, “the party asserting waiver of work product immunity, rather than the party asserting the work product protection, [has] the burden to establish waiver.”
In addition, otherwise-protected materials may be discovered if the party seeking the discovery demonstrates that there is substantial need for the materials and there is no other means for obtaining that information without suffering undue hardship.
*5 When documents are withheld under the attorney-client privilege or work-product protection, the burden is on the withholding party to produce a detailed privilege log. Fed. R. Civ. P. 26(b)(5)(A) provides that
[w]hen a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, the party must:
(i) expressly make the claim; and
(ii) describe the nature of the documents, communications, or tangible things not produced or disclosed and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.
If a party fails to make the required showing, by not producing a privilege log or by providing an inadequate one, the court may deem the privilege waived.
“The information provided [in a privilege log] must be sufficient to enable the court to determine whether each element of the asserted privilege or protection is satisfied.”
Specifically, courts have required that a privilege log include the following information:
1. A description of the document explaining whether the document is a memorandum, letter, e-mail, etc.;
2. The date upon which the document was prepared;
3. The date of the document (if different from # 2);
4. The identity of the person(s) who prepared the document;
7. The number of pages of the document;
8. The party's basis for withholding discovery of the document (i.e., the specific privilege or protection being asserted); and
9. Any other pertinent information necessary to establish the elements of each asserted privilege.
As stated in Haid v. Wal-Mart Stores, Inc
., “the question whether materials are privileged is for the court, not the defendant ... to decide, and the court has the right to insist on being presented with sufficient information to make that decision.”
In the hope that the parties will be sufficiently motivated to efficiently work through any disputes over documents listed on defendants' privilege logs, the court will reiterate what was stated in the second amended scheduling order entered on March 17, 2015 (ECF doc. 99). That is, the parties and counsel are respectfully reminded that this court strictly enforces the certification requirements of Fed. R. Civ. P. 26(g). Among other things, Rule 26(g)(1) provides that, by signing a discovery request, response, or objection (which of course would include privilege logs), it's certified as (i) consistent with the applicable rules and warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law, or for establishing new law; (ii) not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and (iii) neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action. If a certification violates these restrictions without substantial justification, under Rule 26(g)(3), the court must
impose an appropriate sanction on the responsible attorney or party, or both; the sanction may
include an order to pay the reasonable expenses, including attorney fees, caused by the violation. Therefore, before
the parties and counsel serve any discovery requests, responses, or objections in this case, lest they incur sanctions later, the court strongly
suggests that they carefully review the excellent discussion of Rule 26(g) found in Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D. Md. 2008). And, since privilege logs usually fall exclusively within the purview of counsel, the court would be inclined to sanction only counsel and, in the more typical situation where monetary sanctions are imposed, bar any right of contribution or reimbursement from the party-client.
Dated September 23, 2015, at Kansas City, Kansas.