In re Zetia (Ezetimibe) Antitrust Litig.
In re Zetia (Ezetimibe) Antitrust Litig.
2019 WL 6122012 (E.D. Va. 2019)
July 16, 2019
Miller, Douglas E., United States Magistrate Judge
Summary
The court found that Merck's disclosure of the claw back documents was inadvertent and that Merck had taken reasonable steps to prevent and rectify the disclosure before and after the fact. The court also found that Merck had complied with the procedural requirements to claim privilege as to the claw back documents, and denied Plaintiffs' Motion to Compel the Claw Back Documents.
Additional Decisions
In re ZETIA (EZETIMIBE) ANTITRUST LITIGATION
THIS DOCUMENT RELATES TO: All Member Cases
THIS DOCUMENT RELATES TO: All Member Cases
MDL No. 2:18md2836
United States District Court, E.D. Virginia
Signed July 16, 2019
Miller, Douglas E., United States Magistrate Judge
MEMORANDUM ORDER
*1 In this multi-district antitrust litigation, Plaintiffs' claims arise from Defendant Merck's[1] alleged efforts to delay generic competition for its cholesterol medication Zetia. The matter is before the court on Plaintiffs' Motion for an Order Compelling Production of Merck's Clawed-Back Documents. (ECF No. 276). For the reasons set out in detail below, Plaintiffs' motion is DENIED.
I. FACTUAL AND PROCEDURAL HISTORY
The detailed allegations in Plaintiffs' 90-page Complaint are reviewed elsewhere.[2] For purposes of this motion, it is sufficient to note that Plaintiffs' claims arise from an allegedly anti-competitive Settlement Agreement between Merck and Defendant Glenmark Pharmaceuticals, a maker of generic drugs. The settlement, entered into in 2010, resolved pending patent litigation between Merck and Glenmark. Plaintiffs claim that Merck also agreed to forego producing an authorized generic version of Zetia in exchange for Glenmark's agreement to drop its patent challenge and refrain from producing a generic competitor until the challenged patent expired in 2016. Plaintiffs claim Merck's agreement amounted to an allocation of monopoly profits, or a reverse payment of the type proscribed by the United States Supreme Court in FTC v. Actavis, 570 U.S. 136 (2013).
During discovery, Plaintiffs have propounded requests for production seeking documentation related to the Settlement Agreement. Because the case centers around resolution of this earlier litigation, Merck employed a robust system of privilege review, including both electronic privilege screens and manual review performed by a team of 37 attorneys employed by Merck's discovery counsel, Morgan Lewis & Bockius, LLP (“Morgan Lewis”). Leonard Impagliazzo Decl. ¶¶ 4-5 (ECF No. 301). The reviewing attorneys received written guidelines and supervision prepared by Merck's litigation counsel, Gibson, Dunn & Crutcher, LLP (“Gibson Dunn”). In addition to the first-tier review by Morgan Lewis, Gibson Dunn attorneys conducted a second level of review for documents flagged by the electronic privilege screen but deemed not privileged by first-line reviewers. Impagliazzo Decl. ¶ 6. At the time this dispute arose, Merck's response to date included production of 112,000 documents, comprising some two million pages. In addition, the company has thus far identified 25,000 responsive documents which it had either partially or completely withheld as privileged. Impagliazzo Decl. ¶ 7.
Shortly after a production delivered May 6, 2019, Merck's counsel wrote Plaintiffs requesting to claw back two documents it claimed had been inadvertently produced. Merck's letter, written by lead counsel from Gibson Dunn, was dated May 9, 2 019, and identified an email thread and accompanying spreadsheet bearing Bates Nos. MRKZETIA_R000048459 to MRKZETIA_R000048460 and MRKZETIA_R000048461. Sharon Robertson Decl. Ex. B (ECF No. 278-2). The two-page document bearing numbers 48459-60 is a partially redacted email chain from Merck's finance employee, Arthur Misyan, to his finance colleague, Paul McCrorey. The email is copied to two Merck attorneys, Edward Murray and Lisa Jakob. The second document is a spreadsheet referred to in the Misyan email (the “'8461 Spreadsheet”). Merck's letter stated that the documents reflected “legal advice and analysis prepared in connection with litigation and at the direction of Merck's in-house counsel.” Id. The documents had been first produced to Plaintiffs in April, but Merck discovered its error after a replacement production was delivered on May 6, 2019. Impagliazzo Decl. ¶¶ 8-9.
*2 The parties conferred by email and phone but reached no agreement on Merck's claw back request. During this exchange, Plaintiffs discovered a second spreadsheet, Bates No. MRKZETIA_R000090828 (“'0828 Spreadsheet”), which appeared similar to the '8461 Spreadsheet. Plaintiffs identified this document to Merck “out of an abundance of caution,” and inquired whether Merck intended to assert a privilege and request claw back. Pls.' Mem. Supp. Mot. Compel 6 (ECF No. 290-1). After investigation, Merck sent a second claw back request, identifying this document as “completely privileged” and requesting its return. Robertson Decl., Ex. G (ECF No. 278-7).
Both claw back requests cited to the parties' agreed protocol with respect to production of electronically stored information. The agreement, titled “Joint Stipulated Protocol Governing Privilege and the Discovery of Electronically Stored Information and Hard Copy Documents,” includes a section governing the “Production of Privileged or Otherwise Protected Material.” (ECF No. 172 at 26-27). This section reads:
[I]f a party or nonparty (the “Disclosing Party”) inadvertently discloses information in connection with the pending litigation that the Disclosing Party thereafter claims to be privileged or subject to work product protection (“Protected Information”), that disclosure of that Protected Information will not constitute or be deemed a waiver or forfeiture ... of any claim of privilege or work product protection that the Disclosing Party would otherwise be entitled to assert with respect to the Protected Information and its subject matter.
(ECF No. 172 at 26). This “ESI Protocol” is “coextensive with Rule 502(b),” which provides similar claw back relief in the event of inadvertent disclosure. See Def. Merck's Br. Opp. 12 n.2 (ECF No. 296).
II. ANALYSIS
Plaintiffs' motion to compel disclosure of the claw back documents rests on two independent claims. They argue that the documents are not privileged, because they reflect the kind of business analysis the company would perform irrespective of pending litigation. They also claim that if the documents had been privileged when they were created, Merck waived the privilege because their production was not “inadvertent” as required by both Rule 502 and their negotiated ESI Protocol. In this regard, Plaintiffs note the ESI Protocol intentionally mirrors the language of Rule 502, and that they expressly declined to add language permitting claw back of documents produced “mistakenly.”
A. Merck has established that the claw back documents are privileged.
The attorney/client privilege protects from disclosure confidential communications between a lawyer and client. Hawkins v. Stables, 148 F.3d 379, 383 (4th Cir. 1998); In re Allen, 106 F.3d 582, 600 (4th Cir. 1997). Because this protection sometimes impedes discovery of the truth, the attorney/client privilege is narrowly construed. Hawkins, 148 F.3d at 383. It is recognized “only to the very limited extent that excluding relevant evidence ... has a public good transcending the normally predominant principal of utilizing all rational means for ascertaining the truth.” Id. (alteration in original) (quoting Trammel v. United States, 445 U.S. 40, 50 (1980)).
For the privilege to apply, there must be an attorney/client relationship, and the communication must be for the purpose of seeking legal advice. United States v. Tedder, 801 F.2d 1437, 1442 (4th Cir. 1986) (citing NLRB v. Harvey, 349 F.2d 900, 904 (4th Cir. 1965)). But the communication need not always originate from, or be directed to, an attorney for the privilege to attach. See Grand Jury Proceedings Under Seal v. United States, 947 F.2d 1188, 1191 (4th Cir. 1991) (recognizing as privileged communication with an accountant if made to assist in rendering legal services rather than solely for the purpose of receiving accounting advice). The privilege “protect[s] not only the giving of professional advice to those who can act on it but also the giving of the information to the lawyer to enable him to give sound and informed advice.” Upjohn Co. v. United States, 449 U.S. 383, 3 90 (1981). An extension of the attorney/client privilege, the work product doctrine, also protects material prepared at the direction of an attorney in anticipation of litigation, or during the course of adversarial proceedings. Id. at 397-98. The work product doctrine is rooted in the necessity that “a lawyer work with a certain degree of privacy.” Id. (quoting Hickman v. Taylor, 329 U.S. 495, 510 (1947)).
*3 Importantly, both attorney/client privilege and the work product doctrine protect the disclosure of communication only, not the disclosure of the underlying facts by those who communicated with the attorney. Upjohn, 449 U.S. at 395. Thus, no client can “be compelled to answer the question, ‘What did you say or write to the attorney?’ but may not refuse to disclose any relevant fact ... merely because he incorporated a statement of such fact into his communication to his attorney.” Id. at 395-96 (quoting City of Philadelphia v. Westinghouse Elec. Corp., 205 F. Supp. 830, 831 (E.D. Pa. 1962)); In re Allen, 106 F.3d at 604. The burden of establishing the existence and limits of the attorney/client privilege rests with the party asserting it. United States v. Jones, 696 F.2d 1069, 1072 (4th Cir. 1982). Likewise, a party claiming work product protection must demonstrate that the documents sought to be protected were created “in preparation for litigation.” NLRB v. Interbake Foods, LLC, 637 F.3d 492, 502 (4th Cir. 2011) (quoting In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir. 1994).
In this instance, Merck has met its burden to show that the three claw back documents are privileged. It submitted multiple declarations attesting to the privileged nature of both spreadsheets and the accompanying email. Merck's then-in-house counsel, Edward Murray, addressed the '8461 Spreadsheet, writing that the analysis it contained was “performed at either my personal request or at the request of other Merck & Co., Inc. in-house counsel responsible for IP litigation.” Edward Murray Decl. ¶ 4 (ECF No. 300). He also stated that the analysis was to evaluate “a potential settlement of the patent litigation between Merck and Glenmark,” and that “[t]he sole purpose of this analysis was for legal, not business, reasons.” Id. Murray stated that he considered the analysis privileged because it was prepared at the request of counsel and reflected “our judgments in connection with the patent litigation against Glenmark.” Id.
Murray's declaration was corroborated by Arthur Misyan, who was then Merck's Director of Corporate Financial Evaluation and Analysis. Misyan coordinated preparation of the '8461 Spreadsheet with other analysts “after receiving direction from Mr. Murray.” Arthur Misyan Decl. ¶ 5 (ECF No. 298). Misyan also stated that the purpose of the work was to “evaluat[e] a potential settlement of patent litigation involving Merck,” and that had counsel “not requested this analysis in order to evaluate a potential settlement, the Excel spreadsheet and the analysis within it would not have been created.” Misyan Decl. ¶ 4. Misyan relied on other financial analysts to prepare the spreadsheet but states that there was no independent business purpose for performing the work, and that Mr. Murray provided information that the analysts used to perform the work. Thus, Misyan states, “the analysis contains and reflects the judgment of Merck's in-house counsel at that time.” Id.
With regard to the '0828 Spreadsheet, Murray stated that it was also prepared at the request of in-house IP litigators to evaluate a settlement of patent litigation involving the drug Propecia. Murray Decl. ¶ 5. As with the other spreadsheet, Murray stated that the Propecia document was solely for legal and not business purposes and that it reflects the judgment of in-house counsel. Id. His descriptions of the document were corroborated by Breon Burgess, who was then Merck's Director of U.S. Pharmaceutical Financial Evaluations and Analysis. Although Burgess did not specifically recall the document, which was originally prepared in 2006, she stated that it was “consistent with the type of analysis [she] frequently prepared,” and that she believed it “was prepared based on certain assumptions provided by in-house counsel at Merck regarding a potential settlement of patent litigation ... over the drug Propecia.” Breon Burgess Decl. ¶¶ 3-4 (ECF No. 299).
*4 These declarations are sufficient to establish a claim of both attorney/client privilege and opinion work product. The materials were prepared at an attorney's request and reflect the attorney's input and judgment. Upjohn, 449 U.S. at 390; see also FTC v. Boehringer Ingelheim Pharm., Inc., 892 F.3d 1264, 1267 (D.C. Cir. 2018) (in corporate context privilege applies to communications between corporate employees and corporation's counsel made for the purpose of obtaining or providing legal advice). In Boehringer, the D.C. Circuit considered a similar dispute and held that business analysis prepared to assist counsel in evaluating a settlement was privileged even though valuing settlement “ultimately was a business decision as well as a legal decision” for the client. 892 F.3d at 1268.
In their challenge to Merck's claim of privilege, Plaintiffs focus on the somewhat qualified nature of the Merck employee statements. Plaintiffs' declaration submitted by counsel of record, Sharon Robertson, notes that when initially pressed to identify the in-house lawyer who requested the analysis in the '8461 Spreadsheet, the Company's attorneys in this case declined to specify any specific attorney. Robertson Decl. ¶ 5 (ECF No. 290-2). Likewise, Merck could not specify the name of any inhouse attorney responsible for the '0828 Spreadsheet in the Propecia litigation. Id. ¶ 8. The Plaintiffs also produced apparently uncontested biographical information demonstrating that the creators of the claw back documents, including Mr. Misyan, Ms. Burgess, and Merck financial employees Sean Xue and Paul McCrorey, were all non-lawyers, principally engaged in financial analysis and forecasting. Robertson Decl. Exs. I - L (ECF No. 278). Plaintiffs argue these facts undermine Merck's clam of privilege. They contend that the documents were prepared by employees holding “quintessential business positions.” Mem. Supp. Mot. to Compel 21. Thus, Plaintiffs argue, Merck's proffered evidence of privilege is speculative and contradictory.
After reviewing the issues raised by Plaintiffs' declarations, the court does not find they undermine Merck's claim of privilege. Although the attorney, Murray, could not definitively recall directing the documents be prepared, he described the nature of the material and confirmed it would have been ordered by either himself or another attorney. Both the Misyan and Burgess declarations expressly corroborated that statement. Plaintiffs also state that the declarations make clear that the information contained in the documents “originate primarily (if not exclusively) from Merck's business employees - Paul McCrorey and Sean Xue.” Pls.' Reply Br. 10 (ECF No. 310). But the Misyan declaration expressly contradicts this claim, stating that the analysis was performed to evaluate possible settlement, that counsel provided information used to perform the analysis, and that the documents “contain [ ] and reflect[ ] the judgment of Merck's in-house counsel at that time.” Misyan Decl. ¶ 4. This is sufficient to establish that the document contains both attorney/client privileged communication and opinion work product and is entitled to protection absent waiver.
Plaintiffs argued in the alternative that Merck's vacillation in initially declining to identify the responsible counsel, and its inclusion of a redacted email, suggests their brief raised sufficient question regarding the claim of privilege to warrant in camera review. Once a prima facie showing of privilege is made, a party opposing the claim can justify in camera inspection of the materials by “advancing ‘a factual basis sufficient to support a reasonable, good faith belief that in camera inspection may reveal evidence that information in the materials is not privileged.’ ” Interbake Foods, 637 F.3d at 502 (quoting In re Grand Jury Investigation, 974 F.2d 1068, 1074 (9th Cir. 1992)). The Court should not “undertake in camera review unless the parties have first properly asserted privilege/protection, then provided sufficient factual information to justify the privilege/protection claimed for each document, and, finally, met and conferred in a good faith effort to resolve any disputes without court intervention.” Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 266 (D. Md. 2008) (citing United States v. Zolin, 491 U.S. 554, 571-72 (1989)). As Merck has established a factual basis for its claimed privilege, Plaintiffs must make a threshold “showing of a factual basis adequate to support a good faith belief by a reasonable person” that an exception to the privilege may apply. See In re Grand Jury Subpoena, 274 F. App'x 306, 310 (4th Cir. 2008) (per curiam) (quoting Zolin, 491 U.S. at 572). Once this threshold showing is made, a judge can review the privileged documents in camera to assist in determining whether exceptions apply. Id. (citing In re Grand Jury Proceedings No. 5, 401 F.3d 247, 253 (4th Cir. 2005)).
*5 In this case, notwithstanding the strength of Merck's privilege claims, the parties' disagreement over the claw back documents is sufficiently narrow that the court agreed to in camera inspection and considered both redacted and unredacted versions of the documents produced directly to chambers. Those documents confirm Merck's statements that both spreadsheets were prepared to assist in evaluating settlement and reflect the judgments of inhouse counsel advising Merck on the then-pending matters. Although they each bear only one Bates number, both spreadsheets are complex decision tools made up of multiple pages of information related to the pending settlements under consideration. Produced in native format, they each contain detailed estimates and formulas apparently intended to evaluate various litigation/settlement scenarios. While they necessarily contain financial data, which standing alone may be non-privileged, in this format the data is integral to the privileged purpose of the document and clearly reflects input from counsel reflecting their legal judgments with respect to both the Glenmark and Propecia matters.
From the court's review it is not clear whether the data would be independently relevant but for its inclusion in the two privileged decision tools at issue. However, to the extent either spreadsheet contains stand-alone forecasts or financial data which is separately responsive to Plaintiffs' requests, these materials would not be subject to a claim of privilege and presumably have been produced. But the spreadsheets themselves, and accompanying communication regarding them, are privileged and may be withheld absent waiver.
B. Merck's Inadvertent Disclosure of the Claw Back Documents Did Not Waive Privilege
Concluding that the claw back documents are covered by attorney/client privilege does not necessarily mean they are protected from discovery. A party may waive privilege, thereby exposing attorney-client communications and other materials to discovery, if it discloses protected information. See Fed. R. Evid. 502; In re Grand Jury Proceedings, 727 F.2d 1352, 1356 (4th Cir. 1984). However, not every disclosure results in a waiver of privilege. Federal Rule of Evidence 502(b) specifies that disclosure does not waive privilege if “(1) the disclosure is inadvertent; (2) the holder of the privilege 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).” Parties may also reach private agreements regarding the effect of disclosure, and these agreements will be enforced by the court. Fed. R. Evid. 502(e). Although the parties' ESI Protocol in this case largely follows Rule 502, to the extent it provides different rules, its language would control. The burden is on the party resisting discovery to show that privilege was not waived. United States v. Jones, 696 F.2d 1069, 1072 (4th Cir. 1982).
Rule 502(b) sets out the court's three-part analysis. First, the court must determine whether Merck's disclosure of the claw back documents was “inadvertent” within the meaning of the Rule and any private agreement between the parties. Second, the court must examine whether Merck took reasonable steps to prevent such disclosure. Finally, the court must consider the adequacy of Merck's response to the disclosure. As detailed below, the court finds that Merck's disclosure was inadvertent. Furthermore, Merck took reasonable steps to prevent and rectify the disclosure before and after the fact. Accordingly, the claw back documents remain protected and Plaintiffs are not entitled to an order compelling their production.
1. Merck's production of the claw back documents was inadvertent
Plaintiffs' primary argument in support of waiver is that Merck's disclosure was not inadvertent, placing it outside the protection of Rule 502 (b). They lean heavily on the fact that Merck produced the Misyan email and the 8461 Spreadsheet on two separate occasions and partially redacted the email before producing it. In Plaintiffs' view, the redactions demonstrate a calculated determination, somewhere in Merck's discovery review process, that the document was not entirely privileged. Such a determination, Plaintiffs contend, is incompatible with Rule 502(b)'s conception of “inadvertent” disclosure.
*6 Though hardly an uncommon term, determining whether a disclosure was “inadvertent” under Rule 502 proves somewhat difficult. Privilege determinations are highly fact-specific. See Fed. R. Evid. 502 advisory committee's notes (characterizing the prevailing multi-factor test as “really a set of non-determinative guidelines that vary from case to case”); see also FDIC v. Marine Midland Realty Credit Corp., 138 F.R.D. 479, 482 (E.D. Va. 1991) (endorsing multifactor test as consistent with Fourth Circuit precedent). And the Fourth Circuit has thus far had few opportunities to define what “inadvertent” means in this context. See Francisco v. Verizon S., Inc., 756 F. Supp. 2d 705, 718-19 (E.D. Va. 2010) (surveying Fourth Circuit cases mentioning inadvertent disclosure), aff'd, 442 F. App'x 752 (4th Cir. 2011). Decisions addressing the narrower question presented here - whether attorney review and partial redaction before production precludes a finding of inadvertence – yield somewhat conflicting rules.
Plaintiffs cite to a string of opinions traceable to the Maryland District Court's decision in McCafferty's, Inc. v. Bank of Glen Burnie, No. MJG-96-3656, 1998 U.S. Dist. LEXIS 12861 (D. Md. Apr. 23, 1998) (unpublished). In McCafferty's, decided before enactment of Rule 502, the court held that a bank was not entitled to assert privilege over a sealed affidavit from a separate proceeding that had come into the possession of an unaffiliated person. Id. at *5-6. Although the evidence did not show how this person acquired the document, it was clear that the bank knew he had it but took no action to protect its confidentiality. Id. The court rejected the bank's argument that the waiver was inadvertent, writing:
[T]here is a distinction between a long term failure to maintain confidentiality and a one short inadvertent waiver of privilege. An inadvertent waiver would occur when a document, which a party intended to maintain confidential, was disclosed by accident such as a misaddressed communication to someone outside the privilege scope or the inadvertent inclusion of a privileged document being produced in discovery. In contrast, when a client makes a decision -- albeit an unwise, or even mistaken, decision -- not to maintain confidentiality in a document, the privilege is lost due to an overall failure to maintain a confidence. In such a case, the owner of the privilege knew full well that he/she/it was making a disclosure of the document which is now being claimed to be privileged.
Id. at *4-5; see also ePlus Inc. v. Lawson Software, Inc., 280 F.R.D. 247, 255 (E.D. Va. 2012) (calling McCafferty's opinion “well-reasoned and ... a useful analytical tool”); Francisco, 756 F. Supp. 2d at 719 (citing to and applying McCafferty's reasoning).
Plaintiffs specifically rely on these post-McCafferty's opinions applying its language to define “inadvertent.” Francisco, for example, involved notes which had apparently been prepared during a confidential meeting between defendant Verizon's general counsel and an EEO compliance officer. 756 F. Supp. 2d at 718. Verizon initially marked the notes as confidential, redacted them, and produced them along with 170 additional pages of documents. Id. at 719. After a second, more extensive investigation, Verizon “realize[d] that the subject document might be privileged” and sought a protective order against its further use. Id. Verizon's claim of privilege came after its counsel had encountered the document in three separate depositions, never raising any objection to its use. Id.
The court - again interpreting only the common-law of waiver - ruled that Verizon's disclosure was not inadvertent. Id. It said that whereas “waivers” are typically “intentional or knowing acts,” inadvertent disclosures “are, by definition, unintentional acts.” Id. at 718 (quoting Marine Midland, 138 F.R.D. at 482). Applying the above-quoted dichotomy from McCafferty's, the court distinguished the circumstances of the document's production from classic “accidental” cases, such as “includ[ing] a single document, known to be privileged, in a large collection of otherwise non-privileged documents. Id. at 719. Rather, Verizon produced the documents “intentionally, and after apparent analysis.” Id.
*7 In ePlus, defendant Lawson Software sought to claw back eight documents it claimed to have inadvertently produced. 280 F.R.D. at 255. These documents were stamped as confidential, at least one was produced in redacted form, and at least one was “discussed at great length” during a deposition before the claw back request. Id. Lawson argued that despite the confidentiality stamps, the documents were “not necessarily ... reviewed before being produced,” as “employees, and not attorneys, may have placed these stamps on them.” Id.
The court found that Lawson had not established its production was inadvertent. Regardless of who stamped the documents, the court said, their marking as confidential “should have alerted Lawson to the fact that they contained potentially privileged information.” Id. Lawson's inadvertence claim was further undercut by the fact that some documents were produced with redactions and that the privilege claim arose only after the documents were used in depositions. See id. Lawson's production may have been mistaken, according to the court, but the parties' Protective Order did not cover mistakes. Id.
Taken together with McCafferty's, the Francisco and ePlus opinions offer a view of “inadvertence” closely linked to the actions of a particular reviewer. Those opinions suggest - but do not specifically hold - that anything other than strictly accidental disclosure cannot be considered “inadvertent,” because the document review and production by an attorney would necessarily involve an intentional act. They also make clear that a party which is aware of a breach in confidentiality must act to remedy that breach or risk waiving it.
Merck, naturally, takes a broader view of what counts as “inadvertent” disclosure. Merck argues that Plaintiffs' rigid conception of Rule 502(b)'s inadvertence standard is incompatible with the Rule's overriding purpose.[3] The Advisory Committee's notes accompanying the Rule support Merck's contention. The Committee was acutely aware of problems posed by prohibitive discovery costs, particularly in cases involving a high volume of electronic discovery. See Fed. R. Evid. 502 advisory committee's notes; see also Marine Midland, 138 F.R.D. at 479-480 (“The inadvertent production of a privileged document is a specter that haunts every document intensive case.”). In its explanation accompanying subsection (b), the Committee endorses a flexible standard for determining whether inadvertent disclosure functions as a privilege waiver. And it places an explicit limitation on the level of vigilance a party must employ to preserve privilege:
The rule does not require the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake. But the rule does require the producing party to follow up on any obvious indications that a protected communication or information has been produced inadvertently.
Id.
Merck also cites to several cases explicitly relying on Rule 502 which support their view that a document may be produced inadvertently even after review and redaction. See Adair v. EQT Prod. Co., Nos. 1:10CV37, 1:10CV41, 2012 WL 2526982 (W.D. Va. June 29, 2012) (“[T]he risk of inadvertent disclosure is present in every case, and particularly present in those cases in which the document production is of significant size. Such inadvertent production can occur and does occur whether the documents are searched and reviewed electronically or by human eyes.”); King Pharm., Inc. v. Purdue Pharma L.P., No. 1:08CV50, 2010 WL 2243872 (W.D. Va. June 2, 2010) (“The fact that the document had been reviewed and partially redacted does not by itself prevent the disclosure from being inadvertent. The nature of the mistake in disclosing a document is not limited by the rules, and logically ought to include mistaken redaction, as well as other types of mistakes that result in disclosure.”). These cases highlight the express purpose of Rule 502 and the importance of viewing a contested disclosure relative to the overall scope of discovery in a case. In King Pharmaceuticals, for example, the defendant sought to claw back a few pages from a document, “one of millions of other documents produced by the parties” in a “complex patent case.” 2010 WL 2243872, at *1. The court considered this a “very limited disclosure” of the sort Rule 502(b) was intended to protect. Id. at *2; see also In re Sulfuric Acid Antitrust Litig., 235 F.R.D. 407, 417 (N.D. Ill. 2006) (“Where discovery is extensive, mistakes are inevitable and claims of inadvertence are properly honored so long as appropriate precautions are taken.”).
*8 Like the disclosing parties in Francisco and ePlus, Merck produced one of the documents at issue in partially redacted form, making clear that it was reviewed by someone at some point in the document review process. It is well established that Merck - as a party - is bound by the actions of its counsel. Neal v. Xerox Corp., 991 F. Supp. 494, 500 (E.D. Va. 1998). On the other hand, the high volume of material produced by Merck (and the relatively small number of disputed documents) puts this case squarely in the same context as Adair and King Pharmaceuticals – which recognize that unintended errors arise in large volume cases despite a party's best efforts to guard against them.
Merck does not make individual decisions to produce or withheld documents. As a corporate actor it is responsible for putting in place a team of trained professionals (attorney and non-attorney) to separate privileged and non-privileged material in a cost-effective manner. It must comply with its obligations under Rule 26 to produce responsive documents, but its perspective encompasses additional considerations. How it - as a corporate party - implements a process for meeting these obligations and avoiding privilege waiver requires consideration of the overall volume of discovery relative to the challenged disclosure and the larger chain of events and/or failures that led to the disclosure.
This perspective aligns with privilege law generally and Rule 502 specifically. As the client and litigating party, Merck holds the privilege. In re Grand Jury Proceedings, 33 F.3d 342, 348 (4th Cir. 1994). The other subsections in Rule 502(b) refer to “the holder of the privilege.” Fed. R. Evid. 502(b)(2), (3). And the Advisory Committee's notes to Rule 502 make clear that the drafters were concerned with the broader impact of high discovery costs on litigants. See Fed. R. Evid. 502 advisory committee's notes (“Depending on the circumstances, a party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken “reasonable steps” to prevent inadvertent disclosure.”).
To the extent Merck's perspective is self-serving, it is tempered by the objective prongs (subsections (b)(2) and (b)(3)) of the Rule 502 analysis. Even an inadvertent disclosure can result in privilege waiver if the disclosing party did not take “reasonable” steps to both prevent it in the first place and rectify the error after the fact.[4] Thus, Merck could not excuse any disclosure simply by chalking it up as an error in the process. And courts remain entirely capable of evaluating the facts of a disclosure and determining if it was truly an error, and not a strategic choice the party now wishes to walk back.
Applying this perspective, the court is satisfied that Merck's disclosure of the claw back documents was inadvertent. Several facts support this determination. First, Merck invoked privilege and sought claw back before Plaintiffs attempted to use any of the material in any capacity, such as a deposition. This alleviates fairness concerns and distinguishes the instant case from both Francisco and ePlus. Second, Merck withheld as entirely privileged several other documents that were identical or similar to the Misyan email and the 8461 Spreadsheet. Impagliazzo Decl. ¶ 9 (ECF No. 301). Again, viewed from Merck's perspective, rather than that of the individual attorney(s) who reviewed these documents, it is logically inconsistent to conclude that Merck both intentionally produced and withheld the same document. And because it withheld all but one such copy, the most reasonable explanation is that the single production was contrary to Merck's intent - or inadvertent.[5] Finally, Plaintiffs' repeated claim that Merck produced the claw back documents twice is unpersuasive. The second production to include those documents was intended only to remedy technical errors involving certain slip sheets which had been incorrectly worded in the original production. Impagliazzo Decl. ¶ 8. No attorney manually re-reviewed the previously produced documents during the correction of this error. Id. This is therefore not a case where a party consistently produced documents after repeated review.
*9 Plaintiffs also emphasize the absence of the term “mistaken” in the parties' negotiated ESI Protocol, in contrast to a prior case in this court. See Opinion & Order, Am. Sales Co., LLC v. Pfizer, Inc., No. 2:14-cv-361 (E.D. Va. Feb. 17, 2017) (Docket No. 166). In Celebrex, defendant Pfizer sought to claw back 104 documents out of 500,000 it had produced. Id. at 9. The parties' negotiated Discovery Confidentiality Order (“DCO”) permitted claw-back after “inadvertent” or “mistaken” disclosures, perhaps broadening the Rule 502 standard. Id. The court held that although the disclosures ”may not qualify as ‘ inadvertent,’ ” they were covered by the term “mistaken;” therefore, the documents remained privileged. Id. at 10 (emphasis added).
Importantly, the Celebrex opinion did not finally determine whether the documents were or were not inadvertently produced. Relying on the parties' briefing, the opinion analyzed precedent noting the distinction between “inadvertent” and “mistaken” disclosures. In doing so, it acknowledged that some courts appear to have restricted “inadvertent” disclosure to purely unintentional acts. See id. at 8 (citing Marine Midland, 138 F.R.D. at 483; Francisco, 756 F. Supp. 2d at 710-11). But as the parties agreed DCO included the term “mistaken” it was unnecessary to finally decide whether the producing party's conduct may have also been “inadvertent.” Moreover, as the above discussion makes clear, from Merck's perspective, the disclosure here was not intentional. Rather, it was an “accidental oversight; a result of carelessness.” Id. (quoting definition of “inadvertence” from Black's Law Dictionary (10th ed. 2014)).[6] As a result, its production fits the definition of inadvertent under Rule 502 and incorporated in the parties' ESI Protocol.
2. Merck took reasonable steps to prevent inadvertent disclosures
The reasonableness of a party's efforts to prevent inadvertent disclosure is “a function of the circumstances presented.” Marine Midland, 138 F.R.D. at 483; see also Fed. R. Evid. 502(b) advisory committee's notes (explaining flexible, multi-factor test for reasonableness). Relevant factors include “the number of documents to be reviewed and the time constraints for production.” Rule 502(b) advisory committee's notes. Rule 502 also contemplates the use of automated discovery tools such as screening software. Id.
The court has little difficulty concluding that Merck's precautions in this case were reasonable. Finding the opposite would run counter to the goals of Rule 502. Merck put in place an elaborate, expansive process for reviewing documents, employing dozens of attorneys (likely at significant cost). Merck implemented this process over approximately five months, what it terms a “compressed time period.” Def. Merck's Br. Opp. 3. Using the numbers Merck provided, the process had an entirely reasonable error rate of 0.003%.[7] See In re Grand Jury Investigation, 142 F.R.D. 276, 280-81 (M.D.N.C. 1992) (finding that production of 18 documents out of 22,000 pages produced and 300,000 pages reviewed was not “suggestive of inadequate precautions”); cf. Felman Prod., Inc. v. Indus. Risk Insurers, No. 3:09-0481, 2010 WL 2944777, at *4 (S.D.W. Va. July 23, 2010) (finding precautions unreasonable where party inadvertently disclosed approximately 30% of over one million pages).
*10 Ordering disclosure on these facts would seriously diminish Rule 502's flexibility. It would contract rather than expand, parties' ability to manage the ever-increasing cost of production and privilege review. Litigants faced with such exacting demands would incur even greater expense protecting against erroneous disclosure. See Adair, 2012 WL 2526982, at *5 (“EQT's position is that the only reasonable search for privileged and responsive documents is done by human beings on an individual document basis. As the bulk of trending case law and the recent amendments to the rules indicate, this is an untenable position.”). Over-inclusive privilege screening would likely produce even more disputes for the courts to resolve, costing time and money and potentially frustrating the free exchange of information intended under the Federal Rules. See Fisher v. United States, 425 U.S. 391, 403 (1976); FEC v. Christian Coal., 178 F.R.D. 61, 67 (E.D. Va. 1998) (recognizing attorney-client privilege as an “exception from the otherwise liberal construction of discovery rules”). The better conclusion is that Rule 502 was intended to permit precisely the sort of relative efficiencies present in this case while preserving privilege protections in the event of isolated disclosure.
3. Merck took reasonable steps to rectify the inadvertent disclosures at issue
The third prong of Rule 502(b) requires prompt, reasonable steps to rectify disclosure errors. Challenged disclosures ordinarily involve long periods of delay after a party realizes its error. See, e.g., Adaptix, Inc. v. Alcatel-Lucent USA, Inc., No. 6:12-cv-22, 2015 WL 12781215, at *1 (E.D. Tex. June 1, 2015) (finding waiver where party had knowledge of disclosure for at least nine months before seeking claw-back); Williams v. District of Columbia, 806 F. Supp. 2d 44, 52-53 (D.D.C. 2011) (finding delay of nearly three years unreasonable under Rule 502(b)(3)).
Here, Merck informed Plaintiffs of the inadvertent production two days after discovering it. Decl. of Christopher Dusseault ¶ 4 (ECF No. 297). The parties organized a meet-and-confer within days of that notice. Dusseault Decl. ¶ 5. When Plaintiffs informed Merck of a third potentially privileged document on May 28, Merck began investigating immediately and communicated its claw-back request two days later. Dusseault Decl. ¶¶ 7, 8. These very brief time periods are fully in line with what courts consider “reasonable.” See, e.g., Harleysville Ins. Co. v. Holding Funeral Home, Inc., No. 1:15CV57, 2017 WL 4368617, at *4 (W.D. Va. Oct. 2, 2017) (finding that attempts to rectify erroneous disclosure within four days were reasonably prompt).
Plaintiffs argue that Merck's post-disclosure efforts were unreasonable because it failed to identify the third document before Plaintiffs brought the document to Merck's attention. See Pl.'s Reply Br. 8 (ECF No. 310). Rule 502(b)(3) is primarily concerned with a party's efforts after it discovers an inadvertent disclosure, and Merck responded promptly after receiving word from Plaintiffs. See Johnson v. Ford Motor Co., No. 3:13cv6529, 2015 WL 1650428, at *11 (S.D.W. Va. Apr. 14, 2015). In any case, Rule 502 does not require post-production review. Fed. R. Evid. 502(b) advisory committee's notes; see also Prowess, Inc. v. RaySearch Labs. AB, No. WDQ-11-1357, 2013 WL 1976077, at *4 (D. Md. May 9, 2013) (permitting plaintiff to claw back privileged documents even though it learned of their inadvertent production from the opposing party). In addition, the '0828 Spreadsheet was prepared in 2006, related to completely separate patent litigation, and may have been inadvertently included in the production as responsive in any event. The failure to identify this one additional document as privileged is not indicative of carelessness. See United States ex rel. Bagley v. TRW, Inc., 204 F.R.D. 170, 179 (C.D. Cal. 2001). The court concludes that Merck has satisfied Rule 502(b)(3).
C. Merck Has Complied with the Procedural Requirements to Claim Privilege as to the claw back documents
As an alternative to their waiver argument, Plaintiffs contend that Merck has not complied with applicable procedures for claiming privilege as to the claw back documents. Plaintiffs argue that Merck's privilege logs lack the detail necessary to support its claims regarding the claw back documents.
*11 The party invoking privilege to withhold otherwise discoverable documents bears the burden of establishing that such protection applies. Hawkins, 148 F.3d at 383. The proponent must make such a claim expressly and must describe the nature of the documents with enough detail to enable other parties to assess the claim. Fed. R. Civ. P. 26 (b) (5) (A) (i) - (ii). A privilege log is sufficient if it demonstrates that each element of the applicable privilege is met; the log need not provide substantial detail regarding the contents of the privileged communication. See Interbake Foods, 637 F.3d at 502.
The challenged privilege logs here contain enough information to permit Plaintiffs to evaluate Merck's claim of privilege. Without disclosing the documents' content, the logs specify their author, recipient, date of transmission, and subject matter. Although, judging by Plaintiffs' account, Merck could have been more immediately forthcoming about the nature of its privilege claim, nothing in the parties' exchange or meet-and-confer process would amount to a waiver of confidentiality. See id. (approving privilege logs that were “not detailed” but provided all necessary information). And in this case, in camera review of the documents confirms that the high-level descriptions in Merck's privilege logs are accurate. A party cannot be expected to defend a privilege assertion by revealing the contents of what it hopes to keep secret. See Baldwin v. United States, No. ll-CV-2033, 2012 WL 1577501, at *7 (D. Colo. May 4, 2012) (approving privilege log describing communication as “e-mail and reply requesting information to respond to Plaintiff's FTCA claim”). The court therefore rejects Plaintiffs' waiver argument on this basis.
III. CONCLUSION
For the foregoing reasons the court DENIES Plaintiffs' Motion to Compel the Claw Back Documents (ECF No. 276) and directs their return to Merck in accordance with the parties' agreed ESI Protocol and Rule 26(b)(5)(B).
Footnotes
“Merck” here collectively refers to Defendants Merck & Co., Inc.; Merck Sharp & Dohme Corp.; Schering-Plough Corp.; Schering Corp.; and MSP Singapore Co. LLC.
See Report and Recommendation on Motion to Dismiss 13-25 (ECF No. 234).
It bears repeating that McCafferty's was decided before enactment of Rule 502, which was adopted in 2007. Though ePlus and Francisco post-date adoption of the Rule, neither opinion cites to it, instead relying on the parties' Agreed Protective Order or the common-law understanding of waiver.
The interplay between 502(b)(1) and (b)(2) further supports Merck's position. 502(b)(2)'s requirement that a party take “reasonable steps” to prevent disclosure clearly expects some degree of document review. But using Plaintiffs' interpretation, a reviewed document could almost never be “inadvertently” produced. This would leave a party with conflicting incentives, with (b) (2) encouraging a thorough review process while (b)(1) ominously threatens to render the entire operation moot.
The declaration from Merck's discovery counsel does not specify exactly how many such duplicative documents were withheld. At oral argument, counsel for Merck indicated that more than 20 iterations were identified, marked as privileged, and withheld.
Celebrex is, of course, merely persuasive authority for present purposes. Furthermore, its facts make a stronger case for intentional disclosure than is present here. The challenged disclosure was much larger, and many of the documents at issue had been reviewed multiple times before production. It also makes no mention of other iterations of the documents in question being withheld, an important factor here.
Three allegedly privileged documents produced out of 112,000 documents total.