EL DORADO IRRIGATION DISTRICT, Plaintiff, v. TRAYLOR BROS., INC., et al., Defendants No. CIV S-03-949 LKK GGH United States District Court, E.D. California Filed March 11, 2005 Hollows, Gregory G., United States Magistrate Judge ORDER Introduction *1 Previously pending on this court's calendar for January 27, 2005, were El Dorado Irrigation District's (EID's) motion to compel first request for production of documents (three disputes), and EID's motion for return of inadvertently produced documents to Traylor Brother's Inc., (“TBI”) (one dispute). Mark Stump appeared on behalf of EID. Theodore Drcar represented TBI. The categories of disputes are discussed separately below.[1] Background Discovery in this case has been as contentious and problematic as the asserted facts which brought on this lawsuit, the alleged misalignment of a water delivery tunnel, the water to be used for electric power generation among other things. EID alleges that TBI, a contractor tasked with drilling a water delivery tunnel through a mountain, finished the tunnel off-mark, both vertically and horizontally. Additionally, the tunnel had a non-specified “dip” in it which caused water to settle and freeze in cold weather, and required special draining equipment when tunnel maintenance was to be performed. EID alleges “fix-it” and maintenance difficulties as a result of the error. EID has sought on several occasions to acquire a complete production of documents related to the alleged error. At times, “complete” has been the subject of dispute with TBI arguing that EID has lost touch with relevance in its zeal to acquire “everything.” However, TBI has been its own worst enemy in this discovery fracas. At the initial discovery hearing, counsel for TBI (Owen) represented (twice) that all potential electronic discovery relevant to EID's requests had been reduced to “hard copy.” However, after further EID discovery into the manner of TBI document retention and preservation, this representation was seemingly as far off the mark as the alleged tunnel misalignment. Through a series of orders, the court ordered electronic discovery to proceed pursuant to strict guidelines. In general, the discovery focused upon the computers of selected TBI employees, and the TBI “headquarters” computers. The court also made provisions for TBI's supplying of privilege logs. The last of the previous disputes involved the computers of TBI's general counsel. The undersigned refused to accept TBI's assertion that “everything” in the general counsel's files (electronic or otherwise) was, of course, attorney-client privileged or subject to the protections of work product immunity. On June 16, 2004, the court ordered TBI to prepare a privilege log for the withheld information. The court's order had surprising results. The sum total of documents available, privileged or not, from the computers of general counsel (Annakin) and his secretary (Allen) totaled four documents. This nearly non-existent number was surprising insofar as Annakin had been general counsel up through January 2004, and had been general counsel during the time from the discovery of tunnel misalignment up through the commencement of litigation as well as during its defense until the time that Owen took over as general counsel. This most recent discovery hearing at issue revealed that Annakin had set up a “personal” electronic document retention “policy” that was guaranteed to obliterate the information after only a few days, and that attempted retrieval of this destroyed information would be forensically very difficult. Ms. Allen also had a curious procedure: every letter document for which she used computer word processing was initiated “on top of” the previously typed document thereby erasing the previous document, ensuring that there would be little, if any, retention of the typed documents in electronic form. When queried at hearing whether Allen kept hard copy files of the documents that she prepared, counsel declared (after months of discovery litigation) that such a search had not occurred to him. *2 Counsel then promised to acquire the Allen hard copy file for which he would create a privilege log (and presumably turn over non-privileged documents). As of the writing of this order, the court is unaware of completion of this task.[2] *3 Owen, who did not maintain the same “destroy when received or created” electronic document retention policy, has belatedly produced a privilege log for those electronic documents maintained on his computers. Understandably, because Owen had not acquired the general counsel duties until mid-way through this litigation, many of his documents were privileged. The above serves as background for the majority of disputes herein. Where further background is necessary in following sections, more is given. Issues The following issues will be adjudicated herein: 1. A motion to compel production of all documents, privileged or not, contained in the Annakin, Owen and Allen computers/files; 2. A motion to compel production of TBI's Equipment Rental Job Cost records; 3. A motion to compel documents asserted as privileged on various TBI privilege logs; 4. A motion to compel return of EID privileged documents, inadvertently disclosed to TBI. Choice of Law Because the subject matter jurisdiction for this action is based on diversity of citizenship, the court must ascertain the appropriate law, federal or California, for discussion of the issues. In this diversity action, questions of substantive privilege are governed by state law. Pagano v. Oroville Hospital, 145 F.R.D. 683, 687 (E.D.Cal. 1993).[3] See also First Pacific Networks, Inc. v. Atlantic Mutual Ins. Co., 163 F.R.D. 574, 576 (N.D. Cal. 1995); Bank of the West v. Valley Nat'l Bank of Ariz., 132 F.R.D. 250, 251 (N.D. Cal. 1990). However, matters going to the procedure for invocation of such privilege, e.g., preparation of privilege logs, are entirely federal in nature. Eureka Financial Corp v. Hartford Acc. & Indem. Co. 136 F.R.D. 179, 182; see Fed.R.Civ. P. 26 (b)(5). Work product is not a “privilege,” but rather is a court created immunity from disclosure. As such, the applicability of the work product doctrine is governed by federal law in diversity cases. Harper v. Auto Owners Ins. Co., 138 F.R.D. 655, 658 (S.D. Ind. 1991). Airheart v. Chicago & Northwestern Transp. Co., 128 F.R.D. 669 (D.S.D. 1989); W.W. Schwarzer, A.W. Tashima & J. Wagstaffe, Federal Civil Procedure Before Trial § 11:32a. Discussion A. Waiver of Privilege/Immunity as a Result of Belated Privilege Logs and Destruction of Evidence EID's argument here is much like a baseball pitcher who shows the batter a vigorous wind-up only to deliver a slow moving change-up. That is, EID discusses extensively its own belief that Annakin and Allen have destroyed electronic evidence that should have been preserved, but then asks for its remedy, not that an adverse inference be drawn, as EID believes (correctly) such would be premature, but rather, for whatever documents do exist (electronic or otherwise) that the court declare all privileges/immunities waived. With one exception, the court is not swinging at this pitch. There can be no doubt that TBI had a duty to preserve both hard copy and electronic documentation pertinent to this dispute. As far back as 1970, litigants were made aware that electronic discovery was placed on the same footing as paper production discovery. In accordance with then changing technology, the Advisory Committee Notes to Fed. R. Civ. P. 34 discuss the discovery of electronic information provide: *4 The inclusive description of ‘documents’ is revised to accord with changing technology. It makes clear that Rule 34 applies to electronics data compilations from which information can be obtained only with the use of detection devices, and that when the data can as a practical matter be made usable by the discovering party only through respondent's devices, respondent may be required to use his devices to translate the data into usable form. In many instances, this means that respondent will have to supply a print-out of computer data. The burden thus placed on respondent will vary from case to case, and the courts have ample power under Rule 26(c) to protect respondent against undue burden or expense, either by restricting discovery or requiring that the discovering party pay costs. Similarly, if the discovering party needs to check the electronic source itself, the court may protect respondent with respect to preservation of his records, confidentiality of nondiscoverable matters, and costs. Advisory Committee Notes, 1970 Amendment. A party's duty to preserve evidence exists where it knew or should have known that evidence was relevant or may be relevant to future litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003). E-mails are discoverable documents under Rule 34. Playboy Enterprises, Inc. v. Welles, 60 F. Supp.2d 1050, 1053 (S.D.Ca.1999). Not all backup tapes for e-mail must be preserved; however, when litigation is anticipated, a party may not destroy evidence which is reasonably likely to be the subject of a discovery request by an opponent. Zubulake, 220 F.R.D. at 217. Once litigation is reasonably anticipated, the anticipated party must put a litigation hold on e-mails and backup tapes which are accessible. Id. at 218. The instant dispute, however, is not about what electronic information is “reasonably accessible,” and is only indirectly about whether a certain electronic document preservation policy is inadequate. Nor does the court need to determine what evidentiary sanctions may be appropriate–a topic generally best left to the trial judge. These are truly sophisticated topics, but it is not necessary here to flesh out the parameters. To a large extent, the court's previous orders, fashioned with the assistance of the parties, has framed the parameters of electronic discovery for this case. Rather, the instant dispute centers about the lack of timely privilege logs, or the lack of a log at all in some circumstances. Privilege logs are due at the time a discovery response is made. See Fed.R.Civ.P. 26(b)(5) (requiring privilege log for withheld documents), and Fed.R.Civ. P. 34(b) (objections are due within 30 days). While not many litigants will be overly incensed about a privilege log not delivered until actual document production, at the very latest, privilege logs should be delivered, or at least promised forthwith during the meet and confer process of a discovery dispute. Eureka, 136 F.R.D. at 184. Although privilege logs may not have been timely and complete for most of the document productions herein, EID does not focus upon early deficiencies in that the court's previous orders permitted TBI to (finally) publish a privilege log. Rather, EID emphasizes that TBI's current general counsel (Owen) initially, after much prodding, produced only a “blanket objection” privilege log, and then did not finally produce a specifically detailed privilege log until too late in the game, and that waiver of the privilege must be found in order to determine the extent to which TBI destroyed electronic documents (Annakin and Allen documents). With respect to the former assertion, the court finds a difference between a “blanket objection” which is decidedly improper, and a deficient attempt at categorization of privilege assertions. An example of a blanket objection occurs when counsel declare: “We generally object to every request in that it calls for information protected by the attorney client privilege.” Such an objection leaves the party expecting production in a complete fog as to what documents are being withheld. On the other hand, it is not the rule that each and every document need be specified in a privilege log if reasonable categorization can be made. United States v. KPMG LLP, 316 F. Supp.2d 30, 32-33 (D.D.C. 2004); Public Service Co. Of N.H. v. Portland Nat. Gas., 218 F.R.D. 361, 363 (D.N.H. 2003). For example, “we object to ten documents on the basis of attorney client privilege; every one of the ten documents was authored by [attorney], contained confidential communications intended for [client], and was not disclosed to any other person.” There would be no need to separately list all ten documents. *5 In reviewing the Owen declaration regarding his initial privilege log (Exhibit 10 to Stump Declaration), it is clear that Owen's privilege log was not purporting to make a blanket objection, but was an attempt to categorize all his post-litigation activities as being completely related to his capacity as lawyer for the client receiving confidential communications or imparting advice based on such. As previously stated, Owen did not take the post of general counsel until well into the pendency of this lawsuit. As a private litigator, he had virtually no contact with the substance of the lawsuit. The court does not at present believe Owen's initial categorization to be reasonable, e.g., it is not possible to tell whether the privilege was waived by disclosure to third parties; however, this is a far cry from saying that the privilege assertion was made in bad faith, or in an act of unreasonable lethargy, or in an act of defiance to this court's orders so as to require a waiver of an otherwise valid privilege. Moreover, although possible, it is doubtful that 2004 and onward Owen's communications would shed much probative light on the documents destroyed in 2002 by Annakin and Allen–a critical time period with respect to the litigation dispute. Finally, and in any event, Owen completed a detailed privileged log, Exhibit 13, albeit quite belated. Therefore, the court will not find a waiver of the attorney-client privilege based on the failure of Owen to timely file his privilege log. The court finds otherwise with respect to the hard copy Allen documents which were only recently “discovered.” If relevant, and no party asserts that they are not, these documents should have been screened for privilege from the outset of discovery requests. This is not the situation where documents are belatedly found because they have been buried in an outpost warehouse, or found in the closet of a retired employee who was not very important to the dispute at hand. Rather, a search of the general counsel's office and his staff should have been the first place where relevant documents should have been searched for and screened for privilege. After all, the parties herein all realized that EID's assertions would likely result in litigation. Indeed, TBI's counsel told the court twice that all electronic documents had been reduced to hard copy. The Court: Well, I'm a little bit perplexed, because if I were counsel in your situation and I received information that the general counsel, number one, doesn't have anything on his computer, all right, the secretary has everything on her computer, but it turns out she has next to nothing on her computer, I would say–I'd call up and say, what's going on here. What do you have a one day turnaround [electronic] document retention policy, or what's the story, and you would have found out at that time, oh, I [Allen] keep a hard copy of everything. I mean I would have been so amazed at the information I would have received that I would have done something about it. Mr. Drcar: Your Honor, I think if (sic) someone in your shoes, that makes a lot of sense.... RT (Feb.14, 2005) 10-11. *** The Court: ...I don't know that I'll go further here, except when I write...[an] order that there's no privilege, is a possibility, but it's something I have to think long and hard about... RT (Feb. 14, 2005) 12. To find that counsel acted reasonably in not giving a privilege log for such documents until early in 2005, if even TBI has supplied one so far, would be to sanction unreasonably non-diligent privilege assertions. And, as Eureka points out, there comes a time when the court will find privilege and immunity assertions to be waived on account of dilatory conduct. Fairness dictates that the failure to discover these Allen documents despite requests pending for approximately one year, and failure to assert a timely privilege or immunity, requires a finding of waiver. The fact that Annakin/Allen electronic documents were destroyed, documents which were likely very pertinent to the instant dispute, although not dispositive to the question of waiver, adds weight to the court's conclusion. The court thus finds a waiver of privileges/immunities for the Allen documents up to the time that Owens took over as general counsel. Therefore, TBI will disclose all “hard copy” documents maintained by Allen dated before Owens' appointment as general counsel within 20 days of the filed date of this order. Nothing in the court's conclusions precludes these documents from being subject to a protective order if such an order is otherwise appropriate. B. Job Cost Records for Equipment Rentals *6 The issue of this dispute centers around “relevance” and “undue burden in light of the probative value of the sought documents.” EID, in its second request for production of documents, sought “job cost records for the [Mill-Bull] PROJECT.” TBI has produced its construction equipment operation costs, but EID wants it to produce its actual ownership/rental costs for certain construction equipment. EID argues that these costs are necessary for it to compute the value of TBI's counterclaim, and for its right to audit costs as set forth in the Contract. Despite the specific, unambiguous contractual provision applicable to the construction equipment cost at issue, EID argues that because the Contract as a whole contemplated a “Guaranteed Maximum Price,” EID is entitled to audit TBI's actual incurred costs in its determination of that maximum price. TBI states that the parties' contract stipulates to ownership/rental costs so actual cost records are irrelevant, that all job costs records have been produced, that ownership/rental costs are not project specific, that actual costs are hard to calculate, and are burdensome to produce. The undersigned agrees with TBI to the extent that the cost information of machinery etc. requested is described in Exhibit 24 to the Contract. In forming the contract for the tunnel project, the parties agreed, for certain equipment, that the cost of such equipment for Contract purposes would be stipulated ahead of time, and that the contract price was based, in part, on the stipulated cost of the equipment. Article 6.1.5.2 of the Contract. The specific equipment contemplated to be covered by the stipulated price is set forth in Exhibit 24 to the Contract. To the court's understanding, the only equipment cost pertinent to the current dispute is for that equipment listed in Exhibit 24. As the court stated at hearing: Judge Karlton [is] the ultimate arbiter of claims, and what's relevant at trial, and what's irrelevant. A[s] the discovery judge, though, I have to take a peek at that to make sure with respect to the burden argument that I don't have TBI Bros. chasing its tail doing a whole lot of work for what ultimately will turn out to be nothing. So my–really, my rule of thumb is if it's patently clear to me that it's not relevant, I'm not going to have [TBI] do discovery. RT (Feb. 14, 2005) 27. The court finds that EID's position is patently incorrect. Regardless of whether the entire contract is subject to some type of potential cost reduction audit, when the parties stipulate in a portion of the Contract that a price for certain equipment ownership/rental is to be paid – so that no one has to perform an actual day-by-day or machine-by-machine cost analysis, the parties should be held to their stipulation. Otherwise, the stipulation would be illusory. EID's position makes as much sense as the parties stipulating to facts in this litigation, but then having EID ask the trial judge to hold three days of evidentiary hearings on the facts of stipulation. Plaintiff's motion to compel equipment rental job cost records is denied. C. Adequacy of TBI's Privilege Logs and Miscellaneous Issues EID complains of 200 documents in TBI's privilege log that it contends either contain insufficient information to establish the existence of the privilege asserted, or that the privilege asserted does not apply or does not exist. TBI contends that it has clarified any ambiguous entries, and that all others are properly withheld based on an asserted privilege. Before discussing the specific categories of dispute, the court must outline the general substantive parameters for assertion of attorney-client privilege (state law) and work product immunity (federal law). 1. Attorney-Client Privilege In California, communications between a lawyer and client which are intended to be confidential are protected from disclosure by statute. Cal. Evid. Code § 952. As used in this article, “confidential communication between client and lawyer” means information transmitted between a client and his or her lawyer in the course of that relationship and in confidence by a means which, so far as the client is aware, discloses the information to no third persons other than those who are present to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted, and includes a legal opinion formed and the advice given by the lawyer in the course of that relationship. *7 The party claiming the attorney-client privilege has the initial burden of showing that communications sought to be suppressed fall within the parameters of the statute. Alpha Beta Co. v. Superior Court (Sundy), 157 Cal. App. 3d 818, 825, 203 Cal. Rptr. 752, 755 (1984). For example, the party claiming the privilege has the burden to establish that the information was transmitted in the course of professional employment. Witkin, California Evidence, § 1125 (Third Ed.). However, once that initial burden is met, the party attacking maintenance of the privilege has the burden to rebut the presumption of confidentiality. Cal. Evid. Code § 917. 2. Work Product Immunity The work-product doctrine protects documents and tangible things that have been prepared by or for a party or his representative in anticipation of litigation or for trial. Fed. R. Civ. P. 26(b)(3). As codified in Rule 26(b)(3), the work product doctrine protects against the disclosure of documents and tangible things “prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative ....” As noted in 1970 by the Advisory Committee on Rules, “Subdivision (b)(3) reflects the trend of the cases by requiring a special showing, not merely as to materials prepared by an attorney, but also as to materials prepared in anticipation of litigation or preparation for trial by or for a party or any representative acting on his behalf.” Work product includes “the so-called ‘qualified work product’ (facts derived from an attorney's investigation) and the ‘absolute’ version (the attorney's mental thought processes).” Doubleday v. Ruh, 149 F.R.D. 601, 606, 607 (E.D. Cal. 1993); Holmgren v. State Farm Mut. Auto. Ins. Co., 976 F.2d 573, 577 (9th Cir. 1992) (showing beyond substantial need/undue hardship to discover “opinion” work product); Handgards, Inc. v. Johnson & Johnson, 413 F. Supp. 926, 933 (N.D. Cal. 1976) (distinguishing between opinion work product and non-mental impression work product). The party asserting the work-product rule has the burden of establishing, for each document, the rule's application. Green v. Baca, __F.R.D.__, 2005 WL 221069 *24 (C.D. Cal. 2005). The protection of the rule is not absolute. When mental impressions are at issue and the need for material protected by the work product rule is compelling, work product may be discovered. Holmgren v. State Farm, 976 F.2d at 577. 3. Ambiguity in Logs After reviewing the privilege logs, reconstructed logs and other assorted documents in thousand page submissions of the parties, the undersigned is unclear of the specific logs at issue. However, with respect to the one privilege log that was submitted by general counsel Owen (Exhibit 13), the court finds such a log to be very adequate. To the extent that TBI's other privilege logs match the Owen log in terms of categories, EID's motion for more specific privilege logs is denied. However, if the categories of information on the other logs does not match the categories set forth in the Owen log, TBI shall reproduce privilege logs using the Owen categories within 20 days of the filed date of this order. The court noted on some logs that “irrelevance” was claimed to be a privilege. As TBI well knows, irrelevance is not a privilege. To the extent that logs issued pursuant to this order are filed, no such “privilege” shall be asserted. DRB (Disputes Review Board) Process Privilege EID contends (correctly) there is no such privilege under California law denominated as a DRB privilege. EID argues that TBI cannot now claim that the documents are protected as attorney-client or work product because TBI did not previously make the assertion and because these protections do not apply to the documents in question. *8 TBI argues that because DRB proceedings are a contractual prerequisite to litigation, draft DRB documents are legal briefs that are not discoverable; however, at the hearing, TBI conceded that the actual grounds for the privilege should have been work product or attorney-client. The court will not find a waiver of the attorney-client privilege or work product immunity for this misnomer. Whether the privilege properly applies to the documents in question is another issue. The revised logs shall contain the appropriate privilege annotation.[4] Improper Assertion of Attorney-Client Privilege EID also believes some assertions of attorney-client privilege are improper. This generic complaint is denied without prejudice pending issuance of revised logs. Any future motion should be brought only with respect to specifically disputed documents. Improper Assertion of Work Product Immunity EID claims that numerous entries in the logs are for documents either not authored by TBI's counsel or its experts, or if so authored, they do not concern the attorneys' thought processes, but are data, notes, factual compilations or project evidence. This generic complaint is denied without prejudice pending issuance of revised logs. Any future motion should be brought only with respect to specifically disputed documents. Daily Job Logs of McDonald and Mitteer These individuals were on-site managers of the project. The relevant issue is their knowledge of the off line and grade condition of the tunnel before hole through. Their logs were either withheld in part or produced in a redacted state where they concerned other construction projects. EID contends their activities on other projects at the time of construction is relevant because their attention was diverted from the Mill-Bull project. The declaration of George Mitteer states that during the project, he occasionally reviewed other projects, but it took “only a small fraction of his time.” Mitteer Decl., filed January 20, 2005, ¶3. He also states that John McDonald served simultaneously as project manager and as project manager for another TBI job which was in Los Angeles, near his office. He went to the Mill-Bull project about once a week and all parties were aware of his dual role. Id., ¶ 4. TBI has not shown why these documents are so proprietary that they should not be produced pursuant to a protective order. The privilege log does not give enough detail for the court to make a determination as to proprietary protection. However, as for the burden to perform a new privilege review of previously redacted notes, TBI has made a showing why a further reproduction is not necessary. If there were only a few redactions to review, the court would not task TBI with the trouble of reproduction in that the few redactions would answer EID's questions, i.e., not much time was spent in endeavors other than the Tunnel. The Mitteer declarations indicates just that for his own time. For McDonald's logs, the Mitteer declaration establishes that he split his time. Unless EID has information which counters these sworn observations, further information is unnecessary. Therefore, at present, EID's motion is denied with respect to these time logs. Privacy Privilege in Regard to Employee Information EID seeks employee wage information, and medical and financial information, purportedly in regard to its fraud, contract, false claims act, and damages claim. EID states that any claimed privacy privilege cannot apply to a corporation. However: *9 A 1974 amendment to the California Constitution added article I, section 1, which states: “ ‘All people are by nature free and independent and have inalienable rights. Among these are enjoying and defending life and liberty, acquiring, possessing, and protecting property, and pursuing and obtaining safety, happiness, and privacy.’ (Italics added.)” (Board of Trustees v. Superior Court (1981) 119 Cal.App.3d 516, 524, 174 Cal.Rptr. 160.) “The drive behind the constitutional amendment was an acknowledgment that ‘[f]undamental to our privacy is the ability to control circulation of information.’ (White v. Davis [1975] 13 Cal.3d 757, 774 [120 Cal.Rptr. 94, 533 P.2d 222], ...)” (Palay v. Superior Court, supra, 18 Cal.App.4th at p. 932, 22 Cal.Rptr.2d 839.) However, “[t]he constitutional provision simply does not apply to corporations. The provision protects the privacy rights of people.” (Roberts v. Gulf Oil Corp. (1983) 147 Cal.App.3d 770, 791, 195 Cal.Rptr. 393.) Therefore, Ameri-Med has no standing to assert a constitutional right to privacy. (Id. at p. 793, 195 Cal.Rptr. 393.) It does not mean, however, Ameri-Med has no privacy rights. “Although corporations have a lesser right to privacy than human beings and are not entitled to claim a right to privacy in terms of a fundamental right, some right to privacy exists. Privacy rights accorded artificial entities are not stagnant, but depend on the circumstances. United States v. Hubbard [D.C.Cir.1980] 650 F.2d 293 speaks to this point: ‘However, we think one cannot draw a bright line at the corporate structure. The public attributes of corporations may indeed reduce pro tanto the reasonability of their expectation of privacy, but the nature and purposes of the corporate entity and the nature of the interest sought to be protected will determine the question whether under given facts the corporation per se has a protectible privacy interest....’ (At pp. 306-307, fns. omitted; ...) [¶] It is clear to us that the law is developing in the direction that the strength of the privacy right being asserted by a nonhuman entity depends on the circumstances. Two critical factors are the strength of the nexus between the artificial entity and human beings and the context in which the controversy arises.” (Roberts v. Gulf Oil Corp, supra, 147 Cal.App.3d at pp. 796-797, 195 Cal.Rptr. 393.) Ameri-Medical Corp. v. Workers' Comp. Appeals Bd., 42 Cal.App.4th 1260, 1287-88, 50 Cal.Rptr.2d 366, 383-84 (1996). The court finds that TBI has cognizable privacy interests in the information sought, and more importantly, TBI could certainly strive to protect the privacy of its individual employees. Because TBI has already provided payroll information to the EID, it will not be required to produce further wage information. EID has not made a showing why information relating to employee performance or medical records is sufficiently relevant to its case. EID's motion is denied in regard to employee information. TBI's Proprietary Information The remaining documents sought by EID, and not discussed already, are variously categorized, compare Joint Statement at 23-24, and 30. The court therefore, is unsure of specifically what documents have been withheld by TBI, although the parties do not seem to have this problem. Nevertheless, the court can break out the remaining categories of documents at issue into two major areas: (a) those that concern the Tunnel project, and (b) those that are germane to other TBI projects. Unless ordered otherwise in the sections above, TBI shall produce requested documents that pertain to the Tunnel project. These may be produced subject to a protective order. TBI need not produce documents that pertain to other TBI projects. D. Return of Assertedly Privileged MWH Documents It so happened in this litigation that EID inadvertently forwarded to TBI certain documents which it had earmarked as privileged under the attorney-client privilege or work product immunity. The parties thereafter agreed that certain privileged documents would be returned to EID, but could not agree on the privileged status of the remaining inadvertently produced documents. Most of the contested documents are those which EID personnel/representatives had disseminated to its engineer-on-site – MWH, or conversely, MWH had disseminated to EID personnel. *10 Although such is possible in certain circumstances, TBI does not argue that the inadvertent disclosure of the documents to TBI constitutes a waiver. See, e.g., Transamerica Computer v. IBM, 573 F.2d 646 (9th Cir. 1978). Rather, TBI contends that the inadvertently produced documents at issue here had their privileged or immune status waived long before, i.e., when EID disclosed confidential communications to MWH, or received such from MWH. In essence, the dispute has accelerated into a motion as if the assertions on a privilege log were being challenged themselves. The major waiver issue, therefore, concerns whether MWH is a “third party” for purposes of waiver of the attorney-client privilege/work product immunity, or whether MWH is simply an agent of EID such that disclosure of otherwise privileged communications between EID and MWH do not waive privileges. The status of EID's engineer representative (MWH) is well set forth in the post-hearing declaration submitted by EID: MWH had two roles on the Mill-Bull Tunnel project. First, it served as the EID's “construction manager.” Using its specialized knowledge of the construction process, MWH acted as the EID's agent in dealing with the many technical issues needing the EID's input during the construction of the Tunnel. MWH served as [TBI's] point of contact with the EID, and had hundreds of written communications with [TBI] and others during the course of the ...project. MWH had a practice of consecutively numbering its project correspondence on the face of the letters themselves. Second, under Section 9.06 of the General Conditions of the construction contract...MWH rendered “Engineer's Decisions” on the project. In general, Section 9.06 requires TBI to submit “claims, disputes and other matters relating to the acceptability of the Work or the interpretation of the requirements of the contract documents [a terms that includes the plans and specifications] to MWH (who is referred to as the Engineer” in the General Conditions). Requests for Engineer's Decisions are to be made in writing, and MWH was to serve as an “interpreter and judge” who “will not show impartiality [sic] to Owner or Contractor” in connection with such disputes. Barnes Declaration at 3. California law has two separate statutory sections pertinent to the issue of waiver of attorney-client privilege, which is somewhat mirrored in federal law for purposes of the work-product doctrine. As seen from the previous quote pertaining to confidential communication, the attorney-client privilege protects confidential communications which “disclose[ ] the information to no third persons other than those who are present to further the interest of the client in the consultation or those to whom disclosure is reasonably necessary for the transmission of the information or the accomplishment of the purpose for which the lawyer is consulted.” Cal. Evid. Code § 952. However, waiver of the privilege is also defined in Cal. Evid. Code § 912: a) Except as otherwise provided in this section, the right of any person to claim a privilege provided by Section 954 (lawyer-client privilege), 980 (privilege for confidential marital communications), 994 (physician-patient privilege), 1014 (psychotherapist-patient privilege), 1033 (privilege of penitent), 1034 (privilege of clergyman), 1035.8 (sexual assault counselor-victim privilege), or 1037.5 (domestic violence counselor-victim privilege) is waived with respect to a communication protected by the privilege if any holder of the privilege, without coercion, has disclosed a significant part of the communication or has consented to disclosure made by anyone. Consent to disclosure is manifested by any statement or other conduct of the holder of the privilege indicating consent to the disclosure, including failure to claim the privilege in any proceeding in which the holder has the legal standing and opportunity to claim the privilege. *11 **** (c) A disclosure that is itself privileged is not a waiver of any privilege. (d) A disclosure in confidence of a communication that is protected by a privilege provided by Section 954 (lawyer-client privilege), 994 (physician-patient privilege), 1014 (psychotherapist-patient privilege), 1035.8 (sexual assault counselor-victim privilege), or 1037.5 (domestic violence counselor-victim privilege), when disclosure is reasonably necessary for the accomplishment of the purpose for which the lawyer, physician, psychotherapist, sexual assault counselor, or domestic violence counselor was consulted, is not a waiver of the privilege. Again, the key issue here is whether communications between EID attorneys and MWH would be considered necessary-for-the-accomplishment-of-the-purpose for which the EID lawyers and staff were retained. Normally, if MWH held the status as simply EID's representative in the field, the court would have no difficulty in finding that EID confidential disclosures made to MWH and vice versa were necessary for accomplishment of the lawyer's retention purpose (assuming that the communications were otherwise privileged). However, MWH wore another hat – it was a neutral adjudicator of disputes between EID and TBI. This relationship adds a troubling twist with respect to maintenance of privilege because implicit in the concept of a neutral, unbiased adjudicator, is the notion that information supplied to an adjudicator to decide disputes will be known to both sides prior to the time a decision is made. For example, one need only ask rhetorically, how would a person feel if that person submitted a dispute to a neutral adjudicator, but the neutral adjudicator had access to “confidential” information, both factual and opinionated, supplied by the person's adversary and unknown to the person. Such a relationship would be, of course, termed unfair, and a violation of due process if occurring in a governmental context. The adversary could not reasonably claim in a non-national security or similar context, that he had a right to keep information “privileged” from the person aggrieved, but nevertheless submitted as a basis for decision to the adjudicator. That is, in essence, what EID asserts herein. Similarly, the adversary could not reasonably claim that the adjudicator gets to talk with it confidentially (ex parte) about substantive matters that may be pertinent to a filed or potential dispute. But, EID claims, it has submitted the Barnes declaration in which he declares that none of the asserted, privileged information was used in any Engineer's Decision. Thus, EID argues, we are back to the situation where EID was conversing with MWH in its representative capacity only. However, the court disagrees with this characterization. The idea of protected disclosure of privileged information to a third person should not depend on a present-day review of what the privileged information was actually used for, but rather on the status of the third party at the time the disclosure was made. Waiver is determined at the time of disclosure of privileged information to a third party – not at some undetermined time in the future depending on what the information was used for in the meantime. Moreover, there is no information given in the Barnes declaration that the privileged information could not have been used in an Engineer's Decision after it was submitted – Barnes only declares that it was not. If a person or entity is in fact simultaneously wearing “two hats” at the time of privileged information disclosure, one for which waiver would be found, and one not, EID cannot unitlaterally redraw the scene at the time of information dissemination to the wearing of one hat only. And, a person or entity that is on call at all times to render adjudications of disputes as they arise is wearing an adjudicator's hat at all times. *12 The situation here is fairly unique, although issues of third party disclosure have arisen in California law. See, e.g., McKesson HBOC Inc. V. Superior Court, 115 Cal. App.4th 1229, 9 Cal. Rptr.3d 812 (2004) (sharing of document with government investigative agency waived both attorney-client and work product privileges); STI Outdoor v. Superior Court, 91 Cal. App.4th 334, 109 Cal. Rptr.2d 865 (2001) (sharing of documents between parties negotiating a business license did not waive privileges). A case that is superficially close to the situation here favors EID's position. In State Farm v. Superior Court (Durant), 216 Cal. App.3d 1222, 265 Cal. Rptr 372 (1989), during the course of a home property damage litigation, an insured's counsel gave confidential information to his client's insurance company – a State Farm's adjuster. However, at the same time, State Farm was defending the case on a reservation of rights, and supplying some of the information given by the insured's counsel to coverage counsel. The court found that because the insured was represented by Cumis counsel, this apparent conflict would not invalidate the attorney-client privilege between the adjuster (State Farm) and coverage counsel in a later filed bad faith action involving the insured and State Farm. Id. at 1227-28, 265 Cal. Rptr. at 375. However, the court sees sufficient dissimilarities between the State Farm situation and the EID-MWH-TBI situation. Most importantly, the appellate court found that the insureds could not expect that the adjuster would be working on their behalf after the coverage dispute arose. Id. That was the reason for Cunis counsel in the first place. “As Cumis counsel, it was Worden's [the insured's lawyer] obligation to guard against improvident revelations to the insurance company.” Here, the situation is the opposite. EID promised in the contract that its agent, MWH would act as an impartial adjudicator of disputes. Moreover the passage of confidential information did not involve TBI at all, but rather only EID and its agent. The court again reiterates, in a situation where an agent of the party claiming attorney-client privilege funnels information to its agent, which is also a duty bound neutral adjudicator between the party and an adversary, the party cannot reasonably claim that privileged information passed between the party and the agent, i.e., that it is only passed for the assistance of the party's counsel. Indeed, the court finds the dominant purpose for intended-to-be-confidential, MWH-EID communications, to be first and foremost potential dispute resolution. Told otherwise would subvert the attorney-client privilege into a tool for mischief. Cf. Scripps Health v. Superior Court, 109 Cal. App.4th 529, 532-534, 135 Cal. Rptr. 2d 126, 128-129 (2003) (where dual purposes exist for potentially confidential communications, one privileged, and one not, privilege may be eviscerated). EID does not fare any better under the federal work product doctrine. Definition of waiver in the work product area is a problematic endeavor given the variety of opinions on the matter, but the better rule is that set forth in Rockwell Intern. Corp. v. U.S. Dept. of Justice 235 F.3d 598, 605 (D.C. Cir. 2001): “It is true that although the ‘mere showing of a voluntary disclosure to a third person ... should not suffice in itself for waiver of the work-product privilege,’ disclosure of work-product materials can waive the privilege for those materials if ‘such disclosure, under the circumstances, is inconsistent with the maintenance of secrecy from the disclosing party's adversary.’ United States v. American Tel. & Tel. Co., 642 F.2d 1285, 1299 (D.C.Cir.1980).” For the reasons set forth above in the attorney-client section, the court finds that EID's disclosures to MWH and vice versa were inconsistent with the need to keep the material secret from its adversary. Analogous to this situation are the dual roles experts might play as consultants and later as testifying witnesses. The work product doctrine may protect communications only if there is a clear distinction between the two roles. Beverage Marketing Corp. v. Ogilvy & Mather Direct Response, Inc., 563 F. Supp. 1013, 1014 (S.D.N.Y. 1983). In Construction Industry Services Corp. V. Hanover Ins. Co., 206 F.R.D. 43 (E.D.N.Y. 2001), the court was unable to distinguish between an expert's role as a business consultant the party on many aspects of the litigation and his role as testifying expert. The court found it significant that the expert had reviewed confidential information in both roles. “Nothing before the court demonstrated with clarity how Liebgold, in his capacity as a damages expert, could not have considered, on some level, his comprehensive knowledge of, and pre- and post-litigation exposure to, all confidential information regarding the lawsuit. Moreover, the fact that Liebgold acted as a consultant prior to being ‘hired’ as the damages expert cannot be the determining factor. If chronology was determinative, the opportunity for parties to shield disclosure of otherwise discoverable documents considered by their experts simply by hiring those individuals first as consultants and later as experts would be too great.” Id. at 53. Consequently, the court found that the work product doctrine was waived. Further, if there is any ambiguity regarding the role played by the expert in reviewing or creating documents, whether as consultant or testifying, should be resolved in favor of the party seeking discovery. B.F.C. Oil Refining, Inc. v. Consolidated Edison Co. Of N.Y., Inc., 171 F.R.D. 57, 62 (S.D.N.Y. 1997). This is especially true where an expert has first reviewed documents as a consultant, and then becomes an expert. The roles are blurred in this instance and the documents are discoverable. Id. at 61. Similarly, MWH's dual roles were certainly blurred as there was no legitimate way that MWH could remove from its analysis “secret” information received from, or given to, EID. *13 Therefore, the documents on EID's “inadvertent production” log which identify MWH or its staff, Tom Erdman and Dave Rogers, as authors or recipients in any capacity, are not protected by attorney-client privilege or the work product doctrine as they were disclosed to a third party whose role was dual. All other documents on EID's “inadvertent production” log shall be returned to EID. With respect to “non-MWH” returned documents, if TBI remains of the opinon that such are not privileged, TBI shall file a new motion. CONCLUSION In accordance with the terms within this opinion, IT IS ORDERED that: 1. EID's motion to compel is granted in part and denied in part; 2. EID's motion to have inadvertently produced privileged documents returned is granted in part and denied in part. DATED: 3/10/05 Footnotes [1] The parties are reminded that courtesy copies of electronic filings must be provided to chambers by the next business day after the electronic filing where a document exceeds 25 pages or where attachments or exhibits exceed 50 pages. E. D. Local Rule 5-133(f). [2] The precise chronology of this discovery dispute is as follows. EID began requesting the documents at issue in November, 2002. Stump Decl., ¶ 6. After this action commenced on April 7, 2003, EID made further document requests on April 23, 2003, and August 11, 2003. Id., ¶¶ 7, 8. EID's first motion to compel after non-production was heard on December 11, 2003. At that hearing, Mr. Owen, as outside litigation counsel for TBI, represented (twice) that to his knowledge, every electronic document had been made into hard copy and made available to EID, “with the possible exception of items that were no longer on the computer that may have been placed in an archive back-up tape or some sort.” Stump. Decl., Exh. 3, p. 7. However, EID pressed its contention that the paper documentation produced thus far contained “gaps,” and that a search of all TBI computers was the only remedy for such “gaps. The court would not permit carte blanche electronic discovery until EID performed some preliminary discovery to explain the gaps and discovery pertinent to the way TBI stored its electronic information. Id. At 7-10. A second motion to compel was heard on March 4, 2004, after EID discovered that all pertinent electronic documents had not been reduced to hard copies, and that there were likely documentary gaps. The court ordered TBI to make certain computers available to EID and to produce a privilege log by March 15, 2004. Order, filed March 15, 2004. EID filed another motion to compel which was heard on May 13, 2004, in part, due to TBI's refusal to allow the EID to make discovery of computers in its general counsel's office. At that hearing, the court ordered TBI to produce a privilege log and declarations to the effect that all non-privileged Mill-Bull Tunnel documents had been produced, which was followed by a written order, filed June 16, 2004. It was TBI's compliance, or lack thereof, with this order that led to the instant dispute. The declarations, dated May 24, 2004, state that the computers of two general counsel, Joseph Annakin and Steven Owen, and their secretary, Patty Allen, were searched and that all relevant documents were produced from them. The problem was – that the Annakin/Allen computers had essentially no pertinent documents on them. The May 24, 2004, declaration of Mr. Annakin indicates that he did not save e-mails but sent them to trash after reading them. The computer automatically deleted them after a short period of time. Annakin Decl., exh. 8 to Stump Decl. Allen's declaration stated that every time she transcribed a new letter, she typed over the text of the last letter and the prior letter was not saved. Allen Decl., exh. 9 to Stump Decl. At this point, there were essentially no documents and no privilege log for general counsel office documents up to the time Owen was appointed general counsel in January 2004, and essentially all of the Owen documents were privileged. Then, on January 7th, 2005, months after the initial discovery motion, Allen signed a supplemental declaration establishing that she kept a hard copy file of all letters, etc. Exhibit 14 to Stump Decl. Up to the time of hearing, EID had not been apprised of the contents of this hard file. [3] Despite the observations in a few cases that Pagano had been implicitly overruled by the Supreme Court (on matters unrelated to the proposition advanced herein), no such overruling ever took place. [4] EID should note, however, that information demonstrating preparation for collateral administrative proceedings involving the Tunnel dispute would probably be encompassed by work product at the very least unless disclosed or otherwise waived.