*1 Defendant Total Quality Logistics, LLC's (“TQL”) Motion to Compel Plaintiffs’ Counsel to Destroy Inadvertently Produced E-Mail Protected by the Attorney-Client Privilege [Dkt. 364] is granted. Plaintiffs are ordered to return, sequester, or destroy the Privileged Email and any copies in their possession within three days of this order.

On January 21, 2022, this Court denied TQL's motion for protective order and ordered TQL to respond within 14 days to Plaintiffs’ discovery requests related to certain United States Department of Labor (“DOL”) investigations of TQL.[1] As part of its discovery response, TQL produced an email between TQL's in-house counsel and outside counsel in this litigation (the “Privileged Email”) to Plaintiffs’ counsel. TQL argues that the Privileged Email was inadvertently produced and that it has not waived privilege; Plaintiffs assert that the TQL waived privilege by producing the Privileged Email, or, in the alternative, that the crime-fraud exception applies to the Privileged Email.

The Privileged Email had 11 attachments that all parties agree were not privileged. [Dkt. 364 at 3.] On July 6, 2021, TQL's counsel sent the 11 attachments to its third-party ESI vendor, IST Management Services, Inc. (“IST”) to upload to IST's document review platform; at that time, counsel did not send the Privileged Email because “the document was fully privileged and was not intended to be produced.” [Dkt. 364 at 4.] The attachments were to be included in a batch of documents being filed under seal before this Court for in camera review. [Dkt. 364 at 4.] Before submitting those documents to the Court for review, counsel noticed that the attachments were displaying the incorrect date; instead of the date they were created, they were showing the date of the Privileged Email (July 6, 2021). [Dkt. 364 at 4-5.] To rectify the problem, IST “asked TQL's attorneys to send the Privileged E-mail itself directly to him, which would allow him to pull the eleven attachments and re-load them with the correct dates.” [Dkt. 364 at 5.] TQL's counsel did so, and both TQL's counsel and the vendor claim that counsel instructed IST not to include the Privileged Email in the production because it was privileged. [Dkt. 364 at 5.] The August 2021 production was completed with no problems; the attachments were produced and the Privileged Email was sequestered from the production. [Dkt. 364 at 5-6.] Unbeknownst to counsel for TQL, IST had uploaded the Privileged Email into the document review platform and it shared a folder with the 11 attachments. [Dkt. 364 at 5-6.]

When the Court ordered TQL to respond to Plaintiffs’ discovery requests in January 2022, TQL began preparing its document production. [Dkt. 364 at 7.] As part of this effort, TQL planned to reproduce all of the documents it had submitted under seal in August 2021 and told IST to use the same folder in the review platform it had used for the August 2021 production. [Dkt. 364 at 7.] As far as TQL's counsel knew, these documents had already been reviewed for privilege and could all be produced; as a result, counsel did not review those documents, and instead focused its review on any new materials that would be included in TQL's forthcoming production. [Dkt. 364 at 8.] This turned out to be a mistake, as the Privileged Email was in the production folder and IST did not remember to exclude it from production the second time; as such, the Privileged Email was produced to Plaintiffs on February 4, 2022. [Dkt. 364 at 8.]

*2 During an email exchange on February 9, 2022, Plaintiffs’ counsel emailed TQL's counsel, alerting them to the fact the Privileged Email had been produced and that they planned to use it in their upcoming motion for sanctions. [Dkt. 364 at 9-10.] Approximately 40 minutes later, TQL explained it had inadvertently produced the Privileged Email, but Plaintiffs maintained that TQL had waived privilege. [Dkt. 364 at 10.] The instant motion followed.

I. FEDERAL RULE OF EVIDENCE 502

Federal Rule of Evidence 502(b) “sets forth a test for whether inadvertent disclosures ‘made in a Federal proceeding’ operate as a waiver of privilege.” Sidney I. v. Focused Retail Property I, LLC, 274 F.R.D. 212, 215 (N.D. Ill. 2011) (quoting Fed. R. Evidence 502(b))). “[A] disclosure of information covered by the attorney-client privilege does not operate as a waiver of that privilege if (1) the disclosure was inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent the 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).” Id.

II. THE PRODUCTION WAS INADVERTENT

Plaintiffs argue that the Privileged Email was not inadvertently produced. This argument has no merit. Obviously, the production was inadvertent. Rule 502(b) “poses a straightforward question of intent.” See Sidney I., 274 F.R.D. at 216. There is no possibility TQL made the production of the Privileged Email intentionally. The primary case relied on by Plaintiffs in their brief found that the production there was inadvertent as well, and the Court does not understand why Plaintiffs cited it to stand for the opposite proposition. See Sidney I., 274 F.R.D. at 216. The Court rejects this argument.

III. TQL TOOK REASONABLE STEPS TO PREVENT DISCLOSURE

Plaintiffs next argue that TQL waived privilege by failing to take reasonable steps to prevent disclosure of the Privileged Email. This case is very similar to the Sidney I. case Plaintiffs cite in their brief, but distinguishable in crucial ways. In that case, the plaintiff was represented by Chicago counsel and California counsel; California counsel sent documents to Chicago counsel, who “reviewed the documents, segregating privileged correspondence from the remainder of the documents.” Sidney I., 274 F.R.D. at 214. “He forgot, however, that his file also contained a duplicate set of these documents, with the privileged and unprivileged material still intermixed.” Id. Two months later, Chicago counsel told his assistant to copy the documents related to the case and send them to opposing counsel as part of plaintiff's initial Rule 26 disclosures without giving the assistant any instructions about screening for privileged documents. Id. As a result, “his assistant copied the set of documents that contained the privileged material, rather than the set from which privileged correspondence had been segregated,” and Chicago counsel neglected to review the production before it was sent to opposing counsel. Id. The privileged communications were used by defendants at plaintiff's deposition several months later; counsel failed to object at the deposition, but filed a motion seeking the return of the privileged documents. Id. at 214-15. The court ruled that plaintiff's production had waived the attorney-client privilege, reasoning:

*3 Id. at 217.

The common fact between Sidney I. and the instant suit is that TQL's counsel admits he did not review the February 2022 production before it was sent to Plaintiffs’ counsel, instead assuming that the portion that overlapped with the August 2021 production would remain identical. Of course, the crucial difference is that TQL's counsel had good reason to make that assumption; the previous production came from the same folders and the same review platform and the same vendor, and correctly excluded the Privileged Email from the in camera production in August 2021. In other words, TQL had already demonstrated the existence of an organized screening procedure in August 2021, and it was reasonable to expect that the procedure would once again exclude the Privileged Email from production. The other facts are also distinguishable. TQL did explicitly instruct IST to keep the Privileged Email out of the production in August 2021 and did not have any reason to know it had been uploaded to the document review platform at all. TQL did not merely forget that the folder contained the Privileged Email, but instead was unaware IST had loaded it into the program and had manually removed the Privileged Email from the August 2021 production.

The Court believes the facts in this case are materially different than Sidney I. TQL had previously expressly discussed with IST the nature of the Privileged Email and that it should not be produced. TQL did not even send the Privileged Email to IST until it became clear that TQL needed to do so to fix a formatting error on the attachments to the Privileged Email, and was careful to explain that the Privileged Email should not be included in the August 2021 production. When the August 2021 production went off without a hitch, it was reasonable for TQL to assume that IST had adequately sequestered the Privileged Email so that it would not be included in any future productions. Given the short turnaround time between this Court's order and the production deadline (i.e., 14 days), TQL reasonably relied on its previous production as proof that subsequent productions would be identical (and indeed asked for the same materials as the August 2021 production). Of course, it would be best practices to review every sheet of paper that is produced, but the law requires reasonable steps to prevent disclosure, not perfection. TQL met the standard required by 502(b), and the Court rejects Plaintiffs’ arguments.

IV. TQL TOOK REASONABLE STEPS TO RECTIFY THE ERROR

TQL also took reasonable steps to rectify the error. Plaintiffs argue “TQL did not take reasonable steps to rectify the error because it did not seek to compel destruction of the document until Plaintiffs sought to use it and brought it to its attention.” [Dkt. 369 at 6.] This argument does not make sense. How do Plaintiffs propose TQL could have rectified an inadvertent error it was unaware of before it was made aware of the error? To Plaintiffs’ credit, they did not play “hide the ball,” and made TQL aware of the Privilege Email's production after reviewing the materials TQL had turned over. Of course, TQL was equally prompt, seeking destruction of the email within 40 minutes of being alerted to the Privileged Email's production. On this prong of the 502(b) test, “courts focus on the producing party's response after it realizes that it has disclosed privileged material.” Sidney I., 274 F.R.D. at 214. The Court believes a 40-minute response time satisfies this requirement. Plaintiffs’ argument is rejected.[2]

V. THE CRIME-FRAUD EXCEPTION DOES NOT APPLY

*4 Alternatively, Plaintiffs argue that the crime-fraud exception to the attorney-client privilege destroys that protection for the Privileged Email. “The crime-fraud exception applies where the party attempting to circumvent the privilege can meet the following test: (1) a prima facie showing of fraud, and (2) the communications in question are in furtherance of the misconduct.” Vardon Golf Co. v. Karsten Mfg. Corp., 213 F.R.D. 528, 535 (N.D. Ill. 2003) (citing Pandick, Inc. v. Rooney, 1988 WL 61180, at *2 (N.D. Ill. June 2, 1988)). “[A] knowing pursuit of baseless litigation is sufficient to show the fraud element of the crime-fraud exception test.” Id. at 535. The Court believes there is a meaningful difference between pursuing baseless litigation and filing a motion that has a low probability of success. Without divulging the substance of the Privileged Email, the Court finds that it falls into the latter category. A review of the Court's opinion on TQL's motion for protective order will demonstrate what it thought of the merits of that motion, and the Court ordered briefing on whether TQL's motion was “substantially justified” for purposes of Federal Rule of Civil Procedure 37(a)(5). [See Dkt. 361 at 8.] While the Court wishes it could prevent these parties and counsel from making arguments with long odds of persuading a judge – including significant portions of the instant motion and TQL's motion for protective order – they do not rise to the level of fraud. The crime-fraud exception does not apply to the Privileged Email.

VI. ATTORNEYS’ FEES

When this Court originally set this motion for a hearing, it entered a minute order stating that the Court would consider Rule 37(a)(5) in deciding this motion and “both parties should be prepared to be heard on this issue if the Court rules against them.” [Dkt. 365.] Neither party argued the issue. Rule 37(a)(5) mandates that the Court must order the losing party on a motion to compel to pay attorneys’ fees unless: “(i) the movant filed the motion before attempting in good faith to obtain the disclosure or discovery without court action; (ii) the opposing party's nondisclosure, response, or objection was substantially justified; or (iii) other circumstances make an award of expenses unjust.” Here, given the apparent similarities between the Sidney I. case and this matter, the Court finds that Plaintiffs were substantially justified in arguing that TQL had failed to take reasonable steps to prevent disclosure of the Privileged Email. As such, it will not order Plaintiffs to pay attorneys’ fees.

Defendant Total Quality Logistics, LLC's (“TQL”) Motion to Compel Plaintiffs’ Counsel to Destroy Inadvertently Produced E-Mail Protected by the Attorney-Client Privilege [Dkt. 364] is granted. Plaintiffs are ordered to return, sequester, or destroy the Privileged Email within three days of this order being entered.

ENTERED:

The Court limits the background discussion to the facts relevant to the instant motion.

To the extent Plaintiffs rely on the factors articulated in Judson Atkinson Candies v. Latini–Hohberger Dhimantec, Inc., 529 F.3d 371, 388 (7th Cir. 2008), the Court believes the factors cut in favor of granting TQL's motion. Those factors are: (1) the reasonableness of the precautions taken to prevent disclosure; (2) the time taken to rectify the error; (3) the scope of the discovery; (4) the extent of the disclosure; and (5) the overriding issue of fairness. Id. As noted above, the first two factors favor TQL. The scope of discovery is admittedly fairly limited and cuts in favor Plaintiffs. The extent of the disclosure is significant – a privileged and extremely relevant email between outside counsel and TQL's corporate counsel about matters highly pertinent to the issues before the Court – and supports TQL arguments. Finally, the cases cited by Plaintiffs regarding the issues of fairness are not relevant here. [See dkt. 369 at 9.] Plaintiffs have not had the Privileged Email for months or relied on it in summary judgment materials. Meanwhile, the Court believes it would be unfair to punish TQL, for a fairly common mistake that often occurs in discovery, by deeming that TQL waived attorney-client privilege.