Maint. Enters., LLC v. Orascom E&C USA, Inc.
Maint. Enters., LLC v. Orascom E&C USA, Inc.
2017 WL 11703412 (S.D. Iowa 2017)
December 8, 2017
Bremer, Celeste F., United States Magistrate Judge
Summary
The Court found that MEI had violated the ESI Order by not promptly destroying the inadvertently disclosed privileged material after OEC's written requests. The Court ordered MEI to strike the portion of its expert report to the extent it relies on any RW Litigation Documents, and to destroy all copies of the RW Litigation Documents if it has not already done so.
Additional Decisions
MAINTENANCE ENTERPRISES, LLC, Plaintiff,
v.
ORASCOM E&C USA, INC. and IOWA FERTILIZER COMPANY, LLC, Defendants.
ORASCOM E&C USA, INC., Counterclaimant,
v.
MAINTENANCE ENTERPRISES, LLC, Counterclaim Defendant
v.
ORASCOM E&C USA, INC. and IOWA FERTILIZER COMPANY, LLC, Defendants.
ORASCOM E&C USA, INC., Counterclaimant,
v.
MAINTENANCE ENTERPRISES, LLC, Counterclaim Defendant
Case No. 3:16-cv-00014-SMR-CFB
United States District Court, S.D. Iowa, Davenport Division
Signed December 08, 2017
Counsel
Mark E. Weinhardt, Elisabeth A. Tursi, Todd M. Lantz, The Weinhardt Law Firm, Des Moines, IA, Terry M. Giebelstein, Alexander Clement Barnett, Benjamin James Patterson, Lane & Waterman LLP, Davenport, IA, Brandon K. Black, Pro Hac Vice, Charles Parker Kilgore, Pro Hac Vice, Jones Walker LLP, Baton RougE, LA, Christopher D. Cazenave, Pro Hac Vice, Michael C. Drew, Pro Hac Vice, Richard John Tyler, Pro Hac Vice, Jones Walker Waechter Poitevent Carrere & Den'egre LLP, New Orleans, LA, Joseph P. Henner, Pro Hac Vice, Jones Walker LLP, AtlantA, GA, for Plaintiff/Counter Defendant.Rebecca Woods, Pro Hac Vice, Seyfarth Shaw, Atlanta, GA, Roger W. Stone, Chad D. Brakhahn, Jacob W. Nelson, Jeffrey A. Stone, P. Gail Brashers-Krug, Simmons Perrine Moyer Bergman PLC, Cedar Rapids, IA, Anthony J. LaPlaca, Pro Hac Vice, Sara Beiro Farabow, Pro Hac Vice, Seyfarth Shaw LLP, Washington, DC, for Defendant/Counter Claimant.
Bremer, Celeste F., United States Magistrate Judge
ORDER ON MOTION TO COMPEL RETURN OF PRIVILEGE DOCUMENTS
*1 This matter comes before the Court on the resisted Motion to Compel Return of Documents and Production of Plaintiff's Privilege Log. [ECF No. 142]. Plaintiff Maintenance Enterprises, LLC (“MEI”) voluntarily produced a privilege log on November 10, 2017. Therefore, the only issue that remains is Defendant Orascom E&C USA, Inc.'s (“OEC”) request that the Court enter an order compelling MEI to return certain documents. A hearing was held on December 7, 2017. Appearing were attorneys: Benjamin Patterson, Christopher Cazenave, and Richard Tyler for MEI; and Rebecca Woods, Chad Brakhahn, and Jeffrey Stone for OEC.
I. BACKGROUND
This case involves a construction project. MEI is suing OEC for, among other things, breach of contract. Throughout the course of discovery the parties have exchanged several hundred thousand documents. At issue are 593 documents that OEC claims were inadvertently produced, and which it claims are protected by the attorney-client privilege or work product doctrine. [ECF Nos. 142-1 at 1; 142-9 at 298–330; 181 ¶¶ 4, 5].
Beginning in June 2017 until August 2017, OEC informed MEI on numerous occasions that OEC had inadvertently produced some privileged documents. Specifically, on July 18, 2017, OEC sent a letter to MEI informing MEI that OEC had identified three additional documents it claims were privileged that MEI used in an expert report. [ECF Nos. 179-4; 179-5]. This was the first time that OEC had informed MEI that these three documents were privileged based upon a claim that they were work product from a different case. On July 19, 2017, OEC sent another letter to MEI indicating that it had found sixty-one additional variations of the documents contained in the July 18, 2017 letter that were also inadvertently produced. [ECF Nos. 142-6; 180 at 2]. The combined sixty-four documents listed in the July 18 and July 19 letters are referred to as the “RW Litigation Documents.” [ECF No. 180 at 3].
On August 16, 2017, OEC provided to MEI a clawback log summarizing all of the documents OEC had requested MEI return and destroy. [ECF No. 142-9]. MEI claims it sequestered the 593 documents that OEC identified as privileged. MEI also avers that counsel has not reviewed the substance of these documents. After reviewing the “August Clawback Log” MEI determined that eighty-five of the documents were facially attorney-client communications or work product, and agreed to immediately destroy those documents. [ECF Nos. 181 ¶ 4; 179 at 4]. At the hearing, on December 7, 2017, MEI indicated to the Court that it thought it had destroyed all 593 documents. However, MEI persisted in its argument that some of the documents in question were not privileged, and OEC should be required to reproduce those documents to MEI. This order concerns the 508 documents that MEI has not agreed are privileged. The motion to compel return of these documents is moot, because they have been destroyed. A schedule for motions relating to any privilege claimed is included below.
II. ANALYSIS
*2 OEC argues that with respect to the RW Litigation Documents and the remaining 508 inadvertently produced documents MEI has effectively waived any objection to OEC's claims of privilege, because MEI has not promptly presented its challenge to the Court. [ECF No. 142-1 at 5]. MEI maintains it did not immediately return the documents or challenge OEC's claims of privilege, because the “August Clawback Log” failed to provide sufficiently detailed information for MEI or the Court to understand the basis for OEC's claims of privilege. [ECF No. 179 at 1–2].
The Court agrees with MEI that the August Clawback Log was insufficient for it or the Court to understand the basis of OEC's claims of privilege. Federal Rule of Civil Procedure 26(b)(5)(A), requires that when a claim of privilege is made a party must “expressly make the claim; and describe the nature of the documents... in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim.” “[T]he notice should be sufficiently detailed so as to enable the receiving party and the court to understand the basis for the claim and to determine whether waiver has occurred.” Fed. R. Civ. P. 26 advisory committee's note to 2006 amendment. The August Clawback Log does not provide any of the substance of the documents. [ECF No. 142-9 at 298–330]. The August Clawback Log merely contains a column describing the name of the document, the subject line of the e-mail, who the e-mail was sent to, who sent the e-mail, and a column for the basis of the claim. Id. The column containing the basis of the claim states whether the document is privileged under the attorney-client privilege or the work product doctrine, but nothing more. Id.
The Court finds that MEI has not waived its basis for challenging OEC's claims of privilege for these documents. Because, on November 30, 2017, OEC finally provided MEI a more detailed privilege log for all documents withheld, in addition to the “clawback” documents, MEI must review this information in order to determine whether to assert or withdraw challenges to OEC's claims of privilege. If, after reviewing the November 30, 2017 privilege log, MEI has the basis to challenge privileges asserted or claims about documents in OEC's clawback logs or privilege logs, MEI shall meet-and-confer with opposing counsel to narrow or resolve any dispute, and then file any motion to compel by December 15, 2017. At the December 7, 2017 hearing, OEC indicated that it received MEI's full privilege log on November 10, 2017. If OEC wants to object to claims of privilege made by MEI it must meet-and-confer before filing its motion to compel by December 15, 2017. Responses to any motion to compel must be made by December 29, 2017. If objections are made to another party's claims of privilege the Court must be provided copies of the updated privilege logs. Once the motions and responses are received, the matter will be submitted. No further argument is required.
Although the August Clawback Log was insufficient to allow MEI to challenge OEC's claims of privilege, MEI was provided sufficient information to challenge OEC's claims of privilege with respect to the RW Litigation Documents. When a party produces discovery that it claims is privileged it “may notify any party that received the information of the claim and the basis for it.” Fed. R. Civ. P. 26(b)(5)(B). “After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has ....” Id. Additionally, the receiving party “may promptly present the information to the court under seal for a determination of the claim.” Id.
*3 Further, this Court's ESI Order states that: “ESI that contains attorney-client privileged information or attorney-work product shall be immediately returned if the documents appear on their face to have been inadvertently produced or, if the producing party, upon becoming aware of the disclosure, promptly requests its return and takes reasonable precautions to avoid such inadvertent disclosure.” [ECF No. 40 ¶ 7]. The ESI Order also states:
Except in the event that the requesting party disputes the claim, any ESI the producing party deems to contain inadvertently disclosed Privileged Material shall be, upon written request, promptly returned to the producing party or destroyed at the producing party's option. This includes all copies, electronic or otherwise, of any such ESI. In the event that the requesting party disputes the producing party's claim as to the protected nature of the inadvertently Privileged Material, a single set of copies may be sequestered and retained by and under the control of requesting party for the sole purpose of seeking court determination of the issue.
Id. ¶ 7(b). The Protective Order also states that “In the case of inadvertently produced privileged and/or work product documents, upon request of the producing party the documents shall be returned forthwith to the party claiming privilege and/or work product immunity.” [ECF No. 63 ¶ 26].
Under the plain terms of the ESI Order, MEI had an unequivocal duty to destroy any privileged material after OEC requested in writing that MEI destroy such material. But MEI was also allowed, under the ESI Order, to sequester and retain a single set of copies for the sole purpose of seeking court determination of the issue if MEI disputed OEC's claims of privilege. The terms of the ESI Order do not put time limitations on when a party must seek a determination from the Court on a privilege claim, but common sense and the spirit of the Federal Rules of Civil Procedure would suggest that any challenge or dispute should be promptly presented to the Court. Even though the ESI Order does not put a time restriction on when MEI was supposed to seek a determination from the Court on a claim a privilege, Rule 26(b)(5)(B) required MEI to promptly present the information to the Court under seal for a determination of the claim.
On July 18 and 19, 2017, OEC informed MEI that sixty-four documents were inadvertently produced and were privileged. The July 18, 2017 letter stated that these documents were generated “solely for the purpose of the resolution of the dispute with RW Constructors, LLC (“RW”) and related mechanic's lien lawsuit.” [ECF No. 179-4 at 1]. The July 18, 2017 letter also states that the three documents contained “various analysies that would be (and were) included in OEC's mediation submission ... and those analyses were generated solely to support OEC's claims in the RW litigation, and they were not prepared in the ordinary course of business.” Further, the July 19, 2017 letter states that OEC had identified sixty-one “variations of or related to the documents identified in [the] July 18, 2017 letter ... [and] [a]ll these documents were created solely for purposes of resolution of the pending dispute with RW Contractors.” [ECF Nos. 142-6 at 1; 180 at 2]. The Court finds that this information provided MEI with more than enough information for it to challenge OEC's claims of privilege. In July of 2017, MEI could have objected to OEC's claims of privilege concerning the RW Litigation Documents and requested the Court to conduct an in-camera review to determine whether these were protected documents.
*4 Instead, MEI sequestered the RW Litigation Documents and failed to challenge OEC's claims of privilege until November 20, 2017. The Court finds under Rule 26, MEI has not promptly presented its objections to the Court concerning the RW Litigation Documents. Over four months have now passed since OEC sent MEI the July 18 and July 19 letters. Because MEI has not promptly challenged OEC's claim of privilege, MEI violated the ESI Order by not promptly destroying the inadvertently disclosed privileged material after OEC's written requests.
Rule 37(b)(2)(A) permits the Court to sanction a party for failure to obey a discovery order. The Court may, among other sanctions, “prohibit[ ] the disobedient party from supporting or opposing designated claims or defenses, or from introducing designated matters in evidence.” Accordingly, MEI is barred from using the RW Litigation Documents or challenging OEC's claims of privilege concerning the RW Litigation Documents. Even if these documents were not excluded as a sanction, they would be excluded because they are work product, not “mere facts.” The RW Litigation Documents are appropriately “clawed back” under the ESI Order. MEI must strike the portion of its expert report to the extent it relies on any RW Litigation Documents. MEI is further required to destroy all copies of the RW Litigation Documents if it has not already done so. However, because of the remedy of striking this portion of the report, and the attempts to resolve this issue informally by discussion with counsel and at the last four status conferences, the Court declines to enter an award of attorney's fees as other circumstances make such an award unjust.
III. CONCLUSION
For the reasons stated, OEC's motion, [ECF No. 142], is GRANTED in part relating to the RW Litigation Documents. The motion to return the other clawback log documents is moot, as the documents have been destroyed.
IT IS SO ORDERED.
Dated this 8th day of December, 2017.