Inadvertent Disclosures:
Approaches and Remedies
Kevin M. McCarthy
The best way to deal with inadvertent disclosure is
to avoid it, but when it does happen, be sure to
know what remedies are available in your jurisdiction.
WITH THE SIGNIFICANT INCREASE in
electronic communications, volumes of information can be communicated by just a few keystrokes. Many government agencies and businesses, including law firms, are operating with
a reduced number of personnel who are busier
than in the past. It should thus be expected that
there will be a number of situations in which a
lawyer for one party in litigation, arbitration, or
mediation will inadvertently produce confidential or privileged documents to the other party’s
counsel. This paper will discuss the ethical and
legal obligations to which counsel receiving
such information must adhere.
Kevin M. McCarthy is a member of the firm of Miller, Canfield, Paddock and Stone, P.L.C., in its Kalamazoo Michigan
office. This article is based on a paper the author prepared for a July 2000 meeting sponsored by the ABA’s Section of
Labor and Employment Law.
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The Practical Lawyer
Either or both of the attorney-client and work
product privileges may be implicated in an inadvertent disclosure from one party to another.
Another privilege that may be affected by an inadvertent disclosure is the government informant privilege. See, In the Matter of Grand Jury
Investigation (Detroit Police Department Special
Cash Fund), 922 F.2d 1266, 1270 (6th Cir. 1991).
Those privileges will not be addressed here.
The issue that will be explored regarding these
privileges is whether they are waived when the
attorney for one side makes an inadvertent disclosure of privileged materials to opposing
counsel.
WHEN IS THE ATTORNEY-CLIENT PRIVILEGE WAIVED? • There are three lines of judicial authority relating to the issue of whether
an inadvertent disclosure of privileged material constitutes a waiver of the attorney-client
privilege.
Automatic Waiver
Among the cases holding that there is an automatic waiver of the privilege in this circumstance are:
• In re United Mine Workers of America Employee
Benefit Plans Litigation, 156 F.R.D. 507 (D.D.C.
1994);
• Wichita Land & Cattle Co. v. American Federal
Bank, 148 F.R.D. 456 (D.D.C. 1992);
• Golden Valley Microwave Foods v. Weaver
Popcorn Co., 132 F.R.D. 204 (N.D. Ind. 1990);
• In re Sealed Case, 877 F.2d 976 (D.D.C. 1989) (it
makes no difference whether the disclosure was
voluntary or inadvertent);
• International Digital Systems Corp. v. Digital
Equipment Corp., 120 F.R.D. 445 (D. Mass. 1988);
and
• Underwater Storage, Inc. v. United States Rubber
Co., 314 F. Supp. 546 (D.D.C. 1970).
April 2001
The High Cost of Carelessness
Although the rationale for these decisions is
articulated differently in each case, the same
theme appears throughout them: Confidentiality is breached (and cannot be restored) and the
privilege is therefore waived when a party or its
counsel is careless enough to disclose the communications to the other party.
Objective of Privilege Not Affected
These cases are linked to another line of cases
that seems to condone the receipt by counsel of
stolen privileged documents. In these cases,
courts have permitted a party to use documents
found in the trash of opposing counsel or leaked
to it by anonymous sources. See, e.g., Suburban
Sew ‘N Sweep, Inc. v Swiss-Bernina, Inc., 91 F.R.D.
254 (N.D. Ill. 1981) (a third party found privileged documents in an attorney’s trash and forwarded them to opposing counsel); and United
Mine Workers of America, International Union v.
Arch Mineral Corp., 145 F.R.D. 3 (D.D.C. 1992) (it
appears that the documents at issue in this case
were not inadvertently sent, but were intentionally leaked to counsel by an unknown person).
The rationale of the court in Suburban Sew ‘N
Sweep is interesting, in that it analyzed the objective of the attorney-client privilege and then
decided that such objective would not be negatively affected by allowing the opposing party
to use the clearly privileged documents that it
had obtained from a third party. The court stated this objective as being to encourage free and
open discussions between a client and attorney.
It then continued:
“The likelihood that third parties will have the
interest, ingenuity, perseverance and stamina,
as well as risk possible criminal and civil sanctions, to search through mounds of garbage in
hopes of finding privileged communications,
and that they will then be successful, is not sufficiently great to deter open attorney-client communication. Furthermore, if the client or attor-
Inadvertent Disclosure
ney fear such disclosure, it may be prevented by
destroying the documents or rendering them
unintelligible before placing them in a trash
dumpster.”
91 F.R.D. at 260.
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• The reasonableness of the precautions taken
to prevent disclosure by the party asserting the
privilege;
• The amount of time taken by that party to
rectify the error;
• The scope of discovery;
Burden on the Party
Asserting Harm to Privilege
In the United Mine Workers case, supra, the evidence indicated that someone had leaked privileged documents from the company to the
union. The company filed a motion to strike the
privileged documents and to disqualify opposing counsel, who had reviewed the documents.
In denying the motion, the Court opined that
the company had the burden of showing that
the documents were confidential and that it had
taken all possible precautions to maintain their
confidentiality. 145 F.R.D. at 6.
No Waiver
A second line of cases holds that there cannot
be a waiver of the attorney-client privilege unless the client makes a knowing, voluntary
waiver of that privilege. An inadvertent disclosure of privileged documents by counsel does
not, therefore, constitute a waiver. See, Connecticut Mutual Life Insurance Co. v. Shields, 18 F.R.D.
448 (S.D.N.Y. 1955); Monarch Cement Co. v. Lone
Star Industries, Inc., 132 F.R.D. 558 (D. Kan.
1990); and Mendenhall v. Barber-Greene Co., 531 F.
Supp. 951 (N.D. Ill. 1982).
Balancing Test
Other courts have opted not to apply a
bright-line test, but have held that they must
weigh a number of factors before deciding if the
inadvertent disclosure was sufficient to waive
the privilege. This test is probably applied more
by courts than the previously discussed tests.
The factors to be evaluated may include:
• The extent of the disclosure; and
• The “overriding issue” of fairness.
The following cases and commentary illustrate
this approach:
• Alldread v. City of Grenada, 988 F.2d 1425 (5th
Cir. 1993);
• Fox v. Massey-Ferguson, Inc., 172 F.R.D. 653
(E.D. Mich. 1995);
• Hydraflow, Inc. v. Enidine, Inc., 145 F.R.D. 626
(W.D.N.Y. 1993);
• Parkway Gallery Furniture, Inc. v. Kittinger/
Pennsylvania House Group, Inc., 116 F.R.D. 46
(M.D.N.C. 1987);
• Kristopek, To Peek or Not to Peek: Inadvertent or
Unsolicited Disclosure of Documents to Opposing
Counsel, 33 Val. U.L. Rev. 643 (1999).
Remedies under the Balancing Test
Various remedies, some more creative than
others, have been created by the courts to deal
with inadvertent disclosures under the balancing test.
Unlimited Use of the Disclosed Material
At one extreme, once the determination has
been made that the disclosure constituted a
privilege waiver, courts have permitted unlimited use of the documents, under the theory that
once an attorney receives information helpful to
her client, she is ethically obligated to use that
information. Aerojet-General Corp. v. Transportation Indemnity Insurance Co., 22 Cal. Rptr. 2d 862
(Cal. Ct. App. 1993).