Software Glitch, Resulting in Inadvertent Disclosure, Does Not Waive Privilege
By: CYNTHIA A. MOYER
May 2011
A federal court in California recently held that privileged materials which were inadvertently produced in discovery due to a software glitch did not waive the attorney-client privilege. Datel Holdings Ltd. v. Microsoft Corp., N.D. Cal. No. C-09-05535 (March 11, 2011) (Laporte, M.J.).
In Datel, the plaintiff Datel Holdings Ltd. brought a motion to compel discovery of six documents that it contended either were not privileged or if they were, any privilege had been waived. Microsoft argued that the documents were privileged, and that a software glitch resulted in truncated versions of the six documents being produced in discovery. Microsoft explained that documents responsive to Datel’s discovery requests were loaded into a document processing system known as “Clearwell.” Clearwell extracted metadata from each document, and converted the documents into a format that permitted text searching. The documents were then reviewed by attorneys for privilege, and non-privileged documents were produced in discovery. Somewhere in that process, the six documents, which were email chains, were abbreviated so that the initial email in each chain was cut off. That initial email was from an attorney and was clearly privileged. Microsoft contended all the other emails in the chain were also privileged because they related to the initial attorney-client email.
The mistake came to light when the truncated documents were marked as an exhibit in a deposition. During the deposition, Datel’s counsel asked for complete versions of the documents. Microsoft’s counsel investigated and discovered that the documents were truncated and the full documents reflected attorney-client privileged information. Microsoft’s counsel stated on the record during the deposition that the documents were privileged and should be returned. The dispute culminated in motion practice before the court. Microsoft contended the documents were inadvertently produced to Datel within the meaning of Fed. R. Evid. 502(b), so there was no waiver of the attorney-client privilege. Datel argued that Microsoft did not take reasonable steps to prevent the disclosure, and therefore waived the privilege. In the end, the court ruled that the production was inadvertent and the privilege was not waived, finding the defendant adopted “fairly robust” measures to protect against inadvertent production. The court also said a software glitch “falls squarely on the inadvertent side of the divide between intentional disclosure under Rule 502(a) and unintentional disclosure under Rule 502(b).” The court did hold, however, that not all the emails in the chains were privileged, and to the extent the emails reflected work product, any such protection was waived.