United States District Court, N.D. Oklahoma
OPINION AND ORDER
F. JAYNE, MAGISTRATE JUDGE UNITED STATES DISTRICT COURT
the Court is Plaintiff's Discovery Motion Pursuant to
Fed. R. Civ. 26(b)(5)(B) (“Motion”) (ECF No. 43),
which was filed under seal. Plaintiff The Bama Companies,
Inc. (“Bama”) requests that the Court (1)
preclude Defendant Stahlbush Island Farms, Inc.
(“Stahlbush”) from “clawing back”
privileged documents pursuant to Federal Rule of Civil
Procedure 26(b)(5)(B) (“Rule 26(b)(5)”); and (2)
find that Stahlbush waived attorney-client privilege as to
the documents. In response, Stahlbush acknowledges that
disclosure of the privileged documents occurred but urges the
Court to apply Federal Rule of Evidence 502(b), which
provides that disclosure does not operate as a waiver if
certain requirements are met.
Court ordered expedited briefing, ordered Stahlbush to submit
the documents for in camera review, and conducted
oral argument on August 7, 2019. For reasons explained below,
the Motion is granted, and the Court finds that privilege has
Facts Relevant to Resolution of Motion
alleges as follows. In March of 2017, Bama discovered twelve
stones in fruit pies made with black raspberries sold to Bama
by Stahlbush. Bama notified Stahlbush, and Stahlbush
cooperated with Bama in investigating the issue. Ultimately,
Stahlbush informed Bama it did not have the necessary
insurance coverage, and Bama filed this lawsuit asserting
claims for breach of contract and negligence against
Stahlbush on December 27, 2017.
documents at issue in the Motion consist of email
communications between Stahlbush employees and
Stahlbush's counsel, Ben Fetherston
(“Fetherston”), from March to June of 2017
(“emails”). All emails relate to the pre-suit
investigation of Bama's claims. Within the emails is a
statement by Keeley Jensen (“Jensen”),
Stahlbush's quality assurance manager, to Fetherston that
“Black Raspberries have been determined as the source
of the stones” (“3/21/17 Email”). ECF No.
43-10 at 3. Bama does not dispute that the communications are
subject to the attorney-client privilege.
around August 20, 2018, Stahlbush responded to Bama's
first set of discovery requests. Bama's requests
encompassed the emails, but Stahlbush did not produce a
privilege log or otherwise identify the emails as responsive.
During oral argument, Stahlbush's counsel stated she did
not recall reviewing the emails during her document review
over a year ago, but she speculated that they were withheld
based on Stahlbush's vagueness and overbreadth
objections. Counsel also speculated that privilege was
perhaps overlooked, because some of the privileged
communications are within a chain of emails that include
communications with Bama.
later in the litigation, Stahlbush retained a testifying
expert, Dr. Reilly. Stahlbush's counsel inadvertently
produced the emails to Dr. Reilly for review in preparing her
expert opinions. Dr. Reilly's report contains a long list
of “documents reviewed, ” which includes the
emails. ECF No. 43-8 at 7-16. On July 2, 2019, the day before
Dr. Reilly's deposition, Stahlbush produced all documents
to Bama that had been produced to Dr. Reilly, including the
emails. On July 3, 2019, Bama's counsel questioned Dr.
Reilly extensively about the 3/21/17 Email, which contains
the communication from Jensen to Fetherston that black
raspberries had been determined as the source of the stones.
Dr. Reilly admitted she had reviewed the 3/21/17 Email.
During this questioning, Stahlbush's counsel failed to
raise any privilege objection or demand that counsel cease
questioning about the 3/21/17 Email, as permitted by Federal
Rule of Civil Procedure 30(c)(2). During oral argument,
counsel explained that she failed to object because she did
not immediately recognize the document and was unsure of its
status as privileged.
around July 7, 2019, Bama's counsel sent an email to
Stahlbush's counsel to inquire whether Stahlbush had
failed to produce other unresponsive documents.
Stahlbush's counsel did not make any claw-back demand at
that time. On July 11, 2019, Stahlbush's counsel
“began communicating with Bama's counsel on the
privilege issue” and indicated that “a clawback
was necessary.” ECF No. 47-1. On July 26, 2019, three
weeks after the deposition, Stahlbush sent a “claw
back” letter to Bama pursuant to Rule 26(b)(5)(B),
asserted attorney-client privilege as to the emails, and
provided a privilege log, which is attached as Exhibit 12 to
the Motion. Bama ceased all use of the privileged emails and
filed the sealed Motion requesting a ruling from the Court,
as required by Rule 26(b)(5)(B).
is no dispute that (1) the emails are privileged
attorney-client communications; and (2) they were disclosed
to third parties in this federal proceeding, including Dr.
Reilly and Bama. The issue is whether such disclosures
resulted in waiver of privilege. As its legal basis for
avoiding waiver, Stahlbush relies on Federal Rule of Evidence
502(b). Rule 502(b) sets “default standards governing
the inadvertent disclosure of information that is subject to
the attorney-client privilege or other protections.”
Certain Underwriters at Lloyd's, London v. Nat'l
R.R. Passenger Corp., 218 F.Supp.3d 197, 201 (E.D.N.Y.
2016). Rule 502(b) provides that disclosure of privileged
documents does not constitute waiver if three requirements
(1) the disclosure is inadvertent;
(2) the holder of the privilege . . . took reasonable steps
to prevent disclosure; and
(3) the holder of the privilege . . . took reasonable steps
to rectify the error, including (if applicable) following