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No ‘Claw-Back’ for Company Docs

Deborah Elkins//March 28, 2012

No ‘Claw-Back’ for Company Docs

Deborah Elkins//March 28, 2012//

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In plaintiff company’s show cause proceeding alleging defendant software company is violating an injunction plaintiff won to prevent defendant from making, using or selling certain product configurations and services, the Richmond U.S. District Court declines to allow defendant to “claw back” documents it claims have been produced inadvertently.

Defendant has asked that eight documents be “clawed back” pursuant to the amended protective order. Plaintiff argues that all of the documents at issue had been reviewed before they were disclosed and that defendant has not proved the disclosure was inadvertent.

Intentional disclosures are not protected by the order. Only “inadvertent” acts are covered. According to Black’s Law Dictionary, “inadvertence” is an accidental oversight, a result of carelessness.

Here, defendant has not met its burden to show that it is entitled to “claw back” the eight documents. In its opposition, defendant addresses only one of the still-contested documents, and its argument is unpersuasive. Defendant claims it accidentally produced the document in unredacted form. But, as plaintiff points out, defendant’s explanation does not show that the production was “inadvertent.” Defendant does not deny that, when it did finally object to the production of the document, it did so on an entirely different privilege ground than it had asserted in its privilege log.

Defendant also argues, with respect to other documents, that the fact that they have confidentiality stamps on them does not necessarily mean they were reviewed before being produced. According to defendant, employees, and not attorneys, may have placed these stamps on them. That is an insufficient basis for establishing inadvertent production. The fact that those documents bore confidentiality stamps should have alerted defendant to the fact that they contained potentially privileged information. If defendant produced them even with those stamps (no matter who did the stamping), it could not have done so “inadvertently.” Further, the record shows defendant intentionally produced two documents after reviewing them, and then realized it had mistakenly produced them. However, the protective order does not cover “mistakes.”

On the record as a whole defendant has not established the documents at issue were produced inadvertently, and they may not be “clawed back.”

Here, the documents at issue reveal the fact that lawyers were involved in development of defendant’s “Requisition Center” and those lawyers recommended specific changes be made to RSS. On this record, defendant has not established that the work of the lawyers was in anticipation of litigation even though it was done during litigation. Hence, defendant has not shown work-product protection of the documents dealing with the development of the RQC.

The court concludes the eight documents produced by defendant are not the proper objects of a “claw back”; the attorney-client privilege has been waived as to the subject matter of defendant’s development of the RQC module; certain privilege log entries are inadequate and the privilege is waived with respect to entries that that do not contain an author or recipient; entries with 10 or more recipient non-attorneys or where a distribution list is the recipient; and entries that pertain to communication between non-attorneys reflecting legal advice; and defendant has not shown work product protection attaches to the lawyer work in developing RQC. On those matters, plaintiff’s motion requiring production of documents is granted. Otherwise, it is denied.

ePlus Inc. v. Lawson Software Inc. (Payne) No. 3:09cv620, Feb. 21, 2012; USDC at Richmond, Va. VLW 012-3-075, 23 pp.

VLW 012-3-075

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