Litigation

Washington Adopts Test for Determining Waiver by Inadvertent Disclosure, Finds Attorney-Client Privilege Waived

By reston, Gates and Ellis

Sitterson v. Evergreen School Dist., 2008 WL 4981630 (Nov. 25, 2008)

In this case, plaintiff brought suit against the defendant, a school district (“the District”), for breach of contract and quantum meruit following termination of his contract as a financial advisor.  About one month after filing suit, plaintiff served his requests for production.  In response, the District produced approximately 439 pages of documents, including four confidential letters between the District and its attorney regarding the litigation.  Three years later and ten days before trial, plaintiff sent copies of his proposed exhibits to the District, including the four confidential letters.  The District objected to their admission on the first day of trial, arguing that they were protected by attorney-client privilege.  In response to a question from the trial court regarding his role in the production of the letters, the attorney for the District responded that the letters did “go through” him and he stated, “…I guess I just wasn’t thorough enough.”  The trial court denied the District’s motion to exclude. Eventually, the jury awarded plaintiff $151,000.

On appeal, the District argued that the trial court erred in admitting the letters because the District had not waived its attorney-client privilege by its inadvertent production.  The District urged the court to hold that inadvertent production would never result in waiver.  The plaintiff advocated a more balanced approach.

The court first addressed the question of who may waive the attorney-client privilege and determined that “an attorney can waive the privilege if he or she is authorized to speak and act for the client on particular matters and discloses privileged material within the scope of that authority.”  The court went on to note that, “[a]nswering discovery requests is generally a matter in which the attorney has the authority to speak and act for the client.”

Turning to its substantive discussion of waiver, the court first acknowledged the traditional approach when a privileged document is voluntarily disclosed. In that case, all disclosures made to the opposing party “in the course of taking adverse steps in litigation are ‘receivable as being made under an implied waiver of privilege.’”  This resulted in waiver even where that was not the intended result.  However, the court went on to point out that many courts have recently considered a more flexible approach in recognition of the enormous volume of documents implicated by modern litigation and the commensurate burden on attorneys to prevent inadvertent disclosure.

The court continued its analysis with the express assumption that the disclosure in this case was, indeed, inadvertent.

Rejecting the proposition that inadvertent disclosure should never result in waiver, the court reasoned that such a rule would decrease the incentive for attorneys to protect the confidentiality of their clients.  The court went on to point out that such a rule would contradict Washington’s policy “of strictly limiting the attorney-client privilege to its purpose” where it sometimes resulted in the exclusion of evidence “contrary to the philosophy that justice requires the fullest disclosure of the facts.”

The court then addressed the “balanced approach” advocated by the plaintiff by first articulating a five-part test previously adopted in Alldread v. City of Grenada, 988 F.2d 1425 (1993).  The factors in that test are:  “1) the reasonableness of precautions taken to prevent disclosure, 2) the amount of time taken to remedy the error, 3) the scope of discovery, 4) the extent of the disclosure, and 5) the overriding issue of fairness.”  The court went on to expressly adopt the test in Washington:

The Alldread balanced approach is flexible, taking into account both the principles underlying the attorney-client privilege and the realities of modern litigation.  The approach will continue to provide incentives for attorneys to protect confidential communications with their clients, but it also, recognizes that truly unpreventable and inadvertent disclosures occur at great costs to the client's interests.  Because of these considerations, Congress recently amended the federal rules of evidence to reflect a balanced approach to inadvertent Waiver of the attorney-client privilege.  [FN8]  Pub.L. No. 110-322, § 1, 122 Stat. 3537 (2008).  We are similarly persuaded and hereby adopt the Alldread balanced approach to determine whether the District's inadvertent disclosures waived the attorney-client privilege.  See also Harris v. Drake, 152 Wash.2d 480, 495, 99 P.3d 872 (2004) (Alexander, C.J., dissenting).

The court held that the District waived its privilege when it produced the four confidential letters to the plaintiff.  In so holding, the court pointed to several facts contributing to its decision, including that counsel for the District offered no evidence of precautions to prevent disclosures, that the District took no steps to remedy the disclosure for three years, and that 439 documents was not the “enormous quantity” of documents that would excuse the inadvertent production.  The court also noted that “the issue of fairness favors neither the District nor [the plaintiff].”

A copy of the full decision is available here.

Full post as published by eDiscovery Law on December 24, 2008 (boomark / email).