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Motion to Compel Pre-suit Investigation Documents and for Sanctions - Granted As to Logging / Denied as to Waiver

By Michael C. Smith

EON Corp. IP Holdings v. Veriuzon Clinto Center Drive Corp., 6:08cv385 (10/15/10)

Judge: John Love

Holding:  Defendant's Motion to Compel Pre-suit Investigation Documents and for Sanctions GRANTED in part.

One of my great regrets recently - which tells you precisely how dull company I probably am - is that I have not had time to read all the, well, if not thrilling or fascinating, at least interesting in a "oh, wow, that looks pretty bad" sort of way all the orders that Judges Love and Davis are cranking out in this case, set to start trial soon.

This particular order had this frisson of "there but for the grace of my legal assistant go I" (I'm on a diet of one italicized French word a day) because it dealt with a motion asking the court to find that the plaintiff had waived attorney-client privilege or work-product protection (kudos to the Court on that one - the first is a privilege, but the second is a "protection" and not technically a privilege, which not a lot of people catch) as to several groups of documents including Plaintiff's pre-suit investigation.  Here's what happened:

Defendant asserted that the Plaintiff waived privilege as to certain documents because it repeatedly failed to properly log the documents (logging them as wp when should have been a/c).  The Plaintiff admitted that it didn't assert the right privilege/protection, but corrected it eventually and the Court found that the defendant wasn't prejudiced, and held that privilege had not been waived.

Next up was a collection of communications to third parties that Plaintiff asserted were working at it or its' attorneys' behest.  (Well, no, that's not French, so that one doesn't count - shouldn't even italicize, I suppose).  The Court reviewed these in camera and held that they were protected, and that protection wasn't waived.  (I just love this - each paragraph uses the right noun depending on whether we're talking about privilege or protection).

Next were belatedly logged redacted documents, for which the Defendants claim the only appropriate remedy ... (dramatic pause) ... was waiver.  Not so much, the Court found.

With respect to the pre-suit investigation documents, the issues got a little more complex, because the plaintiff contended there was an agreement that documents created in anticipation of litigation need not be logged, and when no such agreement could be located, it relied on what it claimed was the custom in Texas not to log such documents.  The court didn't find such reliance well-founded, but because it found remedy was such a serious penalty, it concluded that the Plaintiff's behavior "has not been so egregious or unethical to justify waiver" and ordered the documents logged with specificity.  (emphasis by Court even though not French).    Plaintiff also argued that it had not opened the door as to these documents in defending against the laches allegations, and the Court agreed - but not by much.  "Plaintiff has walked a thin line regarding these documents and the Court urges Plaintiff to tread carefully from this point forward," it wrote. 

In the end, the Court declined to find waiver, but did order the Plaintiff to pay Defendants' costs associated with the motion, and to supplement its privilege log to include all pre-suit investigation documents within six days.

 

Full post as published by Eastern District of Texas Federal Court Practice on October 19, 2010 (boomark / email).