Waiver of Attorney-Client Privilege by Inadequate Privilege Log — Sale and Transfer of Assets, Including Privileged Material, Waives Privilege and Work Product — Court Enters 502(d) Order Confining Waiver to Instant Case

Solis v. Bruister, 2013 U.S. Dist. LEXIS 29108 (January 22, 2013):

Plaintiff's Motion to Compel seeks an order compelling the production of documents subpoenaed by Plaintiff from DirecTV, the purchaser of Southeastern Ventures, Inc. f/k/a Bruister & Associates, Inc. These documents were stored on Defendant Amy Smith's Bruister & Associates computer, which DirecTV acquired in the purchase. In a previous Order, Docket No. 355, this Court denied a request by Defendants to quash the DirecTV subpoena. However, without making any determination on whether Defendants have any viable or legally cognizable claims of privilege or protection as to the documents subpoenaed from DirecTV, the Court allowed Defendants an opportunity to review the documents prior to production to Plaintiff. The Court ordered that, after review, Defendants produce to Plaintiff all subpoenaed documents to which Defendants claim no privilege or protection and a privilege log compliant with L.U.Civ.R. 26(a)(1)(C) for all subpoenaed documents withheld from production to Plaintiff. The instant motion seeks production of the DirecTV documents withheld by Defendants. DirecTV asserts no objection to the production of the documents at issue in Plaintiff's Motion.

A. Waiver

[T]he Court finds that Defendants have waived any privilege, albeit on a limited basis as described in the penultimate paragraph in this Order. The Court instructed Defendants no less than two times to comply with L.U.Civ.R. 26(a)(1)(C) when providing a privilege log, see Docket Nos. 355 at 2 and 402 at 1, and specifically instructed the Defendants in the Order at Docket No. 414 to comply with L.U.Civ.R. 26(a)(1)(C)(2) when it ordered production of the information which is the subject of this Motion to Compel.

The standards for privilege logs are clearly set forth in the Local Rules, the Federal Rules of Civil Procedure, and case law. The relevant Local Rule provides that a privilege log must contain at least the following information:

name of the document, electronically stored information, or tangible thing; description of the document, electronically stored information, or tangible thing, which description must include[] each requisite element of the privilege or protection asserted; date; author(s); recipient(s); and nature of the privilege. To withhold materials without such notices subjects the withholding party to sanctions under Fed. R. Civ. P. 37 and may be viewed as a waiver of the privilege or protection.

L.U.Civ.R. 26(a)(1)(C)(emphasis added). The Local Rule works in conjunction with Fed. R. Civ. P. 26(b)(5)(A), which provides that a party withholding information on a claim of privilege or other protection must describe the information not produced or disclosed "in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim." Furthermore, the Court specifically described for Defendants the information that must be provided when claiming privilege when it ruled on other motions in this case. See Docket No. 409. As stated in its Order,

[i]n seeking a ruling on privilege, "the proponent must provide the court with enough information to enable the court to determine privilege, and the proponent must show by affidavit that precise facts exist to support the claim of privilege." Nutmeg Ins. Co. v. Atwell, Vogel & Sterling, 120 F.R.D. 504, 510 (W.D. La. 1988). "A general allegation of privilege is insufficient to meet this burden." Williams v. Smurfit-Stone Container Enter., Inc., Civil Action No. 10-1025, 2011 WL 6026596, at *3 (W.D. La. Dec. 2, 2011).

Docket No. 409 at 2-3.

Nevertheless, despite this guidance, Defendants wholly failed to describe in their privilege logs the allegedly privileged DirecTV/Amy Smith documents withheld with sufficient detail for the Court to make any meaningful determination. The Court attempted to glean on its own whether any of these documents were privileged by an in camera review. However, review of the documents from the "missing 141," in conjunction with the privilege log provided for those documents, demonstrated the futility of the effort.

In addition, a review of the privilege log for the remaining 1,268 documents demonstrates the deficiencies in that privilege log when compared to the standard set forth in Fed. R. Civ. P. 26(b)(5) and L.U.Civ.R. 26(a)(1)(C). See Docket No. 428-2. In entry after entry, Defendants have failed to give enough information for the Court or the other party to assess the claim. In Plaintiff's Motion to Compel, Docket No. 427, and supporting memorandum and documents, Docket No. 428, Plaintiff has set forth in painstaking detail the myriad deficiencies of Defendants' privilege logs. The Court declines to ferret further. Accordingly, because Defendants failed to present privilege logs in compliance with Fed. R. Civ. P. 26(b)(5) and L.U.Civ.R. 26(a)(1)(C), the Court determines that Defendants have waived the privileges and protections claimed as more specifically set forth below.

Moreover, Plaintiff has argued that because all the documents at issue were provided to a third party, DirecTV, the privilege, if any ever existed, was waived on that basis. See Alldread v. City of Grenada, 988 F.2d 1425, 1434 (5th Cir. 1993)("Patently, a voluntary disclosure of information which is inconsistent with the confidential nature of the attorney-client relationship waives the privilege."). Along those lines, other federal district courts have held that a sale and transfer of assets, including allegedly privileged information, waives the attorney-client and work product privileges. See Robbins & Myers, Inc. V. J. M. Huber Corp., 2003 WL 21384304, *3 (W.D.N.Y May 9, 2003); and In re In-Store Adver. Secs. Litig, 163 F.R.D. 452, 458 (S.D.N.Y. 1995). Defendants have not convinced the Court that any privileges were not waived when Amy Smith's computer was turned over to DirecTV. ***

D. Scope of this Order

The waiver of privileges found in this Order is limited. Specifically, the waiver found in this Order constitutes a waiver for purposes of this case only, and this Order shall not be used in any other federal, state, administrative, or other proceeding to support that Defendants have waived any privileges as to the documents at issue in this Order. Further, the Court specifically finds that disclosure of these documents in this case shall not be construed to be and is not a waiver in any other federal, state, administrative, or other proceeding. See Fed. R. Evid. 502(d).

SO ORDERED, this the 22nd day of January, 2013.

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