Case Law: In re Fontainebleau Las Vegas Contract Litigation

Document Dump of Servers Leads to Privilege Waiver

In re Fontainebleau Las Vegas Contract Litig., 2011 WL 65760 (S.D. Fla. Jan. 7, 2011). In this bankruptcy litigation, the requesting party claimed the third party waived privilege by producing three servers in response to a subpoena and court orders without conducting a review for either privilege or responsiveness. Seeking to use the information but avoid any adverse consequences, the requesting party offered to “eat” the cost of searching the massive document dump of approximately 800 GB and 600,000 documents for relevant materials in exchange for the right to review and use the data free of the obligation to appraise or return any privileged documents. Reviewing the third party’s conduct, the court found that its failure to conduct any meaningful privilege review prior to production constituted voluntary disclosure and resulted in a complete waiver of applicable privileges. Noting that more than two months after production the third party had not flagged even one document as privileged, the court rejected its “belatedly and casually proffered” objections as “too little, too late.” Accordingly, the court granted the requesting party full use of these documents during pre-trial preparations of the case, but ordered it to timely advise the third party of any facially privileged information it encountered upon review.

Commentary

This case demonstrates the importance of conducting a proper review and production process. The third party in this case simply “dumped” a significant amount of information onto the requesting party without engaging in a document review; instead, the third party complained that the review and production process would be unduly burdensome and delayed production numerous times. Finally, the third party produced three servers without conducting a privilege review, but did belatedly produce a privilege log for one of the servers.

If the third party had conducted a document review, it would not have been in the position to spend costs on numerous motions and would not have faced the penalty of the court declaring that privilege was waived (with the exception of the server that had an accompanying privilege log). The document review process may seem like a daunting, costly and burdensome task, but it is often a necessary step in ediscovery. Thankfully, Intelligent Review Technology exists and can save you 50 percent on review costs, while improving the quality and defensibility of document review. Through use of Automated Workflow, Intelligent Prioritization and Intelligent Categorization, counsel can avoid conducting the strictly manual process of document review that inherently leads to inaccuracies and inconsistencies. IRT also provides transparent reports and real-time metrics, giving counsel peace of mind as to the defensibility of the technology and process. If the third party in this case invested in technology to conduct the document review, their costs would arguably have been far less than what was spent on numerous motions and the cost of opposing counsel’s access to and use of privileged materials in the pre-trial preparation process.