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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MARYLAND VICTOR STANLEY, INC. Plaintiff CIVIL ACTION NO. MJG-06-2662

vs.

CREATIVE PIPE, INC., et al. Defendant

MEMORANDUM AND ORDER The plaintiff, Victor Stanley, Inc. ("VSI" or "Plaintiff") filed a motion seeking a ruling that five categories of electronically stored documents produced by defendants Creative Pipe, Inc. ("CPI") and Mark and Stephanie Pappas ("M. Pappas", "S. Pappas" or "The Pappasses") (collectively, "Defendants") in October, 2007, are not exempt from discovery because they are within the protection of the attorney-client privilege and workproduct doctrine, as claimed by the Defendants. VSI argues that

the electronic records at issue, which total 165 documents, are not privileged because their production by Defendants occurred under circumstances that waived any privilege or protected status. Alternatively, as for a subset of nine email

communications from M. Pappas to a computer forensics expert Defendants retained to assist them with producing electronically

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stored information ("ESI"), VSI contends that the attorneyclient privilege is inapplicable, and with regard to another two email communications (one draft, the other actually sent) from M. Pappas to one of his attorneys, VSI contends that they are neither privileged nor protected. Finally, as for two email

communications from M. Pappas to two of his attorneys, VSI argues that they are beyond the scope of the attorney-client privilege because they fall within the crime/fraud/tort exception. Defendants acknowledge that they produced all 165

electronic documents at issue to VSI during Rule 34 discovery, but argue that the production was inadvertent, and therefore that privilege/protection has not been waived. As to the

various email communications, Defendants argue that they are within the scope of the attorney-client privilege and workproduct protection, and that the crime/fraud/tort exception is not applicable. The motion has been fully briefed, Paper Nos.

212, 221, 225, and 230, and I find that a hearing is not necessary. Local Rules of the United States District Court for For the reasons that

the District of Maryland, Rule 105.6.

follow, I find that all 165 electronic documents are beyond the scope of the attorney-client privilege and work-product protection because assuming, arguendo, that they qualified as privileged/protected in the first instance,1 and assuming further
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The 165 documents were produced to me for review in camera. 2

that Defendants properly complied with their obligation to particularize any claims of privilege/protection imposed by Fed. R. Civ. P. 26(b)(5), Local Rules of the United States District Court for the District of Maryland, Appendix B, Discovery Guideline 9.c ("Discovery Guideline"), and the orders of this court detailing how such assertions must be demonstrated once they were challenged by VSI,2 the privilege/protection was waived

Having done so, it is apparent that many do not qualify as attorney-client privileged or work-product protected. For example, the following documents were asserted to be privileged or protected, yet the court's in camera review discloses that these assertions are without merit: Doc. No. 18 (discovery request from Plaintiff to Defendant); Doc. Nos. 28,32 (email between employee of Creative Pipe to M. Pappas, not discussing any materials that legitimately could be characterized as confidential); Doc. Nos. 24, 60 (email from Plaintiff's attorney to Defendants' attorney); Doc. Nos. 56, 61-65 (email between M. Pappas and G. Turner, Defendants' ESI expert, regarding payment); Doc. Nos. 105, 111, 130-133, 148-149, 151-158 (pictures of products, such as benches, trash can); Doc. No. 143 (page from invoice M. Pappas from attorney, no confidential information contained). It should be noted that the Defendants' failure to comply with the court's order of December 28, 2007, Paper No. 194, regarding how to handle assertion of privilege/protection claims resulted in an absence from the record of the factual basis to support their claims.
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This court informed Defendants that they had the burden of providing an evidentiary basis to establish each element of the attorney-client privilege and work-product protection for each document at issue. Letter Order, Dec. 28, 2007, Paper No. 194. Notwithstanding, Defendants failed to do so, relying instead on the privilege logs that they provided to VSI, which did little more than briefly identify and describe each document and identify the basis for the refusal to produce it. As will be explained in this memorandum and order, when a party refuses to produce documents during discovery on the basis that they are privileged or protected, it has a duty to particularize that claim. Fed. R. Civ. P. 26(b)(5), Discovery Guideline 9.c; Caruso v. Coleman Co., CIV. A. No. 93-CV-6733, 1995 WL 384602, 3

by the voluntary production of the documents to VSI by Defendants. Background Facts The following facts are not subject to dispute. The

Defendants' first Rule 34 response was a "paper production," not ESI, made in May 2007. Pl.'s Supp'l Mem. 3, Paper No. 221. Plaintiff objected to its sufficiency, and following a hearing, the court ordered the parties' computer forensic experts to meet and confer in an effort to identify a joint protocol to search and retrieve relevant ESI responsive to Plaintiff's Rule 34 requests. Id. This was done and the joint protocol prepared. The protocol contained

Pl.'s Supp'l Mem. Ex. 9, Paper No. 221.

detailed search and information retrieval instructions,

at *1, (E.D. Pa. June 22, 1995); Bowne of New York City v. AmBase Corp., 150 F.R.D. 465, 474 (S.D.N.Y. 1993); In re Pfohl Bros. Landfill Litig., 175 F.R.D. 13, 20 (W.D.N.Y. 1997); United States v. Kovel, 296 F. 2d 918, 923 (2d. Cir. 1961). While a privilege log that complies with Discovery Guideline 9.c is an acceptable way to do so initially, once the claims of privilege/protection have been challenged by the requesting party, the producing party must then establish an evidentiary basis to support the privilege/protection claim. Failure to do so results in a forfeiture of the privilege/protection claimed. Bowne, 150 F.R.D. at 474 (holding that if the party claiming privilege fails to provide sufficient detail to demonstrate all legal requirements to make out the privilege, the claim must be rejected); Fox v. California Sierra Fin. Servs., 120 F.R.D. 520, 524 (N.D. Cal. 1998) (finding that a party claiming privilege as basis for withholding discovery must properly identify each document and the basis for the privilege claimed); In re Pfohl Bros., 175 F.R.D. at 20 (holding "[m]ere conclusory or ipse dixit assertions of privilege" fail to satisfy the burden of demonstrating the applicability of a privilege).

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including nearly five pages of keyword/phrase search terms. is noteworthy that these search terms were aimed at locating responsive ESI, rather than identifying privileged or work-

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product protected documents within the population of responsive ESI. After the protocol was used to retrieve responsive ESI,

Defendants reviewed it to locate documents that were beyond the scope of discovery because of privilege or work-product protection. Counsel for Defendants had previously notified the

court on March 29, 2007, that individualized privilege review of the responsive documents "would delay production unnecessarily and cause undue expense." Pl.'s Letter of Mar. 29, 2007, Paper No. 79. To address this concern, Defendants gave their computer

forensics expert a list of keywords to be used to search and retrieve privileged and protected documents from the population of documents that were to be produced to Plaintiff. Id.

However, Defendants' counsel also acknowledged the possibility of inadvertent disclosure of privileged/protected documents, given the volume of documents that were to be produced, and requested that the court approve a "clawback agreement" fashioned to address the concerns noted by this court in Hopson v. Mayor of Baltimore, 232 F.R.D. 228 (D. Md. 2005).3 In

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In Hopson, this court discussed the dangers inherent in using non-waiver agreements, such as "clawback" or "quick-peek" agreements, and noted that reliance on them could nonetheless result in a determination that privilege and work-product 5

response, the court held a telephone conference to discuss the proposed clawback agreement, and thereafter issued a letter order requesting additional briefing by the parties "regarding the burdens associated with conducting a privileged [sic] review of the information to be produced in the time frame required by [the] discovery [schedule] in this case." 24, 2007, Paper No. 92. Letter Order, Apr.

However, on April 27, 2007, Defendants'

counsel notified the court that because Judge Garbis recently had extended the discovery deadline by four months, Defendants would be able to conduct a document-by-document privilege protection had been waived, notwithstanding the agreement, given the current state of the substantive law regarding privilege waiver. Hopson, 232 F.R.D. at 236-38. The court further identified a process that could be employed within the boundaries of existing privilege waiver law that would significantly improve the likelihood of avoiding privilege waiver. The court noted: [I]t is essential to the success of this approach in avoiding waiver that the production of inadvertently produced privileged electronic data must be at the compulsion of the court, rather than solely by the voluntary act of the producing party, and that the procedures agreed to by the parties and ordered by the court demonstrate that reasonable measures were taken to protect against waiver of privilege and work product protection. Id. at 240. Defendants' counsel were aware of the requirements of Hopson. Pl.'s Letter of Mar. 29, 2007, Paper No. 79. The court's request for additional briefing regarding the burdens associated with conducting privilege review within the time allotted for Defendants to produce the ESI to Plaintiff was aimed at developing a factual record that would permit a Hopson compliant non-waiver agreement to be approved by the court.

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review, thereby making a clawback agreement unnecessary. Defs.' Letter of Apr. 27, 2007, Paper No. 93. Accordingly, Defendants

abandoned their efforts to obtain a clawback agreement and committed to undertaking an individualized document review. Following their privilege review, Defendants made their ESI production to Plaintiff in September 2007. Paper No. 221. Pl.'s Supp'l Mem. 5,

It is noteworthy that by the time of this

production, Defendants had discharged their local attorneys, Messrs. Mohr and Ludwig from Meyer, Klipper & Mohr, and brought in new counsel.4 After receiving Defendants' ESI production in September, 2007, Plaintiff's counsel began their review of the materials. They soon discovered documents that potentially were privileged or work-product protected and immediately segregated this information and notified counsel for Defendants of its production, following this same procedure each time they identified potentially privileged/protected information. Supp'l Mem. Exs. 11-15, Paper No. 221. Pl.'s

Defendants' Counsel, Mr.

Schmid, responded by asserting that the production of any privileged or protected information had been inadvertent. Pl.'s

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It also is worth noting that Defendants' current counsel, James Rothschild, of Anderson Coe and King LLP, and Joshua Kaufman, of Venable LLP entered their appearance after all the events that are relevant to resolving the pending dispute had taken place and are not responsible for any of the actions or inactions that contributed to the court's ruling.

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Supp'l Mem. Ex. 17, Paper No. 221.

Defendants also belatedly

provided Plaintiff with a series of privilege logs, purportedly identifying the documents that had been withheld from production pursuant to Fed. R. Civ. P. 26(b) (5). 4, 6, and 9, Paper No. 225. The parties disagree substantially in their characterization of how Defendants conducted their review for privileged and protected documents before the ESI productions were made to Plaintiff. Defendants contend that after the joint Defs.' Opp'n Mem. Exs.

ESI search protocol was implemented and the responsive ESI identified, their computer forensics expert, Ms. Genevive Turner, "conducted a privilege search using approximately seventy different keyword search terms . . . [that] had been decided upon previously by Mr. Pappas, his former attorney, Christopher Mohr, and another attorney, F. Stephen Schmid . . . . All documents which were returned during the

keyword search were segregated and provided to one of Mr. Pappas' attorneys, John G. Monkman, Jr. for the first phase of the pre-production privilege review." Defs.' Opp'n Mem. 4, Ex. This

1 (Pappas Aff.) and Ex. 3 (Monkman Aff.), Paper No. 225. characterization, however, is somewhat misleading. In

actuality, after the joint retrieval protocol had been executed, Ms. Turner determined that there were some ESI files (4.9 gigabytes) that were in text-searchable format and others (33.7

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gigabytes) that were not.

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