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After Defendant Seeks to Claw Back Attorney-Client Privileged Documents, District Court Determines Privileged Waived (Including Work Product) Because Witness Gave Testimony Regarding Privileged Documents at Deposition

The defendants produced documents in response to plaintiffs’ first set of requests for production and included in the production were five documents that the defendants were later claim were subject to attorney-client privilege. Before the defendants made that claim, however, the plaintiffs deposed a corporate designee of Defendants Musion Events Ltd. and Musion 3D Ltd. During that deposition the five documents in questions were marked as exhibits. For some of the documents, the deponent testified regarding the contents of the documents and even read portions of the documents into the record–all without objection as to privilege or work product.

Shortly after that deposition, the defendants’ counsel to plaintiffs’ counsel and requested a claw-back of the five documents pursuant to the parties’ protective order.

In analyzing whether a claw-back was appropriate, the district summarize the law in the Ninth Circuit with a focus on waiver: The Ninth Circuit recognizes several ways by which parties may waive privilege. In re Pac. Pictures Corp., 679 F.3d 1121, 1126 (9th Cir. 2012) (citing Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010)). Voluntarily disclosing privileged documents to third parties destroys the privilege. Id. (citing Hernandez, 604 F.3d at 1100). Disclosure, however, does not constitute a waiver if it is inadvertent, the holder of the privilege took reasonable steps to prevent disclosure, and the holder took reasonable steps to rectify the error. Fed.R.Evid. 502(b).

The district court also addressed Federal Rule of Evidence 502, explaining that Federal Rules of Evidence 502(d) and (e) allow the Court to enter a protective order supplanting the default rule governing inadvertent disclosure. Great-W. Life & Annuity Ins. Co. v. Am. Econ. Ins. Co., 2013 WL 5332410, *10 (D. Nev. Sept. 23, 2013). “For example, the court order may provide for return of documents without waiver irrespective of the care taken by the disclosing party; the rule contemplates enforcement of claw back and quick peek arrangements as a way to avoid the excessive costs of pre-production review for privilege and work product.” Id. (quoting Advisory Committee Note to Fed.R.Evid. 502).

But importantly, the district court noted that claw-back provisions govern only waivers by inadvertent disclosure. Great-W. Life & Annuity Ins. Co., 2013 WL 5332410 at *15. Failure to timely object to the introduction of an exhibit waives any privilege, regardless of the presence of a claw-back provision governing inadvertent disclosure.

As a result, the district court concluded that “[r]egardless of whether the stipulated protective order controls inadvertent disclosure, Defendants waived their privilege claims by failing to timely object to the use of the disputed exhibits.”

The district court also concluded that there was a waiver of work product protection. “Waiver of privilege does not necessarily result in waiver of work product protection. Datel Holdings Ltd. v. Microsoft Corp., 2011 WL 866993, *7 (N.D. Cal. Mar. 11, 2011). However, voluntarily testifying regarding protected information waives any claim to work product protection. Hernandez v. Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010) (United States v. Nobles, 422 U.S. 225, 239-40 (1975)). Accordingly, the voluntary testimony regarding Exhibit 22 extinguished Defendants’ sole work product claim. Nobles, 422 U.S. 225, 239-40 (“Respondent can no more advance the work-product doctrine to sustain a unilateral testimonial use of work-product materials than he could elect to testify in his own behalf and thereafter assert his Fifth Amendment privilege to resist cross-examination on matters reasonably related to those brought out in direct examination”).

Hologram USA, Inc. v. Pulse Evolution Corp
., Case No. 2:14-cv-00772-GMN-NJK (D. Nev. July 5, 2016)

The authors of are patent trial lawyers at Jeffer Mangels Butler & Mitchell LLP. For more information about this case, contact Stan Gibson at 310.201.3548 or