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Metso Minerals Inc. v. Powerscreen International Distribution Limited

September 6, 2007

METSO MINERALS INC., PLAINTIFF,
v.
POWERSCREEN INTERNATIONAL DISTRIBUTION LIMITED, TEREX CORPORATION, POWERSCREEN NEW YORK, INC. AND EMERALD EQUIPMENT SYSTEMS, INC., DEFENDANTS.



The opinion of the court was delivered by: Hon. E. Thomas Boyle United States Magistrate Judge

MEMORANDUM

OPINION AND ORDER

Before the court is the motion of the plaintiff, Metso Minerals Inc. ("Metso" or "plaintiff"), seeking a protective order pertaining to certain privileged documents that plaintiff asserts were inadvertently produced to the defendants during discovery. Defendants, Powerscreen International Distribution Limited, Terex Corporation, Powerscreen New York, Inc. and Emerald Equipment Systems, Inc. (collectively referred to as "defendants") maintain that plaintiff's production of the privileged documents was not inadvertent and amounts to a waiver of the attorney-client privilege.

An evidentiary hearing with respect to this issue was held on July 10, 2007. Plaintiff offered two witnesses at the hearing, both attorneys from plaintiff's counsel's law firm who were involved in the document production at issue. Defendant offered no witnesses.

For the following reasons, the plaintiff's motion for a protective order is granted.

FACTS

This is an action for patent infringement. Plaintiff alleges that defendants infringed U.S. Patent Number 5,577,618 ("the '618 Patent"), which is entitled "Mobile Aggregate Material Processing Plant." Defendants deny any infringement and assert, among other things, that plaintiff's patent is invalid.

On March 30, 2007, during the course of discovery in the within action, plaintiff's counsel, Cohen Pontani Lieberman & Pavane LLP ("Cohen Pontani"), produced to defendants' counsel, Bryan Cave LLP, approximately 1,584 pages of documents in response to document production demands made by defendants (the "March 30th Production"). (Tr. of Evid. Hrg., dated July 10, 2007 ("Tr."), 45.) These documents were received by Cohen Pontani from a European law firm referred to as the Ashurst law firm ("Ashurst") and pertained generally to the ownership and acquisition of the '618 Patent. (Id., 7, 55-56.)

A fourth-year associate at Cohen Pontani, David Badanes, testified that the documents were received from Ashurst on March 15, 2007. (Id., 7.) Mr. Badanes began reviewing them on March 20, 2007. (Id., 9, 20.) Although Mr. Badanes could not specifically recall the process by which he reviewed these documents, he testified that he typically adheres to a certain procedure when he is readying documents for production. (Id., 6, 24.) This procedure includes first instructing the paralegal assigned to the case to have the documents photocopied so that a "pristine copy" is able to be maintained in the firm's storage files. (Id., 6.) Mr. Badanes testified that he then reviews the documents, separating them into several categories, including (1) documents to be produced; (2) documents requiring redaction; (3) privileged documents that need to be placed on a privilege log; (4) documents that require discussion with a more senior attorney; and (5) non-responsive documents. (Id.) This procedure of copying, reviewing and sorting documents is "exactly the same," regardless of the source of the documents. (Id., 6-7.)

Mr. Badanes further testified that this procedure was employed with respect to the documents received from Ashurst and subsequently produced to defendants. (Id., 7-8, 23.) After the documents were separated and categorized, those documents that were intended to be produced were provided to the paralegal to be furnished to the copier, as is typically done in all cases. (Id., 8.) However, an "error" of some sort occurred in this instance, whereby the documents were apparently "commingled" and those documents that were intended to be placed on the privilege log - and accordingly, withheld from the production - were instead provided to the copier with the responsive documents and were ultimately produced to the defendants. (Id.) Mr. Badanes was unable to recall how this error specifically occurred. (Id.) Mr. Badanes did not review the documents a second time once they were received back from the copier, prior to their production. (Id., 21, 22.)

By email, dated May 25, 2007, defendants' counsel, George Yankwitt, informed plaintiff's counsel, Lisa Ferrari, that there were numerous documents included in the March 30th Production that were stamped "privileged." (Id., 64; Pl. Ex. 3.) Mr. Yankwitt further informed Ms. Ferrari that he considered any privilege to have been waived by virtue of the documents having been produced. (Id.) However, Ms. Ferrari testified that she had actually learned of the inclusion of privileged documents in the March 30th Production on May 23, 2007, while preparing a witness for an upcoming Rule 30(b)(6) deposition. (Tr., 64-65.) By letter, dated May 25, 2007, two days after discovering that privileged documents had been produced and on the same day that Mr. Yankwitt informed Ms. Ferrari of the issue, Ms. Ferrari thanked Mr. Yankwitt for bringing the matter to her attention and informed him that it was Cohen Pontani's belief that the privileged documents had been inadvertently produced. (Id., 65-66; Pl. Ex. 11.) Ms. Ferrari further informed Mr. Yankwitt that Cohen Pontani was investigating the situation and requested that he not share the privileged documents with anyone, including his clients, until he heard back from her concerning the results of the investigation. (Id., 66; Pl. Ex. 11.)

After investigating the issue, Cohen Pontani confirmed that the documents were indeed inadvertently produced, although how the mistake occurred is unclear. (Tr., 67.) By letter, dated May 30, 2007, Ms. Ferrari informed Mr. Yankwitt of the inadvertent production and requested that the documents be immediately returned. (Id.; Pl. Ex. 12.) Ms. Ferrari further informed Mr. Yankwitt that certain non-privileged documents included in the March 30th Production should have been marked "confidential," pursuant to the terms of a Protective Order entered by the parties, but, for some unknown reason, were not. (Id.) Attached to the May 30, 2007 correspondence was also a second supplemental privilege log, identifying the privileged documents inadvertently produced, and a corrected production of the non-privileged, responsive documents bearing the appropriate confidentiality designation. (Tr., 68.) Ms. Ferrari reviewed all of the documents originally received from Ashurst prior to making this revised production.*fn1

(Id., 70-71, 82.) The documents asserted to be privileged include internal drafts by Ashurst, who are plaintiff's former attorneys, as well as correspondence between Ashurst and plaintiff, and amount to 1,062 pages of the original 1,584 page production. (Id., 70, 81.)

By letter, dated June 6, 2007, Mr. Yankwitt responded to Ms. Ferrari's May 30, 2007 correspondence, stating again that defendants' view was that plaintiff had waived any privilege with respect to the documents included in the March 30th Production by virtue of the fact that they had produced them. (Id., 72; Pl. Ex. 13.) Mr. Yankwitt further stated that plaintiff's designation of confidentiality with respect to the responsive documents was untimely under the terms of the parties' Amended Protective Order. (Id.)

Plaintiff submitted the instant motion to the court on June 6, 2007, seeking an order (1) finding that plaintiff's disclosure of privileged documents in the March 30th Production was inadvertent and did not constitute a waiver of any privilege as to those documents; (2) requiring defendants to either return or destroy the inadvertently produced documents; and (3) permission to designate the responsive documents produced in plaintiff's supplemental production on ...


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