Ranger Construction Industries, Inc. v. Allied World National Assurance Company, No. 9:2017cv81226 - Document 216 (S.D. Fla. 2019)
Court Description: ORDER denying 185 Defendant's Motion to Disqualify Plaintiff's Counsel. Signed by Magistrate Judge William Matthewman on 2/4/2019. See attached document for full details. (kza)
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Ranger Construction Industries, Inc. v. Allied World National Assurance Company Doc. 216 UN ITED STA TES D ISTR ICT COU RT SOU TH ERN D ISTR ICT OF FLO RIDA CivilN o.17-8lzz6-clv -M arra/M atthewm an RAN GER CON STRUCTION IN D U STRIES, IN C ., Plaintiff, FILED BY A LLIED W ORLD N A TION A L A SSU RAN CE COM PA N Y , D.C. FE8 2i 2215 ANGELA e.NOBLE GLE:K U G DIS; GX Defendant. s.n.oFdG .-W.RB. O RD ER DEN YIN G D EFEN DA N T'S M O TIO N TO DISOUALIFY PLAINTIFF'S COUNSEL IDE 1851 TH IS CA U SE is before the Court upon Defendant,A llied W orld N ational A ssurance Company's(isDefendanf')M otion to Disqualify Plaintiff'sCounsel('iM otion'')(DE 1851. This m atter w as referred to the undersigned by United States District Judge Kenneth A .M arra. See DE 188. Plaintiff,RangerConstruction Industries,Inc.(sdplaintiff'')tiled aresponse gDE 1901, andDefendanttiledareply gDE 1971. 1. Evidentiarv H earine The Courtheld an evidentiary hearing and oralargum ent on the M otion on January 28, 2019,and January 29,2019. The Courtm ade its findings in open courtand orally denied the M otion on January 29,2019. In reaching its decision to deny the M otion,the Courtconsidered the M otion,response,reply,the sealed transcriptand exhibitsfrom the deposition ofDefendant's Rule 30(b)(6) designee Christopher Finneran gDE 1951,the 10 attorney-client privileged documentsprovided to the Coul'tforin camera review,theparties'hearingexhibits(DES203, 1 Dockets.Justia.com 209,211,212,213J,the testimony ofRichard W eldy,Esq.,and W alter Andrews,Esq.,the argum ent of the parties,and the entire docket in this case. This Order is intended to adoptthe Court'soraltindings and rulingsand elaborate on them . D efendant initially m oved for disqualitication of Plaintiff's counsel, H unton A ndrew s Kurth,onthebasisthat(1)defensecounselinadvertentlydisclosedsevenattorney-clientprivileged docum ents- letters and em ails- betw een Fow ler W hite, D efendant's coverage counsel in the underlyingstatecaseandDefendant,andthat(2)Plaintiffscounsel,uponreceiptofthoseseven attorney-clientprivileged docum ents,allegedly failed to abide by FederalR ule ofCivilProcedtzre 26 and Rule 4-4.4 of the R ules Regulating the Florida Bar. At the January 28,20l9 hearing, defense counselexplained thatan additionalthree attorney-clientprivileged docum entsthatw ere internalto D efendant and discussed the legaladvice or legalopinions provided to D efendantby D efendant's currentcounselin this federalcase had also been inadvertently disclosed to Plaintiff. Thus, the Court addressed a total of 10 attom ey-client privileged docum ents produced by D efendantto Plaintiffin regard to the M otion forD isqualification. The Courtseparated the evidentiary hearing and oralargum entinto fourissues,w ith lssues lI1and IV being deem ed interrelated,as is suggested by the relevantcase law . The Courtm ade individual findings and rulings as to each of the four issues. Those tindings and rulings are adopted as orally m ade in open courton January 28 and January 29,2019,and they are further discussed below and elaborated upon in thisO rder. II. O verview The facts underlying this disqualification m otion establish that,unfortunately,law yers on both sidesofthe litigation acted poorly. A tthe heartofthis dispute isa disappointing butobviousinability ofopposing counselin this case to talk and eorrespond w ith each other in good faith, to rely on each other's representations,and to dealhonestly and squarely w ith one another. From its inception,thiscase has been replete with num erous and extensive discovery disputes, m yriad m otions, lengthy hearings,and finger-pointing by opposing counselagainsteach otherforvariousalleged bad acts. The Courtdoesnotknow ifthisconductand m istrustisbased upon pastdealingsbetween counsel ordueto otherfactors,butthe attorneysshould be aware thattheir conductisnothelping their respective clients'positions in this litigation. In fact,itis downrightunprodud ive and silly. ln specitk reference to the disqualitk ation m otion,itis clearto the Courtw hattranspired here. D efendant's counsel,rushing in advance of the upcom ing 2018 Christm as holiday and certain loom ing discovery deadlines, inadvertently produced 10 attorney-client privileged docum ents out of a totalof approxim ately 14,500 discovery docum ents produced on D ecem ber 20, 2018. That very large discovery production w as reviewed by Plaintiff s counsel over the Christmasholiday,and on December28,2018,justbefore the New Year'sholiday,Plaintiffs counsel advised D efendant's counsel in writing that approxim ately 100 docum ents- w hich appeared to be attonzey-clientprivileged docum ents between Fow ler W hite and D efendant- had been produced by D efendantw ithin thatlarge production,butthatPlaintiffw ould Sçassum e''that those l00 orso docum entsw ere correctly produced and w ere,in fact,notprivileged. Plaintiff did notspecitically identify the approxim ate 100 docum ents by Bates ntlm bers, and w hatfollowed w aseach side telling the other side thatthe otherside w as obligated to provide the specificBatesnum bersforthose approxim ate 100 doctlm ents. ln thisregard,there w asa level of gam esm anship exhibited by cotm selon both sides,com bined w ith the rush ofthe holidays- and the flu and illness of counsel on both sides- w hich affected the responses of both sides' counseland exacerbated and prolonged this dispute. 3 Thisallled to an unfortunate disqualification dispute w hich hascaused the Courtto expend extensivejudicialresources,including presiding overa two-day evidentiary hearing and oral argum ent. W hatthe parties'counselseem to m issin a1lofthisisthatifopposing counselw ould havejustpicked up the phone ormetin person,honestly spoken to one another,jointly and im m ediately identified and specified the approxim ate l00 docum ents atissue,and acted in good faith w ith one another like professional attorneys are supposed to do,they could have quickly resolved this m atter am ong them selves w ith a sim ple claw -back of the privileged docum ents by DefendantunderFRE 502(b)orothersimilaragreement.l Thatdid nothappen,and now this Courtw illproceed to explain and analyze thisdispute in greaterdepth and alm ounce in writing its ruling on D efendant's M otion to D isqualify Plaintiff sCounsel.z 111. Issue O ne: W hether D efendant M et Its Burden of Establishina that the 10 D ocum ents atlssue W ere A ttornev-c lientPrivileged Docum ents The Courtfinds thatthe 10 docum ents atissue are,in fact,covered by the attorney-client privilege. O ne argum entvigorously advanced by Plaintiff in its papers and at the hearing w as thatthe originalseven docum ents w ere neverpreviously placed on a privilege log by D efendant, lThe Courtis frankly surprised thatthe sophisticated attorneysin thiscase did notenter into awritten 502 clawbackagreem entearly on inthisIitigation,eitherseparately oraspartofan ESIProtocolA greem ent. Jessica W ang,NonwaiverAgreementszl icrFederalRuleofEvidence502.-4GlanceatQuick-peekandClawback -/ Agreements,56UCLA L.Rev.1835,1844(2009)(explainingthatclaw-backandquick-peekagreementsftclearly producesubstantialbenefits,suchassavingoncostsofprivilegereview andpreservingprivilegev''l;seealso AdvisoryCommitteeNotestoFed.R.Evid.502(d)(stating thatsuch formalagreementsarettbecoming increasingly importantinlimitingthecostsofprivilegereview andretention,especiallyincasesinvolvingelectronicdiscovery''). ThisCourtencouragescounselina11casesinvolvinge-discoverytoconsiderthebenefitsofjointlyenteringintoa 502(d)claw-back agreementand/oran ESlProtocolAgreementearlyon inthecase. 21iA UnitedStatesMagistrateJudgehastheauthoritytoenteranorderdenyingsanctions(asopposedtoareport andrecommendationsl.''Jeudinev.Cit yofHomestead,Florida,No.14-23896-C1V,2016WL 913261,at*l(S.D. Fla.Mar.9,2016)(citingQBE Ins.Corp.v.JordaEnterprises,lnc.,277F.R.D.676,683n.2(S.D.Fla.2012)).<çAn orderonthedisqualiscationofcounselisanon-casedispositivematterthatmaybehandledbyamagistratejudgeas apretrialdutyunder28U.S.C.j636(b)(l)(A).''1d.(citingEstateoflonesv.BeverlyHeaIthdrRehab.Senw,lnc., 68F.Supp.2d l304 (N.D.Fla.1999)), .seealso BioMatri x Specialt y Pharmacy,LLC v.Hori zonHealthcareSenw, lnc.,No.l8-61680-ClV,2018W L 6812842,at*1(S.D.Fla.Dec.27,20l8). 4 andthereforeanyclaim ofprivilegewaswaived. However,theCourtrejectsthisargumentasthe evidence established w ithoutany doubtthatthe seven Fow ler W hite docum ents w ere previously placed on tw o privilege logs- albeitw ith differentBates num bersthan they had w hen they w ere produced on Decem ber20,20l8- which w asdue to a tstagging error.'' The inadvertent disclosure of D efendant's three additional intem al docum ents reciting legaladviceorlegalopinionsfrom defensecounselin thisfederalcasewasuncovered so recently thatDefendanthas notyethad sufticienttim e to place them on a privilege log. A second argumentadvanced by Plaintiffin theirpapersand atthe hearing wasthatthe docum ents could not be considered to be attorney-client privileged as they w ere created after D efendant reasonably anticipated litigation. ln other w ords, in this case involving 10 solely attonwy-clientprivileged documents(and no claim by Defendantofwork productastothe 10 documentsatissue),Plaintiffarguesthataninsurancecompanysimplycannotmaintainattorneyclientprivilegeoverdocum ents,if,atthe tim e the attorney wasretained orrendered a legalopinion or advice,the insurance com pany did notreasonably anticipate litigation. Plaintiff argues that thisCourtmustread into an insurance company's(such asDefendant)claim ofattorney-client privilege an absolute prerequisite that the insurance com pany m ust have reasonably anticipated litigation in order for the insurance com pany to be able to advance a claim of attorney-client privilege. Plaintiffarguesthat,since,inthiscase,Defendant's30(b)(6)representativetestitied thatD efendantdid notreasonably anticipate litigation untilthe date this federallaw suitwas filed (November7,2017),then Defendant'sclaim ofattomey-clientprivilegeoverthe 10 documents mustfail.TheCourtrejectsPlaintiff'sargument. The Courtacknow ledges thatthere are a handfulof Florida appellate cases and Southern DistrictofFlorida cases thathave seem ingly suggested or nlled thatthe attom ey-clientprivilege 5 only attachesin the insurance com pany contextwhen the legaladvice w asobtained orrendered in anticipationoflitigation. See,e.g.,Bankerslns.Co.v.Fla.Dep' toflns.d:Treasurer,755So.2d 729,729(F1a.Dist.Ct.App.2000)' ,1550BrickellAssocs.v.QBE Ins.Co.,597F.Supp.2d 1334, 1336(S.D.Fla.2009);Atriumsofpalm BeachCondo.Assn.,lnc.v.QBE lns.,Co.,No.08-80543CIV,2009W L l0667478,at*3(S.D.Fla.June17,2009)* ,M ilinazzov.StateFarm Ins.Co.,247 F.R.D.691,697(S.D.Fla.2007). M ilinazzo appears to be the firstfederalcase in this circuit to rule in this m anner. That case states in relevantpart: ln an insurance context,the attorney-clientprivilege only attacheswhen an attorney performsactsforaninsurerinhisprocessionalgsic)capacityan (sic)inanticipation oflitigation. See,e.g.,BankersIns.Co.v.Florida Dept.oflns.,755 So.2d 729 (Fla.lstDCA 2000)(findingnoattorney-clientprivilegeexistswhereattomey is merely Saconduit'fortheinsurer). M ilinazzo,247 F.R.D .at697. Interestingly,Bankerslns.Co.,the Florida state case relied upon by M ilinazzo for this holding,does not so hold.A carefulreading of the Bankers Ins.Co.case show s that it does not state that an insurance com pany m ustreasonably anticipate litigation in orderto asserta claim ofattom ey-clientprivilege. To the extentM ilinazzo m ay have relied upon Bankers lns.Co.for thatpurported holding,and to the extentPlaintiffRangerrelies on Bankers lns.Co.tourgesuchaholdingfrom thisCoul't,suchrelianceisrejected. W hatthe short,tw o-page Bankers Ins.Co.opinion statesisas follow s: How ever, w e REVERSE the trial court's finding that an attorney-client privilege attachesto com m unications betw een the appellantand George K .Delano with respect to the investigation of the D epartm ent's em ployee. The evidence dem onstrates thatD elano serves as the appellant's secretary and general counsel, buttheappellantpresented only argum ent,and no evidence,thathe undertook the investigation of the D epartm ent's em ployee in his professional capacity as general counsel, or that he undertook the investigation in anticipation of litigation in w hich the appellantw ould be a party.... 6 f#.at729-30 (Fla.Dist.Ct.App.2000)(emphasisadded). ltappearsthattheitor''in thebold sentence above hasbeen overlooked by som e courts and by Plaintiff. C learly,the Stor''language in Bankers Ins. Co. m eans that a corporate insurance com pany can claim the attorney-client privilege if counselwas retained or tasked w ith providing an opinion in his or her professional capacity as an attorney pt if counsel's investigation w as undertaken in anticipation of litigation. .. Plaintiff's argum enteffectively changesthe (ûor''to an k'and''in Bankers Ins.Co.,som ething the Courtrejects. M oreover,itappears to this Courtthatthe courts in the line of cases following M ilinazzo and Bankers Ins.Co.m ay have som ewhatm isinterpreted the 1aw or conflated a w ork-product analysisw ith an attorney-clientprivilegeanalysis in the insurance com pany contextand overstated the signiticance ofthe anticipation oflitigation issue in regard to an insurance com pany'sclaim of attonw y-clientprivilege. ln fact,a close reading ofM ilinazzo shows thatitw asprim arily a w ork productcase and only spenta few paragraphs discussing the ability of an insurance com pany to claim attorney-client plivilege. 1d. at 696-97. The Court notes that M ilinazzo provides an excellent, w ell-reasoned fram ew ork to analyze the work-product privilege in an insurance com pany context,and this Court has previously relied upon M ilinazzo's excellent and w ell- reasoned w ork productanalysis in deciding cases involving claim s ofw ork productby insurance com panies. See,e.g.,Sun CapitalPartners,Inc.v.Twin Cï/.y Fire Ins.Co.,N o.12-8l397-CIV , 2015W L 9257019,at*4 (S.D.Fla.Dec.18,2015). ,Embroidme.com,Inc.v.TravelersProp.Cas. Co.ofvqm.,No.12-81250-CIV,2013W L 12094637,at*3 (S.D.Fla.Sept.9,2013). However, the Courtsim ply cannot follow M ilinazzo to the extent it requires that an insurance com pany anticipate litigation in orderforthe attorney-clientprivilege to attach. To correctly analyze this issue,w e m ust first go to the Florida Statute on attorney-client 7 privilege. This isbecause state law providesthe rule ofdecision in diversity actions, such asthis one, w here a party asserts the attorney-clientprivilege. See, e g., 1150 Brickell Assoc.,253 . F.R.D .at 699, .Fed.R .Evid.501. U nder the Florida Statutes,a Siclient''can be a corporation. Fla.Stat.j90.502(l)(b). Thestatutedetiningattorney-clientprivilegealso statesthataSçclient hasa privilege to refuse to disclose,and to preventany other person from disclosing,the contents of confidentialcom m unications w hen such other person learned of the com m unication because theyweremadeintherenditionoflegalservicestotheclient.'' Fla.Stat.j90.502(2). Thestatute doesnotrequire that a corporation- such as an insurance com pany--establish thatitanticipated litigation atthe tim e itretained counselorreceived legaladvice in order to invoke the attom eyclientprivilege. H owever,Florida and federalcase 1aw has som ewhataltered the attorney-clientprivilege analysis forcorporations and has held thatclaim s ofattorney-clientprivilege by corporations are subjecttoklheightenedscrutiny.'' Courtshavedeterminedthattheproperinquiryforacorporation iswhether(a)tûthecommunicationwouldnothavebeenmadebutforthecontemplationoflegal services,''and (b)whethertheSkcontentofthecommunication relatesto thelegalservicesbeing rendered....'' ArlenHouseE.Condo.Ass' n,Inc.v.QBE lns.(Europe)Ltd.,No.07-23199-C1V, 2008 W L 11333859,at *4 (S.D.Fla.Aug.27,2008) (citing Southern BellTelephone and Telegraph Co.v.Deason,632 So.2d 1377,1383 (F1a.1994)). M oreover,'slwlherealawyeris engaged to advise a person as to business m atters as opposed to legal m atters, or w hen he is em ployed to actsim ply as an agentto perform som e non-legalactivity for a client ...there is no privilege.'' Cutrale Citrus Juices USA,Inc.v.Zurich Am erican lns.G roup,Case N o.5:03-cv- 420-Oc-10GRJ,2004W' L 525191,*3(M .D.Fla.Sept10,2004). The Courtagreesw ith thisbody ofcase 1aw w hich requires Siheightened scrutiny''when a 8 corporation claim s attom ey-client privilege. But this heightened scrutiny does notm ean thata corporation doing business as an insurance com pany m ustanticipate litigation in orderto be able to claim or assertthe attonw y-client privilege. The Courtbelieves thatrequiring an insurance com pany to anticipate litigation in orderforitto assertan attorney-clientprovide w ould notonly constituteamisreadingoftheapplicableFla.Stat.j90.502 andcaselaw,itwould alsopartially, and im properly,eviscerate the attorney-clientprivilege for instlrance com panies w ho retain legal counselforlegaladvice w hen litigation isnotyetanticipated. M oreover,itisclearthat,in the insurance context,çsno privilege attaches when an attorney performsinvestigativeworkinthecapacityofaninsuranceclaimsadjuster,ratherthanasalawyer, gbut) simply because (the attorney'slassigned duties were investigative in nature''does not preclude an assertion ofthe attonwy-clientprivilege. Arlen House E.Condo.Ass' n,Inc.,2008 W L 11333859,at*5;Cutrale,2004W L 525191,at*3.Therefore,ûûltjherelevantquestionisnot whether gthe attorneyl was retained to conduct an investigation,but rather, whether this investigation was related to the rendition of legal services. If it w as ... the privilege is not w aived.'' 1d. The Courtagrees w ith theArlen H ouse analysis. W hile it m akes sense that the attorney-clientprivilege can only be claim ed by corporate insurers- and corporations in general w hen their counsel is actually rendering legalservices, andnotworkingin anotherseparatecapacitysuch asaclaimsadjustor,itiswhollyillogicalthat the attorney-client privilege would not apply in the insurance com pany context unless the insurance com pany anticipates litigation atthe tim e counselis retained or the legalservices are rendered. Attorneys often perform legalservices and render legaladvice for corporate insurers before the corporate insurerreasonably anticipates litigation. To say that such legaladvice and legalopinions are notcovered by the attorney-client privilege w ould be nonsensical and w ould 9 unfairly rem ove attorney-clientprotection forcorporate insurers in such circum stances. Itseem s thatsom e courts m ighthave possibly conflated the attorney-clientprivilege and w ork product doctrine. ln fact, several vost-M ilinazzo cases have seem ingly abandoned the dkanticipation of litigation'' requirem ent w ith regard to the application of the attorney-client privilege for corporations. See,e.g.,In re D enture Cream Prod.L iab.Litig.,N o.09-2051-M D , 2012 W L 5057844,at*6 (S.D.Fla.Oct.18,2012). ,M ossv.GEICO Indem.Co.,No.5:10-CV104-OC-10TBS,2012W L 1623923,at*3(M .D.Fla.M ay9,2012)litigation;Abbyv.Paige,No. 10-23589-C1V,2011W L 13223681,at*3(S.D.Fla.Nov.30,2011). TheCourtagreesandfinds thata corporation doing business as an insurance com pany should notbe estopped from claim ing an attorney-clientprivilege m erely because thatinsurance com pany did notreasonably anticipate litigation atthe tim e counselw asretained oratthe tim e the legalservicesw ere rendered. To rule otherw ise w ould be an absurdity. The realtestfor whether the attom ey-clientprivilege attaches in the contextofcorporate insurersiswhethertheattorneyfunctionedasamereconduit,claimsadjustororclaim investigator, or rather,w hether the attorney functioned in the attonzey's professionalcapacity in dispensing legaladvice. Bankers lns.Co.,755 So.2d at729. Clearly,the privilege should n0tattach when theattomey isworking forthecorporate insurersolely asaconduit,claimsadjustorora mere claim investigator rather than as an attorney rendering legal advice or legal services. But the attorney-clientprivilege should attach w hen the law yerisrendering legaladvice or legalservices to a corporate insurer even if no litigation is reasonably anticipated by the insurer at the tim e counsel is retained or at the tim e the legal advice or legal service are rendered. Plaintiff's argum ent that Defendant sim ply calm ot claim attorney-client privilege as to seven of the 10 docum ents atissue because D efendantdid notanticipate litigation atthe tim e Fow ler W hite w as 10 retained oratthe tim e Fow lerW hite provided legaladvice orlegalservicesto D efendantis tlatly rejected. Perhapsincertain factualcircumstancesthedatethatthecorporateinsurerreasonably anticipated litigation m ightbe considered as one potentially relevantfactor in an analysis of an insurance com pany's claim of attorney-client privilege; however, such a factor should not be determ inative nordeem ed to be aprerequisite to acorporate insurer'sability to claim the atlorneyclient privilege. In this case,Fow ler W hite w as not in-house counsel, but rather w as outside coverage counselforD efendant. Fow lerW hite w asnotacting as a conduit,claim s investigator, or claim s handler. Fow ler W hite w as providing legaladvice and legal services to Defendantin itscapacity asoutside coverage counsel,and itm attersnotwhetherDefendantanticipated litigation at the tim e Fow ler W hite w as retained or at the tim e Fow ler W hite rendered its legaladvice or legalservices. ln the instantcase,the Courthascarefully review ed the 10 docum ents at issue in cam era and tinds that they are protected by the attorney-client privilege. Fow ler W hite w as clearly retained by D efendant in the contem plation of legal services. M oreover, the content of the docum ents sufficiently establishesthatFow lerW hite w asrendering legalservicesand wasacting inthecapacity oflegalcounselandnotasaclaim investigator,claimsadjustor,monitor,ormere conduit. D efendant's claim ofattorney-clientprivilege over seven ofthe 10 docum entsisproper andislegallyand factuallyjustified. The other three docum ents w ere internal docum ents of D efendant which recited legal adviceoropinionsrendered by D efendant'scurrentlegalcounselin thisfederalcase. Those tllree docum entsare clearly protected by the attorney-clientprivilege. IV . Issue Tw o:W hether D efendantM et1tsBurden ofEstablishinc thatItD id N ot W aive ItsC laim ofA ttornev-c lientPrivileue as to the 10 D ocum ents Upon carefulreview of al1the evidence and testim ony subm itted on this issue,and upon listening to the testim ony and observing the dem eanorofRichard W eldy,Esq.,the Courtfindsthat D efendanthas m etits burden ofestablishing thatitdid notw aive the attorney-clientprivilege as tothe 10documents. First,Defendantdidnotwaivetheprivilegeby failingto includetheoriginal seven Fow lerW hite docum ents on a privilege log asDefendantdid,in fact,include the docum ents on tw o previousprivilege logs- albeitw ith differentB ates num bersthan they had when produced on Decem ber 20,2018,w hich w as due to a Sttagging enor.'' A dditionally,due to the tim ing of their production, D efendant did not yet have an opportunity to place any of the other three docum ents internalto D efendanton a privilege log,butthey w illdo so prom ptly. Second,the CourtfindsthatDefendanthasestablished thatitscounselacted in com pliance with FederalRule of Evidence 502(b)3 and FederalRule of CivilProcedure 26(b)(5)(B)4. A pproxim ately 14,500 docum entsw ere produced by DefendantA llied on D ecem ber20,2018,and only 10 docum ents of that large batch of docum ents were produced in enor. W e al1 m ake 3 (b)InadvertentDisclosure.W henmade in afederalproceeding orto afederalofficeoragency,thedisclosure doesnotoperateasaw aiverinafederalorstateproceeding if: (1)thedisclosureisinadvertent; (2)theholderoftheprivilegeorprotectiontookreasonablestepsto preventdisclosure;and (3)theholderpromptlytookreasonablestepstorectifytheerror,including(ifapplicable)followingFederalRuleof CivilProcedure26(b)(5)(B). Fed.R.Evid.502. 4InformationProduced.Ifinformationproducedindiscoveryissubjecttoaclaim ofprivilegeorofprotectionas trial-preparation m aterial,the party making the claim m ay notify any party thatreceived the information ofthe claim andthebasisforit. Afterbeingnotified,apartym ustpromptlyreturn,sequester,ordestroythespecified information and any copies ithas;m ustnotuse ordisclose the information untilthe claim isresolved' ,m usttake reasonable stepsto retrievethe information ifthe party disclosed itbefore being notified;and may promptly present the inform ation to the coul' tunder sealfora determ ination ofthe claim .The producing party mustpreserve the information untilthe claim isresolved. Fed.R.Civ.P.26(b)(5)(B). mistakes,andDefendant'scounselmadeonehereby inadvertentlyproducingthose 10doctlm ents. It is im portantto note,how ever,the contextw ithin which this m istaken, inadvertentproduction wasm ade by D efendant'scounsel. D efendant m ade its production of docum ents on D ecem ber 20, 2018- right before the Christm as holiday. Plaintiff s counselsentD efendant's counsellengthy correspondence at4:00 p.m .on Friday,D ecem ber 28,2018,rightbefore the N ew Y ear's holiday,stating in part, and at the very end of the letter,thatD efendant had produced som e correspondence involving Fow ler W hite which may havebeen subjectto attorney-clientprivilege. Defendant'scotmsel'soffice w as closed forthe holidays untilJanuary 2,2019,which w asclearly reasonable. The D ecem ber 28,2018 correspondence,from Andrea DeField,Esq.,atPlaintiff s 1aw firm did not specify the Bates num bers of the seven docum ents contained w ithin the approxim ate 100 pages of Fow ler W hite docum ents,butthe Courtnotesthatshe w asil1w ith the tlu overthe holidaysand ultim ately hospitalized,w hich certainly accounts for any alleged deticiency in the letter. Plaintiff scounsel,D avid Costello,Esq.,called D efendant's counsel,Richard W eldy,Esq., in the m orning on January 2,2019,and they ultim ately participated in a telephone conference that afternoon regarding discovery. M r.W eldy and M r.Costello specifically discussed the Fow ler W hite docum ents at issue,and M r.W eldy told M r.Costello that any Fowler W hite docum ents containing legal advice or opinions w hich had been inadvertently disclosed to Plaintiff by D efendantshould be segregated,returned to D efendantand destroyed by Plaintiff. M r.Costello requested the Bates num bers ofthe docum ents atissue from M r.W eldy,and M r.W eldy w anted those sam eBatesnum bersfrom M r.Costello,butneithercounselapparently knew them forcertain atthattim e. M r.W eldy prom ised to puthisrequestin w riting,buthe failed to do so untilJanualy 7,2019,afterthedepositionofDefendant's30(b)(6)representativewheretheissuecnmetoahead. M r.W eldy,itshould be noted,suffered from the flu from January 4 to January 8,2019,which w as certainlypartofthecauseofthe delay and any deticienciesin hisresponse. Under the facts of this case, Defendant's counsel's disclosure of the 10 attorney-client privileged docum ents w as clearly inadvertent. The holder of the privilege,D efendant and its counsel,took reasonable stepsto preventdisclosure. Defendant'scounselutilized the servicesof ajuniorassociate,seniorassociate,and an e-discovery vendorto siR through thevoluminous documentsresponsivetoPlaintiff'sdiscoveryrequests,andjustafew documentswereimproperly m is-tagged by m istake. A dditionally,Defendant's counseltook reasonable steps to rectify the enorasestablished above. Rule26(b)(5)(B)doesnotrequirethatthe holderoftheprivilege im m ediately provide Bates num bers forthe privileged docum ents,although thatw ould surely be the bestpractice ifthe B ates num bers were known atthe tim e. M r.W eldy did prom ptly notify M r.Costello of D efendant's claim of attorney-client privilege as to the Fow ler W hite attorney- clientprivileged docum ents and dem anded return ofthe docum ents. Thatw as clearly sufficient underthe applicable rules. The docum entsw ere inadvertently produced,and no w aiverofthe attorney-clientprivilege OCCUITCd.5 V. lssue Three: W hether Defendant M et 1ts B urden of Establishin: that Plaintiff's CounselFailed to Complv with Rule 26(b)(5)(B)and Florida Bar R ule 4-4.4 Upon carefulreview ofa1lofthe evidence subm itled asto this issue and upon listening to the testim ony and observing thedem eanorofW alterAndrew s,Esq.,the CourtfindsthatD efendant did not m eet its burden of establishing that Plaintiff's counsel failed to com ply w ith Rule 5 Asto theone documentBatesstamped AW NA C02050, Defendanthasagreed to redactthe docum entasdiscussed in open courtand provide aredacted version ofthe documentto Plaintiff. Thatshallbe done forthw ith. 14 26(b)(5)(B)andRule4-4.4 oftheRulesRegulatingtheFloridaBar6upon leaming ofPlaintiffs receiptofprivileged docum ents. ln otherw ords,the evidence establishesthatPlaintiff's counsel m etits basic obligationsunderthe rules- although Plaintiff scounsel's conductw asnotperfect. Plaintiff'scounsel'sDecem ber28,2018 correspondence did raisethe issue ofD efendant's production ofdocum ents involving Fow lerW hite,even though the correspondence did notspecify the Bates num bers for the docum ents in question and stated that Plaintiff's counsel w ould ddassume''awaiverofanyclaim byDefendantofattorney-clientprivilege. TheCourtrejectsany such lkassum ption''of w aiver by a receiving counselof potentially privileged docum ents as the applicable rules do not perm it an attonw y to tlassum e''w aiver. How ever, the tim ing of the production around the holidays,the rushed review that follow ed over the holidays,the fact that A ndrea D eField,Esq.,w as hospitalized w ith an illness,and the fact that W alter A ndrew s,Esq., w as scheduled to attend his ow n daughter's w edding and related fam ily events,a11affected and m itigated Plaintiffs counsel's im perfectconductin thiscase. M oreover,the evidence show s that,once Plaintiff s counselreceived the B ates num bers forthe docum entsw hich D efendant's counselclaim ed were attorney-clientprivileged,Plaintiff's counseldid reasonably prom ptly segregate,return and destroy the docum ents. Additionally,only three ofthe 10 docum ents w ere attem pted to be used in any m alm er by Plaintiff's counsel,and only ata deposition w here Plaintiff's counseltestified thathe w as m erely trying to establish the basis for Defendant's claim of attorney-clientprivilege. Finally,any potentially prejudicial substantive answ ers to the lim ited questions by Plaintiff's counsel at that deposition w ere not 6 A lawyerwho receivesa docum entorelectronically stored inform ation relating to the representation ofthe lawyer'sclientand knowsorreasonably should know thatthe documentorelectronically stored inform ation w as inadvertentlysentmustpromptlynotifythesender. Fla.BarRule4-4.4(b). providedbyDefendant's30(b)(6)witness,butratherwereobjectedtobyDefendant'scounselwho instnlcted the w itnessnotto answ erthe questions. V l. Issue Four:W hether D efendantM etIts Burden ofEstablishing thatThere Is a Possibilitv that Plaintifrs C ounsel H as R eceived an Unfair Inform ational A dvantace Upon consideration ofa1lthe relevantevidence,testim ony and argum ents,the Courttinds that D efendant has not m et its burden of establishing that there is a possibility that Plaintiff's counsel has received an unfair inform ational advantage. The attorney-client privileged docum ents have not been used in an am ended com plaint or other pleading. The only real attem pted use ofthree ofthe 10 docum entsw as ata deposition asdiscussed above,and there isno possibilityofprejudicebaseduponthosequestions,whichwere,forthemostpast,objectedtoand notansw ered. A dditionally,law yers'opinions asto punitive dam agesand supersedeasbonds are notrelevantasthe Courtis responsible for interpreting a contract. lntep retation ofan insurance contractis a legalissue to be m ade by the Courtby looking atthe contractlanguage. This further militatesagainstthepossibilityofanyprejudicewhatsoevertoDefendant.? V1I. D isqualification isN otProper or A ppropriate ln sum ,Plaintifps counselshould notbe disqualified. ln addition to the analysisabove, the Court denies the M otion for the follow ing reasons. First, disqualification is an extrem e sanctionwhichisnotjustifiedinthiscase. Second,thiscomplexandfact-intensivecasehasbeen pending forsom etim e and hasreached the tinalstages ofdiscovery. Requiring Plaintiffto retain 1 lnitsresponsetotheMotiontoDisqualifygDE 190,p.8),PlaintiffattemptstomaketheargumentthatDefendant anditscounselviolatedRulel1infilingthemotiontodisqualifyPlaintiff'scounsel. However,theCourtrejects thisargum ent. Aftercarefully reviewing alIofthe evidence and testim ony in relation to the m otion to disqualify,it isclearto the CourtthatDefendantand itscounseldid notfilethe m otion to disqualify foran im properpurposesnor did they advance argum ents which were frivolousorhad no evidentiary support. 16 new cotmseland getthem up to speed this late in the litigation would be unduly expensive and burdensome. Disqualification ofPlaintiffscounselwould severely prejudice Plaintiffand is w holly umzecessary underthe factsofthiscase. Third, Defendantcreated thisproblem in thefirst place by inadvertently producing privileged docum ents. Both sides share the blam e forwhat occurred in this case and this m ilitates against disqualification. Fourth, m any Fow ler W hite documentsnotsubjecttoaclaim ofattorney-clientprivilegewereproducedbyDefendantinAplil 2018 and D ecem ber2018;thus,itw asdifficult,ifnotim possible,forPlaintiff scounselto quickly determine which documents were inadvertently disclosed and subject to the attorney-client privilege and w hich w ere not. Fifth,Plaintiffscounselnotified Defendant'scounselofapossible attorney-clientprivilege problem im m ediately. Sixth,Plaintiff's counselw as m adly scram bling to review 14,500 docum entsoverthe holidaysand w asgiven no initialguidance from Defendant's counselabout w hich docum ents w ere allegedly privileged. Seventh,Plaintiff's counselcannot recallwhattheprivileged docum entseven discussed. Eighth,the Courtcan cure the problem w ith lessdrastic m eans by im posing prophylactic m easures,assum m arized below . Based on the foregoing, and as stated in open courton January 29,2019,it is hereby O R D ERED asfollow s: Defendant'sMotiontoDisqualifyPlaintiff'sCotmsel(DE 1851isDENIED. Plaintiff is not perm itted to utilize any of the 10 attorney-client privileged docum ents atissue,orany ofthe specific infonnation directly and exclusively obtained from the 10 docum ents, in this case or in any other case involving D efendant. Plaintiff's counsel and Plaintiff shall ensure that they have destroyed allcopies ofthe 10 docum ents and shallreaffirm and certify to the Courtandopposingcounselthattheyhavedonesowithinseven(7)daysofthe date ofthisOrder. Ifin the future Plaintiff scounselorPlaintiffdo utilize any of the 10 docum ents or the specitic inform ation directly and exclusively obtained from those specific docum ents, the Court is w illing to revisit the disqualification issue.B The Court, how ever,strongly expects such action not to be neoessary. 3. The tem porary stay thatw as ordered by the Courton January 15, 2019 EDES 192,1931islifted. Thepartiesareorderedto expeditiouslyandcooperatively com plete discovery in this case. ln lightofthis dispute and the discovery delays occasioned by thisdispute, the Januaçy 2019 cut-off date for discovery and dispositive m otions is obviously untenable. A s alm ounced in open Courton January 29,2019,the discovery cut-offand dispositive m otion deadline are both hereby extended to M arch 4,2019,withoutprejudice to the parties'ability to requestfurther extensions,ifnecessaryandjustified,forconsiderationbytheCourt. D N E and O RD ER ED in Cham bers atW estPalm Beach,Palm B each Cotmty,Florida, this(-dayofFebruary,2019. W ILLIA M M A T EW M AN U nited States M agistrate Judge 8Ofcourse, asdiscussedpreviously in thisOrder,onceredacted and produced byDefendant,thedocum entIabeled A W N AC02050 can be used by Plaintiff. 18
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