Jack Nelson Jones Professional Association
December 4-10, 2017
Gerber Prods. Co. v. CECO Concrete Constr., LLC, 2017 Ark. App. 578 (November 11, 2017)
This appeal comes from the Sebastian County Circuit Court, Fort Smith District, honorable Stephen Tabor presiding. This case concerns the claim of privilege over documents inadvertently produced during discovery.
This case stems from a construction project at the Gerber Products Company plant in Fort Smith. Alberici Constructors, Inc. served as the general contractor and construction manager on the project, and CECO Concrete Construction, LLC was hired to perform concrete work. CECO and Alberici propounded requests for production of documents (RFPs) to Gerber in early 2013 during the discovery phase of the litigation.
The RFPs asked that Gerber produce contracts, reports, emails, and other correspondence and paperwork related to the construction project, along with the personnel files of two employees. Gerber objected to providing the personnel files on grounds of confidentiality and irrelevance but otherwise made no objection to the RFPs. The response Gerber provided contained about 2,700 pages of documents. Upon review, CECO and Alberici (hereafter, collectively, “CECO”) found few, if any, 2011 emails, and, after several requests to Gerber, were told there were only two relevant emails from that period. CECO also found privileged materials in the documents, which it informed Gerber of and returned the documents. Gerber stated that it would provide more material and would work on providing a privilege log.
In May 2013, CECO filed a motion to compel further production of documents by Gerber. The circuit court granted the motion in July 2013, and Gerber sent CECO approximately 96,000 pages of additional documents. CECO detailed perceived deficiencies in a June 2015 letter to Gerber and propounded a second set of RFPs.
Thereafter, Gerber provided several thousand more pages of documents and in July 2015 produced an eight-page privilege log. The log listed several items that Gerber claimed were subject to attorney-client and work-product privileges. In October 2015, CECO filed a second motion to compel seeking a more complete response to its RFPs. The circuit court granted the motion to compel and soon thereafter, Gerber produced an additional 18,000 pages of documents and a second privilege log. The thirteen-page log contained over 200 entries listing items that Gerber considered to be protected by attorney-client or work-product privilege – some of which had not been identified in the previous privilege log. Within weeks, CECO sent a letter to Gerber asserting that Gerber had waived its claim of privilege by waiting too long to assert it and that, in any event, Gerber had already turned over some of the materials listed in the privilege log without objection in an earlier “document dump.” By this point, Gerber had acquired new counsel who responded that Gerber had not waived attorney-client privilege and asked that CECO return or destroy numerous inadvertently provided materials. CECO refused.
In July 2016, Gerber filed a “Motion For Protective Order Seeking Return of Inadvertently Produced Privileged Documents and Protection of Unproduced Privileged Documents Identified On Privilege Logs.” Gerber asserted that it had not waived its right to seek the return or destruction of privileged documents that it had inadvertently produced. Following a hearing, the circuit court denied Gerber’s motion. The court stated that it was “particularly taken by the apparent complete lack of precautions in place” to prevent Gerber’s inadvertent disclosures of privileged material. Gerber appealed. While Gerber argued it did not waive its right to assert privilege over unproduced documents listed in the privilege logs, this summary only discusses Gerber’s argument that the circuit court erred in refusing to allow the retrieval or destruction of the privileged documents that Gerber inadvertently provided to CECO.
On appeal, the Court explained that Rule 26(b)(5) of the Arkansas Rules of Civil Procedure addresses the inadvertent disclosure of privileged materials during discovery. The rule provides, in part, that the producing party is presumed not to have waived the defense of privilege as to inadvertently produced documents if, within fourteen days of discovering the inadvertent disclosure, it notifies the receiving party of the specific documents involved and the privilege to be asserted. However, the circuit court may consider whether the surrounding circumstances show waiver. The Court noted that, among the factors to be considered is the reasonableness of the precautions taken to prevent the inadvertent disclosure.
Gerber argued that it responded to CECO’s March 2016 notification of inadvertent production within fourteen days and was therefore entitled to the presumption of non-waiver. While that was a matter of some dispute, the Court held that, regardless, the circuit court was within its discretion to determine that a waiver occurred in this instance based on Gerber’s lack of precautions to prevent inadvertent disclosure. The record showed that the circuit court’s concern about Gerber’s lack of precautions was well-founded. For example, Gerber cited an affidavit from a representative of its former law firm as evidence of precautions taken against the inadvertent disclosure of privileged documents. However, the affidavit was lacking in detail on that subject and would by no means require the circuit court to find that reasonable precautions were taken. Moreover, the Court continued, the series of events throughout the parties’ multiyear history of discovery demonstrated a pattern by Gerber of providing large numbers of documents without objection and without sufficient and diligent screening for privileged materials. Affirmed.