Defendant Barred from Viewing Sequestered Documents Pending Privilege Decision
Why This E-Discovery Case Ruling Is Important
This ruling underscores the procedures outlined in Rule 26(b)(5)(B) regarding the handling of inadvertently produced privileged documents. It clarifies the limits placed on receiving parties, offering critical guidance for legal professionals handling disputes over privileged materials.
Overview of the Case
The U.S. District Court for the Northern District of Mississippi recently issued a notable ruling in GXO Logistics Supply Chain, Inc. v. Young Living Essential Oils, LC. The case arose from a business dispute between the parties where GXO claimed privilege over 16 documents previously produced during discovery.
The defendant, Young Living, sequestered the documents as required under Rule 26(b)(5)(B). However, disagreement arose over whether the defendant could review and use the sequestered documents to challenge the privilege claim. GXO filed a motion to prohibit Young Living from doing so.
Citing Rule 26(b)(5)(B), the court emphasized that sequestered documents cannot be used or reviewed by the receiving party until the privilege claim is resolved. The court sided with GXO, blocking Young Living’s access to the documents and their substance pending a privilege determination.
Ruling
- Sequestration Procedures: The Court explained that Rule 26(b)(5)(B) states parties “must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; ... and may promptly present the information to the court under seal for a determination of the claim.” Permission to "present" the material is not tantamount to reviewing it to contest privilege claims.
- Clawback Protections: By citing Google RTB Consumer Privacy Litigation, the court highlighted the purpose of Federal Rule of Evidence 502(d) was to promote more efficient and cost-effective discovery by allowing parties to "claw back" privileged materials after the fact without waiving privilege. Allowing “receiving parties to examine and brief the contents of documents subject to a claw back notice would defeat the purpose of the rule, as parties would likely choose to undertake an exhaustive pre-production review to identify and withhold privileged information rather than risk a waiver for briefing purposes only.” (Emphasis ours)
- Prohibition of Use: The fact that the documents under the privilege claim had not been used in a brief or deposition filed with the court merited a clear distinction from cases where a document had already been disclosed substantively before the claw back attempt. The court held that Young Living could not view or use the disputed documents to oppose GXO’s claim of privilege.
Magistrate Judge Roy Percy’s well-reasoned decision allows parties to continue to rely on non-waiver orders and clawback rules, to reduce the time and expense to make “perfect” privilege calls before producing documents. In holding that receiving parties may not use information in sequestered documents when opposing privilege clawback requests, the opinion rejected an exception adopted by at least one prior court, which held that the receiving party could cite information it learned from the documents before the clawback request. This opinion approves an exception only where the documents have previously been used by a party substantively (e.g. in a brief or deposition) prior to the clawback request. David R. Cohen, Partner, Chair of the E-Discovery Group, Reed Smith LLP
E-Discovery Case Law Tip
Avoid potential misunderstandings over privileged documents by entering into an FRE 502(d) agreement prior to production of ESI during the discovery process. Learn about other recent cases, including one revolving around FRE 502(d), in our 2024 E-Discovery Case Law in Review whitepaper.
