Telephonics Corp. v. United States

32 Fed. Cl. 360, 1994 U.S. Claims LEXIS 215, 1994 WL 661808
CourtUnited States Court of Federal Claims
DecidedNovember 23, 1994
DocketNo. 92-846C
StatusPublished
Cited by6 cases

This text of 32 Fed. Cl. 360 (Telephonics Corp. v. United States) is published on Counsel Stack Legal Research, covering United States Court of Federal Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Telephonics Corp. v. United States, 32 Fed. Cl. 360, 1994 U.S. Claims LEXIS 215, 1994 WL 661808 (uscfc 1994).

Opinion

ORDER

HARKINS, Senior District Judge.

The complaint in this case, filed December 10, 1992, seeks an equitable adjustment under a contract with the Army, Communications Electronic Command (CECOM) awarded on October 31, 1989, for manufacture and delivery of radar sets. Final delivery of all radars was not complete on October 24, 1994.

As part of discovery, defendant o'n July 15, 1993, submitted interrogatories and requested documentary production. In preparation to respond, plaintiffs outside counsel reviewed approximately 30 boxes of documents, comprising tens of thousands of pages. The ongoing contract file was included. The documents were ready for inspection in September 1993, but because of illness of defendant’s counsel, defendant did not send personnel to inspect the documents until July 25 and 26, 1994. Defendant’s eight-man examination team included three lawyers and agency personnel.

During the course of inspection, defendant’s personnel found a document (WR & F Analysis) clearly marked in bold capital letters: “PRIVILEGED AND CONFIDENTIAL/ATTORNEY-CLIENT PRIVILEGE/ATTORNEY WORK PRODUCT.” This document was a letter dated July 29, 1992, that had been prepared by plaintiffs [361]*361outside counsel; it assessed the merits of the case and discussed potential litigation and negotiation strategies. The letter was addressed to plaintiff; a copy was sent on July 30, 1992, to another outside counsel of plaintiff.

When defendant’s personnel found the WR & F Analysis, the discovery was not brought to the attention of representatives of plaintiffs counsel who were present at all times during the document review. Defendant’s personnel apparently passed the document for examination to all eight members of its examination team, one of whom took extensive notes of its contents.

Defendant marked the WR & F Analysis for copying. A copy of the WR & F Analysis has not been produced. Plaintiffs counsel removed it from documents to be produced and notified defendant that it was being withheld on the basis of the attorney/client privilege and work product doctrine.

On October 6, 1994, defendant filed a motion to compel production of the WR & F Analysis. The motion attached a document captioned “Notes from Telephonies’ Legal Memo” which apparently is an electronic facsimile. It is marked DAJA-LTT, Aug-23-1994 17:35.

Defendant’s motion asserts that any claim of attorney-client privilege or attorney work product doctrine has been waived, citing Carter v. Gibbs, 909 F.2d 1450 (Fed.Cir.1990), In re Sealed Cases, 877 F.2d 976 (D.C.Cir.1989), and other cases that found waiver in situations where there was a voluntary, inadvertent, or careless disclosure of documents asserted to be privileged.

There is no per se rule that a waiver must be found in all situations where there is a mistaken or inadvertent production of a privileged document. There are many factual circumstances in which the privilege can be kept despite inadvertent disclosure. All circumstances that surround an inadvertent disclosure must be considered. In the Court of Claims, the criteria was expressed as “fundamental questions always are: did the client wish to keep back the privileged materials, and did he take adequate steps in the circumstances to prevent disclosure of such documents.” National Helium, Corp. v. United States, 219 Ct.Cl. 612, 616, 1979 WL 10176, *3 (1979). In National Helium, the Court of Claims found no waiver after the plaintiff undertook a “good faith, sufficiently careful, effort to winnow a relatively small number of privileged materials from a very large volume of documents to be produced ...” 219 Ct.Cl. at 615, 1979 WL 10176 at *2.

The precautions taken by Telephonies were reasonable and careful. In its response to defendant’s requests for production of documents, Telephonies noted it did not intend to produce any documents covered by the attorney/client privilege or attorney work product doctrine. Plaintiffs outside counsel and a paralegal spent two days reviewing the documents to protect against production of any privileged material. They found and removed two copies of the WR & F Analysis during their review. The WR & F Analysis was the only privileged document in 30 boxes containing many thousands of pages. The document was stamped with an appropriate protective legend in bold capital letters so that even someone taking a cursory review of the document would recognize the protected nature of the material. Upon learning that defendant had identified and sought to obtain a copy of the WR & F Analysis, plaintiff notified defendant in writing of its continuing claim of privilege, and withheld the document from production.

Courts have maintained these privileges even in cases in which more than one privileged document had been inadvertently produced. See, e.g., Lois Sportswear v. Levi Strauss & Co., 104 F.R.D. 103,105 (S.D.N.Y. 1985) (22 privileged documents); National Helium, 219 Ct.Cl. at 616,1979 WL 10176 at *3 (10 privileged documents); In re Grand Jury Investigation, 142 F.R.D. 276, 281 (M.D.N.C.1992) (18 privileged documents).

There is an issue of fairness in Telephonies inadvertent disclosure. To find a waiver in the circumstances here would be particularly harsh. Notwithstanding plaintiffs steps to mark the document and notify defendant of its intent not to produce privileged material, and notwithstanding plaintiffs counsel being on site during the actual production or otherwise available, defendant did not alert plain[362]*362tiff when it found the WR & F Analysis. Instead, defendant shared the document with its several representatives at the production and took notes on the document. It is only because defendant had not undertaken its review of plaintiffs documents until some 10 months after the material was ready for inspection that the document in question reappeared in the previously purged boxes as a consequence of on-going contract administration.

In Alldread v. City of Grenada, 988 F.2d 1425 (5th Cir.1993), the Fifth Circuit affirmed a detailed review of the issue of inadvertent disclosure. Id. at 1433-35. Circumstances to be considered include a five part test:

(1) the reasonableness of the precautions taken to prevent disclosure;

(2) the amount of time taken to remedy the error;

(3) the scope of discovery;

(4) the extent of the disclosure; and

(5) the overriding issue of fairness. Alldread, 988 F.2d at 1433, accord Lois Sportswear, 104 F.R.D. at 105; Hydraflow, Inc. v. Enidine Inc., 145 F.R.D. 626, 637 (W.D.N.Y.1993); Shriver v. Baskin-Robbins Ice Cream Co., 145 F.R.D. 112, 115 (D.Colo. 1992); In re Grand Jury Investigation, 142 F.R.D. at 278-79; Federal Deposit Ins. Corp. v. Marine Midland Realty Credit Corp., 138 F.R.D. 479, 482 (E.D.Va.1991); Monarch Cement Co. v. Lone Star Indus., Inc., 132 F.R.D. 558, 560 (D.Kan.1990); Bud Antle, Inc. v. Grow-Tech, Inc., 131 F.R.D. 179, 183 (N.D.Cal.1990).

A determination whether to maintain the attorney/client and work product privileges encompasses an analysis of the intent of the party seeking protection of the document.

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Bluebook (online)
32 Fed. Cl. 360, 1994 U.S. Claims LEXIS 215, 1994 WL 661808, Counsel Stack Legal Research, https://law.counselstack.com/opinion/telephonics-corp-v-united-states-uscfc-1994.