Gibson Dunn Disqualified by California Superior Court for Using Privileged E-Mail that Had Been Inadvertently Disclosed

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According to the formal Court Order:

“An email from attorney to client shows attorney/client privilege; Counsel’s review and use of the email at deposition goes beyond ‘mere exposure’ and raises the likelihood that this could affect the outcome of these proceedings both in terms of Plaintiff’s rights against use of his privileged communications against him and in terms of the integrity of these judicial proceedings and public confidence in them; Grant.” – Minute Order, Hausman vs. McDermott Will & Emery, No.30-2015-00785872 (Cal. Superior Ct. Orange County May 25, 2016).

Based on the explanation in the ABA Section of Litigation issue, the further background is as follows:

“Hausman had inadvertently sent the email to a third-party family member who later forwarded it to Gibson Dunn, who used the information contained in the email during a deposition in defending McDermott. The plaintiffs’ counsel informed Gibson Dunn that the email had been inadvertently disclosed but Gibson Dunn refused to return it, insisting that privilege had been intentionally waived because it was in the possession of a nonparty and because no one had requested its return in the probate action. California law provides that when an attorney receives inadvertently disclosed documents, he or she may not read the document any more closely than necessary to ascertain that it may be confidential or privileged and must then notify opposing counsel to resolve the situation. If the parties cannot agree on the use of the document, court intervention is required. ‘California law imposes reasonable procedures. If a party receives a document that may be privileged, it needs to stop reviewing and figure out the privilege issues. This is the kind of thing you want to work out without having to risk something as drastic as disqualification….’

“Not all jurisdictions have the same rules. The ABA’s Model Rules of Professional Conduct defer to counsel’s professional judgment regarding whether to return an inadvertently produced document, and state bar requirements can vary. ‘Counsel faced with the receipt of an inadvertently produced privileged document must know the applicable ethical rules and case law, which may vary from state to state. This is particularly true when the document could have a material impact on the case — counsel should do whatever possible to try to preserve the right to use it’ ….  The court found that Gibson Dunn failed to follow the process for determining privilege, which may have been its key mistake. ‘From the court’s perspective, the real problem was that Gibson Dunn seemed to take the law into its own hands regarding whether the document was privileged or not. The law in California did not permit Gibson Dunn to resort to what could be characterized as a “self-help” remedy in determining the question itself.’  In opposing the motion to disqualify, Gibson Dunn argued that the plaintiffs had waived privilege and that disqualification was improper. ‘Gibson Dunn stated a logical basis for its belief that the document had been intentionally shared with a third party, but it seemed more like a waiver argument than a dispute about whether the document had been inadvertently produced in the first instance.’ Other section leaders view the delay argument as missing the core issue. ‘Gibson Dunn’s argument seemed to be that the plaintiffs did not object until it was too late. This was more like a game of “gotcha” and Gibson Dunn used it to run roughshod over privilege.'”

Daniel P. Elms, “Law Firm Disqualified for Retaining and Using Privileged Email” ABA Section of Litigation (Fall 2016), p.8.

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