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Ethics Byte

What to do when you find a smoking gun, but it’s privileged

By Diane Karpman

Diane KarpmanImagine yourself in litigation, large or small, and you finally receive the anxiously anticipated discovery. Much to your dismay, however, it’s tons of discovery. Boxes on boxes, thousands of pages. You slog through it, and wonder of wonders, you find the “smoking gun” that proves the other side is engaging in perjury. It’s in black and white and smoking right there in your hand. One week later, however, you receive a call requesting that the document be destroyed, because it was “inadvertently” produced, and it is privileged.

Having attended numerous CLE classes, you know about the special procedures that are triggered for inadvertently sent information, which are designed to protect “innocent” clients from the loss of their privilege. This is a popular topic in articles, and may be my fifth or sixth column about these protocols. At one time, you had to return the document to the sender (State Compensation Insurance Fund v. WPS, Inc. (1999) 70 Cal. App. 4th 644 and former ABA Model Rules). This has changed so that return is no longer required (Rico v. Mitsubishi Motors Corp. (2007) 42 Cal. 4th 807).

However, these special protocols, which now require you to notify the sender and embargo (or do not disseminate) the information, were never intended to provide a cover for criminal conduct. They are intended to impose upon the receiving party the obligation to respect the inadvertence of an adversary. People make mistakes, and a client’s privilege should not be lost because of inadvertence or carelessness, by staff or lawyers.

But if you destroy the document, clear evidence of a crime, might you run the risk of being an accessory after the fact? One could speculate that a defense of being an inadvertent recipient would not be much of a defense to criminal charges.

Rico provides a solution: “parties may then proceed to resolve situation by agreement or may resort to court for protective [relief].” (Rico v. Mitsubishi Motors Corp. (2007) 42 Cal. 4th 807, 171 P.3d 1092).

Until recently, the court was always the safest solution, and this was actually mandated in federal practice. “If inadvertent disclosure is part of the discovery process, federal practice requires that the allegedly inadvertently produced privileged materials be filed with the court if there is a question as to the potential use of the discovery,” wrote Southwestern Law School Professor James M. Fischer. Incidentally, this is a superb article on these and other topics, such as unauthorized disclosure or purloined documents.

We have always advised filing the information with the court, but now you must file it under seal. In a recent case involving arbitration, the lawyer copied the document, made a spreadsheet, and sent it to the entire panel. He was sanctioned (Bak v. MCLFinancial Group Inc. (2009)170 Cal. App. 4th 1118). One lesson to be learned here is to embargo the documents. You are not allowed to copy them, send them to experts, disseminate them or reproduce them in any manner. In other words, do not use, employ, craft or share the documents, unless and until the status of the document is resolved. This is known as the “do not use until clarified” protocol, according to Fischer (page 218, fn 61).

This can be an incredibly difficult situation. Clients hire you to foster their interests, not to be chummy with the other side. How do you explain to your client that, well, yes, you had the smoking gun document, but instead of taking advantage and exploiting their negligence, you destroyed it at the request of the opposing party? If the document is that valuable, of course you have to inform the client about it. Obviously, it will be much easier for a client to understand the act of lodging it under seal with the court for a determination. This conduct is much less likely to impair the fragile attorney-client relationship.

In this situation, the court is balancing competing interests: those of the opposing party against those of your client. But the problem is that the negative impact of the sending lawyer (disqualification or sanctions) is imposed on the passive recipient. It seems that in this area blame is placed on the innocent receiver, as opposed to the party who set the harm in motion. Be cautious in this area. Sooner or later, it happens to everyone.

Legal ethics expert Diane Karpman can be contacted at 310- 887-3900 or