Court Finds that Disclosure of Entire Email Server Did Not Result in a Waiver of the Attorney-Client Privilege over Certain Emails with Attorneys

On November 27, 2023, in White Oak Commercial Finance, LLC, v. EIA Inc., et al., Index No. 650346/2023, Justice Margaret Chan granted, in part, a motion for an order of protection sought by Defendants after the Plaintiff filed communications subject to Defendants’ attorney-client privilege on the court docket. Defendants had granted Plaintiff access to the entire contents of its email server, before the start of formal discovery, as part of a stipulation resolving an earlier motion for a preliminary injunction. Plaintiff later filed a second motion for preliminary injunction, which included a communication from the email server between some of the individual Defendants and their attorneys. Defendants sought a protective order preventing Plaintiff from reviewing or using any attorney-client communications located on the email server and preserving their attorney-client privilege.

The Court ultimately found that Defendants had not waived attorney-client privilege by granting the Plaintiff complete access to their email server and that a protective order was warranted. The Court explained:

As courts have routinely held in similar situations, an agreement to broadly provide for access to records does not, in turn, create an unfettered right to review and rely upon privileged communications and documents contained therein . . . And nothing in the record otherwise indicates that Defendants intended (explicitly or implicitly) to relinquish the protections of the attorney-client privilege by merely agreeing to the inclusion of broadly worded books and records provisions in the Credit Agreement or the Stipulation. . . . [T]he record supports a fair conclusion that [Defendants] were acting with the understanding that [Plaintiff] would be retaining the Email Server for preservation purposes and that [Defendants] would have an opportunity to locate and review those records with [Plaintiff] at a later date. . . . Thus, Defendants’ failure to deploy any screening procedures prior to turning over the Email Server does not undercut their attorney-client privilege claims or their contention that disclosure of privileged communications was inadvertent.

The situation faced by the parties here shows the importance of robust controls when engaging in electronic discovery or otherwise granting access to electronic communications or servers. The attorneys at Schlam Stone & Dolan frequently litigate issues surrounding electronic discovery and the attorney-client privilege. Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning such issues.