Spectrum Scientifics, LLC v. Celestron Acquisition, LLC

Background

Defendants moved to compel discovery from the Direct Purchaser Plaintiffs (DPPs) concerning a collection of 51,500 documents that defendants’ vendor mistakenly produced in March 2022. Defendants had informed the DPPs that the production was erroneous and asked that the documents be returned or destroyed. Defendants asserted that approximately 190 documents in the collection were privileged, but their discovery requests were not limited to those documents.

The court noted that the mistaken production also included relevant documents that should have been produced earlier, as well as nonprivileged and nonresponsive documents containing personal and sensitive information. The court found that the production of privileged documents resulted from defendants’ vendor’s mistake and that defendants took reasonable steps to recover the documents and protect their confidentiality after discovering the error. The court also noted that defendants’ clawback request did not provide the information required to support a privilege claim for particular documents.

Parties’ Positions

The DPPs objected to the discovery requests on several grounds. They argued that defendants had not shown the disclosure was inadvertent, had waived any privilege claims by failing to assert them timely, and had not shown substantial justification for seeking discovery from opposing counsel.

The record did not establish whether the DPPs disputed defendants’ privilege claims for any of the approximately 190 documents. The court also found it unclear whether the DPPs or their lawyers had reviewed any of those documents after receiving the March 16, 2022 clawback request. Although declarations from two DPPs’ lawyers stated that they had not reviewed “any privileged documents,” one lawyer could not say at the hearing whether anyone on the DPPs’ legal team had reviewed any of the documents for which defendants asserted privilege.

Ruling

Judge Virginia K. Demarchi concluded that comprehensive discovery into the DPPs’ and their lawyers’ actions was not appropriate until these threshold factual questions were answered. If no member of the DPPs’ legal team reviewed any of the approximately 190 documents after the clawback request, the court saw no need for the requested discovery. If the legal team did review documents, the court stated that it might first need to decide the merits of any disputed privilege claims.

The court denied defendants’ motion to compel discovery without prejudice. It ordered the DPPs to file one or more supplemental declarations addressing whether anyone on their legal team reviewed any of the approximately 190 documents, who reviewed each document, whether the DPPs disputed the privilege claim for each reviewed document, and whether they notified defendants of any challenge by September 7, 2022. The DPPs were directed to consult reasonably available information sources, including records maintained by their electronic-discovery vendors, and to file the declarations by May 12, 2023.

Classification

This is a procedural order because it concerns discovery and does not decide the underlying antitrust claims.