MPAY Inc. v. Erie Custom Computer Applications, Inc.

Background

MPAY, Inc. challenged privilege logs served by Erie Custom Computer Applications, Inc.; PayDay USA, Inc.; Payroll World, Inc.; Proliant, Inc.; Proliant Technologies, Inc.; and Kevin Clayton. The defendants had served an initial log, an amended log, and a second amended log concerning documents withheld from discovery. MPAY argued that the logs did not adequately describe the withheld documents, redactions, email chains, or attachments.

The court held a conference and gave the defendants additional opportunities to provide a compliant privilege log. At a December 19, 2019 hearing, defense counsel represented that no email attachments were being withheld. The court therefore requested the withheld emails for private judicial review, without the attachments if the attachments had already been produced. The defendants’ January 28, 2020 certifications later disclosed that the attachments had not been produced as represented and would instead be produced later.

Legal standards

Attorney-client privilege protects confidential communications made to obtain or provide legal advice. A communication is not protected merely because a lawyer sent or received it; it must concern legal services provided in the lawyer’s role as a lawyer. The common-interest doctrine can protect otherwise privileged communications shared by clients with a common legal interest. Work-product protection generally covers documents prepared because of anticipated litigation, although factual work product may be discoverable in limited circumstances and an attorney’s mental impressions and legal theories receive stronger protection.

Emails

The court stated that the defendants withdrew privilege and work-product assertions for numerous privilege-log entries. After reviewing the remaining materials, the court found that at least the challenged emails listed in the opinion were not privileged or protected because they did not contain confidential legal communications or were non-legal business communications on which a lawyer was merely copied. Those emails had to be produced.

The court also reviewed certain unchallenged withheld emails and found that the listed emails were not privileged or protected for the same reasons. Those emails also had to be produced.

Attachments and waiver

The defendants’ privilege log did not identify attachments to the withheld emails or separately list them. The court found that the defendants waived privilege and work-product protection for all attachments to the challenged emails. The court identified three bases for waiver: the defendants had multiple opportunities to list the attachments; they represented at the hearing that no attachments had been withheld; and they did not submit withheld attachments for the court’s private review when given the opportunity.

The court also found that the defendants’ conduct caused unjustified delays and that more than 100 attached documents were produced only after the court required further explanations. The court ordered all attachments to the challenged entries produced in unredacted form, except that descriptions of work performed in the case on lawyer invoices could remain redacted. The defendants could not replace original attachments with later versions.

Remaining documents

For the remaining withheld emails and attachments to unchallenged emails, the court required defense counsel to review each document and compare it with the corresponding privilege-log entry. Lead Counsel and Local Counsel had to certify that any remaining privilege or work-product claim had a good-faith basis, identify additional withdrawn emails or attachments, and confirm that the required review had occurred. MPAY could challenge any remaining entry if it had a reasonable basis.

Fees and costs

The court found that the Second Amended Privilege Log was inadequate because it failed to identify the source entity for privilege claims, failed to identify attachments, provided insufficient descriptions, inaccurately described some documents and recipients, and did not timely withdraw unsupported claims. The court also found that the defendants’ nondisclosure, response, and objections were not substantially justified and that no other circumstance made an award of expenses unjust.

The court stated that it would award MPAY reasonable fees and costs connected with the privilege-log dispute, the later dispute-resolution process, and the motion to compel. It ordered MPAY’s counsel to file an affidavit and supporting documents for the fee request by March 6, 2020.

Disposition

The court granted MPAY’s Motion to Compel. It ordered the required emails and attachments produced by March 6, 2020; required the defense counsel certifications by that date; and directed MPAY’s counsel to submit support for its request for attorney fees and costs.