(PS) Terry v. Register Tapes Unlimited, Inc.
2:16-cv-00806
E.D. Cal.Jul 31, 2017Background
- Terry sued his former employer, Register Tapes Unlimited, Inc. (RTUI), alleging unpaid commissions and disability/discrimination claims; the operative Second Amended Complaint asserts only state-law claims.
- Central disputed materials concern: (1) an inadvertently sent pre-litigation email from RTUI's HR director to Terry that referenced RTUI's attorney and a comment about "figure out how to get rid of [plaintiff]," and (2) RTUI's post-2003 communications and agreements with Safeway regarding register-tape advertising revenue.
- RTUI asserted attorney-client privilege over testimony about the inadvertent email and asserted trade-secret and relevance objections to discovery of post-2003 Safeway materials; no privilege log had been produced by the hearing.
- Plaintiff moved to compel: testimony about the inadvertently disclosed email, production of post-2003 Safeway communications, and a privilege log for withheld post-2003 Safeway documents.
- The court heard the motion despite procedural filing irregularities, rejected plaintiff's timeliness objection, and proceeded to rule on privilege waiver, trade-secret assertions, and the requirement of a privilege log and protective order.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the inadvertently sent pre-litigation email waived attorney-client privilege and is discoverable | Terry contends disclosure to him waived privilege and entitles him to testimony about the email | RTUI argues the email was an inadvertent pre-litigation disclosure to the client/third party and therefore privilege was not waived | Denied — court held California law protects inadvertent disclosures and privilege was not waived; testimony about the email is not discoverable |
| Whether post-2003 communications between RTUI and Safeway are discoverable | Terry seeks post-2003 Safeway communications as relevant to damages, profits, negotiations, and whether RTUI withheld contract information | RTUI asserts trade-secret privilege and relevance objections, seeking to withhold post-2003 materials | Granted in part — limited post-2003 documents relevant to register-tape agreements, profits/losses/costs/commissions, and withholding of contract info must be produced (RFPs 38, 44, 54-64, 88-91); broader requests denied |
| Whether RTUI satisfied its burden to assert trade-secret privilege over post-2003 Safeway materials | Terry argues RTUI has not shown trade secrets and that discovery is needed | RTUI relied on a blanket assertion of trade-secret protection and relevance objections | RTUI failed to meet initial burden; trade-secret privilege not accepted without particularized showing; disclosure ordered subject to possible protective measures |
| Whether RTUI must produce a privilege log for withheld post-2003 Safeway documents | Terry requests a privilege log to evaluate withheld materials | RTUI offered no justification for failing to produce a log | Granted — RTUI must produce a privilege log complying with Fed. R. Civ. P. 26(b)(5) for withheld post-2003 communications; failure to log may waive privileges |
Key Cases Cited
- State Comp. Ins. Fund v. WPS, Inc., 70 Cal. App. 4th 644 (1999) (inadvertent attorney disclosure does not automatically waive attorney-client privilege)
- Ardon v. City of Los Angeles, 62 Cal. 4th 1176 (2016) (inadvertent client disclosure may not waive privilege; waiver requires deliberate choice or consent)
- McDermott Will & Emery LLP v. Superior Court, 10 Cal. App. 5th 1083 (2017) (inadvertent disclosure exception applies to pre-litigation inadvertent disclosures)
- Continental Cas. Co. v. St. Paul Surplus Lines Ins. Co., 265 F.R.D. 510 (E.D. Cal. 2010) (discussed by plaintiff but distinguished—addressed disclosure to insurer rather than inadvertent client disclosure)
- Bridgestone/Firestone, Inc. v. Superior Court, 7 Cal. App. 4th 1384 (1992) (trade-secret privilege requires balancing of interests and consideration of protective orders or less-intrusive alternatives)
- Apple Inc. v. Samsung Elecs. Co., 306 F.R.D. 234 (N.D. Cal. 2015) (party asserting privilege must produce a privilege log; failure may result in waiver)