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In Landmark E-Discovery Decision For North Carolina, Judge Rules Attorney-Client Privilege Waived

In a classic understatement, Judge Gale said in a North Carolina Business Court opinion last Thursday that "North Carolina case law addressing problems inherent in electronic discovery. . .is not yet well developed." Op. ¶50. But in Blythe v. Bell, 2012 NCBC 42 [enhanced version available to subscribers], the Judge went ahead and posted some road signs along that undeveloped and difficult path.

The issue in Blythe was waiver of attorney-client privilege. The Defendants had produced 3.5 million documents on two hard drives of which 1,700 turned out afterwards to be potentially privileged. They made a motion for an order compelling the return of the privileged documents, which Judge Gale denied, ruling that the privilege had been waived.

The first lesson of the case is the test the Court will follow in determining whether an inadvertent disclosure will result in a waiver of attorney-client privilege in an electronic production. It is that the Court will consider "(1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the number of inadvertent disclosures; (3) the extent of the disclosures; (4) any delay in measures taken to rectify the disclosures; and (5) the overriding interests of justice." Op. ¶52. You might remember that test from the infamous case of Victor Stanley, Inc. v. Creative Pipe, Inc. (D. Md. 2008) [enhanced version].

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Read this article in its entirety on North Carolina Business Litigation Report, a blog for lawyers focusing on issues of North Carolina business law and the day-to-day practice of business litigation in North Carolina courts.

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