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Thorne Research Inc. v. Xymogen, Inc.

United States District Court, D. Utah

February 13, 2018

THORNE RESEARCH, INC. and SOFTGELFORMULATORS, INC., Plaintiffs,
v.
XYMOGEN, INC. Defendant.

          MEMORANDUM DECISION AND ORDER GRANTING PLAINTIFFS' MOTION TO DEDESIGNATE PRIVILEGED DOCUMENT

          Ted Stewart United States District Judge

         This matter is before the Court on Plaintiffs' Motion to Dedesignate Privileged Document. For the reasons discussed below, the Court will grant the Motion.

         I. BACKGROUND

         During discovery, Defendant produced XYOMGEN238-242. Defendant raised attorney/client and work product claims of privilege with respect to the document during the deposition of Mike Mahoney. Defendant then “clawed back” the document.

         Plaintiffs sought to dedesignate the document.[1] The Magistrate Judge denied Plaintiffs' request and the Court overruled Plaintiffs' objection to the Magistrate Judge's decision.[2]

         Defendant again produced the document during trial preparations and listed it as Exhibit BX on its exhibit list. Plaintiffs' counsel alerted Defendant to this and Defendant withdrew Exhibit BX as a trial exhibit. Plaintiffs now seek to dedesignate the document, arguing that Defendant has waived any privilege the document enjoyed.

         II. DISCUSSION

         Federal Rule of Evidence 502(b) provides that disclosure does not operate as a waiver if:

(1) the disclosure is inadvertent;
(2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and
(3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26 (b)(5)(B).[3]

         In addition, courts within this circuit, including this Court, consider the following: (1) the reasonableness of the precautions to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of the discovery; (4) the extent of the disclosure; and (5) the overreaching issue of fairness.[4] Considering these factors, the Court concludes that the privilege has been waived.[5]

         First, the Court finds that Defendant failed to take reasonable steps to prevent disclosure. Defendant asserts that the document was disclosed when choosing which exhibits to include on its exhibit list. Defendant states that one of its counsel, Mr. Fields, made a notation that Defendant should object to the introduction of this document should Plaintiffs attempt to introduce it. This resulted in counsel's staff including this exhibit as a trial exhibit. Defendant argues that Mr. Fields did not realize that the document had already been returned and, thus, had reason to believe that Plaintiffs might attempt to introduce it at trial.

         The Court finds that this explanation fails to show that Defendant took reasonable steps to prevent disclosure. Defendant claims that counsel did not realize that Plaintiffs no longer had possession of the document. This claim, however, is belied by the record wherein Plaintiffs clearly stated that they had “destroyed all copies of the document at Xymogen's request.”[6]Indeed, the Court had to request Defendant produce the document for in camera review because Plaintiffs could not provide a copy with their motion.[7] Thus, even a cursory review of the docket would have informed counsel that Plaintiffs did not have a copy of the document. Moreover, ...


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