Clawbacks: A Weapon Against Defense Undue Burden Argument?

15 Apr 2013

A common excuse for defendants responding to plaintiff electronic discovery requests is that it is unduly burdensome to have to review massive amounts of documents for privilege.  Many defendants will claim that having to review the documents to remove or redact privileged electronic data is just too expensive. While these defendants may attempt to use this argument to reduce the scope of discovery or seek cost shifting orders as solution, some courts are coming up with a new type of compromise: clawback provisions.

In In re Coventry Healthcare, Inc. ERISA Litigation (2013 WL 1187909 (D.Md.), in opposing plaintiff’s motion to compel, defendants in this class action lawsuit argued that when they used the plaintiff search terms for responsive data, they “hit” approximately 200,000 documents. They argued that it would cost $388,000 to organize and review the documents for privilege. The defendants contended that by not first thoroughly reviewing the documents, the accidental production of privileged documents might constitute a waiver.

The court addressed this issue by ordering a “clawback provision” where the defendants produce the entire production without first reviewing for privilege and are protected against a claim of waiver in the event that plaintiffs find privileged data. With such clawback provision in place and the plaintiffs agreeing to refine their proposed search terms to certain designated custodians, the court granted plaintiff’s motion and held the defendants failed to demonstrate that the defense production was unduly burdensome.

ILS – Plaintiff eDiscovery Experts

[eDiscovery Extra: As electronic discovery law continues to take shape, clawbacks may become more common.]