In our last post, this blog reviewed emails redacted under purported attorney-client privilege in Ewald v. Royal Norwegian Embassy, Case No. 11-cv-2116 (SRN/SER)(D.Minn. March 7, 2014). The magistrate ruled it was not privileged, but Defendant moved for sanctions as a plaintiff trial attorney read the disputed email aloud into the record.
The magistrate found Plaintiff did, in fact, violate Rule 26(b)(5)(B). This rule prohibits the “use” of a document claimed to be privileged. As Plaintiff read the document on the record at a public hearing, that action violated the rule. However, the magistrate declined to order sanctions.
The magistrate also declined to order sanctions sought by Plaintiff for purported destruction of electronically stored information (ESI). Plaintiff had alleged spoliation of a mobile phone, a laptop computer and third-party documents. The magistrate agreed that spoliation of the phone occurred, but denied that Plaintiff was prejudiced as a result. He did not find spoliation as to the laptop or third-party documents. In denying sanctions, the magistrate wrote an extremely thorough legal analysis as to why he ruled in such a fashion.
But the take away from this case is much more than whether emails cc’d to third parties can be protected by attorney-client privilege, whether Plaintiff was prejudiced by the phone loss or whether spoliation actually occurred regarding the laptop and documents. The magistrate questions the effectiveness of Rule 26 sanctions for this case as a whole.
Noting that the costs and fees to each party had already toppled one million and the amount in controversy was only $100,000, the proportionality element of Rule 26 had been “abandoned.” Therefore, the court was unsure what any Rule 26 sanction upon either party might accomplish. “Because the parties moved for sanctions against each other, and because sanctions are not likely to have any deterrent effect on this case given its history and procedures posture, this Court finds sanctions are not warranted against either party.”