Hur v. Lloyd & Williams, LLC

• Decision Date: 31 January 2023
• Docket Number: 38363-6-III
• Citation: 523 P.3d 861
• Parties: Patty HUR, individually, Respondent, v. LLOYD & WILLIAMS, LLC, a Washington limited liability company; Dewight L. Hall, Jr., individually; and Tod W. Wilmoth, individually, Petitioners, Priori Cultivation, Inc., a Washington corporation, Defendant.
• Court: Washington Court of Appeals

523 P.3d 861

Patty HUR, individually, Respondent,

v. LLOYD & WILLIAMS, LLC, a Washington limited liability company; Dewight L. Hall, Jr., individually; and Tod W. Wilmoth, individually, Petitioners,Priori Cultivation, Inc., a Washington corporation, Defendant.

No. 38363-6-III

Court of Appeals of Washington, Division 3.

FILED January 31, 2023

George M. Ahrend, Luvera Law Firm, 421 W Riverside Ave. Ste. 1060, Spokane, WA, 99201-0406, for Petitioners.

Heidi Nicole Urness, Attorney at Law, 1424 11th Ave. Ste. 400, Seattle, WA, 98122-4271, for Respondent.

PUBLISHED OPINION

Pennell, J. ¶ 1 Electronically stored information is ubiquitous in contemporary law practice. When an attorney responds to a discovery request by sending electronically stored information to opposing counsel, care must be taken to avoid inadvertent disclosure of embedded information that might be subject to a claim of privilege. Nevertheless, if an inadvertent disclosure happens, the receiving attorney must take corrective action, including notifying the sender. Sanctions must be imposed if an attorney fails to take corrective action, with the most severe sanction being disqualification.

¶ 2 Counsel for Lloyd & Williams, LLC, and its members, Dewight Hall Jr. and Tod W. Wilmoth (collectively L & W), inadvertently disclosed information subject to a claim of privilege when it sent electronic discovery responses to opposing counsel that had been partially redacted but not scrubbed of embedded text. Instead of notifying counsel for L & W and sequestering the documents, opposing counsel cited portions of the embedded text in support of a summary judgment motion. This prompted L & W to move for opposing counsel's disqualification.

¶ 3 The failure of opposing counsel to take corrective action violated rules of civil procedure and professional conduct. Nevertheless, the trial court ruled disqualification was not an appropriate sanction because counsel's rule violations were not intentional. Having accepted discretionary review of this matter, we find no abuse of discretion in the trial court's choice of sanction. Accordingly, we affirm.

FACTS

¶ 4 Patty Hur is embroiled in a contract dispute with L & W. Responding to a discovery request, L & ’s lawyer, George Ahrend, sent more than 1,000 pages of e-mails to Ms. Hur's lawyer, Heidi Urness. The discovery was sent electronically and was accompanied by a notice stating privileged information had been redacted. Mr. Ahrend later explained he redacted the purportedly privileged e-mails by blacking out the substantive content, leaving the header information (i.e., date, sender, recipient, and subject) visible in lieu of a privilege log.¹

¶ 5 More than one year after receipt of the discovery responses, Ms. Hur moved for partial summary judgment. Attached to Ms. Hur's declaration in support of the motion were two exhibits taken from Mr. Ahrend's discovery materials. The exhibits are screenshots, and each image has a left-hand column and a right-hand column. The left-hand columns display the results of keyword searches. The search results are sentence fragments containing the search terms "Maggie" and "rent,"² accompanied by a denotation of how many "matches" had been found in the searched documents. Clerk's Papers (CP) at 71-74. Alongside each set of search results, in the images’ right-hand columns, appears a visual of e-mail headers followed by completely blacked out text.

¶ 6 Mr. Ahrend reviewed Ms. Hur's summary judgment submissions and recognized the e-mail fragments as content he had intended to redact. Upon further investigation, Mr. Ahrend discovered his attempt at redaction had been only partially successful. Although portions of the discovery had been blacked out, the metadata³ associated with the redacted portions had not been removed from the documents produced. As a result, the content of the blacked-out text was discoverable upon performing a word search of the document.

¶ 7 L&W moved to disqualify Ms. Urness from the case, alleging her receipt and retention of privileged materials violated ethical and discovery court rules. Ms. Urness denied any wrongdoing. She provided various explanations for her conduct, including assertions that she did not understand metadata and that she had received at least some of the information from a third party. Ms. Urness also argued the e-mails were not privileged and that they revealed L&W had engaged in its own ethical violations by withholding information and making misstatements to the court.⁴ Ms. Urness was adamant she had not tried to uncover privileged information, but had simply performed a word search of the discovery materials.

¶ 8 The superior court denied L&W's motion to disqualify Ms. Urness. The court opined that some of Ms. Urness's explanations were suspicious but credited Ms. Urness's assertion that she did not knowingly search through privileged material. Furthermore, the superior court acknowledged that disqualification is an extraordinary remedy, imposed only in extremely rare circumstances. The court fashioned alternate remedies: it ordered Ms. Urness to destroy the files, promised to banish the e-mail excerpts from the court's decision-making, and instructed the parties to not mention the excerpts again.

¶ 9 L&W sought discretionary review of the superior court's order denying its motion for disqualification. We accepted review.

ANALYSIS

¶ 10 Our review of the trial court's order denying disqualification involves two steps. First, we assess the nature and extent of the rule violations giving rise to the disqualification motion. This is a legal matter, reviewed de novo. In re Firestorm 1991 , 129 Wash.2d 130, 135, 916 P.2d 411 (1996). Second, if a violation is found, we assess whether disqualification is an appropriate remedy. We review the trial court's choice of remedy for abuse of discretion, keeping in mind that disqualification is a drastic sanction that should be limited to egregious violations. Id. at 140, 916 P.2d 411 ; Wash. State Physicians Ins. Exch. & Ass'n v. Fisons Corp. , 122 Wash.2d 299, 338, 355-56, 858 P.2d 1054 (1993).

1. The nature and extent of the rule violation

¶ 11 L&W alleges Ms. Urness's conduct violated two court rules governing the handling of discovery that is subject to a claim of privilege. The rules are as follows:

A lawyer who receives a document or electronically stored information relating to the representation of the lawyer's client and knows or reasonably should know that the document or electronically stored information was inadvertently sent shall promptly notify the sender.

RPC 4.4(b).

If information produced in discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; and must take reasonable steps to retrieve the information if the party disclosed it before being notified. Either party may promptly present the information in camera to the court for a determination of the claim. The producing party must preserve the information until the claim is resolved.

CR 26(b)(6).

¶ 12 Taken together, these rules require a recipient of inadvertently disclosed information subject to a claim of privilege to notify the sender and either return, sequester, or destroy the materials. Under CR 26(b)(6), the attorney can share the materials with the court in camera if privilege is disputed. But until the issue of privilege is resolved, the attorney should not disclose the materials to others, including the public by way of a nonconfidential court filing.

¶ 13 L&W contends Ms. Urness violated the foregoing rules by reading its privileged e-mails. This is incorrect. The rules do not prohibit a lawyer from reading inadvertently disclosed information that is subject to a claim of privilege. The only proscription is of the failure to take corrective action.

¶ 14 L & W also claims Ms. Urness somehow purposefully "looked behind the redactions" to view privileged materials. Pet'rs’ Opening Br. at 20. Had this occurred, it would have been a significant ethical breach. See Wash. State Bar Ass'n (WSBA) Rules of Prof'l Conduct Comm., Advisory Op. 2216 (2012). But the record does not support L & W's claim. When Mr. Ahrend's office produced the discovery responses, his staff advised Ms. Urness that information subject to a claim of privilege had been redacted. Proper redaction means taking reasonable steps to prevent disclosure of confidential metadata. See id. ; RPC 1.6(c). There is nothing improper or unreasonable in conducting a word search on materials containing redactions. Nor is it unethical to simply read the results of that word search. See WSBA Advisory Op. 2216 (noting that "[u]nder the ethical rules," a recipient of inadvertently sent metadata is "not required to refrain from reading the document, nor [are they] required to return the document" to the sender). Indeed, it is only by reading the materials, at least cursorily, that a recipient can be expected to discover in the first place that they were inadvertently sent privileged information.

¶ 15 While the rules did not forbid Ms. Urness from reading the e-mail excerpts, the record nevertheless indicates she violated RPC 4.4(b) and CR 26(b)(6). Upon reviewing L & W's discovery materials, Ms. Urness should have understood she was able to discover portions of e-mails that were supposed to have been redacted due to a claim of privilege. Ms. Urness may have disagreed with the claim of privilege, but this did not excuse her from taking corrective action. Upon discovering electronically stored information subject to a claim of privilege, Ms. Urness was required to notify Mr. Ahrend and either return, sequester, or destroy the materials in question. She should...