Fragile Contents: Dropping the Box Can Waive Privileges; Opening the Box Can Get You Sanctioned
Keith A. Call, J.
The Virginia federal district court just issued a decision that should make every litigator shiver. The court ruled that a seemingly innocent mistake when using a file sharing site waived the attorney-client privilege and work-product protection. At the same time, the court sanctioned the receiving party for the way it handled the now unprotected material. Harleysville Ins. Co. v. Holding Funeral Home, Inc., No. 1:15CV00057, 2017 WL 1041600, at *8 (W.D. Va. Feb. 9, 2017). This case provides a warning to all attorneys who handle electronically stored information (ESI).
When the Holding Funeral Home in Castlewood, Virginia, burned down, Harleysville Insurance Company suspected arson. Id. at *1. To further the investigation, a Harleysville agent sent a video of the fire to the National Insurance Crime Bureau (NICB). Id. It delivered the video by uploading it to a cloud storage and file sharing service operated by Box, Inc. (the Box Site). Id. On September 22, 2015, the Harleysville agent emailed a hyperlink to the video to an NICB investigator (the September 22 email), who was then able to view and download the video. Id. The Box Site was not password protected. Id.
Seven months later, a Harleysville agent used the same Box Site to transfer the entire claims file to its outside counsel. Id. at *2. A few weeks after that, lawyers for the Funeral Home issued a subpoena to NICB, requesting NICB’s entire file. Id. In response, NICB produced all documents it had received from Harleysville, including a copy of the September 22 email that contained the hyperlink to the Box Site. Funeral Home’s counsel checked out the hyperlink, which now contained Harleysville’s entire claims file. Id. Funeral Home’s counsel downloaded and reviewed the entire file without notifying Harleysville or its counsel. Id.
Harleysville’s counsel filed a motion to disqualify Funeral Home’s counsel. Id. The court ruled that Harleysville had waived any attorney-client privilege or work-product protection that had attached to the file. Id. The court reasoned that Harleysville had taken no precautions to prevent the unwanted disclosure. Id. at *3. Rather, Harleysville...