Viamedia, Inc. v. Comcast Corporation et al

Northern District of Illinois, ilnd-1:2016-cv-05486

MEMORANDUM by Viamedia, Inc. in Opposition to Sealed motion {{104}}, motion to compel {{111}}

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Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 1 of 21 PageID #:2111 UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION) VIAMEDIA, INC.,))) Case No. 1:16-cv-05486 Plaintiff,)) Hon. Amy St. Eve v.)) COMCAST CORPORATION, and) COMCAST SPOTLIGHT, LP,)) Defendants.)) MEMORANDUM OF LAW IN SUPPORT OF PLAINTIFF VIAMEDIA, INC.’S OPPOSITION TO DEFENDANTS’ MOTION TO COMPEL PLAINTIFF TO PRODUCE DOCUMENTS 1 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 2 of 21 PageID #:2112 TABLE OF CONTENTS TABLE OF AUTHORITIES......................................................................................................... iii FACTUAL AND PROCEDURAL BACKGROUND.................................................................... 2 ARGUMENT.................................................................................................................................. 7 I. Viamedia Did Not Waive the Attorney-Client Privilege or Work Product Protection by Disclosing Documents to Litigation Funders................................................................ 7 A. Comcast Has Failed To Show That Discovery of Communications with Litigation Funders Is Relevant and Proportional to the Needs of the Case............ 7 B. The Work Product Doctrine Protects All 51 Documents Shared With Litigation Funders................................................................................................... 7 C. Under the Common-Interest Doctrine, Disclosure of Privileged Documents to Litigation Funders Did Not Waive the Attorney-Client Privilege.......................... 9 D. Disclosure of Privileged Documents To Litigation Funders Did Not Waive the Attorney-Client Privilege Under the Agency Exception...................................... 10 E. Comcast’s Subject-Matter Waiver Claim Is Unprecedented and Untenable........ 11 II. Viamedia’s Inadvertent Production to DOJ Was Not a Waiver of any Privilege or Protection.......................................................................................................................... 11 A. Viamedia Did Not Intentionally Produce Privileged Documents to DOJ............ 11 B. Viamedia Took Reasonable Steps To Prevent Disclosure.................................... 13 C. Viamedia Took Prompt Steps To Rectify Its Inadvertent Production.................. 14 CONCLUSION............................................................................................................................. 15 ii Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 3 of 21 PageID #:2113 TABLE OF AUTHORITIES Cases Page(s) Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., No. 1:12-CV-296, 2013 WL 501735 (N.D. Ind. Feb. 8, 2013).................................................. 9 Carlyle Inv. Mgmt. LLC v. Moonmouth Co. S.A., C.A., No. 7841-VCP, 2015 WL 778846 (Del. Ch. Feb. 24, 2015)...................................................... 8 Coburn Grp., LLC v. Whitecap Advisors LLC, 640 F. Supp. 2d 1032 (N.D. Ill. 2009)................................................................................ 13, 14 Costello v. Poisella, 291 F.R.D. 224 (N.D. Ill. 2013)................................................................................................ 10 Devon IT, Inc. v. IBM Corp., CIV.A. No. 10-2899, 2012 WL 4748160 (E.D. Pa. Sept. 27, 2012)................................ 8, 9, 10 Doe v. Soc’y of Missionaries of Sacred Heart, No. 11-CV-02518, 2014 WL 1715376 (N.D. Ill. May 1, 2014)................................................. 8 EEOC v. Office Concepts, Inc., No. 1:14-cv-00290-RL-SLC, 2015 WL 9308268 (N.D. Ind. Dec. 22, 2015)..................... 14, 15 Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D. 204 (N.D. Ind. 1990).............................................................................................. 13 Graco Children’s Prod., Inc. v. Dressler, Goldsmith, Shore & Milnamow, Ltd., No. 95 C 1303, 1995 WL 360590 (N.D. Ill. June 14, 1995).................................................... 11 Heriot v. Byrne, 257 F.R.D. 645 (N.D. Ill. 2009)................................................................................................ 13 In re Int’l Oil Trading Co., LLC, 548 B.R. 825 (Bankr. S.D. Fla. 2016)......................................................................... 1, 8, 10, 11 Kmart Corp. v. Footstar, Inc., No. 09 C 3607, 2010 WL 4512337 (N.D. Ill. Nov. 2, 2010)............................................................................. 13 Ludwig v. Pilkington N. Am., Inc., No. 03 C 1086, 2004 WL 1898238 (N.D. Ill. Aug. 13, 2004)............................................................................. 9 Miller UK Ltd. v. Caterpillar Inc., 17 F. Supp. 3d 711 (N.D. Ill. 2014).................................................................................. 1, 8, 10 iii Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 4 of 21 PageID #:2114 Mondis Tech. Ltd. v. LG Elecs., Inc., Civil Action Nos. 2:07-CV-565-TJW-CE; 2:08-CV-478-TJW, 2011 WL 1714304 (E.D. Tex. May 4, 2011).............................................................................. 8 N. River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518 (MJL), 1995 WL 5792 (S.D.N.Y. Jan. 5, 1995)........................................... 10 Njenga v. San Mateo Cty. Superintendent of Schools, No. C-08-04019 EDL, 2010 WL 1261493 (N.D. Cal. Mar. 30, 2010)............................... 15, 16 One Place Condo. LLC v. Travelers Prop. Cas. Co. of Am., No. 11 C 2520, 2013 WL 788092 (N.D. Ill. Mar. 1, 2013)........................................................ 9 Patrick v. City of Chicago, 154 F. Supp. 3d 705 (N.D. Ill. 2015)........................................................................................ 11 Rembrandt Techs., L.P. v. Harris Corp., C.A. No. 07C-09-059-JRS, 2009 WL 402332 (Del. Super. Feb. 12, 2009)............................. 10 SCM Corp. v. Xerox Corp., 70 F.R.D. 508 (D. Conn. 1976)................................................................................................. 10 Sullivan v. Alcatel-Lucent USA, Inc., No. 12 C 7528, 2013 WL 2637936 (N.D. Ill. June 12, 2013).................................................... 8 United States v. Apex Oil Co., No. 05-CV-242-DRH, 2007 WL 4557827 (S.D. Ill. Dec. 21, 2007).................................. 14, 15 Valentin v. Bank of N.Y. Mellon Corp., No. 09 CV 09448(GBD), 2011 WL 2437644 (S.D.N.Y. May 31, 2011)................................. 15 Walker Digital, LLC v. Google Inc., Civ. No. 11-309-SLR, 2013 WL 9600775 (D. Del. Feb. 12, 2013)..................................... 9, 10 West v. Miller, No. 05C4977, 2006 WL 2349988 (N.D. Ill. Aug. 11, 2006)...................................................... 7 Rules Fed. R. Civ. P. 26(b)(1)................................................................................................................... 7 Fed. R. Civ. P. 26(b)(5)(i)............................................................................................................... 9 Fed. R. Evid. 502(b).................................................................................................... 12, 13, 14, 15 iv Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 5 of 21 PageID #:2115 Fed. R. Evid. 502(b)(3)................................................................................................................. 15 Other Authorities Claim Funders and Commercial Claim Holders: A Common Interest or a Common Problem?, 63 DePaul L. Rev. 305 (2014)................................................................................ 10 v Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 6 of 21 PageID #:2116 This motion is an unabashed effort by Defendants Comcast Corporation and Comcast Cable Communications Management, LLC (together, "Comcast") to obtain an unfair advantage in this litigation by intruding into Plaintiff Viamedia Inc.’s ("Viamedia") outside legal advice and confidential litigation strategy. Viamedia has not waived privilege as to any of the challenged documents – much less the broad subject-matter waiver Comcast claims. Although Comcast tries to blur the issues, it makes two separate and unpersuasive waiver arguments. First, in addition to the 360,000 documents Viamedia has produced, Comcast seeks production of 51 documents – and all other privileged documents on the same subject matter – on the ground that Viamedia waived the attorney-client privilege when it shared those documents with third-party finance companies. That argument is meritless, for five independent reasons. 1. At the threshold, Comcast has failed to show that discovery of Viamedia’s communications with prospective litigation funders is relevant and proportional to the needs of the case. Comcast’s discovery requests are intended merely to burden Viamedia and intrude into its litigation strategy. Any underlying documents shared with litigation funders are separately discoverable to the extent they are relevant, so there is no justification for duplicative discovery of communications with funders. 2. Federal and state courts across the country, including this Court in Miller UK Ltd. v. Caterpillar Inc., 17 F. Supp. 3d 711 (N.D. Ill. 2014), consistently have held that documents disclosed to litigation funders remain protected by the work-product doctrine. That legal principle – which Comcast does not dispute – is sufficient to resolve the privilege issue as to all of the documents that Comcast challenges. 3. If the Court addresses the attorney-client privilege, the weight of authority holds that disclosure of privileged material to litigation funders is covered by the common-interest doctrine. The Court should not follow Miller’s minority position that the common-interest doctrine does not apply (even though the work-product doctrine does apply). 4. Disclosure of documents to prospective litigation funders also did not waive the attorney-client privilege under the agency exception to waiver. See In re Int’l Oil Trading Co., LLC 548 B.R. 825, 833-35 (Bankr. S.D. Fla. 2016). 5. In all events, there is no basis to find a subject-matter waiver under these circumstances. Waiver of that breadth generally applies only where a party picks and chooses which material to disclose to gain a strategic advantage in a litigation. Litigation financing generally, and this case in particular, presents no such concern. 1 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 7 of 21 PageID #:2117 Second, Comcast contends that Viamedia waived the attorney-client privilege as to 432 documents – but not the subject-matter of those documents – when it produced them to the U.S. Department of Justice ("DOJ") prior to this lawsuit. Comcast’s repeated claim that Viamedia intentionally provided privileged materials to DOJ to fuel its ongoing investigation of Comcast is flatly untrue. As explained below, and in the accompanying affidavit of Viamedia’s outside counsel, Thomas Reilly, Esq., Viamedia produced these documents in response to compulsory civil investigative demands ("CID"), and the inclusion of privileged material was inadvertent, not intentional. Those documents comprise a tiny fraction of Viamedia’s production of more than four million pages; Viamedia took ample precautions to prevent the production of privileged information; and it promptly investigated the matter and clawed back the challenged documents when Comcast’s counsel identified privileged documents in Viamedia’s production. Discovery is meant to be a search for admissible evidence, and Comcast’s motion does nothing to achieve that fundamental goal. Rather, it is a defense ploy designed to swamp Viamedia with additional litigation costs (on top of those that led Viamedia to seek outside financial assistance in the first place), to intrude into Viamedia’s preparation of its case, and to distract from Comcast’s own conduct, which is the proper focus of this litigation. Comcast’s discovery requests of Viamedia are just the tip of the iceberg: Comcast has also served Rule 45 subpoenas on all three litigation funders demanding extremely broad production of documents. This Court should see Comcast’s tactics for what they are and deny its motion to compel. FACTUAL AND PROCEDURAL BACKGROUND A. Viamedia approached three prospective litigation funders (Therium, Longford, and Burford Capital) in mid-2015, while it was actively contemplating litigation against Comcast. Ex. A (Decl. of T. Reilly), ¶ 4. As a condition of Viamedia’s sharing information, each funder 2 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 8 of 21 PageID #:2118 entered into a nondisclosure agreement ("NDA") that precludes it from disclosing confidential information to other unrelated parties. Id. ¶ 5. The documents Viamedia provided to them and an existing lender, PNC Bank, NA, with which Viamedia also had an NDA, see id. ¶ 37, include documents that reflect its attorneys’ legal advice and/or the thoughts and mental impressions of Viamedia and its attorneys about the case. See Decl. of D. Toscano, Ex. S, ECF No. 107-19. Of the 51 documents at issue, Viamedia initially asserted only attorney-client privilege as to 19 documents. Following the parties’ meet-and-confer, Viamedia amended its logs to assert work product as to 17 of those 19 documents. See id. Exs. Q & S, ECF Nos. 107-17, 107-19. The remaining two documents (entries 4508 and 4509) are not separate documents as such, but rather attachments to an email as to which Viamedia did assert work-product protection in its privilege log (at entry 4507). Viamedia’s position is that all 51 documents at issue are protected by the attorney-client privilege and work-product doctrine. B. In November 2015, Viamedia received a compulsory CID from the U.S. Department of Justice Antitrust Division demanding Viamedia to produce documents and information in response to 20 far-reaching topics. See Ex. B (CID) at 1-5. The DOJ’s CID required Viamedia to review over nine million documents for responsiveness and privilege, and produce them on a rolling basis. Ex. A (Decl. of T. Reilly), ¶ 11. To comply with the CID, Viamedia – a small company with no in-house litigation department – employed a multi-step process. First, Viamedia engaged a third-party discovery vendor to run electronic searches through its document collections. Id. ¶ 12. Viamedia’s litigation counsel (at the time, Mayer Brown LLP) crafted search terms to identify document custodians and capture responsive documents. Id. ¶ 13. Those searches left over 600,000 documents for further review. Id. ¶ 14. 3 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 9 of 21 PageID #:2119 Second, Viamedia engaged a team of contract attorneys to perform first-level review of the post-search collection under the supervision of Viamedia’s litigation counsel (Mayer Brown). Id. ¶ 15. Viamedia decided to incur the costs of extensive human review in part to avoid inadvertently producing privileged documents. Id. ¶ 16. Viamedia’s counsel created two lists of privilege terms: one identified counsel and law firms engaged by Viamedia, and the second set identified general terms likely to appear in privileged documents. Id. ¶ 17. Viamedia’s third-party vendor then took steps to ensure that those names and terms were highlighted on each document on which they appeared to facilitate the privilege review process. Id. Documents identified as potentially privileged were collected and reviewed specifically for privilege. Id. To guide the contract-attorney review, Viamedia’s litigation counsel trained the reviewers and created a thorough guidance protocol. Id. ¶ 19. That protocol, among other things, instructed reviewers to elevate to Viamedia’s litigation counsel any questions about potentially privileged documents. Id. ¶ 20. The reviewers then reviewed all documents – both those identified as privileged by the electronic searches and those marked for production – for privilege. Id. ¶ 21. After the first-level review process was complete, senior contract attorney staff conducted a quality control review. Id. ¶ 22. Third, Viamedia’s litigation counsel performed a final quality control review and prepared a privilege log for production to DOJ. Id. ¶ 23. On June 9, 2016, Viamedia produced over 360,000 documents spanning over four million pages to DOJ, together with a privilege log identifying 5,795 privileged documents withheld from production. Id. at ¶ 24. After Viamedia filed this case, the Court ordered the parties to exchange the relevant portions of their productions to DOJ, and Viamedia did so on December 5, 2016. ECF No. 38; ECF No. 55 (Stipulated Order Re: Discovery of Electronically Stored Information ("ESI")) at 1 4 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 10 of 21 PageID #:2120 n.1. In its cover letter, Viamedia noted that "any production of privileged or otherwise protected documents in this DOJ Production is inadvertent and not intended as a waiver of any such protections." Ex. C (Dec. 5, 2016, Letter from M. Provance to D. Toscano) at 1. On January 27, 2017, Comcast notified Viamedia that it had identified 54 documents from Viamedia’s DOJ production that may be privileged. Ex. D (Jan. 27, 2017, Letter from A. Burke to B. Miller). Comcast also stated that, "[p]ending [Viamedia’s] response, we have ceased further review of the documents." Id. Comcast’s January 27, 2017, letter was the first indication Viamedia had that any privileged document had been inadvertently produced to DOJ or to Comcast. Ex. A (Decl. of T. Reilly), ¶¶ 26-27. Three days later, Comcast notified Viamedia that it had identified 90 additional documents that may be privileged in Viamedia’s DOJ production, and that it had "ceased further review of the documents" pending Viamedia’s response. Ex. E (Jan. 30, 2017, Letter from A. Burke to B. Miller). Immediately upon receiving Comcast’s letters, Viamedia’s litigation counsel (Mayer Brown) began a comprehensive review of not only the documents Comcast had identified, but also its entire DOJ production. Ex. A (Decl. of T. Reilly), ¶ 29. Mayer Brown attorneys developed keyword searches to identify other potentially privileged documents in its production. Id. ¶ 30. Counsel then reviewed each of the 2,000 resulting documents, and determined that the documents Comcast had identified, as well as several hundred additional documents, were privileged and had been inadvertently produced. 1 Id. ¶¶ 30-31. Viamedia completed its review by February 7, 2017, and promptly notified both Comcast and DOJ that it had inadvertently 1 Viamedia initially identified 920 total privileged documents. Through the meet-and-confer process, Viamedia narrowed its privilege assertion to 432 documents based on Comcast’s agreement that, in doing so, Viamedia had not waived any privilege over any subject matter. Ex. A (Decl. of T. Reilly), ¶ 34. 5 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 11 of 21 PageID #:2121 produced privileged material, and identified those documents by Bates number. Id. ¶¶ 32-33; Ex. F (Feb. 7, 2017, Letter from M. Provance to A. Burke); Ex. G (Feb. 9, 2017, Letter from T. Reilly to C. Willner). Viamedia also produced – to both DOJ and Comcast – a supplemental privilege log including those documents. Ex. A (Decl. of T. Reilly), ¶ 35. The Agreed Confidentiality Order in this case provides that once the producing party notifies the receiving party that it has inadvertently produced privileged documents, the receiving party has five business days to move to compel. See ECF No. 44, ¶ 15(c). If it does not do so within that time, then the receiving party must "(i) return or destroy all copies of the Disclosed Protected Information, and (ii) provide a certification of counsel that all of the Disclosed Protected Information has been returned or destroyed." Id. ¶ 15(b). Despite Viamedia’s notification that it had inadvertently produced privileged documents, Comcast refused to return or destroy those documents as required by the protective order. Instead, Comcast contended that Viamedia wanted DOJ to investigate Comcast, and thus either intentionally produced these privileged materials to DOJ in response to a compulsory CID or "did not exercise reasonable care." Ex. H (Apr. 13, 2017, Letter from D. Toscano to K. Fetterman) at 3-4. In an effort to resolve this dispute, the parties agreed to extend Comcast’s time to file a motion to compel to "10 days following impasse (as acknowledged by both parties)." Ex. I (Mar. 14, 2017, Email from C. Lynch to M. Provance). After several efforts to resolve the issue, the parties reached impasse by April 28, 2017. Ex. J (Apr. 28, 2017, Letter from K. Fetterman to C. Lynch) at 2. Comcast’s window to move to compel production of the inadvertently produced DOJ documents opened on April 28, when Viamedia memorialized the parties’ impasse, and closed on May 8. So on May 9, Viamedia requested that Comcast confirm it would return or destroy the inadvertently produced privileged 6 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 12 of 21 PageID #:2122 documents as required by the Agreed Confidentiality Order. Ex. K (May 9, 2017, Letter from K. Fetterman to D. Toscano). Despite not having changed its position on this issue for several weeks, Comcast claimed that the parties had only "now" reached impasse. Ex. L (May 9, 2017, Email from D. Toscano to K. Fetterman). ARGUMENT I. Viamedia Did Not Waive the Attorney-Client Privilege or Work Product Protection by Disclosing Documents to Litigation Funders A. Comcast Has Failed To Show That Discovery of Communications with Litigation Funders Is Relevant and Proportional to the Needs of the Case Before reaching the issue of privilege, Comcast must show that discovery of Viamedia’s communications with prospective litigation funders is relevant and proportional to the needs of the case. See Fed. R. Civ. P. 26(b)(1); West v. Miller, No. 05C4977, 2006 WL 2349988, at *2 (N.D. Ill. Aug. 11, 2006) (proponent of discovery bears burden). Comcast has not attempted to make that showing, and it cannot. Comcast’s discovery requests are an attempt to make discovery more expensive and burdensome for Viamedia, without any prospect of shedding light on the merits of Viamedia’s antitrust claims or any conceivable defense. This case is about Comcast’s business conduct, not Viamedia’s efforts to fund its litigation. Discovery of materials Viamedia shared with litigation funders is not proportional to the needs of the case because it is duplicative of discovery of the underlying information that was shared. The Court should nip Comcast’s burdensome and disproportionate fishing expedition – which also includes Rule 45 subpoenas that Comcast has also served on the funders themselves, see Ex. M – in the bud. B. The Work Product Doctrine Protects All 51 Documents Shared With Litigation Funders All 51 documents are protected by the work product doctrine because they were "prepared in anticipation of an'articulable claim’ of litigation." Sullivan v. Alcatel-Lucent USA, 7 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 13 of 21 PageID #:2123 Inc., No. 12 C 7528, 2013 WL 2637936, at *10 (N.D. Ill. June 12, 2013) (citation omitted). Comcast does not dispute that litigation funding communications are protected work product, and federal and state courts consistently have reaffirmed that principle. See In re Int’l Oil, 548 B.R. at 835-39; Miller UK, 17 F. Supp. 3d at 738; Doe v. Soc’y of Missionaries of Sacred Heart, No. 11-CV-02518, 2014 WL 1715376, at *4 (N.D. Ill. May 1, 2014); Devon IT, Inc. v. IBM Corp., CIV.A. No. 10-2899, 2012 WL 4748160, at *1 n.1 (E.D. Pa. Sept. 27, 2012); Mondis Tech. Ltd. v. LG Elecs., Inc., Civil Action Nos. 2:07-CV-565-TJW-CE; 2:08-CV-478-TJW, 2011 WL 1714304, at *3 (E.D. Tex. May 4, 2011); Carlyle Inv. Mgmt. LLC v. Moonmouth Co. S.A., C.A. No. 7841-VCP, 2015 WL 778846, at *9 (Del. Ch. Feb. 24, 2015) (citations omitted). 2 Comcast’s responses are unpersuasive. First, Comcast speculates that certain documents were prepared in anticipation of litigation by the DOJ rather than litigation by Viamedia. That argument rests on a misinterpretation of Viamedia’s privilege log. Those documents relate to a legal memorandum that Mayer Brown provided to Viamedia regarding Viamedia’s potential claims against Comcast, not potential DOJ claims. See Decl. of D. Toscano, Ex. S. Viamedia has not waived the work-product protection by amending its privilege logs. Rule 26(b)(5)(i) does not include a deadline for asserting privilege. See One Place Condo. LLC v. Travelers Prop. Cas. Co. of Am., No. 11 C 2520, 2013 WL 788092, at *1 & n.2 (N.D. Ill. Mar. 1, 2013) (rejecting the argument that amendments made to a privilege log to provide "a more detailed description of each of the documents at issue" should be disregarded as untimely; amendments made after motion to compel was filed); Ludwig v. Pilkington N. Am., Inc., No. 03 2 Comcast’s quibbles (at 6) with the NDAs’ confidentiality provisions are beside the point. The relevant question is whether Viamedia, by disclosing these documents to a potential litigation funder pursuant to an NDA, substantially increased the likelihood that Comcast would receive the documents. Comcast makes no effort to show as much, and it cannot. 8 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 14 of 21 PageID #:2124 C 1086, 2004 WL 1898238, at *1 (N.D. Ill. Aug. 13, 2004) (inadvertent mislabeling of documents did not waive work product). Comcast has made no effort to show any prejudice that might justify the "serious and harsh sanction" of finding waiver. Advanced Tactical Ordnance Sys., LLC v. Real Action Paintball, Inc., No. 1:12-CV-296, 2013 WL 501735, at *1 (N.D. Ind. Feb. 8, 2013) (rejecting waiver). This Court should be guided by the proper application of the law – which uniformly supports the application of the work-product doctrine to all 51 documents – and it should not indulge Comcast’s efforts to use the Federal Rules to set technical traps. C. Under the Common-Interest Doctrine, Disclosure of Privileged Documents to Litigation Funders Did Not Waive the Attorney-Client Privilege All 51 documents are also privileged under the common-interest doctrine. As the majority of courts have held, the common-interest doctrine brings litigation funders within the attorney-client privilege because party and funder hold "a shared common interest in litigation strategy" and are engaged in "actual cooperation toward a common legal goal." Devon IT, 2012 WL 4748160, at *1 n.1; see In re Int’l Oil, 548 B.R. at 832; Walker Digital, LLC v. Google Inc., Civ. No. 11-309-SLR, 2013 WL 9600775 (D. Del. Feb. 12, 2013); Rembrandt Techs., L.P. v. Harris Corp., C.A. No. 07C-09-059-JRS, 2009 WL 402332, at *7-8 (Del. Super. Feb. 12, 2009). In an analogous case also involving Burford, one of the potential litigation funders here, the court concluded that the common-interest doctrine applied: "[Plaintiff’s] disclosures to Burford were necessary to obtain informed legal advice.... [Plaintiff], his counsel, and Burford did not intend to disclose their communications to third parties. The information exchanged between the parties was for the limited purpose of assisting in their common cause, which was to propound litigation [against the defendant]." In re Int’l Oil, 548 B.R. at 832. So, too, here. And the same 9 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 15 of 21 PageID #:2125 analysis applies to PNC Bank: As Comcast says (at 11), "Viamedia provided" it "with privileged information in connection with the bank’s role in a litigation funding transaction." This Court should decline to follow Miller UK’s contrary holding, which other courts have also found unpersuasive. See id. at 831-33 (following Devon IT and Walker rather than Miller UK). Miller UK reasoned that the funder’s commercial motives mean that the parties lack a common legal interest. But a common legal interest does not require a common interest as co-litigants, just a common interest in the litigation. See Costello v. Poisella, 291 F.R.D. 224, 231-32 (N.D. Ill. 2013). That is why the doctrine covers liability insurers, see, e.g., N. River Ins. Co. v. Columbia Cas. Co., No. 90 Civ. 2518 (MJL), 1995 WL 5792, at *4 (S.D.N.Y. Jan. 5, 1995), and other parties with common business interests in litigation, see, e.g., SCM Corp. v. Xerox Corp., 70 F.R.D. 508, 514 (D. Conn. 1976) (parties that "shared a [common] business interest in the successful exploitation of certain patents"). See Michele DeStefano, Claim Funders and Commercial Claim Holders: A Common Interest or a Common Problem?, 63 DePaul L. Rev. 305, 349-351 & n.206 (2014) (citing additional cases). D. Disclosure of Privileged Documents To Litigation Funders Did Not Waive the Attorney-Client Privilege Under the Agency Exception Litigation funders also fall within the agency exception to privilege waiver, which permits a party to disclose privileged information to "professionals with whom communication may be necessary for the provision of legal advice." 548 B.R. at 834. "Litigation funders fall in this category." Id. "Communications with a litigation funder fall within the agency exception for the very reason that litigation funders exist – because without litigation funders, parties owed money, or otherwise stymied by deep-pocketed [defendants], might have reduced or no ability to pursue their claims." Id. at 835. "Absent the ability to communicate with funders without 10 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 16 of 21 PageID #:2126 waiving privilege, potential plaintiffs... might be'handcuffed.’" Id. The court in In re International Oil Trading Co. held "that all communications among Burford, [plaintiff], and his counsel are protected from discovery as they are subject to the attorney-client privilege as a result of the agency exception." Id. This Court should also so hold. E. Comcast’s Subject-Matter Waiver Claim Is Unprecedented and Untenable Not a single one of Comcast’s cases (at 10-13 & n.8) holds that a litigant waives attorney-client privilege as to the subject matter of every document shared with a funder. For good reason: "subject matter waiver generally occurs only where the party holding the privilege seeks to gain some strategic advantage by disclosing favorable, privileged information, while holding back that which is unfavorable." Patrick v. City of Chicago, 154 F. Supp. 3d 705, 715-16 (N.D. Ill. 2015); Graco Children’s Prod., Inc. v. Dressler, Goldsmith, Shore & Milnamow, Ltd., No. 95 C 1303, 1995 WL 360590, at *9 (N.D. Ill. June 14, 1995) ("Because there is no evidence that [the producing parties] sought to gain tactical advantage, their document production does not constitute a subject matter waiver."). The classic case is where a party selectively discloses privileged material in litigation, and then seeks to shield other privileged material on the same subject. But nothing like that has occurred here. Viamedia does not seek to use any privileged material; it seeks the return of all inadvertently produced documents. II. Viamedia’s Inadvertent Production to DOJ Was Not a Waiver of any Privilege or Protection A. Viamedia Did Not Intentionally Produce Privileged Documents to DOJ Under FRE 502(b), disclosure of privileged material "in a federal proceeding or to a federal office or agency... does not operate as a waiver" if the disclosure was "inadvertent," the producing party "took reasonable steps to prevent disclosure," and the party "promptly took 11 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 17 of 21 PageID #:2127 reasonable steps to rectify the error." Fed. R. Evid. 502(b). The circumstances here show that Viamedia’s production of privileged materials to DOJ was inadvertent, not intentional. First, the context of Viamedia’s production to DOJ – in response to a compulsory CID – is critical. Comcast’s argument (at 13) that Viamedia "voluntarily provid[ed] information to the DOJ" as part of "an extended lobbying campaign" is simply inaccurate. It is true that Viamedia has long contended that Comcast engaged in unlawful conduct—after all, that is why Viamedia brought this lawsuit. And Viamedia has never disputed that it met with DOJ regarding Comcast’s anticompetitive conduct prior to bringing this action. But Viamedia did not disclose to DOJ at that time any of the documents at issue here. Instead, Viamedia inadvertently produced the documents at issue only in response to a mandatory document request, and only after conducting a months-long, expensive review process. Ex. B (CID); Ex. A (Decl. of T. Reilly), ¶¶ 9-24. There is simply no basis for Comcast’s suggestion that Viamedia deliberately produced privileged material to the DOJ. Second, the volume of documents Viamedia reviewed was enormous by any standard. The CID’s 20 broad topics required Viamedia to cull a universe of more than nine million potentially responsive documents down to its final production of more than 360,000. Ex. B (CID) at 3-5; Ex. A (Decl. of T. Reilly), ¶¶ 11, 14. "Where discovery is extensive, mistakes are inevitable and claims of inadvertence are properly honored so long as appropriate precautions are taken." Coburn Grp., LLC v. Whitecap Advisors LLC, 640 F. Supp. 2d 1032, 1039 (N.D. Ill. 2009). The volume of documents here dwarfs what courts have considered large under that standard. See, e.g., Kmart Corp. v. Footstar, Inc., No. 09 C 3607, 2010 WL 4512337, at *4 (N.D. Ill. Nov. 2, 2010) ("close to 4,500 pages of documents"); Coburn, 640 F. Supp. 2d at 1039 (72,000 pages reviewed and 40,000 pages produced); Heriot v. Byrne, 257 F.R.D. 645, 659-60 12 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 18 of 21 PageID #:2128 (N.D. Ill. 2009) (collecting cases involving "large" productions between 7,864 and 25,000 documents). Indeed, Comcast’s only case, Golden Valley Microwave Foods, Inc. v. Weaver Popcorn Co., 132 F.R.D. 204 (N.D. Ind. 1990), found production of privileged material "truly inadvertent" largely because the producing party’s examination of 90,000 documents and production of 14,000 documents "involv[ed] tremendous... discovery efforts." Id. at 207. Third, the 432 inadvertently produced documents make up a tiny fraction of Viamedia’s 360,000-document production. See Heriot, 257 F.R.D. at 659 ("the broader the scope of discovery, the more extensive a party’s disclosure of confidential materials may be without waiving the privilege"). Comcast argues (at 14) that Viamedia’s "description [of its review process] implies that contract attorneys made deliberate privilege determinations – only to be second-guessed by different counsel." Again, that is inaccurate; there was no "conscious decision" to produce privileged material. Ex. A (Decl. of T. Reilly), ¶¶ 16-24. B. Viamedia Took Reasonable Steps To Prevent Disclosure Viamedia’s review process to avoid disclosing privileged documents to DOJ readily satisfies Rule 502(b)’s "reasonable steps" requirement. Fed. R. Evid. 502(b). Viamedia’s counsel designed, supervised, and engaged in a comprehensive privilege review. Ex. A (Decl. of T. Reilly), ¶ 12-23. That months-long review process involved electronic searches specifically targeted at identifying privileged materials, extensive contract-attorney review under the supervision of Viamedia’s counsel, and direct counsel review. Id. Given the scope of the CID and the enormous universe of potentially responsive documents, Viamedia’s use of electronic searches, contract attorneys, and counsel review was eminently reasonable. Indeed, the process approved as "reasonable" in Coburn is substantially the same as the one here, and the Court 13 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 19 of 21 PageID #:2129 should reach the same result. 640 F. Supp. 2d at 1039 (two paralegals conducted first-level review, supervised by litigation counsel who answered privilege questions). Comcast’s argument boils down to the contention that Viamedia’s procedures were not reasonable because they were not perfect. But if that were so, "Rule 502(b) would have no purpose; the starting point of the Rule 502(b) analysis is that a privileged or protected document was, in fact, turned over." Id. at 1040. Nor does the fact that certain documents referred to the names of Viamedia’s counsel show that the process was unreasonable, because mistaken production of documents containing lawyers’ names is common in electronic discovery. See, e.g., United States v. Apex Oil Co., No. 05-CV-242-DRH, 2007 WL 4557827, at *1-4 (S.D. Ill. Dec. 21, 2007) (involving facially privileged document labeled "ENFORCEMENT CONFIDENTIAL NOT SUBJECT TO DISCOVERY"). Comcast’s only case on this point (at 14) reinforces the reasonableness of Viamedia’s efforts. In EEOC v. Office Concepts, Inc., No. 1:14-cv-00290-RL-SLC, 2015 WL 9308268 (N.D. Ind. Dec. 22, 2015), the producing party’s counsel "did not review the emails prior to producing them." Id. at *4 (emphasis added). Rather, counsel simply asked the party itself "to ensure that no attorney-client privilege[d] communications were included in the production." Id. And on top of deputizing the non-attorney party staff to conduct the privilege review, counsel for the producing party "fail[ed] to prepare and produce a privilege log to the EEOC until months after the production." Id. Those facts are nothing like the facts here. C. Viamedia Took Prompt Steps To Rectify Its Inadvertent Production Comcast does not dispute that Viamedia "promptly took reasonable steps to rectify the error." Fed. R. Evid. 502(b)(3). Comcast’s letters on January 27 and January 30, 2017, were the first indications Viamedia received that it had inadvertently produced privileged materials. Ex. 14 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 20 of 21 PageID #:2130 A (Decl. of T. Reilly), ¶¶ 26-30. The advisory committee anticipated and blessed that very situation: "The rule does not require the producing party to engage in a post-production review to determine whether any protected communication or information has been produced by mistake." Fed. R. Evid. 502(b), advisory committee’s note. Once on notice, Viamedia’s counsel immediately reviewed the documents Comcast had identified, ran searches for and reviewed thousands of additional potentially privileged documents, and then notified Comcast that it was clawing back the identified documents. Ex. A (Decl. of T. Reilly), ¶¶ 29-31; Ex. F (Feb. 7, 2017, Letter from M. Provance to A. Burke); Ex. G (Feb. 9, 2017, Letter from T. Reilly to C. Willner). In light of the scope of Viamedia’s production and Comcast’s express indication that it had already sequestered the privileged documents it had identified, Ex. D (Jan. 27, 2017, Letter from A. Burke to B. Miller); Ex. E (Jan. 30, 2017, Letter from A. Burke to B. Miller), Viamedia’s attempt to rectify its error was both "prompt" and "reasonable." See, e.g., Valentin v. Bank of N.Y. Mellon Corp., No. 09 CV 09448(GBD), 2011 WL 2437644, at *1 (S.D.N.Y. May 31, 2011) (producing party promptly took reasonable steps to rectify the disclosure by petitioning the court for relief within a week from the time they understood the privileged nature of the disclosed documents); Njenga v. San Mateo Cty. Superintendent of Schools, No. C-08-04019 EDL, 2010 WL 1261493, at *17 n.2 (N.D. Cal. Mar. 30, 2010) (same). CONCLUSION For the foregoing reasons, the Court should deny Comcast’s motion and order Comcast to comply with the protective order, to destroy or return Viamedia’s inadvertently produced documents, and to certify that it has done so. 15 Case: 1:16-cv-05486 Document #: 117 Filed: 05/17/17 Page 21 of 21 PageID #:2131 Dated: May 17, 2017 Respectfully submitted,/s/Richard J. Prendergast Richard J. Prendergast Michael T. Layden Collin M. Bruck RICHARD J. PRENDERGAST, LTD. 111 W. Washington Street, Suite 1100 Chicago, Illinois 60602 (312) 641-0881 rprendergast@rjpltd.com mlayden@rjpltd.com cbruck@rjpltd.com James M. Webster (pro hac vice) Aaron M. Panner (pro hac vice) Derek T. Ho (pro hac vice) Kenneth M. Fetterman (pro hac vice) KELLOGG, HANSEN, TODD, FIGEL & FREDERICK, P.L.L.C. 1615 M Street, N.W., Suite 400 Washington, D.C. 20036 (202) 326-7900 jwebster@kellogghansen.com apanner@kellogghansen.com kfetterman@kellogghansen.com dho@kellogghansen.com Counsel for Plaintiff Viamedia, Inc.