Burch & Cracchiolo, P.A. v. The Honorable Robert D. Myers, __Ariz. Adv. Rep. ___ No. 1 CA-SA 15-0013 (App. Div. I, June 4, 2015) (J. Jones)

ATTORNEY CLIENT PRIVILEGE NOT WAIVED REGARDING INADVERTENTLY DISCLOSED DOCUMENTS BY VIRTUE OF PARTY BRINGING MOTION TO DISQUALIFY ATTORNEY INADVERTENTLY RECEIVING DOCUMENTS

Petitioner brought an action against the real party in interest [Bradford] seeking the establishment of a guardianship. During the course of the litigation Bradford's an attorney who had represented Bradford in an earlier conservatorship proceeding produced documents to petitioners in response to a subpoena duces tecum, mistakenly thinking petitioner was undertaking to represent Bradford. Once this error was discovered, petitioner was informed of the inadvertent disclosure and that certain documents produced were protected by the attorney client privilege.  Petitioners thereafter disclosed all the documents to other parties in the lawsuit. and Bradford then filed a motion to disqualify petitioners as counsel in the case submitting the claimed privileged documents in camera in support of the motion. The trial court granted this motion and the petitioner than brought this special action. The Arizona Court of Appeals accepted jurisdiction and denied petitioner the relief sought.

Arizona Rule of Civil Procedure 26.1(f)(2) provides that when a party is notified that privileged documents have inadvertently been disclosed to it, it “must promptly  return,  sequester,  or  destroy  the  specified  information  and  any copies  it  has  made  and  may  not  use  or  disclose  the  information until the claim is resolved.”  Similarly,  Ariz.  R.  Sup.  Ct.  ER  4.4.  provides, the party must “promptly notify the sender and preserve the status quo for a reasonable period of time in order to permit the sender to take  protective  measures.”

In order to determine if there has been an implied waiver of the attorney client privilege the court examines

(1) [whether  the] assertion  of  the  privilege  was  a  result  of some affirmative act, such as filing suit, by the asserting party;

(2) [whether] through this affirmative act, the asserting party put the protected information at issue by making it relevant to the case;  and 

(3) [whether] application  of  the  privilege would have denied the opposing party access to information vital to his defense.

The court of appeals found that reliance upon privileged documents in support of a motion to disqualify counsel for violation of Rule 26.1(f) does not place the documents at issue in the case and does not constitute an implied waiver. In deciding the motion itself the court must evaluate

(1)  whether  the  motion  is  being  made  for  the  purposes  of harassing the [opposing party],

(2) whether the party bringing the motion will be damaged in some way if the motion is not granted,

(3) whether there are any alternative solutions, or is the proposed solution the least damaging possible under the circumstances,  and 

(4)  whether  the  possibility  of  public suspicion will outweigh any benefits that might accrue due to continued representation.

In conclusion the court of appeals found that when faced

with  a  motion  to  disqualify premised upon the  abuse of privileged information disclosed Inadvertently, the trial court must:

(1) determine whether the documents at issue  are  in  fact privileged;

                (2) determine  whether  the  receiving  party exercised  an  unfair  advantage  over  the  documents,  such  as  reviewing, copying, or distributing them in violation of Rule 26.1(f)(2) and ER 4.4(b); and

(3) review the privileged information objectively, in light of the context of  the  case, to  determine  whether  the  receiving  party  possibly  gained  an unfair   tactical   advantage   over   the   moving   party.   

In   reviewing   the information, the  court may consider certain  mitigating  factors,  such  as whether the privilege d information might have already been known by the receiving party, [a]nd because

disqualification  motions  are  disfavored, the trial  court  should  always consider alternative  solutions  that  will  adequately  address  the  purported  harm. (Citations omitted).