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CIBA-GEIGY CORP. v. SANDOZ LTD.

December 28, 1995

CIBA-GEIGY CORPORATION, Plaintiff,
v.
SANDOZ LTD., et al., Defendants.



The opinion of the court was delivered by: WOLFSON

 WOLFSON, UNITED STATES MAGISTRATE JUDGE

 Presently before the Court is the motion by defendants Sandoz Ltd., Sandoz Corporation, Sandoz Pharmaceuticals Corporation, and Sandoz Chemicals ("Sandoz"), seeking a Protective Order compelling plaintiff to return copies of a privileged document which defendants maintain they inadvertently disclosed. The Court has received moving, opposition, reply and sur-reply briefs. This matter is being considered pursuant to Fed. R. Civ. P. 78. For the following reasons, the Court will deny defendants' motion on the grounds that defendants have failed to establish that they inadvertently produced copies of the document. Accordingly, the Court rules that defendants waived the attorney-client privilege with respect to the document.

 Procedural History

 On October 23, 1992, plaintiff filed the complaint in this action against the Sandoz defendants. Plaintiff's complaint seeks relief under the Comprehensive Environmental Response Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Action of 1986 (42 U.S.C. §§ 9601-75), the New Jersey Spill Compensation and Control Act (N.J. Stat. Ann. § 58:10-23.11 through 58:10-23.11z), the New Jersey Joint Tortfeasors Contribution Law (N.J. Stat. Ann. § 2A:53A-A, et seq.), and other common law principles, for costs incurred or to be incurred by plaintiff in cleaning up hazardous waste at its Toms River, New Jersey plant, formerly the Toms River Chemical Company ("TRC"). *fn1" Plaintiff's Complaint at P 1. Plaintiff alleges that, until November, 1981, plaintiff and defendants operated the TRC as a joint venture, and that, during this period, the TRC's waste disposal and/or waste treatment practices resulted in the contamination of the plant. Plaintiff's Complaint at P 2. The United States subsequently demanded that plaintiff clean-up the plant. Plaintiff's Complaint at P 2. Plaintiff avers that, because defendants failed to contribute to any of the clean-up costs, plaintiff has borne the full financial burden of the cleanup, which, at the time of the filing of the complaint, exceeded $ 55 million. Plaintiff's Complaint at P 7.

 On December 16, 1994, plaintiff filed a second amended complaint, which added a count alleging that plaintiff and defendants had participated in a joint venture, and that, as joint venturers, defendants were liable to plaintiff for some or all of the response costs incurred in connection with the clean-up. See Plaintiff's Second Amended Complaint at PP 73-79.

 Plaintiff's Complaint at P 1.

 On August 31, 1995, defendants moved to dismiss the joint venture count added by the second amended complaint on the grounds that the alleged joint venture agreement failed to satisfy the statute of frauds and that the joint venture agreement had been integrated into other contracts. See Defendants' Memorandum Of Law In Support Of Their Motion To Dismiss Count Three of Plaintiff's Second Amended Complaint at 21-26.

 The Protective Order

 On April 5, 1994, this Court made several rulings regarding the provisions to be contained in the parties' proposed Protective Order. With respect to the inclusion of an inadvertent disclosure provision, the Court rejected the so-called "blanket" inadvertent disclosure clause advocated by plaintiff's counsel, and insisted that any such provision would not excuse the parties from conducting a privilege review prior to the production of documents, in accordance with controlling case law. See Minutes of Proceedings Dated April 5, 1994, at 28.

 On June 23, 1994, a Protective Order was entered in this case. Paragraph 19 of the Protective Order provides that an inadvertent disclosure of a privileged document will not waive any claim of privilege with respect to the inadvertently-produced document. *fn2" Paragraph 14 provides that a party shall make available, forty-five days in advance of a deposition, documents it intends to use as exhibits. *fn3"

 Factual Background

 The document at issue is an internal Sandoz Ltd. memorandum, dated May 15, 1973, and written in German. Defendants' October 20, 1995 Brief, Exhibit 3, Second Supplemental Affidavit of Matthew D. Lee, Esq., at P 3 (hereinafter "2d Lee Supp. Aff.") and Exhibit 4, Affidavit of Thomas A. DiBiase, Esq., at P 3 (hereinafter "DiBiase Aff."); Defendants' October 6, 1995 Brief, Exhibit 1, Supplemental Affidavit of Matthew D. Lee, Esq., at P 3 (hereinafter "Lee Supp. Aff.") and Exhibit 2, Affidavit of Matthew D. Lee, Esq., at P 3 (hereinafter "Lee Aff."). The document, authored by Dr. Ulrich Oppikofer, a Sandoz Ltd. attorney, and addressed to Max Hediger, an employee of Sandoz Ltd., conveys legal advice regarding the Toms River Chemical Corporation (hereinafter the "Oppikofer document"). DiBiase Aff. at P 3; Lee Supp. Aff. at P 3; Lee Aff. at P 3. Counsel, without conducting any privilege review, produced copies of the Oppikofer document on two separate occasions. The first disclosure occurred on August 31, 1995, when defendants produced two copies of the original German document in connection with their designation of potential exhibits for the depositions of two witnesses, Mr. Max Hediger, the addressee of the Oppikofer document, and Dr. Jakob Benz. *fn4" Lee Aff. at P 6. The second occurred on August 29, 1995, when defendants produced two copies of each of two different English translations of the document. *fn5" Lee Supp. Aff. at P 7; Lee Aff. at P 8.

 On July 13, 1995, defense counsel noticed the depositions of Hediger and Benz, and scheduled them to take place the week of September 11, 1995. Lee Supp. Aff. at P 4; Lee Aff. at P 6. On July 31, 1995, counsel designated 681 *fn6" documents as exhibits for the depositions, without reviewing any of the documents for privilege. 2d Lee Supp. Aff. at P 6; Lee Supp. Aff. at P 4; Lee Aff. at P 6. Mr. Matthew D. Lee, Esq., counsel for defendant, was responsible for the designation of the documents. 2d Lee Supp. Aff. at P 6. Of the 681 documents designated as exhibits, 300 were in English, and 381 were in German. Lee Supp. Aff. at P 4; Lee Aff. at P 6. Included among the German documents were two copies of the Oppikofer document. Lee Aff. at P 6.

 Counsel had selected the deposition documents by conducting a search for all documents bearing the name of either Mr. Hediger or Mr. Benz on the litigation database of Shearman & Sterling, pro hac vice counsel for defendants. Lee Supp. Aff. at P 4; Lee Aff. at P 6. Defense counsel claims that its failure to review any of the documents for privilege prior to designating them as exhibits was the result of their mistaken belief that all documents on Shearman & Sterling's database had previously been produced to plaintiff, and thus, that none of the documents contained on the database was privileged. Lee Supp. Aff. at P 5; Lee Aff. at P 7. This mistaken belief was based upon conversations with Thomas A. DiBiase, Esq., a former associate at Shearman & Sterling, and other associates who were familiar with the firm's database and who had been involved with defendants' prior document productions to plaintiff. DiBiase Aff. at P 1, P 4; 2d Lee Supp. Aff. at P 6.

 Sometime after July 31, 1995, Mr. Lee discovered in a file folder two English translations of the Oppikofer document, one dated August 29, 1991, and the other dated December 8, 1994, which translations had been performed in-house at Shearman & Sterling. 2d Lee Supp. Aff. at PP 6, 11. Lee Supp. Aff. at P 7. On August 23, 1995, Mr. Lee confirmed with Thomas A. DiBiase his understanding that the documents on Shearman and Sterling's database had been previously produced to plaintiff. 2d Lee Supp. Aff. at P 8; Lee Supp. Aff. at P 9; Lee Aff. at P 7.

 On August 29, 1995, pursuant to an agreement with plaintiff's counsel, defense counsel produced English translations of the 381 German documents designated as exhibits. Lee Supp. Aff. at P 7; Lee Aff. at P 8. Prior to producing the translations, counsel "briefly" reviewed the documents for substance, but again failed to review them for privilege. See Lee Supp. Aff. at P 8. In reliance upon its prior beliefs and upon Mr. DiBiase's statements of August 23, 1995, counsel continued to labor under the misapprehension that the documents had been previously produced to plaintiff. 2d Lee Supp. Aff. at P 10; Lee Supp. Aff. at P 8; Lee Aff. at P 8. Included among the translations were two copies of each of the two translations of the Oppikofer document discovered by Mr. Lee. Lee Supp. Aff. at P 7; Lee Aff. at P 8; Plaintiff's October 6, 1995 Brief at 13.

 On September 5, 1995, plaintiff's counsel wrote a letter to Judge Mary Little Parell, stating that he wished to "bring to the Court's attention 'newly discovered evidence,'" evidence which plaintiff's counsel believed was dispositive of the claims asserted in defendants' motion to dismiss the joint venture claim added by plaintiff's second amended complaint. Plaintiff's September 5, 1995 Letter at 1. The "newly discovered" evidence was the Oppikofer document. In a letter dated September 8, 1995, defendants responded that they had inadvertently produced the document, and that, pursuant to paragraph 19 of the Protective Order, defendants invoked the attorney-client privilege ...


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