JESSE M. FURMAN, District Judge.
In this civil fraud case, familiarity with which is assumed, the United States (the "Government") alleges that Defendants Wells Fargo Bank, N.A. ("Wells Fargo" or the "Bank") and Kurt Lofrano, a Bank employee, engaged in misconduct with respect to home mortgage loans that were insured by the Government. Now pending is Wells Fargo's motion to compel the Government to re-produce approximately 1,000 documents (the "Documents") that the Government "clawed back" on the last day of fact discovery. (Docket No. 235).
The current dispute centers on the interpretation and applicability of a protective order that the Court entered on March 21, 2014 (the "Protective Order"). (Docket No. 97). That Order, which was proposed by the parties (Docket No. 95), provides that, "if, in connection with this litigation, a party . . . discloses information subject to a claim of [any applicable privilege]. . . such disclosure shall not constitute or be deemed a waiver or forfeiture of any claim of privilege." (Protective Order 15-16). Despite the seemingly broad sweep of the Protective Order, the Bank contends that the Government was not entitled to claw back the Documents because it failed to "promptly" assert that they were privileged. (Wells Fargo Bank N.A.'s Mem. Law Supp. Mot. To Compel Re-Production "Clawed Back" Documents & Adequate & Complete Privilege Log Pl. (Docket No. 249) ("Wells Fargo's Mem.") 16-17).
The Government responds that the Protective Order does not impose a deadline by which it must assert its privilege and that, in any event, it did act promptly in seeking the Documents' return. The Government asserts that it clawed back privileged documents as it identified them, and insists that it could not have been expected to re-review its production for privilege any sooner because of the large number of documents it had produced (about 1.7 million) and because the parties were in the midst of taking depositions. (Mem. Law United States Am. Opp'n Def. Wells Fargo Bank N.A.'s Mot. To Compel Re-production of "Clawed Back" Documents (Docket No. 253) ("Gov't's Mem.") 12-14).
In support of its argument that the Government waived its right to request the return or destruction of the Documents by waiting too long, Wells Fargo largely relies on cases analyzing waiver under Rule 502(b) of the Federal Rules of Evidence. (Wells Fargo's Mem. 15-16 (citing Bensel v. Air Line Pilots Ass'n, 248 F.R.D. 177, 180 (D.N.J. 2008); Fed. Deposit Ins. Corp. v. Marine Midland Realty Credit Corp., 138 F.R.D. 479, 483 (E.D. Va. 1991))).
Wells Fargo has not met that standard. Although the clawback at issue here occurred more than six weeks after Wells Fargo first notified the Government that it had received privileged documents, the Government began clawing back documents on a rolling basis on April 3rd. (See Kaplan Decl. ¶ 7-8, 10, Exs. B-E). The clawback at issue was merely the last one to occur. Given the scale of discovery in this case, the Court cannot say that the Government's approach was unreasonable, let alone completely reckless. Further, while the Government undoubtedly should have informed Wells Fargo (and the Court) that it was continuing its privilege review, nothing in the protective order — or in any case cited by Wells Fargo — obligated it to do so. Wells Fargo states that it "reasonably assumed" that the Government's April 3rd clawback was the entire response to Wells Fargo's March 31st e-mail, but it never took any steps to verify that that was so, and, in any event, it admits that the Government continued to make requests for the return of documents, with which Wells Fargo complied, after that date. (Wells Fargo Bank N.A.'s Reply Supp. Mot. To Compel Re-Production "Clawed Back" Documents & Adequate & Complete Priv. Log Pl. (Docket No. 258) ("Wells Fargo's Reply") 4-5 & n.3; Kaplan Decl. ¶¶10-14, Ex. C-F).
Nor does the large number of documents clawed back change the analysis. First, "[i]t is not enough that the inadvertent production involved a large number of documents"; "[g]iven the scale of document production in contemporary litigation, errors — even those involving multiple documents — are inevitable." Parnon Energy Inc., 2014 WL 2116147 at *4. Second, the number of documents clawed back cannot be considered in a vacuum, but rather must be viewed in relation to the total number of documents produced. Here, the 1,000 or so Documents at issue make up less than one tenth of one percent of those turned over to the Bank during discovery. See HSH Nordbank, 259 F.R.D. at 75 (upholding a clawback where the inadvertently disclosed documents "represent[ed] less than one-hundredth of one percent of those reviewed"); cf. Dover, 2014 WL 4065084, at *3-4 (finding that a production was not completely reckless where the privileged information consisted of a "few rows and columns of information embedded on two of 34 pages of spreadsheets").
In addition to arguing that the delay was unreasonable in and of itself, Wells Fargo contends that it has been unfairly prejudiced by the Government's decision to wait until the last day of fact discovery to claw back the Documents. See Dover, 2014 WL 4065084, at *3-4 (considering whether the "`overriding issues of fairness' which underlie all determinations regarding waiver or forfeiture of protection of privileged documents" required a finding that privilege had been waived, even though the Court had already concluded that the party seeking to claw back a privileged document had not been "completely reckless"). Wells Fargo identifies two potential forms of prejudice: first, that "Wells Fargo had reviewed and relied on [the Documents] in developing its discovery and case strategy," and second, that the end of the fact discovery period deprived Wells Fargo of the opportunity to "do[] anything to alter the strategic decisions it had already made in the expectation that the documents were available." (Wells Fargo's Mem. 18). Wells Fargo, however, provides no detail about the kind of discovery it would have sought had the Government clawed back the Documents earlier. Nor does it explain what information was contained in the 1,000 Documents that is not available elsewhere or why that information is central to its case. Further, despite Wells Fargo's insinuations to the contrary (Wells Fargo's Mem. 19 (stating that the Government "postponed taking appropriate action" until after the close of discovery)), there is no evidence that the Government intentionally sandbagged Wells Fargo. At bottom, therefore, Wells Fargo's prejudice argument amounts to little more than a complaint that it cannot use the information contained in the Documents. But, as the Government points out in its memorandum of law (Gov't's Mem. 15-16), "the prejudice factor focuses only on whether the act of restoring immunity to an inadvertently disclosed document would be unfair, not whether the privilege itself deprives parties of pertinent information." BNP Paribas Mortg. Corp. v. Bank of America, N.A., No. 09-CV-9783 (RWS), 2013 WL 2322678, at *8 (S.D.N.Y. May 21, 2013). That conclusion does not change merely because the relevant clawback occurred on the last day of discovery. See Quinby v. Westlb AG, No. 04-CV-7406 (WHP), 2007 WL 2068349, at *3 (S.D.N.Y. July 18, 2007) (rejecting the plaintiff's argument that applying work-product protection to a document after the close of discovery would be unfair to her because the close of discovery prevented her from "us[ing] other means to obtain the evidence [the document] contain[ed]" on the grounds that the plaintiff had had "ample incentive to obtain additional evidence" before the document was clawed back).
Wells Fargo is, however, entitled to two documents that were used, without objection, during depositions. (Kaplan Decl. ¶¶ 20-21).
For the reasons stated above, the Bank's motion is GRANTED with respect to the documents used during depositions, but DENIED with respect to all other documents.
The Clerk of Court is directed to terminate Docket No. 235.
SO ORDERED.