Hunton Andrews Kurth attorneys won’t be disqualified from an insurance law case where they received 10 inadvertently produced, privileged documents, a Florida district court ruled recently.

But the judge had harsh words for both parties.

“The facts underlying this disqualification motion establish that, unfortunately, lawyers on both sides of the litigation acted poorly,” Magistrate Judge William Matthewman said, adding that the attorneys’ conduct didn’t help their clients and was “downright unproductive and silly.”

The defendant’s attorneys mistakenly produced the documents in rush to meet a deadline before the Christmas holiday in 2018, the court said. Eight days later, the Hunton Andrews Kurth attorneys notified them of the documents, which the firm said appeared to be attorney-client privileged between the defendant and its attorneys.

Hunton Andrews Kurth told the opposing counsel it would assume that those documents were correctly produced and thus not privileged, the court said. The firm didn’t identify the documents by Bates number and there followed a back-and-forth between the parties about who should provide the numbers, according to the court.

“This all led to an unfortunate disqualification dispute which has caused the Court to expend extensive judicial resources, including presiding over a two-day evidentiary hearing and oral argument,” the court said.

Attorney-Client Privilege

The disputed documents are subject to attorney-client privilege, despite Florida case law suggesting that privilege only attaches in the insurance company context when the legal advice was given in anticipation of litigation, Matthewman said.

This isn’t a requirement, the court said, but corporate claims of attorney-client privilege are subject to heightened scrutiny under Florida law.

This means that for corporate insurers, the question to ask is whether the attorney functioned merely as a claims adjustor or whether the attorney actually dispensed legal advice, the court said.

Here, the defendant’s law firm was clearly retained to provide legal services and the content of the 10 documents sufficiently establishes that firm was rendering legal services and wasn’t acting as as a claims adjustor, according to the court.

The defendant’s law firm also didn’t waive the attorney-client privilege, because it complied with with Federal Rule of Evidence 502(b) 5 and Federal Rule of Civil Procedure 26(b)(5)(B) 6., Matthewman said.

Only 10 out of 14,500 documents were produced in error, the court noted. “We all make mistakes, and Defendant’s counsel made one here by inadvertently producing those 10 documents,” it said.

What’s important is that the holder of the privilege—the defendant and its counsel—took reasonable steps to prevent disclosure and to rectify the error, the court said.

Finally, the defendant didn’t meet its burden of showing that Hunton Andrews Kurth didn’t comply with Rule 4-4.4 of the Rules Regulating the Florida Bar 8 when it discovered the privileged documents, Matthewman said.

The firm met its basic obligations under the rules even if the attorneys’ conduct wasn’t perfect, according to the court, which cited mitigating circumstances, including the timing of the production around the holidays, the fact that one attorney was hospitalized with an illness and that another was scheduled to attend his own daughter’s wedding.

Disqualification is an extreme sanction not justified in this case, the court concluded.

Hunton Andrews Kurth represented the plaintiff. Young, Bill, Boles, Palmer and Duke P.A. represented the defendant.

The case is Ranger Constr. Indus., Inc. v. Allied World Nat’l Assurance Co., 2019 BL 37283, S.D. Fla., No. 17-81226-CIV-Marra/Matthewman, 2/5/19.