By Eric Schweibenz
On August 18, 2009, Administrative Law Judge E. James Gildea issued the public version of Order No. 17 (dated August 5, 2009) in Certain Cold Cathode Fluorescent Lamp (“CCFL”) Inverter Circuits and Products Containing the Same (Inv. No. 337-TA-666).  In the Order, ALJ Gildea granted Complainants O2 Micro International Ltd and O2 Micro Inc.’s (collectively, “O2 Micro”) motion to compel Respondent Monolithic Power Systems, Inc. (“MPS”) to re-produce a document that MPS had “clawed back” as privileged.

In support of its motion, O2 Micro argued that (1) MPS did not demonstrate the disputed document was privileged; and (2) even if the disputed document was privileged, the privilege was waived when MPS produced such document in prior litigation between the parties.  MPS, on the other hand, argued that (1) the disputed document was privileged and related to pending litigation in Taiwan; (2) the disputed document was inadvertently produced in the prior litigation and the instant investigation “because the prior production was re-produced en masse”; and (3) privilege was not waived because counsel for MPS promptly “clawed back” the disputed document during a June 2009 deposition and followed it up with notification in writing.  For its part, the Commission Investigative Staff argued that (1) MPS waived any privilege to the disputed document in light of the inadvertent production in the prior litigation; and (2) the ALJ should perform an in camera review of the disputed document to confirm that it is privileged.

Citing Federal Circuit case law, ALJ Gildea determined that “the attorney-client privilege evaporates upon any voluntary disclosure of confidential information to a third party and that it is irrelevant whether the disclosure was inadvertent.”  ALJ Gildea further determined that MPS did not use "reasonable effort" to protect the disputed document by disclosing it to opposing counsel in two separate lawsuits.  According to ALJ Gildea, “[w]hat might have been an inadvertent production in one case could not reasonably be said to be inadvertent a second time, when MPS did not even screen the second production containing the [disputed] [d]ocument for relevance, let alone privilege.”  Accordingly, ALJ Gildea determined that MPS waived attorney-client privilege as to the disputed document and ordered its production.

Regarding the parties’ “claw-back” agreement, ALJ Gildea took no position as to the freedom of the private parties to enter into such stipulations, however, “a claw-back agreement may not shield the inadvertent production of an attorney-client privileged document to an adversary absent some showing that a party used a ‘reasonable effort’ to protect the confidences it contains.”