Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 1 of 7
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`IN THE UNITED STATES DISTRICT COURT
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`FOR THE DISTRICT OF NEW MEXICO
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`IN RE: GOLD KING MINE RELEASE
`IN SAN JUAN COUNTY, COLORADO
`ON AUGUST 5, 2015
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`This Document Relates to All Cases
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`No. 1:18-md-02824-WJ
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`ORDER DENYING DEFENDANT SUNNYSIDE GOLD CORPORATION’S REQUEST
`TO CLAWBACK AN INADVERTENTLY PRODUCED DOCUMENT AND
`SEQUESTER DEPOSITION TESTIMONY OF RULE 30(b)(6) WITNESS HAYDUK
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`This matter comes before the Special Master on the request by Sunnyside Gold Corporation
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`to clawback an inadvertently produced document that was used at the deposition of a Rule 30(b)(6)
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`Kinross Gold and Kinross Gold USA witness. The clawback request is being pursued by
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`Sunnyside Gold because it is Sunnyside Gold’s document and it is Sunnyside Gold’s privilege that
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`is being asserted. Sunnyside Gold Corporation states that the document should have been marked
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`as protected by the attorney-client privilege and should not have been produced in discovery.
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`Sunnyside Gold argues that the document should be returned to it pursuant to Federal Rule of
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`Evidence 502(b) as an inadvertent disclosure.1 The Sovereign Plaintiffs, the Navajo Nation and
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`1 The Stipulated Protective Order Pursuant to Rule 502(d) of the Federal Rules of Evidence, filed in this case as Doc.
`148, states in Paragraph 4 that in the case of an inadvertently produced document upon notification by the party
`claiming the privilege, “the receiving party must promptly return, sequester, or destroy the specific information and
`any copies it has; must not use or disclose the information until the claim is resolved; and must take reasonable steps
`to retrieve the information if the receiving party disclosed it before being notified. See Fed. R. Civ. P. 26(b)(5)(B). If
`the receiving party does not agree with the privilege claim, the parties must meet and confer in an attempt to resolve
`the claim within 14 days of the notification of the privilege claim by the producing party. If meeting and conferring
`regarding the privilege claims does not resolve the claim, either party may promptly present the information to the
`Court or Special Master, as appropriate, in camera, for a determination of the claim and any party in possession of the
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 2 of 7
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`the State of New Mexico, argue that Sunnyside Gold waived any claim of privilege because it
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`failed to properly and timely object to the document as privileged during the deposition.
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`The Special Master finds that that the document was inadvertently produced. However,
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`the Special Master finds that Sunnyside Gold waived the attorney-client privilege during the
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`deposition because it unduly delayed its objection to the document and allowed the deponent to
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`continue to be questioned about the document for a substantial amount of time. Having waived
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`the assertion of the attorney-client privilege, Sunnyside Gold is not entitled to the return of the
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`document. The document may be used in this litigation as though it had been voluntarily produced
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`in discovery. Similarly, the portion of the deposition of Nicholas Hayduk during which the
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`document was introduced as Exhibit 213, and during which the witness was being examined about
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`the exhibit, will not be stricken. The transcript of the deposition will be released without
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`redactions.
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`The document, SGCDOC458672-SGCDOC458678, is a string of emails beginning on July
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`7, 2015 and ending on August 3, 2015. The emails are printed from the latest date to the earliest
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`date. The four emails dated August 3, July 31, July 29, and July 28 at 1:09 PM are between
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`attorneys, Martin Litt and Nathan Longenecker, general counsel at that time for Sunnyside Gold
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`Corporation and Kinross Gold USA, and their clients, Lauren Roberts and Pat Maley, who were
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`officers and directors of Sunnyside Gold and Kinross Gold USA at that time. Those four emails
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`appear on their face to be protected by the attorney-client privilege because they are
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`communications between attorneys and clients purportedly for the purpose of giving or seeking
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`information must preserve the information until the claim is resolved. See Fed. R. Civ. P. 26(b)(5)(B). The burden
`of proving the privilege claimed remains with the producing party.”
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`2
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 3 of 7
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`legal advice. The last nine emails in the string are dated July 28 at 1:02, July 28 at 12:46, July 21
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`at 8:11, July 21 at 9:01, July 10 at 8:28, July 10 at 8:51, July 10 at 7:43, July 9, and July 7, and are
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`generated by or sent to an independent consultant named Stephen Phillips as well as some of the
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`previously named people. Those last nine emails would not be protected under the attorney-client
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`privilege whether or not they had been inadvertently produced because of the inclusion of the
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`independent consultant Phillips.
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`The Special Master accepts Sunnyside Gold’s assertion
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`that
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`the document
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`SGCDOC458672-SGCDOC458678 was inadvertently produced. The sheer volume of the
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`production of documents by Sunnyside Gold in this case (estimated to be 400,000) makes an
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`inadvertent production understandable. In litigation involving this magnitude of documents,
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`mistakes are sometimes made, and documents are sometimes overlooked or misclassified.
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`Sunnyside Gold stated that there are at least ten other versions of this email string, which were
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`marked as privileged, included in a privilege log, and withheld from production pursuant to the
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`attorney-client privilege. This particular version of the email string was apparently simply missed
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`during its review for attorney-client privilege. It was not until the document was being used during
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`the deposition of Nicholas Hayduk that Sunnyside Gold realized that a potentially privileged
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`document was being used as an exhibit and that it had apparently been inadvertently produced.
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`During the deposition, the Navajo Nation directed the videographer to put the document
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`on a screen, identified it as Exhibit 213, and began questioning the Rule 30(b)(6) witness about
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`the document. After few minutes of questioning, the witness noted that one of the emails was to
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`two lawyers and was “presumably seeking their legal advice because that’s the only capacities
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`they hold at the KGUSA level.” Tr. p. 194, lines 1-3. Several minutes later counsel for Sunnyside
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`3
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 4 of 7
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`Gold spoke up and stated that a large part of the document appeared to be privileged and may have
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`been inadvertently produced. Counsel for Sunnyside Gold stated, “to the extent you get into
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`attorney client privileged communications I’m going to raise the objection.” Tr. p. 197, lines 5-
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`12. The problem is that by the time this objection was raised, at least five minutes had elapsed
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`based on the court reporter’s estimate that the portion of the transcript that concerns this exhibit is
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`about 17 minutes long. Based on that estimate, it is possible that as much as ten minutes had
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`elapsed before the objection was raised. During that time, the attorney for the Navajo Nation
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`reviewed the exhibit and questioned the witness about the email string. The witness testified that
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`he had little or no knowledge about the document or its background. See, e.g. Tr. p. 194, lines 5-
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`8.
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`Sunnyside Gold is requesting that the document be returned to it and all other copies be
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`destroyed because it has complied with Federal Rule of Evidence 502 concerning inadvertent
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`disclosures.
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`Federal Rule of Evidence 502 states:
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`(b) Inadvertent Disclosure. When made in a federal proceeding or to a federal
`office or agency, the disclosure does not operate as a wavier in a federal or state
`proceeding if:
`(1) the disclosure is inadvertent;
`(2) the holder of the privilege or protection took reasonable steps to prevent
`disclosure; and
`(3) the holder promptly took reasonable steps to rectify the error, including
`(if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).
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`As stated earlier, the Special Master finds that the disclosure was inadvertent based on the
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`fact that ten other versions of the same email string had been labeled as attorney-client privileged
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`and included in a privilege log. The fact that the other ten versions had been reviewed, marked a
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`4
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 5 of 7
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`as attorney-client privileged, and included in a privilege log leads the Special Master to conclude
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`that the holder of the privilege, Sunnyside Gold, had taken reasonable steps to prevent the
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`inadvertent disclosure in accordance with Rule 502(b)(2). Sunnyside Gold sent an email and a
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`letter the day after the deposition asking for the document to be returned and that the portion of
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`the deposition discussing Exhibit 213 be sequestered, which demonstrates that the holder of the
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`privilege took some steps to rectify the error. However, those steps were insufficient to rectify the
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`error. The five to ten minute delay in raising a specific objection to this document during the
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`deposition while allowing the document to be used during questioning of the Rule (30(b)(6)
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`witness failed to fully meet the requirements of Federal Rule of Evidence 502(b)(3) that the holder
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`of the privilege take “reasonable steps to rectify the error.” This delay resulted in a waiver of
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`Sunnyside Gold’s right to clawback the document.
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`This issue was addressed in the recent case of Certain Underwriters at Lloyd’s, London v.
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`National Railroad Passenger Corporation, 218 F. Supp. 3d 197 (E.D.N.Y. 2016). That case also
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`involved multiple documents and extensive privilege logs, which had been revised multiple times.
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`During a deposition of Noonan, a former Amtrak employee, opposing counsel introduced a
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`document that was marked as confidential and labeled “work product.” Counsel for Amtrak noted
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`that it could have been privileged and reserved Amtrak’s rights but allowed opposing counsel to
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`question the witness about the document. The next day, at the continuation of Noonan’s
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`deposition, another document that may have been privileged was introduced. Opposing counsel
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`questioned Noonan about the document for approximately ten pages of transcript. While Amtrak’s
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`counsel raised objections, he did not specifically raise the objection that the document was
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`5
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 6 of 7
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`privileged. The following day counsel for Amtrak sent a letter to clawback the two exhibits
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`claiming that both were protected by the attorney-client privilege and the work-product doctrine.
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`The issue eventually came before the United States Magistrate Judge who held that Amtrak
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`had waived “privilege and work-product protection for Exhibits 26 and 44 by failing to seek to
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`preclude their introduction and use at the Noonan deposition.” Id., at 201. By failing to timely
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`and specifically object to a party’s use of privileged material, the court held that Amtrak had
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`waived its right to clawback the documents and that the “generalized objections” made by counsel
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`had not complied with Federal Rule of Evidence 502(b).
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`Similarly, the court held in Entrata v. Yardi Systems, Inc., 2018 WL 5438129 (D. Utah
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`2018) that Yardi had waived its work-product protection for a document that had been used as an
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`exhibit at a deposition by “failing to seek to preclude [its] introduction and use at” the deposition.
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`Id., at *8, quoting Certain Underwriters at Lloyd’s, supra, at 201. The transcript revealed that
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`while Yardi’s attorney had objected during the time when the witness was being questioned about
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`the document, the attorney had not raised a specific objection that the document was protected by
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`the work-product doctrine. By allowing the witness to be questioned about the document, Yardi’s
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`attorney had waived the protection of the work-product doctrine. See, also, Luna Gaming-San
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`Diego, LLC v. Dorsey & Whitney, LLP, 2010 WL 275083 (S.D. Cal. 2010). “When the privilege
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`holder objects immediately upon discovery of the inadvertent disclosure, 502(b)(3) is satisfied.
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`But under both state and federal law, if a privileged document is used at a deposition, and the
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`privilege holder fails to object immediately the privilege is waived.” Id., at *5 (citations omitted.)
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`Even through the document SGCDOC458672-SGCDOC458678 was inadvertently
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`produced in this litigation, the failure by the holder of the privilege to make a timely and specific
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`Case 1:18-md-02824-WJ Document 838 Filed 09/21/20 Page 7 of 7
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`Objeetion to the use of the docunem during the d印osition ofthe Rule 30(b)(6) witness Hayduk
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`has waived any right Sumys王de Gold may have to clawback血e document or to have portions of
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`the Hayduk deposition stricken・ The request by Sumyside Gold is denied.
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`IT IS SO ORDERED.
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`THE PARTIES ARE NOTIFⅢD T璃AT WrTⅢN 21 DAYS OF SERVICE of a copy of血e
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`Order, rePOrt, Or reCOmmendations, they may則e written o星iections with the Clerk of th。 C。血
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`PurS11ant tO Federal Rule of Civil Procedure 53(D(2)・ A party must刷e any objection w皿the
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`Clerk of the Court within the twenty-One-day period if that party wants the District Judge to hear
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`血eir o匝ctions. If no o軽ctions are餌ed within the twenty-One-day period, the District Judge
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`may adopt the order, reP。ri’Or reCOmmendations in whole・ If刷ing a docunent for which a
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`Privilege is claimed, check the access limited to別er and the court ondy box. For questious about
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`則ing restricted access documents, Please cou同c=he CM侶CF Help Desk by email
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`at g塑鎚f@md・uSCOurtS臆"挫虫link sends e-mail) or by phone at 505-348-2075 、
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