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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
)
AudioText International, Ltd., )
)
)
Complainant, ) File No. EB-03-MD-010
)
v. )
)
AT&T Corp., )
)
Defendant.
MEMORANDUM OPINION AND ORDER
Adopted: January 23, 2004 Released: January 27,
2004
By the Chief, Enforcement Bureau:
I. INTRODUCTION
1. In this Order, we deny the request of defendant AT&T
Corporation (``AT&T'') for confidential treatment and other
relief relating to eleven pages of documents (``the Subject
Documents'') that complainant AudioText International, Ltd.
(``AudioText'') included in the appendix to the formal complaint
that AudioText filed with the Commission under section 208(a) of
the Communications Act of 1934, as amended (``Act'').1 AT&T
seeks confidential treatment of the Subject Documents pursuant to
sections 0.457 and 0.459 of our rules,2 on the grounds that they
are protected by the attorney-client and attorney work product
privileges.3 AudioText opposes AT&T's request.4 As explained
below, we deny AT&T's requests relating to the Subject Documents,
because we find that AT&T has waived any attorney-client
privilege and/or work product protection that may have once
attached to these documents.
II. FACTUAL BACKGROUND
II.A. The District Court Litigation
2. Prior to initiating this proceeding before the
Commission, AudioText had filed a complaint against AT&T in the
United States District Court for the Eastern District of
Pennsylvania (``the District Court'') alleging breach of contract
and of the covenant of good faith and fair dealing. 5 In the
course of that litigation, AT&T produced the Subject Documents to
AudioText on August 2, 2001 in response to AudioText's discovery
requests. AT&T's outside counsel, Thomas P. Bracaglia, enclosed
the Subject Documents in a transmittal letter to AudioText's
outside counsel, Stephen G. Burns,6 and advised that
``[a]dditional documents which are deemed confidential and/or
privileged will be produced upon receipt of the signed Protective
Order.''7
3. On August 31, 2001, Mr. Bracaglia sent a letter to Mr.
Burns stating that certain documents protected by the attorney-
client privilege, including the Subject Documents, ``were
inadvertently produced by error.''8 Mr. Bracaglia asked whether
AudioText would return the documents or whether AT&T would
instead need ``to file a motion to correct this error.''9 Mr.
Burns responded in two letters, both dated September 13, 2001, in
which he indicated that because AudioText lacked information
about the authors and recipients of the Subject Documents, it
could not agree that the documents were attorney-client
communications.10 Mr. Burns invited Mr. Bracaglia to call him to
discuss the matter further.11 Three months passed, during which
AT&T failed to persuade AudioText to return the Subject
Documents.
4. On December 17, 2001, AT&T filed a motion asking the
District Court to dismiss AudioText's complaint or, in the
alternative, to dismiss it without prejudice to AudioText's
submission of its claims to the Commission for disposition
pursuant to the primary jurisdiction doctrine.12 On December 18,
2001, AT&T's in-house counsel, Jennifer L. Leuba, sent a letter
to AudioText's outside counsel, Mr. Burns, noting that the
parties ``had agreed last week to resolve the privilege issues''
prior to the deposition of AT&T in-house counsel, Andrew
Schlafly, which was scheduled for December 21, 2001. 13 Ms.
Leuba asked Mr. Burns to let her know ``which documents you will
not return, so that we may file the appropriate motion with the
Court.''14 On December 19, 2001, Mr. Kasman informed Ms. Leuba
by letter that AudioText did not intend to return any of the
documents that AT&T had requested because AudioText did not
believe they were privileged.15 Mr. Kasman advised AT&T to
``take any steps you deem appropriate with respect to these
documents.''16
5. The deposition of Mr. Schlafly was held on December 21,
2001, as scheduled.17 During the deposition, Ms. Leuba and Mr.
Burns discussed their dispute concerning the Subject Documents,
and Ms. Leuba noted that ``the parties have not yet briefed the
issue of privilege, and I think we all assume we may be doing
that in the near future.''18 On January 17, 2002, the District
Court ordered that AudioText may submit its claims to the
Commission, and stayed all further proceedings in the case
pending completion of administrative proceedings before the
Commission.19 AT&T did not file a motion to compel the return of
the Subject Documents, or otherwise notify the District Court of
the parties' dispute regarding these documents, at any time
before or after the District Court issued the stay order.
6. In August 2002, AudioText filed a second complaint in
the District Court charging that AT&T violated section 201 of the
Act and AT&T's tariffs by terminating AudioText's services and
blocking its traffic.20 In November 2002, the District Court
granted a motion by AT&T to consolidate AudioText's two suits,
and to stay both cases pending referral to the Commission for
disposition.21
II.B. The Complaint Proceeding Before The Commission
7. AudioText filed and served its Complaint before the
Commission on May 13, 2003 following an unsuccessful effort at
pre-complaint mediation before Commission staff.22 AudioText
included the Subject Documents in the appendix it filed and
served with its Complaint, and quoted or divulged information
from the Subject Documents in several paragraphs of the
Complaint.23 AT&T did not notify the Commission that it
considered the Subject Documents to be privileged and
confidential until May 22, 2003, and only then raised the issue
in response to an inquiry from Commission staff about whether
certain documents included in the appendix to the Complaint, that
were stamped ``confidential'' or ``proprietary,'' were intended
to be made publicly available.24 In response to this inquiry,
AT&T made an informal request to staff that the Subject Documents
be excluded from the public record because they are privileged
documents.25
8. At the suggestion of staff, AT&T documented this
request in a letter to the Commission, which AT&T filed on June
4, 2003.26 In that letter, AT&T requested confidential treatment
of the Subject Documents pursuant to sections 0.457 and 0.459 of
our rules,27 on the asserted grounds that the documents were
protected by the attorney-client and work product privileges.28
Two weeks after filing its June 4 Letter, AT&T made an additional
request to the Commission for an order requiring AudioText to
return to AT&T all copies of the Subject Documents, and
precluding AudioText from introducing, referencing, and/or
relying upon the Subject Documents in this proceeding.29 This
was AT&T's first and only request to an adjudicatory entity for
an order requiring return of the Subject Documents, and it came
almost two years after AT&T produced the documents. AudioText
submitted letters opposing both requests.30
9. We have excluded the Subject Documents from the public
record to preserve the status quo pending resolution of AT&T's
request. We have not, however, ordered AudioText to return the
Subject Documents to AT&T or precluded AudioText from referencing
and/or relying upon them.31
III. DISCUSSION
10. AT&T's request to exclude the Subject Documents from
the public record rests on sections 0.457 and 0.459 of the
Commission's rules,32 which implement the Freedom of Information
Act (``FOIA'').33 Under FOIA, the Commission must disclose
reasonably described agency records requested by any person,
unless the records contain information that fits within one of
the nine exemptions from disclosure provided in the Act.34
Section 0.457(d) of the Commission's rules, which implements FOIA
Exemption 4, provides that records not routinely available for
public inspection include ``[t]rade secrets and commercial or
financial information obtained from any person and privileged or
confidential.''35 Section 0.459(a) provides that any person
submitting information or materials to the Commission may request
that such information not be made routinely available for public
inspection.
11. AT&T advances two principal arguments in favor of
withholding the Subject Documents from the public record. First,
AT&T argues that AudioText should not have included the Subject
Documents in its Complaint to the Commission, because AT&T had
asserted a claim of privilege with respect to these documents and
notified AudioText that the documents had been produced
inadvertently in the District Court litigation.36 AT&T contends
that ``[i]t is contrary to the basic tenets of FOIA to take
information that is otherwise private and unavailable to the
public,'' such as the Subject Documents, and ``place that
information in the public domain by capitalizing on an
inadvertent mistake made by'' AT&T's counsel.37 AT&T asserts
that the Subject Documents should be excluded from the record
``[o]n this ground alone,'' and that the traditional tests
governing application of FOIA Exemption 4 are inapplicable.38
12. Second, AT&T argues that even if AT&T is required to
make a showing that the Subject Documents are excludable from the
public record under FOIA Exemption 4, 39 the Bureau should
conclude that the Subject Documents qualify for protection under
that exemption.40 AT&T contends that the Subject Doctrines are
protected under Exemption 4 because they are ``commercial''
documents, in that they involve attorney-client communications
with respect to AT&T's ability to suspend service to a business
customer, and are both ``privileged'' and ``confidential.''41
13. Regarding AT&T's first argument, we reject AT&T's
suggestion that AudioText's allegedly improper submission of the
Subject Documents to the Commission relieves AT&T of its
obligation to satisfy the standards for excluding material from
the public record under FOIA exemption 4. We have no authority
to exclude the Subject Documents from the public record under
FOIA Exemption 4 without a showing that the Documents qualify as
``trade secrets'' or ``commercial or financial information'' that
is ``privileged or confidential'' within the meaning of FOIA
Exemption 4 and section 0.457(d) of our rules.42
14. We also reject AT&T's second argument, which attempts
to show that the Subject Documents are protected under Exemption
4 on the ground that they are ``commercial'' materials that are
both ``privileged'' and ``confidential.'' As discussed below,
even assuming, arguendo, that the Subject Documents are
commercial documents that were subject to the attorney-client and
work product privileges before AT&T produced them to AudioText in
August 2001, and even assuming such production was inadvertent,
we find that AT&T waived any privilege or confidentiality
relating to these materials by failing to take reasonable action
in the District Court to secure their return. The Subject
Documents thus do not qualify for protection under FOIA Exemption
4, because they lost whatever confidentiality or privilege that
may have once attached to them, before AudioText ever filed the
Subject Documents with the Commission.
15. Courts have widely recognized in cases involving
inadvertent or involuntary production of privileged materials
that the privilege holder waives the privilege where he ``fails
to pursue all reasonable means of preserving the confidentiality
of the privileged matter.''43 The law of the Third Circuit,
which AT&T urges us to apply in this case,44 provides a case on
point. In Grand Jury,45 the court held that a party waived the
work-product privilege when he waited three and a half months
before filing a motion to compel the return of a file that had
been inadvertently produced to his adversary.46 Because the
involuntary disclosure was made directly to the party's
adversary, who refused requests for return of the file, the court
in Grand Jury found that judicial enforcement of the privilege
was the ``only remedy'' that would have foreclosed the
adversary's use of the documents.47 ``Without such judicial
vindication,'' the court held that the adversary ``was free to
continue to utilize the documents, thereby negating their
confidential character.''48 The court observed that
[A] reasonable person would not only inform
his or her adversary of the breach of the
privilege, but also would seek a judicial
determination of the controversy if his or
her adversary took an opposing stance.
Merely asserting the privilege to an
adversary is not sufficient to protect the
privilege in these circumstances inasmuch as
the adversary has possession of the materials
claimed to be privileged and thus can make
use of them.49
16. In this case, as in Grand Jury, the holder of the
alleged privilege, AT&T, failed to take reasonable steps to
retrieve the inadvertently produced Subject Documents. The
record indicates that three months after AudioText told AT&T's
counsel on September 13, 2001 that AudioText could not agree that
the Subject Documents were attorney-client communications,50 AT&T
had failed to obtain the return of the Subject Documents, either
by agreement or by requesting court intervention.51 Moreover,
after AudioText informed AT&T, in its letter of December 19,
2001, that AudioText did not intend to return the Subject
Documents,52 AT&T again took no action to obtain relief from the
District Court. Indeed, although AT&T's counsel informed
AudioText's counsel on August 31, 2001, and again on December 18,
2001, that AT&T would file a motion with the District Court if
AudioText did not return the Subject Documents, AT&T never did
so.53
17. AT&T's suggestion that it was prevented from filing
such a motion to compel by the District Court's decision to stay
the litigation is wholly unpersuasive.54 First, AT&T was the
party who filed the Motion to Dismiss that resulted in the
District Court decision to stay the action. If filing the Motion
to Dismiss jeopardized AT&T's ability to protect the privilege
and confidentiality of the Subject Documents, AT&T has only
itself to blame. Second, the District Court order staying the
litigation was issued on January 17, 2002 - nearly a month after
AudioText informed AT&T that it did not intend to return the
Subject Documents. AT&T has not explained why it did not file a
motion to compel return of the Subject Documents before the stay
order issued.55 Nor has AT&T explained why it did not ask the
District Court to lift the stay, once it issued, for the limited
purpose of addressing AT&T's request for return of the Subject
Documents.56 The testimony of AT&T's outside counsel, Mr.
Bracaglia, indicates that AT&T intended to ask the court to
compel return of the Subject Documents only if the District Court
did not dismiss or stay the case.57 This testimony, and AT&T's
failure to seek court intervention, suggest that AT&T was willing
to leave the Subject Documents in the hands of its adversary,
AudioText, as long as the District Court action was dismissed or
stayed. Based on this record, we cannot conclude that AT&T
``pursue[d] all reasonable means of preserving the
confidentiality'' of the Subject Documents.''58
18. AT&T's reliance on case law holding that inadvertent
production of privileged documents does not, as a matter of law,
result in a waiver of the privilege is unavailing.59 AT&T cites
cases from Pennsylvania setting forth five factors that courts
consider in determining whether inadvertent disclosure waives the
attorney client privilege, and attempts to show that these
factors support the conclusion that no waiver occurred here.60
To the extent these arguments had merit, AT&T should have
presented them to the District Court, as AT&T repeatedly told
AudioText it would do. At this point, after AudioText has been
in possession of the Subject Documents for two years, has
thoroughly analyzed and digested the documents, and included them
in its pleadings, the confidentiality of the Subject Documents
has been completely destroyed, and no order from this agency can
restore it.61
19. For all of these reasons, we conclude that AT&T has
failed to show that the Subject Documents are confidential or
privileged. Thus, we deny AT&T's request that the Subject
Documents be excluded from the public record under sections 0.457
and 0.459 of the Commission's rules. We also deny AT&T's further
request for an order requiring AudioText to return to AT&T all
copies of the Subject Documents, and precluding AudioText from
relying upon the documents in this proceeding. AT&T has failed to
cite any authority permitting the Commission to order a party to
return documents produced in the District Court litigation and,
in any event, we see no basis to require AudioText to return the
Subject Documents, or to refrain from relying upon them, in view
of our finding that the Subject Documents have lost any privilege
or confidentiality that may have once attached to them.
IV. ORDERING CLAUSES
20. ACCORDINGLY, IT IS ORDERED, pursuant to sections 1,
4(i), 4(j), and 208 of the Communications Act of 1934, as
amended, 47 U.S.C. §§ 151, 154(i), 154(j), 208, sections 0.457
and 0.459 of the Commission's rules, 47 C.F.R. §§ 0.457 and
0.459, and the authority delegated in sections 0.111 and 0.311 of
the Commission's rules, 47 C.F.R. §§ 0.111, 0.311, that AT&T's
requests for confidential treatment of the Subject Documents and
for an order requiring AudioText to return to AT&T all copies of
the Subject Documents, and precluding AudioText from introducing,
referencing, and/or relying upon the document in this proceeding,
are DENIED.
21. IT IS FURTHER ORDERED, pursuant to section 0.459(g) of
the Commission's rules, 47 C.F.R. §0.459(g), that AT&T may,
within five working days, file an application for review of this
Order by the Commission.
FEDERAL COMMUNICATIONS COMMISSION
David H. Solomon
Chief, Enforcement Bureau
_________________________
1 47 U.S.C. § 208. See Formal Complaint, File No. EB-03-MD-
010 (filed May 13, 2003) (``Complaint''). The Complaint alleges
that AT&T violated sections 203(c)(3) and section 201(a) of the
Act by engaging in conduct that was not authorized by AT&T's
governing tariffs. Citations to the appendix to the Complaint
appear in the form (``Complaint App. at __'').
2 47 C.F.R. §§ 0.457 and 0.459.
3 See Letter from Jennifer L. Leuba, Counsel for AT&T to
Marlene H. Dortch, Secretary, Federal Communications Commission,
File No. EB-03-MD-010 (filed June 4, 2003) (``June 4, 2003
Letter''). The Subject Documents appear at the following pages
of the appendix to the Complaint: Complaint App. at 270-271; 277-
79; 281; 282; 303-06; 307-08. See June 4, 2003 Letter at 5-7.
See also Letter from Jennifer L. Leuba, Counsel for AT&T to
Marlene H. Dortch, Secretary, Federal Communications Commission,
File No. EB-03-MD-010 (filed June 18, 2003) (``June 18, 2003
Letter'') at 10. AT&T has described the eleven pages of Subject
Documents as consisting of ``emails written to and/or from AT&T
in-house attorneys, on the subject of AT&T's legal right to
suspend services to AudioText . . .;'' a ``facsimile from an AT&T
sales executive, transmitting fact information to Sharon Gans, an
AT&T in-house litigator, for the purpose of receiving legal
advice, and in anticipation of litigation''; ``handwritten notes
of Ms. Gans, reflecting internal, privileged communications with
AT&T clients on the subject of suspension;'' and ``a draft of an
AT&T tariff, prepared by, and in consultation with, AT&T in-house
attorneys.'' June 4, 2003 Letter at 2.
4 See Letter from Russell D. Lucas, Counsel for AudioText, to
Marlene H. Dortch, Secretary, Federal Communications Commission,
File No. EB-03-MD-010 (filed June 11, 2003) (``June 11, 2003
Letter''); Letter from Russell D. Lucas, Counsel for AudioText,
to Marlene H. Dortch, Secretary, Federal Communications
Commission, File No. EB-03-MD-010 (filed June 23, 2003) (``June
23, 2003 Letter'').
5 Joint Statement of the Parties, File No. EB-03-MD-010 (filed
July 23, 2003) (``Joint Statement'') at 34, ¶ 181.
6 June 11, 2003 Letter, Exhibit 1.
7 June 11, 2003 Letter, Exhibit 1. On October 11, 2001, the
District Court entered an order adopting an Agreed Protective
Order submitted by the parties that, inter alia, provided for
confidential treatment of designated information produced in
discovery. See Order and attached Agreed Protective Order,
attached as an exhibit to June 4, 2003 Letter. The Agreed
Protective Order contains no language or provision addressing
inadvertent production of privileged documents.
8 June 11, 2003 Letter, Exhibit 2; June 18 Letter, Declaration
of Thomas P. Bracaglia (``Bracaglia Decl.''), attached as
exhibit, at 3, ¶ 14.
9 June 11, 2003 Letter, Exhibit 2.
10 June 11, 2003 Letter, Exhibit 3.
11 June 11, 2003 Letter, Exhibit 4.
12 Complaint App. at 402-37; Bracagalia Decl. at 3, ¶ 16; Joint
Statement at 34, ¶ 186. AT&T's motion was entitled, Motion Of
Defendant, AT&T Corp., To Dismiss, Or In The Alternative, Motion
To Dismiss Without Prejudice To Submit This Matter To The Federal
Communications Commission For Disposition (``Motion to
Dismiss'').
13 June 11, 2003 Letter, Exhibit 5.
14 June 11, 2003 Letter, Exhibit 5. Ms. Leuba made a similar
request to Mr. Burns's colleague, Andrew Kasman, that same day.
See June 11, 2003 Letter, Exhibit 6.
15 June 11, 2003 Letter, Ex. 7.
16 June 11, 2003 Letter, Ex. 7.
17 Complaint App. at 438.
18 Complaint App. at 454, page 96.
19 Complaint App. at 565-66; Joint Statement at 35, ¶ 191.
20 Complaint App. at 580-86.
21 Complaint App. at 587.
22 See Addendum to Complaint at 26-27, ¶¶ 70-74. In its June
11, 2003 Letter, AudioText argues that a submission that
AudioText provided to Commission staff during the pre-complaint
mediation process included quotes from some of the Subject
Documents. Id. at 6. According to AudioText, AT&T raised no
objection to these disclosures. Id. AT&T did not dispute this
contention in its June 18 2003 Letter responding to AudioText's
arguments.
23 See Complaint at ¶¶ 161, 177, 178, 180, 181, 182, 183, 184,
206, 325, and 328.
24 See e-mail communications between Christopher N. Olsen,
Assistant Chief, Market Disputes Resolution Division, Enforcement
Bureau, and Jennifer L. Leuba, counsel for AT&T, attached hereto
as Exhibit 1. AT&T's counsel noted in the June 4, 2003 Letter
that she had sent AudioText's counsel a letter on May 20, 2003
requesting the return of the Subject Documents. See June 14,
2003 Letter at 1-2. According to AT&T, AudioText refused this
request. Id.
25 Id. AT&T's counsel advised staff that a few of the Subject
Documents contain both privileged and non-privileged information,
and offered to provide redacted versions of such documents for
inclusion in the record. Id.
26 June 4, 2003 Letter.
27 47 C.F.R. §§ 0.457 and 0.459.
28 See June 4, 2003 Letter at 1.
29 June 18, 2003 Letter at 6, 10.
30 See June 11, 2003 Letter; June 23, 2003 Letter.
31 See 47 C.F.R. § 0.459(d)(1)(where the Commission has
received a request that information submitted to the Commission
be withheld from public inspection, ``the information will be
accorded confidential treatment. . . until the Commission acts on
the confidentiality request and all subsequent appeal and stay
proceedings have been exhausted.'')
32 47 C.F.R. §§ 0.457 and 0.459.
33 5 U.S.C. § 552.
34 See 5 U.S.C. § 552(b).
35 47 C.F.R. § 0.457(d). See 5 U.S.C. § 552(b)(4) (Exemption
4, stating that the government need not disclose ``trade secrets
and commercial or financial information obtained from a person
and privileged or confidential.'')
36 June 4, 2003 Letter at 2.
37 June 4, 2003 Letter at 2.
38 June 4, 2003 Letter at 2-3 (citing the tests set forth in
National Parks and Conservation Ass'n v. Morton, 498 F.2d 765,
770 (D.C. Cir. 1974) and Critical Mass Energy Project v. NRC, 975
F.2d 871, 879 (D.C. Cir. 1992 (en banc), cert denied, 507 U.S.
984 (1993)).
39 5 U.S.C. § 552(b)(4).
40 June 4, 2003 Letter at 3.
41 June 4, 2003 Letter at 3. AudioText contends that the
protections of sections 0.457 and 0.459 are not available to AT&T
because AT&T was not the person who submitted the Subject
Documents to the Commission. According to AudioText, only
persons who have submitted materials to the Commission are
entitled to request that they be withheld from the public record
under sections 0.457 and 0.459 of our rules. See June 11, 2003
Letter at 1-2. AudioText's suggestion that only the person who
has submitted information to the Commission may request
confidential treatment of the information appears to be at odds
with section 0.459(i) of our rules, which provides that ``[t]hird
party owners of materials submitted to the Commission by another
party may participate in the proceeding resolving the
confidentiality of the materials.'' 47 C.F.R. § 0.459(i). We
need not, however, decide whether AT&T is entitled to request
that the Subject Documents be withheld from public inspection
under sections 0.457 and 0.459, even though AT&T itself did not
submit these materials to the Commission, because we find that
AT&T has not established that the Subject Documents qualify for
confidential treatment under those rules, regardless of who
submitted the Subject Documents to the Commission.
42 47 C.F.R. § 0.457(d). See 5 U.S.C. § 552(b)(4).
43 United States v. de la Jara, 973 F.2d 746, 749-50 (9th Cir.
1992)(finding that attorney-client privilege was waived where a
criminal defendant waited six months before seeking the return of
a privileged letter that the government seized in executing a
search warrant). See, e.g., In re Grand Jury (Impounded), 138
F.3d 978 (3d Cir. 1998) (holding that in cases of inadvertent
disclosure, ``the party asserting the work product doctrine must
pursue all reasonable means to restore the confidentiality of the
materials and to prevent further disclosures within a reasonable
period to continue to receive the protection of the privilege'');
SEC v. Lavin, 111 F.3d 921, 929 (D.C. Cir. 1997)(noting that the
D.C. Circuit ``adheres to a strict rule on waiver of
privileges,'' and holding that ``'the confidentiality of
communications covered by [a] privilege must be jealously guarded
by the holder of the privilege lest it be waived.''') (citations
omitted).
44 June 18, 2003 Letter at 3 and n.1 (arguing that ``[b]ecause
the AudioText litigation was pending in Pennsylvania and because
the inadvertent production of these privileged documents at issue
occurred in Pennsylvania, the holdings of the Court of Appeals
for the Third Circuit and the District Courts sitting in
Pennsylvania should govern the scope of the privilege afforded
the documents and all issues regarding waiver'').
45 138 F.3d 978 (3d Cir. 1998).
46 Although Grand Jury addressed the work-product privilege, in
analyzing the factors considered in determining whether a waiver
occurred, the court in Grand Jury relied upon decisions
concerning the attorney-client privilege. 138 F.3d at 981 (citing
the holding in United States v. de la Jara, 973 F.2d at 750).
47 Id. at 982.
48 Id. at 982.
49 Grand Jury, 138 F.3d at 982.
50 June 11, 2003 Letter, Exhibit 3.
51 See June 11, 2003 Letter, Exhibits 5, 6.
52 See June 11, 2003 Letter, Exhibit 7 at 1(stating that
AudioText ``did not intend to return any of these documents to
[AT&T],'' and advising AT&T's counsel to ``take any steps you
deem appropriate with respect to these documents.'') .
53 Like the privilege holder in Grand Jury, AT&T does not even
claim that it had ``had reason to believe that the adversarial
party was not making use of'' the allegedly privileged material.
138 F.3d at 982. The record shows that, at the Schlafly
deposition, held in December 2001, AT&T's counsel noted that
several of the topics on which AudioText sought deposition
testimony were based on the privileged documents that AT&T had
asked AudioText to return. See Complaint App. at 439-40.
54 See June 18, 2003 Letter at 2, 5 (arguing that ``AT&T had
intended to file a motion for their return when the matter was
referred to the Commission'' and that ``AT&T's efforts to rectify
the disclosure were not only timely but ongoing and persistent up
until the time this action was stayed''). See also June 4, 2003
Letter at 1 (arguing that the District Court's Order of January
17, 2002 ``stayed `all further proceedings,' which, among other
things, included all motion practice.'')
55 Indeed, AT&T could have asked the District Court for
expedited treatment of such a motion to compel in view of the
pendency of the Motion to Dismiss, or requested that the court
decide the motion to compel before ruling on the Motion to
Dismiss.
56 AT&T apparently did not regard the January 17, 2002 stay
order as precluding all activity in the District Court
litigation, as evidenced by its successful motion, in November
2002, to have AudioText's second-filed action consolidated with
the action that was the subject of the January 17, 2002 stay
order. See, supra, at ¶ 6. In addition, the fact that AudioText
filed a motion with the District Court on January 25, 2002
seeking reconsideration of the January 17, 2002 stay order, which
the District Court denied in an order dated August 21, 2002,
provides further evidence that the January 17, 2002 stay order
did not bar all motion practice in the District Court litigation
See Complaint App. at 567-79.
57 Bracagalia Decl. at 4, ¶ 17(stating that AT&T ``intended to
file a motion to compel return of the documents if its [Motion to
Dismiss] was not been [sic] granted.'')
58 United States v. de la Jara, 973 F.2d at 750.
59 See June 18, 2003 Letter at 3
60 June 18, 2003 Letter at 3. The five factors are as follows:
(1) the reasonableness of the precautions taken to prevent
inadvertent disclosure in view of the extent of the document
production; (2) the number of inadvertent disclosures; (3) the
extent of the disclosure; (4) any delay and measures taken to
rectify the disclosure; (5) whether the overriding interests of
justice would or would not be served by relieving a party of its
error. Id. citing Rotelli v. 7-Up Bottling Co. of Phila., 1995
WL 234171 (E.D. Pa. 1995); Advanced Medical, Inc. v. Arden
Medical Services, Inc., C.A. No. 87-3059, 1988 WL 76128 (E.D. Pa.
July 18, 1988).
61 See In re Grand Jury Investigation of Ocean Transp., 604
F.2d 672, 674-75 (D.C. Cir.), cert denied, 444 U.S. 915 (1979)
(where documents were turned over one year prior to the assertion
of privilege, and they had already been ``copied, digested and
analyzed'' before a motion was filed with the district court,
``the disclosure [could not] be cured simply by a return of the
documents'' and the ``privilege ha[d] been permanently
destroyed); McGreevy v. CSS Industries, Inc., Fair Empl. Prac.
Cas. (BNA) 1644, 1996 WL 412813, at *2 (E.D. Pa. 1996)
(disclosure of privileged document was already complete, as
opposing party had learned its full contents); Advanced Medical,
Inc., 1988 WL 76128, at *3 (E.D. Pa. 1988) (noting that, although
a ``limited disclosure resulting from glancing at an open file
drawer or designated documents for copying may not justify a
finding of waiver when the party does not know the essence of the
document's contents. . . when disclosure is complete, a court
order cannot restore confidentiality'').