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Episode 136: Back to eDiscovery Basics — How One Party’s Failure to Recognize When the Duty to Preserve Arose Resulted in Waiver of Privilege

In Episode 136, Kelly Twigger discusses whether an FRE 502(d) order is appropriate to allow a party to intentionally disclose privilege materials, and how one party’s correspondence about the date of the duty to preserve arose waived privilege as to communications regarding the planning and implementation of preservation and issuing legal holds in Lubrizol Corp. v. IBM Corp., 2024 WL 941686 (N.D. Ohio 2024).


Welcome to this week’s Case of the Week series brought to you by eDiscovery Assistant in partnership with ACEDS. My name is Kelly Twigger. I am the CEO and founder at eDiscovery Assistant, your GPS for ediscovery knowledge and education. Thanks so much for joining me today.

Each week on the Case of the Week I choose a recent decision in ediscovery and talk to you about the practical implications. This week’s decision is a big one, which raises the issues of the scope of 502(d), as well as the importance of knowing when the duty to preserve arises and the potential implications for waiver of privilege when that argument is made incorrectly.

If you haven’t yet had a chance to grab our 2023 eDiscovery Case Law Report that discusses the key trends and cases from last year, you can download that today.

All right, let’s dive into this week’s decision, which comes to us from the Lubrizol Corp. v. IBM Corp. breach of contract action. We covered the initial sanctions motion from this case back on Episode 108 of Case of the Week. This week’s decision, as I mentioned, comes to us from Judge Jennifer Dowdell Armstrong. She’s a United States Magistrate Judge in the Northern District of Ohio, and this decision is dated February 8, 2024. Judge Armstrong has four total decisions in our eDiscovery Assistant database. As always, we add the issue tags for each of the decisions in our database, and this week’s issues include attorney-client privilege, waiver, legal hold, spoliation, proportionality, failure to produce, and failure to preserve.


The underlying facts of this case include a breach of contract between the parties related to the construction of an enterprise resource planning piece of software (“ERP software”). Lubrizol alleges that IBM committed fraud and various torts in connection with the project to implement a new ERP software, and Lubrizol subsequently amended its complaint to allege spoliation when it learned that IBM had deleted the electronically stored information of several IBM personnel who worked on the ERP project, which included both current and former employees of IBM. Now that’s key, because the email boxes of departed employees that were relevant were deleted after Lubrizol alleged IBM’s duty to preserve arose.

There are a number of facts in this case that go to the timeline on the motions and that emphasize, as we do regularly here on Case of the Week, that the timeline in a case is crucial. The short story is that IBM argues its duty to preserve did not arise until the filing of the complaint in April 2021, and it implemented legal holds and preservation in May 2021. Lubrizol alleges that the duty to preserve for IBM arose much earlier given multiple facts, including that:

  • Lubrizol sent IBM a notice terminating the party’s contract for cause in April 2020 — a full year before the complaint was filed,
  • the parties exchanged letters addressed to senior legal personnel at both companies labeled “Subject to Rule 408 and the Ohio and Federal Rules of Evidence” in which Lubrizol described its legal claims and damages in correspondence to IBM and was, “explicit about its plan to sue IBM”,
  • IBM informed Lubrizol that it had hired outside counsel in September of 2020, and
  • the parties conducted a mediation in November 2020, during which they acknowledged that there was “a massive gulf” between their respective positions on claims, defenses, and damages.

Despite all of those facts occurring prior to the filing of the complaint, IBM maintained its position that its duty to preserve did not arise until after the filing of the complaint in April 2021.

We are before the Court here on two competing motions. Lubrizol has made a motion to compel the production of documents and a motion from IBM asking the Court to enter an FRE 502(d) order allowing it to produce documents without waiving privilege. The basis of both motions is the timing of when IBM’s duty to preserve arose.


The Court undertakes an analysis of each individual step here, which is different. Sometimes we get the court saying, hey, you’ve argued this, this and this, but really this particular issue is dispositive, so I’m not going to address the other ones. That’s not the case here. The Court goes through each of the individual motions and there’s interesting content for each, and interesting implications, so we’re going to cover those.

IBM’s Motion for FRE 502(d) Order

Let’s start with IBM’s motion for an FRE 502(d) order. The Court cites the language of FRE 501, and notes that FRE 502 was enacted to achieve two main goals: first, resolving disagreement among the courts regarding the effect of certain disclosures of privileged information, and second, preventing litigation costs from spiraling due to fears that any disclosure of a privileged document would result in subject matter waiver of all other communications on the same topic.

IBM’s motion first asks the Court to authorize IBM to produce — without waiving the attorney-client privilege or the attorney work product protection — all documents and communications concerning “the preparation, implementation, institution, application, and dissemination by IBM of document preservation and litigation holds” through May 15, 2021, and second, responses to Lubrizol’s interrogatories on the same subject, and third, a Rule 30(b)(6) witness on the same subject.  

Lubrizol argues that such an order would permit IBM to intentionally — rather than inadvertently — disclose privileged information without constituting a subject matter waiver of all other documents and communications on the same topic, and that the Court lacks the authority to do so.

The Court notes initially that a court may enter into a Rule 502(d) order on its own initiative and without the consent of both parties. We covered that same issue on Episode 127 of the Case of the Week in the decision U.S. v. Captive Alternatives, LLC.

The Court acknowledges here that whether it has the authority to enter a 502(d) order that covers intentional rather than inadvertent disclosures of privileged information is unclear. The Court then goes into some analysis on different case law, as well as the Sedona Conference, and the Court notes that the position of the Sedona Conference is that a Court does have that authority. But then the Court also cites to several other decisions from other courts that have held that it does not have that authority.

Following a review of case law, the Court determined that it remained unconvinced that it had the authority to enter a Rule 502(d) order that preemptively authorizes IBM to make intentional disclosures without waiving privilege.  Even assuming that it did have the authority, the Court concluded here that the Rule 502(d) order that IBM proposes is not appropriate in scope and is not likely to “narrow and refine” the party’s arguments for two reasons: first, the timeframe IBM selected did not cover all relevant discussions, and second, IBM’s proposed order would allow it to disclose documents that support its spoliation position but allow it to withhold less favorable documents. As to the latter point, the Court also noted several cases that have identified that issue and refused to grant 502(d) orders.

On this issue, the Court held that IBM’s proposed scope of a 502(d) order did not eliminate the risk of selective disclosure and that it is not likely to narrow the disputes between the parties. The Court also found that nothing in the text of 502(d) gave the Court the authority to unilaterally impose a broader waiver of privilege than IBM had agreed to. With that, the Court denied IBM’s motion.

Lubrizol’s Motion to Compel

The Court then moves to Lubrizol’s motion to compel, which involved an interrogatory and multiple requests for production. The motion involves an interrogatory that Lubrizol sent to IBM, and I want you to listen carefully to the language of the interrogatory. The interrogatory asked IBM to identify “all communications before 2022 concerning IBM preparing, implementing, instituting, applying, and disseminating document preservation and litigation holds in connection with” the ERP project. The instructions to the interrogatory state that “identify” means to provide the date of the communication, whether the communication was oral or written, and the individuals who participated in the communication. Lubrizol acknowledges the privilege in those documents, but wants a log of the actions taken to identify whether IBM put a hold in place when its duty to preserve arose.

The Court notes that “[u]nder both federal and Ohio law, the mere fact that a party communicated with counsel is not privileged.” The Court also notes that the interrogatory does not impose an undue burden on IBM and that the existence, timing, and frequency of the communications is relevant to Lubrizol’s argument that IBM anticipated litigation at the time of the alleged spoliation, i.e., before the complaint was filed in April 2021. The Court also found that IBM failed to meet its burden on proportionality, finding that “[b]eyond the bare assertion that responding to Interrogatory Number 6 would require it to list ‘numerous’ communications, IBM has not provided any specific evidence regarding the volume of communications at issue or the burden that responding to the interrogatory would impose.” We’ve discussed multiple times here on Case of the Week that you have to provide specific facts to prevail on a proportionality argument.

Finding that the documents were relevant to Lubrizol’s spoliation claim, the Court also required IBM to produce documents and communications regarding:

  1. any written legal hold notices;
  2. any steps IBM took to preserve relevant evidence;
  3. the potential for litigation;
  4. the parties’ failed November 18, 2020 mediation to the extent those documents relate to the potential for litigation;
  5. IBM’s policies, practices, and procedures for preserving or deleting the data of the former employees at issue;
  6. steps IBM took to determine whether it was possible to restore or retrieve the information deleted from the email boxes of the former IBM employees;
  7. communications from IBM and the former IBM employees regarding data preservation and deletion;
  8. communications from a former employee regarding data-related passwords; and
  9. documents and communications regarding the separation of the former IBM employee from IBM and the preservation of their files.

The Court also found that IBM had produced extensive non-privileged materials on these topics, and that IBM had previously challenged Lubrizol’s claim of relevance and been ordered IBM to produce any additional non-privileged documents.

At this point, we’ve got the log and the non-privileged documents that have to be produced regarding when the duty to preserve arose. The next question is whether or not IBM waived its privilege with regard to the other privileged materials that would apply related to the duty to preserve. The Court here applied a three factor test under Ohio law and found that IBM did waive its privilege with respect to IBM’s document preservation efforts, whether IBM reasonably anticipated litigation at the time of the alleged spoliation, and when IBM identified the disputed custodians as individuals who might possess information relevant to the case. That’s a pretty important holding here.

Under that test — which is dictated by the Hearn v. Rhay case — the Court found that IBM asserted the privilege through an affirmative act when it sent a letter on October 29, 2021, in which it alleged that it did not reasonably anticipate litigation at the time the documents were deleted and that it did not identify departed employees as custodians until Lubrizol included them in their ESI disclosures. Remember that the complaint was filed in April 2021, six months prior to this letter stating IBM’s idea of when its duty to preserve arose. Evaluating the Hearn test, the court found that by arguing it did not reasonably anticipate litigation until the complaint was filed, IBM made the advice that it had received from counsel regarding its document preservation efforts and whether litigation was reasonably likely prior to that day relevant evidence.  According to the Court:

If counsel was telling IBM before April 2021 that litigation was reasonably likely, that is certainly relevant to Lubrizol’s claim. Similarly, if IBM’s counsel identified the disputed employees as potentially relevant custodians before their email boxes were deleted, that would impact IBM’s state of mind and the strength of Lubrizol’s spoliation claim.

The Court also found that applying the privilege here would deny Lubrizol access to information that is “vital to its spoliation claim.” As such, the Court granted Lubrizol’s motion to compel and required IBM to produce:

  • all non-privileged documents responsive to the interrogatory and RFPs at issue, and
  • all documents responsive to interrogatory number 16 and the relevant requests for production for which IBM was currently claiming privilege that addressed IBM’s document preservation efforts, whether IBM reasonably anticipated litigation prior to the alleged spoliation or when IBM identified the disputed custodians as individuals possessing potentially relevant information.

This is a really important ruling, because this essentially says by issuing a letter to Lubrizol claiming that the duty to preserve arose after the filing of the complaint, IBM waived all of its privilege in communications that would have shown that it spoliated data because its duty to preserve arose earlier than it contemplated.


There’s a lot to unpack in this decision. Let’s start with the scope of Federal Rule of Evidence 502(d). While there is still a question here, we are seeing more and more courts come down — as Judge Armstrong did here — and find that Federal Rule of Evidence 502(d) does not cover an intentional production of privileged material, only one that is inadvertent. It’s not a shield to prevent a party having to review, only one that allows cover when you inadvertently produce privileged material.

Interestingly, that seems to beg the question — how is 502(d) different than Rule 26 that requires reasonable efforts? Is it just another easier layer of protection, but not all encompassing? And if that’s the case, is the rule really meeting the underlying rationale for 502(d), which was meant to curb costs in review? We’ll have to keep an eye on how that continues to develop. I do agree that allowing a party to engage in a document dump and then use 502(d) to claim a privilege isn’t right.

We’ll have to just keep our eyes open as to how things happen here, but keep in mind that the scope of 502(d) is for inadvertent production under most court’s rulings at this time, rejecting the Sedona Conference’s statement that intentional disclosure should also be covered.

The next issue here on Lubrizol’s motion to compel identifies an excellent strategic angle to take when you suspect or allege spoliation based on the date of the duty to preserve. Lubrizol has the Court ordering IBM to first produce a privilege log of the documents regarding its discussions about when the duty to preserve arose and what actions were taken internally to identify custodians and preserve data. Just a log, but still monumental in the log’s application to Lubrizol’s ability to show that IBM anticipated litigation long before it claimed it did at the filing of the complaint.

This is a great strategy to use, especially one where you don’t get the Court to find waiver the way that the Court did here. There can be no sanctions for failure to preserve where the duty to preserve has not attached, so getting a log may demonstrate when a party believed that a duty arose is a huge step and just a terrific strategic plan to be able to use. So, file that one away.

As we know, the Court goes even further than the log here. The huge elephant in the room of this decision lies in the Court’s ruling that by asserting that it did not anticipate litigation until the filing of the complaint, IBM waived privilege in documents between counsel that it may have thought otherwise were privileged. That’s a big waiver, folks, and it’s a wake up call. If you aren’t already doing this, you need to have a clear understanding of when the duty to preserve arises and how you can support your argument. The facts here in this case that we went over are pretty suggestive that IBM should have known the duty to preserve arose much earlier, and they absolutely suggest that the duty to preserve arose long before the filing of the complaint.

This decision is key in a number of respects, but it all comes down to the fact that you need to advise your clients carefully on when the duty to preserve arises and what obligations that duty imposes on your need to identify, preserve, and collect data to prevent spoliation. This is a hard concept, and it gets harder the more technology gets complicated as we talk about Slack, Microsoft Teams data, hyperlinked files and all of those issues that have to be dealt with. You’ve got to have a plan in place now more than ever to be able to identify when the duty to preserve has arisen and what you’re going to do to identify and preserve information quickly.

We’ll keep an eye on this Lubrizol matter going forward, as there’s very likely to be additional sanctions motions if the case progresses.


That’s our Case of the Week for this week. Thanks so much for joining me. We’ll be back again next week with another decision from our eDiscovery Assistant database.

As always, if you have suggestions for a case to be covered on the Case of the Week, drop me a line. If you’d like to receive the Case of the Week delivered directly to your inbox via our weekly newsletter, you can sign up on our blog. If you’re interested in doing a free trial of our case law and resource database, you can sign up to get started.

See you next Tuesday!

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