A case that has clearly caught the attention of e-discovery professionals is Mt. Hawley Insurance Company v. Felman Production Inc., 2010 WL 1990555 (S.D.W.Va., May 18, 2010). As we noted in a post here recently, U.S. Magistrate Judge Paul W. Grimm, a highly respected authority on e-discovery law and procedure, expressed criticism of the opinion in a recent article published in the Richmond Journal of Law and Technology, Federal Rule of Evidence 502: Has It Lived Up to Its Potential? And in a post on this blog last year, Bad Facts Make Bad Law: ‘Mt. Hawley’ A Step Backward for Rule 502(b), Catalyst CEO John Tredennick was one of the first to point out the flaws in the opinion’s analysis.

Now, the September issue of InsideCounsel magazine considers the Mt. Hawley case in an article by Michael Kozubek, Data-indexing Glitches Can Accidentally Disclose Privileged Documents. Kozubek zeroes in on one intriguing aspect of the Mt. Hawley case–the fact that the inadvertent disclosure of a “smoking-gun” email was due, at least in part, to an indexing glitch in one of 13 Concordance database files. Because of this glitch, searches by outside counsel failed to hit on the un-indexed emails.

Even in light of this failure of technology, the judge in Mt. Hawley faulted counsel for failing to perform critical quality control sampling. The InsideCounsel article quotes Catalyst’s Tredennick as suggesting that outcome was unfair:

John Tredennick, CEO of legal technology vendor Catalyst Repository Systems, questions the court’s assessment of the reasonableness of Felman’s efforts.

“In Mt. Hawley, plaintiff’s counsel performed many procedures including sampling and ‘eyes-on’ review of all documents identified both as relevant and potentially privileged before production—by my count as many as 23 steps,” he says.

The court should punish willful disregard or even abject sloppiness. However, punishing mistakes, particularly those caused by a vendor’s system, is bad policy, Tredennick adds. “The result will be people taking 50 steps to check everything or doing human review of everything, which runs up e-discovery costs.”

The article also quotes Ralph Losey, e-discovery team leader at Jackson Lewis, who agrees with Tredennick. “I’m inclined to think of the [Mt. Hawley] case as an outlier,” he tells InsideCounsel.

Still, the case illuminates the need for counsel–and their clients–to be diligent about quality control and not to become complacent about technology, Mayer Brown partner Anthony Diana tells InsideCounsel. “Organizations should not avoid the use of advanced technology for fear of privilege waiver,” he says in the article. “Rather, their counsel should carefully consider the risks involved in relying primarily upon technology to help curb the costs of a privilege review.”