Court Did Not Err in Sanctioning Counsel for Improper Response to Inadvertent Production of Privileged Material

On May 30, 2024, the First Department issued a decision in Pursuit Credit Special Opportunity Fund, L.P. v. Krunchcash, LLC, 2024 NY Slip Op. 02996, holding that the trial court did not err in sanctioning counsel for its improper response to an opponent’s inadvertent production of privileged information, explaining:

The motion court did not abuse its discretion in sanctioning defendants and their counsel for accessing and downloading folders from a live Dropbox link that, unbeknownst to plaintiff, provided direct access to its corporate files. CPLR 3103 confers broad discretion upon a court to fashion appropriate remedies to prevent the abuse of disclosure devices. The court here correctly determined that counsel was required to notify plaintiff that it had obtained the Dropbox link inadvertently, as the link contained folders that counsel knew or should have known were confidential or privileged. Counsel’s refusal to sequester the inadvertently disclosed files led to plaintiff having to file the underlying motion and incur substantial legal fees.

(Internal citations omitted).

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