Hunton Insurance Recovery Blog

A Feb. 17 federal court ruling has found that neither the attorney-client privilege nor work product protection apply to a criminal defendant’s self-directed prompts and large language model outputs.  In the ruling in USA v. Heppner, US District Judge Jed S. Rakoff ordered the production of 31 documents generated by the defendant using Anthropic’s Claude, notwithstanding that the defendant had incorporated information obtained from counsel and later shared the AI outputs with his attorneys. In a recent legal update, Hunton partner Meghan Podolny and associate Jessie Purtell discuss how the ruling provides early judicial guidance on privilege issues related to AI-generated materials, an area with limited existing case law.

Although the ruling occurred in a criminal proceeding, the reasoning should apply equally across all litigation.  The ruling could therefore have serious implications for policyholders in coverage litigation and mandates a cautionary approach to client-guided “research” using open ai models.

In a welcome win for defendants litigating claims under the Illinois Biometric Information Privacy Act (“BIPA”), earlier this month a Northern District of Illinois magistrate judge denied a plaintiff’s motion to compel communications between defendant Union Pacific Railroad Company (“Union Pacific”) and the vendors that provided it with fingerprint-activated security gates.  Fleury v. Union Pac. R.R. Co., No. 20 C 390, 2024 WL 1620613, at *4-6 (N.D. Ill. Apr. 15, 2024).  In so doing, the court implicitly affirmed that, in a BIPA lawsuit, the common interest doctrine presumptively protects the communications between biometric technology vendors and their customers, regardless of which entities are named as defendants.  This ruling is a powerful tool in the BIPA landscape for employers (who are typically the customers in this scenario) and other defendants alike because it supports the ability of BIPA defendants to coordinate their defense strategy with entities who share their legal interest.  The opinion is also a good reminder, however, that vendors and their customers should use best practices early on in a BIPA litigation to maximize the scope of the common interest doctrine.

Sanctions are an extreme remedy; frequently sought, but seldom granted.  Such was the case in Hunton Andrews Kurth LLP’s action on behalf of hotel and casino, Treasure Island, LLC (“Treasure Island”), against Affiliated FM Insurance Company (“AFM”) in federal court in Nevada, where AFM “hid” documents which refute the insurer’s defense on the central disputed issue in Treasure Island’s case—and many more actions seeking insurance coverage for losses arising from the COVID-19 pandemic.  A copy of the sanctions order can be found here.

Earlier this month, the Eighth Circuit remanded a COVID-19 insurance recovery case to the district court on jurisdictional grounds. See Great River Ent., LLC v. Zurich Am. Ins. Co., No. 21-3815, 2023 WL 5839565 (8th Cir. Sept. 11, 2023).The Eighth Circuit’s decision underscores federal courts’ continued scrutiny of subject matter jurisdiction—especially in complex cases involving limited liability companies.