United States: FRE 502(d) – An Underutilized "Safety Net" In Document Intensive Litigation

The inadvertent disclosure of privileged material may haunt a company for years, particularly in today's era of pattern litigation and increased collaboration within the plaintiffs' bar. Fortunately, in matters pending in federal court, this consequence can be avoided through the use of Federal Rule of Evidence (FRE) 502(d).

The attorney-client privilege is arguably "the most sacred of all legally recognized privileges." United States v. Bauer, 132 F.3d 504, 510 (9th Cir. 1997). As explained by the Supreme Court, "[i]ts purpose is to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice."Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Naturally, the importance of preserving privilege and avoiding waiver cannot be overstated. This is particularly true in the context of product liability litigation where certain documents may be repeatedly placed at issue across numerous lawsuits involving the same product model.

Despite its simplicity, FRE 502(d) continues to be underutilized despite having been enacted in 2008. The rule provides as follows:

Controlling Effect of a Court Order. A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court — in which event the disclosure is also not a waiver in any other federal or state proceeding.

The purpose of 502(d), which pertains to "disclosure of a communication or information covered by the attorney-client privilege or work-product protection," is simple. An order entered pursuant to the rule provides litigants an extra layer of protection in the event of inadvertent production. Importantly, the production of a privileged or protected document does not constitute a waiver on behalf of the producing party both in the current litigation and "in any other federal or state proceeding." In stark contrast to FRE 502(b), which requires a demonstration that the producing party took reasonable steps to prevent disclosure and rectify the error, an order under 502(d) provides absolute protection so long as the disclosure was "connected with the litigation pending before the court."

As explained by the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, the impetus for FRE 502 was a recognition that "the current law on waiver of privilege and work product is responsible in large part for the rising costs of discovery, especially discovery of electronic information." The rule's drafters expected that the rule would permit litigants to minimize efforts to conduct privilege review, and thereby reduce the cost of responding to discovery demands, when litigants no longer faced the risk of waiver of privilege in concurrent or future litigation. But of course, as every litigator knows, you cannot un-ring a bell. Despite the rule's noble intention, litigants remain highly protective of their "full and frank communication[s] [with] attorneys," and therefore continue to take substantial efforts to avoid disclosure of such materials. As a result, the intended reduction of discovery costs has not materialized. (Of course, by all accounts, the volume of electronically stored information subject to review and production has greatly increased since 2008, resulting in the continued growth of discovery costs irrespective of privilege review methods.)

Aside from an attorney's lack of familiarity with the rule, we can think of only one possible reason why litigants would be dissuaded from seeking an order under 502(d): fear that burden and proportionality arguments as to potential document review efforts will be diluted. A concern among litigants may exist that a party would be diminishing its ability to object to the scope of discovery where a 502(d) order had been entered. In response to such an objection, a requesting party (and the court) could potentially respond that the producing party need not expend time and money to conduct privilege review because disclosure of privileged materials would not constitute waiver in the pending litigation or any other proceeding. In other words, litigants may worry that a court would simply order production without privilege review. Fortunately, appropriate phrasing in a 502(d) order will avoid such a scenario. A model FRE 502(d) order by U.S. Magistrate Judge Andrew Peck, perhaps the judiciary's biggest proponent of 502(d), provides as follows:

  1. The production of privileged or work-product protected documents, electronically stored information (ESI) or information, whether inadvertent or otherwise, is not a waiver of the privilege or protection from discovery in this case or in any other federal or state proceeding. This Order shall be interpreted to provide the maximum protection allowed by Federal Rule of Evidence 502(d).
  2. Nothing contained herein is intended to or shall serve to limit a party's right to conduct a review of documents, ESI or information (including metadata) for relevance, responsiveness and/or segregation of privileged and/or protected information before production.

Procedurally, seeking an FRE 502(d) order from the court could not be easier, particularly as the rule does not require a stand-alone order. The above language is easily incorporated into a protective order or a proposed ESI protocol. On a substantive level, a 502(d) order may be nothing more than a safety net. But when you're given a "get-out-of-jail-free" card, you should certainly put it to use.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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