Hot Topics for Trial Lawyers
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New Methods for Protecting Privilege
Posted 3/9/08 David Chaumette, Shook, Hardy & Bacon L.L.P.Now more than ever, maintaining privilege, especially given large production volumes, can be a significant challenge. It is well documented that the time, delay, and costs associated with an e-discovery privilege review are substantial. To reduce these costs and the risk of waiver, the advisory committee appears to encourage parties, during their Rule 26 meeting and conference, to enter into non-waiver agreements that become part of the Rule 26(f) order. Although helpful, these agreements are not dispositive of whether privilege has been waived. If, however, the assertion of privilege is challenged, these agreements will provide evidence that the parties did not intend to waive the privilege or protection.
One type of agreement is called “quick peek,” under which the responding party will provide certain requested materials for initial examination without waiving any privilege. The requesting party then designates the documents it wishes to actually have produced. This is the Rule 34 request. The responding party then responds, screening the documents requested and asserting privilege to those documents.
Another type of agreement is called a “clawback agreement.” Under a clawback agreement the parties agree that production made without intent to waive privilege or protection should not be a waiver so long as the responding party identifies the documents mistakenly produced, and that the documents should be returned under those circumstances. Other voluntary agreements may be appropriate depending on the circumstances of the litigation. Once the parties have reached an agreement, they should have the agreement included in the court’s case management order. According to the advisory committee, in most circumstances, a non-waiver agreement and its inclusion in a case management order should preclude waiver of an inadvertently produced privileged or protected document.
These agreements are not necessarily a complete solution. n recognition of this, there have also been some important changes to the procedural rules in federal courts. The 2007 amendments to the Federal Rules of Civil Procedure contained a new version of Rule 26 (b)(5) designed to specifically address inadvertent disclosure. The amended rule specifies the steps needed to preserve the privilege when documents are inadvertently produced to the other side. Under the rule, if information is produced in discovery which is subject to a claim of privilege or protection as trial preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. This notice must be in writing unless circumstances - such as the disclosure of privileged information during a deposition - preclude it. After being notified of a claim of privilege or protection, the receiving party must promptly return, sequester, or destroy the specified information, and any copies it has, and may not use or disclose the information until the claim is resolved. The advisory committee included this provision in part because the receiving party may have included this information in its trial preparation materials. Also, if the party that received the information disclosed it to a non-party before being notified, the party must take reasonable steps to retrieve the information.
The rule also affords the party receiving the privileged information the right to challenge the assertion. The new rule states that a party receiving a notice of claim of privilege or protection may promptly present the information to the court under seal for a determination of the claim. The producing party shall preserve the information until the claim is resolved. Accordingly, notice must be sufficiently detailed so that the receiving party can determine whether to challenge the claim. Also, if challenged, detail is needed to assist the court as to the basis of the claim.
More recently, the Senate approved S. 2450, a bill adding new Federal Rule of Evidence 502 to the Federal Rules of Evidence, by unanimous consent in February 2008. The next step for the bill is the House of Representatives. Under the new rule, inadvertent disclosure of privileged or protected information during discovery would constitute a waiver only if the party did not take reasonable precautions to prevent disclosure and did not make reasonable and prompt efforts to rectify the error. The Rule is intentionally broad. In its current form, the proposed rule:
1. Applies in all cases in federal court, including cases in which state law provides the rule of decision.
2. Applies in state court with respect to the consequences of disclosure previously made at the federal level.
3. Emphasizes that a subject matter waiver occurs only when the waiver is intentional.
4. Mandates that parties are not required to take extraordinary efforts to prevent disclosure of privilege and work product; nor are parties required to conduct a post-production review to determine whether any protected information has been inadvertently disclosed.
5. Applies the protections against waiver by inadvertent disclosure to federal offices or agencies.
6. Has no language allowing for selective waiver.
Amended Rule 26(b)(5) is a step towards more effective management of the costs, delays, and risks associated with producing documents in the e-discovery era. However, by no means does its adoption signal the end of the burdensome privilege review. Until a definitive ruling has been made enforcing non-waiver agreements, or until proposed Rule 502 is fully adopted, the wiser approach is for producing parties to engage in a complete privilege review. In addition to a full privilege review, producing parties should, as a matter of course, discuss and enter into some type of non-waiver agreement regarding inadvertent disclosure during the Rule 26(f) conference. The parties should also insist that courts make the non-waiver agreement part of the case management order. These actions do not guarantee that privilege will be preserved. However, at this point in the e-discovery era, compliance with amended Rule 26(b)(5) gives producing parties the best chance to avoid inadvertently waiving privileges and protections.