A series of privileged communications between in-house counsel and the board of directors was unintentionally produced to the opposing side during the pre-deposition discovery period in a federal action. During the deposition of one of the boardmembers, the opposing side submits the set of privileged documents as an exhibit. There is no agreement or court order on file in the case dealing with the inadvertent production of privileged documents.
Risks Associated with Inadvertent Privilege andWork ProductWaiver
As many attorneys can attest, because of the volume of documents involved inmany cases, even with the most diligent of privilege reviews, a party can inadvertently disclose privileged documents. Inadvertent disclosures can result in a waiver of privilege with the scope of the waiver depending on the jurisdiction of the court. Some courts have limited the scope of the waiver to, atmost, the inadvertently produced documents themselves, while others have applied subject matter waiver.
Federal Rule of Evidence 502
The Federal Rules of Evidence include procedures to protect parties that inadvertently disclose privileged documents during litigation. This protection operates as long as the disclosure was unintentional, and the producing party behaved “reasonably” both before and after the disclosure. Federal Rule of Evidence 502 —which was signed into law on September 19, 2008— protects against the inadvertent waiver of the attorney-client privilege; it is applicable in all proceedings pending on, or commenced after, its date of enactment.
FRE 502 states that there is no waiver of privilege in the event of an inadvertent disclosure of privileged or protected documents in federal proceedings if the holder took reasonable steps both to prevent the disclosure and to rectify the error when it did occur. In early August, in Coburn Group, LLC v.Whitecap Advisors, LLC, 2009WL 2424079, the Northern District Court of Illinois cited FRE 502 when it ordered the return of an email that had been inadvertently produced to plaintiffs after a privilege review conducted by two experienced paralegals. Defendants learned of the inadvertent production when the email was used during the deposition of the email’s author.
Crucially, unlike casemanagement orders of the past, FRE 502(d) provides that non-waiver orders issued by a court in federal proceedings are binding on other federal and state courts. Non-waiver agreements between partiesmust be incorporated into an order to obtain the benefit of this protection.
Best Practices: React Quickly, Negotiate a Discovery Agreement and Obtain a Court Order
Generally, because of the reasonableness requirements found in FRE 502, organizations that wish to take advantage of the rule should adopt defensible privilege review policies and practices. Indeed, the best way to take advantage of the FRE 502 protections is to be diligent during the discovery process and react quickly to any instances of inadvertent disclosure of privileged documents. To best position themselves to gain the benefits of FRE 502, litigants should consider taking the following steps:
- Negotiate an agreement that sets forth what will be considered reasonable efforts to protect privilege and that provides for the return of privileged documents if inadvertently produced.
- Have the discovery agreement entered as an order of the court.
- Implement defensible privilege review practices. The traditional method is a page-by-page review of all documents for potential privilege, followed by a privilege-logging process where the final decisions aremade. Given thatmost information is now electronic, and generally is electronically searchable, modern practice in cases with voluminous data usually also includes running searches for known lawyers and subjects likely to be privileged. The wisdomof this practice is reinforced by recent studies that call into question traditional assumptions about the superiority of human review relative to othermethods. In fact, itmay well be true that such electronic searches are equally or more efficacious than human review and should be considered an adequate substitute to linear document review.
- A litigant involved in simultaneous state and federal proceedings should seek protections through the federal system because, pursuant to FRE 502, a court order in a federal case granting protections against inadvertent waiver will automatically apply to subsequent state proceedings.
- Attorneys dealing with opposing counsel and attending depositions should be prepared to react quickly and reasonably if it becomes apparent that privileged information has been inadvertently produced.