You are an associate in a law firm who has just been assigned the responsibility of managing a document production in a breach of contracts case.  There are 700,000 electronic documents to be reviewed, and there is a court-ordered deadline for the production in two weeks.  Fast forward a few months, after you have successfully met the deadline, when you are defending a deposition in that same case.  Opposing counsel hands you the first exhibit.  To your horror, you realize it is an email between your client’s CEO and the company’s in-house counsel showing your client knowingly and intentionally breached the contract.  There is no clawback agreement or order in place.  Have you just lost your case?  Under Federal Rule of Evidence 502(b), that depends on what you did during those two weeks and what you do now.  

While disclosure of privileged information usually constitutes waiver of the privilege for all information regarding the same subject matter, Rule 502(b) provides that an inadvertent disclosure of attorney-client communication or attorney work product in a federal proceeding does not constitute a waiver of the protection.  Where Rule 502(b) applies, the document will remain protected by the privilege and opposing counsel will not be able to use it.  However, three requirements must be met before a party asserting privilege can make use of the rule.

1.  The disclosure must have been inadvertent.

An inadvertent disclosure is one that is unintentional.  This requirement is not met if a party purposefully discloses a privileged document, even if the party is unaware that privilege is waived when a document is disclosed or they do not realize an email was written by outside counsel.  It is, therefore, essential for litigators to understand the rules governing privilege and properly identify all lawyers relevant to a case before beginning a document review.

2.  Reasonable steps were taken to prevent the disclosure before it occurred.

In the world of electronic discovery, where discovery can involve tens of millions of documents, parties are not necessarily expected to conduct detailed record-by-record privilege reviews.  However, they are expected to make a good faith effort to prevent unintended disclosures.  It is good practice for litigators to take the time to plan a document review process, including determining the appropriate number of attorneys to use and deciding whether there needs to be multiple levels of review.  Attorneys should also choose search terms with care and conduct sampling tests, both before the terms are finalized and after a review is done, as a quality check before making a production.  Further, they ought to memorialize the process taken because courts can consider the methodology employed as evidence of reasonableness.

In determining reasonableness, courts decide each situation on a case-by-case basis and do not consider an exhaustive list of factors.  Reasonableness is measured with reference to the complexities of a situation, and courts sometimes exercise leniency where there are time constraints or a company employed a large number of law firms as outside counsel.  Other relevant evidence can include the number of attorneys on a document review team, the total number of hours spent conducting the review, and whether sophisticated software is used.  The extent of the document production is also relevant, as well as the percentage of the total production that is privileged or nonresponsive.

3.  Reasonable steps are taken to rectify the mistake once the disclosure is discovered.

Courts will only apply Rule 502(b) and find that privilege has not been waived if a producing party acts promptly once the inadvertent disclosure is discovered.  For instance, in the situation above, in which inadvertent disclosure is discovered during a deposition, it would be best for a party to immediately object to the use of the privileged information and send a letter, postmarked the same day, demanding the return or destruction of the applicable documents.  There is no bright-line rule regarding promptness, but courts have found an objection to be untimely where it is given to opposing counsel more than a few days after discovery of the disclosure.

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In conclusion, as litigators conduct extensive document reviews, they should find some comfort in Rule 502(b)’s protection against privilege waivers where there is an inadvertent disclosure of an attorney-client discussion or attorney work product.  However, the rule only provides relief under certain circumstances and diligence is required to take advantage of the rule’s protection.  Litigators should ensure their familiarity with Rule 502(b) so they are best positioned to protect their clients’ confidential communications and materials should an inadvertent disclosure occur.  Lastly, while this article has only considered inadvertent disclosures in situations where there is no clawback arrangement, it is often advisable for parties to consider entering into one at the beginning of discovery.  Such agreements can increase a party’s chance of preserving privilege or extend Rule 502(b) protections to cases that are not in federal proceedings.