The House has at last approved the amendments to Evidence Rule 502, dealing with privilege waiver. I have addressed the Rule several times in the past, as it wended its way through the drafting and approval process. See (Aug 8, 2007, Oct. 26, 2007, Jan 18, 2008, June 26, 2008).
The amendments basically go hand in hand with the clawback provisions of amended Civil Procedure Rule 26(b)(5), and must be read in conjunction with Magistrate Paul Grimm’s opinions in Hopson v. The Mayor & City Council of Baltimore, 232 F.R.D. 228 (D. Md. 2005) and Victor Stanley, Inc. v. Creative Pipe, Inc., Case No. MJG-06-2662 (D. Md. 2008), both of which are discussed here (June 26, 2008).
My comments from a few months ago are still apropos:
First, note that only an intentional waiver of the privilege with respect to a communication results in a subject matter waiver. If the waiver is made in a federal proceeding or to a federal officer or agent inadvertently, there is no subject matter waiver under this rule.
Second, an inadvertent production of privileged documents is not a waiver if the holder of the privilege or work-product protection took reasonable steps to prevent disclosure. This is nothing more than the existing standard and still requires that the holder of the privilege show reasonable review to avoid waiver.
Third, an agreement to in effect waive waiver for inadvertent disclosure is only binding on the parties to the agreement, unless the agreement is incorporated into a court order, much as Judge Grimm discusses in Hopson. See discussion here (June 26, 2008)
Fourth, this Rule applies in Federal Court even when state privilege law governs, as it does in state law causes of action.
Fifth, if the inadvertent disclosure was made in State court and the material is then sought or offered into evidence in Federal Court, this Rule applies if it would have applied had the initial waiver been made in Federal Court or if it was not a waiver under governing State law.
The House was not satisfied to merely pass on this Rule. It received considerable attention, which ultimately resulted in an agreement between Congress and the Advisory Committee to expand the Advisory Committee Note by adding the following text:
STATEMENT OF CONGRESSIONAL INTENT REGARDING RULE 502 OF THE FEDERAL RULES OF EVIDENCE
During consideration of this rule in Congress, a number of questions were raised about the scope and contours of the effect of the proposed rule on current law regarding attorney-client privilege and work-product protection. These questions were ultimately answered satisfactorily, without need to revise the text of the rule as submitted to Congress by the Judicial Conference.
In general, these questions are answered by keeping in mind the limited though important purpose and focus of the rule. The rule addresses only the effect of disclosure, under specified circumstances, of a communication that is otherwise protected by attorney-client privilege, or of information that is protected by work-product protection, on whether the disclosure itself operates as a waiver of the privilege or protection for purposes of admissibility of evidence in a federal or state judicial or administrative proceeding. The rule does not alter the substantive law regarding attorney-client privilege or work-product protection in any other respect, including the burden on the party invoking the privilege (or protection) to prove that the particular information (or communication) qualifies for it. And it is not intended to alter the rules and practices governing use of information outside this evidentiary context.
Some of these questions are addressed more specifically below, in order to help further avoid uncertainty in the interpretation and application of the rule.
Subdivision (a)—Disclosure vs. Use
This subdivision does not alter the substantive law regarding when a party’s strategic use in litigation of otherwise privileged information obliges that party to waive the privilege regarding other information concerning the same subject matter, so that the information being used can be fairly considered in context. One situation in which this issue arises, the assertion as a defense in patent-infringement litigation that a party was relying on advice of counsel, is discussed elsewhere in this Note. In this and similar situations, under subdivision (a)(1) the party using an attorney-client communication to its advantage in the litigation has, in so doing, intentionally waived the privilege as to other communications concerning the same subject matter, regardless of the circumstances in which the communication being so used was initially disclosed.
Subdivision (b)—Fairness Considerations
The standard set forth in this subdivision for determining whether a disclosure operates as a waiver of the privilege or protection is, as explained elsewhere in this Note, the majority rule in the federal courts. The majority rule has simply been distilled here into a standard designed to be predictable in its application. This distillation is not intended to foreclose notions of fairness from continuing to inform application of the standard in all aspects as appropriate in particular cases—for example, as to whether steps taken to rectify an erroneous inadvertent disclosure were sufficiently prompt under subdivision (b)(3) where the receiving party has relied on the information disclosed.
Subdivisions (a) and (b)—Disclosures to Federal Office or Agency
This rule, as a Federal Rule of Evidence, applies to admissibility of evidence. While subdivisions (a) and (b) are written broadly to apply as appropriate to disclosures of information to a federal office or agency, they do not apply to uses of information—such as routine use in government publications— that fall outside the evidentiary context. Nor do these subdivisions relieve the party seeking to protect the information as privileged from the burden of proving that the privilege applies in the first place.
Subdivision (d)—Court Orders
This subdivision authorizes a court to enter orders only in the context of litigation pending before the court. And it does not alter the law regarding waiver of privilege resulting from having acquiesced in the use of otherwise privileged information. Therefore, this subdivision does not provide a basis for a court to enable parties to agree to a selective waiver of the privilege, such as to a federal agency conducting an investigation, while preserving the privilege as against other parties seeking the information. This subdivision is designed to enable a court to enter an order, whether on motion of one or more parties or on its own motion, that will allow the parties to conduct and respond to discovery expeditiously, without the need for exhaustive pre-production privilege reviews, while still preserving each party’s right to assert the privilege to preclude use in litigation of information disclosed in such discovery. While the benefits of a court order under this subdivision would be equally available in government enforcement actions as in private actions, acquiescence by the disclosing party in use by the federal agency of information disclosed pursuant to such an order would still be treated as under current law for purposes of determining whether the acquiescence in use of the information, as opposed to its mere disclosure, effects a waiver of the privilege. The same applies to acquiescence in use by another private party.
Moreover, whether the order is entered on motion of one or more parties, or on the court’s own motion, the court retains its authority to include the conditions it deems appropriate in the circumstances.
Subdivision (e)—Party Agreements
This subdivision simply makes clear that while parties to a case may agree among themselves regarding the effect of disclosures between each other in a federal proceeding, it is not binding on others unless it is incorporated into a court order. This subdivision does not confer any authority on a court to enter any order regarding the effect of disclosures. That authority must be found in subdivision (d), or elsewhere.