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Careless Disclosure: Federal Rule of Evidence 502

In the realm of electronic discovery (to borrow from and with apologies to King Louis XV): “Après le deluge, le problème.”   That is, mass-scale document production of ESI (Electronically Stored Information) leads to a problem, specifically, inadvertent disclosure of privileged documents, notwithstanding the greatest of care.   One jurist, Judge Kaplan of the Southern District of New York, acknowledged the same:

“…inadvertent production of one or a few privileged documents in a massive disclosure is not necessarily inconsistent with the exercise of due care to avoid such occurrences, as it is virtually impossible to avoid any error whatsoever in dealing with large volumes.”

S.E.C. v. Cassano, 189 F.R.D. 83, 86
S.D.N.Y.,1999)

This truism led to a debate over waiver of privilege, namely, whether inadvertent disclosure waives the protection entirely, thus exposing all attorney-client communications and attorney work product to opponent eyes. Some federal courts held that inadvertent disclosure of one privileged documents opens the door to disclosure of all privileged documents.   This is strict or per se waiver, a draconian outcome to be sure.   See, Underwater Storage, Inc. v. United States Rubber Co., 314 F. Supp. 546 (D.D.C. 1970).

To lend reason to the issue, in 2008 Congress enacted  Rule 502 of the Federal Rules of Evidence [“Attorney-Client Privilege and Work Product; Limitations on Waiver], which is based on a reasonableness standard first espoused by Judge Grimm of the District Court of Maryland in Victor Stanley v. Creative Pipe, 250 F.R.D. 251 (D.Md. 2008).   

Now, according to 502(b), when unintentional disclosure of a privileged document occurs, the disclosure does not operate as a waiver if: (1) disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following  Federal Rule of Civil Procedure 26(b)(5)(B) (the “clawback” provision” formally titled as “Claiming Privilege or Protecting Trial-Preparation Materials—Information Produced”).

The receiving lawyer should be aware that he has a “notice” obligation to reveal his bounty once he realizes it.  ABA Formal Opinion 92-368.  

However the error is realized, the careful lawyer who nonetheless produces privileged material must carefully adhere to Rule 26(b)(5)(B) in order to get them back with no harm, unless the rule is superseded by agreement of the parties.  Rule 502(e).  Pursuant to 26(b)(5)(B), the receiving party must be notified of the gaffe and he must then promptly return, sequester, or destroy the specified information.  Furthermore, the recipient must not use or disclose information until the claim is resolved.  Parties can also negotiate their own quick-peek and clawback agreements.

For the practicing lawyer confronting massive ESI disclosure and seeking to avoid inadvertent disclosure, he should:

  • Limit volume. The more that’s produced the more likely the wrong stuff will be produced.
  • Get enough time. The more time a law firm has the more likely it will cull out privileged material.
  • Get enough qualified manpower. The more qualified lawyers working on document production the better the result will be. Multi-level reviews should be considered.
  • Create a protocol for privilege review.
  • Search terms need to be tested.   Development of search terms requires care and work in order to maximize optimal document retrieval.
  • Prepare adequate privilege logs.

The production of ESI has become an amalgam of law, computer science, quality control, and personnel training. The law firm that best manages these disciplines will obtain the best results in terms of avoiding inadvertent disclosure and will best serve his client.

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