Evidence Rule 502: The Solution to the Privilege-Protection Puzzle in the Digital Era
Evidence Rule 502: The S olution to the Privilege- Protection Puzzle in the Digital Era
John M. Barkett 0 1
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1 John M. Barkett, Evidence Rule 502: Th e Solution to the Privilege-Protection Puzzle in the Digital Era , 81 Fordham L. Rev. 1589 (2013). Available at:
* Mr. Barkett is a partner at the law firm of Shook, Hardy & Bacon L.L.P. in its Miami
office. Mr. Barkett is a commercial litigator (contract and corporate disputes, employment,
trademark, and antitrust), environmental litigator (CERCLA, RCRA, and toxic tort), and, for
the past several years, a peacemaker and problem solver, serving as an arbitrator, mediator,
facilitator, or allocator in a variety of environmental, commercial, or reinsurance contexts.
Mr. Barkett is an adjunct professor of law at the University of Miami School of Law where
he teaches a class on E-Discovery, a topic he has written extensively about. In March 2012,
Chief Justice Roberts appointed Mr. Barkett to serve on the Advisory Committee for Civil
Rules of the Federal Judicial Conference.
1. In this Essay, as a convention, I frequently refer only to “privileged” documents
instead of “privileged and work-product protected” documents, recognizing that
workproduct can be entitled to less protection than attorney-client communications.
2. In the author’s experience, this risk is as great for plaintiffs and defendants, whether
they are individuals or business entities.
3. Model Rule 1.6(a) provides that “[a] lawyer shall not reveal information relating to
the representation of a client unless the client gives informed consent, the disclosure is
impliedly authorized in order to carry out the representation, or the disclosure is permitted by
paragraph (b).” MODEL RULES OF PROF’L CONDUCT R. 1.6(a) (2012). Model Rule 1.6(b)
permits disclosure of information relating to the representation of a client in limited
circumstances. See id. at R. 1.6(b). The Model Rules do not directly govern the conduct of
lawyers; state rules of professional conduct do, and state rules are based on the Model Rules.
The duty to protect information related to the representation of a client, however, is
applicable to all lawyers in the United States.
prevent the inadvertent or unauthorized disclosure of, or unauthorized
access to, information relating to the representation of a client.”4
What are “reasonable efforts” when a privileged document is buried
within gigabytes or terabytes5 of data? This is where Federal Rule of
Evidence 502(d) plays an important role—if lawyers would take advantage
of the value it brings to solving the privilege-protection puzzle. In this
Essay, I explain why lawyers should maximize the use of Rule 502(d)
orders. Because my conclusion is intertwined with both a rule of
professional conduct and a rule of procedure adopted before Rule 502(d)
was enacted—but with similar purposes—I discuss them first. I then
describe the terms of Rule 502, explaining how Rule 502(a) has eliminated
“subject matter” waiver concerns except where the production of a
privileged document is intentional, and how Rule 502(b) has standardized
in federal courts the factors that determine whether the inadvertent
production of privileged information results in a waiver. Then I focus on
the application of Rule 502(b) in recent cases. Finally, I discuss how Rule
502(d) can eliminate privilege waiver worries under Rule 502(b) and why a
properly framed Rule 502(d) order should be routinely sought by litigants in
I. MODEL RULE 4.4(B), NOTICE REQUIREMENTS UNDER RULE 26, AND
ABA Model Rule of Professional Conduct 4.4(b) was added in 2002 to
address the receipt by a lawyer of documents or electronically stored
information6 that the lawyer “knows or reasonably should know” was sent
inadvertently.7 While Model Rule 4.4(b) does not address substantive legal
issues concerning return of the documents or privilege waiver, it does
impose an ethical duty on a recipient to “promptly notify the sender.”8
Comment 2 to Rule 4.4 suggests that the Rule is not limited to privileged
documents, but embraces any documents “that [were] mistakenly sent or
produced by opposing parties or their lawyers.”9 Comment 2 further states
that whether the lawyer is required to do more than give notice to the
sender, “such as returning the [original] document . . . is a matter of law
beyond the scope of these Rules, as is the question of whether the
privileged status of a document . . . has been waived.”10
Model Rule 4.4(b) is a component of the privilege-protection puzzle and
should play a role in evaluating the conduct of lawyers in a privilege waiver
analysis under Rule 502. Rule 4.4(b) may help an inadvertent producer
where the timeliness of the request to retrieve the privileged information is
material to the outcome of the request.11
Rule 4.4(b) also should not be taken lightly by lawyers in litigation. In
Stengart v. Loving Care Agency, Inc.,12 the New Jersey Supreme Court
determined that counsel for an employer violated Rule 4.4 when the lawyer
retrieved privileged emails located in the cache folder of temporary internet
files on a former employee’s laptop’s hard drive.13 The court held that
counsel should have set aside the “arguably privileged messages once
[counsel] realized they were attorney-client communications.”14 Counsel
then erred by “failing either to notify its adversary or seek court permission
before reading further.”15 The matter was remanded to determine what
sanction to impose, including, potentially, disqualification.16
Federal Rule of Civil Procedure (FRCP) 26(b)(
)(B), adopted on
December 1, 2006,17 may help the inadvertent producer as well. It
addresses the handling by a recipient of inadvertently produced privileged
documents after the producing party provides notice of the mistaken
production. Specifically, Rule 26(b)(
)(B) provides that “if information
produced in discovery is subject to a claim of privilege or of 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.”18 In addition
to giving notice, which, based on the committee note, should be in writing
“unless the circumstances preclude it,”19 the producing party must
“preserve the information until the claim is resolved.”20
Upon receipt of this notice, the receiving party is obliged to “promptly
return, sequester, or destroy the specified information and any copies it has;
must not use or disclose the information until the claim is resolved.”21 Rule
13. Id. at 666 (“We find that the Firm’s review of privileged e-mails between Stengart
and her lawyer, and use of the contents of at least one e-mail in responding to interrogatories,
fell within the ambit of RPC 4.4(b) and violated that rule.”).
15. Id. The Court said there was no evidence of bad faith since the employer had a
policy in place that provided that the employer could access employee emails. Id.
“Nonetheless,” the Court held, the law firm “should have promptly notified opposing
counsel when it discovered the nature of the e-mails.” Id.
16. Id. at 666–67. The New Jersey Supreme Court issued this instruction to the trial
court: “In deciding what sanctions to impose, the trial court should evaluate the seriousness
of the breach in light of the specific nature of the e-mails, the manner in which they were
identified, reviewed, disseminated, and used, and other considerations noted by the
Appellate Division.” Id. at 666. “As to plaintiff’s request for disqualification, the court
should also ‘balance competing interests, weighing the need to maintain the highest
standards of the profession against a client’s right freely to choose his counsel.’” Id. (quoting
Dewey v. R.J. Reynolds Tobacco Co., 536 A.2d 243 (N.J. 1988) (internal quotation marks
omitted)). The Appellate Division had identified these considerations:
[T]he content of the emails, whether the information contained in the emails would
have inevitably been divulged in discovery that would have occurred absent [the
Firm’s] knowledge of the emails’ content, and the nature of the issues that have
been or may in the future be pled in either this or the related Chancery action.
Stengart v. Loving Care Agency, Inc., 973 A.2d 390, 403 (N.J. Super. Ct. App. Div. 2009).
17. FED. R. CIV. P. 26(b)(
18. Id. The notice also must be more than perfunctory. The committee note explains
that it must be “as specific as possible” in identifying the information inadvertently produced
and must state the basis for the claim. Id. advisory committee’s note. The notice also “should
be sufficiently detailed so as to enable the receiving party and the court to understand the
basis for the claim and to determine whether waiver has occurred.” Id.
20. FED. R. CIV. P. 26(b)(
)(B) also provides that if the receiving party has already disclosed
the information before being notified of the claim of privilege, it “must take
reasonable steps to retrieve the information.”22
The receiving party may “promptly present the information to the court
under seal for a determination of the claim.”23 The committee note
provides that in presenting the question to the district court, “the party may
use the content of the information only to the extent permitted by the
applicable law of privilege, protection for trial-preparation material, and
)(B) does not give the producing party a time period within
which to give notice of the production of privileged or protected
documents. The Rule, by design, stays out of the battle of whether the
producing party’s delay in giving notice results in a waiver of the privilege
or protection. The committee note states: “Courts will continue to examine
whether a claim of privilege or protection was made at a reasonable time
when delay is part of the waiver determination under the governing law.”25
Some litigants seek to eliminate the risk of waiver or reduce the cost of a
privilege review by entering into nonwaiver agreements by stipulation or
through a court order. These agreements allow a producing party to “claw
back” privileged documents inadvertently produced even after an opposing
party has had a “quick peek” of the privileged documents.26 FRCP
26(f)(3)(D) supports this kind of agreement.27 It provides that counsel, in
the “meet and confer” session required under Rule 26, must consider
whether they can agree that the court should enter an order protecting the
right to assert any privilege or protection after production of the privileged
or protected information.28 In making this change to Rule 26, the Advisory
Committee suggested that parties consider use of “quick-peek” and
“clawback” agreements to minimize the risk of a privilege waiver and to
reduce the costs of litigation.29
22. Id. The receiving party, in effect, must keep control over copies that have been
made of the privileged or protected documents. In today’s litigation world, where document
copies can proliferate, that may not be an easy task.
24. Id. advisory committee’s note.
25. Id. In other words, it does not eliminate the disparity in waiver outcomes that,
before the adoption of Rule 502, was dependent upon the law of the jurisdiction where the
action happens to reside. See infra note 36 and accompanying text.
26. See infra note 29 and accompanying text.
27. FED. R. CIV. P. 26(b)(
28. See id. As noted above, privilege review costs are particularly concerning when
electronically stored information is in issue because of, among others, the volume of such
data; the propensity for e-mail to be forwarded to many parties; the operation of computer
programs that retain drafts, editorial comments, and deleted data; or metadata.
29. FED. R. CIV. P. 26(b)(
)(B) advisory committee’s note; see, e.g., J.C. Assocs. v. Fid.
& Guar. Ins. Co., No. 01-2437(RJL/JMF), 2005 WL 1570140, at *2 (D.D.C. July 1, 2005)
(where plaintiff sought claims files that defendant estimated might total 1.3 million, and
plaintiff then focused on a geographic subset of 448, the magistrate judge proposed a
quickpeek and clawback protective order and gave defendant ten days to determine whether it
would surrender the 428 files on this basis); Zenith Elecs. Corp. v. WH-TV Broad. Corp.,
However, while there may be sensible economic reasons to enter into
such agreements, litigants still feared that the stipulation or court order
precluding waiver was not applicable to third parties. In addition, litigants
continued to seek uniformity in the law in the case of inadvertent
production, especially regarding the scope of the waiver with respect to
information concerning the same subject matter as the inadvertently
produced information. Relief in both respects arrived in the form of Rule
II. FEDERAL RULE OF EVIDENCE 502
In May 2007, the Advisory Committee on the Federal Rules of Evidence
proposed Rule 502.30 It has two purposes: (1) to resolve the disparate lines
of authority on inadvertent waiver, and (2) to respond to subject matter
waiver claims where, to reduce privilege review costs, a disclosure of
privileged information (“however innocent or minimal”) has been made in a
federal proceeding under a court order or to a federal agency.31 Rule 502
had to be approved by the Congress before it could go into effect.32 On
December 11, 2007, S. 2450 was introduced in the U.S. Senate to adopt
Rule 502.33 The bill was passed by the Senate on February 27, 2008,
approved by the House on September 8, 2008, and signed by the President
on September 19, 2008.34 It became effective in all proceedings
“commenced after the date of enactment” and “insofar as is just and
practicable, in all proceedings pending” on the date of enactment.35
No. 01 C 4366, 2003 WL 21911066, at *4 (N.D. Ill. August 7, 2003) (clawback procedure
30. For a thorough discussion of Rule 502’s origins and the initial case law interpreting
the rule, see Paul W. Grimm Lisa Yurwit Bergstrom & Matthew P. Kraeuter,, Federal Rule
of Evidence 502: Has It Lived Up to Its Potential?, 17 RICH. J.L. & TECH. 8 (2011).
31. See FED. R. EVID. 502 advisory committee’s note; see also JUDICIAL CONF. OF THE
UNITED STATES, COMM. ON RULES OF PRACTICE AND PROCEDURE, REPORT OF THE ADVISORY
COMMITTEE ON EVIDENCE RULES 3–4 (2007); Letter from Lee H. Rosenthal, Chair,
Committee on Rules of Practice and Procedure, to Patrick J. Leahy, Chairman, Senate
Committee on the Judiciary (Sept. 26, 2007) [hereinafter Rosenthal Letter], available at
32. See Rosenthal Letter, supra note 31, at 1.
33. S. 2450 (110th): A Bill To Amend the Federal Rules of Evidence To Address the
Waiver of the Attorney-Client Privilege, GOVTRACK.US, http://www.govtrack.us/congress/
bills/110/s2450 (last visited Feb. 15, 2013).
35. Pub. L. No. 110-322, § 1(c), 122 Stat. 3537, 3538 (2008) (codified as amended at 28
U.S.C. app.). The explanatory note on Rule 502, prepared by the Advisory Committee on
Evidence Rules, states that Rule 502 does not attempt “to alter federal or state law on
whether a communication or information is protected under the attorney-client privilege or
work product immunity as an initial matter. Moreover, while establishing some exceptions
to waiver, the rule does not purport to supplant applicable waiver doctrine generally.” FED.
R. EVID. 502 advisory committee’s note. The explanatory note also states that common-law
waiver doctrines still may be applicable where there is no disclosure of privileged
information or work product. Id. The Advisory Committee on Evidence Rules cited to cases
involving an advice-of-counsel defense, Nguyen v. Excel Corp., 197 F.3d 200 (5th Cir.
1999), and an allegation of lawyer malpractice, Byers v. Burleson, 100 F.R.D. 436 (D.D.C.
Rule 502(a) provides that if a disclosure of privileged information is
made in a federal proceeding or to a federal agency and “waives the
attorney-client privilege or work-product protection,” the waiver extends to
an “undisclosed” communication or information (i.e., so-called subject
matter waiver) in a federal or state proceeding36 only if “(1) the waiver is
intentional; (2) the disclosed and undisclosed communications or
information concern the same subject matter; and (3) they ought in fairness
to be considered together.”37 In other words, for an inadvertent disclosure,
subject matter waiver cannot occur at all under Rule 502(a).38
Rule 502(b) addresses disclosures generally in a federal proceeding or
when made to a federal office or agency.39 The inadvertent disclosure does
not operate as a waiver in a federal or a state40 proceeding if the holder of
the privilege or work product protection “took reasonable steps to prevent
[such a] disclosure”41 and the holder “promptly took reasonable steps to
rectify the error,” including (if applicable) following Rule 26(b)(
discussed above.42 This is a fact-specific inquiry to be made on a
case-by36. The reference to a state proceeding here is designed, according to the explanatory
note to Rule 502(a), to assure “protection and predictability” in that the federal rule on
subject matter waiver will govern “subsequent state court determinations on the scope of the
waiver” by the disclosure. FED. R. EVID. 502(a) advisory committee’s note.
37. FED. R. EVID. 502(a). The explanatory note to Rule 502(a) borrowed the language
“ought in fairness” from Federal Rule of Evidence 106: “If a party introduces all or part of a
writing or recorded statement, an adverse party may require the introduction, at that time, of
any other part—or any other writing or recorded statement—that in fairness ought to be
considered at the same time.” FED. R. EVID. 106. The note explains that under both Rules, “a
party that makes a selective, misleading presentation that is unfair to the adversary opens
itself to a more complete and accurate presentation.” FED. R. EVID. 502(a) advisory
38. The explanatory note to Rule 502(a) specifically states: “The rule rejects the result
in In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989), which held that inadvertent disclosure
of documents during discovery automatically constituted a subject matter waiver.” FED. R.
EVID. 502(a) advisory committee’s note. I do not dwell on Rule 502(a) in this Essay, but its
value to litigants cannot be underestimated since a properly framed Rule 502(d) order should
eliminate any concern regarding subject matter waiver.
39. The Advisory Committee on Evidence Rules recognized that the consequences of
waiver and the related costs of pre-production privilege review can be just as great when
disclosures are made “to offices and agencies as they are in litigation.” FED. R. EVID. 502(b)
advisory committee’s note. Hence, Rule 502(b) covers federal offices or agencies and
includes those acting in the course of their “regulatory, investigative or enforcement
authority.” Id. Illustratively, EPA’s issuance of a Section 104(e) information request under
the federal Superfund law, 42 U.S.C. § 9404(e) (2006), would be embraced by Rule 502(b).
40. Under 28 U.S.C. § 2074(b), Rule 502 can only bind state courts if it is adopted by
41. FED. R. EVID. 502(b) advisory committee’s note.
42. FED. R. EVID. 502(b). The explanatory note to Rule 502(b) states that the Advisory
Committee on Evidence Rules “opt[ed] for the middle ground” of the three lines of authority
on when inadvertent disclosure represents a waiver. FED. R. EVID. 502(b) advisory
committee’s note. To put this statement in context, theretofore, courts reacted to inadvertent
waiver of attorney-client privileged information and work product in three ways. Some
courts had held that inadvertent production of a privileged communication is an irretrievable
waiver: the First Circuit, District of Columbia Circuit, and the Federal Circuit adhered to
this view. See Hopson v. Mayor of Balt., 232 F.R.D. 228, 235 & n.15 (D. Md. 2005). Other
courts held that unless the disclosure of the privileged information was intentional or there
case basis but demonstrates the value of promptly implementing Rule
)(B) if it is applicable.
The explanatory note provides guidance to courts and counsel on the
application of new Rule 502(b) and, in particular, its flexibility in an era
when the volume of documents is measured not by banker’s boxes but by
Cases such as Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104
F.R.D. 103, 105 (S.D.N.Y. 1985) and Hartford Fire Ins. Co. v. Garvey,
109 F.R.D. 323, 332 (N.D. Cal. 1985), set out a multifactor test for
determining whether inadvertent disclosure is a waiver. The stated factors
(none of which is dispositive) are the reasonableness of precautions taken,
the time taken to rectify the error, the scope of discovery, the extent of
disclosure and the overriding issue of fairness. The rule does not
explicitly codify that test, because it is really a set of non-determinative
guidelines that vary from case to case. The rule is flexible enough to
accommodate any of those listed factors. Other considerations bearing on
the reasonableness of a producing party’s efforts include the number of
documents to be reviewed and the time constraints for production.
Depending on the circumstances, a party that uses advanced analytical
software applications and linguistic tools in screening for privilege and
work product may be found to have taken “reasonable steps” to prevent
inadvertent disclosure. The implementation of an efficient system of
records management before litigation may also be relevant.43
The explanatory note to Rule 502(b) adds that a producing party need not
engage in post-production review to determine whether a protected
communication or information has been accidentally produced.44 However,
the note continues, a producing party is required “to follow up on any
obvious indications that a protected communication or information has been
Rule 502(c) addresses disclosures generally made in state proceedings
where the disclosure is not the subject of a state-court order concerning
waiver. The disclosure does not operate as a waiver in a Federal proceeding
as long as the disclosure: “(1) would not be a waiver under this rule if it
had been made in a federal proceeding; or (2) is not a waiver under the law
of the State where the disclosure occurred.”46 The explanatory note to Rule
502(c) states that the Evidence Rules Advisory Committee elected to have
was gross negligence, there was no waiver. The Eighth Circuit and a number of district
courts adopted this approach. Id. at 235–36. The remaining courts that addressed the topic
took a middle ground. They looked at the facts to determine the circumstances of the
disclosure and they evaluated the reaction of the producing party to the discovery of the
production. Under prior case law, the more careless the production and the more dilatory the
response to obtain return of privileged information, the more likely a court determined the
privilege was waived. Id. at 236.
43. FED. R. EVID. 502(b) advisory committee’s note.
46. FED. R. EVID. 502(c).
courts “apply the law that is most protective of privilege and work
If the state law is more protective (such as where the state law is that an
inadvertent disclosure can never be a waiver), the holder of the privilege
or protection may well have relied on that law when making the
disclosure in the state proceeding. Moreover, applying a more restrictive
federal law or waiver could impair the state objective of preserving the
privilege or work-product protection for disclosures made in state
proceedings. On the other hand, if the federal law is more protective,
applying the state law of waiver to determine admissibility in federal
court is likely to undermine the federal objective of limiting the costs of
Rule 502(c) specifically does not address the enforceability in a federal
proceeding of a state-court order protecting the confidentiality of
documents produced. The explanatory note to Rule 502(c) said that it was
unnecessary to do so because “a state court order finding no waiver in
connection with a disclosure made in a state court proceeding is enforceable
under existing law in subsequent federal proceedings.”49 In view of this
statement, parties in state-court proceedings seeking disclosure protection
unquestionably should obtain state-court confidentiality orders.
I discuss Rule 502(d) in greater depth later, but for this descriptive
narrative, Rule 502(d) addresses the binding effect of a federal district court
order on nonwaiver. It provides in full: “A federal court may order that the
privilege or protection is not waived by disclosure connected with the
litigation pending before the court—in which event the disclosure is also
not a waiver in any other federal or state proceeding.”50 This language
gives force to a nonwaiver order approving a clawback procedure. Party
agreement is not necessary to enforce a 502(d) order, but any party agreeing
to a clawback of privileged or protected documents or information will also
want to have the court enter a 502(d) order.
47. Id. advisory committee’s note.
49. FED. R. EVID. 502(c). The Evidence Rules Advisory Committee relied upon 28
U.S.C. § 1738, which provides that state judicial proceedings “shall have the same full faith
and credit in every court within the United States . . . as they have by law or usage in the
courts of such State . . . from which they are taken,” and Tucker v. Ohtsu Tire & Rubber Co.,
191 F.R.D. 495, 499 (D. Md. 2000), which the explanatory note characterizes as “noting that
a federal court considering the enforceability of a state confidentiality order is ‘constrained
by principles of comity, courtesy, and . . . federalism.’” FED. R. EVID. 502(c) advisory
50. FED. R. EVID. 502(d). The explanatory note to Rule 502(d) states that this provision
does not allow a federal court to enter an order determining the waiver effects of a
separate disclosure of the same information in other proceedings, state or federal.
If a disclosure has been made in a state proceeding (and is not the subject of a
state-court order on waiver), then subdivision (d) is inapplicable. Subdivision (c)
would govern the federal court’s determination whether the state-court disclosure
waived the privilege or protection in the federal proceeding.
Id. advisory committee’s note.
Rule 502(e) requires that to be binding on third parties, agreements
among parties on the effect of disclosure must be incorporated into a court
Rule 502(f) identifies the breadth of Rule 502’s protections and, in
particular, with respect to state proceedings. It provides in full:
Notwithstanding Rules 101 and 1101,52 this rule applies to State
proceedings and to federal court-annexed and federal court-mandated
arbitration proceedings,53 in the circumstances set out in the rule. And
notwithstanding Rule 501, this rule applies even if state law provides the
rule of decision.54
The final subdivision of Rule 502, Rule 502(g),55 in subparagraph
(1) defines attorney-client privilege as “the protection that applicable law
provides for confidential attorney-client communications,” and in
subparagraph (2) defines “work-product protection” as the protection “that
applicable law provides for tangible material (or its intangible equivalent)
prepared in anticipation of litigation or for trial.”56
Let me offer this illustration of the interplay of these various rules. If a
lawyer receives an inadvertently produced privileged document, under
Model Rule 4.4(b), the lawyer should “promptly” notify the sender. If the
sender discovers the inadvertent production first in a federal proceeding,
)(B) should result in notice and resolution of the claim of
waiver by the district court. Rule 502(b) would then provide a uniform rule
of law to determine if a waiver has occurred. Parties that wish to address
the potential of inadvertent production upfront should ask the district court
51. FED. R. EVID. 502(e).
52. Rule 101 says that the Rules apply to proceedings in the courts of the United States
to the extent and with the exceptions in Rule 1101. Rule 1101 lists, among other things, the
federal court jurisdictions in which the Rules of Evidence apply. See FED. R. EVID. 101; FED.
R. EVID. 1101. The explanatory note states that Rule 502(f) “is intended to resolve any
potential tension between the provisions of Rule 502 that apply to state proceedings and the
possible limitations on the applicability of the Federal Rules of Evidence otherwise provided
by Rules 101 and 1101.” FED. R. EVID. 502(f) advisory committee’s note.
53. The explanatory note states that Rule 502(f) “is not intended to raise an inference
about the applicability of any other rule of evidence in arbitration proceedings more
generally.” FED. R. EVID. 502(f) advisory committee’s note.
54. FED. R. EVID. 502(f). According to the explanatory note, “[t]he costs of discovery
can be equally high for state and federal causes of action, and the rule seeks to limit those
costs in all federal proceedings, regardless of whether the claim arises under state or federal
law. Accordingly, the rule applies to state law causes of action brought in federal court.”
Id. advisory committee’s note.
55. The Advisory Committee considered an additional paragraph in Rule 502 on
selective waiver—where a cooperating entity provides a government agency with privileged
information without waiver as to third parties. It was too controversial to include in Rule
502, but the Advisory Committee provided draft language on selective waiver for Congress
to consider. See JUDICIAL CONF. OF THE UNITED STATES, supra note 31, at 4. Congress did
not act on this proposal in adopting Rule 502.
56. FED. R. EVID. 502(g). The explanatory note adds that the operation of waiver by
disclosure as applied to other evidentiary privileges “remains a question of federal common
law.” Id. 502(g) advisory committee’s note. The rule also does not apply to the Fifth
Amendment privilege against self-incrimination. Id.
to enter a Rule 502(d) order to protect the parties from claims of privilege
waiver by parties within the litigation or by third parties. Under Rule
502(a), only an intentional waiver can result in subject matter waiver if
fairness dictates such an outcome and undisclosed information concerns the
same subject matter. Finally, parties are advised to obtain confidentiality
orders in state court to best protect themselves from waiver claims in
federal proceedings, although Rule 502(c) may still offer protection if its
terms are satisfied.57
With this background, let me more sharply juxtapose Rule 502(b) and
Rule 502(d) by looking at decisions under each Rule. Prudent litigators will
quickly realize that there is no reason to put clients unnecessarily at risk of a
claim of waiver or even of the need to expend resources and time to defend
against a claim of waiver by eschewing a Rule 502(d) order. They will also
see that there is no client risk to utilizing a properly framed Rule 502(d)
order, while there is considerable client risk in failing to have one.
III. RULE 502(B) DECISIONS: INADVERTENCE IS IN THE EYES OF THE
BEHOLDER—AND THAT’S TREACHEROUS
The failure to have a Rule 502(d) order puts litigators in Model Rule 1.6
jeopardy. A discussion of just a few decisions demonstrates why thoughtful
litigators will pay more attention to entry of Rule 502(d) orders.
In Ceglia v. Zuckerberg,58 the plaintiff argued that a privileged email
dated March 6, 2011, had been inadvertently produced and sought the
return or destruction of the email and any copies of the email.59 In
response, the defendant invoked Rule 502(b), arguing that the privilege had
Plaintiff’s counsel, Argentieri, was in California but needed a document
from his computer in his office in Hornell, New York.61 So he retained an
information technology expert, Flaitz, to recover the document, a PDF file
labeled “Lawsuit Overview.”62 Flaitz was instructed to produce the file to
defendants’ digital forensic consulting firm on December 16, 2011.63 The
Lawsuit Overview file was an attachment to a March 6 email.64 Flaitz
explained in a declaration that he inadvertently copied both the March 6
email and the attachment and burned them onto a CD that he gave to
Argentieri’s secretary who then, “[u]pon information and belief,” forwarded
57. The form of a state confidentiality order is not the subject of this Essay, but there is
no reason why a state court confidentiality order could not include a statement that the order
is intended, at least in part, to achieve the protection offered by Rule 502(a) with respect to
subject matter waiver, as well as the full protection from waiver offered by Rule 502(d).
58. No. 10-CV-00569A(F), 2012 WL 1392965 (W.D.N.Y. Apr. 19, 2012).
59. Id. at *2.
61. Id. at *8.
63. Id. at *7.
the CD to defendants’ consultant.65 Argentieri provided a declaration in
which he stated he instructed Flaitz to copy only the attachment.66 Flaitz
apparently did not contest that he was so instructed.67
Defendants’ consultant, however, had received the Lawsuit Overview file
and the March 6 email not by a CD, but by an email received on December
16, 2011.68 This transmittal email had been originally sent from
Argentieri’s Gmail account and was forwarded by Flaitz to defendants’
consultant, who added in his declaration that he never received a CD.69
Defendants’ consultant also, on January 4, 2012, produced the transmittal
email to all parties, effectively putting plaintiffs on notice of the production
of the privileged email.70 Plaintiff’s first request to return or destroy the
March 6 email was not made, however, until March 12, 2012, or more than
two months later.71
The magistrate judge identified the components of Rule 502(b)72 but then
relied on pre–Rule 502 case law to establish the following test to evaluate
waiver: “The burden is on the party claiming a communication is
privileged to demonstrate it ‘took reasonable steps to prevent’ any
inadvertent disclosure, tried to remedy such disclosure immediately, and
that the opposing party will not be unduly prejudiced by a protective
order.”73 The plaintiff failed to meet this burden. As to the reasonableness
of the steps taken to prevent the inadvertent disclosure, the district court
held that Argentieri erred by failing to have Flaitz forward to him first
whatever documents Flaitz retrieved from the Hornell, New York office.74
If the retrieval of documents from Argentieri’s computer was that
important, the court held that Argentieri should have supervised it himself,
also adding that Argentieri had not proffered any explanation why his
presence in New York was not possible.75 Plaintiff also did not offer any
explanation from Argentieri’s secretary regarding the CD Flaitz said he had
As to the immediacy of remedial action, the magistrate judge observed
that “generally” a producing party must request the return or destruction of
65. Id. at *8.
66. Id. at *7.
67. See id.
70. See id. There is no indication in the opinion that Rule 4.4 was the basis for the
notice. New York’s Rule of Professional Conduct (RPC) 4.4(b) is identical to Model Rule
4.4(b). Compare N.Y. RULES OF PROF’L CONDUCT R. 4.4(b) (2012), with MODEL RULES OF
PROF’L CONDUCT R. 4.4(b) (2012).
71. Ceglia, 2012 WL 1392965, at *9.
72. Id. at *8 (“The privilege will not be waived if (1) the disclosure is inadvertent; (2)
the privilege holder took reasonable steps to prevent disclosure; and (3) the privilege holder
took reasonable steps to rectify the error.”).
73. Id. at *8 (quoting Chapel Park Villa, Ltd. v. Travelers Ins. Co., No. 02-CV-407F,
2006 WL 2827867, at *5 (W.D.N.Y. Sept. 29, 2006)).
inadvertently produced privileged documents “within days after learning of
the disclosure.”77 The plaintiff’s delay until March 12, 2012, more than
two months later, was too long, the court held.78
The magistrate judge then added that the plaintiff failed to meet its
burden of showing that the defendants would not suffer prejudice if no
waiver was found: “Plaintiff has utterly failed to offer any explanation
demonstrating that protecting belated protection of the March 6, 2011 email
will not be unduly prejudicial to Defendants.”79
Inhalation Plastics, Inc. v. MedexCardio Pulmonary Inc.,80 involved the
inadvertent production of less than 347 pages of privileged documents out
of a production of 85,000 pages of documents that occurred in phases.81 A
May 30, 2011 production was in issue.82 IPI successfully demonstrated that
Medex had waived the privilege.83
The magistrate judge began the waiver analysis by quoting the text from
Rule 502(b) but then identified the following five factors for consideration
in a waiver determination: “(1) the reasonableness of precautions taken in
view of the extent of document production, (2) the number of inadvertent
disclosures, (3) the magnitude of the disclosure, (
) any measures taken to
mitigate the damage of the disclosures, and (
) the overriding interests of
justice.”84 The court recognized that this multifactor test is not a mandatory
test under Rule 502(b), but instead “serves to guide a court’s analysis when
appropriate under the particular circumstances of each case.”85
Nonetheless, the court proceeded to evaluate each factor.
As to the reasonableness of the steps taken to prevent the disclosure of
privileged documents, Medex told the court that there were several levels of
review by attorneys, who “isolated the privileged documents.”86 The
magistrate judge was not persuaded. The court explained that Medex did
not specify who reviewed the production in question, the steps taken to
review the documents for privilege, and whether the May 30, 2011
production was different from prior productions.87 It also did not produce a
privilege log despite the fact that its declarations stated that “several layers
of attorneys” had “isolated” privileged documents.88 This misfeasance
amounted to a failure to establish that reasonable precautions were taken to
prevent an inadvertent disclosure.89
The May 30, 2011 production consisted of 7,500 pages.90 Thus, the 347
pages claimed to be privileged represented 4.6 percent of this production.91
Once again, the declaration that several layers of attorneys reviewed this
production came back to haunt Medex.92 The court observed that this was a
high percentage of privileged documents given this assertion by Medex.93
What is meant by the third of the court’s factors: the “magnitude of
disclosure”? Again emphasizing Medex’s assertion that several layers of
attorneys reviewed the production, the court explained why the magnitude
of the disclosure was high:
The documents disclosed in the May 30 production were essentially
complete documents consisting of legal memoranda, emails and email
attachments. The number of privileged documents that were disclosed
was significant, those documents were not marked as confidential and no
privilege log was provided with the disclosed documents. More
importantly, the documents appear to be relevant to IPI’s claims and IPI
has attempted to use them in depositions. These considerations all
suggest that the magnitude of the disclosure was high.94
In Rule 502(b) terms, Medex had acted quickly to rectify the disclosure. It
learned of the disclosure when IPI sought to use the documents in
depositions.95 It immediately demanded return of the documents.96 Yet,
adding another gloss to Rule 502, the magistrate judge faulted Medex for
failing to follow FRCP 26(b)(
)(B), which, the court said, required that
Medex give notice to IPI, identify the privileged information, and state the
basis for the claim of privilege.97 Instead, Medex gave IPI notice that it
intended to assert a claim of privilege, and that the documents “might
contain” privileged communications that were inadvertently produced.98 It
failed to identify any documents that were privileged and, as the court had
repeatedly noted, had failed to generate a privilege log.99 Medex also failed
to state “a basis for the claimed privilege.”100 The court noted that
“[c]onsideration of Medex’s inaction and failure to comply with Rule 26
leads to the conclusion that Medex failed to take adequate measures to
rectify or mitigate the damage of the disclosures.”101
Finally, much like the “undue prejudice” factor in Ceglia, the court held
that the “interests of justice” factor favored IPI, because: (1) Medex did not
specify a particular document that it claimed was privileged; (2) had not
produced a privilege log; and (3) did not comply with Rule 26(b)(
On the other hand, IPI relied on the disclosures as evidenced by the “extent
of the disclosure” and the “relevance of the information disclosed,” as well
as IPI’s attempt to use the disclosures in depositions of three individuals.103
The court concluded that “[t]hese factors, combined with Medex’s
relatively weak response in its attempts to rectify the claimed inadvertent
disclosure, suggest that the interests of justice militate in favor of IPI.”104
The court in Thorncreek Apartments III, LLC v. Village of Park Forest105
also found a waiver. The discovery process at issue involved a keyword
search for documents on backup tapes by the defendant.106 The village’s
vendor, Kroll, placed the documents retrieved in an online database
accessible only to counsel for the village, who then reviewed them for
responsiveness and privilege.107 The village said that its attorney reviewers
labeled every document in the database as responsive, nonresponsive, or
privileged.108 On a rolling basis, Kroll then placed responsive documents
into a database available to plaintiff’s counsel.109 To assuage plaintiff’s
concerns about the village’s decisions, the database was structured to allow
plaintiff’s counsel to see documents that had been marked as
Production then occurred over a seven-month period through October
2009.111 Within this time frame, the village did not produce a privilege log
and its counsel told plaintiff’s counsel that it was not withholding any
documents.112 At a December 10, 2009 deposition, plaintiff sought to use
two documents that the village immediately claimed were privileged.113
Four months later, on April 26, 2010, the village produced a privilege log
listing 159 documents that the village had marked as “privileged” during its
review but had been inadvertently placed into the production database
available to plaintiff.114 Several meet-and-confer sessions reduced the
number of privilege claims to six documents, the focus of plaintiff’s waiver
The magistrate judge first determined that parts of the six documents
contained privileged information.116 It then applied Rule 502(b) to
determine whether waiver had occurred.
The court eschewed multifactor analyses to determine inadvertence. The
magistrate judge explained that prior to the adoption of Rule 502(b), courts
looked to “the extent of discovery and the level of care exercised during
pre-production review to determine whether a disclosure was
inadvertent.”117 After the passage of Rule 502(b), courts in the Northern
District of Illinois, at least, had “largely abandoned” the multifactored test
and instead asked the question of whether the producing party “intended a
privileged or work-product protected document to be produced or whether
the production was a mistake.”118
The second half of this disjunctive statement is what should control,
since a lawyer should never intend to produce a privileged document except
in rare circumstances. Nonetheless, the court sought to discern the village’s
intent. Favoring the village, the court credited the statement in the village’s
filing that its counsel was under the impression that documents that had
been marked “privileged” would be withheld from the production
database.119 It also recognized that the village objected at the deposition to
the use of the privileged documents, saying then they had been
inadvertently produced and following up with plaintiff’s counsel after the
deposition to make the same point.120 Disfavoring the village was the fact
that, during the rolling production, its counsel had told plaintiff’s counsel
three different times that no documents were being withheld, and a privilege
log was never generated giving credence to that representation.121
balance, the magistrate judge decided that the production
The court recognized that the advisory committee note to Rule 502(b)
states that Rule 502(b) does not “explicitly” codify the multifactor test used
in prior case law123 to determine whether a producing party took reasonable
steps to prevent disclosure. The court, however, relied on the multifactor
test because the note also states that Rule 502(b) is “flexible enough to
accommodate any of those listed factors.”124
The village did not provide the court with much to rely on to save the
village from waiver. The village’s counsel said he “spent countless hours
reviewing” documents and labeled privileged documents in the Kroll
database, but the village itself never provided any sworn testimony
regarding the review process, which the court regarded as significant.125
The magistrate judge was also unimpressed by the lack of discipline in the
privilege review when the “most the Village can say is that it ‘thought’ that
marking a document as ‘privileged’” would cause Kroll to segregate the
privileged documents.126 Not surprisingly, the court pointed out that it
would have been very simple for the village to check the production
database to verify that privileged documents had not been included.127 The
court was impressed by another fact, however: the “abject failure” of the
village’s process to protect any of its claimed privileged documents.128
While the volume of documents—250,000—was large, the village took
six months to produce them, meaning that, on these facts, time trumped
volume. Time was not, however, the village’s friend when it came to
evaluating the steps taken to rectify the inadvertent disclosure. While the
court acknowledged that the village reacted immediately when it learned of
the disclosures at a deposition, and while the court chose not to penalize the
village for the delay in producing a privilege log, the court could not
overlook the failure of the village to figure out between March 2009—when
production commenced—and the deposition in December 2009—when the
village learned of the disclosures—that it had produced every one of its
privileged documents.129 The magistrate judge then evaluated “fairness,”
giving the nod to the plaintiff because it had already used two of the
documents in a deposition.130
The final case I have chosen in this illustrative tour is Rhoads Industries,
Inc. v. Building Materials Corp. of America.131 Rhoads highlights the role
of a privilege log in the waiver analysis but from a different perspective
than in Inhalation Plastics and Thorncreek Apts. It also highlights how the
“interests of justice” differ from “overriding interests of fairness” or “undue
prejudice” in a multifactor analysis of waiver.
In Rhoads, the plaintiff engaged consultants in early 2008 to conduct a
thorough keyword search of ESI.132 The consultants designated 2,000
emails as privileged.133 They were removed from electronic folders that
were ultimately produced to the defendants, but they were not recorded on a
privilege log.134 The plaintiffs refined the keyword search to attempt to
reduce the number of responsive documents, conducted a review of the
resulting ESI, and generated a privilege log of privileged documents within
this batch of ESI before it was produced to the defendants.135
129. Id. at *8. After pointing out that the production began in March 2009, that the
village’s counsel expected privileged documents to be excluded, that plaintiff was accessing
the database and extracting documents for production, the court observed:
Yet, for some nine months, the Village apparently had no inkling that the
production database contained documents that the Village wished to withhold as
privileged, or that Thorncreek was reviewing and obtaining those documents. If
that is true (and we accept that it is), that means the Village was not paying any
attention whatsoever to what documents its opponent in the litigation was
selecting from the database. Perhaps Thorncreek simply selected all of them; the
parties’ briefs do not tell us if this is so. But, even if that were the case, a single
visit to the production database could have alerted the Village to the problem.”
130. Id. There was no reference to Illinois Rule of Professional Conduct 4.4 in the
opinion. Illinois’s RPC 4.4(b) reads: “A lawyer who receives a document relating to the
representation of the lawyer’s client and knows that the document was inadvertently sent
shall promptly notify the sender.” ILL. RULES OF PROF’L CONDUCT R. 4.4(b) (2010). Given
the absence of a privilege log and the village’s representation that it was not withholding any
documents, perhaps the lawyer did not know the two documents were privileged. It is
difficult to discern from the court’s analysis whether any of the village’s six documents
claimed to be privileged were, in fact, privileged, and whether the deposition exhibits were
131. 254 F.R.D. 216 (E.D. Pa. 2008).
132. Id. at 222.
On June 5, 2008, the defendants identified documents within this
production that appeared to be privileged and gave notice to the
plaintiffs.136 Plaintiff’s counsel responded immediately that the production
of privileged information had been inadvertent.137 By June 30, 2008, the
plaintiff produced a new privilege log adding 812 documents and requested
that the defendant sequester the inadvertently produced documents.138 The
defendant then moved to have the court determine that the privilege had
In a subsequent hearing, counsel for the plaintiff admitted that the 2,000
emails originally identified as privileged by plaintiff’s consultant had not
been identified on a privilege log because they believed that these
documents would have been captured on the June 6 log. That misfeasance
was remedied on November 12, 2008, when the plaintiff produced another
privilege log.140 Of the 2,000 emails, after duplicates and nonresponsive
documents were removed, 120 of them were responsive but privileged, and
had not been logged on prior privilege logs.141
Under FRCP 26(b)(
)(A), a party that withholds discoverable
information because it is privileged must generate a privilege log.142
Failure to do so may amount to a waiver.143 The district court first
determined that Rule 502(b) played no role in the determination of waiver
as to the documents on the November 12, 2008 privilege log. The delay
between June 30, 2008, and November 12, 2008, was too long to be
excused, the court held, and thus, under FRCP 26(b)(
)(A), the privilege
was lost as to documents logged for the first time on that date.144
As to the Rule 502(b) waiver analysis, the district court first determined
that the plaintiff had “minimally complied” with the three factors stated in
Rule 502(b) but that “reasonableness” was in dispute.145 To evaluate
reasonableness, the court applied the “traditional five-factor test” articulated
in Fidelity & Deposit Co. of Maryland v. McCulloch146:
(1) the reasonableness of the precautions taken to prevent inadvertent
disclosure in view of the extent of the document production;
(2) the number of inadvertent disclosures;
(3) the extent of the disclosure;
) any delay and measures taken to rectify the disclosure; and
) whether the overriding interests of justice would or would not be
served by relieving the party of its errors.147
On the facts, the district court concluded that the first four factors favored
the defendant, but that the interests of justice favored the plaintiff:
Loss of the attorney-client privilege in a high-stakes, hard-fought
litigation is a severe sanction and can lead to serious prejudice. Although
I have little knowledge of the content of Rhoads’s privileged documents, I
assume they contain candid assessments of the facts and strategy in this
case, as to which Rhoads understandably has a high degree of proprietary
The district court added that the defendants would not be prejudiced
because they had no “right or expectation to any of” plaintiff’s privileged
These cases demonstrate why thoughtful lawyers will never want to rely
on Rule 502(b) for protection against inadvertent disclosure. In Ceglia, the
court had already decided that the plaintiff did not act reasonably in
producing the document or in trying to retrieve it. Why add prejudice into
the equation? Suppose the plaintiff had failed to take reasonable steps to
prevent the production but acted immediately to try to retrieve it. Or
suppose plaintiff had taken reasonable steps and acted immediately to
retrieve it. Would prejudice matter in either case? When does prejudice
This conclusion does not entail any analysis of F.R.E. 502, because of the clear mandate of
Federal Rule of Civil Procedure 26(b)(
145. Id. at 226.
146. 168 F.R.D. 516 (E.D. Pa. 1996).
147. Rhoads, 254 F.R.D. at 226.
148. Id. at 226–27.
149. Id. at 227. The court explained in full:
On the other hand, denying these documents to Defendants is not prejudicial to
Defendants because, in the first place, they have no right or expectation to any of
Rhoads’s privileged communications, and further, because of my ruling on the
privileged documents not logged by June 30, 2008, the Defendants will receive a
significant number of privileged documents. Furthermore, there has been
abundant discovery on the merits of this case, and expert depositions await
become “undue”? And what of the rights of the holder of the privilege?
The text of Rule 502(b) does not mention the concept of prejudice; it
focuses only on whether the disclosure was, in fact, inadvertent and the
reasonableness of the steps taken to prevent the disclosure and rectify the
error. A recipient of inadvertently produced privileged information that the
producing party is trying to retrieve is likely always going to be prejudiced
by the inability to use it.
Inhalation Plastics suggests that a recipient of inadvertently produced
documents can improve its argument in support of waiver by trying to use
the documents and then arguing the interests of fairness favor waiver
because of the relevance of the privileged documents and an attempt to use
them in discovery. It also introduces compliance with Rule 26(b)(
into the determination of the reasonableness of the steps taken to rectify an
Thorncreek cabins the use of multifactor tests to determine if the
production of a privileged document was a mistake but minimizes the role
that the volume of documents plays if a producing party spreads the
production over a relatively long period of time—in effect suggesting that
the inadvertent disclosure should have been discovered. It also paid no
heed to the recipient’s Model Rule 4.4 duty to put the producing party on
notice that it had received privileged documents.
Rhoads points out the hazard of trying to satisfy Rule 502(b) when there
is no protective order and a party is aware of privileged documents but fails
to include them on a privilege log that was generated. It also points out the
variability in judicial reactions to the application of “interests of justice,”
“fairness,” or “prejudice.”
Had a thoughtfully constructed Rule 502(d) order been entered, the
producing parties in all of these cases could have avoided a Rule 502(b)
analysis, and waiver would have been determined under the terms of the
order, or not at all, if the order anticipated that privileged documents might
be produced which, after all, is the purpose behind Rule 502(d).
IV. RULE 502(D) ORDERS: WISE LAWYERS WILL WELCOME THEM
Properly framed Rule 502(d) orders will change the focus of inadvertent
production from the question of waiver to the question of privilege. But
before we get to framing, let me paint the case law picture because it is an
Alcon Manufacturing, Ltd. v. Apotex, Inc.150 was a patent lawsuit
involving one document, referred to as Exhibit 71 in the opinion. Exhibit
71 was a publication release form relating to the publication for a scientific
article regarding an ophthalmic solution that was at issue in the litigation.151
There were handwritten notes of an attorney on the document, which was
150. No. 1:06-cv-1642-RLY-TAB, 2008 WL 5070465 (S.D. Ind. Nov. 26, 2008).
151. Id. at *1.
part of an electronic production made by plaintiffs.152 On January 29,
2008, one of the plaintiffs’ witnesses was deposed.153 The exhibit was
marked and shown to the witness who testified that she did not recognize it
or the handwriting on the exhibit.154 Counsel for the defendants moved on
to the next exhibit.155 Counsel for the plaintiffs made no objection at the
On February 6, 2008, counsel for the defendants deposed an in-house
counsel of the plaintiff Alcon.157 Exhibit 71 was shown to the witness who
then explained that the handwriting at the top of the page was that of an
inhouse intellectual property lawyer.158 After an eight-minute break, counsel
for the defendants asked a question about the handwriting in the middle of
the page.159 Counsel for the plaintiffs then indicated that the writing may
be privileged and moved to strike the notation on the exhibit.160 Plaintiffs’
counsel did not, at this time, identify the handwriting at the top of the
document as privileged.161
The plaintiffs then determined that Exhibit 71 had been listed on its
privilege log because of notes written on the document but that it had been
inadvertently produced because of an electronic document break error.162
On February 11, 2008, the plaintiffs provided the defendants with a
redacted version of the document and asked the defendants to destroy all
copies of the documents containing any handwritten notations.163 The
defendants ignored the request and showed the document to one of its
expert witnesses who relied on the document in rendering an expert
There was no dispute that the unredacted version of Exhibit 71 was
privileged.165 But the defendant argued that under Rule 502(b), the
privilege had been waived.166 A prescient pre-502(d) protective order
rescued the plaintiff and changed the inquiry from waiver under 502(d) to
compliance with the order.167 Paragraph 20 of the order provided that as
long as the producing party made a good-faith representation that an
inadvertent production was a mistake and took prompt remedial action to
withdraw the disclosure upon discovery, the recipient had to return the
document and destroy all copies and summaries or notes relating to the
document, and could not make a waiver claim.168 Here is the text of
If a producing party inadvertently or mistakenly produces information,
documents or tangible items in this Action that should have been withheld
subject to a claim of attorney-client privilege or work product immunity,
such production shall not prejudice such claim or otherwise constitute a
waiver of any claim of attorney-client privilege or work product immunity
for such information, provided that the producing party promptly makes a
good-faith representation that such production was inadvertent or
mistaken and takes prompt remedial action to withdraw the disclosure
upon its discovery. Within three (3) business days of receiving a written
request to do so from the producing party, the receiving party shall return
to the producing party any documents or tangible items that the producing
party represents are covered by a claim of attorney-client privilege or
work product immunity and were inadvertently or mistakenly produced.
The receiving party shall also destroy all copies or summaries of, or notes
relating to, any such inadvertently or mistakenly produced information;
provided, however, that this Order shall not preclude the party returning
such information from making a motion to compel production of the
returned information on a basis other than a waiver because of its
inadvertent production as part of a discovery production under this
protective order. The producing party shall retain copies of all returned
documents and tangible items for further disposition.169
The magistrate judge looked literally at compliance with the terms of the
order. The plaintiffs made a good-faith representation.170 They told the
defendants at the second deposition that the disclosure was inadvertent.171
Five days later, they wrote the defendants a letter stating that the production
was inadvertent.172 Bolstering plaintiffs’ good faith, the court noted that
Exhibit 71 had been placed on a privilege log and was produced only
because of an electronic break error.173 The defendants also acknowledged
that they had no evidence to dispute the inadvertence of the production.174
The court also regarded the plaintiffs as in compliance with the order’s
requirement that the producing party take prompt remedial measures to
withdraw the disclosure. While plaintiffs’ counsel did not immediately
assert a privilege at the first deposition, and did not specifically object to
the use of the handwriting until several days after the second deposition, the
court remained comfortable that the protective order’s requirements had
170. Id. at *5.
173. Id. at *4.
[T]he handwriting on the privileged document—particularly the notation
at the top of the sheet including the signature—is difficult to read. The
handwriting at the top of the page is also rather similar to the handwriting
in the center of the page, so on first glance both writings could easily be
attributed to the same author. Failure by the attorney creating the
privilege log to immediately recognize the handwriting at the top of the
page as that of a different attorney is understandable. Likewise, the
several-day delay Plaintiffs took after the Ryan deposition to review the
document against its records, decipher the handwriting, and ascertain all
communicators involved does not indicate a lack of prompt remedial
action by Plaintiffs.175
The court bolstered its views by invoking as one of the main purposes of
Rule 502 the potential reduction in litigation costs:
Concluding otherwise would undermine one of the main purposes of
new Evidence Rule 502, which codifies the primary purpose of provisions
such as ¶ 20 of the protective order in this case: to address the
“widespread complaint that litigation costs necessary to protect against
waiver of attorney-client privilege or work product have become
prohibitive due to the concern that any disclosure (however innocent or
minimal) will operate as a subject matter waiver of all protected
communications or information” which is “especially troubling in
electronic discovery.” Perhaps the situation at hand could have been
avoided had Plaintiffs’ counsel meticulously double or triple-checked all
disclosures against the privilege log prior to any disclosures. However,
this type of expensive, painstaking review is precisely what new Evidence
Rule 502 and the protective order in this case were designed to avoid.176
The order in Alcon superseded Rule 502(b). In contrast, the order in
United States v. Sensient Colors, Inc.177 made allowance for the application
of Rule 502(b); thus, a waiver resulted.
In Sensient Colors, over a six-day period, the United States had produced
45,000 documents representing 135,000 pages in 450 boxes.178 On August
29, 2008, the defendant returned eighty-one documents it thought might be
privileged.179 By letter dated September 10, 2008, the plaintiff confirmed
that eighty of the eighty-one documents were privileged and inadvertently
produced.180 However, the United States took no other actions to reassess
On October 23, 2008, the defendant returned another eighty-nine
documents as privileged.182 On November 21, 2008, the plaintiff produced
a supplemental privilege log that listed most of the returned documents.183
175. Id. at *6 (citation omitted).
177. Civ. No. 07-1275 (JHR/JS), 2009 WL 2905474 (D.N.J. Sept. 9, 2009).
178. Id. at *1.
On March 18, 2009, the plaintiff identified another document as privileged
that had been produced.184 After acquiring new software, the plaintiff
reviewed its document database and determined that ninety-one more
privileged documents had been inadvertently produced.185 It identified six
more such documents on August 6, 2009.186 Finally, on August 7, 2009,
the plaintiff advised the court that its privilege review process was
completed and, in the end, 214 privileged documents had been produced
Claiming waiver, the defendant moved to compel production of the
privileged documents. The United States argued that the parties’ discovery
plan precluded a privilege waiver.188 Unfortunately, that document did not
state that the parties were excused from Rule 502(b).189 Paragraph VI of
the discovery plan provided: “The Parties agree that the inadvertent
production of privileged documents or information (including ESI) shall
not, in and of itself, waive any privilege that would otherwise attach to the
document or information produced.”190 The magistrate judge construed this
language to mean that an inadvertent production was not an automatic
waiver but that a waiver claim could still be made:
The most sensible construction of the parties’ Discovery Plan is that the
inadvertent production of a document “in and of itself” does not waive a
privilege. In other words, the parties agreed not to subject themselves to
the harsh rule that a mere inadvertent production results in a waiver. The
Court agrees with defendant that the parties intended to incorporate the
“flexible” standard to determine if a waiver occurred.191
The court added that the parties were represented by sophisticated counsel,
and had they wanted to permit a clawback of privileged documents
187. Id. at *1–2.
188. Id. at *2.
190. Id. at *2 n.4.
191. Id. at *2 (citations omitted). The court agreed with the statement in Koch Materials
Co. v. Shore Slurry Seal, Inc., 208 F.R.D. 109 (D.N.J. 2002), that courts generally frown
upon broad “blanket” disclosure provisions because they immunize attorneys from
“negligent handling of documents, could lead to sloppy attorney review and improper
disclosure which could jeopardize clients’ cases.” Koch Materials, 208 F.R.D. at 118. The
“blanket provision” in Koch Materials was a letter agreement between counsel in which they
agreed that documents that contained handwritten comments would not become the subject
of a waiver argument. Id. The recipient of the privileged documents argued that the
agreement applied only to a subset of the production and not to all documents produced and
that, therefore, on the facts, a waiver had occurred. Id. This debate prompted the district
court to say that where the “interpretation of the provision remains hotly disputed, as it is in
this case, broad construction is ill advised.” Id. The court then performed a substantive
waiver analysis. Id. at 118–21. A 502(d) order is entered by the district court purposefully to
protect the privileged materials from waiver due to inadvertent or even advertent disclosure
in order to reduce the review costs associated with production of electronically stored
information and minimize disputes unrelated to the merits.
inadvertently produced, they would have so stated.192 The court then
proceeded to conduct a 502(b) waiver analysis substituting for the terms of
502(b) the five-factor test from Ciba-Geigy Corp. v. Sandoz Ltd.193 The
court upheld the privilege as to documents returned by the defendant as
potentially privileged on August 29, 2008, but deemed the privilege waived
for all inadvertently produced documents identified after that date because
of the United States’ failure to take “prompt and diligent steps to re-assess
its document production” after it was put on notice of a problem by the
August 29, 2008 letter.194
U.S. Home Corp. v. Settlers Crossing, LLC195 provides another example
of a protective order framed, in hindsight, to trigger, instead of avoid, Rule
192. Sensient Colors, 2009 WL 2905474, at *2.
193. Id. at *3; see Ciba-Geigy Corp. v. Sandoz Ltd., 916 F. Supp. 404, 411 (D.N.J. 1995).
The test is as follows:
(1) the reasonableness of the precautions taken to prevent inadvertent disclosure in
view of the document production, (2) the number of inadvertent disclosures, (3)
the extent of the disclosures, (
) any delay and measures taken to rectify the
disclosure, and (
) whether the overriding interests of justice would or would not
be served by relieving the party of its error.
Sensient Colors, 2009 WL 2905474, at *3 (citing Ciba Geigy, 916 F. Supp. at 411). The
magistrate judge felt that the advisory committee note to Rule 502(b) allowed the court to
utilize these factors. Id. at 3 n.8 (“The rule . . . is really a set of non-determinative guidelines
that vary from case to case” and is designed to be “flexible.”). In Ciba Geigy, the district
court rejected a “blanket” inadvertent disclosure clause that was advocated by the plaintiff
and “insisted that any such provision would not excuse the parties from conducting a
privilege review prior to the production of documents, in accordance with controlling case
law.” Ciba Geigy, 916 F. Supp. at 406. In 1996, this may have been a sensible ruling.
Today, courts are doing just the opposite: offering protective orders to prevent a producing
party from having to incur the enormous costs of privilege review. See, e.g., US Bank Nat’l
Ass’n v. PHL Variable Ins. Co., No. 12 Civ. 6811(CM)(JCF), 2012 WL 5395249 (S.D.N.Y.
Nov. 5, 2012); Rowe Entm’t, Inc. v. William Morris Agency, Inc., 205 F.R.D. 421, 432–33
(S.D.N.Y. 2002) (where, as a cost-saving measure, the magistrate judge proposed a clawback
procedure so that the privilege could be asserted by the responding party after production
and review of electronic documents by the requesting party). U.S. Bank National Ass’n
involved a motion to quash subpoenas issued by the plaintiff and objected to by two
nonparty insurance companies. US Bank Nat’l. Ass’n, 2012 WL 5395249, at *2. The
information sought was only marginally relevant, which apart from Rule 45’s requirement to
protect the subpoena recipient from undue expense, prompted the court to require US Bank
to bear the search, collection, and production costs associated with the subpoenas. Id. at *3–
4. The magistrate judge was unwilling, however, to shift privilege review costs to the
subpoena-issuer. Id. at *4. To ameliorate this conclusion, the court entered an order under
Rule 502(d) to protect the nonparties from a privilege waiver leaving it up to the nonparties
then to decide whether they wished to do a privilege review first at their expense: “Although
Transamerica and SCOR are, of course, free to engage in as exacting a privilege review as
they wish, entry of a Rule 502(d) order will give them the option of conducting a more
economical analysis while minimizing the risk of waiver.” Id. at *4.
194. Sensient Colors, 2009 WL 2905474, at *6. This failure triggered Rule 502(b)(3)’s
application, and in support of its decision, the court relied on the advisory committee’s note
to Rule 502(b)(3): “The rule does not require the producing party to engage in a
postproduction review to determine whether any protected communication or information has
been produced by mistake. But the rule does require the producing party to follow up on any
obvious indications that a protected communication or information has been produced
195. No. DKC 08-1863, 2012 WL 3025111 (D. Md. July 23, 2012).
502(b) in the face of an inadvertent production. The case has unusual facts.
Defendant iStar subpoenaed plaintiffs’ former counsel, Greenberg Traurig,
seeking documents in the firm’s possession.196 Plaintiffs’ litigation
counsel, Womble Carlyle, was given notice of the subpoena.197 Louis
Rouleau of Womble Carlyle later reached Timothy Bass of Greenberg
Traurig to discuss the response.198 According to Rouleau’s declaration
submitted in the hopes of avoiding a privilege waiver, Bass assured
Rouleau that Greenberg Traurig would handle “the matter properly on its
own” adding, as Rouleau recalled, something like: “We got it. We know
how to respond.”199
Rouleau then told the court:
Given (i) the assurances that Mr. Bass provided to me during our
conversation on December 15, 2010, (ii) the fact that he is a litigation
partner in a well-known, national law firm, and (iii) the subpoena’s
express and repeated limitation of its requests to “non-privileged”
documents, Womble Carlyle did not further request to coordinate with
and assist Greenberg Traurig in regard to the subpoena.200
In January 2011, Greenberg Traurig produced eighty-one documents
consisting of 4,199 pages of material.201 On January 25, 2011, iStar offered
to provide a copy of the documents to Womble Carlyle.202 Instead of
saying “yes,” Womble Carlyle asked for the cost of reproducing the
documents.203 On March 15, they asked for copies of what Greenberg
Traurig had produced.204
On April 13, 2011, Womble Carlyle realized that both privileged and
work-product protected documents had been produced by Greenberg
Traurig.205 It sought their return, to no avail.206 It then sought to enforce
the clawback provisions of a “confidentiality order” that had been entered
upon agreement of the parties.207 Paragraph 6 of the order read as follows:
Non-waiver of privilege for inadvertently disclosed materials.
Pursuant to Fed. R. Evid. 502(d), the inadvertent disclosure of any
document that is subject to a legitimate claim that the document is subject
to the attorney-client privilege or the work-product protection shall not
waive the protection or the privilege for either that document or for the
subject matter of that document.208
196. Id. at *1.
199. Id. at *2.
200. Id. at *1.
201. Id. at *2.
Paragraph 7 of the confidentiality order required the recipient of the
inadvertent disclosures to return or destroy the materials unless the recipient
disputed the claim in which case the recipient could retain a “single copy”
of the materials and, in what turned out to be a fateful phrase, seek a
judicial determination of the matter “pursuant to Fed. R. Evid. 502.”209
There was considerable motion practice before a magistrate judge that
ultimately resulted in a determination that there was no waiver.210 Before
the district court, iStar successfully objected to this determination.
Citing Rule 502(d) and (e), the district court recognized that the waiver
“test” established in Rule 502(b) “may be superseded by court order or
agreement of the parties.211 However, the district court held that the
confidentiality order did not supersede Rule 502(b) because the order
lacked “concrete directives” regarding “each prong of Rule 502(b).”212 The
district court explained that where a 502(d) order does not “provide
adequate detail regarding what constitutes inadvertence, what precautionary
measures are required, and what the producing party’s post-production
responsibilities are to escape waiver, the court will default to Rule 502(b) to
fill in the gaps in controlling law.”213 Here, the confidentiality order was
silent on the precautionary or post-production responsibilities to avoid
waiver and allowed a disputant to obtain a determination “pursuant to Rule
502.”214 Thus, the district court held, Rule 502(b) remained applicable to
Womble Carlyle’s conduct.215
210. Id. at *2–3. The magistrate judge first ruled that the privileged had been waived as
to all but one of the documents in question, but then, on a motion for reconsideration,
decided that the privileged had not been waived. Id.
211. Id. at *5.
213. Id.; see also Mt. Hawley Ins. Co. v. Felman Prod., Inc., 271 F.R.D. 125, 130, 133
(S.D. W. Va. 2010), overruled sub nom. Felman Prod., Inc. v. Indus. Risk Insurers, 2010 WL
2944777 (S.D. W. Va. July 23, 2010); Luna Gaming-San Diego, LLC v. Dorsey & Whitney,
LLP, No. 06cv2804 BTM (WMc), 2010 WL 275083, at *4 (S.D. Cal. Jan. 13, 2010). In Mt.
Hawley, Rule 502(d) was not mentioned in either opinion. Mt. Hawley involved Section H
of a stipulation of the parties that was not embodied in a court order. Mt. Hawley, 271 F.R.D.
at 128. The stipulation provided that the return of “an Inadvertently Produced Document
does not preclude the receiving party from disagreeing with the designation of the document
as privileged or redacted and re-produced and bringing a Motion to Compel its production
pursuant to the Federal Rules of Civil Procedure.” Id. at 129. The stipulation also contained
a procedure for rectifying the disclosure and that contemplated the application of Rule
502(b): “Compliance by the producing party with the steps required by this Section H to
retrieve an Inadvertently Produced Document shall be sufficient, notwithstanding any
argument by a party to the contrary, to satisfy the reasonableness requirement of FRE
502(b)(3).” Id. Luna Gaming involved a protective order that provided that the inadvertent
disclosure of privileged documents “shall not constitute a waiver of any privilege.” Luna
Gaming, 2010 WL 275083, at *4. The order did not address “under what circumstances
failure to object to the use of inadvertently produced privileged documents waives the
privilege, which is what the Court must resolve here.” Id. The district court then applied
Rule 502(b). Id. at *5–6. In both cases a waiver was found.
214. U.S. Home Corp., 2012 WL 3025111, at *6.
215. Id. at *7–8.
Unfortunately, Womble Carlyle provided evidence of only two brief
phone calls with Greenberg Traurig, only one of which was substantive.216
“Such minimal efforts to secure the privilege or protection,” the court held,
“are unreasonable” and amounted to “little more than a broad abdication of
Womble Carlyle’s responsibility” to Greenberg Traurig.217 The court
Womble Carlyle’s acceptance of Greenberg Traurig’s statements that
they “got it” and “know how to respond” to the subpoena does not
constitute a reasonable precaution to protect the attorney-client privilege
or work product protection. Womble Carlyle was obligated to do more to
protect its client and to demand that Plaintiffs’ interests feature more
prominently in Greenberg Traurig’s efforts.218
Because the second prong of Rule 502(b) was not satisfied, the court
explained that it did not have to address the third prong, although it was
skeptical that Womble Carlyle acted promptly to rectify the error.219
This case law teaches that a thoroughly drawn Rule 502(d) order should
disclaim the application of Rule 502(b), and instead identify the order as the
sole vehicle under which the availability of the privilege should be
evaluated. It should declare that any production of a privileged or
workproduct protected document is inadvertent. Indeed, the concept behind Rule
502(d) is to assist parties in minimizing the cost of reviewing a large
electronic production to search for privileged documents by affording the
parties the right to produce a privileged document with the absolute right to
retrieve it without creating waiver.220 As just stated, the order should
216. Id. at *8.
218. Id. (footnotes omitted).
219. Id. at *9. The court explained:
Womble Carlyle requested a copy of the production—but only after requesting a
cost estimate. Second, it took nearly another month for Womble Carlyle to review
the production and discover that the contested documents had been produced;
Womble Carlyle offers absolutely no explanation for this delay. And third, other
than notifying Greenberg Traurig of the disclosures, Womble Carlyle fails to
explain any other steps it took to rectify the error, let alone when it took such steps.
220. In a letter from the Committee on Rules of Practice and Procedure of the Judicial
Conference of the United States to the Committee on the Judiciary of the United States
Senate and House of Representatives, dated September 26, 2007, the problems being
remedied by Rule 502 were identified:
In drafting the proposed Rule, the Advisory Committee concluded that the current
law on waiver of privilege and work product is responsible in large part for the
rising costs of discovery, especially discovery of electronic information. In
complex litigation the lawyers spend significant amounts of time and effort to
preserve the privilege and work product. The reason is that if a protected
document is produced, there is a risk that a court will find a subject matter waiver
that will apply not only to the instant case and document but to other cases and
documents as well. Moreover, an enormous amount of expense is put into
document production in order to protect against inadvertent disclosure of
privileged information, because the producing party risks a ruling that even a
mistaken disclosure can result in a subject matter waiver. Advisory Committee
provide for a return of privileged or protected documents at any time upon
notice by the producing party of the inadvertent disclosure, or discovery by
the receiving party that it received a document that appears to be privileged
or protected. This latter obligation is imposed on lawyers independent of
any order under each state’s equivalent to Model Rule 4.4.221 In the case of
notice from the recipient to the producing party of the disclosure of
privileged information, the order should provide for a reasonable time
period within which the producing party must seek return of the
information. The order then should provide for a time period within which
any challenge to the assertion of the privilege must be made.
Since plaintiffs and defendants typically have similar worries about
producing privileged or protected documents in any electronic production,
especially when data-rich parties are in litigation with each other, they
frequently agree on the terms of a 502(d) order. But there is already
precedent that Rule 502 gives courts ample reasons to issue them even over
a party’s objection. Illustratively, in S2 Automation LLC v. Micron
Technology, Inc.,222 Micron proposed entry of a “Non-Waiver and
ClawBack Order” that provided in pertinent part that:
1. The inadvertent production of privileged or protected material
during the course of discovery shall not be deemed a waiver or an
impairment of any claim of privilege or protection, including the
attorneyclient privilege and the work-product doctrine, in this or any other state or
federal proceeding, as to the material inadvertently produced or as to the
subject matter thereof.
2. In the event counsel to a party producing documents in response to
a request for production or disclosures pursuant to Federal Rule of Civil
Procedure 26 (“Producing Party”) discovers an inadvertent production of
privileged or protected material, the Producing Party shall notify counsel
to the party who received the inadvertent production (“Receiving Party”)
in writing and identify the privileged or protected material by Bates
number. Upon receipt of a notice of inadvertent disclosure, the Receiving
Party must refrain from viewing such material or using such material in
any way, and must follow the Producing Party’s instructions regarding the
disposition of the material. To the extent there is a disagreement
regarding the proper disposition of the material, the Receiving Party shall
members also expressed the view that the fear of waiver leads to extravagant
claims of privilege. Members concluded that if there were a way to produce
documents in discovery without risking subject matter waiver, the discovery
process could be made much less expensive.
Rosenthal Letter, supra note 31, at 3. The advisory committee note to Rule 502(d) begins
with this sentence: “Confidentiality orders are becoming increasingly important in limiting
the costs of privilege review and retention, especially in cases involving electronic
discovery.” FED. R. EVID. 502(d) advisory committee’s note.
221. Only six jurisdictions have not yet adopted some form of Model Rule 4.4(b):
Georgia, Hawaii, Massachusetts, Missouri, Texas, and West Virginia. See AM. BAR ASS’N,
supra note 11, at 1–6.
222. No. CIV 11-0884 JB/WDS, 2012 WL 3150387 (D.N.M. July 23, 2012).
refrain from using the material unless and until the Court makes a
determination as to its proper disposition.
3. In the event the Receiving Party believes that the Producing Party
inadvertently produced privileged or protected material, the Receiving
Party shall notify the Producing Party in writing and identify the
suspected privileged or protected material by Bates number within five
business days of such discovery. Once the Receiving Party believes that
there has been an inadvertent disclosure, the Receiving Party must refrain
from viewing such material or using such material in any way and must
follow the Producing Party’s instructions regarding the disposition of the
material. To the extent there is a disagreement regarding the proper
disposition of the material, the Receiving Party shall continue to refrain
from using the material unless and until the Court makes a determination
as to its proper disposition.223
S2 objected to entry of the order on two grounds. First, S2 said that it did
not want to be in a deposition, seek to use a document, and then have
Micron object on the ground that the document was inadvertently
produced.224 Second it said that the attorneys were subject to rules of
professional conduct and, therefore, there was no need for the order.225
Citing extensively to the advisory committee notes to Rule 502 regarding
the role that confidentiality orders can play in limiting the costs of privilege
review, the court entered the order over these objections.226 There is no
reason why other courts, similarly informed, should not reach the same
Rule 502 of the Federal Rules of Evidence provides uniformity in the law
of privilege waiver and can provide relief to parties worried about
inadvertent production of privileged documents in large electronic
document productions. Rule 502 should reduce the cost of litigation, a goal
all litigators should be seeking to advance to achieve the fair administration
Recent Rule 502(b) case law, however, demonstrates a stubborn
adherence to former, not uniform case law as part of the application of a
rule that was intended to create uniformity. In doing so, some courts have
entered a time warp—as if e-discovery were nonexistent. A major goal of
Rule 502 is to decrease litigation costs. This means looking at the data
storage world we face today and eschewing reliance on cases decided in a
different era that do not account for the costs of restoration, retrieval, and
review of electronically stored information. Court orders need to encourage
the use of technology in smart ways that may not be 100 percent privilege
protective, meaning that these court orders must protect the privilege in
223. Id. at *2.
226. Id. at *3.
meaningful ways to avoid stifling the benefits technology can provide to
reducing litigation costs.
A Rule 502(d) order achieves these goals. It can establish inadvertence,
permit a party to reduce privilege review costs, avoid waiver in any
proceeding, and avoid any concern about subject matter waiver. It can
declare the procedure to be followed to return documents—including
making the return automatic—and identify the consequences of a failure to
abide by that procedure. It can establish a time frame for a determination of
whether a document is, in fact, privileged or work-product protected. And
it can disclaim application of Rule 502(b)(2) or (3), since the design of the
order is to allow the producing party to produce privileged documents, and
the order itself will set forth the procedure for return of the documents.227
The combination of Model Rule 4.4, FRCP 26(b)(
)(b) and 26(f)(3)(D),
and Rule 502(d) demonstrates that rulemakers and Congress have
recognized the challenges facing lawyers to protect privileged and
workproduct documents while simultaneously trying to control litigation costs
that are financially choking those lawyers’ clients. Model Rule 1.6(c) has
recognized the risk of inadvertent disclosure in the digital world in which
lawyers operate and tells lawyers that they must make “reasonable efforts to
prevent the inadvertent or unauthorized disclosure of, or unauthorized
access to, information relating to the representation of a client.”228
227. To illustrate this point, see Brookfield Asset Mgmt., Inc. v. AIG Fin. Prods. Corp.,
No. 09 Civ. 8285(PGG)(FM), 2013 WL 142503 (S.D.N.Y. Jan. 7, 2013). In this matter,
redacted information appeared in metadata associated with various drafts of the minutes of
an AIG Board of Directors meeting due to vendor error. There was no question that the
redacted information was privileged. Because of the entry of a 502(d) order, the magistrate
held that there could be no dispute over the right of AIG to “claw back” the minutes:
[E]ven if AIG or its counsel had dropped the ball (which they did not), the parties
at my urging had entered into a Rule 502(d) stipulation which I so ordered on
February 11, 2011. That stipulation (ECF No. 57) contains one decretal paragraph,
which provides that “Defendants’ production of any documents in this proceeding
shall not, for the purposes of this proceeding or any other proceeding in any other
court, constitute a waiver by Defendants of any privilege applicable to those
documents, including the attorney-client privilege . . . .” Accordingly, AIG has the
right to claw back the minutes, no matter what the circumstances giving rise to
their production were.
4. Id. R. 1 .6( c ). Model Rule 1 . 6(c) will eventually percolate its way into state rules of professional conduct to the extent that it has not already done so .
5. “ One gigabyte is the equivalent of 500,000 typewritten pages . Large corporate computer networks create backup data measured in terabytes, or 1,000,000 megabytes; each terabyte represents the equivalent of 500 billion typewritten pages of plain text.” MANUAL FOR COMPLEX LITIGATION (FOURTH ) § 11 .446 ( 2004 ).
6. The phrase “or electronically stored information” was added to Model Rule 4.4(b) in August 2012 . ABA COMM'N ON ETHICS 20/20 , RESOLUTION 105A, 196 - 99 ( 2012 ). Whether state bar associations adopt the change remains to be seen, as it is unlikely that anyone would interpret “document” to exclude electronically stored information, at least for purposes of Rule 4.4(b ). Ethics opinions on the propriety of lawyers to explore metadata in an electronic document, for example, have been issued by several state bar ethics opinion writers without making a distinction between document or electronically stored information . See, e.g, ABA, Standing Comm. on Ethics & Prof'l Responsibility , Formal Op . 06 - 442 ( 2006 ); D.C. Bar Ass'n, Ethics Op . 341 ( 2007 ), available at http://www.dcbar.org/ for_lawyers/ethics/legal_ethics/opinions/opinion341.cfm; Fla. St. Bar. Ass'n, Ethics Op. 06- 2 ( 2006 ).
7. MODEL RULES OF PROF'L CONDUCT R. 4.4(b ).
9. Id. at R. 4.4(b) cmt . 2.
11. Rule 4.4 has been adopted in different forms by several states. The ABA Center for Professional Responsibility has collated the various forms of Rule 4.4 . See AM . BAR ASS'N, CPR POLICY IMPLEMENTATION COMMITTEE, VARIATIONS OF THE ABA MODEL RULES OF PROFESSIONAL CONDUCT: RULE 4.4 RESPECT FOR RIGHTS OF THIRD PERSONS ( 2012 ), available at http://www.americanbar.org/content/dam/aba/administrative/professional_ responsibility/mrpc_4_4.authcheckdam.pdf. In New Hampshire, for example, Rule 4 . 4(b) provides that a lawyer that receives privileged material and knows it was inadvertently sent “shall promptly notify the sender and shall not examine” the materials . It further provides that the receiving lawyer “shall abide by the sender's instructions or seek determination by a tribunal .” N.H. RULES OF PROF'L CONDUCT R. 4.4(b ) ( 2008 ). In New Jersey, a lawyer is not only prohibited from reading the document and must stop reading the document if he or she has begun to read it, but also must return the document to the sender: A lawyer who receives a document and has reasonable cause to believe that the document was inadvertently sent shall not read the document or, if he or she has begun to do so, shall stop reading the document, promptly notify the sender, and return the document to the sender . N.J. RULES OF PROF'L CONDUCT R. 4.4(b ) ( 2004 ).
12. 990 A.2d 650 , 655 (N.J . 2010 ).
77. Id . at *9; see also U.S. Fid. & Guar . Co. v. Braspetro Oil Servs. Co., Nos. 97Civ.6124 (JGK)(THK) , 98Civ . 3099 (JGK)(THK) , 2000 WL 744369, at *6 (S.D.N .Y. June 8, 2000 ) (one-day delay in making request represented prompt action); Aramony v . United Way of Am. , 969 F. Supp . 226 , 237 (S.D.N .Y. 1997 ) (same); Ga .-Pac. Corp. v. GAF Roofing Mfg. Co., No. 93 Civ. 5125 (RPP) , 1995 WL 117871, at *2 ( S.D.N.Y. Mar . 20 , 1995 ) (two-day delay was timely).
78. See Ceglia , 2012 WL 1392965, at *9.
79. Id . It is not clear what the court meant by this statement. The email had identified a person, Holmberg, who prepared the Lawsuit Overview . That was significant because the court had earlier required the plaintiff to identify every person who had possession of the Lawsuit Overview . Holmberg had not been identified. If this was the basis of the prejudice, however, it was not explained why the defendants were “unduly prejudiced” by the failure to identify Holmberg earlier .
80. No. 2 : 07 -CV-116, 2012 WL 3731483 (S.D. Ohio Aug . 28 , 2012 ).
81. Medex sought privilege status for 347 pages of documents . Id. at *2- 3 . The magistrate judge determined that only some of the documents were privileged . Id.
82. Id . at *1.
83. Id . at *6.
84. Id . at *3 (quoting Evenflo Co . v. Hantec Agents Ltd., No. 3 -: 05 -CV-346, 2006 WL 2945440, at *6 (S.D. Ohio Oct. 13 , 2006 )).
85. Id . (quoting N. Am . Rescue Prods., Inc., v. Bound Tree Med ., LLC , No. 2 : 08 - cv101 , 2010 WL 1873291, at *6 (S.D. Ohio May 10, 2010 )).
86. Id . at *4.
87. Id .
88. Id .
89. Id .
90. Id .
91. Id .
92. Id .
93. Id .; see also Evenflo Co. v. Hantec Agents Ltd., No. 3 -: 05 -CV-346, 2006 WL 2945440, at *6 (S.D. Ohio Oct. 13 , 2006 ) (134 pages out of 10,085 pages resulted in a waiver); Dyson v . Amway Corp., No. G88-CV-60 , 1990 WL 290683, at *3 ( W.D. Mich . Nov. 15 , 1990 ) (93 documents out of 15,000 documents resulted in a waiver).
94. Inhalation Plastics , 2012 WL 3731483, at *4.
95. Id . at *1. There was no discussion in the opinion of Ohio RPC 4.4(b), which reads the same as Model Rule 4.4(b ). Compare OHIO RULES OF PROF'L CONDUCT R. 4.4(b) (2012), with MODEL RULES OF PROF'L CONDUCT R. 4.4(b ) ( 2012 ).
96. Inhalation Plastics , 2012 WL 3731483, at *5.
97. Id .
113. Id .
114. Id .
115. Id .
116. Id . at *4- 5 .
117. Id . at *5; see also Judson Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec , 529 F.3d 371 , 388 ( 7th Cir . 2008 ).
118. Id . (quoting Coburn Grp ., LLC v. Whitecap Advisors LLC , 640 F. Supp . 2d 1032 , 1038 (N.D. Ill . 2009 )) ; see also Sidney I. v. Focused Retail Prop. I, LLC, 274 F .R.D. 212 , 216 (N.D. Ill . 2011 ); Kmart Corp . v. Footstar, Inc., No. 09 C 3607 , 2010 WL 4512337, at *3 ( N.D. Ill . Nov. 2 , 2010 ). The magistrate judge added that this analysis is preferred “because the drafters' choice to separate inadvertent disclosure from subparts (b)(2) and (b)(3) suggests that they did not intend for courts to repeatedly consider the same facts at each step of Rule 502(b ). ” Thorncreek Apts. III , 2011 WL 3489828, at *5 ( citing Coburn , 640 F. Supp . 2d at 1038).
119. Thorncreek Apts . III, 2011 WL 3489828, at *6.
120. Id .
121. Id . at *2, *6.
122. Id . at *6 (“However, we are not persuaded by this evidence that the Village intended to produce these documents. There is no evidence that the Village sought to use these documents affirmatively-or even knew they had been produced until plaintiffs sought to use two of them at the Mick deposition. And, when plaintiffs sought to use these documents, the Village's counsel immediately objected. That conduct is inconsistent with an intentional production . On balance, therefore, we are persuaded that the production was inadvertent .”).
123. Id . These are the same factors used in Innovation Plastics, which the court in Thorncreek summarized as “the reasonableness of precautions taken, the time taken to rectify the error, the scope of discovery, the extent of disclosure, and the overriding issue of fairness . . . .” Id.
124. Id . (quoting FED . R. EVID. 502 ( b ) (internal quotation marks omitted)).
125. Id . at *7. The court compared Coburn and Kmart . Compare Coburn Grp., LLC v. Whitecap Advisors LLC , 640 F. Supp . 2d 1032 , 1034 - 38 ( N.D. Ill . 2009 ) (finding an affidavit outlining a six-step review process sufficient to deny waiver), with Kmart Corp . v. Footstar, Inc., No. 09 C 3607 , 2010 WL 4512337, at *3 ( N.D. Ill . Nov. 2 , 2010 ) (holding that an affidavit from counsel stating that he personally reviewed documents with an eye toward identifying any privilege issues was an inadequate description without any further facts).
126. Thorncreek Apts . III, 2011 WL 3489828, at *7.
127. Id .
128. Id . The court cited Harmony Gold U.S.A ., Inc. v. FASA Corp., 169 F .R.D. 113 , 117 (N.D. Ill . 1996 ), in which the court held that it is “axiomatic that a screening procedure that fails to detect confidential documents that are actually listed as privileged is patently inadequate .”
136. Id . There was no indication in the opinion that Pennsylvania RPC 4.4, which is identical to Model Rule 4.4, was the basis for the notice . Compare PA . RULES OF PROF'L CONDUCT R. 4.4(b) (2012), with MODEL RULES OF PROF'L CONDUCT R. 4.4(b ) ( 2012 ).
137. Rhoads , 254 F.R.D. at 222.
138. Id . at 222-23.
139. Id . at 223.
140. Id .
141. Id .
142. Rule 26(b)(5)(A) provides: When a party withholds information otherwise discoverable by claiming that the information is privileged or subject to protection as trial-preparation material, the party must: (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed-and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim . FED. R. CIV. P. 26 ( b)(5)(A).
143. Rhoads , 254 F.R.D. at 221 (quoting Mass. Sch. of Law at Andover, Inc. v. Am. Bar Ass'n , 914 F. Supp . 1172 , 1178 (E.D. Pa . 1996 )). The district court in Rhoads laid out time contours: a delay of two months after production to produce a privilege log resulted in a waiver, see Get-A-Grip, II, Inc . v. Hornell Brewing Co., No. CIV.A. 99-1332 , 2000 WL 1201385, at *2- 3 ( E.D. Pa . 2000 ) ; while a delay of four days after the original production was timely, see In re Total Containment, Inc ., No. 04 - 13144BIF , 2007 WL 1775364, at *8 ( Bankr. E.D. Pa . 2007 ). Rhoads, 254 F.R.D. at 221.
144. Rhoads , 254 F.R.D. at 226 (“ Despite Rhoads's attempts to justify, explain and minimize its failure to log all of its inadvertently privileged documents by June 30, 2008, the Court finds that the delay in doing so until November 12, 2008 is too long and inexcusable .