LCJ Takes Central Role In Adoption Of New Rule 502

Saturday, November 1, 2008 - 01:00

Barry Bauman

Executive Director

Lawyers For Civil Justice (LCJ)

LCJ and the defense community scored a significant Congressional legislative victory when S.2450, which establishes new Federal Rule of Evidence 502 related to inadvertent disclosure of privileged information, was signed into law by President Bush in September of this year. Enactment of new Rule 502 was a top legislative priority for LCJ.

Current law on the effect of inadvertent production of documents containing privileged information is varying and uncertain, but the risks are clear.Under current law, if a single document containing privileged or protected information is produced, the producing party risks waiving the privilege not only as to what was produced but as to all documents dealing with the same subject matter. The waiver is not limited to the case in which the production occurred but can apply to other cases filed subsequently in state or federal courts.

Waiver may be found even if the producing party took reasonable steps to avoid disclosure.Even though most of the documents produced in discovery have little value, litigants must spend huge amounts of time and money to have lawyers conduct exhaustive pre-production document reviews.Discovery of electronic information, which is more voluminous and more dispersed than paper, has made privilege reviews even more expensive and burdensome.

LCJ led an unusually broad and diverse coalition to pass S. 2450, with strong support from practitioners from both corporations and defense law firms who contacted their House and Senate members at key times to urge support for this bill. LCJ's Rule 502 Task Force coalition worked tirelessly over a period of many months to overcome enormous political hurdles in a very difficult political environment.

The coalition was able to bunt aside issues which threatened the legislation, which it passed without any weakening amendments. This legislative victory is a testament to the importance of getting involved at the earliest time possible and then remaining steadfast and focused on our legislative goal.

In 2006, then House Judiciary Chairman Sensenbrenner called upon defense practitioners to support the proposed Rule. This set into motion a series of actions by LCJ. It provided the committees of the Federal Judicial Conference with the defense community's input at critical junctures. Many defense practitioners were among those who testified at hearings in 2006 so that a new Rule 502 could be promulgated by the Federal Judicial Conference after the conclusion of the hearings process.

Rule 502 will help reduce the skyrocketing costs of discovery in litigation that result from the need to conduct exhaustive privilege reviews before producing information. It provides predictable and consistent standards for determining the consequences of disclosing privileged information in discovery.The Rule does not alter federal or state law on whether information is protected under the attorney-client privilege or work product doctrine.The Rule does not affect other aspects of privilege or waiver.

In brief summary, the new Rule provides:

No Subject-Matter Waiver : Rule 502 (a) provides that if a waiver is found, it applies only to the information disclosed by a party, unless a broader waiver is made necessary by the party's intentional and misleading use of privileged information.

Protections Against Inadvertent Disclosure : 502(b) provides that, consistent with the practice of most federal courts, an inadvertent disclosure of privileged information by a party does not operate as a waiver if the party took reasonable steps to prevent such a disclosure and to retrieve the mistakenly disclosed information.

Effect on State Proceedings and Disclosures Made in State Courts : Subdivision (c) provides that: (1) if there is a disclosure of privileged information at the federal level, then state courts must honor Rule 502 in subsequent state proceedings; and (2) if there is a disclosure of privileged information in a state proceeding, then admissibility in a subsequent federal proceeding is determined by the law that is most protective against waiver.Rule 502 respects federal-state comity and does not apply to a disclosure made in a state proceeding when the disclosed information is subsequently offered in another state proceeding.

Orders Protecting Privileged Information Binding on Nonparties : 502 (d) provides that if a federal court orders that a disclosure of privileged information does not constitute a waiver, that order is enforceable in federal or state proceedings. Thus, parties in an action in which such an order is entered can limit preproduction privilege review, resulting in reduced costs.Rule 502 extends this protection to subsequent federal and state court proceedings so that parties can rely on it without fear that a subsequent court would find waiver.

Agreements Protecting Privileged Information Binding on Parties : Subdivision (e) provides that parties in a federal proceeding can enter into an agreement providing for mutual protection against waiver in that proceeding.Such agreements bind the signatories without a court order and bind nonparties if incorporated into a court order.

Overall, the establishment of new Rule 502 would benefit defense counsel and their clients enormously. Enactment of Rule 502 is part of the ongoing LCJ program on procedural rules reform.