The Impact of Rule 502(d) on Protective Orders — Updated 2012 Draft 502(d) Orders

Gregory P. Joseph*

    On September 19, 2008, the President signed into law Federal Rule of Evidence 502 (Attorney-Client Privilege and Work Product; Limitations on Waiver). It applies to previously-filed cases in the discretion of the trial judge and to all cases filed on and after September 19, 2008, without exception.

    Rule 502(d) is the most innovative aspect of the new Rule, and it dictates that protective orders be drafted differently than they have in the past. Subdivision (d) provides that a federal court order governing waiver through disclosure of privileged or protected information is binding on all other courts and third parties:

(d) Controlling effect of a court order. — 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.

    For years, it has been common practice to include in protective orders claw-back provisions to address the inadvertent production of material protected by the attorney-client privilege or work product protection. Rule 502(d) resolves a vexing, pre-existing problem — that the court-ordered return and protection of inadvertently produced material in Case 1 did not afford any protection from the discovery demands of litigants in Case 2. But it does more, too.

Current Short-Form Order

    Prior to Rule 502(d), a typical short-form version of such a provision provided:

If a party inadvertently produces information that it later discovers to be privileged, the production of that information shall not be deemed to constitute the waiver of any applicable privileges, provided that the producing party promptly informs the receiving party of the inadvertent production and requests the return or confirmed destruction of the privileged information, including any copies or derivative works that have been made of that inadvertent production. Within three (3) business days of receiving such notification, the receiving party shall return or confirm destruction of all such privileged Information, including any copies or summaries thereof.

    Four observations in light of Rule 502(d):

    First, this order is limited by its term to privilege. While conventional practice in the past has been to read “privilege” expansively to include work product protection, Rule 502 clearly distinguishes between the two, and so should court orders now. Otherwise, a reference only to privilege is subject to the argument that it reflects a negotiated narrowing of the Rule’s protection.

    Second, this order focuses on inadvertent production of information, rather than disclosure of information. Inadvertent disclosure can occur many ways — e.g., at deposition, by email, in extrajudicial conversations relating to the case. The language of Rule 502(d) is broad enough to cover all of these, and the order should do so as well (absent specific reasons not to).

    Third, Rule 502(d) does not impose a promptness requirement on any request to return the information. A promptness requirement may be desirable, depending on many factors, including the magnitude of the anticipated discovery. Further, lawyers may choose to distinguish party disclosures from third-party responses to subpoenas, as to which it may be desirable to maintain a promptness requirement.

    Fourth, and perhaps most important, this form of order is limited to inadvertent disclosure. It may be in any given case that limiting the scope of the order to inadvertent production is prudent. But that is a choice for counsel to make (more about the consequences of this choice below).

Form of Order — Inadvertent Disclosure

    Taking Rule 502(d) into account, this is a provision that is limited to protecting inadvertent disclosure:

(a) If, in connection with the pending litigation, a party (the “Disclosing Party”) inadvertently discloses information subject to a claim of attorney-client privilege or attorney work product protection (“Inadvertently Disclosed Information”), the disclosure of the Inadvertently Disclosed Information shall not constitute or be deemed a waiver or forfeiture of any claim of privilege or work product protection that the Disclosing Party would otherwise be entitled to assert with respect to the Inadvertently Disclosed Information and its subject matter.

(b) If a claim of inadvertent disclosure is made in writing by a Disclosing Party with respect to Inadvertently Disclosed Information, the Receiving Party must —unless it contests the claim of attorney-client privilege or work product protection in accordance with paragraph (c) — within five business days of receipt of that writing, (i) return or destroy all copies of the Inadvertently Disclosed Information, and (ii) provide a certification of counsel that all of the Inadvertently Disclosed Information has been returned or destroyed. Within five business days of receipt of the notification that the Inadvertently Disclosed Information has been returned or destroyed, the Disclosing Party must produce a privilege log with respect to the Inadvertently Disclosed Information.

(c) If the Receiving Party contests the claim of attorney-client privilege or work product protection, the Receiving Party must — within five business days of receipt of the claim of inadvertent disclosure — move the Court for an Order compelling disclosure of the Inadvertently Disclosed Information (a “Disclosure Motion”). The Disclosure Motion must be filed under seal and must not assert as a ground for compelling disclosure the fact or circumstances of the inadvertent disclosure. Pending resolution of the Disclosure Motion, the Receiving Party must not use the Inadvertently Disclosed Information or disclose it to any person other than those required by law to be served with a copy of the sealed Disclosure Motion.

(d) The parties may stipulate to extend the time periods set forth in paragraphs (b) and (c).

(e) The Disclosing Party retains the burden of establishing the privileged or protected nature of the Inadvertently Disclosed Information. Nothing in this paragraph shall limit the right of any party to petition the Court for an in camera review of the Inadvertently Disclosed Information.

    This model has the following salient characteristics:

    First, it is not limited to privilege but explicitly applies to work product protection as well.

    Second, it extends beyond production to disclosure of information. True, it is clumsy in its operation as to the proverbial blurt-out of privileged information at a deposition or an extrajudicial statement (how do you return or destroy that?). But the operational issue is not the real problem. Subject matter waiver is the problem, and this order prevents it. It is also consistent with the holdings of various courts a blurt-out of protected information at a deposition does not effect a subject matter waiver. See e.g., In re County of Erie, 2008 U.S. App. LEXIS 21496 (2d Cir. Oct. 14, 2008); Pinnacle Pizza Co. v. Little Caesar Enters., 2007 U.S. Dist. LEXIS 488845 (D. S.D. July 3, 2007).

    Third, this provision eliminates any promptness requirement for requests for the return of protected information. If a promptness requirement is deemed appropriate, it can be added as a proviso at the end of paragraph (a), using the language of the dependent clause at the end of first sentence of the Current Short-Form Order, above.

    Fourth, this model is limited to disclosures “in connection with the pending litigation.” The rulemakers placed that limitation in Rule 502(d) to prevent parties from using the courts to protect non-litigation-related disclosures, as to regulatory agencies. Query how effective that limitation is. If a regulatory agency serves a subpoena and the receiving party seeks to quash it in court, that court action is presumably a “litigation” to which Rule 502(d) applies. The limitation in the Rule does, however, eliminate its application to voluntary disclosures to regulators, and that could require parties to decide whether they want to force the issuance of subpoenas (which, in some circumstances, may require the commencement of formal regulatory proceedings that become disclosable events).

Form of Order — Not Limited to Inadvertent Production

    Rule 502(d) is not limited to inadvertent disclosure. It protects against waiver by disclosure of any type, whether inadvertent or intentional. It therefore permits a party to open its files to an adversary; allows the adversary decide what information it considers relevant and wants to use; and permits the disclosing party to assert privilege thereafter (or not to do so) — as in the quick-peek approach to electronic discovery. The Rule also permits a disclosing party to selectively waive privilege or work product protection, which raises a specter addressed below.

    A provision that is not limited to inadvertent disclosure could take this form:

(1) If, in connection with the pending litigation, a party (the “Disclosing Party”) discloses information [produces documents] subject to a claim of attorney-client privilege or attorney work product protection (“Disclosed Protected Information”), the disclosure of the Disclosed Protected Information shall not constitute or be deemed a waiver or forfeiture of any claim of privilege or work product protection that the Disclosing Party would otherwise be entitled to assert with respect to the Disclosed Protected Information and its subject matter.

(2) A Disclosing Party may assert in writing attorney-client privilege or work product protection with respect to Disclosed Protected Information. The Receiving Party must — unless it contests the claim of attorney-client privilege or work product protection in accordance with paragraph (3) — within five business days of receipt of that writing, (i) return or destroy all copies of the Disclosed Protected Information and (ii) provide a certification of counsel that all of the Disclosed Protected Information has been returned or destroyed. Within five business days of the notification that such Disclosed Protected Information has been returned or destroyed, the Disclosing Party shall produce a privilege log with respect to the Disclosed Protected Information.

(3) If the Receiving Party contests the claim of attorney-client privilege or work product protection, the Receiving Party must — within five business days of receipt of the claim of inadvertent disclosure — move the Court for an Order compelling disclosure of the Disclosed Protected Information (a “Disclosure Motion”). The Disclosure Motion must be filed under seal and must not assert as a ground for compelling disclosure the fact or circumstances of the inadvertent disclosure. Pending resolution of the Disclosure Motion, the Receiving Party must not use the Disclosed Protected Information or disclose it to any person other than those required by law to be served with a copy of the sealed Disclosure Motion.

(4) The parties may stipulate to extend the time periods set forth in paragraphs (2) and (3).

(5) The Disclosing Party retains the burden of establishing the privileged or protected nature of the Disclosed Protected Information. Nothing in this paragraph shall limit the right of any party to petition the Court for an in camera review of the Disclosed Protected Information.

(6) If, at trial or on any motion other than a Disclosure Motion, a Disclosing Party offers into evidence or submits to the Court any Disclosed Protected Information — or proffers or elicits testimony that incorporates Disclosed Protected Information, including evidence within Federal Rule of Evidence 703 — that act shall be deemed to effect a waiver and forfeiture by the Disclosing Party of any attorney-client privilege or work product protection that would otherwise apply (i) to the Disclosed Protected Information and (ii) to undisclosed information concerning the same subject matter within Federal Rule of Evidence 502(a).

    The key to this form of order is subdivision (6), which takes into account the most dangerous threat posed by Rule 502(d) in the context of intentional disclosure of protected information — namely, that a party could use the privilege as both a sword and a shield. The Rule is intended to facilitate discovery. It is not intended to permit a party affirmatively to introduce a favorable piece of privileged or protected information while simultaneously protecting unfavorable information. Subdivision (6) is intended to preclude this result. Note that it prevents back-dooring privileged information through experts.


BACK*Mr. Joseph is a past President of the American College of Trial Lawyers and past Chair of the Section of Litigation of the American Bar Association. He can be reached at Gregory P. Joseph Law Offices LLC in New York and gjoseph@josephnyc.com. © 2008 Gregory P. Joseph

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