The following blog post was written by Matthew Callahan, a law student at NYU, for the Legal Ethics Forum law student blogging competition. It was chosen as one of two winning entries after a blind review of the submissions. The other winning submission is here.
Federal Rule of Evidence 502(d), offering protection for privilege in accidentally disclosed documents during civil discovery, came into effect in 2008. While adoption of the Rule has been slow, lawyers who ignore it may one day find themselves on the wrong end of a malpractice suit.
Inadvertent disclosure is the bane of discovery; no lawyer wants to be in the position of releasing privileged documents to the other side. Moreover, like the many state rules that follow it, American Bar Association Model Rule of Professional Conduct 1.6(c) requires attorneys to “make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” Both for the sake of their clients happiness and to avoid professional misconduct charges, lawyers have strong incentives to keep privileged documents from leaking to the other side.
However, even with heroic efforts to protect privileged documents, mistakes do happen. Rule 502(d) provides one way to mitigate the harm of those failures by permitting the court to enter—on motion of the parties, or sua sponte—what is commonly called a “clawback” order. The order holds that privilege in a document is not waived unless a party intentionally shares it: mistaken disclosure, even if negligent, is not a waiver in any court, and the disclosing party can require return of a document by informing the opposing party that the document in question is privileged.
502(d) was not widely used by the legal community in its early years, but there are signs that the tide is starting to turn in favor of 502(d) orders. The District Court for the District of Kansas issues guidelines for cases involving e-discovery that require parties to familiarize themselves with 502(d) orders. Among others, Maryland District Court Judge Paul W. Grimm includes language from Rule 502(d) in his standing discovery order; that same order was included as an exemplar by e-discovery expert Ralph Losey in his Electronic Discovery Best Practice blog.
Judicial decisions have also begun to embrace 502(d). The judge in Chevron v. Weinberg, a D.C. District Court case, entered a 502(d) order two years into discovery, commenting that “[i]t is a shame that this tool was not employed by the Weinberg Group earlier on” since such an order “may have prevented the protracted litigation and discovery battles that have plagued this case for the past two years.” The District Court for the District of New Mexico declared that “clawback orders are staples of modern complex commercial litigation” and entered one over the objection of one of the parties in S2 Automation, LLC v. Micron Technology, Inc.
Given the power of 502(d) and its ability to save a case, judges (particularly Southern District of New York Magistrate Judge Andrew Peck) have stated in conferences that not requesting a 502(d) order may expose a practitioner to a malpractice claim. As the Legal Ethics Forum blog previously discussed, Magistrate Judge Jillyn Schulze has even held that a 502(d) order completely removes the need for privilege review. Building on this holding, one law review article makes the claim that lawyers who fail to request a 502(d) order are doing so for the purpose of overcharging their clients for privilege review, and could face liability as a result. Furthermore, as the use of 502(d) becomes more common, the “reasonable efforts” to prevent unauthorized access to privileged documents required by Model Rule 1.6(c) may encompass a request for a 502(d) order, opening the non-requesting lawyer up to disciplinary action.
In addition to the stick of increased liability for not requesting an order, there is a carrot for requesting one, too. While opinions differ, Daniel J. Capra, the Reporter to the Judicial Conference Advisory Committee on Evidence Rules (and one of the authors of Rule 502), believes that if a law firm successfully claws back a privileged document, it could not lose a malpractice suit for improper disclosure of that document.
Rule 502(d)’s path to universal acceptance is not certain, however. Some courts have read additional requirements of reasonable care into the Rule, gutting its protections (e.g. in the 2010 Central District of California case Kandel v. Brother International). Prof. Henry Noyes of Chapman University School of Law believes that 502(d)’s provisions protecting against waiver in state courts are vulnerable to a constitutional challenge, which could result in a Rule that protected only against waiver in other federal courts but not state courts. And some critics have argued that, rather than protecting both parties equally, a 502(d) order just shifts the burden of privilege review from the producing party to the receiving party, who must ensure that their case isn’t built on documents the producing party will claw back with a privilege claim at the last minute.
Nonetheless, 502(d) has many strong adherents, and it is here to stay. No malpractice awards have yet been granted for failure to enter a 502(d) order, but lawyers ignore this Rule at their peril. In any case involving e-discovery, lawyers would be well-served to consider requesting a 502(d) order, both to protect their clients’ interests and their own.