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Can Attorneys Rely Exclusively on the Power of FRE 502 (d)?

The Way eDiscovery Should be Done….

 

 

 

 

 

The Federal Rules of Evidence (FRE) has some very specific language under the section “Attorney-Client Privilege and Work Product; Limitations of Waiver.  The idea behind FRE 502(d) is straightforward;  to protect privileged information that is inadvertently exchanged during the eDiscovery process.  The problem, as is often the case, is more complicated and nuanced in the implementation and interpretation of the rule.

FRE 502(d)

FRE 502(d) states that “ 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.” According to the Committee on Rules of Practice and Procedure of the Judicial Conference of the United States, the rule was created to recognize the fact 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.”  Without the rule in place, attorneys spent countless hours examining each and every document before turning it over to the opposition in order to make sure that not a single privileged document was ever produced.  The goal of the rule was to help lessen the burden of production and speed up eDiscovery.

FRE 502(d) is supposed to protect parties from the effects of inadvertently producing privileged information.  With that as its central goal, you would think that it would be much more widely employed than it has been since the benefits in eDiscovery efficiency (less time and resources spent on privilege review) and quality (less potential for damage from the inadvertent production of privileged documents.

U.S. Magistrate Judge Andrew J. Peck of the Southern District of New York recently stated that the order “is still used in only a small percentage of cases” despite the fact that in certain scenarios, “it is malpractice for lawyers not to at least consider asking for a 502(d) order.”  Why is this Rule so underused?

Impact on eDiscovery

In a theory, most attorneys would agree that obtaining a FRE 502(d) order is advantageous; the impact on a parties’ eDiscovery strategy is not as clear cut and is a cause for some confusion.  In reality, FRE 502(d) does not eliminate the need to perform a reasonable level of document review to reduce the chances of inadvertent production.  Once these documents are delivered it is extremely hard to “unring the bell”.  Sensitive information that is damaging to the party could lead the opposition to gain an advantage they would not have had without a quick view of the document. Inadvertent production of privileged material in these situations may also lead to messy and costly disputes regarding whether the documents are, in fact, privileged. Attorneys need to weigh the potential damage against the cost of review in order to best serve their clients.  But in any event, attorneys cannot and should not rely on FRE 502(d) as the sole strategy regarding privileged documents.

Determining a Defensible Course of Action

 So what factors should counsel consider in deciding how heavily to rely on the protections of an FRE 502(d) order while still effectively mitigating both risk and cost of eDiscovery?  There are three primary considerations that should be examined by attorneys in making their decisions:

Risk Assessment: 

A series of risk assessment questions should be asked by counsel.

  1. What is the nature of the case? Does it pertain to the core business performed, or is it considered a tertiary matter?
  2. Does the risk of revealing any potential privileged information outweigh the benefits of a less intensive (and therefore costly) privilege review? Does it make sense to save money here?
  3. Does the request include communications from senior executives or sensitive information that could risk the company’s reputation if revealed?
  4. What is the nature of the opposition: have they given any indication that requests for future information requests regarding privilege may become routine?

The more voluminous and significant the sources of risk, the more likely counsel should devote significant resources to a more extensive privilege review, even with an FRE 502(d) order in place.

 Resource Allocation:

With the risk issues identified and on people’s minds, time can be devoted to determining adequate resource allocation amounts required to do the job correctly. It often makes sense to determine levels of review thoroughness based different sets of documents that are more likely to contain privileged and sensitive material.  You do not have apply the same level of document review to the entire population.  Using early analytic tools such as custodian segmentation, date ranges keywords or subject matter to create different buckets of potentially relevant material, can guide you to create 2 or more levels of review thoroughness, which can save you time and money.  Determining that a number of buckets can receive a less complete review while still benefiting from a 502 order, is a defensible position to take.

Determining the Complexity of the Review:

Performing an assessment of the potential document population will help identify a common sense solution to designing a review process that makes sense while providing comfort to your client.  Again, not all documents must be treated equally in a review process to achieve your goals.  There is a vast difference between the potential risk of material in communications between top management and standard contract documents.  Understanding which documents are considered “critical” to an organization can allow review levels to be designed that make sense for the organization.  Some things can be streamlined while others will require a more substantial review.

Takeaway

While FRE 502(d) provides a wide level of protection for counsel regarding inadvertent document production, it does come with some level of risk.  Identifying and quantifying these risks regarding review, coupled with a 502 order is the best and most cost efficient way to conduct eDiscovery more quickly without risking the enterprise.  Counsel should perform the same three level analyses for each case under consideration to make sure that informed decisions are being made.  Simply slapping a 502 order on an eDiscovery agreement is not sufficient due diligence if it is not combined with a well thought out document review process that is documented and defensible.

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