Finally, the Notice adds proposed rule 210.27(c)(3), which limits discovery when "the responding person has waived the legal position that justified the discovery or has stipulated to the facts."
The proposed rule provides a procedure for claiming privilege in section 210.27(4)(e)(1). Currently, the ITC discovery rules do not have a provision regarding privilege log production. The proposal provides uniform privilege log elements and requires a party claiming privilege to produce the log within 10 days of a privilege claim. Given the pace of ITC litigation, it typically would be quite a challenge for a party to comply with this provision. This provision will likely be subject to several comments from the public. The proposed privilege provisions also include language similar to FRCP 26(b)(5)(B) which sets forth a procedure for dealing with situations where privileged material is produced in litigation. The proposed rule includes specific time periods for dealing with the produced privilege material, which the FRCP does not.
The ITC stated that it considered Federal Rule of Evidence 502 in crafting its proposed rules regarding privilege waiver, although some ALJs have held that the Federal Rules of Evidence are not binding on ITC proceedings, even though they may look to the rules for guidance. See, e.g., Certain Dynamic Random Access Memory and NAND Flash Memory Devices and Products Containing Same. Inv. No. 337-TA-803, Order No. 63 (May 14, 2012) (ALJ Gildea) [Inv. 803] and Certain Wiper Blades, Inv. No. 337-TA-816, Order No. 32 (July 12, 2012) (ALJ Bullock). In fact, one ALJ has even held that an ITC investigation is not a "federal proceeding" under FRE 502. See Inv. 803 at 6.
The ITC appears to reject the provisions of FRE 502 which permit parties to craft non-waiver agreements, such as a "claw-back" agreement allowing parties to recover privileged material produced to the opposing party without a costly privilege review procedure. The FRE 502 Advisory Committee Notes contemplate that a party could obtain an order that would provide "for return of documents without waiver irrespective of the care taken by the disclosing party." Instead, the ITC Notice states that administrative law judges should apply "federal and common law when determining the consequences of any allegedly inadvertent disclosure. That law would include consideration of whether the holder of the privilege or protection took reasonable steps to prevent disclosure of the information and other considerations found in Federal Rule of Evidence 502."
The ITC commentary begs the question regarding waiver scope. Courts are conflicted over whether an inadvertent disclosure of privileged data constitutes a waiver. The FRE 502 Advisory Committee recognized that the federal courts' approach to waiver has varied significantly. "A few courts find that a disclosure must be intentional to be a waiver. Most courts find a waiver only if the disclosing party acted carelessly in disclosing the communication or information and failed to request its return in a timely manner. And a few courts hold that any inadvertent disclosure of a communication or information protected under the attorney-client privilege or as work product constitutes a waiver without regard to the protections taken to avoid such a disclosure." See FRE 502 Advisory Committee Notes.
It is precisely this conflict among the various federal courts that was, in large part, the impetus behind FRE 502. According to the Advisory Committee "subject matter waiver is limited to situations in which a party intentionally puts protected information into the litigation in a selective, misleading and unfair manner. It follows that an inadvertent disclosure of protected information can never result in a subject matter waiver." Unfortunately, the proposed rules do not clarify the potential waiver scope.
With respect to determining waiver in the first place, the ITC states in the Notice that the ALJs should consider whether the holder of the privilege "took reasonable steps to prevent disclosure of the information and other considerations found in Federal Rule of Evidence 502." Presumably this language refers to FRE 502(b) which provides that there is no privilege waiver if "(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error." Indeed, this is the approach taken in Certain Wiper Blades, Inv. No. 337-TA-816, Order No. 32 (July 12, 2012) (ALJ Bullock).
Interestingly, the FRE 502 Advisory Committee stated that "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." It is an open question as to whether the ITC will find the Advisory Committee's statement persuasive. The ITC may wish to consider whether a party agreement or ALJ ground rules will permit parties to reach a prior agreement regarding "reasonable precautions." For example, "The Protective Order Toolkit: Protecting Privilege with Rule of Evidence 502," 10 Sedona Conf. J. 237 (2009), suggests that parties consider agreeing to language that provides the following:
The Producing Party will be deemed to have taken reasonable steps to prevent communications or information from inadvertent disclosure if that party utilized either attorney screening, keyword search term screening, advanced analytical software applications and/or linguistic tools in screening for privilege, work product or other protection.
At first blush, the proposed rule does appear to offer some potential relief from privileged data management costs. Proposed rule 210(e)(3) provides that:
Parties may enter into a written agreement to waive compliance with section (1) of this paragraph [relating to privilege claim/privilege log provisions] for documents, communications, and things created or communicated within a time period specified in the agreement. The administrative law judge may deny any motion to compel information claimed to be subject to the agreement. If information claimed to be subject to the agreement is produced in discovery then the administrative law judge may determine that the produced information is not entitled to privilege or protection.
This provision could potentially be considered substantially similar to the situation that arose in Certain Digital Models, Digital Data, and Treatment Plans for Use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom, and Methods of Making the Same, Inv. No. 337-TA-833, Order No. 7 (June 28, 2012) (ALJ Rogers) [Inv. 833]. In this investigation the parties stipulated that materials withheld from privilege created on or after a certain date were exempt from privilege log disclosure. The ALJ's ground rules provided that if this type of "agreement is in force, the Administrative Law Judge will not consider any motions involving privileged documents." In Inv. 883 the respondent produced a privileged document created after the date set forth in the agreement. The claimant filed a motion arguing the document was not privileged or, alternatively, if privileged that the respondent waived the privilege. The ALJ declined to consider the motion stating that the ground rules precluded the motion.