Rule 502(e) states, "an agreement on the effect of disclosure in a federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order." This subsection codifies something that many attorneys have already put into practice: any confidentiality agreement between the parties must be made part of a court order to give it appropriate protection. Moreover, these two subparts, read together with the advisory committee notes, endorse and approve clawback agreements and orders.
Post-502: Are Courts Enforcing the Rule?
Even with the added protections afforded by Rule 502(d), many practitioners may still be hesitant to produce documents without the standard privilege review, which may involve several layers of attorney review, plus additional time for quality-control checks. Federal courts have not unilaterally assuaged these fears – Rule 502(d) has been interpreted by very few courts since its inception, and few, if any, trends have emerged with regard to confidentiality/clawback provisions.
A few courts have chosen to enforce the provisions of Rule 502(d) with no inquiry into the traditional Rule 502(b) "reasonableness" requirements, as appears to be contemplated by the rule itself and the accompanying advisory committee notes. Some have chosen to enforce clawback provisions in stipulated protective orders and other court orders, but have at least mentioned the Rule 502(b) analysis as part of their decision. (See Kandel v. Brother Int'l, 683 F. Supp. 2d 1076 (C.D. Ca. 2010).) Still others, however, have ignored Rule 502(d) agreements in their entirety and have required compliance with Rule 502(b). For example, in ReliOn v. Hydra Fuel Cell, No. CV06-607-HU (D. Or. Dec. 4, 2008), a magistrate judge found that two produced emails in a large document production were enough to constitute waiver, despite the presence of a stipulated protective order.
It should be noted that courts have also been using Rule 502(d) sua sponte to resolve discovery disputes between the parties. For example, in the recent case of Fleisher v. Phoenix Life Insurance, No. 11 Civ. 8405 (CM) (JCF), (S.D.N.Y. Dec. 27, 2012), the defendant argued that it could not complete its document production in less than five months because of a burdensome and costly privilege review. The court entered an order under Rule 502(d) stating that Phoenix did not waive any privilege by producing the documents in their current form, thereby eliminating the defendant's justification for delay. This type of "compelled quick peek" may be used by judges with more frequency in cases where parties cannot agree on a production schedule or in cases where a piece of media, such as a hard drive, may contain both responsive and privileged materials. Several other courts have actively encouraged parties to apply for Rule 502(d) orders to assuage privilege concerns, and federal judges in the U.S. Court of Appeals for the Third Circuit and elsewhere have publicly spoken about the benefits of such agreements in litigation.
Rule 502(d) Agreements: A Producing Party's Insurance Policy
The current inconsistent application of Rule 502(d), however, does not mean that the practitioner should write off this rule until further clarification is available. Instead, it should be used as part of a belt-and-suspenders approach to enhance any stipulated protective orders currently in use. A few practice tips:
• If an opponent is delaying executing a clawback agreement, consider getting an order without their consent.
• Specifically reference Rule 502(d) in any confidentiality agreement/order.
• Decide whether it is prudent to include a "promptness" provision in your agreement. Rule 502(d) does not require that a party assert that a production was inadvertent after a certain number of days or within a "reasonable" amount of time. However, a practitioner may want to distinguish party disclosures from other productions such as subpoena responses, where promptness may be desired by both parties.
• Add language that the reasonableness requirement of Rule 502(b) is "presumed satisfied"; although courts are not required to engage in a reasonability analysis under Rule 502(d), some still choose to do so.
• Specify in the agreement that any disclosure is, per se, "inadvertent" to avoid any argument that Rule 502(a) applies.
Federal Rule of Evidence 502 provides producing parties with an additional measure of comfort regarding inadvertent waiver, which may allow parties to limit the costs associated with privilege review. Moreover, it eliminates the worry of inadvertently produced documents being used in other litigation, whether at the federal or state level. Lastly, it is more in line with current trends toward technology-assisted review, because it provides a much-needed safety net to practitioners who choose to use new advances to cut document review costs. While its full impact has yet to be felt, attorneys whose cases involve electronic discovery would be wise to take the gifts given in Rule 502 and use them to enhance their current practice.
Jana M. Landon is of counsel in the Philadelphia office of Stradley Ronon Stevens & Young, where she serves as co-chair of the firm's e-discovery task force. She can be reached at 215-564-8049 or via email at jlandon@stradley.com.
Subscribe to The Legal Intelligencer
