Rule 502(d) Orders: The Most Effective and Underused Protection against Privilege Waivers | Practical Law

Rule 502(d) Orders: The Most Effective and Underused Protection against Privilege Waivers | Practical Law

This Legal Update highlights the advisability of entering into a Rule 502(d) order under the Federal Rules of Evidence (FRE), which allows parties to provide for the return of privileged documents produced during discovery without fear that the disclosure waives the attorney-client privilege or work product protection. Surprisingly, Rule 502(d) orders are currently underused by federal court practitioners, despite being favored by federal judges.

Rule 502(d) Orders: The Most Effective and Underused Protection against Privilege Waivers

by PLC Litigation
Published on 05 Mar 2013 • USA (National/Federal)
This Legal Update highlights the advisability of entering into a Rule 502(d) order under the Federal Rules of Evidence (FRE), which allows parties to provide for the return of privileged documents produced during discovery without fear that the disclosure waives the attorney-client privilege or work product protection. Surprisingly, Rule 502(d) orders are currently underused by federal court practitioners, despite being favored by federal judges.
FRE 502 was enacted in 2008 in response to widespread complaints that the cost of protecting against waivers of attorney-client privilege or work product protection during discovery has become prohibitive because of the concern that even an inadvertent or insubstantial disclosure waives protected communications or information (see Advisory Committee Notes to FRE 502), particularly in cases involving e-discovery, which may encompass a large number of documents. Rule 502(a) and (b) explain under what circumstances the unintentional disclosure of privileged information does and does not constitute a waiver of privilege.
Under Rule 502(d), however, the court may issue an order providing that a party's disclosure of documents protected by the attorney-client privilege or work product protection does not waive the privilege (unless there was an intent to waive the privilege). According to the Advisory Committee notes, this is true even when a party produced documents without conducting any screening for privileged material (see Advisory Committee Notes to FRE 502(d)).
A Rule 502(d) order is a unique discovery tool because:
  • The no-waiver effect also applies in other federal and state court proceedings.
  • The parties may incorporate into the order a specific and detailed agreement regarding its scope and effect in the litigation.
  • Privileged documents must be returned to the disclosing party "irrespective of the care taken by" the party in reviewing them prior to production.
  • The court may issue the order sua sponte, without the parties' agreement.
(FRE 502(d) and (e) and Advisory Committee Notes to FRE 502(d).)
Judges favor Rule 502(d) orders because they are designed to reduce the cost of privilege review and allow parties to review and produce documents expeditiously and without lengthy and expensive motion practice regarding potential waivers of privilege. Recently, several judges have expressed their approval of Rule 502(d) orders and relied on them to find that a party's disclosure of privileged documents did not waive the attorney-client privilege or work product protection. For example:
  • Magistrate Judge Andrew Peck of the United States District Court for the Southern District of New York opined that it is malpractice to not seek a Rule 502(d) order from the court before the commencement of document discovery (see View from the Bench: Judges on E-Discovery at LegalTech Day Two, Law Technology News, Evan Koblentz (Jan. 31, 2013)).
  • In Chevron Corp. v. The Weinberg Group, the court entered a Rule 502(d) order allowing the defendant to knowingly produce privileged materials without waiving any privileges regarding the subject matter of the documents in any proceeding (Misc. Action No. 11-409, at *1 n.1 (D.D.C. Oct. 26, 2012)). Magistrate Judge John M. Facciola wrote that he was "troubled that the [defendant] has just now discovered Rule 502(d), the use of which may have prevented the protracted litigation and discovery battles that have plagued this case for the past two years."
  • In Rajala v. McGuire Woods, LLP, the court held that an inadvertently produced document did not waive privilege and could be taken back by the producing party (clawed back) because the court had entered a Rule 502(d) order before the disclosure. The court determined that the terms of the Rule 502(d) order, and not the provisions of Rule 502(a) and (b), governed the handling of inadvertently produced documents and noted that the purpose of the order was to reduce the time and costs involved in a document-by-document privilege review (No. 08-cv-2638, , at *5 (D. Kan. Jan. 3, 2013)).
  • In Brookfield Asset Management, Inc. v. AIG Financial Products Corp., the court held that the Rule 502(d) order issued by the court before the defendant's production of privileged documents gave the defendant the right to claw back those documents "no matter what the circumstances giving rise to their production were" (No. 09-cv-8285, , at *1 (S.D.N.Y. Jan. 7, 2013)).
For an example of a claw-back provision that parties may incorporate into a confidentiality order or an FRE 502(d) order, and for additional information on Rule 502(d) generally, see Standard Document, FRE 502(d) Order: Drafting Note, Return (Clawback) of Privileged Information.