Federal Rule of Evidence 502

The practice of “produce first-ask questions later” can also result in unpleasant surprises down the road, such as the use of a privileged document for the first time during a deposition or even a trial, followed by a scramble to enforce the claw back agreement. Unhappy courts may react to this situation by setting deadlines for privilege holders to assert privilege claims in advance of depositions or trial, which would offset the cost savings intended by the adoption of Rule 502. See David B. Alden, Drug and Device Law blog, New Federal Rule of Evidence 502 ' A Modest Improvement? http://druganddevicelaw.blogspot.com, Sept. 23, 2008.

The prudent lawyer will take advantage of the protections of Rule 502(d), but also adhere to the reasonableness requirement of Rule 502(b). Although a client protected by a Rule 502(d) order presumably need not act “reasonably” under Section 502(b), the client may not view that trade-off as advantageous and may want to take steps to protect its privileged documents. Lawyers can cull out privileged documents through the use of search terms and then sample the remainder of the document set to assure that the privilege terms identified the appropriate documents. These steps will reduce the chance that a privileged document will be produced inadvertently. At the same time, the parties should enter into a “claw-back” agreement and incorporate it into a Rule 502(d) court order to assure that a privileged document, if inadvertently produced, cannot be used in the present case or any other.

An opponent may argue that a claw-back agreement alleviates the need for a long discovery phase because less time will be needed to review documents, a suggestion the court may find appealing. However, judges should reasonably accommodate a lawyer who seeks to protect his or her client both by shielding privileged documents from the eyes of the adversary and by obtaining the court's protection in the event of inadvertent disclosure.

How can the product liability defense lawyer use this “belts and suspenders” approach to keep privileged documents out of the plaintiff's hands, yet keep costs down? The answer, as is so often the case, lies with planning and strategy.

Protection of privileged documents starts with sound practices in identifying search terms for relevance, which means learning about the industry, the product and the client. Counsel should interview the product design and development team to identify terms that describe the product, including acronyms, abbreviations, jargon and specialized terms. These terms will be used to identify relevant documents.

Advice for Counsel

Counsel should identify obvious sources of privileged documents and segregate them. The key to this step is anticipating documents that the plaintiff will request. Along with requesting information about the product, the alleged incident and the resulting injury, a plaintiff will seek to obtain records of similar incidents, consumer complaints, product changes or problems the defendant has encountered relative to the product which are all records that the defendant may house in computerized data bases. See Douglas Danner and Larry J. Varn, Pattern Discovery ' Products Liability
3d ” 19:13 and 20:2 (2005). If counsel reviews responses to complaints or provides other privileged input, that information should be copied from the database and segregated from the general document collection at the beginning of the collection phase.

Counsel and the client should collaborate to cull privileged documents from the relevant documents previously identified through a relevancy word search. If incident reports, complaints, or discussions of product problems have been tracked in a database as noted above, segregation of privileged material residing in the database may be straightforward. If, on the other hand, such reviews were recorded and discussed via e-mail ' in so-called “unstructured data” ' the records must be identified through privilege search terms and other strategies, pulled from the relevant document set and subjected to close scrutiny for privilege through careful review by senior lawyers. The “non hits” ' which will comprise the vast bulk of the data set ' should then be reviewed by junior lawyers or other legal professionals who receive training in the identification of privileged documents.

Counsel should conduct sampling in the “non-hits” ' the document set that remains after the privileged “hits” have been removed. This is the step that lawyers skipped in Victor Stanley and Rhoads, and there is no excuse for this omission. Neither case specifies the requirements of such sampling, such as what proportion of documents must be sampled, but common sense dictates that a sample should be randomly selected; for example, one in every 100 documents.

Conclusion

Litigants today struggle with the review of large volumes of electronic documents. It is difficult and expensive to identify relevant and responsive documents, and the fear of inadvertently disclosing privileged documents compounds the difficulty. Federal Rule of Evidence 502(d) allows parties to “claw back” privileged documents pursuant to a court-approved agreement. However, this provision may provide small comfort to a party whose privileged communications have been read by its adversary. Although Rule 502 appears to relieve parties of the obligation of conducting any privilege review whatsoever, the prudent lawyer will not forego this step, and will follow the methods outlined in Victor Stanley that demonstrate “reasonableness.” Even though, under Rule 502(d), reasonableness is not required, it is reasonableness that keeps privileged documents out of the adversary's hands.

Cynthia K. Courtney is Day Pitney's Electronic Discovery counsel She is based in the Hartford, CT, office and is a member of the Commerical Litigation Department. Edgar B. Hatrick is an associate in the Commercial Litigation Department of Day Pitney's Boston office. He practices in the areas of property and contracts litigation, product liability, and insurance defense.

The first part of this article summarized the law of inadvertent waiver of privilege and the evolution of courts' approaches to this problem, described the changes brought about by newly enacted Federal Rule of Evidence 502, and discussed such leading cases as Victor Stanley, Inc. v. Creative Pipe, Inc. and Rhoads Industries, Inc. v. Building Materials Corporation of America. The conclusion offers a roadmap for the product liability practitioner to navigate the opportunities and challenges presented by Rule 502, and illustrates how to protect a client's privileged communications in a cost-conscious way.

The Path Forward

How can a lawyer protect the client's privileged communications in a cost-conscious way? Will lawyers abandon the privilege review and rely on either the claw back agreement or the so-called “quick peek” arrangement, in which no privilege review is conducted, yet privileged documents viewed by one's adversary are returned without challenge? Although there is talk of this approach, it is not a safe path. A party's case has arguably been damaged by the simple viewing of privileged information by one's adversary, even if the privilege is maintained. In addition, privileged material may reveal secrets and problems other than those relating to the instant case. Although the document may be safe from admission into evidence or disclosure in another case, a crafty adversary can use the document or the information in the document in subtle ways that cannot be challenged. Moreover, between the time the disclosure was made and the adversary is asked to return the privileged document, the recipient of the document may have shown it to a fact or expert witness who cannot then “unlearn” the contents of the document.

The practice of “produce first-ask questions later” can also result in unpleasant surprises down the road, such as the use of a privileged document for the first time during a deposition or even a trial, followed by a scramble to enforce the claw back agreement. Unhappy courts may react to this situation by setting deadlines for privilege holders to assert privilege claims in advance of depositions or trial, which would offset the cost savings intended by the adoption of Rule 502. See David B. Alden, Drug and Device Law blog, New Federal Rule of Evidence 502 ' A Modest Improvement? http://druganddevicelaw.blogspot.com, Sept. 23, 2008.

The prudent lawyer will take advantage of the protections of Rule 502(d), but also adhere to the reasonableness requirement of Rule 502(b). Although a client protected by a Rule 502(d) order presumably need not act “reasonably” under Section 502(b), the client may not view that trade-off as advantageous and may want to take steps to protect its privileged documents. Lawyers can cull out privileged documents through the use of search terms and then sample the remainder of the document set to assure that the privilege terms identified the appropriate documents. These steps will reduce the chance that a privileged document will be produced inadvertently. At the same time, the parties should enter into a “claw-back” agreement and incorporate it into a Rule 502(d) court order to assure that a privileged document, if inadvertently produced, cannot be used in the present case or any other.

An opponent may argue that a claw-back agreement alleviates the need for a long discovery phase because less time will be needed to review documents, a suggestion the court may find appealing. However, judges should reasonably accommodate a lawyer who seeks to protect his or her client both by shielding privileged documents from the eyes of the adversary and by obtaining the court's protection in the event of inadvertent disclosure.

How can the product liability defense lawyer use this “belts and suspenders” approach to keep privileged documents out of the plaintiff's hands, yet keep costs down? The answer, as is so often the case, lies with planning and strategy.

Protection of privileged documents starts with sound practices in identifying search terms for relevance, which means learning about the industry, the product and the client. Counsel should interview the product design and development team to identify terms that describe the product, including acronyms, abbreviations, jargon and specialized terms. These terms will be used to identify relevant documents.

Advice for Counsel

Counsel should identify obvious sources of privileged documents and segregate them. The key to this step is anticipating documents that the plaintiff will request. Along with requesting information about the product, the alleged incident and the resulting injury, a plaintiff will seek to obtain records of similar incidents, consumer complaints, product changes or problems the defendant has encountered relative to the product which are all records that the defendant may house in computerized data bases. See Douglas Danner and Larry J. Varn, Pattern Discovery ' Products Liability
3d ” 19:13 and 20:2 (2005). If counsel reviews responses to complaints or provides other privileged input, that information should be copied from the database and segregated from the general document collection at the beginning of the collection phase.

Counsel and the client should collaborate to cull privileged documents from the relevant documents previously identified through a relevancy word search. If incident reports, complaints, or discussions of product problems have been tracked in a database as noted above, segregation of privileged material residing in the database may be straightforward. If, on the other hand, such reviews were recorded and discussed via e-mail ' in so-called “unstructured data” ' the records must be identified through privilege search terms and other strategies, pulled from the relevant document set and subjected to close scrutiny for privilege through careful review by senior lawyers. The “non hits” ' which will comprise the vast bulk of the data set ' should then be reviewed by junior lawyers or other legal professionals who receive training in the identification of privileged documents.

Counsel should conduct sampling in the “non-hits” ' the document set that remains after the privileged “hits” have been removed. This is the step that lawyers skipped in Victor Stanley and Rhoads, and there is no excuse for this omission. Neither case specifies the requirements of such sampling, such as what proportion of documents must be sampled, but common sense dictates that a sample should be randomly selected; for example, one in every 100 documents.

Conclusion

Litigants today struggle with the review of large volumes of electronic documents. It is difficult and expensive to identify relevant and responsive documents, and the fear of inadvertently disclosing privileged documents compounds the difficulty. Federal Rule of Evidence 502(d) allows parties to “claw back” privileged documents pursuant to a court-approved agreement. However, this provision may provide small comfort to a party whose privileged communications have been read by its adversary. Although Rule 502 appears to relieve parties of the obligation of conducting any privilege review whatsoever, the prudent lawyer will not forego this step, and will follow the methods outlined in Victor Stanley that demonstrate “reasonableness.” Even though, under Rule 502(d), reasonableness is not required, it is reasonableness that keeps privileged documents out of the adversary's hands.

Cynthia K. Courtney is Day Pitney's Electronic Discovery counsel She is based in the Hartford, CT, office and is a member of the Commerical Litigation Department. Edgar B. Hatrick is an associate in the Commercial Litigation Department of Day Pitney's Boston office. He practices in the areas of property and contracts litigation, product liability, and insurance defense.