U.S. Federal Rule of Evidence 502

The Federal Rules of Evidence have now been amended to include a new Rule 502 [PDF], which should represent a sea change in the law of waiver in the United States. Rule 502 is intended to introduce uniformity in the law of waiver of attorney-client privilege and work production protection throughout the United States courts and, through operation of the Commerce Clause of the United States Constitution, among State courts.

The problem that led to the enactment of the Rule is the sheer volume and expense that arises from the review of perhaps millions of documents that are “electronic” in nature. A party may inadvertently produce “protected” materials, and that inadvertent production may lead to waiver or privilege or work product. It is now commonplace for parties in a given litigation to enter into a so-called “claw back” or, more rarely, a “quick peek” agreement to protect against waiver of inadvertently produced materials. However, what happens when a nonparty seeks access to those inadvertently produced materials arguing that, regardless of the binding effect of an agreement between the parties, there has been a waiver as to anyone else?

One answer was suggested by Chief Magistrate Judge Grimm in Hopson v. Mayor and City Council, 232 F.R.D. 228 (D. Md. 2005). Judge Grimm suggested that, if parties entered into a nonwaiver agreement as a result of a “meet-and-confer” under Federal Rule of Civil Procedure 26(f), and that agreement was embodied in an order, any inadvertent production would be made under “judicial compulsion” and there would be no third party waiver. There was no certainty, however, that such a result could be obtained in other federal or State courts. See Henry v. Quicken Loans, 2008 WL 474127 (E. D. Mich. Feb. 15, 2008). Rule 502 is intended to provide that certainty.

Rule 502 does address a number of matters related to privilege. Subsection (a) deals with intentional waivers of otherwise protected materials “in a Federal proceeding or to a Federal office or agency.” Waivers extend to undisclosed materials if the waiver was intentional, what was disclosed and undisclosed concern the same subject matter, and the materials “ought in fairness *** be considered together.”

Subsection (b) deals with inadvertent production in federal or State proceedings.” It provides that there is no waiver if the disclosure was inadvertent, reasonable steps were taken to prevent disclosure, and reasonable steps were promptly taken to rectify the disclosure. Subsection (b) refers to Federal Rule of Civil Procedure 26(b)(5)(B), which established a uniform procedure for the federal courts to address inadvertent waiver. Note that Subsection (b) can operate independent of any party agreement.

Subsection (c) addresses disclosures in State proceedings. Assuming there is no controlling State order, inadvertent disclosure is not a waiver in a federal proceeding if the disclosure would not have been a waiver if it had been made in the federal proceeding and if the disclosure “is not a waiver under the law of the State where the disclosure occurred.”

Subsection (d) is, in many ways, the heart of Rule 502. It provides that, “[a] Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation before the court—in which event the disclosure is also not a waiver in any other Federal or State proceeding.” This allows parties to enter into claw back and quick peek agreements, presumably without fear that by doing so they will waive protection elsewhere.

Subsection(e) states that agreements between parties in federal proceedings bind only themselves. Subsection (f) states that Rule 502 is binding in diversity actions pending in federal courts “even if State law provides the rule of decision.” Subsection (f) also states that Rule 502 “applies in State proceedings and to Federal courts ***.”

Rule 502 raises a number of questions. Among other questions:

1. Is it constitutional as applied to States?
2. Should parties simply enter into nonwaiver agreements and not seek orders?
3. Should parties enter into quick peek agreements that are embodied in orders and effectively do no privilege review?
4. Should a federal judge simply enter a nonwaiver order on party consent or require some showing of “good cause” to do so?
5. How will nonparties challenge nonwaiver orders?

Only time—and judicial interpretation—answer these and other questions.