11. Protection of attorney-client privilege and confidentiality

11.1.Protection of attorney-client privilege and confidentiality goes to the heart of the adversary system. Production of ESI, which can often be voluminous and contain non-apparent information, leads to the risk that information subject to privilege or work product protection, or information that is confidential in nature, is inadvertently produced or is produced without adequate protection.

11.2.Issues presented

11.2.1.Responding parties that withhold relevant documents on privilege or work product grounds are almost universally required to provide a privilege log identifying the withheld documents and stating why the documents were withheld. See, e.g., FRCP 26(b)(5)(A).

11.2.2.FRCP 26(b)(5)(B) establishes a default procedure for asserting claims of privilege after production of information in discovery. If privilege or work product is asserted over produced information, the producing party must timely notify the receiving party, who is obligated to “promptly return, sequester, or destroy the specified information and any copies it has. …” The information should then be identified on a privilege log, subject to judicial resolution if challenged. “The producing party must preserve the information until the claim is resolved.”

11.2.3.FRCP 26(b)(5)(B) is a procedural rule and does not afford any substantive protection for attorney-client communications or work product material produced during discovery. While the procedure is designed to reduce cost and delay associated with disputes over inadvertently produced privileged documents and ESI during discovery, production itself may give raise to a waiver in many state courts. Until recently, this was also true in many federal courts, and the scope of waiver may have extended to all information regarding the same subject matter as the inadvertently-produced information.

11.2.4.Therefore, the risks associated with inadvertent production of privileged information have been very high; consequently, the cost of privilege review is often cited as a major component of the overall cost of litigation.

11.2.5.Rule 502 of the FRCP of Evidence (“FRE”) was enacted in the fall of 2008 to address these concerns. Several states have adopted equivalents of FRE 502.

11.2.6.FRE 502(a) limits the risk of subject matter waiver to instances in which the waiver was intentional. FRE 502(b) establishes somewhat uniform standards throughout the federal courts to resolve claims of waiver by inadvertent production, adopting a three-part test to determine if an inadvertent production constitutes a waiver. FRE 502(d) has the greatest potential for cost-savings and efficiencies. It provides for nonwaiver confidentiality orders under which parties can disclose ESI and other information in discovery without waiving attorney-client privilege or work product protection. Such an order is binding in any other federal and state proceeding. FRE 502 was intended to reduce the cost and risks associated with the production of large-scale collections of information, particularly ESI.

11.2.7.Beyond protecting privilege and work product, parties often seek to protect information that might, for example, constitute a trade secret or reveal highly personal matters. If exchanged without some type of restriction of use or dissemination, that information may become known to the public at large. Protective orders issued pursuant to FRCP 26(c) or its state equivalents must be looked to for protection here.

11.3.Suggested judicial management strategies

11.3.1.Ensure that the parties meet-and-confer on privilege and confidentiality issues before discovery begins and before presenting any disputes to the court.

11.3.2.Direct the parties to attempt to agree on issues of waiver and protection of confidential information, and that any resulting agreements be presented to the court at the initial case management conference and incorporated in the court’s FRCP 16 scheduling order.

11.3.3.Consider entering a nonwaiver confidentiality order with or without the parties’ agreement under FRE 502(d), after providing the parties with an opportunity to express any concerns about such an order.

11.3.4.Establish a procedure by which challenges to privilege or confidentiality assertions can be addressed in the most timely and efficient manner, ideally before disputed documents appear in depositions or as attachments to motions.

11.3.5.In the event that the privilege or confidentiality designations of a large volume of documents are challenged, direct the parties to attempt agreement on categorizing disputed information so that a ruling on samples will apply to each category.

11.3.6.Suggest that the parties engage (or order the appointment of) a neutral to rule on challenges to privilege or confidentiality designations.

11.4.Sample orders

11.4.1.Stipulation and Order Under FRCP of Evidence 502(d), Franco v. Connecticut Gen. Life Ins. Co., 818 F. Supp. 2d 792 (D.N.J. 2011) (order dated Oct. 28, 2010).

11.4.2.Protective Order Containing Clawback Provisions, Rajala v. McGuire Woods, LLP, No. 08-2638-CM-DJW, 2010 WL. 2949582 (D. Kan. July 22, 2010).

11.4.3.Discovery Order Pertaining to Rule 502(d) (excerpt).

11.5.Representative decisions

11.5.1.Datel Holdings Ltd. v. Microsoft Corp., 2011 WL 866993 (N.D. Cal. Mar. 11, 2011).

11.5.2.Jeanes-­-Kemp, LLC v. Johnson Controls, Inc., 2010 WL 3522028 (S.D. Miss. Sept. 1, 2010).

11.5.3.Protective Order Containing Clawback Provisions, Rajala v. McGuire Woods, LLP, No. 08-2638-CM-DJW, 2010 WL. 2949582 (D. Kan. July 22, 2010) (FRE 502(d)). (considering whether to issue an order entering a clawback provision to govern the inadvertent disclosure of “privileged or otherwise protected” documents and information).

11.5.4.Thorncreek Apartments III, LLC v. Vill. of Park Forest, 2011 WL 3489828 (N.D. Ill. Aug. 9, 2011).

11.6.Further reading

11.6.1.A Project of The Sedona Conference® Working Group on Protective Orders, & Confidentiality & Public Access (WG2), The Sedona Guidelines: Best Practices Addressing Protective Orders, Confidentiality & Public Access in Civil Cases, Mar. 2007 Post-­-Public Comment Version, 8 SEDONA CONF. J. 141 (2007).

11.6.2.artin R. Lueck, Patrick M. Arenz, Federal Rule of Evidence 502(d) and Compelled Quick Peek Productions, 10 SEDONA CONF. J. 229 (2009).

11.6.3.Patrick L. Oot, The Protective Order Toolkit: Protecting Privilege with Federal Rule of Evidence 502, 10 SEDONA CONF. J. 237 (2009).

11.6.4.Maura R. Grossman and Ronald J. Hedges, Do the FRCPs Provide for ‘Clawless’ Clawbacks? 9 DDEE 285 (BNA Sept. 1, 2009).

11.6.5.Paul W. Grimm, Lisa Yurwit Bergstrom, Matthew P. Kraeuter, Federal Rule of Evidence 502: Has It Lived Up to Its Potential? 17 Rich. J.L. & Tech. 8 (2011).

11.6.6.The Sedona Conference® Working Group on Electronic Document Retention and Production (WG1), The Sedona Principles, Second Edition: Best Practices Recommendations & Principles for Addressing Electronic Document Production, 2012 Public Comment Draft (Mar. 2012).