New England Biz Law Update
Nearly two years after Congress enacted an evidentiary rule aimed at protecting lawyers who mistakenly turn over privileged materials during discovery, practitioners say they are still struggling with critical aspects of the measure.
Signed by President George W. Bush in September 2008, Federal Rule of Evidence 502 was initially praised by the legal community for creating a presumption that disclosures made in federal proceedings do not waive the attorney-client privilege if certain “reasonable steps” were taken to prevent them from occurring.
Lisa C. Wood of Foley Hoag in Boston, who recently conducted an analysis of Rule 502, said one major problem she identified with the rule is that it applies only to cases in which litigation is pending before a court.
Wood said lawyers across the country have learned the hard way that the rule’s limited application means agreements reached with federal agencies during the critical pre-litigation stage of a case are not covered.
It is precisely that preliminary stage of an investigation, Wood said, when parties often turn over large volumes of electronic documents that are most susceptible to inadvertent disclosures.
“How you protect against the inadvertent production of privileged material in that setting is an open question that unfortunately is not addressed by [FRE] 502,” she said. “It’s really just an anomaly in the rule.”
Bringing in the judge
Wood, who chairs a local rules committee in U.S. District Court in Boston, said agreements between parties to limit the scope of an attorney-client privilege waiver based on inadvertent disclosures are not binding on third parties unless a judge issues a protective order.
“Even if you have an agreement with the agency that a disclosure should not result in a waiver of the privilege, I could see a lawyer in a related private litigation trying to challenge the insufficiency of that agreement because it has not been endorsed by a court,” Wood said. “The rule expressly states waiver determinations must be made by court order, which by definition seems to exclude cases where a party is turning over documents to the government during a pre-litigation investigation.”
Because attorneys are often trying to keep their clients’ dirty laundry out of the courtroom at that stage of a case, obtaining a waiver agreement in front of a judge is not always feasible, she said.
“Congress wanted these agreements to be reviewed by judges, but if you’re dealing with an agency of the government in an investigation, a judge may not want to be involved and it may not be in your client’s best interests,” she said.
It is also unclear, Wood said, if the government agency would even agree to enter into such a deal. She said she plans to ask the Department of Justice’s Antitrust Division and the Federal Trade Commission to comment on the matter.
Vetter & White lawyer George E. Lieberman, who is vice president of the Federal Bar Association for the 1st U.S. Circuit of Appeals, said he, too, is aware of the discrepancy.
“There will be changes to the rule,” he predicted. “Where, how and when remains to be seen, but I guarantee there will be changes.”
Until then, one way to deal with the pre-litigation uncertainty is to file a motion to quash or some other petition in which the lawyer can ask a judge to endorse a waiver agreement, he advised.
Lieberman, who practices in Massachusetts and Rhode Island, said such a request is the only way to fully protect a client.
“The rule was intended to protect documents that were inadvertently produced and to avoid having to bog down the court with discovery disputes,” he said. “Before this was enacted, you had judges on all sides of the spectrum, so it would certainly be reasonable at this point to ask for a court order that will protect you against a third-party lawsuit.”
Lending an appellate hand
While the pre-litigation disclosure issue remains fuzzy, most practitioners agree that future decisions from circuit courts of appeal will help provide clarity on many of the questions raised by Rule 502.
Scott P. Lopez of Lawson & Weitzen in Boston, who credits Congress for resolving a split that existed among the circuits on inadvertent disclosure, said the only caselaw he is aware of that interprets Rule 502 can be found at the trial level.
Jonathan I. Handler of Boston’s Day Pitney said he knows of no substantive Rule 502 decisions issued by federal judges in Massachusetts.
“If you were to search the District of Massachusetts or 1st Circuit to see how often Rule 502 questions have come up, you would find very few cases,” he said. “Where the rule has had more impact, which is harder to measure, is in the way its existence has penetrated into people’s thinking and has caused lawyers to behave in a slightly different way than they normally would have before.”
Mary Jo Harris, who practices at Morgan, Brown & Joy in Boston, said the rule codified what many practitioners were already doing with regard to inadvertent disclosures and that she is not surprised it has not drawn the attention of the appellate courts.
Harris, vice president of the Massachusetts chapter of the Federal Bar Association, said a lawyer typically cannot file an interlocutory appeal based on an adverse discovery decision. Therefore, in order for any aspect of the rule to reach a court of record, the issue would have to come at the conclusion of the case, she said.
“So the fact that it has been on the books for two years and there hasn’t been an appellate decision makes sense to me,” she said. “When we do get some decisions, it will certainly help inform the District Court as to what the appellate courts are going to find reasonable.
And it will also help parties know what the outside parameters are on what will be tolerated and what won’t be tolerated in terms of the extent of the oversight that has to be given to discovery review.”
