Proper framework for analysis and evidence needed to establish inadvertent waiver under F.R.E. 502(b) – or – “I may not always be right but I’m never wrong.”

December 14th, 2009 | By Steve Puiszis

Amobi v. District of Columbia Dept. of Corrections, 2009 WL 4609593 (D.D.C. Dec. 8, 2009)

Comrie v. Ipsco, Inc., 2009 WL 4403364 (N.D.Ill. Nov. 30, 2009)

Coburn Group, LLC v. Whitecap Advisors LLC, 640 F. Supp.2d 1032 (N.D.Ill. 2009)

Today’s “trifecta” addresses the proper framework for analyzing the application of Fed. R. Evid. 502(b) to claims of inadvertent waiver of attorney-client privilege and work-product protection. It also discusses the information that should be provided to a court when seeking Rule 502’s protection. In both Amobi and Comrie, defendants failed to establish that they took reasonable steps to prevent the disclosure of privileged information, and thus, failed to establish the elements of Rule 502(b), resulting in a finding of waiver. These decisions confirm that the reasonableness of the precautions taken by a party to protect its privileged and protected communications is an explicit consideration in determining whether a waiver occurred under Rule 502(b), no matter how inadvertent the disclosure. 

Notably, in Amobi Judge Facciola rejected the argument that if a “disclosure was made by a lawyer, then it clearly was not mistaken and not inadvertent.” He observed that if a lawyer’s mistake never qualified as an inadvertent disclosure, it “would vitiate the entire point of Rule 502(b)…. It would essentially reinstate the strict waiver rule in cases where lawyers reviewed documents, and would create a perverse incentive not to have attorneys review documents for privilege.” 2009 WL 4609593 at *8. Judge Facciola also jokingly noted that the premise of plaintiff’s argument was wrong because: “Lawyers make inadvertent mistakes; it is judges who never make mistakes.” Id.(emphasis in original). The court’s tongue-in-cheek comment in Amobi reminded of me of something my father frequently told me in my youth: “I may not always be right, but I’m never wrong.” I have remembered that sage advice throughout my legal career, especially when reflecting upon a court’s evidentiary rulings.

Proper test for determining whether a disclosure was inadvertent

Rule 502(b) addresses inadvertent disclosures and provides the test for determining whether a waiver has occurred. The rule, however, does not define the term “inadvertent.” Prior to the enactment of Rule 502, those courts that applied an intermediate balancing test to the issue of inadvertent waiver considered a variety of factors in determining “inadvertency,” such as the number of documents produced in discovery, the number of privileged or confidential documents disclosed, the procedures used to review the documents before they were produced and the actions of the producing party after learning that privileged or confidential information had been disclosed. See, e.g., Judson-Atkinson Candies, Inc. v. Latini-Hohberger Dhimantec, 529 F.3d 371, 388 (7th Cir. 2008). Several district court decisions have continued that approach since the enactment of Rule 502, including one of today’s featured decisions, Comrie, 2009 WL 4403364 at *2, and Heriot v. Byrne, 257 F.R.D. 645, 654 (N.D. Ill. 2009), which was featured in one of our prior blog posts.

However, two of today’s featured decisions, Amobi and Coburn reject that approach, finding “the structure of Rule 502 suggests that the analysis under subpart (b)(1) is intended to be much simpler, essentially asking whether the party intended a privileged or work-product protected document to be produced or whether the production was a mistake.” Coburn, 640 F.Supp. 2d at 1038. Coburn noted that the “parallel structure of subparts (a)(1) and (b)(1) of Rule 502 contrasts a waiver that is intentional with a disclosure that is inadvertent.” Id. (emphasis in original). In Amobi, Judge Facciola found this interpretation “to be in line with one of the goals of the drafting committee: to devise a rule to protect privilege in the face of an innocent mistake.” 2009 WL 4609593 at *7. Additionally, he observed:

[P]ermitting ‘inadvertence’ to be a function of, for example, the amount of information that had to be reviewed or the time taken to prevent the disclosure melds two concepts, ‘inadvertant’ and ‘reasonable efforts,’ that should be kept distinct. One speaks to whether the disclosure was unintended while the other speaks to what efforts were made to prevent it.

Thus, so long as there is a showing that the documents in question were mistakenly disclosed, that should suffice to meet Rule 502(b)(1)’s requirements. That does not mean, however, those factors which courts had previously relied upon in determining whether a waiver was inadvertent play no role in Rule 502’s analysis. Both Amobi and Coburn explain those factors can properly be considered in connection with subpart (b)(2) of Rule 502, which examines whether the holder of the privilege took reasonable precautions to prevent the disclosure. Judge Facciola recalled in Amobi that the explanatory note to Rule 502(b) identifies several non-dispositive factors that a court may consider and explains the drafters of Rule 502 “consciously chose not to codify any factors in the rule because the analysis should be flexible and should be applied on a case-by-case basis.” 2009 WL 4609593 at *8.

Explain steps taken to prevent disclosure of privileged information

Rule 502(b)(2) specifically requires the party asserting privilege take reasonable steps to prevent the disclosure of protected information. The decision in Comrie explains that simply indicating the number of documents reviewed and produced will not suffice to establish that reasonable precautions were taken. The fact that a protective order was in place which describes how to designate documents confidential and explains the procedures for clawing back documents was also found to be insufficient in Comrie. The defendants failed to advise the court about any of the steps they took to review the documents prior to production. As a result, the court concluded that the defendants failed to meet their burden to show that they took reasonable steps to prevent the disclosure of privileged information.

A similar conclusion was reached in Amobi where the defendants only vaguely referred to several reviews of the documents they produced. Judge Facciola explained that he kept searching the defendant’s papers to find “what they did when they got the documents, how they segregated them so that the privileged documents were kept separate from the non-privileged, and how, despite the care they took, the privileged document(s) was inadvertently produced.” Forcing a court to speculate about the specific precautions taken will not meet a party’s burden under Rule 502(b). Judge Facciola observed that because the defendants failed to provide any evidence that they took reasonable efforts to prevent the disclosure, “the only injustice in this matter is that done by [d]efendants to themselves.” Amobi, 2009 WL 4609593 at *9.

Use of paralegals is not unreasonable under Rule 502(b)

In Coburn, plaintiff argued that the use of paralegals to screen documents for privilege and work product was unreasonable. While noting “the experience and training of the persons who conducted the review is certainly relevant to the reasonableness of the review,” the court in Coburn held that the use of experienced paralegals who were given specific direction and supervision by lead counsel in the case met Rule 502(b)’s reasonableness standard. 640 F.Supp.2d at 1039. The court also rejected the suggestion that simply because a confidential document was not identified during the course of the review meant that review was unreasonable. The court in Coburn observed: “If that were the standard, Rule 502(b) would have no purpose; the starting point of Rule 502(b) analysis is that a privileged or protected document was turned over.” 640 F.Supp.2d at 1040.

The protocol followed in Coburn also bears mentioning because the court implicitly found it to be reasonable. The protocol for that document review involved the following instructions:

• Identify responsive documents by date;
• Identify and mark for attorney review, any correspondence between defendant’s general counsel and any defendant employee;
• Identify and mark as privileged, any correspondence between defendant’s employees and defendant’s outside counsel;
• Identify and mark as privileged, documents prepared by any employee of defendant in anticipation of or in preparation for litigation pursuant to requests by defendant’s outside counsel;
• Pursuant to a protective order, mark responsive documents relating to customers as ‘confidential material’ or ‘attorney’s eyes only; and
• Segregate non-responsive documents, including documents relating to other matters.

So there you have our “trifecta” for the week. It may not win you anything at the racetrack, but following the holdings of these decisions can preserve your claim of attorney-client privilege. And, preserving privilege has become even more important than ever in light of the Supreme Court’s December 8th decision in Mohawk Industries v. Carpenter, that the privilege rulings of federal judges are not immediately appealable under the collateral order doctrine.

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