On Sept. 19, President Bush signed into law Federal Rule of Evidence 502 (Attorney-Client Privilege and Work Product; Limitations on Waiver). It applies to previously filed cases in the discretion of the trial judge and to all cases filed on and after Sept. 19, without exception. Rule 502(d) is the most innovative aspect of the new rule, and it dictates that protective orders be drafted differently than they have in the past. It provides that a federal court order governing waiver through disclosure of privileged or protected information is binding on all other courts and third parties:

“(d) Controlling effect of a court order. — A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court — in which event the disclosure is also not a waiver in any other federal or state proceeding.”

For years, it has been common practice to include in protective orders clawback provisions to address the inadvertent production of material protected by the attorney-client privilege or work- product protection. Rule 502(d) resolves a vexing, pre-existing problem — that the court-ordered return and protection of inadvertently produced material in Case 1 did not afford any protection from the discovery demands of litigants in Case 2. But it does more, too.

A look at the current short-form order

Prior to Rule 502(d), a typical short-form clawback provision provided:

“If a party inadvertently produces information that it later discovers to be privileged, the production of that information shall not be deemed to constitute the waiver of any applicable privileges, provided that the producing party promptly informs the receiving party of the inadvertent production and requests the return or confirmed destruction of the privileged information, including any copies or derivative works that have been made of that inadvertent production. Within three (3) business days of receiving such notification, the receiving party shall return or confirm destruction of all such privileged Information, including any copies or summaries thereof.”

Four observations in light of Rule 502(d). First, this order is limited by its term to privilege. While conventional practice in the past has been to read “privilege” expansively to include work-product protection, Rule 502 clearly distinguishes between the two, and so should court orders now. Otherwise, a reference only to privilege is subject to the argument that it reflects a negotiated narrowing of the rule’s protection.

Second, this order focuses on inadvertent production of information, rather than disclosure of information. Inadvertent disclosure can occur many ways — e.g., at deposition, by e-mail, in extrajudicial conversations relating to the case. The language of Rule 502(d) is broad enough to cover all of these, and the order should do so as well.

Third, Rule 502(d) does not impose a promptness requirement on any request to return the information. A promptness requirement may be desirable, depending on many factors, including the magnitude of the anticipated discovery. Further, lawyers may choose to distinguish party disclosures from third-party responses to subpoenas, as to which it may be desirable to insist on promptness.

Fourth, and perhaps most important, this form of order is limited to inadvertent disclosure. It may be in any given case that limiting the scope of the order to inadvertent production is prudent. But that is a choice for counsel to make.

Taking Rule 502(d) into account, this is a model provision that is limited to protecting inadvertent disclosure:

“(a) If, in connection with the pending litigation, a party (the ‘Disclosing Party’) inadvertently discloses information subject to a claim of attorney-client privilege or attorney work product protection (‘Inadvertently Disclosed Information’), the disclosure of the Inadvertently Disclosed Information shall not constitute or be deemed a waiver or forfeiture of any claim of privilege or work product protection that the Disclosing Party would otherwise be entitled to assert with respect to the Inadvertently Disclosed Information and its subject matter.

“(b) If a claim of inadvertent disclosure is made by a Disclosing Party with respect to Inadvertently Disclosed Information, the Receiving Party shall, within five business days, return or destroy all copies of the Inadvertently Disclosed Information and provide a certification of counsel that all such Inadvertently Disclosed Information has been returned or destroyed.

“(c) Within five business days of the notification that such Inadvertently Disclosed Information has been returned or destroyed, the Disclosing Party shall produce a privilege log with respect to the Inadvertently Disclosed Information.

“(d) The receiving party may move the Court for an Order compelling production of the Inadvertently Disclosed Information (a ‘Privilege Motion’). The Privilege Motion shall be filed under seal and shall not assert as a ground for entering such an Order the fact or circumstances of the inadvertent production.

“(e) The Disclosing Party retains the burden of establishing privileged or protected nature of any Inadvertently Disclosed Information. Nothing in this paragraph shall limit the right of any party to petition the Court for an in camera review of the Inadvertently Disclosed Information.”

This model has four salient characteristics: First, it is not limited to privilege but explicitly applies to work product protection as well. Second, it extends beyond production to disclosure of information. Third, this provision eliminates any promptness requirement for requests for the return of protected information. If a promptness requirement is deemed appropriate, it can be added as a proviso at the end of paragraph (a), using the language in the first sentence of the current short-form order, above. Fourth, this model is limited to disclosures “in connection with the pending litigation.” The rule-makers placed that limitation in Rule 502(d) to prevent parties from using the courts to protect nonlitigation-related disclosures, as to regulatory agencies.

Form of order — not limited to inadvertent production

Rule 502(d) is not limited to inadvertent disclosure. It protects against waiver by disclosure of any type, whether inadvertent or intentional. It thus permits a party to open its files to an adversary; allows the adversary to decide what information it considers relevant and wants to use; and permits the disclosing party to assert privilege thereafter. The rule also permits a disclosing party to selectively waive privilege or work-product protection, which raises a specter addressed below.

A provision that is not limited to inadvertent disclosure could take this form:

“(a) If, in connection with the pending litigation, a party (the ‘Disclosing Party’) discloses information subject to a claim of attorney-client privilege or attorney work product protection (‘Disclosed Protected Information’), the disclosure of the Disclosed Protected Information shall not constitute or be deemed a waiver or forfeiture of any claim of privilege or work product protection that the Disclosing Party would otherwise be entitled to assert with respect to the Disclosed Protected Information and its subject matter.

“(b) A Disclosing Party may assert in writing attorney-client privilege or work product protection with respect to Disclosed Protected Information. The Receiving Party shall, within five business days of receipt of that writing, return or destroy all copies of the Disclosed Protected Information and provide a certification of counsel that all such Disclosed Protected Information has been returned or destroyed.

“(c) Within five business days of the notification that such Disclosed Protected Information has been returned or destroyed, the Disclosing Party shall produce a privilege log with respect to the Disclosed Protected Information.

“(d) The receiving party may move the Court for an Order compelling production of the Disclosed Protected Information (a ‘Privilege Motion’). The Privilege Motion shall be filed under seal and shall not assert as a ground for entering such an Order the fact or circumstances of the inadvertent production.

“(e) The Disclosing Party retains the burden of establishing privileged or protected nature of any Disclosed Protected Information. Nothing in this paragraph shall limit the right of any party to petition the Court for an in camera review of the Disclosed Protected Information.

“(f) If, at trial, at a hearing, at a deposition, or on a motion, a Disclosing Party marks for identification or offers into evidence Disclosed Protected Information — or proffers or elicits testimonial or other evidence that incorporates or relies on Disclosed Protected Information, including evidence within Federal Rule of Evidence 703 — that act shall be deemed to effect a waiver and forfeiture by the Disclosing Party of attorney-client privilege and work product protection that would otherwise apply to undisclosed information concerning the same subject matter, within Federal Rule of Evidence 502(a). The preceding sentence shall not apply to (i) proceedings to determine whether the Disclosed Protected Information is privileged or protected or subject to discovery or disclosure, or (ii) Disclosed Protected Information that is marked for identification, offered into evidence, or incorporated in evidence proffered or elicited by an adverse party, or relied on by a witness proffered by an adverse party.”

Gregory P. Joseph of Gregory P. Joseph Law Offices in New York is a fellow of the American College of Trial Lawyers and the former chair of the Section of Litigation of the American Bar Association. He can be reached at [email protected].