Utilize FRE 502 to Protect Privileged Information from Waiver

Created on September 27, 2012

Director of Marketing Programs

With rapidly increasing data volumes, a primary challenge facing legal team is how to protect against the inadvertent production of privileged information during discovery. Case in point is Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc. (S.D. Ohio Aug. 28, 2012). In this case, the court ruled that the defendant, Medex Cardio-Pulmonary, waived its attorney-client privilege in regards to 347 pages of inadvertently produced emails due to defendant failing to meet the requirements under Federal Rules of Evidence (FRE) 502(b).

According to FRE 502(b) the production of privileged information does not act as a waiver of the attorney-client privilege if the producing party proves the following:

  • (1) The disclosure is inadvertent;
  • (2) The privilege holder took reasonable steps to (a) prevent the disclosure and (b) rectify the error

More specifically, in most cases the court will consider the five following elements in assessing sub-points (1) and (2):

  • The reasonableness of precautions taken in view of the extent of document production
  • The number of inadvertent disclosures
  • The magnitude of the disclosure
  • Any measures taken to mitigate the damage of the disclosures
  • The overriding interests of justice

In Inhalation Plastics, the defendant produced 7,500 pages in paper format to the plaintiff, Inhalation Plastics, within a specific production request. Subsequently after the production and during depositions, the defendant learned of its production of privileged information and asserted that 347 pages of emails were inadvertently produced. The defendant sought to have the privileged documents sequestered and returned, in turn leading the plaintiff to motion the court for a determination whether the defendant waived its privilege by producing documents to the plaintiff.

The court utilized the five factor test listed above to serve as their roadmap to analyze whether the inadvertent disclosure operated as a waiver of the privilege. Among other things, the court based its ruling that the defendant waived the attorney-client privilege on these principal factors:

(A) The defendant did not prove that reasonable precautions were taken to prevent the inadvertent disclosure. The court cited four specific factors to justify their ruling – the defendant did not specify (1) who was responsible for the document review, (2) any specific steps taken to review documents for privilege, (3) no privilege log was produced, and (4) why this specific production was produced in an inconsistent paper format, diverging from the electronic format of past production requests.

(B) 4.6% of the production was inadvertently disclosed, which the court remarked as a “relatively high" percentage. In coming to this conclusion the court cited a previous federal case in which the court held privilege was waived when only 1.3% of documents were inadvertently disclosed.

(C) The defendant did not take reasonable steps to rectify/mitigate the damage of the disclosure because the notice sent by defendant “did not state a basis for the claimed privilege." Under FRCP 26, immediate notice (preferably written) must be given to the applicable party. A basis for the privilege claim must be stated within the notice “sufficiently detailed so as to enable the receiving party and the court to understand the basis for the claim and to determine whether waiver has occurred." In Inhalation Plastics, even though the defendant immediately notified the plaintiff of the inadvertent disclosure, the defendant did not provide a privilege log or any basis for the privilege, instead only offering “conclusory statements," which the court deemed as inadequate.


E-Discovery is a complicated, time-consuming process that entails the movement of thousands to millions of documents between multiple entities (inside counsel, law firm, service provider, etc.) in a relatively short timeframe. The key to properly addressing e-discovery is for legal teams to be proactive by being equipped with a process and a plan. As evidenced by Inhalation Plastics, most courts will utilize a privilege waiver test that benefits parties who have a process in place which (1) takes reasonable precautions to prevent inadvertent production of privileged information (i.e. documentation of how privilege review was conducted, establish and maintenance of a privilege log) and (2) employs a standard protocol to rectify the inadvertent production of information. Legal teams can help manage, enforce and adhere to an e-discovery process by leveraging technology. Technology can empower legal teams to search, data sample, produce privilege logs and track/document steps throughout each EDRM stage. Taking a proactive approach will help demonstrate that reasonable steps were taken to prevent the inadvertent disclosure, making it more likely a court will allow you to “clawback" the privileged information.

Aside from having a process in place, legal teams can be proactive by leveraging rules under the Federal Rules of Evidence (FRE) to safeguard against inadvertently producing privileged information. Under FRE 502(d), the rule enables “a federal court [to] 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 no a waiver in any other federal or state proceeding." To employ a 502(d) agreement, parties must agree to terms that limit and offer protection from the inadvertent waiver of privileged information and then submit those terms to the court. The ideal time to come to this agreement is during the FRCP 26(f) meet and confers. Next time, before your next meet and confer make sure to review FRE 502(d). This very much underutilized rule not only minimizes risk of accidentally disclosing confidential, privileged information, but can also help reduce overall e-discovery costs on the back end.

To learn more about FRE 502(b) and (d), tune into Exterro's upcoming educational webcast, “(b) v. (d) - Protecting Against the Disclosure of Privileged Information in E-Discovery." Register here.

Mike Hamilton, J.D. is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on how to solve e-discovery issues proactively with technology. His e-discovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. You can find him on Google+, Twitter and Linkedin.