Look Before You Leap: A Guide to the Law of Inadvertent Disclosure of Privileged Information in the Era of E-Discovery

AuthorJulie Cohen
PositionJulie Cohen: J.D. Candidate, The University of Iowa College of Law
Pages06

Julie Cohen: J.D. Candidate, The University of Iowa College of Law, 2008; B.A., Yale University, 2004. I wish to thank my family, in particular my father Eric C. Cohen, who initially suggested my Note topic and spent several hours discussing the relevant legal issues with me, and my mother Linda Henning-Cohen, for enduring such conversations and for her support. Also, thanks to my friends for their continued faith, support, and late-night laughter. Finally, thanks to the editors and student writers of Volumes 92 and 93 for their insightful comments and edits. Particularly, thanks to my editors, Brad Price, John Messerly, Colin Proksel, and Thad Wilson for their suggestions and hard work. All remaining errors and omissions are my own.

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I Introduction

The attorney-client privilege is a doctrine that lawyers confront daily in conversations with clients, clients' agents, third parties, and in the discovery process.12 Despite its omnipresence, a significant disagreement exists over the doctrine as it relates to inadvertent disclosure of documents during discovery.3 Relatively recent developments in electronic discovery have only exacerbated the levels of confusion and disagreement over this aspect of waiver law.4

The complexities of recovering electronic data are time consuming and result in increased expenses for attorneys who must review documents for privilege before production.5 Electronic discovery increases the sheer volume of potential documents at issue in a lawsuit. For a point of reference, "[t]he U.S. Postal Service [was] expected to deliver 212 billion pieces of mail in 2006," but "computer users sent approximately 31 billion e-mail messages every day in 2002, 'a figure . . . expected to [have] double[d] in 2006.'"6 A higher document volume means that attorneys must spend more time reviewing documents for production and that discovery will be more expensive. The cost and time pressure of reviewing massive amounts of Page 630 documents may result in the inadvertent production of privileged documents to opposing counsel.

The consequences of such inadvertent disclosure depend upon each jurisdiction's substantive evidence law.7 To counteract the potentially uncertain consequences of such inadvertent disclosure, parties have begun to enter into agreements establishing that such a mistake does not result in a waiver of the privilege.8 As a result, several of the Federal Rules of Civil Procedure relating to discovery have been amended,9 and a new Federal Rule of Evidence has been proposed.10 This Note questions whether those amendments will establish consistent standards for courts to determine when inadvertent disclosure results in a waiver of the attorney-client privilege.

Part II examines the historical law of privilege11 and the general principles of determining whether a privilege exists.12 It then concludes by discussing the three approaches courts have taken with respect to inadvertent disclosure of privileged documents.13

Part III expands upon the particular problems that electronic discovery creates, first discussing the issues posed by the production of electronic documents14 and then providing examples of the challenges that electronic discovery presents in litigation.15 Part IV provides an analysis of the amended Federal Rules of Civil Procedure and proposed Federal Rule of Evidence 502. It begins by discussing Federal Rules of Civil Procedure 26(b), 26(f), and 16(f)16 and ends by examining proposed Federal Rule of Evidence 502.17

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This Note concludes that the amendments and the proposed rule may provide some relief to parties dealing with issues of inadvertent waiver, but it cautions parties to continue to conduct careful privilege reviews. As the law currently stands, the consequences of waiver are far from clear.18 Most notably, a protective order that preserves privilege for inadvertently produced documents in one case may not protect a party in a subsequent case, where a different substantive privilege law may result in a finding that the privilege had been waived.19 Proposed Federal Rule of Evidence 502 provides that protective orders containing non-waiver clauses are enforceable against third parties in subsequent litigation in both federal and state courts. As such, the rule would alleviate much of the cost and burden currently posed by electronic discovery, but as far as the rule purports to bind state courts, it may present constitutional issues. If Congress resolves those issues and passes Rule 502, the effects of an inadvertent waiver will be greatly mitigated.

II Background
A Privilege Law's Historical Beginnings

The general principle of privileged communications can be traced back to late sixteenth-century England.20 Originally, the privilege was "a consideration for the oath and the honor of the attorney rather than for the apprehensions of his client."21 As the law of privilege evolved, scholars and courts began to view the doctrine as a means to facilitate honest communication between attorneys and clients.22 Thus, by the end of the 1700s, courts had begun to recognize that privilege belonged to the client, not the attorney.23 Today, it is clear that the client is the holder of the privilege. Moreover, substance, not procedure, governs the law of privilege, so in some instances federal privilege law applies and in others state privilege law applies.24

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B The General Principles Of Privilege Law

Wigmore recognized four fundamental conditions necessary to establish privilege against disclosure of communications: (1) the communications had to originate in confidence; (2) the element of confidentiality had to be "essential" to the "relation between the parties"; (3) the relation had to be one the community thought should be "fostered"; and (4) the injury that would occur through disclosure had to be "greater than the benefit thereby gained for the correct disposal of litigation."25 According to Wigmore, only those communications that satisfy all four fundamental elements are privileged.26 The most recognized modern articulation of the rule comes from United States v. United Shoe Machinery Corp.:

The privilege applies only if (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his subordinate and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion on law or (ii) legal services or (iii) assistance in some legal proceeding, and not (d) for the purpose of committing a crime or tort; and (4) the privilege has been (a) claimed and (b) not waived by the client.27

Though courts readily accept this principle of privilege, they do not apply it without hesitation. Privilege encourages honest communication between attorneys and clients,28 but privilege also makes it more difficult to ascertain the truth by limiting the disclosure of relevant evidence.29 For that reason, as Page 633 a general rule, courts have narrowly construed privilege.30 For example, privilege does not protect the underlying facts of a communication from disclosure, and it does not protect communications to an attorney acting as a business advisor.31

C The Three Approaches To Inadvertent Disclosure Of Privileged Documents

Considerable problems arise when discussion turns to the waiver of privilege. In particular, there is no consensus among jurisdictions as to when an inadvertent disclosure of privileged documents during discovery waives privilege.32 Part of the reason for this, aside from the lack of Supreme Court precedent, is that courts have disagreed about how the burdens associated with discovery should factor into the laws governing the inadvertent disclosure of privileged documents.33 The risks of inadvertent disclosure greatly increase when attorneys with the responsibility to assert privilege face the new burdens that electronic discovery creates; whether inadvertent disclosure will lead to waiver depends on the substantive law of the jurisdiction in which the parties happen to be litigating.34 Courts have taken Page 634 three approaches to the consequences of inadvertent disclosure: the lenient approach, the strict approach, and the middle-of-the-road approach.35

1. The Lenient Approach

Under the lenient approach, "lawyer-client privilege is waived only when the disclosing party actually intended to waive it."36 The rationale for this approach is that waiver involves the relinquishment of a known right,37 since privilege belongs to the client, not to the attorney.38 Courts that endorse...

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