The troubling ambition of Federal Rule of Evidence 502(d).

• Author: Correll, Michael
• Position: P. 1057-1081

In another important development, a recent district court opinion addressed the question of when Rule 502(a) should be considered. In Smith & Nephew, Inc. v. New Hampshire Insurance Co., the court considered a motion to compel disclosure under Rule 502(a). (145) Though the offensive use of the rule by the moving party is itself an interesting and novel tactic, that development is not the most interesting aspect of the Smith & Nephew decision. Rather, the striking part of the decision was the court's refusal to decide. Rather than immediately compel production, the court determined that,

[I]t is not appropriate [during discovery] to determine whether either attorney-client privilege or work-product protection has been waived. The question of waiver is more appropriately determined if and when either party attempts to present arguably privileged information as substantive evidence, either upon motion for summary judgment or at trial, because it is at this point in the litigation that the District Court would determine whether or not certain materials "ought in fairness to be considered together" to avoid a "selective and misleading presentation of evidence to the disadvantage of the adversary." (146) Instead, the court held that only Federal Rule of Civil Procedure 26(b)(1) applied and the materials should be presented to the magistrate judge to determine whether they were discoverable. (147) This emphasis on the split between discovery and evidence has not been addressed, or even acknowledged, by many courts. Still, it is a critical distinction. Whereas the former controls access to information, the latter controls use. As will be discussed infra in Part IV, this split has major implications for the scope and potential uses of Rule 502(d).

Again, as with Rule 502(b), early applications of Rule 502(a) provide enormous insight into how courts view the new rule. The consistent developments between Rule 502(a) and Rule 502(b) suggest that Rule 502(d) will likely follow a similar path. At the same time, the divergences noted above also suggest that courts are willing, in the right circumstances, to treat the various provisions of the rule as discrete authorizations and move in different directions with this newfound authority.

2. The Vaulting Ambition of Rule 502(d)

   Rule 502(d) has already overleaped and extended the fairly considerable authority conferred by the narrow reading envisioned by Congress. (148) The early cases applying Rule 502(d) diverge into three distinct categories: (1) courts linking the issuance of Rule 502(d) orders to some sort of satisfaction of the requirements of Rule 502(a) or (b); (2) courts relying upon Rule 502(d) orders to support a decision to compel disclosure over an assertion of privilege; and (3) courts approaching Rule 502(d) as a source of unfettered authority to protect the privilege to whatever extent is necessary to advance the immediate needs of pending litigation.

   1. The "Enabling" Approach

      Rule 502(a) and Rule 502(b) clearly represent the substantive meat of Congress's effort to reform and reconcile privilege jurisprudence. In fact, the rule can be seen as falling into two parts: two substantive provisions followed by five procedural and technical provisions. The one subparagraph that precedes Rule 502(d) and the three subparagraphs that follow address a variety of procedural details including the consequences of state court disclosures, the effects of party agreements, the effect of the rule on state proceedings, and a few key definitions. (149) It is unsurprising, then, that a great many of the early courts charged with applying Rule 502(d) have treated it as little more than an enabling provision that simply gives force to the protections afforded by Rule 502(a) and Rule 502(b), or alternatively, that allows courts to proactively resolve certain Rule 502(a) and Rule 502(b) issues in advance.

      Decided less than a year after the rule went into effect, Peterson v. Bernardi represents a quintessential demonstration of this very narrow approach to Rule 502(d). (150) In Peterson, the plaintiff brought a "Motion to Compel the Return of Inadvertently Produced Documents Pursuant to [Federal Rule of Civil Procedure] 26(b)(5)(B)." (151) The plaintiffs motion concerned 156 allegedly privileged documents that were inadvertently disclosed by the plaintiff. (152) The court first found, unremarkably, that the majority of the claimed documents were not privileged and that even if they had been privileged, the plaintiff failed to meet the strictures of Rule 502(b). (153) The court then turned to a special, nine-page subset of the claimed documents. (154) The court expressly concluded that this short run of pages satisfied Rule 502(b) and, accordingly, their inadvertent disclosure did not constitute a waiver. (155) But the legally operable language of the order that followed made no reference to Rule 502(b). Instead, it read:

      IT IS FURTHER ORDERED that pursuant to FRE 502(d) any privilege or discovery protection attached to documents P0086988-6996 is not waived by the inadvertent disclosure in this court. (156) In so holding, the court implicitly concluded that Rule 502(b) does not, in itself, afford a presiding judge with any authority to enter a controlling order. Instead, the court treated Rule 502(d) as the source of authority necessary to put the two major substantive provisions of Rule 502 in to effect.

      Similarly, a number of courts following the logic of Peterson have limited Rule 502(d) to providing for clawback agreements and similar proactive devices for addressing inadvertent disclosures in advance of a problem actually arising. In Rajala v. McGuire Woods, LLP, for example, the court considered a motion for entry of such a clawback provision. (157) In deciding whether and in what form to grant the motion, the court hewed closely to Rule 502(b). (158) The court focused its analysis largely on whether a Rule 502(d) order would help prevent disputes regarding (1) the proper understanding of the term "inadvertent" (the principle concern of Rule 502(b)(1)); (159) (2) the propriety of a party's efforts to avoid inadvertent disclosure (the principle concern of Rule 502(b)(2));160 and (3) the cost-savings issues that motivated the adoption of the rule in the first place. (161) This analysis directly reflected the Raj ala court's stated understanding of the power conferred by Rule 502(d) to "fashion an order, upon a party's motion or its own motion, to limit the effect of waiver when a party inadvertently discloses attorney-client privileged information or work product materials." (162) In short, even in choosing to proactively address inadvertent disclosure issues, the court still viewed Rule 502(d) as little more than a vehicle for enforcing the express substantive protections contained in the first two provisions of the rule. (163)

      Ultimately, this approach to Rule 502(d) does not comport with the text enacted by Congress. First, as will be discussed in greater detail infra, Rule 502(d) contains no limiting language. It does not reference Rule 502(a) or (b). It does not reference inadvertent disclosure or subject matter waiver. Rather, it is only restricted in one way: a court may only regulate the consequences of disclosure "connected with the litigation pending before the court." (164) Further, the language of Rule 502(a) and Rule 502(b) does not suggest an external enforcement mechanism is even necessary. Rule 502(a) focuses on subject matter waiver--not the very different Rule 502(d) question of "non-waiver." Assessing the scope of a given waiver has always fallen within a trial court's broad discretion, and Rule 502(a), while arguably narrowing that discretion, does not demand any sort of procedural change for exercising that discretion. Rule 502(b) also focuses on a different problem than Rule 502(d)--ex post correction of a mistake that has already occurred. Rule 502(d), on the other hand, is concerned with whether a future disclosure will work a waiver. This fact is underscored in the Advisory Committee notes to Rule 502(d). The note explaining Rule 502(d) associates it with pro active confidentiality orders--not the retroactive considerations of Rule 502(b). (165)

      Consequently, the early cases reducing Rule 502(d) to a simple tool of Rules 502(a) and (b) are likely in error. A court need not reference Rule 502(d) to enforce Rules 502(a) or (b), and conversely, a court need not limit its authority to enter non-waiver orders based on those provisions.

   2. The "Compulsion" Approach

      A second group of courts has taken a more liberal view of Rule 502(d) that stops short of allowing wholesale voluntary disclosures but still treats the new authority conferred by Rule 502(d) as a freestanding tool of judicial economy. This small but growing number of courts have issued Rule 502(d) orders to protect a party's claim of privilege while requiring that party to disclose privileged material in discovery. Borne of the cost-saving imperative underlying Rules 502(a) and (b), this approach increasingly looks to become a major corollary to the clawback approach discussed supra. (166) Of some concern, these courts have effectively negated parties' ability to assert claims of privilege--the most significant and frequent objection to compelled discovery-and, in some cases, have completely abrogated the Rule 502(b) requirement that a party take reasonable steps to prevent inadvertent disclosures.

      Radian Asset Assurance v. College of Christian Brothers of New Mexico represents a prime example of this emerging trend. (167) In Radian, the defendant objected to a request for production that demanded it surrender 52 backup tapes and 135 hard drives. (168) By the time of the hearing on the plaintiffs motion to compel, the defendant had only successfully reviewed 6 of the hard drives, and it had only restored 26.5 of the backup tapes. (169) At the hearing, the court proposed issuing a Rule...