Court Rules that Party Waived Privilege Despite a 502(d) Order 1

The USDC for the EDNY ruled that a party cannot “claw back” privileged documents, disclosed without a privilege review, because it failed to waiverproperly object when opposing counsel questioned a deponent about them.  This waiver ruling came despite the party having previously secured a FRE 502(d) protective order providing that the party does not waive any privilege claim by disclosing information later identified as privileged.  Certain Underwriters at Lloyd’s, London v. Nat’l R.R. Passenger Corp., 2016 WL 6875968 (E.D.N.Y. Nov. 17, 2016).  You may read the decision here.

502(d) Orders

Fed. R. Evid. 502(d) permits federal courts to enter an order precluding privilege waiver “by disclosure connected with the litigation pending before the court.”  More…

18 Questions Doom Counsel’s Inadvertent Disclosure Argument and Waive Privilege

We all know that lawyers must “promptly take steps to rectify” an inadvertent disclosure of privileged information or risk privilege waiver.  FRE 502.  And while the term “promptly” may have different meanings in different contexts, a federal court has ruled that permitting a lawyer to ask 18 deposition questions about an inadvprivilege boxertently disclosed, privileged email before lodging an objection was not prompt enough.  Waste Connections of N.C., Inc. v. K.R. Drenth Trucking, Inc., 2015
WL 4647823 (W.D.N.C. Aug. 5, 2015).  You may read the opinion here.


In this breach-of-contract case, the corporate plaintiff produced over 11,000 emails and documents, including emails between the company’s Division Vice President and two in-house lawyers.  One of these emails contained a statement indicating the vice president’s interpretation of a pertinent contract provision.

At the vice president’s deposition, defense counsel showed him one of these emails and asked 18 questions about it without objection from plaintiff’s counsel.  The parties took a 49-minute lunch break and, upon resumption of the deposition, plaintiff’s counsel informed defense counsel that it appeared his client inadvertently produced privileged documents.

Defense counsel then filed a motion asking the court to deem the privileged waived as to the email used at the deposition as well as all inadvertently disclosed privileged emails.

Consent Protective Order

The parties agreed that a Consent Protective Order, available for review here, governed the vice president’s deposition and related discovery.  While the Order provides guidance regarding the identification and return of inadvertently produced documents, it was silent regarding the precautionary measures that the parties must take to avoid inadvertently producing privileged information.  The court took note of the absence of any governing provisions.

Adequate Measures

In the absence of guidance from the Consent Protective Order, the court defaulted to FRE 502 to determine whether the corporate plaintiff took adequate precautionary measures to prevent inadvertent disclosures.  The plaintiff argued that objections to privileged materials do not have to be immediate, but the court determined that allowing 18 questions before asserting an objection was neither immediate nor prompt.

The Court is sympathetic with counsel, but does not believe that he should be afforded greater protection than an attorney at trial who does not object to evidence at the critical point when tendered.

The court found the privileged waived and ordered production.

PoP Analysis

Two lessons arise from the Waste Connections opinion.  First, if lawyers agree on a protective order that governs inadvertent disclosures, then they should consider including an agreement on precautionary measures that each party must take to avoid inadvertent production of privileged information.  Without identified and agreed-upon measures, courts will default to FRE 502 (or state equivalent) to determine the adequacy of procedures.  A word of caution: if a party agrees to certain pre-production measures, then he must adhere to them or risk indefensible waiver.

Second, while allowing your opponent lawyer 18 questions on a putatively privileged document may not seem overly permissive, particularly when the lawyer was unsure how defense counsel obtained the documents and felt secure in the Consent Protective Order, the court’s ruling instructs lawyers to object immediately, even with a protective order, and prevent further questioning until all of the facts are known.

Excellent DRI Article on Duty of Confidentialty and FRE 502 Waiver Preventions

Federal Rule of Evidence 502 authorizes parties to enter nonwaiver orders and nonwaiver agreements in an attempt to remedy inadvertent disclosures and avoid waiver of the attorney-client privilege or the work-product doctrine.Puiszis_Page_1  (As an aside, Rule 502 waiver preventions apparently do not apply to other evidentiary privileges).  Questions arise, however, whether Rule 502 protections comport with Model Rule 1.6’s duty of confidentiality, and whether utilizing Rule 502 protections may nevertheless lead to ethical violations.

Steven M. Puiszis’s excellent article, Reconciling Federal Rule of Evidence 502 with Model Rule 1.6, published in DRI’s reputable For the Defense journal, identifies the problems and offers sound solutions.  The article, accessible here, explains how 502(d) nonwaiver orders and 502(e) nonwaiver agreements may help avoid pre-production privilege-review costs but at the same time breach the lawyer’s confidentiality duty.   Mr. Puiszis’ correctly points out that Rule 502 has “not lived up to its promise” of reducing costs, and posits that the reason is concern that using 502 orders or agreements may result in an ethical violation:

While the entry of a Federal Rule of Evidence 502(d) nonwaiver order or a Federal Rule 502(e) nonwaiver agreement may allow an attorney to recover privileged or protected information produced in discovery, an unauthorized disclosure has nonetheless occurred. . . . Accordingly, a disciplinary tribunal could conclude that the mere entry of a nonwaiver order does not qualify as a reasonable attempt to prevent disclosure as required by Model Rule 1.6(c).

The article contains a thorough discussion of the “reasonable steps” required to protect against inadvertent disclosures and inadvertent release of confidential information and concludes with 7 meaningful practice tips.  The article is a must-read for in-house and outside counsel.  My thanks to Mr. Puiszis and DRI for permission to reprint the article in this post.