By Michael Hoenig - New York Law
Journal - January 12, 2015
This article discusses a recent report the reader might have
missed. The insights in this report can help catalyze a lawyer's
strategic thinking to develop tactical steps useful in certain
types of complex litigation. The report is The Sedona
on Protection of Privileged ESI" issued in November
is the "Public Comment Version" published by the Sedona
Conference Working Group on Electronic Document Retention and
Production. Space limitations here permit elaborating only brief
The Sedona Conference is a nonprofit, nonpartisan research and
educational institute that allows leading jurists, lawyers,
experts and academics to come together in conferences and
mini-think-tanks (called Working Groups) and dialogue about
moving the law forward in a reasoned and just way. The Sedona
Conference publications, particularly its "Best Practices"
regarding Electronic Document Production, are quite influential
and frequently cited.2
The new Sedona Conference "Commentary on Protection of
Privileged ESI" deals with the interface between the need to
produce ESI (electronically stored information) in discovery and
the lawyer's duty to protect against disclosure of privileged
materials, notably attorney-client communications and attorney
work product. As most who engage in complex litigation know,
disclosure of ESI poses enormous challenges to parties and their
Litigants not only have to issue timely "litigation holds" that
preserve potentially relevant documents when suit is commenced
or reasonably anticipated, but also have to search and produce
voluminous documents and emails. Thousands, hundreds of
thousands, sometimes even millions of documents (or pages) are
involved. Finding and culling out from such a production trove
the privileged documents can be an onerous and expensive
proposition, particularly when facing aggressive discovery
On a simple level, it is somewhat incredible that, for the
pittance price of a court filing fee, a litigant, via discovery,
can demand and get disclosure of the adversary's private,
confidential documents, among which may be embedded privileged
communications. American pretrial discovery rules are extremely
generous, indeed uniquely so in the world's legal systems. That
generosity is praised by many as enhancing the search for the
truth, yet it also is criticized by many for the excesses it
stimulates. Finding a balance—the key label often used is
"reasonable" discovery—usually hinges on cooperation by the
litigants' counsel and fairness by the court when such agreement
The Sedona Commentary homes in on the complications faced by
disclosing parties to identify and exclude from production and
then to "log" the documents that are subject to a recognized
privilege. Many courts require that parties claiming privileged
materials should be withheld from production must provide a
document-by-document "privilege log" setting forth identifying
information and specifying the privilege asserted. In complex
litigation, such efforts consume much time at great expense. The
logs are supposed to "enable other parties to assess" the
claimed privilege and, also, to "reduce the need for in camera
examination of the documents" by the court. The Sedona
Commentary suggests that neither of these goals is achieved by
and large.3 Not
only that, say the authors, the procedure and process for
protecting privileged ESI from production "is broken."4
The authors advance four "Principles on Protection of Privileged
ESI." They are: Principle
1: Parties and
their counsel should undertake to understand the law of
privilege and its appropriate application in the context of
electronically stored information. Principle
counsel, and courts should make use of Rule 502(d) and its state
3: Parties and
their counsel should follow reasonable procedures to avoid the
inadvertent production of privileged information. Principle
4:Parties and their counsel should make use of protocols,
processes, tools, and technologies to reduce the costs and
burdens associated with the identification, logging, and dispute
resolution relating to the assertion of privilege.
Each "Principle" is itself the subject of substantive
"Commentary." Within each commentary, the reader will find
salient aspects of law, helpful citations and suggestions for
improved practice in order to better and more efficiently
protect privileged materials from disclosure, particularly via
inadvertent production. Even expert litigators can benefit from
points made throughout the commentaries.5
Thus, under Principle 1, calling for counsel to understand the
law of privilege and its appropriate application in the context
of ESI, the reader is told about a professional obligation and
an ethical duty to do so. Several provisions of the professional
rules give rise to such obligations. These are the duties of
"confidentiality," "competence" and "supervision."6 The
first restrains the lawyer from revealing the client's
information unless the client gives informed consent. Lawyers
must make "reasonable efforts to prevent the inadvertent or
unauthorized disclosure of, or unauthorized access to
information relating to the representation of a client."
The duty of competence compels a lawyer to provide competent
representation to a client. In turn, that means having the
"legal knowledge, skill, thoroughness and preparation reasonably
necessary for the representation." To maintain this, the lawyer
must keep abreast of changes in law and practice, "including the
benefits and risks associated with relevant technology." The
latter, note the authors, is most important in discharging ESI
discovery obligations since technological advances have impacted
ESI management state of the art.
Under the duty of "supervision," partners, managers and
supervisory lawyers (persons with managerial authority) are
required to make reasonable efforts "to ensure" that the firm
and its lawyers follow professional rules and, further, that
lawyers must supervise the firm's "junior members, paralegals,
support staff, and any third-parties for whose work the lawyer
is responsible." The latter duty looms large in ESI disclosure
projects because "crunch" work on voluminous ESI discovery
demands often falls to junior lawyers and legal assistants or
outside third parties. Thus, senior lawyers cannot shirk their
professional duties regarding ESI simply by assigning the work
to juniors. Supervision is required.
Although noting that a detailed discussion of the
attorney-client privilege is beyond the scope of the commentary,
the Commentary observes that "practical guidance" about
identifying and protecting privileged ESI "cannot start without
a basic review of the law of privilege and, in particular, what
may legitimately be deemed privileged and how to avoid waiving
the privilege." So, the Commentary proceeds to review important
aspects of attorney-client and work product protections.7 This
is helpful because many of us can use a brief tutorial or a
This review is particularly helpful—even for optimistic
know-it-alls—because, in part, it focuses on a central thrust of
the Sedona Commentary, namely, creative use of Federal Rule of
Evidence 502, enacted in 2008, and meant to work a substantial
departure from the traditional approach to waiver of
attorney-client and work product protection. The rule itself
limits the scope of waiver.
Prior to Rule 502, non-waiver of privileged materials was not
assured. The main recourse was procedural, i.e., to notify the
adverse party under Federal Civil Procedure Rule 26(b)(5)(B)
that privileged material was disclosed. That rule, however, did
not dispose of the issue of waiver. Evidence Rule 502, on the
other hand, specifically addresses waiver of the privilege and
limits its scope, particularly in the case of inadvertent
disclosures. Subsection (b) sets forth the conditions when
"disclosure does not operate as a waiver."
The creative mechanism urged by the Commentary is to use Rule
502(d) to bypass possible squabbles over whether requirements
set forth in subsection (b) were met. Under Rule 502(d), the
parties can request the court to issue an order that the
"privilege or protection is not waived by disclosure connected
with the litigation." Indeed, the court can do so on its own. By
taking away the "fear factor" of a disclosure-created privilege
waiver, litigants supposedly will be induced to disclose
voluminous materials more freely, thereby reducing expense and
enhancing efficiency of discovery.
Further, Evidence Rule 502(d), which authorizes the court to
issue an order that the privilege is not waived, gives a federal
court the power to bind parties and courts in all other state
and federal proceedings with respect to disclosures made in the
federal proceeding in which the Rule 502(d) order was entered.8 A
number of states have enacted Rule 502 analogues, but there are
differences among the state rules. A helpful Appendix F
discusses the state variants and gives citations.
The Commentary's focus on Rule 502 and the potential to use
subdivision (d) more aggressively or proactively should be
instructive even to those who think they have mastered the
complex arts of privilege protection. Prior to Federal Evidence
Rule 502, the attempt to alleviate the pain of inadvertent
disclosure of privileged materials resided in Federal Procedure
Rule 26(b)(5)'s allowance of so-called "clawback" practice by
which notice of inadvertent disclosure was given to adverse
counsel who then was required to "promptly return, sequester, or
destroy the specified information and any copies it has" and
"not use or disclose the privileged information until the claim
[of privilege] was resolved." However, Rule 26(b)(5) did not
address waiver of the privilege. And, often, the contest about
privilege and waiver then had to go to the judge. Perhaps even
more critical, disclosure of privileged materials, even with a
"clawback" feature, "forces a producing party to ring a bell
that cannot be un-rung."9
The Commentary seems to suggest that creative use of a Rule
502(d) order will minimize perceived prejudice from the "
un-rung bell," i.e., the adversary's knowledge of privileged
information, by making non-waiver the order of the day, not only
in the subject litigation but in other federal and state courts
as well. Whether the danger truly is mooted , however, is
debatable as I point out later. Nonetheless, readers should
consider the Commentary's approach with an open mind,
particularly since getting a Rule 502(d) order is desirable in
The Commentary's purpose, in part, is to enhance counsel's
understanding of Evidence Rule 502 by: (1) reminding lawyers
that some of the discovery problems stem from attorneys' basic
misunderstanding of the law of privilege in the context of
modern document production; (2) encouraging parties, lawyers and
courts to consider employing Rule 502(d) type orders in every
complex civil matter; (3) in the absence of such orders,
articulating a "safe harbor" standard that protects parties from
claims of waiver when inadvertent production of privileged
materials occurs—provided that the producer adhered to certain
basic "best practices" in the context of ESI privilege review;
(4) encouraging cooperation among litigants to lower the cost
and burden of identifying privileged information; and (5)
identifying "protocols, processes, tools, and techniques that
can be used to limit the costs associated with the
identification, logging and dispute resolution relating to the
assertion of privileges."10
Thus, in keeping with this objective, Principle 2 urges that
counsel and courts "should make use" of Evidence Rule 502(d) and
its state analogues. The rule is a "vehicle to ensure that the
production of ESI does not result in waiver regardless of the
circumstances of its production."11 The
parties' confidentiality agreements, protective orders or even
court rulings that there was no privilege waiver can be
incorporated in a Rule 502(d) order and this will control waiver
issues regarding that disclosure even in other matters.
As a matter of routine practice (unless good cause is shown not
to), courts should enter Rule 502(d) clawback/non-waiver orders
when "parties fail to appropriately consider and agree upon the
entry of such orders." Indeed, parties should "take it upon
themselves to carefully craft and submit for approval to the
court a Rule 502(d) order setting forth under what circumstances
the production of a privileged document will constitute a
waiver. Helpfully, the Commentary sets forth a Sample Model
Order in Appendix D. Additionally, several courts and pilot
projects have created and published sample orders, one of which
is set forth in Appendix E.12
Pushing Rule 502(d) agreements and orders is intended, in part,
to "defeat the default operation of Rule 502(b) in order to
reduce costs and expedite discovery."13 Rule
502(b) deals with "inadvertent disclosures" and provides that
the disclosure does not operate as a waiver of the privilege if
the disclosure is inadvertent and the holder of the privilege
"took reasonable steps to prevent disclosure" and reasonable
steps to rectify the error (including Federal Civil Procedure
Rule 26(b)(5)(B)). The problem with reliance exclusively on
Evidence Rule 502(b) is that the adversaries can get into
wrangling about whether "reasonable steps" were taken, whether
efforts to rectify were timely, whether the disclosure could
have been better protected against, and the like.
A Rule 502(d) order, on the other hand, can introduce certainty.
The privilege or protection is not waived by disclosure in the
pending litigation, and it also is not a waiver in any other
federal or state proceeding. Additionally, Rule 502(d)
protection is available not only to litigants but also to third
parties who have to produce information as, for example, via a
Readers and litigation counsel, however, have to be realistic.
Motivations to expedite discovery by creative use of Rule 502(d)
agreements or orders, particularly in voluminous document
productions, can result in privileged information disclosures to
the other side. Such revelations could be prejudicial regardless
of the non-waiver issue. After all, the adversary now has
information that should not have seen the light of day.
Arguably, the "bell has rung and cannot be un-rung." There may
be no erasure from the adversary's knowledge. For example, after
viewing privileged material, a party might submit a request for
admission to elicit the material or tailor a deposition question
to do the same. Or a party might adjust its settlement position
in light of its review of the privileged information.
Further, some courts may be tempted to freely issue Rule 502(d)
orders but then also enter a Federal Civil Procedure Rule 16(b)
scheduling order that issues aggressive document production
deadlines that do not provide the parties with sufficient time
to review the documents for privilege. In such a case, a judge
might caution the parties of dire consequences for missing the
disclosure deadlines and, instead, encourage massive production
using "quick peek" or "make available" mechanisms. The latter
are consensual techniques where the party facilitates production
without any privilege review "subject to an assurance that
privileged documents produced…will be returned without a later
claim of waiver."15 The
Commentary suggests that courts should not attempt to compel
such a result indirectly since it is not one intended under Rule
Accordingly, it may be that a particular litigant's best
approach to preserving privilege is to go via the painstaking
route of examining the documents in advance for privileged
communications. Nonetheless, even if that is the preference of
the reader, there is much to learn from the Sedona Commentary.
It is important for counsel to be knowledgeable, prepared and
vigilant. Reading the report advances those objectives.
1. A link to the report is https://thesedonaconference.org/publications.
2. See, "The Sedona Principles Best Practices Recommendations &
Principles Addressing Electronic Document Production" (March
2003). The Sedona website is www.thesedonaconference.org.
3. Sedona Commentary, p. 2.
4. Id. at 2.
5. For example, see p. 18 of the Commentary which advises that "due
process is implicated when privileged communications are
required to be disclosed, even for in camera review." (Citing United
States v. Zolin, 491 U.S. 554, 572 (1989).
6. Id. at 4.
7. Id. at pp. 4-15.
8. Id. at 10-15.
9. Id. at 9, 18.
10. Id. at 3.
11. Id. at 14.
12. Id. at 16 (Appendix E contains U.S. Magistrate Judge Andrew J.
Peck's Model Rule 502(d) Order (S.D.N.Y.)).
13. Id. at 16.
14. Id. at 10, 15-16.
15. Id. at 17.
16. Id. at 18-19.
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