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E-Discovery and Attorney-Client Privilege:

Document Reviews and Inadvertent Disclosures Conducting a Defensible Privilege Review and Leveraging FRE 502

and Clawback Agreements to Protect Communications and Documents

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TUESDAY, SEPTEMBER 11, 2012

Presenting a live 90-minute webinar with interactive Q&A

Maura R. Grossman, Counsel, Wachtell Lipton Rosen & Katz, New York

Jennifer F. Beltrami, Member, Cozen O’Connor, New York

Sarah Jane Gillett, Shareholder, Hall Estill, Tulsa, Okla.

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Hall, Estill, Hardwick, Gable, Golden & Nelson, P.C.

Developing and Conducting a Defensible Privilege Review in the Age of Electronic

Discovery: A Team Approach

Presented by Sarah Jane Gillett

at Strafford Webinar on September 11, 2012

6

Discussion Outline: Privilege Review

Advance Planning

To Outsource or Not . . . (Tips on Vendor Selection)

Privilege Identification

Use Technology Wisely

Quality Control

The ESI Privilege Log

7

Planning for the Review

Start Early

Factors to Consider:

Case venue

Volume of ESI

Types of privilege at issue

Client capabilities

Type of case

Team Approach

8

Project Management & Organization

Experienced Team Leader

“Right-Size” the Process

Thoughtful Review Protocol

Specific & Detailed Instructions

Copious Documentation

Transparent Communication

Reference: The Sedona Conference Commentary on Achieving

Quality in the E-Discovery Process (2009)

9

The Outsourcing Decision

What services are available?

Sophisticated review platforms

Secure data hosting

Latest Technology:

E-mail threading

Clustering

Predictive coding

Managed or contract review teams

If I outsource, will I save money?

Almost definitely

If I outsource, will I be pleased with the quality of the work?

Probably – assuming appropriate project management and expertise

10

Making Outsourcing Work for You

Competitive bidding process & negotiation on pricing

Know the strengths/weaknesses of the vendors & develop a

relationship with several

Clear communication with vendor about timing and scope of project

Participation in staffing decisions

Thoughtful, well-defined review protocol

Quality training for reviewers

Provide a point person for questions

11

Privilege Identification

Select appropriate law of privilege

Familiarize yourself with varying standards

Attorney/client privilege

Other types of privileges:

Self-critical analysis

Spousal

Common interest

Patient-doctor

Work product doctrine

12

Determine the Applicable Law

Which law applies will determine availability of privilege claims

Fed. R. Evid. 501 (state law controls in a diversity case)

The scope or existence of a privilege may be different under federal

common law as opposed to state law

State law privileges (statutory or common law) may vary from state to

state

13

Example: Self-Critical Analysis Privilege

The self-critical analysis privilege protects certain self-evaluations

undertaken by organizations to determine their compliance with

regulatory requirements without creating evidence that could possibly

be harmful in future litigation.

Oklahoma does not recognize this privilege

Lindley v. Life Investors Ins. Co. of America, 267 F.R.D. 382, 387 (N.D. Okla.

2010).

But Kansas does. . .

See Kan. Gas & Elec. v. Eye, 789 P.2d 1161, 1166–67 (Kan. 1990).

14

Determine Whether the Privilege Applies Even if your jurisdiction recognizes a particular privilege, the scope of

the privilege may not extend to your case

Your jurisdiction may apply a particular privilege in certain contexts,

and not in others

15

Example: Self-Critical Analysis Privilege The self-critical analysis privilege originally was created to protect

from disclosure documents produced during peer review committee

meetings in a medical malpractice action. See Bredice v. Doctors

Hosp., Inc., 50 F.R.D. 249 (D. D.C. 1970).

Employment discrimination – Compare:

Sheppard v. Consol. Edison Co., 893 F.Supp. 6 (E.D. N.Y. 1995) (concluding

that the self-critical analysis privilege is applicable to protect a company’s

internal study of equal employment opportunities).

Morgan v. Union Pac. R.R. Co., 182 F.R.D. 261, 265 (N.D. Ill. 1998) (“The

rationale for the self-critical analysis privilege in employment discrimination

cases is to assure fairness to entities who are legally required to engage in self-

evaluation. In contrast, the justification for the privilege in tort cases is to

promote public safety through voluntary and honest self-analysis.”).

16

Dealing with Common Privileges

Attorney-Client Communications

Identify all attorneys that may have provided legal advice

Be inclusive of in-house counsel, former in-house counsel & in-house and outside

counsel’s staff members

Was the document created for the purpose of seeking or rendering legal

advice?

Don’t relegate to most junior members of team

Insist on client input

Was the communication made at the behest of an attorney?

Protecting the consultant: “The [attorney-client] privilege also is held to cover

communications made to certain agents of an attorney, including accountants hired

to assist in the rendition of legal services.” U.S. v. Schwimmer, 892 F.2d 237, 243

(2d Cir. 1989) (citing United States v. Kovel, 296 F.2d 918 (2d Cir. 1961)).

17

Dealing with Common Privileges

Work Product

Fed. R. Civ. P. 26: “Ordinarily, a party may not discover documents and tangible

things that are prepared in anticipation of litigation.”

Identify the date when client first anticipated litigation

There must be a “real and substantial probability” that litigation will occur at the time

the documents were created. The threat of litigation must be “real” and “imminent”.

High Point SARL v. Sprint Nextel Corp., 2012 WL 234024, *18 (D. Kan. Jan. 25, 2012)

Don’t forget work product created for a different matter

Most courts hold that documents prepared in anticipation of any litigation are

protected, even if they were not prepared for the pending litigation

Frontier Refining, Inc. v. Gormann-Rupp Co., 136 F.3d 695 (10th Cir. 1998)

Be aware of legal hold date

Work product claims prior to implementation of legal hold may be problematic

18

Use Technology Wisely

Know your options and consult an expert

Craft search strategy carefully

Pay attention to privilege filter

Build in time for a “test run”

Categorization/clustering/e-mail threading

The predictive coding debate/software work flow capabilities

Operate with transparency

19

Quality Control Tools

Second level review

Sampling

Statistical analysis

Checking for consistency among reviewers

Method for providing consistent feedback to reviewers

20

Final QC at Production Stage

Targeted key word searches

Ensure that no documents marked “privileged” in production set

Verify redactions

Re-run some privilege filter searches

Document QC steps

21

The ESI Privilege Log

Obtain agreement regarding timing of service of privilege log

If privileged ESI is voluminous, consider discussing a categorical log

with opposing counsel and the court

Automated tools can help

Make decisions in advance about e-mail chains and other common

issues

Ensure that log is appropriately detailed

22

If you have further questions . . .

Please feel free to contact me:

Sarah Jane Gillett

918.594.0439

[email protected]

ATTORNEY-CLIENT PRIVILEGE REVIEWS AND INADVERTENT DISCLOSURES: CONDUCTING A PRIVILEGE REVIEW AND LEVERAGING FRE 502 AND

CLAWBACK AGREEMENTS TO MAINTAIN PRIVILEGED COMMUNICATION AND PROTECT WORK PRODUCT

PART II: FRE 502 AND INADVERTENT DISCLOSURES

STRAFFORD PUBLICATIONS WEBINAR

SEPTEMBER 11, 2012

Maura R. Grossman Wachtell, Lipton, Rosen & Katz

[email protected] 212.403.1391

Congressional Response

“Mr. Speaker, the cost of discovery has spiked in recent years based on the proliferation of e-mail and other forms of electronic recordkeeping. Litigants must constantly sift through a mountain of documents to ensure that privileged material is not inadvertently released. While most documents produced during discovery have little value, attorneys must still conduct exhaustive reviews to prevent disclosures. The cost to litigants is staggering and the time consumed by courts to supervise these activities is excessive. The system is broken and must be fixed.”

– Representative King of Iowa

24

Non-Waiver Agreements: “Clawbacks”

The parties entered into an agreement such that inadvertent production of a privileged document without an intent to waive privilege did not serve as a waiver as long as the responding party timely identified the documents mistakenly produced. Once identified, the inadvertently produced documents were to be returned by the requesting party.

25

Non-Waiver Agreements: “Quick Peeks”

The parties entered into an agreement such that the responding party would provide certain requested material for initial examination by the requesting party without waiver of any privilege or other protection. The requesting party then designated the documents it wished to have produced in response to its Rule 34 request. The responding party then responded in the usual manner, screening for privilege only those documents identified by the requesting party.

26

Limitations of Non-Waiver Agreements

• Both parties had to agree to the non-waiver agreement.

• Non-waiver agreements provided protection only in the judicial proceeding in which they were entered.

• A third party was not prevented in subsequent litigation from arguing that a waiver had occurred by virtue of the disclosure of the privileged information in the previous matter.

27

What FRE 502 Does and Does Not Do

The rule makes no attempt to alter federal or state law on whether a communication or information is protected under the attorney-client privilege or work-product immunity in the first place.

28

What FRE 502 Does and Does Not Do (Continued)

The rule governs only certain waivers by disclosure. Other common law waiver doctrines (such as the advice of counsel defense, or allegations of attorney misconduct) may still result in a finding of waiver. See, e.g., Ryers v. Burleson, 100 F.R.D. 436 (D.D.C. 1983) (allegation of lawyer malpractice constituted a waiver of confidential communications under the circumstances).

29

Signed Into Law on Sept. 19, 2008

• Applies in “all proceedings commenced after the date of enactment,” and “in so far as is just and practicable, in all proceedings pending on such date of enactment.”

• First rule addressing privilege enacted by Congress since the Federal Rules of Evidence were first enacted in 1975.

Analysis of FRE 502

‘‘The following provisions apply, in the circumstances set out, to disclosure of a communication or information covered by the attorney-client privilege or work-product protection.”

– Rule 502 only applies to attorney-client privilege or work-product protection.

– Other privileges (e.g., for marital communications, patient-physician, or deliberative process) are not covered by the rule.

31

Analysis of FRE 502 By Subsection

‘‘(a) DISCLOSURE MADE IN A FEDERAL PROCEEDING OR TO A FEDERAL OFFICE OR AGENCY; SCOPE OF A WAIVER.—When the disclosure is made in a Federal proceeding or to a Federal office or agency and waives the attorney-client privilege or work-product protection, the waiver extends to an undisclosed communication or information in a Federal or State proceeding only if:

(1) the waiver is intentional;

(2) the disclosed and undisclosed communications or

information concern the same subject matter; and

(3) they ought in fairness to be considered together.”

32

Subdivision (a)

Subdivision (a) provides that a voluntary disclosure in a federal proceeding or to a federal office or agency, if it constitutes a waiver, generally results in a waiver only of the communication or information disclosed.

33

Subdivision (a) (Continued)

• A subject matter waiver of either privilege or work product is reserved for those unusual situations in which fairness requires a further disclosure of related, protected information, in order to prevent a selective and misleading presentation of evidence to the disadvantage of the adversary. See, e.g., In re United Mine Workers of America Employee Benefit Plans Litig., 159 F.R.D. 307, 312 (D.D.C. 1994) (waiver of work product limited to materials actually disclosed because the party did not deliberately disclose documents in an attempt to gain a tactical advantage).

34

Subdivision (a) (Continued)

Thus, it follows that an inadvertent disclosure of privileged or protected information can no longer result in a subject matter waiver. The rule rejects the result in In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989), which held that inadvertent disclosure of documents during discovery automatically constituted a subject matter waiver.

35

Subdivision (b)

‘‘(b) INADVERTENT DISCLOSURE.—When made in a Federal proceeding or to a Federal office or agency, the disclosure does not operate as a waiver in a Federal or State proceeding if:

(1) the disclosure is inadvertent;

(2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and

(3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).”

36

Subdivision (b) (Continued)

Previously, courts were in conflict over whether an inadvertent disclosure of a communication or information protected as privileged or work product constituted a waiver.

The rule opted for the middle ground: inadvertent disclosure does not constitute a waiver if the holder took reasonable steps to prevent the disclosure and also promptly took reasonable steps to rectify the error.

37

What Constitutes “Reasonable Steps to Prevent Disclosure”?

• Cases such as Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104 F.R.D. 103, 105 (S.D.N.Y. 1985) and Hartford Fire Ins. Co. v. Garvey, 109 F.R.D. 323, 332 (N.D. Cal. 1985), set forth multifactors test for determining whether inadvertent disclosure constituted a waiver.

• The stated factors (none of which are dispositive) include the reasonableness of precautions taken, the time taken to rectify the error, the scope of discovery, the extent of disclosure, and the overriding issue of fairness. 38

What Constitutes “Reasonable Steps to Prevent Disclosure”? (Continued)

Rule 502 does not explicitly codify the Lois Sportswear or Garvey guidelines; the Advisory Committee Notes state that FRE 502 is “flexible enough” to accommodate any of the listed factors (as well as others).

39

What Constitutes “Reasonable Steps to Prevent Disclosure”? (Continued)

• Other considerations bearing on “reasonable steps” include the number of documents to be reviewed and the time constraints for production.

• Depending on the circumstances, a party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken “reasonable steps” to prevent inadvertent disclosure. The implementation of an efficient system of records management before litigation may also be relevant.

40

What Constitutes “Reasonable Steps to Rectify the Error”?

• The rule does not require the producing party to engage in a post-production review to determine whether any privileged or protected communication or information has been produced in error.

• But the rule does require the producing party to follow up on any obvious indications that a privileged or protected communication or information has been produced inadvertently.

41

Compliance with FRCP 26(b)(5)(B) Constitutes “Reasonable Steps to Rectify the Error”

• “If information produced in discovery is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it.”

• “After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim.”

• “The producing party must preserve the information until the claim is resolved.”

42

Subdivision (c)

‘‘(c) DISCLOSURE MADE IN A STATE PROCEEDING.—When the disclosure is made in a State proceeding and is not the subject of a State-court order concerning waiver, the disclosure does not operate as a waiver in a Federal proceeding if the disclosure:

(1) would not be a waiver under this rule if it had been made in a Federal proceeding; or

(2) is not a waiver under the law of the State where the disclosure occurred.”

43

Subdivision (c) (Continued)

Rule 502(c ) provides that a federal court is to apply the law that is most protective of privilege and work product.

44


• Rule 502 (c ) does not specifically address the enforceability of a state court confidentiality order in a federal proceeding.

• The Advisory Committee Notes to FRE 502 state that question is covered both by statutory law and principles of federalism and comity. See 28 U.S.C. § 1738 (providing that state judicial proceedings “shall have the same full faith and credit in every court within the United States . . . as they have by law or usage in the courts of such State . . . from which they are taken”); see also Tucker v. Ohtsu Tire & Rubber Co., 191 F.R.D. 495, 499 (D. Md. 2000) (noting that a federal court considering the enforceability of a state confidentiality order is “constrained by principles of comity, courtesy, and . . . federalism”).

45


Thus, a state court order finding no waiver in connection with a disclosure made in a state court proceeding is generally enforceable under existing law in subsequent federal proceedings.

46

Subdivision (d)

‘‘(d) CONTROLLING EFFECT OF A COURT ORDER.—A Federal court may 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 not a waiver in any other Federal or State proceeding.”

47

Subdivision (d) (Continued)

Before FRE 502, there was some dispute over whether a confidentiality order entered in one case was enforceable in other proceedings. See generally Hopson v. City of Baltimore, 232 F.R.D. 228 (D. Md. 2005), for a discussion of this case law.

48

Subdivision (d) (Continued)

• FRE 502(d) provides that when a confidentiality order governing the consequences of disclosure in the instant case is entered in a federal proceeding, its terms are enforceable against non-parties in any subsequent federal or state proceeding.

• For example, the court order may provide for return of documents without waiver irrespective of the care taken by the disclosing party; the rule contemplates enforcement of “quick peek” and “clawback” agreements as a way to avoid the excessive costs of pre-production review for privilege and work product.

49

Subdivision (e)

‘‘(e) CONTROLLING EFFECT OF A PARTY AGREEMENT.—An agreement on the effect of disclosure in a Federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order.”

– The rule makes clear that if parties want protection against non-parties from a finding of waiver by disclosure, the agreement must be made part of a court order.

50

Subdivision (f)

‘‘(f) CONTROLLING EFFECT OF THIS RULE.—Notwithstanding Rules 101 and 1101, this rule applies to State proceedings and to Federal court-annexed and Federal court-mandated arbitration proceedings, in the circumstances set out in the rule. And notwithstanding Rule 501, this rule applies even if State law provides the rule of decision.”

51

FRE 502’s Impact on “Selective Waiver” to Governmental Agencies

• Before FRE 502, courts were in conflict over whether disclosure of privileged or protected information to a government agency conducting an investigation of a client constituted a general waiver of the information disclosed.

• Most courts rejected the concept of “selective waiver,” holding that waiver of privileged or protected information to a government agency constituted a waiver for all purposes and to all parties. See, e.g., Westinghouse Electric Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991).

52

Rule 502 Impact on “Selective Waiver” to Governmental Agencies (Continued)

• Other courts had held that selective waiver was enforceable if the disclosure was made subject to a confidentiality agreement with the government agency. See, e.g., Teachers Insurance & Annuity Association of America v. Shamrock Broadcasting Co., 521 F. Supp. 638 (S.D. N.Y. 1981).

• A minority of courts held that disclosure of protected information to the government did not constitute a general waiver, so that the information remained shielded from use by other parties. See, e.g., Diversified Industries, Inc. v. Meredith, 572 F.2d 596 (8th Cir. 1977).

53

Rule 502 Impact on Selective Waiver to Governmental Agencies (Continued)

• FRE 502 was not intended to alter existing common law on “selective waiver.”

• Pursuant to FRE 502(a), a voluntary disclosure to a federal office or agency will generally result in a waiver, but only for the communication or information disclosed.

54

Contact Information

Maura R. Grossman Wachtell, Lipton, Rosen & Katz

51 West 52nd Street, 31st Floor New York, NY 10019-6150

[email protected]

212.403.1391

Thank You!

55

© 2012 Cozen O’Connor. All Rights Reserved. | 575 Attorneys • 21 Offices • www.cozen.com

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The Clawback:

Friend or Foe?

Jennifer Beltrami

Cozen O’Connor

45 Broadway

New York, NY 10006

© 2012 Cozen O’Connor. All Rights Reserved. 575 Attorneys • 21 Offices • www.cozen.com

Codifying the Claw: FRE 502

Federal Rule of Evidence 502(d) & (e) – Endorses/approves clawback agreements

and orders (inadvertent production of

privileged materials doesn’t waive privilege)

– Goal: reduce costs, monetary and otherwise “In an era where vast amounts of electronic information is

available for review, discovery in certain cases has become

increasingly complex and expensive. Courts cannot and

do not expect that any party can meet a standard of

perfection” Pension Committee v. Banc of America, 2012

WL 184312 at *1 (S.D.N.Y. Jan. 15, 2010)

57


Underused – Why?

• Relatively new (FRE 502 amended in 2008),

hasn’t achieved level of acceptance

• Gotcha – don’t want to give up argument the

other side waived

• Concerned will be forced to truncate review/turn

production into quick peek

• FRE, not FRCP, so not on “checklist”

• Bad case law: claw is useless because some

courts engage in 502(b) inquiry anyway

58


Why Get a Claw?

• Cost reduction

– clients want costs down

– clawback agreement means privilege review can be much less involved,

fewer layers

– avoid costly privilege/waiver disputes

• Carefree – avoid inquiry into level of care taken on review

– FRE 502 Advisory Committee Notes say no waiver “irrespective of the

care taken by the disclosing party”

– Alcon v. Apotex (2008 WL 5070465) (“expensive, painstaking review”

such as “double or triple-check[ing] all disclosures” … “is precisely what

new Evidence Rule 502” was “designed to avoid”)

• Disaster avoidance – without it, high stakes/potential waiver

BUT: if your review is simple & limited, and the

other side’s is complex & large, consider not

raising the issue 59


Barn Door Case: Jacob v. Duane Reade, 2012 U.S. Dist.

LEXIS 25689 (S.D.N.Y. Feb. 28, 2012)

Textbook example of why you

should have a clawback

agreement/order in place

• 2 million documents reviewed by outside vendor

and internal document review team in less than a

month – normal safeguards in place – document

produced, used by other side at deposition without

objection, attempted clawback 2 months later held

ineffective – failure to satisfy 502(b)(3)

• CLAWBACK AGREEMENT /ORDER ENTERED A

COUPLE OF MONTHS LATER

60


Agreement v. Order

Agreement

FRE 502(e)

Binding only on parties

to this proceeding

Order

FRE 502(d)

Inadvertent disclosure

isn’t a waiver in this

proceeding or any other

61


Get an Order

• So-order an agreement

• Incorporate in protective order

• Even if no confidentiality issues, get a

separate clawback order

• Even if opponent won’t agree, ask court to

enter order – Rajala (2010 WL 2949582, D. Kan.) did

sua sponte; Advisory Committee (“enforceable whether or

not it memorializes an agreement among the parties”);

Statement of Congressional Intent (502(d) “designed to

enable a court to enter an order, whether on motion of one

or more parties or on its own motion”); FRCP 26(c)(1)

62


Cases Vary in Treatment of Claw

• Some enforce with no inquiry into or

discussion of 502(b) factors

• Some enforce agreement on its face but

engage in 502(b) analysis anyway

• Some ignore the agreement and require

compliance with 502(b)

63


Enforce on Its Face - Examples

• Degeer v. Gillis, 2010 WL 3732132 (N.D. Ill. Sept. 17, 2010) (following

clawback agreement to find no waiver; no application of FRE 502(b))

• Rodriguez-Monguio v. Ohio State Univ., 2009 WL 1575277 (S.D. Ohio June

3, 2009) (relying on clawback provision in protective order to find no waiver)

• Alcon Mfgr. Ltd. v. Apotex, Inc., 2008 WL 5070465 (S.D. Ind. Nov. 26, 2008)

(enforcing clawback provision of protective order to find no waiver and

observing that “expensive, painstaking review” such as “double or triple-

check[ing] all disclosures” “is precisely what new Evidence Rule 502” was

“designed to avoid”)

• Morris v. Scenera Research, LLC, 2011 WL 3808544 (N.C. Super. Aug. 26,

2011) (finding no need to examine whether review and recall was

reasonable under FRE 502(b), as the parties had entered into a clawback

agreement)

64


Adair v. EQT

2012 U.S. Dist. LEXIS 75132 (W.D. Va. May 31, 2012)

• Aggressive enforcement of claw

• Clawback agreement specifically authorized

production with no review

• Can’t shift costs for more extensive review

• Party wanted order saying no production, or shift

costs → court said produce and no cost-shifting “EQT’s position … that the only reasonable search for

privileged and responsive documents is done by human

beings on an individual document basis … is an untenable

position” in light of 2008 FRE amendments and case law

65


Enforce But Mention 502(b)

Board of Trustees, Sheet Metal Workers’ Nat’l Pension

Fund v. Palladium Equity Partners, LLC, 722 F. Supp. 2d

845 (E.D. Mich. 2010) (upholding clawback provision in

protective order but also enumerating facts demonstrating

that Rule 502(b) factors were met by producing party;

finding no waiver)

Kandel v. Brother Int’l Corp., 683 F. Supp. 2d 1076 (C.D.

Ca. 2010) (enforcing clawback provision in protective order

but also making specific determination as to whether

producing party’s review and recall were reasonable;

finding no waiver)

66


Decline to Enforce

Mt. Hawley Ins. Co. v. Felman Production, Inc., 271 F.R.D.

125 (S.D. W.Va. 2010) (despite clawback agreement, steps

to prevent disclosure of privileged materials in the first

instance must be reasonable; finding waiver because

producing party failed to conduct sampling to determine

efficacy of search terms)

Relion, Inc. v. Hydra Fuel Cell Corp., 2008 WL 5122828 (D.

Or. Dec. 4, 2008) (finding waiver where 2 emails slipped

through in review consisting of 40 feet of shelf space worth

of documents, despite protective order with clawback

provision)

67


A Wrinkle

Some courts have required re-examination

of entire production once an inadvertent

production has been identified – even with a

clawback agreement in place

United States v. Sensient Colors, Inc., 2009 WL 2905474 (D.N.J. Sept.

9, 2009)

Brookdale Univ. Hospital v. Health Ins. Plan of Greater New York,

2009 WL 393644 (E.D.N.Y. Feb. 13, 2009) (enforcing clawback

agreement, but finding privilege preserved only as to those documents

initially recalled; producing party not excused from reexamination of

entire production)

68


Is There a Pattern?

Does particular language necessarily gain

respect with the court?

NO

Compare the various clawback provisions:

69


Degeer (provision enforced)

“inadvertent production of any confidential, privileged, or work product documents shall be without prejudice to any claims that the document is confidential or privileged, and shall constitute neither a waiver of any claim of privilege that may otherwise attach thereto nor a general waiver of such claim or privilege.”

– No preclusion of 502(b) inquiry, but court

didn’t engage in it

70


Morris (provision enforced)

“[t]he production of attorney-client privilege materials, work product protected materials, or trial preparation materials shall not constitute a waiver of those protections. In the event of such protected information, the Parties will follow the procedure set out in Rule 26(b)(5).”

– No preclusion of 502(b) inquiry, but court

didn’t engage in

– Express reference to Federal Rules

71


Kandel (enforced + 502(b))

The protective order expressly specified that

the order didn’t alter the legal definition of

“inadvertent,” thus inviting a 502(b) inquiry

72


Palladium (enforced + 502(b))

“If a party has inadvertently produced to the other party information subject to [a] claim of privilege or immunity, the other party upon request shall promptly return the information for which a claim of inadvertent production is made. The party returning such information may then move the Court for an order compelling production of such information, but said party shall not assert that inadvertent disclosure constitutes a waiver”

– Precludes party from asserting, but court

could still find waiver – invites 502(b) inquiry

– No preclusion of 502(b)

73


Relion (provision had no teeth)

“Inadvertent production of documents or information subject to the attorney-client privilege, work product immunity, or both shall not constitute a waiver of, nor prejudice to, any claim that such or related material is privileged or protected by the work product immunity, provided that the producing party notifies the receiving party in writing promptly after discovery of such inadvertent production.”

– Same as in foregoing cases, but court made

its own determination of whether the

producing party’s conduct was reasonable

and found waiver 74


Mt. Hawley (provision lacked enough teeth)

“A party may seek the return (and/or destruction, as the case may be) of any document produced in response to discovery requests in this action that the party later claims should have been withheld on grounds of privilege, including the work product doctrine (collectively referred to hereinafter as an ‘Inadvertently Produced Document’)”

- and -

“Compliance by the producing party with the steps required by this Section H to retrieve an Inadvertently Produced Document shall be sufficient, notwithstanding any argument by a party to the contrary, to satisfy the reasonableness requirement of FRE 502(b)(3)”

– Same as no-waiver cases, but implicitly

invites inquiry at production stage only

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How to Strengthen the Claw

• Add language that reasonableness requirement

is presumed satisfied

• Specify what parties are going to do and

stipulate that it’s reasonable

• Add language that any disclosure is deemed

inadvertent or have the agreement apply

regardless of whether production is “inadvertent”

• Specifically authorize parties to produce without

a privilege review at all

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Can You Forego Privilege Review?

• Zubulake language (parties may enter into “so-called ‘claw-back’

agreements that allow the parties to forego privilege review altogether,”

216 F.R.D. 280 (S.D.N.Y. 2003)), cited in FRE 502 Advisory Committee

Notes, is confusing – not meant to forego review altogether, but reduce

cost

• Clawback isn’t a quick peek (agreement to no pre-production review)

• Clawback could protect you even with no review at all, but differing

treatment of courts makes this a risky proposition – and depends on the

agreement

• Ringing the Bell -- once disclosed, even if returned or destroyed,

adversary has the information

• Rajala – document dump not allowed even with clawback

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Perceived Danger of Claw

• Production times further shortened – lose

argument that need more time for review

• Privilege eroded – more likelihood

privileged documents will be produced;

even if can claw back, damage is done

• Forces reliance on technology when we’re

not yet sure how well it works 78


Is the Claw a Friend or Foe?

PRO

o Reduce need for

exhaustive review –

reduce costs

o Protect against

malpractice claim

o Avoid costly

privilege/waiver

disputes

CON

o Can’t argue waiver

against opponent

o Encourages courts to

impose short review

times

o De facto quick peek –

bell is rung

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Brave New World

• Given new 502, clawback is a reality

• As technology becomes more familiar,

more and more courts will insist on

clawback orders

• Hands-on review is thing of the past

• Fears can be mitigated by improved

technology (there was always the risk of

mistakes)

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CONTACT INFORMATION

Jennifer F. Beltrami

Cozen O’Connor

45 Broadway

New York, NY 10006

(212) 883-4955

[email protected]

www.cozen.com

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