[Congressional Record Volume 153, Number 189 (Tuesday, December 11, 2007)]
[Senate]
[Pages S15141-S15143]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LEAHY (for himself and Mr. Specter):
  S. 2450. A bill to amend the Federal Rules of Evidence to address the 
waiver of the attorney-client privilege and the work product doctrine; 
to the Committee on the Judiciary.
  Mr. LEAHY. Mr. President, today I introduce legislation to create 
Federal Rule of Evidence 502. I am pleased that Senator Specter has 
joined me in this

[[Page S15142]]

effort. After much study, several hearings, and significant public 
comment, the Judicial Conference's Standing Committee on Rules of 
Practice and Procedure, and the Advisory Committee on Evidence Rules, 
arrived at a proposed new rule that is intended to provide 
predictability and uniformity in a discovery process that has been made 
increasingly difficult with the growing use of email and other 
electronic media. I commend all of the judges, professors and 
practitioners who were involved in the rule's drafting and subsequent 
improvement for their hard work and attention to this issue. The 
legislation we are introducing today contains the text that the 
Judicial Conference recommends.
  Billions of dollars are spent each year in litigation to protect 
against the inadvertent disclosure of privileged materials. With the 
routine use of email and other electronic media in today's business 
environment, discovery can encompass millions of documents in a given 
case, vastly expanding the risks of inadvertent disclosure. The rule 
proposed by the Standing Committee is aimed at adapting to the new 
realities that accompany today's modes of communication, and reducing 
the burdens associated with the conduct of diligent electronic 
discovery.
  Our proposed legislation would set clear guidelines regarding the 
consequences of inadvertent disclosure of privileged material, and 
provides that so long as reasonable steps are taken in the prevention 
of such a disclosure, or to assure the prompt retrieval of disclosed 
information, no waiver will result. Moreover, an inadvertent disclosure 
of privileged information would not result in a broader subject matter 
waiver beyond the specific materials disclosed.
  If a disclosure of privileged material is made voluntarily, only the 
privilege associated with the voluntarily disclosed material is waived, 
and not other undisclosed related materials. But if voluntary 
disclosure of privileged material is done selectively in an effort to 
mislead or gain unfair advantage, then where fairness dictates, this 
will result in a subject matter waiver.
  This legislation would also provide that confidentiality agreements 
entered into by parties to litigation, and approved by the court, will 
bind all non-parties in other State or Federal litigation. This 
provision will add meaningful protection to parties entering 
confidentiality agreements and, along with other components of the 
proposed rule, will aid in reducing the burdens of excessive pre-
production document review.
  Unlike other Federal court rules, any proposed rule that modifies an 
evidentiary privilege must be approved by Congress pursuant to the 
Rules Enabling Act. The modification of a privilege is an undertaking 
not to be approached lightly, and the process that resulted in proposed 
Rule 502 was thorough and thoughtful. It has resulted in widespread 
approval of the proposed rule from the bench and bar at both the State 
and Federal level.
  I urge all Senators to join Senator Specter and me to pass this 
proposal and take a positive step toward modernizing and improving the 
Federal Rules of Evidence.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 2450

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. ATTORNEY-CLIENT PRIVILEGE AND WORK PRODUCT; 
                   LIMITATIONS ON WAIVER.

       (a) In General.--Article V of the Federal Rules of Evidence 
     is amended by adding at the end the following:

     ``Rule 502. Attorney-Client Privilege and Work Product; 
       Limitations on Waiver

       ``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.
       ``(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.
       ``(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).
       ``(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.
       ``(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.
       ``(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.
       ``(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.
       ``(g) Definitions.--In this rule:
       ``(1) `attorney-client privilege' means the protection that 
     applicable law provides for confidential attorney-client 
     communications; and
       ``(2) `work-product protection' means the protection that 
     applicable law provides for tangible material (or its 
     intangible equivalent) prepared in anticipation of litigation 
     or for trial.''.
       (b) Technical and Conforming Changes.--The table of 
     contents for the Federal Rules of Evidence is amended by 
     inserting after the item relating to rule 501 the following:

``502. Attorney-client privilege and work-product doctrine; limitations 
              on waiver.''.
       (c) Effective date.--The amendments made by this Act shall 
     apply in all proceedings commenced after the date of 
     enactment of this Act and, insofar as is just and 
     practicable, in all proceedings pending on such date of 
     enactment.

  Mr. SPECTER. Mr. President, I seek recognition today to introduce 
legislation, together with Senator Leahy, to enact Federal Rule of 
Evidence 502.
  Federal Rule of Evidence 502, which was drafted and proposed to 
Congress by the Judicial Conference of the United States, is a rule to 
provide heightened protection against inadvertent loss of the attorney-
client privilege during the discovery process. At a time when 
litigation costs are skyrocketing and discovery alone can last for 
years, this rule is urgently needed. And unlike other Federal rules of 
procedure, which go into effect unless Congress acts, rules governing 
evidentiary privilege must be enacted by Congress.
  Current law on attorney-client privilege and work product is 
responsible in large part for the rising costs of discovery--especially 
electronic discovery. Right now, it is far too easy to inadvertently 
lose--or ``waive''--the privilege. A single inadvertently disclosed 
document can result in waiving the privilege not only as to what was 
produced, but as to all documents on the same subject matter. In some 
courts, a waiver may be found even if the producing party took 
reasonable steps to avoid disclosure. Such waivers will not just affect 
the case in which the accidental disclosure is made, but will also 
impact other cases filed subsequently in State or Federal courts.
  Thus, lawyers must spend significant amounts of time ensuring that 
documents containing privileged communications and work product are not 
inadvertently produced. In this day and age when there can be literally 
millions of electronic files to comb through looking for privileged 
material, the risk of one slipping through the cracks is very high. The 
fear of waiver leads to undue expense and to extravagant claims of 
privilege.
  The proposed rule will alleviate these burdens in two primary ways: 
First, it

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protects against undue forfeiture of attorney-client privilege and work 
product protections when privileged communications are inadvertently 
produced in discovery--where the party producing the documents took 
reasonable steps to prevent the disclosure and does not try to use the 
disclosed information in a misleading way. Second, it permits parties 
and courts to protect against the consequences of waiver by permitting 
limited disclosure of privileged information between the parties to 
litigation. This allows parties and courts to manage the effects of 
disclosure and provide predictability in current and future litigation.
  The proposed rule enjoys wide support from parties on both sides of 
the ``v.'' Both plaintiffs and defendants want this rule because it 
makes the litigation more efficient and less costly; it ensures that 
the wheels of justice will not become bogged down in the mud of 
discovery.
  The Judicial Conference, which is the body responsible for proposing 
new procedural rules, has undertaken an extensive process in crafting 
this rule over the last year and a half. The rule was approved by the 
Judicial Conference's Advisory Committee on Evidence Rules, the 
Standing Committee on Rules of Practice and Procedure, and the Judicial 
Conference itself, after a public comment period that included several 
hearings with supportive comments and testimony from bench and bar. 
There were more than 70 public comments, and more than 20 witnesses 
testified.
  The time is ripe to move forward and enact this proposed rule into 
law. Therefore, I have worked with Senator Leahy to bring this bill to 
the floor in a timely and bipartisan fashion. This rule is necessary to 
protect the attorney-client privilege, to bring clarity to the law, and 
to ensure fairness for all parties. And every day we wait wastes the 
time and resources of litigants and the courts. I urge my colleagues to 
join with Senator Leahy and me in supporting this bill.

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