[Congressional Record Volume 154, Number 32 (Wednesday, February 27, 2008)]
[Senate]
[Pages S1317-S1319]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
TO AMEND THE FEDERAL RULES OF EVIDENCE
Mr. SALAZAR. Mr. President, I ask unanimous consent that the Senate
proceed to the immediate consideration of Calendar No. 580, S. 2450.
The PRESIDING OFFICER. The clerk will report the bill by title.
The legislative clerk read as follows:
A bill (S. 2450) to amend the Federal Rules of Evidence to
address the waiver of the attorney-client privilege in the
work product doctrine.
There being no objection, the Senate proceeded to consider the bill.
Mr. LEAHY. Mr. President, today I hope we pass a bipartisan bill that
will go a long way in reducing the costs of litigating disputes in our
civil justice system. This bill creates a new Federal Rule of Evidence
regarding electronic disclosure of privileged material that would limit
the consequences of inadvertent disclosure. The new rule would provide
predictability and uniformity in a discovery process that has been made
increasingly difficult with the growing use of e-mail and other
electronic media. This legislation contains the full text of Judicial
Conference recommendations and is supported by all sectors of the legal
community.
I ask unanimous consent to have printed in the Record the Judicial
Conference's Committee Note to illuminate the purpose of the new
Federal Rule of Evidence and how it should be applied.
There being no objection, the material was ordered to be printed in
the Record, as follows:
Explanatory Note on Evidence Rule 502
This new rule has two major purposes:
(1) It resolves some longstanding disputes in the courts
about the effect of certain disclosures of communications or
information protected by the attorney-client privilege or as
work product--specifically those disputes involving
inadvertent disclosure and subject matter waiver.
(2) It responds to the widespread complaint that litigation
costs necessary to protect against waiver of attorney-client
privilege or work product have become prohibitive due to the
concern that any disclosure (however innocent or minimal)
will operate as a subject matter waiver of all protected
communications or information. This concern is especially
troubling in cases involving electronic discovery. See, e.g.,
Hopson v. City of Baltimore, 232 F.R.D. 228, 244 (D.Md. 2005)
(electronic discovery may encompass ``millions of documents''
and to insist upon ``record-by-record pre-production
privilege review, on pain of subject matter waiver, would
impose upon parties costs of production that bear no
proportionality to what is at stake in the litigation'').
The rule seeks to provide a predictable, uniform set of
standards under which parties can determine the consequences
of a disclosure of a communication or information covered by
the attorney-client privilege or work-product protection.
Parties to litigation need to know, for example, that if they
exchange privileged information pursuant to a confidentiality
order, the court's order will be enforceable. Moreover, if a
federal court's confidentiality order is not enforceable in a
state court then the burdensome costs of privilege review and
retention are unlikely to be reduced.
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 as an
initial matter. Moreover, while establishing some exceptions
to waiver, the rule does not purport to supplant applicable
waiver doctrine generally.
The rule governs only certain waivers by disclosure. Other
common-law waiver doctrines may result in a finding of waiver
even where there is no disclosure of privileged information
or work product. See, e.g., Nguyen v. Excel Corp., 197 F.3d
200 (5th Cir. 1999) (reliance on an advice of counsel defense
waives the privilege with respect to attorney-client
communications pertinent to that defense); 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). The rule is not
intended to displace or modify federal common law concerning
waiver of privilege or work product where no disclosure has
been made.
Subdivision (a). The rule provides that a voluntary
disclosure in a federal proceeding or to a federal office or
agency, if a waiver, generally results in a waiver only of
the communication or information disclosed; 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). Thus, subject matter waiver is limited
to situations in which a party intentionally puts protected
information into the litigation in a selective, misleading
and unfair manner. It follows that an inadvertent disclosure
of protected information can never result in a subject matter
waiver. See Rule 502(b). 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.
The language concerning subject matter waiver--``ought in
fairness''--is taken from Rule 106, because the animating
principle is the same. Under both Rules, a party that makes a
selective, misleading presentation that is unfair to the
adversary opens itself to a more complete and accurate
presentation.
To assure protection and predictability, the rule provides
that if a disclosure is made at the federal level, the
federal rule on subject matter waiver governs subsequent
state court determinations on the scope of the waiver by that
disclosure.
Subdivision (b). Courts are in conflict over whether an
inadvertent disclosure of a communication or information
protected as privileged or work product constitutes a waiver.
A few courts find that a disclosure must be intentional to be
a waiver. Most courts find a waiver only if the disclosing
party acted carelessly in disclosing the communication or
information and failed to request its return in a timely
manner. And a few courts hold that any inadvertent disclosure
of a communication or information protected under the
attorney-client privilege or as work product constitutes a
waiver without regard to the protections taken to avoid such
a disclosure. See generally Hopson v. City of Baltimore, 232
F.R.D. 228 (D.Md. 2005), for a discussion of this case law.
The rule opts for the middle ground: inadvertent disclosure
of protected communications or information in connection with
a federal proceeding or to a federal office or agency does
not constitute a waiver if the holder took reasonable steps
to prevent disclosure and also promptly took reasonable steps
to rectify the error. This position is in accord with the
majority view on whether inadvertent disclosure is a waiver.
Cases such as Lois Sportswear, U.S.A., Inc. v. Levi Strauss
& Co., 104 F.R.D. 103, 105
=========================== NOTE ===========================
On page S1275, February 27, 2008, the Record shows the printing
of S. 1200.
The online Record has been corrected to show the printing of S.
1200, as amended.
========================= END NOTE =========================
[[Page S1318]]
(S.D.N.Y. 1985) and Hartford Fire Ins. Co. v. Garvey, 109 F.R.D. 323,
332 (N.D.Cal. 1985), set out a multi-factor test for determining
whether inadvertent disclosure is a waiver. The stated factors (none of
which is dispositive) are 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. The rule does not explicitly codify that test,
because it is really a set of non-determinative guidelines
that vary from case to case. The rule is flexible enough
to accommodate any of those listed factors. Other
considerations bearing on the reasonableness of a
producing party's efforts 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.
The rule does not require the producing party to engage in
a post-production review to determine whether any protected
communication or information has been produced by mistake.
But the rule does require the producing party to follow up on
any obvious indications that a protected communication or
information has been produced inadvertently.
The rule applies to inadvertent disclosures made to a
federal office or agency, including but not limited to an
office or agency that is acting in the course of its
regulatory, investigative or enforcement authority. The
consequences of waiver, and the concomitant costs of pre-
production privilege review, can be as great with respect to
disclosures to offices and agencies as they are in
litigation.
Subdivision (c). Difficult questions can arise when 1) a
disclosure of a communication or information protected by the
attorney-client privilege or as work product is made in a
state proceeding, 2) the communication or information is
offered in a subsequent federal proceeding on the ground that
the disclosure waived the privilege or protection, and 3) the
state and federal laws are in conflict on the question of
waiver. The Committee determined that the proper solution for
the federal court is to apply the law that is most protective
of privilege and work product. If the state law is more
protective (such as where the state law is that an
inadvertent disclosure can never be a waiver), the holder of
the privilege or protection may well have relied on that law
when making the disclosure in the state proceeding. Moreover,
applying a more restrictive federal law of waiver could
impair the state objective of preserving the privilege or
work-product protection for disclosures made in state
proceedings. On the other hand, if the federal law is more
protective, applying the state law of waiver to determine
admissibility in federal court is likely to undermine the
federal objective of limiting the costs of production.
The rule does not address the enforceability of a state
court confidentiality order in a federal proceeding, as 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''). Thus, a state
court order finding no waiver in connection with a
disclosure made in a state court proceeding is enforceable
under existing law in subsequent federal proceedings.
Subdivision (d). Confidentiality orders are becoming
increasingly important in limiting the costs of privilege
review and retention, especially in cases involving
electronic discovery. But the utility of a confidentiality
order in reducing discovery costs is substantially diminished
if it provides no protection outside the particular
litigation in which the order is entered. Parties are
unlikely to be able to reduce the costs of pre-production
review for privilege and work product if the consequence of
disclosure is that the communications or information could be
used by non-parties to the litigation.
There is some dispute on whether a confidentiality order
entered in one case is 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. The rule provides
that when a confidentiality order governing the consequences
of disclosure in that case is entered in a federal
proceeding, its terms are enforceable against non-parties in
any 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 ``claw-back'' and ``quick
peek'' arrangements as a way to avoid the excessive costs of
pre-production review for privilege and work product. See
Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, 290 (S.D.N.Y.
2003) (noting that parties may enter into ``so-called `claw-
back' agreements that allow the parties to forego privilege
review altogether in favor of an agreement to return
inadvertently produced privilege documents''). The rule
provides a party with a predictable protection from a court
order--predictability that is needed to allow the party to
plan in advance to limit the prohibitive costs of privilege
and work product review and retention.
Under the rule, a confidentiality order is enforceable
whether or not it memorializes an agreement among the parties
to the litigation. Party agreement should not be a condition
of enforceability of a federal court's order.
Under subdivision (d), a federal court may order that
disclosure of privileged or protected information ``in
connection with'' a federal proceeding does not result in
waiver. But subdivision (d) does not allow the federal court
to enter an order determining the waiver effects of a
separate disclosure of the same information in other
proceedings, state or federal. If a disclosure has been made
in a state proceeding (and is not the subject of a state-
court order on waiver), then subdivision (d) is inapplicable.
Subdivision (c) would govern the federal court's
determination whether the state-court disclosure waived the
privilege or protection in the federal proceeding.
Subdivision (e). Subdivision (e) codifies the well-
established proposition that parties can enter an agreement
to limit the effect of waiver by disclosure between or among
them. Of course such an agreement can bind only the parties
to the agreement. 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.
Subdivision (f). The protections against waiver provided by
Rule 502 must be applicable when protected communications or
information disclosed in federal proceedings are subsequently
offered in state proceedings. Otherwise the holders of
protected communications and information, and their lawyers,
could not rely on the protections provided by the Rule, and
the goal of limiting costs in discovery would be
substantially undermined. Rule 502(f) is intended to resolve
any potential tension between the provisions of Rule 502 that
apply to state proceedings and the possible limitations on
the applicability of the Federal Rules of Evidence otherwise
provided by Rules 101 and 1101.
The rule is intended to apply in all federal court
proceedings, including court-annexed and court-ordered
arbitrations, without regard to any possible limitations of
Rules 101 and 1101. This provision is not intended to raise
an inference about the applicability of any other rule of
evidence in arbitration proceedings more generally.
The costs of discovery can be equally high for state and
federal causes of action, and the rule seeks to limit those
costs in all federal proceedings, regardless of whether the
claim arises under state or federal law. Accordingly, the
rule applies to state law causes of action brought in federal
court.
Subdivision (g). The rule's coverage is limited to
attorney-client privilege and work product. The operation of
waiver by disclosure, as applied to other evidentiary
privileges, remains a question of federal common law. Nor
does the rule purport to apply to the Fifth Amendment
privilege against compelled self-incrimination.
The definition of work product ``materials'' is intended to
include both tangible and intangible information. See In re
Cendant Corp. Sec. Litig., 343 F.3d 658, 662 (3d Cir. 2003)
(``work product protection extends to both tangible and
intangible work product'').
Mr. LEAHY. Mr. President, I thank Senator Specter for joining me in
introducing this bill last December, as the first session of this
Congress drew to a close. The Judiciary Committee took up and
unanimously approved the bill during our first business meeting after
returning from the holiday recess. 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. SALAZAR. Mr. President, I ask unanimous consent that the bill be
read a third time and passed, the motion to reconsider be laid upon the
table, with no intervening action or debate, and that any statements
relating to the bill be printed in the Record.
The PRESIDING OFFICER. Without objection, it is so ordered.
The bill (S. 2450) was ordered to be engrossed for a third reading,
was read the third time, and passed, 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;
[[Page S1319]]
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.
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