[Congressional Record (Bound Edition), Volume 154 (2008), Part 13]
[House]
[Pages 18015-18018]
[From the U.S. Government Publishing Office, www.gpo.gov]




             ADDRESSING WAIVER OF ATTORNEY-CLIENT PRIVILEGE

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I move to suspend the rules 
and pass the Senate bill (S. 2450) to amend the Federal Rules of 
Evidence to address the waiver of the attorney-client privilege and the 
work product doctrine.
  The Clerk read the title of the Senate bill.
  The text of the Senate bill is 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.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Texas (Ms. Jackson-Lee) and the gentleman from Iowa (Mr. King) each 
will control 20 minutes.
  The Chair recognizes the gentlewoman from Texas.


                             General Leave

  Ms. JACKSON-LEE of Texas. Mr. Speaker, I ask unanimous consent that 
all Members have 5 legislative days to revise and extend their remarks 
and include extraneous material on the bill under consideration.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Texas?
  There was no objection.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, this legislation enacts a new Federal Rule of Evidence, 
proposed by the Judicial Conference, to address a growing problem that 
is adding inordinate and unnecessary burden, expense, uncertainty, and 
inefficiency to litigation.
  The new rule 502 reaffirms and reinforces the attorney-client 
privilege and work product protection by clarifying how they are 
affected by, and withstand, inadvertent disclosure in discovery.
  As the author of the companion bill, H.R. 6610, in the House, I urge 
my colleagues to join me in supporting the Senate-passed bill so that 
we can send it to the President and enact it into law without further 
delay.
  Doing the research on this legislation and spending time with a 
number of lawyers, and the American Bar Association, Mr. Speaker, I can 
assure you that this has no negative impact on those lawyers 
representing defendants or those lawyers representing plaintiffs. In 
fact, unlike the courthouse and the courtroom, plaintiff lawyers and 
defendant lawyers, the plaintiff bar and the defendant bar, have come 
together in a unanimous voice, indicating that this will in fact 
enhance their ability to represent their clients and to ensure that 
they may have the broadest based discovery possible.
  We have asked and answered a series of questions that impact this 
particular legislation, including engaging the Federal bench. And so I 
move that my colleagues view this enthusiastically and that it be 
supported.

[[Page 18016]]

  The attorney-client privilege and work product protection are crucial 
to our legal system. They encourage businesses and individuals to 
obtain legal counsel when appropriate by protecting the confidentiality 
of communications between clients and their attorneys, and documents 
prepared by attorneys to assist their clients in litigation. In fact, 
this is the backbone, the infrastructure of civil and criminal 
litigation.
  These legal protections are not absolute, however. Traditionally, 
persons seeking to rely on them must maintain the confidentiality of 
the information involved. If the information is shared outside the 
circle of confidentiality provided by the law, the legal protection is 
forfeited, or waived, as the purpose for it no longer applies.
  This traditional principle can work unfair results in modern-day 
litigation when privileged information is disclosed by accident. Fast-
moving litigation or expensive and vast litigation has both plaintiff 
and defendant shooting back and forth various documents, particularly 
in extensive discovery. In the course of the kind of voluminous 
discovery that often takes place, this can happen, where a privileged 
document is seen by the other party.
  When vast amounts of documents are transmitted and stored 
electronically and can be searched and collected in the same manner, it 
is all too easy for a document containing privileged information to be 
overlooked, despite careful efforts to prevent it. Even in my practice 
of some years ago, the technology has made it different. I remember 
being in a massive case, a personal injury case, where documents were 
going back and forth, but I might say, Mr. Speaker, that it moved a lot 
slower than it does today.
  Unfortunately, the case law has not kept up with these developments 
of expedited discovery and the electronic use of passing documents. 
Outdated legal precedents from an earlier era continue to create 
uncertainty. There are precedents, for example, holding that an 
inadvertent disclosure of a single document or communication not only 
can waive the privilege as to that one item, but can result in a 
blanket waiver as to all information concerning the same subject. That 
can collapse a case.
  Concern about the potential adverse consequences has in recent years 
forced clients and their lawyers to undertake exhaustive, time-
consuming, and expensive examination of documents item by item, often 
page by page, before they can be comfortable turning them over in 
discovery. That impacts, of course, negatively plaintiffs and 
defendants.
  The document reviews can be grossly disproportionate in cost to the 
stakes of the underlying litigation and significantly impede the 
efficient processing of cases through the courts.
  Courts have developed a balance rule in the case law that 
appropriately protects confidentiality, while guarding against abuses. 
But one court's order and one district's order and one circuit's order 
has uncertain authority, at best, in another court. Only a uniform rule 
can bring the certainty needed, and a uniform rule in the area of 
evidentiary privileges can only be achieved by an act of Congress.
  The rule we are submitting today, submitted to Congress last year by 
the Judicial Conference, is a product of careful deliberations in its 
Advisory Committee on Evidence Rules, informed by years of examination 
of the issue in its Committee on Rules of Practice and Procedure.
  The Advisory Committee enlisted the help of eminent jurists, 
practitioners, and legal scholars, and sought and obtained extensive 
public comment both in written submissions and at two hearings. The 
rule that resulted has wide support in the legal community. I know, Mr. 
Speaker. I have spent time, my staff has spent time with lawyers on 
both sides of the bar, and I can assure you their voices were one in 
arguing for the passage of this change.
  In order to more fully explain how the new rule is to be interpreted 
and applied, the Advisory Committee also prepared an explanatory note, 
as is customary, for publication alongside the text of the rule. The 
text of the explanatory note appears in the Record in the Senate 
debate.
  The proposed rule has now also undergone careful review in the House, 
as well as the Senate. During its consideration in the House Judiciary 
Committee, a number of questions arose regarding the scope and contours 
of the effect of the proposed rule on current law regarding attorney-
client privilege and work product protection. That is a very important 
and cherished right, to ensure that privilege does not interfere or 
hamper the rights of a plaintiff, sometimes the underdog, and the 
defendant.
  The Judicial Conference was able to answer all these questions 
satisfactorily, without need to revise the text of the rule as 
submitted to Congress. In order to further reduce any potential 
uncertainty regarding how the rule is to be interpreted and applied, 
the committee has asked and the Judicial Conference has agreed to 
augment the explanatory note. I would like to insert the agreed 
addendum to the explanatory note in the Record at this point.


  Statement of Congressional Intent Regarding Rule 502 of the Federal 
                           Rules of Evidence

       During consideration of this rule in Congress, a number of 
     questions were raised about the scope and contours of the 
     effect of the proposed rule on current law regarding 
     attorney-client privilege and work-product protection. These 
     questions were ultimately answered satisfactorily, without 
     need to revise the text of the rule as submitted to Congress 
     by the Judicial Conference.
       In general, these questions are answered by keeping in mind 
     the limited though important purpose and focus of the rule. 
     The rule addresses only the effect of disclosure, under 
     specified circumstances, of a communication that is otherwise 
     protected by attorney-client privilege, or of information 
     that is protected by work-product protection, on whether the 
     disclosure itself operates as a waiver of the privilege or 
     protection for purposes of admissibility of evidence in a 
     federal or state judicial or administrative proceeding. The 
     rule does not alter the substantive law regarding attorney-
     client privilege or work-product protection in any other 
     respect, including the burden on the party invoking the 
     privilege (or protection) to prove that the particular 
     information (or communication) qualifies for it. And it is 
     not intended to alter the rules and practices governing use 
     of information outside this evidentiary context.
       Some of these questions are addressed more specifically 
     below, in order to help further avoid uncertainty in the 
     interpretation and application of the rule.
     Subdivision (a)--Disclosure vs. Use
       This subdivision does not alter the substantive law 
     regarding when a party's strategic use in litigation of 
     otherwise privileged information obliges that party to waive 
     the privilege regarding other information concerning the same 
     subject matter, so that the information being used can be 
     fairly considered in context. One situation in which this 
     issue arises, the assertion as a defense in patent-
     infringement litigation that a party was relying on advice of 
     counsel, is discussed elsewhere in this Note. In this and 
     similar situations, under subdivision (a)(1) the party using 
     an attorney-client communication to its advantage in the 
     litigation has, in so doing, intentionally waived the 
     privilege as to other communications concerning the same 
     subject matter, regardless of the circumstances in which the 
     communication being so used was initially disclosed.
     Subdivision (b)--Fairness Considerations
       The standard set forth in this subdivision for determining 
     whether a disclosure operates as a waiver of the privilege or 
     protection is, as explained elsewhere in this Note, the 
     majority rule in the federal courts. The majority rule has 
     simply been distilled here into a standard designed to be 
     predictable in its application. This distillation is not 
     intended to foreclose notions of fairness from continuing to 
     inform application of the standard in all aspects as 
     appropriate in particular cases--for example, as to whether 
     steps taken to rectify an erroneous inadvertent disclosure 
     were sufficiently prompt under subdivision (b)(3) where the 
     receiving party has relied on the information disclosed.
     Subdivisions (a) and (b)--Disclosures to Federal Office or 
         Agency
       This rule, as a Federal Rule of Evidence, applies to 
     admissibility of evidence. While subdivisions (a) and (b) are 
     written broadly to apply as appropriate to disclosures of 
     information to a federal office or agency, they do not apply 
     to uses of information--such as routine use in government 
     publications--that fall outside the evidentiary context. Nor 
     do these subdivisions relieve the party seeking to protect 
     the information as privileged from the burden of proving that 
     the privilege applies in the first place.
     Subdivision (d)--Court Orders
       This subdivision authorizes a court to enter orders only in 
     the context of litigation

[[Page 18017]]

     pending before the court. And it does not alter the law 
     regarding waiver of privilege resulting from having 
     acquiesced in the use of otherwise privileged information. 
     Therefore, this subdivision does not provide a basis for a 
     court to enable parties to agree to a selective waiver of the 
     privilege, such as to a federal agency conducting an 
     investigation, while preserving the privilege as against 
     other parties seeking the information. This subdivision is 
     designed to enable a court to enter an order, whether on 
     motion of one or more parties or on its own motion, that will 
     allow the parties to conduct and respond to discovery 
     expeditiously, without the need for exhaustive pre-production 
     privilege reviews, while still preserving each party's right 
     to assert the privilege to preclude use in litigation of 
     information disclosed in such discovery. While the benefits 
     of a court order under this subdivision would be equally 
     available in government enforcement actions as in private 
     actions, acquiescence by the disclosing party in use by the 
     federal agency of information disclosed pursuant to such an 
     order would still be treated as under current law for 
     purposes of determining whether the acquiescence in use of 
     the information, as opposed to its mere disclosure, effects a 
     waiver of the privilege. The same applies to acquiescence in 
     use by another private party.
       Moreover, whether the order is entered on motion of one or 
     more parties, or on the court's own motion, the court retains 
     its authority to include the conditions it deems appropriate 
     in the circumstances.
     Subdivision (e)--Party Agreements
       This subdivision simply makes clear that while parties to a 
     case may agree among themselves regarding the effect of 
     disclosures between each other in a federal proceeding, it is 
     not binding on others unless it is incorporated into a court 
     order. This subdivision does not confer any authority on a 
     court to enter any order regarding the effect of disclosures. 
     That authority must be found in subdivision (d), or 
     elsewhere.

  The new rule protects the confidentiality of privileged information 
against waiver in several ways. It protects information inadvertently 
disclosed in discovery, as long as the party has taken reasonable 
efforts to avoid disclosing privileged information and, upon learning 
of the disclosure, promptly takes reasonable steps to rectify it.
  It protects against a waiver extending to other, undisclosed 
documents except where privileged information is being intentionally 
used to mislead the fact finder to the disadvantage of the other party, 
so that fairness requires that other information regarding the same 
subject matter also be available.

                              {time}  1445

  And it authorizes courts to enter orders enforceable in all 
jurisdictions permitting parties to make initial discovery exchanges 
efficiently without waiving the right to appropriately assert privilege 
later for documents culled for actual use as evidence.
  This is sort of a back-up protection. This is your guarantee. This is 
an assistance to the idea of protecting privilege. This is extremely 
important, in that vast majority of documents exchanged in discovery, 
in some cases running to millions of pages, ultimately prove to be of 
no interest.
  Importantly, the rule does not alter the law regarding when the 
attorney-client privilege or work product protection applies in the 
first instance. It is narrowly targeted to address the question of when 
the specified kinds of litigation-related disclosures do or do not 
operate as a waiver of the privilege that would otherwise apply.
  Mr. Speaker, this legislation enjoys strong support in the House 
Judiciary Committee and the Senate Judiciary Committee and, of course, 
the House Judiciary Committee, with both sides of the aisle supporting 
it. I would like to especially commend Congressman Jim Sensenbrenner 
for encouraging the Judicial Conference when he was chairman of the 
committee to pursue developing a new rule of evidence to address this 
problem.
  I urge my colleagues to support this important legislation.
  Mr. Speaker, I reserve the balance of my time.
  Mr. KING of Iowa. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, last year the U.S. Judicial Conference submitted a 
proposed addition to the Rules of Evidence governing waivers of the 
attorney-client privilege or work product immunity. Rules governing 
evidentiary privilege must be approved by an act of Congress.
  The Judicial Conference concluded that the current law on waivers of 
privilege and work product is largely responsible for the rising costs 
of discovery, especially discovery of electronic information. The 
reason is that if a protected document is produced, there is a risk 
that a court will find a subject matter waiver that will apply not only 
to the instant case and document, but to other cases and documents as 
well. The fear of waiver also leads to extravagant claims of privilege.
  Mr. Speaker, the Judicial Conference devoted great process to 
drafting their proposal. For more than a year, the conference's 
Advisory Committee on Evidentiary Rules conducted hearings that 
featured testimony that was submitted by eminent judges, lawyers and 
academics. The advisory committee later coordinated with the Conference 
of Chief Justices to assure that the evolving draft addressed 
federalism concerns raised by the individual State court systems.
  In April of 2006, the advisory committee held a conference at Fordham 
Law School at which a selected group of academics and practitioners 
reviewed the draft. More revisions were developed that resulted in a 
revised rule that was published for public comment in August of 2006. 
The advisory committee received more than 70 public comments and heard 
testimony from 20 witnesses at two hearings.
  In April of 2007, further changes were made based on this process, 
and the new rule 502 was released. This draft was approved by the 
Committee on Rules of Practice and Procedure and the full Judicial 
Conference. The text of S. 2450 incorporates the submission developed 
and approved by the Judicial Conference. The Senate passed the measure 
on February 27, 2008, by unanimous consent.
  The content of the new rule includes the following provisions: If a 
waiver is found, it applies only to the information disclosed, unless a 
broader waiver is made necessary by the holder's intentional and 
misleading use of privileged or protected communications or 
information. An inadvertent disclosure does not operate as a waiver if 
the holder took reasonable steps to prevent such a disclosure and 
employed reasonably prompt measures to retrieve the mistakenly 
disclosed communications or information.
  If there is a privileged or protected disclosure at the Federal 
level, then State courts must honor the new rule in subsequent State 
proceedings. If there is a disclosure in a State proceeding, then 
admissibility in a subsequent Federal proceeding is determined by the 
law that is most protective against a waiver. A Federal Court order 
that a disclosure does not constitute a waiver is enforceable in any 
Federal or State proceeding.
  Finally, Mr. Speaker, parties in a Federal proceeding can enter into 
a confidentiality agreement providing for mutual protection against 
waiver in that proceeding.
  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. S. 2450 does just that by 
providing a predictable standard to govern waivers of privileged 
information. The legislation improves the efficiency and the discovery 
process, while it still promotes accountability. It alters neither 
Federal nor State law on whether the attorney-client privilege or the 
work product doctrine protects specific information. The bill only 
modifies the consequences of an inadvertent disclosure once a privilege 
exists.
  The process devoted to the development of new Federal Rule of 
Evidence 502 by the Judicial Conference was extensive. The Senate has 
reviewed the

[[Page 18018]]

measure and approved it by unanimous consent with an accompanying 
committee report. The House Judiciary Committee spent months informally 
reviewing S. 2450, a process that included intense discussions with 
representatives of the judiciary and a Fordham Law School professor who 
assisted in the drafting of the rule.
  Now, Mr. Speaker, it is time to act. I urge my colleagues to support 
S. 2450.
  Mr. Speaker, I yield back the balance of my time.
  Ms. JACKSON-LEE of Texas. Mr. Speaker, I thank the gentleman for his 
very kind remarks about the bipartisan negotiations at the level of the 
House Judiciary Committee. I was delighted again to also have the 
companion bill, H.R. 6610, on that legislation.
  I do want to add a particular point of contention dealing with 
subdivision E, party agreements. This subdivision simply makes clear 
that while parties to a case may agree among themselves regarding the 
effect of disclosures between each other in a Federal proceeding, it is 
not binding on others unless it is incorporated into a court order.
  I think this is very important, and it was certainly a point that 
others, various counsel raised, because of the impact that it might 
have, the far-reaching impact it might have. This particular 
subdivision does not confer any authority on a court to enter any order 
regarding the effect of the disclosures. That authority must be found 
in subdivision D or elsewhere. So we see that this rule has been 
meticulously refined in order to ensure that the sanctity of the 
attorney-client privilege is preserved.
  This is good legislation, and I would ask my colleagues to support 
it.
  Mr. Speaker, I yield back my time, asking for support of this 
legislation.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Texas (Ms. Jackson-Lee) that the House suspend the 
rules and pass the Senate bill, S. 2450.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the Senate bill was passed.
  A motion to reconsider was laid on the table.

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