Today, privileged documents (ranging from emails to client memoranda to retainer agreements) are inadvertently produced to opposing counsel during the discovery process. At least in theory, the Federal Rules of Evidence do not automatically deem the privilege to have been lost by such inadvertent disclosure.
However, as a practical matter, recent case law, including a recent decision handed down by a federal district court in the Southern District of California, demonstrates that litigators must remain vigilant if they wish to avoid being deemed to have waived the privilege in these instances.
Pursuant to FRE 502(b), a party that discloses privileged information may avoid waiver if (1) the disclosure of the protected document was inadvertent; (2) the disclosing party took reasonable steps to prevent disclosure; and (3) the disclosing party promptly took reasonable steps to rectify the error of its inadvertent disclosure. Fed. R. Evid. 502(b). As recent cases have demonstrated, it is this third prong that is all-important and critical to a court’s determination as to whether a finding of waiver is appropriate.
In Orthopaedic Hospital v DJO Global, Inc., 2020 U.S. Dist. LEXIS 163643, 2020 WL 5363307 (S.D. Cal), a federal district court ruled that defense counsel had failed to satisfy the requirements of FRE 502(b). There, plaintiff’s counsel questioned a defense witness, without objection, about a privileged letter (drafted by the defendant’s patent lawyer) that had been inadvertently produced.
After the deposition, plaintiff’s counsel sent defense counsel a letter seeking the production of further privileged documents on the basis that defense counsel had waived the privilege as to all documents on the same subject. In response, defense counsel for the first time raised the privilege and clawed back the inadvertently produced attorney letter.
Even though only a few hours had passed between the time of the deposition and the defense counsel’s clawback request, the court still found that defense counsel had failed to promptly take steps to rectify his mistake, as required under FRE 502(b).
The court did not institute a bright line rule requiring a disclosing party’s attorney to object immediately whenever (inadvertently produced) privileged information is introduced by the other side in a deposition. But, the window of opportunity to successfully assert a privilege objection may literally be only a matter of minutes, depending on the facts and circumstances of the case. See, Luna Gaming — San Diego, LLC v. Dorsey & Whitney, LLP, 2010 U.S. Dist. LEXIS 3188, 2010 WL 275083, (“But under both state and federal law, if a privileged document is used at a deposition, and the privilege holder fails to object immediately, the privilege is waived.”)
In Orthopaedic Hospital, the fact that the testimony regarding the privileged information spanned nearly four minutes without any objection was enough to render the privilege waived. Thus, counsel defending depositions must always be on the lookout for such inadvertently produced privileged documents, and stand ready to make a specific privilege objection and claw the document back.
It is noteworthy, as we are still in the shadow of the pandemic, that the court, in Orthopaedic Hospital, had no sympathy for the defense counsel’s contention that because the deposition took place “remotely,” it made it more difficult for him to realize that the document was privileged and an inadvertent disclosure had taken place. In the wake of decisions like Orthopaedic Hospital, once the receiving party’s counsel takes a further step based on its use of the privileged document without a specific privilege objection (as the plaintiff’s counsel did in Orthopaedic Hospital when he sought additional documents on the theory that the use of the inadvertently produced privileged document, without objection, resulted in a broader subject matter waiver), this further action by the receiving party’s counsel will often act to shut the door on the disclosing party’s ability to invoke the protection of FRE 502(b) and may result in a broader waiver of the privilege.