Why Disclosure Threatens Privilege

Inadvertent Disclosure and Clawback

Why Disclosure Threatens Privilege

The lawyer-client privilege protects a communication only while certain conditions hold, and one of them is that the client preserved the communication's confidentiality after making it.¹ A privileged memo that lands in an adversary's hands strains that condition, so a single misdirected page can put a whole privilege in doubt.

Mistaken disclosures take two common forms. A lawyer sweeps privileged documents into a batch of nonprivileged ones sent to a third party during negotiation or litigation, or a privileged message is misaddressed and reaches someone outside the small circle of "others" with whom privileged information may be shared.² Either way the harm begins at once, because the recipient now knows what the communication says and cannot unlearn it. The legal questions concern what happens next. Must the holder now disclose other privileged communications to other parties? May the recipient, or others who learn of the material, such as government investigators, use it in evidence?³

The mistake need not be the client's. A lawyer acts as the client's agent and can produce a waiver without consulting the client. An intentional disclosure by the lawyer binds the client unless the client expressly forbade it, and an inadvertent disclosure may produce a waiver even though the client would plainly have objected.⁴ A clerical slip in a law office can therefore cost a client a protection the client never agreed to surrender.

Waiver does have a limit. It would be poor policy to let theft or fraud destroy a privilege, and most authority therefore requires that a disclosure at least be voluntary.⁵ Accidental production in discovery sits awkwardly against that requirement. Producing documents is a voluntary act, but the privileged page buried in the production is something no one chose to send.

Volume sharpened the problem. Avoiding disclosure once took relatively little effort. Today an opponent may demand enormous quantities of documents in discovery, and some privileged material is likely to pass through even the most tightly woven screen. Because the consequences of one oversight are potentially staggering, courts had to ask whether traditional waiver doctrine should bend, and their answers diverged.⁶ They fell into three camps:⁷

• Some courts held that privilege is automatically lost once the material is disclosed.
• Some courts held that privilege persists, either because the disclosure was not intentional or because the client never authorized the lawyer to disclose in that way.
• Some courts held that the result depends on the diligence of the party claiming privilege, both in screening out protected material at the outset and in how quickly it detected the error and notified the other side.

Each position carries its own logic and its own cost. Automatic loss is simple to administer, but at modern document volumes it turns one missed page into a staggering penalty, however careful the holder was. Persistence protects the holder who erred, but it asks nothing of the holder who did nothing to prevent the error. The diligence test falls between them, because it ties the outcome to what the holder actually did before and after the mistake. Its cost is that every dispute becomes a factual inquiry into conduct, which is why a later section is devoted to weighing reasonableness.

Federal Rule of Evidence 502 fills this gap by adopting the third position. There is no waiver if the holder took reasonable steps to prevent the disclosure and promptly demanded retrieval, and a waiver found under that formula does not extend to other documents or information on the same subject.⁸ Congress had to enact the rule. The Supreme Court lacks authority to promulgate rules that modify evidentiary privileges without approval by Act of Congress, and Rule 502 probably exceeds the Court's rulemaking power in any event because it displaces state law in some circumstances.⁹

Litigants invoke the rule for the very problem described above. In one discovery dispute, defendants who had recalled privileged documents acknowledged that the plaintiffs returned 116 of them but maintained that the plaintiffs still held at least 18. The defendants argued that Rule 502 was meant to protect against waiver in just these circumstances, when vast amounts of documents change hands in discovery and privileged information is easily overlooked.¹⁰

Prevention begins inside the law office. A lawyer's supervisory responsibility over nonlawyer assistants under Model Rule 5.3 includes giving employees appropriate instructions about the duty to safeguard client information. A lawyer who delegates support work to an outside company must adopt measures to ensure that the contractor understands and follows the same professional standards.¹¹ Whether such measures amount to reasonable steps under Rule 502(b) is the subject of the sections on weighing reasonableness.

Two tools follow, and the sections ahead teach them in turn. Rule 502(b) decides whether the privilege survived the mistake. It asks three cumulative questions: whether the disclosure was inadvertent, whether the holder took reasonable steps to prevent it, and whether the holder promptly took reasonable steps to rectify the error.¹² Federal Rule of Civil Procedure 26(b)(5)(B) governs what happens to the document in the meantime. The producing party notifies the recipient of the claim and its basis. The recipient must then promptly return, sequester, or destroy the information and its copies, must not use or disclose it until the claim is resolved, and must take reasonable steps to retrieve it if it was disclosed before notice. The recipient may also present the information to the court under seal for a ruling, and the producing party must preserve the information until the claim is resolved.¹³