FEDERAL JUDGES GUIDE TO DISCOVERY. Edition 2.0. A Publication of the Electronic Discovery Institute

Transcription

1 The FEDERAL JUDGES GUIDE TO DISCOVERY Edition 2.0 A Publication of the Electronic Discovery Institute

2 THE FEDERAL JUDGES GUIDE TO DISCOVERY EDITION 2.0

3 THE FEDERAL JUDGES GUIDE TO DISCOVERY Editor in Chief: Robert D. Owen Executive Editor: Patrick Oot Editorial Board: Thomas Y. Allman David M. Greenwald David J. Kessler Shannon Capone Kirk Ashish Prasad Jonathan M. Redgrave Daniel L. Regard Herbert Roitblat John Rosenthal Ronni Solomon Martin Tully Copyright 2015 by the Electronic Discovery Institute Published by the Electronic Discovery Institute P.O. Box Washington, DC All rights reserved. No part of this publication may be reproduced or used in any form or by any means graphic, electronic, or mechanical, including photocopying, recording, taping, or information storage and retrieval systems without written permission of publisher.

4 THE FEDERAL JUDGES GUIDE TO DISCOVERY (2015) This guide to discovery in the federal courts is published by the Electronic Discovery Institute. It addresses the amended rules effective December 1, It is being distributed free of charge to all active district and magistrate judges in the United States as part of EDI s nonprofit mission. Our goal in this Guide is to provide a basic introduction from a sophisticated perspective to the topics covered, to equip the jurist and the practitioner alike with a quick overview and to point to other resources. EDI plans future editions to add additional topics and to keep the Guide up to date. EDI s officers and directors extend their deepest gratitude to the outstanding judges and practitioners who contributed chapters. They are, in alphabetical order: Prof. Thomas Y. Allman Hon. John Facciola Hon. James C. Francis David M. Greenwald David J. Kessler Shannon Capone Kirk Patrick Oot (executive editor and EDI co-founder) Robert D. Owen (editor-in-chief and EDI President) Ashish Prasad Jonathan Redgrave (with Victoria Redgrave, Karen Hourigan, Monica McCarroll and France Jaffe) Daniel L. Regard Herbert Roitblat John Rosenthal (with Christopher Costello) Ronni Solomon (with Andrew Walcoff) Martin Tully (with Lauren Cooper) (The authors professional affiliations are listed at the beginning of their respective chapters.) EDI welcomes suggestions from any and all as to how this Guide can be improved. Please direct your suggestions to Bob Owen (robert@lawinstitute.org) or Patrick Oot (patrick@lawinstitute.org). Electronic Discovery Institute The author(s) of each chapter retain nonexclusive copyrights to their work.

5 Chapter 7 PRIVILEGE REVIEW AND LOGGING By David M. Greenwald 86 The cost of reviewing for attorney-client privileged and work product protected material, logging withheld documents, and resolving disputes relating to privilege can be enormous and, in many matters, disproportionate to the importance of the issues at stake, the amount in controversy, the resources of the parties, and the likely benefit with respect to reaching the merits of the matter. Costs in a moderate sized matter can exceed hundreds of thousands of dollars. In large, complex cases, costs regularly exceed a million dollars, and often consume multiples of that figure. Document-by-document logging, in particular, often consumes substantial resources that far exceed the benefit of the exercise. Some cost is inevitable. However, there are several ways in federal proceedings that parties, with the assistance of the court, can streamline the review and logging process and avoid unnecessary disputes. Where a requesting party balks at agreeing to sensible, cost saving measures proposed by a producing party, the court can prevent waste and delay by adopting those proposals over the requesting party s objections. DRIVERS OF COST The cost of reviewing, logging and resolving disputes regarding privilege is driven by several factors, including fear and lack of knowledge. Fear: Under the common law, disclosure of the substance of an attorney-client privileged communication, including unexcused inadvertent disclosure, could lead to waiver of the subject matter of the communication. Subject matter might be defined broadly or narrowly by a court after a disclosure occurs, making it difficult at the review stage to assess the scope of risk of inadvertent or intentional disclosure of privileged information. Under the common law approach, an attorney may fear that the inadvertent production of a handful of privileged s could result in broad subject matter waiver over a large portion of a case or investigation. As a result, counsel may advise a client to engage in labor intensive, manual review of all or most potentially responsive documents to prevent inadvertent production of any privileged material. 86 David Greenwald is a Partner of Jenner & Block LLP. The views expressed by the author are his own and do not necessarily represent the views of the firm or any of its clients

6 Lack of Knowledge: As any judge who has reviewed documents in camera can attest, lawyers may not understand the law of privilege and work product, and do not consider the specific substantive law of privilege that will apply in a particular case. Privilege issues require fact-specific analysis under the particular substantive and procedural laws that apply in a particular matter. In addition, lawyers often are not sufficiently knowledgeable about the federal rules that can enable parties to mitigate risk and cost, specifically Fed. R. Evid. 502, and Fed. R. Civ. P. 16 and 26. Lawyers also may not be aware of techniques, such as using alternatives to document-by-document privilege logs, that can streamline a process that is rarely proportionate to the needs of a case. 87 Rule 502 As reflected in the Rulemaking and Legislative history of Rule 502, and in the Advisory Committee s Notes to the rule, Rule 502 is designed to reduce the cost of discovery by limiting the scope of waiver and eliminating the fear of broad subject matter waiver in the event of an inadvertent disclosure. Echoing the United States Supreme Court s decision in Upjohn, 88 the Advisory Committee Notes provide: 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 attorneyclient privilege or work-product protection. Rule 502 will be most successful if parties use it and the courts apply it consistent with its purpose. 89 Rule 502(a) Rule 502(a) ameliorates the fear of broad subject matter waiver in two ways. First, Rule 502(a) limits subject matter waiver to voluntary disclosures and eliminates subject matter waiver for inadvertent disclosures. 90 Second, Rule 502(a) reserves subject 87 The reader may wish to refer to David M. Greenwald, Michele L. Slachetka, Protecting Confidential Legal Information: A Handbook for Analyzing Issues Under the Attorney-Client Privilege and the Work Product Doctrine, (Jenner & Block LLP 2015) available at (last visited on September 29, 2015); or David M. Greenwald, Robert R. Stauffer, Erin R. Schrantz, Testimonial Privileges, (West 2015) ( Testimonial Privileges ). 88 But if the purpose of the attorney-client privilege is to be served, the attorney and client must be able to predict with some degree of certainty whether particular discussions will be protected. An uncertain privilege, or one which purports to be certain but results in widely varying applications by the courts, is little better than no privilege at all. Upjohn Co. v. United States, 449 U.S. 383, 398 (1981). 89 Judge Paul Grimm has noted with respect to Rule 502: to date it has not lived up to its promise....because parties have overlooked it and courts have not construed it consistently with its purpose.... Hon. P. Grimm, Lisa Urwit Bergsttrom & Matthew P. Kraeter; Federal Rule of Evidence 502: Has it Lived Up to its Potential?, Richmond Journal of Law and Technology, Vol. XVII, Issue 3, (Spring 2011). 90 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 (footnote continued on following page)

7 matter waiver to only those rare and unusual circumstances in which fairness requires further disclosure. 91 The legislative history supports the position that there should be no subject matter waiver unless a disclosure is voluntary and a party s strategic use of the disclosed privileged or protected information in litigation 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. 92 If courts construe Rule 502(a) consistently, and find subject matter waiver only in rare and unusual circumstances, parties and their lawyers will be able to conduct a cost-benefit analysis regarding the resources that they will spend to screen for privilege, and whether to produce arguably privileged but otherwise insignificant documents rather than spend significant time and money fighting the issue in response to motions to compel. As discussed with respect to Rule 502(d) below, parties and the courts can further decrease the risk of uncertainty regarding waiver by utilizing Rule 502(d) orders that not only address the claw back process for inadvertently produced material, but that are tailored to the needs of a specific case. Inadvertent Production: Rule 502(d) Orders and Rule 502(b) Prior to the adoption of Rule 502, the courts applied one of three approaches to determining whether a party who produced privileged material would be allowed to claw it back from the receiving party. The predominant approach was the middle, multifactor test, in which courts considered 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 in deciding whether inadvertent disclosure resulted in waiver. 93 In the absence of a Rule 502(d) order that addresses the issue, Rule 502(b) provides a uniform statutory approach to the issue of inadvertent production and waiver, eliminating the three common-law approaches in determining whether there has been an (footnote continued from previous page) 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. 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. Adv. Comm. Note, FRE 502(a) (internal citations omitted). 91 In re General Motors LLC Ignition Switch Litig., 80 F.Supp.3d 521, (S.D.N.Y. 2015). 92 Statement of Congressional Intent, 154 Cong. Rec. H , September 8, 2008, 2008 WL ; 23 Wright & Graham, Federal Practice and Procedure, 5438 at (Supp. 2011). 93 Adv. Comm. Notes, FRE 502(b)

8 inadvertent waiver. Rule 502(b) adopts a three-part test to determine whether an inadvertent disclosure results in waiver: (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). Although uniform, the default provisions in Rule 502(b) can result in needlessly expensive and time consuming disputes in which the parties contest whether a disclosure was in fact inadvertent, whether reasonable steps were in fact taken prior to production, and whether the disclosing party in fact promptly took reasonable steps to rectify the error. These disputes often involve detailed evidentiary submissions in support of one or more of the three fact questions posed by Rule 502(b), often through declarations of one or more of the following: (i) the service provider that processed, hosted, and prepared data for production; (ii) litigation counsel involved in the document review; or (iii) litigation counsel who learned of the error and took steps to rectify it. Such proceedings by their nature involve counsel and their consultants regarding work and communications that were made in anticipation of litigation and for trial. These proceedings also pit a producing lawyer or party, who has admittedly committed error, against a requesting party who argues that, notwithstanding testimony to the contrary, the lawyer or party did intend to produce the document, or that the error made was so egregious that claw back relief should not be made available by the court. A Rule 502(d) order is designed to allow the parties and the court to defeat the default operation of Rule 502(b) in order to reduce costs and expedite discovery. 94 Rule 502(d) gives a federal court broad power to enter an order ruling that the parties disclosures in connection with the litigation do not result in waiver, in which event the disclosure is not a waiver in any other federal or state proceeding. Ideally entered as part of a Rule 26(f) discovery plan and scheduling order following a Rule 16(b) conference, or in a protective order, a Rule 502(d) order at its 94 See Rajala v. McGuire Woods, LLP, No CM-DJW, 2013 WL (D. Kan. Jan. 3, 2013); Brookfield Asset Mgmt., Inc. v. AIG Fin. Prods. Corp., 09 CIV PGG FM, 2013 WL (S.D.N.Y. Jan. 7, 2013) (holding that party had the right to claw back the [documents], no matter what the circumstances giving rise to their production were because the parties at [the Court s] urging had entered into a Rule 502(d) [order] that contained no limitations. )

9 most basic may provide that production of privileged information during the course of the litigation will not waive privilege and that a party may claw back disclosed privileged information upon written notice to the requesting party. 95 This type of order avoids incorporating the factual hurdles of Rule 502(b) by not using the words inadvertent, reasonable, or prompt. Where the parties or the court wish to add detail to the Rule 502(d) order, the order should avoid creating fact questions that could lead to protracted disputes. For example, if a Rule 502(d) order allows a party to claw back privileged information where the production was inadvertent, the order may use a standard for proving inadvertence that can be met straightforwardly. For example: The inadvertent production of privileged information shall not waive the attorney-client privilege or the work product protection, provided that the producing party makes a good faith representation, in writing to the receiving party, that such production was inadvertent or mistaken. Parties likely would be reluctant to call into question the good faith of the producing party unless there were truly exceptional circumstances. There are a number of model Rule 502(d) orders available, each of which has its own strengths and potential weaknesses. 96 Note: There is no requirement that the parties agree to have a Rule 502(d) order entered. The court has the power to enter a Rule 502(d) order where parties are unable or unwilling to suggest or agree to the entry of such an order. The Advisory Committee Notes state: [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. 97 Where one party proposes sensible, cost saving measures that do not adversely affect the rights of the objecting party, the court can prevent waste and delay by entering an order over the objection of the requesting party. 95 See Peck, M.J., Rule 502(d) Order, available at judge_info&id=928 (last accessed September 14, 2015). 96 See, e.g., Seventh Circuit Pilot Program, [Proposed] Case Management Order No. 2, available at (last visited on September 14, 2015); Symposium Participants, Model Draft of a Rule 502(d) Order, 81 Fordham L. Rev (2013), available at (last visited September 14, 2015). 97 See Rajala v. McGuire Woods, CV No CM-DJW, 2010 WL , at *4-5 (D. Kan. 2010) (the court has the authority to enter a claw back provision [even when] not all the parties agreed to one. )

10 Using Rule 502(d) Orders to Address Specific Issues During the Course of a Matter Rule 502(d) orders need not be limited to the issue of inadvertent disclosure. The broad powers provided by the rule enable the parties, with the court s assistance, to work around otherwise difficult privilege issues, and move a matter through discovery and toward the merits. For example, there may be a category of documents that the producing party has properly withheld, but which the requesting party disputes are privileged. The producing party may consider the documents withheld to be insignificant in themselves, but does not want to take the chance that intentional disclosure will be deemed to result in broader subject matter waiver in the pending matter or in parallel or subsequent litigation with other parties. In this case, the court may enter a Rule 502(d) order, ruling that disclosure of these documents in the proceeding before the court does not result in waiver as to any undisclosed privileged information relating to the same subject matter. That ruling is binding in parallel and subsequent state and federal proceedings, even if the parties to those proceedings are not before the court. There may also be situations in which a producing party may wish to show a portion of withheld documents to the requesting party in a quick peek to demonstrate either that the documents are properly withheld, or that they are not relevant to the matter and need not be the subject of lengthy dispute. A Rule 502(d) order allowing a quick peek without waiver in these circumstances could enable the parties to avoid unnecessary disputes, while assuring the producing party that waiver will not be the price of defusing the dispute. Rule 502(d) Does Not Provide For Compelled Quick Peek or Make Available Productions Although Rule 502(b) provides broad powers to a federal court, it does not give the court the power to order parties to produce privileged information where there has been no finding of waiver. A court may enter a Rule 502(d) order allowing the parties to engage in a quick peek process, but the court cannot order that process over the objection of the privilege holder. 98 At least one court s standard Rule 502(d) order expressly states that the order does not preclude a party s right to review for privilege See The Sedona Conference, Commentary on Protection of Privileged ESI, 18 (Nov. 2014) (Public Comment Version). 99 Nothing herein is intended to or shall serve to limit a party s right to conduct a review of documents, ESI or information (including metadata) for relevance, responsiveness, and/or segregation of privileged and/or protected information before production. Peck, M.J., Rule 502(d) Order

11 Privilege Logs It is black letter law that the party asserting the attorney-privilege or work product protection has the burden to demonstrate the elements of privilege or work product. Rule 26(b)(5)(A) provides that when a party withholds information on grounds of privilege or work product, the party must (i) expressly make the claim; and (ii) describe the nature of the documents, communications, or tangible things not produced or disclosed and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim. Many courts have taken the position that this burden may be satisfied only with a detailed, document-by-document privilege log. 100 This approach, however, runs counter to the Advisory Committee Notes that accompanied this provision of Rule 26 in 1993: Details concerning time, persons, general subject matter, etc., may be appropriate if only a few items are withheld, but may be unduly burdensome when voluminous documents are claimed to be privileged or protected, particularly if the items can be described by category. Note: was only beginning to be available in 1993, and the explosion of ESI that motivated the 2006 amendments to Rule 26 had not yet occurred. Even in that ESI pre-history, there was concern that requiring a party to provide detailed information on a document-by-document basis would be unduly burdensome, that is, disproportionate to the benefit of the exercise. An increasing number of courts, particularly where large volumes of ESI are involved, allow the parties to log by category, 101 or otherwise relax log requirements to avoid unnecessary burden and expense. 102 Commentators have urged the bar and the bench to find ways to limit the time and expense devoted to logging, and to avoid protracted disputes relating to logs. 103 As a recent Commentary from The Sedona Conference explains: Cooperation in the area of identifying, logging and dispute resolution surrounding the assertion of privilege with respect to the review of ESI has the potential to reduce the parties risk and costs, while promoting judicial economy Testimonial Privileges, 1:69, fn.8 (collecting cases). 101 Testimonial Privileges, 1:69, fn. 19 (collecting cases). 102 Id., 1:69, fn. 20 (collecting cases). 103 Commentary on Protection of Privileged ESI, at 25-30; Hon. John M. Facciola and Jonathan M. Redgrave, Asserting and Challenging Privilege Claims in Modern Litigation: the Facciola-Redgrave Framework, 4 Fed. Cts. L. Rev. 19 (2009). 104 Commentary on Protection of Privileged ESI, at

12 There are a host of ways in which parties can agree to limit these costs, and the court can assist this effort by incorporating the parties agreed protocols, processes, tools, and technologies into a Rule 502(d) order. 105 In the absence of agreement, the court may adopt reasonable protocols over the objection of a party. Possible approaches include: Exclusion of some custodians from the logging process; Exclusion of documents generated after the date the litigation commenced; Use of objective privilege logs, with more detailed review of a subset of the documents 106 ; Foregoing logging of documents with privilege redactions; Agreeing to a hierarchical privilege or staged review of privileged ESI, including where appropriate seeking the court s guidance on threshold questions of privilege law relevant in a particular case 107 ; Agreeing to a quick peek procedure; Using a categorical approach to identification and logging of privileged ESI Id., citing John Rosenthal and Patrick Oot, Protecting Privilege with Rule 502, Real ediscovery (Winter 2010) at 8 (protective order should address not just inadvertent disclosure but also cost-effective privilege logging processes). 106 Objective logs are generated by a litigation support system and include objective metadata (author, recipient, date created, document title, etc.). The receiving party can designate documents or categories of documents on the objective log that it would like the producing party to describe in more detail on a log. Commentary on Protection of Privileged ESI, at 29. See also Seventh Circuit Pilot Program, [Proposed] Case Management Order No. 2, at There may be issues that, if addressed by the court at an early stage, could prevent late emerging motions to compel that could disrupt the discovery and trial schedule. For example, there may be a question whether the joint defense privilege or common interest doctrine protects communications with a third party; or whether an in-house attorney was acting in a legal or business capacity at some specific point in time. If factually ripe, and brought to the court for ruling early in discovery, a prompt ruling could keep discovery on track, where an adverse privilege ruling coming late in discovery could derail the schedule. 108 In 2014, the New York Commercial Division adopted Rule 11-b in order to reduce the time and cost associated with preparing privilege logs. 22 N.Y.C.R.R (g), Rule 11-b. The rule provides that it is the preference in the Commercial Division for parties to log documents by category, and that when a requesting party refuses to permit a categorical approach, the producing party, upon a showing of good cause, may apply to the court to shift costs incurred by the producing party to prepare the log, including attorneys fees. Rule 11-b(b)(2)

13 THE FEDERAL JUDGES GUIDE TO DISCOVERY EDITOR-IN-CHIEF Robert D. Owen President, The Electronic Discovery Institute Partner, Sutherland Asbill & Brennan LLP EXECUTIVE EDITOR Patrick Oot Co-Founder, The Electronic Discovery Institute Partner, Shook Hardy & Bacon LLP FORWARD BY Hon. John M. Facciola U.S. Magistrate Judge (Ret.) U.S. District Court, District of Columbia Hon. James C. Francis IV U.S. Magistrate Judge U.S. District Court, Southern District of New York EDITORIAL BOARD Thomas Y. Allman Professor, The University of Cincinatti College of Law David M. Greenwald Partner, Jenner & Block LLP David J. Kessler Partner, Norton Rose Fulbright US LLP Shannon Capone Kirk Partner, Ropes & Gray LLP Ashish Prasad Director, The Electronic Discovery Institute Vice President & General Counsel, etera Consulting Jonathan M. Redgrave Parner, Redgrave LLP Daniel L. Regard CEO, idiscovery Solutions Herbert Roitblat Co-Founder, The Electronic Discovery Institute Data Scientist, Proofpoint, Inc. John Rosenthal Partner, Winston & Strawn LLP Ronni Solomon Partner, King & Spalding LLP Martin Tully Data Law Practice Co-Chair, Akerman LLP About the Electronic Discovery Institute Copyright 2015 Founded in November of 2006, The Electronic Discovery Institute ( EDI ) is a registered 501(c)(3) non-profit organization dedicated to education, leadership, service, advocacy and research at the intersection of law and technology. The EDI community comprises corporate counsel, private practitioners, judges, professors of law and science, consultants, technologists and experts. Each year our members gather at the EDI Leadership Summit to learn, teach and collaborate on emerging issues in law and technology - with a focus on discovery, information governance, cybersecurity, litigation and big data management. We are a warm, collegial community united by our interest in these issues and our mutual respect. The Electronic Discovery Institute