Guarding Against Privilege Waiver in Federal Investigations

11 minute read | September.20.2016

It has been well over a year since Judge Andrew Peck gently excoriated the legal community for underusing the not-so-new privilege waiver protections of Federal Rule of Evidence 502(d). He has fondly referred to it as the “Get Out of Jail Free Card” and offered that “it is akin to malpractice not to get [a Rule 502(d)] order.” It is a powerful hand indeed: a Rule 502(d) order can protect litigants against privilege waiver without having to prove that they have taken reasonable steps to prevent an inadvertent production of privileged documents. While Judge Peck’s remarks may have raised awareness of the rule’s novel and expansive protections for litigants in federal court, Rule 502 as a whole, together with any potential federal agency regulations concerning privilege waiver, offers little peace of mind to parties subject to government investigations.

Buckets of judicial ink have been spilled lamenting the mounting costs of discovery obligations in the dawn of email and big data. To be sure, technological advances in e-discovery, like predictive coding and advanced analytics, have made great strides in alleviating the pain that technology itself has inflicted on litigants. But technology is no panacea for our discovery system’s ills — the solution lies in its marriage with legal innovation.

Yet the latter is still not carrying its weight as lawyers continue to fear the prospects of waiving privilege in the 275,801st document of last March’s production. Without a doubt, Rule 502 (and the 2015 revisions to the Federal Rules of Civil Procedure) has marked a solid start in the right direction: it was enacted in 2008 in part to “respond[] 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.”

While Congress may have enacted Rule 502 to replace the patchwork of federal common law governing privilege waiver in litigation, agencies are left to decide on an individual basis whether, and to what extent, to adopt the rule’s provisions in their own administrative proceedings or investigations.

Even though the Rules Advisory Committee acknowledges that “[t]he 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,” textually, the thrust of Rule 502 governs the existence and reach of privilege waiver only in federal or state proceedings, to the exclusion of agency proceedings or investigations, even in cases where the privileged documents have been produced to a federal office or agency. Put differently, the rule may govern privilege waiver in cases where parties are subject to parallel (or sequential) federal investigation and civil litigation, but it does not address the scope of waiver — or the threshold question of whether there has been a waiver — with respect to the federal agency itself.

Originally published in Law360; reprinted with permission.