Judge Grimm Authors Tutorial on Federal Rule of Evidence 502

Magistrate Judge Paul W. Grimm, a renowned authority on e-discovery, recently published an article in the Richmond Journal of Law and Technology discussing Federal Rule of Evidence 502. Judge Grimm’s article, “Federal Rule of Evidence 502: Has It Lived Up To Its Potential?,” provides a comprehensive analysis of Rule 502, offers frank criticism of court decisions interpreting the rule and outlines do’s and don’ts for practitioners.

Judge Grimm lauds the goals of Rule 502 but laments that “to date it has not lived up to its promise.” As explained in the Advisory Committee notes, Rule 502 has two main purposes: (1) to resolve disputes regarding inadvertent disclosures and subject matter waiver of privileged information and (2) to address complaints that litigation costs to protect against subject matter waiver have become prohibitive. While the goals of the rule are clear, Judge Grimm notes that they cannot be achieved if the courts do not interpret the rule correctly:

It cannot function as intended if some courts interpret it in a manner that is not in concert with its purposes, because without uniform application, there can be no predictability. Absent this predictability, the rule is robbed of its primary justification.

The article examines each section of Rule 502. Rule 502(a) limits the circumstances under which a subject matter waiver will be found. Subject matter waiver occurs only when: (1) the waiver is intentional; (2) the disclosed and undisclosed communications concern the same subject matter; and (3) the communications ought in fairness be considered together. Judge Grimm first explains that “intentional” means that while no showing of intent to waive the privilege is required, the disclosure must be voluntary (i.e., not inadvertent). Second, he notes that neither Rule 502(a) nor the accompanying Advisory Committee notes make a distinction between fact work product and opinion work product for purposes of subject matter waiver. He explains, however, that courts have declined on fairness grounds to require production of opinion work product under Rule 502(a) and, indeed, emphasizes that fairness is the touchstone of Rule 502(a). Noting “a party cannot have its cake and eat it too,” Judge Grimm explains that the rule was principally designed to prevent a party from producing protected information in a selective manner.

Rule 502(b) addresses inadvertent disclosure and identifies the circumstances in which disclosure of protected information will operate as a waiver. According to the rule, there is no waiver so long as: (1) the disclosure was inadvertent; (2) reasonable steps were taken to prevent disclosure; and (3) prompt, reasonable steps were taken to rectify the error once it was discovered. Judge Grimm notes there has been “a surprising amount of disagreement” among courts regarding the inadvertence requirement, and he criticizes courts for injecting reasonableness into the determination of inadvertence, thereby conflating the first and second requirements. He strongly rejects this approach, commenting that production is either inadvertent or it is not. Judge Grimm also criticizes courts that have demanded extraordinary measures to satisfy the reasonableness requirement of Rule 502(b)(2). In this regard, he explains that the Rule is designed to encourage the use of cost effective computer-based analytical methods to conduct pre-production reviews for privilege and warns that requiring extraordinary measures defeats the purpose:

Rule 502 will never reach its intended goal of reducing the cost of ESI discovery and encouraging the use of computer analytical review methodology if courts demand near-perfection in pre-production precautions.

Judge Grimm concludes his article with a discussion of Rule 502(e), which allows parties to enter into binding agreements regarding the effect of disclosure of protected information. Through such agreements, parties can establish criteria for non-waiver and the claw back of documents that may be different (broader or more restrictive) than the criteria set forth in Rule 502. For example, parties can agree that documents may be clawed back regardless of whether they were intentionally or inadvertently produced and regardless of whether any precautions, reasonable or otherwise, were taken to avoid disclosure. As Judge Grimm points out, however, some courts have refused to fully enforce such agreements. Such decisions thwart the purpose of the rule and present a “sober lesson” for lawyers. Judge Grimm advises lawyers to be careful in preparing agreements under Rule 502(e), warning:

When drafting a non-waiver agreement under Rule 502(e) and Rule 26(b)(5)(B), painstaking care should be taken to ensure that the agreement clearly addresses both pre-production and post-production obligations. Otherwise, the parties run the risk that the court will make its waiver determinations in accordance with Rule 502(b)(2) and (3) instead of the non-waiver agreement.

Judge Grimm concludes his article by noting that Rule 502 is clearly written and should be sufficient to fulfill its purposes of clarifying and limiting the effect of disclosure of protected information and reducing the costs associated with pre-production review. The rule, however, “has not fulfilled it purpose, mainly because parties have overlooked it and courts have not construed it consistently with its purpose . . . .” Perhaps if courts and lawyers carefully digest Judge Grimm’s thorough exposition of the issues involved in application of Rule 502, the rule’s fundamental purpose may yet be fulfilled.