Courts Embrace Sua Sponte Imposition of Rule 502 Clawback Provisions

In 2008, Congress adopted Federal Rule of Evidence 502. FRE 502 was designed to promote discovery by providing litigants with a tool to control review costs in large-scale document or electronic evidence productions while avoiding the risk of wholesale subject matter waiver in cases of inadvertent production of privileged materials. Under Rule 502, where privileged material (or other information protected from disclosure) is inadvertently revealed, the disclosing party retains the privilege so long as it took reasonable steps both to prevent the disclosure and to rectify its mistake. Although it is still in its infancy, Rule 502 nonetheless appears to be living up to expectations. Indeed, as two recent federal decisions demonstrate, FRE 502 is not simply a tool available to litigants but rather, it is yet another weapon in a judge’s arsenal, permitting the court to manage discovery and protect privilege, through sua sponte entry of clawback orders.

In Radian Asset Assurance, Inc. v. College of Christian Brothers of New Mexico, District Judge James O. Browning resolved a dispute concerning Christian Brothers College’s production of approximately fifty back up tapes. Confronted with the absence of an agreement by the parties, as well as Radian Asset’s concession that the back up tapes it sought likely contained data that was largely non-responsive, Judge Browning imposed a clawback order pursuant to Rule 502. Judge Browning’s imposition of the Rule 502 order was both an acknowledgement of the Court’s power to manage discovery as well as a consideration of the relative value of requiring Christian Brothers College to engage in an expensive review of voluminous data that, by Radian Asset’s own admission, was likely to be of little value. Recognizing that the costs of an extensive pre-production review were outweighed by the small likelihood of discovering relevant information, Judge Browning used Rule 502 to allow liberal access to discovery while reducing costs to the producing party.

In Rajala v. McGuire Woods, Magistrate Judge David J. Waxse of the District of Kansas reached the same conclusion. Articulating the procedural basis for his sua sponte imposition of a clawback order, Magistrate Judge Waxse reasoned that, while Rule 502 does not expressly authorize a court to enter a clawback order on its own initiative, Federal Rule of Civil Procedure 26 provides a court with broad power to manage discovery, including the entry of an appropriate protective order. Essentially, Judge Waxse reasoned that Rule 26 provides the Court with the power to manage discovery and enter appropriate relief and that a clawback provision under Rule 502 is one of the tools at the court’s disposal to exercise its Rule 26 authority.

As Radian Asset and Rajala demonstrate, Rule 502 not only affords litigants valuable protections, but also provides courts with an additional tool to manage discovery. These opinions vindicate the purpose of Rule 502, namely reducing costs and protecting privilege, and should encourage jurists to utilize Rule 502 on their own initiative when a discovery dispute calls for the imposition of the Rule’s protections.

Stephen J. Finley, Jr. is an Associate on the Gibbons E-Discovery Task Force.
Print