Expanding Privilege Protection to Fill the Gaps Left by Fed.R.Evid. 502

Federal Rule of Evidence 502 was passed in 2008 by a unanimous vote in the Senate, overwhelmingly in the House, and signed by President George W. Bush.  Anything with that degree of support has to be good and Rule 502 provides substantial and necessary benefits.

An excellent publication describes the rule in detail.  The Sedona Conference, Commentary on the Effective Use of Federal Rule of Evidence 502(d) Orders, 23 Sedona Conf. J. 1 (forthcoming 2022).

However, large gaps are left by the Rule.  It applies only to the attorney-client privilege and work product doctrine.  It does not apply to any other privilege. Nor can it protect other confidential information, such as trade secrets.

This blog suggests a “work around” to protect other privileges and trade secrets in discovery.

The Sedona Conference has noted that some courts have attempted to extend Rule 502’s reach to “any other privilege.”  Effective Use of Federal Rule of Evidence 502(d) Orders, 23 Sedona Conf. J. at 33-34.  The Sedona Conference has questioned the enforceability of such orders, at least beyond the parties.  Id. at 34.

This leaves a problem that has not been addressed by the rules:

If Fed. R. Evid. 502‘s protections are needed to reduce the cost of review in the attorney-client and work product contexts, there would appear to be an equal need as to other privileges; however, by its express terms, Rule 502 provides no such protection.

M. Berman, “The Continuing Utility of the Hopson-Immunized Clawback” in M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), 416 (Emphasis added).

In short, it may be just as costly and difficult to protect the accountant-client privilege as the attorney-client privilege, or to protect the executive privilege as the work product doctrine; however, Fed.R.Evid. 502 provides no aid in protecting the accountant-client or executive privileges.  Nor can it protect trade secrets from the consequences of inadvertent disclosures.  Stated simply, it was not designed for those tasks.

Rule 502 was enacted in substantial part as the result of flaws in Fed.R.Civ.P 26(b)(5) (clawback) identified by the Honorable Paul W. Grimm in Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228 (D. Md. 2005).  There, Judge Grimm created the “Hopson-Immunized Clawback” a/k/a the “Hopson compliant non-waiver agreement” to provide substantive non-waiver protection before Rule 502 was enacted.  See Berman at 409 n. 1.

At the risk of substantial oversimplification, Hopson suggested that, if a party asked the Court to order production based on a disclosed and reasonable search methodology, there would be no waiver if privileged information slipped through because the Court-ordered disclosure was not voluntary:

Essentially, if the producing party factually demonstrated to the court that compliance with milestone dates, or costs of review on the facts of the case, likely precluded a fully-robust privilege review, the parties could reach a reasonable agreement as to the review to be conducted and submit it to the court. The court could determine reasonableness and, if reasonable, then order production using that methodology. Production would then be compulsory. Because the privilege is waived only by voluntary disclosure, if the compulsory production inadvertently contained privileged information, there would not be a substantive waiver by voluntary disclosure. And, Rule 26(b)(5)(B) would then permit a procedural clawback. Cumbersome but elegant, Hopson provided needed substantive protection.

Berman at 414-15.

That process became known as a “Hopson-Immunized Clawback.”  Of course, as to attorney-client or work product material, Hopson is a mere historical footnote.  Berman at 410.  Rule 502 governs material subject to those protections.

Not so as to other privileges or trade secrets.

Conceptually, there is no reason why a Hopson-Immunized Clawback Agreement could not apply to any other privileged or confidential materials on an appropriate factual predicate. If so applied, the cost-savings of Hopson could be broadly recognized and applied across-the-board [to materials not protected by Fed.R.Evid. 502]….

A Hopson-Immunized Clawback Agreement could provide a solution . The producing party could follow the Hopson process and obtain an order compelling it to produce after a reasonable search that is described and supported in its motion. If an email or other ESI protected by the accountant-client privilege later slipped through the cracks, the order would protect against substantive waiver— the production was not voluntary; it was court-ordered after a finding of reasonable efforts to avoid error. And, Rule 26(b)(5)(B), which applies broadly to all privileged materials, would permit a procedural clawback. Risk would be reduced, money would be saved, and, the proceeding would go more quickly. In short, an expansive application of Hopson would be consistent with Fed. R. Civ. P. 1’s mandate “to secure the just, speedy, and inexpensive determination of every action and proceeding.”

Id. at 416-18.

I admit that this process, applied to other privileges or confidential information, is cumbersome and may not be ideal.[1]  Nevertheless, in some situations it may provide the best available protection.  A litigant seeking to protect trade secrets or the accountant-client privilege may have much at stake.  All of the risks of inadvertent disclosure due to software glitches, human error, and searching frailties remain present for any privileged or confidential information that is beyond the scope of Rule 502.  A Hopson-Immunized Clawback Agreement may fill the gap in an appropriate case .

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[1] Additionally, trade secrets may be substantively protected by the Hopson order, but not procedurally protected by Rule 26(b)(5)(B)’s clawback.