Maryland v. Federal Clawback and Privilege Non-Waiver Rules
Sedona Conference’s “Commentary on Protecting Trade Secrets Throughout The Employment Life Cycle”
April 1, 2022Maryland v. Federal Rules on the Scope of Discovery and Proportionality
April 3, 2022I have written about several differences between the Maryland Rules and the Federal Rules of Civil Procedure. See Maryland v. Federal Rule Regarding a Mandatory Conference of the Parties, Maryland v. Federal Summary Judgment Rule, and M. Berman & A. Shelton, “Commentary: With ESI, difference between federal, state rules,” The Daily Record (June 17, 2016); M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020) (Chap. 8, co-authored with Alicia Shelton, Esq.). Maryland is also one of only ten states that have not adopted the ABA’s 2012 “technological competence” rule. See 40th State Adopts a Duty of Technological Competence – Is It a Good Idea?
Maryland’s “clawback” and privilege non-waiver rules do not follow the Federal texts. See M. Berman, “A Comparison of Fed.R.Evid. 502 and Md. Rule 2-402” in M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), Chap. 16.
PROCEDURAL “CLAWBACK” RULES
While the Federal clawback rule, Fed.R.Civ.P. 26(b)(5)(B), does not require notification by a recipient, Maryland Rule 2-402(e)(2) states that: “A party who receives a document, electronically stored information, or other property that the party knows or reasonably should know was inadvertently sent shall promptly notify the sender.” The Committee Note cross-references Md. Rule 19-304.4(b), which contains a parallel ethical requirement.
Federal Rule 26(b)(5)(B) requires that, after notice of a clawback, the recipient must “promptly return, sequester, or destroy the specified information and any copies it has….” The Maryland Rule does not contain that phrase. Rule 2-402(e)(3) states in pertinent part: “A receiving party may not use or disclose the information until the claim is resolved and shall take reasonable steps to retrieve any information the receiving party disclosed before being notified.”
Thus, both rules prohibit further use or disclosure; however, the Federal Rule provides substantial additional protection, i.e., requiring the recipient to return, sequester, or destroy the clawed back information. Both rules provide procedures for challenging a claw back assertion under seal.
The Committee Note to the Maryland Rule states: “Unlike the corresponding federal rule, a party must raise a claim of privilege or protection within a ‘reasonable time.’”
SUBSTANTIVE NON-WAIVER RULES
The non-waiver provision of Fed.R.Evid. 502 differs significantly from Md. Rule 2-402(e)(4).
| Fed.R.Evid. 502 | Md. Rule 2-402(e):
Effect of Inadvertent Disclosure |
| (a) Disclosure Made in a Federal Proceeding or to a Federal Office or Agency; Scope of a Waiver. When the disclosure is made in a federal proceeding or to a federal office or agency and waives the attorney-client privilege or work-product protection, the waiver extends to an undisclosed communication or information in a federal or state proceeding only if: (1) the waiver is intentional; (2) the disclosed and undisclosed communications or information concern the same subject matter; and (3) they ought in fairness to be considered together.
Statement of Congressional Intent: This subdivision does not alter the substantive law regarding when a party’s strategic use in litigation of otherwise privileged information 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. |
None |
| (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). | (e)(4) A disclosure of a communication or information covered by a privilege or protection does not operate as a waiver if the holder of the privilege or work product protection (A) made the disclosure inadvertently, (B) took reasonable precautions to prevent disclosure, and (C) took reasonably prompt measures to rectify the error once the holder knew or should have known of the disclosure. |
| (d) Controlling Effect of a Court Order. A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court–in which event the disclosure is also not a waiver in any other federal or state proceeding.
(e) Controlling Effect of a Party Agreement. An agreement on the effect of disclosure in a federal proceeding is binding only on the parties to the agreement, unless it is incorporated into a court order. |
(e)(5) Unless incorporated into a court order, an agreement as to the effect of disclosure of a communication or information covered by a privilege or protection is binding on the parties to the agreement but not on other persons. If the agreement is incorporated into a court order, the order governs all persons or entities, whether or not they are or were parties.
Committee Note: Subsection (e)(5) provides that an agreement of the parties governing confidentiality of disclosures is enforceable against nonparties only if it is incorporated in a court order, but there can be no assurance that this enforceability will be recognized by courts other than those of this State. There is some dispute as to whether a confidentiality order entered in one case can bind nonparties from asserting waiver by disclosure in separate litigation. |
| (c) Disclosure Made in a State Proceeding. When the disclosure is made in a state proceeding and is not the subject of a state-court order concerning waiver, the disclosure does not operate as a waiver in a federal proceeding if the disclosure:
(1) would not be a waiver under this rule if it had been made in a federal proceeding; or (2) is not a waiver under the law of the state where the disclosure occurred. |
None |
| (f) Controlling Effect of This Rule. Notwithstanding Rules 101 and 1101, this rule applies to state proceedings and to federal court-annexed and federal court-mandated arbitration proceedings, in the circumstances set out in the rule. And notwithstanding Rule 501, this rule applies even if state law provides the rule of decision. | None |
| (g) Definitions. In this rule: (1) “attorney-client privilege” means the protection that applicable law provides for confidential attorney-client communications; and (2) “work-product protection” means the protection that applicable law provides for tangible material (or its intangible equivalent) prepared in anticipation of litigation or for trial.
Committee Note: The rule’s coverage is limited to attorney-client privilege and work product. The operation of waiver by disclosure, as applied to other evidentiary privileges, remains a question of federal common law. Nor does the rule purport to apply to the Fifth Amendment privilege against compelled self-incrimination.
State of Congressional Intent: In general, these questions are answered by keeping in mind the limited though important purpose and focus of the rule. The rule addresses only the effect of disclosure, under specified circumstances, of a communication that is otherwise protected by attorney-client privilege, or of information that is protected by work-product protection, on whether the disclosure itself operates as a waiver of the privilege or protection for purposes of admissibility of evidence in a federal or state judicial or administrative proceeding. |
As noted above, subsection (e)(4) applies to “a communication or information covered by a privilege or protection….”
The Rule does not contain the words “attorney-client” before “privilege” or “work-product” before “doctrine.”
For a more complete comparison, please see M. Berman, “A Comparison of Fed.R.Evid. 502 and Md. Rule 2-402” in M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), Chap. 16 at pages 382-86 (discussing “legislative” history of the Md. Rule). The 158th Report of the Rules Committee referred to “privilege” or “work product protection.” The Minutes of the October 13, 2006, “Rules Committee” contain a discussion that would limit the application to the attorney-client privilege and “conform to federal practice….” In that event, as to other privileges and trade secrets, see Chapter 19, “The Continuing Utility of the Hopson-Immunized Clawback,” in the same book. |
