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Federal Rule of Evidence 502 governs the treatment of inadvertent disclosures of privileged attorney-client communications or work-product materials. While Rule 502 is an evidence rule, the cases interpreting and applying it focus on its impact on the scope of discovery. Enacted by Congress in 2008, it was designed to address the growing risks of inadvertent disclosure in the era of e-discovery. The rule acknowledges the practical challenges of privilege review and aims to reduce the associated costs and uncertainties.
In the January 30, 2025 edition of The Legal Intelligencer, Kelly Lavelle writes, “The Importance of Federal Rule of Evidence 502 and Its Impact on Privilege.“
Federal Rule of Evidence 502 governs the treatment of inadvertent disclosures of privileged attorney-client communications or work-product materials. While Rule 502 is an evidence rule, the cases interpreting and applying it focus on its impact on the scope of discovery. Enacted by Congress in 2008, it was designed to address the growing risks of inadvertent disclosure in the era of e-discovery. The rule acknowledges the practical challenges of privilege review and aims to reduce the associated costs and uncertainties. The comments to Rule 502 highlight the value of confidentiality orders in limiting costs of privilege review, especially in cases involving e-discovery.
Subsection (a) of the rule addresses intentional disclosures, while subsection (b) governs inadvertent disclosures. Specifically, Rule 502(b) establishes the default framework for determining whether an inadvertent disclosure results in a waiver of privilege. Under this rule, privilege is preserved if three conditions are met: the disclosure was inadvertent; the producing party took “reasonable steps” to prevent the disclosure; and upon discovery of the disclosure, the producing party promptly took reasonable steps to rectify the error, including compliance with Federal Rule of Civil Procedure 26(b)(5)(B).
Importantly, Rule 502(b) does not require a responding party to conduct a post-production privilege review to determine whether any protected communication or information was inadvertently disclosed. However, the rule does direct a responding party to address any “obvious indications” that a protected communication or information may have been inadvertently produced. The challenge arises from the fact that courts often apply the reasonableness standard differently, depending on the interpretation of what constitutes “reasonable steps.” Because of the inconsistency, parties can never be completely certain that any given privilege review procedure will be reasonable.
Rule 502(d) provides certainty. It offers a more predictable alternative to the default framework by allowing courts to issue orders that preclude privilege waivers, regardless of the care taken during document review. Specifically, Rule 502(d) provides that a federal court may order that the privilege or protection is not waived by disclosure related to the pending litigation, and that disclosure is also not a waiver in any other federal or state proceeding. This broad application ensures a consistent approach to preserving privilege of the communication or information.
There are several additional key benefits that come with Rule 502(d). In addition to preventing waiver, parties can incorporate into the order a detailed agreement specifying its scope and effect on the litigation, offering a more tailored and comprehensive understanding of the order’s implications. The order also imposes a strict obligation requiring that privileged documents are returned to the disclosing party regardless of the care taken by the producing party prior to production. Furthermore, the court has the authority to issue a Rule 502(d) order sua sponte, without necessitating explicit agreement from the parties involved.
One area that remains unclear is the effect of a 502(d) order on intentional disclosures. A key case on this issue is Lubrizol v. IBM, 2024 WL 941686 (N.D. Ohio Feb. 8, 2024). In this case, Lubrizol accused IBM of fraud and various torts in the development of an enterprise resource planning software project. Lubrizol later amended its complaint to include allegations of spoliation by IBM, specifically regarding the deletion of electronically stored information from both current and former IBM employees who were integral to the project. IBM sought a court order under Rule 502(d), seeking to disclose certain documents without waiving attorney-client privilege or work product protection. Lubrizol argued that the court lacked authority to enter a Rule 502(d) order that would permit IBM to intentionally (rather than inadvertently) disclose privileged information without constituting a subject matter waiver of all other documents and communications on the same topic.
While the Sedona Conference suggests that a Rule 502(d) order may apply not only to inadvertent waiver but also to intentional disclosure, the court in Lubrizol determined that there was ambiguity surrounding this issue. The court was primarily concerned with the possibility that IBM’s proposed 502(d) order would allow it to disclose documents that support its position while continuing to withhold other less favorable documents. It ultimately held that it lacked the authority to grant such an order for intentional disclosures. The court relied on case law from other jurisdictions that found that Rule 502(d) does not authorize strategic or selective disclosure of some privileged materials for use in litigation while withholding others on the same subject.
Although the court in Lubrizol declined to extend Rule 502(d) to intentional disclosures, this limitation does not diminish the significant advantages the rule offers. Beyond addressing inadvertent disclosures, Rule 502(d) provides a mechanism to reduce the costs and risks associated with privilege review and enables expedited production of documents. That the rule allows parties to disclose privileged materials in one proceeding without waiving privilege in other proceedings, results in more efficient resolution of disputes. A well-drafted Rule 502(d) order can also specify that the “reasonable steps” standard of Rule 502(b) does not apply, proving greater clarity and predictability. Parties may also include optional provisions for clawback procedures or privilege logs to further streamline discovery.
Without a Rule 502(d) order, Rule 502(b) applies by default, leaving parties vulnerable to inconsistent judicial interpretations of the reasonableness standard. In contrast, Rule 502(d) offers a consistent and reliable framework, minimizing disputes and facilitating efficient resolution of privilege-related issues. By enhancing predictability and reducing discovery costs, Rule 502(d) serves as an indispensable tool, particularly in cases involving large volumes of electronically stored information. However, while Rule 502(d) provides critical protection, it is not a substitute for taking reasonable precautions during document review. Even with a 502(d) order, disclosing sensitive materials may still have strategic consequences. Therefore, most parties combine Rule 502(d) protections with other safeguards to mitigate risks.
In practice, seeking a Rule 502(d) order early in the case is crucial, as it provides significant protection against privilege waivers. Lawyers expend considerable effort, and clients incur substantial costs, to avoid the consequences of privilege waivers. The certainty afforded by Rule 502(d) is particularly valuable in the context of e-discovery, where the risk of inadvertent disclosure is exceptionally high. As highlighted in the commentary to the Sedona Conference, a Rule 502(d) order can be used as a “get-out of jail free card” and is deemed so essential that failing to obtain one is “akin to malpractice.”
Reprinted with permission from the January 30, 2025 edition of “The Legal Intelligencer” © 2025 ALM Media Properties, LLC. All rights reserved. Further duplication without permission is prohibited, contact 877-257-3382 or reprints@alm.com.