Clawing Your Way to the Top in the Age of Computer-Assisted Review

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Butler Snow LLP

Have you ever tried to personally review 15,000,000 pages of electronic documents for privilege and relevance?  There comes a time in the discovery process when manual, human review of documents is not only inefficient, but a practical impossibility.  The management of large volumes of electronically stored information (ESI), including emails with attachments and families, Word documents, PDF’s, Excel spreadsheets, PowerPoints, photos, and texts, has forced lawyers and law firms to implement technology-assisted review (TAR) or computer-assisted review (CAR) protocols in lieu of the traditional document review process.

The benefits of TAR and CAR review are countless, but there are unavoidable downsides to an objective review process that lacks human intuition and judgment.  Stated simply, the problem is that TAR and CAR are not perfect and there are still scenarios in which privileged information can be missed and inadvertently produced to opposing counsel.

With this backdrop, the issue of clawing back inadvertently-produced privileged or sensitive information has emerged at the top of most litigators’ list of worries.  Under ordinary circumstances, claw-back questions are governed by Fed. R. Evid. 502(b).  In order to show that a disclosure does not constitute a waiver of attorney-client privilege under Rule 502(b), the party who made the disclosure must demonstrate: (1) the disclosure was inadvertent; (2) the holder of the privilege took reasonable steps to prevent disclosure; and (3) the holder of the privilege took reasonable steps to rectify the error. But the Rule 502(b) matrix creates uncertainties that are ripe for argument, including what constitutes inadvertence, reasonableness, and reasonable measures to cure the disclosure problem.  The only certainty under this matrix is that a claw-back request can easily become time-intensive and expensive.

The uncertainties and unpleasantness of a Rule 502(b) dispute can be avoided, however, with the use of a Rule 502(d) Order (“502(d) Order”). Rule 502(d) provides that “[a] federal court may order that the privilege or protection is not waived by disclosure connected with litigation pending before the court – in which event the disclosure is also not a waiver in any other federal or state proceeding.”  In other words, Rule 502(d) gives the Court the authority to issue an order declaring that an inadvertent disclosure of documents does not constitute a waiver of privilege.  The elegance of a 502(d) Order is that it can peremptorily make such a proclamation and altogether eliminate the Rule 502(b) inquiry from a case.

502(d) Orders are not a novel concept.  Case law research reveals that 502(d) Orders have been employed across the county, particularly in United States District Courts in New York, West Virginia, Florida, and South Carolina since as early as 2012. In fact, the Advisory Committee Notes for Rule 502(d) state: “The rule provides a party with a predictable protection from a court order – predictability that is needed to allow the party to plan in advance to limit the prohibitive costs of privilege and work product review and retention.”  The authors’ experience with the District Court in South Carolina confirms that courts generally react favorably to such an approach.

There are a few practices that will increase the likelihood of a court entering a 502(d) Order.  First, it is recommended that the parties confer and submit a proposed 502(d) Order jointly or by consent.  It is usually an easy sell to opposing counsel because the protections from the 502(d) Order are advantageous to all parties who produce documents in the litigation.  Second, it is recommended that the 502(d) Order be submitted as a separate and freestanding document from the consent protective order.  While there is nothing to prevent the inclusion of Rule 502(d) protections within a protective order, utilizing a separate order helps to identify and highlight the preemptory effect of the order.  Finally, while there is no “magic language” required in a 502(d) Order, it is recommended that counsel include sufficient details to address handling of a claw-back dispute and to ensure efficient dispute resolution under the order.  As such, businesses and individuals involved in document-intensive litigation should consult with their attorneys toward the beginning of litigation to ensure that an effective and robust 502(d) Order is drafted and submitted to the Court for approval.

The ability to use a 502(d) Order to preempt a prolonged fight over an inadvertent disclosure and the factors listed under 502(b) is an invaluable resource to lawyers, their clients, and the judicial system. The practice increases judicial efficiency and provides an added layer of protection that is becoming ever more important with the evolution of ESI. In light of the complexities of modern discovery and ESI management, innovative litigators across all jurisdictions should employ 502(d) Orders to protect themselves and their clients from the ill-effects of protracted claw-back proceedings.  Don’t let complacency or prior good fortune distract you; get on board with 502(d) Orders before you inadvertently disclose a privileged document and it is too late.

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