Basis for Privileged and Protected Information
The U.S. Supreme Court has acknowledged the importance of the attorney-client privilege as “one of the oldest recognized privileges for confidential communications.” Mohawk Indus. v. Carpenter, 558 U.S. 100, 108 (2009) (citing Swidler & Berlin v. United States, 524 U.S. 399, 403 (1998)). The reason behind the privilege is to encourage clients to make “full and frank” disclosures to their counsel. Id.; see also Upjohn Co. v. United States, 449 U.S. 383, 389 (1981). Such disclosures allow counsel to “provide candid advice and effective representation” and also serve “broader public interests in the observance of law and administration of justice.” Mohawk Indus., 558 U.S. at 108.
The Federal Rules of Civil Procedure also recognize the importance of attorney-client privilege, as well as work-product protections, and provide a mechanism for withholding privileged information from discovery in a lawsuit. In particular, Federal Rule of Civil Procedure 26(b)(1) provides specific protection for privileged materials by limiting the scope of discovery to “nonprivileged material.” Similarly, information “prepared in anticipation of litigation or for trial by or for another party or its representative” (what is commonly known as work product) typically is not discoverable. Fed. R. Civ. P. 26(b)(3).
Procedures for Invoking Privilege and Work-Product Protection
Federal Rule of Civil Procedure 26(b)(5) provides the procedural mechanism for withholding privileged material or material that is subject to protection as work product. When information is withheld on either basis, you must (1) expressly make the claim of privilege or work product protection; and (2) describe the nature of the documents, communications, or materials not produced in a manner that will enable the other party to assess the claim without access to information that is privileged or protected.
Invoking this privilege or work-product protection in the context of written discovery requires two steps. First, an objection should be made to a request for information that is privileged or work product by stating what the objection is (e.g., the information is privileged or work product), clarifying whether materials are being withheld based on an objection, and specifying what is being withheld. Fed. R. Civ. P. 34(b)(2)(c). Second, an appropriate disclosure should be made under Federal Rule of Civil Procedure 26(b)(5). Typically, this includes a “privilege log” that provides enough information for the opposing party to understand what is being withheld.
Under other circumstances, such as at a deposition, privilege or work-product protections are invoked by making the appropriate objection.
Intentional Production of Privileged Information or Work Product
There may be situations where a waiver of privilege or work-product protections over certain information is intentional. One example is a noninfringement opinion prepared by counsel in a patent lawsuit. As another example, companies often share certain privileged information in the context of a business transaction (and they may wish to rely on this information in subsequent litigation). In such situations, a question may arise as to the scope of the waiver—in other words, how to ensure that the opposing party’s potential access to related privileged information is as limited as possible.
In some instances, waiver over one document or item of information can extend to other related documents or information. This is sometimes referred to as “subject matter waiver.” However, a waiver of some material extends to other, as yet undisclosed material only in circumstances where (1) the waiver is intentional, (2) the undisclosed material concerns the same subject matter, and (3) the undisclosed material “ought in fairness” to be considered with the disclosed material. Fed. R. Evid. 502(a). Therefore, if the client is considering waiving privilege or work-product protection over a document or piece of information, consideration should be given to whether there are other documents or items within the same subject matter that could be caught up in the waiver. As noted in In re United Mine Workers of America Employee Benefit Plans Litigation, a court “retains broad discretion in deciding the appropriate scope of a waiver.” 159 F.R.D. 307, 309 (D.D.C. 1994).
The concern with selective disclosure of some information in conjunction with a claim of privilege or work-product protection over related information is that it could enable a party to make a “misleading presentation” that is unfair to the other side. Fed. R. Evid. 502(a) (explanatory note). This concern may carry less weight if a party does not intend to rely on the disclosed information. If that is the case, the scope of the subject matter waiver will typically be more limited, or the waiver will not be applicable at all.
Considerations for In-House Counsel
Not all communications are afforded privilege protection. Generally, the company that employs you as in-house counsel is your client. But over what specific types of communications, and with whom, are you permitted to invoke privilege protections?
Courts recognize privilege protections where communications with in-house counsel are related to providing legal advice for the company. However, there are instances where privilege protections may not apply. Merely copying in-house counsel on an email does not automatically make the email a privileged communication. Even if the email pertains to legal advice, sharing the email with an outside third party could destroy privilege. In-house counsel should be mindful of the recipients of communications and work product so as not to waive privilege and should caution others in the company to do the same.
Privilege and work-product protections only apply in the legal context. In-house counsel often can have varying roles in a company. It is important to keep in mind that privilege and work-product protections only apply to actions that in-house counsel take in their capacity as counsel. To the extent that in-house counsel’s role involves giving business advice or making business decisions, the attorney-client privilege and work-product protections may not apply. Though there is no bright-line rule for determining what communications and work product are made in a legal capacity, most courts will look to the “primary purpose” of the communication. See, e.g., United States v. Chevron Corp., 1996 U.S. Dist. LEXIS 4154 (N.D. Cal. Mar. 13, 1996).
Considerations for Outside Counsel
Privilege and work-product protections belong to the client. As an initial matter, outside counsel should keep in mind that protections over privileged information and work product belong to the client. Therefore, outside counsel need authorization from the client to waive privilege. And if the client is a company, outside counsel should make sure that the appropriate person at the company provides such authorization; lower-level employees who do not have decision-making authority, for example, generally cannot waive the protections or authorize outside counsel to do so.
Accidental production does not waive privilege and protections. Much of discovery is conducted via electronically stored information (ESI), which can sometimes amount to hundreds of thousands of documents. Outside counsel are frequently tasked with collecting ESI from a client, reviewing it, and producing relevant and responsive documents. Because the task involves such a voluminous amount of material, mishaps can occur. What happens if privileged documents are inadvertently disclosed to the opposing party within a large document production?
The Federal Rules of Civil Procedure contemplate such a scenario and provide a “clawback” provision for information produced during discovery that is the subject of a claim of privilege or work-product material. Fed. R. Civ. P. 26(b)(5)(B). In order to invoke the clawback, the party making the claim may notify any party that received the information of the privilege claim and the privilege basis. The party that is notified of the inadvertent disclosure
must promptly return, sequester, or destroy the specified information and any copies it has; must not use or disclose the information until the claim is resolved; must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information to the court under seal for a determination of the claim.
Similarly, Federal Rule of Evidence 502(b) provides that inadvertent disclosure of privileged material or work product is not a waiver of protection over that material 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 the clawback protocol in Federal Rule of Civil Procedure 26(b)(5)(B).
In addition to relying on the rules noted above, parties will often have a protective order in place to govern discovery. As counsel, you should consider including an additional provision in your protective order, as appropriate, to allow the recovery of privileged information that is inadvertently produced. In addition to adding another mechanism to address inadvertently disclosed information, a protective order provision also can allow the parties to agree on a clear statement that an inadvertent disclosure of privileged information or work product that is clawed back does not constitute a waiver of any privilege or protection. Including a clawback provision in a protective order can also provide an avenue to avoid explicitly waiver of privilege for inadvertent disclosure of privileged information outside of written discovery, such as at a deposition.
The takeaways from this information are best summed up in a series of practice pointers.
General practice pointers include the following:
- For written discovery in particular, make specific objections in response to discovery requests, and serve a privilege log for withheld documents.
- Consider the scope of waiver if intentionally disclosing and relying on privileged information or work product.
In-house counsel should focus on the following practice pointers:
- Know who in your company is “your client.”
- Advise others in your company to be mindful of sharing communications from the legal department.
- Keep in mind that privilege and work-product protections apply to your communication or work only when you are acting in your capacity as legal counsel.
The two main practice pointers for outside counsel are as follows:
- Know who has authority to waive privilege or work-product protections on behalf of your client.
- If privileged or work-product information is inadvertently disclosed, immediately notify the opposing party to minimize any prejudice and confirm compliance with Federal Rule of Civil Procedure 26(b)(5)(B) and Federal Rule of Evidence 502(b).