Another Court Assesses Whether a Non-Waiver Court Order Covers the Inadvertent Production of Privileged Documents

February 4, 2009

Under new Federal Rule of Evidence 502, litigants can agree to a court order requiring the return of any privileged documents produced during discovery — regardless of the producing party’s sloppiness. For the time being, however, most courts continue to apply the more traditional type of non-waiver orders, under which the producing party can retrieve privileged documents only if it proves that their production was “inadvertent.”

In Raytheon Co. v. Indigo Systems Corp., No. 4:07-cv-109, 2008 U.S. Dist. LEXIS 104488 (E.D. Tex. Dec. 29, 2008), Raytheon argued that defendants had waived the privilege protecting 23 pages that the defendants had produced to Raytheon just before a deposition. The defendants resisted Raytheon’s argument, pointing to an Agreed Protective Order indicating that an “inadvertent” production of documents did not constitute a waiver. The court relied on various factors in concluding that “the Defendants’ production of the documents at issue was voluntary” — and thus triggered a waiver. Id. at *5. Among other things, the court noted that: two defense lawyers had reviewed the documents (demonstrating that they had made “a conscious decision” to produce them); the documents were labeled as privileged (meaning that “the only possible conclusion is that their production was a calculated decision”); and the 23 pages constituted the entire production on the eve of a deposition (unlike the situation in which litigants exchange millions of pages, when the inadvertent disclosure of privileged communications is “a statistical certainty in a case of this magnitude”). Id. at *6.

As courts and litigants become familiar with Rule 502, they will have to decide whether to continue using this traditional type of order (limiting the non-waiver effect to “inadvertently” produced documents) or take advantage of Rule 502(d)’s provision indicating that “[a] Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court” — whether inadvertent or not.