Privileges, Logs & Confidentiality

This is perhaps the most technically vital, and longest, Practice Guide in GoJoSecure. You will spend some time studying this material and watching the accompanying Training Video. It will be time well spent!

Before reading this Practice Guide, read the Firm Policy entitled Privileges & Confidentiality. You will also find the following Training Videos very helpful:

• Privileges, Logs & Confidentiality
• Document Management in SharePoint
• Redacting, Tagging & Annotating
• Logs Lists & Disclosures
• Document Analysis

Expensive, stressful and risk-laden motions practice arises from disputed claims of privilege. Motions to compel and for motions protective orders under Rule 37 often include sanctions—awards of attorneys fees and costs; punitive exclusion testimony and exhibits; and even orders striking claims or defenses may be imposed when a court finds that a party’s position on privilege is unfounded. These sanctions can drastically affect the outcome of a case. Hence, it is vitally important that an attorney understand and apply the law and appropriate tactics when it comes to asserting or defeating claims of privilege.

It might seem that the best way to avoid this problem is to simply produce everything in your client’s possession and avoid challenging your opponents’ claims of privilege, but your ethical obligations to protect your clients’ secrets (Rule 1.6) and your duty of diligence (Rule 1.3), sometimes mistaken for the duty of  “zealous advocacy” do not permit either of these approaches. You must assert privilege when the law permits, and you must follow up to enforce your opponent’s disclosure and discovery obligations when a claim of privilege is improperly asserted.

It is your job to know and apply the law and tactics related to privilege and confidentiality, including how to correctly generate privilege logs and how—and when—to respond when your opponent claims privilege improperly. Surprisingly, many litigators (and some judges) possess only a superficial understanding of these topics.

Test Your Knowledge:

Most lawyers are overconfident of their knowledge on the subject of this Practice Guide, which is why so many of them commit major mistakes in dealing with protected materials. In order to make this point a reality, please test yourself with these questions:

All of these questions, and many more, are answered in this Practice Guide. When we unexpectedly confront you with some or all of these questions in order to test your knowledge, will you be ready? You may think you know the answers to some of the questions above, but it is likely that—if you candidly considered them—you found many that you could not fully and correctly answer. Of course, a thoughtful and accurate answer to each question could be, “I don’t know,” but we only let you get by with that for a short while. Now is the time to fill your knowledge gaps—before you accidentally make yourself and your client vulnerable to potentially irreparable harm.

The material in this Practice Guide can help keep you out of trouble and help you win cases. In this carefully-organized discussion you will find citations to more than 70 cases and dozens of rules, statutes and annotations. You do not have to read them all, but you must read this Practice Guide and know where in this document to find what you need. The Table of Contents will help.

First you must know the applicable rules, and with this knowledge, you must apply the Firm’s standard practices uniformly in all of your cases.

Privilege Versus Work Product

The law recognizes several privileges that protect from disclosure certain kinds of communication. These are listed in our Policy entitled: Privileges & Confidentiality, which you must know and follow, with the help of this Practice Guide.

The attorney-client privilege protects from disclosure to third parties confidential attorney-client communications that relate to legal advice. The purpose of the attorney-client privilege is to promote full and frank communications between attorneys and their clients. The attorney-client privilege’s protections are absolute. An adversary cannot overcome these protections by showing substantial need. However, under certain circumstances, the privilege may be waived.

The work product doctrine protects from disclosure those documents and tangible things that a party or its representative prepares in anticipation of litigation. In some ways, the work product doctrine is broader than the attorney-client privilege because its protections are not limited solely to communications or confidential matters. However, the work product doctrine is also narrower than the attorney-client privilege because its protections extend only to documents and other tangible things that are prepared in anticipation of litigation.

Both of these protections have many exceptions, and both of them may be waived, either intentionally or inadvertently. An adversary may obtain certain kinds of work product by showing “substantial need,” and in some cases, such as in legal malpractice actions, attorney-client communications may be subject to disclosure (typically subject to a protective order) and used as evidence.

You must know the differences between attorney client privilege and the work product doctrine, which are defined by Westlaw as follows:

On the other hand, the Work Product Doctrine is defined as follows:

Further, Fed.R.Evid. 502(g), which relates to inadvertent production and is discussed below, defines the terms this way:

For more about what constitutes work product and the scope of its protection from disclosure, see the annotation: Work Product Doctrine: Protected Information.

Privilege Logs

In order to preserve the protections from disclosure that pertain to materials withheld in disclosures and discovery responses, it is necessary to identify the materials that are being withheld and provide additional information sufficient to permit an opposing party to ascertain whether to challenge the decision to withhold the materials. In federal court, the operative rule is Fed.R.Civ.P. 26(b)(5), which provides as follows:

This rule is essentially mirrored in most states’ rules of civil procedure, though there is some variability from the federal rule in many states. For example, in Colorado, the language of the rule pertaining to inadverent disclosure (subpart (B)) is slightly different. In the box below, the key additional language has been emphasized:

This emphasized additional language makes it necessary for a party receiving inadvertently disclosed material to provide notice within 14 days of receipt of that notice that the claim of privilege is contested, and if this notice is given, the producing party has another 14 days thereafter within which to file the material with the court under seal with for determination of the privilege in order to avoid waiving the claim of privilege. The federal rule has no such time limits, and the Local Rules in federal court do not address this issue. There does not appear to be a time requirement related to the giving of the notice by the producing party, which is logical in view of the reality that the producing party may not recognize the error in producing privileged material for some time.

It is also worth noting that both the state and federal rules refer to “trial preparation materials” rather than “work product,” and the Advisory Committee Notes related to the 1970 Amendment of Fed.R.Civ.P. 25(b)(5) refer to the 1947 decision in Hickman v. Taylor, 329 U.S. 495 (1947), in which trial preparation materials were treated as roughly synonymous.

Scope of Privilege Logs

The 1993 Advisory Committee Notes to the Federal Rules of Civil Procedure explain that the Rules’ requirement to describe withheld documents do not attempt to define what information a party must provide when asserting a privilege or work product protection claim (Advisory Committee Notes on 1993 Amendments to FRCP 26(b)). Significantly, the Advisory Committee Notes acknowledge that specific details concerning the date, recipients, or general subject matter may be appropriate when only a few items are withheld, but may be unduly burdensome if voluminous documents are claimed to be privileged or protected (Advisory Committee Notes on 1993 Amendments to FRCP 26(b)). Courts, however, usually require specificity in nearly all privilege logs.

Privilege Log Contents

According to some commentators, each privilege log description supporting an attorney-client privilege claim should identify:

• The client representative involved in the communication (including the representative’s role).
• The lawyer’s involvement in the communication.
• The subject matter of the communication.
• Why the communication primarily relates to legal advice.

Entries supporting a work product claim should describe:

• The litigation that motivated the document’s creation.
• The connection between the litigation and the documents.
• Whether the document reflects opinion, which deserves a higher level of protection.

Additionally, most courts require specific information about the recipients who received the withheld communication because too wide a circulation can destroy the privilege (see Brown v. American Partners Fed. Credit Union, 645 S.E.2d 117, 123 (N.C. Ct. App. 2007)). Courts may require that the privilege log describe the recipient’s title or position (Berlinger v. Wells Fargo, N.A., 2012 WL 640708, at *2 (M.D.Fla. Feb. 28, 2012)), and/or identify each recipient, even if that recipient was not mentioned in the document itself (Turner v. Moen Steel Erection, Inc., 2006 WL 3392206, at *2 n.1 (D. Neb. Oct. 5, 2006)). Where a litigant is a corporation, this kind of detail may prove very difficult. Only a few cases have allowed litigants to describe the withheld documents by category rather than with specific log entries for each document. One court explained that in some situations particularity may actually impede court review (Judicial Watch, Inc. v. FDA, 449 F.3d 141, 147 (D.C. Cir. 2006)).

Our Logs List in SharePoint contains a menu-driven selection process that allows an attorney to fill in the required information that most courts find sufficient to preserve privilege. With practice, using the materials contained in this Practice Guide, you should be able to correctly fill out this information, and be able to protect yourself against adverse consequences in relation to withheld and redacted documents. More information on this subject is available in the Training Video that accompanies this Practice Guide.

Failure to Timely Produce a Privilege Log

Courts generally take one of three basic approaches in dealing with a litigant’s failure to serve a timely privilege log. These three approaches include:

• Finding that the litigant has missed the chance to carry its burden of showing protection, and therefore must produce all of the documents withheld but not logged. (Granger v. McBride, 2006 WL 6651779, at *3 (N.D. Ind. May 24, 2006)); Texas Brine Co., LLC v. Occidental Chem. Corp., 879 F.3d 1224, 1229 & n.5 (10th Cir. 2018) (“See, e.g., Fed. R. Civ. P. 45 advisory committee’s note to 1991 amendment (“A person claiming a privilege or protection who fails to provide adequate information about the privilege or protection claim to the party seeking the information is subject to an order to show cause why the person should not be held in contempt under subdivision [ (g) ].”); In re Grand Jury Subpoena, 274 F.3d at 576 (“A party that fails to submit a privilege log is deemed to waive the underlying privilege claim.”); Dorf & Stanton Comms., Inc. v. Molson Breweries, 100 F.3d 919, 923 (Fed. Cir. 1996) (affirming the district court’s determination that the attorney-client privilege had been waived because the party asserting the privilege failed to comply with Fed. R. Civ. P. 45(e)(2)(A) and 26(b)(5)).”).
• Allowing the delinquent party more time. (A. Farber & Partners, Inc. v. Garber, 234 F.R.D. 186, 193 (C.D. Cal. 2006)).
• Taking matters into their own hands and reviewing the documents in camera. (Washington v. Thurgood Marshall Academy, 232 F.R.D. 6, 10-11 (D.D.C. 2005)).

In some situations, a court’s order can be complex. One court held that a party had to produce:

• Documents that it had not included on a timely privilege log. They could continue to withhold portions of email strings that had been included in the earlier log, even if the first in the string had not been included in the log.
• Any portions of e-mail strings that had not previously been logged as privileged, even if the most recent e-mail on the string had been included in the timely-delivered log.

Rhoads Indus., 254 F.R.D. at 241-42.

Communications with Non-testifying Experts Need Not Be Logged

Specially employed litigation-related non-testifying experts are generally exempt from discovery (FRCP 26(b)(4)(D)). Therefore, a non-testifying expert’s documents often do not have to be included on a privilege log (see Ludwig v. Pilington N. Am., Inc., 2003 WL 22242224, at *3 (N.D. Ill. Sept. 29, 2003) (analyzing issue under former FRCP 26(b)(4)(D)).

Certain Communications with Testifying Expert May Now be Logged

Traditionally, almost all communications with a party’s testifying expert were discoverable. However, FRCP 26 was amended in 2010 to extend work product protection to communications between a party’s attorney and the party’s testifying expert, unless the communications:

• Relate to compensation for the expert’s study or testimony;
• Identify facts or data that the party’s attorney provided and that the expert considered in forming the opinions to be expressed; or
• Identify assumptions that the party’s attorney provided and that the expert relied on in forming the opinions to be expressed.

See, Fed.R.Civ.P. 26(b)(4)(C).

Effect of Increased Electronic Communications on Privilege Logs

The increasing use of electronic communications complicates privilege log issues. Non-privileged e-mails may be withheld from discovery if they are subsequently forwarded by the client in an e-mail string for the purpose of securing legal advice (see Barton v. Zimmer, Inc., 2008 WL 80647, at *5 (N.D. Ind. Jan. 7, 2008); Muro, 250 F.R.D. at 363). In this situation, the final e-mail string must be logged (see Muro, 250 F.R.D. at 363). However, courts are divided over whether each underlying e-mail in the string must be logged: Some courts do not require a detailed itemization of each underlying e-mail in the e-mail string (see Rhoads Indus., Inc. v. Building Materials Corp. of Am., 254 F.R.D. 238, 241-42 (E.D. Pa. 2008); Muro, 250 F.R.D. at 363). Other courts require a detailed itemization of each underlying e-mail in the e-mail string (see Baxter Healthcare Corp. v. Fresenius Med. Care Holding, Inc., 2008 WL 4547190, at *1 (N.D. Cal. Oct. 10, 2008); In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d at 812; In re Univ. Svc. Fund. Tele. Billing Practices Litig., 232 F.R.D. at 674). Even if the final e-mail string is deemed privileged, the withholding party may still have to produce the individual non-privileged e-mails in the form they existed before being forwarded to counsel (see In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d at 811; Muro, 250 F.R.D. at 363; but see Rhoads Indus., Inc., 254 F.R.D. at 241, n.5).

Additionally, litigants should also be careful that privilege logs reflect accurate information about withheld e-mails because documents printed out on computers may reflect the date of the printing rather than the date they were created. Litigants identifying an e-mail string in a single log entry may use the date indicated in the most recent e-mail even though the most important e-mails may have been written much earlier (see In re Vioxx Prods. Liab. Litig., 501 F.Supp.2d at 812 n.33).

Courts’ Criticism of Particular Privilege Log Tactics or Phrases

Courts criticize vague, ambiguous, or boilerplate language used by litigants in log entries when asserting the attorney-client privilege or work product protections (see, for example, James J. Binns, P.C. v. Flaster Greenberg, P.C., 2006 WL 2982141, at *2 (N.D. Ill. Oct. 13, 2006)). Courts have criticized certain words used in log entries for documents withheld as privileged, such as “and/or” or “legal advice,” or words such as “in connection” and “possible litigation” for documents withheld under the work product doctrine (see Kopacz v. Delaware River & Bay Auth., 2005 WL 2086747, at *1 (D. De. Aug. 29, 2005)). Courts criticize the use of these words or phrases because they do not provide sufficient detail about what privilege or protection is being asserted or the nature of the withheld document to the recipient of the privilege log (United Investors Life Ins. Co. v. Nationwide Life Ins. Co., 233 F.R.D. 483, 488 (N.D. Miss. 2006)).

Waivers and Exceptions

The attorney-client privilege can be waived, either with respect to specific documents or in relation to entire subject matters. The law generally recognizes the concept of limited waivers, waivers subject to a reservation of rights, waivers governed by specific confidentiality agreements and Protective Orders, and subject matter waivers. There are many ways in which waivers can occur, and they may be either knowing and intentional, or inadvertent.

Inadvertent Disclosure

The provisions of Fed.R.Civ.P. 26(b)(5)(B), cited above, combine provisions that affect the requirements of privilege logs with a procedure to be followed by counsel in the event of inadvertent disclosure. These provisions are known to most litigators.

In addition, the provisions of Fed.R.Evid. 502 contain extensive additional detail on this subject. Because these provisions are contained in the Rules of Evidence, they tend to be less commonly known to litigators.

At least one court has held that a lawyer violated Federal Rule of Civil Procedure (FRCP) 26(b)(5)(B) by filing in open court a privileged document the adversary claimed to have been inadvertently produced. The court noted that under appropriate circumstances it could disqualify counsel for this type of conduct. (See Cars R Us Sales & Rentals, Inc. v. Ford Motor Co., 2009 WL 1703123, at *1 (N.D. Ill. June 18, 2009).) Another court disqualified a lawyer for reading and relying on a privileged document that the lawyer claimed to have inadvertently received from a court reporter. However, the facts of that case seem to indicate the lawyer surreptitiously took the document from the opposing lawyer’s briefcase. (See Rico v. Mitsubishi Motors Corp., 171 P.3d 1092, 1094-95, 1100 (Cal. 2007).)

More discusson  on this subject is found in the next section.

Inadvertent Waivers

The provisions of Fed.R.Civ.P. 26(b)(5)(B), cited above, combine provisions that affect the requirements of privilege logs with a procedure to be followed by counsel in the event of inadvertent disclosure. These provisions are known to most litigators.

In addition, the provisions of Fed.R.Evid. 502 contain extensive additional detail on this subject. Because these provisions are contained in the Rules of Evidence, they tend to be less commonly known to litigators. Some courts hold that the privilege survives a lawyer’s inadvertent production of protected documents in litigation (see Harold Sampson Children’s Trust v. Linda Gale Sampson 1979 Trust, 679 N.W.2d 794, 796 (Wis. 2004).

The Expectation of Confidentiality Principle

It is important to distinguish between a waiver of the attorney-client privilege and the “expectation of confidentiality principle,” because while former may operate to require the production of privileged information, the latter simply defines the scope of what is privileged.

Not all attorney-client communications are privileged. An attorney may express opinions or state facts that are outside the scope of his representation (such as comments about sports, weather, recreational activities) or provide information to the client that is intended to be followed and give rise to the defense of good-faith reliance on the advice of counsel. An attorney may relay settlement offers, agree to relay information to groups both large and small, or act in furtherance of a client’s illegal conduct.

Communications made without an expectation of confidentiality do not qualify for privilege protection. Because the privilege never attaches to these communications in the first place, their disclosure to non-privileged third parties does not waive the privilege and cannot result in subject matter waiver (see Wesp v. Everson, 33 P.3d 191, 198 (Colo. 2001); Alabama Aircraft Indus., Inc. v. Boeing Co., 2016 WL 7745029, at *7 (N.D. Ala. Dec. 2, 2016), report and recommendation adopted, 2017 WL 134764 (N.D. Ala. Jan. 13, 2017)).

Who May Waive The Privilege—Clients

The attorney-client privilege belongs to the client. Generally, only the client can waive the privilege (see Kerr v. Stewart (In re Diet Drugs Prods. Liab. Litig.), 2004 WL 1058160, at *3 n.3 (E.D. Pa. May 11, 2004); Newman v. State, 863 A.2d 321, 333 (Md. 2004)). Some courts hold that the client’s lawyer may also waive the privilege, but only if the lawyer is acting as the client’s agent.

For example, most courts hold that a corporation’s lawyer may waive the corporation’s privilege (see United States v. Health Care Mgmt. Partners, Ltd., 2006 WL 6654875, at *9-10 (D. Colo. Aug. 17, 2006)). However, a lawyer acting to protect herself or in some other way contrary to the company’s interest generally cannot waive the company’s privilege. As mentioned above, these courts occasionally find that the privilege survives a lawyer’s inadvertent production of protected documents in litigation (see Harold Sampson Children’s Trust v. Linda Gale Sampson 1979 Trust, 679 N.W.2d 794, 796 (Wis. 2004)).

Jointly Represented Clients

Generally, jointly represented clients must unanimously join in any waiver of privilege covering joint communications (see Jordan (Bermuda) Inv. Co., Ltd. v. Hunter Green Invs. Ltd., 2006 WL 2773022, at *1 (S.D.N.Y. Sept. 27, 2006)). The unanimity requirement can be problematic when a company wants to waive the privilege to gain some advantage, such as in return for cooperation credit from a government agency during an investigation, but a jointly represented employee refuses. This is one of the reasons counsel should carefully consider all potential conflicts of interest before agreeing to jointly represent a company and an employee on the same matter (see Under Seal v. United States (In re Grand Jury Subpoena: Under Seal), 415 F.3d 333, 340 (4th Cir. 2005), cert. denied, 546 U.S. 1131 (2006)). However, a jointly represented client usually can waive the privilege covering her own communications with the joint lawyer, as long as the waiver does not implicate another jointly represented party’s communications with the lawyer (see Official Comm. of Asbestos Claimants of G-I Holding, Inc. v. Heyman, 2006 WL 2883255, at *3 (S.D.N.Y. Oct. 6, 2006); Kroha v. Lamonica, 2001 WL 58205, at *4-5 (Conn. Super. Ct. Jan. 3, 2001)).

If the formerly jointly represented clients become litigation adversaries, either of the clients usually can use the privileged communications against the other (see Restatement (Third) of Law Governing Lawyers § 75 cmt. d (2000) and Newmarkets Partners, LLC v. Sal. Oppenheim Jr. & Cie. S.C.A., , 258 F.R.D. 95, 104 (S.D.N.Y. 2009)). However, courts disagree about whether former joint clients can use privileged communications against each other when the adversity between them does not result in litigation (see In re JDN Real Estate—McKinney L.P., 211 S.W.3d 907, 922 (Tex. App. 2006)).

Common Interest Agreement Participants

As with a joint representation of multiple clients, no single member of a common interest arrangement may waive the privilege covering joint communications (see Corporate Express Office Prods., Inc. v. Gamache (In re Wagar), 2006 WL 3699544, at *12 (N.D.N.Y. Dec. 13, 2006); Bruker v. City of New York, 2002 WL 484843, at *4 (S.D.N.Y. Mar. 29, 2002)). However, common interest participants generally may waive the privilege protecting their own communications that they have shared with the other participants.

Unlike jointly represented parties, common interest participants who become adversaries generally do not have to disclose to the other participants communications that they did not already share with the other participants (see Crispin Co. v. Petrotub-S.A., 2006 WL 2472878, at *2 (W.D. Okla. Aug. 24, 2006)). In other words, common interest participants can share with the group only what they want to share. They can maintain privilege protection for communications with their own lawyer and keep those communications secret from the other participants.

Effect of Express Waiver

Courts generally hold that an express waiver is complete and eliminates privilege protection for all purposes, as to all parties, and for all time (see Westinghouse Elec. Corp. v. Republic of the Philippines, 951 F.2d 1414 (3d Cir. 1991); MPT, Inc. v. Marathon Labels, Inc., 2006 WL 314435, at *5-6 (N.D. Ohio Feb. 9, 2006); S & I Invs. v. Payless Flea Mkt., Inc., 10 So. 3d 699 (Fla. Dist. Ct. App. 2009)). In other words, a party cannot waive the privilege in a dispute with one adversary only to reassert it as to another at some later date.

Specificity of Disclosure Required for Waiver

Even if there is a disclosure, the privilege is not typically waived unless the client or attorney discloses the substance of a privileged communication (see In re OM Group Sec. Litig., 226 F.R.D. 579, 591 (N.D. Ohio 2005); Long-Term Capital Holdings v. United States, 2002 WL 31934139 (D. Conn. Oct. 30, 2002)). For example, disclosing a memorandum that indicated that the litigant had communicated with counsel, but did not reveal the substance of the communications, did not waive the privilege (see K-TEC, Inc. v. Vita-Mix Corp., 2009 WL 2436694, at *2 (D. Utah Aug. 7, 2009)).

Disclosing privileged communications in a court filing or during testimony may waive the privilege as to the subject matter of those communications (see Malkovich v. Best Buy Enter. Servs., Inc., 2006 WL 1428228, at *1 (D. Minn. May 22, 2006)). However, disclosing privileged communications to the court for in camera inspection does not waive the privilege (see United States v. Zolin, 491 U.S. 554, 568 (1989)).

Waiver may occur in litigation in other ways as well. For example, the privilege may be waived where a third party reveals privileged communications while testifying at a deposition or trial and the privilege holder fails to object to the disclosure (see Nguyen v. Excel Corp., 197 F.3d 200, 207-08 (5th Cir. 1999); Drimmer v. Appleton, 628 F. Supp. 1249, 1251-52 (S.D.N.Y. 1986)). Courts may also find that a party has waived the privilege through its litigation misconduct, including, for example, by its failure to timely log a document as privileged in response to a document request (see Peat, Marwick, Mitchell & Co. v. West, 748 F.2d 540, 542 (10th Cir. 1984)).

Compelled Disclosure Generally Does Not Waive the Privilege

Express waiver occurs only when the client voluntarily discloses privileged communications (see Hopson v. Mayor & City Council of Baltimore, 232 F.R.D. 228, 243-44 (D. Md. 2005)). By contrast, compelled disclosure does not waive the privilege (see Pension Comm. v. Banc of Am. Sec., LLC,, 2009 WL 2921302, at *1 (S.D.N.Y. Sept. 8, 2009)).

Generally, a disclosure qualifies as compelled if a court orders the privilege-holder to disclose a privileged communication. Courts are split on the extent to which a producing party must fight an adversary’s attempt to discover privileged documents before the disclosure may be deemed compelled. For example, one court held that a litigant complying with a court order to produce documents did not waive the privilege if the litigant fought the order (see Hynix Semiconductor Inc. v. Rambus Inc., 2008 WL 350641, at *2 (N.D. Cal. Feb. 2, 2008)). Another court held that the privilege was waived when a third party produced a privileged document belonging to another entity because the document’s owner did not seek judicial intervention to retrieve the document. However, it did demand that the third party seek return of the privileged document (see In re Philip Servs. Corp. Sec. Litig., 2005 WL 2482494, at *2 (S.D.N.Y. Oct. 7, 2005)).

Disclosure to Third Parties

Most courts expand the privilege to communications with a client’s agents beyond those limited individuals who are necessary to transmit information between the client and the lawyer. Courts taking this liberal approach are more likely to find that disclosing privileged communications to third parties does not waive the privilege. These courts have held that the following client-agents may be covered by the privilege:

• Client’s liability insurers (see State ex rel. Med. Assurance of W. Va., Inc. v. Recht, 583 S.E.2d 80 (W. Va. 2003)).
• Insurance brokers (see American Colloid Co. v. Old Republic Ins. Co., 1993 WL 195270, at *2 (N.D. Ill. June 7, 1993)).
• Reinsurers (see Gulf Ins. Co. v. Transatlantic Reinsurance Co., 788 N.Y.S.2d 44, 45-46 (N.Y. App. Div. 2004)).
• Another insurance company’s adjusters (see Safeguard Lighting Sys. v. North Am. Specialty Ins. Co., 2004 WL 3037947, at *1-2 (E.D. Pa. Dec. 30, 2004)).
• Investment bankers (see Hexion Specialty Chems., Inc. v. Huntsman Corp., 2008 WL 3522445 (Del. Ch. Aug. 12, 2008)).

However, a minority of courts take the opposite view, and hold that disclosure of privileged information to the following client-agents or consultants do waive the privilege:

• Attest auditors (see SEC v. Brady, 238 F.R.D. 429, 439-40 (N.D. Tex. 2006)).
• Accountants (see Ross v. UKI Ltd., 2003 WL 22319573, at *2 (S.D.N.Y. Oct. 9, 2003); American Health Sys., Inc. v. Liberty Health Sys., 1991 WL 42310, at *6 (E.D. Pa. Mar. 26, 1991)).
• Investment bankers (see Louisiana Mun. Police Emps. Ret. Sys. v. Sealed Air Corp., 253 F.R.D. 300 (D.N.J. 2008); Nat’l Educ. Training Group, Inc. v. Skillsoft Corp, 1999 WL 378337, at *4-5 (S.D.N.Y. June 10, 1999)).
• Public relations consultants (see Cellco P’ship v. Nextel Commc’ns, Inc., No. M8-85, 2004 WL 1542259 (S.D.N.Y. July 9, 2004); American Legacy Found. v. Lorillard Tobacco Co., No. 19406, 2004 WL 2521289 (Del. Ch. Nov. 3, 2004)).
• Insurance brokers (see Rhodes v. AIG Domestic Claims, Inc., 2006 WL 307911, at *11-12 (Mass. Super. Ct. Jan. 27, 2006)).
• Investment advisers during a bank merger (see Stenovitch v. Wachtell, Lipton, Rosen & Katz, 756 N.Y.S.2d 367, 378-79 (N.Y. Sup. Ct. 2003)).

Disclosure to Corporate Employees — the Upjohn Test

Most courts follow the approach in Upjohn Co. v. United States, 449 U.S. 383 (1981), in determining which of the corporation’s employees may participate in privileged communications on behalf of the corporation. Under this approach, the class of privileged employees may include the company’s top management and employees who provide information to the company to help it secure legal advice, as well as other employees who need to know the privileged information to perform their job duties.

Sharing attorney-client communications with these individuals should not waive the privilege, but sharing privileged communications with employees without a need to know likely results in waiver (compare In re New York Renu, MDL No. 1785, 2008 WL 2338552, at *2 (D.S.C. May 6, 2008) (no waiver)) with Verschoth v. Time Warner Inc., 2001 WL 286763, at *2-3, (S.D.N.Y. Mar. 22, 2001), upheld in, 2001 WL 546630 (S.D.N.Y. May 22, 2001) (corporation waived privileged by sharing communications with individuals with no need to know)).

Some courts point to the wide circulation of a privileged communication among a corporation’s employees as evidence that the communication does not deserve privilege protection at all (see In re Vioxx Prods. Liability Litig., 501 F. Supp. 2d 789 (E.D. La. 2007)). This approach, while similar to a waiver analysis, really focuses on whether the content of a communication primarily relates to non-privileged business advice rather than legal advice.

Settlement and Mediation

Courts disagree about whether intentionally disclosing privileged communications to a litigation adversary during settlement negotiations waives the privilege (compare Eagle Compressors, Inc. v. HEC Liquidating Corp., 206 F.R.D. 474, 477 (N.D. Ill. 2002) (waiver) with Akamai Tech., Inc. v. Digital Island, Inc., 2002 WL 1285126, at *6 (N.D. Cal. May 30, 2002) (no waiver)). The waiver analysis becomes more complicated where parties disclose privileged communications during a mediation.

Many states recognize a mediation privilege that prohibits, or otherwise limits, the discoverability or admissibility of statements made during the mediation process (for example, see Colo. Rev. Stat. § 13-22-307 and Yaekle v. Andrews, 195 P.3d 1101 (Colo. 2008); Cal. Evid. Code §§ 1115-1128). Several states have legislation recognizing a mediation privilege modeled on the Uniform Mediation Act (UMA) (see Uniform Law Commission website). In addition, several federal district courts have local rules that give confidential status to communications made during a court-administered mediation (see, e.g., S.D.N.Y. Procedures of the Mediation Program; D.D.C. LCvR 84.9(a)). The mediation privilege is broader than the settlement privilege in FRE 408, because the settlement privilege only protects mediation participants from disclosure of information to the trier of fact, and not from discovery by a third-party (see Citizens Dev. Corp., Inc. v. Cty. of San Diego, 2019 WL 172469, at *6 (S.D. Cal. Jan. 11, 2019)).

In ACQIS, LLC v. EMC Corp., (2017 WL 2818984 (D. Mass. June 29, 2017) the court applied the federal mediation privilege in a patent infringement dispute). The court noted that the privilege protects “communications to which a mediator was personally privy” but not to settlement negotiations in which a mediator is not involved, such as negotiations that follow a formal mediation; see also Folb v. Motion Picture Indus. Pension & Health Plans, 16 F. Supp. 2d 1164, 1180 (C.D. Cal. 1998), aff’d, 216 F.3d 1082 (9th Cir. 2000) (post-mediation communications are protected only by the FRE 408 limitations on admissibility)). 

The Crime-Fraud Exception

The courts have long recognized that where an attorney actively participates with a client in the commission of a crime or the perpetration of fraud, communications and activities that amount to independent torts—such as civil conspiracy, fraud, illegal schemes or other wrongs—the attorney’s communications with the client and the attorney’s work product may be discoverable.

This subject has been extensively reviewed by legal scholars. Six of the key treatises are linked below:

• CrimeFraud Exception to Work Product Privilege in Federal Courts (178 A.L.R. Fed. 87)
• Crime-Fraud Exception to Attorney-Client Privilege in State Courts—Contemplated Crime (9 A.L.R.6th 363)
• Too High A Price For Truth: The Exception To The Attorney-Client Privilege For Contemplated Crimes And Frauds (64 N.L.C. Rev. 443)
• Attorney-Client Privilege as Affected by Wrongful or Criminal Character of Contemplated Acts or Course of Conduct (125 A.L.R. 508)
• Understanding the Crime-Fraud Exception to the Attorney-Client Privilege and Work Product Immunity (70 S.C. L. Rev. 1)
• The Crime-Fraud Exception to the Attorney-Client Privilege in the Context of Corporate Counseling (87 Ky. L.J. 1191)

Legal Malpractice Cases

Legal malpractice cases present special circumstances affecting the privilege. When an attorney is sued by a client (the party to whom the confidentiality is owed), the client and the client’s subsequent counsel in a malpractice action are entitled to both the attorney’s records and recollections relating to the communications with the client and the attorney’s records and recollections relating to the attorney’s actions, work or conduct. It is generally held that where a client sues an attorney for legal malpractice or professional negligence, the client waives the privilege. Under this doctrine, both the client and certain other outside parties, such as expert witnesses on both sides, may be provided with these materials and information.

For cases on this issue, see the annotation: Attorney-client privilege and work product protection—Attorney-client privilege.

Redaction of Information

If some portions of a document deserve protection while others do not, the litigant normally redacts the protected portion and produces the remainder of the document (105 Street Assocs., LLC v. Greenwich Ins. Co., 2006 WL 3230292, at *6-7 (S.D.N.Y. Nov. 7, 2006)). The same principle applies to deposition testimony (U.S. Bank Nat’l Ass’n. v. U.S. Timberlands Klamath Falls, L.L.C., 2005 WL 2037353, at *2-3 (Del. Ch. June 9, 2005)).

Where the protected communications in a document are interwoven with non-privileged information, courts generally hold that the entire document is privileged (Potter v. United States, 2002 WL 31409613, at *6 (S.D. Cal. July 26, 2002)). Therefore, withholding the entire document, and listing it in a privilege log, is more appropriate than redaction (Potter, 2002 WL 31409613, at *6). However, where privileged and non-privileged information appearing within the body of the document are clearly separable, the better practice may be to redact (and log) the privileged portions and produce a redacted version of the document to the opposing side (see Expert Choice, Inc. v. Gartner, Inc., 2007 WL 951662, at *5 (D. Conn. Mar. 27, 2007)).

Because the work product doctrine protection normally depends on the client’s or representative’s motivation in creating the entire document, litigants are less likely to redact work product documents. Litigants who have waived fact work product protection might be allowed to redact opinion work product before producing the fact portion of a document to the adversary.

Mining for Metadata

Some state bars and the ABA have addressed the ethical duties of lawyers sending and receiving metadata. Metadata is data hidden in an electronically transmitted document that may allow the recipient to determine who made changes to the document, when the changes were made, and what changes were proposed and rejected.

Some state bars have found that the receiving lawyer cannot ethically mine for metadata included in an electronic document transmitted to her (see, for example, New York LEO 749 (Dec. 14, 2001); North Carolina LEP 2009-1 (Jan. 15, 2010); West Virginia LEO 2009-01 (June 10, 2009); New Hampshire LEO 2008-2009/4 (April 16, 2009); Maine LEO 196 (Oct. 21, 2008); Arizona LEO 07-03 (Nov. 2007); District of Columbia LEO 341 (Sept. 2007); Alabama LEO RO-2007-02 (Mar. 14, 2007); Florida LEO 06-2 (Sept. 15, 2006)).

The ABA Ethics Committee, however, has indicated that lawyers receiving electronic documents from another lawyer may examine the metadata without violating the ethics rules (see ABA LEO 06-442 (Aug. 5, 2006)). Some states have followed the ABA’s approach (see, for example, Vermont LEO 2009-1 (Oct. 2009); Pennsylvania LEO 2009-100 (2009); Colorado LEO 119 (May 17, 2008); Maryland LEO 2007-09 (2007); Pennsylvania LEO 2007-500 (2007)).

Other states have taken more nuanced positions. For instance, Minnesota declined to state whether or not the receiving lawyer could search for metadata (Minnesota LEO 22 (Mar. 26, 2010)). The Oregon Bar indicated that the receiving lawyer could use standard software to look for metadata in an electronic document, but could not use special software designed to thwart the sending lawyer’s attempt to scrub the metadata (Oregon LEO 2011-187 Nov. 2011)).

Protecting Confidential Information

Ordinarily a party to a court proceeding has a right to inspect all documents held by the other party that are relevant to the dispute. The only exception to this is if the document is privileged. Confidentiality is not a ground to oppose inspection by another party and until recently it was not usual for a party to try to limit inspection on the grounds of confidentiality.

This can be contrasted with the position regarding a party issuing a subpoena to a non-party for the production of confidential documents in the court proceeding, in which case a motion to quash or limit the subpoena may be filed, or the court may order that the documents produced in response to the subpoena are covered by a Protective Order as discussed below.

Sometimes a subpoena is issued that by its terms is very broad and can include a request for confidential or commercially sensitive documents from the non-party to the proceeding. While confidentiality is not a ground to oppose production, the parties may agree or the court may require a particular confidentiality regime to govern the inspection and treatment of sensitive or privileged third-party documents to the same extent that governs documents exchanged by the parties. This is separate to any right to challenge a subpoena on one of the established grounds.

Such documents might include a supply contract with generous pricing for a particular client or company accounts that show the margins the company is running that may be relevant to the proceeding and so may be inspected by another party.

Document discovery generally is the most expensive part of litigation. The cost of reviewing millions of potentially relevant documents forces many defendants to settle their cases, regardless of the merits of the claims, so they can avoid the more expensive discovery process. Defendants that choose to fight their claims and proceed with discovery consistently look for ways to reduce the costs of document discovery.

Many tools are available to parties to reduce document review costs. In selecting the appropriate technology for a case, however, defendants must weigh the risk of inadvertently producing privileged or confidential information against the cost of document review. This balancing act varies on a case-by-case basis, depending on the client’s tolerance for risk and the sensitivity of its information.

You should consider the following:

Entering into a Rule 502(d) Order

Federal Rule of Evidence (FRE) 502(d) permits a federal court to order that the disclosure of attorney-client privileged material, protected work product or other protected information does not waive those protections in the pending case or in any other federal or state proceeding (FRE 502(d)). A Rule 502(d) order typically is applicable to the production of all privileged material, regardless of whether the production was inadvertent. Parties that enter into a Rule 502(d) order should still use care when conducting a privilege review, but they can customize the privilege review based on the level of risk associated with the potential disclosure of substantive privileged documents.

Here is a sample of a Rule 502(d) Order.

Entering Into a Protective Order With a Claw-Back Provision

A Protective Order identifies confidential information that a party would like to protect from disclosure and, occasionally, limit the persons that have access to it. Parties often stipulate to a confidentiality agreement and then have it ordered by the court as a Protective Order. In a case involving particularly sensitive information (such as patent designs), the parties may agree to a two-tiered confidentiality order, limiting access to the most sensitive information to a select group of individuals, such as outside lawyers (as opposed to attorneys such as corporate general counsel or other regular employees of a party).

Counsel may incorporate into a Stipulated Protective Order a provision for a privilege waiver with a “claw-back” clause into a Protective Order. This provision sets out a process for recipients of privileged information to return privileged information that counsel inadvertently discloses during discovery. It also protects against the waiver of privilege resulting from inadvertent disclosure, and may, by stipulation or court order, exceed or modify the provisions of Rule 502(d).

[ADD SAMPLE PROTECTIVE ORDER WITH CLAW-BACK PROVISION]

How do you tell whether a document is privileged?

First, you must carefully read the document, but just doing that will often be insufficient. Before they have been trained here, most lawyers are a bit lazy when it comes to document review, but in this activity cutting corners is very dangerous, and will severely hamper your performance throughout the life of the case. Document review time is billable, but you must first inform your client of the fact that reviewing voluminous document collections can require many, many hours of attorney time. Manage your client’s expectations, and don’t hesitate to consult frequently with your client and others to be sure you understand the contextual background of documents, including why they were created, who created them, when they were created and how they came into existence. Ask: who, what, when, where, how and why? Feel free to make annotations on working copies—that is what they are for!

Some lawyers quickly skim documents to see whether they written to or by someone they recognize as an attorney. This practice is faulty, for it is easy to miss the fact that one or more of the people at the other end of an email string is an attorney. Assumptions are dangerous, especially when you don’t realize you are relying on them. You should make very sure that you know the identity and role of every person with whom a written or electronic communication has been shared. This will generally require you to make inquiries, and document the results in your notes or, even better, in the appropriate SharePoint list. You will need this information for both your privilege logs and your initial disclosures—not to mention Stages 1 and 2 of your case planning.

What is the difference between how courts deal with claims of work product and how they deal with claims of privilege?

First, remember that there is technically no such thing as a “work product privilege. As explained in detail above, work product is generally (but not always) protected from disclosure, and must be logged in the same general fashion as privileged documents; however, the protections afforded to work product are broader but more easily penetrated than the protections given under the law to truly privileged materials.

Second, a court may require an attorney to produce an affidavit establishing why certain documents contain work product. Work product materials are more likely to be subject to disclosure in redacted form than privileged materials, particularly if parts of the documents contain information that does not meet the definitions above. The protections for work product are topical, whereas the privileged materials are, with the exceptions discussed throughout this Practice Guide, granted categorical protection.

Third, work product can be subjected to mandatory disclosure when an attorney becomes a witness or where there exists a substantial need for the information in a document and the information is not available from another source.

Fourth, be alert to special rules that apply to work product in particular circumstances. Work done by a client, even before hiring an attorney, may qualify for the work product protection. For example, work done by corporate defendants and insurance companies may constitute work product if it was done in anticipation of specific litigation, See, e.g., Hawkins v. Dist. Court In & For Fourth Judicial Dist., 638 P.2d 1372 (Colo. 1982)

Finally, remember that there are many different kinds of privilege, and the scope and applicability of the protections given to these various classes of documents vary under the law. The key to understanding this variability is to perform thorough legal research before taking a position.

Answers to Test Questions

As promised at the beginning of this Practice Guide, the questions we supplied for you to test yourself are all answered here. If you have read the entire Practice Guide, you probably know most of the answers already. For the sake of certainty, however, here are the answers you should know off the top of your head:

How many kinds of privilege exist, and what are they?
Do you know when claims of privilege have been waived?
Are all privileged materials confidential?
Is there such a thing as a statutory privilege?
What do you do when your opponent requests confidential materials that are not privileged?
What do you do when privileged material has been disclosed inadvertently?
Do you understand how our SharePoint Document Management Procedure operates to preserve privileges?
Do you know when to file a motion for a protective order rather than merely objecting to a request for privileged documents?
What tactics should you employ when your opponent objects on the basis of privilege?
Do you have an obligation to disclose the existence of privileged material in Initial Disclosures under Rule 26?
Does the court or judge in your case have special procedures for dealing with claims of privilege?
Can you file an interlocutory appeal if you receive an adverse ruling in the context of a privilege dispute?
What should you tell your client about privileges?
When is it proper for a court to review documents in camera, and how do you obtain such a review?
What are the most common mistakes attorneys and LSS staff make when it comes to potentially privileged documents?
When is document metadata considered privileged?
Are contested claims of privilege the most common kind of discovery dispute?
How can you determine whether your client is being honest with you when he/she/it claims that you have been given all relevant material, or whether the client is “taking matters in hand” by deciding in advance that something is privileged and then failing to inform you? (A corollary question is: How do you protect yourself from the possibility that a client is withholding documents or information without informing you?)
Is there any kind of motions practice that courts despise more than discovery disputes related to privilege?

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© Brett Godfrey 2020. All rights reserved. No portion of this material may be duplicated, disseminated or reproduced without express written permission from the author.