JSH Reporter Summer 2016 - Page 20

CLAWBACKAGREEMENTSARTICLE 020 AN INVESTIGATIVE PIECE ON CLAWBACK AGREEMENTS A mechanism to take back inadvertently disclosed privileged and/or confidential information and protect against an argument that you waived privilege. where The Federal Rules of Evidence were amended in 2008 to introduce Rule 502. States adopted Rule 502 shortly after its introduction. what Clawback agreement; Alias: Rule 502 Agreement. when who AUTHORS: Michele Molinario, Justin M. Ackerman CONTRUBUTOR: Gaya Shanmuganatha EMAILS: mmolinario@jshfirm.com, jackerman@jshfirm.com BIOS: jshfirm.com/michelemolinario jshfirm.com/justinmackerman Rule 502 is located in the Federal Rules of Evidence, and their State counterparts. why The scope of discovery seems endless. The rules permit a party to obtain discovery regarding any nonprivileged matter that is “relevant” to any party’s claim or defense. Fed. R. Civ. P. 26(b)(1). What is considered to be “relevant” evidence, for purposes of discovery, is essentially limitless. The Federal rules, and State counterparts, permit a party to obtain any piece of evidence that could lead to the discovery of admissible evidence. The rules, as they stand today, do not contemplate whether the discovery sought is sufficiently reliable, trustworthy, or even admissible at trial. They simply ask: “Can this request potentially lead to the discovery of admissible evidence?” Attorneys routinely craft affirmative answers to that question. The rules, therefore, have not caught up with the mountain of evidence that could be construed as relevant in today’s day and age. Parties can now seek discovery from another’s Twitter®, FaceBook®, Instagram®, YouTube®, Email, Cellphone, WhatsApp®, Snapchat®, Parascope® or any other digital resource. Unless your client is willing to spend an extraordinary amount of money to have every email, picture, text, tweet, post, and document reviewed with a fine-toothed comb, the likelihood of inadvertently producing privileged or confidential information expands with each passing year as discoverable evidence becomes more and more “digitized.” Rule 502 protects you if and when privileged or confidential information is inadvertently disclosed. Prior to 502 Rule Extent of Rule Before Rule 502, production of privileged or confidential information could permit your opponent to, rightfully, argue that you waived your claim of privilege and/or confidentiality. Some courts held that inadvertent production of even one privileged or confidential document constituted a waiver of the privilege for that document and all other documents related to that subject matter. As you can imagine, such subject matter waiver can drastically impact your client’s case. Therefore, discovery costs skyrocketed as parties felt the need to review each and every document for privileged and/or confidential information to guard against the consequences associated with inadvertent production. The rule only protects those who take steps to weed out privileged or confidential information beforehand. Therefore, the rules do not cover a blind “document dump” on your opponent in the hopes of your opponent calling your attention to privileged or confidential information. While your opponent is ethically bound to notify you and return any inadvertently produced privileged or confidential information, you should not rely on your opponent to identify all the privileged documents. Furthermore, the purpose of designating documents as “privileged” and “confidential”– secrecy–is defeated if your opponent has to read the documents to recognize that they are privileged and/or confidential. Rule 502 was implemented to protect parties who do not have Midas’ war chest. Rule 502 bars an opposing party from claiming “waiver” if: (1) the disclosure was inadvertent; (2) you took steps to prevent the disclosure; and (3) you promptly took reasonable steps to rectify the error. Fed. R. Evid. 502(6).