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Even With Clawback Agreement, Use of Material May Waive Privilege

Image of Clawback Agreement Waiver Symbol

We here at Percipient are fans of clawback agreements.


Clawback agreements are authorized by state and federal evidence rules, such as Federal Rule of Evidence 502, and permit parties to “claw back” attorney work product or attorney-client privileged information that is produced during discovery in litigation. Under Rule 502(b), if a party took reasonable steps to prevent and rectify the disclosure of privileged information, inadvertent production of that information does not waive its privileged nature.


A different section of the rule, Rule 502(d), permits litigants to craft their own “clawback” agreements and alter the language of Rule 502(b). For instance, parties may limit the effect of Rule 502(b) and agree that production of protected information may be clawed back regardless of inadvertence and regardless of reasonable steps taken to prevent disclosure.


However, even with a clawback agreement, documents may lose their privileged nature if they are used in litigation and the party trying to preserve the privilege did not object to use of the documents.


For instance in Certain Underwriters at Lloyds et al v. National RailRoad Passenger Corporation [Amtrak], 14-cv-4717 (E.D.N.Y. Nov. 17, 2016), the parties entered into a Rule 502 agreement under which Amtrak unsuccessfully tried to clawback two documents used as deposition exhibits. The court denied Amtrak’s clawback request because Rule 502 protects only against waiver of privilege by disclosure of information, not waiver caused by actual use of protected material.



The dispute in the Amtrak case centered on two documents. One of which Amtrak originally included in a privilege log, but later removed. At a deposition, after “reserving its rights” regarding the document removed from the privilege log and making various objections to use of the other document, Amtrak permitted opposing counsel to question an Amtrak witness about the documents.


After the deposition, Amtrak’s attorney sent a letter to opposing counsel attempting to claw back the documents pursuant to the parties’ Rule 502 agreement. The issue ultimately ended up before the judge who concluded the documents were not subject to clawback and that Amtrak waived any privilege in them.


The court noted that by its terms, Rule 502 protects only against waiver through “disclosure” of privileged information and does not apply to waiver by other means. “[W]hile an appropriately worded protective order may prevent waiver due to a producing party’s disclosure of privileged information, that party’s subsequent failure to timely and specifically object to the use of that information—during a deposition, for example—can waive any applicable privilege.”


The court concluded that Amtrak waived any privilege or work-product protection for the exhibits by failing to prevent their use at deposition. The court also went on to note that Amtrak’s removal of one exhibit from its privilege log favored a finding of waiver because “Amtrak’s decision to withdraw its claim of privilege for Exhibit 26 was an explicit waiver after considered legal analysis.”


The court concluded:

Amtrak seems to argue that the non-waiver provision in the instant case permits the parties to assert and retract claims of privilege at will, but this goes too far. Case law and commentary make clear that Rule 502(d) was intended to make discovery issues relating to privilege and waiver more predictable, not insulate parties entirely from the possibility of waiver, see Fed. R. Evid. 502 advisory committee’s note (“[W]hile establishing some exceptions to waiver, the rule does not purport to supplant applicable waiver doctrine entirely.”). This is especially true where, as here, disclosure is intentional. . . Amtrak’s reading of the non-waiver provision would yield an absurd result, permitting Amtrak to claw back documents, even those used . . . in depositions and court filings, at any time—conceivably, even through the close of litigation. The protective order, which was entered by this Court, does not countenance such gamesmanship.


In a more recent case with a similar procedural history, another court also concluded that documents used in a deposition could not be clawed back. But, it was not the use of the documents at deposition that prevented clawback, but the production of the documents in the first place that waived any privilege in them.


In New Mexico Oncology and Hematology Consultants, Ltd. v. MV/GBW Presbyterian Healthcare Services, Civ. No. 12-526 (D.N.M. February 27, 2017), Presbyterian Healthcare reviewed and produced redacted documents and included them on a redaction log. When its adversary objected to the redactions, Presbyterian Healthcare reviewed the documents again and decided to produce unredacted versions.


Over the objection of Presbyterian Healthcare’s attorney, one of the reproduced unredacted documents was used as a deposition exhibit. After the deposition, the attorney attempted to claw back the document as privileged and asserted it was produced inadvertently. When the clawback request was refused, the dispute ended up in court.


The special master in the case concluded that although the attorney’s objection to use of the document at deposition prevented a privilege waiver, reproducing the document with no redactions waived any privilege in it. The special master concluded that because Presbyterian Healthcare’s attorneys reviewed the document multiple times before removing redactions and producing it, the healthcare organization could not claim it was produced by mistake or inadvertence.


Posted on July 18, 2018 in Attorney Client Privilege and Attorney Work Product, Court Rules, E-Discovery, Evidence

About the Author

Chad Main is an attorney and the founder of Percipient. Prior to founding Percipient, Chad worked as a litigator in Los Angeles and Chicago. He is a member of the Seventh Circuit Electronic Discovery Pilot Program Committee and may be reached at cmain@percipient.co.
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