Report from Hearing on Proposed Rule 502 of Federal Rules of Evidence

On January 29, 2007, the Advisory Committee on Evidence Rules held its second and last hearing on proposed Federal Rule of Evidence 502. The committee heard testimony from criminal defense attorneys, trade associations, in-house lawyers, litigation support consultants, and other interested parties.

All witnesses except one opposed proposed Rule 502(c), a rule to facilitate selective waiver in governement investigations or proceedings. The general sentiment of those who oppose the adoption of Rule 502(c) is that the rule would increase government requests for waivers. No witness made a showing to indicate why that would happen, and they seemed to fall short of convincing the committee that Rule 502(c) is bad idea as a matter of public policy. Nevertheless, there is enough ambivalence to suggest Rule 502(c) may not survive and be part of the final recommendations.

Several committee members said such a rule would be a positive development and would not encourage more waiver requests. If companies are waiving privileges anyway, this rule would help and safeguard against broad subject matter waiver in collateral civil proceedings. There are significant questions, however, whether a federal rule of evidence could have binding effect in state and local proceedings. There were no constitutional law scholars testifying on January 29 or anyone present able to help the committee on federalism questions. The committee also did not have an answer for how protection from disclosure to government officials would protect a corporation against waiver for disclosing investigation results to auditors or indepedent outside directors.

Proposed inadvertent disclosure Rule 502(b) also appears on its way to the Standing Committee for adoption. There was much discussion about the term “reasonable precautions,” but the committee did not seem to have a clear vision on what steps, if any, corporations could take to isolate privileged communications from the massive volumes of other electronically stored information. The committee may mention in the notes to the rule that reasonable precautions could include the use of advanced search methodologies or records management compliance systems which, while far from perfect, could reduce the overall volume of information that might otherwise contain privileged content.

Finally, the committee heard testimony that clawback orders and sneak-peek agreements will save time and expedite proceedings, but no one could demonstrate how such a rule would result in meaningful cost savings or bind preclude use of disclosed, privileged content in state court proceedings.

See earlier posts of the subject.


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