Rule 502 May Not Deliver Promised Cost Relief

Federal Rule of Evidence 502, enacted on Sept. 19, 2008, has been heralded as a significant development which “will effectively limit the skyrocketing costs of discovery.”[FOOTNOTE 1] The Rule and its promotion as a cost-saving panacea have no doubt raised expectations among clients and courts alike.

As a rule of evidence, FRE 502 is significant because it (a) resolves conflicts among federal courts concerning the effect of voluntary and inadvertent productions of privileged material and (b) imposes federal evidentiary rules on state courts.[FOOTNOTE 2] FRE 502 will not meaningfully reduce the costs of discovery, particularly in cases involving huge e-discovery obligations, related investigations by state government entities, and “asymmetric” discovery obligations (where one party has to produce a tremendous number of documents and the other does not) for three reasons:

1. The touting of FRE 502 as a cost-savings measure is based on the erroneous premise that mitigating the risk of waiver will substantially reduce e-discovery costs.2. To avoid waiver, litigants must take “reasonable steps” to avoid inadvertent disclosures and “reasonable steps” to rectify productions errors, an ambiguous standard that is expensive to meet.

3. As acknowledged by its drafters, FRE 502’s ability to mitigate the risk of waiver requires that state courts be bound by the Rule. Its so-called “controlling effect” provisions may not be constitutional. Until, and unless, FRE 502’s constitutionality is established, it will provide little assurance to litigants that state attorneys general and private litigants will be unable to establish waiver in state court proceedings.

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