Worst Nightmare: Court Uses 502 to Compel a Sneak Peek of Privileged Docs

Court of Federal Claims Judge, Margaret Sweeney, who presides over Government litigation regarding oversight of financial institutions, has issued another opinion on attorney client privilege, this time distinguishing Federal Rule of Evidence 502(d). In the most recent status report in the case, Fairholme Funds, Inc. v. United States, No. 13-456C, 2017 WL 4768385(Fed. Cl. Oct. 23, 2017), the defendant produced an additional 3500 documents in response to an earlier order by the court, but in so doing, produced 38 documents that were privileged, then after a review of those, then produced another 22 additional documents. The plaintiff asked to use the quick peek procedure under Rule 502(d), to which the defendant disagreed.

Judge Sweeney, clearly frustrated by lack of cooperation, fashioned a remedy to move the case forward on jurisdictional discovery as a way to bring the long running case to a merits determination.

Judge Sweeney required the defendant, among other things, to:

• Provide plaintiffs with the opportunity to review the approximately 1500 documents at issue—which are currently being withheld by defendant as privileged pursuant to the deliberative process and bank examination privileges—at a time and place to be determined by defendant.  In so doing, defendant shall not be deemed to have waived any privileges as to these documents.

Judge Sweeney also rejected Sedona’s comment disarming 502’s use as a weapon:

• [FRE] 502(d) does not authorize a court to require parties to engage in ‘quick peek’ … productions and should not be used directly or indirectly to do so. … Rule 502 was designed to protect producing parties, not to be used as a weapon impeding a producing parties’ right to protect privileged material. Compelled disclosure of privileged information, even with a right to later claw back the information, forces a producing party to ring a bell that cannot be un-rung.

This case may be distinguished due to the comingling of confidentiality into the privilege designation and FRE 502’s focus on privilege protection, the resources of the court anticipating an in-camera review and the Judge’s lack of patience with the producing party.

K&L Gates discusses the case, and provides a direct link to the opinion here.

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Jim Gill’s writing about eDiscovery and Data Management has been twice recognized with JD Supra Reader’s Choice Awards and he holds an MFA in Creative Writing from Southern Illinois University, Carbondale. Before working in eDiscovery, Jim taught college writing at a number of institutions and his creative work has been published in numerous national literary journals, as well as being nominated for a Pushcart Prize.