ALJ at ITC: Clawbacks, Schmawbacks.

The "new" provisions of Federal Rule of Evidence 502 provide that, if a privileged document is inadvertently produced, there is no waiver of privilege if (1) the disclosure had been inadvertent; (2) the party had taken reasonable steps to prevent disclsoure; and (3) the partypromptly took steps to rectify the error.

Suppose you inadvertently produce a privilege document in an ITC investigation.  Does the rule apply?  On its face, it applies to inadvertent production "in a federal proceeding…."  Sounds like it applies, right?

Not so fast.

In In the Matter of Certain Dynamic Random Access Memory and NAND Flash Memory Devices and Products Containing Same (USITC Inv. No. 337-TA-803 Order No. 63 May 14, 2012), 2012 WL 3058613, the ALJ was faced with the demand by a non-party for return of a privileged document it had produced in response to a subpoena in that proceeding.  The non-party argued that the Fed. R. Evid. 502 bound the ITC, but the ALJ rejected that position, but also held that even if the rule applied, waiver of privilege had occurred.

His rationale to me is less than clear.  He cited three cases to support his position, none of which interpreted the phrase "in a federal proceeding" from this rule, but instead analyzed other rules of evidence or, in one case, subpart 502(d), which by its terms only permits a "federal court" to make orders concerning litigation pending before it.

So, I'm left with giving you this warning:  a proceeding before the ITC is not a "federal proceeding" under Fed. R. Evid. 502(b).  

On a related note, and I do tend to agree with his observation, the ALJ stated that he found provisions that allowed for clawback of privilege documents to reduce the incentive for extremely careful privilege review.  The problem, of course, with that belief is that the drafters of Rule 502 have indicated that the balance should be in favor of less review and easier clawback.  (And, I realize that there might be interesting seperation of power issues if Fed. R. Evid. 502(b) is read to apply to the ITC, but my point is that on its face, it does.)

About David

Professor of Law, Mercer University School of Law. Formerly Of Counsel, Taylor English Duma, LLP and in 2012-13, judicial clerk to Chief Judge Rader.