NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6606
SPONSOR: Wright TITLE OF BILL: An act to amend the civil practice law and rules, in
relation to the waiver of privileges
This is one in a series of measures being introduced at the request of
the Chief Administrative Judge upon the recommendation of his Advisory
Committee on Civil Practice.
On the recommendation of our Advisory Committee, we support, with
modification, the proposal of the Advisory Group to the New York State
Federal Judicial Council to more closely align New York law with the
waiver provisions of F.R.E. 502(a) via addition to the CPLR of a new
section 4550.
The addition of this new section would accomplish two goals: first, to
more closely harmonize New York State's evidentiary law concerning the
inadvertent waiver of the attorney-client privilege and/or work product
protection in both civil and criminal litigation with corresponding
evidentiary law in the Federal courts; and, second, to codify existing
decisional law in New York regarding the standard for establishing inad-
vertent waiver and, where inadvertent waiver has been established, codi-
fy existing decisional law in New York governing the return or retention
of such inadvertently exchanged matter.
This measure incorporates into proposed new section 4550 the requirement
that a party inadvertently exchanging matter that is privileged or work
product demonstrate that the recipient of the inadvertently exchanged
matter will not be prejudiced by its return. See, e.g., Manufacturers &
Traders Trust Co. v. Servotronics, Inc., 132 A.D.2d 392 (4th Dep't
1987). Our Advisory Committee considered and rejected the idea of adopt-
ing Fed. R. Civ. P. 26(b)(5)(B), which sets forth the action required by
the recipient of inadvertently, exchanged matter upon realizing, or
being notified, that the matter exchanged was exchanged inadvertently.
Committee members believe that action by the recipient of what is, or
comes to be known as, inadvertently exchanged matter is an ethical
matter, appropriately and adequately addressed by New York's Rules of
Professional Conduct. See, Rule 4.4(b).
The current proposal contains minor modifications from the original
draft of the proposal. That original draft addressed disclosures made in
a "proceeding." CPLR 105(b) provides that the word "action" includes a
"proceeding." Therefore the amended proposal refers to disclosures made
in an "action." Additionally, the original draft of the proposed statute
listed the absence of "undue prejudice" as one of the conditions for
non-waiver of the privilege by inadvertent disclosure, without indicat-
ing which party has the burden on that issue. The current proposal makes
it clear that the burden is on the party in possession of the inadvert-
ently disclosed material to demonstrate undue prejudice in the nullifi-
cation of the waiver and return of the material, while retaining the
burden on the disclosing party to demonstrate the other grounds for
nullifying the waiver.
The current proposal retains the use of the term "undue prejudice," as
opposed to adopting the suggestion of the New York City Bar Association
Committee on State Courts that it be replaced with the phrase "prejudice
arising from the inadvertent disclosure and subsequent restoration of
immunity." That suggested language creates unnecessary interpretation
issues. The party in possession of inadvertent disclosure will always
suffer some prejudice from the restoration of immunity. That party will
lose the right to use that disclosed material. The issue in these situ-
ations is whether that prejudice will be, in the circumstances of each
individual case, unfair. Hence the phrase "undue prejudice" better
serves the purpose of the proposed statute. It is a term with which
courts and lawyers are familiar from various contexts, and which is
usually applied in this context as well (see, The New York Times Newspa-
per Division of The New York Times Company v. Lehrer McGovern Bovis,
Inc., 300 A D 2d 169 (1st Dept. 2002) (A privilege is waived when a
document is produced, unless the proponent of privilege demonstrates
that "the client intended to maintain the confidentiality of the docu-
ment, that reasonable steps were taken to prevent disclosure, that the
party asserting the privilege acted promptly after discovering the
disclosure to remedy the situation, and that the parties who received
the documents will not suffer undue prejudice if a protective order
against the use of the document is issued" (emphasis added))).
This measure, which would have no fiscal impact, would take effect on
January first following the date on which it becomes law.
2015 LEGISLATIVE HISTORY:
OCA 2015-33R
