In this week’s Case of the Week, I dive into a critical decision from FTC v. Amazon.com, Inc. (August 1, 2024), which underscores the precarious nature of privilege in document production—particularly in the context of multiple investigations. The decision sheds light on the complications that arise when documents are produced with varying degrees of redaction across different proceedings, and the limitations of Federal Rule of Evidence 502(b) in providing protection.
The Case Background
This case is part of the broader FTC action against Amazon, where the FTC alleges that Amazon employs anticompetitive strategies to maintain monopoly power. The focus of this decision is on 17 documents that Amazon produced across multiple FTC investigations—only to later assert privilege and claw them back.
The heart of the dispute lies in whether Amazon waived privilege by producing these documents with redactions in one investigation and then attempting to claw them back in another. The FTC argued that Amazon’s failure to promptly claw back inadvertently produced documents and its inconsistent handling of redactions led to a waiver of privilege.
Key Issues and the Court’s Analysis
The Court had to tackle two major issues:
- The Applicability of the FRE 502(d) Order: Amazon argued that the 502(d) order—intended to prevent waiver of privilege due to inadvertent production—should apply to documents produced in pre-litigation investigations. However, the Court disagreed, ruling that the 502(d) order only applied to documents produced during the current litigation, not to those produced in earlier investigations. This finding significantly impacted Amazon’s defense and highlighted a critical limitation of 502(d) orders.
- The Waiver of Privilege Under FRE 502(b): The Court then examined whether Amazon took reasonable steps to prevent and rectify the inadvertent production of privileged documents. Under Rule 502(b), a party can avoid waiver if it can show that the disclosure was inadvertent, reasonable steps were taken to prevent the disclosure, and reasonable steps were promptly taken to rectify the error.
The Court found that Amazon’s repeated redaction and subsequent production of documents indicated intentional, not inadvertent, disclosures. Moreover, the Court deemed the time frames Amazon took to claw back the documents—ranging from 18 to 49 days—unreasonable, leading to a finding of waiver for several documents.
Practical Takeaways for Litigators
This decision serves as a stark reminder of the complexities involved in managing privilege across multiple investigations and the stringent standards courts apply under Rule 502(b). Here are the crucial takeaways:
- Plan Ahead for Investigations: The Court’s ruling emphasizes the importance of having a robust process in place before an investigation begins. This includes identifying all potentially privileged documents and ensuring consistent handling across all proceedings.
- Be Mindful of Redactions: Redacting documents is a strategic decision, and courts may view it as an intentional action rather than an inadvertent error. This makes it harder to claim inadvertent disclosure if a mistake is later discovered.
- Understand the Limits of 502(d) Orders: While 502(d) orders are valuable, they may not cover documents produced before litigation begins. Litigators should be aware of this limitation and prepare accordingly.
- Coordinate Across Teams: In large-scale investigations, where multiple teams or counsel are involved, coordination is key. Designate a central point of contact to oversee privilege issues and ensure consistent treatment of documents across all investigations.
In conclusion, the FTC v. Amazon.com, Inc. decision highlights the high stakes of privilege management in complex litigation and investigations. By taking proactive steps, litigators can safeguard against inadvertent disclosures and avoid the costly consequences of privilege waiver.
She is a co-author of Electronic Discovery and Records and Information Management, and host of Case of the Week at eDiscovery Assistant. As Principal at ESI Attorneys, Kelly manages the boutique eDiscovery and information law firm that acts as operational business partners with its clients to advise law firms, corporations, and municipalities on all areas of electronic information including eDiscovery, privacy, cybersecurity, and information governance.
Kelly is also the CEO of eDiscovery Assistant — a SaaS-based practical resource for litigators handling eDiscovery — that curates discovery decisions, rules, and additional content. She is developing an online academy to provide on-demand education for lawyers and legal support professionals to stay abreast of changes in the law and technology that affect litigation and clients’ obligations to respond.
You can reach Kelly at [email protected], join her Facebook community group at Let’s Talk eDiscovery, or connect with her on Twitter @kellytwigger.