Proposed evidence rule changes would thwart state law, ethics.

New proposed changes to the Federal Rules of Evidence are based on a breathtakingly broad notion of congressional power that would justify a preemptive federal rule of evidentiary privilege and a federal takeover of the regulation of law practice.

The Center for Constitutional Litigation (CCL) is working on behalf of ATLA members to modify proposals that would preempt state laws on privilege and require lawyers to behave in ways prohibited by state ethics rules.

Proponents of restricted access to justice--believing that the Federal Rules Committee did not give them everything they wanted in new procedural electronic discovery rules taking effect this month-have now proposed substantive amendments to the Federal Rules of Evidence.

Proposed Rule 502, "Attorney-Client Privilege and Work Product: Limitations on Waiver," not only would preempt state laws of privilege and state ethics rules, but also would preclude certain evidence now available to victims of corporate misconduct from being used in state or federal courts.

Federal enforcement guidelines suggest leniency in punishment if a corporation under investigation waives the attorney-client privilege. The proposed rule permits corporations to selectively waive the privilege and negotiate sweetheart deals with the federal government while effectively insulating themselves from state laws that would provide redress to the victims of their bad behavior. The rule preempts state laws that would allow the disclosed information to be used by victims seeking redress in court.

CCL has asserted that preempting victims' redress is the wrong response to prosecutorial overreaching.

The proposed rule also requires lawyers to return, and not to exploit, certain privileged materials inadvertently disclosed in discovery. That is contrary to ethics requirements in some states and effectively sets a federal rule of lawyer ethics.

The rule requires even third parties to pretend that the materials had remained secret, preempting state laws that treat materials as unprivileged once disclosed.

As dangerous as the proposed rule is to people harmed by corporate misbehavior, the suggestion that Congress has the power to regulate the bar and preempt state evidence rules has even more mind-boggling repercussions: There seemingly would be no state law of redress--and no state procedure--that Congress could not preempt.

The proposed rule is available at www.uscourts.gov/rules/Reports/ EV05-2006.pdf. Written public comments will be taken through February 15, 2007. Hearings will be held in Phoenix on January 12 and in New York on January 29.

If you are interested in writing comments or appearing at a hearing, contact CCL Senior Litigation Counsel John Vail at [e-mail].