Be Careful What You Ask For: Two New Cases Seek to Limit Burdensome E-Discovery Requests

Most of you know the story: either the plaintiff wants everything under the sun from the defendant as part of discovery but has no documents of its own to produce, or two big companies hit each other with unreasonable discovery requests to make the other side settle an otherwise meritorious case.

To address both opportunities for abuse, two new cases put out the message, “If you make unreasonable demands, you are going to have to pay for it.”

In Lubber, Inc. v. Optari LLC, No. 3:11-0042, 2012 WL 899631, at *1 (M.D. TN March 15, 2012), the defendants filed a motion asking the judge to either limit the relevant timeframe for e-discovery or require the plaintiff to pay for all of the defendants’ costs in connection with such discovery. Magistrate Judge Joe B. Brown agreed with the defendants that when a party has to bear a part of the cost of producing what they request, the amount of material requested drops considerably:

When a party has to contemplate whether the last possible bit of information will cost them more than it is worth, they quit asking for items of marginal relevance. As long as requesting the last bit of information costs them nothing, they have little, if any, incentive not to request it. Even if they choose never to look at it, they have put the opposing party to the cost of production. In some cases discovery becomes a tool with which to bludgeon the other side into submission.

Id. at *2. Thus, using the authority granted to him by Federal Rule of Civil Procedure 26, the magistrate ordered each side to bear half the expenses of the materials not already produced. He also ordered the plaintiff to post a $10,000 bond, prior to the defendants producing the requested documents, to protect the defendants if they were ultimately successful on the merits and entitled to costs.

Similarly, in Cannata v. Wyndham Worldwide Corporation, 2:10-cv-00068-PMP-VCF, 2012 U.S. Dist. LEXIS 20625 (D. Nev. Feb. 17, 2012) Magistrate Judge Cam Ferenbach reined in e-discovery requests that were quickly spiraling out of control by ordering cost-shifting for unreasonable requests.

The court found that as long as the final combined set of search terms and custodians or data storage sites did not exceed 40, the plaintiffs would not be required to reimburse the defendants. If, however, the combined total exceeded 40, for each extra search term or site (up to 50) the plaintiffs would have to reimburse the defendants for 5 percent of their e-discovery costs, from the date of the order through the end of discovery, up to 50 percent.

While these cases provide ammunition to bring a motion for cost-shifting for parties who are on the receiving end of overbroad document requests, they also place responsibility on corporate counsel to ensure that it narrowly tailors the discovery being served on its behalf. Otherwise, it could be you on the other side of that cost-shifting motion.

 

This article was originally posted in Inside Counsel.

Ode to E-Discovery in 2008

Flooding the internet, they consistently accrue:
Blawgs offering e-discovery 'Year in Review's;
But these go on about facts and case histories too,
Before getting to the point of what you can and can't do.

Why not cut to the chase? Why not give it up straight?
Stripped below are the basics of two thousand and eight.
We'll start off with the general dos and the don'ts;
The haven'ts, the shouldn'ts, the emphatically won'ts.

Quite instructive are Canon's and Keithley's examples
Of "lackadaisical attitude" of defendants. As samples:
Do not find that hard drive behind the client's home door,
When discovery has been ongoing for a year or for more.

Do not stumble on computer reports you said "did not exist"
In an e-folder marked "Reports" that you for some reason missed.
And periodically remind clients and their IT personnel
Of the need to preserve the source code that was written on that Dell.

When you don't produce e-mails, the court said in Peskoff
Explain your search method and why, at production, you scoffed.
But if you contributed to information deletion or loss
And the court orders recovery, you won't get your costs!

Do not say you've e-searched when it's just a tall tale:
This was sanctioned under Rule 26 in R&R Sails.
There were costs sanctions also in Ajaxo, among a larger plethora.
And sanction of termination in Arteria and also Pandora.

In Keithley sanctions were imposed even on a party pro se
And in Schwarzenegger for "foot dragging" and a "litany of delays."
But take heed, warned O'Keefe -- don't request termination on whim.
Do not "strike at a king" unless you're sure you'll "kill him."

O'Keefe (plus Equity, Victor) gave lawyers heart attacks.
For saying that search term effectiveness is for experts to crack;
And that if lawyers pick and evaluate the key words instead
They are moving toward places "where angels fear to tread."

The courts warned that when using a method of searching
Learn first of its weaknesses through prior researching.
This was why D'Onofrio rejected what both experts said
And created a brand new search protocol method instead.

Rule 502 on preventing waiver through "reasonable steps"
Saw decisions pronouncing judgment on various missteps.
Alcon acknowledged that the Rule's very recent debut
Was designed to avoid "expensive, painstaking review."

Despite this pronouncement, some courts have cried "waived"
As to attempts made in hindsight to have privilege saved.
Rhoads found possible waiver for documents mistakenly produced
If they were not in the privilege log – there could be no excuse.

And failure to take measures that could prevent waiver
Like claw-back agreements, or Sedona-type saviors
Led to Victor’s conclusion, which uncommonly held
That the attorney-based privilege at issue was quelled.

Moving on, Mancia addressed the Rule 26 obligation
To meet early on regarding e-preservation,
Proclaiming "adversarial conduct" in e-discovery condemned
As a "burden to the American judicial system."

Some courts dove in early to prevent such discord,
Ordering forensic exams to preserve evidentiary records.
To conserve ephemeral info in Xpel, it was fair;
And when defendants were evading service, it was ordered in Allcare.

Other examples included when a party was unable
or unwilling (in Canon) to preserve/produce on the table.
Just remember: as emphasized in Sterle and Square D
Do not interfere with a court-ordered forensic decree.

Rodman, Reinhard and Younessi addressed nonparty subpoenas
And the protection of confidential, trade secret arenas.
Where nonparties are concerned and offer up much resistance
In-house searches are fine, or neutral expert assistance.

The debates continue on metadata versus non-native tracks
And Aquilar labeled metadata as being "the new black."
That court ordered re-production of non-natives with meta
Though the recipient was required to pay costs, as pro rata.

But not all courts required conversion to a metadata mode.
Extra burden led D'Onofrio to an "only if necessary" ode.
And Autotech said doc requests must actually require "native" --
You can't ask for it in hindsight by getting creative.

Yet if e-documents already exist in original native form
And the requests do not contain any language that informs,
White condemned the conversion to non-native in litigation
Since this is done just to increase the opponent's frustration.

Finally, social networks are making an appearance in law
And becoming a most popular e-discovery draw.
The field is wide open on the extent to which these
Are discoverable and admissible, or cannot be seized.

Flagg required defendants to give ISPs consent
And to produce ISP-retrieved records of texts that it sent.
And in Australia a court made clients even more nervous
By allowing Facebook to be used as a method of service!

We hope you've enjoyed this short "Year in Review"
And that all of this knowledge is useful to you.
We await more developments in two thousand and nine;
And wonder whether and where courts will draw any lines.

 

**For a complete list of the cases discussed above, please contact the author.
 

Is E-Discovery Eliminating the Benefits of Arbitration?

The broad scope of Federal Rule of Civil Procedure 26, coupled with electronic discovery and aggressive trial counsel, have increased litigation costs exponentially. (See Arbitration's E-Discovery Conundrum, by Thomas J. Aldrich). As a result, corporations and their legal counsel have recently turned to arbitration in an attempt to escape the huge expansion of document discovery in federal civil litigation. Id. However, as litigation discovery techniques used in federal court trickle down to the arbitration process, the benefits of arbitration - cost-efficiency and speed - have all but disappeared. Id. In an effort to preserve the benefits of arbitration, while balancing the need to discover documents with the cost and burden involved with producing them, many arbitral institutions have developed comprehensive guidelines for dealing with discovery and resolving disputes. Id. In his article entitled "Arbitration's E-Discovery Conundrum", Thomas J. Aldrich provides a rundown of the discovery guidelines propounded by arbitral institutions in an effort to "stem the tide of runaway discovery in arbitration." Id.  Read on to see a summary of his findings.

The International Institute for Conflict Prevention and Resolution

The arbitration committee for the International Institute for Conflict Prevention and Resolution has proposed guidelines for preventing overzealous discovery in arbitral proceedings. Section 1(a) of the protocol reads: "[a]rbitration is not for the litigator who will 'leave no stone unturned…' [Z]ealous advocacy must be tempered by an appreciation for the need for speed and efficiency… [D]isclosure should be granted only as to those items that are relevant and materials for which a party has a substantial, demonstrable need." Id. The guidelines state that the disclosure of electronic documents shall follow the general principles of narrow focus and balancing cost, burden and accessibility with the need for disclosure. "Production of e-materials from a wide range of users or custodians, which is both costly and burdensome, should not be permitted without a showing of extraordinary need." Id. 

 

The guidelines also contain a list of various "levels" of disclosure from which the parties may select. Mr. Aldrich summarizes the levels or "modes" of disclosure succinctly when he states:

"Mode A, the narrowest scope, provides for no prehearing disclosure other than copies of printouts of e-documents to be presented in support of each party's case. Mode B provides that each side produce e-documents maintained by an agreed limited number of designated custodians, that the disclosure be limited to e-documents created from the date of signing the arbitration agreement to the date of filing the request for arbitration, and that production be limited to e-documents from primary storage facilities. In other words, no documents from backup servers, backup tapes, cell phones, personal digital assistants or voicemails will be produced. And no information obtained through forensic methods will be admitted in evidence." Id.

"Mode C provides for a larger number of specified custodians and a wider time period than Mode B, and also provides that the parties may agree to allow documents obtained through forensic methods to be admitted. Finally, Mode D provides for disclosure of electronic information regarding nonprivileged matters relevant to any party's claim or defense, subject to limitations of reasonableness, duplicativeness and undue burden. It is a broad level of disclosure similar to that required or permitted under FRCP Rule 26." Id. 

 

The Chartered Institute of Arbitrators

 

The article also discusses the Chartered Institute Protocol for E-Disclosure in Arbitration, which was put into effect in October 2008. See Chartered Institute Protocol for E-Disclosure. The purpose of the Protocol is "(1) to achieve early consideration of disclosure of documents in electronic form ('e-disclosure') in those cases where early consideration is necessary and appropriate for the avoidance of unnecessary cost and delay; (2) to focus the parties and the tribunal on e-disclosure issues for consideration, including the scope and conduct of e-disclosure (if any); and (3) to address e-disclosure issues by allowing the parties to adopt this protocol as part of their agreement to arbitrate a potential or existing dispute." Id. The Protocol delineates what is necessary for "early consideration;" the necessary contents of a request for disclosure of electronic documents; how electronic documents are to be produced; and the procedure and allocation of costs associated with electronic disclosure of documents. Id. 

 

International Centre for Dispute Resolution

 

Mr. Aldrich also discusses the rules for the exchange of information promulgated by the ICDR, the international arm of the American Arbitration Association. See ICDR Guidelines for Arbitrator Concerning Exchanges of Information. The Guidelines provide that "while arbitration must be a fair process, care must also be taken to prevent the importation of procedural measures and devices from different court systems, which may be considered conducive to fairness within those systems, but which are not appropriate to the conduct of arbitrations in an international context and which are inconsistent with an alternative form of dispute resolution that is simpler, less expensive, and more expeditious." Id. Under the Guidelines, the only documents to be exchanged are those on which a party relies. The Guidelines specifically address electronic documents, and state:

 

"When documents to be exchanged are in electronic form, the party in possession of such documents may make them available in the form (which may be paper copies) most convenient and economical for it, unless the tribunal determines, on application and for good cause, that there is a compelling need for access to the documents in a different form. Requests for documents maintained in an electronic form should be narrowly focused and structured to make searching for them as economical as possible. The Tribunal may direct testing or other means of focusing and limiting any search." Id. 

 

Conclusion

 

While it is obvious that some arbitral institutions are taking steps to regulate discovery in arbitration proceedings, others lag behind. Even with these protocols, it is up to the parties and the arbitrators to enforce them, "stem the tide of runaway e-discovery in arbitration" and preserve the benefits associated with alternative dispute resolution. For a full discussion of these issues, click here to read "Arbitration's E-Discovery Conundrum" by Thomas J. Aldrich.