Florida Supreme Court Juices Up E-Discovery Requirements

On July 5, 2012, the Florida Supreme Court adopted seven amendments to the Florida Rules of Civil Procedure (“Fla. R. Civ. P. ___”). See In re Amendments to the Florida Rules of Civil Procedure -- Electronic Discovery, ____ So.3d ____, 2012 Fla. LEXIS 1318 (Fla. July 5, 2012). These amendments are largely modeled on the 2006 Amendments to the Federal Rules of Civil Procedure (namely, Rules 16, 26, 33, 34, 37 and 45), and are designed to encourage harmonization with federal decisions. Specifically, the seven amended rules consist of Fla. R. Civ. P. 1.200 (Pretrial Procedure); 1.201 (Complex Litigation); 1.280 (General Provisions Governing Discovery); 1.340 (Interrogatories to Parties); 1.350 (Production of Documents and Things and Entry Upon Land for Inspection and Other Purposes); 1.380 (Failure to Make Discovery; Sanctions); and 1.410 (Subpoena).

However, while the amendments parallel the changes to Federal Rules, some contain subtle variances from their federal counterparts, that arguably operate to make the Florida rules broader and more malleable than their federal counterparts.

Some of the important provisions, and a comparison to their federal counterparts, can be summarized as follows:

1.    No requirement to "meet and confer" in Florida. The “meet and confer” provisions of Fed.R.Civ.P. 26(f) are not adopted by the Florida rules. While this development might be seen as a surprising omission, Florida Rule 1.200, applicable to all Florida court divisions, provides for the a Case Management Conference to be convened by order of the Court or by a party merely serving a notice setting the conference. More importantly Rule 1.2000 specifically sets out electronic discovery matters to be discussed at the Case Management Conference, telling the parties to:

  • "consider the possibility of obtaining admissions of fact and voluntary exchange of documents and electronically stored information, and stipulations regarding authenticity of documents and electronically stored information;"
     
  • "consider the need for advance rulings from the court on the admissibility of documents and electronically stored information;"
     
  • "discuss as to electronically stored information, the possibility of agreements from the parties regarding the extent to which such evidence should be preserved, the form in which such evidence should be produced, and whether discovery of such information should be conducted in phases or limited to particular individuals, time periods, or sources;"

Additionally in cases deemed Complex Litigation, Florida Rule 1.201 has been amended to specifically require discussion during the Case Management Conference of "the possibility of obtaining agreements among the parties regarding the extent to which such electronically stored information should be preserved, the form in which such information should be produced, and whether discovery of such information should be conducted in phases or limited to particular individuals, time periods, or sources[.]"

Florida's approach thus provides flexibility to accommodate the wide variety of cases in Florida courts of general jurisdiction while providing greater guidance than found in Fed. R. Civ. P. 26(g) and Fed.R.Civ.P. 16.

2.  Pre-litigation duty to preserve remains in question. Rule 1.380 adopts, verbatim, the well-known (though seldom used by courts) Fed.R.Civ.P. 37(e) safe harbor, under which sanctions cannot be awarded against a party who failed to produce ESI lost as a result of "good faith operation." The Florida Committee Note also obliquely references the duty to preserve . . . however, it does so without resolving whether there is actually a pre-litigation duty in Florida. Under federal law, a duty to preserve arises when there is "reasonable anticipation" of litigation, though the exact scope of this phrase remains to be tied down. The Florida Committee is silent as to whether any duty exists, and has left the issue to the courts to determine on a case by case basis rather than drawing any hard lines. Chances are, Florida courts will come down in line with the federal "reasonable anticipation" standard.  But there is current Florida law that appears to hold that a duty to preserve arises only by statute, contract, or a request for production. Regardless of what happens on this front, however, the intentional destruction of evidence to thwart the administration of justice (either before or during litigation) does give rises to spoliation claims under Florida law.

3.   ESI to be produced as "ordinarily maintained" or "reasonably usable form." Rule 1.280 further authorizes discovery of ESI, and Rule 1.350 treats ESI as a type of document whose production must be in the form ordinarily maintained, or else in a reasonable form. The important change in Rule 1.350 is that the producing party must specify before production and in the written response to the request for production what production format will be used. The requesting party can specify a format, and if the producing party objects or a format is not specified, the producing party must state the format of production it intends to use.

The great utility of this structure is that disputes as to format will surface early for judicial resolution.   While the amendment does not define "reasonably usable," this will vary from case to case depending on cost and utility issues. The amended Rule 1.350 does, however, make clear that the producing party may produce as "ordinarily maintained" -- it need not take any extraordinary steps to enhance the utility of the production form by (for example) converting paper into searchable OCR text. But note that because the amended Rule does not require production in "native," only in a "reasonably usable," format, native production may or may not be the right format for the case.

4.  Motions to compel inaccessible ESI permitted. Fed.R.Civ.P. 26(b)(2)(B) contains a presumptive exclusion of ESI production from inaccessible materials such as backup tapes. Amended Rule 1.280(d)(1) authorizes objections to the discovery of ESI from such inaccessible sources, requiring the objecting party to demonstrate "undue burden and cost." Even upon a showing of undue burden and cost, however, the Court may still order production on a showing of good cause, although it must consider appropriate conditions and limitations on such discovery including cost shifting. 

The amended Rule 1.280(d)(2) also specifically makes proportional considerations applicable "in determining any motion involving discovery of electronically stored information." The proportionality factors courts should consider (such as the expense, the time commitment, and potential usefulness the material, and so on) are helpfully listed in Rule 1.280(d)(2) as well. These factors track Fed. R. Civ. P. 26(b)(2)(C).

5.   ESI can be used to answer interrogatories. Rule 1.340 authorizes producing ESI in lieu of interrogatory answers. In doing so it spells out the form of production instead of leaving it open, as does Fed.R.Civ.P. 33.

6.   Litigation holds are not mentioned. The Florida Committee Note does not mention litigation holds, but states that in determining “good faith” the court may consider any steps taken to comply with preservation obligations. Cf. W. Hamilton, Florida Moving to Adopt Federally-Inspired E-discovery Rules (Sept. 20, 2011) (arguing that “traditional Florida spoliation remedies are in play when a party intentionally destroys relevant information to thwart the judicial process – whether before or during litigation”); Michael D. Starks, Deconstructing Damages for Destruction of Evidence, 80-AUG Fla. B. J. 36 (July/August 2006) (noting that both sanctions and tort damages are available under Florida law, although "the first-party spoliation tort" has since been destroyed). 

7.  Inadvertent production. Effective January 2011, Florida adopted Rule 1.285 to govern the responsibilities of parties upon post-production claims of inadvertent production of privileged material. This rule is analogous to Fed.R.Civ.P. 26(b)(5)(B)'s "claw-back" provision, but broader and more comprehensive. Like the federal version, however, Florida leaves the issue of waiver to a separate proceeding.

 

In sum, Florida has enacted a nuanced and powerful set of e-discovery rules that provide excellent direction and authority for the management of e-discovery. The new Florida amendments are to take effect in September 2012.
 

Four Lessons Counsel can learn about Da Silva Moore and Predictive Coding

There’s good news in the world of electronic discovery. This February in New York, Magistrate Judge Andrew Peck and counsel for the parties in Da Silva Moore v. Publicis Groupe gave us a magnificent e-discovery lesson and pushed open the door for the utilization of advanced search technologies -- namely predictive coding, an increasingly used methodology of computer-assisted review.

The Case

The plaintiff filed a Title VII class action gender discrimination claim against defendant Publicis Groupe, alleging she and other female employees at Publicis Groupe endured discriminatory terminations, demotions and job reassignments. The plaintiff (who had very little, if any, electronically stored information (ESI) of her own to produce) demanded that Publicis Groupe produce documents (including ESI) that related to whether Publicis Groupe:

  1. Compensated female employees less than comparably situated males through salaries, bonuses or perks.
     
  2. Precluded or delayed selection and promotion of females into higher-level jobs held by male employees.
     
  3. Disproportionately terminated or reassigned female employees when the company was reorganized in 2008.

Based on the records requested and the number of custodians, the parties anticipated the document pool would be around three million documents, which would have likely cost in excess of $1 million with traditional keyword search methods. Instead of going this route, the parties agreed to something bold: review the documents using what has come to be called predictive coding, a methodology of computer-assisted review. By using these methods, the parties hoped to reduce the number of manually-reviewed documents from 3 million to 20,000.

The implementation of predictive coding is not simple. Fortunately, Da Silva Moore v. Publicis Groupe provides a lengthy guide on important topics such as methods to identify the initial seed set, iterative training rounds to refine the “predictive coding to assure reasonable recall” and methods of sampling to validate levels of confidence and confidence intervals.
 

What the Case Means for Your Business

Although discovery in Publicis Groupe is far from over, and the parties have each filed motions challenging portions of Judge Peck’s ruling, there are already lessons to be learned for how to effectively deploy computer-assisted review to reduce the cost of electronic discovery in your cases:

1. Have an expert, knowledgeable about the review tool you intend to use.  Judge Peck turned to the parties’ technical experts to explain the effect of the review protocol on the validity of the ultimate production. Surely judges less familiar with the technology could benefit from hearing from an expert in the field. Since experts tend to disagree (as they did in Publicis Groupe), it’s an absolute requirement to provide testimony about the operation and testing of the search tool chosen for the case.

2. Be willing to accept that you will not receive every potentially relevant document. Judge Peck put it best when he reminded counsel, “By the time you go to trial, even with six plaintiffs, if you have more than 100 trial exhibits it will be a miracle.” He also explained that, “The idea is not to make this perfect, it’s not going to be perfect. The idea is to make it significantly better than the alternative (human review) without nearly as much cost.”

Consequently, you have to be willing to risk that a computer will miss more documents than the recent law grad you would normally pay to sift through each page. Keep in mind that human review and key word search strings are far from perfect. Predictive coding when properly applied will likely enhance both recall and precision.

3. Cooperate with the opposition. The utilization of this technology requires engaged cooperation between the parties. Counsel must review and share the initial seed set with the opposition, and agree on statistical sampling techniques. Notwithstanding subsequent disputes, Da Silva Moore v. Publicis Groupe illustrates competent counsel working closely on e-discovery to meet the interests of both the plaintiffs and the defendant. Keep in mind that both sides agreed to utilize this advanced technology in this case. Of course, the devil is in the details, where reasonable litigants can disagree.

4. Understand the technology.  Even with technology experts at the ready, counsel were still necessary to advocate for their client’s interest in balancing the cost of discovery against the completeness of the final set of documents produced. Predictive coding is not right for all cases. It is not inexpensive—counsel must expend considerable up-front fees identifying the seed set and fine tuning the technology.

Touted as a practical, cost-saving and revolutionary solution, computer-assisted review is finally getting its chance to show what it’s worth. The private bar is watching anxiously to see whether it lives up to its billing.
 

 

This article was originally published in Inside Counsel.

Florida Moving to Adopt Federally-Inspired E-Discovery Rules

Florida is hurdling toward the adoption of new civil procedure rules that address the discovery of electronically stored information (ESI) in the Florida state courts.

The Florida Civil Rules Electronic Discovery Sub-Committee, initially under the leadership of Lawrence Kolin and now Kevin Johnson, recommended rule changes addressing e-discovery after years of study. The full Rules Committee voted at The Bar’s Annual Meeting in June to accept the Sub-Committee's proposed rules with minor editorial changes sent the e-discovery rules to the Supreme Court on an expedited “out-of-cycle” track, which would avoid an additional two-year wait for the 2013 regular cycle rules changes. On July 29, 2011, The Bar’s Board of Governor’s accepted the recommendations, including expedited review and voted to have The Bar’s legal counsel submit the proposed rules to the Supreme Court.  After publication in The Bar News and the opportunity for comment, the Supreme Court will be able to consider the rules as early as this fall.

For the most part, the recommended rule changes track the federal 2006 rule changes with a few exceptions. The Sub-Committee’s wisdom in tracking the federal rules is important for a number of reasons.

  • First, the adoption of parallel e-discovery rules will provide Florida state courts with the abundant guidance found in federal case law. While the decisions of the federal courts interpreting the federal rules are not binding on Florida judges, federal decisions will have a dramatic persuasive impact on Florida cases. Practitioners will be able to refer to federal court case and cases in states where rules patterned on federal law have been enacted, which avoids re-inventing a substantial body of important case law.
  • Second, national corporations and businesses litigating disputes in Florida will now find consistency between federal and state court decision.
  • Third, the adoption of Florida e-discovery rules that closely track the federal rules will minimize forum shopping between federal and state courts, at least with respect to handling ESI. Soon Florida and federal courts will be aligned regarding, among other things, the principle of proportionality that has become critically important in managing electronic discovery. Litigants will no longer need to be concerned that the Florida concept of “undue burden” under Fla. R. Civ. P. 1.280(c) is less encompassing than the proportionality requirements of Fed. R. Civ. P. 26(b)(2)(B) and (C). The new Florida e-discovery rules will give Florida judges a clear directive to effectively manage the discovery of voluminous ESI that threatens to eclipse the value of any case whether or not the digital data is "reasonably accessible." Florida judges have principally resolved discovery objections on the basis of relevance: with few exceptions, if the information is “relevant” it must be produced if requested. Now, however, under the soon to be adopted Florida e- discovery rules, the sheer volume of relevant digital data relative to the “value” of a case may be a sufficient foundation to invoke e-discovery management tools such as staging, sampling and other methods that control the volume of digital data subject to preservation, search and review.

The proposed Florida e-discovery rules differ from the Federal rules in one important respect. The new proposed Florida rules will not require an early Federal Rule 26(f) type “meet and confer” conference regarding electronic discovery. Florida courts of general jurisdiction handle all sorts of matters –family, probate, landlord tenant, foreclosure—and the Sub-Committee reasoned that a mandatory Rule 26(f) conference may not be productive in all cases and could create a burden in low value cases or where routine procedures are already in place. However, what burden is it to place a call to the opposition and ask if electronic discovery will be part of the case?  Digital data will play some role in almost all cases—even the smallest—and a preliminary dialogue is the best method to avoid disputes, if not disasters, down the road. Fortunately, this “omission” is not as serious as it may seem. Circuit courts in three of Florida’s major urban areas have established “business courts” for more significant commercial cases. These courts in Miami, Orlando and Tampa have local rules already requiring early judicial conferences and meetings with counsel, and often clients, that can address e-discovery issues. See e.g. http://www.fljud13.org/JudicialDirectory/RichardANielsen/ProceduresPreferences.aspx

Additionally, in cases deemed "complex", Florida has a special rule that mandates Rule 26(f) type conferences. Fla. R.Civ. P. 1.201. And finally the Sub-Committee noted that any party in any case can make a motion and request a preliminary e-discovery conference with the Court and the opposition. In sum, the Sub-Committee wisely decided to recommend the important rule changes where agreement could be reached rather than derailing the entire process due a lack support from all Bar segments. The new Florida e-discovery rules are a significant advance that will catapult Florida in to the ranks of those states with progressive e-discovery rules.

Beyond “meet and confer” differences, litigators should also be forewarned of claims of significant differences regarding preservation in Florida and Federal courts. The idea that preservation is not mandated in Florida when litigation is reasonably anticipated derives from some Florida decisions that broadly recite, mostly in dicta, that preservation is only required when mandated by contract, statute, or a request for production. In this regard, Florida e-discovery preservation jurisprudence appears to lag behind Federal courts and other state courts. See e.g. Gayer v. Rind Line Construction & Electric, Inc., 970 So.2d, 424,426 (Fla. 4th DCA 2007); Royal Sunalliance v. Lauderdale Marine Center, 877 So.2nd 843 (Fla. 4th DCA 2004). However, reliance on this general and fact specific precedent to conclude that a duty to preserve only arises in Florida from a contract, statute (e.g. medical records), or a request for production is ill-advised. In our recently published LexisNexis® Practice Guide Florida Electronic Discovery and Evidence, my co-author, former Florida state court judge Ralph Artigliere, and I argue this view is both mistaken and dangerous. Although Florida law has been slow to address the pre-litigation triggers requiring the preservation of electronically stored information, common law preservation duties are not absent in Florida. Traditional Florida spoliation remedies are in play when a party intentionally destroys relevant information to thwart the judicial process--whether before or during litigation. Further, we believe that as Florida case law slowly develops it will adopt what the Federal case law has established: the fragile and ephemeral name of digital data and the auto-deletion features of computer devices and computer networks require affirmative efforts to halt such deletion when litigation is reasonable anticipated. Just as Florida has come into alignment with Federal rules relating to proportionality, Florida courts will also align themselves with federal precedent on preservation.

In short:  any litigator in the Sunshine State advising clients that the deletion of relevant electronically stored need not be suspended when litigation is reasonably anticipated, is inviting the proverbial e-discovery train wreck. 

The Search for Search Standards: The Hunt at DESI IV

What makes an e-discovery search legitimate and defensible?

While virtually every case involves a search for relevant electronically stored information ("ESI"), there is no industry-based definition or measure of a “legally defensible” search. Reminiscent of Supreme Court Justice Potter Stewart's famous quip, some think we know a good search “when we see it,” but the simple and embarrassing truth is that we do not have an operative definition of search acceptability. The lack of any such industry standard for searching and finding ESI in a case wreaks havoc in the field and leaves it to courts to determine, on a case by case basis, whether a particular search passes muster. Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.d. 251 (D. Md. 2008).

But while judicial officers are many things, they are not search experts. United States v. O’Keefe, 537 F. Supp. 2d. 14 (D.D.C. 2008); Equity Analytics, LLC v. Lundin, 248 F.R.D. 331(D.D.C. 2008). In fact, many judges were elevated to judgeship years or even decades before ESI became prevalent, and thus lack any practical experience in searching for, processing, or producing ESI. Putting the question to the courts will therefore result (and has resulted) in disparate answers that vary from jurisdiction to jurisdiction depending both on how the search issues are presented, and on the quality and quantity of resources each side brings to the court. Do we want an approach that may lead to different search standards, say, in a federal court in Chicago versus a state court in Los Angeles?

The risk is simply too great and the issues too pressing, to allow a generation or two of common law decisions across multiple jurisdictions to be cobbled together to shape an overarching definition of a "good" search that counsel and clients can rely upon -- one that will stand up to judicial scrutiny.  That's where "ICAIL," the International Conference of Artificial Intelligence and Law, and its Discovery of Electronically Stored Information (DESI) Workshop, comes in.

Actual search practice in litigation is a chaotic cacophony of divergent practices applied with more or less vigor and attentiveness. What is the best approach for any particular case? Much litigation is still stuck on the case-specific level of discussing and testing the application of Boolean search terms. As a result, the more general and overarching issues of search tools and other technologies involved --which form a large part of whether a search methodology passes muster as a whole -- often take a back seat.

The current lack of legally defensible search standards is especially paradoxical given the tremendous strides that we are making in searching as a general rule. The public release of the Enron (and other voluminous) digital data collections has allowed for search algorithm testing and development on genuine ESI collections, and unleashed exciting new search technologies and methodologies. See.e.g. http://www.edrm.net/resources/data-sets/enron-data-set-files  We now have our terra firma of a sufficient expanse, to conduct trial and error testing to find sustainable methods of searching. Moreover, an increasingly scientific approach to legal search is dispelling intuitive “the world is flat” biases -- such as the belief that the most reliable search (the so-called “gold standard”) is human, linear review of documents. See http://jolt.richmond.edu/v17i3/article11.pdf and http://trec.nist.gov/pubs/trec18/papers/LEGAL09.OVERVIEW.pdf. A purely linear approach is an invitation to cost and quality disasters, as the court implied in Multiven, Inc. v. Cisco Systems, 2010 WL 2813618 (N.D. Cal. July 9, 2010), and harkens back to Ken Withers' admonishment to move beyond the dark ages of "proto-digital" e-discovery. See also Kenneth J. Withers, "E-Discovery in the Next Decade: Finding a Way out of Purgatory," Keynote Address at Fifth Annual Advanced E-Discovery Institute (Nov. 20, 2009) and http://ediscovery.quarles.com/2010/08/articles/case-law/because-something-must-be-done-the-dangers-of-trying-to-save-ediscovery-costs-by-treating-data-like-paper/

As our search technologies and research advances, these capabilities will need to be incorporated into the definition of a “legally defensible search” that will give comfort to counsel and client, and that will not be second-guessed in the trenches of our adversarial litigation process. Because, ironically, while we struggle for precision in our searches, today we cannot precisely define a defensible search.

This is not to say there is no guidance at all. Federal magistrate judges have provided some invaluable guidance, and The Sedona Conference® as always has provided important thought leadership on general search technologies and approaches. See generally www.thesedonaconference.org and The Sedona Conference®, Commentary on Achieving Quality in E-Discovery. EDRM has produced excellent search commentaries. http://www.edrm.net/projects/search. And e-discovery blogs such as Ralph Losey’s “E-Discovery Team,” http://e-discoveryteam.com/2011/05/30/the-information-explosion-and-a-great-article-by-grossman-and-cormack-on-legal-search and John Tredennick's "E-Discovery Search Blog," http://www.catalystsecure.com/blog, have also advanced the dialogue. However, we are far from a definition of “legally defensible search” that judges can use to assess search efforts.

Into this vast and uncharted territory, rides the Discovery of Electronically Stored Information (DESI) Workshop of ICAIL, which held its fourth meeting this month at the University of Pittsburgh. http://www.umiacs.umd.edu/~oard/desi4/. The questions posed to the Workshop by Jason Baron and the DESI organizing steering committee composed of Jason Baron, Laura Ellsworth, Dave Lewis, Debra Logan, and Doug Oard to the 150 participants (vendor representatives, academicians, and lawyers) were:

(a) whether e-discovery search is capable of standardization, and

(b) if so what models might be suitable for the standard setting task.

In short, what would a defensible search standard look like? The day was divided between excellent presentations/discussions and small break-out groups working on discrete topics. We were honored and energized by an extended videoconference visit by Federal magistrate judge Paul Grimm http://www.mdd.uscourts.gov/publications/JudgesBio/grimm.htm, who is well-known for issuing thoughtful opinions on the issue of e-discovery, who enthusiastically endorsed the committee's work and provided a penetrating critique of the impact of the lack of search standards from the perspective of the bench.

I am not the official reporter of the DESI IV meeting and the opinions here are my own, but I think it safe to say that a consensus emerged on a number of points, two in particular:

  • A cross-vendor search standard will not be a particular tool or methodology, but an institutionalized quality assurance process that is required in many industries but that that has not penetrated the legal industry generally, much less e-discovery in particular. For example, manufacturers and retailers refuse to accept supplier products and services that are not “produced” subject to ISO standards. Legal processes should not be an exception. The ISO 9001 certification standard will require quality controls, precision and recall metrics, a proper mix of automated process and human direction and iteration, sampling parameters, exception reporting, refinement, auditing, and a senior management, institutional process commitment to on-going, enhanced measureable and verifiable quality. Clients, lawyers, and courts may ultimately, and perhaps soon, require ISO certifications before accepting search results.

ICAIL’s DESI IV Workshop has launched a long overdue undertaking. There will be little justice without e-discovery and little meaningful ESI without good, defensible search in our exploding digital data ecosphere. See Baron and Losey,"E-Discovery: Did You Know? http://www.youtube.com/watch?v=bWbJWcsPp1M.  

At stake is the legitimacy and integrity of our judicial processes. In trying to pave roads through a near-barren landscape, DESI deserves our unwavering support.
 

The Litigator's Guide to E-Discovery Sanctions: Who Pays the Piper When ESI "Disappears"?

As interest in e-Discovery continues to grow, there's no question what's the driving force that grabs the headlines. Sanctions, of course.   It is the water cooler of the ESI world.  Sanctions capture clients' interest, and motivates unwitting attorneys to pay attention to the growing field that is e-discovery. And while it may be known that significant sanctions have recently been imposed for e-discovery violations, what is missing is perspective. How often are sanctions requested? When will they be imposed? How severe will the punishment be? What did the client and/or attorney do wrong?

A recent study by three King & Spalding attorneys that was published in the Duke Law Journal, attempts to provide some of this perspective. A full copy of the article can be found here. They identified 401 e-discovery cases where sanctions were sought dating back to the early 1980's and through January 1, 2010. Of those cases, sanctions were awarded in 230 cases.

How many cases are there today? Likely many more. It should be no surprise that the number of e-discovery sanction cases has been growing in recent years -- and exponentially.  As recently as 2003, there were only seven e-discovery sanction cases. In 2009? That number spiked to 111. To put this in perspective, these 111 cases outnumber the total for all of the years prior to 2005 combined, and accounted for over 25% of the all cases ever reported.

So sanctions are being sought and awarded on average in over fifty percent of the cases (401/230).  But how severe are the penalties?  Courts awarded in excess of $5 million in five of the cases identified, and in excess of $1 million in four of the cases. Courts also terminated the action, either by dismissal or default judgment, in thirty-six of the identified cases.

Note, however, that the above cases involved extreme misconduct. Of the thirty-six cases that courts terminated, thirty-four involved willful misconduct or bad faith behavior. Only two involved gross negligence, and none involved negligence. Moreover, these extreme examples are the minority. They only account for ten percent of the e-discovery sanction cases, and twenty percent of the cases where sanctions were awarded.

The study also revealed that defendants were sanctioned three times more often than plaintiffs. This makes sense because for defendants are more likely to hold ESI relevant to the lawsuit and to face broad discovery demands from plaintiffs. The most common misconduct was failure to preserve ESI followed by failure to produce and failure to produce in a timely fashion.

Judicial sanctions of counse -- whether through money or orders to attend certain legal education classes -- are also increasing, though this is still considered a drastic remedy. The study identified thirty cases where counsel was sanctioned, including seven instances in 2009 alone. The vast majority of these cases involved a pattern of misconduct as opposed to isolated incidents. The predominant sanction was an award of attorneys' fees and costs, which ranged from $500 to $500,000.

The bottom line:  sanctions for e-discovery are on the rise and they can be exorbitant. Clients and practitioners can take some solace, however, in two facts:  (a) the most severe sanctions only result from the most egregious misconduct; and (b) while sanctions may be growing, they still remain relatively small in number and infrequent.

For additional thoughts on this topic and the Duke Law Journal article, please visit the excellent article in the ABA Journal by Debra Cassens Weiss or the report from the Catalyst E-Discovery Blog.
 

Tools for Evaluating and Selecting E-Discovery Vendors

Helpful, effective guidance on evaluating and selecting e-discovery vendors is rare. For one, the constant development of technology makes it difficult to keep up with the latest vendor offerings. Not to mention that more vendors pop up on almost a daily basis.  Court rulings also play a role in changing the e-discovery landscape and therefore the tools needed to keep up with it.

On the scholarly end, The Sedona Conference® published a white paper on e-discovery vendor selection (June 2007), and Gartner, Inc. offered a similar guide for attorneys and litigation support professionals (Dec. 2009). Gartner's guide also provided a market rating on 18 of the biggest players in the e-discovery industry. Some of the important evaluation criteria considered in both reports include:

  • Project identification (scope of work)
  • Vendor's viability (business organization, office locations, sub-contracting, staffing, technical expertise, conflicts, financials)
  • Vendor's market understanding and sales strategies
  • Vendor's experience or work quality
  • Customer feedbacks or client references
  • Products and services
  • Products support and maintenance (document repositories, media type, project/data security, recovery, forensics, project/records management, internal/external IT infrastructure integration)
  • Pricing
  • Delivery (deadlines, project scope changes)

The The Sedona Conference® 2007 includes a sample decision matrix to weigh various factors that are critical to project success.  The 2009 Gartner report provides a rating summary for reviewed vendors. 

But despite these available, helpful guides and road maps, it is still a time-consuming process to conduct internal audits, compile RFI (Request for Information) and RFPs (Request for Proposals), evaluate responses, and utlimately select the appropriate vendor(s) to handle the project.

One possible solution?  Enter Apersee.

Of late, Socha Consulting LLC and Gelbmann & Associates have jointly developed an automated vendor evaluation tool, which they call Apersee.

Still in "beta" mode, Apersee is a ranking tool meant to assist practitioners in selecting e-discovery providers as well as associated products and services. After the user defines and weighs the priorities for an e-discovery company, product or service (a weight is defined on a scale of from 1 (appreciated but unimportant) to 5 (critical & required)), the Apersee Selection Engine sets out to analyze how important a given element is to the decision process by applying a proprietary algorithm to score every product in its database.

If a product or service met all of the requirements, it would receive a score of 100 percent. This scoring method gives preference to criteria the user has designated as most important, and returns the list of matching products or services in ranked order. Essentially, Apersee follows the Electronic Discovery Reference Model (EDRM) in its evaluative process. It includes the following matrix:

  • EDRM stages (information management, identification, preservation, collection, and processing with review and production)
  • Functions (tools, project management, media types, security, capacity, training, support, fee structures and provider integration)
  • Geography and vendor office locations
  • ESI types and languages covered
  • Qualifications (experience, staffing, certifications, cases handled, affiliations and awards)
  • Product type (applications, cloud, SaaS, service)

In most scenarios, parties to litigation have limited time to prepare for e-discovery and vendor selection. Any tools and strategies that can help shorten the decision-making process would prove beneficial. At first glance, Apersee seems to incorporate all the important elements in evaluating e-discovery vendors. Its success will be contingent on the size and quality of its vendor database and the services the vendors offer. It could prove to be a welcoming tool to streamline the arduous process of e-discovery vendor selection.  Only time will tell.

"Friends" in High Places: Social Networks, Lawsuits and Friending Judges

 

"You ain't never had a friend like me." Lyric by Howard Ashman from Disney’s Aladdin,© 1992

     Wanna be friends with a judge? Well, he might end up “friending” you on Facebook as part of an in-camera review of your page, if something you post may be relevant to a lawsuit.

     Imagine that you are a middle management corporate employee who has finally (urged on by your kids) joined the 21st century and launched a personal Facebook page.  And then you friended a bunch of people, including some neighbors, family, and some of your fellow employees and supervisors. Why not?  After all, you have a pretty good relationship with them.

     Over the next few months, the following occurs:

  • You post that your supervisor is an idiot who doesn’t pay any attention to what’s going on in the office.  The next day some receivables go missing, and now the boss suspects you. How did he find out?  Perhaps you friended him and simply forgot; perhaps you friended another employee who is friends with your boss.  Or perhaps you simply forgot to change your privacy settings.
     
  • You are sued by an employee who you friended a while back.  Why? You fired him two weeks ago because the employee’s Facebook page showed him skiing on the day he called in sick.
     
  • You posted derogatory comments about your horrible neighbors.  A week later someone vandalized their house, and now they are blaming you.

     According to an article in the DRI Defense Bar by Michael Goodfried and Martha Dawson, Electronically Stored Information (“ESI”) contained on a party's social networking site can be subject to discovery if it relates to the issues in the litigation. In EEOC v. Simply Storage Mgmt., No. 1:09-cv-1223-WTL-DM, 2010 WL 3446105, at *3, (S.D. Ind. May 11, 2010), the court stated that discovery of social networking sites "requires the application of basic discovery principles in a novel context", and that the challenge is to "define appropriately broad limits . . . on the discoverability of social communications."

     Once it’s been determined that the content on the social networking site is subject to discovery, the next element is to determine which particular content is discoverable, based on the court’s consideration of the relevance of the requests within the scope of Rule 26 - or whether the requesting party is on a fishing expedition. “The court may choose to order the user to provide access to their entire profile, or it may order access to a limited portion of the content, such as wall postings available to all of the user's contacts, or messaging with particular individuals. In at least one instance, the court has offered to provide an in camera review by becoming "friends" with the user in order to review the private content for relevancy, before making a decision as to whether the other side could see it. Barnes v. CUS Nashville, No. 3:09-cv-00764, 2010 WL 2265668, at *1 (M.D. Tenn. June 3, 2010).”

    Shazzam! Instant friendship with a judge!

     Courts may also examine the privacy policies of the social networking sites themselves. Many of these sites explicitly state that they do not guarantee the privacy of user content. For example, Facebook's privacy policy, as of October 5, 2010, states that "some of the content you share and the actions you take will show up on your friends' home pages and other pages they visit" and that Facebook may "disclose information pursuant to subpoenas, court orders, or other requests (including criminal and civil matters) if we have a good faith belief that the response is required by law." See Facebook's Privacy Policy. In Romano v. Steelcase, 907 N.Y.S. 2d 650, 655 (2010), the court went so far as to state that the plaintiff has no reasonable expectation of privacy "notwithstanding her privacy settings" because Facebook and MySpace did not guarantee "complete privacy."

     So before you post that your assistant is a moron and get sued for defamation, consider whether you really want to friend a judge.

     The Social Network…coming soon to an in-camera review in a courtroom near you.

Bill Hamilton's Seven Deadly Sins of the Rule 26(f) 'Meet-and-Confer' Conference

**This article was published by Bill Hamilton, a partner at Quarles & Brady and Chairman of the Association of Certified E-Discovery Specialists (ACEDS), www.aceds.org, the member organization for professionals in the private and public sectors who work in the field of e-discovery.**

 

Federal Rule of Civil Procedure 26(f) requires parties in litigation to "…confer as soon as practicable … [and to]…state the parties’ views and proposals on …any issues about disclosure or discovery of electronically stored information….."  Proper handling of these "meet and confer" sessions about electronically stored information (ESI) and e-discovery is crucial to a winning litigation strategy. Don't think of the session as a procedural formality and just go through the motions.  STOP!! Take a deep breath and think.  The Rule 26(f) conference is where you begin the management of the opposition, and sets the structure of a case's e-discovery process. Your goal is to minimize your e-discovery costs and risks and to make sure you will be able to get the data you need from the opposition.

 

Avoid the Seven Deadly Sins of the Rule 26(f) conference and you’ll be well on your way to making e-discovery work for your case.

Deadly Sin #1: Failure to Set the Agenda. Come prepared to the Rule 26(f) conference . . . and make sure your opponent is prepared. Write a letter to the opposing counsel saying what you expect to accomplish at the conference, what information you will bring to the conference, and what information you expect from the opposition. Allowing the opponent to come to the conference unprepared wastes time and money, and impedes achieving your conference goals. If the opposition shows up at the conference “empty handed,” let the opposition know that you will advise the court of any further failures. Additionally, re-schedule the conference immediately. You need to insist on a genuine, meaningful Rule 26(f) conference for the very reasons the opposition is intent on avoiding it. Don’t let them escape this opportunity for you to structure electronic discovery in a way that works best for you.

Deadly Sin # 2: Failure to Manage Preservation.  While your instincts at the beginning of litigation may be to keep information close to the vest, disclose your preservation decisions at the Rule 26(f) conference. Be prepared to explain them. You cannot preserve all client data. Unnecessary preservation takes time and money and is wasteful. For example, it is probably not necessary to preserve forensic images of laptops and desktops or Internet browsing histories. It is also unlikely that back-up media containing unimportant and cumulative data will be needed. Disclosure allows you to sleep at night. If unpreserved data suddenly becomes relevant, your initial disclosure will help you avoid or minimize judicial sanctions. Demand the same from your opponent. Their data is part of your case. Make sure it is secured.

Deadly Sin # 3: Failure to Corral E-Discovery Limit and phase e-discovery. E-discovery is typically not an "all at once" game. Most cases can only afford so much e-discovery. E-discovery is bounded by the dollar value and importance of the case. ESI volume is often staggering. Present a sensible plan to corral the important data. Only a handful of documents are likely to be used at trial. Why process and review the data of 20 company employees who might have some marginally relevant ESI when a few key players can be identified quickly? Suggest starting with these two or three key employees and building from there. Reach agreement on a flexible, rolling e-discovery plan. Include this phased plan in the scheduling order that is entered pursuant to Federal Rule of Civil Procedure 16. Be sure to disclose the locations of electronically stored information that you consider not reasonably accessible under Federal Rule of Civil Procedure 26(b) (2) (B). Be prepared to defend your claims. When the opposition declares ESI locations not reasonably accessible, put them to the test. Don’t accept generalized representations of counsel. Technology moves on. Much of what was once thought not reasonable accessible is today readily available. Demand the details, and consult an expert on ESI accessibility.

Deadly Sin #4: Failure to Set Search Expectations.  Make sure your opponent knows you will insist on search quality and demonstrable, statistically valid recall. High recall means the search is pulling most, if not all, the responsive documents. The opposition will normally be attentive to search precision and not pulling false positives, i.e. unresponsive documents. Don’t let the opposition test for precision and not test for recall. Find out how the opposition will search the data and whether the opposition will employ manual searching or automated search tools using key words and concept filters. Make sure your opponent knows that search quality is your focus. It is your job to deter sloppy, casual searching for the data you may need to win your case. Your client deserves the best possible data, not just what the other side happens to find. Be sure to meet your own search standards or you will not be able to effectively call the opposition to task. Don't settle for a "don't ask, don't tell" strategy and blind reliance on what the opposition produces.

Deadly Sin #5: Failure to Specify the Production Format. Establish the production format. You usually get only one bite at the production apple. Make sure you get the data in a format and with a load file that works for the technology you will be using. The opposition will not know how you need the data delivered unless you tell them. Don’t wait for delivery and then complain. You should reach agreement on how you want the electronically stored information from your opponent produced and how you will produce your own. Do you intend to produce data in "native" (meaning a copy of the original electronic file) or in TIFF or PDF formats with load files containing extracted searchable text? What metadata will be produced? Discuss how each side's data will be organized and delivered and what metadata will be produced. If you are using a vendor, get the vendor’s delivery specifications and provide it early to the opposition. Don’t let the opposition decide what format is reasonably useable for the case.

Deadly Sin # 6: Failure to Protect Against Privilege Waiver from Inadvertent Production. Make sure to get the entry of a court order, under Federal Rules of Evidence 502, protecting you against inadvertent disclosure of privileged documents and providing that any determination of non-waiver arising from an inadvertent production is also binding on state court proceedings. Negotiate a written protocol with the opposition as to the procedures to be followed if a privileged document is discovered to have been inadvertently produced. Mistakes happen even after rigorous - and expensive - review and double checking. Don’t think your production will always be flawless. The greater the volume of ESI, the greater the chance of mistake and error. Neither automated searches nor human reviewers are 100% perfect.

Deadly Sin # 7: Failure to Document. Don't let what you won at the Rule 26(f) conference get lost in the fog of competing - and faulty - memories. Confirm in writing all the agreements and understandings. No one will recall a year later what transpired unless you confirm it in writing. Memorialize the conference as you would a settlement agreement or a contract. This documentation is your roadmap to a successful case.

 

Avoiding these Seven Deadly Sins will help you take control of your case and manage e-discovery. Taking control means taking control of the Rule 26(f) conference and achieving your e-discovery goals, a crucial component of any winning strategy.
 

____

**Bill Hamilton will be a featured speaker at the ACEDS 2011 Annual E-Discovery Conference on March 23-25, 2011 at the Westin Diplomat in Hollywood, Florida.  For more information and to sign up for the Conference -- a chance to learn the ins and outs of e-discovery through hands-on experience, practical guidance and interactive learning from 28 experts in the field -- visit /conferencewww.aceds.org** 

Court Refuses to Read Silence as Agreement to Pay Opposition's ESI Costs

Never assume that the other side will be paying for your e-discovery costs.  A New York state court recently rejected a party's crafty strategy of (a) telling its opposition in writing that it expected them to pay for the costs of production; and (b) taking the opposition's failure to respond as acquiescence to a $67,000 bill.

Plaintiffs filed suit  for breach of contract in a construction case, Silverman v. LeMadre Development, LLC et al., No. 08-603231 (N.Y. Sup. Ct. 2008). Plaintiffs requested  that the defendants produce electronically-stored information (ESI) as part of the discovery process. In response, defendants sent a letter in July 2010 reminding plaintiffs' of a so-called obligation to pay for costs incurred in producing ESI.  Defendants' letter asked the plaintiffs to respond within two business days "so that [the defendants] can proceed as promptly as possible with [plaintiffs'] demand."

Plaintiffs did not reply to the letter.  Nonetheless, defendants went ahead and produced more than 7,000 pages of ESI at the cost of $67,000. Two months later, they filed a motion to compel the plaintiffs to pay for the costs on the grounds that the plaintiffs' silence constituted an agreement to do so.

Not so.  In a Nov. 2010 order, New York Supreme Court Justice Eileen J. Bransten ruled that the defendants could not shift the cost of e-discovery to plaintiffs under a "silence is acquiescence" rationale. Citing Russell v. Raynes Associates Ltd. Partnership, 166 AD2d 6 [1st Dept 1991], the court held that plaintiffs had no legal duty to respond to the letter, so their lack of response could not be deemed acquiescence.

Defendants' choice of case citations did not help their case.  Relying heavily on T.A. Ahern Contractors Corp. v. Dormitory Authority, 24 Misc 3d 416 (Sup Ct, NY County 2009), defendants asserted that "the party seeking discovery bears the cost incurred in its production. But the Ahern court itself had earlier declined to compel production of each party's requests for electronic discovery until each party agreed to cover the costs of producing the data that party requested.  Here, there was no such explicit agreement, whether voluntary or court-ordered.

Defendants then cited Waltzer v. Tradescape & Co., LLC, 31 AD3d 302 [1st Dept 2006], which concerned retrieval of deleted ESI.  But in this case, the data was readily available.  Finally, defendants cited Lipco Elec. Corp. v. ASG Consulting Corp., 4 Misc 3d 1019(A)(Sup Ct, Nassau County 2004) in which a separate program was needed to search and extract data, as well as a relational database to store the data and another program to read and collate it. Here, defendants' ESI retrieval process was much less complex. 

This decision suggests several factors for determining when and whether e-discovery production costs can be allocated between the parties:

  • The presence (or lack thereof) of a clear agreement between the parties to allocate production costs.
  • Whether the data is readily accessible or difficult to retrieve.
  • Whether special tools/programs are required to organize and review the retrieved ESI.

But could this dispute have been avoided altogether?  According to a 2010 New York State Unified Court System report, the New York state court system has adopted Commercial Division Uniform Rule 8(b) and Uniform Trial Court Rule 202.12(c)(3), requiring parties to meet-and-confer on ESI-related issues before the preliminary conference in court.  It is just one example of how state courts are trying to catch up to the avalanche of cases that involve e-discovery issues.  In this case, perhaps if the parties had communicated more efficiently about their expectations for ESI production, they would have been spared the expense of litigating who would bear the expense.

WI Supreme Court Continues to Debate E-Discovery Amendments

          

On July 6, 2010, the Wisconsin Supreme Court set the date for the next and final hearing regarding amendments to the state rules of civil procedure that relate to the discovery of electronically stored information. The hearing will take place on September 30, 2010 at 9:30 a.m. at the State Capitol in Madison. The Court will accept written comments from the public until August 31, 2010. 

By a 4-3 vote, the Court has already adopted amendments to Wis. Stat. §§ 802.10, 804.01, 804.08, 804.09, 804.12 and 805.07 to address e-discovery. However, the amendments are subject to revision following public comment and the hearing on September 30, 2010. The amendments will become effective January 1, 2011. 

As the 4-3 voting split indicates, the Court is not of one mind regarding the amendments. While all of the Justices agree that the rules should be amended to address e-discovery, there are three key issues regarding which the Court remains divided: 

 

(1) whether the rules should require parties to meet and confer on e-discovery at the outset;

(2) whether the rules should include a “claw-back” provision; and

(3) whether the rules should expressly provide for cost-shifting. 

 

Currently, the amendments include a mandatory meet and confer provision regarding e-discovery and do not include claw back or cost shifting provisions.  Under the circumstances, and because the Court is divided, it looks as though the public has a meaningful opportunity not only to be heard, but to affect the ultimate outcome.

In large part, the disagreement between the Justices is based on their varied understandings regarding what cases the rules are most likely to apply to, because not every case involves significant e-discovery.  The dichotomy is as follows:

  • Justices who focus on smaller, less complicated disputes tend to oppose mandatory e-discovery conferences as well as express “claw back” and cost-shifting procedures. 
  • Justices who focus on complex commercial disputes, which frequently involve extremely costly and extensive e-discovery tend to be in favor of mandatory e-discovery conferences, claw back and cost-shifting provisions. 

 Chief Justice Abrahamson has appealed to the public to focus on these particular issues when submitting written comments. As a result, it is worth considering each side of the debate.

 

Mandatory early e-discovery conferences:  Those in favor of an early, mandatory e-discovery conference argue that if the parties confer before discovery, they can reduce the ultimate cost of discovery and head off future disputes before they develop. Those opposed note that the conference is a waste of time in the majority of cases, which are typically small, less complicated disputes in which neither party will request or receive much in the way of e-discovery. Those opposed also note that there is no rule that would prevent parties in complex commercial disputes from meeting and conferring independently in the absence of a rule requiring the parties to meet.  Current vote:  five in favor of this rule, two against (5-2).

 

Claw back provisions:  Those in favor of an express claw back provision note that in cases involving voluminous e-discovery productions, it is extremely expensive and time-consuming for the producing party to review every single document and file prior to production to determine if it contains privileged information. They argue that a claw back provision is necessary to alleviate the producing parties burden by allowing a party who inadvertently produces privileged information to demand its return and prohibit the receiving party from using the privileged information. Those opposed note that an effective claw back rule is both procedural and evidentiary to the extent that it must address whether the privileged information remains privileged despite having been produced. They argue that the claw back rule is best addressed at a later time, when amendments to the rules of evidence can also be considered to avoid inconsistencies between the procedural and evidentiary provisions. Current vote:  three in favor of this rule, four against (3-4).

 

Cost-shifting:  Finally, those in favor of a provision authorizing cost shifting argue that the court should be expressly empowered to make a requesting party pay for the unduly burdensome discovery it seeks. Those opposed only disagree to the extent that they argue that the current rules of civil procedure already authorize the court to require a requesting party to pay for unduly burdensome discovery. They cite Wisconsin case law in support of their position, and note that federal cases provide persuasive authority regarding the circumstances under which cost shifting is appropriate.  Current vote:  three in favor of this rule, four against (3-4).

 

Whether the current distribution of votes will change likely depends on the volume and nature of written comments the Court receives before August 31, 2010, as well as the persuasiveness of any argument the Court hears at the public hearing on September 30, 2010. 

 

Let the arguments begin . . .

"Because Something Must Be Done": The Dangers of Trying to Save E-Discovery Costs by Treating Data Like Paper

This article was published by Wendy Akbar and Bill Hamilton.

Remember the days before the computer, the typewriter, the printing press, and even carbon paper? The days when, to copy a book, one needed to sit down and re-write it by hand? Every letter of every word of every sentence-dappled paragraph, had to be painstakingly copied one by one. With all the technology available today, no publisher would ever consider copying a book by hand rather than re-printing a copy saved on the computer. To do so would be a waste of time -- a return to the Dark Ages.

When it comes to e-discovery, unfortunately, the Dark Ages still occasionally guest stars in modern-day electronically stored information (ESI) retrieval and production. The dangers of being such an e-discovery ostrich were most recently highlighted in Multiven, Inc. v. Cisco Systems, 2010 WL 2813618 (N.D. Cal. July 9, 2010). Plaintiff Multiven, along with the two counterclaim defendants, originally elected to undertake a manual review of the full set of voluminous ESI it possessed prior to production. Sound conscientious? Not exactly. It means they turned the clock back about 15 years (in e-discovery time, akin to 150 years) and:

(1) Refused to use an outside vendor to help organize ESI information;
(2) Refused to utilize any search terms to narrow the "giant mass" of data to be reviewed;
(3) Instead used approximately five attorneys for six months to a year, to manually review every unfiltered page of "that giant mass" for responsive documents.

Why? They wanted to save on cost, particularly the expense of hiring an outside vendor to help whittle down potentially responsive information. Perhaps they adopted a manual review for other strategic reasons. (Never mind, of course, the hourly billing rate of five attorneys doing eight hours of document review five days a week for over six months, which more likely than not was more expensive than hiring a vendor to narrow the "giant mass" to a more reasonable review load for the attorneys).   The end result, however, was not exactly what was intended . . .
 

What sounded like a Great Idea to Multiven ultimately backfired. The process bogged everyone down, taking months and months. Finally, the district court became distressed when it became apparent that the delays associated with the manual review of all electronic files was causing the case to extend well beyond the boundaries of the scheduling order:

[I]t has become clear to this Court that [the plaintiff and counterdefendants] cannot complete their review and production of documents with enough time before the close of discovery to allow Cisco time to actually do anything with them. [They] so far have insisted on a review process that guarantees that they will not finish this extensive project in any reasonable amount of time.

Id. at *2. The trial court thus adopted the Report and Recommendation of Magistrate Judge Lloyd, required Multiven to utilize a vendor to assist in e-discovery, and appointed a Special Master to manage certain e-discovery disputes that potentially threatened to derail the litigation. In short, the Court concluded (id. (emphasis added)):

Because something must be done, this Court recommends that the District Court order the parties to promptly retain a third party vendor to assist with this increasingly perilous situation.

So first, Multiven was not only stuck having to hire the very vendor it had hoped to avoid, but on top of it had to pay its attorneys the hundreds of thousands it cost to conduct the months of document review that were done to avoid hiring a vendor in the first place. Instead of saving money, their gamble multiplied the cost of e-discovery in the case. Second, by this point, even Multiven was so fed up with the document review process that it was amenable to hiring a vendor before the court order even issued. Sure, part of it was because the defendant, Cisco, had offered to pay for part of the vendor cost, but Multiven had finally learned that it was in over it head, and that in trying to save money, it had wound up spending significant more cost on e-discovery.

While the Court's intervention was necessary to get the case back on track, one wonders what possessed the Multiven and its counsel to undertake a prolonged manual review, especially when Cisco appeared to be urging Multiven to employ modern technology all along. Delay was only one by-product of Multiven's decision. A second by-product was the likely extraordinary costs such manual reviews entail. The most substantial e-discovery costs arise from the attorney review process, regardless of whether that review is done internally by firm lawyers or outsourced to vendors in the United States or abroad.

One might think that a manual review is the "gold standard" and the most thorough, comprehensive way of searching. In other words, while you can place fistfuls of hay at a time into a hay-sorter to separate out those few stray needles, there's still a margin of error. You're more likely to find them if you use the time-consuming method of picking up one strand at a time and eyeballing it. Right? Oddly, no. In truth, the so-called gold standard of manual review is mythological, and the human eye can miss a lot more than a well-crafted keyword search protocol can capture. A widely-regarded study, Blair et al., Wittgenstein, 'Language and Information:  Back to the Rough Ground!' 302 (2006), found that manual review teams only found 20% of the relevant documents!  Ralph Losey and Jason Baron have also demonstrated that adding conceptual search tools to key-word searching further improves results and reduces cost. So Multiven's Dark Ages strategy not only multiplied costs and delayed the proceedings, but likely would have missed most of the relevant documents -- leading to potential sanctions and do-overs. Some cost-saving strategy!

In truth, there are very limited circumstances in which a case or production might require every e-document to be reviewed: the all-consuming, unfiltered, manual document review is dead, and for good reason. Today's staggering volume of ESI makes such a manual review both cost and time prohibitive. Utilizing the broad array of tools to cull down, de-duplicate and search data volumes is generally accepted and is even becoming mandated practice, as Multiven learned too late. While all searches are not created equal, the Text REtrieval Conference (TREC) Project -- co-sponsored by the National Institute of Standards and Technology (NIST) and U.S. Department of Defense-- has demonstrated a better search results by machines than plowing through data manually. While a search methodology utilized by a party has to be defensible, standards are slowly emerging, as documented by The Sedona Conference® in its May 2009 Commentary on Achieving Quality in the E-Discovery Process: Best Practices for Document Retention and Production. There is no reason to be stuck in the Dark Ages of linear, manual review.
 

"Say Cheese!": Wisconsin Supreme Court Pictures New E-Discovery Rules . . . TWICE.

Courts are becoming increasingly persnickety when parties fail to discuss e-discovery issues early on in the case, even to the point of imposing sanctions.  The latest railway car attached to this train of thought, can be found in The Cheese State.

Back in January, we reported on the Wisconsin Supreme Court’s public hearing and open administrative conference about the Wisconsin Judicial Council’s petition for an order amending the state rules of civil procedure to deal explicitly with the discovery of electronically stored information (ESI). Those meetings closed with the court asking for a new petition that would rely more heavily on language in the Federal Rules of Civil Procedure, incorporate commentary to the federal rules, and possibly include new substantive provisions, particularly one requiring that parties confer about e-discovery issues early in any proceeding.

The Judicial Council submitted its amended petition in March.

This amended petition responded to the Court’s requests by more closely tracking language in the Federal Rules of Civil Procedure and incorporating, within the Judicial Council’s own notes, large chunks of commentary supplied by the federal Advisory Committee on Civil Rules. The amended petition also included a new provision granting Wisconsin courts discretion to order that parties confer about various discovery problems, including the discovery of ESI.

The Court considered the Council’s amended petition at an open administrative conference on April 28 (video here) and quickly zeroed in on the Council’s new discovery conference provision. The justices voiced unanimous approval for all other provisions in the amended petition. But several justices, led by Justice Annette Ziegler, argued that the Council had not gone far enough to encourage parties to confer at an appropriately early time about e-discovery issues.

The Court ultimately voted 5-2 to adopt the Council’s amended petition but to change the discovery conference provision to require that parties always confer about the discovery of ESI -- although not about discovery issues generally -- unless excused by the court. The Court was unable to hammer out exact language to adopt during the April 28 conference, finding that it needed more time to get the drafting right. But the Court agreed to have the new rules ready for publication this fall.

The e-discovery debate, however, will not end there. The new rules will not be effective until January 2011, and the Court agreed to hold yet another hearing in the fall to receive public commentary, particularly about the discovery conference provision.  The Court may still make additional changes before those rules apply to proceedings in the Wisconsin courts. 

Other states have and will follow suit, not to mention federal courts.   So while marshalling one's ESI arsenal and assessing its contents may seem like a time-consuming task so early on in the case, it is becoming increasingly clear that this must be done.  E-discovery discussions -- which necessitate an understanding of yours or your client's ESI capabilities and contents -- need to occur early on in the case.  Courts are no longer buying excuses to the contrary.

Edmund Hillary Knows Beans About Metadata

"Because it is there" may be a perfectly adequate response to the question of why you want to scale a mountain (although it invites the follow-ups of "are you crazy?" and "does your spouse know you spent four thousand dollars on climbing gear?"). It does not, however, cut it when a judge asks why you want a mountain of metadata. 

The court in Dahl v. Bain Capital Partners, LLC, 2009 U.S. Dist. LEXIS 52551 (D. Mass. June 22, 2009) reminds us of this fact.  In that case, a requesting party sought every last scrap of metadata associated with the electronically stored information produced by the other side. The producing party refused, instead offering to hand over just 12 fields of metadata. Ignoring the inevitable follow-up question, "Does your client know you spent four thousand dollars on a discovery dispute over metadata?", the requesting party took the issue before the court. 

The Dahl court explained that the goal of discovery is still to uncover admissible evidence, no matter how many new and exciting areas of information may exist for attorneys and their clients to fight over.  Not all metadata leads to admissible evidence, and so sweeping requests for metadata (regardless of its likely utility) are unnecessarily costly and burdensome -- a fact also recognized in the Rule 34 Advisory Committee Notes.  Accordingly, the court ruled that the requesting party should tailor its metadata requests to specific word documents, emails, or sets of email in an effort to reduce the burdens of production, thereby increasing the likelihood of prudent and efficient litigation.

As has been noted on this very same website, about three inches down from this post, attorneys should be aware that a successful discovery process requires knowledge of both the technological peculiarities of ediscovery and the established procedures and limits of discovery.  The Dahl opinion confirms that observation.

The Ringmaster or the Clown? Dealing with the E-Discovery Elephant in the Room

It is rare to find one of those shared tenets that defy all cultural, geographic, and chronological boundaries -- some fundamental underpinning of life found everywhere from the days of the caveman to the modern age. One we can all agree on, however, is that a professional's worth is and always has been commensurate with his or her experience. The senior dragon slayer of King Arthur's round table received a shinier suit of armor than the new guy. The master caveman's time and worth rose above the apprentice's. And in present day law firm culture, the value of the Associate is often dwarfed by that of the Senior Partner in the cozy corner office.

Electronic discovery, however, has turned this fundamental dynamic on its head. In most areas of the law, change is effected in small increments, opinion by opinion and statute by statute. Sage senior lawyers add to their existing knowledge by keeping up on recent developments -- no fundamental change in thinking is required. Electronic discovery, however, has forced a radical, qualitative change in almost every aspect of how discovery is conducted. Heck, an entire Federal Rule of Civil Procedure was rewritten to account for it. And the dreaded "it" -- that virtual elephant in the room -- is everywhere. As Judge Shira Scheindlin of the Southern District of New York observed in an interview, "We used to say there's e-discovery as if it was a subset of all discovery. But now there's no other discovery."

This ever-expanding nature of e-discovery is carving out a unique dynamic in the three-ring circus that is the Law Firm and the in-house legal department. In short, the problem is that the two parts of the equation needed to master e-discovery (expertise in discovery law and procedure, and expertise in electronic media) are currently located in two separate circus rings: the Ringmaster's and the Clown's.
 

  • The Ringmaster: In one outer ring you have the partner, our Ringmaster, an experienced and respected litigator so well-versed in discovery procedures and law that he or she can write interrogatories and respond to document requests while juggling oversized balls of Case Strategy, Knowledge and Experience for the client in the front row. It is true that there are Ringmasters who are also well-steeped in the art of e-discovery, who have taken the initiative to learn everything about it and keep up on the latest social networking arrivals. This article is not addressed to these Ringmasters. It is addressed to the more litigation-centric ones -- and there are many -- who view discovery as more of just another step on the way to the ultimate trial and motion practice, than a living entity in its own right. Ask such a Ringmaster for electronic search protocols and you will receive a list of terms that do not capture the depth and breadth of materials needed. Say "Twitter" and he or she will ask about your bird-watching hobby. E-mail them about Flickr and you'll get berated for spelling mistakes.
     
  • The Clown: In the other outer ring you have the young associate, our Clown, who is still on some level struggling to appreciate the distinction between general and specific objections to document requests. But at the same time, our Clown has a unique appreciation for electronic discovery that the Ringmaster often does not.  The Clown is intimately familiar with all potential bastions of electronic communication, from e-mail and iPhones to Twitter, YouTube, Flickr and Facebook. He or she appreciates from personal experience that social networking sites are interactive and amorphous circus animals, such that the only thing unchanging about them is the fact that they change several times a day. Even coming up with electronic search protocols requires a working knowledge of computer technology nowadays. Judge Scheindlin observed that, "People think they've searched and they haven't looked in the right places, haven't communicated with the right people, they haven't used best technology to go through materials they do have." Younger associates know where and how to find the most obscure information online. They cut their e-teeth on Google. They have run countless word-searches on Westlaw, learning from experience how to best craft searches to obtain the results they need. They know what types of computer applications to find documents in. Microsoft is their friend.

There is no doubt that Ringmasters are more than capable of learning the basics through articles, lectures and other means. But there is a difference between knowing that and knowing how. For Clowns -- many of whom check Facebook and Twitter before they brush their teeth in the morning -- the intricacies of electronic communication are as intuitive as the art of humor. To expect many Ringmasters to extract secondhand a deep understanding of how these new innovations work and to obtain what he wants from them, is like asking a law student to fully comprehend the Federal Rules based on a first-year Civil Procedure class. Just as it takes practicing in a real courtroom for the isolated rules to "click", immersion into electronic communication is needed to truly appreciate its fine points. Plenty of Ringmasters can and have done this. But plenty more have not. As Judge Scheindlin observed, "Those of us who are a little older, shall I say modestly or immodestly, [ ] it's too late for us. We can't really change completely. But for these young people coming out the world will change with them."

And it is. Just a couple of weeks agok, the court in Chen v. Dougherty, 2009 WL 1938961 (W.D. Wash. July 7, 2009) implied what would happen in the e-discovery circus if, in a sequel to blockbuster flick I am Legend, a genetically-engineered cure to a devastating illness had the unintended side effect of wiping out the associate population -- and since Will Smith's character was snuffed out in the first movie, there was no one to create a cure. The answer: the partner may find himself balancing the trapeze without a safety net. The Chen court refused to award the prevailing plaintiff its attorneys' fees based on its attorney's normal hourly rate, for the time the attorney spent on e-discovery. Why? The attorney, a partner with twenty years of experience, almost certainly knew general discovery law inside and out. No matter:

"[The attorney's] inhibited ability to participate meaningfully in electronic discovery tells the Court that she has novice skills in this area and cannot command the rate of experienced counsel."

There is no doubt that this was a good lawyer -- she won the case, after all. And the defendants had to pay her regular fee for all other portions of the case. But the court ordered the attorney's rate to be reduced on e-discovery matters to $200 for, as an example, "failing to offer search terms for the delivery of relevant ESI." Given that some partners in Seattle bill out at over $400 an hour, it is possible that this attorney's e-discovery fees were halved. Ouch.

This divide between Ringmasters and Clowns will only widen as social networking expands. Niche social networking sites are emerging every day -- some recent new ones include Ning, Sodahead, Bebo, Fanpop, Imeen, and Eons. The British government has published a guide to help ministers understand how to use Twitter, with the aim of extending its news and corporate messages online. And major companies are now using these resources as networking and branding tools to communicate with consumers and offer an inside look at the company in more intimate, real-time fashion than a website. As noted in a recent U.S. News article, Victoria's Secret, Southwest Airlines, Mastercard, The Gap, and Starbucks are using Twitter and Facebook. And now smaller businesses are joining the Twitter fray. As Zappo CEO Tony Hsieh recognized via Twitter update, borrowing a phrase from the eminently-quotable Winnie-the-Pooh, "You can't stay in your corner of the forest waiting for others to come to you. You've got to go to them sometimes."

The resulting interactivity -- and the brazenness with which these social corporations are lifting the veil that separates individual consumers from company executives -- is astounding. And it foretells the inevitable legal tangles to come in all types of litigation, from false advertising to employment, patent, defamation, government investigations into off-label promotion practices of pharmaceutical companies, and many others. (A defamation lawsuit was just filed in Chicago against a woman for "twittering" that her management company was tolerant of moldy apartments.) Unfortunately, most of the legal issues posed by social networking have yet to see the inside of a courtroom. The area is new, and the old rules may not apply. Social networks such as Facebook change appearance by the minute, making it difficult to track down the specific version relevant to a litigation. On the other hand "Tweleted," a site that digs up deleted Twitter Posts from Twitter's search engines, is now taking the world by storm. Even more confusing, all social networks -- even any two Facebook accounts -- are not created equal. Whether their content is fair game for e-discovery may depend on individual privacy settings: whether an owner allows general access or access only by "friends."

Think of a social network like the typically elaborate circus car rolling into the Center Ring. A Ringmaster may see a car with a capacity for four or five occupants, each of which the Ringmaster will question thoroughly. The Clown will more often see a car in which an unlimited number of occupants can fit -- every friend, every follower, every update, post, blog, tweet and related "app". He or she will know that each of these occupants should be questioned, but will not be quite sure where to go from there. It is clear that one way or another, the Ringmasters in their circus ring of discovery knowledge and experience, and the Clowns with their technology expertise, need to come together in the Center Ring. This can be done any number of ways:

  • Encourage more Ringmasters-Clown Collaboration. Partner-associate interaction in e-discovery should resemble more of a shared collaboration than a senior person doing the higher-level work and delegating the lower-level tasks to a junior. Unlike many areas of the law, a young associate may have significant input to offer on e-discovery matters -- where to look, what to look for -- even if he or she does not recognize that at first glance due to lack of in-depth knowledge about discovery procedures.
     
  • Make Clowns the Ringmasters of the Center Ring.  Choose a small number of young associates and turn them into "one-stop shopping" experts by deepening their knowledge of discovery law and process to supplement their knowledge of electronic media. Send them to CLEs. Give them 50 non-billable hours for the year to read up on discovery issues. Have them present CLEs, or write law journal articles or blog entries applying the law and process to new social media. As e-discovery options and procedure expand, these younger associates will be best poised to recognize the issues.
     
  • Sole practitioners and small firms are in the hardest position.  The Chen attorney was a sole practitioner or close to it, with little to no associate knowledge to rely on. This is typically the case in very small firms. As the role of e-discovery and social media in litigation expands, these partner-shareholders will need to master these new e-media themselves -- mere knowledge of discovery in general will not be enough, and relying on non-legal e-discovery consultants who do not know the case, and/or are not attorneys, is risky. Alternatively, they should consult with younger attorneys on a part-time basis, who can provide some focus on what to look for, where, and how.
     
  • Graduates of Clown U.  Senior associates and junior partners are not yet Ringmasters, but have left their Clown days behind. They grew up in the tail end of the Paper Age and the beginning of the E-paper Age. E-mail emerged in junior high or high school, the World Wide Web in college or law school, and Westlaw a couple of years before or after they started law school. These lawyers are almost as savvy at the technology side of e-discovery as the Clowns. The difference is that (1) they do not take it for granted, because they spent formative years without it; and (2) it is not as intuitive for them; they have to work at it a little more, particularly the newer forms of e-communication. Facebooks and Twitters are divergences that they understand and even use, but without quite the same level of immersion. Their advantage, however, is that in being less fascinated with the bell-and-whistle details they are more apt to see the 'big picture' -- to view these tools as the latest but not greatest fads, and to be able to anticipate, given their knowledge of both law and the technology, what will come next. Yes, they have things to learn both from the Clown and the Ringmaster, and they (like Ringmasters) must make an effort to keep themselves fresh when it comes to each new wave of e-communication, something that comes more naturally to Clowns. If they do, their knowledge of both outer circus rings may propel them farther and faster than Ringmasters or Clowns.

These are not the only solutions. The point is, however, that now is the time for firms and corporations to position themselves for a future in which e-discovery will play an even larger role, by recognizing that the traditional bright-line Ringmaster-Clown, partner-associate dynamic cannot function in this area. If they fail to do so, they may find themselves in the middle of the circus, hanging from the trapeze with -- like the Chen attorney --only half a safety net below.
 

The Governator Signs Electronic Discovery Act Into Law

Apparently taking a break from figuring out where the money will come from to run California, The Governator signed into law the Electronic Discovery Act (“EDA”) on June 29th, joining the ranks of approximately twenty other states in adopting specific rules designed to manage e-discovery. Like most of these other states, California’s EDA is substantially based on the 2006 amendments to the Federal Rules of Civil Procedure.

According to Eric Sinrod, writing in The FindLaw Technology Blog, “The new California rules, which represent the culmination of several years of negotiations, appear to work a compromise between plaintiff trial attorneys who sought in depth access to electronic records and corporate defense counsel who desired safeguards for data that they believe is too burdensome and costly to produce.” 

A significant difference between the Federal Rules and the EDA is the inclusion in the EDA of a safe harbor that does not sanction a party or attorney who fails to produce electronically stored information that has been lost, damaged, altered or overwritten, if it was done as a result of the routine, good faith operation of an electronic system.


Additionally, according to Sinrod, the Act directs that “electronically stored information should be provided in the form ordinarily maintained or in a reasonably usable form; a party may object to the production of electronically stored information on burden or inaccessibility grounds, but that party bears the burden of proving that objection, and a court still may require production upon a showing of good cause by the demanding party; and the Act is applicable to third parties pursuant to subpoenas, although one can expect potentially less e-discovery burdens being placed on third parties as opposed to parties in a case.”

 

Based upon the current legislative trend, it should be anticipated that eventually all of the states will soon have similar laws in place to address the evolving issues associated with electronically stored information.

Google to the (E-Discovery) Rescue?

Recently I came across a doubleclick.com digital marketing piece touting Google's latest search technology, Google Search Appliance 6.0. The inviting web ad promised:  "Google brings Findability to Enterprise Search".

The list of oohs and aahs includes:

  • Dynamic Scalability to thousands, millions, even billions of documents.
  • Linking multiple search engines (federated searches) separated across departments or geographies to provide a unified set of results.
  • Syndicated searches of up to 30 million documents.
  • Fine-tuning relevancy by using latest technologies in search algorithm and search result ranking.
  • Customizable security.
  • User-centric search enhancements such as "User-Added Results" and "Query Suggestions."

While the new Google Search Appliance (GSA) represents another hopeful step towards the Holy Grail of Search, it is also a potential antidote to the current state of e-discovery -- at least from a strategic perspective.  The cost of litigation appears to be at a breaking point where containment hinges on effective ESI searches and collaborative e-discovery maneuvers.  Although Google's search technology may be primarily designed for Intra/Extranet implementations, GSA could also serve to reduce litigation costs by helping lawyers cull through exabytes of electronically stored information.

Finding an efficient means for culling through those exabytes cannot happen a moment too soon.  Electronic discovery not only increases the costs of litigation, it also diminishes the legal profession. 

According to a 2008 American Judicature Society (AJS) report, discovery abuse in civil cases presents a significant problem.  Indeed, nearly half of survey respondents (45 percent) indicate they believe that discovery is abused in every civil case.  Moreover, 71 percent agree that attorneys use discovery as a tool to force settlement.  An astounding 81 percent of AJS report survey respondents stated that their firms turn away cases when it is not cost effective to handle them, and 83 percent said that litigation costs drive cases to settle that deserve to be tried on the merits. 

The end result is that some deserving cases are not brought, and some meritless cases are settled out of court -- not because of the strength of the parties’ claims, but instead because the cost of pursuing or defending those claims fails a rational cost-benefit analysis.  According to Ralph Losey, e-discovery has become a threat to the U.S. legal system.  And that threat is pernicious and spreading.

In his e-Discovery Team blog, Losey -- himself a trial lawyer -- asserts that trial lawyers wrongly blame runaway e-discovery costs on poor rules, laws, and judges.  According to Losey, the true cause of escalating e-discovery costs is the legal profession's failure to keep pace with the dizzying advances of new technologies.

In my opinion, there's plenty of blame to go around when it comes to e-discovery and the rising cost of litigation.  Among other things, there is lack of knowledge on e-discovery issues and technologies; poor planning, selection and application of appropriate technologies to initiate effective searches; failure to collaborate and communicate effectively among counsel and IT staff; and, in particularly eggregious situations, wholesale adoption of the ostrich head-in-sand approach to e-discovery.

One need not become a techie in order to be an effective 21st Century litigator.  But knowing when and where to seek help with respect to e-discovery issues could save you and your clients a lot of headaches and heartbreaks down the road. 

5 days of searching ESI - $250,000.
4 days of filtering search results - $150,000. 
10 rounds of sparring between parties - $300,000.
Google finding the right information - Priceless.

 

ESI Storage Blues

If you're like me, when I run out of space in my house, I sort through things, toss them out, give them away or hold a rummage sale. Even then I end up with items that not even Goodwill will accept-- in the trash they go. Unfortunately, you can't do that with your client's or your own corporate data.

So what to do when you run out of storage for the all important bits and bytes? Two options: buy more storage or rent disk space. Sounds simple enough but both of which can have a significant impact on e-discovery data management and retrieval. I will briefly examine both options.

Purchasing more servers or storage peripherals spells ownership but it also has a hardware depreciation and upgrade element to consider. It also means more upkeep that might even require more staffing to maintain the systems. In cost accounting lingo, it is described as the Total Cost of Ownership (TCO). The goal is to decrease TCO, not increase it.

However, this might be the only viable avenue to store data if your client insists on absolute security and confidentiality, despite the fact this might only provide a perception that the data is more safe and secure than being stored somewhere else. No one wants to admit the fact that neither security nor confidentiality can be guaranteed in today's hacker and virus-proned environments. There's simply no absolutes in the IT world.

On the other hand, renting disk space translates into paying someone to be the custodian of your data. This is an increasingly attractive proposition due to the growing terabytes or even petabytes of electronically stored information (ESI) that can overburden internal IT infrastructures. Data organization and ease of retrieval should be one of the key criteria to consider before engaging a vendor to take on this critical task.

The advantage of using a third-party vendor is that there's minimal costs or overhead associated with hardware, software maintenance or potential staffing issues. Since these vendors specialize in storage, they also tend to be very efficient at it. Regardless, hiring a vendor to handle your data is not as easy as it may sound. Before signing the service agreement on the dotted line, consider the following factors:

  • Hardware - Does the vendor's system integrate well with your IT infrastructure? It is critical that the vendor system "talks" to your internal document management system (DMS), your email servers and Intranet portal storage elements such as Microsoft SharePoint. All of which involve SQL databases to a great extent.
  • Searching - How receptive is the vendor's system when it comes to "data-on-demand"? Is the storage system fully searchable and in what manner? How fast can data be retrieved and produced? How is the data being indexed, migrated or archived in the vendor's system. All of which affect your company's ability to comply with e-discovery requests pertaining to F.R.C.P. Rule 26(f) and/or court subpoenas.
  • Administration - Does the vendor's system impose a shift on how you manage your data internally? If so, how easily can your organization and/or vendor adapt to this new paradigm. Do you need adjustments to your IT framework in order to make full use of the vendor's system? Inadequate planning can easily turn "Plug-and-Play" into "Plug-and-Pray."
  • Leverage - Does outsourcing data storage provide a better solution than insourcing? In this down economy, IT budgets are closely scrutinized and a misstep can spell a million dollar disaster (think cost effectiveness and client buy-in). In addition, outsourcing data storage potentially provides a justification in passing some of the costs to clients. At the minimum, your expenditure can show up on the client's invoice as a line item even your company might decide to write it off for the client's benefit-- Seeing is believing.
  • Collaboration - How well can the vendor's system work with other multi-platform systems that your e-discovery team potentially encounter. The more compatible the vendor, the higher chance of success. Industry standard is king or queen.
  • Continuity - Do you have a plan B (or C) if the vendor goes out of business (especially without notice)? How functional is your business without vendor support? What about your vendor's business partners? Can they provide support when the parent has gone fishing?

All of these are not easy questions to answer. However, with adequate planning, some, if not all, of the risks mentioned above can be minimized. If you abide by productivity expert Denis Waitley's  motto of "Expect the best but plan for the worst," at least you can say you have done your best when things go wrong. And they will.

Free Webinar -- The E-Discovery Toolkit

Join us for the second webinar in our three part series, titled The E-Discovery Toolkit:  The Tools Your Organization Needs to Manage Information in an Electronic World, on Wednesday, April 22nd at noon CST, 1pm EST.  The webinar will run for an hour with a 30 minute question and answer period.  I will host the webinar and provide a big picture overview of the policies and procedures your organization needs to have in place to be prepared to manage, preserve and produce ESI, as well as reviewing tips for creating an effective legal hold protocol, the notice to employees, and a system for tracking holds.  Lisa Berry-Tayman of Kahn Consulting will provide an overview of a records retention policy and accompanying retention schedules and discuss the do's and don'ts of putting a policy and schedule in place.  John Collins of The Ingersoll Firm will discuss the inherent challenges in this process given the ever changing landscape of technology and review the types of technologies available to assist in various stages of the EDRM model.  To register for the webinar, click here.  Please use the email icon to the right of or below this post to email the link to other colleagues who may be interested in attending, or to post it to a list serve of interested professionals. 

Gone But Not Forgotten

In "Men in Black," Will Smith carries a tool that is the Holy Grail of every litigant with something to hide: a "neuralizer" that erases aliens and Tommy Lee Jones' acting from the memories of those unlucky enough to witness either.  The real genius is that the subject doesn't know they've been "neuralized"--not only is the crime gone, but so is the cover-up.

There are a number of products on the marketplace that attempt to do the same for hard drives.  Some are surprisingly straightforward about their goal: destroying incriminating evidence.  For example, with a name that might provoke the most mild mannered judge, Evidence Eliminator boasts on its website that "If you do not use Evidence Eliminator, ' your PC is a ticking time bomb, waiting to go off!' . . . Only with Evidence Eliminator can you get the protection you deserve, only then can you use your PC to explore the Internet with confidence."  The company drives the point home with a page entitled "Reasons to Buy," which recounts statistics on prison violence.  The thinly veiled message is that the product can destroy incriminating evidence, and spare its purchaser jail time or civil liability.

However, unlike Will Smith's neuralizer, while the crime (or tort) may be erased from the hard drive, the cover-up is probably detectable to a competent forensic analyst.  In other words, the hard drive will typically contain an indication that it has been wiped.

This is a bad thing for those seeking to cover their tracks.  Attempts to destroy relevant evidence routinely lead to an adverse inference instruction if the following requirements are met: 1) the party was under an obligation to preserve the evidence; 2) the evidence was destroyed with a culpable state of mind (i.e. negligently or knowingly); and 3) the destroyed evidence was relevant.  In such a situation, the jury will typically be instructed that the party has destroyed information that would have been harmful to it.

It is easy to imagine situations in which such an instruction is far more devastating than the electronic information itself.  Thus, litigants should keep in mind the old adage that is as true today as it was in the paper era: the documents are what the documents are.  At least until a workable neuralizer is developed, attempting to hide incriminating documents creates more problems than it solves.

Getting TIFFed Off: The Dangers of Not Going Native with ESI . . . Or, The Perils of Killing the Bunny

For a full understanding of the Great TIFF v. Native Debate and the dangers of choosing the wrong side, try this. Picture a bunny.

Why not? Spring is near, and Easter is only a month away. So, picture a bunny. You can cuddle it, watch its little nose twitch, listen to its heartbeat, even observe its behavior and follow it home. If you are one of those lucky creatures who speak bunny -- like computer programmers speak source code -- you can politely inquire where it's been, what it's seen and who it has spoken with.

Electronically-stored information (ESI) such as e-mails and spreadsheets, is like that living bunny. It exists in pure native form, possessing an exotic birthday suit from which can be gathered the hidden details known as metadata -- who authored the data, who sent and received it, the underlying formulas behind the numbers in an Excel spreadsheet, where files or e-mails were stored, who read or possessed them, when they were created, accessed, modified and saved. Such ESI produced by a party is fully searchable. Like the bunny, it can talk to your opponent, and tell them things.

But herein lies the nasty little secret: attorneys and their clients do not want the bunny to talk to their opponents. In fact, they would love to produce ESI in such a way that their opponents cannot communicate with the bunny. But in most cases, their opponents' requests for production specifically ask them to turn over the bunny. So what can they do?

Picture that bunny, dead. Whacked. A poor dead bunny, handed over to the other side. No pulse. No heartbeat. You can't follow a dead bunny home. You can't talk to it, and it certainly can't talk back. That dead bunny is a TIFF, or "Tagged Image File Format," like a PDF. When the bunny is snuffed and the electronic data "TIFFed" -- i.e., printed out in hard copy and then re-scanned -- it becomes dead and frozen, rather than dynamic and searchable. What you see is what you get. The hidden information, the ability to search millions of pages of text for smoking gun language, and to peek at its living history, is lost. And your opponent has no way to recreate it. There is no way for him to resuscitate that bunny. Sure, he can take a DNA test of the dead bunny: convert the tiny elements of TIFF images -- the individual letters, like the Ts, As, Gs and Cs of a double helix -- into searchable text format through optical character recognition ("OCR"). But OCR does not solve the main problem: identification of the lifeblood, the living metadata of the bunny's life history (the who, what, where, when and why) that does not appear in the TIFFs.

Still, what's wrong with this? Why not always produce ESI in TIFF rather than native metadata form? Why not always produce a dead bunny? Isn't this a perfect solution? Unfortunately, no -- as one law firm, two lawyers, and their very unhappy client just learned in Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., No. 6:07-cv-222-Orl-35 KRS (M.D. Fla. Mar. 4, 2009). In short, Lexington wanted a live bunny and requested all ESI in native format without any alteration or deletion of metadata. Its opponent Bray & Gillespie (B&G) produced a very dead bunny, and was called out by the court for doing so. And that was before B&G's counsel began lying about who killed the bunny and when.

At issue were material misrepresentations made by two individual partners at B&G's counsel, Reed Smith: Berringer (who was involved in discovery) and Ellison (who was not). Berringer told the court that its client B&G killed the bunny by printing its ESI in hard copy and sending it to its former counsel Anderson Kill, who then scanned the documents to create the TIFFs that Reed Smith later produced when they took over the case. But Berringer's information was third-hand, and wrong. He could have contacted Anderson Kill, reviewed the original database, or talked to his client to determine the truth. He did nothing. Even an early draft of a declaration from B&G's vice president stated "electronic documents were extracted directly from individual computers" and given to Anderson Kill. These paragraphs were mysteriously omitted from the final version of the declaration.

The court found that B&G and its counsel had deliberately ignored evidence that in fact, the ESI had been obtained from the client in native and fully-searchable electronic form with metadata, in an Introspect database. In other words, Anderson Kill obtained a live bunny from the client. The bunny was then killed -- converted to TIFFs "using a program that was set to selectively exclude certain types of metadata" before production, which "removed or significantly degraded Lexington's ability to search the ESI and, accordingly, that it was not in a reasonably usable form as required" by Rule 34 of the Federal Rules of Civil Procedure.

Berringer waited until near the end of a hearing before the court to admit that the bunny had been obtained alive. Even then, he did not disclose what metadata was in the Introspect database or how the ESI was transferred to the database; did not disclose the existence of the Target Hard Drive with the original production or that Reed Smith had a copy of it. Instead, Berringer and Ellison made material misrepresentations as to why they did not produce this live bunny: they blamed Anderson Kill's refusal to allow them access to the database, which was not true. The court found that B&G “directly or through their agents deliberately manipulated the electronically stored information in such a way as to withhold from the defendants the information that had been requested, specifically metadata,” and ordered production of the live bunny.

The end? Not even close. B&G produced the bunny -- alive, but with an impaired memory, or limited metadata. In short, they gave up a lobotomized bunny. The court responded by requesting a supplemental response addressing why sanctions should not be imposed upon B&G and its counsel. After a second hearing, the court found that Lexington was severely prejudiced, and ordered production of the entire Introspect database in whatever form Lexington wanted, with all costs borne by B&G, and 60 days of extra discovery for Lexington to conduct any follow-up. The court then turned to the issue of Rule 37 sanctions for killing the bunny, lying about it, and then following up with a brain-damaged bunny:

Anderson Kill, the original law firm that gathered the data: NO SANCTIONS. The firm, Anderson Kill, was off the case by the time production occurred and gave Reed Smith full access to all data. While responsible for putting together the TIFF disks, it was open with Reed Smith about the fact that had been transferred from native electronic format with metadata, to TIFF format. And it did not produce the TIFFs.

A new attorney on the case who joined after the discovery misconduct: NO SANCTIONS. But the court warned him against "blindly relying on outside counsel falls short of the duty he has as an officer of the court, as counsel of record, and as an advocate for his client."

Ellison, counsel of record that was not responsible for the discovery misconduct: SANCTIONS. The discovery misconduct was done under his supervision, making him “an attorney advising” the defendant on the discovery misconduct, and thus personally liable for Rule 37 sanctions.

Berringer, counsel of record responsible for the discovery misconduct: SANCTIONS, pending a hearing. The court issued an order to show cause as to why Berringer should not be personally sanctioned for his misconduct.

Reed Smith, the law firm of both counsel of record: SANCTIONS. Law firms that employ attorneys who "have engaged in a pattern of withholding and concealing information concerning discoverable material and misrepresenting to the court and opposing counsel material facts about numerous failures to comply with discovery requests and Court orders -- including falsely blaming a lack of third-party cooperation and fabricating a false story about the form in which ESI was gathered and stored" are subject to "significant sanctions." The Firm and its counsel were jointly and severally liable for Lexington's fees and costs.

The court rejected all of B&G counsel's excuses for killing the bunny, including that: (1) Lexington did not provide adequate notice of its requests for metadata because they was buried in "five pages of boilerplate definitions and instructions"; (2) re-production would be too burdensome as it would require a new privilege review -- which was not true, because the documents in the Introspect database had already been reviewed for privilege; and (3) B & G was entitled to produce ESI as maintained in the usual course of business and in a reasonably usable form -- an odd argument, since maintenance of ESI in the "usual course of business" was in native metadata form anyway.

The lessons here are many, and clear.  Counsel at Reed Smith could have avoided this whole mess by confirming the trail and treatment of ESI as it passed hands from the client to opposing counsel. Similarly, the court noted that B&G and its counsel could have easily resolved the dispute before either hearing by handing over the live bunny: "by producing the complete metadata load files from the Introspect database for the TIFF images." So, don't kill the bunny. Don't lie about who killed the bunny and when. Don't try to get away with it using lame excuses as to why you killed the bunny. And don't try to redeem yourself with a brain-damaged bunny. Instead, to avoid sanctions, especially when document requests specifically ask for ESI in native format (as almost all do now), turn over the bunny.

Alive and kicking.
 

Rule 502: Curbing the Cost of E-Discovery

Although the proposed Federal Rules of Evidence 502 aims at reducing the cost of e-discovery, businesses can also play a critical role in managing this process.

In an article entitled "Preparation and Communication are Key to Managing E-Discovery Costs," (published in 25 No. 22 Andrews Toxic Torts Litigation Reporter 3, December 5, 2007), Richard Friedman of Dreier LLP explains the various ways businesses may prepare to produce electronically stored information (ESI) and thereby controlling both their costs and reducing the potential for expensive errors. Some pointers--

  • Adopt uniform procedures makes e-discovery a more manageable process with more predictable costs.
  • Through communication and negotiation, counsels can reach agreements on the scope of electronic discovery as early as possible resulting in significant cost savings for both sides, by reducing litigation costs as well as the volume of ESI that must be reviewed.
  • Identify the information that the organization collects and generates and the means by which it is stored. Organizations that lack adequate knowledge of both their inventory of information and their information technology systems risk seriously disadvantaging themselves at the initial Rule 16(b) scheduling conference and subsequent pretrial conferences.
  • Limit the kinds of information that are generated on a daily basis to reduce their potential exposure or to control their storage and retrieval costs, organizations may want to prevent certain kinds of information from being generated.
  • Initiate and enforce litigation holds to preserve relevant information in the event of a lawsuit. This step is necessary to prevent potentially responsive information from being routinely destroyed or deleted when there is a reasonable expectation of imminent litigation and certainly after litigation is pending.
  • Take advantage of techniques and technology that will reduce the universe of ESI that needs to be reviewed, as well as what needs to be produced in litigation.

While it remains to be seen whether Rule 502 will be adopted, businesses and law firms alike can certainly follow Mr. Friedman's advice on e-discovery cost control.