Paradigm shifts in e-discovery litigation: cooperate or continue to pay dearly.

AuthorManlowe, Robert C.

THE COST of pretrial discovery has grown tremendously in recent years as discovery of electronically stored information ("ESI") has come of age. Costs climb exponentially higher when counsel misuse or abuse the discovery process, obfuscate collection and production procedures, or fail to recognize that discovery of ESI requires new skills and knowledge that do not apply to discovery of filing cabinets and banker's boxes. The resources of clients, counsel and courts are quickly overtaxed in this new era when counsel make unreasonable demands for information or fail to carefully think through the process of searching for and collecting ESI. The last few years, however, signal a collective effort by the federal courts and the leaders at the Sedona Conference to curb the runaway costs and the abuse of the rules by way of a new paradigm. In several recent opinions, federal district courts have set forth explicit guidance to attorneys regarding their duties under the rules of civil procedure in requesting and responding to discovery. Distilled to its essence, the courts' guidance is founded on principles of cooperation, fairness, reasonableness, proportionality and common sense. This article outlines seven core principles that emerge from these cases as a prescribed "ESI code of conduct" for attorneys to follow in conducting discovery. The article concludes with recent examples of situations where the ESI code of conduct was not followed and the sanctions for such failure.

Principle 1. Electronic discovery requires cooperation and transparency in all aspects of preservation and production of ESI

The predominant method for culling through huge caches of computerized information is to use "keyword" searches. Boolean keyword searching (searching for keywords using connectors like and, or, or within so many words) is only about 22 to 57 percent effective in locating responsive documents. (1) Because the limitations of keyword searching are becoming more well known, courts have begun to take a dim view of situations where parties have unilaterally crafted search term lists--or failed to talk to the people who actually wrote the documents to find out what words to look for to find more responsive information.

Early in 2008, Magistrate Judge Facciola, one of the leading jurists on e-discovery issues, took on the topic of keyword searches. United States v. O'Keefe (2) involved a prosecution of a Department of State employee for allegedly receiving, quid pro quo, gifts and other benefits from his co-defendant for expediting visa requests for employees of co-defendant's company. Resolving a discovery dispute between the parties, Judge Facciola cautioned:

Whether search terms or "keywords" will yield the information sought is a complicated question involving the interplay, at least, of the sciences of computer technology, statistics and linguistics.... Given this complexity, for lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread. This topic is clearly beyond the key of a layman and requires that any such conclusion be based on evidence that, for example, meets the criteria of Rule 702 of the Federal Rules of Evidence. (3) It turned out that O "Keefe was just an opening salvo on the inadequacies of keyword searching and counsel's inability to address them. (4)

Last year, Magistrate Judge Peck in the Southern District of New York, issued a "wake-up call to the Bar in this District about the need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or 'keywords' to be used to produce emails or other electronically stored information." (5) The case involved a multimillion dollar dispute over alleged defects and delay in the construction of the Bronx County Hall of Justice, also known as the Bronx Criminal Court Complex. The Dormitory Authority of the State of New York ("DASNY") was the "owner" of the project. Non-party Hill International was DASNY's construction manager. DASNY agreed to produce Hill's project-related documents and ESI to the other parties to the suit. The parties, however, could not agree on how to produce Hill's emails in a way that separated out project-related emails from Hill's unrelated emails, and they sought the court's intervention.

Judge Peck proposed a set of keyword searches for the parties to use, but noted his discomfort with being put in the position of having to craft a keyword search methodology for the parties, without adequate information from the parties and Hill, noting that this another case "of lawyers designing keyword searches in the dark, by the seat of the pants, without adequate discussion with those who wrote the emails." (6) After "strongly endors[ing]" the Sedona Conference Cooperation Proclamation the court admonished the parties:

Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a minimum must carefully craft the appropriate keywords, with input from the ESI's custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of "false positives." It is time that the Bar even those lawyers who did not come of age in the computer era--understand this. (7) The Sedona Conference Cooperation Proclamation is "a coordinated effort to promote cooperation by all parties to the discovery process to achieve the goal of a 'just, speedy, and inexpensive determination of every action.'" (8) As of September 30, 2010, the Cooperation Proclamation was publically endorsed by over 110 judges around the country. The Proclamation sets forth sound reasoning that cooperation in discovery is consistent with zealous advocacy:

Lawyers have twin duties of loyalty: While they are retained to be zealous advocates for their clients, they bear a professional obligation to conduct discovery in a diligent and candid manner. Their combined duty is to strive in the best interests of their clients to achieve the best results at a reasonable cost, with integrity and candor as officers of the court. Cooperation does not conflict with the advancement of their clients' interests--it enhances it. Only when lawyers confuse advocacy with adversarial conduct are these twin duties in conflict. (9) The Cooperation Proclamation also explains that cooperation is required by the Federal Rules of Civil Procedure and provides a list of methods to accomplish cooperation:

* Utilizing internal ESI discovery "point persons" to assist counsel in preparing requests and responses;

* Exchanging information on relevant data sources, including those not being searched, or scheduling early disclosures on the topic of Electronically Stored Information;

* Jointly developing automated search and retrieval methodologies to cull relevant information;

* Promoting early identification of form or forms of production;

* Developing case-long discovery budgets based on proportionality principles; and

* Considering court-appointed experts, volunteer mediators, or formal ADR programs to resolve discovery disputes.

The authors recognize that it is unrealistic to expect a sudden outbreak of cooperation. To accomplish the paradigm shift, the Sedona Conference has stated it will: promote awareness of the need and advantages of cooperation; commit to develop a detailed understanding and articulation of the issues and changes needed to obtain cooperative fact-finding; and develop and distribute "toolkits" that can be used for education and training.

Principle 2. Counsel should attempt to reach agreement on a scope of discovery proportional to the estimated damages in the case

Magistrate Judge Paul Grimm has endorsed the Cooperation Proclamation, and often "forces" parties to cooperate on e-discovery issues. For instance, in Mancia v. Mayflower Textile Services, (10) Judge Grimm was confronted with a plaintiff' s excessive and overly burdensome requests and a defendant's inadequate discovery responses. In light of the nature of the case and the relatively modest damages for each plaintiff, Judge Grimm asked the parties to attempt to quantify a workable "discovery budget" that was proportional to what was at issue in the case. With this objective in mind, he ordered the parties to take the following steps:

* Estimate the likely range of provable damages that foreseeably could be awarded if plaintiffs prevailed at trial. For purposes of this analysis, the parties should assume the pending motion to certify a collective action would be granted because doing so would allow the parties to gauge the "worst case" outcome defendants could face. Plaintiffs' counsel should also estimate their attorneys' fees.

* Plaintiffs and defendants' counsel should discuss the amount and type of discovery already provided, and then discuss the additional discovery still sought by plaintiffs to determine whether plaintiffs' legitimate additional discovery needs could be fulfilled from non-duplicative, more convenient, less burdensome, or less expensive sources than those currently sought by plaintiffs (the "Rule 26(b)(2)(C) factors"). The burden is on the party challenging the discovery requests to provide a particularized factual basis to support any claims of excessive burden or expense. See generally CBT Flint Partners, LLC v. Return Path, Inc., 676 F. Supp. 2d 1376 (N.D. Ga. 2009) (ordering plaintiff in a patent infringement action to pay more than $268,000 in costs to defendants for the services of a computer consultant hired to fulfill broad discovery demands).

* The parties' counsel should then attempt to reach an agreement about what additional discovery (and from what sources)...

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