The Revolution and Evolution of Discovery Disputes in the Digital Age

• Date: 01 April 2024
• Author: Andrew P. Atkins and Caragh McGovern Landry

Forum on Construction Law The Construction Lawyer Volume 43, Number 2 The Revolution and Evolution of Discovery Disputes in the Digital Age By Andrew P. Atkins and Caragh McGovern Landry Andrew P. Atkins is an attorney with Smith, Anderson, Blount, Dorsett, Mitchell, & Jernigan, LLP, in Raleigh, North Carolina. He has volunteered for the Forum on Construction Law since 2019 and is vice chair of the Construction Forum of the North Carolina Association of Defense Attorneys. Caragh McGovern Landry is chief legal process officer for Technology Concepts and Design Inc. and is based in Weston, Connecticut, where she specializes in workflow design and continuous improvement programs. Electronic Discovery Is Here This article explores the evolution of discovery disputes in the digital age. While attorneys have been making discovery objections for years, the increasing prevalence of electronic discovery (also referred to as eDiscovery) and the sheer volume of data resulting from electronic records have created challenges for practitioners. Discovery disputes increasingly center on the scope of discovery of electronically stored information and courts have begun to adjust to address this emerging and constantly developing issue. Practitioners can expect courts to continue to make adjustments in the coming years as electronic discovery becomes even more of the norm. Because construction disputes often concern multiple years’ worth of documents and data, the development of electronic discovery best practices is of utmost importance to the industry. This article first addresses the purpose of discovery and common disputes; it then explores in detail new issues and best practices for engaging in electronic discovery. While this article generally covers issues and disputes in the context of litigation, the issues often equally apply in the context of arbitration. The Purpose of Discovery Rule 26 Outlines What Is Discoverable When approaching discovery and discovery disputes, it is often valuable for practitioners to “return to basics” and remember the underlying purpose of discovery. That purpose, as generally set forth in Rule 26 of the Federal Rules of Civil Procedure (FRCP), is to “obtain [information] regarding any nonprivileged matter that is relevant to any party’s claim or defense.” 1 In the age of electronic discovery, the concept of proportionality has emerged as a crucial consideration when proposing discovery scope. 2 Proportionality continues to be an important part of discovery disputes and a limit on “overdiscovery.” 3 Especially in construction cases, with large volumes of potentially relevant documents, discovery can easily account for a significant portion of litigation costs and, if left unchecked, could easily exceed the value of relatively modest claims. Thus, parties and the courts are left to grapple with how best “to secure the just, speedy, and inexpensive determination of every action and proceeding.” 4 Of course, cooperation of counsel is paramount to efficient discovery and avoiding discovery disputes, which may transform into a “metaphysical exercise.” 5 The Proportionality Standard The FRCP limits discovery to matters that are proportional to the needs of the case. 6 In analyzing this Published in The Construction Lawyer Volume 43, Number 2, ©2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. Forum on Construction Law The Construction Lawyer Volume 43, Number 2 concept, courts consider “the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” 7 Many state court procedural rules have similar analogues. 8 But while the proportionality standard is an important tool to ensure that the value of a claim is not engulfed by the costs of discovery, it is also is a frequent culprit for disputes regarding the limits of discovery. Gathering, storing, and producing electronically stored information (ESI) can be expensive. 9 ESI must be electronically stored and is often hosted on an eDiscovery platform to facilitate reviewing, analyzing, searching, and producing. However, hosting can become an expensive exercise and, in larger cases, can account for significant monthly costs. Nonetheless, “parties are expected to bear the expense of producing” ESI. 10 Courts are unlikely to give parties “a free pass” because electronic discovery is difficult or costly. 11 But even though courts expect parties to bear the costs for electronic discovery, courts have recognized that document productions “need not be perfect.” 12 Accordingly, parties typically gather and then produce large document sets using search terms. 13 Attorneys are also increasingly using technology-assisted review (TAR) to identify responsive documents without the need for manual review. 14 It, of course, will be interesting to see how the evolving advanced artificial intelligence akin to ChatGPT changes the space; many eDiscovery platforms are already adopting this type of technology. As eDiscovery becomes more common and tools exist to effectively manage large document sets, the question of proportionality becomes front and center. Attorneys have an ethical duty to be competent in the area of law in which they practice—and eDiscovery is no different. 15 Unfortunately, disputes regarding proportionality often arise because of a lack of cooperation among the parties and/or counsel. Regrettably, these disputes often arise after significant work has already been done to generate a production. One way to avoid disputes after generating a production is to cooperate with the other party and be candid about how one intends to fulfill its discovery-related responsibilities. For instance, if one intends to use search terms in determining which documents to produce, the best practice is to propose terms to the opposing party, receive potential feedback on the terms, and ultimately reach an agreement on the terms that will be employed. 16 Reaching an agreement on the front end for both search terms and the mechanics of how documents will be produced reduces the likelihood of discovery disputes and avoids the circumstance where one could be on the losing end of a dispute and then need to repeat/ redo certain discovery tasks that were already underway. 17 For instance, where parties can agree at the outset on the form of production of ESI (i.e., whether documents should be produced in native, .pdf, TIFF, or some other form), there should be limited disputes on the production format as discovery progresses. 18 Parties requesting discovery can also be proactive to reduce the likelihood of eDiscovery disputes. For instance, a narrowly tailored document request is likely to stand the proportionality test. Construction attorneys are all-too familiar with the request for the “entire project file.” In present times, where the “project file” could arguably consist of a near incalculable number of documents, such a request is not proportional where cases typically concern specific issues in dispute. While such a request could be more proportional for a dispute involving a years-long delay and disruption claim worth millions of dollars, even there it is likely that parties can better tailor such a request to focus on documents/ issues likely to yield meaningful information. Courts are likely to consider the specific nature/scope of a dispute in making determinations on the reasonableness of requests: “Reasonableness and its bedfellow, proportionality, require a case-by-case balancing of jurisprudential considerations, which is informed by factors the discovery rules identify as limiting the scope of discovery . . . .” 19 Published in The Construction Lawyer Volume 43, Number 2, ©2024 by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association. 8 Forum on Construction Law The Construction Lawyer Volume 43, Number 2 A Comparison—Discovery Differences Between the United States and Canada While this article focuses primarily on discovery expectations in the United States, it is often valuable to understand how other countries’ legal systems approach discovery. While US and Canadian litigation processes are very similar, there are some notable differences that impact the discovery phase; some of these key differences include the scope of discovery, recovery of costs, data privacy, and privilege. Practitioners are encouraged to consider how adoption of some of these different approaches could improve the discovery process. Scope of Pre-Trial Discovery An important difference between litigation in Canada and the United States happens during the pre-trial discovery phase. In Canada, parties are obligated to produce relevant documents and are afforded the opportunity only to depose specific custodians or a single corporate representative of a corporation or organization. By contrast, in the United States, pre-trial discovery can involve depositions of many witnesses. Because of this, pre-trial discovery in the United States is often significantly more time consuming and costly than in Canada. Recovery of Costs In Canada, the default rule in litigation is that the prevailing party is entitled to recovery of its costs. This default position can have a significant influence on parties’ decisions during the discovery phase, with parties...