Maine Evidence and Electronic Discovery

Seventh Circuit Adopts Set of Principles and Standing Order for Handling E-Discovery

The Seventh Circuit recently adopted an Electronic Discovery Pilot Program that will run through May 2010, at which point feedback from the program will be assessed and the program may be modified.  As the judge who chaired the committee reported in a news release, electronic discovery "is expensive, burdensome, time-consuming, and it is causing executives to make decisions about sometimes meritless litigation simply because of the costs involved in the litigation."

The Pilot Program report states that acommittee of more than 40 e-discovery practitioners was assembled last spring with the goal of developing a set of principles designed to "incentivize early and informal information exchange on commonly encountered issues relating to evidence preservation and discovery, paper and electronic."  Pilot Program at 9.  As the committee noted, "Too often these exchanges begin with unhelpful demands for the preservation of all data, which often are followed by exhaustive lists of types of storage devices. Such generic demands lead to generic objections that similarly fail to identify specific issues concerning evidence preservation and discovery that could productively be discussed and resolved early in the case by agreement or order of the court. As a result, the parties often fail to focus on identifying specific sources of evidence that are likely to be sought in discovery but that may be problematic or unduly burdensome or costly to preserve or produce."  Id.

The committee developed a draft Standing Order to be entered by participating judges in selected cases.  "Once adopted as standing orders, the Principles will serve as supplemental procedural guidelines to be followed by litigants."  Id. at 10. 

All too often discovery turns into a contentious, difficult process, which generally adds to the ultimate costs and frustrations of all involved.  The committee observed that an "attorney's zealous representation of a client is not compromised by conducting discovery in a cooperative manner."  Id. at 11.

The principles set forth a series of deadlines and meetings that have to take place early on in a case, prior to the initial status conference with the court, to get everyone thinking about the specific electronic discovery issues that will be implicated by a particular case.   Parties are required to appoint "e-discovery liaisons" to handle technical issues and to appear in court to explain the issues as necessary. 

With respect to document preservation, the committee's consensus was to avoid overly broad, blanket document protection orders.  "Vague and overly broad preservation requests do not further the goals of these Principles and are therefore disfavored. Vague and overly broad preservation orders should not be sought or entered."  Id. at 13. 

Under the principles, "the requesting party is responsible for the incremental cost of creating its copy of requested information. Counsel or the parties are encouraged to discuss cost sharing for optical character recognition (OCR) or other upgrades of paper documents or non-text-searchable electronic images that may be contemplated by each party," but "ESI and other tangible or hard copy documents that are not text-searchable need not be made text-searchable."  Id. at 15-16.

It is surprising that more courts haven't already followed the lead of the District of Maryland, which adopted its own set of guidelines more than a year ago (discussed in my prior post here).  What is interesting about the Seventh Circuit's program is that it specifically contemplates revisiting the principles next spring to assess how effective they have been in addressing the goals of the committee.  The feedback and changes that may be made to the principles going forward next summer no doubt will be influential in guiding others looking at ways to reasonably and cost effectively implement the e-discovery rules.

Twitter and Electronic Discovery

An interesting article recently was published in the May 2009 issue of the New York State Bar Journal, on issues relate to the use of Twitter both by lawyers and by individuals and employees who eventually become embroiled in litigation.  He touches on some of the potential e-discovery implications of Twitter messages.

As the article explains, Twitter applications typically are not offered by businesses for their employees' use; rather, employees use either their own cell phones or their employer-provided cell phones to send messages outside the parameters of a company's routine IT data retention protocol.  As such, the messages likely are nor being captured and stored by businesses, and indeed the company may have no idea of what is even being sent or received.  In spite of that lack of awareness on the corporate level, that does not necessarily mean that a court will conclude that the messages are beyond the scope of electronic discovery in certain contexts, although there is an argument to be made that the temporary nature of the data is outside the scope of what the rules intended to capture in defining electronically stored information.  And in any event, the fact that such data might be found beyond the scope of e-discovery in certain cases does not mean that the other side won't find it posted on the Internet somewhere and use it to its advantage anyhow.  As with much electronic data, it is the data you don't know about that can be the most damaging.

Yet another challenging issue that courts have only begun to grapple with.

Should Lawyers Have Their Heads in the Clouds?

So there's been a lot of talk recently about "cloud computing."  What is "cloud computing?"  Essentially it refers to the increased practice of some companies to outsource the provision of hardware, software and human resources to deliver, store and manage digital data offsite.  The idea is that outside service providers can achieve economies of scale, thereby lowering the cost for providing these types of services to their customers.

Not surprisingly, "cloud computing" raises a whole host of challenging electronic discovery issues.  With "cloud computing," a company may be accessing data storage on computers owned and operated by other entities located anywhere in the world.  Although the company likely continues to "own" its own data stored on those computers, there may be issues regarding the company's ability to access information about that data, like information about when the data has been accessed and by whom.  That sort of information can be a critical component of e-discovery.

Also, what about preservation?  I've written before about the importance of litigation holds and effective document retention plans.  But a company's ability effectively to preserve data hosted on computers owned by another entity halfway around the globe may be difficult to coordinate.  Even production of data on those offsite computers likely will add numerous challenges. 

In-house counsel at large companies who either already are outsourcing some of these data functions, or who anticipate doing so in the future, would be well advised to start thinking about some of these logistical issues now.  Ideally they would be addressed in the service agreements between the company and the "cloud computing" entity.

If you are interested in reading more about some of these challenges, here are a couple of links to recent articles on law.com and infoworld.com.

American College of Trial Lawyers Issues Report Critical of Electronic Discovery Rules

On March 11, 2009, the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System issued their final report on a joint project to examine the role of discovery in the American civil justice system and to make recommendations for reform.

According to the joint press release, the group's proposals are "designed to treat the nation’s ailing system of civil justice."  In particular, the group concluded that "Discovery costs far too much and has become and end in itself; discovery should be limited by proportionality, taking into account the nature and scope of the case, relevance, importance to the court’s adjudication, expense and burdens."

According to the report, "discovery can cost far too much and can become an end in itself. As one respondent noted: 'The discovery rules in particular are impractical in that they promote full discovery as a value above almost everything else.'  Electronic discovery, in particular, needs a serious overhaul. It was described by one respondent as a 'morass.' Another respondent stated: 'The new rules are a nightmare. The bigger the case the more the abuse and the bigger the nightmare.'"

In general, the group has proposed that discovery be tailored to specific cases, based on the issues and amount in controversy.  Discovery should be "proportional" and staged where appropriate.  The group has suggested, among other things, that there be financial limitations on the amount of money that either party can spend, or be forced to spend by its opponent, on discovery.

Regarding e-discovery in particular, the group advocates for substantially curtailing the scope and breadth of current discovery called for under the federal rules.  As the group observed, "Electronic information is fundamentally different from other types of discovery in the following respects: it is everywhere, it is often hard to gain access to and it is typically and routinely erased. Under judicial interpretations, once a complaint is served, or perhaps even earlier, the parties have an obligation to preserve all material that may prove relevant during a civil action, including electronic information. That is very difficult, if not impossible, to accomplish in an environment in which litigants maintain enormous stores of electronic records. Electronic record keeping has led to the retention of information on a scale not contemplated by the framers of the procedural rules, a circumstance complicated by legitimate business practices that involve the periodic erasure of many electronic records.

The group recommends that "Electronic discovery should be limited by proportionality, taking into account the nature and scope of the case, relevance, importance to the court’s adjudication, expense and burdens."  Although Federal Rule of Civil Procedure 26(b)(2) is intended to address some of those concerns, the group concluded that it is insufficient as applied by the courts.  The group further proposes:

The obligation to preserve electronically-stored information requires reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation; however, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant electronically stored information.

Absent a showing of need and relevance, a party should not be required to restore deleted or residual electronically-stored information, including backup tapes.

Sanctions should be imposed for failure to make electronic discovery only upon a showing of intent to destroy evidence or recklessness.

The cost of preserving, collecting and reviewing electronically-stored material should generally be borne by the party producing it but courts should not hesitate to arrive at a different allocation of expenses in appropriate cases.

Many of the group's proposals make good sense, and in fact are guided by the spirit of the Sedona Principles and the federal rules.  Certainly some courts under the current rules have balanced the scope and costs of e-discovery against the issues and size of the litigation, but too often those considerations are not given the proper attention until too late in the process, or after substantial costs already have been incurred, sometimes with little relevant information gained in spite of the massive scope of data produced. 

I suspect that the group's recommendations will receive some resistance for the precise reason the group believes reform is necessary:  for some parties discovery is an end in itself, and is used for driving others to the settlement table simply to curtail the high costs of continuing to litigate.  Particularly in cases where there is only one institutional party, and so the e-discovery costs are borne almost entirely by one side, the incentive for the other side to agree to reasonable limitations on electronic discovery usually does not exist.  But these proposals offer a number of interesting ideas, and are sure to lead to "nationwide discussion" and "lively and informed debate," just as the drafters intended.

Teaching Electronic Discovery in Law School

So I've been thinking recently about how electronic discovery procedures are taught to lawyers.  In recent months a number of commentators have complained that American law schools aren't doing enough - or even doing anything at all - to teach future lawyers about the rules and intricacies of electronic discovery.  See for instance "Teach Your Children Well" - A Case for Teaching E-Discovery in Law Schools, Slaying the E-Discovery Dragon: Are Law Schools Up to the Task?, and The E-Discovery Crisis: An Immediate Challenge to our Nation’s Law Schools  The authors make the points that e-discovery is here to stay, it is not a passing fad, and indeed e-discovery costs routinely consume large portions of major litigation budgets, so it undeniably is something worth learning about.  And as shown in many of the court decisions cited in this blog, the costs of failing to understand prevailing electronic discovery rules and practices can be extreme, both for lawyers and their clients.  So providing at least the basics of this relatively new area of the law to future lawyers surely would be a good thing.

But then again, a lack of e-discovery courses certainly isn't the only area in which law schools don't provide practical instruction on how to actually be a lawyer.  We all remember civil procedure class, a course that by its name might suggest that it's geared toward teaching the procedures of how to actually litigate a case.  But at least when I took it, most of the class was devoted to personal jurisdiction and due process issues,thorny federalism questions and other complex issues that typically don't arise in the average lawyer's practice on a daily basis.  There was no instruction or practice on how to draft a complaint, what a set of interrogatories should look like, how to take a deposition, the requirements for preparing a statement of material facts for summary judgment, or any of the other countless things a litigator has to do on a daily basis to advance a case. 

The classic description of law school is that it teaches future lawyers how to think, so that when they graduate and begin practicing, they have the tools necessary to figure out how to resolve legal problems.  Law schools simply cannot teach everything.  Unless law schools decide to fundamentally overhaul the entire education process, to redirect it toward the instruction of practical skills through hands-on learning, rather than Socratic teaching of a diverse and often unrelated range of substantive areas of the law, e-discovery will simply have to be added to the list of other practical things that law students need to learn on their feet after graduation.  If there is indeed a "crisis" in American law schools because they are not offering courses on e-discovery, then the lack of electronic discovery courses is only the tip of the iceberg.

The Lighter Side of Electronic Discovery

I recently came across a site called "Case in Point," that seems to be a fairly recent blog (started in October 2008) that runs a weekly cartoon series that puts a humorous spin on electronic discovery.  It's worth checking out if you have a minute.

Just How Much Electronic Discovery Is Enough?

If you’ve been on the receiving end of a request for electronic data, you know that the other party who’s asking for your client’s electronic files usually is suspicious that there’s a “smoking gun” buried somewhere among thousands of emails.  So your protests about the burden of having to retrieve, review and produce reams of emails usually fall on deaf ears. 

Sometimes the other side has good reason to believe there’s more out there that you haven’t turned over.  Like in the discrimination case against the Secret Service pending in federal court in Washington, in which the agency has been sanctioned already by the court for failing to turn over email, and now faces the possibility of being defaulted after it came to light that one of the agency’s paralegals burned documents that were supposed to be produced.  (If you haven’t heard about that one, a couple of articles about that case are here and here.)  Those kinds of things make the news and make plaintiffs and their lawyers in other cases suspicious that every other agency or business who’s sued may be doing the same thing, when of course that isn’t the case.

But the point that often gets lost in any discussion about whether a handful of electronic documents have been overlooked is how much already has been produced.  In the Secret Service case, apparently the agency already produced some 20 million electronic documents spanning a 16 year period.  Anyone who’s been involved in e-discovery knows how much work is involved in a production like that.  And unfortunately for businesses, it’s not unusual for even a fairly ordinary lawsuit to implicate massive quantities of electronic files.  Just look at your own in-box and see how many emails you’ve received in the past year alone.

Long before you and your client are staring in the face of potential sanctions, the key is to bring the discussion back on to your client's turf by building a record of everything you have done to preserve and produce responsive electronic data, how much more effort and expense would be required to produce anything else, and the likely limited value to the other side of forcing you through the additional effort.  It's easy for the other side to keep asking for more and to point out a few examples of things that might have slipped through the cracks.  The challenging part is to build a record that will convince the court that enough is enough.

Introduction to Electronic Discovery Issues

Hello and welcome to the blog.  As the message to the left says, with this blog, we hope to have a dialogue about issues concerning electronic discovery and evidence, both in Maine and elsewhere.  Feel free to contact me with any questions or comments – just click on my email address.

So by now electronic discovery (or e-discovery for short) is something that just about everyone has heard about.  (It’s even defined in Wikipedia, as is just about everything else.)  And chances are, at least if you’ve been litigating any cases in federal court in the last couple of years, it’s something you’ve had to deal with, as well. 

We’ll leave for another day an exhaustive discussion of how the current e-discovery rules that apply in federal court were developed.  But the starting point, of course, is the amendments to the Federal Rules of Civil Procedure that went into effect in December 2006.  Because of the shift in the corporate world from recording everything in paper files stuffed in a file cabinet somewhere to storing things on computers, in email and on discs, the rules had not kept up with the times, and there was no uniform practice for dealing with discovery related to electronic forms of documents.  Discovery in big cases used to involve sitting in a warehouse somewhere looking through boxes of musty paper.  Now it often involves sitting at your computer scanning through millions of pages of documents and emails that have been downloaded from a company’s server (although we can’t avoid the warehouses entirely, especially for cases involving long-running disputes).

The federal rules now specifically acknowledge that “electronically stored information” is subject to discovery in the normal course, Fed. R. Civ. P. 34(a)(1)(A), at least unless it is “not reasonably accessible because of undue burden or cost.”  Fed. R. Civ. P. 26(b)(2)(B).  As with most things, the devil is in the details, and the focus in most e-discovery disputes is on how accessible the information is, the other party’s need for it, and what the costs would be to retrieve it.  In theory, the parties are supposed to try to agree on the scope of e-discovery at the onset of a lawsuit, Fed. R. Civ. P. 26(f), and the court’s initial scheduling order should address the basic scope of electronic discovery.  Fed. R. Civ. P. 16(b)(3).  And of course, to make sure people actually follow the amended rules, there’s always the threat of sanctions if a party fails to produce electronic information that is requested by an opponent, unless the information is “lost as a result of the routine, good-faith operation of an electronic information system.”  Fed. R. Civ. P. 37(f).

Until the last few years, there wasn’t much guidance from the courts on the business of electronic discovery and how to handle the nitty-gritty details of it, like when the obligation to preserve documents arises, how to determine the scope of electronic data that must be preserved or how to balance the costs between the parties. Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York has been the trend setter in addressing these types of issues in a series of opinions in Zubulake v. UBS Warburg LLC, a case involving gender discrimination and retaliation.  Judge Scheindlin’s decisions have provided the framework both for the development of the 2006 amendments to the federal rules, and for how many courts analyze e-discovery issues as they arise today.  See Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) (analyzing production of e-mails from backup tapes and consideration of cost-shifting) (“Zubulake I") ; Zubulake v. UBS Warburg LLC, 2003 U.S. Dist. LEXIS 7940 (S.D.N.Y. May 13, 2003) (“Zubulake II”) (involving plaintiff’s ability to disclose contents of deposition of defendant’s employee concerning company’s email retention policies); Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) (“Zubulake III”) (addressing costs of restoring backup tapes); Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) (“Zubulake IV”) (awarding sanctions against defendant for violating the duty to preserve evidence); Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (“Zubulake V”) (holding that jury would be given an adverse inference instruction with respect to e-mails that had been destroyed by defendant's employees in defiance of instructions by counsel not to do so).

Basically, Judge Scheindlin held in Zubulake I and III that the party producing electronic data generally bears the costs of production unless the request for production constitutes an undue burden – in which case the requesting party would bear the cost of production.  To determine whether the production would involve an “undue burden,” Judge Scheindlin adopted a multi-part test that focuses on elements such as the need for the information, the availability of the information from other sources, whether the discovery request is appropriately tailored, and the costs and benefits for all concerned.

And in Zubulake IV and V, Judge Scheindlin dealt with the much more unpleasant task of figuring out what form of sanctions to impose on a defendant for failing to preserve electronic evidence.  That’s the stage no corporate party ever wants a judge to have to reach.  And it’s clear that counsel has a vital role in making sure that his client adheres to the rules requiring preservation of electronic evidence.  Just ask the lawyers who represented Qualcomm and were referred to their state bar authorities by a federal magistrate judge after it came to light that they and their client had failed to produce 300,000 pages of responsive emails.  Click here to read more about that, if you’re not familiar with the case.

Here in Maine, the state rules of civil procedure don’t specifically address the issue of electronic discovery the way the federal rules do.  Although there is talk that that may change.

In future postings, we'll explore any decisions in Maine federal or state courts that deal with e-discovery issues.  And we'll also highlight new and notable decisions from elsewhere that are likely to be considered by Maine judges when these issues inevitably arise.