Inside Experts: Courts Increase Skepticism over Electronic Discovery Self Collection

Monitoring trends in the electronic discovery world has become increasingly complex since there are often multiple cases appearing each week, versus the relatively glacial pace of even a few years ago. To further compound issues, many of these cases also happen to be highly fact specific, so it's often hard to glean any clear cut best practices. However, over the past year there has been a discernable trend in which judges have increasingly expressed skepticism over the self collection of data in the e-discovery process. In many of these cases, the reviewing judge or magistrate has looked at this traditional process with a jaundiced eye, in some cases using the self collection component as part of the rationale for imposing significant sanctions.

At the outset, the legal standard surrounding the preservation and collection process is pretty straight forward. Not surprisingly, a party fulfills its duty to preserve evidence if it acts "reasonably." Unfortunately, the challenge with this reasonableness standard is that it's often not clear what the contemporary standards are, particularly given that many enterprises do not share how they approach this issue. Furthermore, too many litigants are simply reactive to the electronic discovery process, and are seen as just going through the motions.

Historically, a self collection methodology (where employees manually select and potentially harvest their own data) was considered defensible if properly executed; meaning with the requisite level of attorney guidance and oversight. And, while this is still technically accurate, the pendulum has swung far enough to proclaim that this approach is simply far too dangerous for most enterprises, except perhaps those that are extremely risk tolerant. While there was no particular straw that broke the camel's back, the trend in the case law now seems to be moving inextricably in one direction-- i.e., that self collection is no longer safe enough for average enterprises. Just like tight rope walking without a safety net, self collection protocols aren't inherently doomed to failure, but there isn't much (if any) margin for error.

The problem with self collection is that there are numerous potential flaws, any of which may render the process unreasonable in a court's analysis. These vulnerabilities haven't gone unnoticed by the plaintiffs bar, who increasingly view e-discovery sanctions as yet another way to win their case.

Ability to Discern Relevancy

First, self collection inherently requires key custodians to make legal decisions about relevancy for the matter at hand. In the recent case of Northington v. H&M Int., the Plaintiff sued her former employer for sexual and racial discrimination and retaliation in violation of Title VII. The court sanctioned the defendant by levying fines and recommending a spoliation inference to be issued at the time of trial, because the defendant's efforts to preserve evidence were deemed to be both "reckless and grossly negligent." One of the main factors rendering the defendant's behavior culpable was the use of a self collection data collection methodology, which the court found to be inherently unreasonable: "Most non-lawyer employees, whether marketing consultants or high school deans, do not have enough knowledge of the applicable law to correctly recognize which documents are relevant to a lawsuit and which are not." Similarly, Judge Scheindlin in Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of America Sec. LLC, took exception with a self collection process that unreasonably placed "total reliance on the employee to search and select what that employee believed to be responsive records without any supervision from Counsel."

Bias is Hard to Overcome

While adequate supervision from counsel can remedy some of the defects seen above, an often thornier problem occurs when there's a perception that biased employees may not accurately self collect data. Green v. Blitz U.S.A., demonstrates another example of self collections gone awry. In Green the plaintiff sought to re-open her lawsuit despite a prior settlement, once she suspected that the defendant had failed to produce relevant electronically stored data (ESI). Finding that defendant had committed numerous discovery abuses, the court issued unusually punitive sanctions where, in addition to a $250,000 fine, the defendant also had to provide a copy of the court's sanctions order to plaintiffs "in every lawsuit proceeding against it" for the past two years, and also had to file the court's order in every case that it is involved in for the next five years. Self collection was again a culprit since the main individual in charge of collections was also closely tied to the research and development of the "flame arresters" that were at issue in this exploding gas can case.

The Northington court also addressed this bias issue as rendering self collections fatally flawed stating: "It is unreasonable to allow a party's interested employees to make the decision about the relevance of such documents, especially when those same employees have the ability to permanently delete unfavorable email from a party's system.... Furthermore, employees are often reluctant to reveal their mistakes or misdeeds." A similar analysis occurred in Orbit One Commc'ns, Inc. v. Numerex Corp. (finding self collection unreasonable since the party placed responsibility for preservation in the hands of the employee "with the greatest incentive to destroy evidence harmful to Orbit One and to his own interests").

Lack of Automation

Finally, even where bias isn't an issue and the custodians are well supervised by counsel, there are still potential issues where custodians simply can't remember if they had responsive ESI or where such information might have been located. This problem can be particularly acute given the fact that litigation is almost always conducted in the rear view mirror, often years in the past.

Fortunately, technology solutions are rapidly able to play a role automating the collection process. This IT-lead approach is being increasingly recommended by organizations like the Sedona Conference (in Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery) which states: "reliance solely on a manual search process for the purpose of finding responsive documents may be infeasible or unwarranted. In such cases, the use of automated search methods should be viewed as reasonable, valuable, and even necessary."

ARMA International has similarly stated that self collection of ESI was only safe in a relatively narrow range of uses cases - particularly in low risk situations.

"...[S]ome corporate litigants opt for more informal, 'manual' collection methods (i.e., searches performed by individual records custodians) when responding to ESI requests. Companies may choose the manual collection of ESI to reduce costs, particularly if they have limited levels of litigation or lower risk levels posed by the litigation itself."

Where to Go from Here?

The safer, contemporary practice is to utilize technology to conduct collections from key players and perhaps leverage the custodians (and technology) to point out where relevant ESI might exist. As such, a belt and suspenders approach is undoubtedly the safer way to proceed. As noted by prominent e-discovery commentator Ralph Losey, in this "dual protection" scenario "key custodians still search, identify, and self-collect what they think are relevant emails, but, as a fail safe, IT also collects all of the key custodians' emails." This approach "guards against the intentional and unintentional mistakes that can sometimes arise in self-collection."

The key to implementing this "dual protection" methodology is that proportionality must be calculated in order to evaluate the proper risk/reward balance. While it's not necessary to use IT tools to collect data immediately for all custodians who have received a litigation hold notice, it's probably unreasonable to not quickly collect ESI (via formal, IT based methods) from at least some subset of key players. The main point is that this isn't an all or nothing calculation. Costs, risks and benefits should all be carefully evaluated and documented, in case there's a downstream challenge.

Conclusion

The good news is that it's now well understood that electronic discovery is never going to be a perfect process. But, the widespread use of self collection simply injects too much risk into an already complicated procedure, particularly given the widespread availability of technology solutions that can easily automate many of the previously manual tasks. Now is the time to change tactics and stop tight rope walking without a safety net. After all, no enterprise wants to be the next to endure a highly publicized and often fatal fall.

Read Dean Gonsowski's previous column.

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