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E-discovery: You can’t blame third parties for e-discovery errors

Courts have repeatedly imposed sanctions on businesses for discovery failures, regardless of a vendor or consultant's mistakes

As litigants and their attorneys have become increasingly more reliant on third-party consultants and vendors to assist with the identification, collection and production of electronically stored information (ESI), it is important for in-house counsel to remember that courts will ultimately hold the party and/or its attorneys accountable for discovery failures—even those attributable to a vendor/consultant’s errors.

While there are not many court decisions on this topic, substantially all (if not all) of the small reported decisions that have confronted the issue indicate that courts will impose sanctions on a party for discovery failures caused by that party’s outside vendor.

As suggested by the Sedona Principles: Second Edition Best Practices Recommendations & Principles for Addressing Electronic Document Production, a set of guidelines authored by the non-partisan group The Sedona Conference, the “ultimate responsibility for ensuring the preservation, collection, processing and production of electronically stored information rests with the party and its counsel, not with the nonparty consultant or vendor.” 

Accordingly, shortly after the Sedona Conference’s release of the Second Edition, a federal magistrate judge found that sanctions were warranted against a defendant for failing to produce “reasonably accessible” or “usable” documents where an electronic production had load file and metadata problems, which the defendant attributed to vendor error.  More recently, a district judge imposed a cost-shifting sanction, including payment for certain expenses for supplemental depositions, against a defendant for its late production of approximately 70,000 pages of documents which the defendant attributed to an e-vendor error. See e.g. Berge Helene, Ltd v. GE Oil & Gas, Inc., 2011 U.S. Dist. LEXIS 19865 (S.D. Tex. March 1, 2011).

Because Rule 26(f) and many district judges mandate that the parties address issues regarding disclosure and discovery of ESI in their discovery planning conference, it is critical that inside counsel, outside counsel and all third-party e-discovery vendors/consultants have a clear understanding at the outset of litigation (or even earlier if possible) of a company’s sources of electronic data (including all potential custodians), internal document retention policies, document retention architecture, etc.

It is incumbent upon in-house counsel to work with outside counsel to ensure that any e-discovery vendor they retain has the technical capabilities and expertise to properly capture and produce the data within any specifications agreed to by the parties and within all deadlines imposed by the applicable rules of procedure or court orders. 

In-house counsel who are knowledgeable regarding their company’s technology infrastructure can greatly assist outside counsel and third-party vendors in streamlining the information exchange process as well as identifying potential pitfalls. 

Given the requirement of an early informational exchange by the parties, counsel and vendors, it is understandable that, barring exceptional circumstances, courts would have little or no sympathy for a party’s discovery failures, even those resulting from an e-discovery vendor/consultant’s errors. 

Contributing Author

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Franklin Zemel

Franklin L. Zemel is a partner in the Fort Lauderdale office of Arnstein & Lehr LLP, where he is a member of the firm's Litigation...

Additional Contributors: Brett Duker

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