For more on e-discovery, read our online exclusives about a company that was penalized for not engaging in a proportionality analysis and the power of Rule 502.
As the e-discovery march goes on, litigants continue to wrestle with questions and disputes both familiar and novel. Eventually they land before the judiciary, which is doing its part to provide useful, informed guidance and to help shape a constantly evolving new frontier. The decisions in these recent cases, drawn from the past 15 months, touch on some of the hottest—and thorniest—issues in the world of e-discovery today.
Relevant case: U.S. Magistrate Judge for the Northern District of Illinois Nan Nolan opens her September 2012 opinion in Kleen Products LLC v. Packaging Corp. of America by quoting The Sedona Conference’s 2009 Cooperation Proclamation, which more than 100 federal judges have endorsed since its publication. It says that lawyers have twin duties of loyalty both “to be zealous advocates for their clients … and to conduct discovery in a diligent and candid manner. … Only when lawyers confuse advocacy with adversarial conduct are these twin duties in conflict.”
The opinion speaks to disputes regarding predictive coding and proportionality, but at its heart, it is a call to all litigants to work together in resolving discovery disputes. Nolan, now retired, goes on to commend both lawyers and clients for their cooperation and to offer some best practices for a collaborative approach to e-discovery. First, she says, such an approach should start early in the case. Additionally, assigned liaisons to each party can be helpful where multiple parties have separate counsel. And finally, parties should discuss and agree on discovery phases at the onset of discovery.
“Experts in this field believe that one of the ways to reduce the cost of e-discovery is to be more cooperative, and the judiciary is picking up on that,” says Chris Forstner, a shareholder at Murphy & McGonigle. “Judges have hammered litigants in a few cases for not being cooperative.” In his June 6 opinion in Taydon v. Greyhound Lines, for example, U.S. Magistrate Judge for the District of Columbia John Facciola declared himself the “new sheriff in town” and ordered the parties in the case to dispense with lengthy and extensive discovery motions and instead to make genuine efforts to engage in a cooperative discovery regime.
Choice words: “In some small way, it is hoped that this Opinion can be of some help to others interested in pursuing a cooperative approach.” –U.S. Magistrate Judge Nan Nolan
Relevant case: The Southern District of New York case Nat’l Day Laborer Org. Network v. United States Immigration & Customs Enforcement Agency is one of the first to outline “the pitfalls of self-collection, where you’re solely relying upon the custodian to do their own document collection,” says Veeral Gosalia, senior managing director of FTI Consulting’s technology arm. “The reality is that a lot of corporations are doing this. Not because there’s anything nefarious or improper going on—not even necessarily that they think this is saving money—but because it seems logical in their minds.” An employee tasked with handling company data is most familiar with that data, after all. Why bring in an outsider? Although U.S. District Judge Shira Scheindlin’s July 2012 opinion doesn’t condemn self-collection, it emphasizes the importance of carefully monitoring custodians to ensure they are conducting appropriate searches.
Although FOIA places a higher burden on the government than what the Federal Rules of Civil Procedure require of litigants in discovery proceedings, Scheindlin’s opinion cites numerous non-FOIA cases. Many of the factors she considers in determining whether searches are adequate and whether attorneys are properly overseeing the collection process are applicable in the e-discovery context.
Choice words: “Most custodians cannot be ‘trusted’ to run effective searches because designing legally sufficient electronic searches in the discovery or FOIA (Freedom of Information Act) contexts is not part of their daily responsibilities.” –U.S. District Judge Shira Scheindlin
Relevant case: In a November 2012 order in EEOC v. Original Honeybaked Ham Co. of Georgia, Inc., a class action sexual harassment suit, the District of Colorado ordered the plaintiffs to turn over their social media passwords to a special master tasked with combing their accounts for relevant information and delivering it for in camera review.
When requesting parties can show they’re relevant, social media accounts are fair game for discovery requests. In employment actions and the like, Facebook has become the new standard discovery request—and this has led to a sea change in the way corporate defendants view e-discovery. For years, they saw it as “a weapon of mass destruction brought on by plaintiffs,” says Kenneth Withers, director of judicial education for The Sedona Conference. Broad e-discovery requests were a tool plaintiffs could use to escalate costs and extract a settlement. “With social media, the corporate defendants are completely turning the table on that paradigm,” Withers says. He notes that John Facciola, U.S. Magistrate Judge for the District of Columbia and an e-discovery authority, has said he imagines the first three questions in depositions are now all the same: State your name, state your address and can you please give us the password to your Facebook account?
Choice words: “If all of this information was contained on pages filed in [an] ‘Everything About Me’ folder, it would need to be produced. Should the outcome be different because it is on one’s Facebook account?” –U.S. Magistrate Judge Michael Hegarty
Relevant case: In a February 2012 advisory opinion in Da Silva Moore v. Publicis Groupe, Andrew Peck, U.S. Magistrate Judge for the Southern District of New York, undertook a fairly fact-specific analysis and became the first judge to approve the use of technology-assisted review, or predictive coding. The district court later upheld Peck’s opinion.
It should be noted that the advisory opinions in Da Silva Moore wouldn’t apply to cases in which a party challenges the results of a technology-assisted review after the fact. Still, parties seeking to use predictive coding may try to hang their hats on the case, says William Gont, a shareholder at McAndrews, Held & Malloy.
“Parties may assert that predictive coding has received court approval and that the algorithms and technology are just getting better, that not only is it more efficient, but it’s also more reliable in finding responsive documents than the typical keyword search or manual review,” Gont says.
Choice words: “Computer-assisted review is an available tool and should be seriously considered for use in large-data-volume cases where it may save the producing party (or both parties) significant amounts of legal fees in document review.” –U.S. Magistrate Judge Andrew Peck
Relevant case: In the July 2012 case Chin v. Port Authority Of New York & New Jersey, a unanimous three-judge panel for the 2nd Circuit rejected the argument that a party’s failure to implement a written litigation hold when it reasonably anticipates litigation constitutes gross negligence per se—a stringent standard that Scheindlin established in two landmark e-discovery decisions, Zubulake v. UBS Warburg and Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC.
Proper litigation holds are still essential, but the relaxed standard the 2nd Circuit articulated represents the opportunity for relief from automatically imposed sanctions. “The tides may be changing when it comes to spoliation and sanctions for destruction of [electronically stored information] (ESI) as courts look for a flexible case-by-case approach instead of traditional Zubulake factors,” says Michele Lange, director of thought leadership and industry relations for legal technology provider Kroll Ontrack.
Choice words: “We agree that ‘the better approach is to consider [the failure to adopt good preservation practices] as one factor’ in the determination of whether discovery sanctions should issue.” –Judge Debra Ann Livingston
Relevant case: Of the various cases that addressed cost allocation in 2012, the August opinion in Boeynaems v. LA Fitness International, LLC/Vaughn v. LA Fitness International, a putative contract dispute class action, is the highlight. In a case of first instance, the Eastern District of Pennsylvania addressed the allocation of discovery costs prior to class certification.
Beyond weighing in on the important class-certification question, the LA Fitness case makes it clear that judges aren’t afraid to tackle cost allocation. The view Withers gets from judges is that they’re not often asked to rule on it, and they wonder why. “Cost allocation is clearly something they are allowed to contemplate under the rules,” he says. “People have just gotten used to the idea that they’re not supposed to ask for it, but there’s no reason. That’s the lesson of the year.”
Choice words: “Where (1) class certification is pending, and (2) the plaintiffs have asked for very extensive discovery, compliance with which will be very expensive, … absent compelling equitable circumstances to the contrary, the plaintiffs should pay for the discovery they seek.” –U.S. District Judge Michael Baylson
Winner Takes Some
Relevant case: Unlike the LA Fitness case, Race Tires America, Inc. v. Hoosier Racing Tire Corp. deals with cost-shifting after a judgment has been delivered. Considering the small number of litigants that reach this stage, it has a narrower impact, but courts continue to deliver conflicting views on when and how to apply 28 U.S.C. § 1920(4), which allows judges to tax as costs against the losing party “fees for exemplification and the costs of making copies … necessarily obtained for use in the case.” In Race Tires, the 3rd Circuit took a narrow view of the statute, saying it doesn’t encompass all e-discovery costs.
The court said in its March 2012 decision that the prevailing party, Hoosier, could recover only costs related to actual copying (of hard documents, electronic data and video), which reduced the award to Hoosier by more than $95,000. “We thought there might be the ability to recover the cost of the document review, and the Race Tires case really took the wind out of our sails,” Forstner says.
Race Tires won’t be the final word, however. Several cases in the 9th Circuit have gone the other way, Withers says. “This is a very unsettled area of the law in which eventually the Supreme Court will make a decision.”
Choice words: “Neither the language of 28 U.S.C. § 1920(4), nor its history, suggests that Congress intended to shift all expenses of … production of ESI … to the losing party.” –Judge Thomas Vanaskie