Is it Time to Rewrite the Rules?

[Ed.'s Note: We're back after a brief hiatus for personal matters. Watch for regular posts again.]

There seems to be a growing hue and cry to re-write the discovery rules in FRCP. See for example Mary Mack's post at Discovery Resources reporting on the American College of Trial Lawyers' Recent report on the discovery "crisis." Among other complaints from the trial lawyers is a claim that the discovery rules have "clogged" the courts because of increased litigation. There may be many failings in the application of the e-discovery rules, but to this commentator clogging of the courts is not one of them. True there are many pitched battles over discovery issues, but that has always been the case; it is only the subject matter that is changing.

In our view the core issue today is just one: the inodinately high cost of complying with the well established standards for pretrial discovery when electronic evidence is involved (and that is almost always the case these days).

In the "old days" we had a discrete number of paper files in metal file cabinets that had to be searched for potentially relevant documents. We dispatched an army of young associates and paralegals at hourly rates well south of the century mark to spend a few days perusing those files and finding potentially relevant documents. After a second review by more senior lawyers, the documents we sent off to the copy center, packed in bankers boxes and shipped to opposing counsel. The costs were fairly predictable. Sure, a few relevant documents were likely to be overlooked but nobody thought seriously about sanctions for such omissions because that risk was just an acceptable part of the process.

Now, however, times have changed. Given the undisciplined nature of store of electronic data and the lack of strong controls over end-user behavior extant at most corporations, almost every lawsuit requires a search of substantial parts of the corporation's electronic universe of information. Searches are done using all too frequently inartfully drawn search term equations (the judges are telling us how bad we are at that process) and huge amounts of information are extracted for manual review to determine whether it is or is not relevant. Because there is no universal standard for form of production, the parties haggle over native vs. tiff vs. pdf; they haggle over whether to produce metadata and if so what fields to produce. They haggle over how the documents are to be organized, preserving parent child information, system identifiers and custodian information. The end result is a very expensive process, often producing results that are only marginally valuable.

Add to the problem the diverse set of software tools and vendor options available in the marketplace and you have a very expensive investment required to even play in the e-discovery space.

A rewrite of the rules will take years to implement. What is needed, instead, is a stronger push for standards such as EDRM and the Sedona Principles, and for taking those standards to a mcuh deeper level. What is needed is for the district judges and magistrates to start to embody a more uniform set of standards in the courts. What is needed is for the trial lawyers to recognize the importance of "getting it right" from the start of the case with good faith negotiations over sound and reasonable e-discovery protocols before embarking on discovery battles.

My 2 cents worth.

Cooperation Checklist from the Experts

With all the talk about the importance of cooperation in the electronic discovery process, it is interesting to see a checklist of items which some experts believe come within the ambit of "cooperation". At a recent Fios webinar, the faculty (Richard Braman of Sedona; retired magistrate now law school dean John Carroll; and Fios consultants Kenneth Rashbaum and Mary Mack) offered several examples of cooperation (a list which is, of course, by no means all inclusive):

* Exchanging information with opposing counsel on relevant data sources, including those not being searched;
* Scheduling early disclosures on the topics of ESI
* Joint development of search and retrieval methodologies
* Early identification of (and agreement upon) forms of production
* Development of case-long discovery budgets based upon proportionality principles
* Using court appointed experts, mediators or formal ADR programs to resolve discovery disputes
* Using in-house or third party "experts" to assist the attorney in drafting discovery requests and preparing responses (presumably to make sure the requests and responses are properly targeted and technologically correct.

The Sedona Conference Cooperation Proclamation probably is now becoming required reading for litigators, given its widespread endorsement. However, checklists like the foregoing from the Fios presenters really advance the cause by putting some specifics on the process.

Establishing an E-Discovery Protocol

I have long advocated the importance of successfully reaching agreement on an electronic discovery protocol early in the litigation process as a means of avoiding disputes down the road and minimizing risks of sanctions. A well crafted, comprehensive protocol can go a long way toward eliminating disputes over form of production, search terms, scope of search and even preservation obligations.

E. Kendrick Smith and Robin A. Schmahl, writing in the Fulton County Record, have provided a good checklist of considerations for protocol negotiations in their article "How to Get an E-Discovery Protocol Rolling" published earlier this month and reproduced at Law.com. Their concluding thought says it well:

Discovery protocols work best when the attorneys do their respective homework and cooperate with each other early in the discovery process. If done thoughtfully and in good faith, entering into such a protocol can drastically reduce costs and streamline discovery. It is a litigator's best tool for managing electronic discovery and avoiding discovery disputes.

To their comments I would add one additional thought: Lawyers must ensure that they fully understand the systems and technology they will be dealing with, both for e-discovery support and at the client's site. In other words, the lawyers must know what they are to be talking about in the protocol negotiations.

Cooperation a Matter of Lawyer Ethics?

Michael Berman, associate editor of the ABA's Litigation News publication, argues that cooperation in e-discovery is an ethical obligation of lawyers. (His article, "Give Peace A Chance," appears in the Winter 2009 issue of Litigation News at p. 25.) Berman draws his context from the oft-chronicled decision in Mancia v. Mayflower Textile Services, U.S. Dist. LEXIS 83740 (D. Md. Oct. 15, 2008) and, in addition, from The Sedona Conference's Cooperation Proclamation.

This blogger has no argument with the thesis of Mr. Berman's article. While the ethical rules impose a duty on each of us attorneys to zealously guard the rights of our clients, there is a parallel duty to the process. Once there is recognition that cooperation is consistent with zealous representation, perhaps lawyers will be more willing to beat their swords into plowshares and together plow the fertile ground that awaits those who work together toward a common goal of justice.

Can There Be Cost Effective E-Discovery?

A recent post by David West, a veep of CommVault argues that there are "Smart Shortcuts to More Cost-Effective eDiscovery." Basically, the suggestion of this vendor is that e-discovery be moved in-house, avoiding the sometimes extremely high costs of outsourcing to third party discovery vendors. Of course, the 800 pound gorilla in the room is the entry fee for being able to move e-discovery inside.

Clearly, a corporation which is willing to invest the time and money to build systems which permit it to anticipate demands for electronic discovery can find cost effective shortcuts to e-discovery. More importantly, they might even find it affordable to defend meritless cases in which massive e-discovery demands are levied upon them and thereby avoid the vacuous evaluative conclusion "it is cheaper to settle than to discover." It is a real question in the current economic climate whether many corporations will be able to afford the high startup costs of buying the tools and building the systems necessary for effective, defensible in-house e-discovery. However, it is an equally real question whether corporations can afford NOT to make the investment lest the house come tumbling down when the "bet the company" e-discovery case comes along.

It Pays to Know What You Are Doing

There's a brief decision by Magistrate Karla Spaulding from the Middle District of Florida that will probably be overlooked by most of my e-discovery colleagues in the blogosphere and certainly won't have any lasting importance in the body of electronic discovery jurisprudence. It does, however, underscore the importance of knowing what you are talking about when making presentations to the court (or opposing counsel) on e-discovery matters.

In Bray & Gillespie Management LLC, et al. v. Lexington Insurance (2009 U.S. Dist. LEXIS 3824 (Jan. 9, 2009), the core issues before the court involved sanctions for failure to comply with a court order. However, in a short footnote at the end of her opinion, the magistrate clearly expressed her frustration over the fact that the lawyers for one of the parties didn't understand the capabilities of their litigation support software and accordingly the party had to spend a lot of money unnecessarily to create a hard drive. Reading between the lines, it would appear the lawyers did not fully understand the capabilities of their Introspect database.

The message, once again, is don't mess with e-discovery if you don't know what you are doing and/or don't have competent assistance at your side.

Ah, the Metadata Debate

Shannon Kirk & Kathryn Hong, writing in Law Technology News for January 16, have focused their attention on the seemingly unanswerable question: When is production of metadata required in response to a Rule 34 Request ("Rule 34: A Cause for Confusion"). It is a bit too simplistic to say that there conclusion is that metadata ought to be produced only when it is requested but I suspect that is the view of the authors.

The problem is that there are differing interpretations of Rule 34's mandate in the manner in which they are usually kept. Does that mean organized as they are in the normal course? Does it mean produce paper if kept on paper? Does it mean produce in native? Of course the parties have the opportunity to specify in their Rule 34 request the format in which electronically stored information should be produced. However, that does not end the debate. Often a party will request native production with metadata just to make life more difficult and discovery more expensive for opposing parties. (Yes, I know that view is rather cynical, but I have seen it happen.)

The metadata issue is one which should be sorted out in the initial meet and confer. The parties need to take a realistic view of the value of metadata in the case at hand as contrasted with the cost (to both parties) of dealing with metadata. If the parties can't agree, a strong direction from the court should be required.

Seek and Ye Shall Find (Maybe)

Kudos to George Paul and Tom Gilson for a thoughtful article on the pitfalls of search term strategies in electronic discovery, entitled "Seek and Ye Shall Find?" The article provides a useful checklist of precautions including negotiations with your adversary, documenting your decisions, testing your terms and exploring alternate technologies to validate your search.

Studies have demonstrated that no set of search terms is guaranteed to retrieve 100 percent of all relevant documents. Of course, it is equally true that a manual (eyes-on paper) search isn't failsafe either. The best protection against sanctions when the missing missive eventually surfaces lies in reaching agreement with opposing counsel. Until we lawyers get past the gunslinger mentality (shoot anything that moves), reaching agreement can be a daunting challenge. The best chance of reaching agreement with opposing counsel lies in a mediated meet and confer or results from strong oversight from the bench.

No Wonder There Are Problems with EDD

From a just released Kahn Consulting survey done in conjunction with ARMA and other organizations:

"Less than one quarter of organizations surveyed believe that their employees understand their [governance, risk management and compliance], [records and information management] and E-Discovery responsibilities and how to fulfill them. Only 9% of employees have a good understanding of how GRC impacts them; only 15% understand their Legal Hold and E-Discovery responsibilities; and only 21% understand how information should be retained and disposed of. Although 67% of those surveyed state that employee training is “critical to their success,” the low confidence in employee awareness indicates that most organizations have more GRC, RIM, and E-Discovery training to do."

No wonder the courts have grown frustrated with the process of electronic discovery. As noted in prior posts, many courts have expressed concern over the competence of the lawyers supervising the e-discovery process. Now we learn from Kahn (no real surprise here, though), that most employees don't fully understand what they are supposed to be doing with their records either.

We have the makings of "a perfect storm" here.

More on Special Masters and E-Discovery

Jonathan Redgrave has called my attention to an excellent article which he co-authored by Judge Shira Scheindlin focusing on the benefits that may be obtained by generous use of special masters in connection with e-discovery. The article, entitled "Special Masters and E-Discovery: The Intersection of Two Recent Revisions to the Federal Rules of Civil Procedure", appears at 30:2 Cardozo L. Rev. 347. The article includes sample orders appointing special masters.

The authors suggest that "[t]he appointment of a special master may make it possible to accomplish in days what would otherwise consume months of litigation and require both sides to incur substantial costs." They further point out that appointment of the right special master will actually save the parties money in the long run, notwithstanding the fees and expense of the special master.

Egads! Cost is No Object for Complete E-Discovery

Thanks to Ralph Losey for pointing out a potential outrageous decision from the DC Circuit of the Court of Appeals, In Re Fannie Mae Securities Litigation, 2009 WL 21538 (CADC, Jan. 6, 2009) in which the Office of Federal Housing Enterprise Oversight -- a third party to the litigation -- was required to spend more than $6 million, an amount equal to nine percent of its annual budget, to respond to an electronic discovery request by affirming the district court's contempt citation. In part, it appears that the court's rationale was that OFHEO undertook the work without objection and thus was stuck with the consequences of its own decision. Neither the cost of the project nor the fact that OFHEO was a third party seemed of much importance to the court.

Early in the e-discovery era (a couple of years ago on the pages of this history book), I came across an employment discrimination case in which a municipality was ordered by a district court to spend $100,000 to comply with an e-discovery request. Ironically, the maxium amount in dispute in that lawsuit was $100,000.

These two examples collectively demonstrate a process out of control. Embedded in the Federal Rules amendments was a concept of proprotionality, a concept articulated in the "not-reasonably accessible" provisions of Rule 26. That concept seems lost on most courts, however. A failure to carryout thorough and expensive searches for electronic discovery or to implement "best practice" methods for retrieval and production could result in sanctions. It is like walking through a minefield without a map. You don't know which mistake you make is going to explode in your face; you only know for sure that the risk of making a mistake is substantial.

If e-discovery is not to destroy the system it is meant to serve, courts must be more sensitive to the need to balance cost against the value derived.

Special Masters in E-Discovery

The article has been around for a while but it's worth a second read in light of the new emphasis on cooperation and competence in e-discovery. Corey Baron's "New Niche for Special Masters" describes the increasing use of special masters for facilitating the resolution of e-discovery disputes.

My own experience as a special master suggests that the best role a master can plan is that of mediator, helping the parties find their own resolution of their differences and disputes. Often, there are no right answers in e-discovery disputes; only differences of opinion as to which fork in the road to take. Produce in native? What meta data fields to include? What media to search? A skilled special master can smooth the bumps in the road for the parties and ultimately reduce both the expense and the time required for adequate ediscovery.

Debating the Top E-Discovery Cases of 2008

One can certainly debate which are the most important e-discovery cases of the last year (as Ralph Losey does so eloquently on his blog, or as Kroll has done by listing its most important case list. However, there can be no debate that 2008 was an important year for e-discovery jurisprudence. The themes of the year can be summed up as "competence," "cooperation" and "concept searching". What will the new year bring? There are nearly as many prognostications about 2009 as there are bloggers. Mary Mack at Fios has listed her twenty predictions in her Sound Evidence blog. Sonya Sigler of Caphora shares her insights, as well. Other predictions abound throught the blogs.

My own prediction, modest though it may be, is that there will be increased emphasis on the initial meet and confer stage of the e-discovery process, with courts insisting that lawyers (who have the competence to know what they are doing) truly cooperate to reach agreement on the myriad issues that need to be discussed and agreed upon at that early stage. We might even see court intervention at this early stage, ordering the parties (who can't otherwise agree) to meet in the presence of a discovery master (or perhaps discovery mediator) to work their way through the issues.

Time will tell. It is an annual year-end ritual to see how the prognosticators fared during the year. Tune back in in 2010 to see what really happens during the year.

Update 1/9/09: Yet another review of the year just concluded is found at Law.Com setting forth yet another view on the top cases of the year. No surprise that Magistrates Grimm and Faciola seem to be at the top of everybody's lists.

Cooperation Enforcer: Discovery Master?

As the judicial theme for 2009 E-Discovery opinions becomes clear (e.g., Judge Facciola's keynote at Legal Tech stressing cooperation and competence) another trend is likely to emerge: the early appointment of a discovery master for complex ediscovery cases. A recent opinion by Magistrate Waxse (Gipson v. Southwestern Bell, 2008 U.S. Dist. LEXIS 103822) may be foreshadowing things to come. After renewing his endorsement of the Sedona Conference's Cooperation Proclaimation, Judge Waxse admonished the parties to confer on the appointment of a special master to "obtain agreed resolutions of disputed matters."

I believe the use of special masters will see increasing frequency in the months ahead as the parties struggle to come to grips with the new emphasis on cooperation. Litigators are not used to cooperating with opposing counsel and will find it difficult to take off their advocates robes to sit down and find common ground to make discovery speedy, efficient and economical while serving the needs of the parties.

From my own experience as a special master and as an advocate in many e-discovery battles from the meet and confer stage through countless sanctions motions, I believe there is real benefit to expanding the use of a discovery master to ensure the parties have an effective initial meet and confer BEFORE they become locked into discovery battles over spoliation, form of production, completeness and all the other issues leading to sanctions.

Time will tell.

The Campaign for Cooperation

Magistrate Faciolla is firing another shot in the campaign in instill the virtues of cooperation among e-discovery counsel. He will be the third day keynote speaker at LegalTech in New York in February. According to a news release " United States Magistrate Judge John M. Facciola will discuss the critical concepts of competence and cooperation in the electronic discovery (EDD) process. Judge Facciola will review the history of the new amendments to the Federal Rules of Civil Procedure, which were intended to expand cooperation among the parties but which, in the absence of competence, can yield precisely the opposite: a widening gulf between parties who understand EDD and those who do not."

Clearly judges are growing weary of e-discovery battles as evidenced by a number of recent opinions and by the number of judges who have signed on to the Sedona Conference Cooperation Proclamation.

Will the message sink in? Only time will tell.