Seeking Proportionality in e-Discovery

The Sedona Conference Working Group on Electronic Document Retention and Production is readying yet another of its work papers with a goal of bringing some measure of reason to the chaotic world of electronic discovery. This paper (not yet available to the general public) will focus on the need for "proportionality" in electronic discovery. It has long been a challenge to balance the burdens and costs of complex e-discovery requests against the potential benefits to the parties, the process and the court. Far too often the cost of complying with e-discovery requests has overshadowed the true amount in controversy.

The citation to the case is lost somewhere in the recesses of memory, but the "poster child" for the campaign for porportionality might just be the Indiana district court case in which a school district was ordered to comply when an e-discovery request that the parties agreed would cost more have $100,000 to satisfy. The maximum recovery by the plaintiff in that case? Less than $100,000!

One of the challenges faced by the parties and the courts is the difficulty of getting a handle on the cost of e-discovery before undertaking the search and recovery project. As the players gain more experience, better estimates will be coming along but still those estimates are imprecise at best, sometimes nothing more the W.A.G.'s. Vendors will undershoot the estimates hoping to win the business. Trial lawyers will act as advocates for their respective clients with the requesting lawyers claiming the data is vital and the cost estimate is inflated; producing lawyers will try to aim for the high side on the estimates, hoping to resist discovery.

One answer is for the courts to seek advice and counsel from experts with no axe to grind. Special Discovery Masters can be enlisted for the purpose of evaluating competing estimates as well as advising the court on potential middle ground resolutions of such discovery disputes.

Obviously not every case can or should carry the cost of a special master. However, when hundreds of thousands of dollars are at stake (even potentially millions in some even mid-range lawsuits), spending a few dollars in advance to find the right balance may just be the ticket to achieving proportionality in e-discovery.

Sanctions 101, a Must Read Article

I had thought of entitling this post "Sanctions for Dummies" in the style of the popular and ever expanding "Dummies" series. (There is even "e-Discovery for Dummies" for those who are so inclined.) That title, however, would demean the scholarship in recent article by Douglas Pepe in the ABA Litigation Journal entitled "Persuading Courts to Impost Sanctions on Your Adversary." Pepe, a litigator with Gregory P. Joseph Law Offices in New York City, has written a thoughtful and easy to understand guide to the numerous avenues by which attorneys seek to sanction their opponents from Rule 11 to the Discovery Rules to the dreaded "inherent power" argument. Anyone considering seeking sanctions -- or defending against a sanctions motions -- should take a look.

What Pepe makes clear is the necessity of hanging your sanctions motion on the right peg. Too often sanctions motions are a murky blend of Rule 11 logic with the discovery sanction rules and frosted with the inherent power argument. When litigators fail to understand the key distinctions among the various sanction powers they may also fail to make the right arguments pro or con to ensure a just result. Particularly with e-discovery and spoliation issues at the forefront in today's litigation, there is a growing blurring of the lines between the various rules and powers.

Sadly, many courts have added to the confusion by something less than a clear analysis of the standards which they are applying in imposing discovery sanctions. Courts may rely on the inherent power argument but cite Rule 37 for the available sanctions. Occasionally they stray into Rule 1 or Rule 11 analyses.

The cause of justice would be well served if litigators adopt Mr. Pepe's advice (1) to chose the right rule for your sanctions motion and (2) seek only the appropriate sanctions designed to fit the wrong.

A breach of fresh air: Non-preservation Agreement

After probably hundreds of thousands of man hours devoted to fighting over preservation agreements and orders or about the failure of a party to properly preserve evidence, a breath of fresh air has emerged. In the case of United States v. La. Generating LLC, 2010 U.S. Dist. LEXIS 20207, 2-3 (M.D. La. Mar. 5, 2010,the parties agreed to a non preservation stipulation. Recognizing that not every case deserves the steam-shovel approach to electronic evidence preservation, scooping up everything in sight, the parties listed an extensive array of ESI that need NOT be preserved. Included in the stipulation (which was approved by the court) were back-up tapes, voice mail messages, PDA data, cell phone logs, deleted files and an interesting array of other material.

In most cases, the parties are happy to lay a trap for the unwary opponent, hoping to find some evidence of spoliation through unpreserved ESI. Let's hope this case sets a precedent for more cooperation among counsel in the future and more realistic approaches to preservation of ESI only when it really needs to be preserved.