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.