Current Issues in Litigation: Electronic Discovery

Electronic Discovery is coming soon to a courthouse near you, just in time for the holidays. So, chug another eggnog, finish off the last of the office’s secret chocolate stash, and let’s get started!

In many respects, the development of e-discovery is yet another step away from the mythical “golden age” of trial practice – when cases could be tried quickly, well and inexpensively. We may now be in a “dark age” of e-discovery, when even smaller cases are expensive, complex and risky.

In the “good ole days,” secrets were stored in people’s heads. They were frequently spilled after healthy doses of alcohol, or sodium pentothal (like in the Manchurian Candidate). Now, the secrets needed to win cases are buried deep in hard drives.

Luckily for us, a recent federal Bench bar conference, led by Gigi Sanchez, Paul MacDonald and Bernie Kubetz, was held on this topic. MLR’s notetaker in chief, yours truly, was there to record the fun.

1. Overview.
Electronic discovery is “a process.” It is not simply complying with a particular rule. From the outset, there is a duty for counsel to preserve all electronic items that should be reasonably anticipated. The trade off is always relevance versus cost.

The standard is whether the person in custody of the electronic data “knew or should have known” that it needed to be preserved. A good “litigation hold” letter will ask for suspension of applicable electronic data destruction policies. At the same time, Federal Rule 37(e) arguably provides a modest “safe harbor” for data destruction policies and procedures conducted in good faith.

Quality control is important. If you just get junk in the e-response, and it’s not in any way relevant, the party producing may be subjected to stiff financial sanctions. A good discovery response will be searchable in PDF format.

Frequently, the initial 26(f) conference misses a lot. The parties don’t really know what’s out there. It’s important to revisit the electronic discovery issues as you go forward.

According to the panel’s view of Rule 26, most everything is discoverable, but requests must be proportional. See: Federal Rule 26(b)(2)(c) in particular, which governs the limits of discovery.

Under Rule 26(b)(2)(b) the twin issues of accessibility and undue burden must also be addressed. The shorthand question – is it relevant and is it reasonable to ask for it?

Bernie Kubetz believes there are two other questions: 1) Can your office handle e- discovery? and 2) Do you have access to a technical person to help with the technical issues in your firm? If either is no, you may want to refer the case out.

2. Litigation Hold Letter.

It is necessary to do a “litigation hold” letter whenever electronic discovery may at issue. This should be done right away, before suit is filed. The duty to avoid evidence spoliation is an important common law doctrine in e-discovery. This doctrine is not rules based, for the most part.

You must negotiate the scope of the hold. Sometimes a 30(b)(6) deposition is needed to locate the custodian to the e-data will be needed. You must also talk to your client about the expense of e-discovery and whether or not it should be done.

An often overlooked step is to implement the hold. The hold’s terms should always be in writing and communicated to the client. The failure to request a hold letter can sometimes raise legal malpractice issues.

There is frequently a dance that takes place once the lit-hold request goes out. After the obligatory objections by counsel, the parties try to craft a satisfactory solution. “It is an invitation to dance.”

3. Form 52. Report of the Parties’ Planning Meeting.

Assuming you have not shipped the e-discovery case to an unsuspecting colleague, you may want to start the litigation phase by looking at Federal Form 52, which sets forth a model discovery plan for e-discovery. There are three key components to any discovery plan: 1) the scope of discovery; 2) method of e-discovery; and 3) privilege waivers.

Form 52 can be easily adopted for use in state courts.

(a) Discovery will be needed on these subjects: (describe)
(b) Disclosure or discovery of electronically stored information should be handled as follows: (briefly describe the parties’ proposals, including the form or forms for production.)
(c) The parties have agreed to an order regarding claims of privilege or of protection as trial-preparation material asserted after production, as follows: (briefly describe the provisions of the proposed order.)

When planning your e-discovery, consider whether you need active sources versus backup and inactive sources, which are much more expensive and burdensome to produce. Can you limit your e-discovery requests to the three or four key players who know about the issue? Can you search the produced data through a keyword search? Can you easily establish pertinent categories of documents?

4. Meta Data.

The discoverability of hidden “meta data” is frequently litigated. Meta data includes, for example, “rough drafts” or edits buried deep in a “Word” document. (That’s a big reason why letters are sent in PDF format, without meta data.)

The standard rule, often modified by agreement, is that the original format of the data is to remain unchanged. That will generally preserve meta data. For example, if the original document is in MS Word, it should be produced in MS Word.

Although you can ask for data in any form you want, the basic rule of thumb is that you never get direct access. You can’t go to somebody’s computer directly and hunt around. (Just like you couldn’t go to a business’s file cabinet and nose around without them observing and monitoring.)

A good question was then asked: “Is it bad to simply get the data in paper form?” Not necessarily. However, a major goal should be to obtain an ability to manipulate the data. Other times, you need to get the data in its original form, to see how it’s been manipulated by the other side.

5. “Quick Peak” & “Claw Back.”
These are a couple of important doctrines. In e-discovery, “quick peak” is a form of agreement that permits relatively rapid disclosure. It makes clear that there are “more documents out there,” to be sent after the initial production. However, rather than hold up production until all documents are ready, it is frequently easier to produce on an installment plan.
“Claw back” gives the sender everything, but retains the right to retrieve privileged materials that are inadvertently disclosed in the rush to produce. Claw back can save countless hours of scanning documents, but is a somewhat risky cost saving measure.

6. Privilege Waivers.
Privilege waiver agreements are critical. Without these agreements, it is usually impossible to produce requested information in a complete and timely matter. These waivers are usually formally addressed in the discovery plan.

Like the doctrines of clawback and quick-peak, privilege waivers are needed in e- discovery because of the complexity associated with producing massive amounts of data, the need to get it out quickly, and the desirability of shifting the expense of searching each and every page of data to the other side.

Privilege agreements are in everyone’s interest. See: Evidence Rule 502. It should be “standard practice” to make sure that privileges are not waived, by agreement of the parties.

7. Cost Shifting.

Costs are another huge issue. Generally e-discovery costs are not “costs of litigation” that can be recovered at the end of the case, through a bill of costs. However, the risk of sanctions, and the need to devise cost shifting arrangements and strategies, are part of the process. Beware: Mindless or deceptive “data dumps” are impermissible and are potential ethical violations.
Cost shifting, via a bill of costs at the end of the case, is generally unheard of. Without an interim court order, the person responding to discovery traditionally has been forced to bear the cost. On the other hand, Rule 26 seems to encourage interim discovery orders to allocate the costs, before production.
In sum, it’s time to tear down the wall of e-secrecy. It’s time to start “a smashin!”

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