Archive for April, 2009|Monthly archive page

Finally Some Limitations on E-Discovery?

Here’s two interesting developments that indicate the ongoing expansion of the scope of e-discovery rulings may be starting to recede. First the decision in Preferred Care Partners Holding Corp. v. Humana, Inc., 2009 WL 982460 (S.D. Fla. April 9, 2009) where the court found that the the Fifth Amendment’s Due Process Clause may limit the sanctions imposed for the loss of ESI.

Factually, the court found that one party had, in fact, breached it’s duty to preserve documents but that the sanctions a court may award under Rule 37 should be “reasonable” in light of the circumstances and by reasonable it said that the court must consider effective remedies which are the “least drastic.” Specifically, the court stated that the violation of a discovery order caused by simple negligence or which was due to confusion, a misunderstanding, or the inability to comply with a court’s order does not justify a Rule 37 default judgment or dismissal.

Further, said the court, “To comply with the Due Process Clause, the court must impose sanctions that are both ‘just’ and ‘specifically related to the particular claim’ or defense affected by the misconduct. Thus, for example, if there is no nexus between the information destroyed were not produced and Plaintiff’s claim or Defendant’s defense, it would not be appropriate to enter a default.”

So, in the facts before it, the court found that the decision by Humana’s counsel to print and purge documents “without consulting opposing counsel or advising the Court was an exercise in bad judgment and constituted a breach of Humana’s discovery obligation to preserve evidence relevant to ongoing litigation.” but since the poor decisions “… were neither intentional nor done in bad faith, but rather resulted from the grossly negligent oversights of counsel.” it was not appropriate to order a default.

Instead the court ordered additional discovery and a monetary sanction, including the payment of PCP’s costs and attorneys’ fees arising from that supplemental discovery. The court further ordered that PCP be allowed to conduct a forensic examination of Humana’s backup systems to verify that it maintained copies of all of the purged emails and Humana was ordered to pay the cost of that forensic examination.

Also we recetnly read a  Texas Laywer article   that described a case argued before the Texas Supreme Court where it was asked to consider arguments about how much electronic discovery should be allowed by trial courts. The issue is apparently a case of first impression: Can a trial court order one litigant in a civil suit to provide a court-appointed computer forensic expert access to its computer hard drives for mirror imaging and searching, if the opposing side pays the costs?  Questioning by the justices centered on specific aspects of the FRCP rules, including the meet and confer and what discovery was agreed upon by the parties.

It seems that as the amount of electronically-stored data continues to grows exponentiallyperhaps the judicial inclination to similarly expand the scope of examination of that data and sanctions for failure to do so is beginning to slow down somewhat.


Cooperation Isn’t Just About Search Protocols

Last summer, the Sedona Conference issued their Cooperation Proclamation in reaction to what they termed “an unprecedented crisis” in the litigation arena. Specifically the Sedona Cooperation Proclamation (SCP) said that: “The costs associated with adversarial conduct in pre-trial discovery have become a serious burden to the American judicial system. This burden rises significantly in discovery of electronically stored information (”ESI”). In addition to rising monetary costs, courts have seen escalating motion practice, overreaching, obstruction, and extensive, but unproductive discovery disputes – in some cases precluding adjudication on the merits altogether – when parties treat the discovery process in an adversarial manner. Neither law nor logic compels these outcomes.” 

 Since then we have had a great deal of discussion about what cooperation means. In Mancia v. Mayflower Textile Servs. Co., 2008 WL 4595175 (D. Md. Oct. 15, 2008), Magistrate Judge Grimm held that “[c]ourts repeatedly have noted the need for attorneys to work cooperatively to conduct discovery, and sanctioned lawyers and parties for failing to do so”, specifically referring to the SCP.

He went on to say that: “Perhaps the greatest driving force in litigation today is discovery. Discovery abuse is a principal cause of high litigation transaction costs. Indeed, in far too many cases, economics-and not the merits-govern discovery decisions. Litigants of moderate means are often deterred through discovery from vindicating claims or defenses, and the litigation process all too often becomes a war of attrition for all parties.”

More recently, in Securities and Exchange Commission v. Collins & Aikman Corp., 2009 WL 94311 (S.D.N.Y., Jan. 13, 2009) Judge Schira Scheindlin found that the SEC’s “blanket refusal to negotiate a workable search protocol” was “patently unreasonable” citing both Mancia and the SCP. 

“Rule 26(f) requires the parties to hold a conference and prepare a discovery plan. … Had this been accomplished, the Court might not now be required to intervene in this particular dispute. I also draw the parties’ attention to the recently issued Sedona Conference Cooperation Proclamation, which urges parties to work in a cooperative rather than an adversarial manner to resolve discovery issues in order to stem the ‘rising monetary costs’ of discovery disputes.”

Now in both these cases, as well as several other that have come down since last fall, the focus is on the challenges of search techniques and the need to confer and agree on search protocols including but not limited to, sampling. As Judge Scheindlin said in SEC v Collins: “The concept of sampling to test both the cost and the yield is now part of the mainstream approach to electronic discovery.”

But amidst all this talk of search protocol agreement and data sampling, it seems to me we have an opportunity to pursue a part of the SCP that is often overlooked.  Paragraph 2 of the SCP states:

“With this Proclamation, The Sedona Conference® launches a national drive to promote open and forthright information sharing, dialogue (internal and external), training, and the development of practical tools to facilitate cooperative, collaborative, transparent discovery.  This Proclamation challenges the bar to achieve these goals and refocus litigation toward the substantive resolution of legal disputes.”   (emphasis added)

It seems to me we need more discussion about those “practical tools” which will then push the ability to cooperate.  And to me the biggest tool for this effort is the web hosting of litigation documents.  We already have web based applications which allow the posting and sharing of documents. I myself have used these services on several large cases and found them a crucial tool for not only cutting costs but quickly and easily disseminating information to both sides of a case, which then allows quicker progress of the entire action.


I’ll be discussing exactly this issue during a webinar hosted by Anacomp’s CaseLogisitx on Wed April 29th. Entitled “How To Purchase Litigation Support Software”,  the session will focus specifically on what tools you need to have in order to adhere to the recommendations of the SCP.  Given the ongoing endorsement of those principles by jedges across the country, this will be a timely disucssion aimed at the nuts of bolts of what you should do to get the best lit support applciation for your needs.  For more info and to sign up, go to the CaseLogistix web site .

2nd Annual E-Discovery Survey of Illinois attorneys

I recently conducted the second annual survey of Illinois attorneys regarding their experience with electronic discovery on behalf of the The Law Bulletin Publishing Company of Chicago.  The results were released at the ABA TechShow last week and can be found at LexTek, the legal blog maintained by Dave Glynn  . The number of attorneys responding increased 64% over 2008, with 372 lawyers responding to 24 questions that asked about their level of exposure to eDiscovery matters, experiences with electronic discovery vendors, and products.

The respondents to this year’s survey showed a shift towards small firms and solo practitioners ( a direction also taken by the ABA TechShow, which led to a decrease in attendance for ED specific sessions, a trend noted by two of the more prominent faculty members, Craig Ball and Sharon Nelson )  with 39% representing firms of between two and twenty attorneys compared to 35% last year and 28% being solo practitioners, compared to 22% last year.

The most interesting result with regards to the discussion on this blog was the continuing erosion of both mind and market share by the better known products which have dominated the litigation support space for years.  On the desktop, the two most popular products are once again Summation  (at 59%, down from 64% last year) and Concordance (level at 47%). CaseLogistix , at 10%, was the only competitor with a double digit response but the others combined for a 28% share, so given the fact that Summation and Concordance actually overlap (some firms own both whch is why the numbers here add up to more than 100%) we can see that they each have about 30% of the market with 40% going to new products led by CaseLogistix.

This shift is seen even more clearly in the use of a Web-based application to host eDiscovery documents. Usage here is up to 77% from 66% last year. The most often-mentioned product was once again iConnect, but its share dropped from 25% to 16%. CaseLogistix (which offers a desktop and web-based version) moved up significantly to second place (from 5% to 13%). Of the remaining Web vendors, only Catalyst remained at the same level (8%), while all other responses dropped including Lextranet (17% to 9%), FYI (10% to 7%) and CaseCentral (10% to 7%).

The reason for this shift? Better educated clients. Last year, 7% of respondents said “I have no idea” in answer to the question on the most important issue. This year, one person gave that answer. This seems to me to show an overall rising of the attention level to eDiscovery issues which is subsequently leading to the purchase of newer, better products.  Bil Kellerman, in the interview I referenced in my last posting, said that he thought the next 12-18 months would see the rise of  a web-based killer app to market dominance and these results certainly show a move in that direction.

Bil Kellerman in the E-Discovery Zone

Bil Kellerman of Wilson Sonsini was the latest guest yesterday on the E-Discovery Zone, the award winning broadcast series hosted by Browning Marean and myself every month on the TechLaw Solutions website.   Bil, who many of you know from his days as Director of Corporate Legal Systems at Summation, is now the electronic discovery manager at Wilson Sonsini, where  he oversees the firm’s Electronic Data Operations Center (eDoc), working with litigation attorneys and clients’ in-house counsel and IT departments to effectively manage all aspects of client data collection associated with a litigation matter.

Our discussion focused on three areas of interest in todays ED space: forms of production, search technology and protective orders.  Needless to say, all three of us had strong opinions on all three areas but much of the discussion centered on the recent decision in Williams v American Mutual (William A. Gross Construction Associates, Inc. v. American Manufacturers Mutual Insurance Co.  07 Civ. 10639 (LAK) (AJP) (March 19, 2009).

In that case, Judge Andrew Peck (who wrote the the groundbreaking decision in the pre-FRCP amendents case of  Anti-Monopoly, Inc. v. Hasbro, Inc., 1995 WL 649934 (S.D. N.Y. 1995),  laid into attorneys who he found technically lacking in a manner reminiscent of Judge Fasciolas arresting keynote speech at LegalTech New York in January.  Bil echoed Judge Peck by noting that the vast majority of attorneys he deals with simply don’t understand the basic technology of digitally stored documents, at which point the discussion progressed into the Sedona Cooparation Proclamation  and the ongoing issue of technical education of attorneys.

The full recording of the discussion should be online by weeks end. In the meantime Browning and I are travelling to Chciago for the ABA TechShow where we will be continuing thses discussions with other colleagues. I’ll give you a full report on how those talks play out later this week and in the meantime I am interested in hearing your opinion.  When you have an e-discovery matter, do most attorneys you encounter understand the basic principles enough to engage in a cooperative dialouge about exchanging digital documents?