In cases involving electronically stored information (ESI), serving boxes of copied documents in response to discovery demands has given way to retrieving gigabytes of ESI. However, while e-discovery has been part of the litigation landscape for several years, the more things seem to change the more they may actually be much the same.
What e-discovery has changed is that attorneys need to become at least somewhat familiar the jargon (e.g., bits, bytes, clusters, file slack, PDF format, TIFF format, etc.), the effect of the use of new electronic devices (e.g., smart phones, iPads, etc.), the impact of social networking sites, and some now not so new rules of court about how the e-discovery game is supposed to be played.
What e-discovery has not changed, though, is the lessening of the tension between the laudable goals of reasonableness, proportionality (the scale of production in relation to the magnitude of the case) and cooperation among counsel in the discovery process, and the goal of litigation counsel to win. A review of recent literature and case law notes that even though the existence of ESI may have changed the form of discovery, the nature of discovery as a potentially contentious process has not changed.
Rules of play can only go so far in regulating behavior before they give way to both the creativity and aggressiveness of counsel. However, exercising “good sense” may still be the Golden Rule of e-discovery to avoid the risk of judicial admonishment.
There is some relative degree of certainty in the e-discovery process at the initial stages of litigation:
1. It is no longer debatable that a litigant’s duty to preserve relevant evidence, including ESI, arises when litigation is reasonably anticipated and no later than the time when a complaint is served. See Fujitsu Ltd. v. Federal Exp. Corp., 247 F. 3d 423, 436 (2d Cir.), cert. denied, 534 U.S. 891 (2001). The failure to issue and comply with a written litigation hold in the face of an actual or even anticipated claim, and the subsequent destruction of ESI (or any other evidence for that matter), will most likely lead to an allegation of spoliation and additional litigation over that issue to include requests for sanctions.
2. Once litigation has actually commenced, counsel have an obligation to meet and confer to, among other things, discuss and agree upon a plan for the discovery of ESI. This is a well-known obligation in Federal Court [see Federal Rules of Civil Procedure, Rules 26(f) and 34], but to a lesser known extent it is also an obligation in state court actions.
Under the Rules of the Commercial Division of the Supreme Court [Uniform Civil Rules for the Supreme Court and County Court, §202.70 (g), Rule 7], a preliminary conference with the court is mandatory, and prior to the conference counsel “shall confer” with regard to anticipated electronic discovery issues [Rule 8(b)]. In other than Commercial Division cases, the preliminary conference is upon request of counsel only, but if it occurs, then one of the matters to be considered “shall be” electronic discovery issues [Uniform Civil Rules, §202.12(a) and (c)(3)].
But beyond those initial duties, the obligations of the parties and counsel are considerably less certain and that uncertainty creates a potential for conflict. In the February 2010 report to the chief and administrative judges entitled Electronic Discovery in the New York State Courts, the executive summary notes that the Uniform Rules noted above were promulgated “to promote reasonable, proportional and cooperative resolution of most e-discovery issues” but, unfortunately, “those goals are not being met.”
What makes the achievement of these goals challenging, beyond the usual contentious tactics of discovery in any form, is that in e-discovery there is a further tension between the competing needs of broad discovery and manageable costs of production, which can quickly get expensive.
That struggle may be best illustrated in a series of past and more recent decisions of United States District Court Judge Shira A. Scheindlin, who wrote the seminal e-discovery decision in Zubulake v. UBS Warburg, LLC, 217 F.R. D. 309 (SDNY 2003), and its progeny, and has wrestled mightily with finding the right balance in the e-discovery process.
In Zubulake, the plaintiff requested emails in the possession of her former employer who she sued in a gender discrimination and retaliation case. The former employer claimed the requested ESI production was cost prohibitive. In response, Judge Scheindlin fashioned a three-part cost allocation test that required the responding party to bear the expense of producing ESI contained in an accessible format.
But, a “fact-intensive” cost-shifting analysis would be applied where the ESI was “relatively inaccessible,” e.g., back up tapes. What the test demonstrated was that the battle over e-discovery often boils down to determining who bears the cost of production, which can be cost-prohibitive, and potentially case dispositive.
Recently, in a self-described “long and complicated” decision, Judge Scheindlin addressed the issue of spoliation of ESI, among other evidence. See Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., 685 F. Supp. 2d 456 (SDNY 2010). The plaintiffs had failed to issue timely written litigation holds and were “careless” and “indifferent” in their document collection efforts, resulting in relevant records, including ESI, being lost or destroyed.
In sanctioning the plaintiffs, the court noted that the parties were not required to “meet a standard of perfection” in preserving evidence, but plaintiffs fell well short of the expected mark. Judge Scheindlin then determined that the level of sanctions was dependent upon the level of culpability, which she self-defined as either negligent, grossly negligent or willful.
The decision was a stark reminder of how imperative proper preservation and collection efforts are in the discovery process, or suffer the consequences.
Even more recently, Judge Sheindlin issued an opinion regarding the production of metadata (data describing the item’s content — “data about data”) in e-discovery, in National Day Laborer Organizing Network v. Immigration & Customs Enforcement Agency, WL 381624 (SDNY 2011). The court held that metadata is presumptively producible, but the parties could not agree on the format of the ESI production.
The plaintiffs requested production in TIFF format and the government produced it instead in an unsearchable PDF format. When the plaintiffs complained, the court ordered the government to reproduce much of the ESI at its own expense, and admonished both parties for not having the “good sense” to meet and confer and cooperate on the format of ESI production.
However, after seeming to establish a new standard for the discovery of metadata, in an example of the struggle and complexity of e-discovery disputes, Judge Scheindlin abruptly withdrew her decision a few months later noting that subsequent submissions in the case showed that her original decision was not based on a full and developed record. What remained relevant about the decision, however, was the admonishment of counsel to cooperate as the better path to resolving e-discovery disputes.
In conclusion, while ESI has added a layer of technical complexity to the discovery process, the old-fashioned rule of “good sense” still applies. The parties must be compliant with preservation and collection obligations, and the attorneys have a further obligation to meet and confer on an e-discovery plan.
Beyond that, the actual rules are less clear than the spirit of the rules in which the courts will look to counsel to be reasonable, proportional and cooperative. To the extent that spirit is not followed, then courts will be invited to admonish and even sanction the parties for misbehavior. A word to the wise.
James E. Metzler is a partner at Boylan Code LLP and is chair of the firm’s Litigation Practice Group. He concentrates his practice in areas of litigation and municipal law. For more information, contact Jim at (585) 232-5300 or firstname.lastname@example.org.