e-discovery 2.0

The New York state court looked in the mirror recently and they didn’t like what they saw.  While it’s hard to imagine the self-dubbed “center of the universe” finding flaws with anything… apparently e-discovery has caused the big apple to take serious stock of the situation.  In a report entitled ELECTRONIC DISCOVERY in the NEW YORK STATE COURTS, Chief Judge Jonathan Lippman and Chief Administrative Judge Ann Pfau do an excellent job laying out the nature of the problem in a 24 page report.  Their initial findings in many ways mirror those of the American College of Trial Lawyers Task Force on Discovery (”Task Force”) and their survey of the Fellows of the American College of Trial Lawyers (”ACTL”).

“Electronic discovery (“e-discovery”) has for some time been changing the face of modern litigation. It is a major, if not the predominant, factor behind rising litigation costs and delays and presents serious challenges to the court system’s ability to resolve disputes ranging from commercial matters to personal injury cases, in an efficient, cost-effective manner.”

Fortunately, the Report recognizes the ubiquity of the vexing e-discovery challenges.

“[T]he volume of electronically stored information (“ESI”) has increased exponentially over the last decade, along with the amount of ESI potentially relevant to legal disputes. But while it is inexpensive to store immense quantities of ESI, it can be extremely expensive in the context of litigation to identify, preserve, and collect potentially relevant ESI and to have it reviewed for responsiveness and privilege by attorneys and paralegals prior to production to another party.”

But surprisingly, they’ve taken their shortcomings personally, and the seriousness apparently threatens New York’s standing in the legal community.

“Interviews with leading judges, law clerks, and practicing lawyers from around the state strongly suggest that the New York court system’s standing as a leading forum of both national and international litigation is at stake. … Those same parties and lawyers appear to be turning away from New York State courts for the greater sense of certainty and ability to handle massive e-discovery disputes that the Federal courts, and to a lesser extent, other state courts with more developed e-discovery practices, can provide.”

The report founded upon “extensive research and interviews with experts in electronic discovery”, addresses the problems of electronic discovery, including cost and delay, and provides several recommendations on how “the courts can manage e-discovery in a more expert, efficient and cost-effective manner within the framework of existing law.”

1. Establish an E-Discovery Working Group

This proposed step is one of the more interesting since the goal is to create “a working group of e-discovery experts that would serve as a resource for the court system and support its efforts to improve the management of e-discovery.”  This Working Group would have a very expansive (perhaps too much so) roster:

• Judges, court attorneys, and court clerks drawn from both the Commercial Division and other courts around the state that handle electronic discovery issues (and perhaps one or more judges/court personnel with little or no e-discovery experience);
• Lawyers with extensive experience litigating cases involving large volumes of ESI;
• One or more CPLR Advisory Committee members with an electronic discovery background;
• Medical malpractice, matrimonial, criminal, mass tort, and employment law practitioners, because of the increasing frequency and importance of electronic discovery in these practice areas;
• General counsel familiar with the issues affecting corporate clients who are heavy-ESI producers, particularly in the financial services and health care industries;
• Forensic computer/e-discovery specialists who typically are hired for large electronic discovery productions, but can share their substantive technical knowledge and familiarity with the latest technological/forensic trends;
• A mix of newer and more experienced practitioners, including one or two more experienced practitioners with limited technical proficiency;
• Bar association representatives who have studied and issued reports on electronic discovery;
• Federal practitioners and/or federal magistrates to offer the federal courts’ perspective;
• An academic who has studied and written about electronic discovery;
• Representatives of the Advisory Group to the New York State and Federal Judicial Council, which works to promote awareness about differences and commonalities in law practice between the state and federal judiciaries;
• A member of The Sedona Conference®, a national group of jurists, lawyers, experts and academics considered to be at the cutting edge of electronic discovery issues;
• Representatives of the Attorney General’s and/or District Attorneys’ Offices who are familiar with how electronic discovery is affecting their caseloads.

Assuming they can put together this dream team, the next challenge (beyond finding times to meet) would be to harmonize all the differing perspective, which certainly won’t be easy.

2. Improve the Preliminary Conference

The Preliminary conference was roundly felt to have value, but there were both short term and long term recommendations for change.  In the near term, the Report concludes that new language should be added to Commercial Division Uniform Rule 1 and to Rule 202.12(c)(3) adding in a new language stating that:

“Counsel appearing at the PC should be sufficiently versed in matters relating to their client’s technological systems to competently discuss with the court and opposing counsel all issues relating to e-discovery. Counsel may, in appropriate cases, supplement their ability to address these issues at the PC by bringing a client representative or outside expert with such knowledge.”

Assuming the short term fixes don’t remediate things completely, the Report recommends two additional steps, each to be piloted.  First, one pilot project should require an Initial Disclosure (similar FRCP Procedure 26[a][1]) for all parties relating to electronic discovery issues, which would require the parties to detail the following, in advance of the PC:

• Who the party’s key IT people are;

• Whether, and to what extent, the party has implemented preservation measures to avoid spoliation of the information relevant to this case;

• Which substantive witnesses the party is likely to call who are likely to possess ESI, and the location of that ESI (e.g., laptops, wireless handheld devices);

• What types of computer systems (including e-mail, word processing and spreadsheet software) and other technologies the party uses that may have created documents relevant to the litigation; and

• Whether the party expects to claim that certain ESI relevant to the case is inaccessible due to the form in which it is maintained (e.g., disaster recovery backup tapes, legacy data).

The other pilot program would require an “Affirmation of E-Discovery Compliance” that would be jointly signed and certified by the lawyers for each party, and provide the court with three lists.

“The first list would contain those e-discovery matters, contained in Rule 8(b) or Rule 202.12(c)(3), which the parties were able to meet-and-confer about and resolve. The second list would contain similar matters that, despite meeting and conferring, the parties could not agree upon or resolve and that need the court’s involvement. The third list would be any additional issues that, because of the disagreements described in the second list, the parties could not yet reach and resolve. The document would also chronicle the parties’ attempts to meet-and-confer, and indicate whether, and to what extent, client personnel and IT specialists were involved.

While there are a few other minor suggestions, one of the most interesting is the shout out to the The Sedona Conference®.  The Report concludes that “judges and practitioners applauded the work of The Sedona Conference®, particularly its emphasis on changing the litigation culture and fostering dialogue, cooperation, and transparency in e-discovery.”  The Report recommends an appointment of a representative to The Sedona Conference® which despite the foregoing “should not be interpreted to mean that the court system necessarily endorses that organization’s work and proposals. Rather, the court system’s appointee would bring back materials for consideration here in New York, to be accepted, rejected, or modified, as appropriate.”

All in all, the New York state court appears to have taken a reasoned and measured approach to address their candid shortcomings.  This type of critical analysis should be taken by more jurisdictions to determine where process gaps still exist.  Only then can a better future state be divined.

Learn More On Litigation Support Software & Electronic Discovery Litigation

While not quite rising to the level of the Tiger Woods affair, the 2008 Qualcomm v. Broadcom brouhaha was the leading electronic  discovery scandal for two years.  Finally, the other shoe has dropped and despite all the handwringing and speculation, nobody will be disbarred.  Even so, there are many lessons to be learned from this case, but first a quick summary of the latest ruling.

On appeal, United States Magistrate Judge Barbara Major provided a quick summary for those who haven’t been following the trials and tribulations closely.  During the initial hearings, Judge Major found that Qualcomm “intentionally withheld tens of thousands of documents” during discovery.  In reaching this conclusion she also stressed the “quantity of suppressed documents, the ease with which Qualcomm ultimately was able to locate the documents, the simplicity and relevancy of the search terms and search locations that led to the discovery of the documents, and the lack of evidence indicating that Qualcomm had engaged in any meaningful oversight of its document production.”

As to finding the scapegoats, and levying $8.5M in sanctions, Judge Major held that six attorneys assisted Qualcomm in withholding the critical documents by “failing to conduct a reasonable inquiry into the adequacy of Qualcomm’s document production.”  She specifically identified several inadequacies in Qualcomm’s document search, including “the failure to search the computers belonging to, or used by, deponents and trial witnesses, the failure to adequately investigate when significant, relevant, and unproduced documents were discovered, and the failure to ensure there was a legitimate factual basis for the legal arguments made to the Court before making them.”

After her initial sanctions order was set aside, on remand Judge Major provided the responding attorneys with “an almost unlimited opportunity to conduct discovery,” and during fifteen months, the parties undertook a massive discovery effort – including searching and reviewing over 1.6 million documents.  In resolving the Order to Show Cause, Judge Major reversed tracks despite concluding “this massive discovery failure resulted from significant mistakes, oversights, and miscommunication on the part of both outside counsel and Qualcomm employees.”  Yet, the testimony “also revealed that the Responding Attorneys made significant efforts to comply with their discovery obligations,” causing the Court to ultimately decline to sanction any of the Responding Attorneys.

Judge Major, in an effort to better educate the bar, goes on to detail some of the many electronic data discovery abuses. This provides a set of important lessons that for anyone in the practice of e-discovery:

1. “The fundamental problem in this case was an incredible breakdown in communication. The lack of meaningful communication permeated all of the relationships (amongst Qualcomm employees (including between Qualcomm engineers and in-house legal staff), between Qualcomm employees and outside legal counsel, and amongst outside counsel) and contributed to all of the other failures.” The communication issue has been raised by many including Judge Scheindlin (who quoted Cool Hand Luke) and is one of the many reasons that Sedona had pushed for more cooperation in the discovery process.  I cannot stress the important of transparent communication in the e-discovery process.  Not only is it mandated, it’s simply a wise practice.
2. “Moreover, outside counsel did not obtain sufficient information from any source to understand how Qualcomm’s computer system is organized: where emails are stored, how often and to what location laptops and personal computers are backed up, whether, when and under what circumstances data from laptops are copied into repositories, what type of information is contained within the various databases and repositories, what records are maintained regarding the search for, and collection of, documents for litigation, etc.” This failure too, first widely articulated in Zubulake V (and followed by Phoenix Four, Inc.,) requires counsel to discover all sources of relevant information involving substantial communicating with information technology personnel and key players in the litigation to understand how electronic information is stored.  Failure here (even absent spoliation) is grounds for sanctions.  See, In re A&M Fla. Props. II, LLC, 2010 WL 1418861 (Bankr. S.D.N.Y. Apr. 7, 2010)
3. “Finally, no attorney took supervisory responsibility for verifying that the necessary discovery had been conducted (including ensuring that all of the correct locations, servers, databases, repositories, and computers were correctly searched for potentially relevant documents) and that the resulting discovery supported the important legal arguments, claims, and defenses being presented to the court.” Where does the buck stop? It’s clear that a supervisory role with the proper experience in e-discovery is a critical component to an efficient and defensible e-discovery process.
4. Another factor that contributed to the discovery failure was a lack of agreement amongst the participants regarding responsibility for document collection and production. See previous comments about the importance of cooperation and communication.

So despite all those blunders Judge Major wasn’t able to find any evidence that the involved attorneys acted in bad faith, which allowed her to rationalize her change of heart.  But, if I were counsel reading the opinion I wouldn’t take this reversal as a license to conduct shoddy legal discovery because the bar (pun intended) is quickly rising such that missteps occurring two years ago probably won’t be tolerated today (see Judge Scheindlin’s latest opinion – Pension Committee).

Qualcomm is still a wake-up call, but just one that (fortunately for the involved attorneys) won’t end up an enduring disaster.

Learn More On Litigation Software & Litigation Support Software.