As the old saw goes, “you don’t need to be a weatherman to know which way the wind blows.” I recently read the recent Duke Law Journal article “Sanction for E-Discovery Violations: By the Numbers.” And, my initial reaction (as someone who tries to read all the electronic discovery cases as they come off the presses) wasn’t one of surprise. For me, most of the interesting e-discovery cases all seem to involve sanctions as they usually provide lessons about “worst” practices, from which we hopefully can infer “best” or at least “better” practices.
But, after a deeper dive into the piece I was fascinated by the metrics and granular trending analysis. The article summarized 401 cases involving motions for sanctions related to discovery of electronically stored information (ESI) in federal courts prior to January 1, 2010:
“We analyzed these cases for a variety of factors, including sanctioning court, sanctioning authority, sanctioned party, sanction type, and sanctioned misconduct. Our analysis indicates that although the annual number of e-discovery sanction cases is generally increasing, there has been a significant increase in both motions and awards since 2004. Motions for sanctions have been filed in all types of cases and all types of courts. The sanctions imposed against parties in many cases are severe, including dismissals, adverse jury instructions, and significant monetary awards. Sanctions against counsel, although uncommon, are on the rise as well. All the while, the safe harbor provisions of Rule 37(e) of the Federal Rules of Civil Procedure2 have provided little protection to parties or counsel.”
Full analysis of the entire article isn’t the goal of this blog post. Instead, I wanted to focus on one particular area that hasn’t received a lot of attention. In an age where counsel seems particularly obsessed with conducting e-discovery in the cheapest way possible, it seems that many have lost sight of the risks associated with cutting corners. The Duke article significantly noted that “[c]onsistent with the overall increase in sanction cases,…counsel sanctions for e-discovery have steadily increased since 2004.” The authors identified various levels of misconduct as the basis for counsel sanctions — “four cases involved negligence, seven cases involved gross negligence, nine cases involved reckless disregard, and ten cases involved intentional conduct or bad faith.”
What should be eye-opening for counsel are the negligent sanctions cases because most will (probably correctly) assume that intentional, bad acts are relatively rare. Fortunately, the article analyzes the three different categories of sanction-able conduct by counsel that have been deemed grossly negligent.
“First, the failure to advise the client to issue litigation holds or to otherwise take steps to preserve potentially relevant information has been found to be gross negligence. Second, the failure to supervise a client search for responsive information by accepting client representations as to the adequacy of the client’s search, in light of clear information to the contrary, has been held to constitute gross negligence. Finally, the failure to produce a critical document in the possession of counsel for several years has also been held to constitute grossly negligent conduct.”
Sanctions can also be based on the “counsel’s personal execution of discovery tasks or on the counsel’s role in coordinating and overseeing the client’s discovery.” As discussed in Metropolitan Opera, although “counsel need not supervise every step of the document production process and may rely on their clients in some respects, the rule expressly requires counsel’s responses to be made upon reasonable inquiry.”
What’s clear, in my mind at least, is that the standard of care for counsel conducting e-discovery is quickly rising. In the past, any number of obnoxious behaviors was seemingly tolerated by the bench, including everything ranging from the blissfully ignorant to downright obstreperous conduct. Now, the bench and the plaintiffs bar have both been through enough wars to know “best” e-discovery practices from its lesser cousins. For counsel that have been running and gunning, hoping to skate by on a quick and cheap MO, these increasing sanctions awards should be a clarion call to what the future likely holds – and that’s an increase in malpractice insurance premiums.