Published on Apr 28, 2014 In February, I had the privilege of moderating a panel on Changing Rules and Best Practices in e-Discovery, with Magistrate Judges Andrew Peck and Frank Maas of the Southern District of New York, and Chief Magistrate Judge Elizabeth Laporte of the Northern District of California. The judges provided insights on proposed Federal Rules of Civil Procedure amendments, and best practices relating to proportionality, efficiency and sanctions. Below are ten highlights of what the judges had to say:
1. On why proportionality is like obscenity:
Judge Peck explained that there is no formula to weigh the proportionality factors provided in the Federal Rules of Civil Procedure.[1] Parties can best demonstrate whether discovery is proportional or not by giving judges real facts about discovery costs and burdens. In addition, Judge Peck said he evaluates whether the estimated discovery costs reflect an efficient process planned by counsel, using the right discovery tools. Even a precise, high cost estimate will not be persuasive if the high costs result from an inefficient discovery plan. Judge Maas and Judge Laporte also cautioned that while attorneys should provide “hard numbers” about costs, it is important that they make a diligent inquiry about whether those costs reflect a reasonable process. For example, an estimate of employee hours required to run searches is useless if it assumes every search would be run separately, but several searches could actually be run together.
2. On the “new” duty of attorneys to ensure discovery is efficient:
The proposed amendment to Rule 1 clarifies that efficient process is a duty of attorneys as well as the court. Judge Laporte emphasized that, regardless of the proposed FRCP amendments, she has always expected parties to take responsibility for efficient discovery. She reflected that justice cannot be carried out if litigation is too costly, and most of discovery occurs outside the supervision of the court. By the time judges get involved, something has already gone wrong. For this reason, the Northern District of California has created a checklist and Guidelines for the discovery process. Judge Laporte explained that these documents are designed to focus the parties on cooperation efforts.
3. On incorrect assumptions by attorneys about technology:
Judge Maas remarked that while lawyers commonly instruct deponents not to assume facts, he has seen many attorneys make assumptions about their clients’ IT system capabilities. He said that attorneys will make representations about what the systems can do based on only a partial understanding of the facts, and are then embarrassed when those representations turn out not to be true. Attorneys should be sure they really understand the systems they are arguing about, or seek help from someone who does.
4. On resolving disputes about technology:
Judge Peck advocated “Bring-Your-Geek-To-Court Day,” in which parties bring an outside consultant or an in-house IT person to facilitate discussion of IT systems in discovery planning meetings or hearings. He said that in cases where the parties disagree about what is possible to produce and he then orders them to bring IT experts, the experts sometimes take only fifteen minutes to find a way to resolve the issue. Without direct “geek” participation in discovery, the tech people will pass information to inside counsel, who pass it to outside counsel, who repeat it to opposing counsel and the court. This game of telephone creates many opportunities for misunderstandings.
5. On how to lose a proportionality argument:
Judge Maas cautioned that parties who invoke proportionality to avoid or shift discovery costs can only do so on the basis of a reasonable, efficient discovery plan. He said he would not likely be persuaded by a party that argues its costs would be disproportional to the case but also wants to review every spreadsheet for attorney-client privilege and have a senior partner review emails.
6. On sanctions for spoliation by sophisticated parties:
Regarding the level of care parties must exercise to avoid discovery sanctions, Judge Laporte warned that the FRCP amendment commentary states that sophisticated parties may be held to a higher level of care.[2] She warned that large companies, which should have robust information management systems, should not expect to be able to get away with repeated cases of inadvertent spoliation, even if Rule 37(e)(2) appears to require a higher standard. Judge Peck agreed that the Rule is not intended to encourage “pure heart, empty head” conduct.
7. On the inevitable trend away from linear review:
Judge Peck acknowledged that linear review is no longer affordable. Moreover, when Technology Assisted Review is done correctly, it is “faster, cheaper and in all ways better in all ways than keywords” searching. In any case, it is certainly better than what Judge Peck called the “go fish” search method, in which attorneys guess keywords without testing them, and focus their negotiations only on how many keywords are appropriate.
8. On the right way to do Technology Assisted Review:
Noting that nothing works perfectly, Judge Laporte said that she is open to Technology Assisted Review or any method that achieves document review with reasonable results at a reasonable price. The key to proving that results are reasonable, she explained, is quality control that is documented.
9. On the importance of a 502(d) order:
With a 502(d) order, parties can establish a standing clawback right for any privileged document that is produced, regardless of whether they can establish that they “took reasonable steps” to prevent disclosure under Federal Rule of Evidence 502(b). Judge Peck said the only legitimate argument he has heard on why attorneys do not establish this “get-out-of-jail-free card” is a concern that judges will then require them to produce all documents very quickly without doing any privilege review. Even when documents are clawed back, they cannot be erased from an adversary’s mind, so attorneys may still need to take steps to prevent disclosure of privileged documents. In recognition of this issue, Judge Peck’s model order, available here explicitly provides that attorneys will not be deprived of the ability to conduct a privilege review.
10. On how much discovery is really needed:
Because most cases are decided on pretrial motions or settled, evidence in most cases never turns into trial exhibits. Add to this that most documents reviewed in discovery are nonresponsive, and most responsive documents do not rise to the level of being potential exhibits, and it is clear that the scope of discovery is very often far too broad. Remarking on how this shows the need for targeted discovery strategies, Judge Maas referred to another judge in his district who asks attorneys how much discovery they need to settle their case. Parties should cooperate to achieve focused, tiered discovery that efficiently targets what they really need. Judge Peck added that in the one case he had where attorneys asked for a staged approach to discovery, he granted a longer discovery period than usual to accommodate the strategy.
[1] The proposed FRCP 26(b)(1) amendment provides that proportionality factors include “the importance of the issues at stake in the action, the amount in controversy, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” The same factors are provided in current FRCP 26(b)(2)(C)(iii).
[2] See Note to Rule 37(e)(2), “The court should be sensitive to the party’s sophistication with regard to litigation in evaluating preservation efforts; some litigants, particularly individual litigants, may be less familiar with preservation obligations than other litigants who have considerable experience in litigation.” Preliminary Draft of Proposed Amendments to the Federal Rules of Bankruptcy and Civil Procedure, August 13, 2013, pp. 325-326.
