iWitness: Reining in E-Discovery

Vol. 37 No. 4

The author is a U. S. magistrate judge in the Northern District of Illinois.

E-discovery has become the bête noire of litigation, and not without cause. Searching for electronically stored information (ESI) can be very expensive, and the consequences of not doing it correctly can be serious. Clients love communicating, processing, and storing information electronically, in increasing and ever-changing media. For their lawyers, that creates a challenge. Discoverable ESI may be lurking in every communication medium. Searching the company computer for email is not enough when the employees also communicate via personal devices and on social networking sites..

To rein in the e-discovery beast, recognize that you can’t solve a twenty-first-century problem with twentieth-century tools. Use the revised Federal Rules of Civil Procedure and new Federal Rule of Evidence 502. Learn your client’s information system, because discovery responses aren’t just for lawyers anymore. More than ever, you must anticipate potential discovery problems and cooperate with opposing counsel.

The Federal Rules of Civil Procedure were substantially revised in 2006 to make discovery of ESI more manageable, but too many lawyers haven’t revised their discovery tools since the Reagan administration. Dealing with ESI is now a required part of discovery requests and responses. The days of responding to a discovery request by reciting a list of “general objections” followed by agreeing to produce specific documents “without waiving those objections” are over.

Under the revised rules, the requesting party may specify the form in which ESI is to be produced. Fed. R. Civ. P. 34(b)(1)(C). The responding party:

•may object to the requested form for producing ESI (Fed. R. Civ. P. 34(b)(2)(D));

•must identify the form in which ESI will be produced (either the form in which it is ordinarily maintained or a reasonably usable form) (Fed. R. Civ. P. 34(b)(2)(E)); and

•must identify sources from which it will not produce ESI—even if those sources might contain responsive information—because of cost or undue burden (Fed. R. Civ. P. 26(b)(2)(B)).

 

A basic concept of the revised rules is “reasonable accessibility.” To control e-discovery burdens, you must identify what ESI is “reasonably accessible” to your client and what is not. “A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.” Fed. R. Civ. P. 26(b)(2)(B). The responding party must state in the discovery response the sources of potentially responsive information that the responding party is neither searching nor producing. The responding party must also provide enough detail to enable the requesting party to evaluate both the burden of searching those sources and the likelihood of finding responsive information in them. Fed. R. Civ. P. 26(b)(2) advisory committee notes (2006). On a motion to compel production, the responding party bears the burden of proving that a particular source of information is not reasonably accessible. Even if the responding party meets that burden, the court may nonetheless decide to order the production but may impose conditions. Fed. R. Civ. P. 26(b)(2)(B).

In short, receiving a request for ESI does not necessarily condemn the client to an expensive hunt through long-abandoned formats. It does, however, require the client to say what exists, what will be searched, and what will not be searched. Stating expressly, for example, that your client will not search backup tapes from a specific time period gets the issue out front for prompt discussion and ruling, if necessary.

Identifying a source as not reasonably accessible does not, however, eliminate the obligation to preserve potentially responsive information located in that source. What a party is required to preserve and when that obligation arises are different questions, beyond the scope of this article. But preservation disputes can be minimized if they are addressed at the outset of litigation. That’s why revised Rule 26(f) requires the parties to discuss in their planning conference “any issues about preserving discoverable information.” Fed. R. Civ. P. 26(f)(2).

Another bane of e-discovery is the risk that privileged or work-product protected materials will be disclosed in the course of producing ESI. The sheer volume of items involved often makes a preproduction privilege review of each item extremely expensive. The nightmare scenario is that turning over one privileged document may trigger a waiver of privilege or protection for all materials on that subject.

Federal Rule of Evidence 502 was added in 2008 to deal with that worry. It is a multifaceted rule that defines and potentially limits the situations in which privilege and work-product protection are waived.

Subdivisions (a) and (b) of Rule 502 deal, respectively, with whether intentional disclosure or inadvertent disclosure of some materials creates a waiver of protection and privilege for undisclosed materials. Under Rule 502(b), an inadvertent disclosure of privileged materials does not result in a waiver of privilege or work-product protection for undisclosed materials if the holder of the privilege or protection took reasonable steps to prevent disclosure and promptly took reasonable steps to rectify the error. Amobi v. D.C. Dep’t of Corrs., 262 F.R.D. 45, 54–55 (D.D.C. 2009); Coburn Grp., LLC v. Whitecap Advisors, LLC, 640 F. Supp. 2d 1032, 1038–41 (N.D. Ill. 2009).

But Rule 502 has more. Subdivision (c) limits the circumstances in which a disclosure in a state court proceeding results in a waiver of protection in a federal proceeding. Subdivision (f) makes Rule 502 applicable in state proceedings as well as federal court-mandated arbitration proceedings.

Rule 502(e) authorizes claw-back or quick peek agreements, which allow the parties to produce ESI with little or no preproduction review and to take back any privileged materials that were produced, without waiving any privilege that may apply. Of course, taking the document back doesn’t un-ring the bell. The opposing attorney may remember the privileged communication even if it has to be returned. But the client may decide that risk is an appropriate trade-off against the expense of prereviewing huge volumes of ESI, especially if the quick peek is limited to a specific set of materials that are not expected to include confidential information.

The effect of an agreement under Rule 502(e), however, is limited to those particular parties. For greater protection, you must ask the court to put the agreement into an order. Under Rule 502(d), “[a] Federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court—in which event the disclosure is also not a waiver in any other Federal or State proceeding.”

Rule 502(d) is a valuable and underused tool for minimizing the risks of e-discovery. With a Rule 502(d) order, you can sleep nights knowing that even if a privileged document was included in the mass of production, it’s not going to explode into a subject matter waiver in your pending case or in any other proceeding.

 

Know Your Client’s Data System

Understanding your client’s information storage and retrieval system is critical to using the federal rules effectively and to convincing a judge to rein in an unreasonable e-discovery request. A discovery response under Federal Rule of Civil Procedure 34 requires that you know how your client’s system works now and how it has worked over the relevant time period so that you can identify what sources are and are not reasonably accessible. Not surprisingly, few lawyers are personally expert in the area of information storage. That means you must enlist your client’s technical support staff to educate you about the system. If your client doesn’t have a dedicated technical support staff, talk with the person who enters data and retrieves information. Perhaps that’s the office manager or the bookkeeper, or it might be the individual client who uses his or her own laptop. The point is to have a focused and detailed conversation with the person most knowledgeable about all of the ways your client communicates and stores information. The more complex those ways are, the more you will have to learn.

Most lawyers appear reluctant to learn much beyond the broadest outlines of their clients’ data systems. Maybe they don’t view themselves as “good at technical things.” But there’s really no substitute for knowing what you’re talking about, and that applies when you’re making an objection or arguing a motion about e-discovery.

Too many e-discovery disputes are generated by lawyers who don’t know what they are talking about. They ask for data they wouldn’t know how to process if they received. They object to requests without having any real facts about how a reasonable search would be done and what could be obtained. They bandy about buzzwords—“native format,” “metadata”—but, when pressed, they can’t explain what the words mean to discovery in the case at hand.

As a judge, I want the facts I need to decide questions about whether the burden of production outweighs the benefit. I’m not an expert in electronic information storage systems, but I’m willing to be educated. That’s the lawyer’s job. Being able to explain, clearly and accurately, how your client’s system works is essential to being persuasive in any e-discovery dispute.

 

Anticipate and Cooperate

Traditionally, the litigator’s role has been mostly reactive. Litigators are used to dealing with the legal consequences of a previously established set of facts. E-discovery is different. You have to get ahead of it.

Preservation of ESI, before and during the lawsuit, is shaping up as a major battlefield. The revised rules provide a limited safe harbor. “Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.” Fed. R. Civ. P. 37(e). That rule, however, does not attempt to define when “good faith” requires modification of the system to preserve relevant information. Fed. R. Civ. P. 37(f) advisory committee notes (2006) (renumbered 37(e)).

The parameters of the preservation obligation are still unclear. What is clear is that the lawyer must be not only an advocate after the fact but also a counselor, assisting the client to create a reasonable and realistic policy for preserving ESI as soon as a claim appears likely. After the lawsuit has been filed is often too late. See Jones v. Bremen High Sch. Dist. 228, No. 08 C 3548, 2010 WL 2106640 (N.D. Ill. May 25, 2010) (sanctions ordered where, after Equal Employment Opportunity Commission charge was filed, defendant allowed individuals involved in alleged discriminatory action to search their own email and decide what to preserve). In
other words, you must anticipate. Obviously, any such counseling requires a clear understanding of the client’s information processes and must be revised as your client’s system changes.

You must also think ahead when you’re designing the search to locate documents in response to a discovery request. Anticipate the possibility that a stray privileged communication may slip into the production. Think about how you will demonstrate that you took reasonable steps to prevent inadvertent disclosure of privileged or work-product protected materials, as required by Rule 502(b) to avoid a subject matter waiver. Perhaps the best way to rein in the e-discovery beast, however, is for the lawyers in the case to act professionally and cooperatively. Initially, ESI was seen as an asymmetrical game in which individual plaintiffs could force corporate defendants to incur huge costs searching for ESI. But now even individual plaintiffs have discoverable ESI—in email, social networking sites, text messages, and the like. Controlling e-discovery by focusing early on what sources are most likely to have the most important information is in everyone’s interest.

The revised rules contemplate a dialogue about ESI between the parties, early and often. Rule 26(f) requires that ESI be part of the parties’ discovery planning conference, but rarely have I seen any report of a Rule 26(f) conference that included a serious discussion of ESI, what should be preserved, and what is reasonably accessible. In addition, some courts require that e-discovery agreements be part of the proposed scheduling order under Federal Rule of Civil Procedure 16(b). Collected local rules and standing orders can be found at www.ediscoverylaw.com (by following the link to “Resources”). Again, you have to come into the planning conference knowing enough about your client’s system and what you want from the other side’s system to make some important preliminary decisions.

Recognizing the importance of cooperation, a group of judges and lawyers in the Seventh Circuit formed a pilot program to promote cooperative facilitation of e-discovery. The project’s website, www.discoverypilot.com, contains a wealth of resources to help deal with e-discovery, including collected cases on discovery issues. The project committee proposed a Standing Order Related to the Discovery of Electronically Stored Information (available on the website), which has been substantially adopted by all of the magistrate judges and many of the district judges in the Northern District of Illinois.

The standing order doesn’t dictate what should be preserved or produced in a particular case. Rather, it sets out some guiding principles. E-discovery’s unique challenges are best faced early, candidly, and cooperatively. Discovery and preservation should be reasonable under the circumstances and follow the principles of proportionality found in Federal Rule of Civil Procedure 26(b)(2)(C). Disputes that cannot be resolved between the parties should be presented to the court promptly, and counsel must understand how their clients’ data are stored and retrieved.E-discovery is qualitatively and quantitatively different from paper discovery, and it is not going away. Using the revised rules effectively, understanding your client’s information system, and working cooperatively with opposing counsel will help you rein in e-discovery.

 

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