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June 01, 2011

Advance Sheet: Looking Through the Wrong End of the Telescope

The action in the discovery process has shifted even more fundamentally from the learning of facts to the retrieval of documents.

Robert E. Shapiro

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Are you sick of spoliation yet? With the suddenness of a 1960s Latin American coup, this once little-used feature of litigation has vaulted into prominence, dominating both day-to-day practice and public discussion. And it’s not a pretty sight, having brought with it unnecessary motion practice, ever-changing rules, and sensational sanction awards. Everyone can tell that all is not right and something must be done. But what exactly? It helps to see some of the elements of the problem correctly.

Spoliation is hardly a new concept. So why has it become so prominent recently? A ready answer seems available in the relatively new phenomenon of digital communication and storage. It’s easy to forget how recently email and the digital revolution entered our lives. One in-house counsel who had refused to let his firm delete old emails finally relented in the face of mounting pressure by permitting the destruction of anything “from the twentieth century.” Jubilation turned to despondency when his colleagues realized how small a number of items this covered. Not surprisingly, spoliation has come of age in the 10 or so years that digital communication has flourished.


But stop a moment. What’s so different about digital records besides the fact that there are just more of them? We seem haunted by fears that they will disappear, but this is somewhat atavistic. The ones and zeroes that make up our digital records are hardly as ephemeral as they once seemed. Digital records are in fact less likely to be lost given backup systems and hard drives from which, it seems, you can re-create almost anything. One has to look a little further than the rise of technology to find the full origins of the spoliation craze.

The second aspect of the new prominence of spoliation is in some sense the flip side of the first. Digital records, partly because of their volume, are incredibly useful, and email in particular has proved to be revealing to an unprecedented extent. Few questions in litigation can rival “What happened next?” for importance and frequency. With email, the days when lawyers needed to sit for hours in a deposition slogging through all the paper documents in the case, trying to piece together a chronology, are long gone.

Unfortunately, the action in the discovery process has shifted even more fundamentally from the learning of facts to the retrieval of documents. The money has shifted here too. This is true for the law firms, which earn large fees for their associates’ expertise in the language and techniques of de-duping and blowbacks and metadata. And there is now an entire industry, no longer of the cottage variety, that has developed around digital discovery, offering solutions to document retrieval needs. Litigation budgets, which once featured a smallish plug-in number for such activities, now list them as a primary cost element.

Pushing the Other Side

These developments have been deleterious to the process. Lawyers have been quick to seize on both the tactical and financial advantages in pushing their adversaries—hard—for digital information. What might make sense as a means to get to the bottom of things quickly has also had its appeal as a means of tormenting the other side. It’s been up to the courts to ensure that the emphasis was on the former rather than the latter. But it’s hard to contain the sense that they’ve flubbed the matter.

Some courts, notably the Seventh Circuit Court of Appeals, seem to have spotted at least some of the elements of the problem and have tried to think it through from the bottom. Cooperation between opposing parties in determining the sources, means of retrieval, and production of electronic data has been identified as a must, reversing decades, not to say centuries, in which the opposing sides were not just permitted, but indeed encouraged, to fend for themselves. The early results have been encouraging, though it remains to be seen whether this turn away from the adversary system really provides the right, or even a workable, solution.

Less happily, many judges have struck out on their own, offering rulings with a plethora of new rules for litigants to follow. The most famous, or notorious, of these are the so-called Zubulake decisions of Judge Shira Scheindlin of the Southern District of New York. She has insisted on formal litigation holds and close lawyer oversight of client document productions, creating presumptions on that basis about good faith and even the existence of documents, while imposing sanctions at will. Many other courts have followed in her footsteps, even if not adopting her exact rules. New decisions in which courts lecture the unwitting, or try to show their literary talent in ridiculing perceived wrongdoers, arrive on our computers daily, alternately amusing and terrifying us all.

Whether this has really advanced the cause of justice, or even fair adjudication, depends on a number of poorly considered questions. Why, after all, are new rules necessary at all? Lawyers have always had an obligation to make reasonable efforts to find and produce their documents. Such things as litigation holds are not a bad idea, but what is there about the new discovery that makes them more important or necessary now than they were previously when they were largely unknown? And what is it that makes them entitled to unique status as a determinant of good faith, as Judge Scheindlin seems to hold? Or as the basis of a presumption about evidence? What is there about the absence of compliance with these new measures that provides a sufficient basis to presume the existence of relevant material?

And amidst all of this, has anyone noticed that the merits of civil cases are becoming the sideshow? Spoliation, which is the doctrine in which all these developments come to the attention of the parties and the courts, seems to be supplanting questions of who did what to whom, and what the consequences should be, at an alarming pace. Indeed, spoliation is the convenient means by which lawyers never have to look at the merits at all, which seem only a pretext for beating up the other side on discovery issues. One cannot help but ask: Is this any way to run the discovery process?

Just how spoliation can turn the telescope around is nicely on view in the case of Green v. Blitz U.S.A., Inc., No. 2:07-CV-372 (E.D. Tex. Mar. 1, 2011). Defendant Blitz U.S.A., which had been sued in numerous cases alleging defects in its gas cans, was hardly a sympathetic party. In the case at issue, Rene Green complained that gas cans manufactured by Blitz were defective because they did not include a flame arrester, which led, she contended, to a wrongful death. Blitz argued that flame arresters were and are ineffective. After discovery, the parties entered into a settlement agreement setting a ceiling and a floor for any ultimate judgment and then went to trial. The jury unanimously found for Blitz, and Ms. Green settled at the low end of the settlement range.

Sanctions for Failure to Produce

Thanks to other similar litigation pending against Blitz, however, Ms. Green later learned that Blitz had failed to produce numerous documents related to the case. Most concerned Blitz’s internal discussions regarding the value of flame arresters and the possibility of incorporating them into Blitz’s gas cans. Ms. Green complained to the court, which found that Blitz’s production in the Green case had been woefully inadequate. But unable to punish Blitz, as other courts did, with instructions to the jury concerning Blitz’s failure to produce in discovery, the Green judge socked Blitz to the tune of $250,000 in civil contempt sanctions.

There was more. The Green court ordered Blitz to provide a copy of its damning memorandum opinion to every plaintiff who had sued Blitz in the previous two years, on pain of a further $500,000 sanction for noncompliance. Finally, the court ordered that Blitz also provide a copy of the court's memorandum opinion to every new party involved with Blitz, whether plaintiff, defendant, or otherwise, with the very first pleading. Ouch.

What had gone wrong? To all appearances, Blitz had tried to comply assiduously with its discovery obligations. Before 2004, it had designated a reasonably senior employee to take responsibility for all its document search and collection activities. That employee testified that his practice was to “look at [the document] requests, talk with [counsel] to understand what was relevant for production.” He would then “talk with areas that—that most likely documents would be in and . . . explain what we were looking for.” After 2004, Blitz brought on national coordinating counsel with which the same designee “would go through the claims, the suits, the discovery requests,  . . . so I would get an understanding of what materials that we needed to be searching for.” The employee would then visit with areas and departments that had the potential to have these documents, talking “face-to-face” with each relevant department “about what I was looking for, what it was about, and explain what these documents could be, and ask them to look for those.”

So what’s wrong with that? To an old-time litigator, Blitz did exactly what it should have done. Not good enough, said the court. Where was the litigation hold? And what keyword email searches were done? Blitz knew nothing of either. “A willful violation,” concluded the court, and the sanctions followed.

Willful? The court might have noted that part of the process it was condemning was from 2003 and 2004, before litigation holds and keyword searches were much discussed, let alone turned into the staple of contemporary discovery they are now. There’s something wrong with an approach that requires a company to predict which rules and technology will later be deemed necessary to the search process. Perhaps if rule makers or local courts uniformly specify what is required, a company can be taken to task for not complying. But to say Blitz had “willfully” failed to produce documents on the basis of continuing its old ways in the face of emergent but hardly well-accepted approaches seems nonsensical.

Then there was the problem of “the types of documents” that the court said were not disclosed. It mentioned three items, presumably choosing those that were most damning. The first was a 2005 handwritten “wish list” written by the chief executive officer about his “expectations” for gas cans over the next two years. Among these was the development of flame arresters. This document was sent to the very man who was charged with collecting the documents, but it was not produced. A second example was a 2005 email, also sent to the document collector among others, noting that the “marine industry” was using flame arresters and stating that the author was going “to look through some of the Coast Guard test procedures and see if I can’t come up with something.” A third “ambiguous” document appeared to contain as an agenda item the suggestion that Blitz might exit the gas can business altogether until it could re-enter with “lower liability” from a “safer” product.

Now there’s no question these documents—and if there were others like them, then those too—should have been produced. At a minimum, they meant that Blitz had a lot more explaining to do. Why they were not produced is a little unclear. Recall that at least two were actually in the hands of the person charged with collecting documents. Strikingly, the court seems not to have drawn the conclusion that he intentionally withheld them, which would have well substantiated its “willfulness” finding. Instead, it was the aforementioned absence of keyword searches that supposedly proved that Blitz had “willfully” failed to do a reasonable search or conducted a sloppy production. This seems something different from willfully failing to produce documents, perhaps a “willful” failure to use the search methods the court deemed best. But, again, who knew from keyword searches in 2007?

Seemingly more supportive of the court’s condemnation was evidence that Blitz had told its employees at various times between 2004 and 2007 to destroy emails. But again there is less here than meets the eye. There was no finding that this was done with any litigation in mind, even if litigation was then pending. As a substitute for such intentional wrongdoing, the court pointed to the absence of a litigation hold, but there was no evidence that anything destroyed would have been preserved by such a hold or anything more produced. Recall also that the one key email from the period cited by the court was not destroyed at all while Blitz’s designated employee was busily visiting departments personally to ensure documents were preserved. And, in 2004 or even 2007, how common were litigation holds anyway?

What’s the point? Surely Blitz’s conduct was hardly a model of discovery compliance. But just as surely the court overreacted, forgoing a more traditional analysis of what Blitz’s intentions were and relying instead on emergent spoliation doctrines and newly wrought presumptions. The danger in all this should be apparent. Even assuming the newfangled doctrines are the right ones, they cannot be applied retroactively, nor should they be viewed as determinative until adopted generally. Uniformity and certainty are key. And on no account should inflexible rules be allowed to substitute for careful thinking about what really has occurred and how willful or prejudicial it really has been. Ms. Green and Blitz were both entitled to a fair consideration of the actual merits of the dispute. It would be shameful for the merits to be overlooked by courts lost in their own new ideas about what really is, at bottom, a very old problem, with but a few new wrinkles to it.


Robert E. Shapiro

The author, an associate editor of Litigation, is with Barack Ferrazzano Kirschbaum & Nagelberg LLP, Chicago.