If John Constantine had been a lawyer, these sanctions would be his vision of ediscovery hell

March 13th, 2009 | By Steve Puiszis

Bray & Gillespie Management LLC v. Lexington Ins. Co., 2009 WL 546429 (M.D. Fla., March 4, 2009)

In the movie Constantine, Keanu Reeves plays an occult detective with the ability to detect demonic beings on earth, and to see into hell. Had his character been a lawyer rather than an occult detective, he would simply have to read the Bray & Gillespie decision to see what a vision of ediscovery hell looks like.

The Bray & Gillespie decision addressed some basic ediscovery mistakes involving a request for production of ESI in its native state with its accompanying metadata. However, those mistakes were compounded by what the Magistrate Judge described as material misrepresentations and omissions by counsel for the party producing that data. The decision also stands as a stark reminder that a supervising partner, and his firm can be held liable for the ediscovery snafus of their local counsel and predecessor counsel.

The court recognized that any motion for sanctions, even one which names only the party, puts both the party and its attorney on notice that the court may access sanctions against either or both of them, absent a showing of substantial justification for the conduct at issue. In Bray & Gillespie, the court determined that it was not appropriate to require the client to pay for the sanctions resulting from the decisions made by its outside counsel. Rather, the court sanctioned outside counsel and his firm, and also issued a Rule to Show Cause why another attorney from that firm should also not be personally sanctioned for his conduct in the case. Even more chilling is the fact that the Magistrate Judge indicated that she was willing to entertain additional sanctions, including a request that the court dismiss the case, if the data she ordered produced contained more metadata than what the sanctioned attorneys offered to produce in discovery.

The plaintiff (B & G) owned a series of resorts in Florida that were damaged by Hurricanes Charley, Frances and Jeanne. The resorts were insured through Lexington with a $25 million per occurrence property damage limit. The dispute involved whether the damage to the resorts was the result of three separate “occurrences,” and whether Hurricane Jeanne caused any property damage in addition to the damage caused by the prior two hurricanes.

Counsel for the B & G initially gathered paper documents and ESI relating to the damage caused by the three hurricanes. The paper documents were scanned, and the ESI, including emails and their attachments, were harvested in their native format. The scanned documents and the ESI were then downloaded to a hard drive and converted to TIFF images. The process used to create the TIFF images captured the metadata for the ESI. The TIFF images were then loaded into a litigation management database. Counsel for B & G provided copies of the documents in both their paper form and on discs to Lexington in support of their insurance claims.

Lexington initially determined that the damage to the plaintiff’s properties was the result of only one occurrence. Later, it paid an additional $25 million to B & G for the damages associated with the second hurricane. Plaintiff (B & G) then filed suit seeking damages caused by the third hurricane.

Lexington filed several production requests seeking ESI in its native format “without deletion or alteration of meta-data.” B & G never objected to the form of production specified in the defendant’s production request, a critical mistake in retrospect as it turned out.

B & G’s initial production response referenced an agreement between the parties in which it agreed to reproduce all of the documents and ESI which had been provided to Lexington prior to the commencement of the litigation, and further indicated that would begin production of additional documents on a rolling basis. That initial production response further noted that per that agreement, “all documents will be provided by sending discs containing scanned copies of the documents; no hard copies of the documents will be provided.” Counsel for Lexington understood that the reference to scanned documents only applied to those documents that originally existed in paper form, and did not apply to ESI.

Lexington filed several motions to compel, and following a renewed motion to compel, B & G discharged its original counsel which had collected the and produced pre-suit, the ESI and paper documents to Lexington. In response to Lexington’s first motion to compel, B & G, produced a disc containing approximately 100,000 documents. In response to Lexington’s renewed motion to compel, B & G produced another 7 discs of information which contained over 720,000 pages of documents, many of which were emails. However, the ESI B & G produced was not in its native state in those two productions, rather the ESI was produced as TIFF images without any optical character recognition (OCR) or the addition of any metadata loads. These two productions were handled by B & G’s local counsel. At some point during this process, new counsel for B & G became involved, and what transpired is a textbook example of how a lawyer can make a bad situation worse.

According to the court, that new counsel “concocted a story” about how the ESI was initially gathered – that B & G had printed the documents from its electronic systems, and then scanned the documents to create TIFF images of them. While new counsel was not involved with the original production, in court’s view he ignored known or readily available facts about the actual process used to collect and produce that ESI.

As you might expect, Lexington filed a motion for sanctions because those productions did not comply with the format specified in its production requests. B & G’s new counsel offered to produce “load files” with 7 metadata fields for the TIFF images previously produced, and was willing to add OCR to the text of the images. Additionally, at some point, counsel offered to provide Lexington with all of the metadata in the database that was originally harvested by B & G’s predecessor counsel. However, when Lexington asked B & G to disclose in writing what metadata was contained in that database, B & G’s new counsel inexplicably withdrew that offer.

In response to Lexington’s motion for sanctions, B & G’s counsel claimed that their failure to learn how the information had been gathered, and produced by predecessor counsel was the result of predecessor counsel’s refusal to provide them with the information. However, at a subsequent evidentiary hearing, B & G’s counsel conceded that the problems with predecessor counsel had been overstated, and they could not provide any examples of information requested that had not been provided. Additionally, B & G’s counsel admitted at that evidentiary hearing, that he had incorrectly advised Lexington that the ESI had been printed out and scanned. At no time during the process did counsel ever mention the existence of the original hard drive containing the ESI in its native state, the production of which could have avoided the entire problem. Moreover, once the motion for sanctions was filed, B & G’s counsel worked with an outside vendor, Logix Systems, to provide the missing metadata.

So what lessons can be learned from the Bray & Gillespie decision?

Do not ignore production format.

As one of my partners was fond of saying: “Sometimes its good to begin at the beginning.” Always carefully examine the format chosen by your opponent for the production of any ESI. Discuss the pros and cons of the requested format with the client, and if the client prefers that its data be produced in a different format, then timely object to the format so the objection is preserved.

Don’t simply ignore the issue, and produce data in the format of your choice, otherwise you may be forced to produce the data a second time in a different format or face sanctions as in Bray & Gillespie. Remember, however, that the ESI must be produced in a “reasonably useable format.” The court in Bray & Gillespie ruled that the TIFF images without OCR and any metadata load files was not reasonably useable. In that state it could not be electronically searched. Remember that the Advisory Committee Notes to Rule 34 provide that if the client maintains or stores its data in a form that is electronically searchable, whatever format you produce that data cannot significantly degrade its electronic searchability.

Responsibility of Supervising Partners or Managing Attorneys

Supervising counsel must also take their responsibilities seriously. In Bray & Gillespie, local counsel was involved in several of the productions which failed to comply with defendant’s requested production format, and the failure to object to the production format was made by predecessor counsel. However, the court directed most of ire, and its Rule to Show Cause against B & G’s counsel who was not involved in either production which ultimately prompted the renewed motion for sanctions and evidentiary hearing. Bray & Gillespie should be read in light of In re Seroquel Productions Liability Litigation, 244 F.R.D. 650 (M.D. Fla., 2002), where new counsel was also sanctioned for inadequate supervision of the production process. Changing horses midstream is especially difficult when it comes to ediscovery. Moreover, counsel taking over for another firm should not expect leniency from a court regarding the discovery decisions made by prior or local counsel.

Complete candor is a must.

Finally, when you realize a mistake has been made, complete candor with opposing counsel and the court is a must. There is an old saying: “When you’re explaining, you’re losing.” Attempting to explain a misstatement about a discovery mistake, may make it appear as if you are attempting to hide the mistake. Busy counsel must take the time to make sure that they have their facts correct, otherwise they run risk of geometrically compounding the original error and taking a situation that might be resolved, and turning it into one where sanctions are likely.

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