Court rejects bright-line or categorical approaches when assessing the acceptability of ediscovery misconduct, preservation efforts, or sanctions

Rimkus Consulting Group, Inc. v. Cammarata, 2010 WL 645253 (S.D.Tex. February 19, 2010)

The Rimkus decision will likely prove to be one of the most important ediscovery decisions announced in 2010. The decision was written by Judge Lee H. Rosenthal, who chairs the Judicial Conference Committee on Rules of Practice and Procedure. It is a decision that merits the attention of any serious ediscovery practitioner.

The blogosphere has been all “a twitter” about Judge Shira Scheindlin’s recent opinion in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 2010 WL 184312 (S.D.N.Y. January 5, 2010). However, Rimkus may ultimately prove to have more lasting and widespread significance.

Pension Committee addressed when the failure to properly preserve and collect ESI justifies the sanction of an adverse inference instruction. In a recent blog post about the Pension Committee decision, we raised several concerns about the opinion’s analysis and conclusions. While Rimkus involved allegations of wilful misconduct, including the intentional destruction of emails and other ESI after a duty to preserve had been triggered, Judge Rosenthal noted that there were “some common analytical issues” between Rimkus and Pension Committee, which merited discussion. Judge Rosenthal’s discussion of those common analytical issues in Rimkus addressed several of the concerns we highlighted in our Pension Committee post.

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PowerPoint Slides about the Seventh Circuit Ediscovery Pilot Program

The Seventh Circuit Electronic Discovery Pilot Program was developed as a result of continuing comments from the business and legal community about the need to reform the civil pretrial discovery process. A committee of trial judges, lawyers, academics and expert consultants met to consider how the cost and burden of electronic discovery can be reduced.

The committee developed a set of ediscovery principles intended to serve as supplemental guidelines to be followed by litigants participating in the program. These principles were codified into a standing order which is being used in selected cases to assess their effectiveness. Kenneth J. Withers, the Director of Judicial Education and Content for The Sedona Conference, and Rebecca L. Kourlis, the Executive Director of the Institute for the Advancement of the American Legal System at the University of Denver assisted in the process of drafting these principles.

What makes these principles unique is that they will be tested during phases of the Pilot Program. The results for Phase I of the program will be presented in May 2010 at the Seventh Circuit’s Annual Meeting. They will then be evaluated and refined. Phase II will then run from June 2010 to May 2011. At that juncture, the committee will present its findings and issue its final principles.

Below is to a set of PowerPoint slides addressing the program and the ediscovery principles that are currently being tested.

Court rules that emails are not reasonably accessible due to undue burden and cost under Rule 26(b)(2)(B)

Rodriguez-Torres v. Gov’t Dev. Bank of Puerto Rico, 2010 WL 174156 (D.P.R. Jan. 20, 2010)

Given the frequency that emails are requested in discovery, this decision merits your attention. In Rodriquez-Torres, the court denied plaintiffs’ motion to compel the production of emails about her, ruling they were “not reasonably accessible” under Rule 26(b)(2)(B).

Plaintiff and her husband brought an employment discrimination claim under ADEA, Title VII, the Lilly Ledbetter Fair Pay Act and 42 U.S.C. §1983. In discovery, plaintiffs sought “all email communications and calendar entries” for a three-year period “describing, relating or referring to plaintiff Vicki Rodriguez, both inbound and outbound” from the defendant’s “messaging system servers.” Plaintiffs requested that the data be produced in its “native electronic format with its original metadata” intact. Defendant objected, claiming plaintiffs’ request was overbroad. Defendant argued that compliance would likely produce “hundreds, if not thousands, of documents” that would include “irrelevant, confidential and potentially privileged information.” Plaintiffs brought a motion to compel and sought discovery sanctions.

The court initially directed the parties to provide information concerning the cost involved in producing the requested information. Plaintiffs were further directed to explain what information they anticipated finding in the native format documents. The parties submitted a report from an ediscovery vendor which estimated the cost of producing the ESI at approximately $35,000. The estimated costs included a $5,000 charge for the configuration and creation of a Concordance Database.

Based on this information, the court determined the emails that plaintiffs sought were not reasonably accessible. The court found that $35,000 was “too high of a cost for the production of the requested ESI in this type of action.” (In their prayer for relief, plaintiffs sought $1.4 million dollars in compensatory damages). Recognizing that the volume of information involved and its form makes privilege determinations more difficult and time-consuming, the court also expressed a concern over the additional cost that would be incurred in reviewing the requested emails for relevancy and privilege.

The court recognized that under Fed. R. Civ. P. 26(b)(2)(B) it could nonetheless order production of the emails if good cause was shown. In an attempt to show what information they could find in the emails, plaintiffs pointed to three articles which suggest that email usage encourages individuals “to write unguarded, unwise and often inappropriate comments.” That argument did not persuade the court that good cause warranted production of the emails. The court explained: “Just because emails are more likely to lead to inappropriate comments is not a sufficient basis to believe that the ESI requested here will lead to the discovery of the information Plaintiffs claim they will discover.” The court concluded that the plaintiffs’ request was merely a “fishing expedition” and denied their motion to compel.

Practical Ediscovery tip: The party asserting undue burden under Rule 26(b)(2)(B) bears the burden of proof. To succeed in establishing the requested discovery will be unduly burdensome or costly to produce, it is imperative that you provide the court with concrete information about the costs and/or personnel hours that will be required to obtain, review and produce the requested information. Vague and unsupported assertions of undue burden will inevitably be rejected by the court.

Protecting nonparties against undue burden or expense from subpoenas seeking ESI under Fed. R. Civ. P. 45

North American Rescue Products, Inc. v. Bound Tree Medical, LLC, 2009 WL 4110889 (S.D. Ohio Nov. 19, 2009)

Rule 45 contains several provisions that can protect third parties from undue burden or expense when responding to subpoenas for electronically stored information (“ESI”).  Fed. R. Civ. P. 45(c)(1) requires a party issuing a subpoena “take reasonable steps to avoid imposing undue burden or expense” on a non-party subject to that subpoena. Rule 45(c)(2)(B) authorizes the recipient of a subpoena to timely object and mandates that any subsequent order must protect the party receiving the subpoena “from significant expense resulting from compliance.”  Fed. R. Civ. P. 45(c)(2)(B)(ii). The Rule contains a third provision, subdivision (d)(1)(D), which provides that the recipient of a subpoena need not produce ESI from sources that are “inaccessible” because of undue burden or cost.

Despite these various protections that are woven into the fabric of Rule 45, the court in North American Rescue rejected a third-party’s request for reimbursement of approximately $24,930 in charges relating to the conversion of its native files to a reviewable format in response to a subpoena for documents. Why? Because the recipient of the subpoena did not follow Rule 45’s procedures. After objecting to the cost and burden of responding to that subpoena, it nonetheless produced the ESI without conditioning its compliance on the payment of its production costs.

The court in North American Rescue, noted that strict compliance with Rule 45’s procedures may be excused where the parties issuing and receiving the subpoena have reached an agreement concerning reimbursement of the costs of compliance. Because the party receiving the subpoena in North American Rescue failed to show the existence of such an agreement, the court concluded that by failing to wait for a court order before producing its ESI, the subpoena recipient forfeited its right to seek reimbursement under Rule 45 of the costs it incurred in complying with that subpoena.

The response of the subpoena recipient in North American Rescue should be contrasted against the approach taken in Guy Chemical Co., Inc. v. Romaco AG, 243 F.R.D. 310 (N.D.Ind. 2007). There, the court found compliance with a subpoena imposed an undue burden upon the nonparty and conditioned the production of any records pursuant to that subpoena upon reimbursement of the nonparty’s costs by the party issuing the subpoena. Simply put, the failure to follow Rule 45’s procedures can result in a waiver of its protection.

Several of Rule 45’s cost-protection provisions predate the 2006 ediscovery amendments to the Rule, and courts have not comprehensively addressed the interplay between the Rule’s pre and post-amendment cost provisions. The Advisory Committee Notes to Rule 45 broadly outline how to apply the Rule’s various cost protections, and the remainder of the post will provide a framework for their application.

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Proper framework for analysis and evidence needed to establish inadvertent waiver under F.R.E. 502(b) – or – “I may not always be right but I’m never wrong.”

Amobi v. District of Columbia Dept. of Corrections, 2009 WL 4609593 (D.D.C. Dec. 8, 2009)

Comrie v. Ipsco, Inc., 2009 WL 4403364 (N.D.Ill. Nov. 30, 2009)

Coburn Group, LLC v. Whitecap Advisors LLC, 640 F. Supp.2d 1032 (N.D.Ill. 2009)

Today’s “trifecta” addresses the proper framework for analyzing the application of Fed. R. Evid. 502(b) to claims of inadvertent waiver of attorney-client privilege and work-product protection. It also discusses the information that should be provided to a court when seeking Rule 502’s protection. In both Amobi and Comrie, defendants failed to establish that they took reasonable steps to prevent the disclosure of privileged information, and thus, failed to establish the elements of Rule 502(b), resulting in a finding of waiver. These decisions confirm that the reasonableness of the precautions taken by a party to protect its privileged and protected communications is an explicit consideration in determining whether a waiver occurred under Rule 502(b), no matter how inadvertent the disclosure. 

Notably, in Amobi Judge Facciola rejected the argument that if a “disclosure was made by a lawyer, then it clearly was not mistaken and not inadvertent.” He observed that if a lawyer’s mistake never qualified as an inadvertent disclosure, it “would vitiate the entire point of Rule 502(b)…. It would essentially reinstate the strict waiver rule in cases where lawyers reviewed documents, and would create a perverse incentive not to have attorneys review documents for privilege.” 2009 WL 4609593 at *8. Judge Facciola also jokingly noted that the premise of plaintiff’s argument was wrong because: “Lawyers make inadvertent mistakes; it is judges who never make mistakes.” Id.(emphasis in original). The court’s tongue-in-cheek comment in Amobi reminded of me of something my father frequently told me in my youth: “I may not always be right, but I’m never wrong.” I have remembered that sage advice throughout my legal career, especially when reflecting upon a court’s evidentiary rulings.

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State court ediscovery rules scorecard

Anyone old enough to remember when Jack Brickhouse and Lou Bodreau were WGN’s broadcasters for the lovable losers on the north side of Chicago, will have fond memories of the venerable public address announcer who graced the “friendly confines” known as Wrigley Field. At the beginning of each game Pat Pieper would begin with his signature announcement: “Attention, Attention, please! Have your pencils and scorecards ready and I will give you the correct lineups for today’s game.”

As of September 2009, there are 24 states which have enacted their own electronic discovery rules. Staying on top of this movement is important for attorneys with multi-jurisdictional practices and for general counsel whose companies operate in multiple states or ship their products through out the country, and as a result, are sued in various jurisdictions. Texas adopted its ediscovery rules (Tex. R. Civ. P. 196.4) before the federal rules were enacted and has not attempted to amend its rules to mirror the federal rules. Several of the states listed below (Idaho and Mississippi) follow the Texas approach. While other states have attempted to base at least some of their ediscovery rules on the corresponding federal provisions, in some instances there are obvious gaps and differences between the analogous state and federal rules, and in others, the variations are subtle, yet significant. So there is no substitute for reviewing the actual rules themselves.

Thus, with a tip of the hat to Tom Allman who originally began tracking those states that adopted their own set of ediscovery rules, and with a bow to Pat Pieper, get your pencils and scorecards ready for a list of those states that have enacted ediscovery rules which are linked below to their respective state rules:

• Alaska
• Arizona
• California
• Idaho
• Indiana
• Iowa
• Kansas
• Louisiana
• Maine
• Maryland
• Michigan
• Minnesota
• Mississippi
• Montana
• Nebraska
• New Hampshire
• New Jersey
• North Dakota
• Ohio
• Tennessee
• Texas
• Utah
• Virginia
• Wyoming

Pat Pieper served as the public address or field announcer at Wrigley Field for 59 years – he worked longer in that capacity than the ediscovery rules listed above likely will. Some fun facts about Pat on his Wikipedia page are that from 1916 to 1932, he used a megaphone to make his field announcements, and he never missed a game at Wrigley Field after 1924 until he retired in 1974. He likely should be listed in Ripley’s Believe It or Not for watching the most baseball games ever lost. Had he only gone to the South Side and worked for the White Sox, at least he could have watched some winning baseball including the 1959 Champs known as the Go Go Sox. Yes, I admit it, I am a White Sox fan, and I am waiting for the most interesting manager in baseball, Ozzie Guillen to pop back up on Twitter. Or was he also Twitterjacked?

Scorecard photo courtesy of Flickr user Caitlinator under this Creative Commons license.

Hinshaw partner Steve Puiszis authors ediscovery chapter in healthcare risk management treatise

The American Health Lawyers Association has published the first edition of its Enterprise Risk Management Handbook for Healthcare Entities. The work is a comprehensive treatise to assist healthcare entities implement an enterprise risk management system.

There is no doubt that ediscovery readiness is a critical feature of any enterprise risk management plan. Hinshaw partner and Practical Ediscovery editor-in-chief Steve Puiszis has written a chapter on that topic which is included in the book. The chapter addresses the substance of the federal rules pertaining to ediscovery and also discusses particular steps that healthcare entities can take to make electronic discovery issues part of their overall risk management plan.

Click here for more information.

Effective Project Management in Discovery

This is a guest post by Ashish Prasad. Mr. Prasad has served as the Executive Editor of the Sedona Principles: Best Practices Recommendations and Principles for Addressing Electronic Document Production, and is the CEO of Discovery Services LLC. Read Mr. Prasad’s full bio at the end of this post.

I. Introduction

Discovery is among the biggest risks facing modern litigants. Effective management of discovery can have an equal, or in some circumstances, greater effect on the outcome of litigation than the actual merits of the case. No one gets to summary judgment, trial, or in most cases, a settlement without first going through the discovery minefield.

Going through the discovery minefield without a plan means taking an unnecessary risk that something will “explode” and derail your litigation efforts and strategy. Not only can discovery errors result in excessive costs, affect the outcome of the case or result in monetary sanctions levied against a client, but courts can impose monetary sanctions on counsel for discovery mismanagement as well. Effective project management is the key to avoid sanctions and other bad things that happen to lawyers and clients en route to case resolution.

This article first briefly explains counsel’s duty to manage discovery, then through several case examples, provides a description of the problems clients and counsel can encounter during discovery, and finally, provides a model for effective project management in discovery.

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A practical tip for keyword searching

Wm. A. Gross Constr. Assocs. v. American Mfrs. Mutual Ins. Co., 2009 WL 724954 (S.D.N.Y. March 19, 2009).

When the opening line of an ediscovery decision is: “This Opinion should serve as a wake-up call to the Bar in the District,” visions of another Qualcomn blowup immediately come to mind. When you realize the decision is about “the need for careful thought, quality control testing, and cooperation with opposing counsel in designing search terms or key words,” you guess this is another decision addressing the inadvertent waiver of privilege. Because ediscovery is easier to get wrong than it is to get it right, lawyers – being the cynical lot we are – immediately think the worst.

 Well, luckily for those involved in Gross Construction Associates, the decision’s opening salvo was a reflection of the judge’s frustration over having to design a keyword search when the parties could not agree on the terms to employ. While much of the decision retraces the same ground covered by the Victor Stanley and Equity Analytics decisions, the court does provide several interesting insights, and one practical tip to help prevent keyword searches from disintegrating into a game of Scrabble.

The decision arises out of a construction defects and delay claim involving the development of the Bronx County Hall of Justice. The Dormitory Authority of the State of New York (“DASNY”) was the “owner,” and employed Hill International as its construction manager on the project. Hill was not a party to the lawsuit.

DASNY agreed to produce Hill’s project-related documents and ESI to the other parties in the litigation. The issue confronting counsel, and the court, however, was how to segregate Hill’s project-related e-mails from those that were unrelated. Thus, the parties proposed to use the use of keyword searches to filter out the unrelated e-mails.

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Clawback and quick peek agreements are no longer considered the Gold Standard for protecting against the inadvertent waiver of privilege.

On a recent flight, I read the February/April, 2009 edition of Litigation Support Today magazine. Under the banner of Best Practices, was an article: “Slashing Ediscovery Costs in a Digital Universe.” One of the author’s recommendations was to negotiate a “quick peek” agreement with opposing counsel. However, care must always be exercised with quick peek and clawback agreements.

Fed. R. Evid. 502(e) confirms that a clawback or quick peek agreement only binds the parties to the agreement “unless it is incorporated into a court order.” Clawback and quick peek agreements provide no protection as to third parties. Thus, while you may avoid a claim of waiver as to information inadvertently produced to a party who signed such an agreement, other parties in that litigation who are adverse to you, and who were not signatories to your agreement, as well as parties in other cases, can claim that your quick peek agreement is not enforceable against them. They will argue that allowing your opponent to potentially view privileged documents without taking any precautions to ensure that privileged information was not reviewed by opposing counsel (other than simply entering into the quick peek agreement) waived attorney-client privilege and the work-production protection as to them. For further insight into the use of quick peek and clawback agreements, see Hopson v. City of Baltimore, 232 F.R.D. 228, 244 (D.Md. 2005).

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