Ever-evolving and constantly growing, electronic discovery presents a variety of challenges for litigators.
In addition to the rise of computer-assisted review, attorneys are struggling with three other concerns related to electronically stored information, or ESI: defensible deletion, cost-shifting and the use of clawback agreements.
Here is a look at how these issues arise in cases and what attorneys need to know about dealing with them.
As the amount of ESI continues to grow exponentially, companies are faced with an overwhelming burden.
For lawyers, the amount of a company’s data can present a huge problem in discovery, and “defensible deletion” may be the answer. Practically speaking, it means that companies can delete ESI and not be held accountable by a court.
Defensible deletion “is the new catchphrase for the notion that less is more,” said Robert Brownstone, technology and e-discovery counsel and co-chair of the electronic information management practice group at Fenwick & West in Silicon Valley.
To establish a “defensible deletion,” a company must craft a data retention and deletion policy and follow it.
Such a policy establishes “a reasonable argument to justify why you got rid of electronic data should there ever be a challenge,” said Andrea Gibson, product director for discovery at Kroll OnTrack, an Eden Prairie, Minn., computer forensics company that specializes in electronic evidence.
By having an established policy in place that is enforced, companies can decrease their data and be able to defend themselves in court if an opposing party seeks ESI.
“Not only does a policy decrease inefficiencies and storage costs, it decreases risk and cost when an inevitable lawsuit hits,” Brownstone said.
The policy should include two important provisions, he advised: a litigation hold section and a section that relates to departing employees.
In the best-case scenario, the litigation hold section will list each employee and what the triggers are to initiate a hold — under which data cannot be deleted — as well as identify the person at the company responsible for deciding whether to issue a hold in a given situation.
For departing employees, ensure that a written protocol includes a defined time period before their data are deleted and requires approval of any deletion by a lawyer or HR person (or both), Brownstone said.
Having a policy allows a company to show a court “that it didn’t intentionally get rid of data but was going through a normal process,” Brownstone said. “If you don’t have [a policy], it’s going to be really hard to fend off a claim where the timing looks suspect.”
Gibson emphasized the importance of implementing the policy to the letter.
“You can have the most fantastic policy in the world but if you don’t follow it, it won’t be much help.”
The cost of electronic discovery rises with the growing amount of ESI. To combat this problem, parties often seek to shift some or all discovery costs to the opposing party, particularly in cases with “asymmetrical discovery,” in which one party has much more data than the other, Brownstone said.
The seminal opinion on cost-shifting was authored by Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York in Zubulake I (217 F.R.D. 309 (2003)), which established a seven-factor test for cost-shifting.
But a recent decision from the Eastern District of Pennsylvania is illustrative of the continuing issues facing litigants.
In Vaughn v. LA Fitness, 285 F.R.D. 331 (E.D.Pa. 2012), the plaintiff sought class-action certification in a suit alleging that the gym chain had improperly billed members.
The plaintiff requested a variety of corporate documents relating to member cancellation which LA Fitness said were archived at an outside storage facility and would be costly to produce. The company argued that it had already produced a substantial amount of discovery at its own expense and that the plaintiff should be forced to shoulder some of the burden.
U.S. District Judge Michael Baylson agreed. He held that the plaintiff must pay for discovery if they wished to search for additional ESI to support their motion to certify a class.
“The fact that defendant has more documents than plaintiffs does not necessarily mean that defendant’s production should be limited. However, as in this case, where the cost of producing documents is very significant, the court has the power to allocate the cost of discovery, and doing so is fair,” Judge Baylson wrote. “If plaintiffs’ counsel has confidence in the merits of its case, [he or she] should not object to making an investment in the cost of securing documents from defendant and sharing costs with defendant.”
The court recognized that by certifying a class in the case, the potential damages could run in the millions of dollars.
Big data has resulted in huge requests for ESI, and discovery can become a weapon in a case. Cost-shifting allows parties to manage huge requests so that they do not deflect from the merits of the case, Gibson said, something the Pennsylvania court recognized.
“The court is firmly of the view that discovery burdens should not force either party to succumb to a settlement that is based on the cost of litigation rather than the merits of the case,” Judge Baylson wrote.
“This is a great case and the first decision where a judge really does an analysis of an asymmetrical case,” said Anne Kershaw, a lawyer and electronic discovery consultant at Anne Kershaw P.C. in Tarrytown, N.Y. “It really opens the doors for more lawyers to be making cost-shifting arguments.”
Federal Rule of Evidence 502
In 2006, the Federal Rules of Civil Procedure were amended to include a “clawback” procedure through which lawyers, invoking a work-product or attorney-client privilege, may go to court to try to get back already produced data.
Federal Rule of Evidence 502 was amended in 2008 to create a protocol for the process. At the beginning of a federal case, attorneys may enter into an agreement about what will happen if discovery is inadvertently produced to the opposing party. The parties may even choose to have the agreement entered by the court.
Kershaw, who testified before Congress in support of enacting the Rule, said she uses such orders “as a matter of course” in her practice.
But it appears she may be one of the few.
Recently, U.S. Magistrate Judge Andrew J. Peck of the Southern District of New York — author of the landmark Da Silva Moore v. Publicis Groupe computer-assisted review decision — spoke about Federal Rule of Evidence 502, calling it “malpractice” for lawyers not to seek such an order.
“I agree with Judge Peck,” Brownstone said. “It is extremely important in every case, not just in federal court, to at a minimum consider some sort of clawback agreement. A lawyer can’t know at the beginning of a case what is going to leak through.”
Gibson also advises clients to use a 502 order, although she acknowledged that many are unfamiliar with the concept.
“It is a little-known and little-used rule for the time being,” but Judge Peck’s call to arms will likely change that, she said.
Lawyers should be sure to specify in their agreements that “there will not be a waiver of any privilege regardless of the circumstances by which production was made,” Gibson suggested. “That way, they are covered if the production was inadvertent or due to an error by a service provider or however else it occurred.”
Brownstone added that if the parties choose to have the court recognize the agreement, they receive added protection. The non-waiver of privilege in a court order not only binds the parties in that case but also binds future litigants who might try to use the advertently produced information.
“Why wouldn’t you want to protect your privilege early on?” Brownstone asked. “The real risk is in not even considering using it.”