What Daubert Can Teach Us About Electronic Discovery Problems
I have written before, probably on more than one occasion, about the fundamental philosophical problem underlying electronic discovery, which is that lawyers and courts continue to view it through the traditional rubric of discovery, one formed in the world of paper documents, interrogatory answers, and deposition testimony. As I have discussed in the past, battles over scope, relevance, costs and burden in that context had some built in controls and limits, namely the actual range of existing files, documents and witnesses. Thus, except in the most extreme and outlier cases, allowing broad discovery wouldn’t overwhelm any party, back in the days of paper. That’s not the case today with electronic discovery, which, as we all know, can expand exponentially, without the type of built in, apparent physical limitations that exist with paper discovery.
As a result, when parties begin seeking electronic discovery under the old rubric of it should be produced if it could possibly lead to evidence, and courts look at an electronic discovery dispute through that old prism, you end up with a presumption of production and a correspondingly broad - and expensive - electronic discovery mandate. It is understandable that lawyers and the courts look at electronic discovery through this traditional frame of reference, for we are all products of our training and experience, and neither the federal rules nor the developing case law in this area push very strongly against this traditional approach to discovery. But the costs of applying the traditional discovery thinking to electronic discovery problems are high, because assuming the relevance of discovery and allowing unfettered electronic discovery without strong controls guarantees broad electronic discovery and high costs, given the expense of that area of discovery. The right approach and antidote to this, I have said before, is a shift away from the traditional thinking on discovery, and towards hands on judicial control of the process, one in which cases are staggered whenever possible to avoid electronic discovery into areas that, as the case plays out, may become unimportant (think of, for example, holding off on damages discovery until liability is proven), in which a party seeking electronic discovery that could be burdensome is required to really show an evidentiary basis for seeking it (think, for example, of requiring deposition testimony or other documentary evidence indicating that the electronic discovery could actually hold some evidence of value before the electronic discovery is allowed), and in which a party opposing the discovery must actually prove high cost and business disruption by competent and admissible evidence.
The analogy that comes to mind for me is a Daubert hearing, conducted to test the admissibility of an expert’s testimony in advance of trial. A similar type of mini-trial type proceeding would be a natural forum for testing whether electronic discovery, when challenged by a party, is warranted. It seems a safe assumption that, over time, the amount saved by parties from the reduction in the scope of electronic discovery that would likely ensue would significantly outweigh the increased discovery costs of engaging in a mini-trial of this nature. And as for the benefits to the courts? Well, all litigators know the old saying that nothing focuses the mind on settlement like a trial date; I suspect nothing will more motivate lawyers to compromise on, and agree to, a particular scope of electronic discovery, than the possibility of having to try the issue in a Daubert like setting.
Oh, and here’s a nice article on the problem from the National Law Journal that started this reverie for me this morning.
On Education and Repetition
Well, I think Roy Harmon and I (mostly Roy, actually) just previewed for you what this webinar plans to cover, the ethical and privilege traps involved in providing legal counsel to ERISA governed plans and their administrators. Still - luckily for people like me and Roy who blog on these subjects and for the presenters of the seminar - there is literally always more to be said about these types of topics. That point was made crystal clear by this article here, which details a court ruling waiving the attorney-client privilege as a result of electronic discovery mistakes, just days after I posted - for the upteenth time - on my qualms about the impact of electronic discovery on clients, costs, and litigation, particularly in the data intensive realm of ERISA actions.
On the other hand, here’s a seminar on everything topical in ERISA breach of fiduciary duty litigation, presented by a who’s who’s of practitioners, which, by its description, is covering a lot more ground than can be trod by a few lone bloggers.
Electronic Discovery and the Federal Rules
Here is an excellent article on electronic discovery under the federal rules, and efforts to reduce the expense of this process by protecting against inadvertent waiver of privilege. As long time readers know, I have frequently criticized the structure and format of the federal rules, and their application by the courts, concerning electronic discovery, for the extraordinary burden and expense they impose on litigants. Moreover, I have focused on the fact that the major problem is that the scope of relevancy is very broad in discovery, which has not been too big a problem in traditional forms of discovery because the very nature of depositions, producing existing documents held in hard copy form, etc., puts some outside limits on the process and thus, on the expense. Electronic discovery, obviously, doesn’t have the benefit of being limited in this way by such simple physical restrictions of time and space; because the quantity of data that can and is stored is immense - and not as easily confined physically as, say, simply pulling all file folders at a client related to a particular transaction - the broad scope of relevancy, when applied to electronically stored information, can expand discovery obligations exponentially in comparison to traditional forms of discovery. For this reason, I have argued in the past that courts need to leave their past rubric for discovery (which basically consisted of the view that discovery is broad, the parties are expected to work most problems out among themselves, and court intervention is only warranted for outlier type issues) where it belongs, in the past, and create new approaches to dealing with electronic discovery, in which the courts - either pro-actively or in response to motion practice by the parties - attempt to focus electronic discovery in a manner that properly balances the importance of the documents in question with both the benefits of that discovery to the requesting party and the costs of that discovery. I am, sadly, still waiting for this to happen. The reason I like this article is its focus on the fact that electronic discovery is far too expensive, and that the latest attempt to target that problem is at best, a finger in the dyke approach, in that it just isn’t a lasting solution to the bigger problem. Moreover, the article rightly focuses on the construct that rests at the heart of the problem; the incompatibility of the historically broad definition of relevance applied in discovery with the amount of data now available in a technological society.
Litigators who read this blog already understand my obsession with this issue; while trying cases is the joy of the work, discovery - and fights over it - is the heavy lifting that takes up much of a litigator’s time and a client’s money. It’s a particular problem in ERISA cases, where any type of a plan with a significant number of participants is going to create a great deal of electronically stored data, almost none of it of relevance to any particular dispute yet still possibly open to discovery as things currently stand.
Apples and Oranges: Litigation Costs and QDROs in the Same Post
A couple of different things from my desk today that are worth passing on.
First, for those of you interested - as I am and have often discussed in these electronic pages - in the need to balance effective litigation tactics with the costs of litigation, particularly given discovery and e-discovery issues, I pass along this article here, which I truly enjoyed. In many ways, it mirrors what I said in my own article on the subject, which you can find here.
Second, the Supreme Court delved back into the ERISA world yesterday with an argument on what, from a practical perspective, is a particularly vexing problem that bedevils plan administrators: namely, who is entitled to plan proceeds when a plan participant has divorced and thereafter a dispute arises as to who should rightly get plan proceeds after the parties thought they had negotiated resolution of the issue as part of the divorce proceedings? The prototypical circumstance, which seems straight out of television but actually happens all the time, is the death of a plan participant who changed the beneficiary, post- divorce, to a new boy or girlfriend, in ways that contradict the agreed division of property made as part of the divorce. For those of you interested in this question, here is a terrific article on the details of the particular case before the Court, and here is the Workplace Prof’s analysis of the argument yesterday before the Court. My own general sense of the case is that it really revolves around the question of whether ERISA’s QDRO provisions, which are directed at this issue, are to be strictly construed and treated as the only manner in which payments in accordance with the plan’s express terms and the operative beneficiary designation can be avoided, or whether, instead, the issue can be handled in a more loosey-goosey fashion that, even if the QDRO provisions aren’t technically satisfied, effectuates the apparent intent of the divorcing parties. Me, I am betting the Court's opinion ends up at the former.
Electronic Discovery is . . .
B. Subject to abuse;
C. So expensive that it can force settlements even where the merits don’t warrant it;
D. An aspect of civil procedure that is still waiting for the courts to create a jurisprudence that will properly manage its potential costs and complexity;
E. Good only for vendors;
F. All of the above.
If you guessed F, you have been reading my posts over the last couple of years on this topic. Simply put, there is obviously an appropriate realm and scope for what lawyers refer to as electronic discovery - who hasn’t found something useful in an adversary’s deleted emails? - but the federal rules are written so broadly that in any given case, electronic discovery is likely to be much broader, more expensive, and more unworkable than is warranted by the value of the case or the value to accurate adjudication of the electronic discovery itself. I have talked many times on this blog about the need for the federal courts to develop a jurisprudence for electronic discovery that takes into account all of these issues before electronic discovery is allowed and relies upon those factors to focus the scope of electronic discovery and keep it as narrow as is possible; absent such an approach, electronic discovery, I have argued before, is going to become the monster that eat St. Louie, or more literally, the procedural rule that doomed litigation, already expensive, from being an even marginally effective tool for resolving complicated disputes. This will be too bad, because as readers of my posts on arbitration know, I am not a big fan of that method of alternative dispute resolution for resolving complicated cases and generally believe that American courts provide as good a forum for resolving disputes as anyone has yet devised.
Anyway, it looks like these concerns about electronic discovery are moving into the mainstream, as is reflected in this report, which echoes these concerns.
A Few Words on the Practicalities of Electronic Discovery
Permalink | I have written a lot on the blog about electronic discovery, most recently in this post, and much of it relates to the legal issues revolving around whether and when to allow such discovery. Before it vanishes off their website, I thought I would pass along this piece out of the Massachusetts Lawyers Weekly that looks at electronic discovery from a more prosaic but equally important perspective, the practicalities of actually engaging in it.
On Discovery Problems and Solutions
Permalink | Here’s an interesting law review article, passed along in detail by the Workplace Prof, on problems, and potential solutions, in managing discovery. Discovery, to beat what must now be a dead horse, has become infinitely more complicated and expensive - with far more consequences for mistakes - in any type of complex litigation with the adoption of the federal rules governing electronic discovery (and in fact with the rise of computerized data itself). Regular readers know that I have argued before in this space that the courts need to develop a jurisprudence that analyzes the need for and cost of electronic discovery - which can often involve massive amounts of computer generated and/or stored data - in much greater depth than the more superficial analysis of discovery disputes that has historically been the norm: in essence, courts should engage in a more searching inquiry into disputes over electronic discovery, given their costs and how much of such data is likely to be irrelevant in any given case, before granting extensive discovery into electronically stored data. At a minimum, there should be a degree of inquiry that, even if it won’t allow conclusive enough findings to decide to outright not allow such discovery, will still allow an intelligent, reasoned limitation on exactly what the scope of that discovery should be. I would argue that, in cases that warrant it, it would even be appropriate to hold a mini-trial type proceeding, maybe of two or three witnesses, and then to rule on to what extent such discovery is warranted. This approach would be a far cry from how courts have traditionally addressed discovery disputes, but, as the article suggests, it is past time for the courts to begin applying a more systemic and in-depth approach to controlling discovery.
This is particularly important in the areas covered by this blog, ERISA litigation and insurance coverage litigation, where computerized data, communications and information processing, is almost literally the coin of the realm. Electronic discovery is therefore truly a major cost-driver and risk factor in these areas of the law. The development, at the boots on the ground level of magistrate judges (to whom discovery disputes are often assigned), special discovery masters and trial judges, of the law of electronic discovery provides an opening for courts to really address these issues, in the manner suggested by the article and with fresh eyes, and its an opportunity that should be taken advantage of, one that calls for curiosity, innovation and reasoned experimentation. I will give you one example, to make my point. One of my partners was recently handling a massive, multi-party litigation, in which there were numerous interrelated legal and factual issues, some of which may be outcome determinative. Rather than engage in the traditional approach of years of discovery with only minimal court oversight, followed by summary judgment motions, the court instead ordered some discovery, followed by summary judgment motions on the key potentially outcome determinative legal issues, followed by, if any party believed further discovery was needed to resolve those issues, the filing of Rule 56(f) affidavits to justify such discovery; the court would then decide what further discovery would be allowed before it would rule on the legal issues. The end result was order out of what otherwise could have been chaos, and a case that stayed on track towards resolution. It’s a good example of a court proactively using existing procedural tools to narrow the issues, and decide on what issues further and potentially expensive discovery is actually needed. This appears to be exactly the type of use of existing procedural tools and focus on the timing of discovery that the article's author is advocating as the means to improve discovery.
A Handy Dandy Summary of the Law of Electronic Discovery
Permalink | Practicing lawyers like things that condense a lot of information accurately into relatively compact but still useful formats. I suspect - or at least hope - that is why many people read this blog, for instance. Along those lines, tucked in among the piles of junk email in my in box for mail order pharmacies and new books the publishers think I should buy, was an excellent little nugget from a company whose email newsletters on electronic discovery I do make a point to open and read. The company is CyberControls, and in the latest newsletter they passed along a Federal Judicial Center publication, “Managing Discovery of Electronic Information: A Pocket Guide for Judges.” I gave it a quick read this morning, and I cannot recommend it more highly. It’s a great starting point for the neophyte first facing electronic discovery issues in the federal courts, and a great standard reference point for the experienced electronic discovery practitioner.
What's Good for the Goose: Should the Rules of Electronic Discovery Apply Equally to All Cases?
Permalink | Michael Fox, who jots down his thoughts about employment law and other things over on his excellent blog, Jottings by an Employer’s Lawyer, raised an interesting point about electronic discovery in a post the other day when he was commenting on my recent discussion of whether electronic discovery threatens to render arbitration the better forum for resolving complex disputes. Michael pointed out that scalability is a key issue that should be considered when it comes to the appropriateness of ordering electronic discovery, and he raises the question of whether electronic discovery that is appropriate in a multimillion dollar case is equally appropriate in a case worth ten times less.
To ask the question is, in my book, to answer it, and I think that was Michael’s point as well. As the courts proceed to develop a body of jurisprudence governing electronic discovery, it seems clear that scalability is a factor that needs to be taken into account. It only makes sense, given the expense of electronic discovery, that as a case moves downrange in terms of the amount at issue, the obligation of a party seeking electronic discovery to actually document a need for such discovery (beyond basic and easily obtained emails and the like) and to evidence that such discovery is likely to be fruitful increase. I have talked before about my belief that the expense of this type of discovery requires that stricter showings of the need for such discovery be imposed than has traditionally been imposed on parties seeking discovery, and this is a natural concomitant of that idea. It is all part of the same thesis: that electronic discovery cannot be allowed to become the central focus and expense of litigation, must instead be treated as an adjunct to obtaining a just outcome, and as a result should be allowed only when and to the extent it is cost appropriate.
Electronic Discovery and the Calculus of Arbitration
Permalink | I have written before about electronic discovery and the amendments to the federal rules governing that discovery, and my theme has often been that the courts need to develop a jurisprudence concerning electronic discovery that carefully weighs the expense of the discovery versus the need for it before granting extensive (and expensive) electronic discovery. In this article here, DLA Piper partner Browning Marean points out that the expense of electronic discovery can often be so burdensome that it forces settlement without regard to the merits of a case; as he puts it in a very clever turn of phrase, “the possibility of extortion by discovery is too real a prospect.” I have said it before and I will say it again: we are at the opening phases of the development of the law of evidence and discovery in this area, and the courts need to establish a body of precedent governing this type of discovery that prevents electronic discovery from having this effect.
At the same time, I have discussed as well on this blog the consensus that arbitration is a poor forum for most complex cases and is often not an improvement - in terms of costs, efficiency or outcome - over litigation. The electronic discovery amendments to the federal rules may be in the process of changing that. Unburdened by the federal rules themselves or the developing case law concerning electronic discovery, an arbitration panel is free to fashion much narrower electronic discovery and to impose much stricter controls over it than courts are currently tending to impose,
all on the thesis that a large part of an arbitration panel’s job is to effectuate arbitration’s promise of cost effective dispute resolution. As a result, as electronic discovery costs go up in federal court, the comparative cost advantage of arbitration - which has been disappearing over the years - increases, possibly changing the calculus for litigants over whether or not to agree to arbitration.
Electronic Discovery and the Hearsay Rule
Permalink | I like this article here about a judge’s extensive evidentiary analysis of the admissibility of electronically generated data, in particular the fact that the judge found that certain types of computer generated data are not subject in any manner, shape or form to the rule against hearsay. As the article sums up the judge’s point:
Perhaps the more important -- and interesting -- aspect of [U.S. Magistrate Judge] Grimm's opinion is his conclusion that information he describes as "electronically generated" is completely outside the hearsay rule. The hearsay rule is among the best known and important of the gate-keeping rules to screen evidence before it reaches the jury. Under the hearsay rule, a statement made outside of court may not be offered into evidence for its truth unless the statement falls within one or more specific exceptions (for example, when the statements are contained in business records, made by employees or agents, or made against the speaker's interests). Hearsay evidence is excluded at trial because there is no opportunity to cross-examine its creator to determine how reliable the evidence is. By electronically generated information, Grimm means information a computer creates itself. Electronically generated information can take a variety of forms. Grimm cites as an example the report a fax machine prints whenever a fax is sent. Another example (but which he does not cite) is "metadata." Metadata is information "created" by the computer that records (often without the user's knowledge and often without the user ever seeing it) what has happened to a particular document, such as who created the document, when it was created, who viewed it and who changed it.
A neat analysis of some of the ever evolving issues arising from the expansion of discovery into computer data, but I can’t say I really buy it. Even though the data and/or the information printed out is not directly inputted by a person, the computer system itself obviously didn’t create and store these types of information on its own or create it from some artificial intelligence of its own. The information is there, and stored and formatted in a particular manner, only because of software and other input placed there by humans for the purpose of having the system create, store and generate the data in a particular manner. As such, the information discussed by Judge Grimm is at root the creation, by extension, of the individuals who did that, rendering the computer generated information a statement of some human or another. The information is therefore more accurately thought of as the out of court statements of an individual, and should only be admissible if an applicable exception to the hearsay rule applies - most likely, as a business record of the party in control of the computer network that generated the data or that created the stored information.
In any event, beyond this one quibble over the application of the hearsay rule to certain forms of computer generated data, the judge’s full opinion on these issues, in the case of Lorraine v. Markel American Insurance Company, is actually terrific and I recommend it to anyone interested in electronic discovery and the rules of evidence. Indeed, it is really a terrific treatise not just on admissibility of electronically stored data, but on the federal rules of evidence themselves. And as I have mentioned before in other posts on the subject of electronic discovery, the evolving law on these types of issues is central to both ERISA and insurance litigation, the primary subject matters of this blog, due to the fact that the administration of ERISA plans and insurance claims are almost always computer based.
The Difference Between Email and Correspondence and Why It Matters Under the Federal Electronic Discovery Rules
Permalink | The other thing about electronic discovery and the federal rules that was on my mind yesterday, as I mentioned in yesterday’s post, is emails, with the thoughts provoked by this article here on discovering emails from opposing parties. Now one mistake people often make when they are first confronted with the federal e-discovery rules is thinking that they govern and are really about the production of emails, and this mistake is understandable, given that nothing has become more ubiquitous in business life than email. But there is, with one exception, nothing special about email when it comes to the production of documents. Instead, as this article points out, emails should be seen as nothing more than correspondence or other types of routine business documents that must be produced if they concern the case; the easiest way to think about it is to view them as though they were letters, and think about whether they must be produced in the same way one would analyze whether a collection of letters is relevant and must be produced.
The only difference is, and this is where the e-discovery rules come into play, is that correspondence can only be produced if it physically was saved somewhere in a file; for cases involving events from some time in the past, it may well be the case that many letters have been discarded or were never kept, and thus they cannot be produced. For purposes of the litigation, it is as if they never existed, except and to the extent you can get someone to testify about their contents, and even then only if that testimony about the contents would be admissible. Otherwise, those letters may as well never have existed, at least for purposes of litigation.
And this is where email differs, because while someone may have long ago deleted emails from their own in-boxes, they may still exist elsewhere in a network or may be stored in back up formats. And what the electronic discovery rules essentially require is that, in that case, a party to litigation not treat the deleted emails as though they were discarded written correspondence, but instead go back into the computer system and the back up storage and either locate and produce those emails, or document that it would be just too dang expensive to do so. And the way the decisions applying the federal electronic discovery rules are going, I would expect it to be the first option, and wouldn’t count on successfully invoking the second. This, in turn, is why electronic discovery vendors and e-discovery lawyers are routinely advising companies now to be proactive when it comes to retention of such computerized information as emails, so that they are saved and sorted even in the absence of litigation, in a manner allowing their - relatively - easy access and searching if a lawsuit ever is instituted.
Electronic Discovery and the Choice of State Court or Federal Court
Permalink | A couple of thoughts that are on my mind today about electronic discovery, concerning a couple of articles related to the subject. The first, which I will talk about today (I will return to the other tomorrow, assuming no breaking news pushes me on to a different topic) has to do with some comments in this article here, which concerns continued disputes over the existence in Massachusetts of a court session dedicated to business disputes, or to so-called complex litigation. For those of you who don’t practice in Massachusetts, the state court system here has a judge rotation system that, at a minimum, it is fair to say tends to seem somewhat unusual, at best, to out of state lawyers litigating here. Under the system, rather than having one judge assigned to a case from beginning to end, the judges rotate from courtroom to courtroom and often from courthouse to courthouse, while the cases stay put in the same courtroom (known here as the cases staying in a particular “session”), with the result that different judges preside over the same case at different times. There are historical reasons for this, and people, including me, have lots of strong opinions, both pro and con, about this system, none of which I will delve into here. The business litigation session, among other things, mostly is a change from this rotation system; for cases deemed to qualify for the session, they stay with the same judge, who sits continually in the business litigation session.
Okay, with the history and context lesson done, on to my point. In the article, the suggestion is made that one potential benefit of litigating a business dispute in the state’s business litigation court is avoiding the electronic discovery rules of the federal courts, where most parties, as long as they can obtain jurisdiction, are likely to file complex business cases. I don’t really think that idea is quite right. In the first instance, avoiding the electronic discovery rules doesn’t change the fact that, in almost every complicated business dispute, you are going to have significant issues related to discovery of electronically stored information. You are not going to avoid this by being in state court, but are only going to avoid the now applicable federal rules governing disputes over such data. The federal courts have far more resources to deal with extensive discovery disputes over these issues than do the state courts in Massachusetts, including, among other things, lower case loads per judge and access to magistrate judges to assign discovery disputes to. So it may well be that a party that is anticipating electronic discovery and the discovery disputes that inevitably accompany it and chooses the state court system for that reason will simply be inadvertently shooting itself in the foot if it elects state court for that reason. It is not avoiding such discovery, only the federal rules that govern it, while putting the issue before a court with less resources to handle it. And second, if there is federal court jurisdiction over the case, the idea of preferring the state court’s business litigation session for purposes of avoiding the federal electronic discovery rules only makes sense if all parties to the case agree to doing so - otherwise, the case is simply going to get removed to the federal court by the defendant. So I don’t really think that the existence of the federal electronic discovery rules is really an argument for the existence or use of the state court’s business litigation session.
Electronic Discovery and the Federal Rules
Permalink | If I am a little obsessed with the topic of electronic discovery, I apologize, although I can explain it. Computer storage and manipulation of information is now the standard operating procedure for insurance companies, financial companies, third party administrators, and others involved with ERISA plans and insurance policies. As a result, the unique discovery issues raised by computerized data is very important in litigating cases in the areas covered by this blog, and has become an important, and frequent, issue in my own practice. Beyond that, though, is the fact that we are engaged in actually watching - and participating when possible in - the creation of a new body of important jurisprudence, concerning how courts will handle electronic discovery; this is something that doesn’t happen everyday.
And so I was very interested in this article, which discusses the development of the case law on electronic discovery at the federal district court level. The article points out that there are approximately fifty district court decisions to date that constitute the operative body of law on this subject, and that they provide “de facto national standards for e-discovery disputes.” The author then discusses two particular decisions in great detail, which in combination provide an excellent overview of how courts are handling the issue of electronic discovery.
Electronic Discovery and Cell Phones
Permalink | Well, here’s a curious thought. Do the electronic discovery amendments to the federal rules reach cell phone text messages? A recent article from BNA’s Digital Discovery and E-Evidence reporter put that thought in my head, and I am sure that the authors of that article have something to say on that point. As for me, well, if discovery obligations run that far, then its just more evidence, from where I sit, that courts really have to think about how far electronic discovery should be allowed to range, and should be prepared in any given case to set some limits, even if, horror of horrors to a litigator, it means that some otherwise relevant material might not be subject to discovery.
In the old days of paper discovery, it was acceptable to understand the limits of discovery as being limited only by the imagination of the party seeking discovery, and to allow discovery so long as only the most minimal requirement of relevance - that the documents sought might lead to admissible evidence - was satisfied. But as the example of cell phone text messages shows, with electronic communications and broad electronic dispersal of information, trying to run down every electronic communication or document that could even conceivably lead to admissible evidence is transparently a herculean task. And this is why, as I have said before, courts really need to start developing a jurisprudence of electronic discovery that requires real weighing of the costs to the producing party against the benefit to the requesting party before allowing broad electronic discovery, when the party from whom discovery is sought objects to the burden imposed on it.
Integrating Electronic Discovery with Business Practices
Permalink | I have a bit of a lawyer geek’s fascination with the electronic discovery amendments to the federal rules of civil procedure; they exist at an interesting intersection of evidence, discovery, and business management issues, each of which alone is interesting to me but that in combination, as they are with regard to these amendments, become a fascinating, almost gordian, knot of issues. In earlier posts, I have talked about a couple of issues raised by them. The first is the need for the courts to develop rules governing electronic discovery that are more rigorous than traditional standards for paper discovery, and that take into account the far greater cost that broad electronic discovery can impose. The second concerned the importance for companies to act proactively, and establish strong computer information systems that keep information well organized and easily accessible in the normal course of business, allowing cost effective data collection, review and production when things turn extraordinary, namely into litigation.
I thought, on both of these points, I would pass along this article that I liked, which really drives home the point that the best solution to the potentially backbreaking cost problem of electronic discovery is proper electronic document management on a day in day out basis in the operation of the business itself, rather than just tackling that issue latter on, after a suit is filed and electronic discovery is sought.
Was it the Electronic Discovery Amendments to the Federal Rules or the Expensive Discovery Amendments?
I have discussed before electronic discovery and the corresponding amendments to the Federal Rules of Civil Procedure, and in particular the need to consider costs of the required discovery relative to the benefits to the requesting party. Personally, I am of the opinion that the scope of the rule changes combined with the massive changes in document creation and retention that computer technology has wrought requires a change in the collective mindsets of litigants and the courts when it comes to discovery. I think few will disagree that the modern history of discovery has been driven by a presumption that all documents that might be relevant ought to be produced, with no real corresponding emphasis on whether or not any particular set of documents really are sufficiently probative to justify production. I am of the opinion that electronic data and the costs of producing them have changed that, and that courts now need to move away from their presumption that a party should be required to broadly produce documents so long as the requesting party can make a rational explanation as to why they may be relevant, and to a fact based analysis of whether the requesting party’s justifications for the production warrant imposing the costs of large scale electronic production on the other party. In essence, it seems to me that courts should expect testimonial evidence, such as affidavits, establishing the relevance and importance of the electronic data being sought, before ordering production of electronic data, in cases in which a party resisting discovery has raised documented problems of cost in producing the electronic data.
Given the short judicial history of this issue at this point in time, I am always glad to find evidence that I am not alone in thinking this. This article lays out exactly the cost problem created by the electronic discovery rules, and suggests that an analysis of costs needs to play a central role in the development of how these rules are applied.