Don’t Call Discovery Over Document Retention Policies Premature After You Admit Destroying Relevant Discovery

A Defendant sought reconsideration of a Court order allowing discovery on their document retention policies and litigation hold strategy on the grounds 1) the order was premature and 2) it was irrelevant and not discoverable. Cactus Drilling Co. v. Nat’l Union Fire Ins. Co., 2014 U.S. Dist. LEXIS 45251, 11-14 (D. Okla. 2014).

The Court denied the motion.


The discovery at issue centered on a key player who left the Defendant’s company whose files were accidently destroyed. The Court stated:

Plaintiff is entitled to inquire into the circumstances of the destruction of such relevant files while this litigation is pending, whether defendants took proper precautions, and whether such precautions were actually exercised by defendants’ employees. Thus, clearly a discovery request on defendants’ document retention and litigation hold practices and policies and whether such policies were followed with respect to Ms. Valerio’s hard copy Cactus file is relevant and discoverable.

Cactus, at *13.

The Court also held that the order was not premature, as the Defendants requested a ruling on whether they had to produce the discovery and witness for deposition in their Joint Status Report. Cactus, at *12.

The parties were ordered to meet and confer over privilege and stipulation issues over the pending discovery. The Court “vented” over the parties prior cooperation in a footnote:

The Court has been disappointed with the parties’ inability to communicate in good faith and work out many discovery issues that could have been resolved between the parties. Such behavior has necessitated repeated intervention by the Court, unnecessarily and significantly depleting the Court and the parties’ valuable time and resources. Accordingly, the Court advises the parties that it will not look favorably on any party engaging in less than good faith behavior that leads to further abuse of the Court’s time and resources.

Cactus, at *14, fn 5.

Bow Tie Thoughts

Discussing the preservation of discovery, its scope and privilege is NEVER premature. These issues should be at the first meet and confer. Attorneys should be actively thinking about preservation the moment the case begins. Lawyers cannot afford to take a “let’s see how the motions go” before ensuring discovery is preserved.

Why do attorneys wait to exercise their duty of competency to ensure the preservation of discovery? Some might not know how to, others might not want to spend the money and others might think they can keep their clients happy by having the least amount of intrusion. These are all bad reasons.

An effective client interview and litigation hold strategy is less invasive then the joys of a person most knowledgeable deposition over how a litigation hold was enacted. Moreover, motion practice is not known for its low billable hours.

There are some lawyers who model their meet and confer strategies right out of Tombstone. This is not a good idea. There are issues worth fighting about, but methods of preservation, the scope of discovery, and other technical issues should stay objective. These issues are vital for moving the case forward, but are not worth brawling over. Save the fight for the merits.

Conferring on Keywords & A Musical Judge

You know someone is taking a hit when a judge works in references to Pink Floyd’s  “Sorrow” and Simon and Garfunkel’s “Sounds of Silence.” Sound the Division Bell, because there is a Bridge Over Troubled Water.


Magistrate Judge Jonathan Goodman did exactly that in Procaps S.A. v. Patheon Inc., 2014 U.S. Dist. LEXIS 35225 (S.D. Fla. Mar. 18, 2014) because of an attorney responding to opposing counsel’s emails with cryptic messages on search terms and their Spanish translations because of a party located in Columbia. Some messages were simply not answered. As such, a motion to compel was filed over search terms. At the hearing, the non-moving party represented they had been in contact with their custodians about search terms.

The short story of what happened is that lead attorney did not get any input on search terms from his clients’ custodians before the moving party filed their motion to compel. Procaps S.A., at 10-11.

Even though the attorney broke their silence over conferring on search terms, the Court ordered the following:

Nevertheless, to the extent that there is any doubt about whether this Court is imposing the requirement and to generate a ruling on which a fees award can be based, the Court grants Patheon’s motion and requires Procaps to have its counsel obtain search word input from all the ESI custodians. The Court may enter further orders on the search term methodology and/or the specifics of the search term list after receiving additional information from Procaps about the search term protocol.

Procaps S.A., at *14.

The Court awarded the prevailing party $3,750 in costs (down from $5000). Procaps S.A., at *16. The Court ordered the lead attorney to pay $1,000 of the award, because “his non-responsive and/or vague email responses triggered this discovery dispute.” Procaps S.A., at *17.  The Court further noted statements on the firm’s website about attorneys with eDiscovery experience who were involved in the case and “urged (though not required) to explore which other attorneys (besides lead trial counsel) caused, or helped  cause, this discovery motion and to determine whether those other attorneys (rather than the firm itself) should pay all or some of the $2,750 fees award now allocated for law firm responsibility (or some of the $1,000 awarded against lead trial counsel).” Procaps S.A., at *17-18.

Bow Tie Thoughts

I respect Jonathan Goodman’s command of the law and use of song references to make his point on an attorney’s silence in conferring over search terms.

Attorneys cannot be another brick in the wall of un-cooperation over Rule 26(f) conferences. eDiscovery requires parties to both 1) confer with the opposing side on the subject matter of the case and 2) conduct client/custodian interviews to determine how technology is used, terms of art, methods of communication and anything else relevant to determine “search terms.”

Discussing “search terms” is not dead because of “predictive coding.” Attorneys still have to know the subject matter of the case in order to use ANY type of advanced analytics so the analysis has content. Lawsuits are about specific issues which have to be defined in order for “technology assisted review,” “visual analytics” or any other form of data clustering to make sense. These topics must be discussed for in order to identify relevant ESI, so efforts are not lost on the dark side of the Moon.

Wishing Browning Marean a Speedy Recovery

Browning Marean is one of the best minds on eDiscovery. He is a friend and recently has been fighting cancer. I wish him a speedy recovery and am very glad he has a favorable prognosis.

One of Browning’s defining traits is caring about others. I have always enjoyed my video calls with him to discuss eDiscovery, the law and life. I have missed those calls while he has undergone treatment.Browning has the voice of a classic sportscaster. Watching him moderate seminar panels with style is always an example of what the gold standard for public speaking.

Please join me in wishing Browning a speedy recovery. To all of those who have visited him during his treatment, thank you for being class acts.

It is also a good reminder there are always those who are fighting an illness, so if you can visit and let them know they are not alone, please do so.

You Want $60,572.61 in Costs? Here is $25.48

It is not a good day when you seek $60,572.61 for eDiscovery costs as a prevailing party and only get $25.48.

Don’t spend it all in one place.

The Court denied the eDiscovery costs applying Race Tires America, Inc. v. Hoosier Racing Tire Corp., 674 F.3d 158 (3d Cir. 2012), because “eDiscovery costs” are not “costs of making copies” under the taxation of costs statute 28 U.S.C. § 1920(4). Thompson, I.G., L.L.C. v. Edgetech I.G., Inc., 2014 U.S. Dist. LEXIS 23189, 6-9 ( E.D. Mich. Feb. 25, 2014)

The only costs the Court allowed was the 10/12/2012 invoice for “Electronic File Conversion” for $25.48.

Bow Tie Thoughts

I am strongly in favor of updating our taxation of costs statute to include recovering collection and processing costs of electronic discovery. These steps actually are making a “copy” of the data. However, many Courts have not recognized how the collection and processing of data is “making a copy.”

Service providers can help their attorney clients by explaining how collection was done and why the collection was done using a specific methodology. The same for processing and using technology assisted review. These invoices cannot simply say it was “necessary for the case.” Those are not magic words that grant cost recovery.

Judges need to understand the technology and reasons why steps were taken to know why something was “necessary.” These cannot be simple declarations “it was necessary.” Help the judge understand how and why technology was used to create a defensible sound copy of the ESI, and the following steps to identify relevant information.

What is the Form of Production for a Database?

Search-Data

Defendants in a discovery dispute produced data from a timekeeping database as PDF’s.

The Plaintiffs objected, arguing their expert would need to spend 300 to 500 hours converting the PDF’s into a database.

The Defendants countered that it would take a team of three to four people between three to four days to write a script to convert their timekeeping export to a report in a .CVS format, because the system natively exported PDF’s as its reporting feature. Castillon v. Corr. Corp. of Am., 2014 U.S. Dist. LEXIS 17950, 9-10 (D. Idaho Feb. 7, 2014).

So, what is the proper form of production of the data?

The Court explained that the Plaintiffs did not state the form of production in their request. As such, the Defendant had to produce the ESI as it is ordinarily maintained or in a reasonably useable form pursuant to Rule 34. The Court found that the Defendant had “sufficiently shown that any report or other extraction of data from the Kronos system is natively produced in a searchable .pdf format. Because Defendant has already produced the Kronos data in that format, it is not required to re-produce it in a different form.” Castillon, at *9-10.

The Court further stated that searchable PDF’s is a reasonably useable form that could be “easily searched.” Castillon, at *10.

Bow Tie Thoughts 

The Star Trek fan in me did not at all find it ironic that data from a timekeeping system named Kronos would end up in a discovery dispute, because it is after all the Klingon home world.

Geeks aside, it is very important to think about how you want to review data from a database when drafting a discovery request. What form will best help your expert? Has this issue been discussed at the meet & confer? Since a searchable database would likely  benefit both parties if discussed at the Rule 26(f) conference, would both parties be willing to split the cost of preparing a script?

These issues are best resolved prior to motion practice. Litigation often has surprises such as this one. Finding out the format of database exports is a very important topic to add to a Rule 26(f) conference if you expect a database to be at issue in a case.

Don’t Forget to Produce Email Attachments

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A defendant law firm in a fee dispute were ordered to produce specific email communications. The law firm produced email messages in PDF format without attachments. The Defendants claimed in a meet and confer they could not produce attachments from the server, but did not explain why. Skepnek v. Roper & Twardowsky, LLC, 2014 U.S. Dist. LEXIS 11894, at *3-4 (D. Kan. Jan. 27, 2014)

LeslieCrystal_Really_EmailIt is never good to have a Judge state, “It is unclear why defendants claim that it is impossible to include every attachment to the produced e-mails but somehow, they are able to produce specific attachments upon request.” Skepnek, at *4.

The Defendants attempted to make the case about the Plaintiffs not stating the form of production in their request.

The Judge did not take the bait and focused on the real issue in the case: the failure to produce the responsive files. Skepnek, at *6.

The Court ordered the production of the attachments, explaining its order as follows:

Defendants offer no excuse for their failure to produce responsive documents except that plaintiffs never requested the documents in native format. Plaintiffs simply want the documents that the court ordered defendants to produce, regardless of format. Because plaintiffs failed to specify a form for producing the electronically stored e-mails and attachments, defendants were required under Rule 34(b)(2)(E)(ii) either to produce the e-mails and attachments in the form (1) in which they are ordinarily maintained, or (2) “in a reasonably usable form.” Defendants failed to produce the attachments at all. Defendants also failed to show PDF format is the form in which their e-mails and attachments are ordinarily maintained.

Skepnek, at *6.

Bow Tie Thoughts

Lawyers often get into trouble with the production of electronically stored information because they do not retain anyone to handle the collection, processing or production of data. Many think their client’s IT staff can somehow “just do it” and avoid the cost of hiring a service provider.

Problem with that logic: You’re doing it wrong.

That is a lot like thinking an auto mechanic charges too much for a break job, so just have your 10 year old do it instead. Since the kid made a great Pinewood Derby car, he should be able to fix the Audi. What could possibly go wrong?

The duty of competency requires lawyers to hire experts to solve technical issues. The collection of ESI and processing are two such areas. Moreover, the technology is constantly advancing. I have watched very impressive product demonstrations of many software applications. Producing email with attachments is something service providers have been doing for over a decade. There are even YouTube videos showing how the technology works. There really is not an excuse from a technological perspective on why email was not produced with attachments in native file format.

No Sanctions for Following Records Retention Policy

ThinkMcFly_DocRetentionIt is not every day you see lawsuits about insurance policies from 1986 to 1987.

Add Judge  Paul Grimm’s powerhouse footnotes and you get a great lesson in document retention policies and litigation holds (plus a great footnote on the state of mind exception to hearsay for all the evidence fans).

This asbestos insurance coverage litigation was not filled until November 2012. As one could expect, there were significant gaps in documents from the passage of time. The Court stated the following regarding the destruction of documents in footnote 6:

Were there any evidence in the record to show that AC&R so much as had threatened legal action before the destruction of those documents, it might be sufficient to find that PMA acted improperly in destroying its documents and was not prejudiced by the passage of time. See Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 524 (D. Md. 2010) (“It generally is recognized that when a company or organization has a document retention or destruction policy, it ‘is obligated to suspend’ that policy and ‘implement a “litigation hold” to ensure the preservation of relevant documents’ once the preservation duty has been triggered.” (citation omitted) (emphasis added)). Because the duty to retain documents did not arise for PMA until after their destruction, it cannot be penalized for following its records retention policy.

Ac&R Insulation Co. v. Pa. Manufacturers’ Ass’n Ins. Co., 2014 U.S. Dist. LEXIS 9063, 29-30 (D. Md. 2014).

Bow Tie Thoughts

You cannot sanction a party for following its normal document retention and destruction policy if there is no duty to preserve. Correspondence that took place during the Reagan years is highly unlikely to still exist as a simple matter of a company’s document destruction policy.

What will be an interesting question is litigation in the 2030s. Will electronically stored information on 20 year old external hard drives still be reasonably accessible if they still exist? Will such “old” information be proportional to the merits of a case? I only have to look at my old laptop from law school to imagine the challenge in recovering old civil procedure outlines.

My gut instinct is the answers to these questions will be “no.” However, let’s see what the future holds.

eDiscovery Leaders on What’s Big in 2014

Legal Tech New York is quickly approaching. I sat down with friends who are eDiscovery leaders and asked them three basic questions:

What are big eDiscovery issues for 2014?

What are the tech solutions?

What can we learn from you at LTNY? 

We also discussed upcoming geek movies in 2014.

Michele Lange from Kroll Ontrack on 2014 & Legal Tech 

Jason Krause from Nextpoint on eDiscovery in 2014 

Drew Lewis On eDiscovery in 2014 & Legal Tech New York 

Caitlin Murphy from AccessData on Legal Tech New York 2014 

Ian Campbell from ICONECT on eDiscovery & LTNY 2014 

Nick Robertson from kCura on eDiscovery 2014 

Hosting ESI is Not “Making Copies” for Cost Recovery

Judge Young B Kim posed an interesting question for a party seeking costs for the hosting of ESI to review: Applying these principles [Race Tires, Rawal, & Johnson] to the specific question of online hosting costs, this court finds that these costs may be recoverable only if hosting amounted to “copying” of ESI for production. Massuda v. Panda Express, Inc., 2014 U.S. Dist. LEXIS 4956, at *21 (D. Ill. 2014).

The issue: does hosting ESI equal “making copies”?

Sadly, you do not need a fortune cookie to see the Court would reject the hosting argument.

Chinese Fortune Cookie broken with blank paper, on white background

The Court held no, but not in a way to block any future arguments for cost recovery. The Court reviewed the Defendant’s hosting invoices and stated they “did not demonstrate that the Relativity services included some form of conversion of data akin to “making copies” for use in this case. Without evidence of this critical nature, this court has no authority to award the hosting costs in this case.” Massuda, at *21 [emphasis added].

The service provider’s invoices said the three boxes of documents were hosted for “Document Search and Retrieval” and “Monthly Relativity Disk Storage.” The attorneys explained that the review application allowed them to “organize, manage and review documents.” Id. 

The Court further noted that “§ 1920(4), for better or worse, is not concerned with attorney efficiency or convenience,” in response to the defense argument that the hosting was “reasonable and necessary” because they had little time to process the documents. Massuda at *21-22. As such, the Court denied the hosting cost of $3,087.92. Massuda at *22.

Bow Tie Thoughts

In my opinion, one of the biggest obstacles to recovering eDiscovery costs is explaining the use of the technology. I strongly believe that making a mirror image of a hard drive IS making a copy of ESI.  However, this has to be explained by an expert.

Service provider invoicing is almost always not written by an attorney who also is an eDiscovery expert (however, many do exist). A judge looking at an invoice that simply says “data hosting” understandably might think the application is an online warehouse. This could not be further from the truth, given the steps taken to collect the ESI, process it, and then host it in a system that has conceptual search tools, data clustering, de-duplification, and the many advantages of predictive coding.

It is my hope that attorneys educate their service providers on what the local discovery judges want to see in an invoice in a cost case. Alternatively, service providers should start thinking about this issue, so invoices for processing and hosting will contain enough information for a judge to grant a cost motion.

One last point: the Court noted that § 1920(4) “is not concerned with attorney efficiency or convenience.” However, Federal Rule of Civil Procedure Rule 1 is concerned with the “just, speedy, and inexpensive determination of every action.” I hope that the principles of Rule 1 would trump any rule NOT concerned with efficiency that drives down costs, instead of inefficiencies that drive up costs. In my view, denying costs for processing for native review and instead awarding costs for conversion to static images, which is usually an increase in processing costs, violates Rule 1 by creating an incentive to not conduct a case in a “just, speedy, and inexpensive” manner.

The Empire State Strikes Back (On the Form of Production)

In an insurance dispute over coverage, a Plaintiff sought production of electronically stored information in native file AND TIFF format after the Defendant produced discovery in hard-copy format. The Defendant opposed re-producing in native file format and sought cost-shifting if required to produce natively. Mancino v Fingar Ins. Agency, 2014 N.Y. Misc. LEXIS 30 (N.Y. Misc. 2014).

EmpireStateBuildingNew York law allows the “full disclosure of all matter material and necessary” in a lawsuit. Mancino, at *3 citing CPLR §3101(a).

The Plaintiff sought the ESI in native file format with TIFF images in order to view objective metadata including the author(s), dates of creation, and dates of edits on a key file to know whether an “Activity Report” was changed after the initial creation or the start of the lawsuit.  Mancino, at *7.

The Defendant countered that issues of metadata were “not involved” in the lawsuit and such a production was unnecessary. Id. the Defendant further argued the Plaintiff should have incurred the $3,500 native production costs and that the TIFFing would be a “laborious task.” Mancino, at *8.

Judge Rakower quickly listed the Zubulake cost-shifting factors (cited in U.S. Bank Nat. Ass’n v. GreenPoint Mortgage Funding, Inc., 94 A.D. 3d 58, 63-64 [1st Dept 2012]) and held that cost-shifting was not justified and that the producing party was to pay their own production costs. The Court clearly ordered the production of the ESI in both native file format with TIFFs. Mancino, at *8-9.

Bow Tie Thoughts

State court litigation is often overlooked by eDiscovery commentators.  Mancino is a very good reminder that over 90% of litigation in this country is in state court about regular people. The Plaintiffs in this case had their home burglarized and the resulting litigation was over coverage to recover stolen property. The key discovery focused on a file over who changed what and when on an insurance document. Few examples better highlight the need for metadata.

One big difference between this case and Federal Court is that a producing party need only produce in one form. A producing party would have to produce in native file format or with TIFF and metadata, not both. That being said, a production cost of $3,500 on a case of this size might be on the high side (it is unclear how many computers were at issue, number of hours spent, cost of production media, etc). Moreover, most processing software could do such a production with a few keystrokes (and I would bet at a lower cost then argued to the Court, depending on the volume of data to be collected pertaining to one insured party and other relevant files). There are of course other factors that could drive up costs, but I would need more information to understand why there was a $3,500 production cost estimate for the specific discovery sought.