Don’t Free Fall on the Duty to Preserve

The duty to preserve is a tricky beast. Determining when a party “knew or should have known that litigation was imminent” is often a free fall into analyzing the facts of when a party had notice of a lawsuit.

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There are times when it is very obvious that a party should have ejected and pulled the ripcord on not destroying any evidenced. This is one of those times.

The Plaintiff in the case was injured in a skydiving accident. The Defendant sent the parachute in the accident from Oklahoma to England prior to the Plaintiff bringing her lawsuit and propounding discovery that sought the inspection of the parachute. Wethington v. Swainson (W.D.Okla. Dec. 23, 2015, No. CIV-14-899-D) 2015 U.S. Dist. LEXIS 171126, at *2.

The Plaintiff brought a motion seeking sanctions, ranging from default judgment to adverse inference instructions. However, this case did not have a crash landing for the Defendant. The Court noted that the Defendant was pro se and should have been aware of the relevance of the parachute. Wethington, at *4. That being said, the Court found that issuing nuclear sanctions were currently inappropriate, but would award the Plaintiff’s attorney fees incurred for the discovery motion. Wethington, at *5.

The Defendant effectively had an emergency chute to avoid sanctions, because the Defendant could produce the parachute for inspection. Id. As such, the Court ordered the inspection of the parachute at the Defendant’s cost, subject to any protocols the parties agreed to, such as a licensed parachute rigger supervising the inspection. Wethington, at *5-6.

Bow Tie Thoughts

The triggering event for the duty to preserve electronically stored evidence is not always as clear as an accident. A retail store where someone has a slip and fall, or auto accident with a shipping service, are all clear lines in the sand to start preserving evidence. Threat of a lawsuit in business is another matter.

Consider situations where individuals who are producing a crowdfunded fan fiction movie are sued by the movie studio that owns the rights to the subject property. Was the triggering event when the first emails were sent discussing the production of the fan film? Was it when the producers first expressed concern they could be sued? Is there any event prior to the filing of a lawsuit that could have triggered the duty to preserve evidence?

The answer is “it depends” on the facts. Few cases are as clear-cut as a skydiving accident and require thoughtful analysis of when someone “knew or should have known that litigation was imminent.” The next steps of identifying the scope of preservation are also complicated, but necessary to ensure a party is reasonably meeting their duty to preserve relevant evidence.

Proportionality is like The Force

The new Federal Rules of Civil Procedure are not as exciting as Star Wars The Force Awakens, but there differently has been an awakening on proportionality. There are those who fear eDiscovery, thus feel the new Rule 26 empowers them to object to every request for production on the grounds the request is not proportional to the merits of the case. Such thinking leads to the Dark Side. The new Rules are designed to bring balance to litigation, not leave it in tatters.

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In a products liability and breach of warranty case involving evaporator coils and condenser coils in air conditioners, the Defendants as the Producing Party claimed producing responsive documents to the Plaintiffs’ request would be unduly burdensome. The Defendants claimed it would take “4,000 hours of lawyer review time over several months” to identify responsive discovery. Siriano v. Goodman Mfg. Co., L.P. (S.D.Ohio Dec. 9, 2015, No. 2:14-cv-1131) 2015 U.S. Dist. LEXIS 165040, at *15.

Magistrate Judge Elizabeth A. Preston Deavers engaged in very thoughtful analysis of Federal Rule of Civil Procedure 26(b)(1)’s new emphasis on proportionality in granting the Plaintiffs’ motion to compel, in part. As a preliminary matter, discovery is available “regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case.” Fed. R. Civ. P. 26(b)(1).” Siriano, at *15.

Judge Deavers recounted the proportionality principles of former Fed. R. Civ. P. 26(b)(2)(C)(iii)), now Fed. R. Civ. P. 26(b)(1), that District Courts are to limit discovery where the “burden or expense . . . outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.” Siriano, at *15-16.

As the Court noted, “restoring proportionality” was the “touchstone of revised Rule 26(b)(1)’s scope of discovery provisions” with the move of proportionality from Fed. R. Civ. P. 26(b)(2)(C)(iii)) to Fed. R. Civ. P. 26(b)(1). Siriano, at *16.

The Court’s analysis is very thoughtful, finding:

  • The discovery sought by the Plaintiff was directly related to their claims for design and manufacture defects;
  • It is highly unlikely that Plaintiffs could discover similar information from another source or in another manner;
  • Documents pertaining to breach of warranty by other customers would be easily accessible to Defendants but likely inaccessible to Plaintiffs;
  • It is more efficient for Defendants to provide information on their distributors, then the Plaintiffs construct it piecemeal with third-party request;
  • Defendants expended relatively little in complying with discovery, because the information sought had been produced in related cases; and
  • Plaintiffs in their Complaint present a putative class action that could include a significant number of class members who each purchased costly products from Defendants.

Siriano, at *16-19.

Harkening back to Yoda’s “size matters not,” just because something is expensive or time-consuming, does not mean it is unduly burdensome. Siriano, at *19.

The Defendants did not offer any alternative means of identifying or producing electronically stored information. Judge Deavers could have stated, “that is why you fail,” but instead wielded the new Federal Rule of Civil Procedure 1 like a lightsaber, hitting the Defendant with the fact that the “just, speedy, and inexpensive determination of every action and proceeding” is to be employed by not just the Court, but the parties under the new Rule 1. Siriano, at *19.

Under the new Rules, cooperation strikes back. Moreover, coupled with the return of proportionality, the new Rules contemplate “active judicial case management.” Siriano, at *19. Thus with the resolve to go to Dagobah, the Court ordered a discovery conference to discuss possibly conducting discovery in phases. Id. Finally, the parties were also directed to “engage in further cooperative dialogue in an effort to come to an agreement regarding proportional discovery.” Siriano, at *20.

Bow Tie Thoughts

eDiscovery might not be as popcorn worthy as Star Wars, but this is an excellent case applying the 2015 Amendments to the Federal Rules of Civil Procedure. The proportionality analysis is thoughtful in getting to the merits of the case. Judge Elizabeth A. Preston Deavers sets a great benchmark for others to follow in determining proportional discovery in cases.

No, You Don’t Have to Read Everything

man-852766_1280I have met lawyers who have a crazy idea: They HAVE to read EVERY email, document, Excel file, video, and every other bit of ESI produced in discovery.

That position is wrong. Lawyers have a duty of competency to their client, and candor to the court, to look at what is relevant to their case and responsive to discovery requests. This can be accomplished using one of the many eDiscovery review applications, leveraging search terms, advanced analytics, time lines, predictive coding, and knowing the scope of discovery.

This issue was highlighted in a criminal case where the government produced over 1.9 million pages of discovery, plus 49 audio recordings, and two videos. United States v. Pomrenke, 2015 U.S. Dist. LEXIS 165287, *1. Defense counsel sought a six-month continuance.

They got a six-week one instead.

Defense counsel argued that they had an ethical obligation to “review every document produced by the government to determine its relevance or lack thereof.” Their estimated time for three lawyers working around the clock would take more than a year to complete. Pomrenke, at *4.

The Court did not buy the argument. Judge James P. Jones stated:

I believe that many of the produced documents can be reviewed very quickly. Counsel for the defendants can use e-discovery software to aid in their review and can enlist the assistance of additional attorneys if necessary. In addition to the three attorneys of record, the defense team also includes an investigator. Moreover, the defendant’s husband is legally trained. Although he is not counsel of record in this case, I previously affirmed an order of the magistrate judge allowing the defendant to disclose the discovery materials to her husband, anticipating that he would assist with trial preparation.

Pomrenke, at *5.

The Court granted a six-week continuance, which was “adequate time for the defense to prepare for trial while still serving the interest of the public and the defendant in having this case promptly concluded.” Pomrenke, at *5-6.

Bow Tie Thoughts

Relevancy review does not require eyes on every document. Determining the case story lawyers want to tell the jury focuses review to find that information. Moreover, jury instructions are highly effective in structuring document review to find what is relevant.

Attorneys can focus the scope of discovery to the key players in the case. From there, searches can be further refined based on time frames, and subject matter to search for in the database.

“Predictive Coding” is also extremely effective in such cases. While different software applications vary, the general theme is the software learns from review to identify what is relevant and what is irrelevant.

One way to help train Predictive Coding on what is irrelevant, is to search for substantive information not relevant to the case. For example, if you have a construction defect case and every project the contractor worked on was added to the database (overly broad collections happen and not everyone removes such data in processing), code the irrelevant projects as such (and ultimately have them removed from the database to reduce costs). Other methods are to search and tag emails from newsletters and advertisements as irrelevant. There are other methods as well to help identify irrelevant information, so these are just examples.

Conducting faceted searches layered with data identified from Predictive Coding is also a very effective way to zero in on responsive information. Searches are run over the possibly relevant information, thus any review is focused and helps train the system for what could be relevant to the case.

There are many ways to identify relevant electronically stored information that further Federal Rule of Civil Procedure Rule 1 and proportionality. None of these methods should require a brute force manual review of each individual record, because no one should have to spend years on document review.

Form of Production Battles: TIFF vs MSG

Pick your battles is a truism in form of production disputes.

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In Feist v. Paxfire, Inc., the Plaintiff alleged the Defendant made multiple discovery abuses, from producing email in .msg format and not as TIFF, to making an “intentionally burdensome production.” Feist v. Paxfire, Inc., 2015 U.S. Dist. LEXIS 145024 (S.D.N.Y. Oct. 26, 2015). These arguments failed.

The Plaintiffs requested ESI to be produced as TIFFs and argued that the Defendant did not properly object to the form of production. Feist, at *2. The Court held that the Plaintiff’s argument was meritless, because 1) there were email communicates between counsel regarding the form of production for email in .pst format; 2) the Court downplayed the difference between .pst and .msg format; and 3) that “msg format contains more metadata than TIFF format.” Feist, at *4. The Court further stated that there was “no evidence” that the .msg form imposed “considerable costs” for the Plaintiffs. Id.

It is worth noting that TIFFs are static images that contain no metadata at all. Any metadata would need to be produced in a load file. While it is wise to always review in a review application, I personally would prefer reviewing native files in a near-native view in a hosted application.

The dispute further included the Defendant’s 2012 production being shared to the Plaintiff in a Dropbox folder. An attorney for the Plaintiff deleted some of the information on Dropbox, resulting in the Defendants re-producing the deleted ESI with a supplemental production. Feist, at *5.

The Court held the Plaintiff responsible for the production of any duplicative ESI, citing an email from Plaintiff’s counsel stating, “that Plaintiff’s counsel was attempting to restore files unsuccessfully, and that she understood ‘you are sending us a hard drive with the materials, so we don’t need to worry about drop box [sic]…’” Feist, at *5-6.

Judge Ronald Ellis ended the opinion with these final words to the litigants: On balance, both Parties have caused unnecessary delay in discovery and have exhibited a lack of communication regarding document production. Feist, at *6.

Bow Tie Thoughts

Attorneys often get lost in the “fog of war” in eDiscovery disputes. There are times when bringing a motion to compel is the absolute right answer; there are times when it is the absolute wrong course of action.

Is it really worth fighting over producing ESI with redactions as TIFFS instead of PDFs? Most review applications give options for either format. If the requesting party wants one over the other, the fight is just not cost effective.

History has many examples of miscommunications resulting in disaster. Lawyers who want to fight on every issue run the risk of ignoring what the opposing party is saying, creating a situation that can end in expensive motion practice. In the end, this results with money and time being lost with nothing gained.

Be Specific If You Are Going to Attack the Form of Production

Oh, Rule 34. You are the code section that keeps giving.

Under Federal Rule of Civil Procedure Rule 34(b)(2)(E)(i), a party “must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request.”

A Plaintiff brought a motion to compel the opposing party to organize and label their production to correspond to the categories in the Plaintiff’s Requests for Production. Things did not go well for the Plaintiff’s motion. Hall v. Habul, 2015 U.S. Dist. LEXIS 87545, *15-16 (M.D. La. July 6, 2015).

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The Defendant’s production was Bates labeled, but the Plaintiff still took the position that the production did not comply with Rule 34(b)(2)(E)(i). Id. Unfortunately for the Plaintiff, there was no further explanation as to why the production did not comply with the Rules. The Court did not know if the production was of electronically stored information, scanned paper documents, or a blended production. Id. Moreover, the Plaintiff did not explain why they did not believe the production was in the usual course of business, which is one of the production options under Rule 34(b)(2)(E)(i). Hall, at *16. As such, the Court could not determine if Rule 34(b)(2)(E)(i) was violated. Hall, at *15.

The only assertion the Court had to work with was the Defense attorney stating the “documents” were produced in the usual course of business. Hall, at *16. There was nothing in the record to refute this statement, thus the Court concluded the Defendant complied with Rule 34(b)(2)(E)(i). Id.

Bow Tie Thoughts

If you are going to challenge a production, be sure to specifically state what is wrong with the production. This could be the request for production called for native file format and static PDF’s were produced instead. There are many ways a production could not comply with the Rules.

I know many attorneys who produce ESI in the “usual course of business,” thus do not believe in labeling their productions. I know a few who revel in this strategy, wanting to let the other side figure out what records correspond to each discovery request. These attorneys often view the opposing party as a zombie hoard to be destroyed without mercy.

Being a good anal-retentive Virgo, I have a different view of document review. I believe in setting up issue coding to correspond to the Requests for Production. If you really want to get organize, have the RFP’s correspond to your Causes of Action or Defense, so you know exactly what supports your arguments and responds to the opposing party. This is excellent for being able to quickly retrieve records for review in preparing discovery responses or motion practice.

Most review applications allow coding fields to be exported out as an Excel file or CSV. A producing party can comply with Rule 34(b)(2)(E)(i) by exporting fields in order of discovery requests for issue tagging (such as an RFP00001), followed by the Document Identifier, such as Bates, Docid, or Production Number, and relevant metadata, perhaps even the system file pathway to show how the origin of the record.

Parties are within their rights to simply produce discovery as it is maintained in the ordinary course of business. I prefer having them labeled, but that is both my preference and one option to specify under the Rules.

 

Proportionality in Asymmetrical Discovery

The Plaintiffs and Defendants in a SEC case highlight the importance of proportionality between asymmetrical parties. In such cases, one side has all of the electronically stored information for discovery requests; the other side does all the requesting. However, the smaller party can have an extremely high burden reviewing any produced ESI, especially if searchable features have been removed.

Magistrate Judge Leda Dunn Wettre in City of Sterling Heights Gen. Emples. Ret. Sys. v. Prudential Fin., (an opinion not for publication) did a great job balancing the proportionality interests between a motion to add additional search terms and custodians to the dispute.

Balancing Custodians

The Plaintiffs sough to add between 22 to 45 additional custodians for the Defendants to add to their discovery search. The Requesting Party made a strong argument for the additional custodians, including a chart of the custodians with the factual basis for expanding the scope of discovery. The parties had already agreed to 66 custodians. City of Sterling Heights Gen. Emples. Ret. Sys. v. Prudential Fin., 2015 U.S. Dist. LEXIS 110712, *4-5; 8.

The Court denied adding the majority of the additional custodians, explaining, Neither plaintiffs nor the Court can know with certainty, of course, whether searches of the additional custodians’ ESI will yield unique, noncumulative documents.” Sterling Heights, at *9. The Court further explained that it was satisfied that the vast majority of the custodians likely had duplicate information. Id.

Judge Wettre drove home her proportionality analysis with the following: the Court is cognizant of the sizeable costs to Prudential involved in the searching, review and production of information from each additional custodian. Although Prudential is a large corporation with substantial resources, the Court should not be – and is not-insensitive to these costs.” Id.

The Court found that the Plaintiffs had provided enough information that there was a “fair inference” that there could be more custodians with additional information. Id. Judge Wettre explained in terms of proportionality that:

Although the number of agreed custodians is already substantial, the resources and personnel at Prudential devoted to the Verus audit and related issues also seem to have been immense. Therefore, it is not surprising that more than 66 Prudential employees may have been heavily involved in the issues relating to this case and may thus have relevant, noncumulative information. Moreover, allowing plaintiffs a moderate number of additional custodians does not seem disproportionate to the size and scale of this action. The Court understands that there are electronic de-duping tools that may be utilized to limit defendants’ review and production of duplicative documents, reducing some of the burden on Prudential of producing information from additional custodians.

Sterling Heights, at *10.

The Court explained that permitting the plaintiffs to select an additional 10 custodians “would balance fairly plaintiffs’ rights to relevant discovery against the costs and burden to defendants of providing that discovery.” Sterling Heights, at *10-11.

Search Terms

The question of adding four new search terms was decided swiftly. The Defendants challenged adding more search terms, claiming they had already produced 1.5 million pages of discovery. Sterling Heights, at *11. The Plaintiffs responded that over half of the 1.5 million pages were “completely unusable redacted pdfs of Excel spreadsheets.” Id.

The Court held that the four search terms appeared designed to target relevant information. Moreover, the Plaintiff noted that if the Defendant had produced a hit count that showed the terms had an “egregiously large” number of “hits,” the Plaintiffs would have considered narrowing the terms. Id.

Judge Wettre allowed the additional terms and explained:

The Court does not have before it information on which it is persuaded that it should deny these four additional terms because they would produce an unduly large number of results likely to be irrelevant to this case. While the Court does recognize that defendant has agreed to a large number of search terms, that is not sufficient basis in and of itself to deny plaintiffs the four additional search terms they seek.

Sterling Heights, at *12.

Bow Tie Thoughts

If proportionality cases were rock concerts, this case has a few “gavel drop” moments. It is great to see a Judge who incorporated proportionality throughout the entire opinion.

Proportionality arguments should not be made out of thin air. The Plaintiffs made a noble effort providing a chart with each additional custodian explaining the factual basis for expanding the scope of discovery for each individual. While they only got 10 additional custodians, this was an excellent way to explain to a Court the value of adding custodians to decide the merits of a case.

The search term arguments for both parties could have been stronger if the proposed search terms were supported by affidavits from expert witnesses. To be fair, the arguments might have been, but the tone of the opinion sounds like the arguments did not include expert affidavits. There are many lawyers who think that because they can conduct case law research that “search terms” in discovery are the same thing. That is a dangerous assumption.

I strongly encourage lawyers to work with eDiscovery consultants to help identify the concepts to identify electronically stored information. Advanced analytics from clustering of similar files to email threading, to visual analytics, to predictive coding all can help identify responsive files. Lawyers should think beyond “search terms” to concepts in order to search discovery.

Finally, I feel greatly for the Plaintiffs who had to review non-searchable PDF’s of Excel files. There are ways to redact Excel files that would require agreements between the parties, but it can be done. This would keep Excel files in native format and avoid spreadsheets exploding into multiple page nightmares.

In closing, a hat tip to the Judge and both parties on their well argued positions and the opinion.