Sedona on Quality: a Must-Read Commentary

The Sedona Conference® Commentary on Achieving Quality in the E-Discovery Process is a must read for anyone seeking to improve their skills in project management, especially in the core functions of search and review. One of its most important insights is that metrics and statistics are now indispensable tools of discovery. The importance of statistics to the law is actually an old insight that has taken a long time to materialize. The Sedona Commentary quotes the great jurist Oliver Wendell Holmes, Jr., shown right, who said in 1897: 

For the rational study of the law the black letter man may be the man of the present, but the man of the future is the man of statistics and the master of economics.

The future has taken a lot longer to reach most lawyers than Justice Holmes expected. Statistics is still a stranger to most litigators, especially as a tool of discovery. But by the time you finish studying this new Commentary on Quality, you will see that statistics is a powerful tool of the here and now.

We can thank the hardworking Sedona Editors-in-Chief for this excellent new publication, Jason R. Baron and Macyl A. Burke. They were assisted by Senior Contributing Editor, Thomas Y. Allman, and Executive Editors, Richard G. Braman and Kenneth J. Withers, with input from Members of Working Group 1. This commentary is a project of The Sedona Conference® Working Group on Best Practices for Document Retention and Production. 

Here is the opening paragraph of the Executive Summary, which should entice you, like it did me, to read more:

The legal profession is at a crossroads: the choice is between continuing to conduct discovery as it has “always been practiced” in a paper world — before the advent of computers, the Internet, and the exponential growth of electronically stored information (ESI) — or, alternatively, embracing new ways of thinking in today’s digital world. Cost-conscious clients and over-burdened judges are demanding that parties now undertake new approaches to solving litigation problems. The central aim of the present Commentary is to introduce and raise awareness about a variety of processes, tools, techniques, methods, and metrics that fall broadly under the umbrella term “quality measures,” and that may be of assistance in taming the ESI beast during the various phases of the discovery workflow process. These include greater use of project management, sampling, and other means to verify the accuracy of what constitutes the “output” of e-discovery. Such collective measures, drawn from a wide variety of scientific and management disciplines, are intended only as an entry-point for further discussion, rather than any type of all-inclusive checklist or cookie-cutter solution to all e-discovery issues.

The truth is, there can be no cookie-cutter solution or all-inclusive checklist for a subject as complex and dynamic as e-discovery. Yet, those of us who specialize in this area get asked for such easy-buttons all of the time. The best that can be hoped for is competency training and the gift of this writing: quality control procedures.

Critique of the Five Reasons Stated for Quality Control

Why is quality so important to the e-discovery process? The obvious answer is to avoid mistakes and the sanctions that can come with mistakes. The Sedona Commentary agrees that such risk management is the primary factor, but then, at page one lists four other reasons quality control is important:

1. “Failure to employ a quality e-discovery process can result in failure to uncover or disclose relevant evidence which can affect the outcome of litigation.” I call this the “adequate recall factor” where you find enough of the truth for justice to be done in a case.
2. “An inadequate e-discovery process may allow privileged or confidential information to be inadvertently produced.” I call this the “adequate confidentiality factor” where you protect enough of the confidential information to meet your client’s specifications. Some may be quite paranoid regarding disclosure of any privileged or confidential information, and willing to spend vast sums of money to avoid it. Others may not care as much if a few attorney-client emails, out of thousands, slip through the cracks and are more willing to rely upon the claw-back protections of Evidence Rule 502 to save money.
3. “Procedures that measure the quality of an e-discovery process allow timely course corrections and provide greater assurance of accuracy, especially of innovative processes.” I consider this to be a secondary “adequate recall factor,” which allows for quality adjustment of search protocols and other processes as results are measured, new facts uncovered, issues evolve, and insights gained.
4. “A poorly planned effort can also cost more money in the long run if the deficiencies ultimately require that e-discovery must be redone.” I call this the “do-over avoidance factor,” where if you do something right the first time, you do not have to pay to do it again. This, for me, is just one aspect of a larger “money-savings factor” that can result from quality processes.

I agree that all five factors are important, but I am inclined to think that the economic savings that can result from quality control are equally important to the e-discovery process as risk management, although perhaps not as obvious. As Justice Holmes said over 100 years ago, we lawyers of his future must not only be men and women of statistics, but also “masters of economics.” The savings can not only be realized by avoiding costly do-overs, as the Commentary points out, but also by increasing culling quantity and review speed. Quality controls make it possible to significantly reduce the amount of ESI to review, and to reduce the ESI volume in a manner that is legally defensible. This culling process, as shown generally in the diagram below, is key to dramatic reduction of the costs of e-discovery.

The process of intelligent reduction of data size prior to review is an essential component of what is now being called “early case assessment.” One of the Senior Editors of the Commentary on Quality, Jason R. Baron, wrote about this type of case assessment culling in another short paper he wrote with Ronni D. Solomon for use at a Sedona Conference Institute CLE entitled Bake Offs, Demos & Kicking the Tires. In spite of this title, it is well worth reading. See especially their Tip 5 where they talk about utilizing keyword “black lists” to reduce ESI size before full review. They also mention the critical need to see the results of keywords, not just hit totals, in order to make an intelligent choice of effective keywords. It is no longer an acceptable practice to choose keywords in the blind. It results in weak culling and thus excessive review. We need to see the results of keyword filtering to be able to aggressively reduce the volume of  ESI and still maintain quality.

This type of early case assessment culling is critical because the review stage is by far the most expensive step in e-discovery. Anything that cuts the amount of ESI to be reviewed has a direct, substantial impact on the bottom line. Of course, better, faster, and more efficient review of the ESI can also reduce costs. See Bake Offs, Tip 3, and the discussion of clustering tools. With proper quality controls, the costs savings from culling can be realized without sacrificing the other four goals stated in the Commentary on Quality.

In today’s economy, the money-saving aspects of quality control are just as important as risk management, and, in my view, more important than the secondary benefits of “adequate recall factors” and “confidentiality factors.” E-discovery costs must be significantly reigned in for the civil justice system to avoid the danger of replacement by private arbitration, or worse, by self-help. For that reason, we must leave the old paradigm of total-recall in favor of a more realistic, cost-controlled view. As I often say these days, how much of the truth can a particular dispute afford in view of the constraints of proportionality and Rule 26(b)(2)(C)? 

This is the public comment version of the Sedona Commentary on Quality and it is my hope that the final version will place a greater emphasis on the economic savings possible with quality controls in an early case assessment environment. As Justice Holmes said: “It is the province of knowledge to speak and it is the privilege of wisdom to listen.”

Four Guiding Principles Behind the Commentary

The Executive Summary also contains an explanation of the four guiding principles behind the commentary:

Principle 1. In cases involving ESI of increasing scope and complexity, the attorney in charge should utilize project management and exercise leadership to ensure that a reasonable process has been followed by his or her legal team to locate responsive material.

Principle 2. Parties should employ reasonable forms or measures of quality at appropriate points in the ediscovery process, consistent with the needs of the case and their legal and ethical responsibilities.

Principle 3. Implementing a well thought out e-discovery “process” should seek to enhance the overall quality of the production in the form of: (a) reducing the time from request to response; (b) reducing cost; and (c) improving the accuracy and completeness of responses to requests.

Principle 4. Practicing cooperation and striving for greater transparency within the adversary paradigm are key ingredients to obtaining a better quality outcome in e-discovery. Parties should confer early in discovery, including, where appropriate, exchanging information on any quality measures which may be used.

I was pleased to see that cooperation was included as the fourth principle behind quality control. As I explained in my blog, There Can Be No Justice Unless Lawyers Maintain High Ethical Standards, cooperation is an ethical imperative that will necessarily result in substantial costs savings by the avoidance of litigation churning. The Commentary correctly notes that cooperation can also cause a significant increase in quality.

All four of these Principles behind Quality are,  in turn, based on the fourteen Sedona Principles, but especially on Principle 11, which states:

A responding party may satisfy its good faith obligation to preserve and produce relevant electronically stored information by using electronic tools and processes, such as data sampling, searching, or the use of selection criteria, to identify data reasonably likely to contain relevant information.

For that reason, much of the Commentary on Achieving Quality in the E-Discovery Process is focused on electronic tools and processes, including sampling and other search methods.

The Commentary Is Not A Recipe Book

This Commentary does not purport to give specific advice on how to maintain quality. So, if you are looking for forms and recipes, you will be disappointed. Sedona was quite correct to so limit this project. Here is their explanation, with which I fully agree:

This Commentary is not intended to serve as a comprehensive roadmap covering all possible uses of quality measures and metrics throughout the e-discovery process. The creativity of the vendors and the bar will ensure that concrete applications of quality techniques will be advanced. Nor have we any bias towards particular methods, tools or technologies or a point of view that asserts that sampling or other types of quality measures are invariably required in every type of litigation. Indeed, the drafters believe that the solution to problems created by scale are not solved by technology per se, which is merely a tool, but by better use of team leader skills, project management, and quality measures.

Although the Commentary discusses many tools including my favorite — sampling — it does not set out a step-by-step process for handling e-discovery projects. There is too much variability in cases and facts for that, and frankly, it is still too early for any such best practices specifications. Electronic discovery project management is still in its early stages and many of us who have developed methods tend to keep them close to the vest for competitive purposes. Plus, it is not Sedona’s role to endorse one particular technique over another, but rather to address issues on a high level and facilitate further study and dialogue. If you read this Commentary with this expectation, you will not be disappointed. Indeed, you will find that it contains many valuable treasures and insights. As Oliver Wendell Holmes, Jr., said: “A moment’s insight is sometimes worth a lifetime’s experience.”

Key Elements of Successful Project Management

The Commentary lists seven elements that Sedona considers critical for successful project management. They do not claim that the list is exhaustive, nor do they purport to rank them in importance. These elements are:

1. Leadership.
2. Tailoring.
3. Expertise.
4. Adaptability.
5. Measurement.
6. Documentation.
7. Transparency.

Although Sedona will not rank these seven, I will. I think that Leadership and Measurement are the two most important factors and the two most difficult. A close third is Documentation, which is key to protection, especially if any of the million decisions made in the course of a project prove to be a mistake. The courts do not expect perfection from attorneys, only expertise, reasonability, and good faith. Good documentation of the process can make it easier to recreate what happened. It will help you to convince the court that you thought you were doing the right thing at the time, even though later events may suggest otherwise. Personally, I do not like the documentation process at all and find it to be as odious as filing. But I know from experience just how valuable it can be, not only to later show what you did, but also in real time to help you to keep track of what you are doing.

Leadership is obviously important. Someone has to be in charge of a project and it needs to be an attorney with special expertise. It is a mistake for the trial attorney to try to fill this role because they probably do not have the necessary skills nor time. But it is also a mistake to delegate the job to a non-lawyer. I continue to believe that lawyers must remain masters of the discovery process and they abdicate their responsibilities when they over-delegate to vendors. The Sedona Commentary (at page 7) agrees that attorneys should retain the “Team Leader” position and should only look to outside vendors for competent assistance, which, it correctly states, is “often essential.”

Measurement

The importance of “Measurement” may not be as obvious as Leadership, but the Commentary does a good job of explaining just how indispensible it is to quality control. It lists five types of quality measurements that are especially useful in e-discovery:

1. Judgmental Sampling
2. Independent Testing
3. Reconciliation Techniques
4. Inspection to verify and report discrepancies
5. Statistical Sampling

Of these five measures of quality, the two types of sampling are, in my opinion, the most important. The two types of sampling are defined and explained in detail in Appendix A: Sampling 101 for the E-Discovery Lawyer:

Judgmental Sampling: Sampling performed on a sample set that was selected based on the judgment of the person doing the sampling. … A common example in the e-discovery context would be keyword searching itself, which is a more-or less informed technique universally used by lawyers and legal professionals to produce a sample slice of a given ESI universe of data, based on the a priori judgment of those selecting the keyword terms.

Statistical Sampling: Probability sampling, or random sampling, is a sampling technique in which the probability of getting any particular sample may be calculated. … A random sample is one chosen by a method involving an unpredictable component.

In the body of the text at page eleven, the Commentary explains that “statistical sampling can serve as a check on the effectiveness of search terms and other automated tools in identifying responsive information.” You can, for instance, use random sampling to test small subsets of the data selected by judgmental sampling, such as keyword culling. Then, by quick reviews of random sample subsets, you can determine the effectiveness of the keywords to identify responsive information. You can then adjust your keywords accordingly and try the new search cull terms again on a new sample. Here is how the Commentary describes this process at page thirteen: “Trial or pilot runs of combinations of words may be tested in an iterative fashion to extrapolate the effectiveness of the chosen set.”

You can use this iterative method to increase the culling rate of ESI to a size where cost projections of final review expenses finally come within the project budget. This use of both judgmental and random sampling methods, coupled with cost estimations, is close to the kind of early case assessment quality control procedure that I have developed to control e-discovery expenses in a legally defensible manner. I would tell you more, but it gets extremely complicated, is case sensitive, and frankly, leads into proprietary territory.

Applying Quality Measures

Part Three of the Commentary, entitled “Applying Quality Measures in E-Discovery,” is probably the section that will be of most interest to practitioners. It divides the analysis into two segments: the Data Collection Phase; and, the Review and Production Phase. The Data Collection Phase is examined in three segments: “Building on Traditional Approaches to Document Collection; Applying Measures of Quality to the Data Collection Process; and, Best Practice Guidelines.”

The Best Practices Guidelines at page fifteen begins with the following good advice:

The selection, organization and filtering of ESI through the use of a search protocol is a critical element in reducing the volume of information to be collected and thus the time and cost of collection. In addition, keyword search techniques are well known and may be used for this purpose. More advanced technologies have emerged that employ complex algorithms for ESI filtering and organization and may, in some cases, be useful at the collection stage. Regardless of the technology chosen, all filtering methods require a well-defined process. Without these basic steps, the use of any filtering technology will likely result in gross over- or under-inclusion of responsive ESI. The process includes several steps:
• Understanding the composition of source ESI;
• Defining the goals of the filtering;
• Applying the filter and testing the results.

On this last filtration/testing step the Commentary makes the basic, yet important point missed by most practitioners still using negotiated keyword searching, that:

The filtering process should be iterative and needs to be repeated  until the desired goals are met. It is not sufficient to blindly run a filtering tool and trust that it is achieving the desired results. One must evaluate the outcome of the search, looking to identify errors in how the filter rules were set up or applied. Key metrics, such as the number of included or excluded documents by keyword or filtering criteria, can be used to evaluate the outcome. Examining the high and low number of search hits can uncover issues with how the search was constructed, the choice of terms, or even issues with the data.

No one is good enough to pick good keywords off the top of their head, much less negotiate a good set of keywords. Words are, after all, so maliable and differ tremendously between person to person. As Oliver Wendell Holmes said:

A word is not a crystal, transparent and unchanging, it is the skin of a living thought and may vary greatly in colour and content according to the circumstances and time in which it is used.

Yet keyword search is still the practice used by most lawyers today and is often ordered by the court. American Family Mutual Ins. Co. v. Gustafson, 2009 WL 641297 at *3 (D.Co. March 10, 2009) (“the parties shall forthwith meet, confer, and agree upon the search terms”). This is a mistake. The “skin of living thoughts” is not so easily snared. Testing of proposed search terms should always be required. Otherwise, your review will be haphazard at best, and a complete waste of time and money at worst. As Oliver Wendall Holmes also said: “Lawyers spend a great deal of their time shoveling smoke.”

Quality controls in the review and production phase are also examined at length in the Commentary. The discussion includes: automated methods to reduce the initial burden of review; “clawback” agreements, Rule 502, and reliance on automated methods; quality control guidelines for responsiveness and privilege; and, final quality checking at production.

Conclusion

The Commentary conclusion begins with a quote I like a lot by William Gibson: “The future is already here – it’s just not evenly distributed yet.” I know many people in this field feel like that is the story of their life. Certainly there is a wide variation in the U.S. and around the world in how the discovery of written evidence is conducted. The Commentary ends with these fine words of wisdom:

In the end, cost-conscious firms, corporations, and institutions of all kinds intent on best practices, as well as over-burdened judges, will demand that parties undertake new ways of thinking about how to solve discovery problems — including employing better project management and better measures of quality to achieve optimum results, as outlined here. The technical and management-orientated quality processes discussed above need to be incorporated into every trial lawyer’s continuing education and daily practice. These processes also dovetail with, and support The Sedona Conference® Cooperation Proclamation — which calls for incorporation of the best thinking of “disciplines outside the law” to achieve the goal of the “just, speedy, and inexpensive” determination of every action. In the end, striving to attain a quality outcome in the conduct of litigation is consistent with the highest ethical calling of the legal profession.

I agree with these noble aspirations, but think it is unrealistic to think that these processes will, or even should, “be incorporated into every trial lawyer’s continuing education and daily practice.” Not every trial lawyer will be interested in random sampling, iteration, linguistic analysis, the latest concept-search engines, ESI architecture, leadership of complex e-discovery projects, and ESI architecture, not to mention the ever changing technologies that create and store electronic information. I agree that all trial lawyers should have some exposure to this and to the idea of quality control, in the same way that all lawyers should have some exposure to antitrust law. But I doubt very much that the subjects in the Quality Commentary are going to be part of “every trial lawyer’s daily practice” anytime soon (if ever). Instead, they will be front and center in the practice of attorneys who specialize in e-discovery.

In the inconsistent future here-now that I see, e-discovery specialists will work closely with trial lawyer specialists. Team-work will be common, even on small cases. Some trial lawyers may have the time and inclination to handle e-discovery themselves, especially in less complicated situations. But, for the foreseeable future, they are likely to be few and far between. As William Gibson says: “Time moves in one direction, memory in another.” Instead, most trial lawyers will work with, not replace, the e-discovery lawyers. This could be a very small team of just two persons, like Perry Mason and Paul Drake, with a clear division of labor and skills, or, in the largest cases, it could be a team of many lawyers, paralegals, technicians, engineers, and information scientists.

The new age of information is too complicated to continue the old practices and traditions where both trial and discovery skills were combined and held by all trial lawyers. It worked when the documents were paper and few in number. But those days are nearly gone. Now we have ephemeral electronic paper that throws itself away when you are not looking. We have needles of relevant evidence hidden in vast electronic haystacks that are larger and more complicated that you can imagine; haystacks that daily change and grow. As our best experts tell us, search is hard. To use Gibson’s words:

I don’t have to write about the future. For most people, the present is enough like the future to be pretty scary.

As a consequence, document discovery is far more complicated than it was before and requires special skills to be done right. It is time for the profession to change. As Justice Holmes said:

I find the great thing in this world is not so much where we stand, as in what direction we are moving — we must sail sometimes with the wind and sometimes against it — but we must sail, and not drift, nor lie at anchor.

The basics of e-discovery can and should be taught to all trial lawyers. Since they are generally a very smart group, they can learn the basics, if they will take the time and effort needed to do so. (So far, not many have been inclined to make this effort. Most seem to hate e-discovery, but this will change soon.) These basic skills, once learned, can suffice for many small cases, with just an occasional assist from a 21st Century version of Paul Drake. But the larger, more important cases will need the skills of a specialist; skills such as those outlined in The Sedona Conference® Commentary on Achieving Quality in the E-Discovery Process.

In today’s world of dispute resolution, the client with a sophisticated matter is better served by specialized services with a division of labor. The e-discovery lawyers will possess the skills and quality control techniques discussed in this Commentary, as well as the many other skills discussed in the many other Sedona Commentaries and other books and articles on the subject. These skills take time to learn and time to practice and maintain. There is not enough time to also learn the many, very different skills needed by a trial lawyer. As a result, in complex cases the discovery lawyers will go through the electronic maze to find the facts and their trial lawyer partners will present them to the court and argue their significance.

Litigation is already a team effort in most law firms. This trend will continue to grow and the clients will be better served because of it. Far from being more expensive, as you might think because more people are involved, the discovery and trial lawyer team will save money. The Fannie Mae type cases of outrageous e-discovery expenses only happen when trial lawyers dabble in e-discovery and make huge mistakes. A true specialist will not only do things right the first time, with quality, but do them quicker and less expensively. In this way, the e-discovery teams of the future will help preserve our system of justice by making discovery affordable again.

There Can Be No Justice Unless Lawyers Maintain High Ethical Standards

This is a continuation of my interview by Karl Schieneman on ethics in e-discovery. If you have not already read Part One, skip down to the preceding blog, or click here, and read it first.

Diligence

KARL: Okay. Let’s go to another rule here. Another of the client duties – diligence. Rule 1.3 on diligence says: A lawyer shall act with reasonable diligence and promptness in representing a client. How do we get in trouble here in e-discovery with that?

RALPH: Well, it’s a big one. I’ve got to credit New Jersey and their local rules for emphasizing this many years ago when New Jersey began to require counsel to talk right away with the IT department of the client to make sure that preservation holds are properly implemented, the auto deletion functions are turned off. The New Jersey rule also requires counsel appearing in cases in New Jersey to talk right away with the key custodians about making sure their evidence is preserved.

Then Judge Scheindlin in Zubalake in her opinion in 2004 picked up on that theme out of New Jersey. She created what I and others are now calling the Zubalake Duty. You’ll see that written about in my blog and in my books where, in her words – she says, “outside counsel are required ‘to make certain that all potentially relevant information are identified and placed on hold.'” So, she’s actually putting that duty on outside counsel, not just the client, but on outside counsel, to make sure that the relevant information has been placed on hold.

This is controversial to many people who think this shouldn’t be an outside lawyer’s job, that diligence shouldn’t include requiring the attorney to be sure everything is placed on hold. But under the Zubalake Duty, you are at least required to have the conversations and to give the advice. Now, if the client doesn’t follow your advice, you’re probably not going to be sanctioned for that. But on the other hand, you may sometimes be in a Qualcomm situation where if the client just blatantly doesn’t follow your advice – and, by the way, I’ve never had this happen to me, but in theory it could happen – then, what you’re supposed to do is withdraw. <Ralph’s secret thoughts: Well, come to think of it, I have been in that position before, or close to it, and I have withdrawn, but not over preservation issues, per se.> That is because you’re not supposed to condone evidence being deleted. <That’s a big Duh!>

Due diligence requires follow up with the client to tell them about their duties, talk to the right key people, explain what they have to do to make sure that relevant evidence isn’t deleted. This is all supposed to happen quickly, which makes it so darn challenging. … So this is another big problem — the duty of diligence has become a huge challenge, particularly in e-discovery in connection with preservation.

KARL: You know, I almost feel like I should stop for a fictitious sponsor statement here. <Oh no. Here it comes, the wine story again! Time to do a quick check of my email.> A couple of years ago I came up with a bottle of wine tied into Zubalake called the Fourth C. There were three Cs in Zubalake. Jim Daley, a good friend of mine, called it the Zen of Zubalake. You have to Communicate with your IT people, you gotta Coordinate you know the stopping, the deleting, etc., and then you gotta Comply with the order. When you mess those up, there’s always Cabernet, which is my Fourth C. We got Judge Scheindlin and Laura Zubalake to autograph the bottle. Used to bring them around to conferences. I still think there’s a role as a tool for a good bottle of wine in e-discovery. Calm everyone down.

RALPH: Yeah…. <Wine as diligence? Not so sure about that one Karl.> and you know, Zubalake is kind of old news. <I am so sick of saying the Z-word.> Okay, it was five years ago this came out, but unfortunately the problem is still there.

It’s still a huge challenge and I would like to mention a more recent case, though. <Anything but Zubu!>  One that just came out, Van Alstyne v. Electronic Scriptorium. Great name for a defendant, huh? <What is a “Scriptorium” anyway?> This is a Fourth Circuit case. So now we’re talking an appellate circuit case which came out on March 18, 2009. What’s interesting about this is the attorney here just took emails that were given to him from his client without doing the diligence of asking: “Where did you get those emails? How is it you came to have the emails of this employee who is suing us now?” Because they were very personal, private emails. The attorney didn’t really do the diligence required to find out – at least I assume he didn’t, and there’s no indication in the opinion to indicate that he knew that these emails were in fact hacked from the employee’s private on-line account. <I have written about this case before.>

This is a crime and it subjected this defendant company to a punitive damages award even though there was no proof of any actual damages from having the employee’s private email hacked into. We all know that here the client was being way too diligent. He figured out a way to get into the Yahoo! Account. He knew or figured out her user name and password and he stole her email. Then just turned it over to his attorney, who blithely said, “oh, okay, thanks,” and used it as surprise on a cross-examination of her deposition. So this is something you’ve got to understand, the evidence and where it’s coming from. This is just a different kind of example where the attorney didn’t do his homework and in fact ended up using evidence that was procured in a criminal manner by his client.

KARL: All right. That’s – that’s – it’s scary stuff. I’ve actually encountered something similar. You know, when you know e-discovery well, you sometimes have friends that ask you questions and in the world of small business, lots of bad things can happen. So your diligence is right.

RALPH: It is, and those of us that have been around it, I mean we know, it’s not that hard really to hack into somebody’s email account. But don’t do it and don’t let your client do it! There’s laws governing these things that need to restrain lawyers as well.

Confidentiality of Information

KARL: Yeah. Well let’s go on to Rule 1.6 – Confidentiality of Information. This falls on the professional duty side of the equation. A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b). Okay. How do we get in trouble here?

RALPH: There’s two things that are really hyper about that. One is, we haven’t talked about the duty of cooperation yet, but it kind of dovetails in with this duty of confidentiality, particularly in e‑discovery, where sometimes we’re going to have to disclose to opposing counsel things that we used to keep secret as work product. <Nothing critical mind you, but stuff needed for CYA.> It used to be kept confidential how you would do your searches. The key words that you might use to search through your own client’s data. That typically was something you just wouldn’t share with the other side. None of their business. That’s my work product. I’m going to keep it confidential. <Afraid it would give away your theory of the case; more likely it would give away how lame your searches were.> The other thing is keeping client’s secrets. <Now those are the important secrets.> In a minute, I’ll explain how both of these confidentiality duties kind of dovetailed together in the Victor Stanley case.

But the other duty is to not produce to the other side attorney/client communications. It’s the client’s privilege, as you know, to keep things secret. The client typically instructs you, the lawyer: “Not to turn over our secret emails to each other; I don’t want to waive that privilege; I don’t want the person who sued me, for instance, to see what we’ve been talking about in connection with this case or in connection with anything.” So part of e-discovery, one of the most expensive parts of e‑discovery, is to review documents that have already been found to be relevant and to remove from those documents the attorney/client communications. These things are protected by attorney/client privilege, or all other kinds of privilege. Then also to review and protect documents that are confidential, that might just be trade secrets of your client and to protect them in various ways.

Focusing in on the duty to keep the communications between an attorney and their client secret, which is what this ethical duty is talking about, is a very important duty. This came to head in the Victor Stanley v. Creative Pipe case. Everybody that’s an e‑discovery junkie knows this one by Magistrate Judge Paul Grimm. It was decided almost a year ago now, May 29, 2008. If you haven’t seen it, you’ll find it discussed in my books and also in the blog. It also pertained to the reasonable diligence requirement, in that the people doing that final review of relevant documents to remove privilege, they missed over 300 privileged documents and they produced them to the other side. Their duty to keep things confidential was breached at that point. They were then invited to explain to the court and the other side whether they conducted a reasonable search. If they were able to prove a reasonable search, they might have been able to prevent the privilege from being waived.

That’s where the other confidentiality concerns reared their ugly head; they in effect said “Nope, we’re not going to tell you what our search terms were. That’s our work product. We’re keeping that confidential. We’re not revealing it.” So, faced with that scenario where 300 documents were produced and they claimed it was accidental, but they wouldn’t explain what they did to try and catch them at all, Judge Grimm found that there was a waiver of the privilege. He did not find that there had been a quality assurance testing program. Basically, he didn’t find that what they had done to try and protect the confidentiality of their client’s information was reasonable. So that was a duty on the shoulders of the attorney which they didn’t discharge, and here it cost the client the loss of their privilege.

KARL: I should throw a little plug in there. I haven’t set the date yet, but Judge Grimm has agreed to do a pod cast talking to one other judge. Want to do something on sort of from a 10,000 foot level search and retrieval from the judge’s perspective. So I’ll keep you updated on that.

RALPH: Well, yeah, having Judge Grimm talk about it would be great. You know, Rule 502, the new evidence code, has addressed some of these problems to a degree, and maybe taken some of the pressure off us, but it is still, I think, one of the fundamental problems we have in e-discovery, and that is doing an affordable privilege review to try and catch these things. I’m sure you’ll have other shows just dealing with Rule 502. That is a big help.

Expediting Litigation by Strategic Cooperation

KARL: Okay. Rule 3.2, Expediting Litigation is another rule that you’ve thrown into the cocktail mix here. A lawyer shall make reasonable efforts to expedite litigation consistent with the interests of the client. How does that relate to e‑discovery?

RALPH: It’s key. I mean, that’s the core ethics rule behind The Sedona Conference Cooperation Proclamation, which if you haven’t heard of it, go to TheSedonaConference.org website, download and read it. It’s being signed on to by judges everywhere. It is also – speaking of Judge Grimm again – the core message in his case Mancia v. Mayflower Textile Services, which came out in October of 2008. <See my prior blog on this important case.>

This is yet another key case to understand this whole business of keeping the cost of e‑discovery down, which is a core problem. Part of the reason e‑discovery costs get out of control is people lose track of this ethical duty we have to move things along. That really is in the interest of your client. Let’s stipulate to things. Let’s have more transparency and cooperation. Let’s stop this old game of hide the ball. It’s never been ethically allowed, but we all know it’s gone on for years and years.

Maybe in the paper world where people were competent, that wouldn’t blow the client’s budget out of the water. But nowadays, when you start playing hide the ball and start playing games in e-discovery, and start trying to be obstructionist, when you start filing boilerplate objections to everything and you don’t cooperate, before you know it, you’re going to have the tail wagging the dog. You’re going to have e‑discovery be the most important part of your case. It’s going to cost you hundreds of thousands, sometimes millions of dollars, just to get involved in sorting out the e‑discovery quagmire and the confusion in the disputes. That’s not what litigation is about.

Litigation is about the merits of the case. Discovery is just a way to get to the truth to then argue about the merits. So my message, and the message of The Sedona Conference, is let’s cooperate on getting the information on the table. Let’s stop trying to play games and one-upmanship and fighting over that. Let’s then fight on what the facts mean. Let’s fight on what the law is. There’s plenty of room for arguments and disputes, but let’s not fight over what should the format of production be, metadata this, metadata that. I mean, most of these arguments that I see in cases are totally unnecessary. You have just run up a bill needlessly on the clients. They think you’re being a vigorous advocate, but really you’re not. You’ve lost track of your duty to move things along, which is by the way, Federal Rule of Civil Procedure, Rule Number One: quick, just, inexpensive adjudication. That’s what we need to be doing. E‑discovery has got to stop being the whipping boy against this and the way to do it is by cooperating, which is why I’m such a strong believer in what Sedona is doing in that area.

KARL: Yeah, we did a show with Richard Braman who heads The Sedona Conference on the Cooperation Proclamation. It’s interesting stuff and certainly critical.

RALPH: You know, I hear some people say, oh, well, that’s wimpy, But the truth of the matter is, this is not just rolling over and giving what the other side wants. This is mutual cooperation. This is what I call strategic cooperation to benefit your client. You have got to pick your battles. One of your battles shouldn’t be over e‑discovery. The battle should be on the merits of the case. The people that think this is just a mistake to cooperate, they’re not really getting it. They’re part of the problem, they’re running up the cost of e‑discovery. This is something that we all have to kind of move beyond our old mindset. There’s nothing wrong with cooperating and in fact, the ethics and the rules require it.

KARL: We did a really nice show with Ariana Tadler last week on the plaintiff perspective. She’s a prominent lawyer at Milberg and one of the few really well known e‑discovery experts on that side. She talked about the meet and confer, about how she goes in with letters and what we’re looking for and sort of an olive branch essentially to try to get the case going the right way. But it’s tempered with healthy skepticism at the same time, you know, because it doesn’t work all the time that way. And the cases where it works are far better, she said, in terms – for both sides.

RALPH: Well, I always say it takes two to tango and you know, if one side won’t cooperate, that doesn’t mean that you give and all they do is take. If they don’t give back and don’t cooperate, you’ve got one clear solution. You go to the judge. You go to the judge quickly and right away. That’s what all of the judges say they want. So, you know, if you get one side that won’t cooperate with you, you do your best, you make your paper record, you make it clear you’re wearing the white hat, and you take it to the judge. You’re going to find out those judges are going to insist on cooperation. There’s no tolerance in the federal bench for this at all.

Candor Towards the Tribunal

KARL: That’s a good lead in to the next rule, candor toward the tribunal. Rule 3.3, which says in various parts and subparts (a): A lawyer shall not knowingly (1) make a false statement of fact or law to a tribunal or fail to correct a false statement of material fact or law previously made to the tribunal by the lawyer . . . or (3) offer evidence that the lawyer knows to be false . . . . So those are key to your position in this area. How does that impact e‑discovery, Ralph?

RALPH: Well, we’ll come back to Qualcomm again because Qualcomm is bigger than Zubalake at this point. <Thank God for that, as we are all so sick of Zubulake.> This is a lesson case for the legal profession at large, that just happens to be in e‑discovery and it’s ongoing. Although Qualcomm and Broadcom settled their series of lawsuits they had all over the country – they finally settled that just a few weeks ago for a big ticket being written from Qualcomm to Broadcom. But nevertheless, the lawsuit in San Diego district court, even though it’s over and the jury ruled against Qualcom over a year ago now, it continues for the question of what kind of sanctions are appropriate against the outside counsel who represented Qualcomm.

There will be a trial on this we’re told later this year, probably near the end of 2009, to assess the blame. Who’s to blame for the false statements being made to the judge, to the jury, to the opposing counsel about the email of Qualcomm, about the denial that was made by Qualcomm from the moment they filed suit, that they had any information concerning their cooperation in this organization, technical organization concerning their patent. They basically tried to hide the elephant. <Almost got away with it too. Makes you wonder how many times they pulled this kind of “evil magic” in the past.> They responded to requests for production on numerous occasions by saying “no, we don’t have any responsive email concerning this.” They had deposition testimony in advance of trial where everybody toed the party line: “nope, we didn’t do this, we didn’t do that.” Then, it turned out there was one honest witness at trial, into like the second week of trial, who said “oh, yes, I think there was an email or two on that. I happen to remember a couple.”

Because of that one honest witness – the jury by the way ruled against Qualcomm very quickly after that –  because of that testimony, which was contrary to all the representations that had been made by Qualcomm before and during the trial, the district court judge said in effect “I want a hearing and I want to find out if there were intentional misrepresentations made by lawyers to the court, made to the jury, made to opposing counsel.” That’s what triggered this investigation into the conduct where in the judge’s words, the judge is convinced <among other things> that he was lied to at a side bar conference during trial, … convinced that lawyers tried to hide evidence and were not truthful.

So this is the core thing. The judges have to understand, and they have to be confident, that when lawyers tell them things, it’s the truth. If they can’t trust the lawyers to tell them the truth, who can they trust? That is the highest duty that we lawyers have, is to be honest to the judges. When you don’t do that, you know, you deserve the rebukes, you deserve the sanctions, you deserve the ethical things. This is the core value – telling the truth. Lawyers telling the truth to judges, lawyers telling the truth to each other and being honest in their discovery. That’s why this is a core message for litigation across the board, that … our system of justice won’t work, if people are lying. Now, litigants may lie, there’s perjury for that. Maybe, you know, that happens. <We all know it happens all of the time.> But lawyers should never lie and that’s basically what this rule is about, that’s what Qualcomm is about.

Fairness

KARL: Okay. Let’s go into the final rule that we’ll discuss on this, Rule 3.4, which is fairness to opposing party and counsel. We’ve touched a little on this: A lawyer shall not (a) unalwfully obstruct another party’s access to evidence or unlawfully alter, destroy or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act. Then in part (b): in pretrial procedure make a frivolous discovery request or fail to make a reasonably diligent effort to comply with a legally proper discovery request by an opposing party . . . . So how does that play into this issue, Ralph?

RALPH: Well, we’ve already kind of talked about it. This is the duty to cooperate; this is the Mancia case and Judge Grimm; this is more of the ethical underpinning of why it is you need to cooperate. You’re required by ethics, by being a lawyer, you’re required to cooperate on this level. Unfortunately, we still see happening, time and time again, lawyers are not discharging their professional duties.

There is another case, not as well known, but I would point the listeners to. It demonstrates non-cooperation, not following this. It’s called U&I Corporation v. Advanced Medical Design, 2008 WL 821993. Again, this is one coming out of Florida, which is why I happen to know about it, dated March 26, 2008. <It is an Akerman Senterfitt case where we obtained a sanctions award against a very uncooperative plaintiff.> This is an important case because it shows how a defendant can insist on cooperation from the plaintiff that was suing them here. When they don’t, you can get sanctions. …

Just one brief quote from the Magistrate Judge, Elizabeth Jenkins, who says, “It is not the court’s role, nor that of opposing counsel, to drag a party kicking and screaming through the discovery process.” I think that’s an important quote. You know, if you can show that to the judge, that that’s what you have had to do because they’re not cooperating, they’re not being forthright, they’re basically fighting you every inch of the way, you will get relief. If you apply to the court for relief, cite to the U&I Corporation case, cite to Mancia, point out the duty to cooperate, and you can stop this. Because unfortunately, you know, a lot of people don’t – didn’t get the cooperation memo. In the real world, most people are still not cooperating. So that’s why it’s important to know about these ethical requirements, know about these cases where lawyers are having their hands slapped when they don’t fulfill their duties.

What’s It All About, Alfie?

KARL: How do these – I mean, you know, there are these six rules and I really liked your quadrant. I’m going to attach your blog, your description in a description of the show, so that people can link to it. But, how do these rules sort of compete with each other. I mean, who wins, the client or the professional duties?

RALPH: <Geesh, that’s bad choice; better elevate this to a big picture “Alfie type” question.> They have to be brought into balance. Because a client doesn’t really win when a lawyer is fighting over everything with opposing counsel. Now, the client might at first get a few rah, rahs out of that: “Oh boy, yeah, he’s fighting for my side!” But you know what? After he starts getting the bills for this month after month, year after year, it stops being so exciting to the client. We all know that that’s not really in the client’s best interest to be fighting over everything. <Only the lawyer wins then, the client loses, whether they win the case or not.> That kind of vigorous advocacy is something that even the biggest corporations can’t afford. They need to cooperate. Then the client will win. That’s the point of all of this.

We’re here in the legal profession to represent parties that are in disputes, to give them legal advice. So the winner on all of this has always got to be the client. They win when the rules of ethics are followed. That’s how they are designed – the ethics duties are designed to improve and maintain the quality of our system of justice. The system of justice is not there for lawyers. It’s not there so we’ll have a job. It’s there so that justice will be done.

That’s getting on the pulpit for a little bit, <well, o.k., maybe a lot> but the winner should always be the people. <That includes companies too, a fact that some lawyers forget.> That’s contrasted with the old days of, you know, trying to resolve disputes through violence or self help. <My personal favorite is trial by drowning, kind of like water-boarding, but you die.> Now we can turn to a system where the truth will come out and just results will be attained. That’s why we’re all here – that’s what we’re really doing – that’s what the goal of everyone is. <Although, I swear it sometimes looks like a few lawyers are just in it for the money, but I could be wrong.> So, I think the people, the clients, will be the winners, once we start following the rules of ethics and have that end-game goal in mind.

KARL: That was as good an answer as I could have expected from that poorly framed question. I’m almost thinking of my ethics class in law school and Judge Weddick here in Pennsylvania is a well known state court judge here, teaches it. And, you know, he would take one side or the other, and we’d only attack one rule at a time. I threw six of them at you. Almost impossible. But you’re right, I mean, there’s – this is a balancing act, but really there are some solutions in here. Let’s try to hit on a couple of these solutions. Try to wrap this up in a couple of tips for the listeners.

Three-Fold Solution

RALPH: We might as well end on practical, positive stuff. <Assuming, of course, that I can climb off of my high horse for a second!> Right now I’m talking about a three-fold solution, trying to keep it simple. <Tomorrow, it may be a five-fold solution; whatever.> So, number one is e‑discovery teams. That’s why I call my blog the e‑Discovery Team. The message there is that lawyers, techs, and management need to all work together as a team. That’s part of the way to overcome the competence problem is get a tech – not tied to the hip as Craig Ball likes to say he wants to avoid – but get a tech on your team. Learn to collaborate. Stop being the — you know <arrogant jerk>. Perry Mason, he used a detective; today’s lawyer needs to have a tech. <Paul Drake with a pocket protector?> They need to have a geek that they can work with. So that’s part of the solution, form an interdisciplinary team. That’s number one.

Number two is cooperation and be transparent in what you’re doing. Cooperate with the other side, fulfill your duty of disclosure, take that seriously; save the arguments for the law. We’ve already talked about that. But that is the second core solution.

And then the third part we haven’t talked about, but that’s what I call calibration and metrics, which includes using the new technologies. Use the latest methods in order to tackle the needle in the haystack search problem and to keep track of your information and manage it better. This is the kind of thing that Jason R. Baron and the TREC Legal Track addresses. <See eg. my prior blog on Jason Baron’s work, the webs for the National Institute of Standards and Technology TREC Legal Track, the general TREC conference.> He’s just come out with a new paper, Sedona has, on quality control and metrics, which I’ll blog about soon. I think it’s an excellent guide to help people on this – this use of calibration and numerics and metrics as part of search.

A lot of groups are working on this. I was just presenting with George Socha of the EDRM.net Group who now has an EDRM search guide available on their website, which provides more information about calibration metrics, how to do so sampling and that type of thing. So there’s a lot of ways to get information on this subject. I urge everyone to learn a little bit more about how to do quality control, and how to do metrics, and to basically use numbers as your friend to keep the price of e‑discovery down. <Did I really just say that? “Numbers as your friend.” Brother, even I think I’m a nerd.>

KARL: Yeah, we’re doing a show coming up with another one of those people who’s in that group. Herbert Roiblatt is going to be doing the show and Kershaw and Patrick Oot are also talking about doing a show on this. So there’s no shortage of people that are studying this that are willing to provide some information.

RALPH: Thank you for mentioning them. That’s the other group, Anne Kershaw’s group, E‑Discovery Institute.

So that to me is the core problem, and the solution to it is using statistics and sampling and just getting a more disciplined handle on how much we actually review. In other words, how to cull down things a lot. So that’s the third prong of the solution. Use teams, cooperate, and figure out how to do search better by using some sort of metric analysis.

KARL: I don’t get to say this very often, but that’s what brought me back into the field is focusing in on that specific issue. It’s just – if you’ve lived off of the other model, which is throwing lots of bodies at the problem, you realize just how inefficient it is. And then when you study the studies, the Blair Maron case and anyone that looked at that sort of brute force based on people, it doesn’t work and it’s very, very expensive. You know, there are tools out there. It’s really fascinating, and it ties right back into your first thread about people learning new skills and working together as a team. It’s interesting how this all fits together.

RALPH: Well, thank you for having me on the show, and thank you to all the listeners <and readers> for having the patience to hang in there. I know we went on and on, but it’s important stuff and I’m glad to have the opportunity to talk to you about it, Karl.

KARL: It is great. Thanks again, Ralph. For those who want to see a complete list of shows, go to www.esibytes.com or – and what we say here at the show is come to ESIBytes to learn more about electronic discovery before ESI bites you back. Thanks again, Ralph.

e-Discovery Competence is a Fundamental Ethical Challenge Now Faced by the Legal Profession

There can be no real justice without truth, and in today’s world of civil litigation, no real truth without e-discovery. That is because writings are the key evidence in most cases and almost all writings today are electronic. The paper documents we see are mere shadows of the original ESI; small tips of vast icebergs of electronic truth. Yet lawyers continue to settle for the few paper remnants scattered about a controversy and avoid search of these depths. This realm is beyond their training, beyond their competence. So they agree between themselves not to go there, or if forced, they delegate the task to vendors. They abdicate the traditional role of lawyer as master of discovery. This is a disservice to the profession and the clients we serve.

This situation is getting worse each day, not better, as ESI grows exponentially in volume and complexity. It has created a crises for the legal profession. It is not a crises of poor rules as some contend, and thus revising the rules again is no solution. It is a crises of competence, and as such it is an ethical crises. It is time we owned up to the problem and did something about it. We have an ethical duty to act. The solution is clear. Education and training, combined with recognition and affiliation of experts where competence has not been attained.

Fundamental to professional ethics is the duty to keep the dispute resolution process fair and honest. Controversies must be settled on their merits based on the facts and the law. Moreover, lawyers must put the interest of their clients ahead of their own personal interests. These are the two core truths of attorney ethics. In electronic discovery, we are failing on both fronts.

Can a lawsuit be fair if only one side has an attorney competent to explore the electronic depths, to uncover the truth of what happened? Is the process fair if the attorneys on both sides lack the competence to find the facts hidden in the electronic writings? If the attorneys agree not to look behind the paper curtain and try a case without knowing the electronic truths, is that a fair trial for anyone? If e-discovery in a case is too arcane and complex for an attorney to handle, do they have a duty to share the burden of representation with another attorney who is competent in this field?

Attorneys must put aside their personal pecuniary interest and act in the best interests of the client. If they are not yet competent in e-discovery, or if they have limited competence and face a problem beyond their means, they must retain co-counsel who is able, rather than avoid it or do it negligently. They have an ethical duty to do so, even though this will lower their fees or prove embarrassing to their false pride. The interests of the client must always come first.

In the medical profession, no physician, barring an extreme emergency, would dream of attempting a procedure for which they were not trained and not competent. They would of course affiliate another physician in their patient’s care who had the expertise needed. They would not just retain a vendor, say a drug company, to tell them what to do. They would enlist the assistance of a peer, of another professional subject to the same duties of ethics and professionalism, not to mention malpractice insurance. Is the legal profession subject to a lower standard? I think not. It is time we started living up to it.

Society is complicated. Law and dispute resolution are in many cases today, if not most cases, nearly as complex as the problems faced by medicine. Specialists are needed in substantive areas of law and in procedural areas. The day has come for e-discovery to be recognized as its own speciality. This does not mean that all e-discovery tasks are beyond the pale of trial attorneys. The modern litigation generalist can, with sufficient time and attention, learn the fundamentals of e-discovery and handle many of the basic tasks on their own, including management of vendors.

Still, most have not yet done so. It takes more than a couple of CLEs and books. Until litigators get there, they have an ethical duty to enlist the assistance of other attorneys who have. Moreover, in large more complex cases, an e-discovery specialist attorney will always be needed to manage and supervise the process and personally handle the most difficult tasks. The facts and issues can be too complex and time consuming to be performed competently by part-time e-discovery practitioners.

ESI Bytes Interview

Since ethics and e-discovery are, in my view, critical topics for all litigators today, when I was contacted by Karl Schieneman (shown left) for another interview, I agreed, but only if we would limit the discussion to ethics. (I have previously done an interview by Karl with Judge Scheindlin focused on education.) Karl, whose day-job is the Director of Legal Analytics and Review at Jurinnov, readily agreed. A lengthy one-hour plus podcast interview resulted, which you can listen to and download at the ESIBytes web. My blog this week, and next, will consist of an edited, shortened, and hyper-linked version of this interview.  Also, by popular demand, I will again include <my secret thoughts to self>, or some of them at least, that occurred to me during this interview, much like I did with the Mary Mack interview. I will skip over the interview introductions and get right to the substance.

THE INTERVIEW

KARL: … Ralph, great to have you back on a second show with us.

RALPH: Great to be here, Karl.  <You’ve gotta be easier on me than Mary Mack.> I like speaking with you and appreciate the opportunity to get the message out there to as many people as possible about the importance of ethics in e-discovery.

KARL: This is a topic that really the more you get into e-discovery becomes apparent as just crying out for attention and you’ve blogged about this topic before.  You recently gave a presentation at Mercer University with Judge Facciola, Jason Baron, Professor Monroe Freedman and others on ethics of electronic discovery.  Tell me a little bit about that conference, which just focused on the ethics.

RALPH: I’d be happy to.  It was really quite an incredible, very well run, good conference at Mercer, which is located just south of Atlanta in Macon, Georgia.  Beautiful campus, and we had two full days for a seminar put on by the Law Review there. <Boy do I sound like a flatter; better shut up.> I believe it was the first academic seminar to address the issues of ethics in e-discovery and also in – there was some other presentations on ethics involving the on‑line provision of legal services and advertising, that sort of thing. <All I can remember of the non-e-discovery stuff was their talk about a former Playboy playmate turned lawyer in Illinois who includes “special photos” in her law web and I am not going to start talking about that!> But the focus was on e-discovery. <Must stop thinking about that Illinois lawyer.>

In fact, this first came up about a year ago, Karl – it’s been that long in gestation. <I am talking about the e-discovery ethics seminar of course.> In reading all of the cases in e‑discovery, where there’s just case after case of lawyers being sanctioned … the latest one is, you know, a law firm alone being sanctioned (Bray & Gillespie v. Lexington Ins.), not the client, for misconduct in e‑discovery.  This seemed quite puzzling to me in that, you know, I’ve been a lawyer a long time – since 1980 – and you didn’t see many sanction cases in the ’80s and ’90s against lawyers.  I mean, they would come up, but spoliation was a pretty rare thing.  So, I got to wondering, you know, what is going on?  Has the legal profession suddenly become less ethical?  Nowadays in the 2000s, are we behaving with lower moral standards than we did in the ’80s and the ’90s. <I was there and learned from many older attorneys and so I know that’s not true.>

I was really trying to figure out why is it that there’s so many sanction cases and that lawyers are being reprimanded so often now, and particularly in the field of e‑discovery.  I mean, I think this is the field, and nobody’s ever challenged me on it, where you’ve got more sanction cases involving lawyers than any other field of law.  I found it quite puzzling.

KARL: You know, I’ve found if you say something like that enough times, it becomes true. People believe it.

RALPH: Well, yeah – no, I would love to see another area of law that has more problems than we do in e‑discovery, but I haven’t seen it.

KARL: I won’t challenge you on it, but why do you think this is growing? Because I don’t disagree, honestly, but why do you think this area is growing with ethical issues?

RALPH: Well, this was the puzzler. <Hope he gives me time because this is going to take a while to answer properly.> And so I started thinking about it, you know, and this is a big problem and it’s not something that just happens overnight.  And then I got an invitation from the Dean at Mercer Law School, who said they were organizing this event and … we came up with a dream team, several of them were available, including Judge Facciola, Jason R. Baron, and the person that I now co‑teach e‑discovery with at the University of Florida Law School, and that is Bill Hamilton.  He came up there.  And then we got Judge David Baker, who’s a Magistrate Judge in Orlando, well known and rightfully so for his writing of the e‑discovery opinion, In Re Seroquel. Judge Baker is the only person I know who’s been messing with computers longer than I have.  He goes back to the early and mid ’70s, so he’s very much of a technophile. 

We had this kind of dream team of people that were all – you know, we had months to prepare for this event and trying to think out the whole question of ethics.  Jason gave a presentation – the way it works is in an academic setting, you make a presentation and then the panel members sort of comment on it. Jason made a very interesting presentation concerning ethics related to search, as you might expect, and it had to do with asymmetric knowledge is the way he called it. In other words, when you represent a client as a lawyer over and over again or if you’re in‑house counsel, you become very familiar with their information and you know basically – you have a much better idea of what’s in their information, certainly far better than opposing counsel does. What kind of ethical duties does that create to assist opposing counsel in their search for relevant information? This was the thesis that Jason explored and that was followed up upon by Judge Facciola in a whole area of discussion.

My area of discussion, though, got back to this puzzling question: why are lawyers behaving badly? <That is supposed to be funny Karl. How about at least a chuckle? Maybe he’s never heard of the show?> Kind of a take-off on the popular television show. <Still no laughs. Oh well. Maybe he’s texting or something?> I came up with this thing that I called the wicked quadrant, which is four different factors that I believe explain why it is that all of a sudden there’s so many lawyers being sanctioned in the field of e‑discovery. So I gave a presentation on that. 

In the meantime, I also wrote a law review article further elaborating on my thoughts, and that’s going to be published by the Mercer Law Review, coming out soon in their next 2009 edition.  The other thing Mercer did, which is fascinating and I suggest you try and get a hold of this, they made a transcript of the entire proceeding. So you can read Judge Facciola’s speech on this, you can read what Jason had to say about the duty to assist opposing counsel.  You can read what I had to say and everybody, including – by the way, the keynote speaker, who was none of us. 

Professor Freedman and Metadata

The keynote speech was given by a legend in academic circles called Professor Monroe Freedman, and he is about – I don’t know – late 70s.  Very vigorous <Tried to beak my hand when he shook it.> and known for his controversiality.  He spoke about the ethics of metadata. He thinks that you have a duty to try and find out what your opposing counsel’s metadata is in emails and correspondence they send you.  In spite of the fact that many state bar associations say it’s unethical, Professor Freedman takes the controversial view that you have a duty to mine metadata.  And so that’s also in the transcript.  A very fascinating discussion about that.  In fact I got into a big argument with Professor Freedman about that as I don’t think that’s proper to do when you’re talking about correspondence between lawyers.  But he has a strong position, saying that it is in fact a duty to your client to try and do that. 

KARL: Is Professor Freedman an attorney as well or just an academic?

RALPH: Oh, boy, they hate it when you say just an academic. <Karl, you can now kiss any possible academic career goodbye!> Yeah, he is an attorney – as a matter of fact he represents lawyers that get in trouble with bar associations. And he’s written several textbooks on the ethics of law and is a guy that you might retain if you had a problem ethically in front of a state board. So yeah, he does practice law, but very controversial. One appeals court judge … who later became a supreme court justice … was on a campaign to have Professor Monroe Freedman disbarred because he was controversial back in the ’60s and ’70s. He survived. It’s quite entertaining to read what he had to say.  So look out for that, the Mercer Law Review with the full transcript.

KARL: Okay.

RALPH I’ll probably blog about that or Twitter about it or something to let people know because I think it’s interesting to hear this kind of discussion.  Believe me, no punches were pulled.

The Wicked Quadrant

So anyway, I wrote this law review article called The Wicked Quadrant that will also be included in the publication, and you know, I’m honored to be in there with Judge Facciola and Professor Freedman and Jason and all of them.  I won’t go into the details, but I will just tell you what the four elements of the quadrant are. … I find there’s a lot of resonance and understanding among the general bar, nonspecialists in e-discovery, concerning ethics.  They get ethics and understand the duty of legal competence. They know that’s the fundamental challenge that we’re facing here. 

One of the four sections of the quadrant is that we all have a duty to keep up.  We have a duty to learn the new law and like it or not, part of that is – in litigation – e-discovery.  So we’ve got to take the time to train ourselves to be competent in this field. The fact that the bar as a whole is not really doing that is one of the problems and leads to this appearance of impropriety.  A lot of the impropriety is from not knowing what they were doing, and they were making mistakes.  It may look like intentional bad faith, but actually they’re just screwing up because they didn’t know any better.

KARL: Yeah, you know, I’ve found that in law.  I mean, if you think back to when you started as a lawyer, this is where — when I was reading this was my – what I first thought about.  I remember that first year summer associate at a downtown law firm being asked to research something.  And it was almost as if everything I learned in legal writing disappeared from my mind.  I walked into the library and I thought, what do I do?  And I must have killed a lot of time.  I didn’t want to tell anyone I didn’t know how to start it.  And, you know, I got – got through the project but – but it was – it’s almost like you’re not rewarded or there’s this fear of saying I don’t understand this, you know, when it’s the first time you try something.  And that – you know, I don’t know if it’s the way lawyers are rewarded.  You know, I’ve often heard partner, making partner, is a lot about never screwing up.  Anyway, I’m sorry to interrupt you.

RALPH. <Huh? What was that all about.> No, it’s – you know, when I got out of law school, the UCC had just been enacted a couple years before. None of the older lawyers knew the UCC and it was a tremendous opportunity for young lawyers to make a contribution immediately. That’s the same situation we’re in now. When you and I did the show before it was on education, so you’ve heard me talk about this before. Young lawyers just getting out of law school now or just starting practice, there’s a tremendous opportunity for you if you can get the competence necessary because a lot of the older attorneys – the ones that are my age – they’re just not going to take the time and it’s just inherently difficult for them.

I started thinking about it and it is more than just a question of legal competence; it’s also a question of technology competence. That is a key part of the quadrant, the four factors to understand why lawyers are screwing up and behaving badly, is because they’re just overwhelmed by the technology. Most lawyers don’t get it, they don’t understand Facebook, they don’t really understand how email works, how deletion works, they don’t know what double-deletion means. There’s just a lot of things that are confusing to them. This technology incompetence leads them to do dumb things in cases like say, “Oh yeah, we’ll review that back-up tape and produce the relevant emails to you next week, Your Honor” when of course they have no clue that there’s 10 million emails on that back-up tape. They just – they don’t know really what they’re talking about. So that’s a big part of the explanation is that we’re in an unprecedented explosion in technological advances. A lot of us lawyers are having trouble keeping up with the ever changing information revolution. <Well, to be honest, for me it still feels like slow motion, especially when using a PC.> So that’s another part of the quadrant.

And then just real quickly, the other two quadrant sectors are the ethics rules – and we’ll get into this in a minute – where you have the client advocacy duties balanced by the professional duties to tell the truth to the court and the duty to opposing counsel to cooperate. That hasn’t been getting enough attention among lawyers until very recently with Judge Grimm and the Sedona Cooperation Proclamation.  The professional duties have been over-shadowed by that other very popular duty to vigorously advocate on your client’s behalf.  That has gotten out of hand on occasion and that’s the other part of the explanation. Because this is the kind of thing clients understand; they see when you are shouting on their behalf and they may reward that financially.  But they don’t understand why it is that you may have a duty to disclose email that’s going to hurt their case and you have a duty to cooperate. So that gets less financial rewards. I get into the economics involved in all of this as well.

Again, I don’t want to get into too much detail except to say the law review article is coming out soon and if you have my second book, Introduction to E-Discovery, Chapter 6 begins with a version of this same article. … from page 385 all the way to 404. …  Then in the book I get into all of the lessons of Qualcom, which of course is the big … e‑discovery ethics case of the decade.  Let’s hope there aren’t any cases worse than Qualcomm.

ABA Model Rule 1.1 of Professional Conduct 

KARL: Yep, that’s true. All right, well let’s – let’s go through some of the rules here. Rule 1.1, Competence, of the ABA Model Rules of Professional Conduct says a lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation. Okay, how do we get in trouble here with ethics and e‑discovery?

RALPH: This is the core problem and this is, you know, why we need more and better training. The problem is, e-discovery isn’t taught in 95% of the law schools, so lawyers are coming out of law school with no information on it, no e‑discovery competence. And in most law firms, except for a very few, typically the larger law firms – in most law firms, there are no e‑discovery lawyers that have done this for years and have gained competence in it one way or the other. So people are all sort of floundering around, which is why your radio show is so important and other educational efforts like that. <A little flattery of the interviewer never hurts.>

People, you know, they need the information out there. It’s why CLEs for e‑discovery continue to be filled even in these rough economic times. People understand that they need to learn this because the whole notion of discovery, it’s now all e‑discovery. Very few writings are created on paper, so 98, 99 percent of our writings today are electronically generated.  Some of them are printed out <Yeah, like that Illinois lawyer. No, must stop thinking about that!>, but a relatively small percentage. Usually the hottest information in any case is going to be the inadvertent information in the electronic mails, the text messages, the instant messages, that short of thing, where people are still saying, you know, incredibly dumb things. <Or including things on their legal web banned in most states.> So to ignore electronic information is to ignore writings. <Writings include photographs you know, all kinds of photographs.> You just can’t conduct litigation <or Bar ethics investigations in Illinois> in a competent manner and not look at all of your writings, not look at the original electronic versions of writings instead of just relying upon, you know, what the client may happen to print out and say, “here, take a look at this.” 

One of my favorite cases I like to talk about, maybe because it’s a Florida case and not everyone knows about it, is Martin v. Northwestern Mutual Life Insurance Company. That’s a 2006 Westlaw case, 148991, Middle District of Florida, where the plaintiff’s attorney, he was suing for disability benefits.  He produced paper that his client – he was representing another plaintiff’s attorney … and they said ‘that’s all we got; those are all the writings we have.’  The insurance company, Northwestern Mutual, eventually proved that that was wrong. They eventually found that they had several thousand pages of email and other records that weren’t produced.  And so they were called in front of the Magistrate Judge on a sanctions motion, and the plaintiff’s excuse was, “I’m sorry, Judge, but me and my client, we’re both computer illiterate.  We didn’t really know how to get to that sort of stuff.” 

Believe me, this excuse has been used for a long time in courts. It’s still used today in state courts all over the country. But in federal court, and when he did it in 2006, the response of Judge Pizo was to call that “frankly ludicrous.”  That’s a quote.  Judges don’t usually call what counsel says ludicrous. <Of course, they think it all of the time, but you have to be incredibly bad for them to actually come out and say it.>  Here the judge said it the writing; sanctions were imposed against the plaintiff. This case represents the death knell of this whole, “gee, judge, I didn’t know” as a valid way to avoid doing your job and finding the writings, even though they haven’t been printed out.  This “frankly ludicrous” reaction is what I think you’re going to find in every federal court in the country now. They’re just not going to put up with this excuse of I didn’t know how to do it.  Although, honestly, we all know it still goes on in state court. But it’s only a matter of time before the state courts won’t put up with it either. <Please!>

KARL: You know, drilling just a little bit deeper into the competence issue, because there’s just so many areas where this can come up.  You know, the podcast that you blogged a little bit about that I did with Judge Facciola and Tom French, we got into the economics.  And, you know, this is going to cost a little bit of money sometimes to do this.  And Tom French on the plaintiff’s time said, well, if you can’t afford it, you shouldn’t be doing it.  You know, he came right out and said that’s an ethical obligation that you have as the lawyers not to take the case if you can’t afford to do it right and to look at the data, which I thought was an interesting thought I hadn’t really thought about too much, to tell you the truth.

RALPH: Well, that’s a rare breath of fresh air and honesty. But, you know, a lot of plaintiff’s lawyers don’t look at it that way. <Some will take any case that walks through the door.> A lot of defense lawyers don’t look at it that way. <They won’t admit they can’t do e-discovery either and so they just make a terrible muck of things.>  In fact, what we’ve had – what we’ve seen – this is me getting controversial here for a minute – we’ve seen lawyers abdicate their responsibility to vendors. <Oh well, just lost half of the vendors with that remark. Hope it does not piss off Karl.> Now, I know you work for a vendor, too, so you’ve seen it, but you don’t have to give – you don’t have to make any comments, but you know rather than their figuring out how to do it, they’ll hire somebody else to do it and these vendors will end up making a lot of legal decisions. <I just love consultants who say, I’m not allowed to give legal advice, but …> And the lawyers don’t really have a clue what they’re doing. <Better try now to get out of the big hole I have just dug myself into.> Now your company is, I know, one of the good ones and they’re honest, but you and I know that they’re not all like that and that vendors are in business to make money. So what they end up doing is over-review, they look at too many documents. The vendors are not really helping to keep the expenses down because it’s not in their best interest to do so. <Of course, the lawyers love it too. They are happy to be mislead. More review equals more billings. The only one that loses is the client, but no one has told them what is really going on.>

I think that one of the real reasons e-discovery is too expensive is that lawyers don’t know how to do it right and so they over-delegate it to vendors that don’t have the same motivation as a lawyer might to save the client money. <I bet you will never see this quote in the vendor driven e-discovery media.>

KARL: One other area of competence I want your thoughts on a little bit is you mentioned the split between large and mid-size law firms, between those who have e-discovery groups or, you know, focus lawyers that understand e-discovery, and those that don’t. Isn’t it also a battle even with the structure, say you’ve done it right and you have that competence established, to get every lawyer to pick up the phone when they have a matter and say, “hey, I may have an issue here”?

RALPH: Yeah, it’s – it’s a real educational challenge. <He’s baiting me here. Probably pissed about my vendor slams. Got to be careful.> The large firms, like my firm, we have the advantage in that, you know, we can have a few people become an expert in it. But then we have the disadvantage of having literally hundreds of litigation lawyers and training them to pick up the phone and do that, that just takes time. Because it’s – you know, it’s like, can you teach an old dog new tricks?  Yes you can, but it takes a lot of effort. Litigators are used to doing discovery on their own. It’s a hard shock for them to realize that there may be part of discovery that they can’t handle. They don’t like to admit that, but slowly they will start to and will turn to specialists for help.

This point was learned recently by a very good firm, Reed Smith, who has some 1500 lawyers, including some excellent e-discovery lawyers. Yet in the Bray and Gillespie v. Lexington Insurance case just this March, the law firm itself was sanctioned for e-discovery mistakes. It was sanctioned for the actions of two of its attorneys, shareholders.  It was an Orlando district court case.  And it’s not because they didn’t have the law firm resources; it’s because they didn’t ask for the help, these two shareholders just did it on their own.

This is the wake up call, the Bray and Gillespie case.  I think it’s a huge wake-up call for law firms to start imposing some discipline in making sure that larger firms actually use the resources that they’re given.  The citation for that by the way is 2009 WestLaw 546429, Middle District Florida, March 4, 2009.  I think that’s a very important case.  I know my good friend, Browning Marean of DLA Piper thinks this case is more important than the Qualcomm case because it sends a message to the law firms themselves that you’ve got to make sure that the knowledge is actually being used. The courts  are not going to tolerate the kind of activity that happened in Bray and Gillespie and others which were, in the judge’s view at least, a clear violation of the rules of what’s required for the format of production.

To be continued in next weeks blog….. 

In the meantime, what do you think? Has the issue of attorney competence with e-discovery reached ethical crises proportions?

 

Part Two: Eight Years of Imminence – Utah Court Mines Safe Harbor Rule 37(e) Into Oblivion

This is a continuation of my last blog on Phillip M. Adams & Associates, L.L.C., v. Dell, Inc., 2009 WL 910801 (D.Utah March 30, 2009). If you have not already read Part One, skip down to the preceding blog, or click here, and read Part One first. Otherwise, this blog may not make a whole lot of sense (and even then I make no promises).

U.S. Magistrate Judge
David Nuffer

Arthur Anderson and the mentioned policy arguments, including privacy rights, were not cited in the opinion, nor were they raised in the parties’ motions. Since these arguments were not made, you can hardly blame Judge David Nuffer for not addressing them. It pains me to have to disagree with Judge Nuffer at all, since he is a fellow blogger and computer nerd, which, in my world, is a high compliment. His blog concerns the federal court electronic filing system and is called the Utah District Court CMECF Updates.

By all reports, Judge Nuffer is also a frequent lecturer on technology and legal issues. Judge Nuffer is clearly one of the more high-tech judges on the federal bench. He even has a page on FaceBook. He is also obviously a strong believer in active, centralized, information management systems and knows a lot about the computer industry.

Evidentiary Rulings on ESI

Although I must respectfully disagree with Judge Nuffer’s holdings on the mentioned issues of duty to preserve and data retention policies, I do wholeheartedly agree with his other rulings in this opinion on the admissibility of electronic evidence. Here, Judge Nuffer gets it right and excludes one piece of electronic evidence as double hearsay, but allows all of the rest, overruling ASUS’ weak authenticity and hearsay objections to email and other electronic documents. Here is his ruling in Phillip M. Adams at *7 and *9 on these points:

The purpose of authentication is to buttress reliability and filter untrustworthy evidence. ASUS is using the requirement of authentication, in conjunction with its internal evidence vacuum, to eliminate the only evidence available because ASUS will not repudiate, authenticate or contradict it. That the evidence comes from other sources will be considered as to the weight the evidence may have, but ASUS should not be able to prevent consideration of the best evidence available, which has reasonable assurances of authenticity.

The Winbond emails are admissible business records of Winbond. They reflect the activities and knowledge of Winbond and only mention involvement of ASUS. The emails do not contain conclusive statements similar to those in the Woon Report. Because the records themselves are the actual communications, they are timely recorded, regular activities; they memorialize events and conditions; and they have no indicia of untrustworthiness. They do not purport to reflect statements of unidentified third parties.

See Losey, R., The Ninth Step: Review of George Paul’s New Book “Foundations of Digital Evidence”. 

ASUS had another objection to admissibility of ESI that was original, but lame. They claimed the evidence was confusing because it included some computer code, hexadecimal and even zeros and ones, along with readable text. They actually argued that this would be so confusing to a jury that it would prejudice them. They wanted to keep this evidence from the jury, even though the readable text was obviously relevant. Judge Nuffer rejected this by saying at *10  “Computer gobblydegook is not confusing or prejudicial.” You have got to admire a judge who says computer gobblydegook, a phrase I have not heard in many years. I guess the defendants picked the wrong judge for a dazed and confused by computers argument. I wonder if that argument has actually worked for them before with someone else?

Could a Duty to Preserve Possibly Commence
Eight Years Before a Suit is Filed?

Judge Nuffer thought that ASUS should start preserving ESI in 1999, eight years before it was sued by Phillip M. Adams & Associates, L.L.C.. On its face, this is a shocking ruling that seems to defy common sense. What about statutes of limitations? What about laches? What about the practical problems of keeping a litigation hold in place for eight years? What about the rights of privacy and to be left alone from intrusive government interference? What about due process? Must we all now employ soothsayers to comply with the law?

I think it is an obviously wrong decision and, I suspect, so will the District Court Judge who decides the pending appeal. I think it will be reversed, but, in fairness, I must tell you that at least one other expert vehemently disagrees with me. Craig Ball at the “International Litigation Support Leaders Conference” in D.C. this week publicly disagreed with my assessment of this case and its likely reversal. He thinks it will certainly be upheld. To emphasize his point, he promised the attendees that he would buy me a steak dinner in Orlando if the opinion is reversed! I have great respect for Craig Ball, who gave a brilliant Keynote speech to start the conference, but I am not backing down, and by the way Craig, I like my steak medium rare.

I will not attempt to dissect Craig’s reasoning (you can see it for yourself in a blog he wrote), but I will examine the reasoning stated in the opinion of Judge Nuffer.  Here is the actual language in Phillip M. Adams at *5 and *12, which provides the background on this eight-year hold holding:

It is true that most of the documentation on which Adams relies on this motion was produced by parties other than ASUS. Only the executable “ifdc.exe;” the patent application; and the two Yang emails were produced by ASUS. The two Yang emails were produced months after this motion was filed. Because ASUS has produced so little, Adams therefore draws the conclusion that ASUS has destroyed evidence.

The universe of materials we are missing is very large. Indisputably, we have very little evidence compared to what would be expected. The next issue is ASUS’ duty to preserve evidence, and whether the lack of evidence is due to breach of that duty. ASUS claims that its duty to preserve documents related to these claims arose only in early 2005.

ASUS claims that Adams’ delay in giving notice and bringing suit is the reason it has so little documentation.

Adams and ASUS agree that a litigant’s duty to preserve evidence arises when “he knows or should know [it] is relevant to imminent or ongoing litigation.” Jordan F. Miller Corp. v. Mid-Continent Aircraft Service, Inc., No. 97-5089, 1998 WL 68879, *5 (10th Cir. Feb. 20, 1998).

This is the judge’s view of the general background and parties’ positions. It is surprising to see that the parties agree on the law of their Circuit, which, by the way, is stricter than most. It requires not just a reasonable likelihood of litigation, but that litigation be imminent. This makes the ultimate ruling all the more confusing. Eight years of imminence? The explanation comes in the next paragraph at *12, *13:

ASUS’ arguments pin this date to the first letter from Plaintiff’s counsel. However, counsel’s letter is not the inviolable benchmark. In 103 Investors I, L.P. v. Square D Co., 470 F.3d 985 (10th Cir.2006), the plaintiff building owner sued an electrical parts manufacturer for failure to warn of proper care for a part alleged to have been the fire ignition point. “[A]fter the fire … without notice to the defendant [manufacturer], plaintiff threw away fifty to sixty feet of the busway and saved only four feet. The portion of the busway that was saved was not a piece that would have contained a warning [label].”FN123 The disposition of the busway was long before suit was filed. But “[t]he district court found that plaintiff had a duty to preserve the evidence because it knew or should have known that litigation was imminent….”FN124

*13 In late 1999, Toshiba paid billions of dollars in a class action settlement related to the floppy disk errors at issue FN125 and a class action lawsuit was filed against HP.FN126 In early 2000, Sam Yang was writing emails about his work on the software ASUS was using “to verify the FDC write-data distortion.”FN127 In late 2001, a patent application was filed by Yang and ASUS.FN128 In April 2000 a class action lawsuit was filed against Sony based on this alleged defect.FN129 Throughout this entire time, computer and component manufacturers were sensitized to the issue. The time period was the technology equivalent of the 103 Investors’ building fire. The building owner may not have known that a defective wiring bus caused the fire, or that suit would be filed, but the owner had a duty to preserve immediately after the fire. In the 1999-2000 environment, ASUS should have been preserving evidence related to floppy disk controller errors.

The problem with Judge Nuffer’s reliance on 103 Investors, and other cases like it, is that the party with the early duty to preserve is always the plaintiff. In 103 Investors, the building owner threw away the evidence before suing the manufacturer. The plaintiff (building owner) had the duty to preserve, not the defendant manufacturer. The building owner decided to wait for years before it filed suit, so of course it was fair to impose an early duty to preserve upon them. It made sense to sanction the plaintiff in 103 Investors for spoliation.

The same logic does not apply to a defendant. How was ASUS to know if and when they would be sued for the industry rage of suits in 1999 about floppy disk errors? Absent notice of imminent threat of a particular official proceeding in which those documents might be material, ASUS had no duty to preserve its email and other electronic records. If something as vague and ephemeral as sensitization to an issue triggers a duty to preserve, then unless we suddenly enter a world devoid of controversy, no one will ever delete an email again. We will soon drown in a deluge of data or risk spoliation when someone decides to sue eight years later. There will be no trigger of a duty to preserve, you will instead have a perpetual duty to preserve anything that someone, someday, might want to use in court against you for God knows what. 

My Theory of the Real Reasoning
Behind the Phillip M. Adams Opinion

Judge Nuffer is known to be technologically sophisticated and probably has extensive knowledge and background of the computer industry. His opinion includes recitations of allegations and information inferring his agreement with the plaintiff’s allegations of intentional patent infringement by ASUS. For example (bold emphasis added):

Adams alleges that “ASUS has destroyed the source code and documents relating to [two] test programs” created with “Adams’ patented and proprietary technology….” FN15 Adams also claims ASUS destroyed “documents that would have conclusively demonstrated ASUS’ piracy.” FN16 Adams’ stated factual basis for this motion is twofold: first, that ASUS has illegally used Adams’ patented software; and second, that ASUS has destroyed evidence of that use. The first assertion is identical to the liability issue in this case. The second assertion is premised on the first: Assuming ASUS used Adams’ software, ASUS’ failure to produce evidence of that use is sanctionable spoliation. Adams has no direct proof of destruction of evidence but is inferring destruction or withholding of evidence. Since Adams is convinced that ASUS infringed, Adams is also convinced that failure to produce evidence of infringement is sanctionable.

Because ASUS has produced so little, Adams therefore draws the conclusion that ASUS has destroyed evidence. ASUS’s only response is that it has produced a large volume of documents. That may be the case; but, it has not produced the most critical documents – those that relate to its misappropriation, its copying, and its willful behavior. The only conclusion after all this time is that ASUS has destroyed critical evidence that it simply cannot show did not exist.FN54

Certainly, other parties have provided evidence that one would expect ASUS to have as well. And the volume and tenor of the Winbond communication and concurrent Yang emails would suggest ASUS should have far more evidence than it has produced in this case. ASUS’ own statements and productions highlight data that is missing. … ASUS has produced a CD with program files from the time at issue,FN109 but somehowthe ASUS source code at issue in this case was not available.

The universe of materials we are missing is very large. Indisputably, we have very little evidence compared to what would be expected.

*13 In late 1999, Toshiba paid billions of dollars in a class action settlement related to the floppy disk errors at issue FN125 and a class action lawsuit was filed against HP.FN126 In early 2000, Sam Yang was writing emails about his work on the software ASUS was using “to verify the FDC write-data distortion.”FN127 In late 2001, a patent application was filed by Yang and ASUS.FN128 In April 2000 a class action lawsuit was filed against Sony based on this alleged defect.FN129 Throughout this entire time, computer and component manufacturers were sensitized to the issue. 

Similarly, here, ASUS’ system architecture of questionable reliability which has evolved rather than been planned, operates to deny Adams access to evidence. This should not be excused.

ASUS’ practices invite the abuse of rights of others, because the practices tend toward loss of data. The practices place operations-level employees in the position of deciding what information is relevant to the enterprise and its data retention needs. ASUS alone bears responsibility for the absence of evidence it would be expected to possess. While Adams has not shown ASUS mounted a destructive effort aimed at evidence affecting Adams or at evidence of ASUS’ wrongful use of intellectual property, it is clear that ASUS’ lack of a retention policy and irresponsible data retention practices are responsible for the loss of significant data. Prejudice might be considerable.

Id. at *2, *5, *11, *12, *13, *15. In ASUS’ objection memorandum appealing this decision to the District Court Judge, they point out that many of the above facts are not in the record at all. They also strongly protest the accuracy and relevance of the alleged Toshiba and Sony settlements, arguing there is no basis to connect those cases or settlements to this case, much less their activities or alleged spoliation.

Reading between the lines throughout the opinion and in the paragraph at *5 quoted above, right on the lines, it seems to me that Judge Nuffer has already made up his mind as to the ultimate merits of this case. He appears to be convinced that ASUS is guilty as charged and this has colored his whole decision. See especially his statement at * 5: “… it (ASUS) has not produced the most critical documents – those that relate to its misappropriation, its copying, and its willful behavior.” Obviously the judge believes that ASUS has illegally reverse-engineered and copied plaintiff’s computer code as the plaintiff alleges, and their destruction of email, source code, and other ESI is all part of an elaborate cover-up. 

I am afraid that this view is based on knowledge and facts way outside of the record presented to him, and in any event, Judge Nuffer does not make any such specific findings of infringement (except perhaps for the quoted sentence in *5 above, which is, I think, more of a Freudian slip than anything). Moreover, Magistrate Judge Nuffer does not have the authority as a Magistrate Judge to so rule on the ultimate merits of the case. A motion for summary judgment has not even been filed yet by the plaintiff, much less referred to him by the District Court Judge for adjudication. Further, the recitation of general industry “facts” in this opinion suggests that Judge Nuffer has relied on his experience and knowledge of events outside of the record of this case. This is also impermissible, but is a common danger faced by all learned judges, especially when a case concerns an area or industry in which they may have some special knowledge and expertise. 

Judge Nuffer’s unstated view of the ultimate merits of the case appears to be the real reason that he found a duty to preserve going back eight years. What Judge Nuffer is really saying is that a retention policy designed and manipulated to hide illegal activities was not a policy carried out in good faith. Since he has already determined that illegal activities occurred, for that reason alone the defendants were not entitled to the safe harbor protection of Rule 37(e). Of course, the opinion does not expressly say anything like this, there are no findings of infringement, which makes the opinion all the more difficult for ASUS to appeal. The real reasons are hidden behind the interpretation of Rule 37(e) and opinions as to the reasonability of document retention policies, which are in themselves also clearly erroneous and contrary to law as previously shown.

Since Judge Nuffer believes, or at least suspects, that ASUS intentionally copied the plaintiff’s computer code, he considers all subsequent deletion of this illegal activity to be intentional spoliation, regardless of any actual knowledge or not on ASUS’s part of imminent litigation. In other words, since ASUS knows it did wrong, they must also know that litigation against them is at all times imminent. Imminent thus become immanent (which means “part of its inherent nature” from the Latin in manere – “to remain within”).

To generalize, this means that any person or entity who commits a civil wrong has a duty to preserve evidence of that wrongdoing and this duty continues, in perpetuity, until such time as a suit against them is actually filed. This quite literally confuses imminence with immanence (which, ironically, is a philosophical belief common in Utah). This may be good theology, but it is bad law. Barring specific records retention laws, there is no inherent legal duty to preserve evidence that may be used against you some day in civil dispute resolution. People and businesses should not be required to keep a permanent record of everything they do just because someone may someday allege that what they did violated their rights in some way. This is over-litigiousness gone mad.

Judge Nuffer’s decision should be reversed because he has improperly imposed sanctions based on the merits of the case, even though he was not asked to rule on the merits and has not made any express findings of the merits. Remember, the plaintiff did not sue for spoliation, it sued for patent infringement. The only findings of wrongdoing Judge Nuffer expressly makes is his questionable finding that ASUS’ method of record keeping was negligent. Judge Nuffer exceeds the jurisdiction allotted to him as a Magistrate Judge when he rules on a discovery issue based on his opinion of the merits. Judge Nuffer was assigned to hear a spoliation motion, nothing more. By addressing the merits, without even a pending motion for summary judgement, or other proper notice and hearings, he deprives ASUS of due process of law. It is fundamental that without due process, there can be no justice.

Conclusion

The facts in Phillip M. Adams do not warrant the imposition of spoliation sanctions. I understand Judge Nuffer’s concerns and suspicions on the merits, and perhaps the District Court Judge or  jury will feel the same way, if and when this case goes to trial. But this is not a valid reason to inviserate Rule 37(e) and impose sanctions for spoliation. It is just the basis for argument of inference, nothing more nor less. 

The lack of email retained by ASUS can be argued as part of the plaintiff’s overall case. This can be a strong and compelling argument. If a judge or jury is inclined to think that ASUS did what the plaintiff alleged, then it only makes sense that ASUS would not want to leave an electronic trail of their wrongdoing. Deletion of all but two emails is consistent with a guilty conscience. This is, I think, a fair inference that the plaintiff should be free to argue, so long as counsel does not go beyond the facts. Conversely, the defense is free to counter with their own version of why things were deleted, not saved. These are issues for trial, not for a Magistrate Judge adjudication under the pretext of e-discovery spoliation.

The missing evidence issues in this case should not be blown out of proportion. It is just the tail of the dog, not the dog itself. It is just one of many possible inferences that both sides will ask the jury to make to rule on the merits of the alleged patent infringement. If the jury is not inclined to believe the case against the defendants, then the issue of missing email does not come into play. This is as it should be. The case should be decided on the merits, not by spoliation sanctions. The jury should be allowed to determine infringement or not. The lack of remaining emails by ASUS should be just one factor among many to consider. This is, after all, a case about patent infringement, not about email retention and the desirability of decentralized information management practices. 

I predict Magistrate Judge Nuffer’s opinion will be reversed on appeal to the District Court Judge, or if not, it will be contradicted and criticized by numerous later courts into obscurity. If I am wrong and Phillip M. Adams becomes generally accepted, then the validity of all document retention policies in the country will be in doubt, except only those that say save everything forever. If this comes to pass, plaintiff’s attorneys, hard disk manufacturers, archive and search companies will have great cause for rejoicing.