E-Discovery: 2009 Year In Review

This year, the case law at both a state and federal level matured, with the end game still being that reasonableness, common sense and good faith are the underlying tenants guiding document discovery.

The federal courts emphasized that document requests balance the cost-reward ratio and rest on some demonstrative basis for the request beyond gut instinct. <I>See e.g., Ford Motor Co. v. Edgewood Props., Inc., 257 F.R.D. 418 (D.N.J. 2009) (should requesting parties fail to make a demonstrative showing that opposing counsel acted in either a purposeful or negligent manner in withholding documents, the court will deny the requesting party demand – weighing the reasonableness of the demand against the cost.); <I>William A. Gross. Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 2009 WL 724954 (S.D.N.Y. Mar. 19, 2009); <I>Aguilar v. Immigration & Customs Enforcement Div. of U.S. Dept. of Homeland Sec., 2008 WL 5062700 (S.D.N.Y. Nov. 21, 2008).

Common sense rules are also in state courts. For instance, when a litigant directly violates a court order to produce their laptop by using wiping software to delete potentially relevant data, sanctions will be issued.  <I>See Oz Optics, Ltd. v. Hakimoglu, 2009 WL 1017042 (Cal. App. Apr. 15, 2009) (Unpublished).  Counsel in receipt of a litigation hold, or certainly a court order, should advise their client to comply and provide guidance on compliance where necessary to avoid negative results and sanctions.  <I>See e.g., Qualcomm Inc. v. Broadcom Corp., 2008 WL 4858685 (S.D. Cal. Nov. 7, 2008); Keithley v. Home Store.com, Inc., 2008 WL 3833384 (N.D. Cal. Aug. 12, 2008); R & R Sails Inc. v. Ins. Co. of Pa., 251 F.R.D. 520 (S.D. Cal. 2008); In re Flash Memory Antitrust Litig., 2008 WL 1831668 (N.D. Cal. Apr. 22, 2008)(discussing importance of counsel’s role in execution of preservation dollars).

This is not to say that the massive amount of information created and stored by an organization does not present an operational challenge to the legal and technology and potential e-discovery risks when a response to a discovery request comes via the courts or administrative agency.  In 2009, the case law and stories reported demonstrated that a great deal of e-discovery headaches arise from the copious amounts of unstructured and unmanaged electronically stored information.

Arguably, legal fees have not grown a great deal in proportion to the amount of data being requested, reviewed and produced.  Clients should realize that greater cost savings can be achieved by focusing on addressing the issues of controlling the amount of information existing within an organization.  While anecdotal, the case law and conversations with my peers, suggest that a clients inability to control their data escalates the costs of e-discovery and not the legal fees.   Effectively less information results in a proportional reduction in the amount of information that is reviewed for legal matters when examined over an extended period – information being defined uniquely for each company and assuming that the systems captures all relevant content.

Counsel should seek solutions that transform an e-discovery request from an unwelcome pressure point to a demonstration of the organization’s capability to marshal its enterprise content with minimal disruption to ongoing business operations.

The coming year will certainly be a big one for e-discovery as the Supreme Court will hear the 9th Circuit’s decision in Quon v. Arch Wireless, 529 F.3d 892 (9th Cir. 2008). It is foreseeable that the Supreme Court may elect to use this case to shape privacy rights of U.S. citizens and weight in on the scope of e-discovery. Below are a couple of good axioms lawyers, for big or small companies or firms, might want to apply in 2010 when dealing with e-discovery.

Trust but verify” It is important that counsel inquire whether cases cited to by vendors in a white paper or presentation have been shepardized, requesting a copy of the case where appropriate. Vendors can unknowingly cite to case law that is no good, or broadly reference and apply cases limited to a unique set of facts. Trust and verify equally applies to counsel’s dealing with in-house information system managers and information custodians – it is rare that the first answer is the complete answer.

“Use it or Lose it”: “Does a vendor eat their own dog food,”asks whether the vendor uses  its own product. If a vendor does not, this should raise a red flag.

It was a watershed year for e-discovery and 2010 is likely to be even more telling.

* Daniel B. Garrie, Esq. has a B.A. and M.A. in computer science and is an e-discovery neutral and special master with Alternative Resolution Centers. He is on the Board of Advisors to Digital Reef Inc. and was named 2009 Top Neutrals as an Up and Coming Star. He can be reached at (310) 284-8224 and daniel@lawandforensics.com