E-discovery continues to keep inside counsel up at night for two major reasons: the fear of sanctions and the incredibly high costs that everyone thinks comes with it. These fears have increased almost as fast as the vast expansion of data-stores, document review technologies, and inconsistent (and unclear) case law. So it’s easy to see how ESI can become a monster hiding under your bed.   

But there are plenty of ways to keep costs low, reduce business interruptions and prevent the possibility of sanctions. Once in-house counsel becomes comfortable with some of the various strategies on how to do this, they’ll be able to rest much easier.

The Nightmare of Inconsistency: Cases Gone Wild

Usually following the rules gives us a greater sense of certainty and control. But in e-discovery, differing judicial interpretations of the same rules have made outcomes much more difficult to predict. For example, a uniform set of rules exists in the federal courts, yet judicial decisions and interpretations in different jurisdictions can lead to vastly different results even when cases involve the same set of facts. The recent Rambus cases: Micron Technology, Inc.  v. Rambus Inc. and Hynix Semiconductor Inc. v. Rambus are prime examples of this frustrating phenomena.

Both Rambus decisions addressed the pre-litigation conduct of Rambus Inc., a patent holder in the computer chip memory industry. While contemplating litigation, Rambus implemented a document retention policy that instructed employees to actively look for and retain any documents that could be helpful in litigation but to destroy all other documents on an ongoing basis until litigation actually was initiated. Rambus “fulfilled” its policy by holding two separate full-day “shred parties” during which it shredded 700 boxes of documents and erased all but one of 1,269 backup e-mail tapes.

In separate declaratory judgment actions brought to challenge the validity of Rambus’ patent, each declaratory judgment plaintiff alleged that Rambus’ destruction of paper and electronic evidence constituted spoliation. The District of Delaware agreed in the Micron case that some part of Rambus’ destruction of evidence constituted spoliation because litigation was reasonably foreseeable by the date of the second shred party. Under the exact same facts, the Northern District of California in the Hynix case reached an opposite conclusion, ruling that litigation was “not reasonably foreseeable” because a number of contingencies existed that made it uncertain whether litigation would actually proceed.

Only the appeal of both decisions resolved the issue. The Federal Circuit held that the duty to preserve evidence triggers when litigation becomes reasonably foreseeable, and that no additional requirement of imminence or certainty exists. While the Rambus court offered some guidance for determining objective foreseeablity, it didn’t provide clear guidance on when the duty triggers before litigation actually becomes certain.

But the unpredictability doesn’t end there. Since no uniform set of rules exists for state court-based conflicts, jurisdictional differences must be considered and understood anytime litigation is imminent. For example, while some states such as California follow the Federal Rules of Civil Procedure, others, like New York, have enacted unique sets of rules crafted from a variety of sources. Still others, like Illinois, have yet to enact any specific rules at all and instead resolve E-discovery disputes by consulting a revolving set of authorities. 

This unpredictability often can lead to counsel being extremely conservative and erring on the side of over-preserving and over-collecting data, undoubtedly leading to increased business interruption and increased costs. But there are some core anchors that in-house counsel can rely on to help them remedy these problems in certain situations.

Practical Strategies for Obtaining Consistent Results

Some of these core anchors to reduce costs and mitigate the potential for sanctions include:

  • Be proactive. Create well-crafted document and electronic data retention policies. Promote access to real information by crafting a policy that identifies and preserves important, unique information while having the ability to eliminate non-unique, redundant data in certain circumstances. Use IT as well legal department inputs as part of the policy design. But make sure to enforce the policy and monitor compliance. 
  • Know the triggers to the duty to preserve. Map out a strategy for tracking past triggers and upcoming potential conflicts. Become familiar with industry and business events that make litigation “reasonably foreseeable.” As an example, in the patent litigation at issue in Rambus, the court said the nature of the parties’ relationship played an important part in assessing whether or not litigation was reasonably foreseeable and explained that the lack of a longstanding mutually beneficial business relationship made litigation more objectively foreseeable once licensing negotiations began. Know these types of case-specific triggers. 
  • Have an effective litigation hold process in place. In some instances, you can eliminate overbroad holds by taking the time to identify the correct individuals for initial inclusion. Include protocols for tracking adherence and handling the data of people who leave the organization. Then, ensure the ability to undertake ongoing strategic hold management by providing procedures that allow release from the hold of included but non-necessary employees.
  • Target Your Collections. The most effective way to contain costs in many situations is to limit the amount of data collected. Know the data you need to preserve and the data—such as non-unique information on legacy systems—that you don’t. Then target your collections to compile the smallest, defensible set of potentially responsive data from involved individuals. Have those custodians help you create keyword searches to test your collection. Also consider the use of an open-book policy that communicates the searches used to the other side—so they can’t complain later. 
  • Plan before, debrief after. Take the time to research the individual approach of the jurisdictions, judges, magistrates and special masters specifically involved in cases which you are or may be involved. In the post-case world, discuss e-discovery rule impact and evaluate lessons learned to implement any changes needed for upcoming cases. Revaluate and rejuvenate your strategies and policy.