In 2009, the American College of Trial Lawyers published a report by a task force on discovery. The overall conclusion was that discovery was destroying the civil judicial process: It costs too much, and can become an end in itself. The report stated that the electronic discovery process needed a serious overhaul. It included a comment from an attorney that the electronic discovery process is "a nightmare." That was in 2009. Nightmare is a mild description in 2013.
E-discovery and the rules for its application are spawning litigation, multiple hearings, conflicting rulings from courts, and an increasing number of consultants and litigation attorneys who make the bulk of their living from it. Several years ago, in a spoof on legal trends published in The Philadelphia Lawyer, the Philadelphia Bar Association's quarterly magazine, a fictitious lawyer was described as being so successful at discovery that he was elected as a fellow of the American College of Discovery Specialists, and one well-known law school was offering a master's degree in discovery. Although the comments were tongue-in-cheek, they are not far off. E-discovery is a gathering storm that will soon cloud the pretrial phase of civil litigation in both federal and state courts. It affects the criminal process as well, especially in grand jury investigations of white-collar corporate crime.
Although there are some guidelines emerging from the courts as to how e-discovery should be handled, there are conflicting approaches. Federal and state courts differ on the judicial procedure, and judges in both of those jurisdictions differ among themselves.
E-discovery is a product of the increased use and storage of documents in electronic form (ESI, electronically stored information). As commercial entities increase storing their business information electronically, e-discovery will increase. ESI compared to paper document retention is described by many as staggering. How this discovery will be managed without stalling the litigation procedure is a major problem. The law profession with its common law, case development methodology is not equipped to handle problems where the technology outpaces the law. The process has spawned a new entity, electronic discovery consultants or specialists, outside third parties who are paid to advise law firms and corporations on storing and retrieving electronically stored information. This is a growing industry. Watch for law firms specializing in e-discovery as well as the major accounting firms offering complete consulting services in competition with the law firms.
Attorneys looking for guidance in handling these matters will find conflicting rules, depending upon federal or state court, and conflicting rules within each jurisdiction. As one attorney outside Philadelphia told me, "The judges on the whole don't have a good handle on this." As shown below, a great many courts simply direct the attorneys to confer, set up a procedure and work it out, before they think about coming to the court.
Federal courts are guided by Rule 26(b) and Rule 16 of the Federal Rules of Civil Procedure. These rules require the attorneys to confer about discovery matters, and then meet formally with the court to manage the litigation. At the Rule 16 conference with the judge, many district court judges look for the lawyers to establish protocols on how they will manage the discovery. Other district court judges do not mention the subject. U.S. District Judge Timothy J. Savage of the Eastern District of Pennsylvania has a standing order governing electronic discovery that is required to be followed if the attorneys cannot reach an agreement on how to conduct e-discovery before the Rule 16 scheduling conference. This order must be followed until the parties conduct e-discovery pursuant to an agreed-upon protocol. This order can be found in Savage's practices and procedures on the court's website.
There are such orders in other federal judicial districts; they vary in specificity. Some are described by practicing attorneys as extreme, and examples of how process has gone bad. Some attorneys are critical of the federal process as attempting to provide too much guidance.
Pennsylvania state courts provide far less direction than federal procedure. The same procedure for traditional hard-copy document discovery still applies in Pennsylvania state courts; however, the old traditional methods need judicial tweaking. Philadelphia Court of Common Pleas Judge Sandra Mazer Moss, and judicial team leader of the First Judicial District, in a recent seminar, said she will meet with attorneys and insist that they produce protocols to follow in the discovery process. She will often appoint discovery masters to make recommendations for the cases. State court judges utilize discovery masters far more than federal court. Eastern District Judge Mitchell S. Goldberg said, at the same seminar, that federal magistrate judges are available to act as discovery masters, and requests to utilize them as such should be made by the attorneys.
E-discovery has produced new issues, new concepts and new code words.
• Preservation. In the old days when businesses relied upon hard copy, document retention and destruction policies were designed to protect the company in the event of litigation, as well as for legitimate business purposes. If litigation arose, the company placed a freeze on its destruction cycle. Because electronic documents such as emails are so numerous, they are destroyed routinely after shorter periods of time. These practices have given rise to a new concept: duty to preserve when litigation becomes reasonably foreseeable. Thus, a party not in litigation should know that certain actions of its company may be subject to future litigation and the entity should preserve evidence that may be relevant to that future litigation. This is not when a suit is filed, but when a suit may be filed sometime in the future. This obligation falls upon the party planning to sue, and the party likely to be sued. (Recall the description by the ACTL task force that e-discovery is a nightmare.) There is a growing body of law to this effect. Failure to adhere to this concept can result in sanctions such as an adverse inference instruction at trial. (See Sekisui America v. Hart, No. 12 civ. 3479, (S.D. N.Y. August 15, 2013).)
• Cost-shifting. There is a concept that when the discovery requests are so onerous the costs should be borne by the party making the requests. This is certainly fact-driven, and will depend upon the circumstances, and whether the demand is made in pretrial discovery or for costs after verdict at trial. There are numerous cases regarding costs from varying formats. One can foresee attorneys becoming format experts.
• Criminal matters. E-discovery becomes very relevant in criminal matters, especially where the prosecutor issues grand jury subpoenas for documents from corporate or other business entities. Federal prosecutors often issue grand jury subpoenas for documents that go back in time five or six years, which in hard-copy production have been routinely upheld by the courts. Such requests are greatly magnified by the volume in today's ESI world. Rob Cary of Williams & Connolly, and co-author of a book on criminal discovery, said the costs of production are often prohibitive, as the concept of relevance in a grand jury investigation has very little application to the volume of documents requested. The circumstances for these subpoena requests are far different than those in a civil discovery case. The U.S. attorney will promptly seek monetary sanctions for failure to produce without a demonstration of good cause, or will use the failure to produce to justify a search warrant for the seizure of company computer hard drives. An additional problem is that there may be difficulty in negating a production protocol, as the prosecutor may rely on grand jury secrecy as a reason for not providing specific information as to the exact subject of the investigation. The attorney for the subpoenaed party should file a motion to suppress the subpoena as being burdensome, and seek an order that the government must pay for the excessive costs. There is no guarantee that this will be successful. The government attorney may be required to demonstrate the purpose of the request in camera to the court. The attorney for the party may request the court to order the government to supply code words for the search, if the government has refused to do so.
The overall concept that one can take from the e-discovery practice is that attorneys had best work out a protocol for determining what documents are necessary. Courts have little patience in plodding through the intricate detail of what categories are relevant, even when a discovery master is appointed. Be reasonable in your requests.
Although e-discovery is the product of the ESI age, e-discovery can affect bona fide litigation; good causes will not be brought to trial because of the discovery costs. As the ACTL task force report stated, trials are not a failure of the system; in the common law, they are the cornerstone. When trials are avoided simply because of the discovery process, we become something resembling the continental European civil law society. One byproduct of this procedure is the trial lawyer disappears and is replaced by a discovery specialist.
Peter F. Vaira is a principal shareholder in the Philadelphia law firm of Vaira & Riley. He is the author of Eastern District Federal Practice Rules, Annotated (Gann Law Books). He can be contacted by email at firstname.lastname@example.org. Vaira has a blog devoted entirely to Eastern District practice at http://petervaira.wordpress.com.