Seventh Circuit's Electronic Discovery Pilot Program

Monday, February 1, 2010 - 00:00

The Editor interviews Hon. James F. Holderman, Chief District Judge, U.S. District Court, Northern District of Illinois.

Editor: Why is e-discovery a pressing issue for our justice system?

Holderman: Electronically stored information ("ESI") touches all aspects of our lives. The convenience offered by constantly improving technology has expanded the volume of communications such that electronic discovery needs to be addressed in virtually all state and federal litigation.

In coping with e-discovery, we have largely relied on the same paper discovery procedures that we used for the last century. It is apparent that those procedures are outdated. The reason we put together the Seventh Circuit Pilot Program was to develop a new approach based on a set of Principles directed specifically to the issues raised by e-discovery.

Whenever I speak to bar groups or to business executives, they tell me that something has to be done about e-discovery. They mention that because it is so expensive, burdensome and time consuming, it causes them sometimes to make decisions to settle unmeritorious suits. That is just not right.

Editor: Please tell us about the E-Discovery Committee.

Holderman: Conceived initially as a committee to work with the United States District Court for the Northern District of Illinois, I appointed lawyers and non-lawyers who are experts in the field of ESI to the E-Discovery Committee to develop a new approach based on a set of Principles directed specifically to the issues raised by e-discovery.

The Committee is chaired by United States Magistrate Judge Nan Nolan. It quickly expanded to include more than forty experts in the field of electronic discovery.

The E-Discovery Committee members include private practitioners from the full spectrum of the bar (plaintiff, defense and government) who are leaders in the area of electronic discovery, in-house counsel at companies who regularly face the challenges of discovery in organizations with large and complex electronic systems, and experts from electronic discovery vendors who regularly collect and process electronically stored information.

The E-Discovery Committee members identified three major areas of focus and formed three corresponding subcommittees: a Preservation sub-committee chaired by James Montana, Jr.. of Vedder Price PC; an Early Case Assessment subcommittee co-chaired by Karen Quirk of Winston & Strawn LLP and Tom Lidbury of Mayer Brown; and an Education subcommittee, co-chaired by Mary Rowland of Hughes Socol Piers Resnick & Dym Ltd. and Kate Kelly of the U.S. Attorney's Office. An additional subcommittee concerned with developing the surveys to gather the data was co-chaired by Joanne McMahon of General Electric and Natalie Spears of Sonnenschein Nath & Rosenthal LLP. Each E-Discovery Committee member joined at least one and often two subcommittees.

All those involved with the E-Discovery Committee deserve great praise for their efforts with particular praise going to the chairs and co-chairs of the subcommittees who devoted untold hours to completing the tasks assigned to their subcommittees.

Editor: Principle 1.01 (Purpose) states that the purpose of the Principles is to secure the "just, speedy, and inexpensive determination of every civil case, and to promote, whenever possible, the early resolution of disputes regarding the discovery of electronically stored information without Court intervention." That says a lot in a few words.

Holderman: What that says is that purpose of the Principles being applied in the Pilot Program is simply to implement the language you quoted, which states the primary basis of the Federal Rules of Civil Procedure (FRCP). What we are doing is developing procedures that enable the purposes of the FRCP to be achieved in the 21st century and make them work for the types of discovery that are necessary in litigation today.

That was the driving force behind our E-Discovery Committee's work and the Principles that it developed. The purpose of the Pilot Program is to test those Principles by applying them to the real world situations reflected in cases before the courts in the Seventh Circuit. It will help us answer questions like: What procedures should we change? How can we adjust the procedures that we have to make them fit the new courtroom realities?

I really believe that we need to change the culture of litigation in the federal courts in the United States. I don't believe that the old hardball approach of "ask for everything, give nothing" works today. We are hoping to convince lawyers that cooperation in seeking the truth is consistent with the concept of zealous advocacy in furthering a client's interest. There has to be a sea change in the approach to discovery. Principle 1.02 (Cooperation) puts teeth in the requirement that the parties cooperate. It states: "The failure of counsel or the parties to litigation to cooperate in facilitating and reasonably limiting discovery requests and responses raises litigation costs and contributes to the risk of sanctions."

Editor: Principle 1.03 (Discovery Proportionality) stresses the need for proportionality. Was this Principle intentionally positioned high on the list?

Holderman: Yes. We just discussed the need for the parties to cooperate to achieve a just result given the explosion of ESI. If the courts don't act, many litigation outcomes will be determined by the burdens of e-discovery rather than on the merits. That's where "proportionality" comes into play.

Lawyers for the parties should at the outset estimate the dollar value of the recovery that is possible in the case and then keep the cost of e-discovery proportionate to that amount. Simply stated, they need to cooperate to evaluate how much e-discovery is reasonable under those circumstances.

Editor: Tell us why Principle 2.01 that requires the parties to meet-and-confer on discovery and to identify disputes for early resolution is important.

Holderman: Essentially what we are talking about is early case assessment. For best results, this should take place in a pre-litigation setting before the lawsuit is even filed. This provides counsel for each of the parties with an opportunity to assess the strengths and weaknesses of their respective cases, including how e-discovery can best be handled given the coordination and proportionality requirements. This needs to be addressed right away, not several months into the litigation.

Editor: Doesn't that pretty much move in the direction of requiring the plaintiff to provide specific facts about the basis for the complaint? How can the discoverable "ESI" to be preserved and produced be determined unless the plaintiff comes forward with the specific facts on which its case is based?

Holderman: It cannot be done, and that is why the plaintiff needs to cooperate by divulging that information at the outset. Hiding the ball is a concept from the last century that can't be a part of present-day litigation. This is reflected in the Supreme Court's decisions in Iqbal and Twombly . Discovery is expensive and let's get the information out early. What is the benefit of bare-bones pleadings when the expense of e-discovery is so great? If the plaintiff has information then let's see whether the plaintiff has a sufficient basis for going forward to withstand a motion for summary judgment.

Editor: Another point that strikes me as being important is that doing discovery in phases is among the matters to be considered at the meet-and-confer conference.

Holderman: The fact that you may not have another crack at e-discovery later puts pressure on the parties to put all their cards on the table at that conference Editor: Paragraph (b) of Principle 2.01 provides that any disputes regarding ESI that counsel for the parties are unable to resolve shall be presented to the court at the initial status conference in Principle 2.01. Paragraph (d) provides that "If the court determines that any counsel or party in a case has failed to cooperate and participate in good faith in the meet-and-confer process or is impeding the purpose of the Principles, the Court may require additional discussions prior to the commencement of discovery, and may impose sanctions, if appropriate." What is the purpose of these provisions?

Holderman: They are supposed to cause the lawyers to be motivated. If there are disputes that the parties are unable to resolve then we want them presented to the court as early as possible. The whole idea is "let's not go down blind alleys"; let's focus on what will be essential for the plaintiff and the defendant to get to the merits of the case. We want to encourage the parties to cooperate to solve any disputes and let them know that if they don't, sanctions will be applied.

These Principles are really just a recitation of what is available in the FRCP anyway and a reaffirmation that there may be sanctions. Frankly, sanctions for failure to cooperate are relatively rare. Given the proliferation of ESI in the second decade of the 21st century, courts recognize that failures to cooperate causes unnecessary expense for both parties and that some sanction should be imposed.

Editor: Why will the appointment of an e-discovery liaison pursuant to Principle 2.02 be helpful?

Holderman: The meet-and-confer conference is essential to reducing the cost of e-discovery. If a lawyer comes to the conference and is not familiar with ESI concepts, we need to have somebody at the conference who can help achieve the most efficient production at the least cost so that we can maintain the concept of proportionality. You just have to have a technical person who understands the client's system.

Editor: Principle 2.03 deals with preservation requests and orders. It states that "Vague and overly broad preservation requests do not further the goals of these Principles and are therefore disfavored."

Holderman: We shouldn't require any party to maintain information that is not going to be essential to discovery. A party will not be sanctioned if there isn't cooperation from the party seeking the discovery in providing specific facts that provide a basis for determining what needs to be maintained. This is reinforced by paragraph (c) of Principle 2.04 which states that "The parties and counsel should come to the meet-and-confer conference prepared to discuss the claims and defenses in the case including specific issues."

Editor: What follow-up has occurred or will occur?Holderman: The reason we started the Pilot Program and the purpose of the Principles is to implement Rule 1 of the Federal Rules of Civil Procedure which is to secure the "just speedy and inexpensive" determination of every case. These Principles will be tested in cases during the phases of the Pilot Program. The tests began in October of 2009 and will be continued through April. In March, the lawyers and judges involved in those cases will be surveyed to see how effective the application of the Principles has been in incentivizing early and informal information exchange on commonly encountered issues relating to evidence preservation and discovery, paper and electronic, as required by Rule 26(f)(2).

Editor: Tell us more about the survey.

Holderman: The survey is being conducted by the Institute for Advancement of American Legal System at the University of Denver (IAALS). We are finalizing the survey with the help of the IAALS. The analysis of the results of the survey will be done by the Federal Judicial Center (FJC), which is the educational arm of the federal courts. The FJC wanted to assist us in our survey here in the Seventh Circuit because the FJC had completed and reported on a survey in October 2009, which was more of a national survey with regard to the Civil Rules. It was a preliminary report to the Judicial Conference Advisory Committee on the Civil Rules. The FJC is going to assist us in analyzing our survey's results. Those results and the analysis will be presented to the Seventh Circuit Judicial Conference here in Chicago in early May.

Editor: Will that be coordinated with the May conference at Duke, and what happens next?

Holderman: We plan to present that same information at the Duke Conference the following week. That will conclude Phase One. We consider Phase One to be a preliminary snapshot with regard to reaction to the Principles.

We are hoping to initiate Phase Two on June 1 after having had the opportunity to revise the Principles based on the results of the Phase One survey and the feedback that we get from our reports about the survey results. The Federal Judicial Center has agreed to assist us with Phase Two, which will run for an entire year from June 1, 2010 to June 1, 2011 and be expanded beyond the Seventh Circuit.