This interview focuses on the approach set forth in the Final Report of the Joint Project of the American College of Trial Lawyers (ACTL) and the Institute for the Advancement of the American Legal System (IAALS) and in the Pilot Project Rules of the IAALS.
Editor: Please describe some instances in which cases were settled in order to avoid eDiscovery costs.
Raymond-Flood: One of the cases that comes to mind was a trade secret case. The electronic discovery volume was huge. In order to evaluate what that case would cost to litigate in light of the volume of electronic discovery at issue, we hired an outside third-party vendor to image all the documents that were on all the relevant computers. The parties jointly asked the outside vendor to perform searches, based on certain keywords, to determine the volume of the documents involved. The volume was so large that the cost to cull and produce the electronic discovery would have far outweighed the value in dispute. Therefore, the parties were able to reach a relatively quick settlement in terms of an agreement with respect to the usage of the various trade secrets involved. In a recent wrongful termination case, the corporate defendant was willing to consider settling early in the litigation, because the volume of its necessary electronic discovery was so formidable.
In general, my practice is to evaluate the eDiscovery issues very early in the case so that I can provide clients with the budget perspective as they pursue settlement options. In the last six or seven cases that I have settled, the cost of eDiscovery was an important factor, although not the only factor, in bringing about settlement.
Editor: In cases where there was extensive discovery, to what extent did you find information through eDiscovery that you would not have found in other ways?
Raymond-Flood: I have had several cases where we found documents that would not have been found in other ways because the documents were only stored electronically. In other cases, eDiscovery has given us some additional information, though not always critical. In cases where both parties have agreed that electronic discovery would not make a significant difference, the parties have agreed not to introduce eDiscovery.
Editor: Have you encountered situations where you felt the other party was intentionally using the cost of eDiscovery to force or improve a settlement in lieu of litigation?
Raymond-Flood: I have not had a specific instance where I felt that the attorneys on the other side were using eDiscovery as a tool to force a settlement, but I certainly think that it has been a major factor in several litigations where one party wished to force the other to the table in the early phase of litigation.
Editor: Have you found cases, in federal or state courts, where notice pleading was used as an investigative tool by the other side to develop facts which they might not have otherwise had to justify bringing a lawsuit?
Raymond-Flood: While New Jersey only requires notice pleading, most of the experienced practitioners in this state provide sufficiently detailed information about the issues and facts. Nonetheless, I have seen litigation where a complaint has been later amended as a result of discovery by the parties in order to make their claims stronger or more specific. I cannot recall a specific instance in which it was used inappropriately as an investigative tool.
Editor: The proposed rules basically state that each party bears the burden of proof with respect to any claim or reformative offense and must plead with particularity all material facts that are known to that party that support the claim or reformative offense. Before eDiscovery takes place, the facts would be on the table so that the eDiscovery would be more focused and less likely to run up costs. How do you view this proposal?
Raymond-Flood: One of the problems is the lack of specificity with respect to eDiscovery, owing to the fact that the volumes of data are so large that it becomes an insurmountable task in terms of dollars and time to ferret out relevant documents. One thing that I've found useful with a case that involves large volumes of electronic discovery is to meet with the other side and hammer out what the parties are really looking for - what are the search terms that we want to use to pull the relevant documents, and do it almost in a phased production. If the parties can specify key search terms that they want searched within their systems, the result is cost-saving and less antipathy between the parties. Each party may still make motions to change the search procedure if there is other information that becomes important. If parties will not agree to narrow searches - don't want to play by the rules - then my view is that they are in the game to run up the costs for the other party and not as concerned about getting the information they profess to need. The courts need to manage this situation in a way that makes it fair for everyone.
Editor: What these rules also provide is that after a time following the making of the claim, the pleading party must make available for inspection and reproduction all reasonably available documents, etc. that may be used to support that party's claims.
Raymond-Flood: That's a very important piece of the puzzle and goes along with our initial disclosure requirements, allowing the parties to understand the allegations early in the process. I would be a proponent of that proposal.
Editor: According to the pilot project rules, the next step is a pretrial conference with the judge meeting with lead trial counsel wherein there would be a complete review with the judge of what was being contemplated by way of eDiscovery. Proportionality would be one of the major discussion pieces early on, along with limitations on eDiscovery.
Raymond-Flood: That is a very important component as well. Proportionality is very important as early as the initial scheduling conference, which is the Rule 16 conference in federal court. The recent practice of the magistrates and judges that I have been before has been to deal with eDiscovery very early on in those conferences. It is important that the attorneys come prepared to discuss these issues, after having met with their clients extensively regarding their systems, how they preserve documents, how they collect documents, what software they have - all of that matters in the way you produce and review documents. The court and attorneys need to understand what the various clients' capabilities are and what the associated costs will be to find and produce the electronic documents at issue. This is why I think that the proportionality issue comes into play and is very important. Certainly one of the biggest concerns that I hear from clients is how much is this going to cost and how will eDiscovery impact the budget of a particular litigation. The value of damages should be considered by the court when it issues a ruling dealing with eDiscovery. For example, if the damages in a particular case are estimated to be a million dollars and the eDiscovery cost would be $40,000, that is a very different analysis from a case that is valued at $40,000 and the eDiscovery costs would be $200,000. In certain cases you may not be able to avoid eDiscovery if that is where the documents are, but there are certainly ways to limit searches and productions in an efficient and productive manner. I generally try to have information with me about what it would cost my client to produce its relevant electronic documents in a particular litigation prior to the initial scheduling conference.
Editor: When you look at the cost of eDiscovery, do you also take into consideration the cost to the client in responding to eDiscovery, such as the litigation hold, costs of personnel involved, and the review with management of emails?
Raymond-Flood: Yes, I take all of these costs into consideration. It may take various employees out of their normal workday for quite a long time when you consider all the work that needs to be done to collect and review documents. Management also has to balance this with how much to keep internal versus how much to send to an outside consultant.
Editor: There is also a provision in the proposed rules with respect to preservation of evidence and litigation holds. One of the principles is that sanctions should apply only where there is a showing of intent to destroy evidence or recklessness.
Raymond-Flood: I think that is a very important consideration, particularly for outside counsel. Outside attorneys work very closely with in-house counsel, HR and IT departments in order to properly preserve and produce evidence. Unfortunately, mistakes happen. It may very well be that you're dealing with documents in such volume that an unintentional oversight occurs. Some of the sanctions that we're seeing today are very extreme. At the same time, we also have to be very careful as a party could be handicapped from pursuing a case if certain necessary documents are not produced. I do tend to agree sanctions should be limited to intentional misconduct, particularly for outside attorneys.
Editor: There are a number of pilot programs being run to test the principles we were talking about. I understand that in New Jersey a pilot program is being conducted where a single judge stays with a case throughout. Have you had any experience in this area?
Raymond-Flood: I have had several cases in New Jersey state courts where we have been with the same judge throughout. I think it makes the case run more efficiently in that we do not need to re-educate the judge every time we walk into the courtroom.
Editor: Do you see any movement toward this more rational treatment of eDiscovery that we've been talking about?
Raymond-Flood: I believe that the magistrates and judges in the New Jersey federal courts are handling eDiscovery in a logical fashion. For example, they are tending to deal with eDiscovery earlier in cases - they want to know the eDiscovery issues and costs up front. The federal judges are embracing various ways to assist the parties to be efficient, such as keyword searching, getting outside vendors in early to determine costs, and providing for budgets to estimate electronic document production versus hard copies. Judges are starting to require early on, depositions of either the IT person or corporate designee who can describe the document practices within a particular company before taking any electronic discovery. I'm finding that the judges are asking the parties to be very specific in how they want the documents produced, and restricting the number of documents that need to be produced in native format. The judges in the federal courts of New Jersey that I have been before recently seem to agree that getting what is needed in the most logical format is what is essential.
Although in the last year I'm starting to see more movement in the New Jersey state courts in the same direction, it is to a lesser degree than the federal courts. One of the specific rules in the New Jersey state courts that is a little different from the federal courts is that petitioners can actually request a conference to deal with electronic discovery issues. It's not an initial scheduling conference as in federal court, but the rule provides a mechanism to allow the parties to deal with the eDiscovery issues in a case. We're starting to see more attorneys use this privilege and I think that it will be to everyone's benefit.
Editor: Do you think it is highly desirable for corporations to provide data and anecdotal evidence to the federal judicial conference so that when they consider rules they would understand just what the burdens are on companies?
Raymond-Flood: I think it's the only way for the judicial conference to actually understand the scope of what we are talking about, which is two-fold - both in the amount of time that it takes a company to produce documents and in the costs.
Another issue is the volume of electronic information produced compared to the actual number of documents that actually gets marked in depositions or at trial. I have one particular case where the electronic documents produced as of today are approximately 240,000 documents. Of these documents, we have marked fewer than 200 for depositions that have occurred thus far. While we still may require more documents, the proportionality of searches in relation to actual documents can be out of kilter.