E-Discovery: Your Data Can Forward Reform

Monday, April 5, 2010 - 01:00

Bill Withrow has more than 29 years of trial and appellate practice experience, specializing in class action, RICO, consumer finance, First Amendment, telecommunications and business litigation. He has served as Chief of his firm's Litigation Section since 2003. In recognition of his trial experience, he was inducted as a Fellow in the American College of Trial Lawyers in 2005 and is a member of its Task Force on Discovery and Civil Justice (Task Force).

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 IAALS's Pilot Project Rules.

Editor: Could you give us some insight as to the thinking of the Task Force? One major issue is that when e-discovery is threatened, the cases settle to avoid the cost of discovery.

Withrow: This situation certainly was a major impetus for the formation of the Task Force and the development of the IAALS's and ACTL's principles. Everybody who is involved in litigation today understands that in many cases, the cost of discovery, including e-discovery, becomes disproportionate to the size of the controversy. Litigants often do a cost-benefit analysis to determine the wisdom of proceeding with litigation. The result is that a lot of meritorious cases do not get brought, and many disputes that deserve to be tried are settled. Overall, there is mounting frustration with the efficiency of our system of civil justice.

Editor: Can you tell our readers about those cases when there is extensive discovery and little information developed?

Withrow: A tremendous amount of information is now stored electronically, and our system has not adapted to the tremendous volume of discovery in most complicated cases. Rules designed to operate effectively and fairly in an era when a young lawyer could carry around all the documents in a file under one arm no longer apply. What happens in many of these cases today is that discovery goes on until either the judge intervenes or the parties decide to settle.

It is a problem that occurs because we, as litigants, are not required to focus early in the case on what the key issues are. We are not required to identify the undisputed facts versus those that are in dispute. Lack of early judicial involvement can lead to unchecked discovery.

The cost of discovery is a primary consideration for most of the clients I represent today when deciding whether to litigate or to settle. Too often, those decisions have nothing to do with the merits of the case, but simply reflect the client's business judgment that it is less expensive to pay the settlement than to engage in protracted discovery. That is a shame because our system is designed to litigate disputes, and there are some disputes that should be litigated.

Editor: Is notice pleading now often used as an investigative tool to put together enough facts to see whether the case can be justified?

Withrow: That is correct. One of the things that we looked at on the Task Force was to devise a way of requiring the court and the parties to focus on which facts are undisputed and which are disputed. Notice pleading, standing alone, doesn't really accomplish that. If you have an active judge who calls the parties in early and requires them to justify the type of discovery they are seeking, in almost every situation the problems we are discussing will be avoided.

What the Task Force has determined is that if we require parties to state the facts known at the beginning of the litigation, this will help narrow the issues. However, that requirement is unconnected to any of the law regarding the sufficiency of pleadings.

Our suggestion that a party plead all known facts is not designed to impact the viability of a plaintiff's claim or to alter the pleading requirements in place. It simply is designed to require a discussion at the front end of the case about the facts and to reach agreement on what needs to be discovered and what doesn't.

Editor: What occasioned the provision on pre-complaint discovery?

Withrow: We started with the notion that pleadings should be more fact specific. As a concession to plaintiffs who are in the dark and need some discovery prior to filing the complaint, we made provisions for that. It is a system that is in place in some states and seems to work very well.

Editor: Could it be argued that Iqbal and Twombly makes all of this unnecessary?

Withrow: Not really. The IAALS's and ACTL's principles and the IAALS's Pilot Project Rules, specifically the requirement for fact-based pleading, have nothing to do with pleading standards. All that we are attempting to do is to require the parties, defendants and plaintiffs, to be on equal footing. The defendant with an affirmative defense must plead all the known facts, just as the plaintiff has to plead its claim with all the known facts. It is unconnected with the pleading requirements and is not an attempt to deal with Iqbal or Twombly . In fact, the work of the Task Force was begun before these cases came out.

Editor: There was an expression of concern in Iqbal for distracting government employees from their work. What kinds of distractions happen in the private sector that might impair the operations of a business?

Withrow: This is another aspect of the tremendous cost to the parties when employees are diverted from their normal duties to respond to discovery. Discovery is very disruptive to the daily operation of most business organizations. If employees are doing a lot of unnecessary production of information or review of information, by definition, they are taking time away from their primary duties.

Editor: The IAALS's and ACTL's principles suggest that proportionality only relates to a relationship between the cost of e-discovery and what is at stake in the case in terms of dollars. Why is proportionality considered so important in the approach?

Withrow: It is not intended to be simply a mathematical calculation of the relative costs involved compared to the amount in controversy, such as attorneys' fees and other costs associated with e-discovery. It can be viewed that way in some cases, but there are certainly going to be a number of cases when the concept of proportionality will involve broader issues of social significance. In those cases, you have to look at it other than in a dollars and cents way.

When we talk about proportionality, we are not attempting to peek behind the curtain to look at the merits of the claim. The concept of proportionality assumes that there is merit on both sides of the case.

What we are saying is that if you have a case, and the amount in controversy is $100,000, it doesn't make sense to incur discovery costs of $200,000 to collect that $100,000 judgment. Conversely, if there are questions of substantial importance, such as litigation involving a civil rights claim or the actions of a government official, that may justify extensive e-discovery.

Too often, litigation is not about the merits of the case. It's about the conduct of the lawyers and the parties in providing discovery. In particular, aggressive litigants will attempt to achieve a strategic advantage by tripping up counsel on a discovery issue, and then turning the focus of the litigation to the conduct of the lawyers and the parties in providing discovery and away from the merits of their case.

Another problem associated with protracted discovery is that mistakes are made that are inadvertent or don't impact the ability of an opposing party to discover facts in the case. Yet, these mistakes become the subjects of sanctions. It's an issue that is true for all discovery contests today, and it's not limited solely to electronic discovery.

Editor: I understand that pilot programs are being run to test the IAALS's Pilot Program Rules, the IAALS's and ACTL's principles as well as the Seventh Circuit's recommendations. Can you tell our readers about that?

Withrow: Yes, one of the goals is to encourage state courts to consider adoption of these rules on a test basis. We are very optimistic here in Atlanta that one of our state courts will apply these rules in a pilot project, which will allow us to determine how they work. The rules, by the way, are not written in stone; they can be modified by the participating court. We think that there can be greater flexibility in implementing these projects on the state level than on the federal level. When we assess the results, I predict that you'll see a movement developing in the state court system to adopt these measures.

Editor: How is this going to work unless there are more judges and better paid judges?

Withrow: I understand that most state governments now, including ours in Georgia, are in a tremendous budget crisis. We certainly understand that the timing of this could be better in terms of asking the judges to get more involved.

So we'll have to approach this on a wait-and-see basis. Obviously, it is not designed to put more work on the courts. The belief of the Task Force is that if judges will adopt these project rules, eventually there will be a quicker disposition of cases, including less motion practice. If they define the scope of discovery at the outset of the litigation and set the rules, the parties will follow them. However, you have to engage in that exercise at the front end, or you're going to have to do it at the back end after the investment by the parties becomes disproportionate to the amount in controversy. To the extent that we can get judges to participate, I think they will discover that in the long run, their dockets will be leaner, and their workload can be reduced.

Editor: What is happening on the corporate counsel front is that under the leadership of the Lawyers for Civil Justice (LCJ), a white paper is being prepared for submission at the Duke Conference in May. It will contain as much information as can be collected about the cost to corporations of responding to e-discovery. Do you feel this is a worthwhile activity?

Withrow: Yes. I still am amazed by the number of people today who don't understand the costs that are associated with discovery. I've heard some judges express amazement that there is so much controversy about out-of-control discovery costs. Certainly a number of lawyers I speak to do not have significant involvement in these kinds of disputes, and they are similarly inexperienced and don't know the costs. So education is important because of the number of judges and practitioners who don't come into contact with these issues often enough to understand how significant the costs are.

Please email the interviewee at william.withrow@troutmansanders.com with questions about this interview.