2009 Year in Review
In 2008, the most significant trend in cases where electronic discovery was at issue was an increase in judicial unwillingness to tolerate electronic discovery blunders. In 2009, that trend continued to grow as courts increasingly held parties and lawyers accountable for electronic discovery failures. Other dominant topics in 2009 were the importance of cooperation and transparency in the ediscovery process, and the increased application of new privilege protections (namely Federal Rule of Evidence 502).
From Jan. 1 to Oct. 31, 2009, 108 significant opinions representing ediscovery rulings were analyzed. The breakdown of the major issues involved in these cases is as follows:
- 39 percent of cases addressed sanctions
- 66.67 percent of sanctions involved preservation and spoliation issues
- 16.67 percent of sanctions involved production disputes
- 16.67 percent of sanctions involved other discovery abuses
- 27 percent of cases addressed various production considerations
- 12 percent of cases addressed privilege considerations and waivers
- 12 percent of cases addressed various procedural issues (such as searching protocol)
- 4 percent of cases addressed cost considerations
- 4 percent of cases addressed computer forensics protocols and experts
- 2 percent of cases addressed preservation and spoliation issues (but not sanctions)
- 1 percent of cases addressed discoverability and admissibility issues
The topic of sanctions was again the clear front-runner for issues addressed in ediscovery opinions, increasing from 25 percent in 2008 to 39 percent in 2009. Of the 42 sanctions cases, 29 opinions (69 percent) awarded sanctions fully or in part, 10 opinions (24 percent) denied sanctions and three opinions (7 percent) stayed action pending further hearings or documentation. These statistics should leave no doubt that now is the time for organizations to proactively invest in ESI readiness policies to help avoid costly and damaging consequences.
Five notable ediscovery cases from 2009 that summarized these issues included:
Court of Appeals Issues Guidelines for the Search and Seizure of Electronic Information
United States v. Comprehensive Drug Testing, Inc., 2009 WL 2605378 (Cal. App. 9 Dist. Aug. 26, 2009). In this federal investigation into steroid use by professional baseball players, the government appealed three orders entered by separate courts in the Ninth Circuit relating to the search and seizure of electronic information. The court determined the government should “forswear reliance on the plain view doctrine or any similar doctrine” regarding seizure of data requiring segregation, and issued five guidelines magistrate judges must follow when the government seeks a warrant regarding examination of electronic media.
Court Issues “Wake-up Call” Regarding Need for Cooperation and Effective Searching Techniques
William A. Gross Constr. Assocs., Inc. v. Am. Mfrs. Mut. Ins. Co., 2009 WL 724954 (S.D.N.Y. Mar. 19, 2009). In this multimillion dollar construction litigation, a non-party agreed to produce electronic documents but objected to the search terms both parties proposed. The court issued a “wake-up call” to attorneys about the need to effectively design search terms used in ediscovery. Citing this as the “latest example of lawyers designing keyword searches in the dark, by the seat of the pants,” the court referenced a series of recent decisions on searching and endorsed the “Cooperation Proclamation” from the Sedona Conference®.
Court Imposes Sanctions for “Pattern of Stubborn Defiance” Regarding Ediscovery
Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., 2009 WL 2407754 (M.D. Fla. Aug. 3, 2009); 2009 WL 546429 (M.D. Fla. Mar. 4, 2009). In this ongoing insurance litigation, the defendants sought sanctions for the plaintiffs’ various production shortcomings and misrepresentations. The court concluded the plaintiffs’ conduct was intended to deceive and prevent discovery. Based on several examples of gamesmanship, the court granted evidence preclusion sanctions, and ordered the plaintiffs, the lead plaintiff attorney and the law firm to pay the defendants’ expenses and costs.
Court Affirms Sanctions Order Finding Non-Party Failed to Comply with Discovery Deadlines
In re Fannie Mae Sec. Litig., 2009 WL 21528 (C.A.D.C. Jan. 6, 2009). In this litigation, the Office of Federal Housing Enterprise Oversight (OFHEO), a non-party, appealed the district court’s order finding it in contempt for failing to comply with a discovery deadline. OFHEO sought several discovery extensions, hired 50 contract attorneys and spent more than $6 million—9 percent of the agency’s entire annual budget—to comply. Finding these efforts legally insufficient, the court compared its treatment of the discovery deadlines as “movable goal posts” and directed OFHEO to supply documents withheld for privilege that were not logged by the deadline as a sanction for their discovery misconduct.
Court Denies Application of Safe Harbor Provision for Preservation Failures
Phillip M. Adams & Assocs., LLC v. Dell, Inc., 2009 WL 910801 (D. Utah Mar. 30, 2009). In this patent infringement litigation, the plaintiff inferred that spoliation occurred based on the defendants’ non-production of certain relevant evidence and sought sanctions. The court denied application of the safe harbor provision, citing an ediscovery expert’s declaration that failed to state the destruction was a result of a “routine, good-faith operation” and noting the defendants’ “[irresponsible data retention] practices invite the abuse of others.”
Although three years have passed since amendments to the Federal Rules of Civil Procedure were adopted, organizations still show signs of struggle regarding proper preparation for and compliance with ediscovery obligations. The economic downturn that took center stage in 2009 further complicated matters by forcing corporations to control costs and do more with less. Companies began utilizing such technologies as early data assessment, and working with outside counsel to create alternative pricing arrangements that provide increased flexibility and predictability. In 2010, companies should continue investing in advancing technologies and engage in proactive data management policies. After all, upfront preparedness is a valuable cost-saving and risk-mitigating strategy.