Electronic Discovery and Digital Evidence in a Nutshell - Chapter VII Outline

Here's another installment of my outline of Electronic Discovery and Digital Evidence in a Nutshell, the second edition of the West Academic guide to electronic discovery law in the United States authored by Judge Shira Scheindlin (the judge in the Zubulake v. UBS Warburg) and members of the Sedona Conference. An outline of the previous chapter was posted on February 5, 2017.


A. CHALLENGING AND DEFENDING EDISCOVERY PROCESS a. Ediscovery often descends into contentious motion practice. b. Victor Stanley v. Creative Pipe court warned that parties must be prepared to explain the rationale for selecting the search methodology, demonstrate that it is appropriate, and show that it was properly implemented. c. Nat’l Day Laborer v. ICE not enough to know the search terms, also have to demonstrate the method in which they are combined and deployed. d. Standard of Reasonableness i. FRCP 34(b)(1)(A) – must describe each item requested with reasonable particularity. ii. FRCP 26(g) responding party must certify that response has been formed to the best of the person’s knowledge after a reasonable inquiry. iii. Freedman v. Weatherford (S.D.N.Y. 2014) – FRCP does not require perfection. Not surprising that some relevant documents fell through cracks – these were uncovered when plaintiffs substituted their search terms for those used by the defendants. iv. FHFA v. HSBC (S.D.N.Y. 2014) – the court refused a request to for discovery from a parallel litigation to be used to test completeness of production. All that can be expected is a good faith, diligent commitment to produce all responsive documents uncovered when following agreed upon protocols. e. Challenges to EDiscovery Process i. Discovery about discovery 1. Motion to compel further discovery under 37(e) 2. Motion for a protective under 26(c) 3. Motion for sanctions under 37(a); (c); or (e) ii. Some courts, including D. Kan, require good cause considering the specific need for discovery, including relevance and suitability of alternative means for obtaining the information. Good cause exists where there is evidence of failure to preserve or produce discoverable ESI. iii. Kinetic Concepts v. Convatec (M.D.N.C. 2010) – even an informed suspicion that additional non-privileged documents exist, cannot support an order to compel production. iv. Finding of good cause requires more than speculation that discovery may be inadequate in the future. v. Am. Mktg. In-Store v. Floorgraphics (D.N.J. 2012) court said that while party used incorrect search terms and did not search all sources, motion to compel was premature because party was still checking its production. f. Defending EDiscovery Process i. Must demonstrate that due diligence was exercised in the process. Some courts have approved checklists and guidelines. ii. Considerations for developing reasonable process: 1. Identity of key custodians 2. Locations of relevant ESI 3. Steps taken to preserve 4. Suitability of criteria used to identify ESI for collection, processing, and review. 5. Suitability of tools 6. Qualifications of individuals entrusted to collect, process, search and review ESI. iii. Contemporaneous documentation of the process is required. 1. Description of information systems. 2. Records of interviews with key custodians. 3. Sources of information excluded including those not reasonably accessible. 4. Chain of custody records. 5. Specifications used to process data 6. Search and culling methods employed, including keywords, date restrictions, TAR protocols, and other culling parameters and filters; 7. Document reviewer guidelines. 8. Sampling or other validation methods used to test efficacy of search methods. 9. Substance of the meet and confer. iv. Da Silva Moore v. Publicis Groupe – Rule 702 and Daubert not applicable to how documents are searched for and found in discovery. But there is a split in opinion on this. g. Information Resolution of EDiscovery Challenges i. Best way to avoid challenges is to avoid them through transparency and cooperation using the Rule 26(f) meet and confer process. ii. Progressive Cas. Ins. v. Delaney (D. Nev. 2014) – court would approve ESI protocol if parties had worked with their ediscovery consultants and agreed at the outset to a predictive coding protocol.

B. COST, COST SHARING, AND COST SHIFTING a. The Costs of Discovery – i. 2011 Degnan Study – 1. $1000 per GB for hosting and processing. 2. $28 per hour to outsource review to India; $65 in New York. 3. Attorneys can review 50 documents per hour. 4. Review cost for 100 GB is between $7,000 and $284,000. 5. Total cost of discovery between $2.70 - $4 per document. ii. 2012 Rand Study 1. Collection 8% of total costs. 2. Processing 19% of total costs. 3. Review 73% of total costs. b. Approaches to Cost Reduction i. FRCP 26(b)(1) restricts scope of discovery to matters relevant to claims and defenses, but not any matter relevant to the subject matter of the dispute. ii. FRCP 26(b)(2)(B) – per se category of unduly burdensome or expensive discovery. – not reasonably accessible. Cost shifting may be ordered. iii. Costs may also be awarded to the prevailing party. c. Cost Sharing and Cost Shifting: The Zubulake Factors i. Zubulake v. UBS Warburg (S.D.N.Y. 2003) – cost shifting should only be considered when there is an undue burden or expense on the producing party. This depends on whether the data is accessible which depends on the media on which it is stored. ii. Backup tapes are the most expensive media to produce from. iii. Seven factor cost shifting test: 1. Specificity of the discovery requests. 2. Availability from other sources. 3. Total cost of production in comparison to the amount in controversy. 4. Total cost of production in comparison to the resources of each party. 5. Relative ability of each party to control costs and its incentive to do so. 6. Importance of issues at stake in the litigation. 7. Relative benefits to the parties of obtaining the information. iv. Boeynaems v. LA Fitness (E.D. Pa. 2012) – cost shifting is available even for accessible data. v. All courts agreed that the mere fact that ESI is not reasonably accessible does not require cost shifting. vi. The 2015 amendments to the Rules resolved the split, by stating in Rule 26( c)( 1)( B) that the court may consider, when framing a protective order, “specifying terms, including time and place or the allocation of expenses, for the disclosure or discovery” (emphasis added) without reference to accessibility of ESI. d. Factors In Addition to Zubulake i. Quinby v. WestLB (S.D.N.Y. 2006) – data moved to backup tapes after a duty for preservation had been triggered. Cost would not be shifted if on such notice at the time of transfer. e. Shifting the Costs Incurred by Nonparties Responding to Rule 45 Subpoenas i. FRCP 45 – attorney issuing the subpoena must take reasonable steps to avoid imposing undue burden or expense on person subject to the subpoena. ii. Courts have traditionally looked favorably on requests to quash unduly burdensome subpoenas or shift cost to the requesting party. iii. DeGeer v. Gillis (N.D. Ill. 2010) – 3 factor test to see if costs should be shifted in case of subpoena on third party. 1. Whether nonparty has an interest in the outcome of the case. 2. Whether the nonparty can more readily bear the costs than the requesting party. 3. Is the litigation of public importance? f. Recovering EDiscovery Costs as a Prevailing Party i. FRCP 54(d) – unless federal statute, FRCP, or court order provides otherwise costs should be allowed to the prevailing party. ii. 28 U.S.C. 1920 narrow definition of costs: 1. Clerk / marshal fees 2. Transcript fees 3. Fees for printing and witnesses. 4. Fees for exemplification and costs of making copies. 5. Docket fees 6. Compensation of experts and interpreters. iii. Race Tires v. Hoosier Racing Tire – (3d Cir. 2011) – Under 28 U.S.C. 1920 – conversion of natives to TIFF and scanning of documents are making copies, not processing and indexing, or collection and preservation. But responding party can invoke FRCP 26 (c) court discretion to grant orders protecting from undue burden or expense, and shift costs.

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