E-Discovery Update: Separating E-Discovery Myths from Realities
By Conrad J. Jacoby, Published on March 18, 2007
As the legal community continues to puzzle through the impact that
digital information is having on the practice of law, many practitioners
are guided by long-standing misconceptions and misunderstandings about
electronic discovery. Whatever seed of truth exists in these platitudes,
taking them at face value can lead to poor strategic decisions that
limit the effectiveness of otherwise competent legal advice. Several
particular “rules of thumb” seem particularly common in the legal
community, even with extensive education efforts.
Myth: E-Discovery Is Now Required In Every Case
Reality: False. Since December 1, 2006, discovery of
electronically stored information (“ESI”) has been a mandatory topic of
conversation in every federal case and in an increasing number of state
court matters. However, simply discussing e-discovery doesn’t materially
change the basis for a legal claim or the factual evidence that supports
or disproves the case. While individuals and businesses alike rely on
computers for many reasons, e-discovery comes into play only when
relevant information is stored digitally.
In some situations, even though electronic evidence is available, it may
be possible to resolve a dispute based on other evidence. Such an
analysis is necessarily case specific, and the outcome is never a
foregone conclusion, because so much useful information is often found
in electronic evidence. However, situations can occur in which
electronic evidence is strategically less important than other evidence.
For example, in a breach of contract case, voluminous electronic
information may pertain to how a business contract was negotiated.
Typical electronic evidence would include e-mail messages, draft
documents, and spreadsheets of estimated profitability. However, the
corporate decision that legally bound to specific guarantees and
covenants took place at meetings of its board of directors. The
handwritten notes of board members, along with annotations they made on
printouts of electronically-prepared documents that were distributed at
each of their meetings, may contain the most relevant and probative
evidence in the entire case. It may be possible to resolve the case on
the basis of only those traditional hardcopy materials.
An increasing percentage of cases already require the preservation and
production of ESI. However, a legal team still has full discretion to
work up a case any way that it believes will achieve best results for
its client. Mandatory discussion about electronic discovery does not
preclude the possibility that digital evidence will only have secondary
importance in the case. However, attorneys must be prepared to analyze
the extent to which it is a factor in their cases.
Myth: Electronic Discovery Substantially Raises
The Cost Of Litigation
Reality: Sometimes true, sometimes false. It’s impossible to deny
that the electronic discovery services business has grown exponentially
over the past few years. Certain costs are associated with managing
electronically stored information, and the cost can be significant in
large cases. However, the fact that large cases can require large
budgets for processing electronic documents doesn’t mean that all
litigation matters require the same budget. Indeed, under the amended
Federal Rules of Civil Procedure, litigants have a number of new
opportunities to discuss e-discovery issues with their opponents and
negotiate ways to contain costs.
Careful preparation is the key to limiting costs. For example, a client
that understands the structure of its ESI repositories can impose
targeted legal hold measures that (1) frees other electronic information
to be used as appropriate without fear of inadvertent spoliation; and
(2) limits the amount of ESI that may have to be collected, processed,
and reviewed (It should go without saying that the less that’s in a
discovery document collection, the lower its overall cost.). In
addition, to the extent that a requesting party is not reasonable in
good faith negotiations about the scope of a legal hold, a well-prepared
producing party has ready access to the information needed to
persuasively present its position to a court and seek affirmative
relief. After all, the guiding principle of fact discovery in civil
litigation is reasonable inquiry at reasonable expense, as measured by
against the significance and nature of the underlying legal dispute.
Myth: People Go To Jail For Mismanaging
Reality: False as stated. People go to jail for intentionally tampering
with or destroying relevant evidence, regardless of its format. While a
number of cases suggest that lawyers have an affirmative duty to be
knowledgeable about electronic discovery as a matter of professional
competence (e.g., Metropolitan Opera Ass’n, Inc. v. Local 100, Hotel
Employees, 212 F.R.D. 178 (S.D.N.Y. 2003)), a legal team or client
that uses reasonable efforts to preserve potentially relevant ESI is
unlikely to face criminal penalties, even if things to horribly wrong.
On the other hand, a number of civil remedies, such as excluding
evidence (United States v. Philip Morris, USA, Inc., No.
CIV.A.99-2496, 2004 WL 1627252 (D.D.C. July 21 2004)), reading a jury
instruction to the jury that permits them to assume that missing ESI
contained information harmful to the producing party (e.g., Zubulake
v. UBS Warburg LLC ("Zubulake V"), 2004 WL 1620866 (S.D.N.Y. July
20, 2004), or even striking affirmative defenses (e.g., Coleman
(Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., 2005 WL
679071 (Fla. Cir. Ct. Mar. 1, 2005),) can have a huge impact on
litigants and their counsel, even without orange jumpsuits and jail
Myth: E-Discovery Is An Exclusive, Esoteric
Practice Area That Can Only Be Properly Managed By [Expensive]
Reality: False. “E-discovery” is not a monolithic subject, and
many important tasks that fall within this general description can be
executed very well by even the most technologically unsophisticated
practitioner. For example, the most important part of civil litigation
fact discovery for both requesting and producing parties is identifying
where potentially relevant information is stored. An age-old but highly
successful strategy for finding these materials is identifying people
involved in the critical events and interviewing them about what they
remember, including where relevant documents and information can be
found. This isn’t e-discovery; it’s basic case development.
E-discovery kicks in when it’s time to identify ways in which fact
witnesses may have stored information electronically, but even here,
crucial initial research requires only limited technical knowledge. Does
the fact witness use a computer? More than one computer? Where are these
computers located? Does the witness send and receive e-mail messages?
Does the witness save e-mail messages after they’ve been read? This
information provides the foundation for all subsequent (and potentially
technical) preservation and collection efforts, but it doesn’t take a
computer scientist to have a productive conversation on these topics.
Technical expertise can be required to move beyond initial
information-gathering questions and into specific issues of data
retention, collection, review, and production. And indeed, current
e-discovery technology is evolving so quickly that it’s important to
have someone on the legal team who can provide this specialized
expertise. However, these subsequent tasks rely by necessity on earlier,
old-fashioned, case preparation.
Myth: Lawyers Have To Understand E-Discovery
Reality: True. For a lawyer to determine whether or not
e-discovery is relevant in a specific case, he or she must have some
understanding of the ESI used or stored by the client and its opponent.
Ignorance is not an option; a number of legal ethics opinions and
published judicial opinions suggest that mismanaging e-discovery may be
a breach of an attorney's duty to provide competent services to clients. An
attorney may not need to understand the esoteric nuances of digital
information storage, but in a world where more than 98% of all new
information is created electronically, it’s no longer possible for
anyone to deny the importance of electronic evidence in the world in
which we live and practice law.