The Georgetown Law Center’s Advanced E-Discovery Institute is a highlight on the calendar every year. The conference kicked off yesterday (Nov. 18) at the Ritz-Carlton in Pentagon City, VA, with an e-discovery case law update that involved a panel of many preeminent jurists. The panel was moderated by The Sedona Conference’s Ken Withers and included the following:
- Hon. John M. Facciola
- Hon. Nan R. Nolan
- Hon. Andrew J. Peck
- Hon. James M. Rosenbaum (Ret.)
- Hon. Lee H. Rosenthal, and
- Hon. Shira A. Scheindlin.
We have transcribed the initial portion of the 75-minute session to help share this important update with the broader e-discovery community. The discussion about preservation was the first segment and it commenced with a detailed review by Ken Withers of Judge Scheindlin’s Pension Committee opinion. This case has stirred debate among the courts about what constitutes reasonable and good-faith behavior.
The panel discussion allowed the judges to maintain a relaxed, collegial rapport. It makes for an interesting and entertaining read. The panel had some important points to make and hopefully the discussion helps illuminate this ongoing discussion about preservation obligations.
To read Monica Bay’s coverage of this session for Law Technology News, click here.
Note: This is an unofficial transcript of the event. Every effort has been made to ensure the accuracy of commentary provided by this esteemed panel. The recording suffered from poor audio quality. Every effort was made to transcribe the panel’s discussion accurately.
So that in a nutshell is Pension Committee and I’d like to start with Judge Rosenbaum, and your reactions to Pension Committee and are these kinds of activities — that were characterized as negligence and gross negligence – are these the kinds of activities that you’ve seen in litigation in your experience?
Well, my practice was based in Minnesota, and Minnesota does not have the violations of e-discovery (laughter) nor are any of the lawyers neither negligent nor culpable, but in New York…. (laughter).
It is with a certain merit that one of the things that I found in the Pension Committee – when I’m five feet away from Shira Scheindlin – there are some things that are, there are many things that are important about that case, but one of them that is quite important is Judge Scheindlin sits in the Second Circuit.
In the Second Circuit you are subject to sanction if you are negligent in your work. Gross negligence would be obviously subject to higher intentional, those kinds of things, would raise the bar. But the Second Circuit standard is the only circuit that has the negligence standard for malpractice in discovery, or for failure to comply with discovery. Judge Scheindlin is also the author of all 19 Zubulake opinions.
This is an unusual area of law. Think back to your first year of law school. What’s the law? The Constitution. Laws passed by Congress, and laws handed down by Courts of Appeals.
This is, and has actually become, a body of law generated by district judges. There are precious few appellate judges and magistrate judges. They are not law giving courts in any kind of tradition. Except in the e-discovery field, it’s the nature of the beast that these cases are handled by the district judges. Either the case then settles or you try the case or you wind up with appeals mostly on different kinds of issues.
But I think it’s important to understand that Judge Scheindlin who wrote the Zubulake decisions made it very clear that in her view it was necessary that there be written hold orders and a failure to supply them, to comply with that, would be negligence. Well, negligence, thinking back again to first year, is a violation of a known legal duty, and known legal duties typically were handed down by appeals courts, but when you have written the Zubulake decisions I think you have a right to rely on those decisions anyway.
It’s a very interesting case. I will quote from no less an authority than her, however. She said that the plaintiffs’ lawyers did issue a telephone call, email and written memorandum “instructing plaintiffs to be over rather than under inclusive and knowing that emails and electronic discoverment with documents should be included in the production.
This instruction does not meet the standard for a litigation hold. It does not direct employees to preserve all relevant records, both paper and electronic, nor does it create a mechanism for collecting the preserved records so that they can be searched.” So the fact that the lawyer did everything but send up smoke signals telling people to behave themselves didn’t say “preserve it” and that’s essential and I think you can be fair in regarding that. And she also charmingly said that a pure heart and an empty head is not a sufficient answer.
So I think with those thoughts in mind you need to be very careful, you need to be careful to preserve and you need to be careful to monitor that preservation.
The last thing I will point out, and it’s quite important, is these were the plaintiffs’ lawyers who were sanctioned. The obligation to preserve is reciprocal. It’s not just on defendants and classically you think of the defendant who has a certain demand for litigation holds and that sort of thing.
There you go.
Ken Withers: Judge Scheindlin, I think you have something to say.
Judge Scheindlin: Yes, it’s called rebuttal.
Judge Rosenbaum: Didn’t I adequately quote you? (laughter)
Judge Scheindlin: I just have a couple of small points that I think are important to note. First of all, the Second Circuit is not alone. There are a couple of other Circuits that take the same view as the Second Circuit. But secondly, we have to distinguish among the kinds of sanctions.
Negligence, in any circuit, may be sanctionable if there’s a loss, if there’s prejudice, and if what was lost is relevant. It doesn’t matter what sanction, but we may not get an adverse inference instruction, we may get a monetary sanction, but if people are negligent and the evidence of loss and somebody’s hurt by it, the court has a basis for those sanctions.
A sanction, in any circuit, is s a matter of what sanction the conduct rules support but we have to be careful to talk about that continuum from intentional, willful to reckless, gross negligence to negligence, but negligence depends on what happens as a result. I think it’s an important point that we have to take away.
Now, the other rebuttal is that I know that a lot of the world is unhappy with me about this litigation hold issue, but I never understood what the big problem is. Write it up, protect yourself, it’s credible, you can defend it, and still… I’m not going to back off! I would go all over the country saying, “Why not issue a written litigation hold?” Spell out for your company what they have to do. Instead of fighting with me about it – just do it. Just do it. You will have a defensible process and people will have guidance about what they have to hold on to.
So some people say, “Well, I have a company of one person, do I have to issue a written legal hold to myself?” Now that’s kind of ridiculous, and I’d like to think that judges aren’t that dumb. So no, if you are one person, don’t write a letter to yourself. But primarily what we’re talking about is with big companies with lots of employees and lots of locations. What’s the problem? Send out a blast email. Tell people what to do, and then if they don’t do that, then that’s a different issue, but at least you showed me in good faith how you went about preservation in good faith. So there you have a little bit of prevention.
Of course I could go on for an hour and a half, but I withhold.
Ken Withers: Judge Rosenthal.
Judge Rosenthal: My question for you – and that you began to answer even before I asked the question – and that is the extent to which your approach was colored by the fact that you were dealing with a very sophisticated multinational company that obviously was the plaintiff that though this was this was not an issue, an appreciation of the litigation was not an issue, could afford to hire the kind of legal talent that had read one through 19.
But in fact, a different way of asking the extent to which the reasonableness scaled because negligence as a court based on the reasonableness concept how much of that is influenced by the very specific and variable factors of the kind of the kind of entity or person you’re dealing with because in my world – I live in the other southern district – and we have a few companies that are big, and we have a few companies that hire the kind of sophisticate legal talent that is in this room.
But that is far, far from the routine case or client. And there are a lot of companies out there struggling economically who are not up to speed on the kind of best practice that Pension Committee is wonderful for providing, it does us all a service by providing, but what do you do with – and for – the rest of the world. Does your reasonableness-negligence concept change for different kinds of litigants?
Judge Scheindlin: That was not a simple question! It has many, many parts but I want to respond to this very critical question. It’s a great question but it covers so much.
Judge Rosenbaum: It’s kind of like pornography. Is there a regional standard or a national standard?
Judge Scheindlin: Well, there went 30 of my 90 seconds!
Judge Rosenbaum: They were better than yours!
Judge Scheindlin: You know they’re only going to give us 60 seconds more, but I’m going to try.
First of all, I had thirteen plaintiffs that I dealt with there and the case had 96 plaintiffs, so not everybody failed in their preservation efforts.
Secondly, this case went back a long way. The case was brought in 2004 and I made that point very carefully. If it had been brought in 2007, 8 or 9 then there would have been a different standard anyway.
The third point I want to make very quickly in my remaining seconds is that, oh no, now I forgot what I was going to say, something about this reasonableness idea. Obviously it’s an evolving concept and the more we learn the more we can have a right to expect different litigants to act reasonably, but we talk about proportionality. Proportionality is the word of the day. So if it’s a smaller case with less documents we don’t need that sort of Cadillac treatment. But if it’s a larger case with $10 million or more at stake then people have to put the time and money into it.
So we do want to be proportional every time when judging the efforts that litigants have made. I do think plaintiffs are particularly unnoticed when they’re going to bring this lawsuit they know – they should know now — that they have to preserve everything exactly proportional in their business. Obviously we’re not saying that they have to go outside and hire, necessarily, expensive outside vendors but they have to take the steps that are reasonable for that case.
The ruling of the Pension Committee was the toughest of cases on this list because we don’t have that intentional destruction, the wiping, deletion. This is a case, in a sense, that teaches us the most about best practices and preservation, I think, because it’s not the dramatic case. Everybody knows that if you put on a shredding program, a window washer, you’ve been bad. That’s easy. Those are the easy cases, and that’s Victor Stanley which Judge Grimm said was clear cut because it was so obvious, so grievous. This is a gray area. What conduct is enough to be reasonable and what’s not? That’s why your question is so great.
Ken Withers: Judge Facciola has a word.
Judge Facciola (poor audio due to Judge Facciola’s malfunctioning microphone): Stand outside this building and you can see the Capitol. I think the thing we have a major concern about, and that’s the United States. It is becoming quite clear that the federal agencies do not have regulations in place needed to retain, and the regulations they do have, to a great length, we don’t talk about them.
Twenty five percent of the cases in our court involve the federal government and I grow increasingly concerned every day how it is preserving things, if at all. The situation is only at a trickle. This year for example, the court proposed that all submissions of documents be made online is coming probably by the end of next year. I really fear that along with the governmental austerity and budgets that we won’t get the money to bring the government into this.
Ken Withers: Judge Rosenthal, you have the last word on this segment.
Judge Rosenthal: I just wanted to pick up on one thing that Judge Scheindlin said which I thought was very helpful and worth underscoring and that is that it’s important and useful to think about the nature of the sanction in relationship to the front end aspect which is the kind of preservation obligation that’s there.
There are case altering sanctions like dismissal and adverse inference, those require a different standard across the circuits and a different approach than other types of orders that courts might issue that some courts – you guys might think are sanctions but the court is likely not going to think of it as a sanction such as an order to adjust the discovery. It can take into account a difficulty in obtaining certain kinds of information that you thought at one point a litigant might be able get, or shift the costs, and different courts have a different approach to that order.
Attorney ordered sanctions, or a case altering sanction or a sanction at all, but things like do another deposition, produce another witness, produce the witness again. Those kinds of things. Those really are not helpfully thought of as sanctions at all and they are certainly not the type of case altering sanctions that all of the fervor is being generated over.
Ken Withers: As I said, we’re going to be having a session just on sanctions later on in the program. I had hoped you’d only be talking about preservation issues but they are certainly related. I’d like to move on.