Child’s Game of “Go Fish” is a Poor Model for e-Discovery Search

Remember the child’s card game Go Fish? You know the one, where each player keeps their own cards secret and tries to guess what cards the others have? You try to get all four of the same rank cards. One player asks another if they have a certain card, such as: do you have any Kings? If that player has any Kings, they have to give them to the requesting player. If not, they say: Go Fish, ha ha, you did not guess right, and then it is the next players turn. (By the way, this game is typically played by very young children.) Based upon the requests one player makes, the other players guess what cards they want. They then try to discard those cards in such a way that the player cannot get to them. The whole enjoyment of the game is derived from not knowing for sure what cards the other players have and from keeping your own card-seeking goals secret. It can take quite a while to guess right and get all four suits of the same rank card. The game goes on until one player wins by only holding four-of-a-kind cards. The game is usually won by the person who is the lucky guesser. There is, to put it mildly, not much skill involved, which is why young kids love the game and older kids don’t.

Most Lawyers Do Search as if it were a Game of Go Fish

I submit that the negotiated key word search model prevalent in e-discovery today uses the same guessing game model as Go Fish. The party requesting ESI guesses what key words might produce evidence to support their case. Do you have any emails that use the keyword “King.” It is necessarily a guess as to what keywords to use because the requesting party cannot see the responding party’s cards. Only the responding party sees all of their own cards, and that is as it should be.

The responding party has a right to privacy. They should not be required to give the requesting party the keys to the server room, the whole deck of cards. The requesting party is either suing the responding party, or being sued by the responding party. Either way, the requesting party should not be permitted to enter and search every nook and cranny of their adversary’s inner sanctum. They should not be granted unfettered access to run ever-more-sophisticated search tools to look for something, anything, that might be incriminating. That kind of fishing expedition has long been prohibited by most courts in the United States. See eg.: Omnicare, Inc. v. Mariner Health Care Management Co., 2009 WL 1515609 at *3 (Del.Ch. May 29, 2009); Hedenburg v. Aramark American Food Services, 2007 U.S. Dist. LEXIS 3443 (W.D. Wash. Jan. 17, 2007). The advances of technology should not be permitted to change that rule. No, the rule must remain, but the game itself should change.

The way the game is now often played, the requesting party also keeps their secrets. They do not want to reveal exactly what it is that they are looking for. But this is, I contend, not as it should be. The requesting player is misusing the paper-world work product doctrine to hide their true discovery intentions. They accomplish this by using broad, general requests. That keeps secret what they really want. They claim a work product right to do so to protect their mental impressions and case strategy. Then they go after what they really want by playing the key word guessing game, both before and after the production. Not all requesters play this way on purpose. This explanation assumes that they have done their home work. It assumes that they know what the issues are and what evidence they need to prove the issues. It assumes that they know what they want, which, for some practitioners, is not always true. Some practitioners have no idea what the real issues are and what they are looking for.

Regardless of the reason for the requesting party’s non-disclosure, this system of discovery by guesses on effective keywords is a model of inefficiency. It may be fun to the players involved, some of whom may reap huge fees in the process, such as the responding party’s lawyers and vendors. It is not, however, designed to get the right cards on the table in the quickest and cheapest way possible. Quite the contrary – it is designed to stretch out the process in an iterative series of negotiated key words and searches. This process involves as much chance as skill.

This kind of approach to the pursuit of truth to attain justice is unreliable and inefficient. The process not only takes too long, the many bad guesses on keywords create a vast quantity of false hits. In the world of information science, that is called poor precision. A ninety percent miss-ratio is not uncommon. That is, for every ten documents that contain the specified keywords, nine are irrelevant, and only one is relevant. This 10% precision rate necessarily results in a tremendous waste of reviewer time. The irrelevant documents retrieved by the search are called false positives. The responding party must then spend a small fortune to screen the many false positives for relevance and privilege.

The Go Fish approach also misses many relevant documents. In the world of information science this is called a poor recall rate. The relevant documents not found are called false negatives. Again, a recall rate of only twenty percent, where eighty percent of the relevant ESI is missed, is not uncommon. This raises questions of the fairness of the process. Can justice be served when only 20% of the relevant ESI is located?

We Need a New Game

We must redesign the game of e-discovery search as it is now commonly played. We should design a new game where the responding party picks the search methods, not the requesting party. In this new game the goal is speedy, just and inexpensive discovery. Get the right cards on the table in a quick, fair and efficient manner. With this goal in mind, it is obvious that the cards should be picked by the person holding them, the responding party. The responding party should design the search strategy, not the requesting party. It is, after all, their hand, and so they can see for themselves what search procedures and terms will work or not.

In order for this new game to work, the responding party needs to know what the requesting party is really looking for. What cards do they want? They might be able to find them, but not if they do not know what they are looking for. Thus, for example, if the goal is to find all deuces, then the requesting party should specifically say so, rather than request all cards that are less than 5. Thus, in this new game the requesting party must show their hand first, they must explain what they need and why. Both sides need to discuss and narrow the issues and be frank and open about discovery. Then the responding party can then look at their own cards and see which are responsive to the defined issues. This approach is consistent with the goal of this new game: both sides work together to find the cards that the requester wants and get them on the table as fast as possible.

This new game can only work if the search is controlled by the responding party. It is, after all, their data, their IT systems, their data custodians, their employees, their agents, their attorneys, their language, their retention policies, their retention practices, etc. The responding party is not blind like the requesting party. They are in a far better position to design the culling and search strategies, including key words. They are in a far better position to find the information that the requesting party wants. They will know how to find all of the number 2 cards, assuming they have any. The responding party may still find nothing and say Go Fish. But the process will be much faster and less expensive than iterative Blind Man’s Bluff keyword negotiations.

The game as played now forces the blind man to make hundreds of guesses at a time, hundreds of key words, hoping that a few might be right. This hurts the respondent who has to review all of the junk generated by the blind guesses. It hurts the requester too, who eventually has to review all of the relevant and marginal calls. It is a colossal waste of time. It is inefficient even if the requester is given several guesses, not just one, and does some refining and talking in between the turns. That only makes the process slightly less wasteful.

Bottom line – we need to stop fooling around with search in e-discovery. That means taking the blindfolds off, but more fundamentally, it means redefining the goals of the game of discovery itself. All too often the goal of discovery today is to try to take your adversaries secrets, but keep your own. Lawyers try to win a case by discovery. Perhaps because they have so few trials, they lose track of the fact that discovery is not supposed to be an end in itself. It is just supposed to be a preparation for trial.

Trial is the time and place for the adversarial process and arguments, not discovery. Many litigators today forget this. They focus instead on a game where they try to only show their good cards, the ones that support their positions. Conversely, they try to keep secret all of their bad cards, the ones that undercut their positions or support the opposition’s positions. For them the goal of discovery is to put only their good cards on the table and keep their bad cards face down in the discard pile.

Today’s paradigm of negotiated search terms perpetuates that adversarial discovery model. It encourages feigned cooperation where each side secretly hopes that the other side will guess wrong. For if that happens, and bad search terms are picked, they will not have to show their bad cards. They can manipulate and hide the truth.

The New Game of Discovery is Won when Completed with Enough Money Still Left for Trial

This perverse game of selective disclosure might have worked in the paper world (although that is debatable), but it no longer works now. We now have a Saganesque number of cards – billions and billions. No one can afford to play this game any more. It should be obvious by now that if you play this game, you will quickly run out of time and money for the real game – the true purpose of litigation – a trial on the merits. How else do you explain a 96% settlement rate in federal court? Yes, trials are expensive. But if discovery were to cost less than it does now, perhaps far less, then there would be adequate resources remaining after discovery to conduct a trial.

Under the new cooperative based, producer-search-driven discovery here proposed, the trials themselves would also become simpler and more streamlined. If lawyers did not play the old games of truth manipulation, and just let the chips fall where they may, many unnecessary side issues would fade away before trial. When bad facts come out early, pseudo-issues go away early too. This inevitably results in fewer issues remaining for trial. Thus if discovery was changed as here recommended, the cost of trials could also be reduced.

The new goal here proposed for discovery is to find and place all of the important cards on the table as quickly and efficiently as possible. This requires cooperation and transparency on both sides. It requires the requesting party to explain what cards they want and why. It also requires them to make precise and narrow requests directed to specific, important issues in the case.

This new game also requires cooperation and transparency by the responding party, moreover it requires their initiative and leadership. The responding party can no longer just sit back and watch poor guesses being made. They must take the lead in getting the truth out. This is a burden, but the responding party is more than compensated for this burden by the protection this provides from over-broad, expensive, inefficient search. It also protects the responding party from having to show their whole deck of cards, their entire ESI collection. The protection of privacy rights is an important factor to many.

The party responding to requests for production must be proactive. They must design the search. As discussed, this only makes sense because it is their data. They have unfettered access to it. They know the language. They know the people involved. For these reasons, the responding party is always in the best position to search the data and, if asked, to fully explain how and why the search met the needs of the requesting party. The process must be transparent. It must also be performed competently. This may sometimes require the employment of experts and search design specialists.

Once the cards responsive to the request are found, they all have to be disclosed, the bad as well as the good. The only exception is privileged documents, which are logged. Honesty and good faith are critical in all discovery processes.

The process may still sometimes be iterative. A careful study by the requesting party of the ESI received may lead to new goals, new issues, and new more focused requests. But still, two fast, focused searches beats one long, over-broad search any day.

This is a new discovery game where both sides win if they complete discovery on time and under budget. This is restrained discovery where the parties only search for the facts they really need. This is discovery where all of the facts are freely disclosed, not just the ones that help your position. This is discovery that typically ends when the budget is exhausted, not the attorneys. For we all know that attorneys are hard working and capable of billing a mind boggling number of hours. These long hours will end in this new game because attorneys will no longer have to try to shape the truth. They will instead cooperate to put the truth on the table. They will save their arguments for what the facts mean under the governing law. This is cost-conscious, proportional discovery where, once completed, sufficient resources still remain for a trial on the merits.

This new game of discovery that I propose, along with many others, is designed for trials, not perpetual preparation. It is a model for those who want to fish, not just “cut bait.” It is a model for all true trial lawyers.

The new rules proposed here apply equally to plaintiff and defendant. Discovery is and will continue to be a two-way street. Both parties will have to find the cards that the other side is looking for. Then, they must put their cards on the table; good, bad or indifferent. If the cards do not exist, and this may happen often, the producer will have to explain exactly what they did. They will also have to remain open to additional searches.

Conclusion

I propose that producing parties always take the lead in the search of their own information. This does not mean that the requesting parties should do nothing and just accept with a smile whatever is handed to them. They will have a seat at the table. They will be heard, but clairvoyance will not be required. I propose a collaborative, transparent process where unnecessary application of the work product doctrine is curbed in favor of efficiency.

Indeed, although the responding party can see-all and thus must lead the search, the requesting party should always still play a key role. First of all, they have to fully describe what their Waldo looks like. In discovery each issue has its own Waldo and its own ideal search methodology to find him. There are recurrent patterns, especially where the responding party has gone through the drill many times. Yet there is rarely a one-size-fits-all search strategy, any more than there is a one-size-fits-all legal strategy.

The requesting party can, if they wish, make more contributions beyond describing their Waldos. The producing party may seek their advice. The requesting party may sometimes have far greater search expertise. Even if they do not, they may still have some good ideas and be able to contribute to the search process.

A leader with vision does not mean a dictator, nor does it imply blind obedience. The responding party should lead, but should also explain everything they did, or plan to do. They should be willing to answer all questions and to ask questions. They should be willing to listen if the other side has something to say. They should be open to constructive suggestions.

If the requester is not cooperative, the responder should also be willing to assume risks. The responding party should be ready and willing to go on their own if need be. They should be ready to explain everything to the supervising judge. The judges can help make this new game work, especially in circumstances of an uncooperative requester. The courts can do this by affirming all reasonable search efforts, absent only a showing of bad faith.

This new game is not a competitive game where one side wins and another loses. Either they both find Waldo or they both lose. The win-lose part of the process comes next. It comes after discovery when the case is decided by summary judgment or tried before a judge and jury. That is the way it should be. Neither discovery nor mediation are adequate substitutes for adjudication.

The new game of discovery here proposed implements strategic cooperation. In this way we can regain our adversary system of justice. We can start doing trials again, instead of playing endless rounds of Go Fish.

________________

I look forward to your comments and help in flushing out the details of this proposal. Please leave a comment below. This is just the beginning. No doubt I have missed some issues and may have gotten a few wrong. What do you think?

A growing trend: Social media as legal evidence

by Chris Wheelock | Michigan Business Review

Wednesday July 29, 2009, 12:30 PM

The Internet has evolved from casual browsing of shopping sites and one-way information portals to the current craving for interaction and a more personal connection.

Today, more people are using social networking sites like LinkedIn, Facebook, MySpace and Twitter than ever before.

In a report on the influence of social media sites released earlier this year, the Nielsen Company, a media research firm, found that not only are more people using the Internet and for longer periods of time, users are spending the most time on social networking sites and on video portals such as YouTube.

According to Nielsen, social network use in February exceeded Web-based e-mail use for the first time (in monthly visits).

As Internet use has exploded, so has the legal use of information mined from the Web and social media sites.

Investigators, divorce attorneys, prosecutors and employers are finding information, photos and videos online which can become evidence in civil and criminal cases or simply become a reason not to hire someone.

In 2006, Congress mandated changes to the Federal Rules of Civil Procedure, expanding the acceptance of electronically stored information, or ESI, as evidence.

Internet security experts say many users give little thought to what they post online or include in their online profiles. It's a decision that can lead to getting fired, reprimanded or even arrested for what's been posted.

That's where Daniel Estrada, president of D.C. Estrada of Grand Rapids, has built a niche for himself. His firm specializes in assessing the electronic information needs and risks of companies, managing electronic evidence when a company is sued and helping companies large and small establish policies for handling electronic data.

"It was a one-way medium in the early days," Estrada said. "It's now a more dynamic medium, where you have people creating content and adding content to the Web -- content that is available for anybody else to see."

Therein lies the problem, because much of what gets posted becomes a permanent record somewhere. Facebook, for example, retains all your information even if you close your account.

Photos contain a lot of embedded information that most users aren't aware of: GPS coordinates showing where the photo was taken and when, even the camera's serial number. Estrada says the embedded information can be read out of that photo and used as evidence.

The business world has also discovered social networking sites, which can be a powerful marketing tool. They can also become a receptacle for complaints about bad customer service or employee comments about the company -- two good reasons to make managing your online reputation a priority.

Business owners are struggling with how to come to terms with all this.

Estrada notes that when a business embraces social media as a marketing tool, some common issues crop up, including the loss of employee productivity and the important distinction of whether an employee is representing the company or themselves when they use social networking sites at work.

"That's where having a documented policy, a clear and concise policy that outlines acceptable use of social media tools, is really important," Estrada said.

Companies use social networking sites as part of the hiring process, including asking job candidates to log in to their Facebook account during an interview.

Estrada says employers are looking for information about a person's character, their social habits or anything that speaks to a person's integrity.

"Don't put anything on a social network page, blog, Web site or in an e-mail," he said, "that you don't want printed on the front page of the newspaper."

Estrada and others recommend businesses think through what kind of policy they want to put in place when it comes to social media sites. Managers should know the technology and what kinds of tools are being used by their organization, considerations that are evolving.

Contact Business Review at br@mbusinessreview.com, or follow our news on Twitter @BusinessReview.

Textbook Case of Discovery Abuse Exposes a Fallacious “Pig in a Poke” Defense

Textbook Case of Discovery Abuse Exposes a Fallacious “Pig in a Poke” Defense

A Senior District Court Judge in Atlanta recently considered sanctions in what he referred to as a textbook case of discovery abuse: Kipperman v. Onex Corp., 2009 WL 1473708 (N.D.Ga., May 27, 2009). I agree. The nineteen page opinion by Judge J. Owen Forrester describes the conduct of defendants and their attorneys. The core of the abuse was defendants’ pig in a poke defense where they argued that there was no way to know if any email of value existed on backup tapes, so there was no need to spend the money to look. Clever argument, but for the fact that, according to Judge Forrester at least, defense counsel knew, or should have known, that there were lots of important emails on the tapes and so the argument was a con.

The conduct examined in Kipperman is reminiscent of the chameleon-like actions described in 1100 West, LLC v. Red Spot Paint & Varnish Co., Case No. 1:05-cv-1670-LJM-JMS (S.D. Ill. June 5, 2009), which I discussed in last week’s blog. Whereas 1100 West resulted in sanctions against the party and the law firm representing it, the amount of which has yet to be determined, the discovery abuses in Kipperman resulted in sanctions of over a million dollars, but against the party alone. Still, the conduct in Kipperman caused Judge Forrester to come very close to entering what he called “the largest default judgment sought by a defendant in the history of the nation,” and, as I point out in the conclusion, the case is not over yet. Kipperman v. Onex Corp., supra at 19.

Over Lawyered

There have been multiple orders entered in Kipperman before the opinion here at issue. It has been pending for over four years and has over 600 docket entries. I have written about the last major order entered in this case on September 19, 2008 in my article, Why E-Discovery is Ruining Litigation in America and What Can Be Done About It. Although Judge Forrester’s latest opinion is focused on the conduct of defendants and their counsel, he begins the opinion with a broad-shot against all of the parties and their legal counsel:

The lengthy discovery process, which has spawned four discovery hearings, has been contentious at best and abusive at worst, and the court has expressed its displeasure with the parties’ behavior on numerous occasions.

Following the official close of fact discovery, the court expressed its frustration with the proceedings in its March 19, 2008 Case Management Order. The court chronicled the parties’ missteps, noted that this matter was being “over lawyered” on all sides, made clear that it would not compel parties to comply with orders already issued by the court, and notified the parties that it was currently tallying their disobedience and would award sanctions at their request.

Id. at *1.

Search for Email on Fifty Backup Tapes

The plaintiff responded to this invitation by requesting a variety of sanctions against defendants, including the ultimate sanction of default. There were many discovery abuses described in plaintiff’s motion, but the core problem concerned electronic discovery issues revolving around email and “ten labeled and forty unlabeled backup tapes.” Id. at *6. Yes, this is another backup tapes sanction case involving thee whereabouts of missing email. In a nutshell, early in the case defendants produced very few emails in response to plaintiff’s initial request for production of electronic records for the time period in question by this lawsuit – 1999-2003. Defendants explained that they did not use email that much back then, that it was before they adopted BlackBerries, and very few remained in their active systems. They claimed that their tapes were “not reasonably accessible” and as such were excluded from discovery under Rule 26(b)(2)(B) Federal Rules of Civil Procedure. (Note that if defendants had not saved these tapes to begin with, they would not have had this problem. They are in effect paying a very high price for unwise retention policies and IT pack-rats.)

Defendants argued that any search of their tapes would be expensive, but unlikely to find any email of value, since they were not using email much back then anyway. That was the clients’ story and their attorneys were advancing it with a vengeance. Based on later findings made by Judge Forrester, one wonders whether they even asked the key witnesses whether this was true or not?

The plaintiff at first apparently accepted the defendants’ word and did not push the point. But then the plaintiff received a production from a third party that included eighteen emails written by defendants. These emails strongly undercut defendants story that it was rare for them to use emails and BlackBerries at the turn of the century. Based on this discovery, the plaintiff moved to compel the production and search of the “ten labeled and forty unlabeled backup tapes” that defendants admitted they had and might contain emails.

Pig in a Poke

At a hearing on this issue, defense counsel argued that the restoration of the backup tapes should not be required because no one knew what was on those tapes. For this reason it would be foolish to require expensive restoration, since it would be like buying a pig in a poke.

… [W]e’re talking about somewhere around 380 to $410,000 worth of costs. And for what? No one literally knows. … So what we have is a pig in a poke, but for everybody. No one knows what’s in there.

Id. at *7. As we will see, Judge Forrester at first bought this argument, but then later, after some peeks into the bag, the poke, decided that the defendants and their counsel must have known all along exactly what was in there, and it was not good. It was not an empty bag. It was a bag full of vicious-cat-like incriminating emails.

The Court first had some sympathy for the pig in a poke argument and crafted a compromise order that allowed for sampling of two of the fifty backup tapes. This order in effect allowed the plaintiff to peak and see if the bag was empty, as defendants suggested it would be. Or if it had contents, whether it would be “pigs or cats in the poke.” To use the modern legal vernacular, whether the email in the backup tapes would be smoking guns or silver bullets.

The court directed Plaintiff to designate two tapes and design a search and directed Defendants to pay for it. The court made Plaintiff the guarantor of the search’s success, however, and granted Defendants the right to demand fees if it produced little discoverable material.

Id.

That seems like a fair decision. Only two out of the fifty tapes had to be searched and if defendants were right, and there was not much email use back then, the plaintiff would have to pay for the futile search. Further, if the search design proposed by the plaintiff was not reasonable and narrow in focus, the defendants could object and move for a protective order.

Lots of Cats Found in the Poke

It turns out that there were lots of email on the two backup tapes and many of them were smoking guns detrimental to the defense. Here is Judge Forrester’s description of what happened next:

Plaintiff selected its tapes and provided its terms by January 16, 2008. Defendants performed a search on the two tapes, received hits resulting in thousands of documents, and began releasing documents to Plaintiff on a rolling basis. Defendants unilaterally decided to search seven witnesses’ mailboxes rather than the entire tape and decided to redact documents. Defendants chose the seven boxes of the individuals Plaintiff wished to depose. These were the witnesses Defendants believed had knowledge or had something to do with the instant matter. Defendants refused to search the hundred or so mailboxes of employees they believed were not related to the case. Plaintiff found Defendants’ production to be incomplete.

Id.

Plaintiff then moved to compel again, seeking search of all mailboxes and an additional backup tape thought to have a missing time period. This lead to another hearing where, according to Judge Forrester:

Defendants argued against an additional tape and contended that only a portion of the existing production was relevant. Defendants explained that the volume of the production was related to (1) the broad nature of Plaintiff’s search terms, (2) the fact that many of the e-mails contained spreadsheets with multiple blank pages, (3) the fact that attachments were reproduced every time an e-mail was forwarded or replied to, and (4) Plaintiff’s demand for every e-mail sent to or received by certain individuals including items they were copied on. Plaintiff’s counsel represented to the court that at least ten to twenty percent of the documents were extremely relevant, or the kind of documents that the Trustee would put on an exhibit list at trial. Defendants informed the court that it had cost them more than $600,000 to search the two tapes. This figure included attorney time for privilege review. Defendants never filed a protective order asking to be relieved of the burden of searching the entire tapes.

Id. at *8.

Note that even though Judge Forrester started off the opinion by saying that the case had been “over-lawyered,” he will hammer defense counsel here for not immediately filing a motion for protective order. The moral of the story is one we have seen in several prior cases, if you want protection for expensive backup tape search, you need to file the motion before you do the work, not afterwards. See: In re Fannie Mae Securities Litigation, _F.3d_, 2009 WL 215282009 (D.C. App. Jan. 6, 2009).

Cats are Out of the Bag and they Bite

What really seemed to get to Judge Forrester was the nature of the emails discovered. Plaintiff argued that ten to twenty percent of the documents were extremely relevant, that is hot-docs, otherwise known as “smoking guns.” The judge read many of these emails himself to decide these motions and he found that the plaintiff was right.

The court itself examined examples of some of the e-mails produced to assess relevance: “I don’t consider myself enough of an expert on the law in this area to declare these to be smoking guns but they certainly are hot and they certainly do smell like they have been discharged lately.”(Tr. 04/29/08 54:10-13). The court stated that it would enforce its existing order but that it would give Defendants a chance to narrow Plaintiff’s search terms and provide Plaintiff with a list of employees, their positions, departments, etc., so that Plaintiff could agree to narrow the number of employee boxes that needed to be searched. The court also agreed to give Plaintiff an additional tape.

Id. at *8.

Judge Forrester would of course wonder how it is that defendants did not know about these emails all along. If the emails discovered has just been marginally important, the defendants story might have had some credibility. The plaintiff’s charge of a cover-up might not have rung true. But with so much email found, and much of it highly relevant, it stretches credibility to think this evidence was not well known to defendants all along. This may explain the court’ testy reaction to defendants failure to move for a protective order until after the fact. The comment in footnote four of the opinion as to a colloquy between judge and defense counsel is particularly interesting:

During the hearing defense counsel attempted to justify his earlier statements to the court about e-mail and justify Defendants’ actions. Defense counsel also conceded that Defendants should have asked for a protective order with respect to its initial production. The court said:

… I didn’t say come close. I said this is what you have to do. That’s an order of the court, and as an officer of the court you are obliged to follow that or to get a protective order to get relieved of that, and failing either, maybe you have to get rid of your client, I don’t know, but what I’m trying to explain to you is something that’s been said a lot before. Close doesn’t count in hand grenades, horseshoes and it doesn’t count here when you have to abide by an order of the court. …

Id.

After this hearing the defendants searched the other custodians and other tape as ordered, and started to produce more emails. Plaintiff complained that they were not getting all of the emails they expected, and more motions followed, including this time a motion for protective order by defendants. Defendants argued that one of the search terms specified, “Armtec,” produced too many false positives. The judge agreed with them on that point and granted protection from production of those documents. But defendants also argued that they could withhold select documents uncovered by the other keyword search terms specified by plaintiff if they deemed them the hits to be irrelevant. Judge Forrester did not buy that argument, implying that defendants were, at this point, not to be trusted. Judge Forrester’s reasoning on this point is very instructive and worth a full reading:

Defendants certified their production as complete for the last time in December 2008. The court believes that some of the most interesting evidence in this matter has come from e-mail production. The court is deeply disturbed by Defendants’ handling of this production. The court recognizes the difficulties associated with electronic discovery and notably the difficulties in producing older documents archived on mediums which were not designed to withstand the rigorous searching associated with modern e-discovery. As such, the court does not fault Defendants for their initial refusal to produce electronic discovery from the so called “backup tapes” or for asserting legitimate legal arguments under Fed.R.Civ.P. 26(b)(2)(B) in their response to Plaintiff’s initial motion to compel this information. The court does condemn Defendants, however, for making blatant misrepresentations about the value of e-mail discovery in this case in an effort to influence the court’s ruling, for refusing to follow the court’s ruling once made, and for behaving as if they, and not the court, got to decide what electronic material was relevant and discoverable under Rule 26 and what material was not.

Experienced defense counsel misrepresented the scope and value of e-mail discovery to this matter. The court has outlined the colloquy that occurred between it and defense counsel regarding e-mail during the January 9, 2008 hearing. Defense counsel notably argued: (1) “Plaintiffs don’t know and we don’t know whether there is a single e-mail on there, a single e-mail in any way related to this case”; (2) “[t]he fact that there are two or three emails that they have found in the Magnatrax documents would tend to indicate that there is a very low likelihood of any e-mails”; (3) “they didn’t even ask Mr. Wright, who they took as a 30(b)(6) witness, a single, you know, question about e-mail usage and what might be stored and what might not be stored”; (4) “[w]e are at the end of discovery, they finally decided … this is interesting to them. It hasn’t been critical until today, but now it’s critical”; and (5) “[w]e don’t even know whether people readily used e-mails. This was not a BlackBerry era at the time.”Counsel also relied upon an employee affidavit and argued that there would be considerable overlap of date on different backup tapes.

*10 The court relied upon these statements to make a determination under Rule 26(b)(2) as to whether Plaintiff had shown “good cause” to order discovery of the backup tapes, whether discovery of all of the tapes would be cumulative or duplicative, and in sum whether the burden or expense of the discovery outweighed its likely benefit. The court relied on these statements in crafting the “two tape” solution at Defendants’ expense with Plaintiff to bear the cost should the search ultimately be fruitless. Looking at the state of the record as a whole, it now appears that defense counsel’s statements were either purposefully misleading or made with a reckless disregard for the truth.

… The issue of backup email discovery was certainly not something that Plaintiff only became interested in on the eve of a discovery deadline. Second, both Plaintiff and Defendants’ counsel were aware that the parties involved in this case used e-mail. … This e-mail indicated that at least one of the relevant parties was using BlackBerry technology at this time, and such technology is synonymous with the regular use of e-mail. Despite defense counsel’s assertions it is clear that Plaintiff’s counsel did discuss e-mail usage and retention with Nigel Wright during Onex’s 30(b)(6) deposition. (Id. Ex 5, at Ex A). Further, the court finds it absolutely inconceivable that defense counsel did not know in January of 2008, more than two years into the case and more than one year into full discovery, whether his client readily used e-mails. Any competent counsel should be expected to ask his client such questions in the infancy of discovery. If counsel did not know, it was because he did not wish to know, and reckless indifference to the truth of a matter is a close brother to willful omission or misrepresentation. FN6

FN6. The court finds it notable that Defendants’ legal team chose to have local counsel argue the e-mail portion of the hearing. Local counsel likely had the least personal knowledge about the workings of Onex and Magnatrax and the least daily telephone and face contact with the clients. Therefore, the court can conceive of a situation in which local counsel had not had discussions about e-mail usage with his client. Regardless, he was responsible for being familiar with the state of the record. Further, his co-counsel were responsible for ensuring that he made no misrepresentations to the court or for correcting any made.

Id. at *9-*10.

Fool Me Once, Shame On You;
Fool Me Twice, Shame On Me

The chameleon attorneys have now been exposed. Judge Forrester now knows who he is dealing with. This in part explains the harsh sanctions that resulted, in spite of the fact that Judge Forrester clearly recognized the difficulties associated with electronic discovery in general and backup tapes in particular.

If defense counsel had acted independently from their clients, and been forthright about the problems, then, in my opinion, sanctions could have been avoided entirely and they would not have alienated the presiding judge. That is never a smart thing to do. The truth contained in the email would still have come out, but that is as it should be. The job of a lawyer is to argue the meaning of facts and the consequences that should flow from them, not to hide or change the facts. If the defense had been handled differently, the whole process would have been far less prejudicial to defendants. Moreover, the judge would likely have restricted discovery and the whole process would have been far less expensive and aggravating.

Eleventh Circuit Sanctions Law

Judge Forrester spends the first sixteen pages outlining the facts of discovery abuse. In the last three pages he explains what the law in the Eleventh Circuit requires him to do under these troubling circumstances. He begins with the rules.

Fed.R.Civ.P. 26(g) was “designed to curb discovery abuse by explicitly encouraging the imposition of sanctions.” Malautea v. Suzuki Motor Co., Ltd., 987 F.2d 1536, 1542 (11th Cir.1993). Rule 26(g) states:

(1) Signature Required; Effect of Signature. Every disclosure under Rule 26(a)(1) or (a)(3) and every discovery request, response, or objection must be signed by at least one attorney of record…. By signing, an attorney or party certifies that to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry:

(A) with respect to a disclosure, it is complete and correct as of the time it is made; and (*17)

(B) with respect to a discovery request, response, or objection, it is: (i) consistent with these rules and warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law, or for establishing new law; (ii) not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and (iii) neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action. ….

(3) Sanction for Improper Certification. If a certification violates this rule without substantial justification, the court, on motion or on its own, must impose an appropriate sanction on the signer, the party on whose behalf the signer was acting, or both. The sanction may include an order to pay the reasonable expenses, including attorney’s fees, caused by the violation.

“The decision whether to impose sanctions under Rule 26(g)(3) is not discretionary,” and “[o]nce the court makes the factual determination that a discovery filing was signed in violation of the rule, it must impose ‘an appropriate sanction.’ ” Id. at 1372. The court does have considerable discretion in determining what sanction is appropriate. Id. However, an order imposing costs under Rule 26(g)(3) should be limited to the reasonable expenses incurred because of the violation. Id. at 1372 n. 45.

District courts enjoy substantially more discretion in deciding whether and how to impose sanctions under Fed.R.Civ.P. 37. Id. at 1366.A district court may impose sanctions against a party which violates a discovery order “as are just.” Id. …

Id. at 16-17.

Judge Forrester then examines the additional authority he has under the common law to impose sanctions.

*18 A court may also sanction litigation misconduct using its inherent power “to manage [its] own affairs so as to achieve the orderly and expeditious disposition of cases.” Eagle Hosp. Physicians, LLC v. SRG Consulting, Inc., No. 08-11026, 2009 WL 613603, *5 (11th Cir. Mar.12, 2005) (citing Chambers v. NASCO, Inc., 501 U.S. 32, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991)). The court must exercise its power, however, with restraint and discretion. Id. “The key to unlocking the court’s inherent power is a finding of bad faith,” and a party may demonstrate bad faith by delaying or disrupting litigation or hampering the enforcement of a court order. In re Sunshine Jr. Stores, Inc., 456 F.3d 1291, 1304 (11th Cir.2006). A party is entitled to due process before a court determines that the party has acted in bad faith and the court invokes its inherent power to impose sanctions and assess fees. Id. at 1306. “Due process requires that the party be given fair notice that its conduct may warrant sanctions and the reasons why.” Id. at 1306-07.A party can be given fair notice by either the court or the party seeking sanctions. Id. Once a party has notice that it might be subject to sanctions, the court must afford it the opportunity to justify its actions either orally or in writing. Id. …

Id. at *18.

Textbook Case of Discovery Abuse

Judge Forrester then makes the statement on textbook case that I have chosen as the byline for Kipperman v. Onex Corp.:

The court regards the instant case as a textbook case of discovery abuse. The court finds that Plaintiff has been prejudiced in two ways-the Trustee has been denied all the documents necessary to depose witnesses and prepare expert reports and the Trustee’s preparation has been made disjointed and difficult and it has been forced to expend a fair amount of time and money and effort to get that which should have been more easily obtained. … Defendants’ only defense is their unpersuasive argument that they have now complied and Plaintiff has suffered no prejudice. Defendants’ defense completely ignores the burdens the court and Plaintiff have endured to garner their compliance and the destructive precedent this court would set were it to allow Defendants to escape the consequences of three years of bad behavior simply because they believe they have now complied.

Id.

Stated Reasons for the $1,022,700 Sanction

Judge Forrester then explains why he decided to only award monetary sanctions, albeit in an amount of $1,022,700, and not simply enter judgment for the plaintiff.

*19 Plaintiff has asked the court for the ultimate sanction. Given the Defendants’ behavior, the court is tempted to grant Plaintiff’s request. That being said, the court will not strike Defendants’ answer. The court believes there are novel issues of liability present in this matter. Further, the ad damnum clause in this case is hundreds of millions of dollars. Were this court to avoid trying this case on the merits, it might be granting the largest default judgment sought by a defendant in the history of the nation. As this matter currently stands, Plaintiff has the raw material and documentation it needs to proceed with its case and this court has the means, through re-depositions and supplemental expert reports, to minimize a large portion of the damage done. The court is simply unwilling to take the dramatic action of striking Defendants’ answer and entering default in the face of moderate prejudice. That being said, Defendants should not and will not go unpunished. The court will exercise its discretion under Rules 26 and 37 and its inherent powers to award monetary sanctions.

Id. at *19.

Conclusion

Sanctions in an amount of $1,022,700 are not minor, but in view of the total amount at issue here, they are not really that severe. Some may think that defendants got off too lightly. But, please remember, the case is not over yet. Indeed, it is about to go to trial. There will be other consequences for the behavior of defendants and their counsel. Judge Forrester will, after all, be making many more rulings just before, during, and after the trial. Once a lawyer has been “outed” as a chameleon, there is no turning back. It is also likely that the jury will learn about some or all of the defendants’ textbook discovery misconduct during this case. The final punishment for defendants’ misconduct will be welded by the judge and jury ruling on the ultimate merits of this case.

Unlike a default sanction judgment, which carries a high risk of reversal on appeal, a final judgment entered after a full trial to a jury on the merits is very difficult to overturn. All experienced trail counsel understand that the risks of appeal often enter into a judge’s decision. Judge Forrester’s ruling may appear to be lenient, but after the trial is over and the jury has spoken, the wisdom of his mercy will be obvious. He has read the email, the smoking guns that defendants tried so hard to hide. No doubt he is confident that justice will be done once a jury reads them too.