The content of this blog series is based upon Gibson Dunn’s 2011 Mid-Year E-Discovery Update, with the permission of its authors. This publication can be read in its entirety at: http://www.gibsondunn.com/publications/Pages/2011Mid-YearE-DiscoveryUpdate.aspx
Electronic discovery laws are evolving rapidly to keep pace with developing technology. According to the firm Gibson Dunn, which performed an analysis of 187 recent e-discovery decisions, the number of 2011 decisions shows an increase of 82% over the same time period in 2010. Although it appears at first glance that decisions relating to e-discovery are on the rise, the courts are not issuing a proportionally increased number of sanctions.
This two-part series endeavors to highlight only a few topics within Gibson Dunn’s valued publication that affect our industry.
Although several cases cited in the Gibson Dunn report imposed monetary sanctions, or allowed for exclusion of evidence, 21% of the cases where sanctions were imposed resulted in terminating sanctions due to the willful and egregious conduct of the party responsible. The misconduct cited includes intentional deletion of relevant data and giving false testimony as to the nature of data deleted. The fact that such a high percentage of sanctions resulted in case-termination illustrates the value of litigators, in-house counsel and e-discovery consultants effectively and collaboratively advising their clients and companies regarding electronic data and discovery.
Legal Hold Processes
Despite the well-publicized decision by Judge Shira Scheindlin, a United States District Court judge for the Southern District of New York who is considered a judiciary expert on electronic discovery, in Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010); courts do not consistently find that lack of a written legal hold is in and of itself a basis for sanctions. In Steuben Foods, Inc. v. Country Gourmet Foods, LLC (No. 08-CV-561S(F), 2011 WL 1549450 at *4 (W.D.N.Y. Apr. 21, 2011), the magistrate judge declined to impose sanctions solely on the basis of plaintiff having issued its legal hold orally, as sufficient discovery was produced without damage to the opposing party. Decisions such as these notwithstanding, corporations and law firms should consider implementing written legal hold policies for improved defensibility purposes.
While courts have continued to require that parties provide evidentiary support of their claims that electronic data is not reasonably accessible, and therefore should not need to be produced, in several cases motions to compel production or requests for sanctions were denied; for reasons such as: the producing party had already provided a significant and pertinent amount of data and the data sought could only be produced at considerable expense (Thermal Design Inc. v. Guardian Building); or the producing party was able to document the expense of restoring back-up of data and to show such cost to be unreasonable in light of the circumstances. The courts have proven to be less than understanding, however, when a party claims inaccessibility without evidentiary proof. Firms and corporations needing to claim inaccessibility should be prepared to prove that the data at issue is truly inaccessible, before making such a claim.
As previously predicted in Gibson Dunn’s 2010 Year-End Electronic Discovery and Information Law Update, the courts continue to expect cooperation between all parties in relation to e-discovery. The bench has made it clear that it will not tolerate bickering or disingenuous claims surrounding attempts to resolve electronic discovery issues; ruling that the parties must work together in resolving e-discovery conflicts.
Gibson Dunn’s showing that electronic discovery decisions have increased sharply in 2011 is not as surprising to us as the content of certain decisions. It speaks to the growing awareness of e-discovery in the legal industry that although the cases with documented e-discovery disputes have increased, the number of sanctions imposed in such cases have remained in the same range since last year. For more information on litigation preparedness or consulting in matters involving electronic discovery, visit www.advanceddiscovery.com.