Congressman Trent Franks, who chairs the Constitution Subcommittee of the House Judiciary Committee, lead hearings, on December 13, regarding e-discovery policy. The hearings, entitled “The Costs and Burdens of Civil Discovery,” focused on issues related to discovery costs in general and specifically on costs related to preservation obligations.. The hearings were not designed to supplant the rulemaking process established by the Rules Enabling Act, but rather to serve the oversight function of updating Congress on these issues. This was the first such hearing since the rules were last revised, and some commentators believe that additional change is necessary in e-discovery policy, to reduce costs and provide more guidance to litigants. Advanced Discovery, an e-discovery company, knows that it is important to keep up with such changes.
Evolvement of e-Discovery
Since December 2006, when the Federal Rules of Civil Procedure were amended to address e-discovery policies, sanctions for discovery violations have increased dramatically, in terms of overall numbers. In fact, a 2010 study published by the Duke Law Journal found that there were more e-discovery sanctions in 2009 than in any prior year, and more than in all years prior to 2005combined. Some analysts contend that this increase in e-discovery sanctions directly impacts the costs of litigation and costs litigants labor and technology resources that could better be directed elsewhere. Other analysts, however, point out that sanctions cases remain a tiny percentage of all civil cases filed, and argue that current e-discovery policies are adequate.
The Subcommittee heard testimony from four witnesses: Rebecca Love Kourlis, Executive Director of the Institute for the Advancement of the American Legal System, University of Denver; William H.J. Hubbard, Assistant Professor of Law at the University of Chicago Law School; William P. Butterfield, Partner at Hausfeld LLP; and Thomas Hill, Associate General Counsel, Environmental Litigation & Legal Policy, General Electric Company.
Ms. Kourlis stated that current e-discovery policies have not adequately addressed the problems of cost and delay, leading to fewer trials, and settlements based on the costs of litigation, rather than the merits of cases. She concluded that the FRCP goal of a “just, speedy and inexpensive system” is not being met by current e-discovery policies, and urged for rule changes to avoid unnecessary expenditures of time and money in litigation.
Prof. Hubbard testified that discovery costs for processing, review, and production, as well as costs for preservation, have a “long tail” in which a small but substantial number of complex, costly cases account for a large share of total costs. He also pointed out that parties incur costs for preservation in matters that never reach litigation. Hubbard concluded that e-discovery policy changes which clarify the events that trigger the preservation duty, the scope of preservation, and the standards for sanctions, could save litigants billions of dollars.
Mr. Butterfield said that fear of sanctions for e-discovery are largely overblown, citing the small number of cases in which sanctions are sought, and the even smaller number in which sanctions are granted. He also argued that courts have only imposed significant sanctions for egregious misconduct, and rarely issue sanctions that determine the outcome of the case. Butterfield testified that discovery costs are generally proportional to the stakes in the litigation, and preservation costs are not excessive. He concluded that the fundamental purpose of litigation is to achieve justice, and that current e-discovery policies are working.
Mr. Hill testified that current e-discovery policies force companies to over-preserve data to avoid the risk of sanctions. Hill stated that clearer rules would allow companies to stop wasting money on over-preservation – money that would be better spent creating jobs and growing the economy. The amount of data created on any given day by GE employees is “beyond comprehension,” said Hill, and much more data is preserved than is ever reviewed or used in litigation. Hill asked for clearer guidance and rules to eliminate needless costs in data preservation.
The Subcommittee is expected to report its findings to the Judicial Conference’s Advisory Committee on Civil Rules, which is currently considering whether and how to amend the Federal Rules of Civil Procedure. Observers anticipate the Subcommittee allowing the Advisory Committee to complete its work and make whatever e-dicovery policy recommendations it deems appropriate at that time.
What do you think? Is clarification of e-discovery policy related to sanctions and electronic document preservation needed? For more information on e-discovery policy, please call Advanced Discovery at (866) 560-5898 or visit the Contact Us section of our website.