E-discovery Is Hard
Catchy blog titles are usually hard too, but not this one. Discovery of electronically stored information (“ESI”) is just plain difficult. If you are lucky, it does not come up in your case at all. Or, the parties agree that only certain emails during a certain period of time are relevant to the dispute. If you are unlucky, you might find yourself in the middle of a massive theft of trade secrets case involving customer lists with thousands of names and an email address for each one of them. At that point, expect to spend several months creating an ESI discovery protocol with your opposing counsel – a process of negotiating everything from search terms to custodian/device lists to hard drive/server copying formats, and so on and so forth. Once that part is finished, you still have to engage in discovery according to the protocol.
The last sentence bears repeating: your ESI discovery has to follow your ESI protocol. You would think that part would be obvious, but it was not to Progressive Casualty Insurance Co. (“Progressive”) in a recent federal court case in Nevada. In Progressive Cas. Ins. Co. v. Delaney, 2014 U.S. Dist. LEXIS 69166 (D. Nev. May 19, 2014) (a declaratory relief action regarding coverage under a liability policy for directors and officers of failed banks taken over by the FDIC), the Court entered a joint proposed ESI protocol and many months passed without Progressive producing any documents. Id. at *2-3. Eventually, the FDIC filed a motion to compel, and Progressive began manually reviewing 565,000 documents (culled from 1.8 million documents through the application of search terms). Id. at *3-6. Things went South when Progressive determined that a manual review was too burdensome and unilaterally decided to jettison that approach (approved under the ESI protocol) in favor of a review utilizing predictive coding (not approved under the ESI protocol). Id. at *6. Using predictive coding techniques (software “trained” by a human being to distinguish between relevant and non-relevant documents), Progressive reduced the original 565,000 document set to 90,575 potentially relevant responsive documents. Id. at *6-7. Only then did Progressive request an amendment to the ESI protocol to permit the use of predictive coding. Id.
The District Court – displeased with Progressive’s unilateral decision – noted that Progressive’s own e-discovery consultant was of the opinion that technology assisted document review requires “an unprecedented degree of transparency and cooperation among counsel,” including the producing party’s “full disclosure about the technology used, the process, and the methodology . . . .” Id. at *28-31. Finding that Progressive was unable to be transparent, the Court denied Progressive’s request to amend the ESI protocol, granted the FDIC’s motion to compel, and ordered Progressive to produce all 565,000 documents to the FDIC within fourteen days, without further review (except for the application of privilege filters). Id. at *31.
There are a couple of takeaways from this decision. First, e-discovery is hard. Second, parties need to consider that on the front end so they will be prepared for the burdens that their e-discovery decisions will impose. Finally, as e-discovery becomes more commonplace, attorneys and clients must prepare themselves for the “unprecedented degree of transparency and cooperation” that is required in these types of lawsuits.
— Michael C. McCabe, Jr.
