By Mike Hamilton, J.D.
E-Discovery is not a simple process. It’s the exact opposite. It’s convoluted, it’s time consuming, it involves multiple moving pieces and people. This makes it downright difficult to have a defensible response to the commonly asked question, “Were all requested documents searched for?”
Legal teams who are asked to answer this question cannot simply state, “We provided everything.” Courts require proof. Case in point, Peerless Indus., Inc. v. Crimson AW, LLC (N.D. Ill. Jan. 8, 2013), the court ordered the defendant, Crimson, to provide proof “that they in fact searched for the requested documents and, if those documents no longer exist or cannot be located, they must specifically verify what it is they cannot produce.”
In this case, the plaintiff, Peerless, sued the defendant for alleged patent infringements that arose out of the defendant’s manufacture and sale of television mounts. Within discovery the plaintiff identified that relevant information may exist from a third party, Sycamore Manufacturing (located in China), who may have been connected to the defendant. The court ruled that information from Sycamore was discoverable, due to the president of Sycamore being the principal of both Sycamore and the defendant, and “that he exercise[d] a considerable amount of financial and managerial control over both corporations.” Based on this control, the defendant was required to “contact individuals at Sycamore and play a role in obtaining the necessary discovery.”
In addressing the adequacy of the defendant’s production from Sycamore, the plaintiff concluded from the defendant’s 30(b)(6) witness testimony that the “defendant did not conduct a reasonable investigation regarding Sycamore’s document production or Sycamore’s document retention for purposes of this litigation.” This 30(b)(6) witness could not answer questions regarding Sycamore’s computer/backup systems, what employees had relevant information, which searches had been conducted and if a legal hold had even been implemented. Even though the defendant and Sycamore contended that documents in Sycamore’s possession were produced, the court ruled that these contentions were inadequate because the defendant never proved that all requested documents were searched for and that all relevant documents were produced from Sycamore.
The court concluded that the defendant took an insufficient “hands off” and “back seat approach” in obtaining necessary discovery from Sycamore. The defendant left the process for searching, collecting and producing information from Sycamore to a vendor, essentially having “no part in the process of obtaining the requested discovery or of determining how Sycamore managed their documents and what might be relevant to plaintiff’s requests.” The court went on to state, “defendants cannot place the burden of compliance on an outside vendor and have no knowledge, or claim no control, over the process.” As a result the court granted the plaintiff’s motion for sanctions (bill of costs) and ordered the defendant to “show that they in fact searched for the requested documents and, if those documents not longer exist or cannot be located, they must specifically verify what it is they cannot produce.”
THE E-DISCOVERY BEAT’S TAKE
Two primary lessons learned from this case:
Lesson #1: E-Discovery Project Management
Courts no longer find it acceptable to “throw it over the chasm.” No longer can in-house legal teams outsource all e-discovery collection activities to third-party vendors. In-house legal teams have an ethical duty to supervise, monitor and ensure that all discovery requests are complete and conducted in a defensible manner. This means knowing the data infrastructure of all organizations in the control of the supervising party, understanding what searches were conducted, identifying all custodians and data sources that may have responsive information, and overseeing the implementation of the legal hold process to protect against spoliation. The courts need and are continuing to demand transparency into each organization’s e-discovery process to ensure that all relevant information has been identified and produced, thus allowing cases to tried on their merits.
Lesson #2: Audit Logs
All decisions and actions made within the e-discovery process must be tracked and documented. Doing so will enable legal teams to immediately identify what steps were taken, why each step was taken and when each step was performed if the court or opposing counsel questions the adequacy of a production. The completeness of the audit logs will enable the court to decipher if the actions taken were “reasonable.”
Again, courts require proof. Pure declaratory statements will not be deemed persuasive. If legal teams are going through the trouble to identify relevant custodians, conduct follow up interviews, send out legal hold notices, periodically issue legal hold reminders, search and collect preserved data for responsiveness, review collected data, and then finally produce it, why not also include an automated process for recording and tracking all these actions? In the end, a solid, documented process will serve as the best proof that defensible actions were taken.
To learn more on implementing defensible legal holds as part of the e-discovery process, read Exterro’s white paper, “Five Steps to Overcome Common Legal Hold Mistakes,” here.
Mike Hamilton, J.D. is a Sr. E-Discovery Analyst at Exterro, Inc., focusing on educating Exterro customers, prospects and industry experts on how to solve e-discovery issues proactively with technology. His e-discovery knowledge, legal acumen and practical experience give him a valuable perspective on bridging the gap between IT and legal teams. You can find him on Twitter and Linkedin.