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The "All-to-Often Ignored E-Discovery Principle": Proportionality

Created on September 12, 2013

Director of Marketing Programs at Exterro


Do most attorneys effectively utilize the principle of proportionality, under FRCP 26(b)(2), to limit discovery parameters? According to Judge Paul Grewal from the Northern District of California, the answer can be inferred as no. In the latest e-discovery chapter of Apple v. Samsung (N.D. Cal. Aug. 14, 2013), Judge Grewal declined to compel Apple to produce electronically stored information (ESI) that “Samsung is able to do without" based on the “all-to-often ignored discovery principle" of proportionality.

The facts of Apple v. Samsung are those that most are familiar, so without getting into the background of the case, I will dive straight into the dispute between the parties. (If unfamiliar with the case, the case facts can be found here.)

In this patent infringement case, Samsung sought to compel Apple to produce several different categories of financial data. The motion stemmed from Samsung objecting to Apple's alleged deficient production of financial records. While Apple did not dispute the relevance of the ESI, Apple would not produce “granular" financial information because it did “not maintain reports of such data in its 'ordinary course of business" and “that only a herculean effort could produce even a subset of the reports demanded."

Judge Grewal rejected Samsung's motion based on the proportionality principle under FRCP 26(b)(2). While the court acknowledged that Apple did have financial databases that it could search to produce some of the requested reports by Samsung, the sheer burden to compile these reports combined with the fact that Samsung had already estimated the damages made it “senseless to require Apple to go to great lengths to produce data that Samsung is able to do without." Judge Grewal utilized a cost-benefit analysis to come to this ruling, limiting discovery because the “expense of the proposed discovery outweighed its likely benefit (FRCP 26(b)(2)(C).

The court initially tried to justify a dismissal of Samsung's motion based on the ESI being not reasonably accessible. Since Apple only made “generalized claims of burden" (i.e. engage multiple financial groups and take “several months"), the court ruled that Apple did not make a “particular and specific demonstration of fact, as distinguished from stereotyped and conclusory statements" (FRCP 26(b)(2)(B)).

e-discovery-beat-linkedin-group-USE-300x113.pngTHE E-DISCOVERY BEAT'S TAKE

Preaching a solution does no one any good if it does not include a path for reaching it. It's like telling sprinter to run faster without giving him/her the proper techniques or training regiment to accomplish the goal. The same can be said for telling lawyers to utilize proportionality when trying to limit e-discovery parameters. Lawyers must know the why and how to leverage proportionality for them to fully apply it.

The Why

Simply put, it will reduce litigation costs. Think of the e-discovery process like a funnel. At the top is all the potentially responsive ESI and at the bottom is the ESI that is produced to opposing counsel. As legal teams move through this funnel the costs will undoubtedly get exponentially higher moving from ESI identification to ESI production.

But an organization's e-discovery process will alter what this funnel looks like. For those who try to limit preservation parameters and utilize proportionality principles, the funnel will sharply narrow earlier in the process at ESI identification and preservation. On the other hand, for organizations who don't use proportionality principles and collect and preserve all ESI via disk imaging or the collect everything approach the funnel doesn't narrow until the very end of the e-discovery process, at the review stage, the most expensive part of the entire e-discovery process.

Primary point being, if there are less documents to review during the review stage, e-discovery costs will decrease and vice versa. That's why a process based on proportionality is a no brainer. But how do you get there, see below.

The How

This may sound cliché but it starts with being proactive. Instead of just saying “be proactive," here are a couple tips in that can lead to effectively leveraging proportionality at the outset of a case.

Understand the case, along with the volume of ESI attached to it. It boils down to an iterative process of gathering information. When litigation is reasonably foreseeable, immediately identify the key custodians who are most likely to understand the facts of the case. Counsel and custodians need to work together to identify additional custodians, relevant data sources and specific keywords, date ranges and other easy to identify filtering criteria.

How technology can help: Leverage data mapping technology that will allow legal teams to easily identify where custodians ESI is located throughout the organization.

Work with IT. Remembering that this is not IT's first priority. Legal teams should come equipped with specific questions and prioritize what needs to be done first. It is imperative that legal understand any technical problems that may deem ESI “inaccessible" or “unduly burdensome" to collect and produce. Having this information readily available enables attorneys to effectively argue for limited preservation or collection parameters.

How technology can help: Automate the custodian interview process by automatically sending an electronic interview/survey to anyone who is sent a legal hold notice. Not only will this streamline the information gathering process it will enable legal teams to see who needs to be followed up with based on the custodian having relevant ESI, ESI subject to data privacy laws or missing information.

Bring e-discovery metrics to Meet & Confer. Conclusory and speculative statements are easy to make, but they hold little bargaining power. Attorneys must have cost metrics and a deep understanding of their client's data infrastructure to effectively negotiate reasonable preservation parameters. These metrics may include the estimated amount of ESI related to the matter, number of potential custodians (including key custodians), estimated costs at each stage of the EDRM (preservation, collection and production) and keywords/filters garnered from the case facts. One easy way to ensure e-discovery costs don't get out of hand too quickly is to suggest a phased discovery approach, ensuring that the ESI that are most at risk, easiest and most obvious are preserved and collected first.

How technology can help: In-place ECA. Without collecting, legal teams now have the ability to quickly scan key custodians data sources and email accounts to get a ballpark estimate on how much ESI might needed to be collected. These metrics can be used to create collection scenarios that will give legal teams persuasive metrics to negotiate proportional e-discovery parameters with opposing counsel.

Mike Hamilton, J.D. is the 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. Contact him directly at michael.hamilton@exterro.com.