June 2, 2014
In the 1980s and 1990s, I was General Counsel for the National Federation of the Blind. I often found myself litigating against large government agencies or major corporations. In an effort to achieve a competitive edge, back in 1995 I started using computers and software such as Summation (litigation support software) and Trial Director (courtroom management software). Thus, I became an early “laptop litigator” and a firm believer in electronic litigation.
I became so fascinated with “electronic litigation” that I left the practice and became a Summation Certified Trainer. I went around the country training lawyers and law firms about how to pursue e-discovery. I ended up co-authoring a multi-volume treatise with Marquette University Law Professor Jay Grenig entitled e-Discovery & Digital Evidence (Thomson-Reuters 2005) which has been updated by pocket parts down to and including the present date. I have also served on the Wisconsin Judicial Council since 2008 and was one of the principal authors of Wisconsin’s new e-discovery rules.
I have a lot of stories from “back in the day,” but there is one in particular which illustrates how e-discovery was conducted in the early days. In 2001, I was retained as discovery “of counsel” to a Knoxville plaintiff’s attorney in a major products liability lawsuit then pending in the Eastern District of Tennessee. I attempted time and again to secure digital evidence from the defendant. I was stonewalled. Finally, fifteen CDs arrived in the mail with an incredible maze of unindexed “documents” which were largely unreadable. So, I filed a motion for sanctions and asked for a hearing before the presiding Federal Magistrate.
Just before the hearing I was contacted by defense counsel and was informed that he was going to bring his defendant’s IS manager to the hearing and that when he was through with me I would regret having gone to law school. However, prior to the hearing, I retained a forensic expert from California (a former NCIS agent) and the Magistrate ended up holding an evidentiary hearing for an entire day. At the end of the hearing, the Judge found that the defendant had acted in bad faith and ordered that I have direct access to the servers and databases of the defendant at its headquarters. My forensic expert and I spent five days conducting searches of those databases. Those depositions were like a trial; they were a constant battle and a number of times we had to telephone the Judge to rule on objections.
However, at the end of the day we found some very damaging evidence (which the defendant claimed did not exist) and the case settled for an undisclosed amount well above what we had asked for when the case began.
Back in 2004 I wrote in a bar journal that “[s]ome local courts have adopted creative rules to deal with the electronic revolution. … [s]ome courts have responded to the electronic revolution with creative and well thought out decisions. However, most courts have struggled with electronic data, seemingly trying to put a square peg in a round hole. It’s not that courts are unaware of the importance of the electronic world, it’s just that their responses only address a part of the problem and there are no consistent efforts to come to terms with the electronic world.”
However, in the past ten years courts and practitioners have made major strides in the area of e-discovery. Historically, federal prosecutors and federal courts grasped the importance of e-discovery at a comparatively early date. The But while federal courts get the idea of “e-discovery” many state practitioners and courts do not. In my home state of Wisconsin practitioners and courts often ignore e-discovery. What has driven the acceptance of e-discovery is the inescapable reality that a great deal of evidence will be “lost” if one does not go for the digital.
What drove the development of e-discovery is the concept of spoliation, which takes on special significance in terms of ESI (electronically stored information). Digital evidence is very perishable and it will quickly evaporate if not preserved. Some of the earliest e-discovery case law addressed this fact and the resulting obligations of parties and counsel to preserve ESI.
Federal courts began to deal with this problem over thirty years ago. Federal courts held that counsel must take all reasonable steps to prevent spoliation from happening and to set up procedures designed to police the preservation of digital evidence. Federal courts, and some state courts, concluded that spoliation of digital evidence should have especially severe consequences. At the same time, courts began to recognize the extent to which forensic computer experts could facilitate the retrieval of digital evidence.
Immediately prior to the adoption of the federal e-discovery rules, federal courts had begun to refine the preservation duties of parties and counsel.
In fact, spoliation sanctions are becoming the tail that is wagging the e-discovery dog. Compare U.S. v. Phillip Morris, 327 F. Supp. 2d 21 (D.C. July 21, 2004) where a monetary sanction of $2,750,000 had to be paid into the Court Registry; with Magana v. Hyundai Motor Am., 220 P.3d 191 (Wash. S. Ct. 2009), where Hyundai was sanctioned eight million dollars, one of the largest discovery sanctions against a company.
The history of e-discovery also contains a number of very important cases regarding when and how to seek it. See Telxon v. PricewaterhouseCooper [PWC], 2004 WL 3192729 (N.D. Ohio July 16, 2004) which involved failures to disclose digital evidence, and the methods used by the plaintiffs’ counsel to prove its existence. According to the plaintiffs in Telxon:
1) Because “PwC … produced hardcopy documents in a version different from any version of the documents in electronic form, the conclusion is inescapable that PwC has not yet made available to Telxon and plaintiffs all of its electronic databases relevant to this action.”
2) “[T]he absence of electronic versions of internal audit workpapers, and the absence of the electronic version of the 1998 workpapers from which the hard copies were produced raises questions as to whether PwC is still withholding discoverable material.” at *23.
The Telxon plaintiffs showed prejudice in the following manner:
1) “[T]he failure to note all modifications and all persons modifying documents on the hard copies produced during discovery caused Telxon and plaintiffs to choose not to depose certain persons or not to ask certain questions of the people whom they did depose.” at *22.
2) “[T]he failure to produce documents in the order in which they were kept and the failure to produce all indices allowing the sorting of produced documents according to topic of interest slowed Telxon’s and plaintiffs’ discovery of relevant information and increased the cost of discovery.” at *23.
The Magistrate in Telxon concluded: “PwC failed at the start of discovery to check thoroughly its local servers and its archives for relevant documents, failed to compare the various versions of relevant documents on those databases, failed to produce documents as they were kept in the ordinary course of business, and failed to reproduce thoroughly and accurately all documents and their attachments. Prior to litigation PwC had permitted destruction of documents despite committing to their preservation.” at *33.
While there is much more to the history of e-discovery, it has largely developed due to the recognition that ESI exists and the failure to preserve it leads to sanctions which can often alter the course of litigation.