NATIONWIDE: An Introduction to E-Discovery & Information Governance

NATIONWIDE: An Introduction to USA – Nationwide eDiscovery

Redgrave LLP 

Introduction 

Handling discovery of electronically stored information (ESI) has become increasingly complex and riddled with risk over the past decade, particularly in complex civil litigation and governmental investigations. Even large, global law firms with highly qualified attorneys increasingly struggle to ensure that their clients are able to fulfill the demands and obligations imposed upon them by opposing parties and courts. At the same time, even individual plaintiffs (and their counsel) are confronting a reality of large volumes of discoverable information to handle. As a result, instances of document discovery going "off the rails" have become increasingly common. The examples are legion of large companies with sophisticated legal departments and represented by prestigious law firms, nevertheless, becoming mired in discovery difficulties—even sanctions—because of failures to adequately preserve relevant information and to timely produce all responsive ESI due to various process failures. Plaintiffs, likewise, are not immune from eDiscovery failures.

The assistance of top-tier eDiscovery counsel is becoming more critical than ever. Often, counsel with this expertise are brought in to bring a company into compliance with court orders and legal obligations after a party has found itself in a desperate situation. Parties can benefit even more by involving experienced and skilled eDiscovery counsel early in the case before paths that lead to later difficulties are taken. Moreover, such counsel can help parties develop and implement defensible processes for legal holds and data disposition that avoid the many downstream impacts of excessive retention of ESI.

Litigation counsel usually rely on traditional approaches that are no longer well-suited to complex environments that include the use of personal devices, texts, chats, instant messages, collaboration applications (e.g., Slack, Teams), as well as email and ever-increasing volumes of ESI. For example, relying on legal hold notices alone for preservation, and on the use of search terms and linear review for document productions and privilege logging, increasingly leads to significant difficulties later. By contrast, eDiscovery counsel have developed more sophisticated and nuanced approaches—including the use of processes involving analytics and technology-assisted review—to handle discovery in proportional ways. These techniques and perspectives avoid the pitfalls of using traditional approaches in this new environment and avoid unnecessary disputes so that cases can move forward past document discovery.

Looking forward, utilization of top-tier eDiscovery counsel is more critical than ever. The realities of a remote workforce (and increasingly distributed data) have hit practically every industry in the wake of the pandemic. At the same time, individuals who may become plaintiffs in any variety of contexts have also witnessed an incredible explosion of data that they create and store. The potential ramifications for identifying, retrieving and producing data and documents from new and varied sources and devices are just beginning to be seen.

Existing and Emerging Challenges Impacting eDiscovery

Many of the emerging trends below will impact how individuals, businesses, and law firms approach eDiscovery, as well as the future development and range of this practice area.

Preservation Challenges 

Parties and their counsel are generally well aware of the need to preserve information relevant to litigation or investigations, and many companies have established processes and personnel to manage legal holds. Yet, preservation issues continue to arise for individuals and companies, particularly concerning sources of data outside of email. On the one hand, failures to preserve relevant ESI on mobile devices and from texting, instant messaging, and chat applications continue to generate a large portion of sanctions decisions. On the other hand, excessive preservation is also an issue (e.g., some companies choosing a 'save everything' approach that creates downstream problems with respect to system capacities and an inability to cycle backup media), and exacerbating the problems associated with high data volumes that must be collected, searched and reviewed for future litigation.

ESI Protocols 

It has become a common practice for counsel to enter what is known as an 'ESI protocol'—i.e., an agreement of the parties entered as a court order prescribing the process for production of ESI. Whether ESI protocols are beneficial for parties—and whether they would be in a better position without departing from the rules of civil procedure—is increasingly coming into question. Producing parties must be careful not to agree to provisions that, although seemingly innocent, operate as a significant relinquishment of rights under the rules. For example, in In re Valsartan Prods. Liab. Litig., the court held that the defendant could not utilize its selected document search and review methodology without the agreement of plaintiffs because of the producing party’s agreement in an ESI protocol to “cooperate in good faith regarding the disclosure and formulation of appropriate search methodology.” By contrast, the court in Livingston v. City of Chicago permitted the defendant to use its selected search and review process over the plaintiff’s objection, pointing to the absence of any requirement in the federal rules that the defendant collaborate with plaintiffs in developing a review process. Accordingly, it is important for counsel to know the potential risks of ESI protocol provisions, and to consider whether simply relying on the existing rules of civil procedure would be more beneficial.

Scope of Relevance Challenges and Productions

Requesting and producing parties often disagree about where to draw the lines of relevance. New tensions arise, however, when parties and courts consider how relevance will be determined in the context of large-scale document reviews and whether or not objectively irrelevant information must be produced. For example, while many courts allow producing parties to review documents for relevance prior to production, other courts and investigative bodies recently have demanded, regardless of any independent assessment of relevance, that information be produced simply because it is in a particular location, or it is responsive to one or more keyword search terms. These divergent approaches present considerable challenges for both producing and requesting parties. Circuit Courts of Appeal have recently split on this issue. On the one hand, the Third Circuit in In re Activis Holdco U.S., Inc. ruled that it was appropriate to require defendants to produce all documents that hit search terms without further review (except for privilege), in effect mandating the production of documents beyond the scope of discovery under the federal rules. On the other hand, the Sixth Circuit in In re Nat'l Prescription Opiate Litig. held that courts cannot mandate discovery beyond the limits set forth in the rules, even if doing so would serve broader interests or efficiencies in the case.

Use of New Technologies in Search and Review

Many lawyers and courts still think of electronically stored information as having paper analogues. Unfortunately, the reality is that much of today’s information is generated and stored in ways where there is no hard-copy equivalent. Whether it is a structured data platform with multiple relational tables or a 'modern attachment' in Microsoft’s Office 365 environment, the means by which these data can be retained, retrieved and produced is significantly different than pulling a paper document from a file folder. Accordingly, to adequately represent their clients, counsel must stay abreast of existing and emerging technologies—and know how to properly use them—to satisfy their discovery obligations in these new information environments. In particular, the use of technology assisted review (TAR) based on artificial intelligence and machine learning is increasingly becoming necessary to deal with extraordinarily high document volumes. The court in In re Valsartan even held that in cases likely to involve large volumes of ESI, the producing party must consider using TAR at the outset of the litigation rather than months later when it finds that using traditional keyword searches is not working because of the large volumes of "false positive" hits.

Proportionality Challenges 

The 2015 Amendments to the Federal Rules of Civil Procedure were noted for their re-emphasis of proportionality in assessing the value and scope of discovery efforts. State courts have largely, but not wholly, followed suit (i.e., the Texas Supreme Court’s 2017 precedent-setting decision in In re State Farm Lloyds). Application of proportionality in a case is often an issue that requires skilled counsel who can understand and explain the intersection of technical facts and the law.

“Possession, Custody or Control” Issues

The continued explosion of cloud-based platforms, along with the increasingly interconnected global web of information and corporate entities, will continue to strain the traditional "possession, custody or control" analysis that dictates how far an entity must go to identify, preserve, retrieve, review and produce information in an investigation or litigation. Adept counsel will identify and navigate these issues early in matters.

Privilege Challenges 

The volume of data involved in investigations and litigation (combined with new technologies that individuals use to communicate, store, and retrieve data), creates substantial challenges for entities that need to withhold documents, in whole or in part, from discovery based upon privilege or other protection. The traditional document-by-document logging is increasingly impracticable and costly, yet many counsel still expect these past practices to suffice. The number of disputes addressing allegedly deficient privilege logs or claims—some with significant case consequences—continues to increase. Quickly identifying matters where early discussion and alternative approaches can ensure the proper identification and withholding of documents, along with an adequate mechanism to challenge claims that are material and legitimately in dispute, will reduce risk and costs for all parties.

Confidentiality Challenges 

Federal and state courts are taking an increasingly restrictive view of confidentiality claims in both discovery and sealing court files. Accordingly, counsel must work with clients to ensure a common and sufficient understanding of trade secrets and other confidential information at issue. Also imperative is identifying a game plan to marshal evidence and arguments for or against such claims as they arise in matters.

Disparity Between Federal and State Rules

Although the Federal Rules of Civil Procedure underwent significant amendments in 2015 regarding discovery issues, states have been slow to adopt new rules. Even for those states adopting new rules, many have not followed the federal rules strictly. Counsel need to be cognizant of these differences and aware of local rules and practices that can significantly impact eDiscovery practice.

Interrelationship with Other Areas of Information Law

eDiscovery is one aspect of the broader area of 'Information Law', which addresses the intersection of different legal constructs with information wherever stored. Other aspects of Information Law include Information Governance, Data Privacy, and Cybersecurity. Counsel should have a holistic understanding of the intersection of eDiscovery with these other areas as there are often overlapping laws, rules, and other considerations.