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There is a new opinion by Senior U.S. District Judge Sandra S. Beckwit of importance to all of us concerned with proportionality in e-discovery. Moody v. Turner Corp., Case No. 1:07-cv-692 (S.D. OH, Sept. 21, 2010). Judge Beckwith is an early signatory of The Sedona Conference® Cooperation Proclamation. She also uses one of my favorite sayings about the e-discovery-tail wagging the merits-of-the-dispute dog in this opinion. But you will have to read to the end for her full context quote. Thanks to Matthew R. Byrne, my Jackson Lewis e-discovery liaison in Cincinnati, for bringing this case to my attention.
This opinion arises out of ERISA, an old legal specialty of mine before I went full-time e-discovery-only in 2006. It is a dispute over the plan administrator’s calculation of pre-retirement lump sum pension benefits. (Yawn.) The plaintiffs’ attorneys apparently tried to stay awake by engaging in old-fashioned, non-cooperative, hardball discovery, which Judge Beckwith summarized as a “lengthy and contentious discovery process.” Seemed like they picked the wrong judge for that sort of litigation tactic, but maybe they have never even heard of Sedona or the Cooperation Proclamation.
Plaintiffs’ Production Request
The plaintiffs made many, many discovery requests in what should be a factually simple, albeit legally complex, dispute. In two of their requests for production they included categories concerning ESI and even specified keywords. Here is how Judge Beckwith describes them:
“Plaintiffs’ request for production No. 1 and No. 2 sought production of emails concerning the plan that contained words or phrases identified in nine separate sub-requests; the Court’s rough count of the requested search terms is at least 160 different terms.”
Id. at pg. 3.
Defendants responded with an objection to the broad definitions of search terms proposed. They supported this objection by describing a “test” search using the keywords for one of the plaintiffs’ many sub-requests. This one search alone resulted in hits for 29.54 gigabytes of information. Id. Good for the defendants. That is exactly how you should go about opposing disproportional discovery requests, although I would have provided more detail, such as file counts and review costs projections.
No One Can Afford The Whole Truth
Plaintiffs counter-argued with complaints about defendants’ failure to conduct a search for “all” documents within their “custody or control.” Id. at. pg. 4. They wanted the whole truth, total recall, damn the costs involved. This is easy to say when you expect the other side to pay for all of those costs, but ignores the realities of our contemporary information-flooded world. No one can handle the whole truth. It’s too expensive to get and is anyway unnecessary to do justice.
When is the legal profession going to wake up to the fact that discovery and production of “any and all” relevant documents is no longer possible? The truth, the whole truth, and nothing but the truth, is a quaint myth of the past. It was never true in the paper world anyway, at least in the post-Xerox paper world, and it is impossible now. Moreover, it is irresponsible now for attorneys or judges to expect it. There quickly reaches a point of diminishing returns and proportionality must trump whole-truth delusions. The tail must not wag the dog.
When it comes to e-discovery, we cannot afford the whole truth, and it is not necessary to do justice. We only need enough of the highly relevant ESI for the fact-finder, be it judge, jury, or counsel, to get a good sense of what happened. Forget about the whole truth. Forget about seeing each and every electronic document that might meet the law’s expanded notion of relevance. Instead, embrace a new credo of proportionality. Seek balance. Towards that end a good place to start is to study the new treatise on proportionality to be released next week: The Sedona Conference® Commentary on Proportionality in Electronic Discovery. The Commentary will be available for free downloading at www.thesedonaconference.org on October 6, 2010, the day after their webinar on this important subject on October 5, 2010, at 1:00-2:30 p.m. EST.
Magistrate Hogan Intervenes
Magistrate Judge Hogan conducted a hearing on these issues on May 12, 2009. He granted Plaintiffs’ motion in part, subject to further conferences with the parties to try to narrow the scope of these discovery disputes. His order as quoted by Judge Beckwith in Moody observes:
“In essence, this discovery dispute amounts to a situation in which both sides have dug their heels into the proverbial sand of their respective corners in the sandbox. Plaintiffs argue that they are entitled to everything they have asked for, as written, without consideration given to any objections or claims of privilege. Defendants, on the other hand, firmly assert that they have produced everything to which plaintiffs are entitled and steadfastly refuse to produce any ESI whatsoever on the grounds that the expense renders any such search and production too burdensome. Neither position is tenable.”
Id. at pgs. 4-5.
The Magistrate Judge held further conferences on October 28, 2009, November 12, 2009, and December 1, 2009, to help the parties work out a reasonable discovery plan. This process did not satisfy plaintiffs’ counsel and they filed another motion to compel. Their motion alleged that “defendants had agreed to run a list of search terms against the email files that had been collected from 33 identified custodians.” Id. at pg. 6.
This led to yet another hearing before Magistrate Judge Hogan where plaintiffs’ counsel argued that defense counsel was stonewalling. Id. Defense counsel countered by complaining “that the costs of attempting to comply with Plaintiffs’ increasingly burdensome requests were escalating rapidly, and there was no reason to require Defendants to incur those costs without a clear demonstration of relevance.” Id. at pg. 7. Magistrate Judge Hogan noted that one of the problems was that Defendants initially promised to do something, but “basically did nothing.”
My guess is defense counsel agreed to do something before they realized how much it would cost. As I like to say to make the point about the importance of e-discovery project estimation: Never agree to get on a plane until you at least have an idea of where it is going and what the ride will cost! You would be amazed at how common a scenario this is. But Magistrate Judge Hogan also had some criticisms for plaintiffs’ counsel, concluding that “… plaintiff is overreaching way beyond what I think anybody is ultimately going to need … to resolve this case.” Id. at pg. 8.
The Plaintiffs’ Appeal
Judge Hogan issued an order after this last hearing, which plaintiffs appealed, prompting the instant opinion by Judge Beckwith. Judge Beckwith affirmed her Magistrate’s discovery order, which had essentially compelled some additional discovery and prohibited the rest. Judge Beckwith began her discussion with a familiar refrain:
The discovery disputes between the parties have consumed an inordinate amount of judicial time and effort, not to mention the time and resources of the parties. The Court agrees with Magistrate Judge Hogan’s observation that both parties have taken unrealistic positions over the course of this case.
Id. at pg. 9.
The Tail Should Not Wag The Dog
Now here we come to the key quote in this opinion, one which I predict will be often cited (I know I will):
“As other commentators have observed, the increasing amount of electronic information in the possession of parties to litigation has caused discovery in some cases to become increasingly complex and expensive. In this Court’s view, the mere availability of such vast amounts of electronic information can lead to a situation of the ESI-discovery-tail wagging the poor old merits-of-the-dispute dog. That appears to be the situation that occurred in this case.”
Id. (emphasis added).
Judge Beckwith also observed that :
“Plaintiffs’ original document requests, in particular requests 1, 2 and 7, were clearly overly broad and would have imposed an undue burden upon Defendants that is disproportionate to the likelihood of discovering truly relevant information.”
Id. at pgs. 9-10.
What happened to the agreement to search you might wonder?
Defendants have specifically represented to this Court that they have in fact conducted that search on the 33 record custodians previously agreed upon with the Plaintiffs.
Kind of makes you wonder why Magistrate Judge Hogan had made a contrary holding that defendants had done nothing to carry out the agreement. No explanation is provided.
Actual Burdens Outweighed Potential Benefits
Plaintiffs had also sought discovery from a number of law firms who had previously represented the ERISA plan. This is the part where plaintiffs accused defendants of stonewalling. Judge Beckwith shut down this discovery, holding:
Plaintiff’s overly broad discovery requests and demands for extensive key word searches of the law firms’ ESI are not reasonably calculated to lead to the discovery of relevant, admissible evidence in this case. And requiring such a broad search would impose an undue burden on those law firms, without a corresponding showing from Plaintiffs of the likelihood of discovering relevant, nonprivileged information.
Id. at pg. 12.
Those of us who spend all of their time in e-discovery are in danger of confusing the tail for the dog. Yes, the pursuit of the facts, the truth, is important in every case. But it is not the case itself. It is the tale behind the case, the story. Truth leads to justice, but is not an end in itself, at least not in our legal system (that is the realm of philosophy). Our system of justice depends upon the parties’ discovery of the stories, the facts that reveal the truth, not the judges’ discovery of those facts. It is an adversarial process, but at the same time, it is a system based on trust and compliance with the rules, both rules of procedure and ethics. When the truth is discovered, then, and only then, can justice be done. But discovery for its own sake is pointless. We need the truth for justice, but is there anything more pathetic and comical than a crazy dog chasing its own tail?
The tail must be proportionate and should not be sought for its own sake. Nothing is more wasteful than discovery-about-discovery. We must control the costs of discovery and make them proportionate to the case. Assuming there are no special over-riding policy considerations, such as in a civil rights case, it is crazy for a party to be required, or even threatened, with having to spend a million dollars in e-discovery in a case with a true value of a million. That is the tail wagging the dog.
To state the obvious, a dog’s tail weighs far less than the rest of the dog. You will never see a dog, or any other animal, with a tail that weighs more than the body. That is not a real dog, anymore than excessive discovery is real justice. It should not be possible. Yet this kind of freak of nature is fast becoming commonplace in state and federal courts around the country.
The dog, the case, should always be much bigger than the tail. How much bigger? That is indeed the key question we should all now focus on. Is ten percent too much or too little? Should you have to spend $100,000 in e-discovery in a million dollar case? That all depends on a multitude of facts that I may write about in the future. I will certainly talk about this at the upcoming Capital One CLE in Washington on November 3rd on Proportionality in e-Discovery. I co-chair this one day event with Maura R. Grossman. This will be a star-studded CLE with keynote by Judge Facciolla, and participation by Judges Grimm, Peck, and Maas, and attorneys Jason Baron, Ron Hedges, Conor Crowley, Patrick Oot, Andrew Goldsmith, Jennifer Young, and many others. Proportionality needs to be talked about. The Capital One event devoted to the subject, like the new Sedona paper and webinar, are much needed.
Although some plaintiffs might think the Golden Mean in math and art should also apply to e-discovery costs, namely 1.61803399, or 38% — I don’t. That is too much. Maybe even 10% is too much. All depends. Also, ten percent of what? An exaggerated Plaintiff’s demand? An unrealistic defense analysis? Other factors to consider include the efficiency of the expenditures and the risks involved. Are you efficient and reviewing 100 files per hour at contract lawyer rates? Or are you plodding around at 30 documents an hour and partner rates? How much bang are you getting for your buck? These factors and more all enter into the complex equation. But still, there should be some general rules where you assume reasonable expert efforts. Is 5% just right, 10%, 20% or even 38%?
This is the Goldilocks question. What may be too big for one, is too small for another. What is the “just right” size for your case? What is the just amount that a party should be required to spend to defend a case? To conduct all discovery? To conduct e-discovery?
Every day in conferences, hearings, and mediations around the country parties are encouraged to pay more to settle a case than it is worth, just to avoid disproportionate costs. Judge, mediators, government lawyers, and opposing counsel have got to stop saying that. It is not fair to require a party to spend $38,000 on e-discovery in a $100,000 case. That may be the Golden Mean in art and math, but it is disproportionate in e-discovery. We have to stand up for the rights of parties for just, speedy and inexpensive litigation. That is, after all, the prime directive of Rule 1, FRCP. We have to stop these disproportionate freaks of nature, these dogs with tails so big they are capable of wagging the body. Judge Beckwith in Moody has made an important step in the right direction.
About the Author
Ralph Losey is the lawyer, writer and educator behind the e-Discovery Team blog. Ralph has been practicing law since 1980 and playing with computers and cyber-communications since 1978. He is a partner in a major national law firm and Professor of Law at the U. of Florida. He holds the highest AV peer rating by Martindale Hubbell and has 70 published opinions to his credit.