The Sedona Conference Working Group on Electronic Document Retention & Production (WG1) has proposed a set of principles and practical guidance for the eDiscovery process, in its recent publication, the “Commentary on Defense of Process: Principles and Guidelines for Developing and Implementing a Sound E-Discovery Process” (available for download here). The Commentary seeks to address what parties can do to avoid, or at the least prepare for, challenges to an eDiscovery process they apply in a given matter and how courts should address discovery disputes. The public comment period on the Commentary has now closed.

By focusing on the defensibility, the Commentary endeavors to provide guidance to parties and their counsel who design and execute eDiscovery plans and processes and who may be called upon to defend the appropriateness and efficacy of their discovery efforts. Indeed, considerations of defensibility of eDiscovery process underlie every decision in-house counsel and their eDiscovery attorneys make, from pulling the trigger on issuing a legal hold notice to completing the last production in the case.

The responsibility for the eDiscovery process is a shared one, falling “on counsel and client alike. At the end of the day, however, the duty to preserve and produce documents rests on the party.” Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 436 (S.D.N.Y. 2004). Failure to fulfill this responsibility, which by nature lacks bright-line rules, comes with potential for substantial monetary and case-destroying sanctions.

The Commentary proposes Thirteen Principles designed to establish the parameters for reasonable and defensible eDiscovery process within a given matter. Today, we will discuss the key takeaways found in Principles 1-3. We will address the remaining Principles over the next few days.

Principle 1. An e-discovery process is not required to be perfect, or even the best available, but it should be reasonable under the circumstances. When evaluating the reasonableness of an e-discovery process, parties and the courts consider issues of proportionality, including the benefits and burdens of a particular process.

Comment 1.a. Perfection Is Not Required

This Principle stands on the proposition that only reasonable effort is required and that more than one process can be deemed reasonable in a given case. And, reaching back to the first-year law school Torts class, reasonable people can disagree on what is reasonable.

Rule 26(g) of the Federal Rules of Civil Procedures requires parties to conduct a “reasonable inquiry” when propounding and responding to discovery in order to determine that their disclosures, requests, or responses are warranted by existing law, not interposed for any improper purpose, and are neither unreasonable nor unduly burdensome or expensive, “considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action.”

Reasonableness of inquiry required by Rule 26(g) is judged by what is reasonable under the circumstances. The Commentary states that to be reasonable, an eDiscovery process “need not be perfect, nor even the best available option, and it does not have to identify all discoverable ESI.” Furthermore, an eDiscovery process “is not inadequate simply because an opposing party can demonstrate that a more accurate or complete process exists.”

Comment 1.b. Proportionality Is Central to Reasonableness

This proposition is helpful in those cases where the requesting party asks for the production of forensic images of everything under the sun plus the backup tapes, in a case worth $10,000.

The Commentary makes a strong point that proportionality does not exist in a vacuum, but that it is rather tied to the circumstances of the case, evaluated against the factors in Rule 26(b)(1), which states that parties may obtain discovery regarding any nonprivileged matter “that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.”

The Commentary illustrates this point through a hypothetical of a contract dispute over $50,000 in allegedly defective merchandise that was returned by a retailer to its supplier. In this hypothetical, the supplier identified relevant ESI by asking the general counsel, who negotiated the contract, and the account representative for the retailer, to search their own email files for emails related to that retailer, by using reasonable search terms discussed between outside counsel and the two custodians. The Commentary argues that this process is reasonable under the circumstances, given the modest value of the litigation, the high cost of a more comprehensive search, and the low likelihood that a more comprehensive search would identify additional unique relevant ESI.

Principle 2. An e-discovery process should be developed and implemented by a responding party after reasonable due diligence, including consultation with persons with subject-matter expertise, and technical knowledge and competence.

Comment 2.a. The Requirement for Due Diligence

The “reasonable inquiry” expected from counsel under Rule 26(g) must be undertaken with “due diligence.” Adequate due diligence is likewise tied to the consideration of proportionality factors, such as burden, cost, and the amount in controversy, as well as the importance of the issues at stake. If the discovery process is challenged, counsel’s failure to demonstrate adequate due diligence may be grounds for sanctions.

Counsel should also be aware of jurisdictional requirements. Some courts, including the District of Kansas and the Northern District of California, have approved checklists, guidelines, and model standing orders that supplement the minimum requirement of a reasonable inquiry.

Comment 2.b. Elements of Due Diligence

While there is no comprehensive checklist to cover all circumstances, the Commentary includes the following topics that need to be addressed by due diligence:

  • The identity and role of relevant custodians
  • The location of sources of relevant ESI (at custodian and organizational levels)
  • Reasonable steps that should be taken to preserve relevant ESI
  • The suitability of criteria and tools used to identify relevant ESI
  • The qualifications, competence, knowledge, and experience of individuals or entities entrusted to collect, process, search, and review ESI

By way of illustration, the Commentary proposes that counsel cannot discharge his due diligence by accepting the client’s IT representative’s report that all of custodial email has been collected from the servers. Before being satisfied with that report, counsel would need to verify that email collection is sufficient. To do so, counsel might need to investigate, for instance, how the client’s email system is structured and used and how custodians store email.

Comment 2.c. The Role of Experts or E-Discovery Liaisons

  • This comment highlights the fact that preservation and collection of ESI is often outside of the common knowledge of attorneys whose practice is not focused on eDiscovery. As such, it is beneficial, and encouraged by some courts, to designate eDiscovery liaisons who are knowledgeable about the technical aspects of eDiscovery and whose expertise can boost the defensibility of the process in a given case.

Principle 3. Responding parties are best situated to evaluate and select the procedures, methodologies, and technologies for their e-discovery process.

Comment 3.a. Application of Existing Sedona Principles

Under the Federal Rules of Civil Procedure, and similar state court rules, the responding parties have the obligation and right to make decisions concerning the eDiscovery process they will employ in a given case. The Sedona Conference adopted this concept as Principle 6 in its Best Practices Recommendations & Principles for Addressing Electronic Document Production.

The principle is based on the fact that the responding party has better knowledge of, access to, and control of, the systems, documents, and custodians at issue. As an illustration to this concept, the Commentary proposes that where parties, after diligent effort to cooperate, are unable to reach a compromise on search terms to be applied by the defendant to its ESI, “it is the defendant’s right to decide how to proceed, understanding that it is under an obligation to conduct a reasonable search pursuant to Rule 26(g) and that its process may later be subject to challenge.”

Comment 3.b. No Safe Harbor

Reiterating the concept above, the Commentary states that in the absence of an agreement or court order, the producing party has the “prerogative and responsibility” to decide what procedures, methodologies, and technologies it will use in a given case. The flipside of this prerogative is that the party will then need to live with the consequences of those decisions. To avoid challenges to the process, parties should always attempt to cooperatively reach an agreement on the eDiscovery process to be applied in their case.

We will discuss the key takeaways from the remaining Principles over the next few days.