2008 provided another year of court interpretation of the Federal rules and another year of robust authorship from the bar on the issues involved in the discovery of electronically stored information. In light of the ever expanding list of states that have now adopted rules highly similar to the Federal Rules, including Ohio this past July (discussed here), the lessons learned at the federal level should have currency with any business or organization that could potentially find themselves in court. So, what can we take away from 2008?

Arguably, the main theme of this past year in the eDiscovery world was the need for greater cooperation, both as a compliance issue and as a means of reducing costs. The Sedona Conferences’ Cooperation Proclamation, published this past July, is a prominent example of the national push by judges, legal scholars, technical consultants, and members of the practicing bar towards increased dialog and the early exchange of information.

Why cooperate? One reason is that it happens to be the law. As Magistrate Judge Grimm pointed out this past year in Mancia vs. Mayflower (discussed here), the attorney certification language of Rule 26(g) imposes an affirmative duty to engage in pretrial discovery in a responsible manner, which in turn requires “cooperation rather than contrariety” and “communication rather than confrontation.” According to Judge Grimm, the Rule is designed to curb discovery abuse and is one of the most important but “least understood or followed, of the discovery rules.”

While the Mancia opinion discusses the certification of counsel in connection with Federal Rule 26(g), the same rationale would appear to apply under parallel attorney certification language in state versions of Rule 11. For example, under the Ohio Civil Rules, which have no counterpart to Fed. R. 26(g), Rule 11 imposes a duty “upon every pleading, motion, or other document of a party” to certify that “the attorney or party has read the document; that to the best of the attorney's or party's knowledge, information, and belief there is good ground to support it; and that it is not interposed for delay.” Thus, we can expect Mancia to be picked up around the country by courts at the federal and state levels in dealing with the dual extremes of excessive discovery and stonewalling.

If that’s not enough for you, try this. Cooperation can save you money. With the economic deterioration in the second half of 2008, and consequent laser-like focus on cost cutting within most organizations, it isn’t hard to see why the idea of mutually beneficial cooperation may be a more appealing alternative to long and involved discovery disputes caused by hide-the-ball practices of one or both parties. A reality of modern litigation is that most organizations store, and will continue to store, vast quantities of fragile electronic information – orders of magnitude greater than they ever stored in paper. The preservation, search, culling, production, and review of this much information – all to get down to the dozen or so documents that actually matter in the case – are challenges that can easily lead to a discovery budget that is far out of whack with the real issues at stake in the dispute.

This can be complicated, highly technical stuff. As Magistrate Judge Facciola pointed out this year in United States v. O’Keefe (discussed here) and reemphasized in Equity Analytics LLC v. Lundin (discussed here), “given the interplay, at least, of the sciences of computer technology, statistics and linguistics…for lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread.” As noted by Judge Grimm in Victor Stanley v. Creative Pipe (discussed here), the same is true for exclusionary search terms in privilege review. Likewise, even when a party makes Herculean efforts to preserve evidence and is ably assisted by competent legal and technical advisors, as was no doubt the case in In re Intel Corporation Microprocessor Antitrust Litigation (discussed here), things can go wrong. The lesson? Any unilateral plan is ultimately subject to attack. This can, of course, lead to the need for additional discovery, motions, and hearings just to sort out the nature and scope of the lost evidence; not a position anyone wants to be in. The list of horribles includes corrective measures such as forensic extraction of deleted data or going back to square one on a production of documents, any of the full spectrum of sanctions, lost credibility with the court, and even ethical or criminal charges against those involved. No case better exemplifies these risks, both for parties and outside counsel, than the series of decisions in Qualcomm Inc. v. Broadcom Corp. (discussed, here, here, here, here, and here). See also U.S. v. Henry (discussed here) for an example of liability for criminal contempt in connection with discovery abuses.

It is not at all surprising that discovery disputes often arise from a sense of distrust among parties and counsel. As complicated as these activities are, it is natural to suspect that one’s adversary may not have conducted its preservation, search, culling, and production adequately or in good faith. A “drive by” Rule 26(f) “meet & confer” session in a federal case is unlikely to assuage such fears. The same is true for a “business as usual” approach to a state case. Some states include the option for discretionary pretrial discovery conferences (discussion of Ohio’s R. 16 here). Informal discussions are of course, always an option as well.

There are very legitimate reasons for parties not to disclose particular information. Trade secrets, computer system security, and attorney-client privilege are but a few factors that must be carefully considered by parties and their counsel before a decision is made to disclose. It is also fair to expect the communication to a two-way street. Mere obfuscation, however, is not likely to be tolerated by a well briefed court. As in Baker v. Gerould (discussed here), courts will grant additional discovery, including depositions, to get the bottom of a discovery dispute, essentially forcing a dialog that is not entered into voluntarily.

Getting the agreement of your adversary on what a sufficient protocol must include may be a worthwhile insurance policy, especially since adverse inference instructions can follow from ordinary negligence in several Circuits, including the Sixth Circuit (as discussed here). Of course, there are going to be times when litigation is anticipated but it is impossible to initiate a dialogue, for example, when the identity of your adversary is not yet known. In these situations, the Sedona Conference this year offered some practical advice for interim preservation decisions (discussed here). Whenever possible, though, early dialog along with a careful paper trail can provide the cover you may later need to rely upon. For example, the parties to Star v. QFA Royalties (discussed here) appear to have taken a good first step by memorializing the framework for their cooperation via an agreed order that leaves many of the details for future agreement between the parties.

Others took a more adversarial approach in 2008, for example, leaving it up to the court to fashion discovery protocols from the in-court arguments and representations made by the parties. In Henry v. Quicken Loans (discussed here) the court held a hearing and ordered a protocol intended to balance the concerns and needs of both sides at what was hoped to be manageable costs. Defendants instructed the court appointed expert to perform five rounds of privilege screening, believing that their instructions were authorized by the protocol, which was embodied in a hearing transcript rather than a stand-alone agreement or order. The court disagreed with defendants’ interpretation of what the protocol required, ordered them to pay for the extra filtering performed by the expert, and ordered the defendants to show cause why the first set of screened results should not be produced. The lessons here are to get a clearly written agreement on the protocol, rather than relying upon a hearing transcript (or an email chain, oral conversation, etc), and include your opposing party on communications with a court appointed expert.

And then, of course, there is the large percentage of cases in which the responding party stonewalls to the end and attempts to keep its search protocol to itself. In but one such example, Sherman v. Harrah’s New Orleans Casino (discussed here) the Magistrate recommended that Plaintiff be awarded over $15,000 for costs, IT support services and attorney’s fees, on the grounds that, “It was only after plaintiff filed and litigated two motions to compel and deposed five Harrah’s employees on three separate days that he obtained all documents and electronically stored data pertaining to him and that the reasons offered by defendant do not justify the extensive efforts plaintiff was required to take to obtain the requested information.” Harrah’s ultimately won its motion for summary judgment but was still left to pick up the tab for the discovery dispute.

Time will tell whether the lessons of 2008 will be taken to heart in the coming year, and by how many. As the cases and articles pile up and the critical mass of “E-Discovery knowledgeable” and technically savvy lawyers continues to form, the stage may well be set in coming years for a fundamental shift in the behavioral norms of parties engaged in discovery—away from a default strategy of non-cooperation and towards earlier and more meaningful dialog. Will economic incentives or a desire to mitigate legal risks lead to a greater degree of cooperation in 2009 than pervious years? As always, we’ll be watching and we will keep you informed.