Proportionality

Over the past year, legal practitioners continued to grapple with the expanding scope of electronic discovery. Courts and legal scholars alike stressed the importance of balancing parties’ discovery needs in prosecuting or defending cases with limiting the sometimes-crippling costs of document preservation, collection, review and production.

  • Amendments to Federal Rule 26. One of the noteworthy changes to the Federal Rules in December 2015 concerned the so-called proportionality principle governing the scope of discovery, which seeks to rein in unrestrained discovery requests and concomitant costs. While some version of the proportionality principle has been part of the Federal Rules ever since 1983, the drafters of the 2015 amendments sought to restore proportionality as an explicit component of the scope of discovery in FRCP 26(b)(1), particularly in relation to ESI. In the past year, judicial decisions that discussed both proportionality and limiting discovery to reasonably accessible data did not address the tension between the two. Instead, courts have defaulted to the traditional burden evaluation. Parties resisting overbroad discovery requests should be prepared to argue that information sought is either not reasonably accessible due to undue burden or cost or is not proportional to the needs of the case, or both.
  • Sedona Conference. The judges, lawyers, academics and other experts who comprise the Sedona Conference agree with this sentiment. In March 2017, the Sedona Conference Working Group on Electronic Document Retention and Production (“WG1”) published the third edition of the influential Sedona Principles. WG1 sought to convey “a reasonable and balanced approach” to the treatment of ESI in the legal process. As did prior editions, the third edition promoted the need for proportionality—in both ESI preservation and production. Attempting to navigate the proportionality and accessibility concepts of Rule 26, WG1 advised that the primary sources of ESI to be preserved and produced should be those readily accessible in the ordinary course; only when ESI is unavailable through such primary sources should parties move down a continuum of less accessible sources, until the information requested is no longer proportional to the needs of the case.

New Developments

In addition to affirming the principles of proportionality and reasonable accessibility in a theoretical manner, rising litigation costs were addressed in practical ways for the very first time last year.

  • The Mandatory Initial Discovery Pilot Project. In mid-2017, the District of Arizona and the Northern District of Illinois became the first districts to participate in the Federal Judicial Center’s Mandatory Initial Discovery Pilot Project (“MIDP”). MIDP, which aims to reduce the cost and delay of civil litigation, substantially alters what would otherwise have been parties’ obligations under the Federal Rules with respect to the scope of the initial disclosures and the timing for discovery. Litigants and counsel in these jurisdictions are advised to review carefully MIDP’s requirements in order to avoid missing deadlines and risking a default. Lawyers in other jurisdictions also should be aware of the changes that MIDP institutes, in the event that additional districts decide to join the project.
  • Self-Authentication of ESI. Federal Rule of Evidence 902 governs certain types of evidence that are considered to be self-authenticating, i.e., those that do not require extrinsic evidence of authenticity to be admitted at trial. Amendments to this rule, which took effect on December 1, 2017, change the process for admitting certain ESI into evidence. The amendments added two new paragraphs permitting a party to self-authenticate certain types of electronic evidence: 902(13) allows for self-authentication of records generated by an electronic process or system that produces an accurate result, and 902(14) permits self-authentication of data copied from an electronic device, storage medium, or file if the data is authenticated by a process of digital identification. Types of data that would fall under these rules could include web pages, emails, text messages and cell phone photos. Under the amended Rule 902, proponents seeking to introduce these types of ESI into evidence no longer need to summon a live witness to the stand in order to provide extrinsic evidence of authenticity; rather, a party will be required simply to provide a certification by a foundation witness to establish the authenticity of the evidence.

Technological Competence

The developments described herein are likely to affect nearly all litigants—as well as litigation counsel—as issues pertaining to electronic discovery permeate nearly every dispute. Failure to keep abreast of technological advancements could result in unwanted consequences.

  • Cloud-Based File Sharing. Cloud storage sites have been used in litigation as a method of sharing information. Users, however, should ensure that they are familiar with how such systems work and should take measures to limit unauthorized access to the confidential information stored on these sites. A recent case in Virginia illustrates the point. In Harleysville Ins. Co. v. Holding Funeral Home, Inc., No. 1:15-cv-00057, 2017 WL 1041600 (W.D. Va. Feb. 9, 2017), the plaintiff, an insurance company, uploaded its entire investigation file—including information potentially subject to the attorney-client privilege and work product doctrines—to a cloud-based Box account. However, the plaintiff negligently failed to establish any further access control over the file. When a hyperlink to that account was produced during discovery, defense counsel downloaded the entire file, including the potentially privileged information. Likening the plaintiff’s conduct to “leaving its claims file on a bench in the public square,” the magistrate judge found that the disclosure was not inadvertent and held that the plaintiff had waived any privilege claim over the information posted to the site. Although the district court sustained, in part, the plaintiff’s objections to the magistrate judge’s order and reversed the waiver finding, the facts of the case nevertheless provide a cautionary tale.
  • Applicability to Lawyers. Lawyers must also take special care to protect the confidential information they store and disseminate. The New York County Lawyers Association’s (“NYCLA”) Committee on Professional Ethics issued an opinion in 2017 providing guidance for lawyers on protecting a client’s confidential information that is stored and transmitted electronically, as well as in the context of conducting e-discovery. The NYCLA opinion said that lawyers practicing in New York owe their clients a duty of competence that “expands as technological developments become integrated into the practice of law.” The opinion states that a lawyer must use reasonable care when transmitting information electronically; must understand the risks associated with the use of technology, including the threat of cyber attacks and inadvertent disclosures; and must either personally possess, or associate with persons who possess, sufficient understanding of the technology at issue. The opinion details concrete steps lawyers can take to meet their duty of competence as it relates to e-discovery.