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View from the Bench: E-Discovery Law – What the Judges Are Seeing


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GARY ADLER: I'd like to start asking each of you to speak to a question I thought might be of interest to all of us, which is, we're now nearly three years on after the amendment to the federal rules. From the perspective of judges who've had to constantly resolve e-discovery disputes as they arise in litigated cases, did the amendments to the rule succeed? Are there issues that, in your view, are still not adequately addressed by the rules and the prior court decisions? And what further changes would you make to the rules if you could do so by judicial fiat? Judge Francis, maybe we can start with you, since you're sitting right next to me.

JAMES FRANCIS: Sure. I think the big success has been, the rules focus on proportionality. Proportionality was in the rules prior to the amendments. But in those days, I think it was a concept rarely taken advantage of. I found myself raising it sua sponte on occasion. Now, I think both the parties and judges, generally, are much more focused on it.

Certainly, there remain issues with respect to implementation of the proportionality concept. But I think it's been a big success. And I think that the concern of requesting parties, that proportionality would be used as a hammer to avoid discovery, has really not come to pass. So I think that's the big success.

The big failure, in my view, and we'll talk about this a little more later, is rule 37(e) and sanctions. There are still questions that are open, or at least are not understood by courts and parties. Among them, what is electronically stored information? Is a lost videotape the loss of ESI or the loss of physical evidence? I also think that the 37(e) has had less impact on problems of the overpreservation of electronically stored information than had been hoped, and also less impact on the number of sanctions motions that parties bring.

One thing I think that the rules did not address that would be really beneficial would be technology-assisted review. I think we continue to struggle to get parties to accept technology-assisted review. And one of the reasons is that they fear the disputes that are going to arise, both going into and then after TAR has been adopted in a particular case. And I think, if the rules can provide some certainty with respect to the use of TAR, it'll be better accepted.

GARY ADLER: Why don't we just walk down the row, if we could? Judge Peck?

ANDREW PECK: All right. I agree with everything Judge Francis said. So I'm not going to repeat. TAR, of course, is something near and dear to my heart. So I particularly appreciate that. I think rule 34(b)(2) has had some effect, and not nearly the effect that we were all hoping for. And I think we're going to talk about that substantively a little bit later.

So I'm going to come at this from a slightly different angle. And that is, the unfortunate thing is that Federal Rule of Evidence 502 is in the evidence rules, not the rules of civil procedure. And it is astonishing to me, 10 years after that rule was enacted, which gives you extraordinary protections against waiver of attorney-client or work-product protection from inadvertent or other production in litigation, that it is incredibly underutilized.

So in the December 2015 amendments, a cross reference to it was put in rule 26(f) and in rule 16(d). And it's still the great mystery to most lawyers that Federal Rule of Evidence 502 exists. So somehow, I would like to get lawyers to actually read and utilize that rule.

GARY ADLER: Judge Smith?

LISA MARGARET SMITH: I think that one of the real failures is, in rule 16, where it is allowed for the parties, at the outset, to include scheduling, for example, for e-discovery, to include discussion of preservation, it's allowed, but not required. And although this comment doesn't apply to large, corporate kinds of situations, where the attorneys for both sides tend to be more focused on discovery of electronically stored information, in the ordinary case, in the medium-size and small case that comes before me, I see no mention of ESI discovery in the initial rule 16 scheduling order.

And for me, those scheduling orders tend to be prepared in front of the district judge. And then the district judge refers to the case to me. So at that point, I'm trying to help the parties play catch up, where if they were to address those issues right at the outset, I think everybody would be in a better position. And in particular, a discussion of preservation at that early time might obviate the need for sanctions, for instance, which my colleagues have mentioned.

GARY ADLER: Thank you. Judge Waxse?

DAVID WAXSE: Well, I don't want to be too contrary at the start, but--

GARY ADLER: Oh, please do.

DAVID WAXSE: But I think some of the things that have already been mentioned have been more problem than solution. Andy was talking about proportionality. And as he mentioned, it's been in the rules for years, and years, and years, and hardly ever used. You can't find a lot of opinions on proportionality and how to use it.

So to try and correct that problem, they moved it. And it now, as you know, is part of the determination of whether you can actually do discovery, not part of the protective order process that it used to be in. And the problem I ran into in trying to then deal with it in its current form, it almost gets down to a due process question, because without repeating all of the factors that we're supposed to look at with proportionality, the practical problem I ran into was, I'll get somebody standing up and saying, judge, this is not discoverable, because it's not proportional.

And of course, the other side says, yes, it is. And I look at the factors, and I say, well, tell me what your position is on each of these factors. Well, there's-- I've never had a case where there was an agreement on each of the factors. I've had many cases where there's such a wide difference in their views that there's no way for me to decide the issue without allowing them to have discovery and me to then have hearings if there's no agreement on things.

The example I've used in the past is, I had one case where it was a nationwide class-action situation. And the defendants filed a motion for a protective order saying, this discovery is not proportional. And if we had to gather all this stuff together, it's going to cost 30-some million dollars. And they had an affidavit signed by somebody in IT at this big company saying that.

And the response was, no, it won't. It doesn't cost anywhere near that. Well, how am I supposed to decide whether it does or doesn't when all I've got are statements from pleadings?

So I said, I'm going to set it for hearing. And I want the affiant here in my court. And I get the normal lawyer response-- well, Judge, she's in North Carolina. I said, you want a protective order, she's going to be in Kansas.

So she shows up at the hearing. And they proceed to try and get her to testify how she got the 32 million. And it became clear, somebody had told her 32 million. She had no idea where the number came from. And she couldn't explain how they'd arrived at it. So the more I listened, the more I realized, they hadn't even had any discussions about this cost issue that they thought was driving proportionality.

So I recessed the hearing and said, I want you to go back, and start over, and have the kind of discussion you should have had before you filed the motion. And the response back was, Judge, we've had all these discussions. And we've decided we really don't have this big a dispute. We think that if we start out with trying, first, to get an agreement on what are the actual factual issues in dispute, that will cut out a lot of the discovery, because you don't need to do discovery on facts that are not in dispute.

And they next said, we really think there are ways we can stage this and do it as a process, not as a one-time thing. And they finally, when I said, well, we're still going to have to have a hearing, they called back and said, Judge, we've settled this discovery dispute. We're going to do some staging. We're going to do various things that are-- they all could have done at the very start.

And yet, the problem is, if I hadn't been able to convince them to go through that process, how am I supposed to decide whether it's 32 million or 2 million? Judges don't have the ability to just pull these things out of the air. And yet, there's no help from the rules committee on what we're supposed to do next when we get faced with these proportionality arguments. So I think that's more problem than solution.

JAMES FRANCIS: Well, the rule was a success, because they settled the issue, David.

DAVID WAXSE: Took a lot of help from me.

GARY ADLER: So a lot of what you all just said goes to questions that I was planning to ask you to follow up on. But one didn't. I want to follow up on that now, Judge Smith, on rule 16. As someone who gives my colleagues a lot of guidance on e-discovery, I do presentations in my firm where the first side I write, put up, says it's already too late.

They don't listen to me. And what you just said about rule 16 really struck a chord for me, because I find that people who are-- especially more senior lawyers who are litigating, and have been for years, they're not going to really volunteer to do anything in their rule 16 that they don't have to. And I'm going to demonstrate, now, a lack of understanding of how much control you all would have over what has to be in a rule 16 statement and what has to be in that conference.

Could you have a local rule that would require some of what is permissive to try to address that issue? And what kind of-- and if the answer to that is yes, what kind of pushback do you think you might get from your colleagues on the bench? I know what you'd get from the lawyers. They're going to be angry, and then they're going to do it, and they're going to be happy later. But I wonder what kind of pushback there would be in the courthouse.

LISA MARGARET SMITH: Well, an individual judge could have, in his or her individual rules, that requirement. Again, I don't know that that would help me, because the rule 16 scheduling order is usually prepared when the case is still before the district judge, before it gets to me. So they're going to do that in accordance with the district judge's individual rules.

You could have a local rule to that effect. But that would require getting a majority of the judges on the district court to agree. And as my colleagues know so well, that's like herding kittens-- may be difficult to get sufficient agreement to allow that to be done. At the very least, encouraging the parties at that very first conference, whenever it might be, to make sure that there is discussion early on to try to set some of those parameters would help to move the ball forward, I think.

ANDREW PECK: Gary, I think one of the problems with the question, so to speak, is we need to get the lawyers to actually read the rules that exist in their current form. I am convinced that all lawyers think the Federal Rules of Civil Procedure say, whatever it is they learned in law school, in Civil Pro 1, regardless of whether law school was two years ago, one year ago, or 25 years ago-- I mean, the problem we're having with rule 34 is an example of that. But there are many courts that have checklists, or the Seventh Circuit, particularly, in Chicago has their pilot program with all sorts of helpful information.

And another problem is, cases are of different sizes. And you have to be careful on rulemaking when, even in federal court, one case may be a diversity auto accident, where there's more ESI than may meet the eye. But it's still very different than what you would need in an employment discrimination case or what you would need in a bet-the-company antitrust case.

But one of the things, and then it's up to each individual judge, the theme of the December 2015 rule amendments, as reinforced by Chief Justice Roberts' end-of-year report, which, at the same time as those rules amendments, I think for the first time ever, we had a Chief Justice not just giving statistics of how many cases the court had, et cetera, but talking about the rules change, how important they are, and that there needs to be a culture change with much more judicial management of cases and much more of attorneys following what the rules are asking them to do. And I think that's where the changes are indeed coming.

GARY ADLER: Great, thank you. All right, Judge Smith, let me turn back to you if I can. And I'm going to ask you the question I thought I was going to ask you 10 minutes ago. But this was just too interesting. What changes have you seen in the past year in the e-discovery issues coming up in your courtroom? And what are the issues that you think will be most prominent in the current coming year?

LISA MARGARET SMITH: My first answer to that question is that I haven't seen as much change as I would have liked. I would say, to the degree that most attorneys turn over ESI in their 26(a) initial disclosure under the heading of documents, although there are still plenty of attorneys out there who don't understand that the word "documents" includes ESI-- nevertheless, the vast majority of what gets turned over at that point in time is emails. And there's no real depth of understanding that ESI goes way beyond emails.

They might talk to a few custodians. They might, and they are-- my apologies to Judge Peck-- they are still using Boolean keyword searches. The vast majority of attorneys who appear before me are entirely uncomfortable with the use of technology-assisted review and fall back into their comfort zone of using keyword searches.

So my first answer to that question is, there hasn't been much change, certainly over the last year. I think what's coming, though, is that TAR is, as it begins to get more refined, begins to get more, dare I say, user friendly, begins to get more affordable, I think we're going to be seeing that, maybe not in the upcoming year, but in the upcoming five years, making a huge dent in the efficiency of providing ESI discovery.

GARY ADLER: Thank you. I'm going to turn, now, Judge Francis, back to you, and back to preservation, spoliation, and sanctions, which you referred to a little bit earlier. Talk a little bit more deeply, if we could about the impact, if any, that you think rule 37 has had as it's been amended. And what are the types of spoliation issues you think are still out there that aren't being addressed? And talk a little bit, if you would, about the obligation of counsel under 26(g), how far we have to go, as lawyers, to police the client to avoid the risk of sanctions.

JAMES FRANCIS: Sure. Well, let me start with what 37(e) didn't do. The rules committee wanted to provide more guidance to counsel by better defining the preservation obligation. And ultimately, it did not succeed in that attempt. It was unable to reach consensus.

It determined that there were so many different contexts in which the preservation obligation kicks in that it couldn't provide more guidance. And it fell back on the common law standard that you must preserve when there is reasonable anticipation of litigation.

So in that sense, it's not surprising that a lot hasn't changed in preservation, and therefore in sanctions. Generally, practitioners aren't acting all that differently in terms of the degree to which they preserve or overpreserve. Part of it is that there's been no change in the standard. Part of it is that even if you feel that you can loosen the standard in light of, perhaps, less-threatening sanctions, you may still have other preservation obligations.

You've got state obligations. You may not know whether the litigation is going to be brought in federal or state court. You've got regulatory obligations. You obviously have business needs. So I think there's still a lot of overpreservation out there.

I think one respect in which the rule change has been somewhat successful is that it has standardized the sanctions across different circuits. One of the concerns of the committee was that circuits had different standards for sanctions, for spoliation. And in particular, the Second Circuit was an outlier, because it allowed quite severe sanctions for the negligent loss of electronically stored information.

The rules committee did away with that. And it now has-- now, under the rule, you must demonstrate an intent to deprive your adversary of ESI in order to obtain either dismissal, or an adverse inference, or a default judgment. The problem, of course, is nobody has quite defined intent.

For example, a large organization-- whose intent is relevant? If you have the rogue employee who manages to destroy evidence in connection with a litigation in which the corporation is the defendant, is that intent attributable to the corporation? Not an issue that I think has been fully decided.

Another issue that's not been decided is the extent to which the courts retain the inherent authority to impose sanctions, even with the existence of 37(e). Now, the rules committee, in its advisory note, indicated that it intended to withdraw inherent authority from the courts. Some courts, present company included, think that there's at least some inherent authority still available, at least in the interstices of 37(e).

Late-breaking news, there was a decision, probably the last decision by Judge Forrest in the Southern District last week, in which she dealt with the fabrication of emails and the destruction of the metadata for those fabricated emails. Despite the fact that this is plainly electronically stored information, she did not rely on rule 37(e). So one issue we have is, when should the courts be relying on it in the first place?

What problems are we still confronting from the point of view of the parties? I think one major problem is just the difficulty of scoping the preservation-- that is, deciding what it is that needs to be preserved. Lots of times, information disappears, not through any bad intent, but because the parties make a misjudgment at the outset about what needs to be preserved. On the other hand, as in Judge Forrest's case, you still have plenty of situations where parties are using Evidence Eliminator and things like that.

What are counsel's obligations? Well, I think there are obligations at all levels-- that is, outside counsel, in-house counsel, and then, obviously, the employees on the ground who receive a litigation hold. What is outside counsel's obligation? I think it really is ensuring that there is a process in place.

Outside counsel can't guarantee that that process is going to be successful and each and every stage. You're going to have an employee who doesn't get the message. But I think, in terms of 26(g), the obligation is to know enough about the entity's information governance structure to be able to issue an appropriate litigation hold and to know enough about their management structure to know who to talk to. So I think it's process oriented.

GARY ADLER: I want to follow up on that for just a minute, because I work on a lot of very large cases with very large companies where that scoping issue is extremely difficult. And my colleagues do, as well. And when I speak with them, I say, my understanding of the way the courts view this-- and I'd like to get all of your views of this, actually-- is, go about it in a diligent, structured way. Have a process. And if you find you made an error along the way, raise your hand.

That the courts will be more understanding of you if you gave it your best shot, and actually-- and I don't mean you threw a rock and hoped, but you actually had a process and had a structure. And they might be more forgiving of an error if you raise your hand and say something. Am I giving them good or bad advice when I tell them that?

JAMES FRANCIS: Well, I don't think you're going to be sued for malpractice.

GARY ADLER: Right.

JAMES FRANCIS: No, obviously, it's good advice. And I think a lot of the sanctions cases that you see are cases where a court has gotten really teed off that something has been covered up. So if you come forward right away and say, look, this information has disappeared, and here's why, and we did our best, but, I think that goes a long way. And indeed, there are plenty of circumstances where it doesn't even get to court, because you go to your adversary with that, and you can work something out.

GARY ADLER: A lot of the times, your adversary will understand. And a lot of the time, at least some of the time, your adversary is playing gotcha. And now, they think they won that little game.

JAMES FRANCIS: Well, and part of the problem there is the asymmetrical case, right? Because in the big case, where both sides have a lot of skin in the game, if one side sees that the other made an error, they may not jump on it, because they know that they may have made a similar error.

GARY ADLER: Right. That's not the case--

JAMES FRANCIS: In the asymmetrical case, it's different.

GARY ADLER: Right. Right, OK. Thank you. I'm going to turn to Judge Peck, on one of your bugaboos. And I use you, by the way, to try to get my colleagues to do this stuff correctly. But they, too, believe that the Federal Rules of Evidence were frozen in 19-fill-in the-blank when they went to law school.

So the question, for those of you who don't know where I'm going yet, which would make sense, is that your decision in Fischer v. Forrest, you reminded the New York Bar and the people who practice in these courts of the requirements of rule 34 with respect to discovery, and in particular, the need for specificity in preparing those kinds of objections. Can you talk a bit about the issues you were seeing with respect to compliance, and whether you saw any improvement after that ruling was issued? Because I'm still struggling with my colleagues.

ANDREW PECK: OK. I think everybody in this room, if you've practiced for more than 10 minutes, can recite with me what is your standard discovery response. We object for all of the reasons in our general objections. In addition, we object that this request is overbroad, burdensome, vague. We don't know some of the English language words in the request and what they mean, blah, blah, blah.

If they have updated their form at all, they now say, and it's disproportionate to the needs of the case. And then, of course the last sentence, without waiver of these objections, we'll produce what we feel like producing when hell freezes over or the court orders us to, all of which is the reason that 34(b)(2) was amended to eliminate a practice that, frankly, had been criticized by the courts beforehand. But now, it's in the rule.

Three things to emphasize from the amended 34(b)(2)-- objections must be made with specificity. That means there's got to be teeth to it. It's sort of like Twombly and Iqbol on the 12(b) motion to dismiss standard. You can't just use buzzwords. You can't just say it's burdensome. You have to say why it's burdensome.

Secondly, you have to state whether you are withholding anything because of the objection, or you're doing it just as a CYA, whatever, but it doesn't really count. I've never quite understood that. But lawyers tend to do that.

And third, you have to state when you are actually going to make production. And if, as is usually the case, you're making a rolling production, you can't just say, well, we'll start producing in 30 days, and we'll finish when we finish. Technically, under the rule, you have to state when you are starting that rolling production and when you will complete your entire production.

Now, I can't tell you how many times before the rule change the discussion-- and it sort of goes back to what Judge Waxse was saying about lawyers not negotiating, or meeting and conferring in good faith before they come to court. It would be something like a document request, all documents about the sale of widgets for the last 10 years. And the responding party would say, well, we objected to that as overbroad, because literally read, that would mean the packing slips, the shipping invoices, every check that we received in payment, et cetera, et cetera. And clearly, that's nonsense.

And the requesting party would say, oh, I didn't realize my request could be calling for that. All I really want to know is how many widgets you sold by year for the last 10 years. Dispute resolved by communication. And so 34(b)(2) was amended to sort of jumpstart that-- got to be specific in the objections.

Unfortunately, as I found and stated in Fischer, parties were not getting the message, so sort of the hit them over the head with a two by four, and maybe they'll get the message. In Fischer against Forrest, I said, if I see any more of the old-fashioned objections, I will deem it a waiver of the objections-- every objection, except for-- you know, I occasionally was a nice guy. I said, except for attorney-client and work-product protection, all other objections would be considered waived.

At least one or two blogs about it said I was in a bad mood when I wrote the decision, or something like that. But the truth of the matter is, there have been at least a half dozen decisions across the country since then following similar lines. Mark, Judge Bennett in Iowa, in the Liguria case, more recently, beginning in 2018, Wesley against Zoom TV out of Michigan, where that judge said something to the effect of, it's pretty amazing there have been so many judicial decisions across the country criticizing this practice, and yet lawyers keep doing it.

Now, now that I'm a practicing lawyer, or a consultant, whatever you want to call what I'm doing at DLA, I will admit that when one gets an incredibly overbroad and burdensome request, it's much, much harder to do the right thing with the objections. But I try to get my colleagues at DLA to take the high road, regardless of how overbroad the requests are.

And one of the things is to use the word "because." It is overbroad because x. It is burdensome because, literally read, we would have to go to 500 custodians throughout the world, when there are two key custodians that will really give you everything you need. So practical solutions, be as specific as possible.

One of the things that the advisory committee notes to rule 34 suggest is, you can say what search methodology you are going to use and that anything not captured by that is not going to be produced and is objected to. So you can say, we are going to search for this information in the files of Sherlock Holmes and John Watson for the date parameters of this to this, and maybe even say, and we're going to use TAR to do it, or heaven forbid, we're going to be using old-fashioned key words, but the key words we're going to use are such and such.

Now, again, there is a conflict with the need for that sort of specificity and the fact that the time period one has is still no more than, really, 30 days for the response. So you may be in a better position to negotiate with the other side and say, rather than me giving you overbroad objections on the 30th day, and then we'll sit down and negotiate, et cetera, et cetera, give me 60 days before I have to respond. Or before I have to officially respond, let's sit down and talk about the requests and the problems I have with your requests. Maybe, if you modify them, the responses will be easier for both of us.

And I would just give a shout out, as many of us on the panel are members of the Sedona Conference. The Sedona Conference Working Group 1 published the Sedona Conference Primer on rule 34(b)(2) just this past year-- has a lot of practical solutions on how to actually comply with your 34(b)(2) response obligations.

LISA MARGARET SMITH: As the one person on the bench who's still sitting on the bench, I give a sort of Fischer v. Forrest-style discussion with counsel at my very first conference with them, reviewing the December 2015 amendments to the discovery rules. And despite giving detailed information about what is, and more importantly, isn't allowed, when discovery disputes come to me, I have to say, more than half of the time, it starts with general objections, which are not allowed.

And counsel seems surprised, to which I say, were you not present at the conference? Were you not listening? So several attorneys have asked me to please put that in writing. Not that I'm blowing my own horn, but in the most recent edition of the Federal Bar Council Quarterly, I did exactly that. There's an article from the bench about the December 2015 rules amendments, dealing with discovery in general. You can find it at federalbarcouncil.org. Dot

GARY ADLER: Well, I appreciate that. And I just want to add one addendum, which is, as a practitioner, we find it, at least I do find it, much easier to work through these issues when my adversary is sophisticated about these issues. The most difficult e-discovery-- discovery in general, but e-discovery seems to take the cake on this-- issues are with someone on the other side who doesn't get what they've asked for. So to try to have that conversation, Judge Peck, that you suggested becomes difficult, because they don't really understand, and don't want to hear, what they've asked me to do. So that educating your adversary seems a little weird, but sometimes, it actually does make it easier.

I want to turn to my contrarian at the end of the row here and talk a little bit more about proportionality, because I understood what you said, and the problems that you're still seeing, even with the new rules. So maybe the way we can try to get at this a little more is to see-- talk a little more, and I know I've heard you talk a bit in the past about the case management tools you did find helpful to foster proportionality, and in particular, how that comes up in the asymmetrical cases.

And then also, we think of-- what you might like to see that would be still more different in the rules that would help us on proportionality. And also, many of us think of proportionality as a factor in analyzing requests and the responses. But you would be considering proportionality in connection with the duty to preserve as well.

DAVID WAXSE: Gary, that's a lot of questions.

[LAUGHTER]

GARY ADLER: It is a lot. And I apologize for that. I have great confidence in you, however.

DAVID WAXSE: I want to step back even before we get to that level of question, because one of the things that I constantly saw in case after case is, the complaint had been filed. The answer had been filed. And it was clear, neither document really focused on the case in front of me. You get these broad statements in the initial pleading, and you get these ridiculously broad-- I've seen pages full of various objections to statements in a complaint.

And so what our local guidelines say is, before you get any discovery, you need to sit down with the other side. Come up with a list of what you think the factual issues are that are in dispute. I can't tell you how many cases I've gotten counsel in for a conference and said, now, what's on that list? Well, they haven't got around to that yet. And they certainly will if I'm going to order them to.

I say that it's in the rule that we have locally. You've got to come up with this list of factual disputes. And sometimes, they'll say, why? Well, because you're only going to do discovery on what's in dispute. If you've got no dispute about a factual issue, you just need to stipulate to that, and there's no discovery-- it not only isn't needed, it's probably a violation of the rules just to try and do it on an issue that you've already stipulated to.

And then the next level is, on those that are in dispute, I would sit down and say, now, tell me in as specific a manner as you can what's actually in dispute here, because a lot of times, they're broad statements that you can't figure out why they're disputing them. And it's amazing how counsel, with the right prodding, can really resolve this stuff, especially unimportant, so-called factual disputes.

And in my old age, I've gotten way too cynical. But I practiced for almost 30 years before I went on the bench. And it seems to me we've lost track of what our profession is set up to do. It's to resolve-- when you're talking about the litigation side, it's to resolve disputes in a just, speedy, and inexpensive manner.

It is not, as so many lawyers have been willing to openly tell me, it's how we make money. I'm not going to make money if I get all this resolved by agreement. I was trying to get a group of counsel to agree on something. And one of the attorneys that I've known for a long time said, Judge, I have kids in college. I can't be getting rid of this case this quickly.

And I don't think that's an aberration. I think, having been in a big firm where I had to actually manage a section of the firm and have associates, boy, you get those associates pinned down on why they've done certain things. They know what their goal, or quota, or whatever it is they're supposed to meet.

And I've had them openly tell me, Judge-- or it wasn't Judge then, but I got hours I got to get in. And if I just don't dispute any of this stuff, I'm not going to get any hours in. It's just an aberration of the system that too many lawyers look at it as a way to make lots of money, not a way to get a just, speedy, and inexpensive determination of a dispute.

ANDREW PECK: Being a little less cynical, if I could just jump in there, I think the other problem is the disconnect, often, between the senior experienced litigator who will be taking the case to trial, if it ever gets there. And as I think you all know, civil cases in federal courts, 99% never get to trial. They're either settled or knocked out on a motion.

There's the disconnect between the experienced litigator with strategy for the case and the younger lawyers thrown in to do discovery who don't necessarily think about how that discovery fits in to the bigger picture theory, as opposed to, we need to ask questions and get answers. And at the end of the day, someone more senior than us will figure out what it all means.

DAVID WAXSE: Yeah, and know I've told this story before. But there was a conference at Duke Law School a few years ago where it was-- a bunch of us, judges and lawyers, were going to try and figure out solutions to the high cost and huge amount of time taken to get litigation resolved. And we came up with a whole lot of suggestions, most of which got put into the most recent set of rules amendments.

And one of the-- I'll never forget. I was on a panel where we were talking about cooperation as being one solution to some of these cost problems. And this woman, who was a general counsel of a well-known national pharmaceutical company, said, judge, you just don't understand. When we have big litigation that involves a huge amount of money, we have to hire really aggressive, hard-nosed counsel to make sure that our interests are protected.

And I said, when I practiced law, if the general counsel of my client said, we do not want you taking all these aggressive steps, we want this resolved. And we want you to first put your effort there, not battling about discovery issues. And I said, have you ever thought of trying that? He was like, well, that sounds like a good idea.

It's just something that's somehow missing from a lot of our litigation process, that-- I mean, people lose track of what the goal is. It is not to try and make a lot of money. It's to try and resolve the dispute.

GARY ADLER: Well, let's follow up, if we can, on that notion of proportionality and costs. And Judge Smith, talk a little bit about cost shifting, if you could, and whether you've seen, in recent times, an increase in requests from litigants for orders shifting cost of discovery based on the amendment to rule 26, and I think it's in (c)(1)(b), and whether you're more willing now than you might have been once upon a time to grant those kinds of requests after the amendments.

LISA MARGARET SMITH: Well, in my experience, I have not seen an increase. My thought is that most counsel aren't aware that it's there. They have some sense, from case law, that there are possibilities of asking for cost shifting. But I have never had the rule cited to me as a basis for cost shifting.

I would probably be more receptive if someone actually referred to and relied on the rule. But I don't see it as often. I think that particularly with regard to just straight email discovery, everybody's gotten used to the notion of producing those things, of trying to work out some kind of an understanding and agreement about producing them. But as I said several questions ago, I think that a lot of folks are still not aware of the large areas that would fall outside of email that may qualify as ESI.

But I'm just not seeing it. The rule does clearly allow for the court to address the question of cost shifting. And it should be addressed at an early stage, in my view. But I'm not having it brought to me by the participants.

GARY ADLER: People aren't coming in and saying, well, that ridiculously overbroad, you want-- be careful what you ask for. You're going to get it. But you ought to pay for it.

LISA MARGARET SMITH: No, no. They're just coming in and saying it's overbroad as a general objection, which is not sufficient.

JAMES FRANCIS: Well, but that's the order in which they should proceed, in my view, right? You ask whether it's relevant. You ask whether it's proportional. And then, if you don't get final resolution with those two questions, you ask whether maybe the cost should be shifted in order to place the burden of the decision on the party that has requested it. It's really, cost shifting should be reserved for those rare gray areas where you can't make an ultimate determination as to relevance and proportionality.

LISA MARGARET SMITH: Sure. But I'm not seeing it then, either.

GARY ADLER: That's very interesting, because I would have thought, given especially what Judge Waxse said about cost, that you would be seeing it more.

JAMES FRANCIS: I think it's worth pointing out at this stage that there's a good deal of confusion among counsel about the relationship between relevance and proportionality. At least when I was still on the bench, I would get parties making arguments about what they call proportionality, when it was plainly relevance. That is, this information doesn't have anything to do with the claims or defenses. Therefore, it is disproportionate. No, therefore, it is irrelevant.

GARY ADLER: That's because they found the word "proportional" in the rules, but they forgot-- they're so concerned about Judge Peck that they don't want to talk about-- isn't relevant to the issues anymore.

JAMES FRANCIS: And conversely, they would say, your honor, this is irrelevant, when it was plainly relevant to a claim or defense. And what they meant was, it would be burdensome to produce.

GARY ADLER: Interesting. Judge Peck, let's talk about TAR a bit, if we could. I was actually surprised when you all were speaking at the beginning about the degree to which it's still difficult, sometimes, to get agreement on the use of TAR. So I'd like to talk a bit about where we are in terms of the-- where we are in terms of the acceptance of TAR and how far the courts can or should be going in terms of trying to get the parties to use some of these electronic mechanisms that really do lead to cost sharing and lead to reduced cost, and whether you think TAR reduces-- helps in this whole proportionality issue.

ANDREW PECK: I do. And it shocks me that we're this many years in since the first-- my first TAR opinion in Da Silva Moore, that it's still being used as infrequently as it appears that it is. As to where the state of the law is, in my opinion, as I said in Rio Tinto against Vale, having analyzed all the cases in the United States at that point, I said, it is now black-letter law that if the producing party wants to use TAR, the courts are going to allow it.

The harder question, which I faced after that in Hyles against City of New York, is can you force a-- as a judge, can you force a reluctant party to use TAR? In that case, the plaintiff was asking the city, and asking me to require the city, to use TAR. And I will say, I put my thumb on the scale as much as I could before writing the opinion. There was a conference at which they raised the issue.

And I'm like, city, you've read my opinions. You know how I feel. TAR is great. You really should be using it. You sure you don't want to use it? And when they kept saying they were sure that in that case, I wound up opining, again, consistent with Sedona principle number six, which says the responding party is in the best position to decide what method it is going to use to produce.

That's the responding party's call until there is shown to be a gap or other problem with the production. So I said I would not require the city to do it. Now, where I think-- and by the way, in terms of acceptance of TAR, where the responding party wants to use it, quoting my decisions and others, there are now decisions, that of the UK, Ireland, and Australia, all approving the use of TAR.

And Ireland, our rule is, for discovery, reasonableness. Their actual rule is completeness. And it's like 100%, you got to do it, not proportional, not whatever. Nevertheless, the Irish court was convinced that TAR made sense.

Now, I think where we're going to be going next is, when the proportionality argument is raised, and the party saying it's disproportionate on cost basis is saying, we're going to have to throw 100 associates billing at x per hour at this working for the next six months, because we like doing it the old-fashioned way of maybe some keywords, but manual review on almost everything, I think that's where either a forced use of TAR, or at least a-- you don't want to use TAR, that's your prerogative. But if you're not going to be efficient, we're not going to say that it's disproportionate, because you could easily, cheaply, et cetera, produce this material in a proportionate manner if you were only willing to use technology-assisted review, a.k.a. predictive coding.

LISA MARGARET SMITH: It may also impact on cost shifting issues.

ANDREW PECK: Yeah, exactly. So I think that's the next frontier on it. The other-- I'm not exactly sure why lawyers are reluctant to use TAR nowadays. In the beginning, it was, we're afraid there won't be judicial acceptance. I think there is widespread judicial acceptance now.

The only other issue is, some fear of having to disclose more of their secret sauce process. If you believe in transparency, and if you're using what the vendor community now calls TAR 1.0, simple learning, where you have to use a training set, and once you have fully trained the algorithm, that's the end of the day, there has been questions as to, therefore, do you have to give all your training material to the other side?

I think that largely disappears when one is using TAR 2.0, also known as continuous active learning, where every document that is reviewed keeps retraining the system until the system is not finding any more relevant documents, at which point review stops, other than a QC process, quality control process, which means you've probably found all the material, responsive ESI, in the first 20, 25% of the documents you're reviewing, so that there's 75% or so that never gets reviewed. And that's where the cost saving comes in. And I'm sure, in the next panel, with Maura Grossman, who might be considered the queen of TAR, that you'll get more on this.

GARY ADLER: Well, I'm going to refer to her that way when I introduce her.

ANDREW PECK: Give me credit for it, since she'll be amused.

GARY ADLER: Well, I have a lot more things I'd like to know. But I'd like to give a chance to some of the folks in our audience to ask some questions, if you have any. If not, we'll-- I got stuff I want to know. But is there anybody who has a question they'd like to ask the judges before we move on?

ANDREW PECK: Come on. Don't be shy.

GARY ADLER: It's OK if the answer's-- good, all right. I get to ask about privilege, Judge Francis, which I wanted to know about. And this will give Judge Peck a chance to talk about 502(d) some more. And this really goes to the TAR issue. And it's the one issue with TAR I've had.

As the ESI predictions get larger, how do you deal with parties who are concerned about the burden, expense, and delay of, in the discovery process, that result from the need to review every doctrine for privilege, the importance of clawback agreements, and how you deal with privilege, also, when you're using a technology-assisted review?

JAMES FRANCIS: Well, you've identified the problem, which is that the volumes are so substantial now that parties are legitimately frightened about turning over privileged documents and potentially not only waiving the privilege with respect to those documents, but waiving it with respect to the subject matter. And in 2008, the advisory committee, with respect to the rules of evidence, came up with rule 502 to try to solve some of those problems.

502(a) solves, we think, the problem of subject matter waiver. It identifies the rare circumstances where the production of a single document would cause subject matter waiver. 502(b) deals with the problem of what had been inconsistent standards for waiver when a document was inadvertently produced. So it now defines inadvertence in a way that the Second Circuit always defined it.

502(d) and (e) are the interesting ones. 502(e) gives the parties the opportunity to come to an agreement, which the court will then enforce, that the production of a privileged document in the course of litigation will not constitute a waiver. But 502(d), and I'll give Andy the chance to do his poll in a second-- 502(d) is the one with real teeth, where the court orders-- enters an order. Then the production of a privileged document in the course of litigation will not be considered a waiver of the privilege-- that's work-product or attorney-client privilege-- not only in this litigation, but in any other state or federal proceeding.

So it protects against the problem that a waiver here, even if taken back, might be considered to blow the privilege for other proceedings. So do your poll.

ANDREW PECK: Now that Jay has given you the answer, but nevertheless, here's what one of my colleagues who frequently does panels with us calls the Peck poll. How many of you-- and by you, that means you, your company, your outside counsel if you're in-house-- how many of you regularly ask for a 502(d) non-waiver order when you're in federal court? Hands for those in the room. Gary, that looks--

LISA MARGARET SMITH: There's three.

JAMES FRANCIS: Oh, there's one.

ANDREW PECK: Oh, there were-- OK, three very smart people. If you take nothing else from today's panel, or at least the judges' panel, I have frequently said it is akin to malpractice not to seriously consider and to get a 502(d) non-waiver order. You will still ethically do as careful a privileged review as your client thinks cost-wise appropriate under the situation of the case.

But no matter how careful you are, no matter how good the technology you use to do it, which probably, at this stage isn't TAR, but good, old-fashioned keywords, where you search for the name of every lawyer you know, the law firm of every lawyer who might be involved, the email extension-- so if my firm was involved, @dlapiper.com. With all of that, something is going to slip through.

If nothing else, most likely, it's going to be from business person A to business person B that says, Joe said we should do x. And nobody connects Joe to Joe outside counsel. And you don't want to have to have a fight with the other side under 502(b) about whether your review was careful enough, and whether you should've caught that or not, et cetera.

If you have a 502(d) order, and there is no downside to it, in my opinion, you don't have to prove how careful you were. You just have to say, we didn't mean to produce this. Give it back to us. And the other side is required to do so.

502(e) is slightly less protective of you on that. And there are some bad decisions under 502(e) that are avoided, I hope, under 502(d). But there's no downside, because if you're going to get a judge who says, despite having one of these non-waiver orders, I'm going to look at the 502(b) factors, you've probably complied with 502(b) anyway.

There is, in the material-- and I know I'm getting the cut sign-- there is, in the material, my two-paragraph standard 502(d) order that protects, in the second paragraph, against the fear that a judge will give you that protection and then turn around and say, therefore, produce everything next week, because you don't have to do a privilege review.

GARY ADLER: Thank you very much. And much as I would like this to go on for several more hours, we're out of time. Thank you so much to our panelists. This is exciting and interesting. And thanks very much.

[APPLAUSE]

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