Discovery in the Electronic Era

The notion of "electronic discovery" in litigation conjures up images of computer forensic technicians plumbing the depths of servers for fractions of messages and bits of data long thought deleted, or at least forgotten, but quietly slumbering between partially overwritten clusters of memory, waiting to be found. Electronic discovery certainly can mean that. But an electronic discovery case can also be completely mundane from a technological perspective. In either circumstance, the content of electronic files and the process of collecting them for litigation often carry huge implications for the scope--and burden--of discovery, as well as the ultimate outcome of the case.

The notion of “electronic discovery” in litigation conjures up images of computer forensic technicians plumbing the depths of servers for fractions of messages and bits of data long thought deleted, or at least forgotten, but quietly slumbering between partially overwritten clusters of memory, waiting to be found. Electronic discovery certainly can mean that. But an electronic discovery case can also be completely mundane from a technological perspective. In either circumstance, the content of electronic files and the process of collecting them for litigation often carry huge implications for the scope–and burden–of discovery, as well as the ultimate outcome of the case.

Not too many years ago, cases arising from business disputes rarely involved more than a handful of e-mails and electronic files. Today, the world conducts business in the digital realm of cyberspace. With the ubiquitous laptop and ever-increasing popularity of Blackberries, the sheer volume of data in electronic form has grown exponentially. Parties can negotiate and enter into contracts without ever setting pen to paper. Businesses constantly communicate and exchange information via e-mail in the course of ongoing dealings. Employees draft and transmit memos and other documents internally and externally without ever printing a hard copy. What would have gone in a carefully drafted and edited memo a decade ago now often appears in an e-mail hastily prepared and sent without the sobering step of seeing words on paper. When employees do send out documents in paper form, the author may not keep a paper copy for his own files, relying instead on the electronic draft stored on a hard drive. In many companies, icons on computer desktops have replaced filing cabinets as the primary locus of stored data. Confidential business information, including trade secrets, that in years past was carefully guarded now passes among employees, and even third parties, with barely a thought given to maintaining confidentiality. Even in companies that still conduct much of their business the old fashioned way, e-mail creates an increasingly thorough documentary record of who said what to whom and when.

From E-mail Outbox to Exhibit List

Any lawsuit, from the most mundane to the enormously complex, becomes an electronic discovery case whenever the claims involve activities people carry out electronically on a day-to-day basis. A plaintiff’s counsel bringing an employment discrimination case involving hostile work environment claims might request all e-mail traffic among various employees, perhaps an entire department, in the hope of discovering politically incorrect (or worse) messages that could supply the circumstantial evidence of discrimination needed to get in front of a jury. A securities fraud lawsuit might put at issue all manner of communications between executives about “making their numbers,” lamenting underperformance, gloating over good news or spreading takeover scuttlebutt that might not have reached the public. Antitrust cases, too, will involve a search for the slightest hints of collusion in communications between competitors. As these examples suggest, e-mail traffic that becomes evidence in a lawsuit rarely proves a defense or demonstrates virtuous behavior. Thus, when a party needs evidence in its opponent’s possession to prove its case, especially when intent and state of mind are critical to the dispute, counsel will focus like a laser on the “paper” trail that e-mail creates.

Depending on the context, that record can be a blessing. More often than not, it proves to be a curse. With astonishing frequency, people fire off e-mails to friendly colleagues in the heat of the moment, without giving any thought to the possibility that a superior–much less a litigation adversary–might someday read that e-mail to gain a window on the author’s thoughts. As a consequence, e-mail has become the Oval Office tape recorder of today, capturing the sender’s unvarnished and sometimes inadequately considered view of events as they happen, at times revealing and at other times obscuring emotion, nuance, intent and context.

All of that makes electronic files–especially e-mails–fertile hunting ground for opposing counsel looking for a smoking gun to prove a case. Even without documents particularly damning on their face, sharp litigators with an eye toward telling the tale of events most favorable to their client can supply smoke for the mirrors of e-mail traffic to create the illusion of fire where none exists. Naturally, that makes discretion and judgment when writing e-mails, even those addressed to someone the author considers totally aligned and trustworthy, of paramount importance. If employees used the same considered judgment when transmitting e-mails and other electronic files that they have always used when preparing letters, memos, presentations and the like, the courts would be a much safer and predictable place for litigants. Some things are better left unsaid, or at least unwritten, particularly since a document may be stored in an electronic file indefinitely. When litigation has begun and opposing counsel comes looking for e-mail files, it is far too late to mind your manners or “clean house,” as one famous defendant wrote, fittingly, in an e-mail.

Living Through Electronic Discovery

When an otherwise ordinary lawsuit becomes an electronic discovery case, it takes on an entirely different form and, almost by definition, vastly expands in scope. The volume of data attorneys and their clients must collect, review, produce to opposing counsel and analyze can expand by orders of magnitude. Famously, the Enron securities litigation involves millions upon millions of e-mails among executives, bankers, analysts, traders and lawyers. Even smaller disputes can quickly develop into the electronic equivalent of a blizzard of paper. A single laptop in regular business use for a year can easily have ten thousand pages of documents on it. Today’s laptops contain hard drives that have up to 30 gigabytes of memory, which translates into more than 200 banker’s boxes of paper–enough to fill a good-sized war room if printed out. A small business with employees scattered in the field may use a dozen or more laptops. In addition to laptops and desktops, businesses that operate on a network might also rely on servers with massive memory capacity, and major businesses may have “server farms” holding the electronic equivalent of millions of pages of documents.

When litigation begins, potentially all those computers and servers must be searched to find the documents opposing counsel requested–those all too often ill-considered e-mails–as well as the documents that prove one’s own case. In an electronic discovery case, that often means hiring consultants. Consultants might spend hundreds of hours reconstructing partially overwritten file clusters (where not-really-deleted files may linger), searching for files or messages stored in unlikely places on hard drives, or making readable a document’s “metadata,” the imbedded information that tracks a document’s author, editorial and transmission history. Sometimes, the consultants will have to provide expert testimony regarding the evidentiary results, the integrity of the data and the integrity of the methods used to locate it.

Even in cases that do not require high-tech sleuthing, counsel may retain
consultants to assist with the search for documents likely to contain information relevant to the dispute, all with a view to narrowing the set of documents counsel will have to review themselves. Depending on the number of computers searched, that process can consume a large amount of time and cost tens to hundreds of thousands of dollars. In “run of the mill” electronic discovery cases, consultants will simply copy hard drives or server memory banks, then provide the data to counsel for review. In almost all electronic discovery cases, consultants will convert the electronic files they find into fixed images for viewing and searching in litigation-support software programs and printing as needed.

The vitally important task of selecting an appropriate consultant can prove problematic because the market is still young and relatively crowded with new entrants appearing almost daily. The level of experience and expertise varies widely, and a misstep at this point will reverberate throughout the litigation. The experience of, and resources available to, the field of potential consultant candidates should be evaluated carefully in consultation with experienced counsel.

After selecting the right consultant, the needs of the case must be considered in selecting the type of service to be supplied. The most basic service, copying a single laptop hard drive and creating images of the files, costs between $3,000 and $6,000, depending on the consultant’s quality and experience level and the format of the output. The maxim that “you get what you pay for” applies in full, and the service chosen affects both litigator and client. An investment in high quality output that displays metadata, enters basic document information (such as author, recipients, date and subject matter) into database fields, and allows counsel to search the text of documents for key words through technology known as optical character read, or “OCR,” can pay significant dividends by making it easier to locate key documents, which makes attorneys more efficient and keeps fees down. On the other side of the ledger, hiring an accomplished firm that can acquire the information needed for the litigation and return the computers to daily use without corruption of any files and minimal disruption of business activities allows the client to keep its critical resources focused on business, rather than discovery.

Once the consultants have finished creating images of the client’s documents, counsel must begin the sometimes daunting process of reviewing the documents found for relevance to the litigation and possible applicability of a privilege from discovery, such as the attorney-client privilege. Sorting out obviously personal e-mails (in an electronic discovery case, someone will see that love note home or your plans for a wild weekend) or joke e-mails (hopefully, they are irrelevant–if not, they aren’t funny anymore) may seem simple, but it takes time. Ensuring that e-mails between employees do not contain attorney-client communications often requires reading most, if not all, of a message’s text. Creating a privilege log describing the documents withheld under privilege claims can take many days of paralegal and attorney time. Most importantly, counsel for the producing party must spend time reviewing the client’s documents to identify items that could prove helpful or problematic in order to understand the facts of the case and prepare for depositions.

For the producing party, the burden of electronic discovery ends when production finally begins. In all but the biggest cases, counsel produce documents by sending CD’s containing the images to the opposing party, although counsel may sometimes elect to “blowback” images into paper form and produce paper. In the largest cases, parties may produce documents to a neutral litigation support firm that hosts a database accessible by all parties via the Web.

All of that assumes that the parties can trust each other to produce their electronic files. When credible allegations of deleting pertinent files or messages surface, an opponent can obtain a court order requiring a party to turn over the computers themselves to a neutral master for forensic examination. At that point, costs really spiral upwards, and the business may lose access to its computers for a substantial period of time.

In many but not all cases, a party that produces electronic discovery also receives electronic discovery. Once receiving counsel loads the produced images into its database, the search begins for the few hundred documents that may become deposition or trial exhibits. Depending on the volume of data produced, that process can consume a team of lawyers and paralegals for weeks at a time. Only after that process ends will frank or colorful e-mails come back to haunt witnesses, who as often as not discover that they have some explaining to do, even if totally innocent.

Words of Caution

Electronic discovery is a trying and very costly experience. Because parties most often do not recover the expenses of litigation and each side usually bears its share of the cost of the discovery it takes and the discovery it responds to, clients entertaining the idea of suing someone in a case that could turn into an electronic discovery case must carefully consider the financial burden, inconvenience and potential embarrassment of living through the process. Clients who cannot avoid electronic discovery should expect the worst–it just might prepare them for the experience.

In the meantime, a gentle reminder: some day a stranger chasing a judgment or looking to put you out of business–and in the process put you through the wringer of electronic discovery–could have a legal right to read every e-mail that ever passed through your inbox and outbox. Keeping that in mind might help prevent those unfortunate messages sent at a moment of lapsed discretion from appearing on a deposition conference table, or being projected on a large screen in a courtroom.