A new article in the Cardozo Law Review lays the groundwork for greater use of special masters in e-discovery. This was not written by a student, nor a professor (professors still remain largely mute on e-discovery), but by Judge Shira A. Scheindlin and Jonathan M. Redgrave. The article is entitled Special Masters and e-Discovery: the Intersection of Two Recent Revisions to the Federal Rules of Civil Procedure. The authors and law review have allowed me to post a copy of it here.
This is an important subject because Special Masters represent a practical way out of the competency morass the legal profession now finds itself in. Eventually, the Academy will wake up and professors will begin teaching students to practice law in the Twenty-First Century, instead of pretending like we still live in a paper world. Eventually trial lawyers will stop doing the same. But as things stand now, most professors and trial lawyers seem to be in cahoots to try to perpetuate the legal practice of Abraham Lincoln. (As a student of Lincoln, this seems especially ironic to me, since he was known for embracing the new technologies of his day.)
When the legal profession finally catches up with the information explosion and learns to embrace technology like Lincoln did, not shun it, then Specials Masters may become obsolete. But in the meantime, say for the next ten to twenty years, they will be the Jedi Knights of the trial world, sworn to protect litigants from the Dark Lords of extorted settlements, smoke and mirror cons, and outrageous e-discovery costs.
The Role of Special Masters in Civil Litigation
Special Masters are appointed by the courts under Rule 53, Federal Rules of Civil Procedure, to act as assistants to the court for all types of issues, including the supervision of e-discovery related issues. In this capacity, Special Masters act as guardians for e-discovery processes by filling the competency void created by one or all of the other actors in the dispute resolution process: lawyers, litigants, and judges. They bring special expertise to facilitate the adjudicative process in a number of ways.
The Special Masters article, at page 374, identifies four different roles for e-Discovery Special Masters:
- facilitating the electronic discovery process;
- monitoring discovery compliance related to ESI;
- adjudicating legal disputes related to ESI; and
- adjudicating technical disputes and assisting with compliance on technical matters, such as conducting computer/system inspections.
The authors then explain each of these roles in a clear and concise manner with very detailed citations to case law. The article also includes a detailed discussion of three cases where a special master was employed. Hohider v. United Parcel Service, Inc., No. 04-363 (W.D. Pa. Dec. 19, 2007); In re Seroquel Products Liability Litigation, No. 6:06-md-1769-Orl-22DAB (M.D. Fla. Sept. 27, 2007); Medtronic Sofamor Danek, Inc. v. Michelson, 229 F.R.D. 550, 552 (W.D. Tenn. 2003).
The authors’ research, assisted by Judge Scheindlin’s law clerk, Rachel Spector, found that Special Masters have been appointed to facilitate the e-discovery process in a number of ways, but especially the following:
- assisting with the Rule 26(f) conference discussions;
- developing preservation protocols;
- developing processes to identify locations and sources of potentially relevant documents and ESI;
- assisting the parties to develop protocols for the identification and depositions of knowledgeable witnesses regarding ESI issues (including guidelines for the scope of pre-trial examinations);
- developing protective orders to address privilege and privacy protection concerns;
- addressing search and retrieval issues (such as negotiating search terms); and
- agreeing upon form of production issues.
Id. The article points out how a special master appointed to facilitate disputes may also be provided with authority by the court to resolve disputes and issue orders, which then may, or may not if the parties agree in advance, be appealable to the district court judge. The primary example used to illustrate this kind of facilitation role is Board of Commissioners of the Port of New Orleans v. Lexington Insurance Co., No. 06 Civ. 8101 (E.D. La. Feb. 19, 2008) (Order Appointing Special Master for Electronically Stored Information). This action seeks insurance proceeds related to the destruction of a dock during Hurricane Katrina. The special master appointed was the best known of them all, Craig Ball. In fact, Craig Ball is the master appointed in several of the cases featured in the article, including the well known class action case In Re Seroquel Products Liability Litigation, 244 F.R.D. 650 (M.D. Fla. Aug. 21, 2007).
Craig probably has more experience in this area than anyone. I have quizzed Craig closely on how he exercises his special master powers. He tries to avoid issuing orders, even when granted such authority by the court. Instead, Craig uses constructive suggestions and settlement techniques. As is well known among Jedi, the actual violent use of the force is a last resort.
Judge Scheindlin and Jonathan Redgrave opine at page 383 of their article, and I strongly agree, that this will be a fast growing area. They go on to provide a good explanation of the quasi Legal-Technical services special masters can provide:
We expect to see an expanding role for specials masters that facilitate ESI discovery. Such a role will have both legal and technical components. The legal component largely applies the procedural rules to the world of ESI. Lawyers with a good background in e-discovery issues and best practices guides, such as The Sedona Principles, should be able to effectively and efficiently steer the parties toward agreed-upon protocols and procedures. Assisting the lawyers to agree on the scope of preservation, disclosure and production and methods for resolving privilege claims are good examples of collaborative legal assistance.
The technical component focuses on the application of specialized knowledge and skills in information technology and/or computer forensics to assist the parties in handling discovery issues. This may involve providing technical specifications for discovery or actually conducting discovery investigations and searches in a neutral capacity. Specially trained lawyers and non-lawyers should be able to serve in this capacity. Such appointments will advance the ultimate resolution of the case by allowing the parties and the court to focus on the merits of a case as informed by any evidence derived from the electronic sources.
A decision by Judge Scheindlin issued shortly after this article was published shows how a judge can use the possible appointment of a special master to cajole parties to reach an agreement on their own. Securities and Exchange Commission v. Collins & Aikman Corp., 2009 WL 94311 (S.D.N.Y., Jan. 13, 2009). In this interesting case the SEC responded to e-discovery requests by making an electronic document dump of largely irrelevant information. The SEC produced on disks the paper equivalent of 10.6 million pages of ESI, with no organization to the production. The defendants could not afford to review such a massive pile of computer files. The SEC refused to perform a real search of their electronic records themselves, or even to speak with the defendants about it.
Not surprisingly, Judge Scheindlin did not accept that approach and ordered the SEC to search and produce according to the specific issues requested by defendants. Judge Scheindlin wisely did not attempt to design the specifics of the search and production. The plan would have to meet the requesting parties need for evidence to defend themselves and the producing parties need to keep the production economical in accord with Rule 26(b)(2)(C) (something another federal agency completely failed to do recently in the In Re Fannie Mae Litigation case). As anyone who has ever attempted to formulate such a search plan knows, this is a monumental undertaking, which requires considerable skill and many, many hours of work. Instead, Judge Scheindlin ordered to parties to meet in good faith to work it out themselves:
While the SEC has raised legitimate concerns about the burdens imposed by particular requests, it cannot unilaterally determine that those burdens outweigh defendants’ need for discovery. At the very least, the SEC must engage in a good faith effort to negotiate with its adversaries and craft a search protocol designed to retrieve responsive information without incurring an unduly burdensome expense disproportionate to the size and needs of the case. The parties are therefore directed to engage in a cooperative effort to resolve the scope and design of a search with respect to the rebate issues and a search of e-mail created and maintained by the SEC.
Judge Scheindlin gave them a deadline to reach agreement and raised the specter of a special master should they fail to agree.
If the parties remain at an impasse, the Court will be prepared to resolve further disputes and will consider the appointment of a Special Master to supervise the remaining discovery in this case.
I expect you will see this kind of “threat” to hire a special master used more and more frequently by judges. There is more going on here than meets the eye. Some recalcitrant parties will stubbornly refuse to cooperate because they know the judge assigned to the case does not have the time or skills needed to resolve the dispute. They take advantage of that and give mere lip service to the judge’s admonitions; always trying instead to make it look like the problems are caused by the other guy, not them. Mutual finger pointing is, after all, the norm in most courtrooms and so this tactic often works. The attorneys know that the judge will never take the time to figure out who is really right. In fact, the judge might be persuaded by mere puffing and convincing pointing to rule their way, or more likely, simply “split the baby.” Either way, it is a win for the offending party and a loss for justice.
Now the mere threat of a special master can defeat this kind of unethical “smoke and mirrors” ploy. The special masters threat is no paper tiger. Special masters have the skills and time to figure out what is really going on. When they are hired the parties will have to pay for it in more ways than one. This is why honest practitioners cheer the arrival of special masters and why I think of them as a new kind of legal Jedi.
On many occasions special masters have been used in a different capacity to monitor and bulldog compliance with prior court orders. In these situations, the parties have usually already made quite a mess of discovery and one side (but sometimes both) has been ordered to provide discovery. This is typically in very complex situations where it is not so easy to determine whether or not the enjoined party is complying in good faith with the order. That is where the special master typically comes in. The appointment of the master in these situations is part of the sanction and indicates the court’s disgust with all of the time and judicial resources the parties have already consumed with the e-discovery dispute. Typically, the losing party pays for all of the special master’s fees and expenses, which is unlike the friendly facilitator role where the masters fees are usually divided between the parties.
The main case which the article uses to illustrate this situation is the disaster ERISA litigation case, which I have previously written about, Wachtel v. Health Net, Inc., 239 F.R.D. 81 (D.N.J. 2006). The special master was appointed in Wachtel after repeated violations of discovery orders by the insurer. The court found the insurer’s actions had placed an “extraordinary drain on the Court’s resources,” in light of which “the need is clear for help in the form of a separate Special Master to monitor discovery compliance to ensure that all documents ordered to be produced have been produced and that all of the Court’s discovery Orders have been complied with.” Needless to say, this is never a position you want to find yourself in.
Adjudicating Discovery Disputes
The next role of the special master is a kind of “rent-a-judge” situation where the parties, or the court, delegate the resolution of certain defined issues to the special master to take evidence and make a decision. Typically, the decision is in the form of a report and recommended order, and the parties can then object with the district court judge. But if they want, typically in situations where time is of the essence, the parties can also agree in advance to waive or at least limit that right. The idea is to choose a person to resolve the dispute who has special expertise and knowledge, not to mention time, to provide a prompt and fair resolution. Typically a court will try to have the parties agree on the special master, but if not, one is selected by the court for them.
There is, of course, a considerable cost involved in the payment of the special master fees, which is typically done on an hourly basis. Still, most observers of the process, myself included, believe that assigning the dispute to a specialist will allow for a much quicker, and overall less expensive resolution of the dispute. It should also result in a significant improvement in the quality of the adjudication. I mean no slight to judges by the comment, but it is not reasonable to expect a judge to handle hundreds of different kinds of cases, from criminal law, to anti-trust, to civil-rights, and then move onto a highly technical e-discovery dispute involving large, arcane computer systems, and handle them as well, or as quickly, as a person who only works in e-discovery. Sure, they can do it, but the odds are it will take much longer, and they are more likely to be confused by competing expert testimony and reach the wrong result. A special master may sometimes require expert testimony too, but often times not, or at least not as much. Most importantly, their ability to understand the testimony is likely to be much better than a generalist trial judge or magistrate.
The article discusses a number of different cases where special masters have been appointed to resolve disputes, sometimes very narrow and specific, but also sometimes fairly broad in scope. They also note that disputes concerning privilege particularly lend themselves to this procedure and special masters have been used many times to resolve complex or voluminous privilege disputes. In e-discovery, the number of documents at issue in a privilege dispute can be astronomical. For instance, In re Vioxx Products Liability Litigation, 501 F. Supp. 2d 789 (E.D. La. 2007) involved a log of over 30,000 documents withheld by the defendant, Merck. The court’s in camera review of confidential documents was the only way to resolve these privilege disputes, but no judge has the kind of time necessary to perform this function. In this situation, there was no question the judges has the necessary expertise to do the privilege review, but not the time; therefore, appointment of a special master was the best solution.
The article, at pages 384-385, elaborates on the adjudicative type services that special masters can provide:
The supervision of discovery disputes is very time consuming. A district judge rarely has the time to provide the hands-on supervision such disputes often require. For example, particularly sensitive or contentious depositions may need on-site supervision in order to quickly resolve disputes. On-site inspections of computer systems by opposing counsel or experts often require careful protocols and supervision in order to protect confidentiality and privacy. Ruling on objections to interrogatories and document requests and resolving disputes regarding the scope of non-party discovery might also require a significant investment of judicial resources. Similarly, an in camera review for privilege can require a judge to carefully read thousands of documents. Finally, many discovery issues that arise in the context of e-discovery require a court to develop a sophisticated understanding of the accessibility of ESI and the costs and burdens of preserving that data and/or retrieving it and translating it into a useable format. There is also the question of whether a party should be sanctioned for its failure to produce ESI. It is these tasks that trial judges often assign to a judicial adjunct, be it a magistrate judge or a special master.
Adjudicating Technical Disputes and Assisting with Discovery Compliance
This last role for a special master is all about their skills; sometimes purely technical skills having little to do with the law. In fact, you will sometimes see courts appoint forensic engineers and other technical specialists with no legal background to resolve purely technical disputes. In this situation, they are sometimes called technical advisors, not special masters, and they provide expert reports to the court.
The law review article by Judge Shira Scheindlin and Jonathan Redgrave, Special Masters and e-Discovery: the Intersection of Two Recent Revisions to the Federal Rules of Civil Procedure, is well worth reading, not only for information about special masters, but also for the excellent review of general e-discovery law and the new rules. Section Two of the article is a handy reference for all of the key issues in e-discovery, including most of the leading cases. For that reason alone this article will likely be often cited. But its key role is to lay the legal groundwork for the expanded use of special masters in state and federal courts around the country. The article opens the door for the few prepared experts in the area to assist the courts and help clean up the mess we are now in. Here is the excellent final paragraph in the article, which will, I hope, entice you to download and read the entire piece:
Generalist judges are not and cannot be experts on electronic hardware and software that enable people to create, store, retrieve, and search ESI. In order to manage discovery in cases involving a substantial amount of ESI, and assuming the stakes at risk warrant the cost, court adjuncts with specialized knowledge may become more the rule than the exception. Thankfully, revised Rule 53, which is no longer tethered to the concept of “exceptional condition,” now permits such appointments whenever the parties consent to an appointment or when the court determines that a pre-trial or post-trial matter “cannot be effectively and timely addressed by an available district judge or magistrate judge of the district.” While we surely do not suggest that such appointments are needed in every case, or even the majority of cases, there will be a subset of cases—often (but not always) involving many parties and/or non-parties, voluminous records, or complex or technical issues—that will benefit from the availability of these adjuncts. The appointment of a special master may make it possible to accomplish in days what would otherwise consume months of litigation and require both sides to incur substantial costs. The key is finding a person who understands his or her role, has the skills to fulfill it, and is accorded the appropriate level of authority and respect to get the job done. If such appointments ultimately reduce the costs of litigation by resolving disputes over the scope of discovery (accessibility), the form of production, and a rational approach to search and retrieval, then the appointment will have been successful. Another measure of success will be a marked decrease in sanctions motions, which many in the legal community fear has become a prime goal of discovery—i.e. not to find documents but to learn that documents cannot be found and as a result someone should be punished. These benefits counsel in favor of the expanded use of special masters to assist in e-discovery matters in appropriate cases. (footnote omitted)