Discovery As Abuse

In my last blog I discussed the Tamburo opinion by Magistrate Judge Nan R. Nolan in Chicago. Tamburo v. Dworkin, 2010 WL 4867346 (N.D. Ill. Nov. 17, 2010). That opinion provides a good guide for the use of proportionality, cooperation, and phasing to prevent abuse of e-discovery. This blog will discuss the discovery thoughts of another great Chicago jurist, Frank H. Easterbrook, Chief Judge of the Seventh Circuit Court of Appeals.

The issue of abusive discovery is not new and certainly did not originate with electronic discovery. It goes back to the seventies and eighties when copy machines dramatically increased the number of copies of paper documents. Requests for productions then ballooned from hundreds of pages of documents to tens of thousands of pages. That is quaint by today’s standards of trillions of pages, but still, it was an exponential increase. Unscrupulous attorneys then, as now, abused discovery to drive up the costs of litigation and thus the settlement value of their case.

Judge Easterbrook

Judge Frank H. Easterbrook raised these issues in the eighties in his famous article, Discovery As Abuse, 69 B.U. L. REV. 635 (1989). Judge Easterbrook is not only an appellate judge, but a renowned scholar and Adjunct Professor of Law at the University of Chicago. Although Judge Easterbrook is primarily an expert on corporate and antitrust law, his article, Discovery As Abuse, delves deeply into the use of discovery, excessive impositional discovery, not to uncover the truth, but to extort higher settlements.

Judge Easterbrook recognized that by the late 1980s discovery had become war for many litigators. He thought that under our rules, where parties and their attorneys control discovery, judges lacked the necessary facts to prevent abuses. Id. He saw the use of discovery, or even threats of discovery, as a normal part of the settlement process. Id. 636-637. He considered that inevitable under economic theory. He thought that judges were powerless to manage discovery. As Judge Easterbrook puts it:

Judges can do little about impositional discovery when parties control the legal claims to be presented and conduct the discovery themselves.

Id. at 638. Although Judge Easterbrook wrote these words in 1989, they still carry great weight. In fact, they were quoted by the Supreme Court in Bell Atlantic Corp. v. Twomby, 550 U.S. 544 (2007) at footnote six:

Given the system that we have, the hope of effective judicial supervision is slim: “The timing is all wrong. The plaintiff files a sketchy complaint (the Rules of Civil Procedure discourage fulsome documents), and discovery is launched. A judicial officer does not know the details of the case the parties will present and in theory cannot know the details. Discovery is used to find the details. The judicial officer always knows less than the parties, and the parties themselves may not know very well where they are going or what they expect to find. A magistrate supervising discovery does not, ” cannot,” know the expected productivity of a given request, because the nature of the requester’s claim and the contents of the files (or head) of the adverse party are unknown. Judicial officers cannot measure the costs and benefits to the requester and so cannot isolate impositional requests. Requesters have no reason to disclose their own estimates because they gain from imposing costs on rivals (and may lose from an improvement in accuracy). The portions of the Rules of Civil Procedure calling on judges to trim back excessive demands, therefore, have been, and are doomed to be, hollow. We cannot prevent what we cannot detect; we cannot detect what we cannot define; we cannot define `abusive’ discovery except in theory, because in practice we lack essential information.” Easterbrook, Discovery as Abuse, 69 B.U.L.Rev. 635, 638-639 (1989).

In this same Discovery As Abuse article Judge Easterbrook observes:

That discovery is war comes as no surprise. That discovery is nuclear war, as John Setear suggests, is. Discovery more often calls to mind the trench warfare of World War I, the war of attrition. During World War I cooperative patterns evolved, as soldiers called time-out and even sang holiday carols to the other side. The cooperation broke down as fresh troops, or worse, new officers, arrived on the scene and disregarded the established patterns. Robert Axelrod views such patterns of cooperation and conflict as logical outcomes of repeated plays of the game Prisoner’s Dilemma.

Judge Easterbrook was citing to John Setear, The Barrister and the Bomb: The Dynamics of Cooperation, Nuclear Deterrence and Discovery Abuse, 69 B.U. L. REV. 569 (1989). As we all know, electronic discovery has since become the nuclear weapon of choice for all unscrupulous discovery abusers. In commercial litigation between parties of equal strength the doctrine of “mutually assured destruction” tempers the abuse of e-discovery. But the only temper in David and Goliath cases is that of the judge. If it is misguided, then injustice results.

Judge Easterbrook recognized the importance of judicial intervention when he wrote this article in 1983. Contrary to what you might think by the premise of the article, he did not support an abdicative attitude from the bench. Instead, he supported a revolution of our rules. He suggested that the only way out of the Prisoner’s Dilemma is to completely rewrite the rules to make the judiciary much more active on discovery, much like the Civil Law systems in Europe. Here is another quote of Discovery As Abuse, once again from the Supreme Court opinion in Twombly at footnote fourteen.

Given his “background in antitrust law,” ante, at 1968, n. 6, Judge Easterbrook has recognized that the most effective solution to discovery abuse lies in the legislative and rulemaking arenas. He has suggested that the remedy for the ills he complains of requires a revolution in the rules of civil procedure: “Perhaps a system in which judges pare away issues and focus on investigation is too radical to contemplate in this country, although it prevailed here before 1938, when the Federal Rules of Civil Procedure were adopted. The change could not be accomplished without abandoning notice pleading, increasing the number of judicial officers, and giving them more authority . . . . If we are to rule out judge-directed discovery, however, we must be prepared to pay the piper. Part of the price is the high cost of unnecessary discovery” impositional and otherwise.” Discovery as Abuse, 69 B.U.L.Rev. 635, 645 (1989).

Even without such a radical change, which seems unlikely because of the costs involved, federal judges still have a lot of power. As a practicing attorney who has been on the other end of that judicial power multiple times, I must respectfully disagree with Judge Easterbrook about that. <Cringe.> There are many things judges can do, there are many things they can find out to resolve discovery disputes. Just look at the many creative opinions of Judges Scheindlin, Rosenthal, Grimm and Facciola, to name but a few.

We Can No Longer Afford Discovery Wars

Companies facing frivolous law suits should not have to pay the piper as an inevitable cost of doing business in America. This problem has grown far worse from the days of Judge Easterbrook’s article in 1989. It requires some corrective action. As the Supreme Court noted in Twombly “the threat of discovery expense will push cost-conscious defendants to settle even anemic cases.”

We cannot as a society afford to allow this legal culture of discovery as abuse to continue. There is too high a cost to business to allow extortionate e-discovery demands to force unjust settlements, to force payoffs of even anemic cases. In today’s world of too much information, it is all too easy to do just that, unless there are active can-do judges that enforce the rules. How are our corporations to compete in a global marketplace if subjected to such a hidden tax? If this kind of injustice is tolerated, we will force more and more companies to outsource.

Judges should not throw up their hands and allow discovery as war as usual. They should use the rules to help manage discovery, to keep it proportional. They should insist on phasing, on cooperation, at least in this one aspect of litigation. There is still plenty of room for lawyer battles on other fronts aside from discovery. In today’s trillion document world of global markets, the old discovery as war attitudes threaten our system of justice and our economy.

Proportionality in Time and Scope

Professor Scott A. Moss recently relied on Judge Easterbrook’s Discovery As Abuse to criticize proportionality as impossible.

Yet courts may have difficulty discerning the probative value of evidence before discovery of that evidence. Nobody knows in advance what a witness will say in a deposition, making it difficult to assess the probative value of going beyond the ten-deposition limit. The same holds for searching computers or voluminous paper files: the party opposing discovery will have to make its proportionality cost-benefit argument before the search, so the court will not see the fruits of the discovery before having to rule on discovery’s likely benefit. … In the absence of any information about [the] evidence,’ Judge Richard Posner noted in discussing how parties anticipate opposing evidence, the only option is to ‘assume that such evidence . . . is of average helpfulness.’

Scott A. Moss, Litigation Discovery Cannot Be Optimal But Could Be Better: The Economics of Improving Discovery Timing In a Digital Age, 58 DUKE L. J. 889, 914 (2009) (article criticizes proportionality limits “as impossible to implement effectively”). Here is his summary of the article.

I must respectfully disagree with Professor Scott, at least in part. In my 30 years of experience as a practicing attorney, I have found that, if you do your homework, you almost always have an idea, usually a pretty good idea, what a witness will say in a deposition, although there are often surprises. Also, I have to point out that the ten-deposition rule in practice has not become the huge problem that many predicted. I am willing to bet that a similar type of limit on ESI discovery would work as well. Perhaps there should be a ten custodian ESI limit? Maybe five in certain types of cases? Other proportional restraints should also be considered.

As for the Professor’s above quoted statement about searching computers, that the opposing party will have no idea on the value of electronic evidence, and thus be incapable of making proportionality evaluations, that is not necessarily true. It may be difficult to discern the probative value of evidence before discovery, but not impossible. Sampling is a powerful tool, so too is phased discovery. In fact, Professor Moss advocates for phased discovery in his article, suggesting that more discovery should be allowed after a case survives motions for summary judgment. I am inclined to agree with him on that, which, in fairness, is really the central point of his article.

Phased Proportional Discovery

As we saw in Tamburo v. Dworkin, 2010 WL 4867346 (N.D. Ill. Nov. 17, 2010), phased discovery, in a cooperative non-war environment, can allow for later, informed requests for ESI production. It can allow the requesting party to hone in on the key evidence, and not just invite a document dump. That is why Judge Nolan in Tamburo allowed only written discovery from the named parties in the first phase of discovery. If the complaint survives a motion to dismiss, more discovery will be permitted after that. Under Professor Mosses’ proposal, still more discovery should be allowed if the facts uncovered in the next phases show justiciable issues precluding summary judgment.

The tools of phasing and sampling are designed to take the blinders off of e-discovery. If you have no idea of the potential contents, as Judge Easterbrook and Professor Moss suggest is inevitable without either unlimited or phased discovery, it is only because you have not tried hard enough. You have not sampled or requested samples, or more likely, you have no idea how to do that.

There is no need to make bland assumptions about average helpfulness. Indeed, in my experience, most ESI requests are way over-broad. The helpfulness of the ESI generated by most requests is usually well below average. Sampling and staged disclosures by the producing party can show the lack of value of the ESI originally requested. This cooperative disclosure can thereby lay a predicate for proportionality protection. Sampling and phased discovery is win/win for all but practitioners of abusive discovery.

Conclusion

Electronic discovery as a weapon is alive and well in America today. It has only gotten worse since Judge Easterbrook’s 1989 article, Discovery As Abuse. Judges need to be aware of this, although no requesting party will ever admit it. They should be sensitive to this abuse and stop it.

Proportionality and phased discovery are the answer, and cooperation is the way, voluntary or forced. This requires judges to be active, to manage. The rules have to be enforced to have meaning. It also requires judges and attorneys trained in how to use the rules. It requires attorneys and experts who know how to guide judges to do the right thing. Providing this kind of knowledge is the raison d’être of this blog’s training program at e-discoveryteamtraining.com. If we all raise our game, we can escape the prisoner’s dilemma.