Bad things tend to happen when lawyers delegate e-discovery responsibility to their clients. As all informed lawyers know, lawyers have a duty to actively supervise their client’s preservation. They cannot just turn a blind eye; just send out written notices and forget it. Lawyers have an even higher duty to manage discovery, including search and production of electronic evidence. They cannot just turn e-discovery over to a client and then sign the response to the request for production. The only possible exception proves the rule. If a client has in-house legal counsel, and if they appear of record in the case, and if the in-house counsel signs the discovery response, then, and only then, is outside counsel (somewhat) off the hook. Then they can lay back, a little bit, but, trust me, this almost never happens.
To see a few of the bad things that can happen when lawyers over delegate e-discovery, you have only to look at a new district court opinion in Ohio. Brown v. Tellermate Holdings Ltd., No. 2:11-cv-1122 (S.D. Ohio July 1, 2014) (2014 WL 2987051 ). Severe sanctions were entered against the defendant because its lawyers were too laid back. The attorneys were personally sanctioned too, and ordered to pay the other side’s associated fees and costs.
The attorneys were sanctioned because they did not follow one of the cardinal rules of attorney-client relations in e-discovery, the one I call the Ronald Reagan Rule, as it is based on his famous remark concerning the nuclear arms treaty with the USSR: Trust but verify.
The sanctioned attorneys in Brown trusted their client’s representations to them that they had fully preserved, that they had searched for the evidence. Do not get me wrong. There is nothing wrong with trusting your client, and that is not why they were sanctioned. They were sanctioned because they failed to go on to verify. Instead, they just accepted everything they were told with an uncritical eye. According to the author of the Brown opinion, U.S. Magistrate Judge Terence P. Kemp:
… significant problems arose in this case for one overriding reason: counsel fell far short of their obligation to examine critically the information which Tellermate [their client] gave them about the existence and availability of documents requested by the Browns. As a result, they did not produce documents in a timely fashion, made unfounded arguments about their ability and obligation to do so, caused the Browns to file discovery motions to address these issues, and, eventually, produced a key set of documents which were never subject to proper preservation. The question here is not whether this all occurred – clearly, it did – but why it occurred, and what, in fairness, the Court needs to do to address the situation which Tellermate and its attorneys have created.
Id. at pgs. 2-3 (emphasis added).
What is the Worst Kind of Lawyer?
Taking reasonable steps to verify can be a sticky situation for some lawyers. This is especially true for ethically challenged lawyers. In my experience lawyers like this generally come in three different varieties, all repugnant. Sometimes the lawyers just do not care about ethics. They are the slimy weasels among us. They can be more difficult to detect than you might think. They sometimes talk the talk, but never walk it, especially when the judge is not looking, or they think they can get away with it. I have run into many slimy weasel lawyers over the years, but still, I like to think they are rare.
Other lawyers actually care about ethics. They know what they are doing is probably wrong, and it bothers them, at least somewhat. They understand their ethical duties, they also understand Rule 26(g), Federal Rules of Civil Procedure, but they just do not have the guts to fulfill their duties. They know its is wrong to simply trust the client’s response of no, we do not have that, but they do it anyway. They are gutless lawyers.
Often the gutless suffer from a combination of weak moral fibre and pocketbook pressures. They lack the economic independence to do the right thing. This is especially true in smaller law firms that are dependent on only a few clients to survive, or in siloed lawyers in a big firm without proper management. Such gutless lawyers may succumb to client pressures to save on fees and just let the client handle e-discovery. I have some empathy for such cowardly lawyers, but no respect. They often are very successful; almost as successful as the slimy weasels types that do not care at all about ethics.
There is a third kind of lawyer, the ones who do not even know that they have a personal duty as an officer of the court to supervise discovery. They do not know that they have a personal duty in litigation to make reasonable, good faith efforts to try to ensure that evidence is properly preserved and produced. They are clueless lawyers. There are way too many of these brainless scarecrows in our profession.
I do not know which attorneys are worse. The clueless ones who are blissfully ignorant and do not even know that they are breaking bad by total reliance on their clients? Or the ones who know and do it anyway? Among the ones who know better, I am not sure who is worse either. Is it the slimy weasels who put all ethics aside when it comes to discovery, and are not too troubled about it. Or, is it the gutless lawyers, who know better, and do it anyway out of weak moral fortitude, usually amplified by economic pressures. All three of these lawyer types are dangerous, not only to themselves, and their clients, but to the whole legal system. So what do you think? Please fill out the online poll below and tell us which kind of lawyer you think is the worst.
I will not tell you how I voted, but I will share my personal message to each of the three types. There are not many slimy weasels who read my blog, but I suspect there may be a few. Be warned. I do not care how powerful and protected you think you are. If I sniff you out, I will come after you. I fear you not. I will expose you and show no mercy. I will defeat you. But, after the hearing, I will share a drink with some of you. Others I will avoid like the plague. Evil comes in many flavors and degrees too. Some slimy weasel lawyers are charming social engineers, and not all bad. The admissions they sometimes make to try to gain your trust can be especially interesting. I protect the confidentiality of their off-the-record comments, even though I know they would never protect mine. Those are the rules of the road in dancing with the devil.
As to the gutless, and I am pretty sure that a few of my readers fall into that category, although not many. To you I say: grow a spine. Find your inner courage. You cannot take money and things with you when you die. So what if you fail financially? So what if you are not a big success? It is better to sleep well. Do the right thing and you will never regret it. Your family will not starve. Your children will respect you. You will be proud to have them follow in your footsteps, not ashamed. I will not have drinks with gutless lawyers.
As to the clueless, and none of my readers by definition fall into that category, but I have a message for you nonetheless: wake up, your days are numbered. There are at least three kinds of clueless lawyers and my attitude towards each is different. The first kind is so full of themselves that they have no idea they are clueless. I will not have drinks with these egomaniacs. The second type has some idea that they may need to learn more about e-discovery. They may be clueless, but they are starting to realize it. I will share drinks with them. Indeed I will try very hard to awaken them from their ethically challenged slumber. The third kind is like the first, except that they know they are clueless and they are proud of it. They brag about not knowing how to use a computer. I will not have drinks with them. Indeed, I will attack them and their stone walls almost as vigorously as the weasels.
Judges Dislike the Clueless, Gutless, and Slimy Weasels
Judges dislike all three kinds of ethically challenged lawyers. That is why I was not surprised by Judge Kemp’s sanction in Brown of both the defendant and their attorneys. (By the way, I know nothing about defense counsel in this case and have no idea which category, if any, they fall into.) Here is how Judge Kemp begins his 47 page opinion.
There may have been a time in the courts of this country when building stone walls in response to discovery requests, hiding both the information sought and even the facts about its existence, was the norm (although never the proper course of action). Those days have passed. Discovery is, under the Federal Rules of Civil Procedure, intended to be a transparent process. Parties may still resist producing information if it is not relevant, or if it is privileged, or if the burden of producing it outweighs its value. But they may not, by directly misrepresenting the facts about what information they have either possession of or access to, shield documents from discovery by (1) stating falsely, and with reckless disregard for the truth, that there are no more documents, responsive or not, to be produced; or (2) that they cannot obtain access to responsive documents even if they wished to do so. Because that is the essence of what occurred during discovery in this case, the Court has an obligation to right that wrong, and will do so in the form of sanctions authorized by Fed. R. Civ. P. 37.
Take these words to heart. Make all of the attorneys in your firm read them. There are probably a few old school types in your firm where you should post the quote on their office wall, no matter which type they are.
Brown v. Tellermate Holdings Ltd.
The opinion in Brown v. Tellermate Holdings Ltd., No. 2:11-cv-1122 (S.D. Ohio July 1, 2014) (2014 WL 2987051) by U.S. Magistrate Judge Terence Kemp in Columbus, Ohio, makes it very clear that attorneys are obligated to verify what clients tell them about ESI. Bottom line – the court held that defense counsel in this single plaintiff, age discrimination case:
… had an obligation to do more than issue a general directive to their client to preserve documents which may be relevant to the case. Rather, counsel had an affirmative obligation to speak to the key players at [the defendant] so that counsel and client together could identify, preserve, and search the sources of discoverable information.
Id. at pg. 35.
In Brown the defense counsel relied on representations from their client regarding the existence of performance data within a www.salesforce.com database and the client’s ability to print summary reports. The client’s representations were incorrect and, according to the court, had counsel properly scrutinized the client’s representations, they would have uncovered the inaccuracies.
As mentioned, both defendant and its counsel were sanctioned. The defendant was precluded from using any evidence that would tend to show that the plaintiffs were terminated for performance-related reasons. This is a very serious sanction, which is, in some ways, much worse than an adverse inference instruction. In addition, both the defendant and its counsel were ordered to jointly reimburse plaintiffs the fees and costs they incurred in filing and prosecuting multiple motions to compel various forms of discovery. I hope it is a big number.
The essence of the mistake made by defense counsel in Brown was to trust, but not verify. They simply accepted their client’s statements. They failed to do their own due diligence. Defense counsel aggravated their mistake by a series of over aggressive discovery responses and argumentative positions, including such things as over-designation of AEO confidentiality, a document dump, failure to timely log privileged ESI withheld, and refusal to disclose search methods used.
The missteps of defense counsel are outlined in meticulous detail in this 47 page opinion by Judge Terence Kemp. In addition to the great quotes above, I bring the following quotes to your attention. Still, I urge you to read the whole opinion, and more importantly, to remember its lessons the next time a client does not want you to spend the time and money to do your job and verify what the client says. This opinion is a reminder for all of us to exercise our own due diligence and, at the same time, to cooperate in accord with your professional duties. An unsophisticated client might not always appreciate that approach, but, it is in their best interests, and besides, as lawyers and officers of the court, we have no choice.
[when e-discovery is involved] Counsel still have a duty (perhaps even a heightened duty) to cooperate in the discovery process; to be transparent about what information exists, how it is maintained, and whether and how it can be retrieved; and, above all, to exercise sufficient diligence (even when venturing into unfamiliar territory like ESI) to ensure that all representations made to opposing parties and to the Court are truthful and are based upon a reasonable investigation of the facts.
Id. at Pg. 3.
As this Opinion and Order will explain, Tellermate’s counsel:
– failed to uncover even the most basic information about an electronically-stored database of information (the “salesforce.com” database);
– as a direct result of that failure, took no steps to preserve the integrity of the information in that database;
– failed to learn of the existence of certain documents about a prior age discrimination charge (the “Frank Mecka matter”) until almost a year after they were requested;
– and, as a result of these failures, made statements to opposing counsel and in oral and written submissions to the Court which were false and misleading, and which had the effect of hampering the Browns’ ability to pursue discovery in a timely and cost-efficient manner (as well as the Court’s ability to resolve this case in the same way).
These are serious matters, and the Court does not reach either its factual or its legal conclusions in this case lightly.
Id. at pg. 4.
In addition to the idea that discovery is broad and is designed to permit parties to obtain enough evidence either to prove their claims or disprove the opposing party’s claim, discovery under the Federal Rules of Civil Procedure has been designed to be a collaborative process. As one Court observed,
It cannot seriously be disputed that compliance with the “spirit and purposes” of these discovery rules requires cooperation by counsel to identify and fulfill legitimate discovery needs, yet avoid seeking discovery the cost and burden of which is disproportionally large to what is at stake in the litigation. Counsel cannot “behave responsively” during discovery unless they do both, which requires cooperation rather than contrariety, communication rather than confrontation.
Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354, 357-58 (D. Md. 2008). Such a collaborative approach is completely consistent with a lawyer’s duty to represent his or her client zealously. See Ruiz-Bueno v. Scott, 2013 WL 6055402, *4 (S.D. Ohio Nov. 15, 2013). It also reflects a duty owed to the court system and the litigation process.
Id. at pgs. 28-29. Also see: Losey, R. Mancia v. Mayflower Begins a Pilgrimage to the New World of Cooperation, 10 Sedona Conf. J. 377 (2009 Supp.).
Tellermate, as an entity, knew that every statement it made about its control over, and ability to produce, the salesforce.com records was not true when it was made. It had employees who could have said so – including its salesforce.com administrators – had they simply been asked. Its representations were illogical and were directly contradicted by the Browns, who worked for Tellermate, had salesforce.com accounts, and knew that Tellermate could access those accounts and the information in them. And yet Tellermate’s counsel made these untrue statements repeatedly, in emails, letters, briefs, and during informal conferences with the Court, over a period of months, relenting only when the Court decided that it did not believe what they were saying. This type of behavior violated what has been referred to as “the most fundamental responsibility” of those engaged in discovery, which is “to provide honest, truthful answers in the first place and to supplement or correct a previous disclosure when a party learns that its earlier disclosure was incomplete or incorrect.” Lebron v. Powell, 217 F.R.D. 72, 76 (D.D.C. 2003). “The discovery process created by the Federal Rules of Civil Procedure is premised on the belief or, to be more accurate, requirement that parties who engage in it will truthfully answer their opponents’ discovery requests and consistently correct and supplement their initial responses.” Id. at 78. That did not happen here.
Id. at pg. 31.
But it is not fair to place the entire blame on Tellermate, even if it must shoulder the ultimate responsibility for not telling counsel what, collectively, it knew or should have known to be the truth about its ability to produce the salesforce.com information. As this Court said in Bratka, in the language quoted above at page 3, counsel cannot simply take a client’s representations about such matters at face value. After all, Rule 26(g) requires counsel to sign discovery responses and to certify their accuracy based on “a reasonable inquiry” into the facts. And as Judge Graham (who is, coincidentally, the District Judge presiding over this case as well, and whose views on the obligations of counsel were certainly available to Ms. O’Neil and Mr. Reich), said in Bratka, 164 F.R.D. at 461:
The Court expects that any trial attorney appearing as counsel of record in this Court who receives a request for production of documents in a case such as this will formulate a plan of action which will ensure full and fair compliance with the request. Such a plan would include communicating with the client to identify the persons having responsibility for the matters which are the subject of the discovery request and all employees likely to have been the authors, recipients or custodians of documents falling within the request. The plan should ensure that all such individuals are contacted and interviewed regarding their knowledge of the existence of any documents covered by the discovery request, and should include steps to ensure that all documents within their knowledge are retrieved. All documents received from the client should be reviewed by counsel to see whether they indicate the existence of other documents not retrieved or the existence of other individuals who might have documents, and there should be appropriate follow up. Of course, the details of an appropriate document search will vary, depending upon the circumstances of the particular case, but in the abstract the Court believes these basic procedures should be employed by any careful and conscientious lawyer in every case.
Id. at pgs. 32-33.
Like any litigation counsel, Tellermate’s counsel had an obligation to do more than issue a general directive to their client to preserve documents which may be relevant to the case. Rather, counsel had an affirmative obligation to speak to the key players at Tellermate so that counsel and client together could identify, preserve, and search the sources of discoverable information. See Cache La Poudre Feeds, LLC v. Land O’ Lakes, Inc., 244 F.R.D. 614, 629 (D. Colo. 2007). In addition, “counsel cannot turn a blind eye to a procedure that he or she should realize will adversely impact” the search for discovery. Id. Once a “litigation hold” is in place, “a party cannot continue a routine procedure that effectively ensures that potentially relevant and readily available information is no longer ‘reasonably accessible’ under Rule 26(b)(2)(B).” Id.
Id. at pg. 35.
As noted above, Tellermate and its counsel also made false representations to opposing counsel and the Court concerning the existence of documents relating to the Frank Mecka matter. Indeed, at the hearing on the pending motions, Tellermate’s counsel stated that she was unaware of the existence of the great majority of the Frank Mecka documents until almost a year after they were requested. Once again, it is not sufficient to send the discovery request to a client and passively accept whatever documents and information that client chooses to produce in response. See Cache La Poudre Feeds, 244 F.R.D. at 629.
Id. at pg. 37 (emphasis added).
There are two distinct but related problems with trying to remedy Tellermate’s failings concerning these documents. The first is the extremely serious nature of its, and counsel’s, strenuous efforts to resist production of these documents and the strident posture taken with both opposing counsel and the Court. Perhaps the most distressing aspect of the way in which this was litigated is how firmly and repeatedly counsel represented Tellermate’s inability to produce these documents coupled with the complete absence of Tellermate’s compliance with its obligation to give counsel correct information, and counsel’s complete abdication of the responsibilities so well described by this Court in Bratka. At the end of the day, both Tellermate’s and its counsel’s actions were simply inexcusable, and the Court has no difficulty finding that they were either grossly negligent or willful acts, taken in objective bad faith.
Id. at pg. 43.
The only realistic solution to this problem is to preclude Tellermate from using any evidence which would tend to show that the Browns were terminated for performance-related reasons. … This sanction is commensurate with the harm caused by Tellermate’s discovery failures, and is also warranted to deter other similarly-situated litigants from failing to make basic, reasonable inquiries into the truth of representations they make to the Court, and from failing to take precautions to prevent the spoliation of evidence. It serves the main purposes of Rule 37 sanctions, which are to prevent parties from benefitting from their own misconduct, preserving the integrity of the judicial process, and deterring both the present litigants, and other litigants, from engaging in similar behavior.
Id. at pg. 45.
Of course, it is also appropriate to award attorneys’ fees and costs which the Browns have incurred in connection with moving to compel discovery concerning the salesforce.com documents and the Mecka documents, and those fees and expenses incurred in filing and prosecuting the motion for sanctions and the motion relating to the attorneys-eyes-only documents. … Finally, Tellermate and its counsel shall pay, jointly, the Browns’ reasonable attorneys’ fees and costs incurred in the filing and prosecution of those two motions as well as in the filing of any motions to compel discovery relating to the salesforce.com and Frank Mecka documents.
Id. at pgs. 45-46.
So sayeth the Court.
The defendant’s law firm here did a disservice to their clients by not pushing back, and by instead simply accepting their clients’ report on what relevant ESI they had, or did not have. Defense counsel cannot do that. We have a responsibility to supervise discovery, especially complex e-discovery, and be proactive in ESI preservation. This opinion shows what happens when a firm chooses not to be diligent. The client loses and the lawyers are sanctioned.
Our obligation as attorneys of record does not end with the client’s sending a litigation hold notice. If a client tells us something regarding the existence, or more pointedly, the non-existence, of electronically stored information that does not make sense, or seemingly is contradicted by other evidence, it is critical for an attorney to investigate further. The client may not want you to do that, but it is in the client’s best interests that you do so. The case could depend upon it. So could your license to practice law, not to mention your reputation as a professional. It is never worth it. It is far better to sleep well at night with a clear conscience, even if it sometimes means you lose a client, or are generally not as successful, or rich, as the few ethically challenged lawyers who appear to get away with it.