I always suggest that attorneys ask for a 502(d) Order under Federal Rules of Evidence before production of ESI. A new case out of Texas demonstrates some of the many bad things that can happen if you do not. Bellamy v. Wal-Mart Stores, Texas, LLC, No. SA-18-CV-60-XR, 2019 WL 3936992 (W.D. Tex. Aug. 19, 2019). The opinion is from one of the leading e-discovery jurists in the country, Texas District Court Judge Xavier Rodriguez. Although he allowed the inadvertently produced documents to be clawed back, it was a close call. In the process Judge Rodriguez considered those documents and sanctioned defendants based on what he read. He struck defendant’s comparative negligence defense and awarded fees and costs. It could have been worse. The accidentally disclosed attorney emails suggested multiple rule violations and a disturbing lack of candor to the court.
This is a must read opinion, not only because of who wrote it, Judge Rodriguez, and the quality of his research and analysis, but also because of the facts of the case. There are many things we can learn from the mistakes highlighted in this opinion. Including the all important ethical values of attorney candor to the court and cooperation.
I will let the learned Judge Rodriguez’ own words in Bellamy explain this case, which was colored by the attorney conduct he uncovered.
This is a slip and fall case. Plaintiff alleges that she . . tripped over a pallet while walking through sliding doors into the garden center. . . .
There have been several discovery disputes that have arisen in this case. The Magistrate Judge presided over the first round of disputes and eventually ordered that the Plaintiff’s [First] Motion for Sanctions be dismissed without prejudice to allow for the deposition of a Wal-Mart employee who may have been responsible for leaving the pallet unattended. The Magistrate Judge further ordered that Defendant supplement its disclosures and discovery responses, amend its objections, and provide Plaintiff with a privilege log as to any withheld documents.
This latest round of disputes centers on what happened next. In responding to the Magistrate Judge’s Order, a paralegal in counsel for Defendant’s office inadvertently produced documents that Defendant claims are privileged under the attorney-client privilege or work product. Plaintiff responds that some documents are not privileged. With regard to documents that are privileged, Plaintiff argues that these documents nonetheless demonstrate that Defendant’s counsel has acted in bad faith and engaged in discovery abuse.
Id. at pg. 1 of 7.
Judge Rodriguez starts with an analysis of Evidence Rule 502.
This Court encourages parties to enter into a Rule 502(d) Order[1], which states: “A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court.” FED. R. EVID. 502(d). Despite this Court’s encouragement, the Defendant did not request such an Order.[2] This was the first of many mistakes by Defendant’s counsel in this case. In the absence of a 502(d) Order, the Court then turns to an analysis under Rule 502(b). . . .
In this case the privilege log was woefully deficient. Specifically, the Court is unable to ascertain the identities of various recipients of the emails in question.
Id. at pg 2 of 7.
The emails were all submitted to Judge Rodriguez for review in camera. The opinion makes clear that Judge Rodriguez did not think all of these emails were in fact privileged under case law, but plaintiff’s counsel had for some reason, not explained, conceded that they were.
But as stated above, because Plaintiff concedes that the documents are privileged, the Court will not disturb the concession that the documents are covered by the attorney-client privilege.
Id.
The elements of Rule 502(b) were met with this odd concession, so Judge Rodriguez had no choice but to order their return and prevent plaintiff from using the emails at trial, but Judge Rodriguez was not at all happy about the contents of the emails. This is where the hammer falls:
*3 Accordingly, pursuant to Fed. R. Evid. 502(b) and Fed. R. Civ. P. 26(b)(5)(B), Defendant is entitled to “claw back” the documents it inadvertently produced. But that is not the end of this analysis. Although Plaintiff may not further use these documents in this case, preventing their use in analyzing the pending motion for sanctions would result in a perverse result, upending the rules of civil procedure and encouraging discovery abuse.
Id.
Judge Rodriguez starts by noting defense counsel became aware of key witnesses and failed to disclose them.
With regard to the above individuals, Defendant failed to list them in its Fed. R. Civ. P. 26(a)(1) initial disclosures and failed to timely list them in answers to interrogatories. It is apparent from a reading of the materials submitted either Defendant’s counsel was grossly negligent in fulfilling their discovery obligations or they realized they had an uncooperative manager who was refusing to assist in their investigation, and they did not want to disclose the identities of potentially “bad” witnesses. Counsel for Defendant attempts to shift some of this blame by stating that Plaintiff was already aware of the manager and garden center employee because of her prior employment with Wal-Mart. This shifting is unpersuasive. Defendant’s counsel had obligations to provide this information and it unreasonably and untimely did not.
Id. at pg. 3 of 7.
The in camera privileged emails Judge Rodriguez read also showed that a video of the slip and fall once existed. Yikes. That is a real problem.
Counsel for Defendant never disclosed to Plaintiff’s counsel that at one time video may have existed that was now lost. Rather, counsel merely kept repeating that video does not exist.
Id.
That was way too cute. Disclosure to opposing counsel and the court was expected by Judge Rodriguez.
If that were not all bad enough, the emails revealed another hidden fact:
Finally, Plaintiff’s counsel discovered in the inadvertently produced emails that: (9) Defendant hired an
investigator to conduct a full social media/background check on the Plaintiff on June 20, 2018; and (10)
outside counsel for Defendant notified “Travis Rodmon-Legal” that surveillance had been completed on the Plaintiff and “it is debatable if the footage will be beneficial…. The investigator informs me that she moves very slowly, gingerly and hobbles a bit.”*4 Counsel for Defendant never disclosed that it possessed video of the Plaintiff. Defendant was under an obligation to disclose any such video as a request for production had been made to that effect. Likewise, Wal-Mart had obtained numerous statements from the Plaintiff prior to her obtaining representation. These statements were requested in requests for production, but not timely disclosed. Counsel for Defendant attributes this failure to the fact that one attorney working this file left the firm and the file was reassigned and the new attorney was unaware of the video’s existence. Although this suggests no “bad faith”, at the time Wal-Mart sent its responses to requests for production and stated that it had no video of the Plaintiff it violated Rule 26(g).
Plaintiff requests that Defendant be sanctioned for failing to disclose that store surveillance video at one point existed and at some point became “lost.” Plaintiff also seeks sanctions because the Wal-Mart manager testified at her deposition that she took multiple photos (including of the pallet) and these photos have never been produced. Likewise, the manager testified that she obtained a statement from the employee who left the pallet unattended and that statement has never been produced. Plaintiff also seeks sanctions because Wal-Mart did not preserve the pallet in question. Finally, Plaintiff requests sanctions generally for Defendant’s failure to honor its discovery obligations. Plaintiff also requests that the Court provide an adverse inference instruction to the jury regarding the missing information. Plaintiff seeks these various sanctions citing generally to Fed. R. Civ. P. 37 and the court’s “inherent
authority.”
Id.
Judge Rodriguez examines the law on sanctions and then considers the ethical Duty of Candor to the Court (Rule 3.3, Model Rules of Professional Conduct) the Duty of Cooperation and Rule 1, FRCP (just, speedy and inexpensive).
D. Duty of Candor, Cooperation and FED. R. CIV. P. 1
Counsel for Defendant wisely opened its Response brief with the following: “Defendant’s counsel
acknowledges and accepts it made mistakes during the discovery of this matter. It accepts that consequences may come from the Court as it considers Plaintiff’s Motions before the Court.”It is apparent that at the time of the accident, Defendant considered this a low-value or nuisance case. It did not contemplate the severity of the Plaintiff’s injuries and medical treatment. But once Plaintiff placed Defendant on notice that she was going to pursue litigation, reasonable and proportionate preservation obligations were required to be met. Likewise, defense counsel may be on billing constraints, but discovery obligations and adherence to the rules of civil procedure must be met.
*7 Federal Rules of Civil Procedure 1 and 26(f) contemplate that the parties meet in good faith to discuss the case and facilitate resolution of the case and discovery issues because the parties have an obligation “to secure the just, speedy, and inexpensive determination of every action.” Rather than complying with the rules, defense counsel delayed the production of adverse material and the identity of witnesses and the extent of the inappropriate acts only fully became revealed after an inadvertent production of emails was made (after intervention by the Magistrate Judge).
Id. at pgs. 5-6 of 7.
Judge Rodriguez then concludes:
A reading of the file in this case makes apparent that Wal-Mart has known early on that it is responsible for the pallet being left unattended for some period of time in an area frequented by customers. Many counsel for defendants argue that the burden is on a plaintiff to establish all elements of their causes of action. That is true. But if that is going to be the Defendant’s strategy (even when knowing they will likely suffer defeat), this Court is not sympathetic to complaints that litigation is too expensive. In this case, rather than focusing on the extent of Plaintiff’s damages, Wal-Mart has now expended significant time and fees on the liability issue its own claims investigator conceded a long time ago.
Conclusion
Defendant’s Motion to Abate or Strike Plaintiff’s Second Motion for Sanctions (docket no. 49) is DENIED, but as stated above Plaintiff may not use the inadvertently produced documents for any other purpose and counsel must return any documents still in Plaintiff’s possession, if any, to Defendant. Plaintiffs’ Motion for Sanctions (docket no. 50) is GRANTED as stated above. Defendant may not assert any comparative negligence defense in this case, including arguing that the danger was open and obvious.
Id. at pgs. 6-7 of 7.
Posted by Ralph Losey 
United States Magistrate Judge Tony N. Leung sanctioned the record company defendant and its two top executives in a suit over the posthumous release of Prince’s “Deliverance” album. They were sanctioned because the plaintiff, the Prince Estate via Paisley Park, proved that the defendant executives intentionally destroyed text messages about the album. They denied bad intent and claim they did what they thought the law required, save the emails and office computer data. Defendants claimed they provided discovery from other sources of ESI, including their work computers, cooperated with a forensic data firm to ensure Plaintiffs obtained everything they sought, but, they further argue that Plaintiffs never asked to inspect their cell phones during this process. They claimed they did not know they also had to preserve their text messages.
Judge Tony Leung was not laughing, purple rain or not. He did not believe defendants’ good faith intent argument. He was no more impressed by their “times are changing,” “we didn’t know” argument than Prince was in Purple Rain. In today’s world preservation of email is not enough. If text messages are how people did business, which was the case in Paisley Park, then these messages must also be preserved. As Judge Leung put it:
Abraham Lincoln was born on February 12, 1809. He was probably our greatest President. Putting aside the tears honest Abe must now be shedding over his political party, it is good to remember Lincoln as an exemplar of a U.S. lawyer. All lawyers would benefit from emulating aspects of his Nineteenth Century legal practice and Twenty First Century thoughts on technology. He was honest, diligent, a deep thinker and ethical. Very ethical. He did not need to be lectured on Cooperation and Rule 1. He also did not need to be told to embrace technology, not hide from it. In fact, he was a prominent Tech-Lawyer of his day, well known for his speaking abilities on the subject. Near the end of his legal career Abe was busy pushing technology and his vision of the future. Sound familiar dear readers? It should. Most of you are like that.
It’s Mueller Time! I predict we will be hearing this call around the world for decades, including boardrooms. Organizations will decide to investigate themselves on sensitive issues before the government does, or before someone sues them and triggers formal discovery. Not always, but sometimes, they will do so by appointing their own independent counsel to check on concerns. The Boards of tomorrow will not look the other way. If Robert Muller himself later showed up at their door, they would be ready. They would thank their G.C. that they had already cleaned house.
Most companies who decide it is Mueller Time, will probably not investigate themselves in the traditional “full calorie” Robert Muller way, as good as that is. Instead, they will order a less expensive, AI based investigation, a Mueller Lite. The “full calorie” traditional legal investigation is very expensive, slow and leaky. It involves many people and linear document review. The AI Assisted alternative, the Mueller Lite, will be more attractive because of its lower cost. It will still be an independent investigation, but will rely primarily on internal data and artificial intelligence, not expensive attorneys.
Robert Mueller investigations typically cost millions and involves large teams of expensive professionals. AI Assisted investigations are cheap by comparison. That is because they emphasize company data and AI search of the data, mostly the communications, and need so few people to carry out. This new kind of investigation allows a company to quietly look into and take care of its own problems. The cost savings from litigation avoidance, and bad publicity, can be compelling. Plus it is the right thing to do..
The computer “reads” or reviews at nearly the speed of light and is 100% consistent. But it has no knowledge on its own. An idiot savant. The AI cannot do anything without its human handlers and trainers. It is basically a learning machine designed to sort large collections of texts into binary sets, typically relevant or irrelevant.
This new legal service allows concerned management to proactively investigate upon the first indications of possible wrong-doing. It allows you to have greater assurance that you really know what is going on in your organization. Management or the Board then retains an independent team of legal experts to conduct the quick E-Vestigation. The team provides subject matter expertise on the suspected problem and uses active machine learning to quickly search and analyze the data. They search for preliminary indications of what happened, if anything. This kind of search is ideal for sensitive legal inquiries. It gives management the information needed without breaking the bank or publicizing the results.
E-Vestigations are a pre-litigation legal service that relies heavily on artificial intelligence, but not entirely. Investigations like this are very complex. They are nowhere near a fully automated process, and as mentioned the AI is really just a learning machine that knows nothing except how to learn document relevance. The service still needs legal experts, but a much smaller team
The glory days of litigation are over. All trial lawyers who, like me, have lived through the last forty years of legal practice, have seen it change dramatically. Litigation has moved from a trial and discovery practice, where we saw each other daily in court, to a discovery, motion and mediation practice where we communicate by email and occasional calls.
But the times were a changing. In the nineties and first decade of the 21st Century, trials quickly disappeared. Instead, Mediation started to take over. I know, I was in the first group of lawyers ever to be certified as a Mediator of High Technology disputes in 1989. All types of cases began to settle earlier and with less preparation. I have seen cases settle at Mediation where none of the attorneys knew the facts. They just knew what their clients told them. Even more often, only one side was prepared a knew the facts. The other was just “shooting from the hip.”
E-Vestigations are confidential, internal investigations that focus on search of client data and metadata. They uses Artificial Intelligence to search and retrieve information relative to the client’s requested investigation, their information need. We use an AI machine training method that we call Hybrid Multimodal Predictive Coding 4.0. The basic search method is explained in the open-sourced 
E-Vestigation is done outside of Litigation and court involvement, usually to try to anticipate and avoid Litigation. Are the rumors true, or are the allegations just a bogus attempt to extort a settlement? E-Vestigations are by nature private, confidential investigations, not responses to formal discovery. AI Assisted investigations rely primarily on what the data says, not the rumors and suspicions, or even what some people say. The analysis of vast volumes of ESI is possible, even with millions of files, because e-Vestigations use Artificial Intelligence, both passive and active machine learning. Otherwise, the search of large volumes of ESI takes too long and is too prone to inaccuracies. That is the main reason this approach is far less expensive than traditional “full calorie” Muller type investigations.
Defendants in criminal cases will still plea out, but based on the facts, on truth, not threats. Defendants in civil cases will do the same. So will the plaintiff in civil cases who makes unsubstantiated allegations. Facts and truth protect the innocent. Most of that information will be uncovered in computer systems. In the right hands, E-Vestigations can reveal all. It is a proactive alternative to Litigation with expensive settlements. The AI data review features of E-Vestigations make it far less expensive than a Muller investigations. Is it Mueller Time for your organization?
I find this kind of constant monitoring to be distasteful. For me, it is too Big Brother and oppressive to have AI looking at my every email. It stifles creativity and, I imagine, if this was in place, would make me overly cautious in my communications. Plus, I would be very concerned about software error. If some baby AI is always on, always looking for suspicious patterns, it could make mistakes. The programming of the software almost certainly contains a number of hidden biases of the programmers, typically young white dudes.
Stealthiness:
Speed:
As discussed, the rise and commoditization of Mediation over the last twenty years has had unintended consequences. The move from the courtroom to the mediator’s office in turn caused the Law to move from objective to subjective opinion. Discussion of the consequences of mediation, and the subjectivist attitude it brings, complicates my analysis of the death of Litigation, but is necessary. Litigation did not turn into private investigation work. One did not flow into another. Litigation is not changing directly into private Investigations, AI assisted or not. Mediation, and its unexpected consequences, is the intervening stage.
Most of my Mediator friends strongly disagree, but I have never heard a compelling argument to the contrary. The death of the trial is a stunning development. But mediation has had another impact. One that I have not seen discussed previously. It has not only killed trials, it has killed the whole notion of objective truth. It has led to a mediation mind-set where the “merits” are just a matter of opinion. Where cost of defense and the time value of money are the main items of discussion.
Objective accounts of what happened in the past are not only possible, they are probable in today’s Big Data world. Your Alexa or Google speakers may have part of the record. So too may your iWatch or Fitbit. Soon your refrigerator will too. Data is everywhere. Privacy is often an illusion. (Sigh.) The opportunity of liars and other scoundrels to “get away with it” and fool people is growing smaller every day. Fortunately, if lawyers can just learn a few new evidence search skills, they can use AI to help them find the information they need.
As Michiko Kakutani said in her book, 
The truth is attainable, but requires dedication and skilled efforts by everyone on a legal team to find it. It requires knowledge of course, and a proven method, but also impartiality, discipline, intelligence and a sense of empathy. It requires experience with what the AI can do, and just as important, what it cannot do. It requires common sense. Lawyers have that. Jurors have that.
Ralph has long been a leader of the world's tech lawyers. He has presented at hundreds of legal conferences and CLEs around the world. Ralph has written over two million words on e-discovery and tech-law subjects,
e-Discovery Team ® 