Second Circuit Uses “Klipsch” to Speak Loud and Clear on e-Discovery Misconduct

September 23, 2018

Klipsch makes some of the best speakers in the world, especially their high-end Klipschorn speaker series shown here. The Second Court of Appeals used a Klipsch in a dispute recently to sound an alarm about e-discovery abuse and how it will not be tolerated. Klipsch Group, Inc. v. ePRO E-Commerce Ltd., 880 F. 3d 620 (2d Cir, 2018). The unanimous opinion written by Circuit Judge Gerard E. Lynch upheld the lower court’s sanctions against Klipch’s adversary in the suit, ePro. The adverse inference sanction entered means that Klipsch will now almost certainly win the case.

The Second Circuit also affirmed the full amount of monetary sanctions, $2,680,000. Klipsch was compensated for almost* all of the additional discovery efforts occasioned by ePRO’s misconduct. ePro was also required to immediately secure payment of the full $5 Million amount of any future judgment against them, which includes damage trebling and fees. I know that sounded great to Klipsch and their attorneys. Especially since they had a four day evidentiary hearing on their spoliation motion to get there.

* Somewhat sadly for Klipsch, however, as the third footnote explained, under the lower court’s opinion all of Klipsch’s fees and costs incurred were not awarded. There was another $300,000 or so that was not included, only because Klipsch could not produce proper credentials for one of the billing attorneys. Ouch. That is extremely rare and odd. Details are so very important.

The Second Circuit Court’s Rare Ruling on e-Discovery and Sanctions

The Klipsch opinion has language that will carry great weight, not only because it makes sense, but also because it is from a United States Court of Appeals panel. There are not that many appeals court opinions on sanctions or e-discovery so this is a rare and important opinion. It will certainly encourage more courts to do as the trial judge did here and sanction offending parties. It is also controlling law for all federal courts in its jurisdiction, which is Vermont, Connecticut and the all important New York.

In the rest of this blog I will let the language of the Klipsch opinion speak for itself with a few of my favorites selections. Klipsch Group, Inc. v. ePRO E-Commerce Ltd., 880 F. 3d 620 (2d Cir, 2018). The first quote from Circuit Judge Gerard Lynch’s opinion lays out the background.

In the course of defending against claims that it sold counterfeit products, defendant-appellant ePRO E-Commerce Limited (“ePRO”) engaged in persistent discovery misconduct: it failed to timely disclose the majority of the responsive documents in its possession, restricted a discovery vendor’s access to its electronic data, and failed to impose an adequate litigation hold even after the court directed it to do so, which omission allowed custodians of relevant electronic data to delete thousands of documents and significant quantities of data, sometimes permanently. As a result, the United States District Court for the Southern District of New York (Vernon S. Broderick, J.) concluded that ePRO had willfully engaged in spoliation. It accordingly granted in substantial part plaintiff-appellee Klipsch Group, Inc.’s (“Klipsch”) motion for discovery sanctions, including a $2.7 million monetary sanction to compensate Klipsch for its corrective discovery efforts and a corresponding asset restraint in that amount, permissive and mandatory jury instructions, and an additional $2.3 million bond to preserve Klipsch’s ability to recover damages and fees at the end of the case. . . .

We find no error in the district court’s factual findings, and we conclude that the monetary sanctions it awarded properly compensated Klipsch for the corrective discovery efforts it undertook with court permission in response to ePRO’s misconduct. In particular, we emphasize that discovery sanctions should be commensurate with the costs unnecessarily created by the sanctionable behavior. A monetary sanction in the amount of the cost of discovery efforts that appeared to be reasonable to undertake ex ante does not become impermissibly punitive simply because those efforts did not ultimately uncover more significant spoliation and fraud, or increase the likely damages in the underlying case. The district court’s orders imposing sanctions *624 are accordingly AFFIRMED in all respects.

The next quote gives you a good glimpse into the degree of frustration that recalcitrant attorneys who excel in gamesmanship can engender, even in an appellate court panel located in New York City:

[T]he history of the case makes clear that the sanctions and fees awarded in this case were carefully limited to costs Klipsch incurred in direct response to ePRO’s misconduct. Klipsch obtained approval from the magistrate judge prior to each of its substantive efforts, and in each case, that approval was given only after ePRO had already squandered an opportunity to correct its own errors.

For example, ePRO’s failure to implement a litigation hold was first discovered in March 2013, during Klipsch’s first round of depositions with ePRO employees, but ePRO was not sanctioned at that time, nor was Klipsch given carte blanche to explore ePRO’s files. Instead, ePRO was permitted to hire its own discovery expert to correct the error, which resulted in the production of substantial additional discovery. Klipsch then spent approximately $550,000 on a second round of depositions occasioned by that late production.

Paul Klipsch

It is evident that the district court did not detect any abusive conduct on the part of Klipsch, such as the piling on of discovery demands and investigatory initiatives in order to burden its *633 adversary with wasteful expenses, motions practice, and sanctions. ePRO does not appear to contest the reasonableness of permitting Klipsch to take those remedial depositions, nor can it plausibly assert that Klipsch would have insisted on doing so even if ePRO’s initial production had been complete or timely. And only in March 2014, after ePRO had repeatedly shown itself to be an untrustworthy participant in the discovery process, did the magistrate judge determine that Klipsch was “fully justified” in seeking to undertake an independent forensic examination. Joint App. at 1187.

Because the costs for which Klipsch is being compensated were reasonably incurred in direct response to ePRO’s misconduct, we cannot conclude that the district court abused its discretion by requiring ePRO to pay monetary sanctions in that amount.[7]

The defendant ePro then tried the “proportionality card” arguing that the multi-million dollar punitive damages exceeded the amount at issue in the case. That did not work. The Second Circuit explained that is not how proportionality works in sanctions. It has no bearing to the value of the case itself, just the amount of additional reasonable costs incurred because of the unreasonable conduct to be sanctioned. One party should not be damaged by the unreasonable conduct of the other. The offended party, here Klipsch, should, in effect, be indemnified from all of the burden and expense incurred because of what the offending party did or did not do. They are the innocent party. Here is how the court put it.

In sum, we see nothing in ePRO’s proportionality arguments compelling us to conclude that the district court abused its discretion by awarding full compensation for efforts that were ex ante a reasonable response to ePRO’s own evasive conduct.[9] The proportionality that matters here is that the amount of the sanctions was plainly proportionate — indeed, it was exactly equivalent — to the costs ePRO inflicted on Klipsch in its reasonable efforts to remedy ePRO’s misconduct.

The Second Court was cognizant of the issues and problems concerning electronic discovery. They had been briefed on the potential for misuses of spoliation sanctions motions. Although this was not at all present in the Klipsch, Judge Lynch address this concern near the end of the opinion.

Nothing that we say in this opinion should be taken as condoning excessive and disproportionate discovery demands, countenancing the tactical use of discovery sanction motions to inflict gratuitous costs on adversaries, or derogating from the responsibility *636 of district courts to ensure that litigation proceeds in a responsible and cost-efficient manner. See Fed. R. Civ. P. 1 (directing that the Rules of Civil Procedure “should be construed, administered, and employed by the court and the parties to secure the just, speedy, and inexpensive determination of every action”) (emphasis added); Fed. R. Civ. P. 26(b)(1) (scope of discovery should be “proportional to the needs of the case, considering [inter alia] the amount in controversy”). If it turns out, as the district court has estimated, that the amount of actual damages in this case is modest in relation to the costs spent on the litigation, that would be a highly regrettable outcome.

But the question before the district court, and before us, is which party should be held responsible for those costs. ePRO does not ever contend that Klipsch’s initial discovery demands were unreasonable or disproportionate to the merits of the case. Nor does it seriously argue that the magistrate judge erred in allowing Klipsch to take the steps it took to remedy ePRO’s refusal to comply with those demands. The district court reasonably concluded, after a full and fair hearing, that it was ePRO’s noncompliance with its legal obligations that occasioned the excessive costs in this case, and we find no reason why ePRO should not therefore be required to pay them.

I leave you with a short video biography of Paul Klipch, a recognized audio engineer leader whom I have long admired.


e-Discovery and Poetry on a Rainy Night in Portugal

April 17, 2018

From time to time I like read poetry. Lately it has been the poetry of Billy Collins, a neighbor and famous friend. (He was the Poet Laureate of the United States from 2001 to 2003.) I have been reading his latest book recently, The Rain in Portugal. Billy’s comedic touches balance the heavy parts. Brilliant poet. I selected one poem from this book to write about here, The Five Spot, 1964. It has a couple of obvious e-discovery parallels. It also mentions a musician I had never heard of before, Roland Kirk, who was a genius at musical multi-tasking. Enjoy the poem and videos that follow. There is even a lesson here on e-discovery.

The Five Spot, 1964

There’s always a lesson to be learned
whether in a hotel bar
or over tea in a teahouse,
no matter which way it goes,
for you or against,
what you want to hear or what you don’t.

Seeing Roland Kirk, for example,
with two then three saxophones
in his mouth at once
and a kazoo, no less,
hanging from his neck at the ready.

Even in my youth I saw this
not as a lesson in keeping busy
with one thing or another,
but as a joyous impossible lesson
in how to do it all at once,

pleasing and displeasing yourself
with harmony here and discord there.
But what else did I know
as the waitress lit the candle
on my round table in the dark?
What did I know about anything?

Billy Collins

The famous musician in this poem is Rahsaan Roland Kirk (August 7, 1935[2] – December 5, 1977). Kirk was an American jazz multi-instrumentalist who played tenor saxophone, flute, and many other instruments. He was renowned for his onstage vitality, during which virtuoso improvisation was accompanied by comic banter, political ranting, and, as mentioned, the astounding ability to simultaneously play several musical instruments.

Here is a video of Roland Kirk with his intense multimodal approach to music.

One more Kirk video. What a character.

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The Law

There are a few statements in Billy Collins’ Five Spot poem that have obvious applications to legal discovery, such as “There’s always a lesson to be learnedno matter which way it goes, for you or against, what you want to hear or what you don’t.” We are all trained to follow the facts, the trails, wherever they may lead, pro or con.

I do not say either pro or con “my case” because it is not. It is my client’s case. Clients pay lawyers for their knowledge, skill and independent advice. Although lawyers like to hear evidence that supports their client’s positions and recollections, after all it makes their job easier, they also want to hear evidence that goes against their client. They want to hear all sides of a story and understand what it means. They look at everything to craft a reasonable story for judge and jury.

Almost all cases have good and bad evidence on both sides. There is usually some merit to each side’s positions. Experienced lawyers look for the truth and present it in the best light favorable for their client. The Rules of Procedure and duties to the court and client require this too.

Bottom line for all e-discovery professionals is that you learn the lessons taught by the parties notes and documents, all of the lessons, good and bad.

The poem calls this a “… joyous impossible lesson in how to do it all at once, pleasing and displeasing yourself with harmony here and discord there.” All lawyers know this place, this joyless lesson of discovering the holes in your client’s case. As far as the “doing it all at once ” phrase, this too is very familiar to any e-discovery professional. If it is done right, at the beginning of a case, the activity is fast and furious. Kind of like a Roland Kirk solo, but without Roland’s exuberance.

Everybody knows that the many tasks of e-discovery must be done quickly and pretty much all at once at the beginning of a case: preservation notices, witness interviews, ESI collection, processing and review. The list goes on and on. Yet, in spite of this knowledge, most everyone still treats e-discovery as if they had bags of time to do it. Which brings me to another Billy Collins poem that I like:

BAGS OF TIME

When the keeper of the inn
where we stayed in the Outer Hebrides
said we had bags of time to catch the ferry,
which we would reach by traversing the causeway
between this island and the one to the north,

I started wondering what a bag of time
might look like and how much one could hold.
Apparently, more than enough time for me
to wonder about such things,
I heard someone shouting from the back of my head.

Then the ferry arrived, silent across the water,
at the Lochmaddy Ferry Terminal,
and I was still thinking about the bags of time
as I inched the car clanging onto the slipway
then down into the hold for the vehicles.

Yet it wasn’t until I stood at the railing
of the upper deck with a view of the harbor
that I decided that a bag of time
should be the same color as the pale blue
hull of the lone sailboat anchored there.

And then we were in motion, drawing back
from the pier and turning toward the sea
as ferries had done for many bags of time,
I gathered from talking to an old deckhand,
who was decked out in a neon yellow safety vest,

and usually on schedule, he added,
unless the weather has something to say about it.

Conclusion

Take time out to relax and let yourself ponder the works of a poet. We have bags of time in our life for that. Poetry is liable to make you a better person and a better lawyer.

I leave you with two videos of poetry readings by Billy Collins, the first at the Obama White House. He is by far my favorite contemporary poet. Look for some of his poems on dogs and cats. They are especially good for any pet lovers like me.

One More Billy Collins video.

 


Guest Blog: “Follow the Money” and Metrics: A User’s Guide to Proportionality in the Age of e-Discovery

April 8, 2018

This is a guest blog by a friend and colleague, Philip Favro. Phil is a consultant for Driven, Inc. where he serves as a trusted advisor to organizations and their counsel on issues relating to the discovery process and information governance. Phil is also currently active in The Sedona Conference. He obtained permission from them to include a description of a recent event they sponsored in Nashville on Proportionality.

“Follow the Money” and Metrics: A User’s Guide to Proportionality in the Age of e-Discovery

Moviegoers and political junkies have flocked to theaters over the past few months to watch period-piece epics including Darkest Hour and The Post. While there is undoubted attraction (especially in today’s political climate) in watching the reenactment of genuine leadership and courageous deeds these movies portray, The Post should have particular interest for counsel and others involved in electronic discovery.

With its emphasis on investigation and fact-gathering; culling relevant information from marginally useful materials; and decision-making on how such information should be disclosed and presented to adversaries, The Post features key traits associated with sophisticated discovery counsel.

Not coincidentally, those same attributes were on display in another drama from the 1970s of which The Post viewers were reminded: All The President’s Men. That investigative journalism classic depicts Washington Post correspondents Bob Woodward and Carl Bernstein as dogged reporters determined to identify the culprits responsible for the Watergate Hotel break-in in June 1972.

A critical aspect of their work involved Woodward’s furtive meetings with Mark Felt, who served at that time as the deputy director of the FBI. Known only as “Deep Throat” (until Felt revealed himself in 2005), Felt provided cryptic yet key direction that aided the reporters’ investigation. One of Felt’s most significant tips (as portrayed in the movie) was his suggestion that Woodward investigate the cash contributions made to help reelect then President Richard Nixon in 1972. Played by iconic actor Hal Holbrook in All The President’s Men, Felt’s soft-spoken but serious demeanor underscored the importance of his repeated direction to Woodward to “just follow the money.” By following the money, the Washington Post reporters helped discover many of the nefarious tactics that eventually brought down the Nixon presidency.

Proportionality

The directive to “follow the money” applies with equal force to counsel responsible for handling discovery. This is particularly the case in 2018 since courts now expect counsel to address discovery consistent with proportionality standards. Those standards – as codified in Federal Rule of Civil Procedure 26(b)(1) – require counsel, clients, and the courts to consider various factors bearing on the discovery analysis. They include:

(1) the importance of the issues at stake in this action; (2) the amount in controversy; (3) the parties’ relative access to relevant information; (4) the parties’ resources; (5) the importance of the discovery in resolving the issues; and (6) whether the burden or expense of the proposed discovery outweighs its likely benefit.

While all of the factors may be significant, monetary considerations – elements of which are found in both the “amount in controversy” and “burden or expense” factors – frequently predominate a proportionality analysis. As Ralph Losey (the owner, host, and principal author of this blog) has emphasized many times, “[t]he bottom line in e-discovery production is what it costs.” By following the money or, perhaps more appropriate for discovery, focusing on the money, counsel can drive an effective discovery process and obtain better results for the client.

As lawyers do so, they will find an increasingly sophisticated judiciary who expect counsel to approach discovery through the lens of proportionality. This certainly was the case in Oxbow Carbon & Minerals LLC v. Union Pacific Railroad Company, which has been prominently spotlighted in this blog. In Oxbow, the court applied the Rule 26(b)(1) proportionality factors to a disputed document request, holding that it was not unduly burdensome and that it properly targeted relevant information. While the court examined all of the Rule 26(b)(1) proportionality standards, money was the clearly determinative factor. The amount in controversy, coupled with the comparative costs of discovery – discovery completed and still to be undertaken, tipped the scales in favor of ordering plaintiffs to respond defendants’ document requests.

The Critical Role of Metrics

Essential to Oxbow’s holding were the metrics the parties shared with the court. Metrics – typically defined as a standard of measurement or (as used in business world) a method for evaluating performance – offer counsel ways to assess the “performance” of a particular document production. Metrics can measure the extent to which a production contains relevant materials, undisclosed privileged information, and even nonresponsive documents. Metrics can also estimate – as was the case in Oxbow – the resources (including time, manpower, and costs) a party may be forced to incur to comply with a discovery request.

Metrics enable a court to follow the money and properly balance the burdens of discovery against its benefits. Without metrics, a responding party could hardly expect to establish that a request is disproportionate and thereby prevail in motion practice. As Ralph observed in his post entitled Judge Facciola’s Successor, Judge Michael Harvey, Provides Excellent Proportionality Analysis in an Order to Compel:

Successful arguments on motions to compel require hard evidence. To meet your burden of proof you must present credible estimates of the costs of document review. This requires . . . reliable metrics and statistics concerning the ESI that the requesting party wants the responding party to review.

As discussed later on, other courts have also emphasized the critical role of metrics in evaluating the proportionality of a particular discovery request.

The Sedona Conference, Proportionality, and Metrics

For counsel who wish to better understand the role of metrics in discovery, the directive to “follow the money” will bring them to The Sedona Conference (“Sedona”). Sedona is the preeminent legal institution dedicated to advancing thoughtful reforms on important legal issues. While Sedona addresses matters ranging from patent litigation and trade secret misappropriation to data privacy and cross-border data protection, the organization is best known for its work on electronic discovery.

Renowned for its volunteer model and for attracting many of the best minds in the legal industry, Sedona prepares authoritative resources that are regularly relied on by judges, lawyers, and scholars. This is particularly the case with proportionality standards and how they should drive the determination of discovery issues.

Sedona published its first Commentary on Proportionality in Electronic Discovery (“Commentary” or “Proportionality Commentary”) in 2010 and a second version in 2013. Last spring, Sedona released a third iteration of the Commentary. Collaboratively prepared by a group of renowned judges and practitioners, the third version of the Commentary provides common sense direction on how metrics can help achieve proportional results in discovery:

Burden and expense should be supported by hard information and not by unsupported assertions. For example, if a party claims that a search would result in too many documents, the party should run the search and be prepared to provide the opposing party with the number of hits and any other applicable qualitative metrics. If the party claims that the search results in too many irrelevant hits, the party may consider providing a description or examples of irrelevant documents captured by the search.

Quantitative metrics in support of a burden and expense argument may include the projected volume of potentially responsive documents. It may also encompass the costs associated with processing, performing data analytics, and review, taking into consideration the anticipated rate of review and reviewer costs, based upon reasonable fees and expenses.

As the Commentary makes clear, metrics can provide insights regarding the effectiveness of search methodologies or the nature and extent of a party’s burden in responding to a particular discovery request. By sharing these metrics with litigation adversaries, counsel can informally address legitimate discovery questions or crystallize the issues for resolution by a court. Either way represents a more cost effective approach to discovery than the opacity of traditional meet and confers or motion practice.

Framing the Issues through Sedona’s TSCI Event

These issues were on display last month at Sedona’s TSCI conference in Nashville, Tennessee. The TSCI event typically provides attendees with an annual opportunity to stay current on developing trends in e-Discovery. The 2018 TSCI event remained consistent with that objective, spotlighting practice developments for counsel “from ‘eDiscovery 1.0’ to New and Evolving Legal Challenges.” Expertly chaired by Jerone “Jerry” English and Maura Grossman, TSCI featured sessions covering discovery and other issues relating to artificial intelligence (AI), the Internet of Things (IoT), mobile applications, data breaches, cross-border discovery, and the always engaging case law panel and judicial round-table.

One of the more practical sessions focused on the importance of using metrics, analytics, and sampling to achieve proportionality in discovery. Entitled Using Data Analytics and Metrics to Achieve Proportionality, the purpose of this session was to help attendees understand how counsel should present analytics, metrics, and sampled data to a court. The session featured a fantastic line-up of speakersGareth Evans, Maura Grossman, U.S. Magistrate Judge Anthony Porcelli, U.S. Magistrate Judge Leda Dunn Wettre – who were well situated to provide views on these topics. Audience members additionally offered insightful comments on the issues.[1]

The most important guidance the speakers and audience emphasized was the need for more complete disclosure of supporting metrics. Unless specific metrics are disclosed, neither adversaries nor the court can address issues as varied as the performance of particular search terms, the reasonableness of a production made using TAR or other search methodologies, or the burdens of a particular discovery request.

On the latter issue of substantiating arguments of undue burden, one particularly insightful comment offered during the session concisely summarized the interplay between metrics, proportionality, and cost: “Follow the money.” This admonition dovetailed nicely with the discussion of two recent cases during that session – Duffy v. Lawrence Memorial Hospital, No. 2:14-cv-2256-SAC-TJJ, 2017 WL 1277808 (D. Kan. Mar. 31, 2017) and Solo v. United Parcel Service Co., No. 14-cv-12719, 2017 WL 85832 (E.D. Mich. Jan. 10, 2017). Both of these cases spotlight how reliable metrics enable a court to follow the money and resolve discovery disputes consistent with proportionality standards.

Duffy v. Lawrence Memorial Hospital

In Duffy, the court modified a discovery order issued less than two months beforehand that granted plaintiff’s requests for various categories of emergency room patient records. In that first round of motion practice, defendant had argued that plaintiff’s requests were disproportionate and unduly burdensome. The court overruled those objections, explaining that defendant failed to provide any substantive metrics to support those objections:

Defendant objects to every document request as being unduly burdensome, but provides no facts to support the objection. Neither does Defendant provide evidence of the costs it would incur in responding to the requests.

In summary, defendant’s failure to share any meaningful metrics regarding the time, manpower, or costs it would incur to comply with plaintiff’s requests ultimately left its arguments bereft of any evidentiary support.

In the second round of motion practice, defendant adopted a different approach that yielded a more proportional result. Confronted by the staggering reality of the court’s production order and having learned how to properly use supporting metrics in motion practice, defendant moved for a protective order.

In contrast to its prior briefing, defendant shared specific metrics associated with the burdens of production. Those burdens involved the deployment of staff to individually review 15,574 electronic patient files so as to identify particular patient visit information. Such a process would be labor intensive and cost well over $230,000:

Defendant estimates it would take 7,787 worker hours to locate and produce responsive information for 15,574 patient records. If Defendant had ten employees working on the task, they would spend more than ninety-seven days working eight hours a day, at an estimated cost to Defendant of $196,933.23.

After aggregating the information, Defendant asserts it would need to redact patients’ personal confidential information . . . redaction would take ten reviewers fourteen days at a cost of $37,259.50. The process would include a quality control attorney reviewer who would spend two hours a day, and reviewers who would review 15 documents per hour for eight hours a day.

In sum . . . producing the information relevant to RFP Nos. 40, 41, 43, and 58 would take 8,982 hours of work and cost in excess of $230,000 if done by contract staff.

Simply put, defendant urged the court to follow the money. By substantiating its proportionality arguments with appropriate metrics, the court recognized its initial production order placed an undue burden on defendant.

As a result, the court adopted a modified order that instead allowed defendant to produce a random sample of 257 patient records. While advancing a number of justifications for its modified order, the court ultimately relied on the tripartite mandate from Federal Rule of Civil Procedure 1. The order would provide the parties to the litigation with a substantively better, more efficient, and less expensive method for producing relevant information.

Solo v. United Parcel Service

Solo v. United Parcel Service reached a result analogous to the Duffy holding, ordering that defendant produce only a sample of the information sought by plaintiff. In Solo, plaintiffs served an interrogatory that sought identification of shipment information relating to its putative class action claims (plaintiffs claimed that defendant overcharged certain customers for “shipments that had a declared value of over $300”). The interrogatory sought shipping record information that spanned a period of six years.

Defendant argued in response that the interrogatory was unduly burdensome and would impose a disproportionate production obligation on the company. Because most of the requested information was archived on backup tapes, defendant shared specific metrics regarding the “overwhelming” burdens associated with responding to the interrogatory:

UPS estimates that it would take at least six months just to restore the archived tapes as described above, at a cost of $120,000 in labor . . . that estimate does not include the time and expense of analyzing the data once extracted in order to answer Interrogatory No. 1, which would require extensive additional analysis of each account number and the manual review of contract language for individual shipper. Such a process would also require a substantial amount of time and resources on the part of UPS.

Based on the metrics defendant disclosed and given that plaintiffs’ claims had yet to be certified as a class action, the court found the interrogatory to be disproportionate. Following the money and drawing on the linked concepts of cooperation and proportionality from Rule 1, the court instead ordered that defendant produce a sample of the requested information from a six-month period. The court also directed the parties to meet and confer on developing an agreeable sampling methodology.

Conclusion

Duffy and Solo reinforce the critical interplay between metrics, proportionality, and money. Just like Oxbow, the responding parties from Duffy and Solo could hardly expect to substantiate arguments regarding undue burden and disproportionality without metrics. Indeed, the court in Duffy initially rejected such arguments when defendant failed to support them with actual information. However, by disclosing metrics with reasonable estimates of time, manpower, and costs, Duffy and Solo resulted in production orders more consistent with proportionality limitations.

All of which translated into substantial cost savings for the responding parties. Defendant in Duffy was facing a discovery bill of over $230,000 to review 15,574 patient files. Dividing the projected cost of the entire review process into the number of patient records – $230,000 ÷ 15,574 – reveals that defendant would pay approximately $15 to review an individual patient record. Under the modified production order, the new projected cost – $15 multiplied by 257 patient records – equals $3,855. Follow the money: the tactical use of metrics apparently saved the client over $225,000!

Duffy and Solo are consistent with and confirmed by Oxbow, the Proportionality Commentary, and the Federal Rules of Civil Procedure. These authoritative resources collectively teach that counsel who use metrics and focus on cost can drive an effective discovery process. Lawyers that do so will ultimately obtain better results for the client in discovery.

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[1] To encourage candid and robust debate during its events, Sedona has promulgated a nondisclosure rule. Known as “The Sedona Rule,” it proscribes attendees from identifying the speakers or audience members by name who share particular insights. It also forbids divulging the contents of particular brainstorming or drafting projects that have yet to be released for publication. The Sedona Rule otherwise allows for the anonymous disclosure of session content from its events.


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