Closing The Loop

Judge Andrew J. Peck has been a leading name in eDiscovery all the way back to at least 1995, when he was first appointed Magistrate Judge for the Southern District of New York. Just a few months after taking the bench, shortly after O.J. Simpson’s trial concluded and Windows 95 was released, Judge Peck issued a key eDiscovery opinion, ruling that companies must make electronic versions of their computerized data available during discovery.Peck-thumb.jpg In the years that followed, Judge Peck has penned several widely influential opinions, from the first opinion approving the use of predictive coding in Da Silva Moore v. Publicis Groupe to a recent warning to the bar over boilerplate discovery objections in Fischer v. Forrest.

We recently spoke to Judge Peck about the importance of proportionality in the discovery process, why the bar needs to “wake up” when it comes to discovery objections and Rule 502(d) orders, and, of course, the role of technology in eDiscovery. What follows is a lightly edited transcript of the first part of our discussion. Part II is available here.

 

Logikcull: Our first question is something we try to ask every one of our judges. As I'm sure you're aware, there's a small and declining percentage of federal civil cases that ever go to trial, which means that those cases that aren't decided on motion are often concluded during the discovery process. Would you think it's a fair assessment to say that discovery is now the de facto dispute resolution mechanism in the federal system? If so, to what extent is our discovery system capable then of ensuring just outcomes?

Hon. Andrew J. Peck: Let me approach those several ways. First of all, you're right. The statistics I have heard are that in federal court civil litigation, less than one percent of cases actually go to trial. That means they either are dismissed on an early motion, a post-discovery summary judgment motion, or they are settled.

While the cost of litigation is a factor in that, I think a major factor is the cyclical nature of that [system]. Cases don't go to trial, so senior associates and young partners don't get trial experience. So, when they become the lead attorney on a case -- let’s assume whichever side of the versus they're on -- the case gets past the summary judgment motion and the judge says, “OK. We're ready for trial,” particularly a jury trial. I think a lot of lawyers panic. They don't want to lose an important case for a client because it's their first jury trial. They may not be comfortable, etc., so they suggest settlement.

"I think a lot of lawyers panic. They don't want to lose an important case for a client because it's their first jury trial. They may not be comfortable, etc., so they suggest settlement."

Clearly, the system is still working, however. I would like to see more trials, but discovery gets the information the parties need to make an educated decision to settle the case or it gives them the ammunition they need to make a case-dispositive summary judgment motion.  So, I think the system is working although, ideally, as a former trial attorney and someone who’d like to think of himself as a trial judge, I'd like to see more cases go to trial.

An interesting point with respect to that: In some cases, where I have the case for the initial conference and the parties say, “You know, there's very little money involved in this case. It’s a shame it's going to cost so much to do discovery.” I have said in several cases, “Hey, no one says you have to do discovery. No one says you then have to make a summary judgment motion. Let's agree on a trial date 30 days from now, or 60 days from now.“ Only once did I have parties jointly say, “That's a good idea. Let’s go that route.”

Logikcull: Do you think that’s mostly because that would terrify attorneys? Why do you think people aren't willing to do that?

Peck: I guess it is the fear that if they don't do discovery they'll miss something. They’re not used to cross-examining a witness cold at trial without a deposition transcript in advance. Criminal defense attorneys do this all the time. The cynic in me might also say lawyers bill by the hour, at least on one side if not both sides, and want to get a certain amount of hours billed before the case is over, but hopefully, that is not the real reason.


Logikcull: In terms of the cost of eDiscovery, we spoke to Judge Facciola about a year and a half ago. He said that discovery system has become so expensive that it has driven a whole economic class out of federal courts. Do you think that's a fair assessment or is that going a little too far?

Peck: It may be more anecdotal than a researched result. I do think small companies and individuals have to think seriously about bringing a lawsuit because of the cost of litigation.

On the other hand, I don't know if it is, in fact I would think it is not, any cheaper to do it in state court or even in arbitration. It used to be, 30 to 40 years ago, the arbitration rules did not allow discovery. Lawyers started finding backdoor ways to get discovery in arbitration by subpoenaing documents to be brought to the arbitration and then asking the arbitrators to adjourn the hearing so that they can actually look at the documents, creating discovery in that way. Since then, most of the arbitration organizations’ rules now allow discovery. So it's everywhere.

If people kept their ESI in a more organized fashion, perhaps, we would not have these costs and expenses. But, unfortunately, most people and companies may or may not be organized for business needs, but are not sufficiently organized for litigation purposes. Despite all the talk about information governance and companies needing to put in an information governance plan, I think there is a lot more talk than major activity in that area.

"Despite all the talk about information governance and companies needing to put in an information governance plan, I think there is a lot more talk than major activity in that area."

Logikcull: In terms of governing the discovery process, the recent changes to Rule 26 emphasized the proportionality aspect of discovery just by moving that word up a little bit in the rule. Do you think the tweak has impacted how judges are dealing with issues of scope post-amendment?

Peck: I do. As the rules were being discussed, I referred to it as the “PR effect” such as the cereal company putting “new and improved” on the pretty box and the only thing new and improved was the box – not the cereal. Nevertheless, I have seen more opinions in the last two years dealing with the concept of proportionality than in the last 10 or 20 years combined. So, the message is getting across to lawyers and judges: Take the concept of proportionality seriously and apply it.

"I have seen more opinions in the last two years dealing with the concept of proportionality than in the last 10 or 20 years combined."

Logikcull: What tools do courts and parties have to reduce discovery burdens? Do you think they're using them sufficiently?

Peck: Well first is a much more active judicial management style dealing with discovery. There is nothing worse in my opinion than discovery getting out of hand because somebody makes a motion to compel and the judge sits on it for six months, during which the case grinds to a halt or you get, “Well, you didn’t give me X; so, I’m not going to give you Y and when the judge rules, we’ll deal with it.”

I think other than just saying active judicial management, one of the tools was the insertion into Rule 16 of the suggestion that judges, who do not already do it, to have, in particular cases, a requirement for pre-motion conferences before a party can make a formal full-blown discovery motion. That's been the practice under our local rules in the Southern District of New York as far back as I can remember, both as a lawyer as well a judge.

"There is nothing worse in my opinion than discovery getting out of hand because somebody makes a motion to compel and the judge sits on it for six months, during which the case grinds to a halt..."

As the Advisory Committee note said about judges in this process, it is extremely helpful for the parties and to the court. It saves the parties money. You don't have to do a full-blown formal motion setting out “Rule 26(b)(1) says, and I quote,” etc. It allows the court to rule much more quickly.

I find that almost all the time, I rule on these disputes at the conference. Only if it involves a heavy privilege issue or something else beyond the ordinary, shall we say, do I have to ask the parties to file a formal motion.

Indeed it also means for judges, we can rule on the record, either by the digital tape recording or the use of a court reporter and not have to write opinions stating “Document request number three requests this. The responding party objected on these three grounds. The court rules as follows…”

It is much faster to just rule from the bench on that and much easier for the lawyers to then know what they're doing, move on and keep the discovery period shorter.

I will note that at the recent Sedona Conference meeting, another judge mentioned that the only problem with that system is it may deprive lawyers and judges of precedents because fewer opinions will be available on Westlaw or Lexis. That is true and I follow the practice of, if I think an issue has broader interest to the bar, particularly on eDiscovery issues, I will issue an opinion, even though I might have been able to rule from the bench.

But we also have to remember that what I or any other magistrate or district judge says is not binding on other judges even in their own court, let alone throughout the country. It’s only the persuasiveness of any judicial opinions that are binding unless it’s a circuit or a Supreme Court decision and we don't get very much of that in the eDiscovery sphere.

 

Logikcull: Speaking of, in a recent written opinion by you, your Fischer v. Forrest opinion, you issued a wake-up call to practitioners regarding the use of boilerplate objections to discovery requests. Can you explain the build up to that decision?  It seems like this is something you had been thinking about for a while. Also do you think that is going to have a persuasive effect on other judges either in the Southern District of New York or elsewhere in the country?

Peck: As to the latter, I think yes. Approximately a week after my decision, Judge Mark Bennett, district judge in the Northern District of Iowa, came out with a similar opinion in Liguria [Foods, Inc v. Griffith Labs, Inc] that also sharply criticized lawyers just following their own form file.

Logikcull: In all caps, I believe, right?

Peck: Yeah. Fischer for me was something I'd been thinking about writing for quite some time. It’s one thing when in January and February 2016, shortly after the December 2015 rules went into effect, lawyers were either blind to the fact that the rules were amended or knew the rules were amended but still were using their old forms and clearly were doing the very thing that the Rule 34 amendments were meant to cure.

"[L]awyers were either blind to the fact that the rules were amended or knew the rules were amended but still were using their old forms and clearly were doing the very thing that the Rule 34 amendments were meant to cure."

Finally, I was getting more and more fed up and used Fischer as a teaching experience or a wake-up call for the bar. I got emails from other judges throughout the country, some of whom I knew and some of whom I didn’t, saying “Good for you. I’m going to use your opinion.” Obviously, the blogosphere carried it far and wide. So I do think it will be persuasive although frankly, it is doing nothing more than saying “Read the rule, follow the rule.”


Logikcull: You've also tried to move the bar forward with regards to Rule 502(d) orders and you even have gone as far to say it could be malpractice for attorneys not to at least consider asking for such orders. Why do you think they should be more common and why in the world are they not already in greater use?

Peck: The only thing I can think of as to why they're not in greater use goes back to the first topic we talked about. Cases don't go to trial, so maybe because of that, lawyers don't read the Federal Rules of Evidence. It is frustrating that Rule 502 was enacted and because it was a rule about privilege and, in essence, invoking Commerce Clause authority over states, it had to go through Congress to be enacted, not just the normal rules process going through the Supreme Court. And yet, nine years later, it is much ignored. That is why the current rules amendments of December 1, 2015, inserted a specific reference to the Federal Rule of Evidence 502 as a subject to be discussed both at the 26(f) conference and the Rule 16 initial pretrial conference.

Perhaps in the asymmetrical case where the plaintiff has no privileged material, the plaintiff’s counsel may not need it. I can't think of any case where the responding party, whether a defendant or a plaintiff, in a more symmetrical case would not benefit by having a 502(d) order -- which means that they can be as careful as they want in reviewing material before production for privilege, spend as much money as the client will allow, if the case justifies doing that.

"I can't think of any case where the responding party, whether a defendant or a plaintiff, in a more symmetrical case would not benefit by having a 502(d) order..."

With the volume of ESI we have in cases today, where there may be as many as a million emails, I would guarantee that in every case something is going to slip through no matter how careful the lawyers or the technological tools doing the screening are. Probably if nothing else, even if they have a search tool looking for the names of all the lawyers, email extensions for all the law firms, etc., there is likely to be an email from business person A to business person B saying, “John suggested that we do the following…” and the reviewers or the computer tools just don't make the connection that John is John General Counsel and that was legal advice that senior executives are talking about amongst themselves, but that would still retain the privilege.

There is nothing worse than having to use Rule 502(b) and have to make a motion to the court saying, under the 502(b) factors, that you were careful enough in your privilege screening and that something slipped through and as soon as you learned about it, you promptly took remedial steps. It’s an embarrassing motion you have to make, even if you don't charge the client for it and even if you win the motion. With the 502(d) order, unless the material is really not privileged for substantive reasons, you get the material back no question asked.

The only legitimate concern I’ve had lawyers express to me is that if they’re before a judge who isn’t very knowledgeable, the judge might say “OK I've given you your 502(d) protection. Now you don't need to spend any time doing a privileged review. Produce all your ESI next week.” I think it's important to educate such a judge that even though you get back the piece of paper or the digital bits and bytes under 502(d), we don't have the Men in Black movie nebulizer and the other side would be able to know what was in the privileged material. So, it is important to give lawyers the time they need for a reasonable privilege review.

To obviate concern about that, the two-paragraph standard order that I use, I make available to the parties, both for my cases and on the Southern District of New York website under ‘My Rules.’ Anybody can borrow it and use it as their proposed stipulation and order. The first paragraph basically says “this gives you the full protection allowed by 502(d).” The second paragraph says, and I’m summarizing, “nothing in the order is meant to prevent a party from having time to take reasonable steps to review for privilege, confidentiality, or similar concerns.”

If that is the form of order a party proposes to a judge who may be less knowledgeable, either the judge will say, “No, I'm not going to give you the protection” or they will and will then be self-educated that that doesn’t mean make the person produce in the following week or month without a chance to do an adequate privilege review.

"It is malpractice to at least not consider it and then perhaps decide not to use it for some reason or another."

So I think there is zero downside and a very big upside. It is malpractice to at least not consider it and then perhaps decide not to use it for some reason or another. To just ignore its availability is a big mistake. It does not require the other side to agree to it. The court can enter it on the request of one party even over the objection of the other or the court can issue it sua sponte, which I don't quite do, but I certainly suggest it to parties in most of my cases.

This post was authored by Casey C. Sullivan, Esq., who leads education and awareness efforts at Logikcull. You can reach him at casey.sullivan@logikcull.com or on Twitter at @caseycsull.
2017 eDiscovery Mid-Year Review

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