Discovery of Electronically Stored Documents

Discovery of Electronically Stored Documents

Corporations today store thousands of documents on their computers: original drafts, rewritten contracts, notices, publications, and e-mail discussions and conversations. When there is contested litigation involving large corporations, culling through the thousands, and perhaps millions, of electronically stored documents (ESI) can be both time consuming and costly. Companies often use shortcut methods to hold down the cost of reviewing documents to find those that are responsive to a request for production of documents and those that are protected by either the attorney-client privilege or the attorney work-product privilege. In taking shortcut methods, the attorney may inadvertently produce documents that should not have been released. In a recent case from the United States District Court for the District of Maryland, plaintiffs sought a ruling that certain documents were not exempt from discovery although they were inadvertently released. The ruling sheds new light on what may be required and in what direction the courts are headed under such circumstances.
 
Background
 
The decision in the case of Victor Stanley, Inc. v. Creative Pipe, Inc., LEXSEE 2008 U.S. DIST. LEXIS 42025, concerned 165 documents. Plaintiffs asserted that defendants had waived the privilege or that the privilege did not apply. The court found that a small number of the documents in question were not subject to either privilege. As to the remainder of the documents that had been inadvertently disclosed, the court held that defendants had waived any privilege or protective status as to any of the 165 documents.
 
To cull out documents that were potentially subject to withholding, a computer forensics expert was hired. The attorneys for defendants identified 70 keywords that were used to segregate the ESI. Due to time and money constraints, the tens of thousands of documents so segregated were mostly reviewed by the attorneys by reviewing the page titles, and not by a review of the entire documents. The judge in the matter granted defendants a four-month extension to provide the documents.
 
A week after the documents were provided to plaintiffs, plaintiffs notified defendants that there were potential documents that might have been wrongfully disclosed. Both parties agreed that the disclosure was inadvertent. Plaintiffs argued that the disclosure was under circumstances leading to the conclusion that the privilege was waived. Defendants denied they had waived privilege.
 
Applicable Law
 
Courts have taken three different approaches to inadvertent release of privileged information. A lenient position holds that there is no waiver where the release of documents was inadvertent. A strict approach holds that the information was released and so there can be no expectation of confidentiality. An intermediate approach balances several factors in deciding whether the disclosing party took reasonable steps under the circumstances to prevent disclosure of privileged and protected information and documents. Individual district courts within the Fourth Circuit have adopted the intermediate approach. 
 
In applying the intermediate approach, the court stated:
 
The intermediate test requires the court to balance the following factors to determine whether inadvertent production of attorney-client privileged materials waives the privilege: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the number of inadvertent disclosures; (3) the extent of the disclosures; (4) any delay in measures taken to rectify the disclosure; and (5) overriding interests in justice.
 
Victor Stanley, Inc. v. Creative Pipe, Inc. supra, at 26. 
 
 
Legal Analysis
 
Defendants, who asserted the privilege, had the burden of establishing an evidentiary basis for asserting the privilege. The court found that they had failed to do so. Using the intermediate approach, the court found that defendants had failed to show that reasonable precautions were taken to prevent inadvertent disclosure.
 
Reasonableness of the Precaustions
 
In reviewing the keyword search used by defendants, the court acknowledged the difficulties and limitations associated with such searches. The court quoted from The Sedona Conference Best Practices Commentary on the Use of Search & Information Retrieval Methods in E-Discovery, 8 Sedona Conf. J. 189:
 
[A]lthough basic keyword searching techniques have been widely accepted both by courts and parties as sufficient to define the scope of their obligation to perform a search for responsive documents, the experience of many litigators is that simple keyword searching alone is inadequate in at least some discovery contexts. This is because simple keyword searches end up being both over- and under-inclusive in light of the inherent malleability and ambiguity of spoken and written English (as well as all other languages).
 
Id at 194-195.
 
Defendants were vague in their descriptions of how the 70 keywords used in their search were developed, the criteria for their selection, how the documents were searched, and what controls were used to assess accuracy and quality of the results. The keywords were developed by the attorneys who were then representing defendants. (Defendants subsequently hired new counsel from different law firms.) Nothing in the affidavits by the attorneys indicated their expertise in developing appropriate keywords for searching the documents.
 
There was no information on how the keywords were used in performing the searches. As pointed out in the Sedona Conference Best Practices Commentary, keyword searches can be performed in many ways, and one of the best is to incorporate more advanced searches such as the use of Boolean proximity operators. Id. at 217-218. Other search tools that utilize formulas based on values can also be incorporated to enhance the value of the search.
 
Just as important, there was no indication that the keywords were subsequently used to sample the resulting documents to determine whether the search results were reliable. There was nothing to establish, before the forensic expert searched the documents, whether the keyword terms or the method in which they were used were over or under inclusive.
 
It was defendants' responsibility to establish the adequacy and accuracy of the search by providing sufficient information on how the search was determined, how the search was conducted, and how accurate the search was based on a statistical analysis for the court to determine whether defendants had taken adequate steps to prevent inadvertent release of privileged or protected information. The court held that defendants were required to "be prepared to back up their positions with respect to a dispute involving the appropriateness of ESI search and information retrieval methodology -- obviously an area of science or technology -- with reliable information from someone with the qualifications to provide helpful opinions, not conclusory argument by counsel" Victor Stanley Inc, supra at 34.  In this case, they had failed to do so.
 
Defendants argued that some of the documents were not in text-searchable format. Although there was innuendo that the inadvertently disclosed information came from this group of documents, there was nothing to establish that this was the case. Defendants argued that much of the nonsearchable material consisted of pictures or photographs. However, plaintiffs argued that all of the documents in dispute were in text searchable format or were in files that used standard search tools.
 
The court recognized the need to keep costs and the burden of discovery to a reasonable level and discussed an ongoing project called the Trec Legal Track, which is a worldwide effort to develop and evaluate methodologies and best practices for e-discovery. The next test is scheduled for the summer of 2008[i].
 
Other Intermediate Test Factors
 
The court quickly disposed of the other four factors. It found that the number of documents at issue, 165, was substantial enough that they did not represent a document or two that fell through the cracks. Many were communications between client and attorney. Some were draft answers to discovery requests. The information had already been released and, like words spoken aloud, was already disclosed.
 
Of more concern to the court was the fact that the inadvertent disclosure was discovered by plaintiffs, not by defendants. This was not a situation in which defendants discovered the inadvertent release and immediately took action to rectify the situation. While defendants took prompt action after they were notified of the potential inadvertent disclosure by plaintiffs, the more important time period to the court was the one week delay between the time the documents were released and the discovery by plaintiffs. Defendants should have found the problem themselves and taken prompt action before being told of the release of information by plaintiffs.
 
The court concluded that defendants had waived privilege by the inadvertent disclosure of the documents at issue.
 
Sufficiency of Assertion of Privilege
 
The court also found that defendants failed to properly assert that the documents were subject to either privilege or protection.
 
Because the responding party is entitled to refuse to produce requested discovery if it is privileged or work product protected, the rules require that when doing so, the responding party must "describe the nature of the documents, communications, or tangible things not produced or disclosed--and do so in a manner that, without revealing information itself privileged or protected, will enable other parties to assess the claim." Fed. R. Civ. P. 26(b) (5) (A) (ii).
 
Victor Stanley, Inc. supra, at 47. This is usually done by compiling a privilege log, which is supposed to contain information that identifies each document withheld, the nature of each document, information as to the nature of the privilege being asserted, the subject matter, the date, and the person sending or receiving the document. In practice, many privilege logs fall far short of this requirement. It is incumbent on the party asserting privilege to provide the court with sufficient evidence and information for the court to make a decision as to whether the document is privileged. Evidence may be in the form of an affidavit containing the facts that establish the existence of privilege. The failure to provide specific details warrants the court to deny a document's privilege or protection.
 
Defendants were ordered to follow the proper procedure in identifying privileged and protected documents. They failed to do so. The failure to follow the court's instructions in identifying the basis for asserting the privilege would have warranted the court to order production of the disputed documents, even if the court had not already found that privilege had been waived.
 

[i] See http://treclegal.umiacs.umd.edu for more information.