FRCP Changes and eDiscovery: Lessons from Recent Cases

On December 1, 2015, amendments to Rules 16, 26, 34, and 37 of the Federal Rules of Civil Procedure (FRCP) took effect, and LITeGATION published a post about this topic, here: modifying requirements related to electronically stored information (ESI).  Among other things, these changes included: (1) Under Fed. R. Civ. P. 16(b)(3)(B)(v), a court’s scheduling order may direct parties to request a conference with the court before filing discovery motions, including moving for ESI production; and (2) Under Fed. R. Civ. P. 26(f)(3), “A discovery plan must state the parties’ views and proposals on any issues about disclosure, discovery, or preservation of electronically stored information, including the form or forms in which it should be produced.  These modifications, in conjunction with existing rules regarding ESI, have made it increasingly important for parties to utilize detailed, precise, and efficient eDiscovery practices.  Recent cases addressing the FRCP’s rules regarding ESI provide both cautionary tales and points of guidance for litigators engaging in eDiscovery.

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        For example, recent cases underscore the importance of discovery plans taking into account the scope, method of productions, and timeframe for eDiscovery.  In Bailey v. Brookdale University Hospital Medical Center, No. CV 16-2195 (ADS) (AKT), (E.D.N.Y. June 16, 2017), a single-plaintiff employment discrimination action, the parties negotiated and executed an ESI agreement after the court had conducted an Initial Conference with the parties in accordance with Fed. R. Civ. P. 26(f).  At the Initial Conference, the court instructed the parties to reach a written agreement regarding the production of ESI, including the use of custodians, search terms and the manner in which the production would take place (e.g., hardcopy or disc format).  Months after the court “so ordered” the parties’ ESI agreement, the plaintiff’s attorney sought to undo various provisions of the ESI agreement, claiming that the costs of ESI discovery would impose a severe financial hardship on Plaintiff.

In assessing this claim, the court noted that the general rule is that the responding party bears all costs of discovery production.  The court also noted that under Fed. R. Civ. P. 34(b)(2)(E), the responding party has the option of either producing ESI in the form requested by the opposing party or in the form in which the documents are kept in the usual course of business.  The court further emphasized that “the scope and parameters of ESI should be a party driven process.”  Looking at the specific parameters of the ESI agreement at issue, however, the court concluded that the agreement (which defendants had drafted) was drawn for use in a corporate setting as opposed to in a single-plaintiff employment discrimination case and that the plaintiff’s attorney did not engage in meaningful discussions with his client about the potential costs of ESI discovery.  In light of these facts, the court ordered that 40% of the plaintiff’s ESI costs be borne by the defendants and that the remaining 60% of costs be borne by the plaintiff’s attorney.  This result demonstrates the importance of parties both being knowledgeable about eDiscovery practices and willing to work diligently and conscientiously with their adversaries to reach workable discovery plans.  When discovery plans fail to provide efficient methods of production of ESI, parties and attorneys may bear significant costs.   As the court notes, “zealous negotiation and compromise” regarding the scope and methods of ESI discovery, early on in the litigation, can help avoid such issues.

        Similarly, Bird v. Wells Fargo Bank, No. 16-1130(DAD-EPG), (E.D. Cal. July 20, 2017), another single-plaintiff employment discrimination case, addresses a party’s failure to conduct eDiscovery in accordance with discovery plans and scheduling orders.  On October 13, 2016, the parties submitted a Joint Rule 26(f) report jointly proposing a deadline for non-expert discovery cut-off of March 6, 2017, and noting that they did “not anticipate this action [would] involve significant electronic discovery issues.”  On March 1, 2016, however, the court held a status conference to address ongoing ESI discovery issues regarding the preservation of the plaintiff’s company email, search terms, the timeframe for ESI discovery, and the costs associated with ESI discovery.  The court provided informal guidance and instructed the parties “to meet and confer” about ESI discovery, but the parties were unable to resolve the issues collaboratively.  The court, therefore, concluded that “discovery . . . has completely broken down” and issued an order outing the scope and time frame for ESI discovery on March 31, 2017.  The court ordered Wells Fargo to: (1) produce eleven sets of documents by June 1; (2) disclose the scope of its search including any search terms, custodians or other limitations within two weeks from the order; and (3) produce a privilege log.

        On April 28, 2017, the plaintiff filed a motion to compel and motion for sanctions, claiming that Wells Fargo was failing to comply with the court’s March 31, 2017, order.  In a joint statement filed May 27, 2017, Wells Fargo noted that it takes 6-8 weeks to pull ESI and additional time to review and redact the emails and it acknowledged that it was in the process of reviewing and redacting emails, but that it would not be able to provide the information by the June 1 deadline.  In fact, Wells Fargo had not produced any ESI between March 31 and June 1.   Wells Fargo finally produced responsive ESI discovery by July 3, 2017.   Focusing on Fed. R. Civ. P. 37(b)(2)(C), the court noted that it “must order the disobedient party, the attorney advising that party, or both to pay the reasonable expenses, including attorney’s fees, caused by the failure, unless the failure was substantially justified or other circumstances make an award of expenses unjust.”  The court concluded that Wells Fargo had repeatedly failed to comply with discovery plans and orders, ostensibly in attempts to delay.  Accordingly, the court ordered Wells Fargo to pay 50% of the reasonable costs and attorney fees associated with the filing of the April 28, 2017 motion to compel and motion for sanctions.

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        These two cases underscore the amended FRCP’s overall approach to ESI discovery.  Parties are expected to both hold an initial conference before the court and to “meet and confer” with the opposing party early on in the litigation to negotiate and plan ESI discovery.  Parties should anticipate the costs and timeframe associated with ESI discovery and should only agree to ESI discovery plans that are both economically and practically feasible.  When there are contested issues regarding ESI discovery, the court will hold additional conferences and provide informal guidance or orders to the parties.  When there are breakdowns in ESI production—due to the parties failure to negotiate an effective discovery plan, follow the discovery plans, or comply with the court’s directive—the court may impose sanctions and employ cost shifting methods.  In these ways, ineffective eDiscovery practices harm litigants (and litigators) by causing delays, limiting useful evidence, and imposing significant expenses.  As such, litigators engaging in eDiscovery should seek the aid of eDiscovery consultants to accurately estimate the costs and burdens of eDiscovery when negotiating discovery plans, ensure compliance with the FRCP, and avoid sanctions.

For information about our eDiscovery and ESI-coordination services, please contact LITeGATION.

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