MANAGING E-DISCOVERY WITH ADR
Michael P. Carbone*
Lawyers and their clients have long bemoaned excessive discovery costs. As e-discovery has driven costs to new heights complaints have reached a crescendo and serious proposals for reform have emerged.
In 2009 the American College of Trial Lawyers and the Institute for the Advancement of the American Legal System released a report ("ACTL Report") that called for reform. They stated that "Discovery is not the purpose of litigation. It is merely a means to an end. If discovery does not promote the just, speedy, and inexpensive determination of actions, then it is not fulfilling its purpose."
This paper discusses improvements in managing the discovery problems associated with electronically stored information (“ESI”). It focuses on the proper use of e-discovery liaisons, special masters and mediators to control costs and to accomplish the true purpose of discovery.
The Sedona Conference and the Seventh Circuit Program
The Sedona Conference has taken the lead in developing proposals for e-discovery reform. Their proposals are contained in The Sedona Principles, which make a number of excellent recommendations. Anyone who is interested in best practices for e-discovery should read The Sedona Principles. Due to their length they cannot be discussed in their entirety in this paper.
The Seventh Circuit Electronic Discovery Committee, which is comprised of judges, lawyers and vendors of electronic data systems, has created the Seventh Circuit Electronic Discovery Pilot Program that is based upon The Sedona Principles.
The Seventh Circuit Program, which is embodied in a form of standing order, requires:
· That counsel cooperate in facilitating and reasonably limiting e-discovery requests and responses
· That requests for production of ESI and related responses shall be reasonably targeted, clear, and as specific as possible
· That prior to the initial status conference with the court, counsel shall meet and confer in order to identify relevant and discoverable ESI, the scope of discoverable ESI to be preserved by the parties, the formats for preservation and production of ESI, the potential for conducting discovery in phases, and procedures for handling inadvertent production of privileged ESI
· That attorneys be knowledgeable about how their clients' ESI is stored and retrieved
· That in most cases the parties should appoint an e-discovery liaison to participate in meet and confer sessions and to be responsible for e-discovery dispute resolution
· That vague and overly broad preservation orders should not be sought or entered and that preservation requests and responses should transmit specific and useful information
· That all parties and their counsel should take reasonable and proportionate steps to preserve relevant and discoverable ESI within their possession, custody, or control.
The Seventh Circuit Program initially ran from October 1, 2009 through May 1, 2010 and has been extended until May 1, 2012. It was found by a survey of participating lawyers and judges to be successful, and should become a model for other federal circuits and for state courts as well. Almost all of the lawyers whose cases were included in the Program approved of its two most important aspects: the principle of proportionality and the use of an e-discovery liaison for the resolution of disputes.
California has moved in the same direction with the enactment of the California E-Discovery Act, which also includes the principle of proportionality. The California Rules of Court now require parties to meet and confer regarding e-discovery matters prior to the initial case management conference.
The principle of proportionality, which requires a cost-benefit analysis, has been generally accepted as fundamental. The ACTL Report stated that "Electronic discovery should be limited by proportionality, taking into account the nature and scope of the case, relevance, importance to the court's adjudication, expense and burdens.”
Similarly the Sedona Principles state that: "Proportionality requires consideration of the technological feasibility and realistic costs of preserving, retrieving, reviewing, and producing electronically stored information, as well as the nature of the litigation and the amount in controversy."
Proportionality is one of the bases upon which a court must limit discovery. Federal Rule of Civil Procedure 26(b)(2)(C) and California Code of Civil Procedure Section 1985.8(h) require the court to limit the frequency or extent of discovery that would otherwise be allowed if it determines that ”…the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.”
If proportionality is to be achieved counsel must formulate their discovery demands and responses correctly. Thus, Principle 1.03 of the Seventh Circuit Program states in part that: " To further the application of the proportionality standard… requests for production of ESI and related responses should be reasonably targeted, clear, and as specific as possible."
The E-discovery Liaison
One of the tenets of the Seventh Circuit Program is that in most cases the meet and confer process will be aided by the use of e-discovery liaisons. In order to resolve any disputes that may arise concerning the preservation or production of ESI, each party must designate a representative for the purpose of meeting, conferring, and attending court hearings.
The liaison may be an attorney, a consultant, or an employee. However, the liaison must: (a) be prepared to participate in e-discovery dispute resolution; (b) be knowledgeable about the party’s e-discovery efforts; (c) be, or have reasonable access to those who are, familiar with the party’s electronic systems and capabilities in order to explain those systems and answer relevant questions; and (d) be, or have reasonable access to those who are, knowledgeable about the technical aspects of e-discovery, including electronic document storage, organization, and format issues, and relevant information retrieval technology including search methodology.
The Federal Circuit Model Order
In addition to the standing order that is being used in the Seventh Circuit, the Advisory Council of the United States Court of Appeals for the Federal Circuit has released its “Model Order Regarding E-Discovery in Patent Cases. Stating that “Patent cases, in particular, tend to suffer from disproportionally high discovery expenses,” the E-Discovery Committee of the Advisory Council explained that the Model Order was intended to be a “a helpful starting point for district courts to use in requiring the responsible, targeted use of e-discovery in patent cases...and to encourage discussion and public commentary by judges, litigants, and other interested parties regarding e-discovery problems and potential solutions.” 
The goal of the Model Order is to streamline e-discovery, particularly email production. It begins with a process whereby the parties exchange core documentation concerning the patent, the accused product, the prior art, and the relevant finances before making email production requests. Requests must identify the custodian, search terms, and time frame. The Model Order limits the number of record custodians and the number of search terms for email production requests to five each, unless the parties agree to modify those limits or unless the court orders otherwise upon showing of a distinct need based on the size, complexity, and issues in the case. If a party chooses to exceed the limits agreed to by the parties or ordered by the court, then that party will bear all reasonable costs caused by such additional discovery.
Email production requests can be propounded only for specific issues, rather than general discovery of a product or business, and search terms must be narrowly tailored to those issues. Requests that fail to comply with these limitations are likewise grounds for cost-shifting.
Metadata is not to be requested absent a showing of good cause, provided however that fields showing the date and time that a document was sent and received, as well as the complete distribution list, shall generally be included in the production.
The Model Order also addresses concerns regarding waiver of attorney-client privilege and work product protection in order to minimize the need for human pre-production review. It states that the inadvertent production of ESI that is privileged or protected is not a waiver and that the mere production of ESI in litigation as part of a mass production shall not itself constitute a waiver for any purpose.
Although it is limited to patent litigation, the Federal Circuit’s approach may be a useful starting point for other forms of complex litigation as well.
The Use of Neutrals
In a perfect world parties would resolve all of their discovery issues on their own. In a perfect e-discovery world parties would negotiate an e-discovery plan and then implement it with no difficulty. In the real world many discovery matters require the intervention of an ADR neutral. Even traditional discovery is notorious for generating pitched battles and high costs, which may include judicial sanctions in some cases.
E-discovery disputes can arise from a variety of circumstances such as overbroad requests, format of production issues, or claims that the data requested is not reasonably accessible. Courts have a strong preference for the resolution of these disputes by the parties without judicial intervention. Therefore, counsel should understand the different roles that neutrals can play, and the use of a neutral expert, special master or mediator should be considered in many cases.
A. Special Masters
Federal courts can appoint special masters under Federal Rule 53. In California, state court judges can appoint discovery referees but only if there are “exceptional circumstances” in “…the particular case.”  This limitation on the power of the court reflects concern for the expense to be borne by the parties.
Special masters are subordinate judicial officers who can be given many different tasks. Typically they will conduct investigations or inspections, hold hearings, make findings of fact, and submit reports and recommendations to the court. They can be appointed to oversee performance under complex decrees, particularly where the party who is required to perform has been resistant. Some of the tasks that a special master can perform are:
- Hear motions;
- Monitor compliance with a discovery plan;
- Be "on call" when issues arise;
- Adjudicate legal and technical disputes;
- Determine whether ESI is reasonably accessible and the appropriate format for its production;
- Identify specific files, search terms, names of individuals, and other means of searching for ESI;
- Decide upon protocols and formatting;
- Control the cost of privilege and relevance review by defining the scope of information to be produced;
- Conduct privilege reviews and make adjudications;
- Perform sampling of data
In "Special Masters and E-discovery: The Intersection of Two Recent Revisions to the Federal Rules of Civil Procedure," 30:2 Cardozo Law Review 347 (2008) the authors discuss specific cases in which federal courts have either appointed or declined to appoint special masters. In addition to the situations described above, special masters have been appointed in cases where technical expertise was required or a neutral expert was needed in order to inspect a party’s ESI systems. Courts have declined to make appointments in cases where the parties’ experts were able to perform the necessary tasks in a cooperative fashion.
In 2010 the United States District Court for the Western District of Pennsylvania created an Electronic Discovery Special Master (“EDSM”) program. The Court maintains a list of qualified attorneys to serve as EDSMs in appropriate cases. The criteria for being an EDSM includes active bar admission; demonstrated litigation experience, particularly with electronic discovery; demonstrated training and experience with computers and technology; and mediation training and experience.
In the event that the Court determines that the appointment of an EDSM is appropriate in a particular case an EDSM will be chosen from the list. The Court will then set forth the scope of the EDSM’s appointed duties, which may include, by way of example, developing protocols for the preservation, retrieval or search of potentially relevant ESI; developing protective orders to address concerns regarding the protection of privileged or confidential information; monitoring discovery compliance; or resolving discovery disputes. Any findings of fact or conclusions of law reached by the EDSM will be presented to the Court as a report and recommendation, to which the parties will have the opportunity to object prior to a de novo review by the Court.
The resolution of e-discovery disputes involves the making of judgments that are based on concepts of proportionality, relevance, reasonableness, undue burden, and accessibility of information. It requires the parties to address complicated matters, which include the scope of preservation of records, search parameters, and format of production of ESI. These tasks are best performed through a process of negotiation. As one court has stated, “[i]identifying relevant records and working out technical methods for their production is a cooperative undertaking, not part of the adversarial give and take.”
The use of mediation for the resolution of e-discovery disputes is a new development, which has been referred to as “e-mediation” or “ESI mediation.” It offers parties who need a neutral intervention the opportunity to create an agreed e-discovery plan and to have their disputes resolved without judicial or quasi-judicial involvement. Costs can be controlled, confidentiality can be maintained, and adverse results such as sanctions can be avoided.
The use of a mediator can be effective in the conduct of the early meet and confer. The parties can begin the meet and confer on their own and then call on the mediator to help with any unresolved issues. In the alternative, they can involve the mediator at the outset. In either case, the issues to be placed on the agenda should include:
· The parties’ information systems and capabilities
· What is not reasonably accessible and how it will be treated
· The scope of ESI to be reviewed and to be preserved
· Identification of relevant and discoverable ESI
· Search parameters and methods of review
· ESI to be produced and not to be produced
· Formats for preservation and production
· Time and manner of production
· The potential for conducting e-discovery in phases
· Procedures for handling inadvertent production of privileged ESI
· Any need for protective orders
· Compliance and enforcement
In any mediation, success depends upon the participation of all the persons whose input or consent will be necessary in order to reach an agreement. In an e-discovery mediation the participants should include the e-discovery liaisons, the party decision-makers, in-house and retained counsel, IT personnel and any technical consultants who are being used. Failure to include a necessary person may result in an unsuccessful mediation due to lack of information or authority.
An e-discovery mediation is likely to be expert-driven. The experts may be the liaisons themselves, the IT personnel, or the technical consultants. The mediator will need to identify the participants on each side who have both the knowledge of the parties’ ESI systems and the skills that are necessary in order to reach an agreement. The mediator must then see that these participants have the opportunity to communicate directly with their counterparts on the other side and that they do so in a way that is constructive. The result of the mediation should be a discovery plan that is signed by the parties and that is enforceable in court under local law.
In California as in other jurisdictions, a special master must report to the court on the results of his or her work, but a mediator may not do so. Confidentiality, which encourages the parties to be candid with each other, forbids the mediator from testifying or from making any report to the court about communications that took place during the mediation. This aspect of mediation must be kept in mind when parties are deciding whether to hire a mediator or a special master.
Disputes can arise in the course of implementing the agreed discovery plan. Any such disputes should initially be referred to the experts or e-discovery liaisons for resolution by mutual agreement. Should they be unable to settle any particular dispute then the agreement should provide that they either return to the mediator or that they engage a qualified third party to act as an umpire.
A collateral benefit of e-discovery mediation may be an improvement in the prospects for early settlement of the litigation. Discovery battles can often lead to an acrimonious climate that is not conducive to settlement. Early and cost-effective resolution of discovery issues may well have the opposite effect. The realization that it is possible to reach agreement on e-discovery should give the parties reason to believe that further progress can be made. Having the information that has become available through discovery, the parties may choose to continue working with the mediator to see if the litigation can be settled.
Not every e-discovery matter will require the employment of a neutral. Parties should first consider the nature of any disputes and whether they can be resolved by the parties' experts or e-discovery liaisons.
If a neutral intervention is required, the parties will need to choose between a special master or a mediator. Thought must also be given to the qualifications that will be required, such as technical expertise, judicial or quasi-judicial experience, and facilitative skills. The use of a mediator may be preferable in many cases because of the confidentiality of the process as well as lower costs.
A qualified and carefully chosen neutral can add value in an e-discovery matter by avoiding judicial intervention. Counsel will thereby earn the respect of both the court and the client.
© 2014 All rights reserved.
*The author is a dispute resolution specialist based in Point Richmond, California. His website is located at www.mpcdisputeresolution.com
 According to a 2009 report from the American Bar Association Section on Litigation ("ABA Survey") 51% of lawyers surveyed believed that discovery was commonly abused, and 66% believed that e-discovery was being abused. 82% of the lawyers surveyed agreed that it was too expensive. In Bell Atlantic Corporation v. Twombly, 550 U.S. 544, 559 (2007) the United States Supreme Court stated that "the threat of discovery expense will push cost-conscious defendants to settle even anemic cases ...."
 Final Report on the Joint Project of the American College of Trial Lawyers Task Force on Discovery and the Institute for the Advancement of the American Legal System http://www.actl.com/AM/Template.cfm?Section=Home&template=/CM/ContentDisplay.cfm&ContentID=4008
 Id. at p. 7
 The California Electronic Discovery Act amended various sections of the Civil Discovery Act and added Sections 1985.5 and 2031.285 to the Code of Civil Procedure.
 Cal. Rule of Court 3.724, par. 8
 Note 2, supra at p. 14.
 Note 5, supra, Principle No. 2.
 Other grounds are that the discovery sought is unreasonably cumulative or duplicative; that it can be obtained from some other source that is more convenient, less burdensome, or less expensive; or that the party seeking discovery has had ample opportunity to obtain the information by discovery in the action.
 Note 7, supra, Principle 2.02
And see the proposed Standing Order Relating to the Discovery of Electronically Stored Information at http://www.7thcircuitbar.org/associations/1507/files/StandingOrde8_10.pdf.
 http://www.ediscoverylaw.com/uploads/file/ediscovery-model-order.pdf. The Court has nationwide jurisdiction in a variety of subject areas, including international trade, government contracts, patents, trademarks, certain money claims against the United States government, federal personnel, veterans' benefits, and public safety officers' benefits claims. Intellectual property cases currently comprise 31% of its caseload.
 (id. at pp. 1-2)
 See Code of Civil Procedure Section 639(5). The term "special master" rather than referee is sometimes used in California practice even though it is not found in Section 639. In this paper the term “special master” is used to include a referee.
 Scheindlin, S. “We Need Help:The Increasing Use of Special Masters in Federal Court,” 58 DePaul Law Review 479 (Winter 2009)
 In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650, 660 (M.D. Fla. 2007)
 See Skinner, A. “The Role of Mediation for ESI Disputes” The E-Discovery Connection Newsletter (May 2009)
 Cal. Evid. Code Sec. 1121
 Cal. Evid. Code Sec. 703.5
 Note 18, supra.
 It may be possible for one neutral to act as both a special master and a mediator, but proceedings before a special master will not usually be confidential. Therefore if confidentiality is required the neutral must make it clear when he or she is acting in one capacity or the other.