Federal Judge Tries Experimental Method to Resolve e-Discovery Dispute

Judge Haynes faced a frustrating maze of technical disagreements on e-discovery issues when he took over a politically charged class action from another judge. He hoped that if the parties' computer experts could just talk amongst themselves about the complex technical issues, without the "help" of all of the lawyers, they could solve the problems, and reach an agreement. John B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007), and the 187 page Memorandum Opinion ("Memo") filed with it (which can be downloaded here in four parts: pages 1-47; pages 48-94; pages 95-144, and pages 145-187) (not yet published).

At first Judge Haynes' surprise tactic worked beautifully. The lawyers went away quietly, the technical experts remained in the courtroom, and by day's end they had reached an agreement on a number of issues, including a list of fifty keywords to search the defendants' computers. In Judge Haynes' words:

In reliance upon precedents in this district involving complex matters, the Court directed the parties' computer experts to confer, without the presence of their counsel, to develop a protocol and/or memorandum of understanding to address the cited problems with electronic discovery. The "experts only conference" was held without objection by any counsel and yielded positive results that were appreciated by the parties' counsel.

Memo pgs. 39-40. The experts' agreement was made on the record and later converted to a stipulated Order.

Judge Haynes seemed to be onto something here. By simply requiring experts to hash out agreements on technical e-discovery issues by themselves, these disputes could be resolved quickly and relatively inexpensively. Judge Haynes' idea to transcend the adversarial process, at least for purposes of e-discovery, is in line with that of most experts. They all agree that complex e-discovery issues do not lend themselves to effective solution in the adversarial model. Complex technical issues are best solved with a degree of cooperation and transparency previously unheard of in our adversarial system. The Bench and Bar are being pushed in this new, and some would say "radical," peaceful-collaborative direction out of necessity. The traditional "hide the ball" model simply does not work in complex ESI discovery. It frequently costs the parties far more than the case is worth, and can produce huge, time consuming, and sometimes outcome dispositive mistakes.

The judge had the right idea, but clearly the method he employed (ordering the attorneys to leave) was doomed to failure, especially in a very political case like this. Since the parties and their counsel did not initiate the departure, their return with a vengeance was inevitable. Still, kudos to the Judge for trying. Perhaps in another case the "expert only" courtroom dialogue technique might work, especially if it is not imposed upon the parties by the judge.

But in this Tennessee case, after a promising start, the experiment quickly failed. When Defendants later conducted the keyword search, they decided not to follow the agreement/order. Instead, "Defendants unilaterally selected two search terms and insisted upon a date-limited search." Defendants' lawyers later argued that they had no choice but to depart from the agreement of their experts, and use only 2 search terms, instead of 50, because they were rushed for time due to a pending evidentiary hearing on another issue. Later, the defense attorneys added a new argument, that the 50-term search would be too costly, that it would have produced far more ESI than the State could ever afford to review. (Odd their experts never thought of that.)

When the court heard these reports, it scheduled another "experts only" conference for April 11, 2007, "to define the parties' technical disputes and to implement the Court's Orders requiring the production of responsive ESI." Memo pgs. 41-42. At the commencement of this second "no lawyers allowed" conference, two lawyers appeared and objected to their exclusion. These objections were overruled, and the conference proceeded without attorneys, but with a court reporter. The transcript was later filed under seal. The Judge only appeared and participated in the "expert only conference" to announce protocol for the conference and to hear the experts' reports on their progress." Memo pg. 42.

Once again, the "no lawyers allowed" courtroom conference purportedly went very well, and the experts reached a number of new agreements. At the conclusion of this hearing the Judge directed the defendants' lead expert "to prepare a written summary of the experts' agreements and to circulate that document among all experts for comment and to file that report with the Court."

After the conference, the lawyers got involved again, and, as the Court puts it, "disputes resurfaced." The Plaintiffs then renewed their earlier motion to compel. The Court gave up on the "experts only" approach, and instead scheduled a full evidentiary hearing, a mini-trial on e-discovery issues with everyone invited, experts and lawyers alike.

Before I go into e-discovery findings and holdings that came out of this trial, a little background into the case itself is needed. This is a class action to require the State of Tennessee, and the health care providers under contract with the State, to provide the children of Tennessee with the minimum health care required by federal law. The case started in 1998, at which time Tennessee and other Defendants almost immediately consented to a judgment. Six years later, the Judge assigned to the case, Judge Nixon, held that the State Defendants had consistently violated the terms of the Consent Decree, and disobeyed a series of his orders. Judge Nixon was clearly upset with Tennessee's willful non-compliance and hard ball discovery tactics. The situation deteriorated to such an extent that in late 2005, Judge Nixon felt he had to recuse himself from the case.

In February 2006, the new judge assigned to the case, Judge Haynes, scheduled his first hearing to discuss the case status. At that conference, one of the Defendants many attorneys "announced that the Defendants had achieved compliance with the Consent Decree." Memo pg. 34. This announcement thereafter triggered a new round of discovery from the Plaintiffs seeking evidence of the claimed compliance, including extensive ESI production. This led to a series of motions and arguments on e-discovery that prompted Judge Haynes to try his "expert only" conference tactic.

As discussed, these "no lawyers allowed" conferences succeeded at first, but ultimately failed when the lawyers took over again. Most of the 187 page October 10, 2007, Memorandum consists of a very complete listing of the parties' evidence, and the court's findings and holdings. The two page Order accompanying the Memorandum provides instructions on what the parties are to do thereafter. John B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007).

The Memorandum begins by agreeing with the Plaintiffs that the 1998 Consent Decree required production of the State's "electronic data files" as needed to verify compliance. In spite of this, the Defendants never sent out a legal hold notice until 2004. Even then, there was no followup to the notice, no attempts were made to implement the hold, or to verify compliance. In the words of the Court:

. . . the proof is that Defendants left their employees to decide on their own what to retain without evidence of any written instruction or guidance from counsel on what is significant or material information in this complex action.

Memo pg. 126. The State could not even show who it sent the notice to, much less verify that there was adequate compliance.

Some of the key custodians testified that they were not sure they ever received a notice, and never made any special efforts to preserve the relevant ESI on their computers, or in their departments. There was also evidence of computers wiped after employees left and other evidence that computer files were destroyed. Moreover, the State's standard six month ESI retention policy was not suspended. This resulted in an automatic deletion of ESI on almost a daily basis.

Fifty of the key custodians produced no emails at all, including the Governor and several of the named defendants in the case. Further, a privilege review had never been conducted for most of the ESI that was collected. The Defendants said that such a privilege review was too burdensome, and of course, they would not produce ESI without first reviewing for privilege. So virtually no ESI production was ever made, just reams of paper documents, including printouts of email.

The paper production was obviously incomplete, and deprived the plaintiffs of all metadata. The Plaintiffs wanted native files with metadata intact. Defendants argued that they had to produce in paper so that they could Bates stamp everything to ensure authenticity, and that you cannot Bates stamp a native file. The Judge saw through that, and pointed out that "'Hash coding' can be attached to metadata to ensure its integrity." Memo pg. 137. See my law review article, HASH: The New Bates Stamp, 12 Journal of Technology Law & Policy 1 (June 2007), for much more on that topic.

This Memorandum Opinion is very long. So you could go on and on describing the nearly never ending parade of horribles, including exaggerated estimates by Defendants' experts of the costs of compliance, but you get the point. The Memo also includes 83 pages of legal conclusions, discussing a wide variety of e-discovery legal issues, including the new rules, and relying heavily on Zubulake. Memo pgs. 102-185. (So much for the "heartlands are unlikely to follow Manhattan" argument.)

The Court's handling of Defendants' undue burden argument is interesting. Memo pgs. 139-142. The Court found that Defendants' "unduly exaggerated" the projected costs of their ESI collection and privilege reviews. Further, the Court was convinced that Defendants could reduce their projected costs by the use of keyword searches for privilege review and by sampling. Nevertheless, the Court accepted Defendants' numbers for purposes of the undue burden analysis. Defendants argued that the 50 key word search performed on 50 key custodians would produce 493 gigabytes of ESI, equivalent to 15 million pages of documents. They claimed it would cost them $10 million to collect and review these documents.

The Court did not find these costs unreasonable in view of the number of plaintiffs in the class. Since the class size was more than 550,000 children, "the unit cost for this ESI discovery is approximately 25 pages per class member at a cost of $16.66 per Plaintiff class member." The Court acknowledged that this analysis might not be reasonable in a typical discovery situation, but pointed out that this motion to compel discovery was made in the context of enforcement of a judgment, and there had already been "repeated judicial findings of the Defendants' violations of childrens' rights." Memo. pg. 141.

Even assuming the ESI discovery imposed an undue burden on Defendants, the Court said it would still compel discovery in view of the total equities of the case, that Plaintiffs had established good cause under Rule 26(b)(2)(C)(i)(ii) and (iii). Memo pg. 143, 148-152. In short, the benefits that are likely to accrue to the 550,00 children from the discovery far outweigh the monetary burden to the State, especially since the court has already determined that the rights of these children to medical care under federal law has been violated by the State. The "think of the children" argument is indeed very powerful and colors this whole opinion.

The Defendants also argued that the Plaintiffs should pay for at least part of the discovery expenses. The Judge found this argument "outrageous," pointing out that the class was composed of "550,000 children whose economic resources are non-existent." Memo pg. 150. All of the factors in the rule, and in Zubulake I,were addressed and all were found to favor the ESI production demanded by Plaintiffs. Memo 148-152.

The Court also addresses many types of privilege issues: attorney client, work product, joint defense, deliberative process, and state statutory privileges. Memo pgs. 53-176. The defense arguments were all rejected.

The Court concluded by reserving ruling on the issue of sanctions until completion of the ESI discovery ordered.

As mentioned, a two page Order was issued at the same time as the Memorandum Opinion. John B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007). Here the Court grants Plaintiffs' renewed motion to compel and ordered a series of specific actions in connection with the mandated ESI production, including the following:

It is ORDERED that the Defendants shall provide complete responses to the Plaintiffs' discovery requests for ESI with the agreed search terms, the designated key custodians and for the time period of June 1, 2004 to the present within one hundred (100) days from the date of entry of this Order. The ESI required under this Order and responsive to Plaintiffs' discovery requests shall include all metadata as well as all deleted information on any computer of any of the Defendants' designated key custodians.

I for one am very skeptical that Defendants will meet this 100 day deadline, and expect another round of delays, and possibly appeals, probably resulting in some kind of settlement. The next paragraph of the order gets very specific in its dictates, and raises my favorite subject.

Given the need for hash coding of the ESI, Brent Antony's limited formal computer training and the Defendants' position about possible alteration of ESI, the Plaintiff's expert, Thomas Tigh or his designee shall be present for the Defendants' ESI production and shall provide such other services to the Defendants as are necessary to produce the metadata, as ordered by the Court. Mr. Tigh or his designee shall inspect the Defendants' computer system to assess whether any changes have been made to hinder the ESI production required by the Consent Decree or previously Order by the Court.

This reference to hash is puzzling. Hash coding is a standard procedure for all competent e-discovery vendors and this process should be well known to any computer expert, regardless of their level of formal training. I am not sure, but the comment appears to be a dig at one of the defense experts. The Court goes on in the next paragraph to say:

Given the intensity and sensitivity of these discovery disputes, the Court is considering the appointment of a monitor who has the Court's confidence and is likely to be acceptable to all parties to serve as monitor to oversee the Defendants' and MCCs' ESI production.

The appointment of a "monitor" or a special master in contested e-discovery cases appears to be a coming trend, especially when the technical issues are complicated, and counsel and the court's IT proficiency is limited. I expect to see more appointments like this in the future, at least until such time as counsel are able to transition from the adversarial model for e-discovery issues. In my experience, outside of Sedona, that is not likely to happen any time soon, so the role for special e-discovery masters is likely to grow quickly and last a long time.

POSTSCRIPT: The Court in fact later appointed a monitor, former United States Magistrate Judge Ronald J. Hedges from New Jersey. He was assigned the difficult task of overseeing the State of Tennessee's court-ordered ESI production. He is one of the best possible people to be assigned this task, and it will be interesting to see how he does.

So far there has not been much for the monitor to do aside from read briefs. In later motions the Court clarified that the Plaintiff's expert, along with the monitor, could inspect the ESI storage devices of the fifty key custodians, and enter the state's premises to do so. The Plaintiff's expert was also allowed to make full forensic copies of the computers involved, including the Governor's computers. The U.S. Marshall was ordered to accompany the inspection so that these orders could be peacefully effectuated.

Not too surprisingly, the State then filed emergency appeals to the Sixth Circuit to try and prevent these inspections, including a petition for a writ of mandamus. On November 26, 2007, the Appeals Court stayed the District Court's Order pending further briefing and ruling by the Sixth Circuit.

So far at least, the attempt in this case to force a truce by ordering the attorneys away, has done nothing but add fuel to the fire. It will be very interesting to see what the Sixth Circuit now has to say about all of this.

Ever wonder what most lawyers have in common with each other? They all love to argue! Now I can just hear the lawyers reading this thinking to themselves: "No we don't!" To which I happily reply, "Yes, we do!" The video by John Cleese below is offered as a refresher course to all those lawyers whose argumentative skills may be diminishing since law school.

Now for something completely different, look at the You Tube video below of John Lennon's Give Peace a Chance.