Far too often, attorneys and clients embark on the journey of E-Discovery without a consideration as to how to limit E-Discovery in the first place. Given the revisions to the Federal Rules of Civil Procedure, the State Court Rules which have followed, and the cases dealing with the sanctions for failing to comply, it is not surprising. This article will outline why such an approach could be costing the insurance industry thousands of dollars, if not millions.
Electronic Discovery, often called E-Discovery, is the discovery of electronically stored information. There is no question but that corporations and individuals in almost every claim/case will have some type of potentially relevant material stored on some type of electronic media (such as a computer, cell phone, or voicemail). However, even though there is likely a source of relevant information, should every case result in unlimited E-Discovery or even some E-Discovery? The answer is a resounding NO!
E-Discovery is costly. Using current methodology, to preserve, process, review and produce 1 terabyte (TB) of data, or on the average 7,500,000 pages, it would cost $1,000,000 to $1,500,000. Preservation alone can be expensive. Each hard drive can cost between $300 to $450 to preserve. Each backup tape can cost $350 to $450 to preserve. Before going down this path, the first questions which should be asked are: (1) What must I do to protect the client?; and (2) What methods can I use to limit the cost of E-Discovery while still maintaining a defensible preservation?
First, preservation requirements begin when a client knew or should have known that a potential claim exists. It begins long before counsel hired by an insurance company is ever contacted. Therefore, attorneys should advise their carriers and ongoing clients of this issue to protect them.
Second, if preservation must occur prior to a case being filed (and it must), what can a client do to limit the cost? A client can a) Choose the proper method of preservation, b) Limit the production to potentially relevant sources, c) Determine Key Players and Time Frames of relevance, d) Exclude shared drives (if possible); e) Cull data to preserve only relevant material within any media source by using limited but educated search terms (although this culling process can add to initial preservation methods it may also reduce later review costs and should be considered if review appears to be likely), f) Get several quotations from various qualified vendors to make sure you are getting the best price, and g) Retain qualified counsel to assist you with the preservation to make sure your plan is defensible.
Third, assuming E-Discovery has been ordered or is conducted by agreement, there are further methods to reduce the cost: a) Use Rule 502 to protect privileged material in Federal Cases, b) Offer a quick peek with a claw back provision and/or an “attorneys eyes only” agreement to reduce but not eliminate the level of “review” necessary, and c) use sampling to verify that relevant documents are being found with search terms and/or non-relevant documents are not being un-necessarily procured through the particular methodology chosen.
Reducing E-Discovery costs is a journey that begins with the understanding that, in light of the changes in our Rules, we must attack this issue rather than be subjected to it.
 Federal Rule of Civil Procedure 26 (f)(3)(C) now requires attorneys as early as the meet and confer conference (that is prior to the scheduling conference) to discuss “any issues about disclosure or discovery of electronically stored information, including the form or forms in which it should be produced”. Rule 34 (b)(2)(D) and (E) give specific guidance on how to respond to a request for Electronically Stored Information in Discovery and in what form it should be produced. Rule 37 (e) provides a safe harbor for circumstances in which ESI is lost as a result of the routine, good faith operation of a document retention policy.
 Zubulake v. UBS Warburg LLC (Zubulake V) , 229 F.R.D. 422 430 (S.D.N.Y. July 20, 2004); Micron Technology, Inc. v Rambus, Inc., 255 F.R.D. 135 (D.Del. Jan. 9, 2009).
[23ACORN v.County of Nassau, 2009 WL 605859 (E.D.N.Y. Mar. 9, 2009); Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc., 244 F.R.D. 614, 620 (D.Colo. Mar. 2, 2007).
Jennifer Keadle Mason
Mintzer Sarowitz Zeris