Authority without accountability is dangerous. Accountability without authority is agonizing. Such agony is manifest in two ediscovery sanction awards making the rounds recently. Peerless has commentators warning us not to pass to the buck to our ediscovery vendor. While Branhaven has raised questions of how much outside counsel can rely on their client when certifying discovery responses (in addition to reaching questionable conclusions re PDF vs. TIFF productions).
The commentary on both cases has been excellent. Much it has focused, understandably, on the division of responsibility – who is accountable for what. Outside counsel, it seems, can trust only themselves – not the vendor (Peerless
); not their own client (Branhaven
). Nor, of course, can anyone rely on custodians to comply with hold instructions
(as we learned in Samsung
), let alone self-collect
In holding the parties accountable both rulings suggest some implicit assumptions about authority that are worth exploring. Specifically, Branhaven assumes that outside counsel will, if she chooses, have visibility into a client’s efforts to assemble documents; while Peerless assumes that a domestic party can supervise document collection efforts at a foreign affiliate.
In Branhaven, outside counsel appears to have little idea as to what his client, Branhaven, was actually doing. Counsel forwarded requests for production to Branhaven. Counsel then certified written responses to requests representing that responsive documents would be produced. Counsel based his certification on his “understanding” that Branhaven was assembling the responsive documents. But, as the District Court in Maryland found and sanctioned, Branhaven’s effort in identifying and assembling responsive documents was lacking. In what appears to be a first, the court also sanctioned outside counsel for failure to make a “reasonable inquiry” into his client’s process and progress—or lack thereof, as it turned out.
I don’t know enough about the specific facts underlying Branhaven to pass judgment on counsel’s behavior. But I do feel a general sympathy for outside counsel whose queries are met with “we’re handling it”—whatever “it” happens to be. Further inquiry may be required as a matter of professional necessity. But pressing in-house counsel for additional information is risky from the perspective of positional power and relationship maintenance.
Many in-house counsel are under enormous pressure to keep costs down and are therefore inclined to do as much work themselves as they can manage. Discussions with outside counsel about that work are just another cost to be avoided. Further, many in-house counsel are offended at the thought of outside counsel questioning their work, judgment, process, etc. because….well, because being the boss can go to one’s head (sorry if I am shocking anyone’s delicate sensibilities here). Finally, regardless of the motivation, what can outside counsel really do if in-house counsel is not inclined to share? There are options, few of them good – e.g., quit, send CYA memos.
A similar dynamic exists between affiliated entities. In Peerless, the vendor on whom too much reliance was placed was responsible for collecting documents from defendant’s non-party, Chinese affiliate. The Northern District of Illinois sanctioned the defendant, Crimson for having an insufficient basis to support its assertion that all responsive documents in the possession of its non-party, Chinese affiliate, Sycamore, had been produced.
The Peerless court had previously ruled that defendant Crimson was able to obtain documents from Sycamore and must therefore do so. Crimson subsequently produced documents provided by Sycamore via a vendor. In conjunction with the production, Crimson represented that all responsive documents had been turned over. The court, however, was unimpressed with Crimson’s “hands-off approach” to managing discovery at Sycamore. Rather than passive recipients of their foreign affiliate’s documents, the court found that Sycamore had a duty to directly “contact individuals at Sycamore and play a role in obtaining discovery.”
Again, I don’t pretend to know the particulars of Peerless. But I possess considerable sympathy for a domestic entity that is responsible for collecting documents from a foreign affiliate. Affiliates do not always play nice with each other. A request for assistance can run into (a) company politics, sibling rivalries, internecine conflicts, etc., (b) a genuine sense of we work at different companies, don’t tell me what to do, (c) busy people who have no time or incentive to worry about your problem, (d) a colorable conclusion that this ediscovery stuff is a bit daft; or (e) all of the above.
The challenges are only more daunting when the affiliate is in a different country where geographic distance, language barriers, cultural differences, and variations in IT infrastructure are only the most obvious obstacles. These dynamics can become particularly untenable when the requesting entity is a small subsidiary of a large, foreign parent from whom the documents are needed. What is a domestic, in-house attorney supposed to do when a VIP at the mothership proves unresponsive to pleas for assistance? There are options; few of them good – e.g., CYA memos; try to go above the VIP.
I am not suggesting that either case was wrongly decided. Courts also face authority constraints. Their power is often limited to those who appear before them – i.e., lawyers and the parties they represent. It is unsurprising who was held accountable in Branhaven and Peerless. But it is still unsettling. Those of us who remain unconvinced of our own omnipotence can easily imagine ourselves in either position regardless of our experience, effort, acuity, etc.