LCJ Takes Action On E-Discovery, Supports Clear, Reasonable Standards
Apr 08, 2011

LCJ took significant action last week to clarify and improve the e-discovery standards to which corporate defendants are held accountable.

LCJ Takes Action On E-Discovery: Supports Clear, Reasonable Standards

 

LCJ took significant action last week to clarify and improve the e-discovery standards to which corporate defendants are held accountable. In both an Amicus Brief submitted to The New York Supreme Court Appellate Division First Department and an official comment to the Civil Rules Advisory Committee, LCJ provided comprehensive analysis of the many flaws in the current rules on preservation as well as detailed description of reasonable measures that should be undertaken to eliminate those flaws.

The court accepted the Amicus Brief and has scheduled an oral argument for April 27, 2011 in New York. All those wishing to attend, please click here for more information. Also, please check the LCJ website for confirmation of the scheduled date, time as well as updates on potential attendance restrictions.

As part of LCJ’s ongoing efforts to reform the rules on preservation, the Amicus Brief, which was submitted in support of the defendant/appellant in the case of Voom v. Echostar, asked the Appellate Division of the New York Supreme Court to overturn a November 2010 New York Supreme Court ruling requiring corporations to preserve all documents and electronically stored data relating to any routine business disputes that could possibly lead to litigation.

This ruling, LCJ argued, set unreasonable and unachievable standards for corporations, especially those corporations that conduct hundreds of such routine negotiations each month. Even those corporations making every possible effort to adhere to these new standards might fail to do so and therein be subject to legal sanctions.

“The Supreme Court’s Order creates a situation where even a party that takes reasonable good faith steps to preserve information will be the target of spoliation sanctions where the party fails to preserve all information,” LCJ said.

The ruling also obscured the definition of circumstances in which the duty to preserve should be triggered, making those circumstances so broad that corporations would be required to preserve data related to each and any given negotiation, a costly process through which much time and money would be wasted.

“Essentially, this new standard triggers the duty to preserve based on a mere “possibility” of litigation, which is far too broad considering the potential cost,” said John J. Jablonski of Goldberg, Segalla LLP, LCJ member and author of the brief.

That same week, LCJ submitted its official comment “Preservation – Moving the Paradigm” to the Civil Rules Advisory Committee, further discussing the widespread  negative impact of current rules on preservation and exploring a number of realistic solutions to the problems created by these rules. Specifically, LCJ suggested that bold action be taken to amend the rules of civil procedure in such a way that would provide appropriate guidance for all those involved in litigation.

“The current paradigm involving preservation and spoliation of electronically stored information (ESI) is undermining the ‘just, speedy and inexpensive’ determination of actions,” LCJ said. “Cases are being settled, discontinued or not brought in the first place because the cost of preservation is too high, the risk of spoliation sanctions is too great, and the impact of ancillary litigation proceedings on discovery disputes is too debilitating.”

The most appropriate course of action, according to LCJ, would be to consider amendments in three key areas: Triggers, Scope and Sanctions. Guidance must be provided to help determine when exactly the duty to preserve exists, which types and sources of information are subject to preservation and when exactly a party should be sanctioned for failing to preserve or produce information. Developing clearer standards that clearly articulate specifics regarding each of these matters is the only way to ensure a fair process for all parties involved in negotiations and litigation.

“Complying with expectations of preservation standards developing around the country is not as easy to honor as flipping a switch, buying more digital storage or distributing a litigation hold notice,” LCJ said. “Thus, meaningful rule amendments would supply the guidance necessary to help solve these increasingly serious and costly preservation problems that our members see in everyday litigation.”

For more information on either the formal comment or the Amicus Brief, please contact Barry Bauman, LCJ Executive Director, at (202) 429-0045 or Bbauman@lfcj.com.