Colloquium on the Future of Commercial Litigation in New York

Colloquium on the Future
of Commercial Litigation in New York:
Developing a Cost-Efficient Judicial Process
for the Electronic Age

Sponsored by the New York State Judicial Institute

Prepared by Maura R. Grossman
Wachtell, Lipton, Rosen & Katz

E-Discovery Outline & Materials

I. Is the volume and cost of e-discovery driving litigants out of the court system? How can we ensure proportionality and reasonableness in e-discovery?
A. Proportionality in preservation obligations.
B. E-discovery budgets.
(1) What is a reasonable e-discovery budget?
(2) How can we get to a budget when the parties and their counsel do not even know what they are looking for, what data sources or volumes of data there are, etc.?
C. Limits on e-discovery, e.g., the number of custodians or data sources to be collected, searched, reviewed, and/or produced.
(1) What is the role of computer forensics?
(a) When is inspection, seizure, or mirror imaging of a computer necessary or appropriate?
(b) What protections should be implemented to protect confidential and/or privileged material?
(2) The carrot or the stick? Is there an appropriate place for sanctions for e-discovery abuses, e.g., overly broad requests or objections, incomplete responses?
(3) The role of N.Y. Uniform Trial Court Rule Part 130.
D. Document and privilege review.
(1) Costs, costs, and more costs. What is a reasonable search and review process?
(a) Is the use of automated search and retrieval technology reasonable?
(2) The problem of inadvertent waiver of privilege.
(a) The need for a state-law equivalent of FRE 502.
(3) Ensuring the protection of confidential third-party material, e.g., customer, account, or counter-party information.
(a) Where do protective orders and sealed cases fit in the picture?
(b) The realities of protective orders and sealed cases in an electronic court filing system

Cases
• Mancia v. Mayflower Textile Servs. Co., Civ. Action No. 1:08-cv-00273-CCB, 2008 WL 4595275 (D. Md. Oct. 15, 2008) (Grimm, J.).
• L.K. Station Group, LLC v. Quantek Media, LLC, Index No. 601015/08 (N.Y. Sup. Ct., N.Y. County Aug. 8, 2008) (Cahn, J.).
• Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251 (D. Md. May 29, 2008) (Grimm, J.).
Rules
• 22 N.Y.C.R.R. § 130-1.
• Fed. R. Civ. P. 26(g).
• Fed. R. Evid. 502.
Other
• Noleen G. Walder, Bid to Seal Records in State Case Rejected, N.Y.L.J. (Aug. 13, 2008).
• Hon. Paul W. Grimm, et al., Proportionality in the Post-Hoc Analysis of Pre-Litigation Decisions, 37 U. Balt. L. Rev. 381 (Spring 2008).
• The Sedona Conference® Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery (Aug. 2007 Public Comment Version).
• The Sedona Guidelines: Best Practices Addressing Protective Orders, Confidentiality & Public Access in Civil Cases (March 2007).

II. Cost allocation – who should pay for e-discovery?
A. The requesting party should pay.
(1) How has Texas R. Civ. P. 196 (the mandatory cost-shifting rule) been working out?
B. The producing party should pay, with the opportunity for cost-shifting or sharing.
(1) What costs should be shiftable?
(a) Only not reasonably accessible ESI?
(b) What about reasonably accessible ESI that is unduly costly?
(c) What about document or privilege review that is unduly costly?
(d) What about preservation requirements that are unduly costly?
C. How exactly are we to measure or determine costs?
(1) What level of information should the Court reasonably expect to receive from the parties?
D. What about the “hidden” costs – the resources the Court needs to devote to e-discovery, e.g., case management, resolving e-discovery disputes, in camera review of voluminous privileged material, etc.
(1) Should these costs be exported or externalized through Special Masters?
(2) What about the parties that cannot afford them?

Cases
• Delta Financial Corp. v. Morrison, 13 Misc.3d 604 (N.Y. Sup. Ct., Nassau County Aug. 17, 2006) (Warshawsky, J.).
• Weiller v. New York Life Ins. Co., 6 Misc.3d 1038(A) (N.Y. Sup. Ct., N.Y. County Mar. 16, 2005) (Cahn, J.).
• Lipco Elec. Corp. v. ASG Consulting Corp., 4 Misc.3d 1019(A) (N.Y. Sup. Ct., Nassau County Aug. 18, 2004) (Austin, J.).
Rules
• Texas R Civ. P. 196.

III. Can we afford to continue with an adversarial e-discovery model?
A. The argument for cooperation and transparency in e-discovery, and the barriers to attaining that.
B. How do we get there?
(1) The role of early case assessment, early discovery conferences, and scheduling orders.
(a) Proposed Amendment to Uniform Rule 202.12 (essentially extending New York Commercial Division Rule 8 to all N.Y. State Trial Courts).
(b) What should the Court reasonably expect counsel to be able to discuss about their client’s information systems and ESI?
(c) The appointment of e-discovery liaisons or coordinators, see, e.g., Default Standards / Protocol from D. Del.; D. Md.; N.D. Ohio.
(2) Is there a place for early facilitation / mentoring / mediation efforts related to e-discovery?
(3) Education and training issues – how do we prepare the next generation of lawyers?
(4) The carrot or the stick? Can this “sea change” be accomplished without imposing sanctions for e-discovery abuse?
(a) The role of N.Y. Uniform Trial Court Rule Part 130.

Cases
• Mancia v. Mayflower Textile Servs. Co., Civ. Action No. 1:08-cv-00273-CCB, 2008 WL 4595275 (D. Md. Oct. 15, 2008) (Grimm, J.).
Rules
• 22 N.Y.C. R.R. § 130-1.
• 22 N.Y.C. R.R. § 202.70 (Rule 8 of the New York Commercial Division of the Supreme Court).
• United States District Court for the District of Delaware, Default Standards for Discovery of Electronic Documents (“E-Discovery”) (“E-discovery liaison”).
• United States District Court for the District of Maryland, Suggested Protocol for Discovery of Electronically Stored Information (“ESI coordinator”).
• United States District Court for the Northern District of Ohio, Default Standard for Discovery of Electronically Stored Information (“E-discovery coordinator”).
Other
• Outline from Hon. Shira A. Scheindlin, Daniel J. Capra, and The Sedona Conference®, Electronic Discovery and Digital Evidence: Cases and Materials (West American Casebook Series® 2008).
• Kenneth J. Withers, E-Discovery and the Combative Legal Culture: Finding a Way Out of Purgatory, The San Diego Lawyer Magazine (Nov. 2008).
• The Sedona Conference® Cooperation Proclamation (July 2008).
• Proposed Amendment to Uniform Rule 202.12, Electronic Discovery, submitted by Andrea Masley, Chair, Committee on State Courts of Superior Jurisdiction (Dec. 28, 2007).
• Link to Hon. John L. Carroll’s on-line course entitled, Digital Evidence & Electronic Discovery Law, at the Cumberland School of Law of Samford University: http://www.lawcourse.net/ediscovery6/.

IV. Rules, rules, rules – does New York need them and if so, which ones?
A. What are other states doing, and how that has worked for them?
B. Proposed amendments to the CPLR concerning e-discovery.
C. Other approaches, including NCCUSL and the Conference of Chief Justices.
D. Are rules really necessary?
E. If New York decides to have rules, how will the Courts enforce them?

Proposed Rules or Guidelines
• Report of the New York State Bar Association Commercial and Federal Litigation Section Recommending Certain Amendments to the CPLR Concerning Electronic Discovery (2008).
• National Conference of Commissioners on Uniform State Laws, Uniform Rules Relating to the Discovery of Electronically Stored Information (Oct. 2007) (Carroll, J., Reporter).
• Conference of Chief Justices, Guidelines for State Trial Courts Regarding Discovery of Electronically Stored Information (Aug. 2006).
Other
• Thomas Y. Allman, State E-Discovery Rulemaking after the 2006 Federal Amendments: An Update and Evaluation (Nov. 3, 2008).
• Richard L. Marcus, E-Discovery Beyond the Federal Rules, 37 U. Balt. L. Rev. 324 (Spring 2008).
• The Sedona Principles: Best Practices Recommendations & Principles for Addressing Electronic Document Production (Second Edition, June 2007).

V. Cross-border e-discovery issues.
A. What exactly is the problem – just produce the damn information!
(1) Data privacy considerations – does comity exist?
(2) Why don’t I just move my server to Switzerland so I don’t have to deal with this crazy U.S. discovery anymore?