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Asked & Answered: Ex-Magistrate Judge Hedges on E-Discovery and more

Welcome to True North. Thanks for taking the time out of your busy schedule to answer some questions about the current state of e-discovery in litigation and investigations from your unique perspective as a former US Magistrate Judge and your ongoing involvement in matters related to ESI.

ronald hedges on e-discovery

In 2007, you co-authored “Managing Discovery of Electronic Information: A Pocket Guide for Judges.” How has the bench evolved its thinking when it comes to ESI in litigation and how does the future look?

Well, to begin, there’s a revised edition of the Pocket Guide that was published last year. Nothing monumental added, but I hope the reader (judicial or nonjudicial) will find it useful. Last year also saw the publication of The Sedona Conference ® Resources for the Judiciary, which I coauthored and is intended to be a “guide” of sorts that judges, State or federal, may refer to throughout the stages of civil litigation.

I think it fair to say the “active case management” offers the best means for judges to address ESI in the management and trial of litigation. I think it also fair to state that active case management is regularly practiced in the federal courts but that, for reasons of history and volume, it becomes harder to do in some State judicial systems. By the way, active case management may be simply described as greater judicial involvement in the “flow” of a given civil action from the beginning to the end.

Is there a trend toward more active case management? I don’t see such a trend in the federal courts. It’s already there. On the other hand—and as ESI becomes more common in State court civil litigation—I expect there will be such a trend, at least before judges who will have to manage increasing volumes of ESI.

The next edition of the Pocket Guide will, I hope, have an expansive discussion of social media. Just about everyone uses social media and there can be treasure troves of relevant information on social media sites. Social media raises a lot of questions: How does one do discovery consistent with the Stored Communications Act? What about privacy rights? Social media-related discovery will grow and courts are only beginning to fashion standards for that discovery.

(PS—I will leave out of the discussion the rapid growth of ESI related to criminal investigations and prosecutions. Not surprisingly, we are seeing a lot of case law. I wish there were significant resources available to educate all the actors in the criminal justice system, State and federal—on ESI-related issues.)

In an interview back in 2011, you said the big problem in discovery is that people don’t talk enough, and also that transparency is essential. Now that technology-assisted review is more prevalent, are you seeing any changes in communication and transparency as litigants begin to accept the role of technology in review?

I still hold those views, but the, shall we say, “rise” of computer-assisted-review or predictive coding or technology-assisted-review (pick your title) has helped me think more about “talking,” a/k/a “cooperation” and transparency.

The Federal Rules already mandate at least some level of cooperation and counsel must participate in 26(f) “meet-and-confers” and submit discovery plans. Counsel are also required to confer before seeking protective orders or sanction. Quite simply, those are mechanisms that require cooperation and some degree of transparency.

Perhaps cooperation and transparency should go to another level when some type of automated review comes into play. But, bear in mind that there is a tension between disclosure of “your” search terms to your adversary: After all, our paradigm of discovery is that one party serves discovery requests on another party, and the latter reviews its documents and/or ESI and chooses what to produce in response to the requests. Does it make sense, when using automated review, to agree on search terms in the expectation that, down the “line” of a given civil action, this would reduce discovery disputes?

Let’s talk about computer-assisted review. I would hope that, given the associated costs in reviewing (really) large volumes of ESI, counsel could agree among themselves to a protocol by which a vendor (or vendors) would be selected, experts chosen, and so-called “seed sets” chosen and that counsel could also review how the computer is “progressing” in being taught what to search for. We’re seen this in the comprehensive order in Actos.

The risk with any automated review is that counsel will not agree. Imagine a situation where the parties want to use automated review but cannot agree on how to do it. Or imagine a situation where one party has used automated review and, for one reason or another, the results are challenged. Now, factor in the likelihood that either of these situations will proceed to a hearing in a federal court and that Daubert applies (and there is a good argument that Federal Rule of Evidence 702 is applicable). What would that hearing entail? What would it cost in term of delay and burden? There’s a lot to think about.

A few other thoughts:

 (1)   Assuming counsel agree to some type of automated review and that is a seed set, where does work product protection fit in? Is the choice of an initial seed set to be made jointly or by one party? If the latter, should disclosure be prohibited as being inconsistent with work product protection? I don’t have any easy answers. However, one solution might be the entry of a nonwaiver order under Federal Rule of Evidence 502 which, I regret to note, appears to be disappearing from the minds of attorneys.

 (2)   I’m beginning to wonder where to draw a line (if there is one), between so-called “tactical” decisions—which attorneys make daily—and decisions which should go to the client for informed consent. On what side of the line does cooperation, transparency and, fundamentally, the decision to use automated review, fall?                                               

In the USA legal system, each side pays its own costs to litigate, including the costs of discovery.  In view of the high volumes and cumulative nature of ESI, do you foresee a change in the approach in this country?

To me, the simple answer is “no.” The Federal Rules provide for cost-shifting or cost-sharing. Either can be done with regard to the production of “not reasonably accessible” ESI under Rule 26(b)(2)(B).  Rule 26(b)(2)(C) may also allow cost-shifting or cost-sharing. And, at the end of a given civil litigation, costs may be awarded to the prevailing party, although we now have a split between circuits as to what ESI-related costs may be awarded.

There are mechanisms in place. What is often left out of the discussion, at least for me, is the use of Rule 26(b)(2)(C) to limit discovery under certain circumstances. Perhaps parties and judges should put more focus on limitations rather than cost awards.

We know from TREC that how well a review is done varies widely based on the tools, and the processes and expertise of the people who use them.  The topic of accuracy and measurement protocols was indeed raised in Da Silva Moore. At what point, if at all, will the courts hold counsel accountable for the accuracy of their document productions, no matter how they are done?

To begin, let me incorporate here my answer to Question Number 2. Building on what I wrote there, I believe that judges do hold counsel of record responsible for the production that counsel makes. In that regard, I believe that we have seen a renaissance, if you will, in Rule 26(g)(1), which effectively imposes a certification requirement on attorneys when they respond to (or serve) discovery requests. Judge Paul Grimm led that renaissance. Just recently, we saw Rule 26(g)(1) used in S2 Technologies to force counsel to, in effect, be transparent in how a computerized search was conducted.

But I suggest this needs to be put in perspective. As volumes of ESI increase within private or public organizations (which seem to be generating and storing ever-expanding amounts of ESI) and with individuals (either on their own sources on third-party sites), I would expect that judges will no longer tolerate the “blunderbuss” approach to discovery requests but will insist on some degree of specificity. Likewise, I expect that speculation will not be tolerated as a basis on which to challenge an adversary party’s production. We will see.

There have been certain areas of law that have had increased attention over the past few years—FCPA, for example—that bring elements such as privacy and cross-border concerns to the e-discovery table. What are the major legal issues that apply to investigatory e-discovery that are different than those for litigation?

Let me count the ways! Seriously, I touched on criminal investigations and prosecutions in my answer to Question Number 1. More on these later.

Let me begin with civil investigations, such as one that might be instituted by the FTC, the SEC, or their State and federal equivalents. We know that Executive branch agencies have broad investigatory powers and we know that those powers can “reach” for large volumes of ESI across many subjects. We have also seen that agencies such as the FTC and the SEC have developed or are developing standards for the production of ESI. That’s one development. (PS—I  am chairing a PLI program on ESI in Government investigations that will be held in New York City on April 4th).

Now, back to the crimes: Criminal investigations and prosecutions (and, to at least some degree, civil investigations) implicate rights guaranteed to persons under the United States Constitution and State constitutions. These rights lead to a number of privacy concerns, most often articulated in the warrant requirement of the Fourth and Fourteenth Amendments. We have seen this addressed by the United States Supreme Court in United States v. Jones in the context of extended GPS monitoring of a motor vehicle. We see case law addressing the applicability of the warrant requirement in the context of many technologies.  The Fourth and Fourteenth Amendments require consideration of both subjective and objective expectations of privacy.

Back to ESI in civil actions: Unlike the European Union, we have privacy across sectors in the United States. For example, HIPPA protects personal health information (“PHI”). Whatever the source of any privacy right, federal and State courts have mechanisms in place to protect privacy interests. On the federal side, Rule 26(c) provides for the issuance of orders that, among other things, assure the confidentiality of discovery materials. I expect that, as greater volumes of ESI are produced in civil actions, we will see a renewed emphasis on attorney-client consultation to determine when to seek such an order. Of course, use of those materials in litigation may lead to the question of sealing. That may raise significant constitutional and common law concerns.

Let me spend some time on so-called “transnational” or cross-border discovery. When a party to a civil action has ESI (or anything) that “resides” in another country—and that country places limits on the “export” of certain information—a discovery demand on that party can create problems. (By the way, the same problems can arise when a nonparty is served with a subpoena). Unless some agreement can be reached with the requesting party, the party served must either produce nonprivileged, responsive ESI or face sanctions. Of course, the party served could ask the court, in the exercise of judicial discretion, to require that Letters Rogatory be used. How a judge might exercise his or her discretion I leave for another day.

What changes might we see in anything I said above? I think the answer is “none,” at least in civil litigation in the federal and State courts. There are mechanisms in place to address privacy concerns.

On the “criminal” side, there are, of course, proposals to amend the EPCA to address when and what law enforcement officers may seek without a warrant. Given what Congress is—or is not—accomplishing in early 2013, I doubt any meaningful statutory change is forthcoming. However, case law is rapidly developing in this area. How that case law develops will be, to say the least, fascinating!

On the transnational front, I expect the latest development will come from the European Union, which appears poised to change the European Privacy Directive. Where that leaves parties who are litigants in the United States and have ESI abroad—and how privacy laws being adopted in other countries will affect those parties—I leave for another day!

In an attempt to better manage e-discovery in criminal cases on their own part and by defendants, the Federal Government issued a (non-binding) e-discovery protocol last February (“Recommendations for ESI Discovery Production in Federal Criminal Cases”). What do you think the impact will be (if any) on ESI and investigations?

You are speaking of the JETWG Recommendations or Protocols. These are the fruits of collaboration between the United States Department of Justice and the Federal Defender Office. I know the Protocols well, having participated in a number of programs with Andrew Goldsmith of USDOJ, Sean Broderick of the FDO and, among others, Justin Murphy of Crowell & Moring.

I hope that the impact will be a greater understanding by all the actors in criminal investigations and prosecutions of the need to talk through ESI-related issues so that, in the final analysis, justice is done. To that end, educational efforts are being made to those actors across the Nation.

One final comment: USDOJ and the FDO should be commended for developing the Protocols and providing much-needed education. They should also be commended for taking an “informal” approach to addressing ESI in the criminal context. Alternatively, we might see the development of formal rules among the federal courts, which might lead to lack of uniformity and discourage innovative approaches. (This is a point well-made by United States District Judge Lee Rosenthal).

Ronald J. Hedges is the principal of Ronald J. Hedges LLC and is of counsel to Corodemus & Corodemus. He was a United States Magistrate Judge in the United States District Court for the District of New Jersey from 1986 to 2007. He has extensive experience in e-discovery and in the management of complex litigation and has served as a special master, arbitrator and mediator. He also consults on management and discovery of electronically stored information (“ESI”).  For a biography of Mr. Hedges, including publications, click here.


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