Welcome to Module 2-0.

What Can Happen When Lawyers Delegate Their e-Discovery Duties to a Client.

An opinion by the Chief Bankruptcy Judge in Manhattan, Arthur J. Gonzalez, illustrates what can happen when lawyers over-delegate to their client the lawyers’ duty to find and collect digital evidence. In re A & M Florida Properties II, LLC, 2010 WL 1418861 (Bankr. S.D.N.Y. Apr. 7, 2010). This case, and countless others just like it, remind me of the old phrase, let George do it. No, this has nothing to do with George Socha. I’m referring to a popular expression in the 1950s and 60s, one that I heard a lot in my family, where every other male was named George. Let George Do It was a popular radio show in the forties and fifties. It was about a detective named George Valentine where all of his clients came from reading a newspaper ad saying:

Personal notice: Danger’s my stock in trade. If the job’s too tough for you to handle, you’ve got a job for me. George Valentine.

This popular show led to the catch phrase, let George do it, meaning to let another person perform an odious task for you; kind of a slacker’s credo. That’s what appears to have happened in In re A & M Florida Properties II, LLC. This class will tell you all about it.

The first delegator here was a lawyer in a major national law firm based in Florida. Now I happen to know that this firm, like most large firms, has an e-discovery department with a few knowledgeable e-discovery lawyers. But it is obvious that they were not consulted here. The smaller New York City firm who took over the case after it was removed from Florida state court to bankruptcy court was no better.

All of the plaintiffs’ lawyers professed unfamiliarity with email archiving, i.e. PST files and the like. They also said that they did not know deleted emails were still retained in un-emptied trash folders. The Bankruptcy judge believed them. He found only negligence, not bad faith, in the plaintiffs’ botched email collections. In this effort, performed by the client, with no communication or guidance from a lawyer skilled in e-discovery, only live email folders were searched. Here is how the Judge Arthur J. Gonzalez explains it:

GFI employees have discretion to move emails from their live inboxes into archive folders and regularly do so. Id. ¶ 9. When an employee deletes an email from his or her mailbox, that message often goes into the deleted items folder. Id. ¶ 10. These messages, like those moved into archives, remain on GFI’s system. …

*4 At an October 28, 2009 hearing, Nash explained that he had only recently learned the difference between archives and live inboxes. Oct. 28, 2009 Tr. at 7.

Id. at *2, *4.

Let George Do It, Cause I Don’t Know How and Don’t Much Care

This lack of basic knowledge of IT systems by any lawyer handling discovery on the plaintiffs’ side ultimately led to sanctions. Here is how it came down and, of course, I am going to simplify the court’s opinion a bit to keep it brief.

Defendant make a request for production after the suit was filed against it in Florida state court. The plaintiffs’ responsive production did not include any internal emails, that is, any emails between the employees of the multiple plaintiffs (over four entities). It also did not include many emails that the defendant knew should have been produced because the defendant either sent the emails to plaintiffs or saw that the plaintiffs were copied.

Soon after filing, the case was removed to bankruptcy court in New York. The defendant then complained about the limited email production. The successor plaintiffs’ attorneys responded by ordering their client “to perform a ‘company-wide’ search, purportedly to straighten out the discovery issues with the email production.” Id. at *2. That appears to have been the extent of the lawyers’ participation in the preservation and collection of ESI. Obviously, since they had never heard of email archiving, they delegated all e-discovery tasks to the client because they did not know how to do them, much less supervise them. This is a classic example of let George do it because I don’t know how and don’t much care.

The client, the plaintiffs here, were the first “George” in this scenario to whom the odious task of e-discovery was delegated. They responded to this directive by further delegating the work to their Chief Technology Officer, Deborah Garfinkle. She was told to perform a “company-wide” search for emails and was apparently given a list of key-words dreamed up by defense counsel. Poor Deborah was the George set up to fail because there was no real communication here with the lawyers. Obviously she knew about archives, deleted emails, and the like, but just as obviously there was no teamwork going on with the “supervising” attorneys. So she interpreted her instructions quite literally and narrowly (IT tends to do that, as they have many other things going on). She only searched live folders, excluding deleted folders, and in that manner came up with just another 346 emails.

These new emails were, by the way, produced in “hard copy,” another fact about which the defendant complained. However, the defendant’s main complaint was that the supplemental production still included very few internal emails. Also, the supplemental production still omitted most of the key emails that the defendant knew, or suspected, the plaintiffs had received.

Let a Certified Expert George Do it

Defense counsel then complained about this limited production of emails at a pre-hearing conference with Judge Gonzalez. This led to the parties agreement to “jointly retain a certified computer forensic technician.” Id. at *3. Everyone seized upon a new George, an expert George, to find the missing emails. The attorneys and judge all seemed to think that merely letting an expert do it would fix everything. Wrong!

Again, there was no communication, no real teamwork between law and IT, so this new George was not able to do much better than the last IT George, Deborah Garfinkle. That was because the ESI turned over to new expert George did not include the deleted folders. More importantly, it did not include the many PST files that the plaintiffs’ employees kept as matter of routine practice.

The old computer saying, garbage in, garbage out applied. The latest George found “very few” new emails. The many emails that the defendants knew or suspected must exist, and hoped would help them to successfully defend the case if they did, were not there.

So the Defendants asked the latest expert George for an explanation of why he was able to find so few new emails. The expert “concluded that the only possible explanation for the message’s absence was that someone at GFI deleted it.” Sorry George, logical, but wrong. The defendant’s reaction to George’s expert opinion was predictable: “American Federated, which had all along been suspicious of GFI’s cooperation during the discovery process, believed that GFI had been purposely deleting certain emails from its system.” Id.

Defendant naturally concluded that if expert George did not find them, it must mean that they had been destroyed by the plaintiffs. Defendant claimed that this proved spoliation and moved for sanctions, including the ultimate sanction of dismissal, based on alleged bad faith destruction of key email.

Sanction the Bad Georges

At this point, when plaintiffs’ entire case was on the line, an amazing thing happened. Real communication and teamwork between IT and Law finally took place. Plaintiffs’ counsel figured out about PST files and deleted files and learned that the client’s IT expert, an earlier George, had never looked there or turned them over to certified expert George to search. So, it was all just a funny Who’s on first? case of miscommunication. That was plaintiffs’ explanation, anyway. After the confusion was cleared up, the plaintiffs turned over the PSTs and deleted emails to certified expert George to search again. Now he finds thousands of responsive emails and ultimately 9,586 non-privileged emails were produced.

Surprise, surprise; it turns out that a few of these newly discovered emails were hot, meaning they were highly relevant and hurt plaintiffs’ case. Plaintiffs then went into the typical no harm, no foul defense to sanctions, saying the defendant now has the emails, so there is no spoliation and no basis for sanction. Sorry, we just goofed and did not know to look in PST files and deleted mail folders.

Defense counsel did not buy this story. Instead, they insisted that this sudden discovery of key email proved that plaintiffs and their legal counsel had all along been engaged in bad faith, hide-the-ball conduct. Defendant revised its motion for sanctions, changing the grounds from spoliation, since the evidence had now suddenly appeared, to intentional obstruction of the discovery process.

Let a Judge George Sort It All Out

Judge Arthur J. Gonzalez (I can’t help but wonder if the J. stands for Jorge) was not amused by the plaintiffs’ Who’s on first? type of explanation, but he did not find any bad faith or intentional misconduct either. Still, he imposed sanctions against plaintiffs and the plaintiffs’ attorneys. Here is how Judge A. J. Gonzalez summed it up:

The Defendant contends that it has incurred needless costs and frustration because of misunderstandings and delays caused by the Plaintiffs and their attorneys. American Federated, having now reviewed the content of some of the recently recovered internal messages, believes that GFI was intentionally preventing American Federated from gaining possession of these internal emails. American Federated asks the Court to dismiss the litigation. In the alternative, it seeks an adverse inference instruction, as well as payment of attorneys’ fees and costs for its extra discovery efforts and the forensic work performed by Vestige. (Vestige is the real name of the certified expert George.)

Despite the fact that spoliation is no longer at issue here, the Defendant argues that the appropriate sanction here would be dismissal of the Plaintiffs’ case with prejudice. Even in cases of alleged spoliation, the grant of a terminating sanction is harsh and rare. (Lengthy citations omitted.) While it is undoubtedly true that GFI and its counsel could have handled the discovery process better, there was no intentional destruction of evidence or failure to obey court orders. Dismissal would be unjustly harsh here, especially considering that American Federated eventually acquired the documents it sought all along. The Defendant’s motion to dismiss with prejudice is denied. …

The granting of an adverse inference instruction is a severe sanction. Phoenix Four, Inc., 2006 WL 1409413, at *4; Zubulake, 220 F.R.D. at 219. Al-though it is arguable that the requisite elements are present in this case, the Court declines to engage in this analysis as such a penalty would be overly harsh for what has occurred here. (Lengthy citations omitted.) In the end the Defendant was able to obtain the desired emails and there was no evidence of bad faith on the part of GFI’s counsel. [FN14] Nash simply did not understand the technical depths to which electronic discovery can sometimes go. [FN15] The Court does not find any intent to block American Federated from gaining possession of the recently discovered messages. As the Court stated previously, the granting of an adverse inference instruction under the circumstances present would be overly harsh. Therefore, American Federated’s request for an adverse inference instruction is denied.

Id. at *5, *6.

The Hammer May Yet Fall on Slacker George

Footnote 15 by Judge Gonzalez is very interesting and suggests that he still has some doubts about his conclusion. This footnote states: “The degree of GFI’s negligence, if any, is unclear from the record. The Court will make a determination on this subject at a later hearing.” Id. at *6. So the defense could still persuade Judge Gonzalez that plaintiffs here were not just negligent, they were grossly negligent. Thus under Judge Scheindlin’s Pension Committee case, which Judge Gonzales frequently cites in this opinion, he could still impose more severe sanctions, including an adverse inference instruction, upon a finding that the negligence was gross.

Just Letting George Do It Violates Federal Law

Judge Gonzalez has imposed monetary sanctions for the lawyer’s failure to make reasonable efforts to identify, preserve, and collect electronically stored evidence. This duty to make reasonable efforts in e-discovery is what I frequently call the Zubulake duty, as it was so clearly articulated in Zubulake V. This duty of minimum diligence requires an attorney to inquire of the client’s IT personnel in order to understand the basics of the computer systems where the evidence resides. It also requires an attorney to actively monitor the collection. A lawyer discharging his ethical and legal duties of diligence cannot just Let IT George do it and over-delegate to the client as happened here. This is a lawyer’s duty and must be discharged by a lawyer. An IT expert can help, and often should help as part of a team approach, but ultimately this is a task that a lawyer must perform. That is where the buck stops, with the officer of the court in charge of the discovery.

The discussion by Judge Gonzalez on this point is excellent:

In cases where discovery misconduct is found, a court retains the authority to impose monetary sanctions when it declines to impose a harsher sanction. See Phoenix Four, Inc., 2006 WL 1409413, at *9. While the delays in discovery were not caused by any intentional behavior, GFI’s counsel did not fulfill its obligation to find all sources of relevant documents in a timely manner. Counsel has an obligation to not just request documents of his client, but to search for sources of information. Id. at *5. Counsel must communicate with the client, identify all sources of relevant information, and “become fully familiar with [the] client’s document retention policies, as well as [the] client’s data retention architecture.” Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y.2004). [FN16] Nash failed in his obligation to locate and produce all relevant documents in a timely manner. A diligent effort would have involved some sort of dialogue with Garfinkle and any key figures at GFI to gain a better understanding of GFI’s computer system. See Phoenix Four, Inc., 2006 WL 1409413, at *5 (stating that counsel’s effort to discover all sources of relevant information “would involve communicating with information technology personnel and the key players in the litigation to understand how electronic information is stored.”). Had he posed the proper questions in these dialogues, Nash would have gained a more nuanced understanding of how GFI employees stored emails much earlier in the discovery process. [FN17] Assuming GFI was operating in good faith, it is almost certain that the archive folders would have been mentioned.

Id. at *6.

Let the Other George Pay the Sanctions

Judge Gonlazez then goes on to impose sanctions on both the plaintiffs and their attorneys. He leaves for another day the questions of the exact amount of the monetary sanction and how the payment will be divided between lawyer and client.

*7 Had Nash fulfilled his obligation to familiarize himself with GFI’s policies earlier, the forensic searches and subsequent motions would have been unnecessary. The Court finds that monetary sanctions are appropriate here and orders GFI and its counsel to reimburse American Federated its half of the cost of the forensic searches. [FN18] GFI and its counsel are also ordered to reimburse American Federated for the costs associated with bringing the motion for sanctions and the motion to compel. The facts presented at this time do not permit the Court to determine an allocation of the fees and costs among GFI and its attorneys. Therefore, a hearing will be scheduled to determine the amount of attorneys’ fees and costs to be reimbursed. The Court will then determine the percentage of that amount GFI and its counsel will be responsible for paying respectively.

Id. at *7.

Florida Seems Like a Lawyer George Paradise to New Yorkers

Footnote 18 is again very interesting. It answers the question of what about the first counsel for plaintiffs, the large firm from Florida? All this order does is sanction the New York lawyers in another small firm. The defendant apparently asked for all of plaintiffs’ lawyers to be sanctioned, not just the latest. This footnote explains why Florida counsel was not sanctioned too, even though the judge noted that the first firm:

… also did not locate all sources of relevant information as the archives were not searched prior to removal of the action to this Court. However, after reviewing the Florida Rules of Civil Procedure as well as Florida case law, the Court sees nothing that imposes a duty similar to the duty Nash must comply with under the Federal Rules and applicable case law.

So, it looks like Florida lawyers have a Free Get out of Jail card, well, at least when they are in New York. I am not so sure a Florida state court judge would have ruled the same way. Just ask Morgan Stanley.

Lawyer Georges Who Want to Handle e-Discovery Must Dip Their Hands Into the Digital Mud

The legal profession has an ethical duty of competence and diligence. It has been embodied into our Code of Professional Conduct for years. See Rule 1 and 1.3 ABA Model Rules of Professional Conduct. For litigation attorneys handling discovery these basic duties prevent them from over-delegating e-discovery to non-lawyers. They cannot just tell the client George to do it and let it go at that. That may have been ok in the old days when documents were all paper and did not throw themselves away. But in today’s world where data retention architecture has replaced simple filing cabinets, an attorney has to personally supervise these efforts.

The attorney cannot simply tell the client to make a complete search and then walk away. The lawyers have to get their hands dirty. They have to dip into the digital mud and make minimum good faith efforts. They have to look at the client’s ESI world, touch it, open a few computer files and most importantly, talk about it. This is not a standard of perfection. Far from it. Mistakes will still happen, even with expert Georges. But hopefully fewer mistakes will happen and less colossal ones, like not finding any internal emails at all.

It’s OK Not to Go Digital, So Long as You Refer Out to e-Discovery Lawyer Georges

It is obvious to every practicing attorney that not every litigator, especially ones over thirty, are up to this task. They simply do not want to make the effort to learn anyone’s data retention architecture. They are not interested in learning how to fulfill their Zubulake duties of ESI identification, preservation and collection, much less dip their hands into the digital mud.

You know what? That’s ok. I am not interested in doing immigration law either. And if a client came to me with an immigration issue, I would not try to learn that complex area of law. I would refer them to an immigration lawyer. At the very least, I would bring in an immigration lawyer as a co-counsel. The law and our ethical rules allow for that. You can simply decline the legal work and refer, or you can affiliate with another lawyer who is competent to do it. To be honest, at this stage of my career I am not much interested in doing anything but electronic discovery and records and other directly related subjects. When other legal work comes my way, I refer it out. I understand perfectly the reluctance of senior attorneys to go into new fields of law, especially ones as arcane as electronic discovery. Established lawyers already have expertise in certain areas of law and we have earned the right not to have to learn a new field of law, if we don’t want to.

It is perfectly alright to let another lawyer George do it. It is not alright to let a non-lawyer do it, like your client, or even a vendor (unless the vendor has and provides practicing lawyers, and, as far as I know, that never happens). If we are not lawyer George enough to competently handle a legal assignment, and not willing to spend the time and effort needed to get up to speed, then we should either decline the work or affiliate with another lawyer who does have the necessary skills.

Litigation lawyers have no problem understanding and following that dictate when it comes to other remote areas of the law, like immigration, tax, probate or real estate. But they do have a problem when it comes to applying that rule to discovery. They assume that discovery of documents still means paper records and they know how to do that. Everyone does. It’s simple. They refuse to accept that there are no more paper records, just print-outs of electronic originals. They refuse to accept that any kind of discovery could be so difficult that they could not easily learn it with a CLE or two. They assume that e-discovery is just like regular paper discovery, but with a lot of hype. They could not be more wrong as the plaintiff lawyers in this case found out.

Conclusion

Few litigators today seem to have the wisdom to understand that electronic discovery is very complex and requires a different and unique skill-set than paper discovery. For if they did, they would have the sense to bring in an e-discovery lawyer George who knows what they are doing. All too often this does not happen. As a result, serious mistakes are made. In re A & M Florida Properties II, LLC illustrates this. When a judge is faced with attorneys like that, what choice does a judge have but to sanction them? Their blunders are wrecking the system, slowing it down, and making it too expensive for all but the super-rich.

Maybe we e-discovery lawyers should place an ad in newspapers, a thing that litigators over 30 still read, that follows the George Valentine tradition and reads:

Personal notice: E-Discovery’s my stock in trade. If the job’s too geeky for you to handle, you’ve got a job for me.

Please. To all of my non-e-discovery litigation lawyer friends out there: Just let e-discovery lawyer George do it.

 __________________

SUPPLEMENTAL READING: Review A & M Florida Properties. Do you think the Florida lawyers got off too easy? Why or why not?

EXERCISE: This kind of case is more common than you would think. Ask any lawyer or vendor to tell you some war stories about client and attorney screw-ups in ESI collection. The vendors will not reveal the names of course, but the facts they can share are amazing. The possibilities of errors in collection and processing by amateurs are near endless. Very amusing (except when it happens to you).

Students are invited to leave a public comment below. Insights that might help other students are especially welcome. Let’s collaborate!

Copyright Ralph Losey 2015

 

 

Ralph Losey is a practicing attorney who specializes in electronic discovery law. He is a principal in a U.S. law firm with over 50 offices & 800 lawyers where he supervises electronic discovery work and litigation support. Ralph has written over two million words on law and technology, including six books on electronic discovery. His latest books are "E-Discovery for Everyone" (ABA 2017) and "Perspectives on Predictive Coding" (ABA 2017) (ed. & contributor). His blog is widely read in the industry: "e-DiscoveryTeam.com." Ralph is the founder and principal author of "Electronic Discovery Best Practices" and "e-Discovery Team Training," a free online course covering all aspects of e-discovery. Ralph's sub-speciality is the search and review of electronic evidence using multimodal methods, including artificial intelligence. He also has a free online training program to teach these advanced methods - the "TAR Course." Ralph has devoted a month of his time each year since 2013 to research and test various AI-enhanced document review methods. In 2015 and 2016 Ralph and his Team participated in the TREC Total Recall Track experiments sponsored by the National Institute of Standards and Technology. Ralph has been involved with computers and the law since 1978. His full biography is found at RalphLosey.com. Ralph is the proud father of two children, Eva M. Losey and Adam Colby Losey, a high-tech lawyer married to another e-discovery lawyer, Cat Jackson Losey, and, best of all, Ralph has been married since 1973 to Molly Friedman Losey, a mental health counselor and life-long friend.

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