e-Discovery Team Training

Welcome to Module 1-Q.

Mathematical Formula for Justice Proves the Importance of ESI in Civil Litigation

I am reluctant to share my unusual analytic approach to law, but am encouraged to do so by the words of the great British philosopher and writer, Bertrand Russell, a champion of math, logic, and justice, who said:

Do not fear to be eccentric in opinion, for every opinion now accepted was once eccentric.

He should know, he was jailed for six months for his anti-war writings in 1918, yet thirty years later was awarded the Nobel Prize for Literature.

My eccentric opinions are quite tame by comparison to his, namely that justice can be represented by an abstract logic formula. I invoke his name in part because abstract formulas were a specialty of Russell’s math and logic based philosophy. My goal here is not to persuade you to adopt this approach, but to stir up dialogue and independent thinking on Lex Principia. Thinking is important. It is dangerous and powerful in and of itself. In the words of Bertrand Russell, who was jailed again in London at age 89 for his anti-nuclear arms protests:

Thought is subversive and revolutionary, destructive and terrible. Thought is merciless to privilege, established institutions, and comfortable habit. Thought is great and swift and free.

Think about these ideas and leave a comment below. Feel free to disagree with my opinions, or to agree and take them to the next step, remembering Russell’s line:

I think we ought always to entertain our opinions with some measure of doubt. I shouldn’t wish people dogmatically to believe any philosophy, not even mine.

This essay pays tribute to Bertrand Russell, but does not attempt to emulate, much less denote his style. If you are not familiar with his work, or, like me, it has been a while, I include a good video at the end, The Three Passions of Bertrand Russell: Love, Truth and Justice. His best known work is A History of Western Philosophy (1945), but his most important work is considered to be Principia Mathematica (1910), which he co-wrote with A. N. Whitehead. Russell is considered one of the founders of modern Analytic philosophy, the dominant philosophy in the Twentieth Century.

Bertrand Russell was the grandson of a Prime Minister of Great Britain. He became famous not only for his work as a young man in mathematics, logic, and philosophy, but also for his later highly controversial writings and speeches as a anti-war activist, religious skeptic, and proponent of sexual liberation. He is said to have written 3,000 words a day, almost every day of his life. He remained active as a political and social critic until his death in 1970 at the age of 97. Many consider him the greatest philosopher of the last century.

The Justice Formula

Justice is derived by the application of Law to Fact. The true Facts (“F”) of a case are parsed or divided by the Law (“L”). Although I use the equals sign here to represent an equation, J=F/L, in reality it is closer to an iterative process: J->F/L. This is because justice, at least in the common law tradition, is always created afresh according to ever-changing facts and slowly evolving law. Also, justice is elusive. It is an ideal that we seek through an imperfect process, a process that is repeated time and time again, much like a Mandelbrot set fractal iteration that approaches, but never quite reaches infinity: z->z² + c. Justice is an abstract ideal, much like infinity, it can be talked about, but never really fully understood or attained.

You could break down the “L” element in the Justice Formula in a number of ways and thus delve into a deeper legal analysis, but I am not going to go there. I know from experience it is a never ending argument. As Russell said:

The most savage controversies are about matters as to which there is no good evidence either way.

So, I will focus on the evidence and analyze the “F” part of the equation, the Facts. I am sure that Bertrand Russell would agree that focusing on the facts is a far more promising line of inquiry. As Bertrand Russell’s protege, Ludwig Wittgenstein, put it:

What is the case (a fact) is the existence of states of affairs.

Also see: Judge Bruce Markell, Bewitched by Language: Wittgenstein and the Practice of Law, 32 Pepp. L. Rev. 801 (2005).

Not too surprisingly, my analysis of the factual component of the Justice Formula shows that electronically stored information is the key component of justice in civil litigation today. This may just be a word game, as Wittgenstein warns, or it may be a true logic mirror of the existing state of affairs. You be the judge.

The Factual Numerator

The true Facts of a law suit are determined by three types of evidence: Testimony (“T”), Physical Objects (“PO”), and Records (“R”). This means that F=T+PO+R. The expanded Justice Formula thus becomes: J=(T+PO+R)/L.

Testimony is given by, or often better put taken from, witnesses who, after making various solemn oaths, try to put into words what they recall about events. They do so not by providing a narrative, but by responding to questions put to them by opposing attorneys, typically by friendly direct examination and often hostile cross-examination. Testimony is based on human memory and is notoriously unreliable. Even when witnesses are all in good faith and trying to testify honestly, which some experienced trial attorneys says is the exception, not the rule, their recollections of the same event can vary dramatically. This variance, which is often conveniently slanted to fit a person’s interests, increases over time. That is why the second and third variables in the Justice Formula, Physical Objects, “PO,” and Records “R,” have always been more reliable than Testimony, “T.” For that reason, they – “PO” and “R” – are the key to determining the Truth, and thus key to the rendition of Justice, and so should be more heavily weighted than Testimony.

Physical Objects, “PO,” are typically called “tangible evidence” in the law, but I did not want to confuse the abstraction by using another “T” in the Justice Formula, so I settled on the admittedly less satisfactory phrase of Physical Objects. PO includes such things as a gun or DNA in a criminal trial, or a tire or drug in a products liability case. Tangible evidence is very important in criminal law, but in civil litigation is of little or no consequence outside of products liability and negligence cases. I have never handled a criminal case and virtually no products liability cases or negligence cases. This may explain why in my thirty years of legal practice in “commercial litigation,” broadly understood, I have never been involved in a case where physical evidence played any role in the outcome of a case. In every civil case I have seen, the true Facts were determined solely by the Testimony of witnesses and the surrounding Records.

Testimony is so inherently unreliable, that the norm is for disputed issues of Fact to exist whenever witnesses testify as to what they recall happened. For this reason, and because Physical Objects usually play little or no role in most civil litigation, Records become all important to the determination of the Facts in civil litigation. They are not subject to the same vagaries of human recollection and have a much higher degree of reliability. They are considered objective, that is unless they are created or forged after a controversy develops to try to create a false record of what happened. Thus they too have reliability issues, but of a different kind, and are typically far less pervasive and easier to detect than memory based testimony frauds. Unlike false or slanted testimony, which can be hard to impeach, fraudulent Records can be exposed and corrected in many ways. Testimony is still important, to be sure, but it is always tempered by the prior Records of what happened, and when there is conflict, which is common, Records made at the time are almost always believed over contradictory testimony.

Since we have seen that the Testimony element in the Justice Formula is discounted, and “PO” plays virtually no role in civil litigation, this means that the Records element in the formula must be very heavily weighted. In my experience, in a scale of 1 to 10, in civli litigation “PO” is a 1, “T” is a 5, and “R” a 9. So if we take the formula J=(T+PO+R)/L and adjust the font size to reflect the relative weight of the symbols, it would look something like this:

But we need to look deeper. What are Records? Records include what you typically think of as documentary evidence, namely writings of all kinds and forms, including paper and electronic writings, but also information that most lawyers would not think of as a document at all, including ever-changing-databases, videos, metadata, etc. There are then fundamentally two kinds of Records: Paper (“P”) and electronically stored information (“ESI”). The admissibility of ESI as evidence is a fact now embodied in the federal rules in 2006, but accepted many years prior to that in the common and statutory law of all fifty states. ESI and Paper documents are both Records under the law, although they are fundamentally different. The formula for Justice in civil litigation becomes clearer if we break down Records into its two component parts, Paper “P” and “ESI,” where R=P+ESI. This level of detail in the formula will allow us to better understand the importance of electronic evidence and e-discovery. The Justice Formula thus expands out as follows:

J=F/L

J=(T+PO+R)/L

The Relative Importance of Paper versus ESI

There is still one step left, the weighing of the relative importance between Paper and ESI, as we previously did between the relative importance of tangible evidence, testimony, and records. Most lawyers today give greater weight to the Paper Records over ESI, and many try to avoid ESI entirely. Many lawyers are still operating under the mistaken impression that most of their client’s Records, and that of their adversary, are Paper Records. But that is not at all true. In point of fact, most are ESI. Moreover, almost all of the Paper Records we see are not originals, they are just printouts of part of the content of electronic records, pale shadows on Plato’s cave. Very few paper Records nowadays are created by hand, by pen or pencil on paper. The estimates I have seen lately project that 98% of the records of businesses today are ESI, and only 2% are Paper. It is true that most businesses are not yet paperless, but that is primarily because many people still printout some of their electronic records and store them in old fashioned filing cabinets. In fact, for most of the federal government that is still required!

Lawyers get the impression that by finding and collecting the relevant paper printouts, they are finding and collecting the relevant records needed to defend or prosecute a case. They are not. The paper is just the tip of a much larger iceberg of information. It may seem like a lot of records, but no matter how many paper documents you may see, there are always at least ten times more, often millions of times more electronic information in the client’s computer systems, backup systems, flash drives, i-phones, blackberries, and the like. Some of it might be very important to a lawsuit, such as databases, or everyone’s favorite, informal electronic communications such as email and text messages. Even if some of the electronic records are found, many lawyers, perhaps most, still fail to grasp that printing out these ESI records and producing the paper is not the same thing as producing the ESI itself.

This confusion is the source of many problems. For instance, it can violate one of the basic rules of evidence requiring parties to produce and use original records for evidence. Unless the parties stipulate to the use of copies, originals are required as the best evidence. This preference to original records, over copies, is designed to assure the judge and jury of the authenticity of the records. Authenticity includes elements of both accuracy and completeness. Thus in the context of a paper type of record, a document must include all of the original pages and all markings on any page, including handwritten annotations on a paper printout. Any attorney would object to a paper record that is missing a page. They might still stipulate to its admissibility into evidence anyway, if they were somehow confident that the missing page was of no consequence. But in any event they would probably point out the deficiency and weigh its potential impact, if any, to the case. If they were not sure of the impact, they would not stipulate to the use of such a incomplete copy and would demand production and use of the original complete document.

Oddly, attorneys today do not exercise the same care and concern for ESI. They routinely stipulate to incomplete copies of ESI, namely paper printouts of ESI, or electronic files with some of their metadata stripped away. They do so without knowing the contents of the other elements of the electronic records that are not included in the paper printouts. The attorneys just assume that the metadata and other purely electronic information in the ESI records are of no importance. Even worse, some are unaware that there is such additional information. They are hiding the ball without even knowing it.

Many lawyers still falsely assume that a paper prinout of ESI is the same thing as the ESI itself. They call it a hardcopy as if were somehow more reliable by being tangible. Some even think the paper version is more complete and reliable than the electronic original because it can be Bates stamped. They have no idea of the value of hash, nor understanding of my proposal to replace the Bates stamp with the truncated hash value.

These same lawyers will, for instance, accept and use a printout of an email without realizing that the original ESI might show people who were sent blind copies of the email, a fact not shown on the printed version. They may not understand that the printout of the Word document does not not necessarily show the embedded comments included in that writing. They may not realize that there are scores of metadata fields containing information about an electronic record that are never included in the paper version of that record. Most of the time there is no harm from such ignorance and mistakes. The hidden metadata is rarely of any importance, just like one missing page in a hundred page paper document is rarely of importance. But sometimes that missing page, or that missing metadata, can be outcome determinative.

Since 98% of all records are ESI, and only 2% are pure paper, you could argue that ESI should be given 49 times as much weight as Paper. Indeed, I see a future where this becomes true. But for now, that would be a gross exaggeration (besides the font size differences would not show well). Many of the paper printouts of ESI originals are handwritten upon, highlighted, or clipped and marked in various ways, and so they become new evidence in their own right. Moreover, most of the ESI that people and organizations keep today is worthless for most litigation. The volume differential has to be heavily discounted for that reason too. Also, most of the metadata and other information that is stripped from a computer file when it is printed out is of no consequence to most cases (most, but certainly not all). That is another reason to discount the importance of ESI and not make it 49 times more important as its volume would otherwise suggest is appropriate.

In today’s world of Records, I suggest that ESI is only four times as important, not forty-nine times. Thus going back to our weighted font size rubic and one to ten scale, you have Paper as a 2 and ESI as an 8. Now the whole Justice Formula would look something like this, with P in 12 point font and ESI in 48 point font:

It is thus easy to see that ESI today is the most important element in the Justice Formula for civil litigation in America, or at least it should be.

Green v. McClendon

It is sad, but true, that the legal practice of most lawyers today reverses this formula and give four times (at least) as much importance to Paper over ESI. But this does not disprove the equation. To the contrary, the failure of American lawyers to follow this formula explains why civil litigation today is so askew and under such stress. A new sanctions case appears almost every week to prove this point. Consider for instance Green v. McClendon, 2009 WL 2496275 (S.D.N.Y. Aug. 13, 2009). In this New York City case involving the purchase of an impressionist painting for $4.2 Million, U.S. Magistrate Judge James C. Francis IV entered sanctions against one of the defendants and her attorney. Judge Francis, like most federal judges in NYC, is an expert in e-discovery law.

In Green one of the two defendants, Mrs. McClendon, and her attorney, were sanctioned for their mutual failure to implement a proper litigation hold and preserve ESI and for the attorneys confused handling of paper and ESI records. The co-defendant, Mr. McClendon, who had separated from his wife, was not mentioned in this opinion. News reports of this case show that the couple had paid a $500,000 deposit on the $4.2 Million painting, then their marriage broke up and they changed their mind about the purchase. They never had possession of the painting and no written contract had ever been signed. The art dealer, Richard Green, wanted the $3.7 Million balance he claimed was due and Mr. and Mrs. McClendon wanted their $500,000 deposit back. This law suit ensued.

Here is what the opinion says about discovery in the lawsuit. Mrs. McClendon responded to a request for production, which clearly included a request for ESI, by producing paper and not much else. Plaintiff, Mr. Green, did not believe this was a complete production and so motions followed. This resulted in a hearing and an order by Judge Francis for defendant’s counsel to certify to the judge that this production was complete. Id. at *2. At this point, the facts start to get interesting, for suddenly defense counsel discovers and produces an undated paper printout of a spreadsheet, explaining only that it came from Mrs. McClendon’s home computer. The spreadsheet was important for some reason not explained in the opinion. It showed a purchase price for the painting of $4.2 Million. Plaintiff responded by asking questions about this mysterious paper spreadsheet, such as the date it was created, who created it, and the dates it was later modified. The answers to these questions could all be found in the original spreadsheet metadata, but that was not produced, only paper. Id.

After receiving these questions, Mrs. McClendon’s counsel then produced “what appear to be three additional electronic versions of the spreadsheet with partial electronic history for each.” Thus we are now left with four different versions of the same spreadsheet, none of them complete, not even the electronic versions, and all of them are different. None of the electronic versions of the spreadsheet included a purchase price for the painting, which, again for reasons not explained, seems to be important and helpful to the plaintiff. Defendants claimed that a third party, whereabouts currently unknown, prepared the spreadsheets, not them, and they could not explain the discrepancies. Id.

Mr. Green was not pleased. He asked for a forensic examination of the home computer to test the authenticity of these four versions of the spreadsheet and find out if the first paper printout was a fraud, an attempt to deceive plaintiff and the court. At that point Mrs. McClendon surprised everyone, except for her attorney, and announced that the hard drive had been wiped clean after this discovery began when “the son of a friend” who is “familiar with computers” reinstalled the operating system on her computer. The original files were supposedly removed during this process and copied onto CDs, which is where her attorney had retrieved the three electronic versions of the spreadsheet that were ultimately produced. As a result of this upgrade hard drive wipe, the details of which were not provided, it was impossible for a forensic expert to find the missing ESI information, the system metadata and deleted file fragments, to answer the questions of suspected fraud. The full original ESI had been destroyed. All that was left was a paper copy that favored the producing party and three other incomplete electronic versions. If this had been a spoliation cover up, as Mr. Green of course claimed, then it had worked. The evidence needed to recreate a true record has been destroyed. Id. at *3.

The plaintiff demanded sanctions for this spoliation of the missing elements of the ESI records. He sought an award of fees and costs, another deposition, and the coveted adverse inference instruction, an instruction which always leads to victory. Judge Francis considered these facts, divided them by the law, and produced what he considered to be a just sanction for this bungling conduct. He did not end the case against Mrs. McClendon with an adverse inference, which I suspect would have ended the case for Mr. McClendon too, but did allow the deposition and ordered Mrs. McClendon and her attorney to pay for this whole fiasco. Although not expressly stated, I assume Judge Francis will allow plaintiff’s counsel to disclose all of these facts of spoliation to a jury, which will be further developed in the depositions. This can sometimes be as devastating as an actual inference instruction. Further, Judge Francis said Mr. Green could return to court later and ask for sanctions again, depending on what was revealed in the deposition. I wonder, for instance, who exactly that “son of a friend” was and what he did to the computer and why. I suspect we have not heard the last of this case. Here is Judge Francis’ explanation of how Mrs. McClendon’s attorney completely failed to understand what was expected of him, thus leading to spoliation and these sanctions.

*5 “The preservation obligation runs first to counsel, who has ‘a duty to advise his client of the type of information potentially relevant to the lawsuit and of the necessity of preventing its destruction.’ “In re NTL, Inc. Securities Litigation, 244 F.R .D. 179, 197-98 (S.D.N.Y.2007) (quoting Chan, 2005 WL 1925579, at *6); see also Fayemi v. Hambrecht and Ouist, Inc., 174 F.R.D. 319, 326 (S.D.N.Y.1997). Moreover, this responsibility is “heightened in this age of electronic discovery.” Qualcomm Inc. v. Broadcom Corp., 05 Civ.1958-B, 2008 WL 66932, at *9 (S.D.Cal. Jan. 7, 2008), vacated in part on other grounds, 2008 WL 638108 (S.D.Cal. March 5, 2008). Indeed,

for the current ‘good faith’ discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and emails are maintained and to determine how best to locate, review, and produce responsive documents. Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search.

Id.; see also Phoenix Four, Inc. v. Strategic Re-sources Corp., No. 05 Civ. 4837, 2006 WL 1409413, at *5-6 (S.D.N.Y. May 23, 2006) (emphasizing counsels’ affirmative duty to search for sources of electronic information); Zubulake V, 229 F.R.D. at 433 (implying that “active supervision of counsel” is of particular importance when electronically-stored information is involved).

There is no question that Mrs. McClendon’s counsel failed to meet these discovery obligations. Unless Mrs. McClendon brazenly ignored her attorney’s instructions, counsel apparently neglected to explain to her what types of information would be relevant and failed to institute a litigation hold to protect relevant information from destruction. Moreover, despite numerous representations to the contrary, it is highly unlikely that counsel actually conducted a thorough search for relevant documents in Mrs. McClendon’s possession in connection with their initial disclosure duties or in response to the plaintiff’s first document request. If that had been done, counsel certainly would have found the spreadsheet from Mrs. McClendon’s personal computer files.

Many attorneys today not only do not get the importance of original electronic evidence over paper printouts, they are shocked to see a court hold them accountable for their client’s failure to preserve evidence, much less such elusive evidence as metadata. The electronic information of metadata is barely real to them. How in the world can they be personally sanctioned when their client accidentally loses it?

The duty of legal counsel of record to make reasonable efforts to have their clients preserve ESI, including, at a minimum, by providing notice to their clients of the legal duty to preserve, is still not well known, or if known, still not accepted by most members of the Trial Bar. Many think it should just be the client’s problem, not theirs. They think judges go too far to personally sanction them for their client’s misconduct. They do not think any of the responsibility should be on their shoulders.

America Needs Technologically Sophisticated Attorneys Who are Comfortable with ESI, Math, and Spreadsheets

The Green opinion, and countless others like it, show that the paper based litigation practices of most attorneys are out of sync with the actual electronic information systems of their clients. This is true for all sizes of clients, from the neighborhood pet store that runs on a computer, to the largest, most sophisticated global corporations. Our practices do not measure up to the Justice Formula because we are not keeping up. As I explained to lawyers in India just last week:

The Law must keep up with society in order to do its job as a guardian of truth and justice. Society is undergoing rapid, profound changes driven by technology and an explosion of information. Lawyers must keep up with these changes in order to remain relevant and do our job. We need to make the special efforts required to understand the new technologies and manage the vast, ever evolving forms of information. This is not easy and requires a new type of specialist, a lawyer that focuses on technology.

For some reason, I am the first U.S. lawyer that this online publication for lawyers in India has asked to interview. Typically they only interview established lawyers in India. They are beginning to take a real interest in e-discovery and this prompted me to take a greater interest in them. India is a country on the move. It already has some of the finest IT engineering schools and technology companies in the world. It is also the world’s largest democracy with a population of 1.2 billion, second only to China. Most people already know this, but did you know that India has over one million law school graduates, with only a few hundred thousand actually practicing law? Like the U.S., and unlike Europe, a law degree in India is an advanced degree, not a college alternative. India has approximately 60,000 law graduates every year, compared to 43,588 graduates each year from U.S. law schools. One of India’s law schools, Baroda School of Legal Studies, already includes computer applications and stress management (yoga) as part of its training, but does not have e-discovery, not yet. Still, as my interview shows, they are beginning to take an interest in the subject. Right now India is not a serious competitor to U.S. lawyers, but that is already starting to change. Some of our legal work is already being outsourced to India. Do the math on demographics. What do you think might happen in the future?

If lawyers in America are to keep their dominant position in the world’s legal economy and remain the go-to attorneys for most global enterprises, then we must understand the Justice Formula and adjust our legal practices to keep up with the times. We must not only create and understand documents, but also spreadsheets. We must become proficient in all forms of software and technology used by our clients. If we do not, others most assuredly will. Law is not immune to the competitive pressures of the global economy. American lawyers must keep up, or we are likely to get pushed out of the way by others who do, perhaps even by lawyers in India who, let’s face it, can afford to work for a lot less.

Conclusion

We cannot hold back technology. We cannot stop innovation. We cannot stop the information explosion. It is not a viable strategy to wish that everyone would just use the phone and stop sending emails. It is not a viable strategy to reach deals of incompetence with opposing counsel and pretend like paper discovery is good enough. It is not good enough. It is, in Plato’s words, like settling for the dim shadows of things seen by firelight, instead of direct vision of the things themselves in the clear light of the Sun. No. We must embrace change, while still remembering and honoring the past. We must ride the tidal wave, not shake our fist at the clouds. This is our best formula for successful competition on a global scale and our best formula for Justice.

I conclude by directing you to a YouTube video on Bertrand Russell on his three great passions: love, truth and justice.

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SUPPLEMENTAL READING: Read Green v. McClendon and all of the links.

EXERCISE: So what do you think? Can justice can be represented by an abstract logic formula? Also, think about the weighting here provided in the formula. Agree or disagree? Any essential components you think are missing? Why or why not? Know of any other good quotes by a 20th Century philosopher that in some way applies to e-discovery?

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

Copyright Ralph Losey 2017

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