A Brief History of Electronic Discovery
This timeline provides an overview of electronic discovery, from its early days in the 1960s to recent developments like GDPR in 2018.
The recognition that “electronic discovery” was a distinct legal category, invested with unique considerations, launched “ediscovery” as a term of interest, but many developments have shaped how ediscovery is regarded and practiced today. Here’s a look at the history of electronic discovery.
METADATA ENTERS THE SCENE
The format of electronic information allows metadata to be included in documents, creating digital “watermark” information such as the dates and times when a document was created or revised. Preservation of this metadata is later recognized to present unique challenges.
The FRCP are amended to include Rule 34, which allowed the discovery of “electronic data compilations from which information can be obtained only with the use of detection devices.”
The EU enacts the Data Protection Directive to protect EU citizens’ fundamental rights and freedoms and to ensure the free flow of data within the EU; one year later, the Directive defines “processing” to include implementing legal holds, thereby invoking the Directive’s privacy protections.
“Directive defines ‘processing’ to include implementing legal holds”
The U.S. Department of Commerce develops the “Safe Harbor” framework, with approval from the EU, which allows U.S. companies to self-certify that they have implemented appropriate safeguards with adequate privacy protection as defined by the Data Protection Directive. The Safe Harbor was struck down in 2015 and was replaced by the Privacy Shield in 2016.
Big 5 consulting firm Arthur Andersen shuts down in the wake of the Enron deletion scandal, ushering in an era of corporate reform and an emphasis on properly governing corporate information.20012003-2005“These opinions emphasize the need to define new terms and concepts related to electronic preservation, discovery, and legal hold notices.”
“These opinions emphasize the need to define new terms and concepts related to electronic preservation, discovery, and legal hold notices.”
In a landmark series of decisions, U.S. District Judge Shira Scheindlin of the Southern District of New York rules that the duty to preserve evidence arises when litigation is reasonably anticipated or when “a party should have known that the evidence may be relevant to future litigation.” These opinions emphasize the need to define new terms and concepts related to electronic preservation, discovery, and legal hold notices.
Lawyers Tom Gelbmann and George Socha develop the EDRM to explain how electronically stored information (ESI) will function in the legal process
The FRCP redefine the scope of discoverable material, adding the phrase “electronically stored information” to Rules 26(a)(1), 33, and 34. Rule 26(b)(2) mandates that producing parties need not produce ESI from sources that are not “reasonably accessible” because of undue burden or expense. Finally, Rule 37(f) creates a “safe harbor” limit for sanctions where ESI is lost through the routine, good-faith operation of computer systems.
In a series of decisions in Qualcomm Inc v. Broadcom Corp., the Southern District of California sanctions Qualcomm $8.5 million for its egregious discovery behavior: the company withheld more than 46,000 documents, mostly e-mails, and made numerous misrepresentations to the court as part of what the court characterizes as “an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial.” The court ultimately finds that in-house and outside counsel failed to meaningfully oversee the corporation’s document production.
“The court ultimately finds that in-house and outside counsel failed to meaningfully oversee the corporation’s document production.”
In Mancia v. Mayflower Textile Services Co., U.S. Magistrate Judge Paul Grimm of the District of Maryland cites the Cooperation Proclamation to advocate for cooperation in discovery. He opines that lawyers could produce more tailored discovery requests if they “approached discovery responsibly, as the rule mandates, and met and conferred before initiating discovery, and simply discussed what the amount in controversy is, and how much, what type, and in what sequence, discovery should be conducted so that its cost — to all parties — is proportional to what is at stake in the litigation.”
Nonprofit legal research organization The Sedona Conference publishes its Cooperation Proclamation, ushering in the idea that lawyers should approach discovery cooperatively. It observes, “The costs associated with adversarial conduct in pre-trial discovery have become a serious burden to the American judicial system. This burden rises significantly in discovery of [ESI]. In addition to rising monetary costs, courts have seen escalating motion practice, overreaching, obstruction, and extensive, but unproductive discovery disputes — in some cases precluding adjudication on the merits altogether
“… the disclosure of privileged material does not waive the attorney-client privilege or work-product doctrine”
Under the new FRE 502, the disclosure of privileged material does not waive the attorney-client privilege or work-product doctrine if the disclosure was inadvertent and the holder of the privilege took reasonable steps to prevent the disclosure. The Advisory Committee notes indicate that this rule responds to rising costs, especially in ediscovery, to avoid accidental subject matter waivers.
In Victor Stanley Inc. v. Creative Pipe Inc., Judge Grimm recommends sanctions, including default judgment, against the defendant for failing to preserve evidence, including failing to implement a legal hold and deleting ESI after the lawsuit was filed. He also rules that the defendant has waived the privilege over inadvertently produced documents, given his failure to cooperate with the plaintiff or to use a reasonable search process. Judge Grimm recommends that the defendant be imprisoned for up to two years until he paid more than $1 million in attorneys’ fees and costs for the case.
In Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, Judge Scheindlin rules that attorneys should issue legal holds in writing to ensure that parties preserved evidence and deemed a party’s failure to do so gross negligence. Although “perfection” in discovery isn’t required, “litigants and counsel [must] take the necessary steps to ensure that relevant records are preserved when litigation is reasonably anticipated, and that such records are collected, reviewed, and produced to the opposing party.”
The first study is released comparing the results of manual review to technology-assisted review (TAR). In “Document Categorization in Legal Electronic Discovery: Computer Classification vs. Manual Review,” Anne Kershaw, Herbert L. Roitblat, and Patrick Oot found that computer-assisted review “was at least as accurate” as manual review.
“… computer-assisted review ‘was at least as accurate’ as manual review.”
Many courts decline to follow Pension Committee. One month after Judge Scheindlin issued her opinion, U.S. District Judge Lee Rosenthal of the Southern District of Texas holds that bad faith is necessary before imposing an adverse inference in Rimkus Consulting Group Inc. v. Cammarata. She asserts, “It can be difficult to draw bright-line distinctions between acceptable and unacceptable conduct in preserving information and in conducting discovery, either prospectively or with the benefit (and distortion) of hindsight.”
Maura R. Grossman and Gordon V. Cormack publish a study in the Richmond Journal of Law and Technology disputing that human review is the gold standard; their research revealed that TAR “can (and does) yield more accurate results than exhaustive manual review, with much lower effort” and a significantly lower cost.
“U.S. Magistrate Judge Facciola of the District of Columbia chastises the parties for their combative discovery tactics…”
In Tadayon v. Greyhound Lines, Inc., U.S. Magistrate Judge Facciola of the District of Columbia chastises the parties for their combative discovery tactics, which he says are more likely to thwart justice and cost-efficiency than advance any substantive position. Judge Facciola, declaring himself the “new sheriff in town,” orders that, “The filing of forty-page discovery motions accompanied by thousands of pages of exhibits will cease and will now be replaced by a new regimen in which the parties, without surrendering any of their rights, must make genuine efforts to engage in the cooperative discovery regimen contemplated by the Sedona Conference Cooperation Proclamation.”
In February 2012, U.S. Magistrate Judge Andrew J. Peck of the Southern District of New York issues the first decision officially approving the use of TAR to conduct ediscovery in Da Silva Moore v. Publicis Groupe. He asserts, “Computer-assisted review appears to be better than the available alternatives, and thus should be used in appropriate cases.”
The American Bar Association (ABA) publishes comment  to Rule 1.1, requiring lawyers to stay current on “the benefits and risks associated with relevant technology.”
The Third Circuit, in Race Tires America v. Hoosier Racing Corp., rules that prevailing parties under Federal Rule of Civil Procedure 54(d)(1) cannot claim the costs of ediscovery unless they fall within the purview of 28 U.S.C. § 1920(4), which allows the recovery of “fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.” The court rejects the trial court’s allowance of costs for an ediscovery consultant’s fees and permitted only ediscovery charges for converting native files to TIFF format and scanning paper documents.
“The court rejects the trial court’s allowance of costs for an ediscovery consultant’s fees and permitted only ediscovery charges for converting native files to TIFF format and scanning paper documents.”
Maura Grossman and Gordon Cormack publish “Evaluation of Machine-Learning Protocols for Technology-Assisted Review in Electronic Discovery,” a study that found continuous active learning (CAL) delivered “generally superior results” to earlier TAR technology (TAR 1.0) with “substantially and significantly less human review effort.”
The 2015 amendments to Rule 26(b)(1) and Rule 37(e) address the issues of proportionality in discovery and inconsistency in imposing spoliation sanctions. Rule 26(b)(1) now limits discovery to what is “proportional to the needs of the case” using a five-factor test. Rule 37(e) instructs that negligence is insufficient to warrant the most severe spoliation sanctions, such as an adverse inference or dismissal.
“The GDPR requires businesses worldwide to limit their possession and processing of the personal data of EU residents…”
The EU adopts the General Data Protection Regulation (GDPR) to strengthen and unify various EU data protection laws and regulations. The GDPR requires businesses worldwide to limit their possession and processing of the personal data of EU residents, creating a quandary for businesses that must conduct discovery abroad.
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