03 Feb Specific Issues in E-Discovery: Over-Delegating E-Discovery Obligations – Podcast

We conclude our e-discovery blog and podcast series with a practical word of caution to the busy individual in litigation—the business owners, their attorneys and anyone else tasked with running a business:  resist over-delegating the task of meeting your company’s e-discovery obligations.  Managing the maintenance, storage, culling and production of electronically-stored information can be an unsurmountable task if one is not involved from the beginning and throughout the process.

More disastrous however can be the legal consequences of not properly managing the process and over-delegating.  If you or your attorney fail to properly manage the process, both of you can be subject to sanctions from the court—which sanctions could be monetary or even worse result in your company’s inability to use key documents or make critical arguments in the litigation.

Attorney Duty to Supervise

Your attorney is required by law to exercise some degree of control over the discovery process, and to ensure you and your company respond completely and promptly to discovery requests.  He or she cannot rely on you or a vendor to conduct and control the e-discovery process.  While it may be tempting for your attorney (or your company as cost-savings measure) to delegate unsupervised tasks to the company, this hands-off, over-delegating approach could result in your company failing to meet its discovery obligations, and possibly suffering sanctions from the court.

For example, in a declaratory judgment action concerning the rights and obligations of the parties under certain licensing and distribution agreements, the court imposed monetary sanctions on both the party and its counsel because counsel relied solely on his client to search for and produce responsive materials, without any involvement.  The court admonished counsel for improperly certifying that he made a reasonable inquiry into the identity and location of the client’s responsive materials, even though counsel had “done little, or nothing, in terms of a reasonable inquiry.”  Counsel did not make any inquiries into whether the client had any relevant materials, where they were or whether they were produced; counsel simply forwarded the document requests to his client with instructions to assemble materials for production, without any meaningful follow-up or supervision.

Client Duty to be Involved  

Companies have also been taken to task for delegating e-discovery duties to outside vendors without supervising or controlling the e-discovery process.  For example, in a patent infringement case, the court imposed monetary sanctions on a company for failing to conduct a “reasonable investigation” into its affiliate company’s document retention and production in the case.  The company had affirmatively asserted that all responsive material had been produced, did not exist or no longer could be found.

The issue in this case was not whether the company had in fact properly produced all relevant material, but rather the company’s lack of involvement in the discovery process, and whether it could be found to be over-delegating e-discovery tasks.  When the corporate representative was questioned in deposition about the process, he could not answer questions about the search and review of the affiliate company’s documents because it had all been handled by a vendor.

Specifically, the court sanctioned the corporate representative because he was unable to (1) provide details about the affiliate company’s computer systems; (2) articulate the methods used to search the computer systems; (3) name the employees who might have been in possession of relevant information; or (4) discuss whether a litigation hold was implemented or whether the affiliate’s employees were contacted regarding the document requests.

Taking a “Hands-On” Approach

To avoid sanctions and prevent accusations of over-delegating, both you and your counsel should take a “hands-on” approach to e-discovery.  This means making sure you are both directly involved in discovery-related tasks, so that either of you, if asked by the court or opposing counsel, could sufficiently explain the actions he or she took to meet the company’s discovery obligations.

Some of the proactive steps you and your attorney can take to ensure active involvement and avoid hiccups down the road in discovery are:

• Implementing written retention policies in house and educating employees about them;
• Creating a “data map” which tracks where the company’s electronically-stored information and paper records are located, stored and deleted;
• Identifying key witnesses and custodians of data and routinely ask them how and where they store relevant documents and ESI;
• Issue a litigation hold;
• Suspend routine destruction of documents and electronically-stored information; and
• Assemble a team at the company that will be responsible for collecting, reviewing and producing relevant documents and electronically-stored information.

Moreover you must ensure your attorney is providing opposing counsel with a description, by category and location, of ESI and tangible items your company has in its possession, custody or control, which may be used to support any claims or defenses.  It is also critical you and your attorney draft discovery responses that clearly identify the custodians of information and the sources from which the collection and production of such information will be made.  Providing precise discovery responses will not only limit the collection burden, but also protect your company from sanctions.

Contact Edwards Law today if you and your company need guidance in devising an ESI and document-retention and production plan.