It seems that Congress feels the need to weigh in on the costs of eDiscovery. Articles from LTN, CMSwire, Law.com and many other bloggers take many different perspectives on the commentary and Q&A session. We went to the House report to try to extract some of the highlights. My biggest take away is that we really do not have any solid metrics and objective market data on the true cost of eDiscovery. The comments focused on the cost and burden of preservation, especially on matters that never become actual litigation. Republican subcommittee members stressed the costs while Democrats questioned the relevance and corporate donor origin of the hearing itself in light of the active rule evaluation by the Judicial Conference. So here are some of the notable statements with my own perspective on them.

Subcommittee Chairman Franks (R-Az) states “parties no choice to but err on the side of preserving more data than necessary.” Duh. We all know that the preservation scope of most matters is overly broad without a mature assessment process with the right personnel, protocol and technology to make it defensible. Counsel do not want to run the risk of sanctions, despite the statement from William Butterfield, a partner at Hausfeld that sanctions were sought in less than one fifteenth of one percent of cases. eDiscovery is still relatively new. Corporations and private companies are just now taking ownership of the early scope and risk assessment process.

Full Committee Ranking Member Conyers (D-MI) asserted that the burdensome discovery processes are only an issue in one-tenth of one percent of all civil cases. Where is he getting his information? He seems to believe that discovery is only a burden to large corporations, which he insinuates is the Republican motivation for this hearing. The eDJ Group consults for a wide variety of public corporations, law firms and some small private companies. eDiscovery is a burden is EVERY matter, large or small. The burden can be out of proportion to the matter, but we have seen early adopters control that burden and convert reactive fire drills into everyday business process. 

Subcommittee Ranking Member Nadler (D-NY) noted that the Department of Justice (DOJ) has expressed significant concerns that a new discovery rule is being considered without adequate empirical evidence that a rule change is necessary. Why is the DOJ even interest in CIVIL discovery? I understand that it does impact some regulatory matters and our federal government is party to many civil suits. I would think that the burden of FOIA requests, Sunshine Laws and other efforts towards governmental transparency far outweigh the impact of civil suits.

Rebecca Love Kourlis, Executive Director, Institute for the Advancement of the American Legal System, University of Denver stated that eDiscovery has increased the cost of discovery by $2-$3 million per case. Where is she getting this number from? Is this the cost of preservation or does it include the cost of review? We need objective, realistic data on the volume, effort and cost of eDiscovery. William Butterfield said the only objective empirical data on discovery costs, from a survey by the Federal Judicial Center, shows that discovery costs in the vast majority of cases are proportionate to the stakes in the litigation and to the total litigation costs. My read of Kenneth Wither’s presentation differs substantially. He stressed the explosion of ESI and the large costs associated with the cited caselaw. We need real data across a wide variety of market verticals and litigation types. 

William Hubbard, Assistant Professor of Law, University of Chicago Law School countered by asserting that the median federal costs for civil litigation “do not appear to be overwhelmingly high” with only the top 5 percent of cases racking up discovery costs into the hundreds of thousands of dollars. His eDiscovery cost of $12,000 per case is based on just four unnamed Fortune 500 corporations. I question whether these four corporations are serial litigants who have already invested in proactive eDiscovery process and technology. His numbers seem appropriate for mature early adopters who have stopped the bleeding, but wildly under the costs that we see for clients still in the ad hoc/reactive stage.

Thomas Hill, Associate General Counsel, Environmental Litigation and Legal Policy, General Electric (GE) stated that GE preserves documents if there is a reasonable chance for litigation, even if a case is never brought. I believe that he hits the nail on the head for the upstream burden and costs. He posited that plaintiffs have little incentive to reduce discovery burdens and that many parties never review the vast majority of productions. This is a real counsel on the front line, telling it like he sees it. When asked if private companies will face the same burden as GE, he says that they will actually face proportionately MORE impact because they do not have the same resources to throw at preservation and review efforts.

The subcommittee members and witnesses seemed to accept the assertion that only 5% of civil matters involved any substantial discovery burden. I think that they miss the impact of willful blindness on the part of too many parties, both counsel and custodians. Are you living that 5% in every one of your cases? That is an indication that you are stepping up and facing your responsibilities.

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