Migrated from eDJGroupInc.com. Author: Greg Buckles. Published: 2010-07-22 05:00:46Format, images and links may no longer function correctly. The firm of Gibson Dunn has published a survey that covers 103 eDiscovery cases from the first half of 2010. To catch the overall legal implications, Ralph Losey has done his usual excellent analysis riffing on an Andy Warhol theme this time. I wanted to pull out some trend highlights and talk through the potential impact on corporate stakeholders who are struggling to implement a full eDiscovery process. Although there have been some large and well publicized eDiscovery sanctions going back to Zubulake v. UBS Warburg, the total number and cost of civil sanctions against the overall litigation scope has not been sufficient to compel most corporations to invest in defensible process. Corporate legal departments are a cost center. Corporate counsel must make risk versus cost decisions every day and the realistic risk of sanctions has not measured up to the cost of doing discovery ‘right’ for many or most companies.
Although 103 cases is not a massive sample size, the total number of published eDiscovery opinions for 2010 probably does not exceed 200-300 cases. Since we started up the eDiscoveryJournal.com search and syndication engine in February, we have had roughly 300 stories and blogs featuring specific cases. That includes bursts of commentary on notable cases, but it does give me some sense of scale. 30% of the survey cases involved potential sanctions and 67% of those sanctions were awarded (21 of 31 cases). This ratio is effectively unchanged from the 2009 Gibson Dunn survey.
Gibson Dunn 2010 Midyear Survey
The above graphic (from the Gibson Dunn survey) gives a breakout of the awards. Most of the actual monetary sanctions seem to be either recovery of costs incurred or minor fines. Anything under $1 million just does not hit the radar of a Fortune 1000 company that may have 100-1000 active matters. The 4 cases (20%) with adverse inference instructions probably raise more risk awareness than all of the actual sanctions combined. To paraphrase a recent client, “We have never been sanctioned and the odds of it happening are just too low to justify serious investment. The cost to do discovery ‘right’ will cost my job, so let’s talk about a practical phased approach.” As long as eDiscovery sanctions continue to hide in unpublished opinions (mostly from Magistrate Judges), it is hard to demonstrate a realistic Return on Investment (ROI) for eDiscovery salaries, technology and documented process based on risk reduction.
Even when outside counsel get a big, public slap on the wrist, 2008 sanction for $8.5 million in Qualcomm, Inc. v. Broadcom Corp., No. 05-cv-1958, 2010 WL 1336937, at *2 (S.D. Cal. Apr. 2, 2010), the sanction was reversed by the district judge this year. Judge Scheindlin has moderated her “gross negligent” language in Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Am. Sec., LLC, 685 F. Supp. 2d 456, 470 (S.D.N.Y. 2010) while Judge Lee Rosenthal’s Rimkus, 688 F. Supp. 2d at 614 decision clearly sets forth a finding of ‘bad faith’ for adverse inference instructions in the Fifth, Seventh, Eighth, Tenth, Eleventh and D.C. Circuits. When the Circuits cannot agree on the standards for sanctions, it is no wonder that many corporations are taking a minimalist approach to discovery compliance.