State Legislators Hear Push for E-Discovery Reform

| 0 Comments | 0 TrackBacks
Limiting e-discovery has become the business community's top civil justice reform priority, from Fortune 50 corporations to neighborhood businesses, two leading corporate attorneys told a gathering of state legislators last week.

E-discovery is an outgrowth of pre-trial discovery, the process in which attorneys in civil litigation review documents and other non-privileged matter that can be considered relevant to a court case. In the U.S. it is considered part of legal due process and has been interpreted broadly throughout history. With the growth of computers, thin client devices and the Internet, however, discovery now extends to electronic documents, be they email, phone records, Microsoft Word and Excel documents and with growing frequency, stored video surveillance images and building access records.

That's why the issue has been gaining a high profile among CSOs and CISOs, many of whom believe that the explosion of data retention that comes with the convergence of security and modern information systems calls for e-discovery reform. Under current laws, they say, good-faith attempts at compliance can wreak havoc with information security in terms of systems and cost.
 
Speaking last Thursday at a workshop at the annual meeting of the American Legislative Exchange Council (ALEC) in Atlanta, Chuck Beach, coordinator, corporate litigation for Exxon Mobil and James McCrystal, a trial attorney and partner with Brzytwa Quick & McCrystal LLC, a Cleveland-based law firm, called for tighter definitions as to what constitutes "reasonable accessibility" when it comes producing electronically stored information (ESI) during pretrial discovery, and laws that would limit the liability of a party who erased or destroyed ESI if it was done with reasonable belief that the information would have no bearing on future litigation.

The attorneys were joined by State Sen. John Donahue of Louisiana, who recently attempted but failed to get e-discovery reform passed in his state.

The increasing cost e-discovery has attorneys concerned that businesses --even if blameless--will simply settle with plaintiffs because the cost of responding to e-discovery requests makes the cost of a trial too high. "The cost is a threat to small business," McCrystal said. "If the cost is prohibitive, what do you do for protection?"

McCrystal cited data from a survey of 1,494 members of the American College of Trial Lawyers, a group that represents the nation's top trial attorneys, A substantial majority said that e-discovery was creating a substantial cost burden on litigants.

The following are statements about e-discovery and the percentage of respondents who answered yes.

E-discovery increases cost of litigation                                     87%
E-discovery increases costs of discovery disproportionally         75%
Courts don't understand the cost ramifications of e-discovery     77%
E-discovery is being abused by counsel                                   63%

In addition to the cost of conducting e-discovery, there's the added cost of pre-emptive data preservation. Exxon Mobil retains about 250 terabytes of information, Beach said, equivalent to 25 billion pages of e-mail. Even then, data is routinely erased as disaster recovery backup tapes are recycled. If recycling were stopped, which, given the current direction of e-discovery attorneys may begin to advise clients to do, the cost of replacing the tapes would exceed $1.7 million per month, or $20 million a year, Beach said.

Beach and McCrystal said they advocated legislation that would distinguish between ESI that is reasonably accessible and ESI that is not reasonably accessible because of undue burden or cost. Companies would have no duty to preserve data not reasonably accessible without a court order. Courts could also rule that requested data is not reasonably accessible if the cost burden of searching for it outweighs the likely benefit. In addition, legislation could also require the requesting party to pay the cost retrieving hard-to-access data. Such a law already exists in Texas, and courts in New York and California have ruled similarly.

Louisiana's Sen. Donahue, who owns a construction company in Mandeville, La., said his firm owns 50 computers storing about 450 gigabytes of information. He estimated that if hit with a lawsuit, it would cost his company as much as $3.1 million to respond to e-discovery. "The thing that concerns me is that small businesses and small law firms could not defend a case because of the cost," he said.

His attempt to pass an e-discovery reform bill based on model legislation from ALEC was defeated 18-16 in the Louisiana Senate. Most tort lawyers in the state took a position against he said, but, on what Donahue considered an encouraging note, one of the state's judicial associations, which had earlier opposed the bill, ended up taking no position.

ALEC is a non-profit organization that brings together state legislators and private sector representatives with an aim toward crafting model legislation that can be used and further tailored by state legislatures. The organization is non-partisan, but tilts conservative, advancing legislative ideas that advance Jeffersonian principles of free markets, limited government and federalism.

Limiting e-discovery has become the business community's top civil justice reform priority, from Fortune 50 corporations to neighborhood businesses, two leading corporate attorneys told a gathering of state legislators last week.

E-discovery is an outgrowth of pre-trial discovery, the process in which attorneys in civil litigation review documents and other non-privileged matter that can be considered relevant to a court case. In the U.S. it is considered part of legal due process and has been interpreted broadly throughout history. With the growth of computers, thin client devices and the Internet, however, discovery now extends to electronic documents, be they email, phone records, Microsoft Word and Excel documents and with growing frequency, stored video surveillance images and building access records.

That's why the issue has been gaining a high profile among CSOs and CISOs, many of whom believe that the explosion of data retention that comes with the convergence of security and modern information systems calls for e-discovery reform. Under current laws, they say, good-faith attempts at compliance can wreak havoc with information security in terms of systems and cost.
 
Speaking last Thursday at a workshop at the annual meeting of the American Legislative Exchange Council (ALEC) in Atlanta, Chuck Beach, coordinator, corporate litigation for Exxon Mobil and James McCrystal, a trial attorney and partner with Brzytwa Quick & McCrystal LLC, a Cleveland-based law firm, called for tighter definitions as to what constitutes "reasonable accessibility" when it comes producing electronically stored information (ESI) during pretrial discovery, and laws that would limit the liability of a party who erased or destroyed ESI if it was done with reasonable belief that the information would have no bearing on future litigation.

The attorneys were joined by State Sen. John Donahue of Louisiana, who recently attempted but failed to get e-discovery reform passed in his state.

The increasing cost e-discovery has attorneys concerned that businesses --even if blameless--will simply settle with plaintiffs because the cost of responding to e-discovery requests makes the cost of a trial too high. "The cost is a threat to small business," McCrystal said. "If the cost is prohibitive, what do you do for protection?"

McCrystal cited data from a survey of 1,494 members of the American College of Trial Lawyers, a group that represents the nation's top trial attorneys, A substantial majority said that e-discovery was creating a substantial cost burden on litigants.

The following are statements about e-discovery and the percentage of respondents who answered yes.

E-discovery increases cost of litigation                                     87%
E-discovery increases costs of discovery disproportionally         75%
Courts don't understand the cost ramifications of e-discovery     77%
E-discovery is being abused by counsel                                   63%

In addition to the cost of conducting e-discovery, there's the added cost of pre-emptive data preservation. Exxon Mobil retains about 250 terabytes of information, Beach said, equivalent to 25 billion pages of e-mail. Even then, data is routinely erased as disaster recovery backup tapes are recycled. If recycling were stopped, which, given the current direction of e-discovery attorneys may begin to advise clients to do, the cost of replacing the tapes would exceed $1.7 million per month, or $20 million a year, Beach said.

Beach and McCrystal said they advocated legislation that would distinguish between ESI that is reasonably accessible and ESI that is not reasonably accessible because of undue burden or cost. Companies would have no duty to preserve data not reasonably accessible without a court order. Courts could also rule that requested data is not reasonably accessible if the cost burden of searching for it outweighs the likely benefit. In addition, legislation could also require the requesting party to pay the cost retrieving hard-to-access data. Such a law already exists in Texas, and courts in New York and California have ruled similarly.

Louisiana's Sen. Donahue, who owns a construction company in Mandeville, La., said his firm owns 50 computers storing about 450 gigabytes of information. He estimated that if hit with a lawsuit, it would cost his company as much as $3.1 million to respond to e-discovery. "The thing that concerns me is that small businesses and small law firms could not defend a case because of the cost," he said.

His attempt to pass an e-discovery reform bill based on model legislation from ALEC was defeated 18-16 in the Louisiana Senate. Most tort lawyers in the state took a position against he said, but, on what Donahue considered an encouraging note, one of the state's judicial associations, which had earlier opposed the bill, ended up taking no position.

ALEC is a non-profit organization that brings together state legislators and private sector representatives with an aim toward crafting model legislation that can be used and further tailored by state legislatures. The organization is non-partisan, but tilts conservative, advancing legislative ideas that advance Jeffersonian principles of free markets, limited government and federalism.

No TrackBacks

TrackBack URL: http://www.securitysquared.com/cgi-bin/mt/mt-tb.cgi/71

Leave a comment