Fools Rush In: The Importance of Negotiating Comprehensive ESI Protocols

Embarking on discovery without first entering into a negotiated protocol regarding electronically stored information (ESI) is like flying blind. An ESI protocol allows parties to address a myriad of critical discovery issues, from such basic issues as the sources of electronic discovery, the exchange of metadata, and the form of production, to more technical issues, including the use (or non-use) of various technologies, such as technology-assisted review (TAR) and email threading, and the protection of irrelevant information within otherwise responsive material. A comprehensive protocol—entered between parties who appreciate and have fully considered the pros and cons of available technology—can go a long way toward avoiding costly disputes. More importantly, good faith participation in this process is required to avoid the imposition of sanctions pursuant to Federal Rule of Civil Procedure 37(f).

Particularly relevant to conducting discovery given constantly changing technologies, an attorney’s duty to provide competent representation includes a duty to stay “abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.” ABA Model Rule 1.1, cmt. 8; see also New Jersey Rule of Professional Conduct (RPC) 1.1.

Apart from counsel’s ethical obligations to understand available technologies, two recent cases (both in the context of disagreements about TAR) suggest that a party’s choices on these issues may significantly impact future motion practice between the parties. While it has been almost a decade since Magistrate Judge Andrew Peck’s (ret.) judicial endorsement of the use of predictive coding in Moore v. Publicis Groupe, 287 F.R.D. 182 (S.D.N.Y. 2012), courts remain hesitant to require a litigant to use TAR or other technology in responding to discovery. Instead, courts remain steadfast in their support for Sedona Conference Principle 6—that a responding party is in the best position to choose an appropriate method for gathering and identifying relevant information for production—and are holding litigants to the consequences of their choices.

A 2020 special discovery master’s ruling emphasizes that counsel’s decisions regarding discovery must be appropriately informed by technological options. In In re Mercedes-Benz Emissions Litig., 2020 WL 103975, at *1 (D.N.J. Jan. 9, 2020), the parties could not agree on certain aspects of a protocol, and Special Master Dennis M. Cavanaugh, U.S.D.J. (ret.) rejected the plaintiffs’ application to enter a protocol compelling the defendants to utilize TAR. Instead, relying in part on Sedona Conference Principle 6, the Special Master deferred to the defendants’ chosen method—search terms. That said, the Special Master acknowledged that courts have universally concluded that TAR is “cheaper, more efficient and superior to keyword searching” and noted that a party’s decision not to avail itself of such technology may have its costs. While allowing the defendants to pursue their requested method, the Special Master cautioned that he would evaluate any future objection regarding the burden of the requested discovery in light of the defendants’ refusal to proceed with TAR. The Special Master did just that and later rejected the defendants’ burden arguments in ruling on the parties’ dispute regarding the scope of discovery and appropriate custodial sources. In re Mercedes-Benz Emissions Litig., 2020 WL 747195, at *6 (D.N.J. Feb. 14, 2020).

At the opposite end of the spectrum, a requesting party’s insistence that an adversary use a particular review method or technology turned out to be a very risky bet. Lawson v. Spirit AeroSystems, 2020 WL 1813395 (D. Kan. Apr. 9, 2020). In Lawson, the court entered a basic ESI protocol well after discovery commenced because the “parties could not agree on ESI custodians or search terms, and had difficulty meeting and conferring productively.” After that process yielded low responsiveness rates, the requesting party insisted that TAR be used notwithstanding the court’s warning that it could be responsible for the associated costs. Ultimately, the court ordered the requesting party to pay over $750,000 because of its insistence that TAR be used despite evidence that the additional documents would have “marginal (if any) relevance.” See Lawson v. Spirit AeroSystems, 2020 WL 3288058, at *1 (D. Kan. June 18, 2020); see also Lawson v. Spirit AeroSystems, 2020 WL 6343292, at *1 (D. Kan. Oct. 29, 2020).

Lawson and In re Mercedes reflect how important it is for parties and their counsel to make decisions about the use of TAR guided by understanding of the technologies. To the extent parties decide not to use TAR, the ESI protocol should explicitly state that the parties considered TAR but determined that it is not appropriate in the specific circumstance. While there is still a risk that deciding not to utilize TAR may impact a subsequent burden argument (if a party uses keyword searching), specifically addressing the decision not to use TAR should: (1) avoid unilateral attempts by one party to force another party to use TAR after discovery is underway; and (2) indicate to the court that the parties considered the use of TAR but made an informed decision not to use it.

In negotiating an ESI protocol, whether to use TAR is not the only question to address. The Sedona Conference Cooperation Proclamation, Federal Rules of Civil Procedure, and countless judicial decisions extol the benefits of cooperation, and cooperation remains critical. However, entering a protocol with wide-ranging cooperation and transparency provisions, such as those in which the parties agreed to “cooperate” and “meet and confer” pertaining to “the disclosure and formulation” of TAR, creates potential risks. See In re Valsartan, Losartan, & Irbesartan Products Liab. Litig., 2020 WL 7054284, at *1 (D.N.J. Dec. 2, 2020). While refusing to cooperate is extremely risky in light of the availability of sanctions under Rule 37(f), full transparency into a responding party’s review and production process is not required. See Miller v. Thompson-Walk, 2019 WL 2150660, at *1 (W.D. Pa. May 17, 2019). Accordingly, litigants negotiating an ESI protocol must walk a fine line between cooperating in good faith and forfeiting the right to conduct discovery with some autonomy.

Few cases address another common technology used to help increase the efficiency of document reviews—email threading, which identifies the most inclusive email in a chain for review and omits the less inclusive emails as near duplicates. Like TAR, however, the use of email threading should be addressed in an ESI protocol. If a producing party wishes to exclude the less inclusive emails from its productions, such an exclusion of responsive documents should be done with the agreement of the requesting party. From the perspective of a requesting party, such an agreement has the seemingly obvious benefit (like de-duplication) of reducing the number of documents a requesting party will receive.

But, before agreeing to the exclusion of lesser included emails, counsel must understand the downside. For example, excluding lesser included emails from production results in the exclusion of the metadata associated with the initiating email in a chain (which may be weeks or even months prior to the last email in a chain). This will materially reduce a receiving party’s ability to search for all correspondence within a date range. Armed with this knowledge, and in consultation with an e-discovery vendor, well-informed counsel faced with a producing party’s request to exclude lesser included emails identified through threading technology may be able to ameliorate this effect by including a protocol provision requiring the exchange of certain metadata for any excluded, lesser-included emails.

Before negotiating an ESI protocol, it should go without saying that an attorney must have a thorough understanding of a client’s information systems and electronic documents. In matters pending in the District of New Jersey, attorneys are expressly required to investigate and understand their client’s ESI. See Local Rule 26.1(d)(1). In carrying out this obligation, counsel should be extremely cautious about agreeing to ESI protocols including broad search terms, especially where they do not have a full understanding of the potential number of search hits before agreeing to the terms. See I-Med Pharma v. Biomatrix, 2011 WL 6140658, at *1 (D.N.J. Dec. 9, 2011).

Protecting confidential information is another area in which counsel’s thorough knowledge of their client’s information systems and documents in advance of negotiating a discovery protocol is critical. It is not uncommon for businesses and employees to compile information in various reports, the text of email correspondence, or numerous attachments to an email. Courts are split over the propriety of redacting irrelevant, non-responsive information within a document containing responsive information. See Engage Healthcare Commc’ns v. Intellisphere, 2017 WL 3624262, at *3 (D.N.J. Apr. 26, 2017) (collecting cases). As a result, counsel should consider the likelihood that these issues will arise in a client’s documents and, if so, seek to provide for the redaction of such information and/or the withholding of non-responsive attachments in an ESI protocol. Given the split of authority on this issue, absent such provisions, many courts may find that it is improper to redact information on the basis of relevance from otherwise responsive documents.

The failure to enter into a comprehensive ESI protocol has the potential to derail a litigation on the merits into costly “discovery on discovery” where parties seek to discover what an adversary did (or did not do) in responding to discovery. While there is no way to prevent discovery on discovery, negotiated provisions such as those discussed above, as well as the inclusion of a good cause standard or other standard for expansion of any agreed upon limits, including meet-and-confer requirements, may be effective in preventing and/or reducing discovery on discovery. Discovery in a complex litigation is riddled with potential landmines, but a comprehensive ESI protocol is an essential litigation tool for minimizing potential disputes.

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Reprinted with permission from the April 12, 2021 issue of the New Jersey Law Journal. © 2021 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved. For information, contact 877-257-3382 or reprints@alm.com or visit www.almreprints.com.