Rocket Docket Court Opinion on Self-Collection

Go to any eDiscovery service provider blog site and you will find a post or discussion of the recent opinion out of the Eastern District of Texas where Judge Ward joins a long list of Federal Judges and Magistrates unhappy with the current state of Discovery around ESI.  Let’s begin with what the penalty assessed against the defendant for what essentially was a self collection.

“In conclusion, the Court holds that Blitz is subject to sanctions for various discovery violations as described in this Memorandum Opinion & Order. The Court orders Blitz to pay $250,000.00 in civil contempt sanctions to the plaintiff in this case. The Court additionally orders that Blitz has thirty (30) days from the date of this Memorandum Opinion & Order to furnish a copy of this Memorandum Opinion & Order to every Plaintiff in every lawsuit it has had proceeding against it, or is currently proceeding against it, for the past two years. The Court issues an additional $500,000.00 sanction that will be tolled for thirty (30) days from the date of this Memorandum Opinion & Order. At the end of said thirty (30) days, if Blitz has certified to this Court that it has complied with the Court`s order, the $500,000.00 sanction will be extinguished. Finally, for the next five years subsequent to the date of this Memorandum Opinion and Order, Blitz is ordered that in every new lawsuit it participates in as a party, whether plaintiff, defendant, or in another official capacity, it must file a copy of this Memorandum Opinion and Order with its first pleading or filing in that particular court. This Court expresses no opinion as to the manner in which a particular court may use or not use such copy.” Green v. Blitz U.S.A., Inc, 2011 U.S. Dist. LEXIS 20353 (E.D. Tex. Mar. 1, 2011)

What happened to defendant Blitz U.S.A. is something that could happen in just about any case. If you’re a litigator and reading this and still think it is a good idea to allow your corporate customer to “self collect”, to “save money”, re-read the above conclusion by the court, and read on.

Fox Guarding the Henhouse

In the paper days we conducted document discovery by going to each witness and asking them about how they keep files and then gathering and copying relevant material. Early on, there were times where we would rely upon the witnesses, or the legal department to gather responsive documents. We quickly learned what Blitz just found out the hardway. Someone close to an event that gave rise to the dispute is the last person you want making decisions about what is relevant and what is not because it is guaranteed that their view of what is relevant is going to be narrow, no matter how many instruction memos you write. The bigger problem, however, is what Ralph Losey referred to in his analysis of the Blitz option as “the fox guarding the henhouse”.

"There are many dangers inherent in self-collection, including good faith omission by inadvertence, laziness, or lack of technical or legal training. But the chief danger is bad faith omission by fraud, by the natural desire of a witness to protect him or herself by not producing incriminating emails. This is the fox guarding the hen house scenario that represents the greatest danger of self-collection." Another “Fox Guarding the Hen House” Case Shows the Dangers of Self-Collection. By Ralph Losey.

In the world of ESI, unlike the world of paper, the delete key can erase forever millions upon millions of records in a blink of the eye, or in this case with the stroke of a key. There is also the danger that a witness will alter evidence. On March 29 in Richmond, Va., District Judge Robert Payne sanctioned the mortgage division at SunTrust by ordering the bank to pay the legal fees related to the pretrial discovery-related work of its adversary, United Guaranty Residential Insurance Co. of North Carolina (UG), a mortgage insurance subsidiary of AIG. The offense? Former bank employee Mary Pettitt tried to re-write history by altering email from 2005. SunTrust is appealing the decision.


Why do I care about what some Judge in East Texas says?

If you are a commercial litigator, particularly someone that handles IP litigation, you might care what Judge Ward says. After all, this is not just any old Federal Judge. This is the rocket docket court. What is a rocket docket? The term was originally applied to the United States District Court for the Eastern District of Virginia, after Albert V. Bryan Jr., who ran the federal courthouse in Alexandria, decided that justice was being dispensed too slowly for his liking. The court earned the nickname among attorneys practicing there in the 1960s, who told stories of Bryan ruling on the spot when motions were argued, and trying entire cases in one afternoon.

More recently, the Eastern District of Texas has seen an increase in the number of cases filed relating to patent infringement. This District has experienced an increase in the number of patent cases filed and tried, notably in the courts of Judge T. John Ward in the Marshall Division, Judge Leonard Davis in the Tyler Division, and Judge David Folsom in the Texarkana Division. Some believe the reason so many IP cases get filed there is because the judges are “Plaintiff friendly”, which is actually not the case. The reason so many patent cases get filed in Marshall is because the district has a set of local rules for patent cases and relatively fast trial settings. As a result, patent plaintiffs have flocked to this small venue. In addition the proximity to larger cities (such as Dallas and Houston) along with an aging jury pool interested in protecting property rights, may attract patent cases to Marshall, Tyler, and Texarkana. See Wikipedia. 
The opinions relating to the discovery of ESI continue to come out of courts across the country, yet we still don’t see a significant change in the way lawyers generally approach the identification, preservation, collection, review and production. We are, however, beginning to see considerable involvement from their corporate customers. What is your preservation and collection process?