Serious Consequences for E-Discovery Wrongdoing

There was a time about 15 years ago or so that requesting an opposing party’s e-mail in litigation was considered to be unusual and out-of-the-ordinary.  Not anymore.  As e-mail use grew—if not exploded in the 1990s—discovery rules have evolved as well and now most courts require e-mail and other e-discovery to be produced just like any other paper document.  (In fact, there is a whole comprehensive area of technology and internet law that has developed just around e-discovery.)  And just as parties can be sanctioned for not turning over relevant hard copy documents, failing to produce e-mails can have serious consequences for both lawyers and litigants.

According to a recent article and study by King & Spaulding, which examined numerous 2009 federal decisions addressing e-discovery violations and sanctions, the study’s authors found that “sanction awards for e-discovery violations have been trending ever-upward for the last 10 years and have now reached historic highs.”  Sanctions included susbstantial monetary awards (bad enough), adverse jury instructions (very bad), and case dismissals (the worst).  The monetary sanctions were as high as $5 million in some instances.  That’s serious pocket change no matter who you are and indicates how seriously courts view a party’s compliance obligations.

According to the study, defendants were sanctioned almost 3 times as often as plaintiffs were.  That’s not really a shocker.  Defendants don’t enjoy being sued (not surprisingly) and will put up all sorts of obstacles during the discovery process.  Smart and ethical defense counsel will try not to let that happen, but I’ve seen instances where defendants aren’t even honest with their own attorneys when it comes to giving them the information they need to comply with their clients’ own discovery obligations.

The most common misconduct identified in the study was failing to preserve electronic evidence, failing to produce the records altogether, or delaying the production.  Lawyers were typically sanctioned along with their clients, and the sanction included payment of the opposing party’s attorneys’ fees and costs (which ranged from $500 to $500,000).

By sanctioning attorneys as well, courts are sending a very clear message that the lawyers must be actively involved in the discovery process and must, of course, act properly throughout.  And the discovery process can at times be daunting given the huge number of e-mails, instant messages, and other e-documents—which could easily be in the millions in some large cases—that may have to be produced.  Nevertheless, counsel must be engaged in the process throughout.  It’s easy to see how litigation can get so costly, isn’t it (even without the sanctions)?

The article also mentions another study by Gibson Dunn which looked at these issues in 2010 and found that the imposition of e-discovery sanctions have declined somewhat from 2009, e.g., courts (both state and federal) granted sanctions 55% of the time in 2010, as opposed to 70% in 2009.  Increased calls for discovery reform could be part of the reason.

In reality, however, I don’t find such a decline to be all that comforting (assuming it’s tangible at all).  A 55% chance of being sanctioned isn’t exactly something that you can “brag” about to a non-complying client, and lawyers are well-advised to discuss the serious consequences of non-compliance with recalcitrant clients.  And of course, clients are particularly well-advised to let lawyers do their job.  Or everyone ends up paying the price.

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