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“Self-collection” refers to the situation in which the custodians of information potentially relevant to a legal proceeding undertake to identify and collect that information on their own and provide the collected content to counsel.

The typical self-collection situation involves some limited instruction or oversight from counsel (in-house or outside).  For example, outside counsel issues a litigation hold notice identifying various topics and potentially responsive data.   A recipient of that notice undertakes to review his/her paper files, self-designates what he/she deems relevant, and provides that “relevant” content to in-house counsel.  Similarly, the self-collecting custodian may run key words in his/her Outlook mailbox and drag and drop “hits” to a designated folder in Outlook.

Such self-collection efforts, however, are often not an advisable course in any litigation, as the risks and consequences of employing self-collection can be significant.

Time Commitment

Consider for example, the salesperson with a computer who has received a legal hold notice and who is deemed to be in possession of potentially responsive information.   Assuming the individual acknowledges receipts of the hold notice (obtaining an acknowledgment of receipt and an intent to comply can often be a task in and of itself), does the individual have the time needed and interest to commit to a thorough and comprehensive collection?  If not, what are the chances the collection is done well, if at all?

Understanding the Scope of What is Required

Does the individual really understand the legal and factual scope of the proceeding at issue?  Even the most thoughtfully drafted hold notice does not necessarily convey to a non-lawyer unfamiliar with the matter the precise scope of relevant materials.  If the custodian doesn’t understand completely the factual and legal scope of the proceeding at hand, relevant materials may be overlooked.  And, assuming there is more than one custodian undertaking a self-collection exercise, how does counsel verify each self-collector’s respective understanding is consistent with those of other self-collectors?  In other words, custodian A may understand that widgets are clearly relevant, while custodian B understands only certain categories of widgets are relevant.

Technical Know How; Potential Conflict of Interest

Putting aside the timing and factual issues that can undermine a self-collection, do the custodians have the technical know-how to complete a defensible and sound collection?   This concern is, in my opinion, more troubling than the first two issues.  Indeed, the technical rube could inadvertently alter or delete relevant content and metadata, which may ultimately affect the data’s evidentiary value.  Or worse, the ill-intentioned self-collector whose interest may be contrary to the client’s interests, could intentionally omit or destroy content (which, could, potentially lead to spoliation motions and sanctions).

Given the potential risks presented by self-collection, lawyers should think long and hard before allowing it.  In the words of the Honorable Shira Scheindlin, “[s]earching for an answer on Google (or Westlaw or Lexis) is very different from searching for all responsive documents in the FOIA or e-discovery context…” and “most custodians cannot be ‘trusted’” to effectuate a legally sufficient collection.  National Day Laborer Org. Network v US Immigration and Customs Enf. Agency, (10 Civ. 3488 [SAS] [SDNY 2012]).

(See related post, Litigation Hold Notices Should Not Cloak the Recipient With Discretion Over What Documents to Preserve).

Have questions regarding data collection in legal proceedings?  Please contact me at kcole@farrellfritz.com.

In In Re State Farm Lloyds, (Texas Supreme Court [May 26, 2017] 2017 WL 2323099), the Supreme Court of Texas elaborated on the standard applied to evaluate and resolve production disputes. Specifically, the Court opined (perhaps not surprisingly) that of “the guiding principles informing the exercise of discretion over electronic-discovery disputes, proportionality is the polestar.” Id. at *15. More importantly however, the Court potentially opened an avenue allowing producing parties to claim an “undue burden” defense relating to, at the very least discovery demands that require production of ESI in a format other than as maintained. The Court’s opinion may have reverberating effects on the issue of ESI degradation in the future.

Relevant Facts

In connection with Plaintiffs’ allegations of insurance underpayments by Defendant for hail-damage claims, Plaintiffs (“Homeowners”) requested vast amounts of ESI during discovery and demanded production be in the “native” or “near native” form, allowing Homeowners to view the files’ metadata (which, would allow Plaintiffs to assess changes made on claims forms).

Defendants objected and proposed instead a production in the files’ “searchable static form,” arguing the “static form” was “reasonably useable,” and thus permissible under Texas Rules of Civil Procedure 192.4 and 196.4. Defendants further noted it was their routine business practice to degrade ESI to the static format and a Court directive to convert (again) the files from the static form would simply add costs.

To support their position, Defendants offered evidence that it processes more than 35,000 claims each day and when those claims are uploaded to the Enterprise Claims System, they are converted to a static form. Further, Defendants’ expert testified that a static format allowed the files to be examined without inadvertent or intentional alteration. He also testified that to produce in native file would be extraordinarily burdensome.

The trial court ruled in favor of the Homeowners, ordering that absent a showing of infeasibility the ESI must be produced in the requested format.   Defendants – and ultimately entities who filed amici briefs in support of Defendants – argued this decision effectively granted requesting parties “unlimited power” in dictating production format.

Eventually, the Supreme Court of Texas heard argument on the issue.

Although the Supreme Court did not resolve the specific production format dispute – instead remanding the case to the trial court with instruction to resolve that issue with input from its opinion – the Court made clear that proportionality is the critical inquiry when evaluating any discovery dispute. To this end, the Court articulated a seven factor proportionality framework to help the Bench and the Bar resolve future discovery disputes on a case-by-case basis.

According to the Supreme Court of Texas, the seven proportionality factors to be considered are the: 1) likely benefit of the requested discovery; 2) needs of the case; 3) amount in controversy; 4) parties’ resources; 5) importance of the issues at stake in the litigation; 6) importance of the proposed discovery in resolving the litigation; and 7) other articulable factors bearing on proportionality. These factors essentially mirror the factors to be considered when assessing proportionality in federal courts.

And, while the articulated proportionality factors are helpful, the data degradation issue that percolated in the background of the opinion must be addressed. As the Court opined, “when a party asserts that unreasonable efforts are required to produce ESI in the requested form and a ‘reasonably useable alternative’ is readily available, the trial court must balance any burden or expense of producing in the requested form against the relative benefits of doing so.” Id. at *1. The Court further observed that, “‘the simple fact that requested information is discoverable . . . does not mean that discovery must be had. So while metadata may generally be discoverable if relevant and unprivileged, that does not mean production in a metadata-friendly format is necessarily required.’” Id. at *6 (internal citations omitted).  What? So, if I ask for metadata I may not get it?  Well, maybe not in Texas.

The Court concluded by noting that “ultimately, the court’s responsibility, using all the information provided by the parties, is to consider [the proportionality] factors in reaching a case-specific determination of the appropriate scope of discovery.” Id. at *14. The Court further stated that in order to compel metadata there needs to be an obvious link to a claim or defense, otherwise such a request to compel will not be granted.

This conclusion recussitates the debate over how the degradation of ESI should be handled when producing electronic information. For those cases in which metadata may be relevant, this decision is potentially troubling as it suggests metadata-friendly production is not necessary absent an ability to link, specifically, the need for metadata to a claim or defense in the litigation.  And, even then, motions to compel may be required. Minimally, however, the decision implies that at least in Texas, Courts may review requests for native format with more rigorous scrutiny where there is a “reasonably useable” alternative and native production is not obviously necessary to prosecute or defend any given claim.

*A special thanks to Farrell Fritz Summer law clerk Philip Merenda for his research and drafting assistance with The Seven Commandments of Proportionality.  Philip is a student at Georgetown University Law and anticipates receiving his J.D. in 2018.