In Martinez v. Gen. Motors Corp., No. 266112, 2007 WL 1429632, at *1 (Mich. Ct. App. May 15, 2007) Plaintiff was terminated due to his involvement in a chain of inappropriate email. Plaintiff contends the emails received were not welcomed, and he did not forward those emails to other colleagues. Contrary to Plaintiff’s contention, evidence suggested certain emails were infact forwarded from Plaintiff’s email. Majority of the time Plaintiff’s computer remained logged in with his credentials, even when he was not around. Therefore Plaintiff contends that others had access to his account and must have forwarded the controversial emails. Plaintiff specifically pointed out the ““the computer ‘go-to’ guy for the workers in the small car group,” was in charge of assisting other workers with computer troubleshooting, and therefore had access to the other employees’ passwords.” The computer ‘go-to’ guy testified that, he was “not sure” whether he or plaintiff had forwarded the inappropriate e-mails to his personal e-mail address, and that he simply could not recall whether he had confessed his involvement…”

To investigate the matter, Plaintiff filed a Motion to Compel to have his own expert extract data from Defendant’s hard drive and Lotus Notes E-Mail Server. Upon investigation Plaintiff discovered destruction of data from “Hard Drive 1” believed to be relevant to the case. Defendant pointed out that the initial discovery order of August 2004 merely required GM to produce “copies of existing e-mails sent or received by Plaintiff …” and did not mention hard drives or any other type of computer evidence. The hard drives were destroyed when the computers’ were reformatted by a third-party leasing company in the normal course of business. GM insists that it had no reason to believe prior to the trial court’s January 2005 digital discovery order that Plaintiff would seek discovery of any computer hard drive evidence in this case.

The court relied on Brenner v. Kolk, 226 Mich. App. 149, 159, 573 N.W.2d 65, 70 (1997) stating that, “if material evidence has been spoiled or destroyed by one party, the trial court must carefully fashion a sanction that denies that party the fruits of its misconduct, but that does not interfere with the party’s right to produce other relevant evidence.”

Court in Martinez went onto follow the rule Federal Courts across multiple jurisdictions have been citing, “Even when an action has not been commenced and there is only a potential for litigation, the litigant is under a duty to preserve evidence that it knows or reasonably should know is relevant to the action.” This rule has been heavily litigated in other jurisdiction, and lays down a broad duty to preserve. Parties bearing the burden of proof often face difficulty in halting regular work operations to preserve data – this process can be time consuming and costly. Implementing proper protocol and best practices can reduce the pain, but not relieve the stress. That being said, keep reading and we might have an exception to this general rule if you are dealing with the a duty to preserve question under Michigan Court Rules.

In Martinez, Defendant argues that the hard drives are not relevant, because all emails are stored on the internal Lotus system, and not on the external hard drive. Defendant failed to provide any evidence to back-up this claim; nonetheless, the court determined this issue irrelevant. Even if the emails were discovered, it will not increase or decrease the probability that Plaintiff actually forwarded those emails. The court went on to say, “Although a party is prejudiced by the destruction or spoliation of material and relevant evidence, it’s axiomatic that a party cannot be prejudiced by the destruction or spoliation of irrelevant evidence.”

As we know, it’s not always distinguishable whether evidence will be relevant to a specific case without actually reviewing the data. Litigators must be careful not to rely on this distinction and always uphold their duty to preserve any and all potentially relevant data. A question not addressed in by this case was whether intervention and destruction by a third-party will fall within the parameters of “routine, good-faith operation of an electronic information system.” Mich. Ct. R. 2.313 (e), Since the actual destruction is not done by an automated electronic information system, but by a third party contractor. As suggested earlier, this exception may provide to be useful considering the limited storage capacity within most servers. Two important questions to ask are:

1. How Michigan courts apply “routine, good faith” exception.

2. Can the intervening actions of people be included in the “Operation of an electronic information system?”

Conclusion: Court upheld the trials court ruling and did not sanction defendant for failing to preserve.

RULE 2.313 FAILURE TO PROVIDE OR TO PERMIT DISCOVERY; SANCTIONS (ONLY RELEVANT PORTIONS OF THE RULE ARE CITED BELOW)

Mich. Ct. R. 2.313

(A) Motion for Order Compelling Discovery. A party, on reasonable notice to other parties and all persons affected, may apply for an order compelling discovery as follows:

(1) Appropriate Court. A motion for an order under this rule may be made to the court in which the action is pending, or, as to a matter relating to a deposition, to a court in the county or district where the deposition is being taken.

(2) Motion. If

(d) in response to a request for inspection submitted under MCR 2.310, a person fails to respond that inspection will be permitted as requested,

(5) Award of Expenses of Motion.

(a) If the motion is granted, the court shall, after opportunity for hearing, require the party or deponent whose conduct necessitated the motion or the party or attorney advising such conduct, or both, to pay to the moving party the reasonable expenses incurred in obtaining the order, including attorney fees, unless the court finds that the opposition to the motion was substantially justified or that other circumstances make an award of expenses unjust.

(b) If the motion is denied, the court shall, after opportunity for hearing, require the moving party or the attorney advising the motion, or both, to pay to the person who opposed the motion the reasonable expenses incurred in opposing the motion, including attorney fees, unless the court finds that the making of the motion was substantially justified or that other circumstances make an award of expenses unjust.

(B) Failure to Comply With Order.

(2) Sanctions by Court in Which Action Is Pending. If a party or an officer, director, or managing agent of a party, or a person designated under MCR 2.306(B)(5) or 2.307(A)(1) to testify on behalf of a party, fails to obey an order to provide or permit discovery, including an order entered under subrule (A) of this rule or under MCR 2.311, the court in which the action is pending may order such sanctions as are just, including, but not limited to the following:

(E) Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

While working as an eDiscovery consultant, all my clients had the same question, what’s the final cost? Rightly so, because eDiscovery is not cheap. Just type in “eDiscovery” on Google and you will be flooded by thousands of articles discussing the same issue. Now the real dilemma was to provide a quote that will benefit both parties. As a vendor we wanted higher margins, while my clients wanted everything for free(no joke). Due to uncertainties of data size, file types, custodians, deadlines, review methods etc. providing a hard quote would be similar to guaranteeing your client $500,000 judgment after the first meeting. Just like any ethical-diligent-attorney who needs to do further digging and fact finding, I needed  to ingest all the data in our processing environment and analyze the entire data set.

“Fair enough Yasir, give me an estimate, one of the custodian thinks we have about 4 GB of data. Half of it maybe PST files.” I am going to attempt answering this general question, while assuming tons of random facts. The breakdown I am about to provide should never be cited during cost disputes and even worse, motion to compel for allegedly-overly-burdensome-production request. If an eDiscovery processing engineer is reading this, I am sorry in advance.

For the sake of lovely whole numbers, we will base our analysis on 1 GB worth of data. My goal is not to solve the cost/benefit dilemma faced by litigators, but to provide some guidance to beginners. Catalyst Secure analyzed 29 cases in their database and came up with an average of 2639 documents per GB (http://www.catalystsecure.com/blog/2011/07/answering-an-e-discovery-mystery-how-many-documents-in-a-gigabyte/) .

the rates are going to be the best rates being offered in Michigan under my experience. If you are quoted anywhere close to these rates, consider yourself lucky. Obviously the rates are inversely correlated with the volume of data.

Hypo 1 – Processing data W/O culling for Tiff Review

Cost: $300/GB.

If the volume justifies the cost, the vendors may offer keyword searching, de-duplicating within the $300, but that’s unlikely. Realistically, litigators can’t predict what percentage of data might be relevant. This calls for keyword searching, de-duplicating etc. (we are not going to discuss Technology Assisted Review A/K/A Predictive Coding). The absolute best rates (for culling) in Michigan are $50/GB prior to processing the data for review.

As provided by Catalyst Secure, on average, you will be reviewing 2639 documents. This will equate to approximately 26,930 pages per Hudson Legal ESI Calculator. On average attorneys review about 52 documents per hour. Knowledge Discovery in Corporate Email, THE COMPLIANCE BOT MEENS ENRON, waterman (2006) https://dspace.mit.edu/bitstream/handle/1721.1/37574/85813548.pdf?sequence=1. Accordingly 1 GB will take just under 58 hours of review. If you don’t work for a law firm that has that can afford a document review software, you will be paying minimum of $75/month hosting fee, $70/month per user fee and on the lower end $250 case setup fee to your vendor. Now you must reprocess the data to produce it to opposing counsel. For 1 GB, you may only be processing 200 MB worth of data, hence the cost of that will be $60. Servient (2012) http://servient.com/blog/2012/10/12/the-most-important-e-discovery-metric-the-responsive-rate-2/ (Many firms normally assume a 20% responsive rate)

Cost Summary:

• eDiscovery processing cost for 1 GB: 300 + 75 + 70 + 250 + 60 = $755
  • 58 Hours of review: 58 x 200 = $11,600 (http://www.thebusinesslawyers.com/BBL_News_Articles/Litigation%20Economics%20101.pdf)
• eDiscovery processing cost for 100 GB: 30,000 + 6000 = $36,000 (plus hosting/review cost.)

Hypo 2 – Processing data W/ culling for Tiff Review

A litigator might decide to cull the data on the front end (pre-processing). Traditional culling methods(which is what we are discussing) can reduce the data from 40% to 50%. Culling Data for Your Case, ABA, http://apps.americanbar.org/litigation/committees/technology/articles/110410-electronically-stored-data-culling-software.html. If your vendor is in the holiday spirit, and in a giving mood, you might get a quote for $50/GB for culling. Which means you will only have to process around 500 to 600 MB (after culling 1 GB worth of data).

Cost Summary:

• eDiscovery processing cost for 1 GB: 50 + 150 + 75 + 70 + 250 + 60 = $655
• 29 Hours of review: 29 x 200 = $5,800 (since you will only review about half the data after culling)
• eDiscovery processing cost for 100 GB: 5000 + 15,000 + 6000 = $26,000 plus hosting/review cost.

Hypo 3 – PDF Review

The option to review data in PDF format is available for those not willing to invest in a review software. Due to my bias towards technology, I am of the opinion that you are doing yourself and your client a disservice by not utilizing a review tool. At the same time I do appreciate thousands of successful litigators, who have been successful in their ways. To convert data from native format to PDF cost .02/page and .01/page to OCR (Optical Character Recognition). OCR means to make the document text searchable.

Cost Summary:

• PDF Review 1 GB, 26,930 pages = $807.90
  • 58 Hours of review: 58 x 200 = $11,600
• PDF Review 100 GB, 2,699,3000 pages = $80,790

* Printing PDF’s can cost between .08/page to .13/page, which equates to $2154.40 to $3500.90

CONCLUSION

                Technology is constantly evolving to make our life easier, eDiscovery is no exception. Litigators can cut the amount of ESI in half by utilizing simple methods of de-duplication, keyword searches and date ranges. However, the issue we face is whether a litigator can get a soft quote from a vendor prior to committing? The answer is maybe, I KNOW, that’s not helpful Yasir!  The only solutions are if vendors are willing to offer free data analysis or law firms invest in a basic data analysis software.

Litigators face an interesting dilemma while contemplating eDiscovery protocol. They must balance their fiduciary duty to clients with obligation to their partners and business. Majority of the time eDiscovery  is a pass-through-cost to the client. Firms don’t make a profit on data processing, however if they decide not to utilize culling or reducing unnecessary ESI, they will increase their billable hours. Now the dilemma is whether to benefit your client or your own practice. Justification to clients is simple and to an extent i can appreciate it – attorneys feel more comfortable reviewing traditionally. All that can be said is, CLIENTS BEWARE!

This blog contains commentary by a law student. My analysis and thought on the subject are not by any means advisory or binding law. This blog is for awareness purposes only and not for the purpose of providing legal advice. You should contact your attorney to obtain advice with respect to any particular issue or problem. Use of and access to this blog or any of the e-mail links contained within the site do not create an attorney-client relationship between Yasir Muhammad and the user or browser. The opinions expressed through this site are the opinions of the individual author.

While dealing with ESI in Michigan litigators must keep the following rules in mind(certain portions of the rules are omitted, visit http://courts.mi.gov/courts/michigansupremecourt/currentcourtrules/1chapter2civilprocedure.pdf for complete rules):

Rule 2.302

General Rules Governing Discovery

(B) Scope of Discovery

(5) Electronically Stored Information. A party has the same obligation to
preserve electronically stored information as it does for all other types of
information. Absent exceptional circumstances, a court may not impose
sanctions under these rules on a party for failing to provide electronically stored
information lost as a result of the routine, good-faith operation of an electronic
information system.

 
(6) Limitation of Discovery of Electronic Materials. A party need not provide
discovery of electronically stored information from sources that the party
identifies as not reasonably accessible because of undue burden or cost. On
motion to compel discovery or for a protective order, the party from whom
discovery is sought must show that the information is not reasonably accessible
because of undue burden or cost. If that showing is made, the court may
nonetheless order discovery from such sources if the requesting party shows
good cause, considering the limitations of MCR 2.302(C). The court may
specify conditions for the discovery.

Rule 2.310

Requests for Production of Documents and Other Things; Entry on Land for Inspection and Other Purposes

(C) Request to Party.

 
(1) The request may, without leave of court, be served on the plaintiff after
commencement of the action and on the defendant with or after the service of
the summons and complaint on that defendant. The request must list the items
to be inspected, either by individual item or by category, and describe each
item and category with reasonable particularity. The request must specify a
reasonable time, place, and manner of making the inspection and performing
the related acts, as well as the form or forms in which electronically stored
information is to be produced, subject to objection.

 
(2) The party on whom the request is served must serve a written response
within 28 days after service of the request, except that a defendant may serve
a response within 42 days after being served with the summons and complaint.
The court may allow a longer or shorter time. With respect to each item or
category, the response must state that inspection and related activities will be
permitted as requested or that the request is objected to, in which event the
reasons for objection must be stated. If objection is made to part of an item or
category, the part must be specified. If the request does not specify the form
or forms in which electronically stored information is to be produced, the party
responding to the request must produce the information in a form or forms in
which the party ordinarily maintains it, or in a form or forms that is or are
reasonably usable. A party producing electronically stored information need
only produce the same information in one form.
(3) The party submitting the request may move for an order under MCR
2.313(A) with respect to an objection to or a failure to respond to the request

Rule 2.313

Failure to Provide or to Permit Discovery; Sanctions

(E) Absent exceptional circumstances, a court may not impose sanctions under
these rules on a party for failing to provide electronically stored information lost as
a result of the routine, good-faith operation of an electronic information system.

Rule 2.401

Pretrial Procedures; Conferences; Scheduling Orders

 
(A) Time; Discretion of Court. At any time after the commencement of the action,
on its own initiative or the request of a party, the court may direct that the
attorneys for the parties, alone or with the parties, appear for a conference. The
court shall give reasonable notice of the scheduling of a conference. More than one
conference may be held in an action

 
(c) The scheduling order also may include provisions concerning discovery
of electronically stored information, any agreements the parties reach for
asserting claims of privilege or of protection as trial-preparation material
after production, preserving discoverable information, and the form in which
electronically stored information shall be produced.

Rule 2.506

Subpoena; Order to Attend
(A) Attendance of Party or Witness.

(2) A subpoena may specify the form or forms in which electronically stored
information is to be produced, subject to objection. If the subpoena does not
so specify, the person responding to the subpoena must produce the
information in a form or forms in which the person ordinarily maintains it, or in
a form or forms that are reasonably usable. A person producing electronically
stored information need only produce the same information in one form.

 
(3) A person responding to a subpoena need not provide discovery of
electronically stored information from sources that the person identifies as not
reasonably accessible because of undue burden or cost. In a hearing or
submission under subrule (H), the person responding to the subpoena must
show that the information sought is not reasonably accessible because of undue
burden or cost. If that showing is made, the court may nonetheless order
discovery from such sources if the requesting party shows good cause,
considering the limitations of MCR 2.302(C). The court may specify conditions
for such discovery.

This blog contains general commentary. The analysis and thoughts on the various subjects are not by any means advisory or binding law. This blog is for awareness purposes only and not for the purpose of providing legal advice. You should contact an attorney to obtain advice with respect to any particular issue or problem. Use of and access to this blog or any of the e-mail links contained within the site do not create an attorney-client relationship between Yasir Muhammad and the user or browser. The opinions expressed through this site are the opinions of the individual author.