In January of this year, Judge Scheindlin issued another important e-discovery opinion in Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities, LLC, et al.As you may know, Judge Scheindlin authored Zubulake, a series of seminal e-discovery opinions in 2004. In Pension Committee, the judge took the opportunity to follow up on her Zubulake decision by highlighting common e-discovery mistakes and the harsh penalties that result from them.

Ensure Counsel Oversees e-Discovery Production at All Stages

In addition to highlighting the importance of fully reviewing and documenting litigation hold policies (click here if you missed the previous post on that subject), Judge Scheindlin’s opinion also reminds businesses not to fall into the trap of relying on IT departments to independently design and implement e-discovery procedures. Judge Scheindlin made clear, by issuing sanctions against the offending parties in the Pension Committee case, that legal counsel must actively participate in the entire process of document preservation and production. The judge said that anything less than total legal oversight would be considered negligence, which in an e-discovery context can be extremely costly. Essentially, when a party fails to have attorney participation in electronic discovery procedures, the judge can shift the costs of electronic discovery from the innocent to the offending party. For large cases, these costs can easily range into the multiple million dollar range. For more significant oversight failures, the judge can issue an adverse jury instruction—a sanction that can easily derail an otherwise winnable case by permitting the jury to infer facts that are detrimental to the offending party.

To avoid costly sanctions, companies must ensure that their e-discovery processes include regular, documented attorney review of all e-discovery production policies. Judges are becoming more and more familiar with the e-discovery process, and a party must show the court that attorneys were involved in the development and implementation of all stages of e-discovery activities. It is no longer acceptable to give the IT department control over the manner and method used to produce electronic information.