Feb. 3, 2010 – A petition to the Wisconsin Supreme Court for new rules governing discovery of electronically stored information (ESI) stirred debate during a Jan. 21 public hearing regarding the reach of the rules.
Milwaukee Circuit Court Judge Richard Sankovitz told the justices that Wisconsin has yet to see many cases involving electronic discovery and that the Wisconsin Judicial Council had merely submitted a “modest” petition “to stay ahead of the curve” in an emerging area of law.
Accordingly, the council’s petition borrows some – but not all – of the provisions of the 2006 amendments to the Federal Rules of Civil Procedure and the Uniform Rules on the Discovery of Electronically Stored Information. Notably, the petition omits a rule mandating that parties meet and confer early in the case to discuss and reach agreement about ESI discovery of a case prior to a scheduling conference. The petition also foregoes a rule strengthening a disclosing party’s ability to “claw back” privileged material inadvertently released and a rule expressly permitting trial judges to appoint a special master to handle technical disputes arising from electronic discovery.
Milwaukee attorney Mark Foley of von Briesen & Roper, S.C. warned the justices that failure to address these matters would make the rules less effective in curbing the spiraling costs of electronic discovery. Disagreeing with Sankovitz, Foley asserted that the problems presented by electronic discovery are already appearing frequently in Wisconsin and forcing parties to resolve disputes on the basis of cost, not justice.
What the petition does
Among its main objectives, the Judicial Council seeks to encourage courts to more actively manage electronic discovery by adding that issue to the list of subjects a judge might consider at a scheduling conference found in Wis. Stat. sec. 802.10(3).
Additionally, the petition would amend 804.08 (3) so that an answering party may produce electronic business records in response to an interrogatory. The petition would add a safe harbor to 804.12 for a party who has lost electronically stored information as a result of the routine, good-faith operation of an electronic information system. The new rules would also change sec. 805.07 to protect third parties from unreasonable burdens of responding to subpoenas that request electronically stored information.
Lack of a meet-and-confer requirement
Foley told the justices that merely adding electronic discovery to the list of items for possible inclusion in a scheduling order accomplishes less than requiring the parties to meet and discuss a discovery process even before the scheduling conference. Without such a requirement, a discovery dispute may not even be recognized by the time of the conference, leaving the issue undeveloped for a judge’s resolution. Belated efforts to resolve a discovery dispute increases costs for the judiciary and the parties, he said.
But Sankovitz argued that not every case involves electronic discovery, noting that judges in Milwaukee report seeing this issue arise in a case only once every three or four months. As a result, Sankovitz said that judges would begin to grant so many exceptions to a mandatory meet-and-confer rule that it would cease to be effective. However, Justice Patience Roggensack questioned whether judges actually witness the true extent of discovery disputes, commenting that much commercial litigation leads to settlement after the parties finish discovery.
Adding a different perspective, technology consultant Bruce Olson argued that the sooner parties determine their need for electronic discovery, the quicker they can act to prevent loss or modification of data that affects its reliability. Olson said data can be easily spoiled, giving a hypothetical in which a lawyer opens a computer file on receipt of notice that a former client wants to sue for malpractice. The lawyer may have only intended to look at what work had been done to create a malpractice claim, but opening the computer file changes its metadata so that it no longer shows the date it was last accessed prior to notice of the malpractice suit.
Olson suggested that a circuit court issue “a preliminary eDiscovery order” upon receipt of an answer, requiring the parties to notify the court within 10 days whether electronic discovery is anticipated and whether a telephone consultation would sufficiently address those concerns prior to entry of a full scheduling order. This requirement would force lawyers to at least consider the matter in a timely way, and they can notify the court if they find it is not an issue in a particular case.
Claw back
When a discovery request leads to production of thousands of emails, a client must pay a lawyer to review each item to ensure it does not contain privileged material, Foley told the court. This costly burden is alleviated when parties can agree that inadvertently disclosed privileged material may be “clawed back,” he explained. But these agreements may not sufficiently cover all confidentiality issues, Foley said.
For example, a document inadvertently disclosed but recovered in one suit could be vulnerable to a demand for production in different litigation lacking a claw-back agreement, Foley said. The litigant unbound by any claw-back agreement would point out that the document was in fact disclosed to an adverse party and consequently is no longer confidential, he explained.
Foley reported that Federal Rule of Evidence 502 recognizes this problem, providing that an inadvertently disclosed document subject to a claw-back agreement retains its privilege in any subsequent federal litigation. He asked the justices to amend Wisconsin’s rule of evidence in the same way and at the same time it amends other rules pertaining to electronic discovery.
But Sankovitz cautioned that the federal claw-back rules apply to all information produced in discovery besides electronic records. That is, answers in a deposition or to an interrogatory would also be subject to a claw back even though they are not furnished in the high volume justifying the rule for electronic discovery, he said.
Moreover, Sankovitz advised the court in a letter that adoption of a claw-back rule “might be interpreted as resolving a question that currently remains open under Wisconsin law – the extent to which an inadvertent disclosure of privileged information works as a waiver of the privilege.” He reminded the court that it left this question open in Harold Sampson Children’s Trust v. Linda Gale Sampson 1979 Trust, 2004 WI 57.
The State Bar of Wisconsin Board of Governors endorsed inclusion of a claw back procedure when it voted to support the Judicial Council petition at its meeting last December. The Judicial Council is reportedly studying whether it will propose changes to the Wisconsin evidence rules similar to Federal Rule of Evidence 502.
Special masters
Sankovitz defended the Judicial Council’s omission of a rule to empower circuit courts to appoint special masters expressly for electronic discovery disputes, arguing that sec. 805.06 already gives them that authority. Additionally, sec. 802.10(3)(j) counsels judges at the scheduling conference to consider “[t]he need for adopting special procedures for managing potentially difficult or protracted actions that may involve complex issues, multiple parties, difficult legal questions or unusual proof problems.”
In addition to the awareness judges gain on this issue through their judicial education courses, Sankovitz said that lawyers working in this field are inclined to ask for a special master if the court does not appoint one on its own.
Madison attorney Tim Edwards acknowledged that some circuit court judges believe they already have the power to appoint a magistrate in electronic discovery disputes, but he argued that power should be explicitly stated in the rules. He added that a rule specifying under which circumstances a party pays for a special master would more likely prompt litigants to resolve their discovery disputes.
The justices deferred action on the petition, referring the matter back to the Judicial Council for review in light of the public comment.
By Alex De Grand, Legal Writer, State Bar of Wisconsin
