Sent to you by pakurilecz via Google Reader: Hospital Defendants
Martyred in the Cause of Cooperative e-Discovery via e-Discovery Team
by Ralph Losey on 9/21/08

A class action against eight hospitals in Detroit produced a
“gotcha-type” e-discovery ruling that unfairly punished the hospitals
for trying to cooperate with opposing counsel. Cason-Merenda v. Detroit
Medical Center, 2008 WL 2714239 (E.D.Mich. July 7, 2008). Here is
Magistrate Judge Donald A. Scheer’s own words at the end of his opinion:
Having elected to martyr itself rather than to seek relief in a timely
fashion, DMC seeks an order imposing the cost of its choice upon its
opponents. I find neither substantive merit nor equity in its request.
IT IS THEREFORE ORDERED that Detroit Medical Center’s Motion to Require
Plaintiffs to Share Third Party Vendor Costs of Electronic Discovery is
denied.

Judge Scheer held that the defendants had elected to martyr themselves
by cooperating with plaintiffs and relying upon a stipulation with
plaintiffs. The stipulation reserved the parties rights to do
e-discovery first and seek cost-sharing later. Judge Scheer’s use of
the inflammatory word “martyr” is ironic, and so is his reliance upon
the Sedona Principles to try to justify his ruling. (To pile the irony
on even higher, Judge Scheer misspells Sedona throughout the opinion
and instead calls it the “Sadona” Conference.) It is ironic because the
Sedona Conference’s latest publication is The Sedona Conference®
Cooperation Proclamation. The Proclamation encourages parties to reach
agreement and specify plans. That is exactly what the defendant
hospitals did here, but instead of rewards and accolades, they were
punished.

The eight hospitals are indeed martyrs, but not in the self-imposed
manner that Judge Scheer’s opinion suggests. They are martyrs to the
cause of cooperative e-discovery that the Sedona Conference and many
others promote. Their martyrdom was not voluntary as the judge
sarcastically suggests. It was caused by opposing counsel and the very
judge who labeled them such. Cason-Merenda is bad law, but is
nevertheless important. It is significant and deserves attention
because it demonstrates that the cooperative approach will not work
unless the judiciary understands and supports cooperation in both word
and deed.
Defendants Cooperated As They Should

The defendants here met with plaintiffs at the beginning of the case
and agreed to certain e-discovery. Instead of reaching an agreement as
to cost sharing at this early stage, which is nearly impossible,
especially before anybody really knows what the costs will be, both
sides agreed to defer the issue of cost sharing. They agreed to reserve
their rights to later move for cost sharing. The court then approved
the stipulation and made it into an order of the court. After that
happened, defendants should have been able to rely on the order, and
make production first, without concern of waiver of rights. That is in
fact what they did. Only later did they discover that reliance on this
court’s order put them on a path to martyrdom.

The six defendant hospitals acted in a cooperative manner to advance
the process by doing the e-discovery work required and making the
production. The opinion does not set forth any of the details, but in a
class action like this, involving six major hospitals, the e-discovery
work would almost certainly have been extensive and complicated. It is
very hard to predict in advance the cost of this kind of work. That is
the practical reason parties should be free to agree to defer this
issue.

After defendants first production, when they knew the actual costs, as
opposed to speculative predictions, they were then in a position to
evaluate whether cost sharing was justified. Apparently they thought it
was, and so contacted plaintiffs counsel to try to reach an agreement.
When plaintiffs’ counsel would not agree to any cost sharing, defense
counsel was forced to seek relief from the court and so filed a motion.

These were not the crazed actions of a deluded martyr. Defense counsel
was following the cooperative approach built into the rules and modern
principles of e-discovery. They should not have been punished for
trying to cooperate and work things out before filing motions. At the
very least, the court should have provided them with their day in court
and heard the issue of whether cost sharing was justified. But that is
not what happened in Cason-Merenda.

Instead, the plaintiffs ceased their prior cooperative attitude, and
went into full adversarial mode. They not only opposed the motion on
its merits, which is certainly fair, but they also challenged
defendants right to bring the motion at all. Their procedural objection
was unfair and excessive adversarial conduct because it was contrary to
their prior agreement. They had agreed that both sides preserved their
rights to later seek cost sharing, but when defendants attempted to
asset their right, they ignored their agreement. Instead, Plaintiffs
pulled out all stops to try to prevent defendants from being heard.
They confused the judge with arguments that defendants must have waived
their rights to seek cost shifting, and so the judge should not even
address the more complicated merits of motion.

At this point, the judge should have put aside plaintiffs’ technical,
forget-the-stipulation waiver arguments. But he did not. Instead, the
adversarial attack work, and the procedural objections were sustained.
What kind of message do you think this sent to the parties in this case?
Defendants Were Unwilling Martyrs

The Court refused to hear the merits and instead denied defendants
motion on procedural grounds. Judge Scheer held that defendants should
have moved for cost sharing before they incurred the costs. Never mind
the stipulation. He held that defendants had waived any right for cost
sharing. He called them martyrs who had voluntarily incurred the
e-discovery costs, and now, after martyrdom, it was too late to seek
any reimbursement or other relief.

Judge Scheer spent most of the decision explaining how the rules and
law contemplate the filing of motions for cost sharing before costs are
incurred. I think he is right on that point, as a general matter. But
in this case the parties entered into a contrary stipulation and order,
and that should have changed everything. It did not, and thus
fundamental principles of judicial estoppel were violated. Judge Scheer
in effect vacated his prior order after the defendants had relied upon
it. By this action he avoided addressing the complex merits of
defendants motion for cost sharing and punished them for taking a
cooperative track.

At the hearing on defendants’ motion they protested the plaintiffs’
argument that they had waived their rights. Defense counsel pointed out
that they had relied on the stipulation and order. Judge Scheer made
short work of that argument in his written opinion by pointing to a
provision in his scheduling order that required parties to file
discovery motions within 14 days after a discovery dispute arises. He
held this provision trumped the stipulated order. He determined, based
on an affidavit filed by one of the plaintiffs’ attorneys, that a
discovery dispute existed between the parties on cost sharing no later
than April 4, 2008. The defendants kept trying to resolve their dispute
without judicial intervention after that date and did not file a motion
until May 20, 2008. That was too late according to Judge Scheer, who,
at the urging of plaintiffs’ counsel, determined that the deadline was
April 28th.

Fortunately, I rarely see this kind of hyper-technical “gotcha-type”
ruling in U.S. District Courts. They may make that kind of observation
about questionable timeliness, but then they usually go on to address
the merits of the motion. This was not done here. The judge refused to
even consider or engage in any type of reasoned evaluation as to
whether cost shifting was justified.
Martyrs to the Cause of Cooperation

Defendants here are true involuntary martyrs, worthy of admiration.
They followed exactly the kind of collaborative process contemplated by
the new Rules, specifically Rule 26(f), Federal Rules of Civil
Procedure. It is also the kind of cooperative arrangement contemplated
by the Sedona Conference in its latest publication: The Sedona
Conference® Cooperation Proclamation. The Proclamation encourages
attorneys, parties and judges to move away from traditional adversarial
models of discovery into more cost effective and balanced collaborative
approaches. The cooperative model Sedona promotes follows the new rules
and encourages parties to reach agreement and specify plans. Here is
the introduction from the Cooperation Proclamation:
The costs associated with adversarial conduct in pre-trial discovery
have become a serious burden to the American judicial system. This
burden rises significantly in discovery of electronically stored
information (”ESI”). In addition to rising monetary costs, courts have
seen escalating motion practice, overreaching, obstruction, and
extensive, but unproductive discovery disputes - in some cases
precluding adjudication on the merits altogether - when parties treat
the discovery process in an adversarial manner.

The Sedona Proclamation goes on to explain how cooperative discovery is
not only an economic imperative, but also an ethical one.
Cooperation in Discovery is Consistent with Zealous Advocacy.
Lawyers have twin duties of loyalty: While they are retained to be
zealous advocates for their clients, they bear a professional
obligation to conduct discovery in a diligent and candid manner. Their
combined duty is to strive in the best interests of their clients to
achieve the best results at a reasonable cost, with integrity and
candor as officers of the court. Cooperation does not conflict with the
advancement of their clients’ interests - it enhances it. Only when
lawyers confuse advocacy with adversarial conduct are these twin duties
in conflict.
Lawyers preparing cases for trial need to focus on the full cost of
their efforts – temporal, monetary, and human. Indeed, all stakeholders
in the system – judges, lawyers, clients, and the general public – have
an interest in establishing a culture of cooperation in the discovery
process. Over-contentious discovery is a cost that has outstripped any
advantage in the face of ESI and the data deluge. It is not in anyone’s
interest to waste resources on unnecessary disputes, and the legal
system is strained by “gamesmanship” or “hiding the ball,” to no
practical effect.
The effort to change the culture of discovery from adversarial conduct
to cooperation is not utopian. It is, instead, an exercise in economy
and logic. Establishing a culture of cooperation will channel valuable
advocacy skills toward interpreting the facts and arguing the
appropriate application of law.

But what happens when one side cooperates and the other does not? As
this case shows, it can be dangerous. “Turn the other cheek” may be a
noble thought, but it will not work in litigation. The Sedona
Cooperation Proclamation notes this common problem at page 2:
And there remain obstreperous counsel with no interest in cooperation,
leaving even the best-intentioned to wonder if “playing fair” is worth
it.

They note the problem, but offer no solution, at least not in this
short proclamation. The only solution I know of is to try to turn the
aggression on the attacker, a kind of aikido-like maneuver that I
discussed in Adversarial Search, a “Perfect Barrier” to Cost Effective
e-Discovery, and One Litigant’s “Aikido-like” Response. That is exactly
what the eight hospitals did in Cason-Merenda, but instead of stepping
in, the judge stepped out. The judge should have rewarded the good
behavior; he should have at least considered the defendants’ motion.
Instead, he fell hook, line, and sinker for the plaintiffs’ adversarial
gamesmanship and joined in the attack. He even added insult to injury
by calling defendants martyrs; all while invoking the ironic name of
“Sadona.” Sad indeed!

Cason-Merendais important because it shows that the collaborative
approach embodied by the Sedona Proclamation will not work without the
active support and participation of the judiciary. Unless judges
encourage and support the collaborative model, the presence of one
obstreperous counsel in a case will act like a rotten apple in a
barrel. I know that Sedona understands this well. In fact, on October
7, 2008, they are having a “virtual press conference” wherein they will
release a list of state and federal judges who have endorsed the
Proclamation. Be on the lookout for this. The courtrooms of these
judges should be martyr-free zones.

The Cooperation Proclamation calls the move from adversarial to
cooperative discovery a fundamental paradigm shift. Sedonda thinks we
can get there by a three part process:
Part I: Awareness - Promoting awareness of the need and advantages of
cooperation, coupled with a call to action. This process has been
initiated by The Sedona Conference® Cooperation Proclamation.
Part II: Commitment - Developing a detailed understanding and full
articulation of the issues and changes needed to obtain cooperative
fact-finding. This will take the form of a “Case for Cooperation” which
will reflect viewpoints of all legal system stakeholders. It will
incorporate disciplines outside the law, aiming to understand the
separate and sometimes conflicting interests and motivations of judges,
mediators and arbitrators, plaintiff and defense counsel, individual
and corporate clients, technical consultants and litigation support
providers, and the public at large.
Part III: Tools- Developing and distributing practical “toolkits” to
train and support lawyers, judges, other professionals, and students in
techniques of discovery cooperation, collaboration, and transparency.
Components will include training programs tailored to each stakeholder;
a clearinghouse of practical resources, including form agreements, case
management orders, discovery protocols, etc.; court-annexed e-discovery
ADR with qualified counselors and mediators, available to assist
parties of limited means; guides for judges faced with motions for
sanctions; law school programs to train students in the technical,
legal, and cooperative aspects of e-discovery; and programs to assist
individuals and businesses with basic e-record management, in an effort
to avoid discovery problems altogether.
Conclusion

The Proclamation came too late for the hospital defendants in
Cason-Merenda. But hopefully their martyrdom will not be in vain.
Cason-Merenda should drive home the point that judiciary buy-in and
training is paramount to this movement’s success.

Judges must not allow themselves to be duped into punishing parties who
try to cooperate. They should not reward traditional gamesmanship. They
should be trained to see through the clever smoke screens that
experienced litigators can emit. If they are not sure, they should err
on the side of ruling with the lawyers that cooperated. Hyper-technical
“gotcha” litigation has no place in cooperative e-discovery. It should
not be tolerated by the lawyers or the judges. If a District Court
Judge sees a Magistrate ruling like Cason-Merenda, they should not
hesitate to reverse it.
Posted in Lawyers Duties, New Rules, Related Legal Webs
Things you can do from here:
- Subscribe to e-Discovery Team using Google Reader
- Get started using Google Reader to easily keep up with all your
favorite sites