U.S. Magistrate Judge Paul W. Grimm may just be the E.F. Hutton of e-discovery–when he talks, people listen. Judge Grimm is the author of several landmark e-discovery opinions–most notably, Victory Stanley Inc. v. Creative Pipe Inc.–and is a frequent author and lecturer on e-discovery.
Recently, Judge Grimm has been talking about Federal Rule of Evidence 502, the rule pertaining to attorney-client privilege and work product. In a detailed and thoughtful article published in the Richmond Journal of Law and Technology, Federal Rule of Evidence 502: Has It Lived Up to Its Potential?, Judge Grimm says that the rule has not lived up to its purpose, which was to reduce the anxiety and costs associated with privilege review. The fault is not in the rule, he suggests, but in the failures of lawyers and courts to understand the rule and apply it consistently. (Two of Judge Grimm’s law clerks also helped author the article, Lisa Yurwit Bergstrom and Matthew P. Kraeuter.)
Over 82 pages, Judge Grimm provides a section-by-section analysis of the rule and offers his ideas for how to enhance its effectiveness. I suggest you read it from beginning to end. However, one section of the article stood out to me for its discussion of a case that this blog has visited several times, Mt. Hawley Insurance Company v. Felman Production Inc., 2010 WL 1990555 (S.D.W.Va., May 18, 2010).
This was the case that held that privilege was waived in an inadvertently produced email because counsel had failed to take reasonable steps to search for privileged material before delivering the production to the other side. On this blog last year, John Tredennick wrote an analysis of the case, Bad Facts Make Bad Law: ‘Mt. Hawley’ A Step Backward for Rule 502(b).
The title of John’s post pretty well sums up his analysis. One of his key points was that counsel did, in fact, take a number of steps to screen for privileged materials. In fact, the opinion listed at least 23 separate steps counsel took, including using sophisticated search technology and techniques and testing the effectiveness of those techniques. At least in part, the failure to discover the inadvertently produced email may have been attributable to a corrupt Concordance database file. I also wrote about the case last year and John has gone on to write more posts about the case and its aftermath, here and here.
‘Reasonable’ Does Not Mean ‘Perfect’
It was interesting, therefore, to see that Judge Grimm shares our view that Mt. Hawley was bad law derived from bad facts. He criticizes the opinion for setting the bar too high and for demanding “near-perfection in pre-production precautions.”
Rule 502(b)(2), as we all know, requires reasonable steps to prevent disclosure of privileged materials. A key purpose of this rule was to encourage the use of search technology in pre-production review, Judge Grimm writes.
[T]he Committee’s Note stresses how important it is that reviewing courts be receptive to the use of search and information retrieval methods that facilitate pre-production review of ESI via computer-based analytical methods, rather than the far more labor-intensive and expensive process of having lawyers review each digital document. Simply put, one of the “two major purposes” of Rule 502 was to bring down the cost of pre-production review of ESI by enabling lawyers and parties to use computer-based analytical methods to search for and identify privileged and protected information, as well as other analytical methods, such as sampling, that avoid the enormous expense associated with personal review of each digital document. The rule cannot achieve this goal if lawyers do not use these analytical methods, or if courts do not support their use by acknowledging that when the methods are properly used, they are reasonable.
In this context, “reasonable” does not and should not mean “perfect,” Judge Grimm asserts.
If courts find waiver in cases where parties use computer analytical tools properly, yet the parties’ privileged or protected information nonetheless is disclosed, then lawyers and clients never will transition away from the burdensome and very expensive methods that have lead to “the widespread complaint that litigation costs necessary to protect against waiver of attorney-client privilege or work product have become prohibitive due to the concern that any disclosure (however innocent or minimal) will operate as a subject matter waiver of all protected communications or information.”
For Judge Grimm, Mt. Hawley is a perfect example of a case in which the court set the bar too high. The judge failed to find that the plaintiff took reasonable steps to prevent the disclosure “even though the plaintiff took what many would view as extensive precautions to avoid production of privileged information.”
Judge Grimm acknowledges that the outcome in Mt. Hawley may have been influenced by the plaintiff’s broader pattern of e-discovery violations.
When viewed in totality, the court found pervasive failures in the plaintiff’s compliance with its discovery obligations. This undoubtedly affected the willingness of the court to give the plaintiff the benefit of the doubt in analyzing whether the plaintiff took reasonable precautions to avoid disclosure of privileged information pursuant to Rule 502(b)(2).
Even so, Mt. Hawley illustrates the challenge to courts in knowing where to draw the line between reasonable and unreasonable, Judge Grimm writes.
Rule 502 will never reach its intended goal of reducing the cost of ESI discovery and encouraging the use of computer analytical review methodology if courts demand near-perfection in preproduction precautions. If, as Voltaire said, “the perfect is the enemy of the good,” it is also a disincentive for counsel and clients to accept the Advisory Committee’s invitation to abandon costly “eyes-on” review of all documents, even voluminous ESI, in favor of “advanced analytical software applications and linguistic tools in screening for privilege and work product.”
It is hoped that future courts will be receptive and accommodating to the use of these screening methods to prevent disclosure of privileged and protected information. While these methods are not perfect, there is growing evidence that they are as good, or far better than, “eyes on” review of all digital information by an attorney or paralegal. There is every reason to believe that computer-based screening methods’ recall (completeness) and precision (accuracy) rates will continue to improve.
Judge Grimm goes on to caution that a court’s evaluation of reasonableness under Rule 502(b)(2) should not be colored by the court’s sense of what is fair to the parties given the circumstances. “Excusing a failure to exercise reasonable measures to protect against disclosure solely based on unfairness interferes with the practice of the rule in the manner intended.”
Judge Grimm makes one other point in this article that bears repeating here. He has made this point before and adds a footnote to this article to make it again. He writes:
It is important to stress that use of computer-based analytical search and information retrieval methods involves technical and specialized methodology, and requires competence and expertise. See Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 260 (D. Md. 2008). Merely using key word searches, concept searching, linguistic analysis, or sampling does not guarantee reasonableness, if the operators do not use the methodology properly.
So there you have it from Judge Grimm. Courts should not require perfection in the use of search technology to screen for privileged materials. At the same time, courts have every right to expect that those who employ this technology have the competence and expertise to use it properly.