Plaintiffs needn’t pay for per-item email review

A natural gas company facing a potential class claim from royalty owners can’t make the plaintiffs pay for per-document privilege review of millions of employee emails, an Abingdon U.S. District Court said last month.

The increased burden to produce electronically stored information, or ESI, and “complicated and contentious issues” made this case typical of some modern civil litigation, U.S. District Judge James Jones said in Adair v. EQT Production Co. (VLW 012-3-286).

Each of the plaintiff owners wanted a class of claimants certified. When discovery got underway, the parties agreed to protective orders allowing disclosure of material, including ESI, on a for-this-case-only basis, to a limited group.

The court also entered the parties’ agreed clawback order to allow them to reclaim privileged documents inadvertently disclosed during discovery.

EQT began churning documents responsive to the class certification issues, including contracts, pooling orders and well and lease files. The company asked U.S. Magistrate Judge Pamela Meade Sargent to shift the costs of review and production to the plaintiffs.

EQT had hired Innovative Discovery LLC and its principal James Perkins to help with producing ESI, turning some five and one-half million documents over to ID. EQT narrowed a field of employees to a target group of eight whose emails would be most likely to have relevant information. Perkins said it would cost $18,936.50 to process that 68.86 gigabytes of data.

Having contract attorneys at $49 per hour do a document-by-document review to screen this batch of documents for privilege would cost $759,181.50, Perkins estimated. EQT could lower that cost by using “analytics” to categorize and organize document review, for a cost of around $440,000. Analytics allow more refined searching through algorithms and concepts that go beyond keyword searching, according to Richmond lawyer William T. Belt Jr., team leader with LeClairRyan’s e-discovery practice group. Belt was not involved in the case.

Review of the potentially privileged documents of the eight EQT employees by an electronic search would pull about 30 percent of the documents, ID said, and further review would cost $160,961.

EQT wanted to hold out for individual review of each of the documents prior to production as the only adequate protection from unwarranted disclosure. But Jones said the protective order and clawback order prevented a waiver of privilege and the use or disclosure of nonrelevant documents outside this litigation.

Jones agreed with Sargent that cost-shifting was not necessary.

The “bulk of trending case law” and recent rules amendments show that running each document past human eyeballs “is an untenable position,” Jones said.

Jones tinkered a little with the language and time period covered by the magistrate judge’s discovery order, and also said EQT could conduct pre-production individual review of all emails sent or received on or after the April 20, 2010, decision date for an earlier related case.

The court’s discovery order said EQT did not have to produce any emails that included search terms with various combinations of the words “attorney,” “client,” “communication,” “work product” and “privileged and confidential.”

Given the routine “privilege” disclaimer many lawyers include with their email signatures, these search terms may yield a lot of “false positives,” some e-discovery experts said.

If you put “privileged and confidential” on every piece of email, “every email goes into the ‘privilege’ pot” and it just drives up the e-discovery costs, said Sherry Harris, the Richmond-based senior discovery advisor for the Crowley Law Office, who was not involved inthe EQT case.

Privilege review is part of every discovery process, and starting with keyword search terms is a very common approach, in order to “maximize recall and precision,” Belt said. E-discovery is an “iterative process” that requires repeated rounds of analysis to get to the relevant documents.

It takes experience to know when and how to plug in the human element of document review, which actually can save money, according to Belt and Harris.

Often it’s best to start with the personnel whose documents will be searched, in order to better target a document search, Harris said. For instance, when a small subset of employees has been identified – as with EQT’s identification of eight employees whose email should be searched – a party may spend a couple of days to personally interview that group to focus the search.

Culling through email is tough, with so many people using business email for news about their kids’ birthday parties, weekend plans and routine news alerts, Harris said.

A lawyer taking on a new corporate client should start early to talk with records custodians about the company’s document retention and management program, Harris said. Occasionally you still find a “renegade custodian,” the electronic version of the file clerk with stacks of paper but an idiosyncratic, in-my-brain filing system. But most companies use their records to conduct their own business, so they probably have a system that’s rational, at least for their purposes.

Although EQT did not win cost-shifting, splitting the costs is increasingly common, said Belt, who sits on review panels for courts considering cost-shifting requests. Courts are recognizing that cost-shifting is an effective tool to insure the parties are approaching e-discovery in a responsible way, he said.

Parties producing huge volumes of documents can seek greater protection by making their clawback agreements apply without regard to the reasonableness of the producer’s pre-production review, Belt said.

But even with the discovery rules’ “reasonableness standard,” “once they’ve laid their eyes on it, you can’t unring the bell,” Harris said.