Recent Legal Developments and Standards in the Discovery of Electronic Media

By: Jay H. Ong
March 1, 2007

I.  Recent Legal Developments and Standards in the Discovery of Electronic Media

A.  Introduction – A Few Attention Getting Figures

These days, hearing a $6 million figure in the context of discussing litigation might hardly give pause to anyone experienced in our legal system…if such a figure is related to liabilities. If, however, we are informed that this figure relates to the cost of responding to discovery, let alone the overall costs and liabilities of litigation, the response is decidedly different. It should not be. In fact, the above figure is just a shade under the amount that one court recently found would cost a litigant to respond to discovery requests directed toward its electronic back-up tape files.  This is far from exceptional. In another recent case, the Court found a cost over $4 million to properly respond to discovery requests directed toward electronic media, excluding attorneys fees and other costs of review.  Moreover, the Court went on to require, consistent with the general “American Rule,” that the responding party cover the majority of the costs.

The foregoing nicely embodies some of the most troubling issues arising in connection with discovery of electronic media in litigation. In today’s business world, with the technological tools it incorporates, factoring such media into the pool of discoverable information exponentially increases the sheer volume of information that must be waded through and parsed by a respondent to discovery. A direct result of this tremendous volume is increased costs and burdens of wading through the sea of information. Scholars estimate that, today, 99.99% of all information is generated in non-paper form, and from 1999 to 2002 the amount of newly stored information grew by an estimated 30%. In 2002 alone, nearly 5 exabytes (1 exabyte is roughly equivalent to the volume of the Library of Congress, multiplied 500,000 times) of information were generated – “more information has been generated and stored between 1999-2003 than all of the information generated since the beginning of mankind” – and most such information never makes contact with a sheet of paper. If the foregoing figures are not sufficient, these increased costs further magnified by technological costs associated with electronically stored information which is stored on media that are not conveniently accessible, such as back-up tapes or network servers (“accessibility” will be a primary, running theme for us in this section). These issues plainly promote the position that discovery of electronic media makes for, at best, an inconsistent fit with our pre-existing, general rules of discovery.

A few more actual examples will drive these points home. Consider a discovery request requiring the responding party to expend up to an estimated 18,000 labor hours merely to review back-up tape data for relevance, or another involving the following estimates by a party to respond to e-discovery requests: (i) nearly 3,800 back-up tapes; (ii) up to 10 hours to restore, duplicate and convert file contents per tape; at (iii) a total cost of over $2.9 million. In fact, these costs can be so mountainous that they have given rise to a burgeoning industry devoted solely to providing professional services assisting litigants in navigating e-discovery, and the sheer numbers driving this market are staggering. One recent case cited to a 2005 survey reporting that the litigation consultant industry specializing in assisting parties in gathering and compiling responsive data (again ignoring the considerable costs of attorney time to review potentially responsive materials for relevance and privilege issues) produced aggregate revenues in the estimated range of $832 million in 2004. Moreover, the trend is rapidly gathering steam. The 2004 estimate represents a 94% increase from 2003, and the survey further provided projections for the next three years: (i) $ 1.282 billion in 2005; (ii) $ 1.923 billion in 2006; and (iii) $ 2.865 billion in 2007.

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