The Government’s Duty to Preserve Evidence in a Non-Intervened “Qui Tam” Case

Stephen_Wood_03032014Featured Expert Contributor, False Claims Act

Stephen A. Wood, Chuhak & Tecson, P.C.

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Every civil litigator and trial lawyer knows (or should know) that a party to litigation has a duty to preserve evidence and documents for use in discovery and trial.  The rule applies to all litigants, whether public or private entities or persons.  It may even be applied to non-parties in certain circumstances, although typically non-parties face more limited obligations.

The False Claims Act qui tam provisions present a unique set of challenges bearing on the government’s duty to preserve.  Qui tam complaints are filed under seal to facilitate the government’s investigation after which it may elect to take the case over.  When it declines to intervene in the qui tam case, the government typically considers itself to be a non-party, eschewing any duty to preserve evidence.  Yet, for many reasons, the government should be treated as a party for purposes of the duty to preserve evidence in those cases in which it has declined to intervene.  And in the face of a breach of that duty, both the government and the qui tam relator should face the prospect of sanctions as the circumstances warrant. Continue reading “The Government’s Duty to Preserve Evidence in a Non-Intervened “Qui Tam” Case”

New NY Commercial Division E-Discovery Rule Encourages Use of Technology-Assisted Review

 

Guest Commentary

By Elizabeth M. Sacksteder and Ross M. Gotler, Paul, Weiss, Rifkind, Wharton & Garrison LLP. Ms. Sacksteder is a Partner with the firm and a member of the Commercial Division Advisory Council. Mr. Gotler is E-Discovery Counsel with the firm. Some of this material first appeared in Law 360.

The most expensive stage of big-ticket litigation today is review of the huge volume of electronically-stored information (ESI) that such cases typically require, notwithstanding such common economies as the use of vendors to do first-level document review. Achieving greater efficiency in this resource-intensive stage of litigation—making review of ESI cheaper, faster, and more accurate—is a shared goal of litigants, their counsel, and the courts. Sophisticated litigants know that the use of technology-assisted review can yield substantial cost savings as well as streamline and accelerate document review and production.

Though the e-discovery industry is embracing technology, neither the Federal Rules of Civil Procedure nor state procedure codes address whether, in what circumstances, or how a party may use technology-assisted review to fulfill its disclosure obligations. Other than references in a few discovery pilot programs, a relatively sparse body of mostly federal case law, and secondary sources such as the commentaries of The Sedona Conference, there has been little express guidance to date for practitioners or courts concerning the appropriate use of technology-assisted review. Continue reading “New NY Commercial Division E-Discovery Rule Encourages Use of Technology-Assisted Review”

Federal Court Offers an Exemplar on Defusing the E-Discovery Litigation Weapon

quickenAny civil litigation target knows that the highest costs of defending a lawsuit arise not from the courtroom or motion work, but from discovery.  Those costs have paradoxically skyrocketed in the digital era.  Though computers made it faster and cheaper to find and disclose documents, the volume of discoverable documents has infinitely increased, inspiring overwhelming production requests that courts must weigh when issuing discovery orders.

As outlined in a WLF Legal Backgrounder, those burgeoning electronic discovery (or e-discovery) demands inspired the U.S. Judicial Conference to amend the Federal Rules of Civil Procedure in 2015.  Among other changes, the amendments altered the scope of discovery under Rule 26 by imposing a stricter proportionality test for e-discovery.  Continue reading “Federal Court Offers an Exemplar on Defusing the E-Discovery Litigation Weapon”

There’s Nothing “New” about “Lone Pine” Orders for Active Case Management

faulkFeatured Expert Column − Complex Serial and Mass Tort Litigation

by Richard O. Faulk, Hollingsworth LLP*

To listen to the plaintiffs’ bar, you’d think that “Lone Pine” orders were a novelty recently conjured out of “thin air” by creative defense lawyers—or a device unsupported by any significant precedents. But although those orders may seem new to the uninitiated, they have deep roots in the history of active case management.

Many lawyers know—or have learned the hard way—why these case management tools are called “Lone Pine” orders, and what they are intended to accomplish. In Lore v. Lone Pine Corporation, No. L-03306-85, 1986 WL 637507 (N.J. Sup.Ct. Nov. 18, 1986), the plaintiffs claimed injuries resulting from contamination allegedly coming from a landfill. When the defendants presented a government investigation that found no offsite contamination, the court required the plaintiffs to make a preliminary showing of exposure, injury, and causation before allowing full discovery to proceed. This ruling led to other cases which recognized the propriety of “Lone Pine” orders when doubt existed “over what medical condition or disease, if any, can be causally related to the toxic agent exposure alleged by each plaintiff.”2 Lawrence G. Cetrulo, Toxic Torts Litigation Guide § 13:49 (2013). Since then, “Lone Pine” order have proliferated, not only in toxic tort litigation, but also in other types of cases.See generally, David B. Weinstein and Christopher Torres, Managing the Complex: A Brief Survey of Lone Pine Orders, 34 Westlaw Envt’l J. 1 (Aug. 21, 2013) (providing extensive list of categorized cases). Continue reading “There’s Nothing “New” about “Lone Pine” Orders for Active Case Management”

New Corporate Survey Illustrates Burdens Of Document Preservation And Benefits Of Proposed Reform

computerpileWith the conclusion of the Federal Rules Advisory Committee’s public comment period last month, the first leg of what The Legal Pulse has described as the long and winding road to reform of the federal rules for discovery is now over. We have at last reached the “end of the beginning,” to borrow Churchill’s phrase.

Comments contributed by the business community conveyed the consistent message that the current rules encourage over-preserving documents, a practice that ill-serves the interests of justice. The committee record is replete with anecdotes demonstrating this point, but it had lacked aggregate data until recently. Enter a Preservation Costs Survey conducted by Professor William Hubbard (my former contemporary at the University of Chicago Law School who has returned to teach there now), which thoroughly documents systematic over-preservation of electronic materials and its profound costs. A summary of Professor Hubbard’s findings is available here.

Business Defendants’ Stories. In its comment to the Advisory Committee, 307,000-employee General Electric noted that in order to preserve information contained in emails alone, it is “faced with a universe of approximately 4,770 terabytes” of data. (Just 10 terabytes, by comparison, is roughly enough storage for the Library of Congress’s entire book collection.)  The comment cited one example from 2011 in an instance where litigation had not yet been filed. GE incurred “fees of $5.4 million to collect and preserve 3.8 million documents totaling 16 million pages.” The company also reported it must spend over $100,000 a year to simply maintain those documents.

Pfizer explained in its comment that it currently has over 300 active legal holds in place impacting over 80,000 employees. It preserves 5 billion emails, and expects that amount to grow by 1 billion per year. Allstate reported that in the past 5 years it has spent over $17 million on e-discovery costs alone.

Ford provided several case studies in its comment, including one arising from a suit in Montana. There, Ford’s legal staff invested more than 800 hours and paid outside lawyers $2 million to produce nine computer hard drives containing 360 gigabytes of documents and 1,200 witness transcripts from past lawsuits. The plaintiff was unsatisfied with Ford’s production and filed a motion for sanctions, which the court denied. In the end, the plaintiff sought to introduce one document from the massive trove it requested from Ford. Continue reading “New Corporate Survey Illustrates Burdens Of Document Preservation And Benefits Of Proposed Reform”

As Comment Deadline Nears, WLF Advisory Board Member Speaks Out on Proposed Discovery Rule Amendments

longandwindingWhen we noted the beginning of the comment period for the Federal Rules Advisory Committee’s proposed amendments to the Federal Rules of Civil Procedure governing the discovery process with a post last August, the February 15 deadline seemed eons away.

But in mere two weeks, that stretch of the long-and-winding road that is Federal Rules reform will have come and gone. Along the way, WLF has been privileged to testify before the Advisory Committee last November and was the first public interest organization to file public comments with it last October. In order to inform the discussion and explain why the Rules reform effort is so vitally important, WLF published a “Conversations With” paper earlier this month featuring former Attorney General Dick Thornburgh, University of Denver’s (and former Colorado Supreme Court Justice) Rebecca Kourlis, and Goldberg Segalla LLP partner John Jablonski.

In a recent Corporate Counsel magazine, GlaxoSmithKline General Counsel Dan Troy authored a must-read article on e-discovery reform, “Changing Federal Rules to Reduce Discovery Costs.” WLF is honored to have Dan as a member of our Legal Policy Advisory Board. He brought the emerging effort to reform the Federal Rules to our and the public’s attention four years ago by authoring a WLF Legal Backgrounder along with GSK Assistant General Counsel John O’Tuel entitled A Toolkit For Change: How The Federal Civil Rules Advisory Committee Can Fix A Civil Justice System “In Serious Need Of Repair”.  In his Corporate Counsel article, Dan focused on the extreme costs of document preservation in the digital age, and the need to not only adopt proposed amendments to Rule 37(e), but also further strengthen the standard for imposing sanctions for “spoliation.”  In terms of the preservation burden, he wrote:

As just one example of the amounts of data at issue, my own company, GlaxoSmithKline, has preserved 57.6 percent of its company email, amounting to 203 terabytes of information. This would be 20 times the amount of the printed collections of the Library of Congress.

Reform of Federal Civil Procedure Rules May Lead to Heightened Pleading Standard in Patent Suits

patentsCross-posted by Forbes.com at WLF’s contributor page

As the process of amending the Federal Rules of Civil Procedure (FRCP) enters a critical juncture, most discussion and attention (including here at The Legal Pulse) have deservedly focused on proposed changes to rules governing the pre-trial discovery process. However, one particular proposed change, overlooked for the most part, would require plaintiffs alleging patent infringement to provide more information in their initial complaints. The Advisory Committee on Civil Rules proposes to abrogate Rule 84 and along with it, the sample complaint forms to which the rule refers, including one relating to patent suits: Form 18.

What Is Form 18? This form has become well-known to patent litigants, especially accused infringers. The judiciary created Form 18 in 1938. It permits plaintiffs to provide a bare minimum of information: a jurisdictional statement, general assertion of patent ownership, a claim of infringement, and a request for relief. A complaint crafted in compliance with Form 18 would thus be in accord with another Federal Rule of Civil Procedure, Rule 8, which dictates pleading standards. In its 2007 Bell Atlantic v. Twombly and 2009 Ashcroft v. Iqbal rulings, the Supreme Court found that the then-existing interpretation of Rule 8—that some relief is “possible”—was incorrect and ruled that plaintiffs must demonstrate that its version of the events is “plausible.” The Court pointedly said that Rule 8 “demands more that an unadorned, the-defendant-unlawfully-harmed-me accusation.”

Form 18 Trumps Rule 8. Patent infringement complaints drafted in minimal conformance with Form 18 are decidedly “unadorned.” Defendants are denied fair notice of their alleged violation, a fault which is magnified exponentially in some patent litigation, such as suits brought by “patent-assertion entities.” As stated in a 2011 letter urging the Administrative Office of the U.S. Courts to address Form 18’s flaws:

[Its] limitations are immediately apparent when the template is used—as is frequently the case—to accuse an entire website or channel of commerce of infringing, in some unspecified manner, a method or software patent. Continue reading “Reform of Federal Civil Procedure Rules May Lead to Heightened Pleading Standard in Patent Suits”