The End of the Age of Ignorance: Courts Are Becoming Less Tolerant of Lapses and Noncompliance With Discovery Obligations Involving Electronically Stored Information

A recent federal case illustrates increasing expectations of courts in civil discovery of electronically stored information (ESI). In Small v. University Medical Center of Southern Nevada, No. 2:13-cv-00298-APG, 2014 WL 4079507 (D. Nev. 2014), a Special Master appointed by the court recommended that draconian and severe sanctions be imposed on a large corporation for its massive failure to comply with its obligations to preserve, identify, maintain, retain and collect ESI, including e-mails and text messages on its servers, company mobile phones, company-issued personal mobile devices (such as laptops, tablets and smart phones), and internal accounting, financial and employee timekeeping records.

In this wage-and-hour class action alleging overtime and meal break violations, there were failures at many levels of the company and stages of litigation (some inadvertent and some intentional), involving corporate officers, employees, outside legal counsel, outside forensic experts and retained consultants.

Courts are becoming less tolerant of lapses, and claimed ignorance or excuses of lack of technological sophistication by companies and their lawyers, such as failures to institute litigation holds or to undertake Page 1 of 2 adequate steps to preserve, retain, identify, collect and produce ESI in discovery. Civil discovery obligations no longer will be viewed differently depending on whether the information sought is in electronic, digital or hard copy format.

Paradoxically, while large organizations have more resources, the problem of producing ESI becomes more complex, costly and time-consuming the larger the business organization. The proliferation of digital devices for work use, as well as different modes of storage such as individual devices, servers, back-up storage tapes and cloud-based platforms, make it much more difficult for companies and lawyers to undertake an adequate investigation of potential sources and repositories of where discoverable ESI may exist when litigation is filed or threatened. Compounding the problem is a trend in asking employees to use their own personal devices for business use. As a result, some of the most fierce and costly battles in future litigation will center on ESI discovery issues. Proper planning and implementation of sound ESI policies can help mitigate these risks.