Ed. note: Gabe Acevedo will be covering LegalTech for Above the Law this year. If you are interested in communicating with someone from ATL about LegalTech coverage, please contact Gabe at [email protected]. Thanks.

It seems that judges are no longer afraid to unleash the power of the gavel when it comes to e-discovery violations.

There has been quite a buzz in the e-discovery community this week about an article in the Duke Law Journal by attorneys Dan H. Willoughby Jr., Rose Hunter Jones, and Gregory R. Antine, of King & Spalding LLP. Willoughby is the partner in charge of the firm’s Discovery Center, and Jones and Antine both practice in the e-discovery arena.

The article, entitled Sanctions for E-Discovery Violations: By the Numbers, was mentioned in the ABA Journal and the WSJ Law Blog, tweeted extensively, and summarized in vendor blogs such as Catalyst and Clearwell.

So what are the authors’ findings? Let’s take a closer look…

This sentence from the article’s conclusion nicely highlights the main point: “Sanction motions and sanction awards for e-discovery violations have been trending ever-upward for the last ten years and have now reached historic highs.”

First, I want to mention Bob Ambrogi’s excellent discussion of the article, on the Catalyst E-Discovery Blog. Ambrogi is a lawyer and writer on legal technology who is well-respected in the industry. His blog, LawSites, is one that I follow closely.

Although there has been a significant spike in e-discovery sanction cases since 2004, the first e-discovery-related sanction by a court came almost thirty years ago.

Sanctions for e-discovery violations began to appear in the early 1980s. The first case identified in which e-discovery sanctions were awarded was William T. Thompson Co. v. General Nutrition Corp. In William T. Thompson, the plaintiff sued General Nutrition Corporation (GNC) for antitrust violations, alleging that GNC falsely advertised the availability of the plaintiff’s products at GNC’s stores. GNC’s purchase, sale, and inventory records, kept in paper form and in computer files, were key to the plaintiff’s case. After the plaintiff filed the lawsuit and initial discovery requests, GNC destroyed its paper and computer inventory records. The district court found that GNC could have maintained the computer records without undue burden and that it did not instruct its employees to preserve records, which resulted in the records’ routine destruction. The court awarded the plaintiff monetary sanctions, attorneys’ fees and costs, and default judgment because GNC’s bad faith destruction of documents prejudiced the plaintiff.

Judge Shira Scheindlin

For well over a decade after William T. Thompson, there were few, if any, e-discovery sanction cases. By 1997, there was a small uptick in cases, but until 2003 there were still fewer than ten instances of sanctions.

Then, in 2004, e-discovery sanction cases more than tripled (from nine to twenty-nine), and then tripled again in 2009 (with 97 such cases). Of course, 2004 was also the year that Judge Shira Scheindlin, U.S. District Judge for the Southern District of New York, sanctioned UBS in the landmark e-discovery case Zubulake v. UBS Warburg. Coincidence perhaps?

As the article points out, “In fact, there were more e-discovery sanction cases in 2009 than in all years prior to 2005 combined.”

Obviously, with the rise in e-discovery cases, sanction awards rose as well, although not as sharply as the cases themselves. While sanction awards also tripled between 2003 and 2004, there was a slight drop in 2005, but then awards picked back up again in 2005 with roughly 45 of the 97 cases being awarded sanctions in 2009. (The best chart that illustrates this is found in the article itself. Just click here and go to page 7.)

The first judges I think of offhand when it comes to e-discovery are Shira Scheindlin, mentioned above; Paul Grimm, of Victor Stanley fame; and John Facciola, who was the presiding judge in the O’Keefe “Where Angels Fear to Tread” case. But e-discovery sanction cases have spread well beyond these three.

Our research indicates that 183 district court judges and 111 magistrate judges from seventy-five federal districts in forty-four states, as well as the Virgin Islands, the District of Columbia, and Puerto Rico, have issued written opinions regarding sanctions involving e-discovery. All eleven of the federal appellate circuit courts, as well as the Federal and D.C. Circuits, have issued opinions involving e-discovery sanctions. Additionally, nine bankruptcy court judges, two United States Court of Federal Claims judges, and one United States Court of International Trade judge have addressed issues relating to e-discovery sanctions.

Another fun fact from the Duke Law Journal piece is that the most common offense sanctioned by courts has been failure to preserve electronically stored information (ESI). The number of attorneys being sanctioned is on the rise as well. And perhaps not so surprisingly, defendants have been sanctioned at a three-to-one ratio over plaintiffs.

Are lawyers getting the message? Perhaps. According to a follow-up post by Bob Ambrogi on the Catalyst Blog, other studies, by Gibson Dunn and Williams Mullen, show conflicting numbers in 2010 about whether e-discovery sanction cases rose or dropped.

Nevertheless, the fact remains that e-discovery sanction cases are sharply on the rise. All was quiet from the early 80’s until 1997, when these cases spiked for the first time. Yes, I know the number doesn’t seem that high, but by 2003, the numbers were eight to nine times higher than in 1996. Okay, that may have been only eight to nine cases total, but it is still quite a jump.

In 2004, the number of e-discovery sanction cases tripled, and then tripled again by 2009. This causes one to wonder: How many cases of this sort will there be in 2013? Or 2014?

Since the upward spiral trend in the number of these cases is likely to continue, this advice of the article’s authors seems especially useful: “Although serious e-discovery misconduct by parties and counsel should continue to be the subject of sanctions, appropriate consideration should be given to the complexity of ediscovery in ruling upon the increasingly frequent e-discovery sanction motion.”

Gabe Acevedo is an attorney in Washington, D.C. and the publisher of the e-discovery blog GabesGuide.com. His articles on legal technology and discovery issues appear regularly on Above The Law. He can be reached at [email protected].


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