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Be Afraid, Be Very Afraid ... Or Not

For much of eDiscovery’s short history, the primary sales and marketing model has been to push FUD—hard. What’s FUD? It’s Fear Uncertainty and Doubt.

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Sanctions, like shipwrecks . . .
Most of the iceberg unseen,
is what drowns Leo

For much of eDiscovery’s short history, the primary sales and marketing model has been to push FUD—hard. What’s FUD? It’s Fear Uncertainty and Doubt, and it was allegedly invented by IBM but later made famous by Microsoft, back when it was the most feared company in the technology world (yes, really).

How does FUD work? Something pretty much like this: Start with an uncomfortable and invasive procedure and add a scary giant-head guy (or maybe we substitute a scary judge) to pop up when you least expect it. How to make the FUD go away? Hand over your cash, and lots of it, to the eDiscovery vendors.

FUD worked well when eDiscovery was this crazy new thing that nobody had ever seen before, but now everybody was talking about it, and nobody knew what to do and here’s that scary giant-head guy again saying something about sanctions and RUN FOR YOUR LIVES!!!

And yes, before you ask, I was guilty of it too. All of us in the bubble were guilty, to some extent.

Experience and time creates wisdom, or at the very least enough data points to calculate statistics (which isn’t quite the same thing as wisdom, but it’ll do in a pinch). The problem with e-discovery FUD is that it turns out that it’s simply not particularly grounded in eDiscovery reality. When you start adding up the statistics, comparing all actual eDiscovery sanctions awarded against actual cases filed, you start to see that the actual numbers (in their respective order) are really small and really, really big. I’m not the only person who’s come up with this idea. A 2011 Federal Judicial Center study found that the number of civil cases filed in United States Federal District court where sanctions are entered due to eDiscovery violations is incredibly small. How small? Let’s consult a helpful chart that I created, which cross-analyzes the FJC study with a study by the Mother Nature Network on deaths caused by various animals (I’ll leave to you to guess which items came from which). All statistics are listed on an incidents/year basis:

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    Killed by hippos: 2,900
    Subjected to a motion for sanctions related to eDiscovery: 209
    Killed by deer (mostly in automobile accidents): 130
    Sanctioned on motion due to eDiscovery violation (per the published 34% rate of such motions being granted): 71
    Killed by jellyfish: 20-40 (for some reason, death by jellyfish is a poorly tracked statistic)

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    Killed by cows: 22

Compare the tiny number of eDiscovery sanctions against the 134,000+ civil cases filed in the subject year of the FJC study, and I’ll take my chances with eDiscovery over hanging out with hippos any day.
The other problem with fudging the FUD factor (“I’ll take Alliterations for $200, Alex”) is that it misses the real root cause of the problem. Years ago, back when everybody had at least the heard the term eDiscovery and were just getting ready to run for their lives, I had the fortune to sit on a conference panel next to a federal court judge who was just learning about eDiscovery himself. After we started talking about what was causing the unseemly abundance of FUD-worthy sanctions cases that were being brandished about, the Judge told me that it was the unseen story beneath the surface of every sanctions case that actually matters. Every sanctions case has a long case history that, over time, has pushed a judge past their limit. Like the 90% of an iceberg that is invisible beneath the surface, in cases where a judge awarded sanctions, what’s rarely apparent in the published opinion is an invisible history of mistakes and missed promises and missed deadlines. That history includes misstatements about the actions of counsel (“We’ve reviewed all of the documents on all of the back-up tapes” – the ones sitting untouched and covered in dust in the back of a closet), of clients (“My client timely and diligently implemented a Legal Hold” – but never sent out any notification to any custodian about it) or whomever (“the IT technician who was going to implement the hold was killed by a cow before he could do so” – when the odds were of course almost certain that he was killed by a hippo instead)

You can see a bit more of the icebergs when the judges recount their role in these scary sanctions cases. A few years back, I watched a former Florida state court judge recount how she felt she had no choice but to enter severe sanctions and adverse instructions that cost a party a jury verdict of more than a billion dollars (yes, really) in what was in its time the most FUD-worthy of all cases: Coleman v. Morgan Stanley (note that the sanctions were later overturned on other grounds). The judge was visibly shaken just talking about it years after the case was over, but she felt compelled to tell the story of all of the misstatements that litigants could have and should have known not to make, of all of the problems that they just seemed to cause for themselves, and of all of the opportunities to make it right that they squandered. Eventually, she believed she had no choice but to impose sanctions.

Still don’t believe me? Go read another infamous eDiscovery sanctions case In Re: Fannie Mae Securities Litigation and count the number of times that the sanctioned party requested extensions, received extensions, and made promises that this time they would get eDiscovery right before that judge brought the hammer down. Hint: it is possible to count it one hand as long as you are not any one of these guys.

So there you go. It’s easy to get convinced that eDiscovery is a dangerous, scary place. And, in fact, it is possible to really screw up an eDiscovery project. However, you are more likely to be killed by a hippo or a deer than you are to be sanctioned due to an eDiscovery problem (though admittedly eDiscovery does appear to be more than triple the danger of turning your back on a cow). You’ll probably be fine as long as you don’t make promises you can’t deliver . . . or don’t know if you can deliver . . . or even if you haven’t asked the people who have to deliver if they can deliver. If the judge asks you something and you don’t know the answer, admit it and state that you will find out and respond quickly with the answer. If you have a problem, try to work it out with the other side—and if genuine, good-faith negotiation doesn’t work, get in front of the judge ASAP to deal with it. eDiscovery problems don’t typically get better with time. If you failed to preserve your back-up tapes 2 years ago, getting yourself another 90 days in the hope that the Back-up Tape Fairy will arrive with her magic wand to make them appear is just going to make that next hearing go oh-so-very much worse for you.

It’s all about basic, competent, and careful lawyering, really. We’ll talk more about that in some of the next installments.

Michael S. Simon is the Co-Founder of Seventh Samurai, an eDiscovery expert consulting firm. Michael is a former practicing trial attorney and he has provided strategic development plus marketing, sales and operational support for eDiscovery and Legal Technology market leaders for over 15 years. Michael is also an adjunct professor at Boston University School of Law, co-teaching a class on eDiscovery Law and Practice.

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