The Duty of Competence: How to Avoid E-Discovery Sanctions
Every law school graduate understands the importance of competence in the practice of law. It is not only essential to client service but a mandatory requirement under professional rules of responsibility. Recently, several courts have sanctioned attorneys (and their clients) for failing to meet the standard of competence in the context of e-discovery. This article will summarize these developments and identify lessons learned to help you avoid the same in your practice.
Attorney Competence in Technology
The ABA Model Rules of Professional Conduct, Rule 1.1 (Competence) addresses technology as an everyday part of the practice of law. The rule and official comment state that all lawyers using technology need to be competent in that technology to zealously advocate for their clients. District Judge Iain Johnston reminds us in DR Distribs., LLC v. 21 Century Smoking, Inc., that the 2012 ABA Commission on Ethics directs us to what competence in technology means in the context of e-discovery, commenting that it "now require(s) lawyers to have a firm grasp on how electronic information is created, stored, and retrieved.”
Forty states have since followed and adopted the ABA amendment or drafted similar language, and at least three—Florida, North Carolina, and New York—now require attorneys to obtain CLE credits focused on technology and/or cybersecurity.
In the Rules, we look at Federal Rule of Procedure, Rule 26(g)(1), which requires counsel to make a reasonable inquiry that the discovery responses provided to the requesting party are complete and correct at the time of signature. In today’s world of electronic data, this requires some level of competence in technology.
Two recent cases highlight this need. In Ondigo LLC v. intelliARMOR LLC, the defendant’s counsel was found to have violated Rule 26(g)(1) and received sanctions under 26(g)(3) for failing to make a reasonable inquiry pertaining to its client’s email system. In DR Distribs., LLC v. 21 Century Smoking, Inc., District Judge Johnston took the opportunity to detail the defendants’ and their counsels’ failed technology and e-discovery competence as they attempted to self-collect cloud-based information.
Ondigo LLC v. intelliARMOR LLC
Ondigo LLC v. intelliARMOR LLC is a breach of contract bench trial out of the Eastern District of Pennsylvania. Rule 26(g) requires all attorneys to certify, after a reasonable inquiry, that a disclosure is complete and accurate when made. Referring to the 1983 Advisory Committee Notes for further clarification, Rule 26 is not a truthfulness rule. Rather, it requires that “the lawyer has made a reasonable effort to assure that the client has provided all the information and documents available to him that are responsive to the discovery demand.”
The facts of this case are simple; the defense counsel told the Judge they had corroborating evidence in the form of emails to certain witness statements that were at the heart of the issue for this matter. Defense counsel submitted that evidence in its post-trial Proposed Findings of Fact and Conclusions. However, the email was not previously disclosed during discovery.
In reply to plaintiff's Motion for Sanctions, defense counsel stated that the email in question was autodeleted from the email client because of its size, but it remained on the email server. It was not until after discovery had closed that the defense counsel asked the correct questions to learn that the email still existed.
The court found that the defense counsel’s statements and almost immediate finding of the corroborating documents were the evidence to prove that the original production violated Rule 26(g).
In making its determination, the court found similarity to DR Distribs., LLC v. 21 Century Smoking, where the producing party was sanctioned for failing to search and produce responsive documents from third-party cloud-storage repositories.
DR Distribs., LLC v. 21 Century Smoking, Inc.
In this trademark infringement matter, the defense counsel set the tone by claiming that electronically stored information was unimportant. As a result of this and many missteps, the defendant was sanctioned for not issuing written litigation holds, not requesting the disabling of auto-delete features for chat and email, being generally unfamiliar with where the responsive data existed, and self-collecting without attorney supervision or instruction.
In the end, an adverse inference was given to the jury, and they were informed of the extent of the spoliation and told that it may “consider that evidence.” The defendant was also precluded from using any untimely produced evidence, and a sanction of $2.5 million was imposed on the defendant and its counsel, to be paid 50/50 to the plaintiff.
In a final slap to defense counsel, District Judge Johnston required them to complete eight hours of continuing legal education on ESI and certify that they had read his opinion.
Judge Johnston cites a plethora of resources, including from the Hon. Shira A. Scheindlin & Daniel J. Capra’s Electronic Discovery and Digital Evidence (2009), where he quotes:
Lawyers have a responsibility to educate themselves and their clients about the new and pertinent legal and technical issues regarding electronic discovery. This is especially true when it comes to counsel's affirmative obligation to actively engage with his or her client in the process of identifying, preserving, reviewing, and producing electronic information. This includes the obligation to seek, as part of the lawyer's due diligence, all relevant information, positive or otherwise, which may relate to the claims at issue. To do otherwise is an ethical violation.
Every litigation/arbitration/mediation includes electronically stored information that should be preserved. What happens after that is specific to each matter, but the duty of competence imposes an ethical obligation on every litigator to understand, or have someone on their team who understands, how electronic information is created, stored, and retrieved.