Historical ESI Highlights – Part III – The “Marquee E-Discovery Disaster Cases”

Historical ESI Highlights – Part II – Zubulake
May 25, 2022
Historical ESI Highlights – Part IV – Hopson & Fed.R.Evid. 502
May 27, 2022

Zubulake was not the first e-discovery case to impose sanctions. Dan H. Willoughby, Jr., et al., “Sanctions for E-Discovery Violations: By the Numbers,” 60 Duke L.J. 789, 794 (2010).

Mr. Willoughby explains that that distinction belongs to Wm. T. Thompson Co. v. Gen. Nutrition Corp., 593 F. Supp. 1443, 1455 (C.D. Cal. 1984)(relying on court’s inherent power and Rule 37).

At that time, sanctions were only sporadic. Willoughby, Sanctions for E-Discovery Violations,  60 Duke L. J. at 794.  However, things changed. The number of sanctions decisions began to rise in 2003 and 2004. By 2010, “E-discovery sanctions [were] at an all-time high.”  Id. at 790.

This led to a series of “[m]arquee e-discovery-disaster cases.”  Willoughby, Sanctions for E-Discovery Violations, 60 Duke L.J. at 790.

Qualcomm Inc. v. Broadcom Corp., became the poster child for sanctions.[1]  “In 2008, a U.S. Magistrate Judge ‘properly incensed’ at counsel’s conduct, imposed $8.5 million in sanctions and referred six attorneys to California Bar Counsel for possible disciplinary action….  That decision received wide publicity. On review, however, the district judge ruled that the magistrate judge had erroneously analyzed privilege issues, prejudicing the sanctioned lawyers, and vacated the sanctions decision. A fifteen-month period of discovery followed during which seven engineers, four attorneys, and two paralegals were deposed…. Following a three-day hearing, the court determined that the attorneys, although they acted in bad faith, should not be sanctioned. While the court remained critical of the previously sanctioned attorneys, the court also described ‘an incredible lack of candor’ by their former client in its discussions with them.  By the time the sanctions were lifted, however, the attorneys’ careers and personal lives had been devastated.”  M. Berman, et al., eds., “Electronically Stored Information in Maryland Courts” (Md. State Bar Ass’n. 2020), 279-80.

Post-Qualcomm, attorneys sent preservation demands asking opponents to “preserve everything” and to refrain from booting up computers.  Berman, ESI in Maryland Courts at 18.  The cost of litigation soared.  Id.

Civility also suffered.  Suddenly, civil litigators could strengthen or win their cases by asserting that opposing counsel had failed to implement and monitor a litigation hold.  This became a civil analog to a “Brady motion” in criminal law.  Berman, ESI in Maryland Courts at 278, What Does “The Making of a Surgeon” Have to Do With ESI and “Software Glitches?”, and  M. Berman, “The Sedona Conference Cooperation Proclamation” ABA Technology for the Litigator.

In December 2015, with the amendment of Fed.R.Civ.P. 37(e), the pendulum began to swing back.  That amendment is designed to dim the marquee lights and cabin the federal spoliation doctrine.

“There are good reasons to approach sanctions decisions with great caution.”  Berman, “Electronically Stored Information in Maryland Courts” at 277-78.  They often arise in an unclear context.  While they may be necessary and appropriate, they may negatively impact civility and unfairly destroy careers.  Id. Qualcomm demonstrated that there is a substantial risk of error for which the impact could be irreparable. Id. at 279.

For an early discussion of “discovery about discovery,” also known as “satellite discovery” or culpability discovery, see The Hon. Paul W. Grimm, M. Berman, et al., “Discovery About Discovery Does the Attorney-Client Privilege Protect All Attorney-Client Communications Relating to the Preservation of Potentially Relevant Information?,” 37 U.Balt.L.Rev. 413 (2008).

History is important.


[1] 2008 WL 66932 (S.D. Cal. Jan. 7, 2008), vacated and remanded in part, 2008 WL 638108 (S.D. Cal. Aug. 18, 2008), reconsideration denied, 2008 WL 2705161 (S.D. Cal. Jul. 7, 2008), appeal dismissed, 327 F. App’x. 877, 2008 WL 1336937 (Fed. Cir. Aug. 18, 2008), on remand, 2010 WL 1336937 (S.D. Cal. Apr. 2, 2010).