October 13, 2018
In the area of proportional discovery, the case Small v. University Medical Center (UMC)¹ was the shot heard ‘round the world. The U.S. District Court’s ruling, in no uncertain terms, sent a message to companies facing even the potential of litigation: have a consistent, documented, and defensible preservation plan in place for all types of electronically stored information (ESI), or face the court’s wrath.
To be sure, the company facing sanctions (UMC) in the Small decision made critical mistakes in their ESI preservation plan. The Special Master noted several key problems:
- No coherent policy for identifying custodians, issuing holds, and monitoring continued compliance
- Duty to preserve ignored until more than 270 days after the complaint was served
- Failure to conduct timely custodian interviews
- Collection problems included significant delays, and lack of knowledge relating to ESI best practices, proper forensic tools and chain of custody protocols.
These failures resulted in the deletion of over 38,000 likely relevant files and over 26,000 lost and wiped text messages,² causing the Special Master to recommend the nuclear option of imposing a default judgment in favor of the plaintiffs, as well as other monetary sanctions.³
The errors do not stop there, however. It is not enough to have a comprehensive preservation plan in place which is triggered when there is, as the Sedona Conference notes, “a credible probability” of litigation.4 Any plan should include an early proportionality mindset specific to the claims and defenses of a case, which right-sizes discovery and creates a transparent and defensible process. Such a strategy should be deployed from the outset of a dispute.
Enter the Proportional Discovery Assessment™ workflow. Companies will dramatically reduce the cost of preservation if non-relevant custodians and data sources can be quickly released from their holds. Technology can be leveraged to help simplify this task.
- Imagine if a number of custodians could be released after a brief five-minute assessment interview.
- Envision those remaining being ranked according to their relevance to the case.
- Picture the various data sources being scored and classified based on collection difficulty.
- Visualize building assessment scenarios which organize custodians and data sources based on the claims and defenses at issue, with real-time metrics and cost estimates to support Rule 26(f) negotiation strategies.
In the end, imagine a hold and collection strategy that could lead to a dramatic reduction of data sources to be collected and the corresponding discovery burden.
The critical mistakes made by UMC can be readily avoided by companies facing sweeping litigation holds by adopting an early proportionality mindset. Had UMC come to the table with a clear strategy for issuing holds on various data sources, with each custodian ranked according to their importance to the matter, a successful negotiation strategy could have been adopted, and the devastating costs and sanctions could have been avoided. This Small case conveys a big lesson to us all.
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To find out more about the importance of Proportional Discovery Assessment™, please download the white paper entitled Proportionality: The Earlier, The Better.X
Daniel Small, et al. v. University Medical Center, et al., No.: 2:13-cv-00298-APG-PAL, 2014 U.S. Dist LEXIS 114406 (D. Nev. Aug. 18, 2014), 31.
 Ibid, 32.
 Ibid, 35.
 The Sedona Conference Commentary on Legal Holds: The Trigger & The Process, A Project of The Sedona Conference Working Group on Electronic Document Retention & Production (WG1) – August, 2010.