When it comes to complex litigation, everything is bigger in California: the companies, the lawsuits, the trade secrets. Everything, that is, except the discovery disputes. Where most of the rest of the country is coming to grips with how to apply new rules that emphasize proportional discovery, active case management, and cooperation, judges in the Northern District of California continue to efficiently execute a playbook that was laid out more than three years ago in ESI guidelines and model orders -- and tested in some of the highest profile cases in the world.
US Magistrate Judge Laurel Beeler is among the group of Bay Area federal judges who are setting the pace for everyone else. A former federal prosecutor at the Justice Department who served as deputy chief for the Criminal Division, she has an impressive track record of smoking out everything from complex drug rings to public corruption. It is to that investigative background that her concise description of electronic discovery -- "to excavate a forensic landscape of what happened" -- in part owes.
In part one of this interview with Logikcull, Judge Beeler explains the relationship between attorney competence and efficient dispute resolution; why more organizations are bringing legal work in house; and how parties can head off expensive disputes before they arise. In part two, which will be posted later this week, we address the meaty topics of e-discovery costs and advanced search technologies.
Logikcull: Rules of procedure are to be administered in such a way that just and affordable outcomes are secured. Judging from your own court -- where you see a lot of highly complicated disputes revolving around complex issues and, often, involving large companies -- what grade would you give the US legal system in its ability to deliver those kinds of outcomes?
Judge Beeler: I love the question “grade.” It’s such a quantification of what seems unquantifiable. I’m not sure I could assign a grade. Generally I think people complain a lot about everything being so expensive as to not allow the speedy, just, and efficient resolution of disputes where the stakes are particularly high.
That said, anecdotally and filtered completely through cases of my own management, I don’t see a lot of parties engaging in that kind of [expensive, scorched earth] litigation recently. I have a very anecdotal sense that lawyers and vendors are doing better. But there always is a tension with the smaller dollar cases of managing discovery reasonably. I don’t see that tension in high stakes litigation with top lawyers as much.
Logikcull: Well obviously, in the Northern District of California, you guys are known as very forward thinking -- whether it's the judges, the litigants or the attorneys. How much do you think that expertise relates to the ability to deliver those efficient resolutions?
"WHEN AMENDED RULE 26 CAME OUT, IT SEEMED IT WAS EVERYTHING WE WERE ALREADY DOING."
I think that our process for having parties identify the crux of the dispute and think about a case management plan early in the game, and requiring the parties to come to court and talk about it, does do a really good job of allowing ligation to be managed appropriately to what’s at stake.
So I believe in that model of active case management, and of course it’s all I’ve ever known as a lawyer and now as a judge. I personally think it works when the parties agree to engage in it and if they don’t, the court has its tools to essentially require participation.
Part of it, too, is setting deadlines. I certainly think that we all work better when we problem solve toward manageable, reasonable deadlines that are set with input from all the parties.
Logikcull: You mentioned that the courts have "tools" to coerce this behavior. How often would you say you actually have to use those tools?
Judge Beeler: When I say "tools," they’re not just tools like sanctioning. There’s a power to order that’s a pretty lovely and useful tool. But when I say "tools," I just mean requiring people to participate in the case management process. I require it. Again, it’s a case management system that many judges here [in the Northern District of California] follow.
When you manage discovery and it's just a part of the conversation, most people, when given the opportunity to talk about the case or think about a case or think how best to handle a case, are active participants in it. And what I really meant by tools was just that we have the ability to create, essentially, mandatory case management that requires participation.
Again, very anecdotally, based only on my experience, it works very well. I don’t see a lot of disputes, and if there are disputes, they’re really more along the lines of differences that can be managed collaboratively through case management. So, I can count on one hand the number of discovery disputes that I’ve had in the last couple years....
I have a theory that lawyers and judges are conservative: We all like access to information; we all want to make sure there’s no stone left unturned, and it creates stress if there are things we think we don’t know. But that said, the iterative process toward discovery, for example, has an effect of illuminating the landscape of what happened. And once that happens and people get enough meaningful insight into what a case really is about, I think the disputes often fall by the wayside -- unless there’s a really strategic reason and we all know that litigation sometimes is in aid of a larger business strategy.
"I HAVE A THEORY THAT LAWYERS AND JUDGES ARE CONSERVATIVE: WE ALL LIKE ACCESS TO INFORMATION... AND IT CREATES STRESS IF THERE ARE THINGS WE THINK WE DON'T KNOW."
Leaving aside that kind of case, I think most cases, most lawyers, and most clients want to manage cases efficiently toward a full understanding of what happened so they can either manage the case toward a dispositive motion, settlement, or, in rare cases these days, trial.
Logikcull: To the extent that you do see headwinds for the ability of the courts to quickly resolve disputes, what do you think those are? Are they cost related? Do they deal with the caseloads the courts are handling? Attorney competence?
Judge Beeler: When you think about discovery as a process of excavating a forensic landscape of what happened, it does strike me that sometimes lawyers don’t know where stuff is kept, and that the process could be managed better either by including people with technical expertise in the process or including folks in-house. I can give you an example of a case where the lawyers did a big investigation that must have cost a fortune and the smoking gun documents and emails weren't found.
"I CAN GIVE YOU AN EXAMPLE OF A CASE WHERE THE LAWYERS DID A BIG INVESTIGATION THAT MUST HAVE COST A FORTUNE, AND THE SMOKING GUN DOCUMENTS AND EMAILS WEREN'T FOUND."
I think they didn’t fully understand how information was managed and stored at the company. So all this money was spent and this small pocket of information wasn’t overturned, and that was an impediment....
I also think that things can be managed better before they become a litigated dispute. For instance, with the trade secrets landscape, there is much you can do to take reasonable security measures with employees to avoid a dispute ever becoming a litigated dispute in the first place.
So I do think that companies are mindful of controlling the spend of litigation by putting policies into play that [prevent litigation], as opposed to litigation spurring a company to reconsider how it maintains its information. But keeping good books and records policies, and good ways of understanding how information is stored and maintained -- those are all things that can be done pre-litigation as a part of a company’s ordinary processes.... I do think that companies are mindful about the spend of money that attaches to litigation and are thinking more creatively about defining their policies or their processes or having other approaches [like using alternative dispute resolution services] to deal with disputes.
Logikcull: I think that’s a great point. And it seems that as the amount of information that these organizations have to keep tabs on continues to grow at such a crazy rate, it becomes, on the one hand, more important for them to address these issues, but on the other, harder to do, right?
Judge Beeler: Right. So it’s possible to engage with folks in all sorts of different places, either at practice programs or in the context of settlement conferences.... Recently, I had one pretty big deal general counsel tell me how expensive the litigation was and how just on an hourly basis, he didn’t want to have to pay his outside lawyers that much money and was really trying to actively manage things. And again, anecdotally, I don’t know whether you’ve seen it, but I’ve seen some companies taking more stuff in-house, because I can think of a couple big companies that can manage a lot more litigation in-house than they did some years ago because they can do it more effectively and efficiently being in the company.
"I HAD ONE PRETTY BIG DEAL GC TELL ME HOW EXPENSIVE THE LITIGATION WAS AND HOW, ON AN HOURLY BASIS, HE DIDN'T WANT TO HAVE TO PAY HIS OUTSIDE LAWYERS THAT MUCH MONEY.... I'VE SEEN SOME COMPANIES TAKING MORE STUFF IN-HOUSE, BECAUSE (THEY) CAN MANAGE A LOT MORE LITIGATION IN-HOUSE... MORE EFFECTIVELY AND EFFICIENTLY."
Logikcull: Well, yeah, and to that point, we've worked with this organization called the Corporate Legal Operations Consortium (CLOC) in the Bay Area. It’s made up of these business efficiency experts at huge companies like Google and Salesforce -- these massive companies -- who are responsible for essentially bringing some of these functions in-house and controlling legal spend. So I think you’re right on the money.
Part two will be posted later this week. To learn more about how judges are approaching recent amendments to the Federal Rules of Civil Procedure, download our sanctions "cheat sheet" below.