The Georgetown Law Advanced E-Discovery Institute: Litigation is the key — How E-Discovery “Fits” into Civil Actions

15 November 2009

When it comes to the flow of litigation information, law firms and clients often feel trapped in a cyclone of data that supersedes substantive issues of a case, both in cost and attention from the court.   Ron Hedges  led the panel and discussed the “flow of litigation” and how active case management (by judges and attorneys) is the key to controlling cost and delay that can result from discovery of electronically stored information (ESI), making reference to motions to dismiss in lieu of answers and reasons to seek stays of discovery rather than beginning the discovery process.

They also discussed the effect of the new pleading standards expounded by the Supreme Court in Twombly and Iqbal, and said that even under those cases, parties will likely continue to incur at least some preservation and collection-related costs before any discovery begins.

In Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007),  and Ashcroft v. Iqbal, 129 S. Ct. 1937 (2009), the Supreme Court made clear that to state a claim for relief in any civil action the “threadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.’’  Moreover, ‘‘only a complaint that states a plausible claim for relief survives a motion to dismiss.’’  

Those decisions (and those of the lower courts interpreting Twombly and Iqbal are likely to lead to the filing of more expansive and fact-sensitive complaints in the US District Courts and more dispositive motion practice pursuant to Rule 12(b).   It is important to consider one important facet of both decisions: management of discovery and the possibility of cost control through that management is not a substitute for a pleading that cannot survive a motion to dismiss.   That being said, what costs related to ESI should be expected to be incurred even if a Rule 12(b) motion and a stay of discovery are imposed?

First, of course, there is the cost of preservation.  The common law duty to preserve relevant information (whether ESI or ‘‘paper’’) arises when litigation is reasonably foreseeable. That duty plainly encompasses information ‘‘relevant to any party’s claim or defense’’; it may also extend to information ‘‘relevant to the subject matter involved in the action.’’

Does that duty further extend to ESI that might be ‘‘not reasonably accessible’’ within the meaning of Rule 26(b)(2)(B)? Can the scope of the duty to preserve information be expanded by receipt of a demand letter from an adversary?   The panel discussed these questions but did not offer definitive ansers, but raised them to note that ESI and other information must be identified, preserved, and sometimes collected once a litigation hold is ‘‘triggered,’’ regardless of whether the complaint appears likely to survive a motion to dismiss.