Effective Discovery Requires Effective Communication

As the Southern District of Ohio recently noted in Brown v. Tellermate Holdings Ltd., “[t]here may have been a time in the courts of this country when building stone walls in response to discovery requests, hiding both the information sought and even the facts about its existence, was the norm (although never the proper course of action). Those days have passed.” Today, many cases address the need to tear down the information-sharing wall between parties—but, as this case shows, this need also applies to lawyers and their clients.

In Brown, an age discrimination case, discovery problems ensued when defense “counsel fell far short of their obligation to examine critically the information which Tellermate gave them about the existence and availability of documents requested by the Browns.” Given “a pattern of Tellermate’s failure either to learn or communicate the truth about matters related to discovery, and its counsel’s failure to make the reasonable inquiries required by [Federal Rule of Civil Procedure] 26(g),” sanctions were warranted, including precluding Tellermate from using evidence that would tend to show the plaintiffs were terminated for performance-based reasons as well as awarding costs and attorneys’ fees, split jointly between Tellermate and its counsel.

There are several take-aways from the “simply inexcusable” failures in this case:

• Tellermate’s employees used Salesforce.com to store their sales activities. The Browns requested this data, but Tellermate never produced it. Its counsel cited a number of reasons that they could not share it, including that Tellermate’s contract forbid it from disclosing the requested information, that Tellermate did not own the data, and that Tellermate could not print out historical records. Every reason was false. Instead of learning how Tellermate used Salesforce.com, counsel failed to learn about the application and its data and, most importantly, failed to ask Tellermate to preserve it. Counsel eventually learned the information that the plaintiffs requested was accessible; by that time, however, there was no guarantee that other employees had not tampered with it.
• Tellermate’s counsel represented to the court that only two documents existed relating to a prior claim of age discrimination against the company; however, she later acknowledged she was “personally unaware of” numerous additional documents. After learning of these documents, counsel did not produce them, asserting that they were privileged, but she never created a privilege log for them. The court ruled that Tellermate had waived any privilege.
• Tellermate promised to produce an “unlimited” number of performance evaluations of other employees in an electronic database “at a time and place to be agreed on by counsel,” but it never did. Instead, in response to the plaintiffs’ motion to compel, it claimed to have produced all responsive information, despite the fact that it had only produced 20 documents. After the court compelled production, Tellermate delivered another 50,000 documents, which it culled by using employee names and nicknames, leading to a set of documents that were largely nonresponsive. Tellermate also marked those documents as “Confidential — Attorneys’ Eyes Only” because it viewed the plaintiffs as competitors. Although the documents were not confidential or proprietary, Tellermate’s counsel relied on the designation because of the breadth of the request and the short discovery deadline. The court found that Tellermate could not explain any harm that would result if the Browns reviewed these documents, and thus the assertion was unjustified.

Here, had counsel communicated clearly with its client and formulated a discovery plan up front, it could have averted these problems. Specifically, here are steps counsel should have taken at a minimum to comply with their obligations:

• Trust, but verify. Counsel should not always take clients’ assertions about their data at their word. Instead, speak with knowledgeable IT personnel and document custodians to ascertain the sources of data, including data stored in the cloud. For any data that a client deems inaccessible, research the issue diligently. Here, Tellermate’s counsel should have reviewed its contract with Salesforce to determine who owned the right to the data.
• Ensure clients understand the need to preserve data. In this case, Tellermate received a litigation hold from the plaintiffs, but it failed to comply. Tellermate’s counsel became aware that the company was not preserving Salesforce.com data in the litigation and still did not take steps to ensure it was protected.
• Prepare and submit a privilege log with document productions. Delaying the submission of a privilege log risks the possibility that the court will deem the privilege waived; it also creates the likelihood that documents will slip through the cracks.

In short, throughout litigation, counsel should not take a passive approach to discovery: they are obligated to serve their clients as active participants.

Bill Mariano is vice president at Conduent. He can be reached at info@conduent.com.