This is a report of a speech given by US Magistrate Judge John Facciola at the Masters Conference in Washington on 17 October 2008. Its theme was leadership. Whatever view UK lawyers and judges may take about US litigation discovery, this thoughtful survey has much of value for a UK audience
Judge Facciola began by holding up FDR (for you Brits, that is Franklin D Roosevelt, the architect of the New Deal in the Depression of the 1930s) as the model for leadership. He went on to give us one modern-day example of fine leadership, and several where leadership was seriously lacking.
His one star was Judge Lee Rosenthal, a Federal Judge in Houston and chair of the Judicial Conference Committee on Rules of Practice and Procedure, whose leadership had ensured the passing into law (on 19 September) of the new Federal Law of Evidence 502. This, in the words of the Representative who introduced the bill, provides a “predictable standard to govern waivers of privileged information” by providing protection to attorneys who inadvertently disclose privileged information. The aim is to reduce the enormous costs of privilege reviews.
The lobbying campaign which Judge Rosenthal ran to achieve this, Judge Facciola said, was “creative, diligent and political in the true sense of the word, that is, collaborative”. To us in the UK and Europe, the word “lobbying” has come to connote commercial enterprises seeking commercial gain by buying favours from government and Brussels. It is refreshing to see the term used in its true sense of working the phones to achieve an improvement in the law. How much of an improvement it is, only time will tell, but most seem to see it as a big step in the right direction.
Judge Facciola turned next to the difficulty of finding electronic information when it was needed. No-one knows, he said, even what is on their own computer. He had recently seen a Terabyte drive for sale for everyday use for $200.
He outlined a hypothetical case where a dismissed employee alleged that her performance appraisals were at least as good, if not better, than those who retained their jobs, and had been so over several years. It was clearly material for her employer to find the appraisals. Most corporations would find it difficult, if not impossible, to do this, and would have to resort to properly framed keyword searches across a mass of data in the uncertain hope of finding them.
He had been introduced to some archivists by Jason Baron, Director of Litigation at the National Archives. They had told him that they received no guidance as to what to save or as to what, if any, their department’s records retention policy was. Then the very lawyer whose job it was to create a system would call up in a panic to get hold of the appraisals. Federal agencies seemed to have no idea of what they were keeping (and no, he was not able to comment on the progress of his inquisition of the White House over Karl Rove’s e-mail backup tapes which had apparently gone missing).
Corporations look down their noses at the Fed, Judge Facciola said, but are no better than government at records retention. The reaction seemed always to be “he kept everything, she threw everything out and he can’t remember”. Then, they come before a Grimm or a Facciola (US Magistrate Judge Paul Grimm is a judge equally well-known for thought-provoking Opinions on the responsibilities of parties and their lawyers in this area).
The parties resemble a firing squad in a circle, he said, with the implication that each of the people involved, both from the lawyers and their clients, blamed one or more of the others for the record-keeping defects.
It is sometimes hard to believe that there has been such a dereliction of duty, Judge Facciola said. The events of the last two weeks or so have highlighted and amplified the problem. Lawyers find themselves uncertain who their client is, as liabilities and causes of action are passed by merger, takeover and bankruptcy from bank to bank and ultimately to FDIC, the Federal Deposit Insurance Corporation. How, he wondered, will Judge Peck manage the claims arising out of Lehman when all the information lies in an unstructured electronic universe?
Judge Facciola’s next target was those responsible for data security. He had, he said, been to a security convention hosted by RSA who had told him about cryptography and the enormous potential for data loss and computer penetration – and resulting fraud. No-one was listening to them, they had told him. He saw cases in his court which would take one’s breath away for their audacity, technical skill and potential loss alike.
Disaster awaits if you add the lack of records management to the lack of security. Traditional concepts used to assess data authenticity do not make sense any more when nothing is an original and nothing is a copy. We need to learn, he said, about information and how it can be manipulated; “we” in this context I took to mean everyone engaged in any aspect of information management – users, administrators, lawyers both in house and external, and judges.
There was, he said, a “compelling case for leadership”. Lawyers do not have the luxury of waiting until everything goes wrong. We face a flood of complicated litigation with outdated tools.
Judge Facciola then turned to the alarming degeneration of the relationship between in-house counsel and external lawyers. External lawyers “treat me like a file clerk” said one in-houser. “Representations are made to the court without asking me”. He noted with concern an organisation of in house counsel which excluded outside counsel. This, he said, leads to Qualcomm, and to war between clients and lawyers. [Qualcomm, for the benefit of those who are not US attorneys, was a case in which, put at the lowest, external counsel failed to inquire into what they were told by an important client; 40,000 material documents turned up after judgment, leading to sanctions in excess of $8 million and a number of attorneys being reported to their bar association. The story rumbles on in the form of disputes between lawyers and client as to where the blame lies, and in the pending investigations into the attorneys’ conduct].
Clients should not be passive, Judge Facciola said, and should not just pay the bills. Budgets have to be made and stuck to.
One of the things which had struck Judge Facciola about his visit to RSA was that the RSA certification had to be renewed after three years. Lawyers, he said, were exempt from that requirement. The only condition for continued membership is a pulse, and sometimes he had his doubts even about that. Pleadings were filed in his court with bad spelling and sentences which do not make sense.
The difference between those who do and those who do not understand electronic discovery is not narrowing, he said. We have those who are very skilled and those who are not skilled at all. Most cases do not need hours of e-discovery. It was quite some job to do justice if there was such disparity between the skills of the attorneys in front of you. The unfortunate thing is, he said, that you cannot hit them when they say they “I don’t understand this computer stuff”.
Judge Facciola said that Judge Grimm had given an Opinion the previous day on co-operation. Tom Allman had led a project to put on the Sedona Conference site some toolkits with suggested forms of proposed orders which anyone could use. He gave it a decade until the education was complete. Leadership was truly called for if the legal profession was to play its part in tackling the problems.
It was, he said, easy to be obstructive and to object to the other side’s discovery. Seeing what resulted from this, he was sometimes tempted to pick up the phone to the clients and to urge them to take the money out to a parking lot and burn it instead of giving it to lawyers.
Judge Facciola turned lastly to the role of judges as mediators. Many judges, he said, spent 70-80% of their time mediating, asking the lawyers to say what they had done to resolve matters. Lawyers squabble over search terms without knowing what they are talking about. There were, he said, people available to help with this, including some within the court without cost.
There was a settlement rate of over 90%, that is, nearly all cases were settling without trial. Why does this matter? It matters, Judge Facciola said, because if the Federal Courts price themselves out of the dispute resolution market, society will lose the mediating influence of judges as society is driven away from the courts by the cost.
Over the last 40 years there has been a rise in the role of judge as case manager, he said. They were now “riding herd on discovery”. The Federal jurisdiction was equal to the challenge of making the courts the forum of choice for disputes.
What did society want from its courts? The state’s attitude to the courts and to judges did not imply that any great value was attributed to the justice system. If this persisted, people would leave the judiciary.
To me (one of only two Britons at the conference – Nigel Murray of Trilantic was the other) there was nothing in this which I had not heard before piecemeal in a UK context. What was impressive – and depressing – about this hour-long speech was the coherent articulation of all these apparently diverse points as a single stream, and one which was going downhill. Electronic disclosure – Judge Facciola’s specialist subject and the object of the Masters Conference – was a bit-player in a survey which raised much wider issues such as recession, neglect of information management and security, falling standards of something as basic as literacy amongst lawyers.
We are used to being told that that we will drown in a sea of information. Those who tell us so are generally those with solutions to sell – there is nothing wrong with this, of course, and we should be thankful that the technology exists which is beginning to catch up with the problems which technology has created. We inevitably discount what we are told by people with something to sell, however, and to hear it from a judge, of great experience but with no underlying agenda, makes it more compelling.
The other point which is compelling about Judge Facciola’s speech is that he has done his homework – he has been out to see the archivists at the National Archive, and attended RSA’s conference to learn at first-hand what the problems are. That, when added to what he sees in his court, gives him authority to speak about them.
Some of what I do involves trying to make judges aware at least as to the solutions by trying to make opportunities for them to see what is available to tackle the problems – how else can they make proportionate decisions? It makes sense also to try and throw light on the problems by creating opportunities for judges to hear at first hand from people who deal with such issues as records retention and security. I will work on this.