Allyson Haynes Stuart, The 3 “C’s” of Ethics in E-Discovery. Part One

AllysonE-discovery is inseparable from the issue of ethics. Because lawyer duties and requirements permeate the realm of e-discovery, they invariably implicate lawyers’ ethical duties. This is illustrated by the fact that the most notorious e-discovery cases are ones where lawyers are heavily sanctioned – including referral to a state bar for disciplinary proceedings. This article tries to distill the current ethical duties of which every lawyer needs to be aware.

Ethical duties in e-discovery can be summarized by three “C’s”: Competence, Candor, and Confidentiality. Competence stresses knowing the law – an essential for avoiding sanctions, knowing when you need help, and knowing what questions to ask. Candor is exemplified in Federal Rule of Civil Procedure 26(g), which requires that every discovery request, response, or objection be signed by an attorney who attests that the discovery is complete and correct, has a proper purpose and legal basis, and is not unreasonable or unduly burdensome. Candor also includes the ethical duties of truthfulness to the court, and truthfulness and cooperation with opposing counsel. Finally, confidentiality is essential for protecting against the loss of attorney-client privilege, and for maintaining that privilege in the face of inadvertent production.

Underlying each of these C’s is the concept of responsibility. Supervising attorneys have ethical obligations with respect to actions taken at their direction. And outside counsel have responsibility for discovery obligations despite reliance upon the representations of in-house counsel.

  1. Competence

Rule 1.1 of the Model Rules of Professional Conduct states that “A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.” Comment 8 to the Model Rule, revised in 2012, goes further: “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.”

Importantly, the rule allows lawyers to fulfill their duty of competence by consulting or associating with another lawyer. But the days of putting your head in the sand when it comes to technology are over. The tie between competence and sanctions is a direct one, given courts’ ability to grant harsher sanctions if a party or her counsel has acted with gross negligence, allowing the presumption of prejudice for purposes of an adverse inference instruction.

Still one of the leading series of cases on baseline requirements for competent e-discovery, the Zubulake cases (particularly Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (Scheindlin, D.J.) (“Zubulake V”)) found certain duties to be quintessential. Counsel has the duty to implement a litigation hold, triggered when the party reasonably anticipates litigation. The scope of that litigation hold includes accessible documents within the custody or control of the key players in the matter. Counsel has the duty to locate relevant information in the possession of the client, which requires counsel to become fully familiar with the client’s document retention policies and data retention architecture. Finally, counsel has the continuing duty to ensure preservation. One notice to the client is not enough; direct communication with key players is necessary, and counsel must identify and store backup media as well.

Six years later, the same district court judge decided Pension Committee v. Banc of America Secur., 685 F. Supp. 2d 456 (S.D.N.Y. 2010) (Scheindlin, D.J.). At this point the judge believed all counsel had had plenty of time to develop competence in e-discovery, and she found that certain failures constituted gross negligence as a matter of law, once the duty to preserve has attached:

  • to issue a written litigation hold;
  • to identify all the key players and ensure their records are preserved;
  • to cease deletion of email or to preserve the records of former employees that are in a party’s possession, custody or control; or
  • to preserve backup tapes when they are the sole source of relevant information, or when they relate to key players whose relevant information is not obtainable from readily accessible sources.

The Pension Committee decision was partially abrogated by the Second Circuit Court of Appeals in Chin v. Ports Authority, where the court stated, “We reject the notion that a failure to institute a ‘litigation hold’ constitutes gross negligence per se. Contra Pension Comm. Rather, we agree that ‘the better approach is to consider [the failure to adopt good preservation practices] as one factor’ in the determination of whether discovery sanctions should issue.” 685 F.3d 135, 162 (2d Cir. 2012). But the lesson of Pension Committee is still a valid one: specific e-discovery competence is required.

The circuits have differed on the determination of sanctions and the related inquiry into whether a party or counsel has acted with gross negligence. For example, the Fifth Circuit has required a showing of bad faith before an adverse inference instruction is appropriate, while the 1st, 4th, and 9th Circuits have allowed such sanctions as long as prejudice is severe. But soon the new F.R.C.P. 37(e) will level the playing field somewhat in the determination of culpability, requiring that all courts find “intent to deprive another party of the information’s use in the litigation” before ordering an adverse inference instruction or other severe sanction:

F.R.C.P. 37 (e) Failure to Preserve Electronically Stored Information. If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action and enter a default judgment.


In all federal courts, the three harshest sanctions (judicial adverse inference, adverse inference instruction, and dismissal) will require a showing of prejudice that cannot be cured through a lesser sanction AND that the sanctioned party acted with more than gross negligence – with intent to deprive the other party of the information’s use in the litigation. Still, the specific actions faulted in pre-37(e) cases are helpful guidelines for counsel seeking to maintain competence in the field.

For more info, contact Allyson Haynes Stuart.

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