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Construction Claims: Effective Discovery Tactics Best Practices for Document Collection, Review and Production
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WEDNESDAY, JUNE 26, 2013
Presenting a live 90-minute webinar with interactive Q&A
Andrew L. Greene, Partner, Perkins Coie, Seattle
Brendan J. Peters, Partner, Perkins Coie, Seattle
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Brendan Peters 206.359.8132
Andrew Greene 206.359.3234
June 26, 2013
Effective Discovery Tactics in
Construction Claims
6
Discovery is Discovery
Typically the most expensive part of the case
Rules are the same:
Ground rules – Rule 26
Requests for Production – Rule 34
Depositions – Rules 27, 28, 30, 31, 32
Interrogatories – Rule 33
Note: California Form ROGS– Construction Lit. (Form DISC-005)
Requests for Admission – Rule 36
Expert Discovery – Federal vs. State Rules
Use of Rule 29 (stipulation)
Failure to Make Discovery – Rule 37
So, what's different . . .
7
Construction Discovery is Different
Number and Type of Parties
Variety of Claims and Legal Theories
Different Categories of Documents
Technology Issues
Prevalence of ADR
Volume of Data
E-Discovery Issues
8
Typical Design-Bid-Build Structure Owner/
Developers
Design
Professionals Contractors
Lenders
Owner
Contractor
Sub-contractors
Suppliers
Architect
Sub-consultants
Sub-
consultants
Sureties
9
Issues with Number and Types of Parties
Third Parties Subpoena Issues
"Informal" Discovery
EDGAR
(http://www.sec.gov/edgar.shtml)
FOIA
Contractor licensing online databases
(Example: https://fortress.wa.gov/lni/bbip/)
Secretary of State – online corporations search
Licensing Boards (design professionals, contractors)
PACER / Westlaw docket search
http://www.pacer.gov/
Joint Defense / Common Interest Agreements
Former employees of corporate adversaries
10
Know Your Claim
Contract claims and discovery "Trust but Verify"
Contractual audit or accounting provisions
Required contract submittals
Discovery limits by contract
Jay Brudz & Jonathan M. Redgrave, Using Contract Terms to Get Ahead of Prospective eDiscovey Costs and Burdens in Commercial Litigation, 18 Rich. J.L. & Tech. 13 (2012)
Specific discovery for tort claims Standard of care claims – relevance of performance on
other projects
Damages
Specific discovery for statutory claims E.g., multi-unit residential inspection – ex. RCW 64.55.030
11
Types of Documents
Contracts Entire contracting chain (prime, subs, suppliers, consultants)
General and supplementary conditions
Drawings By Phase (schematic, design development, and construction documents)
Bidding Documents
Shop Drawings
As-Built Drawings
Specifications "Front End" – Divisions 0 and 1
Technical Specifications
"Change Documents" Change Orders
CCDs
Minor Changes in the Work (ASIs)
RFIs
Work Orders / Work Directives
Field Sketches
12
Types of Documents
Submittals
Schedules As-planned schedule
As-built schedule
Fragnets
Cost-loaded
Insurance
Bonds
Payment documents Pay applications and backup
Lien releases
Schedule of values
Progress reports
Meeting minutes
Correspondence
Third-party documents Lender inspections / reports
Government agencies
Practice Tip: Consider early Rule 30(b)(6) deposition
13
Technology Issues
CAD
Multiplicity of software platforms
Layers
Viewers
Models
BIM
Multiplicity of software platforms
Tracking changes (no more clouds?)
Schedules
Viewers
Metadata
Odd-ball file types (ex. surveying data collectors)
Emergence of forensic discovery consultants
The future (the "cloud," tablet project management, etc.)
14
Prevalence of ADR
Mediation Mediation communications
Arbitration AAA Construction Industry Arbitration Rules
Regular Track R-24 – limits discovery
Large, Complex L-4, L-5 – discovery by agreement with arbitrator limits
Fast Track F-9 – virtually no discovery
Discovery as potential waiver of ADR
15
Expert Discovery
Fed. R. Civ. P. 26(b)(4)(B) & (C) Protection for draft reports
Protection for communications between expert and attorney
Work product issues (consulting vs.
testifying experts)
On-site claims consultants
16
Testing and Inspections
Site Inspections under Rule 34(a)(2) – “requesting
party may inspect, measure, survey, photograph,
test, or sample the property or any designated object
or operation thereon”
Destructive testing issues
Testing protocols and use of Rule 29
17
Volume of Data
Where is the data?
How much?
What type?
Triage approach
Early Rule 30(b)(6) deposition to document
custodian
Review of hardcopy documents in person before
scanning
Rule 34(a) – request to "inspect" and "copy"
Rule 34(b) – "party must produce documents as they are
kept in the usual course of business or must organize and
label them to correspond to the categories in the request"
18
E-Discovery
What is E-Discovery?
The production of electronically stored information in civil discovery
And: The process by which electronic data is requested, located,
secured, searched, and produced
19
20
21
E-Discovery
Discovery includes e-discovery 2006 Amendments to the Federal Rules of Civil Procedure
address e-discovery obligations ("electronically stored information" or ESI) explicitly in Rules 16, 26, 33, 34, 37, and 45
Not addressed specifically in many state civil rules—but commonly (if not universally) accepted
E-discovery continues to be a rapidly evolving area of law and can have extreme consequences for non-compliance
22
E-Discovery Decisions
Can Be Extreme
Arthur Andersen, LLP v. United States, 544 U.S. 696 (2005)
Zubulake v. UBS Warburg, LLC (multiple opinions)
Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011)
Hynix Semiconductor v. Rambus Inc., 645 F.3d 1336 (Fed. Cir.
2011)
And they continue…
Victor Stanley v. Creative Pipe, Inc. (multiple opinions)
Pension Comm. of Univ. of Montreal Pension Plan v. Banc of Amer.
Sec., 685 F. Supp. 2d 456 (S.D.N.Y. 2010) (Zubulake Revisited)
(reversed in part)
DaSilva-Moore v. Publicas Groupe, 2012 WL 607412
(S.D.N.Y. Feb. 24, 2012 )
23
Construction & E-Discovery William A. Gross Constr. Assoc., Inc. v.
American Manufacturers Mutual Ins. Co. 256 F.R.D. 134 (S.D.N.Y. 2009) (Peck, Mag. J.)
24
Construction & E-Discovery William A. Gross Constr. Assoc., Inc. v. American Manufacturers Mutual Ins. Co.
Defect and delay claims
Non-party (Hill International's documents)
Issue: how to separate project-related e-mails from
unrelated e-mails
Court addressed keyword searching
Lesson learned:
"This problem would have been avoided, of course, if Hill
used a standard 'Re' line in its Bronx Courthouse emails to
distinguish that project from its other work."
25
Construction & E-Discovery Global Aerospace Inc. v. Landow Aviation, L.P.
No. CL 61040, 2012 WL 1431215, at *1 (Va. Cir. Ct. Apr. 23, 2012)
26
Construction & E-Discovery
Global Aerospace Inc. v. Landow Aviation, L.P.
Landow: Moved for protective order authorizing use of
predictive coding
Manual review would cost $2 million and locate at most
60% of documents
Keyword searching would produce possibly 20% of
documents
Predictive coding could locate 75% of potentially relevant
documents "at a fraction of the cost and in a fraction of the
time of linear review and keyword searching."
2012 WL 1419842 (Va. Cir. Ct. Apr. 9, 2012) (motion)
27
Construction & E-Discovery
Global Aerospace Inc. v. Landow Aviation, L.P.
Landow: Proposed Predictive Coding Protocol
"Seed" set of documents
Privilege Log
Sampling program after predictive coding
Court: approved predictive coding "for purposes of the
processing and production of [ESI]"
Without prejudice to question "completeness of the contents
of the production or the ongoing use of predictive coding"
28
Managing Document
Intensive Cases
The lawyers must understand the structure, costs, limitations
and benefits of compiling a large number of documents into a
usable format
The greatest challenge is efficiently and defensibly reducing
the volume of information that will be reviewed (and later
produced) to identify the key documents in the case
Is every document really needed?
Can the volume of data be reduced by agreement on key custodians,
date ranges, search terms, etc.
Can collected data be "de-duped"—some limitations
Electronic searches for key terms help to further refine what documents
are actually reviewed and in what priority
Early case assessment and cooperation are key
29
Review
Hours
Linear Review
Accelerated Review
(Search Terms)
Automated Review
(Predictive Coding)
Automation
E-Discovery Early Case Assessment
30
Identification: Know Your Custodians
and Potential Sources of ESI
Identify key document custodians Review Complaint, demand letters, etc., and attempt to reach
agreement with opposing party on key custodians
Talk with key players
Review project, division, and company org. charts
Interview document custodians In-person is always best (if possible)
Don't forget to interview IT department
Common sources of ESI Corporate and personal email systems
Desktop or laptop computers
External or networked ("shared") drives
Instant messaging systems
Internet and social network sites
Cloud computing sites
Backup systems and applications
31
Preservation: Send Hold Notices;
Track Compliance
Issue Written Document Hold Notices Describe litigation and claims
Make clear what documents are relevant and what ESI must be retained
Ask custodians to acknowledge receipt and compliance
Consider Suspending Data Management Program Automatic email deletion
Backup recycling procedures (sole source of relevant information for key players whose data is not otherwise readily accessible)
Document retention policies
Recycling of IT resources
Manage Document Hold Notices Send periodic reminders
Coordinate with HR department regarding departures
Third-party software is available
32
Collection: Collect
ESI Promptly and Correctly
Once relevant custodians are identified and interviewed . . . Collect documents and ESI quickly
Involve attorneys in the process—non-delegable duty
Document all preservation efforts, decisions, chain of custody, etc.
Collection options Guided collection
Active data collection
Forensic collection
Be wary of metadata "Data about data"
Includes everything from header information in emails to the revision history for documents
Collection method can change certain metadata (such as the last opened date or the last modified date)
Consider using a consultant for collection
33
Processing and Review: Early Case
Assessment is Key
Processing considerations What file types will be excluded?
What search terms will be used? Expert help required?
What other exclusions will apply (date and custodian restrictions, etc.)?
Vertical or horizontal de-duplication, or both?
Highlighting for substance, privilege, etc.
Exception reports (corrupted, password protected, encrypted, foreign language, etc.)
Review considerations Linear review platforms (Concordance/FYI, Relativity)
Strategic review platforms (Attenex, Clearwell)
Use of contract attorneys?
Pricing considerations Vendors: the good, the bad and the ugly
Most favored nation pricing
34
Production: Seek Agreement
When Possible
Cooperation is necessary Volumes of data can be so large, and the cost of review and production
can be so significant, that parties must discuss production issues in advance
Common topics for discovery conference Identity of document custodians
Privilege issues (including clawback agreements)
Potential volume of data
Search strategies to reduce data for review
Realistic timeline for production
Production format
35
Emerging Issues in E-Discovery
Computer-aided review and the use of predictive coding Da Silva Moore v. Publicis Group et. al., 2012 WL 607412 (S.D.N.Y. Feb. 24,
2012)
Proportionality General Electric v. Wilkins, 2012 WL 570048 (E.D. Cal. Feb. 21, 2012)
Pippins v. KPMG LLP, 2011 WL 4701849 (S.D.N.Y. Oct. 07, 2011)
Cost-shifting U.S. Bank N.A. v. GreenPoint Mtge. Funding, Inc., 939 N.Y.S.2d 395 (N.Y. Sup.
Ct. App. Feb. 28, 2012)
Form of production Many options
Common "reasonably usable" production formats
Native, Static TIFF or PDF images—or some combination
If non-native, need load file containing negotiated metadata
Extracted or OCR text (for keyword searching capability)
Inadvertent disclosure of privileged material—claw back rights?
Evolving types of data—Blog posts, Facebook updates, tweets, text messages, calendar entries, etc.