Wisconsin Business and Commercial Litigation

The way things are going, I might as well re-name the blog “All About E-Discovery Rules.”  Based on the latest feedback about the 7th Circuit’s pilot e-discovery program, I would be willing to bet that the pilot program is going to take full flight soon.  Have a look at Lawyers USA’s Correy Stephenson’s column about the survey results from the 7th Circuit program.  Apparently, everyone loved it (or at least didn’t hate it), which is pretty incredible coming from a bunch of lawyers.

By the beginning of next year, Wisconsin will have new rules governing e-discovery.  In the Wisconsin Law Journal, Jack Zemlicka writes about the path and content of the new rules.  The rules aren’t final yet, and will require some additional tweaking, but they generally follow the outline of the federal rules on the same topic.

E-discovery, much discussed in the past five years or so, hasn’t made as much of a day-to-day impact as was predicted (buth then again, what ever does?  remember the swine flu epidemic, the avian flu, the year 2000, etc.?).  Nevertheless, in cases where e-discovery is important, it can become one of the central issues in the case, and certainly one of the most expensive components of discovery. 

In federal court, many lawyers have taken to using e-discovery as a crowbar to open opponents’ wallets and get a case resolved through financial blackmail rather than through consideration of the substance of the claims and defenses.  While I don’t at this time quibble much with the details of the suggested rule, my fervent hope is that Wisconsin courts will police the use of the rule in a way that preserves the facts of the case as the most important part of the dispute.

computer photo courtesy dlisbona’s flickr gallery via this creative commons license

Although Wisconsin’s rules of civil procedure don’t currently deal specifically with e-discovery, the spectre of continuing increases in the number of cases that require it may force action sooner rather than later.  Jack Zemlicka of the Wisconsin Law Journal writes:

According to the Wisconsin Judicial Council, about 25 other states are considering or have already implemented rules incorporating elements of the 2006 amendments to the Federal Rules of Civil Procedure pertaining to e-discovery.

The Judicial Council recently presented a petition to the state Supreme Court seeking many of the same updates, including enabling parties to specify the form or forms in which electronically stored information is to be produced and a “safe harbor” provision that would prohibit court sanctions if a party fails to produce electronically stored information lost as a result of routine operation of a system

The Council is also recommending that business records be allowed to be produced in electronic form and that parties be permitted to request an opportunity to test or sample materials sought in addition to inspecting and copying them. However, the petition includes commentary from the Federal Rules of Civil Procedure Advisory Committee notes stating that “courts should guard against undue intrusiveness resulting from inspecting or testing such systems.”

One of the major problems with the current proposal, points out Zemlicka, is that there is no claw-back provision.  Given the volume of production and the time required to review the information, claw-back has become a mainstay of the federal system.  Of course, nothing official has happened yet, but stay on your toes — it’s sure to impact you one way or another.

Photo courtesy Robert S. Donovan’s Flickr gallery under this creative commons licence.

Read what Hinshaw & Culbertson LLP’s Steve Puiszis writes about the Seventh Circuit’s new electronic discovery pilot program.  As everyone’s aware, electronic discovery necessitated changes to procedural rules in courts across the country.  The Seventh Circuit’s program is road-testing approaches to the issue.  If you or someone you know is involved in a case that’s been selected to take part, have a look at Puiszis’s post.  It’ll be worth your time.

In Luckett v. Bodner, 2009 WI 68, the Supreme Court exhaustively (I’m not kidding — the thing is 70 pages long) addressed the standards for withdrawal of an admission.  You may prefer to read the summary by Alex De Grande of the Wisconsin State Bar (for some reason that link’s not working, but you can find the article, for the moment, at www.wisbar.org) which distills the opinion to a more manageable length. 

Requests to admit are very handy tools to narrow the issues that must be tried, and for pinpointing areas of need for both parties.  And, despite my griping about the length of the discussion, it’s good to have a detailed review of this somewhat under-served procedural implement. 

The Court wasted little time in deciding that the trial court properly exercised its discretion by permitting the withdrawal in that the withdrawal would aid in the ascertainment of truth and the development of the merits (which seems fairly obvious).  The sweet marshmallow center of the opinion (depending, as always, upon which side of the dispute you fall) is this:

The “prejudice” contemplated by Wis. Stat. § 804.11(2) “is not simply that a party [obtaining the admissions] would be worse off without the admissions.”  To demonstrate prejudice in maintaining the action or defense on the merits, the party who obtained the admission “must show prejudice in addition to the inherent consequence that the party will now have to prove something that would have been deemed conclusively established if the opposing party were held to its admissions.”

 Prejudice in maintaining the action or defense on the merits “relates to the difficulty a party [here the defendants] may face in proving its case, e.g., caused by the unavailability of key witnesses, because of the sudden need to obtain evidence with respect to the questions previously answered by the admissions.”

The prejudice inquiry requires a court to “focus on the prejudice that the nonmoving party [here the defendants] would suffer at trial.”

It is the defendants’ burden to demonstrate that withdrawal or amendment of the admissions will prejudice them in maintaining their defense on the merits.

The defendants made a variety of prejudice assertions, none of which convinced the Court.  The lone dissenter, Justice Prosser, makes an impassioned argument for overturning the lower court’s decision. 

Whether you agree or disagree with the holding, this case is sure to provide some bullets for your next round of discovery skirmishes.

A recent e-discovery decision out of Minnesota federal district court (the Zurn Pex plumbing products litigation) reminded me of the high stakes involved in cases dependent upon electronic information.  The staggering cost of discovery of electronic information can alter the entire economic balance of a lawsuit. 

Plaintiffs request roughly 361 gigabytes of data. . . .  Zurn represents that by using the generally accepted standard of 75,000 pages per gigabyte, Plaintiffs’ request amounts to nearly 27 million pages of documents. . . .  If the K drive were not searched, the remaining data consists of 48 gigabytes.   Zurn also states that a search of the custodians’ emails and J drive files will require approximately seventeen weeks and cost $1,150,000, exclusive of vendor collection and processing costs, to review and process the data.

A couple other issues of note — the court mentions that counsel worked through discovery “amicably.”   It’s a sign of the declining level of professionalism in law practice when counsel who work amicably together are sufficiently anomolous to warrant comment. 

For clients, this decision provides something for you to consider.  Counsel who fight bitterly with opposing lawyers, while sometimes scratching an emotional itch on the part of the client, often succeed only in increasing the cost and length of litigation.  Professionalism and civility can make a distasteful event like a lawsuit a little less distasteful.  And as this decision proves, having counsel that are reasonable can, in the end, save millions in discovery and motion costs.