Construction Claims: Effective Discovery Tactics Best Practices for - - PowerPoint PPT Presentation

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Construction Claims: Effective Discovery Tactics Best Practices for - - PowerPoint PPT Presentation

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Presenting a live 90-minute webinar with interactive Q&A Construction Claims: Effective Discovery Tactics Best Practices for Document Collection, Review and Production WEDNESDAY, JUNE 26, 2013 1pm Eastern | 12pm Central | 11am

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Construction Claims: Effective Discovery Tactics

Best Practices for Document Collection, Review and Production

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

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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 BPeters@perkinscoie.com

Andrew Greene

206.359.3234 AGreene@perkinscoie.com June 26, 2013

Effective Discovery Tactics in Construction Claims

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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 . . .
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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
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8

Typical Design-Bid-Build Structure

Owner/ Developers Design Professionals Contractors

Lenders

Owner

Contractor

Sub-contractors Suppliers

Architect

Sub-consultants Sub- consultants Sureties

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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
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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
  • ther projects
  • Damages
  • Specific discovery for statutory claims
  • E.g., multi-unit residential inspection – ex. RCW 64.55.030
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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
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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
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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.)
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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
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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
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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

  • r operation thereon”
  • Destructive testing issues
  • Testing protocols and use of Rule 29
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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"

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E-Discovery

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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

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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
  • f law and can have extreme consequences for non-

compliance

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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 )

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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.)

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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."

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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)
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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)
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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
  • f the production or the ongoing use of predictive coding"
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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
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Review Hours

Linear Review Accelerated Review

(Search Terms)

Automated Review

(Predictive Coding)

Automation

E-Discovery Early Case Assessment

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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
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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
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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
  • pened date or the last modified date)
  • Consider using a consultant for collection
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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
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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
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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.