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

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12pm Central | 11am Mountain

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10am Pacific

Today’s faculty features: Andrew L. Greene, Partner, Perkins Coie, Seattle Brendan J. Peters, Partner, Perkins Coie, Seattle

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Effective Discovery Tactics in Construction Claims Brendan Peters 206.359.8132 [email protected]

Andrew Greene 206.359.3234 [email protected] June 26, 2013

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 . . . 6

Construction Discovery is Different       

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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

Typical Design-Bid-Build Structure Sureties

Lenders

Owner

Contractors

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Owner/ Developers

Design Professionals

Contractor

Architect

Sub-contractors

Sub-consultants

Suppliers

Subconsultants

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 9

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 10

Types of Documents 

Contracts  Entire contracting chain (prime, subs, suppliers, consultants)  General and supplementary conditions

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Drawings    

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By Phase (schematic, design development, and construction documents) Bidding Documents Shop Drawings As-Built Drawings

Specifications  "Front End" – Divisions 0 and 1  Technical Specifications

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"Change Documents"      

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Change Orders CCDs Minor Changes in the Work (ASIs) RFIs Work Orders / Work Directives Field Sketches

Types of Documents  

Submittals Schedules    

  

Insurance Bonds Payment documents   

   

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Pay applications and backup Lien releases Schedule of values

Progress reports Meeting minutes Correspondence Third-party documents  

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As-planned schedule As-built schedule Fragnets Cost-loaded

Lender inspections / reports Government agencies

Practice Tip: Consider early Rule 30(b)(6) deposition

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.) 13

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 or 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" 17

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 of law and can have extreme consequences for noncompliance

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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 of 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 28

E-Discovery Early Case Assessment Linear Review

Review Hours Accelerated Review (Search Terms)

Automated Review (Predictive Coding)

Automation 29

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        30

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

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 31

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

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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      

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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

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)

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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)

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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)

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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)

  35

Inadvertent disclosure of privileged material—claw back rights? Evolving types of data—Blog posts, Facebook updates, tweets, text messages, calendar entries, etc.