Discovery in Commercial Cases

By Daryl Williams

Discovery in commercial cases, which is all I do, has always been a problem. Before computers and electronically stored information, ESI in lawyer-speak, the issue was being taken to a warehouse full of closed files where you could spend days and weeks looking through banker’s boxes, the producing party saying, “The documents are in there somewhere and the burden and expense for you to find them is the same or less than the expense of us finding them.”

ESI has not made this easier; indeed, the discovery burden is greater because of the volume and complexity associated with looking at the electronic documents and the potential for sanctions if you do not preserve ESI. We handle this internally by getting images of our own client’s computers, which is not very expensive, so that we cannot be accused of not having the ESI if a discovery dispute arises. We have the snapshot. We can then process our client’s records using an internal program that de-dupes and deNISTs the client files; deNISTing involves identification of standard files, like program files, that have nothing to do with data. We can, then, pare the data files down to something manageable with statistical analysis of who is involved in email chains, document revisions, etc. We save the client tens-of-thousands of dollars doing this in-house rather than sending it out to a vendor.

Eventually, though, someone has to put eyes on the images, and the client’s input is essential so you are not engaged in a rock-turning exercise. The client needs to direct the lawyer to the rocks covering the worms needed to go fishing—go to trial. Otherwise, you are turning over rocks in the field of discovery with no more of a plan than turning over every rock in the field to find every worm. The client can give guidance, like describing the wet side of the field where the worms are. It is very expensive to just turn over every rock. The trial lawyer needs to feel comfortable knowing he has enough worms in his can to go fishing even though he has not turned over every rock. Too many lawyers spend all their time rock turning without going to trial. The object is going to trial, i.e. fishing with enough bait to catch your fish.

I also think you need to be careful about spending to much time looking at your client’s or the other side’s computer. We get images of the other side’s computers, of course, and do our own internal de-duplication and de-NISTing and paring, but the client usually knows where to look for worms on its own computer and the other side’s computer. For example, just looking at a particular date range can be very helpful and limits the rock-turning time. Likewise, a subpoena to a third party can turn up a document not produced by the other side, resulting in a narrowly targeted review of the computer if the document is important enough. Is that document important enough?

Many firms tend to put baby lawyers into the field of discovery where they are engaged in prolix rock-turning. The big client being represented by the big firm is slow to realize that the work can be done more efficiently, mistaking the size of the firm and the number of lawyers engaged in rock turning for the quality of representation. Computers make a small firm with expertise equal to the big firm with manpower; after all, it is just one lawyer who stands up and talks in the courtroom.

Theory and Practice in the Courtroom: Hearsay in Business Litigation

By Daryl Williams

Exclusion of hearsay in the courtroom is like a knee-jerk reaction by opposing counsel and a similarly quick response by the judge. “What did he say?” is a question opposing counsel and the judge will think calls for hearsay if the guy talking is not a party to the lawsuit. So, the trial lawyer thinks, he will recast the question to “What did you understand?” Is that not hearsay if the only way the understanding came was by listening to what that non-party individual said?

How about this: the president of a company fires a superintendent after he hears from various employees that this superintendent was speaking to others in a derogatory manner about customer employees and behaving in a manner that did not meet the standards of the company. The superintendent sues for wrongful termination so the company’s lawyer asks the president on the stand why he fired the superintendent. The reason the superintendent was fired, of course, is because the president believed what he heard about the superintendent.

Q. Why did you fire him?
A. Because I was not happy when I heard bad reports from a customer.
Q. Who?
A. Joe Schmow.
Q. What did Mr. Schmow tell you?

Is it hearsay? Can the president relate what he was told that formed the basis of his decision? After all, that is why he fired the superintendent.

Some judges are going to rule that this is blatant hearsay and inadmissible, but others are going to let it in. Moreover, the courts ruling will be affected by—this is human nature—the court’s view of the case. The judge, even one on the bench for fifteen years, may disregard the technicalities of the hearsay rule if it suits him, the following is an actual transcript:

BY COUNSEL: Well, your Honor, again, we’re not using any of this evidence for the truth of the matter, other than this is the truth of the basis upon which we made a decision, which is not a hearsay problem.
THE COURT: All right. You can try to say that out loud to the jury if you want, but I’m going to laugh when you say that to me. You can split that hair and have somebody actually make that mental gymnastic leap. Good luck. I understand the damage that it does . . . .

The question, then, becomes how the lawyer educates or confuses the judge as to the nature of hearsay. Not being prepared for this type of nuance can be the difference between winning and losing. The trial lawyer has to remember that the trial judge does not try very many commercial cases, and those that he does try usually do not involve this sort of nuanced issue.


Baird Williams & Greer Wins $47M Breach of Contract Lawsuit

Baird Williams & Greer appears in Arizona Real Estate News Access, following a $47 million verdict Baird Williams & Greer won for Arizona-based RCS Capital Development, who filed a breach of contract suit against Australian-based ABC Learning Centres Ltd. and its U.S. subsidiary. In its lawsuit, RCS alleged ABC agreed to buy 31 child-care centers from RCS prior to ABC’s bankruptcy filing. RCS reported that ABC failed to buy the child-care centers, therefore claiming they were in breach of contract. BWG Attorney Daryl Williams served as lead counsel, helping RCS settled its breach of contract lawsuit against ABC. Read more >>