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New niche for e-discovery: special masters

CORREY E. STEPHENSON
Dolan Media Newswires
February 10, 2008 4:19 PM

BOSTON — The increased use of electronic discovery has resulted in a new set of practitioners: e-discovery special masters.

A special master is an officer of the court appointed to help with its proceedings, and may perform functions such as taking testimony or advising the court as a neutral expert.

“Essentially, you represent the judge and the court as an independent in evaluating technological disputes and electronic discovery issues,” explained Peter S. Vogel, chair of the Electronic Discovery and Document Retention Team and co-chair of the Internet and Computer Technology Practice Group at Gardere Wynne Sewell in Dallas.

Vogel, a partner at the firm, has worked on more than 20 cases with some form of an e-discovery special master.

The role varies, explained Judge Shira Scheindlin, a U.S. District Court judge in the Southern District of New York and the author of several seminal opinions on e-discovery, including Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004).

Courts can appoint an electronic discovery special master “for a narrow dispute, such as a privilege review, or a broader task like supervising all discovery,” she said.

Special e-discovery masters have become prevalent because over the last few years, “the level of technical detail simply outgrew what judges and counsel could comprehend,” explained Craig Ball, a trial lawyer and technologist in Austin, Texas, who has served as a special master in approximately two dozen cases.

“When neither the attorneys nor the court felt able to ask the right questions or understand the answers, that created the need for a technical special master,” he said.

E-discovery masters in Maryland 

But the use of special masters for e-discovery in Maryland is still rare, judges and practitioners say. The state currently does not have a widely recognized certification program for e-discovery special masters.

Chief U.S. Magistrate Judge Paul W. Grimm, who has authored a series of guiding opinions on e-discovery, said special masters have generally been appointed in federal court for large civil-rights cases that require ongoing monitoring — such as the Baltimore public-housing desegregation class action Thompson v. HUD — but he has not appointed a special master for e-discovery assistance in his 11 years on the bench.

Grimm said he could conceive of circumstances in which the appointment of a special master would make sense, though, such as a case that required the long-term attention of a technical expert to review thousands of pages of privileged documents.

“What’s best for the public?” Grimm asked. “To have a judge … do that for the next three years and nothing else, or handle the 500 cases they usually handle?”

Maryland’s state courts, particularly the Business and Technology Case Management Program, have used special masters slightly more frequently.

Baltimore City Circuit Judge Albert J. Matricciani Jr. said he appointed a special master to manage electronic discovery in an August 2005 case where investors in an Alex. Brown Management Services Inc. hedge fund alleged the fund managers had not timely disclosed the fund’s losses.

Matricciani picked Donald A. Rea, an attorney at the Baltimore office of McGuireWoods LLP who has served as a special master in Maryland state courts, who he knew through the Implementation Committee of the business and technology program.

Rea met with the parties several times via teleconference to iron out discovery disputes regarding, among other things, allegedly privileged corporate e-mails.

Where the parties could not agree, Rea submitted his recommendations to Matricciani, who agreed with Rea on nearly every point.

Matricciani said Rea submitted regular invoices to the court, which were then split between the parties. In an Oct. 17, 2005 order, Matricciani noted that Rea’s fees to date were about $20,000.

Matricciani said that figure did not represent Rea’s eventual bill. Rea, who has served as a special master on two other occasions in Howard and Montgomery counties, said he spent approximately 60 hours on the case and that his hourly rate was the same as he charges for standard legal representation. “I think the parties were really grateful to have his attention,” said Matricciani. “And the case settled.”

A legal eagle and a tech expert 

While some tasks an e-discovery special master might take on are strictly technical, others require legal knowledge and expertise.

A special master must “speak fluent litigator and fluent geek,” Ball said. “I couldn’t do what I do without both extensive trial experience and the training and background that qualifies me as a certified computer forensic examiner.”

While Grimm has never appointed an e-discovery special master, he has turned to an expert for help with technical issues.

“What I have done in two instances, which is a little bit different, is I’ve appointed a court expert,” Grimm said.

Whereas a special master acts as an administrator and makes recommendations to the judge, a court expert serves to help the judge understand the evidence, Grimm said.

In one such case, Grimm said the plaintiff wanted to examine an allegedly patent-infringing computer program while it was running; the defendant contended the plaintiff would then be able to see too much.

Both sides’ experts could not agree on the facts, and “I’m looking at the technical stuff and it’s over my head,” Grimm said. So he hired an expert referred to him by the American Association for the Advancement of Science.

“The lawyers paid his fees 50-50,” Grimm said. “And in the process, the case got resolved.”

Appointing a special master

Under Rule 53, courts are encouraged to consult the parties in the process of appointment, which can take a variety of forms, Judge Shira Scheindlin explained.

“Some courts will request nominations, having each party suggest three names,” she said. “Or the court can provide a list of possibilities and ask the parties if they have any objections to those proposed.”

Matricciani said he tells the parties about the special master he has in mind and considers objections to the appointment. On his end, as a special master, Rea said he checks for conflicts before accepting an appointment.

Once an individual is selected, the court then must set out an order of appointment, which details in great specificity what the role of the special master will be in the case.

Matricciani said he specifies the extent of the special master’s authority, the expected length of the appointment, the special master’s rate and the parties’ right to challenge the master’s recommendations.

Scheindlin noted that the parties can also approach the court about using a special master.

“If the court hasn’t thought of it and the parties think it would be helpful, they could politely suggest that they need outside help and technical expertise,” she said.

What do they do? 

Rule 53 allows e-discovery experts to “shepherd litigants through the discovery process on technological issues, and answer questions such as ‘What is reasonably accessible? What form should the electronically stored information be produced in?’” Withers said.

Special masters can be especially effective in cases with a large volume of privileged documents, Withers noted. The typical case requires a judge to review arguably privileged documents in camera to determine their actual status. But what if there are tens of thousands of electronic documents to review?

The most common use of special masters occurs when a court appoints a neutral to perform a technical task, Scheindlin said, such as cloning a party’s hard drive or performing an on-site inspection of the materials found on a personal computer.

The actual work performed can vary greatly depending on the case.

“Sometimes I am a neutral examiner who sees both sides’ secret and privileged data to ensure that each side is getting what it is entitled to receive without compromising their opponent’s legitimate privacy and privilege issues,” Ball explained.

Alternatively, he said, “I may be a neutral expert advising the court when other experts can’t seem to find common ground.”

On a hands-on level, that means Ball may perform a forensic examination into a party’s electronically stored information, or he may help develop and implement search strategies to remedy a failed e-discovery effort.

Special masters can also provide the court with a realistic assessment of costs, Scheindlin said.

If electronically stored information has been erased, or needs to be restored, the court will appoint an e-discovery neutral to determine what the cost would be to translate a backup tape or restore information.

In one case, Vogel was tasked with determining whether slanderous e-mails were being sent from a specific computer system’s server.

“I had to evaluate all of the e-mails in the system, which involved looking at hundreds of thousands of e-mails,” he said. “That is not something a judge has the time or necessarily the training to do.”

Cost-effective litigation fees 

Some parties may hesitate to use a special master because it can seem like an added litigation expense. Parties typically split the cost, although judges have the discretion to apportion accordingly if they feel discovery abuse has occurred.

“You want to be judicious about piling on another layer of expense,” said Grimm, noting parties may take exception to a special master’s recommendations. “Am I making more work or am I solving the problem?” he asked.

According to Withers, a special master can “tremendously streamline the process and speed things up, and also come up with solutions to problems that reduce costs. It may seem more expensive up front, but this role is going to get a case resolved faster and costs will be reduced.”

And the use of e-discovery special masters will only continue to increase, he predicted.

Ball agreed: “The demand for the service outstrips the ranks of experienced, technically adept lawyers.”

Ball — who charges $500 per hour ($250 per hour for travel plus expenses) and assesses a $5,000 engagement fee credited toward the first 10 hours — said it’s possible to make a living as an electronic discovery special master.

“I made more as a trial lawyer, but enjoyed it less,” he said. “I charge a handsome hourly rate and am fortunate to have nearly all the work I can handle.”

(Daily Record Legal Affairs writer Brendan Kearney contributed to this article. Correy E. Stephenson writes for Lawyers USA, a sister publication of The Daily Record.)

This article has been reprinted with permission from The Daily Record Co. 2008.

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