Hadley: E-Discovery — a new sporting contest in criminal prosecutions

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By Vivek Hadley

Among the hot-button political issues of our time is criminal justice reform. Critics rightly point out that the system at the state and federal levels can marshal its extensive resources to target poor and marginalized communities. Although such abuses receive extensive commentary in the press, less focus is devoted to the potential for governmental abuse in prosecuting white-collar crime.

In 2003, Jamie Olis was an accountant working at Dynegy Corporation. He worked on an energy transaction for the company. Olis, on instructions from his bosses (he alleged), was part of a team that characterized funds as stemming from “operations” rather than “financing.” Following an SEC audit, Olis and two other employees were indicted for securities fraud, mail fraud, wire fraud and conspiracy.

As a corporate executive, Olis was by no means indigent, but the immediate costs stemming from a white-collar indictment can be substantial. Determined to fight the charges, Olis immediately faced a $100,000 price tag just to print the 12 million documents the government collected and intended to marshal in its prosecution. While the government employed prosecutors, FBI agents, postal inspectors and accounting experts, Olis — even as a mid-level corporate executive, and even after selling his house — hired an attorney who worked out of a three-person shop.

Confronted with the prospect of legal expenses and potential convictions, Olis’ two co-defendants quickly pleaded guilty. His boss received 15 months, the other co-worker 30 days. Olis fought the charges with the team he could afford. But his co-defendants received their sentences in exchange for their testimony against Olis. He ended up with a 24-year prison sentence (reduced to six years on appeal).

Similarly, Michael Cohen racked up millions of dollars in attorney fees over the course of months simply sorting through the huge number of documents federal agents seized when they raided his office. After selling several of his New York real estate interests (valued in the millions of dollars) and telling associates that the legal fees were bankrupting him, Cohen let his first legal team go. He quickly hired new representation to negotiate a plea deal.

Through most of the nation’s history, defendants facing prosecution confronted a different predicament. The standard rule was the government did not need to disclose evidence before trial. In 1927, then-Chief-Justice of New York’s Court of Appeals Benjamin Cardozo said he could detect “the glimmerings of such a doctrine” allowing discovery in criminal cases. As late as 1953, however, courts such as the Supreme Court of New Jersey forcefully argued against any discovery in criminal cases, suggesting that “the criminal who is aware of the whole case against him will often procure perjured testimony in order to set up a false defense.” Critics, like then-Judge William Brennan writing in dissent, disagreed: “That old hobgoblin perjury … is again disinterred from the grave where I had thought it was forever buried … .” Future-Justice Brennan pointed out that the same arguments had been advanced but shown to be misguided in the civil context. He argued that an individual facing a complete loss of liberty had much more at stake in learning the opponent’s case than a company facing a monetary judgment. Over time, that critique won out.

The result was Federal Rule of Criminal Procedure 16, which mandates seven areas of disclosure the prosecutor must make upon a defendant’s request. Among the categories are the substance of any relevant oral statements made by the defendant in response to a government interrogation, any of the defendant’s written statements, any prior criminal record, expert opinions, and a catch-all for documents and objects that are “material to preparing the defense” or “obtained from or belongs to the defendant.”

Yet today, defendants such as Olis or Cohen face the opposite problem, namely that of overproduction. An example is the seminal 2010 6th Circuit Court of Appeals case on e-discovery (and Fourth Amendment protection for emails) in criminal trials, United States v. Warshak. In that case, the government produced 17 million pages of documents from the defendants’ computers, plus 506,000 hard-copy documents, plus 275 discs of material gathered by the grand jury and 13 discs of trial exhibits compiled by the government.

The defendants objected that the electronic discovery was disorganized, unsearchable and impractical to review. But the court noted, unlike the rules of civil procedure, there is no mechanism in Rule 16 requiring the producing party (the government) to organize and label documents. The defendants also objected to the sheer quantity of documents, stating, “It is as if the government has pointed the defendants to the Earth’s oceans, saying ‘there is your discovery.’” The defendants argued they should have had a 90-day continuance to be able to “satisfy their constitutional obligation to review all the evidence…,” but the court disagreed because that harm was hypothetical, not “actual.”

As part of the push toward broader discovery disclosures in criminal cases, Justice Brennan wrote an article entitled “The Criminal Prosecution: Sporting Event or Quest for Truth?” His argument was that broad discovery in criminal matters made prosecutions less like the former and more like that latter.

Yet today, the government can collect millions upon millions of digital documents with little to no effort. At the same time, larger firms with white-collar defense practices have increasing capabilities to scan through titanic amounts of information for keywords, patterns and relevant evidence. Ironically, Rule 16 has come full circle. In many ways, this new world of massive e-discovery in criminal trials has returned them to a sporting event, measuring who has the better technology to sort through and organize millions of documents — without running out of money — rather than a quest for truth.•

Vivek Hadley[email protected] — is an attorney in Taft Stettinius & Hollister’s litigation group. Opinions expressed are those of the author.

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