Thomas Vanaskie, influential circuit judge, discusses eDiscovery cost transparency and vendor pricing

Judge Thomas Vanaskie was appointed to the U.S. Third Circuit Court of Appeals in 2010, having served at the federal district level in Scranton for 16 years prior. Over the course of his two decades on the bench, technology has drastically reshaped how litigation is waged and disputes resolved. But Vanaskie has spearheaded efforts to keep the justice system up to speed. In 2005, he was selected by Chief Justice William Rehnquist to head the Information Technology Committee of the US Judicial Conference, the policy making body for federal courts. He served in that role until 2008, and currently sits on the Information Technology Committee for the Third Circuit Judicial Council.

Both a thought leader and gatekeeper, Judge Vanaskie may be best known in legal technology circles for authoring what is perhaps the most influential decision on recovery of electronic discovery costs. In the seminal Race Tires America antitrust case, he delivered the opinion that vacated more than $300,000 in eDiscovery costs taxed against the losing plaintiff, largely staying a growing trend in federal courts to reimburse broad categories of eDiscovery expenses to prevailing parties (still, though, uncertainty on the issue lingers).

We asked Judge Vanaskie to comment on a related trend where federal courts are granting the request of parties to seal eDiscovery vendor pricing information from public view — a phenomenon that generally occurs during the cost-recovery stage of a lawsuit. Here are excerpts, directly quoted or closely paraphrased, from our conversation.

On judicial rationale that vendor pricing information constitutes a client ‘trade secret’

I have difficulty understanding the justification for why that information qualifies as a client ‘trade secret,’ or how it could be used to disadvantage the client. It would seem the vendor has more to gain from keeping that information from the public. I’ve read a couple of the orders sealing invoices, and there doesn’t appear to be much analysis as to why.

On the difficulty of vetting eDiscovery costs 

At the Circuit level, I’m struggling with trying to approve eDiscovery vouchers in criminal cases. I’ve tried to track going rates (for various eDiscovery activities) but they’re hard to find. And if you don’t know the going rates, it’s hard to know what’s a reasonable amount to pay.

Reviewing eDiscovery costs is different from reviewing attorneys fees, where the prevailing market rates are generally available. The other difference is that vendor rates usually aren’t contested by the opposing side due to lack of knowledge about what’s reasonable.

At the circuit level, there’s really not much we can do (to vet costs) unless a dispute percolates up to us. I’ve personally seen an instance where a vendor’s per-gigabyte rate (for a certain activity) struck me as too high, so I made the party reduce it. I assume that (computing and storage) costs should be dropping, but that doesn’t always appear to be the case.

On public policy implications of sealing vendor pricing information

I’m sympathetic to the point of view that transparency and public interest should outweigh the perceived harm a client may experience (from having the pricing information of its eDiscovery vendor made available). Generally speaking, information disclosed in federal courts should be public. We encourage transparency in the Third Circuit. For instance, when I was at the district level, I wouldn’t approve any self-executing confidentiality orders, where parties would agree to keep certain information private without any input from the court.

But I’m seeing the effect of inertia (as evidenced by lack of challenges to cost and lack of judicial analysis). One of the problems is that the public doesn’t have any insight into the cost of discovery — and isn’t aware it’s an issue.

On whether those reviewing eDiscovery are qualified to do so

I don’t think (most judges and clerks) are in a position to say what’s reasonable. You need expert opinions, because there is a knowledge gap out there.

As told to Robert Hilson, a director at Logikcull. He can be reached at robert.hilson@logikcull.com.