E-Newsletter, January 2007

In this issue:

A Reasonable Approach to Electronic Discovery.

By Thomas L. McCally, Esq. and and Nat P. Calamis, Esq.

THE RECENT AMENDMENTS to the Federal Rules of Civil Procedure along with a series of federal court decisions sanctioning parties for flawed document retention policies have caused electronic discovery to take on a new level of importance in litigation.  This trend is forcing attorneys to strike a balance between providing their opposing parties with relevant electronically stored information in response to discovery requests thereby avoiding sanctions, and incurring the burden and cost of reviewing and producing the often overwhelmingly voluminous amount of electronic information that can be stored within a client’s IT infrastructure.  The obvious question which emerges is how attorneys can best strike this balance.  Recent case law, as well as the amendments to the Federal Rules of Civil Procedure, provides a helpful, albeit somewhat vague framework for answering this question.

In the now often cited United States District Court for the Southern District of New York decision Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (2004), Judge Scheindlin discussed in detail an attorney’s duty to monitor his or her client’s retention and production of electronically stored information:  “Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” Zubulake, 229 F.R.D. at 431.  “Once a ‘litigation hold’ is in place, a party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold’ . . . [t]o do this, counsel must become fully familiar with her client’s document retention policies, as well as the client’s data retention architecture.  This will invariably involve speaking with information technology personnel . . . [i]t will also involve communicating with other ‘key players’ in the litigation . . .” Id at 432.

The Zubulake decision can serve as a helpful guideline for attorneys to establish a reasoned approach to retaining and producing electronic information.  An attorney should take certain steps with respect to electronic data as soon as litigation is “reasonably anticipated”.  For defense attorneys, this usually occurs upon receipt of a demand letter from Plaintiff’s counsel.1  First, the attorney should contact the client’s IT specialist(s) in order to understand the client’s data retention policies.  Unless the attorney has sophisticated knowledge of IT networks, it may be advisable to hire an IT consultant to facilitate the exchange between the attorney and the client’s IT personnel.  While hiring a consultant can be expensive, the benefits of this approach may outweigh the costs, since improperly handled electronic discovery can lead to dramatically increased exposure to the client in the form of sanctions and/or adverse inference jury instructions.

Once the attorney has an understanding of the client’s IT infrastructure, he or she should locate where within this infrastructure potentially relevant electronic information may be stored.  Once this is done, the attorney should confer with the client’s IT personnel and the client’s key employees involved in the litigation to ensure that all potentially relevant electronic data will be retained throughout the course of the litigation.  In other words, the attorney should place a litigation hold on the client’s electronic databases that hold potentially relevant electronic information.  As the litigation progresses, the attorney should periodically check in with the client’s IT department and key employees to ensure that they are adhering to this litigation hold.

It is important for attorneys to note that they will not necessarily have to produce all of the electronic data that is retained pursuant to a litigation hold.  This information is subject to relevance and privilege objections in the same manner as discovery requests for paper documents.  The purpose of the litigation hold is to ensure that the client is protected from inadvertently destroying electronic evidence that a court may determine is relevant and order produced.  This destruction is what can lead to sanctions and adverse inference jury instructions.

Attorneys can look to the amendments to the Federal Rules of Civil Procedure for guidance on what electronic data they will be obligated to produce.  Specifically, Rule 26(b)(2)(B) puts limitations on the scope of electronic information that a party to litigation is obligated to produce: “a party need not provide discovery of electronically stored information that the party identifies as not reasonably accessible because of undue burden or cost . . . the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.  If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause . . .”

Therefore, when an opposing party makes discovery requests seeking electronic data that would be difficult and expensive to review and produce, an attorney should file a protective order identifying that information as “not reasonably accessible”.  Even if it is determined that this information is “not reasonably accessible”, a court can still order the data produced upon a showing of “good cause” by the requesting party.  It is unclear how courts will define “not reasonably accessible” and “good cause” when interpreting these amended rules.  It can be speculated, however, that current e-mail inboxes and outboxes, as well as databases currently existing on a client’s employee’s hard drive will be considered reasonably accessible, while backup tapes, deleted items from e-mail, and legacy data will be considered “not reasonably accessible.”  The determination of whether a requesting party has shown “good cause” for purposes of ordering the production of “not reasonably accessible” data will likely be extremely fact and case specific.

There is no doubt that in the coming years, the case law will develop in this area of law to more clearly define the steps attorneys should take in retaining and producing electronically stored information.  In the meantime, existing case law and the amended Federal Rules of Civil Procedure have provided attorneys with enough of a framework to take a reasonable approach in tackling the complex problems that arise with voluminous electronic discovery.  The single most important thing an attorney can do is to communicate with his or her client.  The attorney needs to explain to the client from a legal perspective which electronic data must be retained and the importance of retaining that data.  At the same time, the attorney must be able to understand his client’s needs from a business perspective in order to identify and argue that certain data is “not reasonably accessible.”

1 Plaintiff’s attorneys have begun sending out simultaneously with demand letters “litigation hold notices”, which instruct the potential defendant to retain specific electronic information.

A More Challenging Scenario for the Toxic Mold Plaintiff

By: Jan E. Simonsen, Esq. and Ali A. Beydoun, Esq.

CONCERN ABOUT TOXIC mold is increasing with heightened public awareness that exposure can cause serious health problems and even death. Mold affects both the home and workplace environment, compromising the structural integrity of buildings and the health of those inside. Municipal buildings and schools have been shut down and destroyed in response to mold concerns.

In the last several years, great attention has been given to famous Hollywood celebrities pitted against homebuilders and insurance companies.  For example, in 2003, Ed McMahon received a multimillion dollar settlement after he and his wife were driven from their California home by mold infestation so dangerous that it claimed the life of their dog. Erin Brockovich was also involved in litigation against the builder of her home.  Other recent claim settlements have reached high into the millions.  In Centex-Rooney Construction Company v. Martin County, the appellate court affirmed a $14 million award to a county in a breach of contract suit alleging that faulty design and construction of a county courthouse led to an infestation of mold that sickened county employees (706 So.2d 20 – Fla. Dist. Ct. App. 1997).  The most notorious case was a $32 Million jury award in Austin, Texas paid by an insurance company for their failure to respond adequately to a toxic mold outbreak in the home of their insured.  The award was later reduced to a $4 million verdict.  Allison v. Fire Insurance Exchange, 98 S.W.3d 227 (Tex. App. 2002).

As many as ten thousand mold related lawsuits have been filed in the United States within the last ten years.  Theories for the recent surge in lawsuits include a greater understanding of the casual connection between molds and adverse health outcomes, greater actual exposure resulting from construction materials and standards, greater attention being paid by the public through mass media, and opportunistic lawyers.

The Burden of Proving Causation – The Weakest Link

Toxic mold personal injury claims are a unique form of toxic tort actions.  At its most basic, the plaintiff alleges that the defendant caused or threatened to cause the plaintiff to be exposed to a toxic agent, resulting in injury.

The burden of proving causation is a weighty one for plaintiff.  The plaintiff must show that the toxicant in question is capable of causing the injury complained of (the GENERAL causation) and must further prove that the toxicant, in fact, did cause the specific injury (the SPECIFIC causation).  To achieve this, plaintiff faces the difficult task of clearly demonstrating proof and the extent of actual exposure, evidence that shows that the element is actually a “toxic” material at the level of exposure, and rule out other potential causes of the same injury.

The defense bar should consider causation as the weakest link in the mold plaintiff’s personal injury claim. In addition to facing the standard challenges inherent in any toxic tort personal injury claim, the plaintiff faces several uniquely difficult realities: mold is a ubiquitous.  Unlike asbestos, which is produced, manufactured and sold by people, mold is a naturally occurring organism that exists in an astounding variety of species, and environmental sampling methods are evolving rapidly, making results from such surveys difficult to translate to actual human exposure. In addition, surprisingly little is known about the impact of molds and mycotoxins on human health, and even the well-characterized symptoms of exposure, while real, are subjective and general in nature.

Proving the particular level of exposure at which an agent like mold would be expected to give rise to adverse health effects is also difficult. Most substances cannot be characterized as toxic per se because they only manifest toxicity above a certain threshold level of exposure. Determining the relevant threshold health effect level is one of the most heated issues in toxic tort litigation.

Expert Testimony Required

Because of the need for expert medical testimony, nearly all toxic tort cases require the court to make admissibility determinations on causation evidence. The courts are ultimately responsible for determining the admissibility of complex medical and scientific evidence. Today, there are two primary standards for admissibility of expert testimony utilized by the courts: the Frye and Daubert tests.

The Frye test requires that a scientific theory or methodology be generally accepted in the relevant scientific community. Frye was widely adopted by both federal and state courts and is still utilized in several states. However, in the 1993 decision Daubert v. Merrell Dow Pharmaceuticals, Inc., the Supreme Court established that judges should be the ultimate arbiters of the relevance and reliability of scientific testimony under the Federal Rules of Evidence. Thus, the admissibility determination in federal courts was shifted from acceptance by the relevant scientific community squarely back onto the shoulders of the judge.

Although Daubert is not binding on the states, many state courts have adopted it. As the causation element is a key component of the plaintiff’s case, defendants frequently launch pre-trial evidentiary challenges. Often, the precise etiology of the disease at issue is subject to very real debate, resulting in completely contradictory expert testimony. Thus, evidentiary decisions made by the courts are profoundly challenging and have the potential to affect the outcome of a particular case.  Simply stated, the ability of a plaintiff to win in a toxic mold/personal injury case depends on whether or not the judge allows the expert testimony.  Thankfully for the defense attorney, there are several obstacles in plaintiff’s way.

First, there is currently very little reliable scientific data that molds contribute to health problems.  As we stated earlier, health problems can be the result of several contributing factors and may takes years, if not decades, to become evident.  Little to no data exists on safe exposure levels to mold.  Remember, mold is not inherently toxic as it exists in all environments and humans are routinely exposed to it as part of everyday life.

The success of a mold case, like other toxic tort cases, hinges on the admissibility and credibility of expert witnesses. Expert witness testimony is often essential to establish causation. Thus, the biggest litigation battles are between parties over the admissibility of scientific evidence through expert testimony, which can be critical to a plaintiff’s case. Ruling against admissibility frequently sounds the death knell for a plaintiff’s cause of action.

The plaintiff’s next hurdle is to prove specific causation, that is, that the plaintiff’s health problems were caused by the exposure to mold.  Plaintiff’s commonly use a “differential diagnosis” to prove this.

A differential diagnosis typically involves a physical examination, review of the patient’s medical history, and consideration of results from various clinical tests conducted on the patient. The medical professional will often discuss clinical evidence of disease and any relevant toxicological or epidemiological information that rules in the suspected agent as the cause of the plaintiff’s injury. The expert may also discuss evidence that rules out other potential causes of the plaintiff’s injury–an especially important consideration when the suspected agent is not associated with a signature disease.  By ruling out other potential causal factors, differential diagnosis has the potential to establish specific causation.

Courts will rightly insist on a differential diagnosis when a plaintiff’s injury can be explained by more than one cause. Defining what constitutes a valid differential diagnosis, however, is subject to significant dispute. And to date, courts have exhibited widely divergent views on the matter. The sheer volume of information included in a complex toxic tort differential diagnosis provides ample opportunity to question the relevance or reliability of proffered evidence. Similarly, the flexibility introduced by Daubert permits significant leeway to courts that choose to insist on more or higher quality data.

The variability on the court’s insistence on the degree of certainty when it comes to establishing causation in toxic tort cases is especially evident in the courts’ treatment of differential diagnosis testimony. For example, while the typical claim involves providing evidence of actual exposure levels, an absence of precise knowledge on this point is not always fatal to the plaintiff’s case.

In Westberry v. Gislaved Gummi ABsupra, the Fourth Circuit recognized that it is often “difficult, if not impossible, to quantify the amount of exposure” in cases involving exposure to toxic agents. Similarly, precise information about the threshold level of toxicity may be absent. TheWestberry court, permitting a worker’s claim that he was injured by exposure to airborne talc in the workplace, addressed the absence of known hazardous exposure levels for the compound:

while precise information concerning the exposure necessary to cause specific harm to humans and exact details pertaining to the plaintiff’s exposure are beneficial, such evidence is not always available, or necessary, to demonstrate that a substance is toxic to humans given substantial exposure and need not invariably provide the basis for an expert’s opinion on causation. Accordingly, the Fourth Circuit reasoned that in the absence of precise data on exposure, the finder of fact may rely on a reliable differential diagnosis that includes evidence of substantial exposure, temporality of symptoms, and general notions of toxicity to determine whether the plaintiff was exposed to unhealthy levels of a toxic agent.

Other courts have scrutinized differential diagnosis evidence far more strictly. For example, in Moore v. Ashland Chemical, 151 F.3d 269 (5th Cir. 1998), the Fifth Circuit rejected testimony from a plaintiff’s physician that argued for a link between exposure to toluene and occupational lung injuries. The court refused to allow the plaintiff to rely solely on evidence of the temporality of exposure and subsequent health outcome, insisting on the need for scientific studies defining relevant threshold levels of exposure.

In Roche v. Lincoln Property Co., 278 F. Supp. 2d 744 (E.D. Va. 2003), summary judgment granted, No. 02-1390-A, 2003 U.S. Dist. LEXIS 23353 (E.D. Va. July 25, 2003), vacated on other grounds, 373 F.3d 610 (4th Cir. 2004), two tenants allegedly suffering from exposure to toxic mold sued their landlord and apartment manager for negligent maintenance of their apartment.  In support of their claim, they offered the testimony of Dr. Bernstein, an allergist that had treated them. Dr. Bernstein concluded, based on medical observations, a review of the scientific literature, knowledge of mold measurements taken from the plaintiffs’ apartment, and his previous experience with patients suffering from sick-building syndrome, that the plaintiffs’ symptoms were caused by allergenic and mycotoxic effects of Stachybotrys and other indoor molds. The defendants moved to exclude Dr. Bernstein’s testimony as insufficient to meet the Daubert standard of admissibility on the issue of specific causation.

The court ultimately concluded that Dr. Bernstein’s testimony was inadmissible under Daubert because he did not establish, “through any acceptable methodology, that the plaintiffs were injured by the mold allegedly contained within their apartment.” Specifically, the court was unimpressed by Dr. Bernstein’s “vague and generalistic” conclusion that mold exposure caused the plaintiffs’ injuries, his over-reliance on a temporal association, and his reference to “conflicting facts.” In fact, the court spelled out no less than ten reasons why Dr. Bernstein’s differential diagnosis testimony was deficient, attacking everything from his lack of credentials as a toxicologist to his failure to rule out the plaintiffs’ “significant allergies to cats.” Dr. Bernstein, the court concluded, failed to “rule in the suspected molds and rule out other allergens,” making his differential diagnosis insufficient as reliable evidence of specific causation.

Other circuits have applied a similar logic, insisting that the plaintiff show “the levels of exposure that are hazardous to human beings generally.” Disparate standards of admissibility can have a profound effect on the plaintiff’s claim in a toxic tort lawsuit.

A key distinguishing characteristic for mold that comes into play in toxic tort personal injury litigations has to do with exposure levels.  Unlike asbestos, there are no established federal guidelines that cover acceptable levels of mold exposure. Until recently there has been essentially no government response to the toxic mold problem. No federal laws regulate permissible human mold exposure limits. The lack of federal government involvement in assessing the mold problem and lack of established permissible mold exposure limits create problems for a plaintiff in establishing causation in mold litigation. Until permissible mold exposure limits are developed, mold litigation will not reach the level of asbestos litigation.

It is axiomatic that, in order to suffer one of the illnesses associated with toxic mold exposure or exacerbation of such illnesses, the individual must first be exposed to toxic mold spores, their fragments (parts), and particularly to toxic mold mycotoxins (metabolites). “Exposure” may be defined for purposes of this article as the act or instance of being in the presence of toxic mold. Exposure connotes a nexus with toxic mold, spatial closeness or proximity.

The frequency of exposure to toxic mold can be continuous or repeated. Repeated exposure occurs, for example, when a person leaves and then returns to a toxic mold infested residential space or premises, and then leaves again, as where the person leaves to go to work in the morning and then returns at night, and goes to work the following morning. In this pattern, the person undergoes repeated exposures to toxic mold.  But how can it be proven?  If the toxicity of the agent at issue is acknowledged, but the dose-response characteristics are poorly defined, the fate of a plaintiff’s personal injury claim may be in question. Where, as with mold, the scientific evidence supporting adverse health impacts is still developing and consists primarily of clinical studies and small-scale epidemiological findings, even compelling case-specific medical evidence may not be accepted by the court as reliable evidence of specific causation. The outcome may well depend significantly on that court’s insistence on defining the levels of exposure that are hazardous to human health.

The presence of fungi on building materials, as identified by a visual assessment or by bulk/surface sampling results, does not necessarily mean that people will be exposed or exhibit health effects. In order for humans to be exposed indoors, fungal spores, fragments, or metabolites must be released into the air and inhaled, physically contacted (dermal exposure), or ingested.

Whether or not symptoms develop in people exposed to fungi depends on the nature of the fungal material (e.g., allergenic, toxic, or infectious), the amount of exposure, and susceptibility of exposed persons. Susceptibility varies with genetic predisposition (e.g., allergic reactions do not always occur in all individuals), age, state of health, and concurrent exposures. For these reasons, and because measurements of exposure are not standardized and biological markers of exposure to fungi are largely unknown, it may be difficult to determine “safe” or “unsafe” levels of exposure for people in general.

Because the events of being exposed to toxic molds are frequently fleeting and unpredictable events, the accurate quantification of risk is nearly impossible. Exposure evidence is therefore highly susceptible to accusations of unreliability. Proving the particular level of exposure at which an agent like mold would be expected to give rise to adverse health effects is also difficult. Most substances cannot be characterized as toxic per se because they only manifest toxicity above a certain threshold level of exposure.

Most importantly, is the strength of the argument that there is no “signature” illness associated with toxic mold mycotoxin exposure. This means that unlike such illnesses as asbestosis or mesothelioma that are signature illnesses known to be causally related to asbestos exposure, neither plaintiff’s counsel nor his or her medical experts can point to one or two illnesses and argue that the medical literature conclusively causally associates illness X or illness Y with exposure to toxic mold. Additionally, a distinction must be drawn between illnesses that are believed causally related to toxic mold exposure, and illnesses that are exacerbated or made worse by exposure. These are thorny causation issues that will confront plaintiff’s counsel in litigating the toxic mold case.

Again, for environmental agents such as the molds, the plaintiff’s burden of proving injurious exposure is often profoundly difficult. Movement of a toxicant from a source to a human is nearly impossible to accurately predict given the overwhelming number of environmental variables to consider. In addition, many toxic agents are metabolized and excreted quickly by the exposed individual, precluding any opportunity to provide definitive evidence of exposure through medical examinations. Finally, the appearance of symptoms such as cancer and chronic organ toxicity may be delayed until many years following exposure. This delay introduces numerous challenges for the plaintiff, including the possibility of intervening exposures and the need to reconstruct exposure from decades-old data of questionable quality.

Despite decades of study, particularly intensive during the past several years, the scientific community has not reached any consensus on the expected range of adverse health effects or the levels at which these adverse health effects might be observed. Concurrent exposure to other indoor air pollutants such as bacteria, cigarette smoke, volatile organic chemicals, and dust mites can frustrate attempts to link specific symptoms to mold exposure. Any of the above factors can be mined by the defense to cause irreparable damage to the plaintiff’s case, particularly on the issue of specific causation. If the defense attorney does her job right, it is hard to conceive of a more challenging scenario for the toxic tort plaintiff.

Back to School: The ASTAR Project Educates Judges on Science and Technology.

By Thomas L. McCally, Esq., Kelly M. Lippincott, Esq., and Laelia Banks, Esq.

AFTER A SIGNIFICANT break from law school, Maryland Judges are back in the classroom.  But this time, they are not learning about the law, they are learning about science and technology “so that they will more adequately understand what is going on in the courtroom,” said Chief Judge Bell of the Maryland Court of Appeals.

In July 2005, the Maryland judiciary began the Advanced Science and Technology Adjudication Resources (ASTAR) Project.  The first class of Maryland judges graduated from the ASTAR Project this year.  The judges have gone back to school to familiarize themselves with the areas of molecular biology, genetics, stem cells, DNA, neuroimaging, genetically modified plants and animal products, and scientific fraud.

“Language of Life Sciences” and “Molecular Biology & Genetics” are just two of the courses the judges have to complete to get their ASTAR certification.  “The classes give a balanced approach on significant scientific issues and help unintimidate the judges when complicated concepts are presented to them in court,” said Judge Stuart R. Berger of the Circuit Court for Baltimore City, one of this year’s graduates.

ASTAR graduate Judge Evelyn Omega Cannon of the Circuit Court for Baltimore City said, “It is amazing to me that I haven’t been aware of how many ways science injects itself in a case.”

Another graduate, Judge Ellen L. Hollander of the Special Court of Appeals of Maryland, said the goal of the program is not to turn judges into experts, but rather to help them better understand the implication of their decisions as well as the complicated scientific concepts that are presented in their courtrooms.

“The ASTAR Project is not meant to be a substitute for attorneys to educate the judge in a particular case,” added Judge Hollander. The record still needs to be made, and judges still rely on the information that is provided by counsel to understand the issues in a case.

A lot of time and effort was put in to establishing the “parameters” and design of the ASTART Project, said Judge Glen T. Harrel, Jr. of the Court of Appeals of Maryland.  The Project was specifically designed not to teach outcomes or “correct answers” to the judges.  The judges are given a balanced presentation on the scientific issues, and the Project is funded 100 percent by government sources.

“The judiciary wants this to be a transparent process,” said Judge Harrel.  It hopes that this program will result in better bench trials with better informed judges as well as better jury trials with more knowledgeable evidentiary gate keepers.