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onstruct!Construction Litigation Committee

In July 2007, the Association or theAdvancement o Cost EngineeringInternational (AACEI) published the

rst American eort at a how-to manual on Foren-sic Schedule Analysis, the Recommended Practice orForensic Schedule Analysis (RP/FSA). The RP/FSAdocument is the result o our years o intense col-laborative activity involving dozens o experts andlawyers in the eld.

Forensic Schedule Delay Analysis is a separate

but related discipline to typical schedule analysis.Typically, large construction projects and most majorprograms o all types use prospective (orward-

The article Electronic Discovery in ConstructionLitigation, published in July 1998, leads with the lineAlthough the Federal Rules o Civil Procedure havecontemplated discovery o electronic data since 1970,many lawyers are only now awakening to the benetsand risks o such discovery in litigation.1 Ten years later,the statement remains largely true except or the act thatthe Federal Rules o Civil Procedure now require partiesto engage in discussions regarding electronic discovery(e-discovery), treating electronically stored inormation(ESI) as evidence that must be preserved and produced

looking) scheduling to plan the work. In the case omajor construction projects, this can result in Criti-cal Path Method (CPM) schedules that have tens othousands o activities, all with separate and indepen-dent durations and logical relations to other activities.Prospective schedule analysis has proven so eectivein assisting the administration o construction projectsthat schedule expertise was also applied to retrospec-tive analysis o planned and actual events on a con-struction project. This retrospective analysis is used to

assist managers, and ultimately litigators, in identiy-ing delays, causes o delays, responsibility or delays,

in civil litigation. This article briefy ad-dresses the technical revolution occurringin the construction industry and how,in light o that revolution, e-discovery will increasinglybecome a part o construction litigation.

The Construction Industry Is Going DigitalConstruction projects generate a plethora o docu-ments including architectural drawings, bids, sched-ules, to change orders, to purchase orders, to eld

The New AACEI Recommended Practice forForensic Schedule Analysis (Part 1 of 2)

By John C. Livengood

Emails, E-Discovery, E-Gads!The Landscape Has Changed

By Sarah Michaels Montgomery

Sarah MichaelsMontgomery

Continued on page 10


Amrcan Bar Assocaton Scton o Ltaton

www.abanet.org/litigation/committees/construction

Summer/Fall 2008 Vol. 18 No. 1

John C.Livengood


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2 Construct! Summer/Fall 2008

Message from the Cochairs

CONSTRUCT! is published quarterly by the ConstructionLitigation Committee o the Section o Litigation,American Bar Association, 321 North Clark Street,Chicago, IL 60654. Issue: Summer/Fall 2008

Commtt Cocars

Charlotte Wiessner Patrick J. Greene Jr.Sherman & Howard LLC Peckar & Ambramson, PC633 Seventeenth Street, 70 Grand AvenueSuite 3000 River Edge, NJ 07661Denver, Colorado 80202 Phone: (201) 343-3434Phone: (303) 299-8110 [email protected]@shermanhoward.com

Nslttr Codtors

Edward A. Salanga M. David KurtzQuarles & Brady LLP Baker DonelsonOne Renaissance Square 201 Saint Charles AvenueTwo North Central Avenue Suite 3600Phoenix, Arizona 85004 New Orleans, LA 70170Phone: (602) 229-5422 (504) [email protected] [email protected]

Amrcan Bar Assocaton

Associate EditorJ.R. Haugen

Graphic DesignerElmarie Calungcaguin

The views expressed in Construct! are those o the authorsand do not necessarily refect positions o the American BarAssociation, Construction Litigation Committee, Section oLitigation, or the editorial sta oConstruct! The publicationo articles in Construct! does not constitute an endorsemento opinions or legal conclusions that may be expressed.

Construct! is published with the understanding that the Con-struction Litigation Committee is not engaged in renderinglegal or proessional services. Readers are invited to submitarticles, comments, or case notes on any aspect o construc-tion litigation. Publication and editing are at the discretiono the editors. Due to production time constraints, galleys orproos are not orwarded to authors. Previous volumes othe newsletter were published by the Construction LitigationCommittee to inorm members o Committee activities andother matters o interest.

Copyright 2008 American Bar Associationwww.abanet.org/litigation/committees/construction

We present the current issue oConstruct! at theend o an extremely active year or the committee

and at the beginning o an exciting year ahead.Indeed it comes at the end o our years o growthand excellence presided over by our longtimecochair, Jim Landgra, who moves on to becomecochair o the Distance CLE committee o theSection o Litigation. Jims excellent work anduntiring eorts on behal o the committee will besorely missed. As the continuing cochair, I can onlyhope that the committee can approach the suc-cess achieved during Jims tenure, in membershipgrowth and excellence in service to our member-ship. My new cochair, Charlotte Wiessner, and Ihave a tough act to ollow. All o us on the commit-

tee express our sincere thanks to Jim or his eorts.At the Section Annual Conerence in Washing-

ton, D.C., (April 1719) the committee participatedwith the Real Estate Committee in the presentationo a timely program concerning the meltdown othe mortgage and real estate markets and its eecton construction contractors. We also presented asubstantive breakast program on the litigation-related issues emerging rom the increasing preva-

lence o public-private partnerships.At the Forum on the Construction Industrys Annual Meet-

ing (April 2426) in La Quinta, CA, the committee presented theprogram Utilizing and Responding to TROs and Other LitigationFast-Track Processes and a substantive breakast program onexperts and e-discovery.

And at the ABA Annual Meeting in New York City (August 712),we presented a substantive breakast on the use o graphics evidencein the trial o complex construction cases, with a Civilian Board o Con-tracts appeals judge and chie litigation counsel or the U.S. GeneralServices Administration as panel members.

In addition to the programs, we published our editions oConstruct! We are currently soliciting proposals or the theme o thewinter edition. I any o you have theme or article ideas, please contactDavid Kurtz at [email protected].

Looking ahead to the uture, we have agreed to cosponsor the

Forum on the Construction Industrys annual winter meeting begin-ning in Bonita Falls, FL, on January 1516, 2009. This program waspreviously cosponsored by TIPS and has been extremely successulor the Forum, drawing about 600 attendees. The two-day program isentitled Critical Insurance and Litigation Insight: Coverages, Disputes,

CharlotteWiessner

Patrick J.Greene


onstruct!Construction Litigation Committee

The Spring 2008 issue o this newsletter mistakenly identifed one o the authors,

Edward B. Gentilcore, as a partner at Meyer Unkovic and Scott. He is in act a partner

at Duane Morris LLP. We apologize or the error.


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Summer/Fall 2008 ABA Section of Litigation 3

Daniel E.Toomey

Last year, theAmerican Instituteo Architects (AIA)

issued its latest iteration o its construc-tion orms. In addition, the Associationo General Contractors (AGC) issued acompetitive set o documents knownas the Consensus Documents.

However, recent recommendedrevisions to the AIAs A312 PaymentBond may be fying under the radar asa result o a spate o decisions jeopar-dizing long-held assumptions regard-

ing a suretys rights and duties underthis widely used orm. In addition,a Florida decision aecting suretiesrights under the A312 PerormanceBond may recommend changes to thatorm as well.

Unchanged or 24 years, the A312has been under siege or the last 5years, during which courts in a num-ber o jurisdictions have oreited thesuretys rights to deend against pay-ment bond claims or ailure to com-ply with the bond orms time require-ments, and deleted a suretys right toreceive notice o an intent to deault asubcontractor. With some irony, theydid so by harmonizing language romthe subcontracts deault terminationclause with the notice provision o theA312 Perormance Bond.

As a result, the surety industry hasbeen orced to recommend importantchanges in language o the paymentbond orm while not, as yet, seekingchanges in the perormance bond

language. And in the meantime,there are extraordinary opportunitiesand dangersor owners, contractors,subcontractors, sureties, claims rep-resentatives, indemnitors, and theattorneys who represent them. OnMay 27, 2008, the AIA and suretyorganizations announced recom-mended changes to the A312 Pay-ment Bond to neutralize the eecto the recent decisions.

But because this case law is rela-tively recent, sureties may be slow toreact to the recommended changes,and there are many unchanged exist-ing A312 payment and perormancebonds out there. For a nite period otime, construction and surety attor-neys need to examine the language otheir bond orms or the opportunitiesand potential dangers presented.

Recommended Changes to theA312 Payment Bond

The AIA and the surety industryrepresentatives said on May 27, 2008,that these recommended changes werean interim response to surety con-cerns that the Payment Bond has beenincorrectly interpreted in the courts,promising to work with organiza-tions representing owners, contractors,subcontractors, and other potentialbond claimants to review ully andoverhaul as necessary bothA312-1984Perormance Bond and Payment Bondand A310-1970 Bid Bond. Suzanne

Harness, AIA managing director andContracts Documents counsel, noted,[i]t was important to us to addressthe sureties concerns as promptly aspossible, but not to substantially revisethe bond without the input o ownersand claimants.

This news release contained a doc-ument entitled Amendment datedMay 21, 2008, to A312-1984 PaymentBond. The problem was, as the textaccompanying the amendment put it:

Recent state and ederal court de-cisions have . . . held that sure-ties that do not send an answerto the [Payment Bond] claimantwithin 45 days have waivedthe right to subsequently dis-pute claims. As a result, severalnational surety companies havereused to issue payment bondswithout signicant modications

to the language o A312-1984.Those modications are not con-sistent nationwide and may alterthe rights and obligations o theclaimant and surety.

The amendment was describedmerely as a stopgap measure, tomeet immediate surety concernsto be ollowed by a more compre-hensive revision. In addition tolengthening the surety response timerom 45 to 60 days, the recommended

changes suggest adding a new Sec-tion 6.3, as ollows:

6.3 The Suretys ailure to dis-charge its obligations under thisSection 6 shall not be deemed toconstitute a waiver o deensesthe Surety or Contractor mayhave or acquire as to a claim.However, i the Surety ails todischarge its obligations underthis Section 6, the Surety shallindemniy the Claimant or the

reasonable attorneys ees theClaimant incurs to recover anysums ound to be due and owingto the Claimant.

The AIA reused, however, toadopt the industrys additional re-quest to require claimants to urnishwritten support or the claim, leavingthe existing requirement that theymerely provide a statement o theclaim with substantial accuracy.

Moreover, these revisions do notaect the A312 Perormance Bondlanguage, but the AIA and the suretyindustry clearly intend to reviewully and overhaul as necessary bothA312 Perormance andPaymentBond and A310-1970 Bid Bond, asstated in the news release.

Interestingly, the surety indus-try has had more success with TheEngineers Joint Contract Documents

Bonanza for Bond Claimants?Surety Industry Seeks to Stem the

A312 Bleeding

By Daniel E. Toomey


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Committee (EJCDC) by simply delet-ing the 45-day response requirementrom their almost identical orm.

How did these changes comeabout, and what are the opportu-nities and corresponding dangersavailable to both payment bondclaimants and obligees under theunchanged A312?

Florida Cases Create a Precedentand Follow the Recent TrendTwo recent Florida cases (one ederaland one state) handed signicant vic-tories to a perormance bond obligeeand a payment bond claimant, castingin doubt long-accepted A312 bondrights and deenses.

Court rules that subcontract languagetrumps bond language

In Dooley and Mack Constructors, Inc.

v. Developers Surety and IndemnityCompany and Buildtec ConstructionGroup, Inc.,1 the Third District Courto Appeal held that despite the lan-guage o the A312, the perormancebond obligee, Dooley and MackConstructors, Inc. (D&M), had noobligation to notiy the surety o itsintent to deault terminate its bondedsubcontractor and could complete thework o the deaulted subcontractor,recovering the extra costs o the workunder the bond.

The appellate court reversed thetrial courts ruling that D&Ms ailureto notiy the suretyas per the A312Perormance Bondrendered thesuretys obligation under the bondnull and void. Instead, the courtdetermined that certain language inD&Ms subcontract was incorporatedinto the bond, and that it thereoretrumpedthe notice requirement.

The court read the subcontract lan-guage and the language o the bondtogether as aording the contractorthe option, but not the obligation,to notiy the Subcontractor and thesurety o its intent to deault ter-minate, or simplyto declare theSubcontract breached and take chargeo and complete the Perormance othe work. I D&M chose the latteroption, it could complete the workitselwithout jeopardizing its right torecover under the bond.

accusing the majority o seizing uponan obscure provision o the subcon-tract, not signed by the surety, toaord Dooley and Mack a remedy notcontemplated either in the deault pro-vision or in the bond and convertingthe bond into an insurance policy.The dissenter argued that the subcon-tract language did not supplant the

notice provisions or any other provi-sion o the Perormance Bond.The surety has led a petition or

certiorari with the Florida SupremeCourt, which has not acted as o thewriting o this article. I the writ is de-nied, or other courts ollow the Dooleyand Mackcase, the surety industrymay eel the need to request the AIAor changes to the A312 PerormanceBond orm too. In the meantime, awindow o opportunity exists orobligees to write clauses into their

contracts and subcontracts similar tothe D&M subcontract.

District court enorces notice oclaim requirement

The Florida Federal District Courtis the most recent court to requiresureties to comply literally with theA312 Payment Bond requirement toconduct and conclude investigationso payment bond claims in 45 days.2That court granted a payment bondclaimant summary judgment on a

more than $700,000 claim becauseo the suretys ailure to meet the45-day deadline, holding that thisailure constituted a waiver osubstantive deenses.

J.C. Gibson Plastering Co. (Sub)was a subcontractor to XL SpecialtyInsurance Companys (Surety) prin-cipal, Auchter Company (Prime), ona housing project. Sub claimed thatPrime had ailed to make its FinalPayment and on February 9, 2007,sent written notice to Prime andSurety, and per the A312s Paragraph4.1 merely stated its claim withsubstantial accuracy. Three dayslater, Sub sent Surety a detailed letterdescribing its claim and its legalbasis thereore.

A312 Paragraph 6.1 requires asurety to send an answer to theclaimant within 45 days ater receipto the claim; state the undisputed

Moreover, D&Ms choice o thisoption subjected the surety, and anybond, to all losses, damages, andexpenses, including attorney ees andcosts incurred in the prosecution ordeense o any action, suit, or arbitra-tion incurred by or resulting to theContractor on the above account.The court o appeals held that the

subcontract and the bond had tobe read together to create this op-tion. In doing so, the appellate court

directed the trial court to enter a sum-mary judgment or D&M on liabilitywith the amount o damages the onlything let to be determined.

Thus, by merely adding languagematerially similar to that contained inthe D&M subcontract, the notice re-quirement o the A312 can be avoidedand the surety can be vulnerable tothe extra amount needed to complete,subject to the suretys deenses o ail-ure to mitigate or unreasonablenesso completion costs.

The Dooley and Mackdecision wasnot without its critics, and the extentto which other courts will ollow itis unknown. One panelist dissented,

A window oopportunityexists or

obligees towrite clausesinto theircontracts andsubcontractssimilar to thatoDooleyand Mack.


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amounts; provide the basis or chal-lenging any amount; and, underParagraph 6.2, pay or arrange orpayment o any undisputed amounts.

Less than two weeks later, butstill within the 45-day period, Suretywrote Sub requesting copies o all othe cost records supporting its claimsand advising that it had copied Prime

to determine its position. On March20, Sub sent receipts that Surety re-ceived the ollowing day, still withinthe 45-day period.

On April 3, seven days ater the45-day period had expired, Sub wroteSurety claiming a breach by Surety torespond within 45 days o receipt oSubs claim; it led suit the next day.Surety immediately wrote Sub con-tending that the 45-day period did notbegin to run until it had received thecost records on March 21; Surety wrote

again on April 5 stating that therewas a legitimate dispute regardingSubs claims that Surety did not haveto resolve and that the Sub needed todeal with the Prime directly. Suretyalso timely answered Subs lawsuitand counterclaimed on the issue o itsobligations under the bond.

The court granted Sub summaryjudgment, nding no material issuesin dispute and resolving two issues inSubs avor: that Surety had materi-ally breached Paragraph 6 o the Pay-

ment Bond by ailing to comply withthe 45-day response requirement;and this breachprecluded Surety romcontesting Subs claim. The court alsodetermined that the notice o claimwas sucient as a matter o law i itstated the amount o the claim withsubstantial accuracy, and wassent to the surety and the owner. Inreaching this conclusion, the Gibsoncourt relied heavily upon the recentcase oNational Union Fire InsuranceCo. v. Bramble.3 The Bramblecourt hadbased its reasoning on three actors:The surety had a greater obligationunder A312 Paragraph 6 to state thebasis or disputing any portion othe claim, the ailure to enorce thisrequirement would render the para-graph nugatory, and its purposewas so that claimants did not haveto absorb their risk o nonpaymentover a protracted period.

Notably, the Gibson court deter-mined that surety contracts wereanalogous to insurance contractsrequiring that they be strictly con-strued against a surety and in avoro the claimant, and rejected as im-material the argument that without aproo o loss, the Surety did not havesucient inormation to veriy the

claim. It also reused to consider aMarch 30 letter rom Primes counselsent to Sub disputing the claim be-

cause it was not rom Surety and didnot state the amounts in dispute.Additionally, the court rejectedSuretys contention o no harm, nooul, declaring that delay wassucient harm.

Finally, Gibson also rejected theholding o an unpublished Massachu-setts opinion,Methuen ConstructionCo. v. Austin Co.,4 that the suretysailure to comply with 45-day obliga-

tion did not constitute a waiver o itsdeenses or an acknowledgment othe claim. TheMethuen court stated:

This court declines to ollowBramble or two reasons. First,the court in Bramble addressedthe relevant language o thebond agreement according to

the rule applicable to insurancecontracts Bramble, 879 A.2d at108. In Massachusetts, however,it is clear that surety bonds arenot insurance.

Second, given the nature olarge construction projects, itis logical to treat [the suretys]January 15, 2004, letter request-ing an Adavit o Claim as anindication that [the surety] hadnot accepted and was disputingMethuens claim. . . . Further, i

the surety paid the claim with-out ully investigating, it wouldbe liable to its principal.

Finally, this is not a case wherethe surety completely ignored thesubcontractors Notice o Claim.(Slip op. 3-4.)

In distinguishingMethuen, theGibson court relied on yet anotherdecision by the U.S. District Courtthat had rejected theMethuen ratio-nale,5 holding that the suretys ail-

ure to adhere to the 45-day responserequirement constituted a waiver odeenses and acknowledgment o theclaim, under the plain language othe [surety] contract.

Holdings Could Enhance Rights ofObligees and Bond ClaimaintsWith three separate jurisdictionsinterpreting the 45-day responserequirement o the A312 identically,there is little wonder that the surety

industry sought interim stopgaprevisions to the bond orm. I theFlorida Supreme Court reusesto address the Dooley and Mackcase,the surety industry will likely lookto revise the Perormance Bondlanguage too.

While these holdings may seemto be a panacea or payment bondclaimants, the rulings create dangersor others, particularly principals

I the FloridaSupremeCourt reuses

to addressDooleyand Mack,the suretyindustry willlikely lookto revise thePerormanceBondlanguage.


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and indemnitors o those bonds.Under the guidance o the Gibson,Bramble,and Casey cases, alert pay-ment bond claimants are in a positionto circumvent otherwise legitimatedeenses o primes and owners byprompt ling o their claims onlyagainst sureties and then pouncingwhen sureties respond too late.

Will the suretys ailure to meet thebonds 45-day response requirementsinsulate its principals and indemni-tors rom their obligations under thesuretys general indemnity agreement(GIA)? On the other hand, theMeth-uen court said, i the surety paidthe claim without ull investigation,it would be liable to its principal. Thesurety would seem to be in a catch-22.

Perhaps they can cut this knotby putting the onus on its principaland indemnitors. Arguably, as soon

as the surety receives a notice oclaim, it should require its principalto explain specic amounts o theclaims in dispute, the actual andlegal basis or withholding, and theamounts not in dispute. Taking thisapproach one step urther, the suretymight even say that i this is not done

within the 45-day window, the suretywill merely pay the claim and seekindemnication.

ConclusionDraters o construction contracts orsubcontracts would do well to incor-porate the language like that containedin the D&M subcontract, giving them

the optionto either complete the workor call on the surety. With only onedecision supporting this view thus ar,however, obligees may nd it too riskyto opt not to notiy the surety and riskletting the surety o the hook. In addi-tion, there is nothing to prevent a suretyrom adding its own language to theA312 Perormance Bond (assuming ithas the choice) with language such asNotwithstanding any language con-tained in the subcontract, notice to thesurety o intent to deault terminate, as

well as the preservation o the suretysrights provided by this bond in theevent o a declaration o deault, shallbe a condition precedent to any obliga-tions o the surety hereunder.

The AIAs adoption o stopgaprevisions clearly indicates that therecent spate o decisions has set us in

uncharted waters. We can expecta air amount o legal activity onthese once settled, but now turbu-lent, questions.

Daniel E. Toomey is with Duane MorrisLLP, Washington, D.C.

Endnotes

1. Dooley and Mack Constructors,Inc. v. Developers Surety and Indem-nity Company and Buildtec Construc-tion Group, Inc., 972 So. 2d 893 (Fl. Ct.App., 3rd Dist., 2007), rehearing denied,2008 Fla. App. LEXIS 2630 (2008), writ ocert. pending.

2. J.C. Gibson Plastering Co. v. XLSpecialty Ins. Co., 2007 WL 2916399(M.D. Fla. 2007).

3. Natl Union Fire Ins. Co. v. Wad-sworth Gol Construction, 863 A.2d347 (Md. Ct. Spec. App. 2004), cert.

granted and afrmed; Natl Union FireIns. Co. v. David A. Bramble, Inc., 388Md. 195, 879 A.2d 101 (2005).

4. Methuen Construction Co. v. Aus-tin Co. (Mass. Sup. Ct. Sept 1, 2006).

5. Casey Industrial v. SeaboardSurety, 2006 U.S. Dist LEXIS 78416(E.D.Va. Oct.25, 2006).

Covering the most common commercial litigation subjects, the new

edition of Business and Commercial Litigation in Federal Courts takes

readers through a step-by-step analysis of the entire litigation process.

With 16 new chapters and more than 500 pages of forms and jury

charges on CD-ROM, the set is an indispensable resource for the

commercial litigator.

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Be CmmerclL Feerl Cr

EditEd By RoBERt L. Haig


7/20


Its a Friday ater-noon. Youve putout all the res.

Everything is under control. Your mindis already on the weekend, with yourbody soon to ollow, when the phonerings. You answer.

The caller says, This is Jane Doeat ABC Construction. (You workedwith Jane and her company in de-ending against a subcontract me-chanics lien oreclosure a ew yearsago.) Jane skips the pleasantries: We

bid on the citys big new civic centerproject last month and received noticea ew days ago that the city intends toaward the contract to our competitorXYZ. We havent seen XYZs bid, butwe cant believe they could beat ourprice unless their bid didnt complywith the citys requirements.

When does the notice say the citywill award to XYZ? you ask, tryingto sound calm.

Monday, Jane responds. Andwe know rom our discussions withthe city that the notice to proceed willbe issued immediately upon award.

Goodbye, weekend. Hello, emer-gent relie.

Logistical and Strategic IssuesOne o the rst questions a lawyeraces when conronted with a clientissue that may require emergent relieis what kind o relie may be available.This may depend on the type o issuethe client aces, what any relevant con-

tracts provide, and applicable law.For example, in public construc-tion contracting, ederal and moststate and local agencies have admin-istrative bid protest procedures thatdisappointed bidders must ollowbeore they may seek court relie. Bidprotests are oten akin to emergent re-lie, with extremely short ling dead-lines, summary proceedings, andquick resolutions. Once a bid protest

is decided, the losing side may thenseek emergent relie in court.Other types o issues may arise

ater a construction contract is alreadyin place and may be governed by thecontracts dispute procedures and otherprovisions. For example, the ownermay ace irreparable harm where acontractor threatens to abandon thejob. Whether the owner in that circum-stance could seek emergent relie, suchas a temporary restraining order (TRO),in court may depend on (a) whether its

construction contract requires submis-sion o such disputes to alternativedispute resolution (ADR), and (b) thelaw in the applicable jurisdiction aboutcourts ability to issue emergent relienotwithstanding mandatory ADRcontract clauses. I the contract or ap-plicable law allows a court action, thenother contract provisions may dictatevenue and choice o law.

Finally, i a party can go to courtor emergent relie, the relie avail-able may vary depending on which

court (or other tribunal) has jurisdic-tion. Procedures vary between ederaland state courts. On ederal projects,disputes brought against the UnitedStates under the Federal Contract Dis-putes Act must be brought in eitherthe Armed Services or Civilian Boardso Contract Appeals (CBCA) or theCourt o Federal Claims (COFC).Unlike ederal district courts andstate courts, those tribunals have noauthority to issue injunctive relie,including TROs. However, disputesbetween or among prime contractors,subcontractors, and suppliers on ed-eral projects are generally governedby state law and not subject to CBCAor COFC jurisdiction.

Gathering inormation

Perhaps the greatest challenge inobtaining emergent relie, especiallyin actually complex matters (as

construction disputes usually are),is obtaining sucient inormation toprove that your client meets the legalrequirements or emergent relie.Typically, this will require showingboth some degree o likelihood thatyour client will succeed in its claimsat trial and that it will likely suer ir-reparable harm i the requested relieis denied.

Your rst source o inormation isyour client. In a procurement dis-pute, your client usually can provide

the solicitation, prebid submissioncommunications (such as bidderquestions, agency clarications, andbidders meeting agenda and min-utes), and the notice o award. Yourclient will less likely have other keydocuments, such as the proposedawardees bid and the agencysscoring documentation. In a contractdispute, your client will be able toprovide you the contract itsel andperhaps relevant correspondence andother documentation. Your client will

also be able to get you in touch withkey employee witnesses.

Where a public entity is involved,whether as the owner, administrativedecision maker (e.g., the entity thatmakes contract awards or decidesprotests), or regulator (e.g., licens-ing boards, environmental agencies,permit issuers), documents may beavailable through public recordslaws. Federal agencies are subject tothe Freedom o Inormation Act, andevery state has its own similar law.Although these laws generally willnot require the public agency to makethe requested documents available insuch a short time rame, you may beable to negotiate expedited disclo-sure where the request is narrowand specic. In some circumstances,the public agency may be willing toproduce documents without a ormalpublic records law request.

Hurry Up and Wait:TROs and Other Emergent Relief

By Aaron P. Silberman

Aaron P.Silberman


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Other relevant inormation maybe publicly available without anyneed or a public records law re-quest. Relevant licenses and permitsmay be available at a public agencyoce or online. Many other typeso inormation are available online(though some only or a ee), such asstandard commercial specications

and public entities solicitation docu-ments, standard terms and condi-tions, and specications.

One last potential avenue orobtaining critical inormation isdiscovery. This will not be a viableoption where the emergent relie isneeded in a matter o days. Nor isdiscovery available in administrativeproceedings, such as bid protests. Toobtain expedited discovery in courtactions, a party typically will haveto le a complaint and apply or a

court order allowing early discovery.Such a request should be supportedby detailed adavits and should belimited to only the most critical inor-mation and the least intrusive meanso obtaining it.

Preparing your clients application

Regardless o the context and appli-cable law, the burden on a party seek-ing emergent relie is high. The chal-lenge is exacerbated because the actsare oten complex, time is alwaysshort, and the judges attention evenshorter. To meet this challenge, thereare some rules you should live by:

K t sml. I at all pos-sible, avoid complicated actstatements or legal arguments,even i they are relevant orright. Most judges have di-culty grasping constructionissues in cases in which theyhave limited time to under-

stand them. On a TRO applica-tion, the judge is not going tohave the time or inclination tobecome an expert on the ac-tual or legal issues you raise.Alays b mndul o talcabl standard o rand lmnts o roo. Manycourt decisions on applica-tions or emergent relie beginand end with the standard o

review. Are you challengingan administrative decisionthat is due some deerence? Iso, you must be candid aboutthat and adequately address it.As or the elements o proo,applicants oten spend toomuch eort showing likeli-hood o success and too little

showing irreparable harm.Rly aly on afdats.Dont argue the key pointsprove them.

gud t court to t m-ortant documnts and kyarts o tos documnts. Thedocuments will oten be com-plicated, especially or a judgewith no background in thedispute (and oten little experi-ence in construction generally).Make it easy or the judge bydescribing in your bries what

parts o the documentary evi-dence the judge really needs tolook at and why.Do rytn you can torod notc to all con-crnd arts. Provide a de-tailed adavit showing thenotice you gave and, to theextent that you were unableto do so, the unsuccessul e-orts you made.

A party seeking emergent relieshould also be prepared to addresswhether the court should require abond as a condition or granting therelie. You should research appli-cable law to determine the likelihoodthe court will order a bond. Doesthe applicable statute make a bondmandatory or discretionary? While

most jurisdictions require a bond orpreliminary injunctions, they usuallydo not require them or TROs (dueto their short duration). You shoulddetermine the likely amount o abond, i required, which will typicallybe tied to the damages other partieswould likely suer i the TRO weregranted in error. You should haveyour client contact its surety and beprepared to get a bond immediatelyater the TRO hearing, in the eventthe court requires it.

Construction ContextsEmergent relie is sought, and some-times obtained, in a wide variety oconstruction contexts. For example,TROs are oten sought to challengeinitial public approvals o construc-tion projects based on alleged vio-lations o permitting, zoning, andsimilar legal requirements.1

TROs to stop construction basedon environmental challenges arealso very common. Construction and

post-construction building use mayimpact air and water quality, animaland plant habitats (including those oendangered species), and wetlands,and may involve handling and dis-posal o hazardous wastes.2 Similarconcerns may arise concerning con-struction impacting historic preserva-tion or Native American sites.

Community and neighborhoodconcerns, such as increases or dis-ruptions in trac, noise, and blight,

also oten motivate TROs to blockconstruction.3

In public construction, disappoint-ed bidders, taxpayers, and publicinterest groups oten seek TROs toprevent contract awards made inalleged violation o competitive bid-ding laws.4 Such litigation requentlyollows unsuccessul administrativechallenges such as bid protests. Italso may ollow ater a public owner

Avoidcomplicatedact state-

mentsor legalarguments,even i theyare relevant

or right.


9/20


directs that a contractor perormout-o-scope work that wouldconstitute a cardinal change, orterminates a contractor and attemptsto engage a replacement contractorwithout putting that work out orcompetitive bidding.

TROs are also sought or consumerprotection to prevent ongoing or re-

peated raud, unlicensed contracting,and unair competition.5Though less common, in extreme

circumstances, project participantsmay obtain TROs to enjoin other par-ticipants rom conduct likely to causeirreparable harm. Examples mightinclude projects in which two partiesdisagree over precautions necessaryto ensure the saety o workers duringconstruction or o building occupantsater work is completed. And, al-though a TRO will usually be denied

to prevent a party rom abandoningits work or to require its return to thesitedue to the diculty o provingirreparable harma party may be ableto obtain such a TRO in extraordinarycircumstances.6 One example could bean instance in which a subcontractor isthreatening to remove key materials orequipment rom the site.

The above examples are ar romexhaustive. Emergent relie has been

sought in countless other contextsinvolving construction, such as TROsto halt or prevent alleged inringe-ment o intellectual property rightsin project designs; violations o laborlaws or union agreements; wrongulrevocations o licenses, prequalica-tions, or building permits; spoliationo evidence; and misuse o or abscond-

ing with unds.

ConclusionThings can happen very quickly onconstruction projects. From the timethe very rst approval is sought to thedemolition o the work at the end oits useul lie, emergencies may arise.When they do, you may get that call(not always late on a Friday aternoon,though it may seem that way), and,when you do, you will need to beready to act ast.

Aaron P. Silberman is with Rogers JosephODonnell in San Francisco, Caliornia.

Endnotes1. See, e.g., http://solanosgotit.

blogspot.com/2007/09/benica-council-

oks-frst-street.html; www.redorbit.com/news/business/870917/new_pow-

er_plant_in_yaphank_on_hold_con-

struction_o_caithness/index.html;

www.kitchendemocracy.com/Berkeley/

Student_Athlete_Center/article; www.ebdailynews.com/article/2007-8-24-eb-

uc-suit.2. See, e.g.,www.kitchendemocracy.

com/Berkeley/Student_Athlete_

Center/article; www.ebdailynews.com/article/2007-8-24-eb-uc-suit;www.npr.org/templates/story/story.

php?storyId=15198528; www.stltoday.com/stltoday/news/special/srlinks.ns/story/8A2C4A80CAF752B1862572F4007

9EB28?OpenDocument; www.durango-herald.com/asp-bin/article_generation.

asp?article_type=news&article_path=/

news/07/news071215_1.htm.3. See, e.g.,www.kitchendemocracy.

com/Berkeley/Student_Athlete_Cen-

ter/article; www.ebdailynews.com/article/2007-8-24-eb-uc-suit; http://lysiak.blogspot.com/2007/11/vitos-v-z-

suit-driven-rom-court.html; www.ny-

times.com/2007/07/07/nyregion/07postalhtml?_r=1&ore=login.

4. See, e.g., www4.vindy.com/content/local_regional/296091840222684.php;www.startribune.com/local/11594391.

html.5. See, e.g., www.oag.state.ny.us/

press/2006/nov/nov09b_06.html.6. See, e.g., http://kansascity.

bizjournals.com/kansascity/stories/

2007/08/20/story5.html?jst=s_cn_hl.

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and allocation o damages. This isnow reerred to as Forensic ScheduleDelay Analysis. The RP/FSA recog-

nizes that the level o detail neededin Forensic Schedule Delay Analysisis oten greater than that needed inprospective schedule development.

As with many new specialties,it has taken decades to developa vocabulary and set o commonunderstandings o the purposesand methods o Forensic ScheduleDelay Analysis. Consider the variousnames o methodologies as we haveknown them in the recent past. Apartial list o methods includes Time

Impact Analysis, Time Impact Evalu-ation, Impacted As-Planned, FragnetAnalysis, Collapsed As-Built, But-ForAnalysis, As-Built Less Delay, As-

Planned v. As-Built, Planned v. Ac-tual, As-Planned v. Update, WindowsAnalysis, Contemporaneous PeriodAnalysis, Update Analysis, Month-to-Month, Global Impact Analysis,Isolated Delay Type Analysis, andTotal Float Management Analysis.The plethora o names and methodsdid little other than conuse people in

the industry.With that as background, theAACEI undertook the task o devel-oping a Recommended Practice. TheRP/FSA is divided into ve majorparts: Organization and Scope, SourceValidation, Method Implementation,Analysis Evaluation, and Choosinga Method. The breadth and depth othe topics discussed in the RP/FSApreclude a detailed discussion here.This article details three o the RP/FSAs sections.

Section 1Organization and ScopeThe rst section o RP/FSA providesa detailed introduction to its conceptsand structure. It includes paragraphsthat identiy the major ideas that ormthe basis o the RP/FSA and states thatThe desired objective o this Recom-mended Practice is to reduce the degreeo subjectivity involved in the currentstate o the art.1

This section describes that theRP/FSA is developed around basic

protocols and enhanced protocols.The basic protocols describe a seto steps that orm the basis o eachmethodology. The protocol does notdescribe them as a minimum, butailure to address all the basic proto-cols could result in a ailed methodol-ogy. The enhanced protocols generallyprovide more accurate analysis, butthey require more work and otenmore data. Again, the development otwo protocol levels allows the expert

the fexibility to choose the protocolthat best ts available resources.

Section 2Source ValidationSection 2 o the RP/FSA concerns theaccuracy and usability o the our ma-jor sources o schedule inormationused in orensic analyses: the baselineschedule, the updates, the as-builtschedule, and, the impact/delayevents. The Recommended Practices

The New AACEI RecommendedPractice for Forensic ScheduleAnalysis (Part 1 of 2)

Continued rom page 1

The Major Characteristics of the RP/FSA

Single Coordinate VocabularyThe rst major concept is that the RP/FSA deals only with orensic or ret-rospective delay analysis. While there is overlap between prospective andretrospective analyses, their objectives are undamentally dierent. Moreover,because o the extraordinary number o methods, subvariations, and namesthereo, the RP/FSA has chosen to abandon the current vocabulary. While itwill take several years or this new vocabulary to catch on, the use o a newvocabulary will clariy the exact methodological characteristics and largelyeliminate some o the current name problems.

Organization of a Coherent TaxonomyLike zoological taxonomy, which groups similar living things, the taxonomyinherent within the RP/FSA provides a structure that identies the similaritiesand dissimilarities o the methodologies. A secondary eature o the taxonomyis that one name describes only one methodological process. Thus, the taxono-my provides distinction and name dierences to the dierent variations o anyspecic methodology.

Step-by-Step Instructions

The RP/FSA contains detailed step-by-step instructions on how to perormthe eight dierent methods o schedule delay analysis. The development o asingle consensus approach to each method should reduce subjectivity in oren-sic analyses.

Detailed List of Advantages and DisadvantagesThe RP/FSA has a complete listing o advantages and disadvantages but doesnot recommend any single methodology as best or even preerred under cer-tain circumstances. The reason is that even ater our years o development, thegroup that developed the RP/FSA concluded that every methodology had itsown advantages and disadvantages and that many actorsincluding qualityo data, available analysis time, and budgetare all considerations in choosinga method. One o the important actors and advantages o the new RP/FSA isto allow transparency regarding the choice o method.

Daubertand the RP/FSAIt seems inescapable that the RP/FSA will have an impact on Daubert chal-lenges against orensic schedule delay experts. While these challenges have metwith very little success to date, the development o the RP/FSA may changethat; the exact contours o that impact will only be evident in the upcomingyears. However, it seems likely that the RP/FSA will assist courts in distin-guishing junk science methodologies and accepted methodologies correctlyperormed. Further, it would assist courts and opposing counsel in disqualiy-ing renegade experts.


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basic assumption is that Any analy-sis method, no matter how reliableand meticulously implemented, canail i the input data is fawed. . . .The best accuracy that an analyst canhope to achieve is the aithul refec-tion o the acts as represented incontemporaneous project documents,data, and witness statements.2

Baseline schedule

The RP/FSA recognizes that whilethe ideal baseline schedule or oren-sic purposes meets a host o denedqualities (the RP/FSA identies nine),it may be undamentally dierentrom a schedule needed or managinga project. Noticeably absent is one othe rst and most undamental ques-tions attorneys ask about the baselineschedule: Was it approved? The RP/FSA does not mention this as a crite-

rion because it has nothing to do withthe unctionality o the schedulerather that question deals with theschedules legal standing. The RP/FSA addresses the validity o thebaseline schedule in a series o recom-mended steps to make an otherwiseimpossible schedule into one thatactually unctions and represents, tothe best o the analysts capability,what the contractor intended when itdeveloped the baseline schedule.

As-built scheduleThe RP/FSA recognizes that the base-line schedule and the as-built scheduleare the two most important schedulesin a orensic analysis. Further, theRP/FSA accepts that no as-built isever perect. Addressing this inherentimperection, the RP/FSA does strayinto the legal eld when it suggeststhat the saest course in the analysis isto call all uncertainty in avor o theadverse party.3

Two major alternatives are oeredor the development o an as-built.The rst is the easiest and most ob-vioustake the last ully progressedupdate, and veriy the dates throughthe critical path, near critical paths,and a random 10 percent sample oactivity dates. The RP/FSA takes theposition that i the date is within oneday o that shown by other indepen-dent sources, the date is accurate. The

second method or the developmento an as-built is the rom scratchprocedure. For this procedure, it isrecognized that a continuous singlesource or inormation is the best andmost reliable, usually the contractoror owners daily reports.

Schedule updates

The RP/FSA contains a detailedguide to checking and veriying theupdate history o a project. While not

all orensic methods require updates(simple as-planned v. as-built amongothers), the RP/FSA recognizes thatthe updates can be useul in theeventual analysis o events on theproject, regardless o the orensicmethod used. Unortunately, manyprojects never develop a completeset o status updates. The RP/FSAthereore includes a detailed set osuggestions on how to ll in miss-ing data or missing updates. In thiscontext, the RP/FSA recognizes thatthe analysis could use hindsightin this processater all, he or sheknows what actually had happened.Alternatively, the analysis could use

blind sightessentially pretend-ing they are standing in the place othe project scheduler at the time theupdate was to be prepared. The RP/FSA takes no position between thesetwo practices.

Impact/delay events

The RP/FSA takes the position that

delay is a actually neutral term:either an extended duration o an ac-tivity or the prevention o the start oan activity in relation to its predeces-sor. The RP/FSA also distinguishesactivity delays rom project delays;not all activity delays are critical pathdelays. The RP/FSA careully avoidsthe issue o entitlement, although rec-ognizing that it is vital to the resolu-tion o most disputes.

Section 3Method Implementation

The Method Implementation sectiono the RP/FSA provides the how-tosteps or eight dierent methodso orensic delay analysis, provid-ing both minimal and advancedtechniques, and discussing theirstrengths and weaknesses. In doingso, the RP/FSA warns: The user isreminded that the ocus o this Rec-ommended Practice is on procedureas opposed to substance. Adopting amethod and using the recommendedprocedures do not, on their own,

assure soundness o substantivecontent.4

Observational MethodsThe RP/FSA makes a primary dis-tinction between the ObservationalMethods, those that use the CPMlogic but do not recalculate sched-ules, and the Modeled Methods thatuse the CPM logic and recalculatethe schedules based on analysis bythe expert.

Observational/Static/Gross

This method uses the logic o thebaseline CPM schedule, does notrecalculate the schedule, and is donein a single overall period. The readerprobably knows this methodology byits better-known name: As-Plannedv. As-Built. This basic methodology,probably the rst and most simplis-tic orensic method, compares the

Developmento twoprotocol

levels allowsthe expertthe exibilityto choosethe protocolthat bestfts availableresources.


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planned and actual progress o thejob. No correction is made in the planto refect changing site conditions,although obviously the actual As-Built schedule refects adjustmentsthe contractor made in perormanceas the project advanced.

Observational/Static/Periodic

This method diers rom the previ-ous one only in that the analysis isdone in separate time periods. Thismeans that the measurement odelay can be more closely matched toevents on the project with the hope oidentiying a causal link between theimpacting events and the delays.

Observational/Dynamic/As-Is

This method is another cousin o theAs-Planned v. As-Built, but with ad-vances that make it one o the most

accurate and widely used methods,regardless o whether it is calledAs-Planned v. As-Built, Windows, orContemporaneous Period Analysis.By perorming an As-Planned v. As-Built analysis in separate time peri-ods, the most undamental problemswith the earlier methods is removed.One o the great advantages o thismethod is that it can readily identiymitigation and acceleration as well asconcurrency and pacing. The majordisadvantage concerns the methods

inability to distinguish contrac-tor mitigation (logic changes) romcontractor acceleration (increasedmanpower, equipment, or materials).

Observational/Dynamic/Split

This method is virtually identical tothe Observational/Dynamic/As-Ismethod, except that this one allowsthe analyst to distinguish betweenschedule recovery due to logic changesand true acceleration measures.

Observational/Dynamic/Modifed orRe-created

This method seems to be very similarto the previous two methods. Thismethod refects the common problemthat updated schedules are not pre-pared or properly maintained, anddescribes how to ll in the blanks.The RP/FSA notes, with some under-statement, that the method is per-

ceived to be an ater-the-act analysisthat ails to consider logic changes . . .[or] . . . contradicts logic changes.5

Modeled MethodsModeled Methods o orensic delayanalysis require a unctioning and ac-curate CPM schedule.

Modeled/Additive/Single BaseThis methodology is commonly knownas an Impacted As-Planned Schedule.

It uses a single baseline schedule and

inserts impacts or ragnets o events tomodel the net eect o these impacts ona projects completion. Experts some-times call this methodology a TimeImpact Analysis (TIA), but giving itsuch a title is incorrect and misleads thereader into believing that actual eventsare ully considered.

The method requires the analystto develop ragnets or parts o a CPMschedule and insert them into an exist-ing baseline schedule by modiying

the underlying logic to incorporate thechange. This method is widely used bycontractors and schedule experts. Itsadvantage is that it is easy to under-stand, but its disadvantages can beatal to its use. First, the method gener-ally does not consider the contractorsown problems or mistakes. Second, itcan only refect the impacts selected,so the analyst may either intentionallyor unintentionally modiy the list o

impacts. Third, this method does notaddress either concurrency or accel-eration very well. Finally, the biggestproblem o the methodology is that ithas been widely rejected by courts.

Modeled/Additive/Multiple Base

This methodology, known as TIA orTime Impact Evaluation (TIE) is per-

haps the most widely known oren-sic methodology due to its requireduse in many government contracts.Another common, but incorrect, nameis Windows Analysis. This methodgenerally requires a reasonable andcorrect baseline, coupled with rationaland proper periodic updates. Like theprevious methodology, ragnets mustbe developed or each impact. The de-velopment o these ragnets is thereoreextremely important. Further, ragnetsare usually developed or all or most

delays, regardless o the perception oresponsibility.

Proper use o this method willresult in arguably the most accurateidentication o delay in a project.This method is, o course, subject tomanipulation in both the updating othe schedule and the development othe ragnets. Such manipulation can beunintentional and exceedingly subtle;thereore, it is sometimes overlooked.Concurrency, pacing, and accelerationare all identiable through this method

or with some slight adjustment. How-ever, like all other methods, the as-built critical path cannot be identiedthrough this CPM-based process.Because schedule sotware can onlyidentiy prospective critical paths, theTIA updates by necessity identiy theprojectedcritical path rather than theas-built critical path. The projectedcritical path identied by the TIA up-dates does provide strong guidance tothe analyst in the identication o theas-built critical path.

Modeled/Subtractive/Single Base

This method is one o the most com-plicated methods described in the RP/FSA. These complications have madethis method subject to shortcuts thathave seriously impaired the perceptiono it as a reasonable and viable meth-odology. It is commonly known as aCollapsed As-Built or But-For Analysis

The biggestproblemo the

methodologyis that it hasbeen widelyrejected bycourts.


13/20

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This methodology takes a completedas-built, along with its implied logic,and subtracts impacts and events romthe last to the rst identied delay. Thismethodology does not clearly identiythe as-built critical path, nor does itreadily permit a orward-lookingcritical path. This method is intuitivelyeasy to understand and explain, and

can be perormed without either abaseline schedule or any updates.However, it is perceived as a pure ater-the-act reconstruction and, admittedly,requires signicant expertise.

ConclusionIn the paragraphs above, I have identi-ed some o the issues associated withthe methods in the RP/FSA. The RP/FSA takes almost hal o its 105 single-spaced pages to describe these eightmethods, so the reader is advised to

look at the RP/FSA to gain a moredetailed understanding o the method-ologies. In the second o this two-partarticle, in the next newsletter, I will dis-cuss the RP/FSAs treatments o someo the issues common to all orensicschedule delay methods: concurrency;pacing; the critical path; foat and accel-eration; as well as the issues to considerwhen selecting a method.

John C. Livengood Esq., AIA, PSP,CFCC, is associate vice president o Pin-

nacleOne Construction Consultants inWashington, D.C.

Endnotes1. Forensic Schedule Analysis 8 (As-

soc. or Advancement o Cost Engg

Intl., Recommended Practice No.29R-03, revisedJune 2007), avail-able at www.aacei.org/technical/rps/29R-03.pd.

2. Id. at 18.3. Id. at 21.4. Id. at 31.5. Id. at 58.

Emails, E-Discovery, E-Gads!The Landscape Has Changed


reports, and the list goes on. Most othese documents are created usingcomputers; however, the construc-tion industry has, until recently,

steered clear o reliance upon digitalles or ear o inaccuracy, mis-use, and liability.2 Beore 2007, theonly copies o data urnished ora project that could be relied uponwere paper or hard copies.3 Becauseo the technical revolution takingplace within the construction indus-try today, continued reliance uponhard-copy documents no longermakes sense. Computer-Aided De-sign (CAD) and Building IndustryModeling (BIM) are replacing, or at

least supplementing, the traditionalblueprint. New project-managementsotware permits the digitization oa project rom design to completion.One such product, Projectmates,is an online collaborative tool thatallows an entire construction projectto be managed over the Internet

(e.g., electronic bidding, requestsor inormation (RFIs), portolioreports, pay applications, purchaseorders, subcontracts, parts orders,invoices, change orders, bulletins,scheduling, budgets, punch lists,submittals, and bid documents).4 Inrecognition o the changing land-scape, the American Institute o

Architects (AIA) issued two docu-ments in 2007 to acilitate the ullintegration o digital data in thecommunications and work prod-uct o a project: AIA DocumentE201-2007, Digital Data Proto-col Exhibit, and AIA DocumentC106-2006, Digital Data LicensingAgreement (2007 AIA Documents).5

The 2007 AIA Documents requireconstruction lawyers to understandtheir clients data and inormationsystems in the same manner as all

lawyers must now understand theirclients data and inormation sys-tems under the e-discovery rules.6For example, the Project ProtocolTable contained in E201 requires theparties to make the ollowing des-ignations or the transmission andreceipt o digital inormation:

E-Discovery and the Rule 26(f) ConferenceThe 2007 AIA Documents and the Electronic Communications Protocol Ad-dendum are a valuable source or litigators preparing to discuss the ollowingtopics during the Rule 26() conerence:

Preservation o electronic evidence (le types, le ormats, and loca-tion o active, archived, and backup computer les; suspension oautomatic/routine destruction)Scope o e-discovery (identication o key custodians, hardware/operating systems, and sotware applications in use; le-naming andstorage conventions, network conguration)Privileged and condential documents (proprietary/condentialinormation, exchange o source code, inadvertent production, claw-back nonwaiver agreements, protective orders)E-document production (production ormat, exchange o metadata,

nonstandard le types)Expert reports (electronic documents reviewed by testiying experts,prior versions o expert report, expert emails, metadata)Chain o custody/security issues (search methodology, third-partyvendors, authentication, encrypted les, orensics, law rm protocolor securing ESI, destruction o ESI ater litigation ends)Cost o e-discovery (reasonable budget, not readily accessible data,cost-shiting)E-discovery schedule (how much data at issue, how much time toreview, rolling production)


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team selects a webmaster.7 A detailedECPA will give litigators valuableinsight into the ESI important to theproject and should help narrow thescope o e-discovery i litigation laterensues. Accordingly, business lawyersand litigators should review digitaldata agreements in order to addresspotential e-discovery issues beore an

agreement is executed.Computer illiteracy is also noexcuse.8 Because o the changing

landscape, business and litigationconstruction lawyers will increas-ingly ace e-discovery.

Understanding the Process ofE-DiscoveryE-discovery is, simply, the discoveryo computer les in litigation. It is es-timated that 93 percent o ESI is neverprinted to paper, and only 7 percent oinormation created, used, or gener-ated by businesses exists in paperorm. In a recent comparison o ESIand hard-copy documents relevant to

Counselmust takeafrmative

steps tomonitorcomplianceso that allsources odiscoverableinormationare identifedand searched.

Digital data (types o electronicdocuments covered by theagreement)Data ormat (sotwareapplication and version inwhich documents will betransmitted)Transmission method (viaelectronic mail, attachment to

email, CD, web posting)Permitted uses (read-only,distribution, alteration)

This table will be o great as-sistance to litigators, because thee-discovery rules require parties todisclose, without awaiting a request,a description by category and loca-tion o ESI to be used in support oany claim or deense. Fed. R. Civ. P.26(a)(1)(B).

E201 does not address some im-

portant issues such as data transmis-sion or conversion errors, security,destruction/retention o digital lesexchanged, or data administration.These issues should be addressed,with particular attention paid to howlong the digital inormation will beretained by the recipient and in whatormat, as well as when digital inor-mation will be destroyed and howthat will be accomplished. Agree-ments regarding the exchange o con-dential digital les should include

provisions about the destruction oESI stored online, nearline, or ofinein archives and on backup media.

Another orm issued in September2007, ConsensusDoc 200.2, ElectronicCommunications Protocol Adden-dum (ECPA), addresses data admin-istration. Under the ECPA, the partiesdesignate permitted le ormats,hardware and operating systemrequirements, sotware requirements,transmission requirements, securityrequirements, translation require-ments, and test protocols. Under theECPA, onlyElectronic Communi-cations prepared in the ormat andtransmission methods identied . . .shall be relied upon. ConsensusDoc200.2 (1.2). Each party also designatesan IT administrator; the IT adminis-trators o the owner, architect, andcontractor comprise the IT manage-ment team; and the IT management

a construction case, only 25 percent othe email communications had beenprinted to paper.9 Failure to discovercomputer les, thereore, meansmissing much o the evidence. Underthe developing case law, in-houseand outside counsel must under-stand their clients data and inorma-tion systems to identiy, locate, and

preserve ESI potentially relevant tothe case, or ace severe sanctions.10The duty to locate and preserve rel-evant ESI cannot be delegated.

[I]t is not sucient to notiy allemployees o a litigation hold andexpect that the party will thenretain and produce all relevantinormation. Counsel must takearmative steps to monitorcompliance so that all sourceso discoverable inormation are

identied and searched. This isnot to say that counsel will neces-sarily succeed in locating all suchsources, or that the later discoveryo new sources is evidence o alack o eort. But counsel andclient must take some reason-able steps to see that sources orelevant inormation are located.11

The process o e-discovery is roughlyanalogous to the process employed intraditional paper discovery. What is

dierent is the nature o the documentinvolved. Hard-copy documents, unlessdamaged or destroyed, are tangibleand static. Electronic documents, on theother hand, are virtual (0s and 1s) andconstantly changing (oten without anyuser input). Hard-copy documents arealso straightorward. What you see onthe printed page is what you get. Whatyou see on the printed page may not beaccurate or true, but it is still what youget. Electronic documents are more likecontainers. Inormation associated withan electronic le, known as metadata,is a part o the electronic document andoten unseen by the user. Metadata con-tains some useul inormation about anelectronic documentsuch as the au-thor, date created or modied, date senti an electronic messagebut primarilymetadatas useulness is in its assistingthe computer to locate, search, sort, andretrieve electronic les. Metadata is


16/20


extracted or loading into areview database. Nonstandardle types, such as CAD lesor les created by proprietarysotware, cannot be processedand must be produced natively.STep OUR: Filter data. Dur-ing the ltering process, limit-ing parameters, search criteria,

and ltering techniques areapplied to the ESI to reduce theamount o data that must bereviewed by attorneys.STep ive: Search, retrieve,and analyze data. The pro-cessed ESI is loaded into a re-view database, along with im-ages o hard-copy documents,which have been OCRd.Documents stored in the reviewdatabase can be electronicallyannotated, redacted, stamped

condential, withheld as privi-leged, and accessed by all.STep Six: Produce data. Oncethe documents have beenreviewed, documents markedrelevant and not privileged canbe produced electronically byexporting the les rom the re-view database into a productionload le or delivery to opposing

discoverable i relevant and not privi-leged. Metadata is vital to managing vo-luminous amounts o ESI in e-discovery.

Generally, the e-discovery processcan be broken down into six steps.12

STep ONe: Identiy relevant datasources. Here, the lawyer askswho, what, and where.

Who are the key participants inthe project? What sotware andhardware are being employed?Where are sources o potentiallyrelevant ESI? IT personnel andkey custodians must be consultedto answer these questions.STep TwO: Preserve relevantdata. Instituting a litigationhold or relevant documents isamiliar to litigators. As previ-ously discussed, it is not su-cient merely to notiy custodi-

ans o the duty to preserve.STep ThRee: Collect andprocess data. ESI that hasbeen preserved must be col-lected. Standard le types suchas Microsot Oce les areprocessed and converted to astandard ormat, typically TIFF(tagged image le ormat) withassociated metadata and text

counsel or experts. A privilegelog can be created contempo-raneously with the review andproduced electronically as well.

Avoiding Common PitfallsParties and lawyers get into trouble ine-discovery when they do not under-stand the technology applicable to the

case, or how that technology is treatedunder the e-discovery rules and emerg-ing case law. Four common pitalls ine-discovery can be avoided.

Failure to institute a compliantlitigation hold or ESI

Because electronic les can bealtered, moved, deleted, and sentwith the stroke o a key (or the clicko a mouse), once litigation is reason-ably anticipated, parties and theircounsel must act quickly to identiy

sources o potentially relevant ESI andpreserve potentially relevant les. Itis not sucient to send a letter to theclient or key custodians notiying themo the duty to preserve evidence. Aspreviously discussed, counsel must takereasonable steps to ensure compliance.

Failure to properly preserve orcollect ESI

Counsel cannot delegate to individualcustodians the responsibility or pre-serving and collecting their own elec-tronic documents. Nor should counselexpect the clients IT personnel tounderstand how to preserve and col-lect ESI as evidence. Unless the clienthas purchased e-discovery sotwareand trained its IT proessionals topreserve and collect ESI as evidence,counsel must oversee the preservationand collection process. Unless agreedto by opposing counsel, never openelectronic documents, print them topaper, or scan them and deliver them

as PDFs. See Advisory CommitteeNotes to Fed. R. Civ. P. 34 (searchableinormation must be produced asordinarily kept).

Failure to use or leverage technology

Lawyers accustomed to litigatingwith hard-copy documents otenrequest that a working copy okey electronic documents be printedto paper, even i the documents are

SAVE THE DATE

January 1516, 2009Bonita Springs, Florida

The Construction Litigation Committee will be cosponsoring theMidwinter Meeting with the ABA Forum on the Construction Industry.

This years two-day program is entitled Critical Insurance and LitigationInsight: Coverages, Disputes, and Tactics or Survival. The program will

present a series o detailed plenary and workshop sessions ocusing on therole o insurance issues, claims, and disputes in construction litigation.

April 1618, 2009

New Orleans, Louisiana

ABA Forum on the Construction Industry Annual Meeting, cosponsored bythe Construction Litigation Committee, ocusing on sustainable design andconstruction issues. The committee will be presenting a plenary program

entitled When Green Turns to Red and LEEDs to a Summons andComplaint: Potential Liability on Green Projects.

April 29May 1, 2009Atlanta, Georgia

ABA Section o Litigation Annual Conerence


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Message from the Cochairs


and Tactics or Survival.The programwill present a series o detailedplenary and workshop sessions ocusingon the role o insurance issues, claims,

and disputes in construction litigation.We also will be presenting the ple-nary program When Green Turns toRed and LEEDs to a Summons andComplaint: Potential Liability on GreeProjectsat the 2009 Annual Meet-ing o the Forumon the ConstructionIndustry on April 1618, 2009, in NewOrleans, LA. We have also proposedprograms or the Section o Litiga-tion Annual Conerence to be held inAtlanta on April 29May 1, 2009.

We expect to continue improving our

website with the addition o useul newcontent and the expansion o existingeatures. Notable eatures added in thelast year include useul articles, newseatures, and links. I you have an articlea news piece, or links to submit or ourwebsite, please contact Tina Paries [email protected] or Ray Garcia [email protected].

This level o activity is only possiblethrough the tremendous eorts o ourmembership and, especially, our sub-committee chairs. We should be espe-

cially grateul or the untiring work othe chairs o our program subcommitteeCharlotte Wiessner and Drew Williams,and the editors oConstruct!, DavidSweitzer and David Kurtz. Charlottehas, o course, moved up to cochairo the committee. David Sweitzer hasmoved on as well. We wish to thankCharlotte and David or their excellentwork. We also invite those o you whoare interested in serving on the programand publications subcommittees to stepup and volunteer your services.

We are an equal-opportunity committee and welcome the participation o allour members. We especially encouragethe involvement o the newest memberso the proessionour young lawyerswho have grown up with the technolo-gies that some o us older lawyers viewas alien and whose resh ideas will helpall o us conront the emerging issuesthese new technologies represent.

stored in a review database. The lawyeroperating under this paper paradigmwill be no match or a techno-savvyopponent. While the paper paradigmlawyer is reviewing printouts, thetech-savvy lawyer is reviewing as-sociated metadata elds, learningwhere the document came rom (lepath and computer), who authored

the document, how it was organized(le name), when it was last revisedor printed, and who received a copyvia email and when. While the paperparadigm lawyer is scribbling com-ments on sticky notes and attachingthem to key documentsnotes thatwill be orgotten and buried among thesea o paperthe tech-savvy lawyer ismaking electronic comments about keydocuments into the review database oraccess by the entire team. The best triallawyers are masters o the evidence in

their cases. It is impossible to masterthe evidence in an e-discovery casewithout learning and understandingtechnology implicated.

Failure to take advantage o the Rule26() Conerence

Counsel must seize the opportunityaorded by the Rule 26() Conerenceto narrow the scope and thereby lowerthe cost o e-discovery. Counsel mustbe prepared to discuss the amount odata involved, sotware or hardware

issues, production ormat and deliverymethod, inadvertent production ocondential ESI, e-discovery schedules,and security. Importantly, becausethe e-discovery rules treat ESI as adocument, counsel should also reachagreement as to whether ESI createdby, viewed or accessed by, or deliveredto testiying experts (including emails)will be exchanged, and i so, in whatormat. Counsel can, and probablyshould, agree to exchange only nalexpert reports in hard-copy ormat.ConclusionAs the construction industry goes digi-tal, so will the construction law prac-tice. Rather than resisting technology,construction lawyers should embraceit. Knowledge o computers will trans-late across almost every aspect o cli-ents business and litigation concerns.Understanding clients inormation

systems requires one-on-one meetingswith upper management and IT person-nel, a tour o the data center, and sittingwith employees at their workstations tosee how they are using the companystechnology. This kind o ace-time isalso a great way to build strong clientrelationships and market ones rm.

Sarah Michaels Montgomery, Esq., iswith Haynsworth Sinkler Boyd, P.A., inColumbia, South Carolina.

Endnotes1. Zovickian, Stephen & Howard,

Georey, Electronic Discovery in Construc-tion Litigation, 18-JUL Construction Law 8(ABA Construction Lawyer 1998).

2. Noble, Christopher L., The AIAsNew Digital Data Documents, The 2007

AIA Documents: New Forms, New Is-sues, New Strategies (ABA Forum on the

Construction Industry/TIPS Fidelity &Surety Law Committee 2008), at 3.

3. See id. at 4 (citing and quoting Stan-dard General Conditions o the Construc-tion Contract published by the EngineersJoint Contract Documents Committee,EJCDC Doc. C-700 (2002 ed.)).

4. See www.projectmates.com (lastvisited April 21, 2008).

5. Noble, C., supra n. 2, at 6.6. This paper is not intended to ad-

dress the 2007 AIA documents. For agood discussion on this topic, see Note 2.

7. Noble, C., supra n. 2, at 12. For agood discussion on the ECPA, seeid. at1114.

8. Martin v. Northwestern Mutual LieInsurance. Co., 2006 U.S. Dist. LEXIS2866 (M.D. Fla. Jan. 19, 2006) (rejectingplaintis claim o computer illiteracyas rankly ludicrous).

9. See Managing and Litigating theComplex Surety Case (ABA 2d ed.2007), Ch. 8, Ashcrat, Howard, W., Jr.,Deciding to Litigate: A Practical Guideto Electronic Discovery in ConstructionDisputes.

10. See, e.g., Zubulake v. UBS War-burg LLC (Zubulake V), 229 F.R.D. 422(S.D.N.Y. 2004) (awarding sanctions ordeendants ailure to implement com-pliant litigation hold or ESI, resultingin $29.1 million jury award).

11. Id. at 432 (emphasis in original).12. See id.


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In This Issue

1The New AACEI

Recommended Practice

for Forensic Schedule

Analysis (Part 1 of 2)

By John C. Livengood

1Emails, E-Discovery,

E-Gads! The Landscape

Has ChangedBy Sarah Michaels Montgomery

3Bonanza for Bond

Claimants? Surety

Industry Seeks to Stem

the A312 Bleeding

By Daniel E. Toomey

7Hurry Up and Wait:

TROs and Other

Emergent Relief

By Aaron P. Silberman

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