A recent decision out of the Northern District of Illinois serves as an important reminder to all counsel relying on e-discovery vendors. In Peerless Industries, Inc. v. Crimson AV, LLC, the defendant was found to have control over its China-based supplier and, in particular, over the supplier’s documents.

After the defendant’s 30(b)(6) witness was unable to describe the Chinese entities’ computer and back-up systems, what searches were performed, or the Chinese entity’s document retention policy, the plaintiff sought sanctions.

Magistrate Judge Cox’s decision covers a lot of territory, including where the corporate representative could be deposed. But the most interesting part of this concise ruling concerns sanctions and her straightforward conclusion that a corporate representative can’t dodge questions concerning the preservation and collection of corporate records by pointing to the discovery vendor. Judge Cox held:

Such a hands-off approach is insufficient. Because of the control or “close coordination” between the two companies, defendants were required to produce the requested information. Defendants cannot place the burden of compliance on an outside vendor and have no knowledge, or claim no control, over the process.

As litigants become increasingly dependent on vendors to assist with the discovery process, they must still understand, direct and approvethe vendors’ activities.

Courts will have limited patience for attorney claims that they simply don’t understand technology. The recently revised comments to ABA Model Rule 1.1 state, “[t]o maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology.”

In fact, this is not the first time a court has rejected attempts to blame vendors for issues arising in a document production. See Thorncreek Apartments III, LLC v. Village of Park Forest, 2011 3489828 (N.D. Ill. Aug. 9, 2011) (party waived privilege claim where it blindly relied on vendor to withhold documents tagged “privileged”); Rosenthal Collins Group, LLC v. Trading Techs. Int’l, Inc., 2011 WL 722467 (N.D. Ill. Feb. 23, 2011) (sanctioning a party for its vendor’s misconduct).

Bottom line - Peerless reminds attorneys, both in house and outside, of the importance of working closely with your vendor. Because at the end of the day, if your client’s discovery obligations have not been satisfied, we suspect that judges will carefully evaluate the involvement of counsel before shifting the blame to vendors.