Not Just Another "Auld Lang Syne"

On New Year's Eve, we typically gather in a glitter-and-confetti whirl to toast the New Year with champagne…or maybe you're a stay-by-the-fire-and-watch-Times Square type. Whatever your preference to usher in the New Year, you may be interested to know that the singing of the Scottish folk song "Auld Lang Syne" at midnight is not as traditional as you believed - it did not come to yearly use until 1929, when Guy Lombardo's orchestra played it at midnight at the Hotel Roosevelt in New York City, then released a record of it and continued playing it every New Year's Eve afterward.

By the same token, a century from now law firms will no doubt wonder at our tizzy in getting used to electronic document discovery instead of our "traditional" means of producing documents via hard copy. But for now, clinging to the old ways and not making sure that document retention policies are not only up to date but adhered to is costing our clients a mint. As reported by Sheri Qualters in The National Law Journal on December 17, 2008, Kroll Ontrack analyzed 138 reported cases from January to October 2008 and reported that ONE QUARTER of the reported electronic discovery opinions in that period resulted in sanctions issues, while 13 percent addressed preservation and spoliation, 12 percent involved computer forensics protocols and experts, 11 percent, admissibility, and 7 percent, privilege considerations. In one case in the Northern District of California, defendants were sanctioned to the tune of more than a quarter million dollars. Keithley v. The Home Store.Com Inc., No. 3:03-cv-04447 (N.D. Calif., Aug. 12, 2008). That buys a LOT of champagne!

 

It's clear that doing things the way they were done in "old times past" - the literal translation of Auld Lang Syne - will get legal clients in trouble with the Court and could result in heavy financial sanctions. The Court has no "cup of kindness" when it comes to electronic discovery issues. So this New Year, no matter your celebratory preference, resolve to pay attention to your document retention and e-discovery policies, or if you do not have such policies, it's a New Year - a great time to implement a formal policy.

New Year's Resolution: Discovery Hold Policy

So you are in tip top physical condition, you give regularly to charity, you call your mom every other day, and you don't miss the sauce a bit.  Sounds like you're in the market for a New Year's resolution! 

How about this: does your company have a litigation hold policy that covers electronically stored information?  According to a recent Deloitte survey, 30 percent of U.S. companies do not have a formalized process in place regarding legal holds, which are policies that guard against the destruction of relevant evidence when legal action is threatened. 

As has been chronicled on this blawg and elsewhere, the potential pitfalls of poorly executed or nonexistent litigation hold policies are serious, and certainly outweigh the relatively small cost of implementing such a policy.

One thing is certain--electronic information will continue to play a larger and larger role in discovery.  Therefore, if your company has not yet implemented a policy to deal with it, shake the confetti out of your hair on New Year's Day, and pledge to tackle the problem early in the year.

Cheers!

Making A Records Retention Policy and Checking It Twice

 

'Twas two weeks before Christmas and a few things were stirring in Seneca County, Ohio. The Big Guy in the red suit wasn't the only one deciding who has been naughty or nice. On December 9, the Ohio Supreme Court ruled in a 7-0 decision (State ex rel. Toledo Blade Co. v. Seneca County Board of Commissioners, 2008 WL 5157133, Dec. 10, 2008) that the Seneca County Board of Commissioners had been naughty and compelled them to make reasonable efforts to recover and provide the Toledo Blade newspaper with emails that had been deleted in violation of the County's records retention policy and disposition schedule.

The fact that these emails had been deleted did not relieve the County from its obligation to produce this information because deleted computer files are still discoverable. Many times this information is recovered by a forensic analysis of the computer, which can be a very costly process. The County’s failure to maintain the requested emails in accordance with the applicable schedule for records retention and disposition was one of the factors cited by the Court in determining to impose the expense of the forensic recovery of the deleted emails on the County.

Much like Santa's list, records retention policies should be rechecked to ensure compliance.

 

 

Is E-Discovery Eliminating the Benefits of Arbitration?

The broad scope of Federal Rule of Civil Procedure 26, coupled with electronic discovery and aggressive trial counsel, have increased litigation costs exponentially. (See Arbitration's E-Discovery Conundrum, by Thomas J. Aldrich). As a result, corporations and their legal counsel have recently turned to arbitration in an attempt to escape the huge expansion of document discovery in federal civil litigation. Id. However, as litigation discovery techniques used in federal court trickle down to the arbitration process, the benefits of arbitration - cost-efficiency and speed - have all but disappeared. Id. In an effort to preserve the benefits of arbitration, while balancing the need to discover documents with the cost and burden involved with producing them, many arbitral institutions have developed comprehensive guidelines for dealing with discovery and resolving disputes. Id. In his article entitled "Arbitration's E-Discovery Conundrum", Thomas J. Aldrich provides a rundown of the discovery guidelines propounded by arbitral institutions in an effort to "stem the tide of runaway discovery in arbitration." Id.  Read on to see a summary of his findings.

Continue Reading...

2008 E-Discovery Year In Review

It's that time of the year again .... chilly temperatures, frenzied shopping, offices full of high-calorie treats, and, my personal favorite, year-end "year in review" and "top" lists.  Kroll Ontrack contributes an interesting early entry to the annual roll with its descriptively-titled, "Year In Review: Courts Unsympathetic to Electronic Discovery Ignorance or Misconduct"

Kroll's sobering survey of the approximately 138 reported opinions on electronic discovery issue leaves something rather more ominous than visions of sugarplums dancing in one's head, revealing that over half of those opinions addressed sanctions, data production, or preservation and spoliation issues, with a whopping 25% involving some type of court-ordered sanctions for e-discovery issues.  Kroll also offers its "top five" 2008 cases demonstrating both the breadth of material available through e-discovery and courts' growing intolerance for e-discovery mishaps:

  • In Flagg v. City of Detroit, 2008 WL 3895470 (E.D. Mich. Aug. 22, 2008), U.S. District Judge Gerald Rosen rejected the city defendants' argument that the court's previous order - compelling the production of text messages sent between City employees on city-issued text messaging devices - violated the Stored Communications Act ("SCA").  Although the SCA does not authorize a service provider to disclose electronic communications in response to a subpoena or court order, Judge Rosen found that the law does not override a defendant's obligation under Federal Rule of Civil Procedure 34 to produce relevant, nonprivileged electronic communications in their possession, custody or control.  Rosen reasoned that defendants were both able and obligated to give their consent to SkyTel, the service provider that stored the text messages, to retrieve those messages, which the city must then produce. 
  • U.S Magistrate Judge Paul Grimm contributes once again to the body of e-discovery casleaw with Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May 29, 2008), and sheds some light on the "reasonable precautions" parties must take to prevent inadvertent disclosure.  Judge Grimm found that defendants had waived the attorney-client and work product privileges as to 165 electronic documents inadvertently produced in discovery by failing to take several measures that could have prevented the waiver, including a clawback agreement the disclosing party voluntarily abandoned and compliance with The Sedona Conference® best practices.
Continue Reading...

Don't Forget the Website!

A corporation's website is often one of a corporation's most visible assets and as a result, websites are often given high priority by corporate marketing and public relations departments.  Websites should be paid the same attention when a corporation institutes a litigation hold.  Unfortunately, when a litigation hold has been instituted, forgetting about your website can be a dangerous oversight. 

In the recent case, Arteria Property Pty Ltd. v. Universal Funding V.T.O., Inc., (2008 WL 4513696, October 1, 2008), the District Court for the District of New Jersey held that websites should be treated the same as other electronic files and sanctioned the defendant corporation for failing to maintain the content on its website once litigation was reasonably anticipated. In Arteria, the plaintiff requested in discovery electronic snapshots or paper copies of the defendant corporation’s website. The defendant corporation failed to produce this information.  There was no dispute that the website was in existence at a time when it was at least reasonable that the corporation would be sued. As a result, the court found that the failure to produce the website constituted spoliation of evidence and imposed sanctions on the defendant corporation. 

The moral of this story?  Your litigation hold policy should have a mechanism in place to insure that your corporation's website, as an electronic document, is preserved in the same manner as other electronic data subject to a litigation hold.  

10 Things You Should Never Put in an E-mail

Want a hint as to the types of phrases found in emails that are going to catch the eye of a lawyer looking for a smoking gun in a lawsuit?

Roger Mathus of Death by Email quotes Elizabeth Charnock, CEO of Cataphora, on 10 things you should probably never write in an e-mail:

  1. “I could get into trouble for telling you this, but…”
  2. “Delete this email immediately.”
  3. “I really shouldn’t put this in writing.”
  4. “Don’t tell So-and-So.” Or, “Don’t send this to So-and-So.”
  5. “She/He/They will never find out.”
  6. “We’re going to do this differently than normal.”
  7. “I don’t think I am supposed to know this, but…”
  8. “I don’t want to discuss this in e-mail. Please give me a call.”
  9. “Don’t ask. You don’t want to know.”
  10. “Is this actually legal?”

Ms. Charnock developed her "top ten list" based on e-mails and documents her company has analyzed for clients.

After reviewing Ms. Charnock's list, Matus advises, "If you find yourself typing one of these phrases, perhaps you should delete the entire e-mail."  In other words, when in doubt, think before you press that "send" button.

Do you have other favorites?  Feel free to share them with us in the Comments.

Predicting the Course of E-Discovery in 2009

As the new year approaches, many are wondering what e-discovery will look like in 2009.  The question is now generating some interesting discussion in the blogosphere.  I think Ralph Losey hit the key issue on the head this last week in a comment posted to EDD Update.  The thrust of the post is that litigation will be on the rise next year, but that corporate budgets will be tighter, leading everyone to look for ways to make the e-discovery process more efficient and cost-effective.  

In discussing the effects that leaner budgets will have on the e-discovery process, Losey makes, among others, two important predictions.  The first is that we will see "an explosion of metrics and proportionality arguments to drastically reduce the amount of ESI to be reviewed and produced."  The second is that in-house counsel may "finally become selective and pick new lawyers that get it, instead of their old stand-byes that don't."  On the latter point, he further offers his "doubt [that] the budget will permit the cronyism system to continue." 

I fully agree with Losey's prediction that companies will have to rethink their e-discovery choices, but I think there is more to be said about how to make smart decisions when it comes to e-discovery.  To be sure, every company - and outside counsel - should already be looking at ways to achieve measurable efficiencies when it comes to e-discovery.  And certainly, companies will be taking a harder look at the outside counsel they hire to do this work.  As Losey suggests, some firms "get it," while others don't.  A law firm with experience can really make the e-discovery process much more efficient, and much less expensive.  For this reason, we're already seeing many companies move towards hiring national e-discovery counsel.  I am confident that these trends will continue, especially in a tight economic market. 

I am concerned, however, that tighter budgets may lead to the slowing, or even the reversal of another very important trend - that is, the trend towards taking a proactive approach to e-discovery issues.  A quick example illustrates the point.  In recent years, many companies have realized the benefit of creating a plan for managing, and responding to discovery requests that call for their electronic data.  As part of that process, companies map their networks, so they know where their data is, and develop protocols for responding to requests for electronic discovery.  As budgets tighten, some companies may not be willing to pay the up-front cost of developing these data management plans.  In doing so, companies who are trying to save money may be making a costly mistake.  The worst time to begin the process of understanding your network - where you have data, how it is stored, how to retrieve it efficiently - is when you are in the middle of litigation and have to respond to discovery requests.  Litigation moves too quickly and gathering electronic data can be a time consuming process.  In the rush to comply with demands for electronic discovery, those who have not planned ahead will not be able to think through their response as thoroughly, and will almost certainly see inefficiencies, work that has to be redone, or costly errors, as a result. 

Making the right e-discovery decision will often mean different things for different companies.  What is universal, however, is that the best decisions are usually made by those companies that have the best advice from those who really understand the e-discovery process.  As Losey suggests in his post, those who understand the process will be the ones who have the competitive edge.  That will be particularly true in the tight economy of 2009.

The Corporate "Know It All"

Our mothers always told us that “no one likes a know-it-all.” However, in today’s litigation environment, where electronic discovery and authentication of data have become important and too often dangerous, a know-it-all is exactly what companies facing litigation need. As Jonathan Sablone points out in his article, “Not Your Father’s Keeper Deposition”, litigators are now routinely using Rule 30(b)(6) depositions as a tool to authenticate data, determine whether another party has met its discovery burden and “to hijack entire cases”. See “Not Your Father’s Keeper Deposition."  As a result, as Sablone accurately points out, the choice of the designated 30(b)(6) witness in the context of electronic and e-discovery is a decision that should be taken very seriously. The failure to do so can not only lead to unnecessary time and expense but, more importantly, can potentially endanger a party’s case. 

Rule 30(b)(6) depositions allow an attorney to notice the deposition of an entity and the burden then shifts to the entity to designate one or more persons to testify on its behalf about the matters at issue. An entity can designate one person or it can designate multiple people and specify the matters upon which each person will testify. With matters relating to electronic records and e-discovery, savvy companies will take the time and expend the effort required to designate one or more witnesses who can testify about the relevant matters in a manner that is to the company’s advantage. This may be one “know-it-all” or several, each of whom is the “know-it-all” about a particular subject. Rule 30(b)(6) requires the witness to testify about information known or reasonably available to the organization. In other words, first hand knowledge of a matter is not required. This means that the company “know-it-all” can be prepped, thereby allowing a company to designate a person or persons that will make a “good witness.” 

Obama To Give Up His Blackberry. Should You?

The New York Times has reported that President-elect Barack Obama will likely give up his Blackberry when he takes office in January.  According to the Times, Mr. Obama - like legions of other professionals - is all but addicted to his Blackberry.  Yet he is giving his up.  So should you be thinking about trading yours in too?  Going Luddite, if you will? 

You may be stretching your thumbs right now, getting ready to send a lengthy and exasperated comment from your Blackberry.  So I'll just start out by saying the short answer is no, you don't need to give up your Blackberry; and no one will try to take it from you.  However, the Times article about Mr. Obama and his reluctant parting of ways with his Blackberry reminds us that we all need to be wary of how we use ours. 

As the Times article explains, Mr. Obama will likely give up his Blackberry for two reasons.  The first is security; anything can be hacked.  The second is "the Presidential Records Act, which puts his correspondence in the official record and ultimately up for public review, and the threat of subpoenas."  So, '[f]or all the perquisites and power afforded the president, the chief executive of the United States is essentially deprived by law and by culture of some of the very tools that other chief executives depend on to survive and to thrive." 

Now, we everyday professionals - who really are that dependent upon our Blackberrys - do not have to worry about the Presidential Records Act subjecting all of our emails to public scrutiny.  That is true.  However, the data on everyone's Blackberry is subject to discovery in civil litigation and regulatory and criminal investigations.  So many seem to forget this, or just don't think about it.  These days, the smoking guns that win and lose cases, or make them for the government, are usually found in electronic correspondence.  Email is just such a casual means of communicating; particularly when sent on a Blackberry.  Most folks aren't thinking about the fact that they are creating a record when they fire off an email.  And if you think lawyers can't get the information you have on your Blackberry, well, "yes we can."  So if you're going to continue using your Blackberry, and you know you are, the tip for the day is to be smart about it.  Some of the best advice I received in law school was from my Evidence professor, Daniel Blinka.  He said, whenever you send a letter to another party, think about whether you'd want to see that letter appear at trial with a sticker on it that says "Exhibit A."  In today's high-tech world, I would take that a step further and say you should imagine that exhibit sticker on everything you write.  And that goes double for your emails, since that's where the good lawyers will look first.

Cloudy Days Ahead for E-Discovery

When it comes to e-discovery, your IT department and forensic experts may be ill-equipped to search, organize, and produce electronic files and documents that are outside the realm of the firm's internal network infrastructure.

The proliferation of vendors that offer web-based computing solutions compounds this problem. Commonly referred to as "Software as a Service" (SaaS), they range from simple email accounts to office suites to whiteboarding and other types of collaborative tools.

This technological alphabet soup in turn facilitates cloud computing and/or utility computing. Basically, it translates into a user's ability to access services from the Internet without having control over the technology infrastructure that supports them. From the IT management perspective, it's like the Wild West of computing. Here's a brief discussion on cloud vs. utility computing.

Lawyers are increasingly mobile due to the shear number of devices, applications and services that connect people, ideas and places. Invariably in-house software may be viewed as inadequate due to various reasons-- system downtime, malfunctioning, subpar performance, and even personal preference. Much to the chagrin of IT staff, users quite often resort to applications that fall outside of the firm's offerings. After all, no firm can acquire and support a large number of applications without a significant drain on IT resources.

Without evolving laws dealing with this type of computing environment, significant barriers will present themselves in the context of e-discovery. First, SaaS providers typically do not have document retention schedules nor are they obliged to initiate litigation holds. Second, information stored on 3rd party systems (databases and server farms) may require subpoenas for retrieval.

In the foreseeable future, e-discovery will no longer involve solely the litigation parties and their respective technical gurus. A multitude of Internet services and ASPs could conceivably be targets of discovery and the cost could escalate with no relief in sight.