Ode to E-Discovery in 2008

Flooding the internet, they consistently accrue:
Blawgs offering e-discovery 'Year in Review's;
But these go on about facts and case histories too,
Before getting to the point of what you can and can't do.

Why not cut to the chase? Why not give it up straight?
Stripped below are the basics of two thousand and eight.
We'll start off with the general dos and the don'ts;
The haven'ts, the shouldn'ts, the emphatically won'ts.

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"If You Don't Have Anything Nice to Say..."


One of history’s most quotable women, Dorothy Parker, said, “If you don’t have anything nice to say, come sit by me.” She also said, “I don't care what is written about me, so long as it isn't true.”   

Unfortunately, few of us share Dorothy Parker’s sentiments, and with the advent of websites, blogs and other electronic storehouses of information, it has become increasingly easy to find ourselves anonymously defamed or knowingly or unknowingly defaming others. Lawsuits regarding defamation on the Internet are becoming increasingly common, and electronic discovery is critical to the prosecution and defense of such cyberspace abuse.

In one such case, Allcare Dental Management LLC v. Zrinyi, Greene, and John or Jane Does I-V, Unknown Persons, 2008 WL 4649131 (D. Idaho Oct. 20, 2008), a dental practice filed suit for defamatory statements made about their practice on a website called “Complaintsboard.com,” and also sought the identification of the anonymous posters of the statements. As part of the discovery process, they subpoenaed the provider, Cable One, seeking the identity of the Doe Defendants’ names and contact information. Since this information is protected under the Cable Communication Policy Act, disclosure of the requested information had to be requested pursuant to a court order.

In this case, the Court granted the Plaintiff’s Motion to serve their Rule 45 subpoena duces tecum on Cable One for the identity of anonymous persons who posted the alleged defamatory statements to the website, but for no other visitors to the site. The Court also required Cable One to preserve all electronically stored data responsive to the Rule 45 subpoena. Further, the Court required that a copy of its Order and the subpoena be served on all affected subscribers and/or account users, and those parties were given 14 days to file a motion to quash the subpoena. Imagine the chagrin of being served with that Order and subpoena and learning that your assumed “anonymity” is just an illusion!

The moral of this story is simple and two-fold: If you don’t have anything nice to say, don’t say it in cyberspace; and there’s no such thing as an “anonymous” posting. Or, to quote John Perry Barlow: “Relying on the government to protect your privacy is like asking a peeping tom to install your window blinds.” The illusion of online privacy is just that - an illusion.

Use Caution When Doing Your Spring Cleaning!


Although we're in the middle of winter, and the Midwest had -40 degree wind chills last week, this is the time for you to think about spring cleaning. I don't mean scrubbing floors or washing windows. Now is the time to develop a record retention policy and a litigation hold policy and then begin appropriately "cleaning house."  Micron Technology, Inc. v. Rambus, Inc., 2009 WL 54887 (D. Del. Jan. 9, 2009) shows us why it is so very important to have a litigation hold policy in place before starting that spring cleaning.

Rambus was a microchip technology company that became concerned about possible patent infringements by microchip manufacturers. It sought counsel regarding possible litigation, and counsel developed a litigation strategy. During this time, Rambus also designed and implemented a record retention policy, then held a series of "Shred Days" where many expired records were destroyed.

Micron sought a declaratory judgment from the court that its designs did not infringe on Rambus' patent.  The court held a separate trial on whether Rambus' wholesale destruction of documents pursuant to its document retention policy constituted spoliation of evidence and the appropriate sanction to be imposed on Rambus if in fact spoliation had occurred.  

In analyzing the spoliation issue, the court found that Rambus had a duty to preserve its documents once litigation became reasonably foreseeable.  According to the court,

Rambus knew or should have known, that a general implementation of the policy was inappropriate because the documents destroyed would become material at some point in the future.  Therefore, a duty to preserve potentially relevant information arose in December 1998 and any documents purged from that time forward are deemed to have been intentionally destroyed, i.e. destroyed in bad faith. 

Because Rambus' bad faith was so clear and convincing and because Rambus destroyed innumerable documents relating to all aspects of Rambus' business, the court determined that the very integrity of the litigation process had been impugned.  The court found that neither adverse jury instructions nor the preclusion of evidence nor the imposition of fees and costs on Rambus could cure the damage done by the massive document destruction.  Instead, the court delivered the ultimate sanction of all, it declared Rambus' patents involved in the lawsuit unenforceable. 

The moral of the story?  Companies must exercise extreme caution in implementing document retention policies and must strongly consider whether a "litigation hold" needs to be placed on some documents, even in cases where litigation has not been officially commenced yet.  Consequently, when you get that itch to do some spring cleaning, plan ahead so that you can protect your intellectual property and your business.

No One Escapes E-Discovery Obligations

Two e-discovery articles this week highlight a theme to remember:  no one escapes document retention and e-discovery obligations.

You think you can't lose.  The facts are on your side.  The law is on your side.  You have a slam-dunk motion for summary judgment.  Or three slam-dunk motions.  You can coast through until you prevail on the merits, right?  WRONG  Leonard Deutchman in the Pennsylvania Law Weekly looks at two of the more-famous e-discovery cases from 2008 - Qualcomm, Inc. v. Broadcom Corp. and Keithley v. The Homestore.com, Inc. - both of which demonstrate that even when you prevail on the merits, only a fool disregards her document retention and e-discovery obligations. 

In Qualcomm, the appellate court reversed an adverse judgment on the merits in the underlying patent infringement case, but  upheld the lower court's findings and rulings as to spoliation and other e-discovery violations, including sanctions imposed on counsel.  In Keithley, although the court ruled for the defendants on the merits, it adopted the magistrate judge's sanctions recommendations for spoliation of evidence and late production of discovery.  The only bright spot for defendants on the e-discovery front was that the court denied the plaintiffs' motions for adverse inference instructions, solely on the grounds that defendants' victory on the merits mooted that issue. 

Even the leader of the free world isn't exempt from document retention and e-discovery obligations.  As this Associated Press article on findlaw.com reports, on January 15, Magistrate Judge John Facciola "tore into" the Bush White House, finding that the administration had failed to meet its obligations to preserve ESI, including millions of missing e-mails.  And Judge Facciola isn't the only one hitting the White House hard over its document retention obligations; just the day before, U.S. District Judge Henry Kennedy issued an order requiring the White House to search for emails created between March 2003 and October 2005.

Lessons learned?  No matter who you are - from the most powerful person in the world to the owner of a small company - and no matter how good your case, you ignore your document preservation and e-discovery obligations at your own peril.

Have you considered preparing a "Data Map?"

At the start or even the anticipation of litigation, in-house counsel are often under the gun to begin identifying the e-data that has been (or could potentially be) requested by opposing counsel. For many, this can be a messy process of identifying individual holders or "custodians" of potentially responsive documents and then further identifying  where and how this e-data has been stored. In a recent article in The Corporate Counselor, posted on In-House Counsel Online, Brett Tarr explored the practice of "Data Mapping" as a potential strategy to streamline and improve efficiency of an e-discovery response.

The concept of data mapping is relatively straightforward.  As Tarr explained, a data map:

"provides legal and IT departments with a guide to the employees, processes, technology, types of data, and business areas, along with the physical and virtual location of data throughout the company."

In other words, a properly constructed data map should allow in-house counsel to identify not only the location of potentially responsive e-data, but also its availability and format.  Those familiar with the onus of going through the e-discovery process are well-schooled in the difficulties that arise, firstly in the identification of relevant custodians of the e-data, and secondly, in determining the actual location of the data.  A properly constructed data map could significantly reduce the time spent in preparation for any outside vendors who may be required to actually extract the data.

Tarr provides four tips to create and maintain a data map:

  1. Involve other departments and managers early on;
  2. Develop logical, comprehensive practices for managing data;
  3. Create clear pathways of communication; and
  4. Don't just create, update

Central to any useful data map is a strong collaboration between the legal and IT departments, especially because of the differing vantage points each department may have with respect to e-data. By completing this process well in advance of any litigation, and as a matter of business practice, in-house counsel will have already eliminated one of the most time consuming aspects of responding to e-discovery requests, and also have readily available the information needed to determine (and potentially argue), the cost/burden of producing certain data versus the benefits of said production.

To read more about data mapping and details on Brett Tarr's tips, you can find his article at this link.

FRE 502: A Reasonable Step to Reduce Costs?

I’m sad to report that despite the political hype, FRE 502 is not likely to provide you with any substantial cost savings related to your electronically stored information ("ESI") and document productions. This is because FRE 502 does not eliminate the need for one of the largest discovery costs - namely, the dreaded page-by-page document review (not to mention the ensuing carpal tunnel of the finger). 

FRE 502 merely codifies the current law of the majority of federal courts on the inadvertent production of privileged material – i.e., there can be no waiver of privilege on inadvertently disclosed documents if you took reasonable steps to prevent and rectify the disclosure.  But what reasonable steps? Although omitted from the law itself, the FRE Advisory Committee informs us that: 

A party that uses advanced analytical software applications and linguistic tools in screening for privilege and work product may be found to have taken reasonable steps to prevent inadvertent disclosure.

And that may actually be helpful, but for the fact that the federal courts have long recognized that such screening comes with limitations and risks because the proper selection and implementation of such technology involves both legal and scientific knowledge.  Is it really a reasonable step to use methods judicially deemed "not foolproof?"

Moreover, cases interpreting the new FRE 502 reiterate and do not eliminate the need for attorneys to conduct a page-by-page privilege review:

Rhoads Industries, Inc. v. Building Materials Corp., No. 07-4756 (E.D. Penn. Nov. 14, 2008): upheld privilege only on inadvertently disclosed documents that were manually reviewed and logged by an attorney.  

Relion, Inc. v. Hydra Fuel Cell Corp., 2008 WL 5122828 (D. Or. Dec. 4, 2008): held that privilege was waived because, even though the issue of inadvertent production was raised by opposing counsel, the holder failed to conduct a page by page review.

Bottom line: keep flexing that finger – at least for now!

Saving Your Company's Bucks and Hide...

Did you know that, before paper money was used, Americans used animal hides, or buckskins, for money?  This is the origin of the slang term "bucks." If you want to help your company keep more of their “bucks” as well as their “hide” in 2009, urge them to review and comply with their existing document retention policy.

Jerome Wendt on the StorageChannel.com’s blog revisited some lessons from the past, which remain relevant for the new year. Wendt’s blog discussed the 2002 case of Murphy Oil USA, Inc. v. Fluor Daniel, Inc. (2002 WL 246439, E.D. La. Feb. 19, 2002). Fluor Daniel had an email retention policy that allowed them to erase backup tapes after 45 days, but neglected to follow their own policy…resulting in the unintended preservation of 93 backup tapes, some of which contained damaging information. The Court ordered Fluor Daniel to produce email from one of these backup tapes. Fluor Daniel could have avoided an unfavorable court decision and the costs associated with producing certain incriminating evidence had it only complied with its own document retention policy. 

The beginning of a new year should be seized as an opportunity to ensure that your company is complying with its existing document retention policy.  This is an excellent first step to saving more than a few bucks and protecting your hide as well. 

E-Discovery World Wars: The Privacy Menace

Descriptions of the art of litigation are ingrained in ancient history, from Greek scrolls yellowed with age to stone hieroglyphs engraved into the pyramid walls of the Egyptians. But these early insular legal systems did not have to deal with what is becoming one of the more daunting aspects of e-discovery: international boundaries. Today, the overseas offices of many United States corporations have been dragged into the painstaking, and often painful, process of e-discovery. Many more corporations, based entirely in foreign countries, have found themselves subject to e-discovery requests from the United States as well.

When requesting e-discovery internationally, foreign information privacy laws must be respected. The dilemma is that foreign countries have placed restrictions on the international transmission of data that can present high, sometimes insurmountable, barriers to United States e-discovery.  

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Walk the Line

There is a thin line when attempting to distinguish between personal records and corporate records. Some would argue that there is no line at all because it is very difficult to sustain a claim that documents prepared in connection with employment are "personal."  The distinction between personal records and corporate records is legally significant because the Fifth Amendment's privilege against self-incrimination can be used to protect personal records.  Because the Fifth Amendment can only be asserted by individuals, corporate records are typically compelled to be produced in response to a subpoena.

The risk to corporate clients is significant when employees maintain records outside of normal record keeping procedures. This issue often arises when employees improperly assume that a record is "personal" because it contains some personal content. Common examples include employee calendars or address books that contain personal information. 

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Back to the Basics for 2009

Over the past several years e-discovery has blossomed into a multi-million dollar industry. Businesses and the legal community alike have struggled to keep up with evolving court rules on e-discovery and their interpretation. When it involves the technical arena, we are often reactive rather than proactive on finding the right tools for the right job. As a result, we fall prey to system vendors' promises of superior products that can solve all our discovery problems.

In this economic climate, most businesses are probably moving cautiously when it comes to securing licenses or system purchases. More than ever, we are doing more window shopping than buying. But when we decide to buy, mistakes can be made due to the following reasons.

  • Poor needs assessment. While technologies can do wonders, it is how they are applied that matters. The mantra is implement the appropriate technology with some leeway for expansion. Because all technologies have shelf lives (the length of time given before they are considered obsolete or unsuitable for use), it presents a business risk to put all the eggs in one basket. Before purchasing any particular products, assess the vendor's business strength by checking its market share, user feedbacks/reviews, ease of implementation, and portability (data being integrated or migrated to another platform). It is also important to examine the interdependency among its business partners to assess its long-term viability should one or more of its business partners fail. In addition, it is crucial that the product fits into the internal technology infrastructure and does not create an impediment to workflow issues.
  • Lack of collaboration. Not only that it is to the advantage of all parties involved in litigation to examine what information is needed and the in-house systems that are readily available to facilitate the retrieval process, FRCP Rule 37(f) demands it. If a third party vendor is needed, both sides might want to work with the same vendor to negotiate discounted services. This in turn creates an added incentive for both sides to make extra efforts to ascertain the type and volume of information that is most relevant for successful litigation and results in potential cost savings for the clients.

While there is no magic bullet against e-discovery, following the ground rules listed above can make the discovery process more productive and less painful.

U.S. Courts Teach Europe the True Meaning of Christmas

Litigation slows around the holidays as all of us, men and women, associate and partner, plaintiff and defendant, join together in the spirit of the season and take some time to remind ourselves why there are some cousins we just don't keep in touch with. But before we bid good riddance to those interminable weeks of peace on earth and good will toward men and look forward to the comfort of acrimonious discovery disputes ahead, let us take a moment to reflect one last time on the true meaning of Christmas, as perhaps first taught us by the U.S. Supreme Court in Societe Nationale Industrielle Aerospatiale v. United States Dist. Ct. for the Southern Dist. of Iowa, 482 U.S. 522 (1987):

It is better to give than to receive sanctions for violating a U.S. discovery order.

This is a universal message, as explained by Peter Selvin and Jed Lowenthal here. Just as Santa may distribute coal to naughty children without regard for the governing statutes of those children's home jurisdictions (many of which contain strict emissions standards which exclude coal from the list of acceptable gift fuels), U.S. courts may distribute sanctions for violations of discovery orders regardless of whether the non-U.S. parties' compliance with those orders would expose the parties to civil or even criminal sanctions in their home jurisdictions. In fact, as Mssrs. Selvin and Lowenthal note, one may not even need to be a party to the litigation to be subject to a discovery order; foreign affiliates of U.S. litigants may be fair game, too, if the court determines that the litigant has control over the information held by the affiliate.

So, if you are a non-U.S. party and are ordered to disclose your discoverable electronically stored information, you will likely be obliged to give that information up. Even if the information is stored on servers in Europe. Even if you aren't a party to the litigation. Even if disclosure would expose you to sanctions back home. Even if you really, really don't want to.

But take heart, non-U.S. readers; things could be worse. For example, this post was only inches away from being titled "U.S. Courts Crash European 'Block' Parties."