Florida Supreme Court Juices Up E-Discovery Requirements

On July 5, 2012, the Florida Supreme Court adopted seven amendments to the Florida Rules of Civil Procedure (“Fla. R. Civ. P. ___”). See In re Amendments to the Florida Rules of Civil Procedure -- Electronic Discovery, ____ So.3d ____, 2012 Fla. LEXIS 1318 (Fla. July 5, 2012). These amendments are largely modeled on the 2006 Amendments to the Federal Rules of Civil Procedure (namely, Rules 16, 26, 33, 34, 37 and 45), and are designed to encourage harmonization with federal decisions. Specifically, the seven amended rules consist of Fla. R. Civ. P. 1.200 (Pretrial Procedure); 1.201 (Complex Litigation); 1.280 (General Provisions Governing Discovery); 1.340 (Interrogatories to Parties); 1.350 (Production of Documents and Things and Entry Upon Land for Inspection and Other Purposes); 1.380 (Failure to Make Discovery; Sanctions); and 1.410 (Subpoena).

However, while the amendments parallel the changes to Federal Rules, some contain subtle variances from their federal counterparts, that arguably operate to make the Florida rules broader and more malleable than their federal counterparts.

Some of the important provisions, and a comparison to their federal counterparts, can be summarized as follows:

1.    No requirement to "meet and confer" in Florida. The “meet and confer” provisions of Fed.R.Civ.P. 26(f) are not adopted by the Florida rules. While this development might be seen as a surprising omission, Florida Rule 1.200, applicable to all Florida court divisions, provides for the a Case Management Conference to be convened by order of the Court or by a party merely serving a notice setting the conference. More importantly Rule 1.2000 specifically sets out electronic discovery matters to be discussed at the Case Management Conference, telling the parties to:

  • "consider the possibility of obtaining admissions of fact and voluntary exchange of documents and electronically stored information, and stipulations regarding authenticity of documents and electronically stored information;"
     
  • "consider the need for advance rulings from the court on the admissibility of documents and electronically stored information;"
     
  • "discuss as to electronically stored information, the possibility of agreements from the parties regarding the extent to which such evidence should be preserved, the form in which such evidence should be produced, and whether discovery of such information should be conducted in phases or limited to particular individuals, time periods, or sources;"

Additionally in cases deemed Complex Litigation, Florida Rule 1.201 has been amended to specifically require discussion during the Case Management Conference of "the possibility of obtaining agreements among the parties regarding the extent to which such electronically stored information should be preserved, the form in which such information should be produced, and whether discovery of such information should be conducted in phases or limited to particular individuals, time periods, or sources[.]"

Florida's approach thus provides flexibility to accommodate the wide variety of cases in Florida courts of general jurisdiction while providing greater guidance than found in Fed. R. Civ. P. 26(g) and Fed.R.Civ.P. 16.

2.  Pre-litigation duty to preserve remains in question. Rule 1.380 adopts, verbatim, the well-known (though seldom used by courts) Fed.R.Civ.P. 37(e) safe harbor, under which sanctions cannot be awarded against a party who failed to produce ESI lost as a result of "good faith operation." The Florida Committee Note also obliquely references the duty to preserve . . . however, it does so without resolving whether there is actually a pre-litigation duty in Florida. Under federal law, a duty to preserve arises when there is "reasonable anticipation" of litigation, though the exact scope of this phrase remains to be tied down. The Florida Committee is silent as to whether any duty exists, and has left the issue to the courts to determine on a case by case basis rather than drawing any hard lines. Chances are, Florida courts will come down in line with the federal "reasonable anticipation" standard.  But there is current Florida law that appears to hold that a duty to preserve arises only by statute, contract, or a request for production. Regardless of what happens on this front, however, the intentional destruction of evidence to thwart the administration of justice (either before or during litigation) does give rises to spoliation claims under Florida law.

3.   ESI to be produced as "ordinarily maintained" or "reasonably usable form." Rule 1.280 further authorizes discovery of ESI, and Rule 1.350 treats ESI as a type of document whose production must be in the form ordinarily maintained, or else in a reasonable form. The important change in Rule 1.350 is that the producing party must specify before production and in the written response to the request for production what production format will be used. The requesting party can specify a format, and if the producing party objects or a format is not specified, the producing party must state the format of production it intends to use.

The great utility of this structure is that disputes as to format will surface early for judicial resolution.   While the amendment does not define "reasonably usable," this will vary from case to case depending on cost and utility issues. The amended Rule 1.350 does, however, make clear that the producing party may produce as "ordinarily maintained" -- it need not take any extraordinary steps to enhance the utility of the production form by (for example) converting paper into searchable OCR text. But note that because the amended Rule does not require production in "native," only in a "reasonably usable," format, native production may or may not be the right format for the case.

4.  Motions to compel inaccessible ESI permitted. Fed.R.Civ.P. 26(b)(2)(B) contains a presumptive exclusion of ESI production from inaccessible materials such as backup tapes. Amended Rule 1.280(d)(1) authorizes objections to the discovery of ESI from such inaccessible sources, requiring the objecting party to demonstrate "undue burden and cost." Even upon a showing of undue burden and cost, however, the Court may still order production on a showing of good cause, although it must consider appropriate conditions and limitations on such discovery including cost shifting. 

The amended Rule 1.280(d)(2) also specifically makes proportional considerations applicable "in determining any motion involving discovery of electronically stored information." The proportionality factors courts should consider (such as the expense, the time commitment, and potential usefulness the material, and so on) are helpfully listed in Rule 1.280(d)(2) as well. These factors track Fed. R. Civ. P. 26(b)(2)(C).

5.   ESI can be used to answer interrogatories. Rule 1.340 authorizes producing ESI in lieu of interrogatory answers. In doing so it spells out the form of production instead of leaving it open, as does Fed.R.Civ.P. 33.

6.   Litigation holds are not mentioned. The Florida Committee Note does not mention litigation holds, but states that in determining “good faith” the court may consider any steps taken to comply with preservation obligations. Cf. W. Hamilton, Florida Moving to Adopt Federally-Inspired E-discovery Rules (Sept. 20, 2011) (arguing that “traditional Florida spoliation remedies are in play when a party intentionally destroys relevant information to thwart the judicial process – whether before or during litigation”); Michael D. Starks, Deconstructing Damages for Destruction of Evidence, 80-AUG Fla. B. J. 36 (July/August 2006) (noting that both sanctions and tort damages are available under Florida law, although "the first-party spoliation tort" has since been destroyed). 

7.  Inadvertent production. Effective January 2011, Florida adopted Rule 1.285 to govern the responsibilities of parties upon post-production claims of inadvertent production of privileged material. This rule is analogous to Fed.R.Civ.P. 26(b)(5)(B)'s "claw-back" provision, but broader and more comprehensive. Like the federal version, however, Florida leaves the issue of waiver to a separate proceeding.

 

In sum, Florida has enacted a nuanced and powerful set of e-discovery rules that provide excellent direction and authority for the management of e-discovery. The new Florida amendments are to take effect in September 2012.
 

"One Ring to Rule Them All?" E-Discovery Search Methodology in Patent Litigation in Light of Recent Model Orders and Case Law

Two Model Rules from the E-discovery-Kings under the sky:
Five or eight custodians for Tech-Lords in their courts of stone;
The vast production of metadata, perhaps doomed to die;
Five or ten search terms for the Dark Lord's e-mail on his dark throne
In the Land of Litigants where the patent Trolls lie.
But is there One Ring to rule them all? One Ring to find them?
One Ring to search them all and then produce and bind them,

In the Land of Litigants where patent cases lie?

 

"It's a dangerous business, Frodo, going out of your door . . .You step into the Road, and if you don't keep your feet, there is no knowing where you might be swept off to.”
              -- J.R.R. Tolkien, Lord of the Rings: The Fellowship of the Ring

Somewhere along the road of litigation and technology, e-discovery's All-Seeing Eye grew bigger than its stomach. Overall, only .0074% of documents requested and produced in litigation (less than 1 in 10,000) wind up on trial exhibit lists.  Still less are actually used. For e-mail, hotly demanded due to the hopes of finding a smoking gun in informal and hastily-sent communications, the proportion is even lower. This trend is especially concerning in intellectual property litigation -- patent cases in particular.

To combat this trend, two sets of courts -- let's call them the Fellowship of the E-Discovery Kings -- recently set on journeys to narrow the range of the All-Seeing Eye in patent litigation, issuing similar and helpful Model Orders for e-discovery to curtail mass and unnecessary production.  But whether there is really One Ring to Rule Them All when it comes to search methodologies -- one workable solution -- may not be as clear as the E-Discovery Kings propose.

 

"Advice is a dangerous gift, even from the wise to the wise, and all courses may run ill."
                  -- J.R.R. Tolkien, Lord of the Rings: The Fellowship of the Ring

First, in November 2011, the Advisory Council of the Federal Circuit promulgated a model rule for patent cases “to streamline e-discovery, particularly email production.” This Model Order's provisions (a) exclude e-mail from general production requests for ESI, requiring parties to serve requests seeking email production on specific issues; (b) limit to five, both the number of custodians whose email must be searched and the number of terms that can be used in Boolean searches of a party’s electronic correspondence; (c) preclude production of all but limited metadata absent good cause; and (d) require that if a party serves broader discovery, it would bear all reasonable costs. Courts have already adopted at least parts of the Model Order, applying it not just to "patent troll" cases but competitor-based patent litigation as well. See, e.g., DCG Sys., Inc. v. Checkpoint Techs., LLC, 2011 WL 5244356 (N.D. Cal. Nov. 2, 2011); Effectively Illuminated Pathways v. Aston Martin, No. 6:11-cv-00034 (E.D. Tex., Oct. 20, 2011).

Second, in February 2012 the Eastern District of Texas, one of the nation’s most popular patent litigation venues for plaintiffs (and the dwelling of trolls in particular), followed up its own Model Order for e-discovery in patent cases. The Texas version differs from the Federal Circuit version in that it (a) permits requesting e-mail from eight custodians; (b) doubles the permissible search terms to ten; and (c) does not contain the Federal Circuit's flexibility for additional discovery or its cost-shifting provisions for adding more custodians or search terms, but does allow parties to move to expand discovery for less than "good cause." Other provisions include requiring the parties to exchange the identities of the fifteen most significant email custodians, allowing for targeted early discovery, and providing guidance on the format of ESI production -- for example providing for production as TIFF images, governing when documents must be produced in searchable format, delineating the sources of data that must be preserved, and excusing parties from restoring back-ups and from preserving and collecting data from voicemails, PDAs and mobile phones, absent good cause.

 

"Short cuts make long delays."
       -- J.R.R. Tolkien, Lord of the Rings: Fellowship of the Rings

Together, the two Model Orders promise to be valuable resources, brainchildren of jurists with among the most patent litigation experience in the judiciary. However, a major presumption underlying both Model Orders is that key-word search terms are the One Ring to Rule Them All: the optimal and only search methodology. Nor is there guidance on how the parties should forge those terms to make sure they return the bulk of relevant and responsive material. In truth, key-word searching may be well on the way to becoming the hard-copy paper document review in today's electronically-favored process -- outmoded and outdated. As such, propounding keyword searching as the gold standard threatens to elevate process over substance, expediency over efficacy.

For example, the results returned from a simple key-word search can be over-inclusive. The terms may be so broad that they return a googol of "hits" to wade through, many of which have nothing to do with the core issues. The collection of terms can likewise be under-inclusive, returning very few hits due to a party's internal use of code words (i.e., "Operation Rivendell" for references to a particular patent or invention). Or perhaps the propounding party simply failed to guess or the searching party's failed to volunteer, "precious" catchphrases that would uncover what a party conceals in its back e-pocket. Ralph Losey, in his popular e-Discovery Team blog, has even referred to keyword searching as similar to a child's game of Go Fish, in which both players try to guess the other side's cards while attempting to conceal their own. Finally, even obvious terms can be overlooked in simple keyword searches: in Wingnut Films v. Katja Motion Pictures Corp., No. 05-1516-RSWL, 2007 U.S. Dist. LEXIS 72953 (C.D. Cal. 2007), for example, a litigation surrounding the Lord of the Rings movies, the target of a discovery request was admonished for having failed to search its servers for the simple phrase ‘‘Lord of the Rings’,’ And this was without a single-digit limit on search terms.

 

"Far below the deepest delving of the dwarves, the world is gnawed by nameless things." 
                  - J.R.R. Tolkien, Lord of the Rings: The Two Towers

Another important fallacy of keyword searching is the fact that it is increasingly not the names and words (the sole focus of keyword searching) that dictate importance. The exact terminology used in an e-mail is becoming less meaningful, with the context -- the individual(s) who sent and received the message, the timing, and its location on the system -- mattering more and more. Keyword searches alone will fail as an All-Seeing Eye:  it will miss many of these features.

What, then, is the One Ring to Rule Them All that should have been utilized? And is there even one? In parallel with our Fellowship's journey and the forging of their Model Orders in the hot fires of patent litigation, another power was on the rise: predictive coding. While such computer-assisted review tools (which allow for automation of a major proportion of document review, with less need for human management) have been around for several years, it was June 2011 when one of the larger e-discovery vendors was issued a patent on the process, thrusting it into even greater prominence. Unlike keyword search terms, predictive coding teaches computers to "predict" the relevant documents based not only on key terminology, but features like dates, names, broader phrases, and other items of context.  Moreover, it is estimated that by automating a significant amount of e-discovery review, predictive coding can save up to 70% of review costs.

While courts and attorneys have been slow to adopt this new technology, in the same month the Fellowship of the Eastern District of Texas forged its Model Order, Magistrate Judge Andrew Peck of the U.S. District Court for the Southern District of New York approved the use of predictive coding in Monique Da Silva Moore, et al. v. Publicis Group SA, et al, 2012 U.S. Dist. LEXIS 23350 (S.D.N.Y. Feb. 24, 2012), aff'd, 2012 U.S. Dist. LEXIS 58742 (S.D.N.Y. Apr. 26, 2012). While neither party in Da Silva Moore actually objected to the use of the technology -- the decision addressed implementation rather than use -- that same week a state court judge approved the use of predictive coding over one party's objection. Global Aerospace v. Landow Aviation , No. CL 61040 (Vir. Cir. Ct. Apr. 23, 2012). Between Da Silva Moore and Global Aerospace, it is thus becoming clear that the judiciary will not hesitate to incorporate predictive coding into e-discovery where appropriate. In fact, Judge Peck noted that computer-assisted review "should be seriously considered for use in large-data-volume cases," and Judge Andrew Carter, who affirmed Da Silva Moore, acknowledged that manual review, upon which keyword searching relies, "is prone to human error and marred with inconsistencies from the various attorneys determination of whether a document is responsive."

 

All that is gold does not glitter,
Not all those who wander are lost;
The old that is strong does not wither,
Deep roots are not reached by the frost. 

         --  J.R.R. Tolkien, Lord of the Rings: The Fellowship of the Ring

But despite the limits to keyword searches and the advantages of predictive coding, the latter may still not be an All-Seeing Eye, or the One Ring to Rule Them All. There are times in which the Old Ways of keyword searching may still be the best candidate. In patent troll cases, for example, where discovery tends to be disproportionately heavy on the accused infringer's side and lighter for the troll (who usually has no product or business other than patent licensing and enforcement to speak of), focused keyword searching may be sufficient. The same is true for other smaller patent and IP litigation disputes. Even then, however, the limitations of keyword searching make it prudent to use it only in conjunction with other search tools, and not as a stand-alone methodology. (Case in point: the arsenal of tools in predictive coding includes keyword searching). But for non-patent troll cases, and for more complex, competitor-based patent and other IP disputes (for example, trade secret misappropriation), predictive coding presents a new One Ring to Rule Them All, ensuring the capture of the greatest amount of relevant and responsive materials while still conserving costs.  At the very least, it presents a viable alternative to the Model Orders' presumption of keyword searching.

Unfortunately, at the time the Fellowship's Model Orders were written a year ago, predictive coding, like Strider, the Ranger of the North, had still not quite revealed itself as an Aragorn, a potential heir to the throne. If the Orders had come out today, perhaps they would have accounted for alternate methodologies. Today's Seventh Circuit E-Discovery Pilot Program, for example, is seriously considering the merits and pitfalls of various search methodologies, including predictive coding. Unfortunately, for now there remains a disconnect between the Model Orders and the growing acknowledgment of predictive coding among attorneys, their clients and the courts. Moreover, the best practices remain to be written, both for utilizing predictive coding and for choosing the best keyword searches under the Model Orders and otherwise. Thus, even if we could choose and carry One Ring to Rule Them All through the rocky terrain of patent litigation, the path on which to carry it remains unclear, much as it was for Frodo Baggins:

At last with an effort he spoke, and wondered to hear his own words, as if some other will was using his small voice. "I will take the Ring," he said, "though I do not know the way.”

Be Careful What You Ask For: Two New Cases Seek to Limit Burdensome E-Discovery Requests

Most of you know the story: either the plaintiff wants everything under the sun from the defendant as part of discovery but has no documents of its own to produce, or two big companies hit each other with unreasonable discovery requests to make the other side settle an otherwise meritorious case.

To address both opportunities for abuse, two new cases put out the message, “If you make unreasonable demands, you are going to have to pay for it.”

In Lubber, Inc. v. Optari LLC, No. 3:11-0042, 2012 WL 899631, at *1 (M.D. TN March 15, 2012), the defendants filed a motion asking the judge to either limit the relevant timeframe for e-discovery or require the plaintiff to pay for all of the defendants’ costs in connection with such discovery. Magistrate Judge Joe B. Brown agreed with the defendants that when a party has to bear a part of the cost of producing what they request, the amount of material requested drops considerably:

When a party has to contemplate whether the last possible bit of information will cost them more than it is worth, they quit asking for items of marginal relevance. As long as requesting the last bit of information costs them nothing, they have little, if any, incentive not to request it. Even if they choose never to look at it, they have put the opposing party to the cost of production. In some cases discovery becomes a tool with which to bludgeon the other side into submission.

Id. at *2. Thus, using the authority granted to him by Federal Rule of Civil Procedure 26, the magistrate ordered each side to bear half the expenses of the materials not already produced. He also ordered the plaintiff to post a $10,000 bond, prior to the defendants producing the requested documents, to protect the defendants if they were ultimately successful on the merits and entitled to costs.

Similarly, in Cannata v. Wyndham Worldwide Corporation, 2:10-cv-00068-PMP-VCF, 2012 U.S. Dist. LEXIS 20625 (D. Nev. Feb. 17, 2012) Magistrate Judge Cam Ferenbach reined in e-discovery requests that were quickly spiraling out of control by ordering cost-shifting for unreasonable requests.

The court found that as long as the final combined set of search terms and custodians or data storage sites did not exceed 40, the plaintiffs would not be required to reimburse the defendants. If, however, the combined total exceeded 40, for each extra search term or site (up to 50) the plaintiffs would have to reimburse the defendants for 5 percent of their e-discovery costs, from the date of the order through the end of discovery, up to 50 percent.

While these cases provide ammunition to bring a motion for cost-shifting for parties who are on the receiving end of overbroad document requests, they also place responsibility on corporate counsel to ensure that it narrowly tailors the discovery being served on its behalf. Otherwise, it could be you on the other side of that cost-shifting motion.

 

This article was originally posted in Inside Counsel.

Four Lessons Counsel can learn about Da Silva Moore and Predictive Coding

There’s good news in the world of electronic discovery. This February in New York, Magistrate Judge Andrew Peck and counsel for the parties in Da Silva Moore v. Publicis Groupe gave us a magnificent e-discovery lesson and pushed open the door for the utilization of advanced search technologies -- namely predictive coding, an increasingly used methodology of computer-assisted review.

The Case

The plaintiff filed a Title VII class action gender discrimination claim against defendant Publicis Groupe, alleging she and other female employees at Publicis Groupe endured discriminatory terminations, demotions and job reassignments. The plaintiff (who had very little, if any, electronically stored information (ESI) of her own to produce) demanded that Publicis Groupe produce documents (including ESI) that related to whether Publicis Groupe:

  1. Compensated female employees less than comparably situated males through salaries, bonuses or perks.
     
  2. Precluded or delayed selection and promotion of females into higher-level jobs held by male employees.
     
  3. Disproportionately terminated or reassigned female employees when the company was reorganized in 2008.

Based on the records requested and the number of custodians, the parties anticipated the document pool would be around three million documents, which would have likely cost in excess of $1 million with traditional keyword search methods. Instead of going this route, the parties agreed to something bold: review the documents using what has come to be called predictive coding, a methodology of computer-assisted review. By using these methods, the parties hoped to reduce the number of manually-reviewed documents from 3 million to 20,000.

The implementation of predictive coding is not simple. Fortunately, Da Silva Moore v. Publicis Groupe provides a lengthy guide on important topics such as methods to identify the initial seed set, iterative training rounds to refine the “predictive coding to assure reasonable recall” and methods of sampling to validate levels of confidence and confidence intervals.
 

What the Case Means for Your Business

Although discovery in Publicis Groupe is far from over, and the parties have each filed motions challenging portions of Judge Peck’s ruling, there are already lessons to be learned for how to effectively deploy computer-assisted review to reduce the cost of electronic discovery in your cases:

1. Have an expert, knowledgeable about the review tool you intend to use.  Judge Peck turned to the parties’ technical experts to explain the effect of the review protocol on the validity of the ultimate production. Surely judges less familiar with the technology could benefit from hearing from an expert in the field. Since experts tend to disagree (as they did in Publicis Groupe), it’s an absolute requirement to provide testimony about the operation and testing of the search tool chosen for the case.

2. Be willing to accept that you will not receive every potentially relevant document. Judge Peck put it best when he reminded counsel, “By the time you go to trial, even with six plaintiffs, if you have more than 100 trial exhibits it will be a miracle.” He also explained that, “The idea is not to make this perfect, it’s not going to be perfect. The idea is to make it significantly better than the alternative (human review) without nearly as much cost.”

Consequently, you have to be willing to risk that a computer will miss more documents than the recent law grad you would normally pay to sift through each page. Keep in mind that human review and key word search strings are far from perfect. Predictive coding when properly applied will likely enhance both recall and precision.

3. Cooperate with the opposition. The utilization of this technology requires engaged cooperation between the parties. Counsel must review and share the initial seed set with the opposition, and agree on statistical sampling techniques. Notwithstanding subsequent disputes, Da Silva Moore v. Publicis Groupe illustrates competent counsel working closely on e-discovery to meet the interests of both the plaintiffs and the defendant. Keep in mind that both sides agreed to utilize this advanced technology in this case. Of course, the devil is in the details, where reasonable litigants can disagree.

4. Understand the technology.  Even with technology experts at the ready, counsel were still necessary to advocate for their client’s interest in balancing the cost of discovery against the completeness of the final set of documents produced. Predictive coding is not right for all cases. It is not inexpensive—counsel must expend considerable up-front fees identifying the seed set and fine tuning the technology.

Touted as a practical, cost-saving and revolutionary solution, computer-assisted review is finally getting its chance to show what it’s worth. The private bar is watching anxiously to see whether it lives up to its billing.
 

 

This article was originally published in Inside Counsel.

E-Discovery: What Increased Data Protection Means for the Global Economy

As our economy and companies become more digital and global, digital information outside the U.S becomes increasingly relevant to resolving civil disputes within our nation.

Digital information will be governed by a set of laws and values many U.S. companies and their lawyers are not familiar with, because the U.S. trades more heavily with nations outside the EU. While most industrialized (e.g., Canada, the United Kingdom and Australia) and newly industrializing (e.g., Singapore and South Africa) nations have developed laws compelling the transfer of relevant electronically stored information (ESI) in civil disputes, none have laws as liberal and far reaching as U.S. civil discovery procedures.

Many nations also impose restrictions on when ESI can be gathered, processed, used and transmitted beyond borders. Indeed, "In many non-U.S. jurisdictions, including the European Union member states, some Asian nations and a few Latin American nations, data privacy is viewed as a fundamental right and ‘personal data’ is afforded greater protections than we are accustomed in the U.S." (Gibson Dunn, "E-Discovery Basics: Cross-Border E-Discovery,” Vol. 1, No. 11). In addition, certain countries have privacy laws designed to protect information about their state-run companies (e.g., China) or even the identity of their banking clients (e.g., Switzerland).

Data protection hits the BRICS

Recently, the world's largest emerging economies, collectively known as "BRICS" (Brazil, Russia, India, China and South Africa), have become more protective of electronic data. Most U.S. litigators have some passing familiarity with the somewhat longstanding and oft-discussed EU Data Protection Directive 94/46/EC, which restricts the processing and transferring of "personal data" about EU member-state citizens. However, they are not generally familiar with the restrictions that emerging economies are placing on data transfer. As recently as July 2011, two BRICS members (Russia and China) passed laws strengthening data protection in their countries.

Every BRICS member nation has stricter data privacy laws than those of the U.S. and none officially authorizes the transfer of "private" data to the U.S. On July 25, 2011, Russia amended its data privacy laws to require written consent to transfer any "personal data" and to grant Russian officials the exclusive authority to determine which sovereignties may receive such data. China also strengthened its protection of "personal information" on July 27, 2011, when it amended the "Provisions on the Administration of Internet Information Services," preventing Internet service providers from collecting and using personal data without individual consent.

Far more important than the particular scope of any of the newly enacted privacy laws is what their enactments say about a growing international consensus on the cross-border transfer of electronic data. In addition to the BRICS and EU nations, Japan, Hong Kong, Argentina, Chile, South Korea, Columbia and Switzerland have data protection laws that are more restrictive than those in the U.S. Some countries have enacted blocking statutes that make it criminal to transfer protected information to the U.S. This, coupled with the fact that China, Russia and Mexico have strengthened their data privacy laws, suggests a trend toward more protection for ESI.

More international e-discovery disputes are likely

Global economic indicators predict that the U.S. will increase trade with emerging economies, including BRICS nations, in the next 10 years. As the U.S. relies more heavily on countries outside the EU to provide raw materials (e.g., Brazil and China), manufactured goods (e.g., China and Singapore), corporate call centers (e.g., India) and energy (e.g., Russia and Brazil), there is a greater potential that data critical to the resolution of a U.S. civil dispute will be housed in a country outside the EU. Because U.S. courts remain resolute in the conviction that they are authorized to compel production of foreign ESI, while much of the world seems to be bent on increased scrutiny of data requests, it's likely disputes over cross-border production of ESI will become more prevalent in the coming years.

As the U.S. increases trade with countries outside the EU and the United Kingdom, the variety and scope of data protection laws U.S. lawyers and their clients will have to contend to should increase substantially in the next decade. The EU Privacy Directive will not be the only data restriction companies will have to navigate and perhaps not even the most important. To best prepare for cross-border e-discovery disputes in EU and non-EU countries, companies should:

  • Determine whether their electronic data is stored in a jurisdiction that restricts their processing or transfer
  • Consult or retain counsel in the jurisdiction where their data or the data they would like to obtain is stored for advice on how the data should be handled

 

This article was originally published in Inside Counsel.

The Dangers of Trusting Technology to Keep Privileged Documents From Opposing Counsel

It's every litigator's fear - inadvertent disclosure of privileged documents leading to a court finding of waiver of privilege.  A recent Illinois case shows just how easy it is to waive the privilege if you do not stay on top of the technological aspects of your production, even after conducting a complete review and indentifying privileged documents.

In Thorncreek Apartments III, LLC v. Village of Park Forest, 2011 WL 3489828 (N.D. Ill. Aug. 9, 2011), the court was faced with a defense counsel who "thought" that merely marking documents as privileged in an electronic database would keep them safe from production. Unfortunately for counsel, every document that had been identified as privileged was produced to opposing counsel. To make matters worse, defense counsel did not learn of the accidental disclosure for nearly nine months of discovery. He then waited an additional four months to produce a privilege log to opposing counsel. Not surprisingly, the court held that while some of documents were privileged when originally created, defense counsel had waived privilege by his actions, or more precisely his inaction.

Here are some key points from the case all litigators should take to heart when engaging in document production:
 

1.  Attorneys must take precautions to protect electronic disclosure of privileged documents. They should never presume that merely marking documents as privileged in an electronic database will prevent their production.

The court determined that the defendants' procedures for privilege review were "completely ineffective." Although counsel "thought" marking a document as privileged in the electronic database would automatically lead to it being withheld from opposing counsel, counsel never actually checked the production to assure that this was the case. The court also noted that counsel hardly could have taken adequate safeguards against production where every single privileged document, not merely one or two, had been produced.

2.  Attorneys should produce privilege logs close to the time when a production is made. It will act as a check on whether documents have inadvertently been produced and alert opposing counsel to a document's privileged status.

The Thorncreek court weighed heavily the defendants' nearly nine-months' ignorance regarding the disclosure of privileged documents. Defense counsel failed to check in at all, on the electronic database of documents to see what documents were present and what documents opposing counsel was viewing from the production.

Defense counsel was also faulted for failing to timely produce a privilege log. Such a log would have alerted both sets of counsel to a privileged document being accidentally disclosed. Instead, defense counsel waited more than a year after production began, and a whole four months after learning of the accidental disclosure during a deposition, to provide such a log.

3.  Where inadvertent production of privileged documents has occurred, counsel must immediately take steps to rectify the error in order to protect and maintain privilege.

The court came down on defense counsel for not knowing of the inadvertent production of privileged documents for months, and then failing to act with diligence after finding out.

It may be basic, but the lesson is that there must be additional checks and balances other than simply checking off documents as privileged in an electronic database, ten steps before they are actually produced. While this hardly means that an attorney must re-check every single document marked for production or privilege a second time, there could be, for example, a search of a sample of privileged documents to ensure they are privileged; and a sample of non-privileged documents to make sure nothing privileged has snuck into the pile. Another method is to run a search for a few attorney names, and verify that the resulting hits are marked privileged.

The bottom line is that counsel should always check a production for privileged documents, monitor documents in an electronic database, and act immediately to assert privilege when an accidental production is found. 

E-Discovery: Cutting Costs with Predictive Coding

The cost of e-discovery is forcing good companies to settle bad cases—but not for long. If your litigation budget had ears, “predictive coding” would be music to them.

How it works

Predictive coding is a “technology-assisted classifying process” in which “a human reviewer codes documents the computer identifies (as responsive)—a tiny fraction of the entire collection. Then, using the results of the human review, the computer codes the remaining documents in the collection for responsiveness.” There are four phases to the predictive-coding process:

  • Phase 1: A senior lawyer chooses the responsive electronic documents based on his or her review of a sample of the electronic documents
  • Phase 2: Phase 1 is repeated with senior lawyers until the computer is sufficiently “trained” to apply their conclusions across a wide set of documents (or the whole document set)
  • Phase 3: The predictive coding software is deployed against the entire document set and will distinguish between relevant and non-relevant documents, or prioritize the documents on a scale of one to 100 (depending on the software you select)
  • Phase 4: The documents that are machine-coded as responsive are subjected to a final human quality review and produced to the opponent

How it saves your company money

Using predictive coding software replaces the once overcrowded rooms of contract attorneys who pored over millions of records and billed by the hour. Rather than hiring 15 $80-per-hour reviewers working 40 hours per week for three weeks for a total review cost of $144,000, your company could conduct the same review with three senior lawyers at $600 per hour for eight hours at a total labor cost of $9,600, saving $134,400 without the cost of using the software. Furthermore, the empirical data on predictive coding confirms “the levels of performance achieved by ... technology-assisted processes exceed those that would have been achieved by ... the law students and lawyers employed by professional document-review companies — had they conducted a manual review of the entire document collection.”

So, why isn’t anyone using predictive coding yet?

No one wants to be the guinea pig. To date, no court has evaluated (or endorsed) the use of predictive coding.

However, a forceful judicial “endorsement” has been asserted by Andrew Peck, U.S. Magistrate Judge for the Southern District of New York:

I know what you’re waiting for: You think one day a judge will deliver an opinion or a judgment which says in terms that a particular kind of technology is approved by the court. ... Perhaps you have a mental picture of the occasion: “It is the opinion of this court that the use of predictive coding is a proper and acceptable means of conducting searches under the Federal Rules of Civil Procedure. ...” Perhaps the judge will go on to praise the car which he or she drove to work, offer an endorsement of the floor polish used in the court, and give a quick puff, as it were, for his own favorite brand of cigarette. IT’S NOT GOING TO HAPPEN!

Take advantage of predictive coding now

Given that both counsel and clients risk hefty sanctions (including default or dismissal) if the predictive coding software fails to “predict” the relevance of an important document, it is wise to be cautious. Litigators, however, can and should take advantage of the cost-saving benefits of predictive coding now by involving the court and the opponent in the predictive-coding process.

1. Learn about predictive coding technology and select a vendor;

2. Seek the opponent’s agreement to use the technology after fully disclosing the risks (in writing);

3. If the opponent agrees, identify to the opponent the documents you have identified as relevant that will guide the software;

4. If the opposition does not agree, run a demonstration on a sample set to prove to the opposition the validity of the software and method;

5. If the opposition still does not agree, move the court to compel your opponent to pay for the cost of a manual review.

Predictive coding is far too enticing a cost-saving mechanism to remain in the shadows for very long. Use the above approach to introduce predictive coding into your cases, and your outside counsel will be able to get back to spending your litigation budget to win bad cases instead of settling them.
 

 

This article was originally published in Inside Counsel.

Florida Moving to Adopt Federally-Inspired E-Discovery Rules

Florida is hurdling toward the adoption of new civil procedure rules that address the discovery of electronically stored information (ESI) in the Florida state courts.

The Florida Civil Rules Electronic Discovery Sub-Committee, initially under the leadership of Lawrence Kolin and now Kevin Johnson, recommended rule changes addressing e-discovery after years of study. The full Rules Committee voted at The Bar’s Annual Meeting in June to accept the Sub-Committee's proposed rules with minor editorial changes sent the e-discovery rules to the Supreme Court on an expedited “out-of-cycle” track, which would avoid an additional two-year wait for the 2013 regular cycle rules changes. On July 29, 2011, The Bar’s Board of Governor’s accepted the recommendations, including expedited review and voted to have The Bar’s legal counsel submit the proposed rules to the Supreme Court.  After publication in The Bar News and the opportunity for comment, the Supreme Court will be able to consider the rules as early as this fall.

For the most part, the recommended rule changes track the federal 2006 rule changes with a few exceptions. The Sub-Committee’s wisdom in tracking the federal rules is important for a number of reasons.

  • First, the adoption of parallel e-discovery rules will provide Florida state courts with the abundant guidance found in federal case law. While the decisions of the federal courts interpreting the federal rules are not binding on Florida judges, federal decisions will have a dramatic persuasive impact on Florida cases. Practitioners will be able to refer to federal court case and cases in states where rules patterned on federal law have been enacted, which avoids re-inventing a substantial body of important case law.
  • Second, national corporations and businesses litigating disputes in Florida will now find consistency between federal and state court decision.
  • Third, the adoption of Florida e-discovery rules that closely track the federal rules will minimize forum shopping between federal and state courts, at least with respect to handling ESI. Soon Florida and federal courts will be aligned regarding, among other things, the principle of proportionality that has become critically important in managing electronic discovery. Litigants will no longer need to be concerned that the Florida concept of “undue burden” under Fla. R. Civ. P. 1.280(c) is less encompassing than the proportionality requirements of Fed. R. Civ. P. 26(b)(2)(B) and (C). The new Florida e-discovery rules will give Florida judges a clear directive to effectively manage the discovery of voluminous ESI that threatens to eclipse the value of any case whether or not the digital data is "reasonably accessible." Florida judges have principally resolved discovery objections on the basis of relevance: with few exceptions, if the information is “relevant” it must be produced if requested. Now, however, under the soon to be adopted Florida e- discovery rules, the sheer volume of relevant digital data relative to the “value” of a case may be a sufficient foundation to invoke e-discovery management tools such as staging, sampling and other methods that control the volume of digital data subject to preservation, search and review.

The proposed Florida e-discovery rules differ from the Federal rules in one important respect. The new proposed Florida rules will not require an early Federal Rule 26(f) type “meet and confer” conference regarding electronic discovery. Florida courts of general jurisdiction handle all sorts of matters –family, probate, landlord tenant, foreclosure—and the Sub-Committee reasoned that a mandatory Rule 26(f) conference may not be productive in all cases and could create a burden in low value cases or where routine procedures are already in place. However, what burden is it to place a call to the opposition and ask if electronic discovery will be part of the case?  Digital data will play some role in almost all cases—even the smallest—and a preliminary dialogue is the best method to avoid disputes, if not disasters, down the road. Fortunately, this “omission” is not as serious as it may seem. Circuit courts in three of Florida’s major urban areas have established “business courts” for more significant commercial cases. These courts in Miami, Orlando and Tampa have local rules already requiring early judicial conferences and meetings with counsel, and often clients, that can address e-discovery issues. See e.g. http://www.fljud13.org/JudicialDirectory/RichardANielsen/ProceduresPreferences.aspx

Additionally, in cases deemed "complex", Florida has a special rule that mandates Rule 26(f) type conferences. Fla. R.Civ. P. 1.201. And finally the Sub-Committee noted that any party in any case can make a motion and request a preliminary e-discovery conference with the Court and the opposition. In sum, the Sub-Committee wisely decided to recommend the important rule changes where agreement could be reached rather than derailing the entire process due a lack support from all Bar segments. The new Florida e-discovery rules are a significant advance that will catapult Florida in to the ranks of those states with progressive e-discovery rules.

Beyond “meet and confer” differences, litigators should also be forewarned of claims of significant differences regarding preservation in Florida and Federal courts. The idea that preservation is not mandated in Florida when litigation is reasonably anticipated derives from some Florida decisions that broadly recite, mostly in dicta, that preservation is only required when mandated by contract, statute, or a request for production. In this regard, Florida e-discovery preservation jurisprudence appears to lag behind Federal courts and other state courts. See e.g. Gayer v. Rind Line Construction & Electric, Inc., 970 So.2d, 424,426 (Fla. 4th DCA 2007); Royal Sunalliance v. Lauderdale Marine Center, 877 So.2nd 843 (Fla. 4th DCA 2004). However, reliance on this general and fact specific precedent to conclude that a duty to preserve only arises in Florida from a contract, statute (e.g. medical records), or a request for production is ill-advised. In our recently published LexisNexis® Practice Guide Florida Electronic Discovery and Evidence, my co-author, former Florida state court judge Ralph Artigliere, and I argue this view is both mistaken and dangerous. Although Florida law has been slow to address the pre-litigation triggers requiring the preservation of electronically stored information, common law preservation duties are not absent in Florida. Traditional Florida spoliation remedies are in play when a party intentionally destroys relevant information to thwart the judicial process--whether before or during litigation. Further, we believe that as Florida case law slowly develops it will adopt what the Federal case law has established: the fragile and ephemeral name of digital data and the auto-deletion features of computer devices and computer networks require affirmative efforts to halt such deletion when litigation is reasonable anticipated. Just as Florida has come into alignment with Federal rules relating to proportionality, Florida courts will also align themselves with federal precedent on preservation.

In short:  any litigator in the Sunshine State advising clients that the deletion of relevant electronically stored need not be suspended when litigation is reasonably anticipated, is inviting the proverbial e-discovery train wreck. 

Nine Points Impacting E-Discovery Costs

There was a time when state court civil disputes did not involve the risk of astronomical e-discovery costs. That time has passed. Just as e-discovery in federal courts reaches some semblance of uniformity, the fifty (very independent) states have begun to realize that discovery in the Digital Age will necessarily involve "staggering" amounts of electronically stored information (ESI).

Since 2003, 30 states have adopted rules or enacted statutes that specifically address ESI management, preservation and production in civil disputes. New York and seven other states have developed their own methods for managing e-discovery, while California (and 21 states like it) generally follows the Federal Rules of Civil Procedure. The remaining 20 states (e.g., Illinois) have yet to adopt any e-discovery rules, but most recognize "the increasing reliance on computer technology," and some explicitly (by judicial interpretation of existing discovery rules) obligate civil litigants to produce ESI as part of their state's existing discovery obligations.

Although all 50 states have somewhat different approaches to managing e-discovery, there are a few trends in how states treat e-discovery that impact costs.

Some of the important trends include:

1.   Discretionary Cost-Shifting. While the federal rules are silent on who should bear the cost of retrieving "inaccessible data," certain states (e.g., Texas) require that a judge order a party requesting inaccessible data to incur the cost of producing it. Other states (like California and Mississippi) give the judge the option to shift the cost of producing "inaccessible" ESI. Given that the retrieval and production of "inaccessible data" can easily cost hundreds of thousands of dollars, the discretion (or obligation) to shift those costs can have a significant impact on the litigation budget.
 

2.   The Meet and Confer. Some states (like New York and Delaware) have made the "meet and confer" the cornerstone of their methodology for managing e-discovery, while other states have abandoned the requirement altogether. Do not miss this opportunity to seize control of the e-discovery process. Skipping an early “meet and confer” may appear to save money and avoid the aggravation of dealing with the "unreasonable" opposition; however, more progressive literature on e-discovery suggests that the "meet and confer" actually saves costs in the long-run and helps insulate the parties against the risk of e-discovery "do-overs" and even more severe sanctions.
 

3.   Safe Harbor. Federal Rule of Civil Procedure 37(e) forbids a court from ordering sanctions against a party who has destroyed potentially relevant ESI "as a result of the routine, good-faith operation of an electronic information system." Although practitioners debate how "safe" the harbor really is in federal courts, several states have eliminated the "safe harbor" altogether. This means that litigation holds in state courts should be implemented as soon as litigation is reasonably anticipated.


4.   Sanctions. It also is important to know what activities (or failure to act) will prompt the court in your jurisdiction to levy sanctions. Counsel should not assume (especially in states that don't follow the federal rules) that state courts will levy sanctions in the same manner and for the same conduct as federal courts. This analysis will inform your discovery strategy and help insulate against the risk of state court sanctions.

 

Although there is no substitute for becoming familiar with each state's e-discovery rules before formulating an e-discovery plan, there are a few fundamental practices that will help manage e-discovery costs (and help avoid sanctions) regardless of your jurisdiction.  Savvy litigants should:

1.   Budget for e-discovery costs in every case (based on the rules of the jurisdiction where the dispute is venued) so that you (and your outside counsel) are forced to address how the state's approach to e-discovery might affect your case.


2.   Discuss e-discovery issues and attempt reach agreement about the parameters of ESI preservation and production as early in the case as practical regardless of whether your jurisdiction requires a “meet and confer.” If the state court rules do not require a “meet and confer” and the opposition refuses, ask the court to order the parties to meet and discuss e-discovery.


3.   Know the most likely circumstances where the jurisdiction has awarded sanctions in e-discovery cases.


4.   Oversee the data collection process in your cases, but try to avoid having your internal IT department collect the data.


5.   Document the steps taken to prevent the destruction of potentially relevant ESI
In additional to local counsel, good resources to check on current state court discovery rules and decisions are maintained by Kroll Ontrack.
 

This article was originally published by Steven Hunter, a Quarles & Brady partner, in Inside Counsel

Ascending to the Cloud Creates Negligible E-discovery Risk

Cloud computing platforms (a set of pooled computing resources that are powered by software and delivered over the Web) have been generating quite a bit of press in the last year. Indeed, just recently computing giant Microsoft launched its Microsoft 365 cloud computing platform, designed to rival Google’s "mega-cloud" platform, which launched in May 2010. Since the release of the first commercial cloud computing platform by Amazon in 2006, cost-conscious companies have been racing to evaluate the pros and cons of moving their computing operations to “the cloud.” According to the Booz, Allen, Hamilton technology consulting firm, “Cloud computing may yield:

Life cycle costs that are 65 percent lower than current architectures

  • Benefit-cost ratios ranging from 5.7 to nearly 25
  • Payback on investments in three to four years."

Notably absent from that cost-benefit analysis, however, is the effect cloud computing may have on the costs and risks associated with conducting electronic discovery. Those engaged in such activities may well ask the question, “Will the savings companies expect from moving their data to the cloud be absorbed by the additional costs/risks created by conducting e-discovery in the cloud?”

The short answer is no. Although there are risks associated with conducting e-discovery from the cloud, they are remote, manageable and eclipsed by the savings companies should expect from cloud computing. Some of the riskiest aspects of conducting e-discovery in the cloud are:

  • The loss/alteration of data and associated metadata
  • The potential violation of international data privacy laws by illegally disclosing data in the jurisdiction in which the cloud is located
  • The unintentional waiver of the attorney-client privilege by co-mingling data or disclosing attorney client communications to third parties
  • The failure to properly and timely implement and monitor litigation holds

Fortunately, companies can easily manage the risk of altering metadata and the risk of violating international data privacy laws by insisting the service agreement with their cloud provider:

  • State that none of the company’s data may be stored outside the United States
  • Provide a detailed mechanism for how the cloud will implement litigation holds
  • Address how metadata will be created and stored in the cloud environment

Similarly, companies can minimize the risk of waiving the attorney-client privilege by including “no waiver” language in their cloud computing service agreements and establishing security protocols to prevent the inadvertent disclosure of communications to the administrators of the cloud or any other third party.

When the technology has improved and cloud computing administrators have developed expertise at responding to e-discovery requests, companies might even enjoy e-discovery cost savings by moving their data to the cloud. “If the cloud fulfills its promise and supplants the hodgepodge of local hard drives, LAN servers, and removable storage that now house our data, the cloud will emerge as the simpler, ‘one-stop shop’ for preservation and search in electronic discovery,” Craig Ball, an expert on trends in e-discovery, predicts.

In fact, that technology already has been developed and is in use for other applications. In late 2010, Facebook (currently the largest functioning equivalent to a cloud computing environment) added to its regular user interface a one-button preservation tool for capturing user content. Now, by simply clicking the “Download Your Information” button (and providing the appropriate password), Facebook users can request a neatly packaged zip file containing all of their videos, messages, wall posts, friend lists and other profile content — it doesn’t require a professional background in information systems to comprehend how similar technology can be applied to collect corporate data stored in the cloud.

Furthermore, cloud administrators saddled with the responsibility of responding to many subpoenas or production requests on behalf of myriad clients will, in time, develop an expertise in culling, processing and producing data. In turn, cloud users will undoubtedly benefit from advances in technology as well as the experience that cloud administrators have gained in responding to e-discovery requests.

The hope is that these efficiencies will translate directly to the end-user. At the end of the day, in-house counsel should be confident that (if managed properly) the benefit of moving a company’s data to the cloud outweighs the risks and costs associated with producing data from the cloud as part of a lawsuit.

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This article was originally published by Steven Hunter, a Quarles & Brady partner, in Inside Counsel.

The Search for Search Standards: The Hunt at DESI IV

What makes an e-discovery search legitimate and defensible?

While virtually every case involves a search for relevant electronically stored information ("ESI"), there is no industry-based definition or measure of a “legally defensible” search. Reminiscent of Supreme Court Justice Potter Stewart's famous quip, some think we know a good search “when we see it,” but the simple and embarrassing truth is that we do not have an operative definition of search acceptability. The lack of any such industry standard for searching and finding ESI in a case wreaks havoc in the field and leaves it to courts to determine, on a case by case basis, whether a particular search passes muster. Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.d. 251 (D. Md. 2008).

But while judicial officers are many things, they are not search experts. United States v. O’Keefe, 537 F. Supp. 2d. 14 (D.D.C. 2008); Equity Analytics, LLC v. Lundin, 248 F.R.D. 331(D.D.C. 2008). In fact, many judges were elevated to judgeship years or even decades before ESI became prevalent, and thus lack any practical experience in searching for, processing, or producing ESI. Putting the question to the courts will therefore result (and has resulted) in disparate answers that vary from jurisdiction to jurisdiction depending both on how the search issues are presented, and on the quality and quantity of resources each side brings to the court. Do we want an approach that may lead to different search standards, say, in a federal court in Chicago versus a state court in Los Angeles?

The risk is simply too great and the issues too pressing, to allow a generation or two of common law decisions across multiple jurisdictions to be cobbled together to shape an overarching definition of a "good" search that counsel and clients can rely upon -- one that will stand up to judicial scrutiny.  That's where "ICAIL," the International Conference of Artificial Intelligence and Law, and its Discovery of Electronically Stored Information (DESI) Workshop, comes in.

Actual search practice in litigation is a chaotic cacophony of divergent practices applied with more or less vigor and attentiveness. What is the best approach for any particular case? Much litigation is still stuck on the case-specific level of discussing and testing the application of Boolean search terms. As a result, the more general and overarching issues of search tools and other technologies involved --which form a large part of whether a search methodology passes muster as a whole -- often take a back seat.

The current lack of legally defensible search standards is especially paradoxical given the tremendous strides that we are making in searching as a general rule. The public release of the Enron (and other voluminous) digital data collections has allowed for search algorithm testing and development on genuine ESI collections, and unleashed exciting new search technologies and methodologies. See.e.g. http://www.edrm.net/resources/data-sets/enron-data-set-files  We now have our terra firma of a sufficient expanse, to conduct trial and error testing to find sustainable methods of searching. Moreover, an increasingly scientific approach to legal search is dispelling intuitive “the world is flat” biases -- such as the belief that the most reliable search (the so-called “gold standard”) is human, linear review of documents. See http://jolt.richmond.edu/v17i3/article11.pdf and http://trec.nist.gov/pubs/trec18/papers/LEGAL09.OVERVIEW.pdf. A purely linear approach is an invitation to cost and quality disasters, as the court implied in Multiven, Inc. v. Cisco Systems, 2010 WL 2813618 (N.D. Cal. July 9, 2010), and harkens back to Ken Withers' admonishment to move beyond the dark ages of "proto-digital" e-discovery. See also Kenneth J. Withers, "E-Discovery in the Next Decade: Finding a Way out of Purgatory," Keynote Address at Fifth Annual Advanced E-Discovery Institute (Nov. 20, 2009) and http://ediscovery.quarles.com/2010/08/articles/case-law/because-something-must-be-done-the-dangers-of-trying-to-save-ediscovery-costs-by-treating-data-like-paper/

As our search technologies and research advances, these capabilities will need to be incorporated into the definition of a “legally defensible search” that will give comfort to counsel and client, and that will not be second-guessed in the trenches of our adversarial litigation process. Because, ironically, while we struggle for precision in our searches, today we cannot precisely define a defensible search.

This is not to say there is no guidance at all. Federal magistrate judges have provided some invaluable guidance, and The Sedona Conference® as always has provided important thought leadership on general search technologies and approaches. See generally www.thesedonaconference.org and The Sedona Conference®, Commentary on Achieving Quality in E-Discovery. EDRM has produced excellent search commentaries. http://www.edrm.net/projects/search. And e-discovery blogs such as Ralph Losey’s “E-Discovery Team,” http://e-discoveryteam.com/2011/05/30/the-information-explosion-and-a-great-article-by-grossman-and-cormack-on-legal-search and John Tredennick's "E-Discovery Search Blog," http://www.catalystsecure.com/blog, have also advanced the dialogue. However, we are far from a definition of “legally defensible search” that judges can use to assess search efforts.

Into this vast and uncharted territory, rides the Discovery of Electronically Stored Information (DESI) Workshop of ICAIL, which held its fourth meeting this month at the University of Pittsburgh. http://www.umiacs.umd.edu/~oard/desi4/. The questions posed to the Workshop by Jason Baron and the DESI organizing steering committee composed of Jason Baron, Laura Ellsworth, Dave Lewis, Debra Logan, and Doug Oard to the 150 participants (vendor representatives, academicians, and lawyers) were:

(a) whether e-discovery search is capable of standardization, and

(b) if so what models might be suitable for the standard setting task.

In short, what would a defensible search standard look like? The day was divided between excellent presentations/discussions and small break-out groups working on discrete topics. We were honored and energized by an extended videoconference visit by Federal magistrate judge Paul Grimm http://www.mdd.uscourts.gov/publications/JudgesBio/grimm.htm, who is well-known for issuing thoughtful opinions on the issue of e-discovery, who enthusiastically endorsed the committee's work and provided a penetrating critique of the impact of the lack of search standards from the perspective of the bench.

I am not the official reporter of the DESI IV meeting and the opinions here are my own, but I think it safe to say that a consensus emerged on a number of points, two in particular:

  • A cross-vendor search standard will not be a particular tool or methodology, but an institutionalized quality assurance process that is required in many industries but that that has not penetrated the legal industry generally, much less e-discovery in particular. For example, manufacturers and retailers refuse to accept supplier products and services that are not “produced” subject to ISO standards. Legal processes should not be an exception. The ISO 9001 certification standard will require quality controls, precision and recall metrics, a proper mix of automated process and human direction and iteration, sampling parameters, exception reporting, refinement, auditing, and a senior management, institutional process commitment to on-going, enhanced measureable and verifiable quality. Clients, lawyers, and courts may ultimately, and perhaps soon, require ISO certifications before accepting search results.

ICAIL’s DESI IV Workshop has launched a long overdue undertaking. There will be little justice without e-discovery and little meaningful ESI without good, defensible search in our exploding digital data ecosphere. See Baron and Losey,"E-Discovery: Did You Know? http://www.youtube.com/watch?v=bWbJWcsPp1M.  

At stake is the legitimacy and integrity of our judicial processes. In trying to pave roads through a near-barren landscape, DESI deserves our unwavering support.
 

The Litigator's Guide to E-Discovery Sanctions: Who Pays the Piper When ESI "Disappears"?

As interest in e-Discovery continues to grow, there's no question what's the driving force that grabs the headlines. Sanctions, of course.   It is the water cooler of the ESI world.  Sanctions capture clients' interest, and motivates unwitting attorneys to pay attention to the growing field that is e-discovery. And while it may be known that significant sanctions have recently been imposed for e-discovery violations, what is missing is perspective. How often are sanctions requested? When will they be imposed? How severe will the punishment be? What did the client and/or attorney do wrong?

A recent study by three King & Spalding attorneys that was published in the Duke Law Journal, attempts to provide some of this perspective. A full copy of the article can be found here. They identified 401 e-discovery cases where sanctions were sought dating back to the early 1980's and through January 1, 2010. Of those cases, sanctions were awarded in 230 cases.

How many cases are there today? Likely many more. It should be no surprise that the number of e-discovery sanction cases has been growing in recent years -- and exponentially.  As recently as 2003, there were only seven e-discovery sanction cases. In 2009? That number spiked to 111. To put this in perspective, these 111 cases outnumber the total for all of the years prior to 2005 combined, and accounted for over 25% of the all cases ever reported.

So sanctions are being sought and awarded on average in over fifty percent of the cases (401/230).  But how severe are the penalties?  Courts awarded in excess of $5 million in five of the cases identified, and in excess of $1 million in four of the cases. Courts also terminated the action, either by dismissal or default judgment, in thirty-six of the identified cases.

Note, however, that the above cases involved extreme misconduct. Of the thirty-six cases that courts terminated, thirty-four involved willful misconduct or bad faith behavior. Only two involved gross negligence, and none involved negligence. Moreover, these extreme examples are the minority. They only account for ten percent of the e-discovery sanction cases, and twenty percent of the cases where sanctions were awarded.

The study also revealed that defendants were sanctioned three times more often than plaintiffs. This makes sense because for defendants are more likely to hold ESI relevant to the lawsuit and to face broad discovery demands from plaintiffs. The most common misconduct was failure to preserve ESI followed by failure to produce and failure to produce in a timely fashion.

Judicial sanctions of counse -- whether through money or orders to attend certain legal education classes -- are also increasing, though this is still considered a drastic remedy. The study identified thirty cases where counsel was sanctioned, including seven instances in 2009 alone. The vast majority of these cases involved a pattern of misconduct as opposed to isolated incidents. The predominant sanction was an award of attorneys' fees and costs, which ranged from $500 to $500,000.

The bottom line:  sanctions for e-discovery are on the rise and they can be exorbitant. Clients and practitioners can take some solace, however, in two facts:  (a) the most severe sanctions only result from the most egregious misconduct; and (b) while sanctions may be growing, they still remain relatively small in number and infrequent.

For additional thoughts on this topic and the Duke Law Journal article, please visit the excellent article in the ABA Journal by Debra Cassens Weiss or the report from the Catalyst E-Discovery Blog.
 

Bill Hamilton's Seven Deadly Sins of the Rule 26(f) 'Meet-and-Confer' Conference

**This article was published by Bill Hamilton, a partner at Quarles & Brady and Chairman of the Association of Certified E-Discovery Specialists (ACEDS), www.aceds.org, the member organization for professionals in the private and public sectors who work in the field of e-discovery.**

 

Federal Rule of Civil Procedure 26(f) requires parties in litigation to "…confer as soon as practicable … [and to]…state the parties’ views and proposals on …any issues about disclosure or discovery of electronically stored information….."  Proper handling of these "meet and confer" sessions about electronically stored information (ESI) and e-discovery is crucial to a winning litigation strategy. Don't think of the session as a procedural formality and just go through the motions.  STOP!! Take a deep breath and think.  The Rule 26(f) conference is where you begin the management of the opposition, and sets the structure of a case's e-discovery process. Your goal is to minimize your e-discovery costs and risks and to make sure you will be able to get the data you need from the opposition.

 

Avoid the Seven Deadly Sins of the Rule 26(f) conference and you’ll be well on your way to making e-discovery work for your case.

Deadly Sin #1: Failure to Set the Agenda. Come prepared to the Rule 26(f) conference . . . and make sure your opponent is prepared. Write a letter to the opposing counsel saying what you expect to accomplish at the conference, what information you will bring to the conference, and what information you expect from the opposition. Allowing the opponent to come to the conference unprepared wastes time and money, and impedes achieving your conference goals. If the opposition shows up at the conference “empty handed,” let the opposition know that you will advise the court of any further failures. Additionally, re-schedule the conference immediately. You need to insist on a genuine, meaningful Rule 26(f) conference for the very reasons the opposition is intent on avoiding it. Don’t let them escape this opportunity for you to structure electronic discovery in a way that works best for you.

Deadly Sin # 2: Failure to Manage Preservation.  While your instincts at the beginning of litigation may be to keep information close to the vest, disclose your preservation decisions at the Rule 26(f) conference. Be prepared to explain them. You cannot preserve all client data. Unnecessary preservation takes time and money and is wasteful. For example, it is probably not necessary to preserve forensic images of laptops and desktops or Internet browsing histories. It is also unlikely that back-up media containing unimportant and cumulative data will be needed. Disclosure allows you to sleep at night. If unpreserved data suddenly becomes relevant, your initial disclosure will help you avoid or minimize judicial sanctions. Demand the same from your opponent. Their data is part of your case. Make sure it is secured.

Deadly Sin # 3: Failure to Corral E-Discovery Limit and phase e-discovery. E-discovery is typically not an "all at once" game. Most cases can only afford so much e-discovery. E-discovery is bounded by the dollar value and importance of the case. ESI volume is often staggering. Present a sensible plan to corral the important data. Only a handful of documents are likely to be used at trial. Why process and review the data of 20 company employees who might have some marginally relevant ESI when a few key players can be identified quickly? Suggest starting with these two or three key employees and building from there. Reach agreement on a flexible, rolling e-discovery plan. Include this phased plan in the scheduling order that is entered pursuant to Federal Rule of Civil Procedure 16. Be sure to disclose the locations of electronically stored information that you consider not reasonably accessible under Federal Rule of Civil Procedure 26(b) (2) (B). Be prepared to defend your claims. When the opposition declares ESI locations not reasonably accessible, put them to the test. Don’t accept generalized representations of counsel. Technology moves on. Much of what was once thought not reasonable accessible is today readily available. Demand the details, and consult an expert on ESI accessibility.

Deadly Sin #4: Failure to Set Search Expectations.  Make sure your opponent knows you will insist on search quality and demonstrable, statistically valid recall. High recall means the search is pulling most, if not all, the responsive documents. The opposition will normally be attentive to search precision and not pulling false positives, i.e. unresponsive documents. Don’t let the opposition test for precision and not test for recall. Find out how the opposition will search the data and whether the opposition will employ manual searching or automated search tools using key words and concept filters. Make sure your opponent knows that search quality is your focus. It is your job to deter sloppy, casual searching for the data you may need to win your case. Your client deserves the best possible data, not just what the other side happens to find. Be sure to meet your own search standards or you will not be able to effectively call the opposition to task. Don't settle for a "don't ask, don't tell" strategy and blind reliance on what the opposition produces.

Deadly Sin #5: Failure to Specify the Production Format. Establish the production format. You usually get only one bite at the production apple. Make sure you get the data in a format and with a load file that works for the technology you will be using. The opposition will not know how you need the data delivered unless you tell them. Don’t wait for delivery and then complain. You should reach agreement on how you want the electronically stored information from your opponent produced and how you will produce your own. Do you intend to produce data in "native" (meaning a copy of the original electronic file) or in TIFF or PDF formats with load files containing extracted searchable text? What metadata will be produced? Discuss how each side's data will be organized and delivered and what metadata will be produced. If you are using a vendor, get the vendor’s delivery specifications and provide it early to the opposition. Don’t let the opposition decide what format is reasonably useable for the case.

Deadly Sin # 6: Failure to Protect Against Privilege Waiver from Inadvertent Production. Make sure to get the entry of a court order, under Federal Rules of Evidence 502, protecting you against inadvertent disclosure of privileged documents and providing that any determination of non-waiver arising from an inadvertent production is also binding on state court proceedings. Negotiate a written protocol with the opposition as to the procedures to be followed if a privileged document is discovered to have been inadvertently produced. Mistakes happen even after rigorous - and expensive - review and double checking. Don’t think your production will always be flawless. The greater the volume of ESI, the greater the chance of mistake and error. Neither automated searches nor human reviewers are 100% perfect.

Deadly Sin # 7: Failure to Document. Don't let what you won at the Rule 26(f) conference get lost in the fog of competing - and faulty - memories. Confirm in writing all the agreements and understandings. No one will recall a year later what transpired unless you confirm it in writing. Memorialize the conference as you would a settlement agreement or a contract. This documentation is your roadmap to a successful case.

 

Avoiding these Seven Deadly Sins will help you take control of your case and manage e-discovery. Taking control means taking control of the Rule 26(f) conference and achieving your e-discovery goals, a crucial component of any winning strategy.
 

____

**Bill Hamilton will be a featured speaker at the ACEDS 2011 Annual E-Discovery Conference on March 23-25, 2011 at the Westin Diplomat in Hollywood, Florida.  For more information and to sign up for the Conference -- a chance to learn the ins and outs of e-discovery through hands-on experience, practical guidance and interactive learning from 28 experts in the field -- visit /conferencewww.aceds.org** 

A Muscular Ruling: Medical Records, ESI and Baseball

Baseball is almost the only orderly thing in a very unorderly world. If you get three strikes, even the best lawyer in the world can't get you off.       -- Bill Veeck                                   

While the law cannot come to the aid of a strikeout on the diamond, it apparently can rule on the muscles behind the bats. Baseball currently stands as not only the national pastime, but the center of a steroid abuse scandal that still reverberates through the hallowed walls of the nation's baseball stadiums and the musty courtrooms of the Ninth Circuit in California. The two venues converged when the Ninth Circuit's Court of Appeals retreated from an August 2009 e-discovery ruling against government prosecutors, in an offshoot of the Bay Area Laboratory Co-Operative (BALCO) steroid abuse scandal.

 

In the BALCO case, government agents had search warrants for the confidential medical records of 10 baseball players. As reported in an article in Crime in the Suites, that original ruling spelled out tight controls on what methods government agents could use to review and retain electronic information seized during the BALCO criminal investigation.  In the course of executing the warrants, medical records of hundreds of other players were obtained and used to obtain more search warrants. The government argued that those records came into "plain view" and thus were usable.

 

The "plain view" theory was put before the Ninth Circuit in August 2009, and a strict criteria for future searches was established. However, the Obama Administration urged the court to rehear and reverse the decision, which it did. In September 2010, a new decision was handed down in the case, United States of America v. Comprehensive Drug Testing, Inc., in which the appellate court adhered to its ruling that law enforcement cannot use materials seized in a computer search which are beyond the scope of the warrant.  However, the decision also downgraded a former five-point criteria for such searches to a non-binding concurrent opinion that is less restrictive and provides guidance in future searches of electronically stored data. It's a home run for Major League Baseball players, whose improperly seized drug-testing records must now be returned to them. 

Chief Judge Alex Kozinski wrote (emphasis added) that "the warrant application should normally include, or the issuing judicial officer should insert, a protocol for preventing agents involved in the investigation from examining or retaining any data other than that for which probable cause is shown. The procedure might involve, as in this case, a requirement that the segregation be done by specially trained computer personnel who are not involved in the investigation."

 

The decision is not binding outside the Ninth Circuit, but it will probably help other jurisdictions that confront the same issues.  It may make it easier to obtain warrants and searches for electronically stored information.  However, the players (and their allegedly artificial muscles) retain some protection of the confidentiality of their medical records.

 

To review the Ninth Circuit's opinion, click here. 

The ABCs of Electronic Storage: Archives v. Backup Tapes in the Courtroom

Now that school is in session, don’t get an education about electronic discovery the hard way by not knowing the difference between archived data and backup data, or you will find yourself banging your head on your desk . . . or being sent to the corner of the room by a court.  The key:  archiving and backup are NOT the same thing -- far from it.  Knowing the difference can cost you significant headaches, time, effort, and money, and can even impact the outcome of a case.

An easy way to compare the two methods of preservation is to consider the difference between retrieving an email that has been archived versus backed up.  Let's call it E-mail X.  If you “archive” E-mail X, you can still retrieve it easily to re-read it, move it to a folder, forward it, or otherwise use it just like the un-archived emails.  And it can be accessed from more than one computer station, meaning that someone cannot simply lose the one and only copy.  On the other hand, if you had created a “backup” of E-mail X, it would have been recorded, along with everything else that was work product that day, on a single backup tape.  There are two problems here.  First, the backup tape itself could be anywhere -- the back of a closet or a warehouse, for example.  And if that one tape got lost or was ruined in a fire, E-mail X is gone forever.  Second, even if the backup is locked in a well-secured safe, going back to actually find E-mail X would be akin to looking through a box of hundreds or even thousands of unsorted photographs for that one needle in an electronic haystack of information. 

Both ways maintain a record of the information, but which would you rather use if responding to a request?  Which would save cost, time and peace of mind? 

THE BASICS:  According to Matthew Lodge, writing in The Metropolitan Corporate Counsel,  “Active archiving…is a way of centrally managing the storage, retention and hold of information while ensuring ‘live’ (or active) access to any item. Active archives are indexed so that information can be rapidly retrieved for business, regulatory or e-discovery purposes.”    He goes on to say that “Once in the archive, an item can be controlled according to an information management policy.”  By contrast, it makes more sense to use backup tapes exclusively for the recovery of information in the event of a disaster, since using backup tapes for retrieval of information during discovery is extremely burdensome.  Such tapes are not "live" data that is currently on the system, neatly categorized and easily accessible.  Rather, picture them picking up dust in a virtual warehouse (and in some cases, actual warehouses), like the unorganized, over-stuffed filing cabinets of the pre-computer era.  The natural result:  a costly and time-consuming process.

 

THE COURTS:  The courts in Coleman v. Morgan Stanley, 2005 WL 679071 (Fla. Cir. Ct. Mar. 1, 2005), Toussie v. County of Suffolk, 2007 WL 4565160 (E.D.N.Y. Dec. 21, 2007), and Adams & Associates v. Dell Inc., 2009 U.S. Dist. LEXIS 26964 (D. Utah Mar. 27, 2009), have exposed the inefficiency of using backup tapes as a principle method for retrieving information, instead of archiving.   In Toussie, for example, the County of Suffolk failed to archive data and was required to restore backup tapes in order to provide information responsive to a discovery request.  Despite a reduction of the search request to 35 search terms, the County of Suffolk incurred costs in the range of $600,000 to $900,000.  It could have averted an overwhelming amount of this cost had it archived information. 

 

THE LESSON Take a long, hard look at how your company is storing information -- notably, whether the reliance is more on archiving or backup tapes.  Unfortunately, if a company relies too heavily on backup tapes rather than archiving, a court may have no choice but to order the expensive and time-consuming retrieval and production of backup tapes, or major portions thereof.  A cry of "too burdensome!" and "too time-consuming!" may not work to excuse production.  If this sneaky strategy could work, everyone would keep their electronic information on backup tapes in order to skirt discovery in litigation. 

 

Thus, a company that relies heavily on backup tapes for preservation purposes may be wise to subject its retention policy to an overhaul going forward.  While this may seem like a pain in both the neck and the pocketbook, the savings will multiply astronomically once litigation comes down the pike and stored information needs to be gathered and produced.  So when considering how to best prepare for possible future litigation, remember your ABCs -Archiving beats Backup in the Courtroom - and you’ll stay at the head of the class.

Google Docs Ready for (Legal) Primetime?

Today's predominant word processors are Microsoft Word and Corel WordPerfect. MS Word is also offered as a web-based application or Saas (Software-as-a-Service).  However, there is a newer type of document collaboration, where numerous people have access to the same document so that they can all contribute and monitor changes made by others.  These types of applications are becoming more common.  For example, Google has begun to offer its own Google Word Processor called "Google Docs" -- which allows users to share and collaborate on documents. 

What does it matter which type you use in your business?  Here's one comparison between the Google and Microsoft web products.  But there's much more when it comes to the battle between WORD v. GOOGLE DOCS.

Sass and Microsoft Word.  SaaS, which Word uses, is really a form of cloud computing, or internet-based computing. Applications such as a word processor is accessed via the Internet, and the resulting data created by the user (documents) is stored on servers managed by particular service providers. This form of service delivery has a siginificant advantage over "localized" computing from a cost and management standpoint.  For example:

  • By paying a SaaS provider to run applications and store documents, businesses no longer have the need to purchase/upgrade their word processing software.
  • It reduces and/or allows the redeployment of hardware (servers) used to store documents.
  • Applications can be accessed anywhere, anytime as long as the user has Internet access.
  • For remote users, an iPhone, iPad, Blackberry, or other Android-powered phones can be used to access documents, and there is no need to login to an internal network using software such as Citrix or any flavors of VDI.
  • SaaS providers typically guarantee 24/7 access due to elaborate network redunduncies.
  • Fewer or no technical staff is needed to manage software and handle storage issues.  This frees them up for other tasks.

Google DocsDepending on your perspective, Google Docs could be a blessing or a curse. Documents created by Google Docs are devoid of metadata. This means that no document scrubbing (e.g., iScrub) is needed before they're being sent to a recipient. There is no chance of inadvertently disclosing confidential information.  Additionally, numerous people can be in the document at one time, make changes, and monitor the changes others are making.  This can work wonders for collaboration.  Unfortunately, there are some down sides for Google Docs:

  • Google Docs tracks all document edits in the form of a "revision history" trail that cannot be eliminated by the user. This same trail could potentially be subpoenaed by the courts for e-discovery purposes.  Google Docs, and Gmail, stores everything. 
  • Google Docs exists as an independent product from Document Management Systems (DMS). As a result, it cannot be integrated with an in-house DMS or part of a company's overall enterprise content management (ECM) strategy.  In other words, you can't develop a record retention policy that can be followed with these documents. 
  • The document versioning method is quite different. For example, a particular MS Word document in a DMS such as iManage will present itself as "document_number.1" and a new version is saved as "document_number.2". The same document created in Google Docs will present itself as two separate entries in the "revision history". Hence, a Google Docs document would be saved as "document_name" and a new version would be saved as a separate document but renamed as "document_name_revised".  As a result, there is no easy way to move all the separate entries into a DMS as a single document with different versions.

Google Docs may be more appealing to smaller businesses that do not want to worry about internal networks and in-house DMS issues.  But large or small, whether Google Docs is a feasible solution depends on your business infrastructure, records compliance requirements, and the resources available to manage it.  Before taking the plunge, consult with Google, your legal department, and perhaps your existing e-discovery vendor on how Google handles litigation holds and document search and retrieval in e-discovery situations.

Regardless of its short-comings, Google Docs could be a solution for certain businesses that don't require a DMS and the main focus is document collaboration without overburdening the IT staff.

WI Supreme Court Continues to Debate E-Discovery Amendments

          

On July 6, 2010, the Wisconsin Supreme Court set the date for the next and final hearing regarding amendments to the state rules of civil procedure that relate to the discovery of electronically stored information. The hearing will take place on September 30, 2010 at 9:30 a.m. at the State Capitol in Madison. The Court will accept written comments from the public until August 31, 2010. 

By a 4-3 vote, the Court has already adopted amendments to Wis. Stat. §§ 802.10, 804.01, 804.08, 804.09, 804.12 and 805.07 to address e-discovery. However, the amendments are subject to revision following public comment and the hearing on September 30, 2010. The amendments will become effective January 1, 2011. 

As the 4-3 voting split indicates, the Court is not of one mind regarding the amendments. While all of the Justices agree that the rules should be amended to address e-discovery, there are three key issues regarding which the Court remains divided: 

 

(1) whether the rules should require parties to meet and confer on e-discovery at the outset;

(2) whether the rules should include a “claw-back” provision; and

(3) whether the rules should expressly provide for cost-shifting. 

 

Currently, the amendments include a mandatory meet and confer provision regarding e-discovery and do not include claw back or cost shifting provisions.  Under the circumstances, and because the Court is divided, it looks as though the public has a meaningful opportunity not only to be heard, but to affect the ultimate outcome.

In large part, the disagreement between the Justices is based on their varied understandings regarding what cases the rules are most likely to apply to, because not every case involves significant e-discovery.  The dichotomy is as follows:

  • Justices who focus on smaller, less complicated disputes tend to oppose mandatory e-discovery conferences as well as express “claw back” and cost-shifting procedures. 
  • Justices who focus on complex commercial disputes, which frequently involve extremely costly and extensive e-discovery tend to be in favor of mandatory e-discovery conferences, claw back and cost-shifting provisions. 

 Chief Justice Abrahamson has appealed to the public to focus on these particular issues when submitting written comments. As a result, it is worth considering each side of the debate.

 

Mandatory early e-discovery conferences:  Those in favor of an early, mandatory e-discovery conference argue that if the parties confer before discovery, they can reduce the ultimate cost of discovery and head off future disputes before they develop. Those opposed note that the conference is a waste of time in the majority of cases, which are typically small, less complicated disputes in which neither party will request or receive much in the way of e-discovery. Those opposed also note that there is no rule that would prevent parties in complex commercial disputes from meeting and conferring independently in the absence of a rule requiring the parties to meet.  Current vote:  five in favor of this rule, two against (5-2).

 

Claw back provisions:  Those in favor of an express claw back provision note that in cases involving voluminous e-discovery productions, it is extremely expensive and time-consuming for the producing party to review every single document and file prior to production to determine if it contains privileged information. They argue that a claw back provision is necessary to alleviate the producing parties burden by allowing a party who inadvertently produces privileged information to demand its return and prohibit the receiving party from using the privileged information. Those opposed note that an effective claw back rule is both procedural and evidentiary to the extent that it must address whether the privileged information remains privileged despite having been produced. They argue that the claw back rule is best addressed at a later time, when amendments to the rules of evidence can also be considered to avoid inconsistencies between the procedural and evidentiary provisions. Current vote:  three in favor of this rule, four against (3-4).

 

Cost-shifting:  Finally, those in favor of a provision authorizing cost shifting argue that the court should be expressly empowered to make a requesting party pay for the unduly burdensome discovery it seeks. Those opposed only disagree to the extent that they argue that the current rules of civil procedure already authorize the court to require a requesting party to pay for unduly burdensome discovery. They cite Wisconsin case law in support of their position, and note that federal cases provide persuasive authority regarding the circumstances under which cost shifting is appropriate.  Current vote:  three in favor of this rule, four against (3-4).

 

Whether the current distribution of votes will change likely depends on the volume and nature of written comments the Court receives before August 31, 2010, as well as the persuasiveness of any argument the Court hears at the public hearing on September 30, 2010. 

 

Let the arguments begin . . .

"Because Something Must Be Done": The Dangers of Trying to Save E-Discovery Costs by Treating Data Like Paper

This article was published by Wendy Akbar and Bill Hamilton.

Remember the days before the computer, the typewriter, the printing press, and even carbon paper? The days when, to copy a book, one needed to sit down and re-write it by hand? Every letter of every word of every sentence-dappled paragraph, had to be painstakingly copied one by one. With all the technology available today, no publisher would ever consider copying a book by hand rather than re-printing a copy saved on the computer. To do so would be a waste of time -- a return to the Dark Ages.

When it comes to e-discovery, unfortunately, the Dark Ages still occasionally guest stars in modern-day electronically stored information (ESI) retrieval and production. The dangers of being such an e-discovery ostrich were most recently highlighted in Multiven, Inc. v. Cisco Systems, 2010 WL 2813618 (N.D. Cal. July 9, 2010). Plaintiff Multiven, along with the two counterclaim defendants, originally elected to undertake a manual review of the full set of voluminous ESI it possessed prior to production. Sound conscientious? Not exactly. It means they turned the clock back about 15 years (in e-discovery time, akin to 150 years) and:

(1) Refused to use an outside vendor to help organize ESI information;
(2) Refused to utilize any search terms to narrow the "giant mass" of data to be reviewed;
(3) Instead used approximately five attorneys for six months to a year, to manually review every unfiltered page of "that giant mass" for responsive documents.

Why? They wanted to save on cost, particularly the expense of hiring an outside vendor to help whittle down potentially responsive information. Perhaps they adopted a manual review for other strategic reasons. (Never mind, of course, the hourly billing rate of five attorneys doing eight hours of document review five days a week for over six months, which more likely than not was more expensive than hiring a vendor to narrow the "giant mass" to a more reasonable review load for the attorneys).   The end result, however, was not exactly what was intended . . .
 

What sounded like a Great Idea to Multiven ultimately backfired. The process bogged everyone down, taking months and months. Finally, the district court became distressed when it became apparent that the delays associated with the manual review of all electronic files was causing the case to extend well beyond the boundaries of the scheduling order:

[I]t has become clear to this Court that [the plaintiff and counterdefendants] cannot complete their review and production of documents with enough time before the close of discovery to allow Cisco time to actually do anything with them. [They] so far have insisted on a review process that guarantees that they will not finish this extensive project in any reasonable amount of time.

Id. at *2. The trial court thus adopted the Report and Recommendation of Magistrate Judge Lloyd, required Multiven to utilize a vendor to assist in e-discovery, and appointed a Special Master to manage certain e-discovery disputes that potentially threatened to derail the litigation. In short, the Court concluded (id. (emphasis added)):

Because something must be done, this Court recommends that the District Court order the parties to promptly retain a third party vendor to assist with this increasingly perilous situation.

So first, Multiven was not only stuck having to hire the very vendor it had hoped to avoid, but on top of it had to pay its attorneys the hundreds of thousands it cost to conduct the months of document review that were done to avoid hiring a vendor in the first place. Instead of saving money, their gamble multiplied the cost of e-discovery in the case. Second, by this point, even Multiven was so fed up with the document review process that it was amenable to hiring a vendor before the court order even issued. Sure, part of it was because the defendant, Cisco, had offered to pay for part of the vendor cost, but Multiven had finally learned that it was in over it head, and that in trying to save money, it had wound up spending significant more cost on e-discovery.

While the Court's intervention was necessary to get the case back on track, one wonders what possessed the Multiven and its counsel to undertake a prolonged manual review, especially when Cisco appeared to be urging Multiven to employ modern technology all along. Delay was only one by-product of Multiven's decision. A second by-product was the likely extraordinary costs such manual reviews entail. The most substantial e-discovery costs arise from the attorney review process, regardless of whether that review is done internally by firm lawyers or outsourced to vendors in the United States or abroad.

One might think that a manual review is the "gold standard" and the most thorough, comprehensive way of searching. In other words, while you can place fistfuls of hay at a time into a hay-sorter to separate out those few stray needles, there's still a margin of error. You're more likely to find them if you use the time-consuming method of picking up one strand at a time and eyeballing it. Right? Oddly, no. In truth, the so-called gold standard of manual review is mythological, and the human eye can miss a lot more than a well-crafted keyword search protocol can capture. A widely-regarded study, Blair et al., Wittgenstein, 'Language and Information:  Back to the Rough Ground!' 302 (2006), found that manual review teams only found 20% of the relevant documents!  Ralph Losey and Jason Baron have also demonstrated that adding conceptual search tools to key-word searching further improves results and reduces cost. So Multiven's Dark Ages strategy not only multiplied costs and delayed the proceedings, but likely would have missed most of the relevant documents -- leading to potential sanctions and do-overs. Some cost-saving strategy!

In truth, there are very limited circumstances in which a case or production might require every e-document to be reviewed: the all-consuming, unfiltered, manual document review is dead, and for good reason. Today's staggering volume of ESI makes such a manual review both cost and time prohibitive. Utilizing the broad array of tools to cull down, de-duplicate and search data volumes is generally accepted and is even becoming mandated practice, as Multiven learned too late. While all searches are not created equal, the Text REtrieval Conference (TREC) Project -- co-sponsored by the National Institute of Standards and Technology (NIST) and U.S. Department of Defense-- has demonstrated a better search results by machines than plowing through data manually. While a search methodology utilized by a party has to be defensible, standards are slowly emerging, as documented by The Sedona Conference® in its May 2009 Commentary on Achieving Quality in the E-Discovery Process: Best Practices for Document Retention and Production. There is no reason to be stuck in the Dark Ages of linear, manual review.
 

Polly Want An Email?

 Live in such a way that you would not be ashamed to sell your parrot to the town gossip.

                                                                              -- Will Rogers

When reviewing and establishing a document retention policy for your business, it pays to pay attention to what constitutes gossip - or, as we call it, hearsay - in the electronic world.  Because sometimes, even e-hearsay can make it into the courtroom.

In a blog posted in WSJ Digits, Ethan Smith reported that thirteen record labels sued the on-line peer-to-peer music sharing program LimeWire for copyright infringement and related infractions. In May 2010, the Court faced Defendant's motion to suppress electronic evidence, such as exhibits of LimeWire's email chains, online exchanges and internet forum postings, on the grounds that it was inadmissable as hearsay.

The Court denied Defendant's motion . . .

Specifically, the Court held that:

  • A statement is not hearsay if it is offered against a party and is the party's own statement, in either an individual capacity or a representative capacity;
  • An admission made by a party's employee is admissible against the party if made during the course of the employee relationship and relates to a matter within the scope of the person's employment; and
  • Where a statement is deemed admissible as an admission by a party-opponent under Rule 801(d)(2), the surrounding statements providing essential context may also be considered.

In short, the Court ruled:

In this case, the Defendant challenged a number of exhibits containing email chains and internet forum postings that were written in whole or in part by LimeWire employees, during the course of their employment with LimeWire. The emails and posting pertained to infringement being committed by LimeWire users, and thus were related directly to matters within the scope of the employees' employment with LimeWire. The exhibits therefore constitute direct or vicarious admissions by Defendant, are therefore not hearsay, and are therefore admissible.

The Court went on to state that messages sent by third parties to defendants, were admissible to provide context for the email messages sent by defendants in response. Additionally, email chains and online exchanges were deemed admissible as non-hearsay on the ground that the messages were offered to establish defendants' knowledge and state of mind as to the activities of its software users.

The lesson here? Hearsay objections will not always work when it comes to electronic evidence -- whether of the e-mail, internet posting, social network, or other variety. 

The solution?  Train your employees to recognize that the e-cracker crumbs they leave in their wake -- their emails and internet postings -- are admissible discovery.  These items, in short, are their parrots.  Most importantly, don't wait until litigation arrives, but educate employees beforehand.  Once employees are clear as to the ramifications, you won't have to worry as much if the parrot has to make a guest appearance in the courtroom, as there won't be nearly as much gossip for him to share. 

"Say Cheese!": Wisconsin Supreme Court Pictures New E-Discovery Rules . . . TWICE.

Courts are becoming increasingly persnickety when parties fail to discuss e-discovery issues early on in the case, even to the point of imposing sanctions.  The latest railway car attached to this train of thought, can be found in The Cheese State.

Back in January, we reported on the Wisconsin Supreme Court’s public hearing and open administrative conference about the Wisconsin Judicial Council’s petition for an order amending the state rules of civil procedure to deal explicitly with the discovery of electronically stored information (ESI). Those meetings closed with the court asking for a new petition that would rely more heavily on language in the Federal Rules of Civil Procedure, incorporate commentary to the federal rules, and possibly include new substantive provisions, particularly one requiring that parties confer about e-discovery issues early in any proceeding.

The Judicial Council submitted its amended petition in March.

This amended petition responded to the Court’s requests by more closely tracking language in the Federal Rules of Civil Procedure and incorporating, within the Judicial Council’s own notes, large chunks of commentary supplied by the federal Advisory Committee on Civil Rules. The amended petition also included a new provision granting Wisconsin courts discretion to order that parties confer about various discovery problems, including the discovery of ESI.

The Court considered the Council’s amended petition at an open administrative conference on April 28 (video here) and quickly zeroed in on the Council’s new discovery conference provision. The justices voiced unanimous approval for all other provisions in the amended petition. But several justices, led by Justice Annette Ziegler, argued that the Council had not gone far enough to encourage parties to confer at an appropriately early time about e-discovery issues.

The Court ultimately voted 5-2 to adopt the Council’s amended petition but to change the discovery conference provision to require that parties always confer about the discovery of ESI -- although not about discovery issues generally -- unless excused by the court. The Court was unable to hammer out exact language to adopt during the April 28 conference, finding that it needed more time to get the drafting right. But the Court agreed to have the new rules ready for publication this fall.

The e-discovery debate, however, will not end there. The new rules will not be effective until January 2011, and the Court agreed to hold yet another hearing in the fall to receive public commentary, particularly about the discovery conference provision.  The Court may still make additional changes before those rules apply to proceedings in the Wisconsin courts. 

Other states have and will follow suit, not to mention federal courts.   So while marshalling one's ESI arsenal and assessing its contents may seem like a time-consuming task so early on in the case, it is becoming increasingly clear that this must be done.  E-discovery discussions -- which necessitate an understanding of yours or your client's ESI capabilities and contents -- need to occur early on in the case.  Courts are no longer buying excuses to the contrary.

Author of the Zubulake Opinions Decides New E-Discovery Case, Chiding Those With A "Pure Heart and Empty Head"

Federal district court judge Shira Scheindlin -- who penned five seminal opinions in the case of Zubulake v. UBS Warburg -- has weighed in again on a litigant's duty to preserve electronically stored information (“ESI”) relevant to pending or reasonably foreseeable litigation. She even titled her opinion, "Zubulake Revisited: Six Years Later."

In Pension Committee of University of Montreal Pension Plan v. Banc of American Securities, LLC 05-CIV-9016, 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010), Judge Scheindlin sanctioned thirteen plaintiff investors for their failure to preserve ESI.  Along the way, she sketched a general framework for determining how much to blame a litigant for its failure to preserve ESI and what sanctions to impose when a litigant's conduct is blameworthy.

But the opinion will be more than just a warning. If Zubulake's reception is any guide, the analytical framework laid out in Pension Committee will greatly influence judicial thinking about the discovery of ESI.  Practitioners would be wise to be familiar with its contents. 
 

Judge Scheindlin begins Pension Committee with some rough definitions, tailored to the discovery context, of three familiar classes of misconduct: negligence, gross negligence, and willfulness. She writes that negligence can result from "a pure heart and an empty head" -- for example, if a litigant acting in good faith fails to collect the records of employees who are peripherally connected to the litigation. A heart somewhat less pure (or perhaps a head more empty) can result in grossly negligent or even willful misconduct. A litigant is at least grossly negligent it fails to collect records from key players in pending or reasonably foreseeable litigation or if it destroys relevant email or certain backup tapes. 

Pension Committee then discusses the sanctions that a court may apply when a litigant wrongfully destroys, alters, or loses ESI -- and thus "spoliates" that evidence. These sanctions include requiring additional discovery, awarding a monetary remedy to the innocent party, imposing a fine on the litigant, issuing special instructions to the jury, excluding certain evidence at trial, or terminating the case with a default judgment or dismissal. A court should always elect the least punitive sanction that can remedy the harm to the innocent party and wield enough force to work as a deterrent. Terminating a case as a discovery sanction is appropriate "in only the most egregious cases, such as where a party has engaged in perjury, tampering with evidence, or intentionally destroying evidence by burning shredding, or wiping out computer hard drives." 

Pension Committee also addresses the difficult question who should bear the burden of establishing that missing or destroyed ESI was relevant to the litigation and that the innocent party has been harmed by its loss. Judge Scheindlin's answer is that the burden may shift depending on how badly the litigant responsible for losing or destroying information has behaved. A willful or grossly negligent litigant is responsible for showing that no harm fell upon the innocent party. But the innocent party must shoulder the burden of proof if the offending litigant behaved only negligently. 

In deciding the case, Judge Scheindlin rejected the defendants' claim that the plaintiffs had engaged in willful misconduct -- and turned down the defendants' request for dismissal as a sanction -- but still found that each plaintiff had been negligent or grossly negligent. All the plaintiffs had failed to timely issue a written litigation hold directing employees to preserve all relevant records and creating a mechanism for collecting the preserved records for discovery. Each grossly negligent plaintiff also had made one or more of the following mistakes: deleting or failing to preserve and collect electronic documents, failing to request documents from key players in the litigation, delegating search efforts without any management supervision, destroying backup data that might have contained the only copies of some key players' documents, and describing their discovery efforts in misleading or inaccurate ways in court submissions. 

Judge Scheindlin used a jury instruction to sanction the plaintiffs who were grossly negligent. She informed the jury that these plaintiffs had been grossly negligent in performing their discovery obligations and had lost evidence as a result. She instructed the jury that it could choose to adopt a rebuttable presumption that the lost evidence was relevant and would have favored the defendants. She also permitted the jury to consider the egregiousness of the plaintiffs' conduct when deciding whether to adopt this presumption.       

Judge Scheindlin imposed monetary sanctions on all the plaintiffs, ordering them to pay the defendants' reasonable attorney's fees and costs attributable to the discovery dispute. She also ordered two of the plaintiffs to provide further discovery if possible, noting that the goal of discovery is "to obtain evidence, not to issue sanctions."   

Pension Committee serves as a cautionary tale: Shoddy discovery efforts can result in serious consequences even when intentions are good. A complicated discovery dispute is not cheap to litigate, and the Pension Committee plaintiffs ended up paying the other side's legal fees in addition to their own. Those found grossly negligent also must now persuade a jury not to presume that any lost evidence was favorable to the defendants, even as they try to focus the jury's attention on the merits of their case. 

Digital Voicemail in E-Discovery -- or Dealing with Cerberus, the Three-Headed Dog from Hell

You have one new voice message. First message: Monday, 4:45pm --

I must have just missed you, Vice President Joe.
It's Mike van Dyke, your CEO.
Remember that complicated widget invention --
Our best-seller you copied from the Widget Convention?
The one in your job interview that you mentioned,
And stole from your last boss for withholding your pension?

Well, they've sued us for patent infringement and such,
And theft of trade secrets -- it's really too much.
So I need you to shred all the documentation:
The tech drawings you stole; design specifications.
And that memo you wrote, before everything,
Saying that they had a patent, worth copying.

And yes, it goes without saying, too, Joe --
Please immediately delete this voicemail also.

End of new messages.

A lawyer who finds a copy of this voicemail buried in the other side's electronic document production will immediately splurge on champagne and party hats. And who can blame him? But here's the question: would this message be captured in the net of responsive material, or would it slip through the cracks? The answer may depend less on the skill of document retrieval experts, and more on how your company (or client's) voicemail system works.

It's old news that voicemail systems have graduated from analog to digital. Now, while the self-contained answering machine is still around, the digital era has also ushered in various types of integrated systems. The most complex, like the famed mythological dog Cerberus guarding the gates of Hell to prevent the dead who cross the river Styx from escaping, have three heads: the company telephone system, e-mail system, and computer system. And while a message on a self-contained machine can be difficult for a company -- let's call it Hades, Inc. -- to track and easy for an individual employee to get rid of, life with Cerberus is akin to life in the underworld: there is no escape, and nowhere to hide.
 

There are four major types of digital voicemail systems, as discussed in a New York Law Journal article:

  1. The Stand-alone: Voicemail is stored only on a stand-alone voicemail server completely separate from the e-mail and computer servers.
     
  2. The Stand-alone with E-mail Notification: This is a stand-alone model with an e-mail alert that notifies users that they have received a voicemail. However, the alert says nothing substantive about the message, and the user cannot access, save or forward the message via computer or e-mail.
     
  3. The Stand-alone with E-mail Link: Here, the e-mail contains not just a notification but a "link" that allows the user to access the message by computer. While the message remains housed in the voicemail server, it is possible to copy it to the e-mail system as an audio (.WAV) file, and save or forward them as attachments.
     
  4. The Unified System -- "Cerberus": With Cerberus standing guard, users receive an e-mail containing the audio file, and can retrieve it on a computer or Blackberry-type device. The message is stored on the e-mail server (not the voicemail server), and is thus exposed to the search protocols undertaken on the company's computer and e-mail systems. A user can also easily save the message or forward it to others, creating multiple copies in different locations and making it more likely that the message will be found. Such messages are also fully subject to Hades Inc's e-mail protocols with regard to back-ups and auto-deletion, which usually call for a greater retention period than a voicemail server.

As the systems move further and further Cerberus-ward down the river Styx, a number of things happen: (1) the amount of control a company has over the deletion and dissemination of voicemails declines; (2) the number of e-crumbs left by the voicemail increases, magnifying the risk of messages such as Vice President Joe's being found and produced to the opposition; and (3) the costs of voicemail-related e-discovery increases.

On the stand-alone end of the spectrum, Hades, Inc. will retain the most control over voicemails, and the risk of eventual production is the lowest. There is only one copy, and it resides on a stand-alone server. It cannot be replicated, forwarded, saved onto a computer or disseminated in any other way. Because of that, the single copy is at the mercy of the user's decision to delete it, or Hades, Inc's auto-deletion policy that spirits messages to the underworld permanently once a specific amount of time has passed. Once deleted, that message is gone, lost in Hades without a trace.

Even if there is no auto-deletion and Vice President Joe accidentally forgets (oops!) to erase the message, the message and others like it may still very well not be found during discovery. The voicemail server is not be connected to Hades, Inc.'s computer or e-mail servers, which are searched much more extensively during litigation (courts are reluctant to order expansive searches of voicemail alone). So the only reason such messages would be found and produced is if voicemails are included in document requests and if the recipient, such as our Vice President Joe, were singled out as one of the key custodians whose collection of data and documents are being searched for responsive materials.

In the case of a stand-alone system with a simple e-mail notification, Hades, Inc. is still in the lower-risk end of the production spectrum. The difference is that a trace of the voicemail remains, deleted or not. The e-mail notification will likely be retained as part of the litigation hold, and may even be produced if it engenders a "hit" during the search protocol. The odds of this are not high, as search terms related to the case will usually not appear in a simple notification e-mail, which does not contain any information about the message's sender or content. However, even if the message is deleted, a search and production of Hades, Inc. e-mails to the opposition may still reveal that Vice President Joe received a voicemail on Monday at 4:45pm on such-and-such a date, which opposing counsel will recognize was right after the complaint was served. Naturally, they will demand production of the voicemail. And if that voicemail has been deleted, there will be hell to pay, faster than Charon can row that ferry across the river Styx. The other side will likely make trouble, such as asking for sanctions, for a more detailed search of Hades, Inc. voicemails, or for an inference at trial that the e-mail must have contained something incriminating.

The third type of system is where it begins to become much more likely that Vice President Joe's voicemail and others like it will be found and produced, or at the least that its existence and subsequent deletion will be noticed. In this case the voicemail is still stored on the voicemail server, but the e-mail notification contains a link to the message. In some cases, the link can be converted into a file that can then be saved on the Hades, Inc. computer or forwarded through e-mail accounts -- say, vpjoe@hades.underworld.com. With all this data floating around with information on the sender and content of the message, production in one form or another becomes much more likely. Even if the original message has been deleted, it has left a trail of e-crumbs -- there are that many more e-mails and copies and files floating around that either contain the message itself, or that make it evident that a message used to be there.

Which leads us to Cerberus, our three-headed monster. Yes, dogs are a man's best friend, and Cerberus may well be the user's best friend, allowing the greatest degree of access to voicemail -- through computer, Blackberry or otherwise -- and the greatest degree of malleability in terms of saving, copying and forwarding the message. With Cerberus, however, the control Hades, Inc. has over these messages is extremely low. The voicemails leave an awful lot of e-crumbs, posing the greatest risk of production in litigation. The message itself will reside in the user's e-mail inbox, may be saved to person folders or hard drives, and can be copied and sent to others ad nauseam. The e-mails will also contain more easily-searchable information than links or e-mail notifications, such as the name of the sender, the originating phone number and the contents of the message. And courts are more likely to treat voicemails in these types of systems like e-mails -- subject to greater obligations insofar as identification, preservation and production. All of these facts will not only increase the cost of e-discovery substantially, but transform the odds of Vice President Joe and his voicemail going down in flames.

What does all this mean? For a company on the defensive side such as Hades, Inc., it is important to understand just what type of voicemail system is being used. While Cerberus is certainly the most technologically-savvy and user-convenient, he is also the messiest eater, leaving far more e-crumbs in his wake than, say, stand-alone voicemail servers. Companies who use Cerberus to guard the gates of voicemail should therefore educate their employees to treat messages more carefully on both the sender and recipient sides. Keep voicemails short and general, think before speaking as to whether the message being left could cause trouble in a litigation, and do not wax poetic (literally or figuratively) about litigation or other controversial matters like our foolish Hades, Inc. CEO Mike van Dyke. Another possibility is shortening the company voicemail retention period to the extent legally permissible, so that the backlog of saved voicemails is not as daunting and not as much of a field day for the other side.

On the offensive side, parties to a litigation should ensure that litigation hold notices, and instructions for document requests, specifically request responsive and relevant voicemail messages. They should also keep an eye out for e-mails produced in discovery that reveal the existence of relevant voicemails that were not produced.  Additionally, parties believing that voicemail will play a key role in the case should request early on in discovery, information as to what type of voicemail system their opponent maintains. That way, they can be more aware of how best to ensure that Vice President Joe's voicemail will escape the watchful eye of Cerberus, cross the river Styx, and get produced.
 

Making Sense of Third-Party Discovery

It would be so nice if something made sense for a change!

- Alice, “Alice’s Adventures in Wonderland” by Lewis Carroll
 

What happens when, out of nowhere, the “other side” in a litigation matter wants electronic information during discovery not from you, but from a third-party who has worked directly with your company? Yikes! What about all that confidential information you provided them, never imagining that anyone else would have access to such electronic information? Alternatively, what if those third parties have purged their files and no longer have the requested information? Is there a duty to maintain electronic documentation which is out of your immediate control? 

The issue was addressed by United States Magistrate Judge Paul W. Grimm in his decision Goodman v. Praxair Servs., Inc., 2009 WL 1955805 (D. Md. July 7, 2009), where the Plaintiff asked that consultants to Praxair Services turn over their electronic documents in discovery.  The Plaintiff alleged that the Defendants violated their duty to preserve evidence when they failed to implement a litigation hold on the third party, resulting in a significant loss of data, including the contents of hard drives and emails relevant to the dispute at issue.

The Court found there was no duty to preserve third party evidence.  Although Fed. R. Civ. P. 34(a) does provide that documents are considered to be under a party's control when that party has “the right, authority, or practical ability to obtain the documents from a non-party to the action,”  the Court determined that Praxair did not have “the sufficient legal authority or the practical ability” to ensure the preservation of documents prepared by its third-party consultants or "any legal control" over those documents.  Accordingly, the Court held that Praxair had no duty to preserve any of the documents prepared by the third-party consultants.  Absent any duty to preserve evidence under a party’s control, there could be no finding that spoliation of evidence had occurred. 

This is a holding that makes perfectly good sense.  Alice would be delighted.

The Ringmaster or the Clown? Dealing with the E-Discovery Elephant in the Room

It is rare to find one of those shared tenets that defy all cultural, geographic, and chronological boundaries -- some fundamental underpinning of life found everywhere from the days of the caveman to the modern age. One we can all agree on, however, is that a professional's worth is and always has been commensurate with his or her experience. The senior dragon slayer of King Arthur's round table received a shinier suit of armor than the new guy. The master caveman's time and worth rose above the apprentice's. And in present day law firm culture, the value of the Associate is often dwarfed by that of the Senior Partner in the cozy corner office.

Electronic discovery, however, has turned this fundamental dynamic on its head. In most areas of the law, change is effected in small increments, opinion by opinion and statute by statute. Sage senior lawyers add to their existing knowledge by keeping up on recent developments -- no fundamental change in thinking is required. Electronic discovery, however, has forced a radical, qualitative change in almost every aspect of how discovery is conducted. Heck, an entire Federal Rule of Civil Procedure was rewritten to account for it. And the dreaded "it" -- that virtual elephant in the room -- is everywhere. As Judge Shira Scheindlin of the Southern District of New York observed in an interview, "We used to say there's e-discovery as if it was a subset of all discovery. But now there's no other discovery."

This ever-expanding nature of e-discovery is carving out a unique dynamic in the three-ring circus that is the Law Firm and the in-house legal department. In short, the problem is that the two parts of the equation needed to master e-discovery (expertise in discovery law and procedure, and expertise in electronic media) are currently located in two separate circus rings: the Ringmaster's and the Clown's.
 

  • The Ringmaster: In one outer ring you have the partner, our Ringmaster, an experienced and respected litigator so well-versed in discovery procedures and law that he or she can write interrogatories and respond to document requests while juggling oversized balls of Case Strategy, Knowledge and Experience for the client in the front row. It is true that there are Ringmasters who are also well-steeped in the art of e-discovery, who have taken the initiative to learn everything about it and keep up on the latest social networking arrivals. This article is not addressed to these Ringmasters. It is addressed to the more litigation-centric ones -- and there are many -- who view discovery as more of just another step on the way to the ultimate trial and motion practice, than a living entity in its own right. Ask such a Ringmaster for electronic search protocols and you will receive a list of terms that do not capture the depth and breadth of materials needed. Say "Twitter" and he or she will ask about your bird-watching hobby. E-mail them about Flickr and you'll get berated for spelling mistakes.
     
  • The Clown: In the other outer ring you have the young associate, our Clown, who is still on some level struggling to appreciate the distinction between general and specific objections to document requests. But at the same time, our Clown has a unique appreciation for electronic discovery that the Ringmaster often does not.  The Clown is intimately familiar with all potential bastions of electronic communication, from e-mail and iPhones to Twitter, YouTube, Flickr and Facebook. He or she appreciates from personal experience that social networking sites are interactive and amorphous circus animals, such that the only thing unchanging about them is the fact that they change several times a day. Even coming up with electronic search protocols requires a working knowledge of computer technology nowadays. Judge Scheindlin observed that, "People think they've searched and they haven't looked in the right places, haven't communicated with the right people, they haven't used best technology to go through materials they do have." Younger associates know where and how to find the most obscure information online. They cut their e-teeth on Google. They have run countless word-searches on Westlaw, learning from experience how to best craft searches to obtain the results they need. They know what types of computer applications to find documents in. Microsoft is their friend.

There is no doubt that Ringmasters are more than capable of learning the basics through articles, lectures and other means. But there is a difference between knowing that and knowing how. For Clowns -- many of whom check Facebook and Twitter before they brush their teeth in the morning -- the intricacies of electronic communication are as intuitive as the art of humor. To expect many Ringmasters to extract secondhand a deep understanding of how these new innovations work and to obtain what he wants from them, is like asking a law student to fully comprehend the Federal Rules based on a first-year Civil Procedure class. Just as it takes practicing in a real courtroom for the isolated rules to "click", immersion into electronic communication is needed to truly appreciate its fine points. Plenty of Ringmasters can and have done this. But plenty more have not. As Judge Scheindlin observed, "Those of us who are a little older, shall I say modestly or immodestly, [ ] it's too late for us. We can't really change completely. But for these young people coming out the world will change with them."

And it is. Just a couple of weeks agok, the court in Chen v. Dougherty, 2009 WL 1938961 (W.D. Wash. July 7, 2009) implied what would happen in the e-discovery circus if, in a sequel to blockbuster flick I am Legend, a genetically-engineered cure to a devastating illness had the unintended side effect of wiping out the associate population -- and since Will Smith's character was snuffed out in the first movie, there was no one to create a cure. The answer: the partner may find himself balancing the trapeze without a safety net. The Chen court refused to award the prevailing plaintiff its attorneys' fees based on its attorney's normal hourly rate, for the time the attorney spent on e-discovery. Why? The attorney, a partner with twenty years of experience, almost certainly knew general discovery law inside and out. No matter:

"[The attorney's] inhibited ability to participate meaningfully in electronic discovery tells the Court that she has novice skills in this area and cannot command the rate of experienced counsel."

There is no doubt that this was a good lawyer -- she won the case, after all. And the defendants had to pay her regular fee for all other portions of the case. But the court ordered the attorney's rate to be reduced on e-discovery matters to $200 for, as an example, "failing to offer search terms for the delivery of relevant ESI." Given that some partners in Seattle bill out at over $400 an hour, it is possible that this attorney's e-discovery fees were halved. Ouch.

This divide between Ringmasters and Clowns will only widen as social networking expands. Niche social networking sites are emerging every day -- some recent new ones include Ning, Sodahead, Bebo, Fanpop, Imeen, and Eons. The British government has published a guide to help ministers understand how to use Twitter, with the aim of extending its news and corporate messages online. And major companies are now using these resources as networking and branding tools to communicate with consumers and offer an inside look at the company in more intimate, real-time fashion than a website. As noted in a recent U.S. News article, Victoria's Secret, Southwest Airlines, Mastercard, The Gap, and Starbucks are using Twitter and Facebook. And now smaller businesses are joining the Twitter fray. As Zappo CEO Tony Hsieh recognized via Twitter update, borrowing a phrase from the eminently-quotable Winnie-the-Pooh, "You can't stay in your corner of the forest waiting for others to come to you. You've got to go to them sometimes."

The resulting interactivity -- and the brazenness with which these social corporations are lifting the veil that separates individual consumers from company executives -- is astounding. And it foretells the inevitable legal tangles to come in all types of litigation, from false advertising to employment, patent, defamation, government investigations into off-label promotion practices of pharmaceutical companies, and many others. (A defamation lawsuit was just filed in Chicago against a woman for "twittering" that her management company was tolerant of moldy apartments.) Unfortunately, most of the legal issues posed by social networking have yet to see the inside of a courtroom. The area is new, and the old rules may not apply. Social networks such as Facebook change appearance by the minute, making it difficult to track down the specific version relevant to a litigation. On the other hand "Tweleted," a site that digs up deleted Twitter Posts from Twitter's search engines, is now taking the world by storm. Even more confusing, all social networks -- even any two Facebook accounts -- are not created equal. Whether their content is fair game for e-discovery may depend on individual privacy settings: whether an owner allows general access or access only by "friends."

Think of a social network like the typically elaborate circus car rolling into the Center Ring. A Ringmaster may see a car with a capacity for four or five occupants, each of which the Ringmaster will question thoroughly. The Clown will more often see a car in which an unlimited number of occupants can fit -- every friend, every follower, every update, post, blog, tweet and related "app". He or she will know that each of these occupants should be questioned, but will not be quite sure where to go from there. It is clear that one way or another, the Ringmasters in their circus ring of discovery knowledge and experience, and the Clowns with their technology expertise, need to come together in the Center Ring. This can be done any number of ways:

  • Encourage more Ringmasters-Clown Collaboration. Partner-associate interaction in e-discovery should resemble more of a shared collaboration than a senior person doing the higher-level work and delegating the lower-level tasks to a junior. Unlike many areas of the law, a young associate may have significant input to offer on e-discovery matters -- where to look, what to look for -- even if he or she does not recognize that at first glance due to lack of in-depth knowledge about discovery procedures.
     
  • Make Clowns the Ringmasters of the Center Ring.  Choose a small number of young associates and turn them into "one-stop shopping" experts by deepening their knowledge of discovery law and process to supplement their knowledge of electronic media. Send them to CLEs. Give them 50 non-billable hours for the year to read up on discovery issues. Have them present CLEs, or write law journal articles or blog entries applying the law and process to new social media. As e-discovery options and procedure expand, these younger associates will be best poised to recognize the issues.
     
  • Sole practitioners and small firms are in the hardest position.  The Chen attorney was a sole practitioner or close to it, with little to no associate knowledge to rely on. This is typically the case in very small firms. As the role of e-discovery and social media in litigation expands, these partner-shareholders will need to master these new e-media themselves -- mere knowledge of discovery in general will not be enough, and relying on non-legal e-discovery consultants who do not know the case, and/or are not attorneys, is risky. Alternatively, they should consult with younger attorneys on a part-time basis, who can provide some focus on what to look for, where, and how.
     
  • Graduates of Clown U.  Senior associates and junior partners are not yet Ringmasters, but have left their Clown days behind. They grew up in the tail end of the Paper Age and the beginning of the E-paper Age. E-mail emerged in junior high or high school, the World Wide Web in college or law school, and Westlaw a couple of years before or after they started law school. These lawyers are almost as savvy at the technology side of e-discovery as the Clowns. The difference is that (1) they do not take it for granted, because they spent formative years without it; and (2) it is not as intuitive for them; they have to work at it a little more, particularly the newer forms of e-communication. Facebooks and Twitters are divergences that they understand and even use, but without quite the same level of immersion. Their advantage, however, is that in being less fascinated with the bell-and-whistle details they are more apt to see the 'big picture' -- to view these tools as the latest but not greatest fads, and to be able to anticipate, given their knowledge of both law and the technology, what will come next. Yes, they have things to learn both from the Clown and the Ringmaster, and they (like Ringmasters) must make an effort to keep themselves fresh when it comes to each new wave of e-communication, something that comes more naturally to Clowns. If they do, their knowledge of both outer circus rings may propel them farther and faster than Ringmasters or Clowns.

These are not the only solutions. The point is, however, that now is the time for firms and corporations to position themselves for a future in which e-discovery will play an even larger role, by recognizing that the traditional bright-line Ringmaster-Clown, partner-associate dynamic cannot function in this area. If they fail to do so, they may find themselves in the middle of the circus, hanging from the trapeze with -- like the Chen attorney --only half a safety net below.
 

Litigation Holds Can Be "Tire"some, But Hang In There!

"It ain't over 'till it's over."  Yogi Berra was talking about baseball, but the quote applies just as well to lawsuits.  It is no secret that litigation can be a very protracted process, and, when a party is subject to a litigation hold, it seems that much longer. 

One question that lawyers get with some frequency is "how long do we have to maintain this hold?"  The answer is that it depends.  One touchstone, though, is that the hold should remain in effect until all deadlines for appeal or further review have expired.

In a recent Louisiana case, Pipes v. UPS, UPS was hit with a motion for sanctions due to alleged spoliation of evidence.  One of its drivers was involved in an accident.  After the accident, UPS fired the driver and he filed a grievance protesting his termination.  He argued that the accident was not his fault, but rather was caused by a faulty tire on his delivery van.  His grievance was denied at all stages, and his firing was upheld.  Following the end of the grievance process, van maintenance records were destroyed, and the allegedly faulty tire was released to a vendor.

However, the fired driver then sued both UPS (for firing him) and his union (for inadequate representation) in federal court.  When he discovered that the maintenance records and tire were gone, he brought a motion for sanctions.  UPS's managers testified that they thought they could put the matter behind them when the grievance was decided, and so had gotten rid of the evidence.  The court ultimately declined to sanction UPS because the driver's claim lacked merit, and the tire and maintenance records were ultimately only slightly relevant to his claims.

As demonstrated by this case, it is imperative that litigation holds remain in place until appeal or review opportunities have passed.  This is a tricky issue where, as here, the avenue for appeal may be novel (one of UPS's managers testified that he had never seen a grievance decision appealed).  It is important that the person managing the hold make sure that all key players are on the same page about when the hold may be released, and that attorneys keep their clients informed about the possible avenues and timelines for appeal.

The Governator Signs Electronic Discovery Act Into Law

Apparently taking a break from figuring out where the money will come from to run California, The Governator signed into law the Electronic Discovery Act (“EDA”) on June 29th, joining the ranks of approximately twenty other states in adopting specific rules designed to manage e-discovery. Like most of these other states, California’s EDA is substantially based on the 2006 amendments to the Federal Rules of Civil Procedure.

According to Eric Sinrod, writing in The FindLaw Technology Blog, “The new California rules, which represent the culmination of several years of negotiations, appear to work a compromise between plaintiff trial attorneys who sought in depth access to electronic records and corporate defense counsel who desired safeguards for data that they believe is too burdensome and costly to produce.” 

A significant difference between the Federal Rules and the EDA is the inclusion in the EDA of a safe harbor that does not sanction a party or attorney who fails to produce electronically stored information that has been lost, damaged, altered or overwritten, if it was done as a result of the routine, good faith operation of an electronic system.


Additionally, according to Sinrod, the Act directs that “electronically stored information should be provided in the form ordinarily maintained or in a reasonably usable form; a party may object to the production of electronically stored information on burden or inaccessibility grounds, but that party bears the burden of proving that objection, and a court still may require production upon a showing of good cause by the demanding party; and the Act is applicable to third parties pursuant to subpoenas, although one can expect potentially less e-discovery burdens being placed on third parties as opposed to parties in a case.”

 

Based upon the current legislative trend, it should be anticipated that eventually all of the states will soon have similar laws in place to address the evolving issues associated with electronically stored information.

The Wi$dom of Collaborative E-Discovery (Especially in Smaller Cases)

Sometimes it seems like it all comes down to money, doesn't it?  Especially now, so many of us are looking for ways to work - and litigate - smarter, leaner, and cheaper.  Fortunately, some of the finest legal minds are hard at work on solutions to costly e-discovery conundrums, and, luckily, many valuable resources are just a (free!) mouse-click away.

So much of what we know about the outlines of E-Discovery law comes from multi-million dollar, bet-the-company litigation between corporate behemoths.  But what about the everyday family law or small business disputes that are the bread and butter for most attorneys across the country?  How do you get the information you need and protect your client from sanctions without spending more on e-discovery than the case is worth?

Sharon Nelson (who writes the clever E-Discovery Blawg "Ride the Lightning") and John Simek created this helpful podcast highlighting both the e-discovery opportunities and pitfalls for the practitioner in smaller litigation matters.  Key topics include finding a vendor for smaller cases, the dangers of using a company's own internal IT folks on e-discovery projects, how to preserve electronic evidence in a cost-effective manner, and calculating expert expenses. 

A particularly helpful pointer Nelson and Simek offer:  cooperating early and often with opposing counsel, especially in smaller cases, can get you what you need and save you money.  The Sedona Conference® agrees, and its Cooperation Proclamation invites lawyers to abandon the traditional adversarial mode and work more collaboratively during the discovery phase of litigation so that counsel and parties can devote more "time and attention (and money) . . . to litigating the merits of the dispute." 

Wow - cooperating with opposing counsel?  For many of us - whether in-house or outside counsel - that represents a huge cultural shift.  Then again, with a huge percentage of litigation costs devoted to discovery, supporters of the Proclamation argue that, far from abandoning the obligation to be zealous advocates for their clients, lawyers who take a collaborative approach to discovery issues save their clients money and can focus on the substantive legal and factual issues in dispute.  You can read more here and here

In these tough economic times, which have led companies large and small to cut their legal departments and litigation budgets, and with numerous jurisdictions starting to adopt rules encouraging cooperation and collaboration in discovery, collaborative discovery appears to be the wave of the future.  "Cooperative Discovery Bytes" has an interesting ring . . .

Google to the (E-Discovery) Rescue?

Recently I came across a doubleclick.com digital marketing piece touting Google's latest search technology, Google Search Appliance 6.0. The inviting web ad promised:  "Google brings Findability to Enterprise Search".

The list of oohs and aahs includes:

  • Dynamic Scalability to thousands, millions, even billions of documents.
  • Linking multiple search engines (federated searches) separated across departments or geographies to provide a unified set of results.
  • Syndicated searches of up to 30 million documents.
  • Fine-tuning relevancy by using latest technologies in search algorithm and search result ranking.
  • Customizable security.
  • User-centric search enhancements such as "User-Added Results" and "Query Suggestions."

While the new Google Search Appliance (GSA) represents another hopeful step towards the Holy Grail of Search, it is also a potential antidote to the current state of e-discovery -- at least from a strategic perspective.  The cost of litigation appears to be at a breaking point where containment hinges on effective ESI searches and collaborative e-discovery maneuvers.  Although Google's search technology may be primarily designed for Intra/Extranet implementations, GSA could also serve to reduce litigation costs by helping lawyers cull through exabytes of electronically stored information.

Finding an efficient means for culling through those exabytes cannot happen a moment too soon.  Electronic discovery not only increases the costs of litigation, it also diminishes the legal profession. 

According to a 2008 American Judicature Society (AJS) report, discovery abuse in civil cases presents a significant problem.  Indeed, nearly half of survey respondents (45 percent) indicate they believe that discovery is abused in every civil case.  Moreover, 71 percent agree that attorneys use discovery as a tool to force settlement.  An astounding 81 percent of AJS report survey respondents stated that their firms turn away cases when it is not cost effective to handle them, and 83 percent said that litigation costs drive cases to settle that deserve to be tried on the merits. 

The end result is that some deserving cases are not brought, and some meritless cases are settled out of court -- not because of the strength of the parties’ claims, but instead because the cost of pursuing or defending those claims fails a rational cost-benefit analysis.  According to Ralph Losey, e-discovery has become a threat to the U.S. legal system.  And that threat is pernicious and spreading.

In his e-Discovery Team blog, Losey -- himself a trial lawyer -- asserts that trial lawyers wrongly blame runaway e-discovery costs on poor rules, laws, and judges.  According to Losey, the true cause of escalating e-discovery costs is the legal profession's failure to keep pace with the dizzying advances of new technologies.

In my opinion, there's plenty of blame to go around when it comes to e-discovery and the rising cost of litigation.  Among other things, there is lack of knowledge on e-discovery issues and technologies; poor planning, selection and application of appropriate technologies to initiate effective searches; failure to collaborate and communicate effectively among counsel and IT staff; and, in particularly eggregious situations, wholesale adoption of the ostrich head-in-sand approach to e-discovery.

One need not become a techie in order to be an effective 21st Century litigator.  But knowing when and where to seek help with respect to e-discovery issues could save you and your clients a lot of headaches and heartbreaks down the road. 

5 days of searching ESI - $250,000.
4 days of filtering search results - $150,000. 
10 rounds of sparring between parties - $300,000.
Google finding the right information - Priceless.

 

E-Discovery Tweets!

Want to keep up with this cutting-edge area of the law in the most cutting-edge way?  (aside from bookmarking E-Discovery Bytes, of course.)

Gabe Acevedo of Gabe's Guide's latest effort, TweetDiscovery, is designed to capture all of the e-discovery-related "tweets" on Twitter.  The first page of TweetDiscovery highlights the tweets of a number of individuals who regularly post e-discovery-related material on Twitter.  The other pages are feeds that include any time someone uses "e-discovery" or "ediscovery" in a Twitter tweet, or any time a person uses the category (called a "#hashtag") "#ediscovery" in a tweet.  You don't even need to have a Twitter account to view the text and access the links in the feed.  It's still a work-in-progress - Gabe repeatedly reminds users that the site is "still in Beta...so Beta we're almost Delta" - but promises to be a valuable resource for those who need to stay apprised of the latest developments in the e-discovery arena.

If you are on Twitter, you can also join the E-Discovery Twibe (a Twitter group for those interested in and tweeting about e-discovery issues), and follow the e-discovery-related posts of all the group's members.  And you can follow Gabe, to get his tweets in your feed every day. 

Although the jury is definitely still out on the overall advantages of Twitter, TweetDiscovery has some distinct benefits:

  • People often tweet in real time from conferences, giving you a window into the latest commentary on e-discovery issues as it happens;
  • It's yet another tool to keep on top of e-discovery issues:  people tweet in real time about developments in the law, cases to watch, and other legal matters;
  • People also tweet in real time about emerging developments in the e-discovery business, including new ventures and products by e-discovery vendors;
  • It connects you with a network of e-discovery businesses and professionals who may become resources in the future;
  • You can follow just the e-discovery-related tweets on Twitter, without setting up a Twitter account for yourself;
  • It's just really cool!

See you in the Twibe!

Logging Email Chains to Preserve Privilege

 

Lawyers regularly receive emails from clients that contain earlier email threads that are forwarded in the course of seeking legal advice. Sometimes these earlier threads appear as attachments. Other times, they are embedded beneath the content of the most recent thread. Regardless of the form of the threads, parties involved in litigation will often seek to withhold the entire chain from the opposing party. The problem lies in determining how to properly log an email chain to preserve the privilege that attaches to the earlier email threads when they are forwarded along with a privileged email.

In a recently published opinion from the Eastern District of Pennsylvania, the court found that each individual thread must be logged. Rhoads Industries, Inc. v. Building Materials Corp. of America, 254 F.R.D. 238, 241 (E.D. Penn. 2008). If an underlying email is not logged, any privilege that otherwise might have attached to it is waived.  

If it doesn’t make immediate sense to you why someone might not want to log each individual thread, consider that the underlying emails probably have to be produced in their original, non-forwarded format. By comparing the log with the emails that have been produced, the opposing party can determine what emails the client forwarded to the lawyer.  Because the opposing party has access to these emails in their original format, the opposing party might be able to determine what the lawyer and client knew and when they knew it, including key facts in any dispute. 

 

Rhoads made many bloggers “Year in Review” lists in December and January because the court, in an earlier opinion, engaged in a lengthy analysis of the factors to be considered under Federal Rule of Evidence 502 in determining whether Rhoads took reasonable steps to prevent inadvertent disclosure and to rectify the mistake upon discovering it. In that earlier opinion, the court decided that Rhoads had waived the privilege that might otherwise apply to several documents that its attorneys had failed to log.

The court was subsequently called upon to clarify whether or not Rhoads had waived the privilege with respect to email chains, some threads of which were logged, others of which were not.  Although the court noted that the attorney-client privilege may attach to an otherwise non-privileged email when the email is forwarded along with a privileged email, the court found that Rhoads had waived the privilege for any unlogged threads. The court ordered Rhoads to produce the email chains, but authorized Rhoads to redact any threads its lawyers had previously logged.

The moral?  If one email in a chain is privileged, counsel needs to take care in considering whether all of the emails in the chain are privileged and treat them accordingly.  If they are not all treated as privileged and logged as such, counsel risks waiving the privilege as to the entire email string. 

The "Wake-Up Call" Rings Twice: Blawgs Buzzing on the Importance of Thoughtful, Collaborative Search Protocol Design

In reviewing the E-Discovery blawgs this week, a recurring theme emerged:  the pitfalls and limitations of keyword searching, and the need for collaboration and cooperation between counsel to devise effective search protocols.

A number of the E-Discovery blawgs this week featured the ABA Journal's article on improving e-discovery search protocols: "In Search of the Perfect Search."  The thought-provoking article highlights the dismaying lack of progress in finding cost-effective ways to locate and retrieve relevant documents through keyword searching. Bottom line? The way we are doing it now is wrong. Although technology has advanced at a rapid clip over the past twenty years, it has not been able to overcome "the fundamental ambiguity of language": research shows that paralegals and attorneys using simple keyword searches on a group of documents find, on average, only twenty percent of the relevant documents. That is basically the same result research found in similar studies conducted twenty years ago. 

The answer? Using a combination of search methods and tools. The Text Retrieval Conference Legal Track is working on a process and protocol to improve the results of digital searches. According to the article, however, few E-Discovery vendors have participated in the project, perhaps reluctant to have the effectiveness of their own search technologies quantified. Early recommendations from the project on how to improve on the usual keyword search include:

 

  • Working with opposing counsel to identify the best search terms;
  • Negotiating proposed Boolean search strings;
  • Using sampling to see whether the search engines are really finding the relevant documents.

Perhaps not-so-coincidentally, the April 3 post from the Electronic Discovery Blog discusses a Southern District of New York opinion that emphasizes these same points in delivering a "wake-up call" to the local bar "about the need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or 'keywords' to be used to produce emails or other electronically stored information . . . " In that case, a dispute over delays and defects in a Bronx Courthouse construction project, parties sought emails from non-party Hill, the construction management company. One party proposed searching solely with the names of the parties and the names of the project as search terms. The other parties all proposed very broad keywords that would result in production of the entire database. Non-party Hill failed to contribute any helpful suggestions. 

 

As a result, the court was forced to create a search protocol itself, without meaningful assistance from the parties. The court closed its "wake-up call" with some golden words of advice for attorneys practicing in the SDNY, which bear repeating for attorneys and businesses facing e-discovery issues across the country:

 

Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a minimum must carefully craft the appropriate keywords, with input from the ESI’s custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of “false positives.” It is time that the Bar — even those lawyers who did not come of age in the computer era — understand this.

 

Words to live by.

Free Webinar -- The E-Discovery Toolkit

Join us for the second webinar in our three part series, titled The E-Discovery Toolkit:  The Tools Your Organization Needs to Manage Information in an Electronic World, on Wednesday, April 22nd at noon CST, 1pm EST.  The webinar will run for an hour with a 30 minute question and answer period.  I will host the webinar and provide a big picture overview of the policies and procedures your organization needs to have in place to be prepared to manage, preserve and produce ESI, as well as reviewing tips for creating an effective legal hold protocol, the notice to employees, and a system for tracking holds.  Lisa Berry-Tayman of Kahn Consulting will provide an overview of a records retention policy and accompanying retention schedules and discuss the do's and don'ts of putting a policy and schedule in place.  John Collins of The Ingersoll Firm will discuss the inherent challenges in this process given the ever changing landscape of technology and review the types of technologies available to assist in various stages of the EDRM model.  To register for the webinar, click here.  Please use the email icon to the right of or below this post to email the link to other colleagues who may be interested in attending, or to post it to a list serve of interested professionals. 

Documents Kept in the . . . Irregular Course of Business?

In yet another example of why records managers should be coordinating with legal on storage of documents, the U.S. Federal Court of Claims has held that documents archived in a manner other than the regular course of business do not comply with Rule 34 of the FRCP. 

In Ak-Chin Indian Community v. United States, 85 Fed. Cl. 397 (2009), documents stored in a different filing system than they were kept prior to transfer to storage were held not to have been kept in the ordinary course of business.  In that case, the plaintiffs were suing the government and wanted to get their hands on responsive documents kept in a bunch of boxes at the American Indian Records Repository (AIRR).  The boxes were indexed using an off-the-shelf commercial software package that "captures information about the source, files, and documents in [each] box [which information is subsequently] entered into the . . . database."  Id. at 398.  People digging around the database for, say, documents responsive to discovery requests, could run queries to search for them.  Id.  So, when served with discovery requests, the government turned to its handy database, ran a few queries to find the boxes that likely contained responsive documents, and sent the database query results along to the plaintiffs.  Id. at 399.  The plaintiffs filed a motion to compel, arguing that this didn't constitute a production of responsive documents organized and labeled by category of request as required by Rule 34 of the Rules of the U.S. Court of Federal Claims.  Id. 

Under Rule 34, "[a] party must produce documents as they are kept in the ordinary course of business or must organize and label them to correspond to the categories in the request."  Id. (quoting RCFC 34(b)(2)(E)(i)).  The Ak-Chin court held that the documents at the AIRR were not maintained in the ordinary course of business under Rule 34, because prior to transfer to the facility, they were reorganized from the filing system of the local agency offices to conform with the AIRR filing system (not wholly surprising, considering that AIRR was a records repository and records are not always in tip-top shape, organizationally-speaking, when they are first unearthed from the mess that makes up most people's filing cabinets). Id.  The court explained that "documents in storage are no longer in the usual course of business, they are kept in the usual course of storage," such that the only option under Rule 34 was to label and categorize the documents.  Id. at 400.  For documents transported to storage to still be kept in the ordinary course of business, the court said, the documents must be stored in the same way they were kept.  Id. The court was also concerned that the filing system at AIRR did not permit a meaningful review if the plaintiff was dissatisfied with the production.  Id. at 401.  Because only the boxes were indexed, not the specific documents in the boxes, the government was out of luck.  Id.

Take home message? Know just how your documents are arranged in storage in relation to how they're kept before they're retired to archives, boxes, and closets or you may incur additional costs to produce them.

Watch the Data Mapping Webinar Here


The ESI Data Map - What Inside Counsel and Records Managers need to know

A recording of the March 24, 2009 encore presentation of the popular webinar The ESI Data Map -- What Inside Counsel and Records Managers Need to Know is available for viewing above.  Just click on the arrow on the lower left corner to play. We welcome your feedback on the presentation. 

 

Back by Popular Demand -- the Free Data Mapping Webinar

Over four hundred inside and outside counsel, records managers and IT professionals attended  the first of our three part series of webinars titled The ESI Data Map:  What Inside Counsel and Records Managers Need to Know.  Following the overwhelming response to the webinar, and a technical glitch that prevented us from posting it here on E-discovery Bytes, we have decided to offer an encore presentation this Tuesday, March 24th at noon CST.  Feedback from attendees and chats from the internet billed it the "best webinar I've participated in" and "full of substantive information -- no fluff."   Please forward the link to this post to other colleagues, friends or associates you may have that might be interested in attending using the email link below this post.

As in the initial broadcast, John Collins, the Vice President of Consulting for The Ingersoll Firm, will lead the webinar with commentary from yours truly, Kelly Twigger of Quarles' Records Retention and E-Discovery Team, and  Lisa Berry-Tayman of Kahn Consulting.  I will discuss the benefits of utilizing a data map in an over all strategy to prepare for preserving, collecting, reviewing and producing electronic information as a way to identify where ESI lives in an organization's infrastructure and how best to consider implementing changes to reduce costs in storage and producing ESI.   Lisa will offer insights into how a data map fits into an organization's records management program and the importance of communication among multiple groups within the organization for successful implementation of any records program.  The webinar is free.  Click here to register. 

Location, Location, Location

 King Edward VII was widely known for his infidelities, and his wife, Queen Alexandra, had to pretend to ignore his affairs and wild escapades. But she got the last word. In a famous, albeit  apocryphal, anecdote, as the King lay on his deathbed in 1910, the faithful and grieving Queen was stricken with one reassuring thought, and she supposedly turned to the King’s aide and said: "Now, at least I’ll know where he is."

  Although Queen Alexandra may have been comfortable with the King’s   whereabouts after his death, organizations cannot and should not take the same comfort with respect to their electronic files. E-files that have been deleted in accordance with an organization’s document retention policy may not be where an organization thinks those files are - gone. To the contrary, the files may be dangerously lurking in the deep dark corners of the organization’s information systems.

 

Unfortunately, when it comes to electronic documents, common document retention and deletion policies and procedures simply may not adequately protect sensitive information from falling into the hands of others. Deleting an e-mail or electronic document may not completely remove the data from a computer or computer system. Instead, the deleted information often remains there, typically on the computer's disk drive, until it is overwritten by other information.  The data can often be recovered using software tools designed for recovering deleted information.

 

When electronic information has not been completely deleted from a computer system, the information may be subject to discovery in litigation.  Kenneth L. Stein and Richard H. An, writing for The Privacy and Data Protection Legal Reporterhttp://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1167818523831, point out a number of cases where information that was thought to have been deleted from a computer system came back to haunt an organization in connection with litigation. In one such case, “forensic analysis of deleted electronic files established that the defendant had perjured himself in his sworn declarations to the court about having had no contact with a certain individual”. See YCA, LLC v. Berry, No. 03 C 3116, 2004 U.S. Dist. LEXIS 8129, at *20-24, 22 (N.D. Ill. May 6, 2004)… In another, “forensic officers were able to recover deleted computer images of child pornography, which led to a lengthy prison sentence for the defendant.” See Anderson v. McBride, No. 2:05-CV-1089, 2006 WL 2468284, at *2 (S.D. Ohio Aug. 24, 2006).

At the end of the day, a company should implement policies that both retain the documents that might be relevant to litigation, and destroys the documents and metadata that might be sensitive and private. A document retention policy that includes automatically deleting e-mails and electronic files, without also wiping the underlying data in those e-mails and files, leads to a false sense of security.

The lesson: unlike King Edward VII, who was safely interred in the chapel at Windsor Castle and hasn’t been seen since, your e-files are not dead and buried until the underlying data is wiped clean. Don’t let your metadata come back to haunt you.

Need to send a personal e-mail? Keep it at home.

As a general matter, employees of corporations are aware that e-mails sent in the course of business may be read by IT support technicians for the company.  But did you know that personal e-mails sent on the job could come back to bite you in a grand jury investigation?  Henry Nicholas wasn’t – at least not until recently.  Nicholas, the billionaire co-founder and ex-CEO of Broadcom, is painfully aware that not even the marital privilege can protect incriminating e-mails sent from a work e-mail account. 

In 2002, Dr. Nicholas sent an e-mail from his Broadcom account to his estranged wife. The e-mail contained admissions of  drug use, various misrepresentations in his capacity as CEO of Broadcom, and other misconduct.  During the grand jury investigation, nearly five years after Dr. Nicholas sent the e-mail, the government became aware of the e-mail and the stock option granting practices at Broadcom when an IT technician at Broadcom discovered the e-mail, leaked it to the press, and turned it over to the government.  After Dr. Nicholas learned that the government had a copy of the e-mail, he demanded that the government return it, arguing that it was protected by the marital privilege. The government refused, and the parties requested that the district court resolve the dispute. The district court held that the e-mail was not privileged because Dr. Nicholas had no reasonable expectation of privacy in the e-mail and because he failed to take reasonable steps to secure its confidentiality. In re Grand Jury Investigation, Order at 2 (C.D. Cal. Sept. 25, 2007). Dr. Nicholas appealed the ruling to the Ninth Circuit Court of Appeals.

The Ninth Circuit vacated the district court's order, and held that the e-mail was protected by the marital privilege, but did not require that the government return the document to Dr. Nicholas. The Ninth Circuit's order only precluded disclosure of the e-mail in the "context of the grand jury proceedings to the full extent of the marital privilege." In re Grand Jury Investigation, Order at 2, (C.D. Cal. May 20, 2008).  On June 4, 2008, the grand jury returned an indictment against Dr. Nicholas and his co-defendant for an alleged conspiracy related to stock option granting practices at Broadcom. Shortly after the indictment, the e-mail was leaked to the Orange County Register by an IT technician at Broadcom. The newspaper ran a story with damaging excerpts from the e-mail. 

In U.S. v. Nicholas, __F.Supp.2d__, 2008 WL 5546721 (C.D.Cal. Dec. 29, 2008), Dr. Nicholas moved to preclude the government from disclosing the contents of the email to his co-defendant and from using the privileged email for cross-examination or impeachment of Dr. Nicholas should he testify at trial. The district court denied his motion, and held that the email (1) may be used at trial; (2) must be disclosed to the co-defendant; and (3) may be used for cross-examination and impeachment purposes at trial.  

The message? Work e-mail accounts should be used for work purposes. Personal e-mails – even those that are protected by a privilege - can have serious implications down the road.

Free Data Mapping Webinar -- March 11, 2009

Join us on Wednesday, March 11, 2009, for the first of a series of three webinars designed to offer practical advice to organizations attempting to get a handle on their ESI.  The first webinar in the series, titled The ESI Data Map:  What Inside Counsel and Records Managers Need to Know, will run for one hour and break down the benefits of creating a data map of your organization's IT infrastructure.  John Collins, the Vice President of Consulting for The Ingersoll Firm, will lead the webinar with commentary from yours truly, Kelly Twigger of Quarles' Records Retention and E-Discovery Team, and  Lisa Berry-Tayman of Kahn Consulting.  I will discuss the benefits of utilizing a data map in an over all strategy to prepare for preserving, collecting, reviewing and producing electronic information as a way to identify where ESI lives in an organization's infrastructure and how best to consider implementing changes to reduce costs in storage and producing ESI.   Lisa will offer insights into how a data map fits into an organization's records management program and the importance of communication among multiple groups within the organization for successful implementation of any records program.  The webinar is free.  Click here to register. 

A Doll's House of Cards: Wanton Laptop Destruction Leads to Sanctions

What happens when Nineteenth Century dolls meet Twenty-First Century litigation? Sometimes - sanctions! Kvitka v. The Puffin Co, LLC, 2009 U.S. Dist. LEXIS 11214 (M.D. Pa. Feb. 13, 2009) reminds us that the failure to preserve relevant ESI can mean disaster in any litigation. Although few of us would fail to recognize the red flags posed by Ms. Kvitka's behavior in this case, it bears repeating that even the inadvertent failure to preserve ESI can fatally compromise an otherwise-valid claim or defense, even in a doll-sized case.

Nancy Kvitka had advertised her antique bisque-headed dolls in the magazine Antique Doll Collectors, published by Puffin Company, LLC, since the magazine's first issue in 1998.  In August 2005, the magazine notified Ms. Kvitka that it would no longer publish her advertisements because of a large number of complaints about her business practices, including her disparagement of other advertisers and misleading advertisements.

 

Upset, Ms. Kvitka sent a letter back, intimating that forged or altered emails had led to the dispute. When Ms. Kvitka threatened litigation, Defendants notified Ms. Kvitka that Puffin had a file containing several emails written by Ms. Kvitka disparaging its other clients. Defendants' counsel also sent a letter to counsel for Ms. Kvitka reminding them that Ms. Kvitka's computer - and, in particular, the hard drive and the email messages contained there - needed to be preserved as potential evidence in the threatened litigation. "As you know," the letter warned, "emails can be deleted, but they cannot be erased."

 

Ms. Kvitka filed suit in Pennsylvania state court in January of 2006. She later claimed that, shortly after filing the state court litigation, she began having problems with the laptop she presumably used to send the offending emails. The laptop was "doing wonky things, ridiculous things," she said, and "it was difficult to receive emails, it was difficult to send emails..."  Nonetheless, after she ordered a new laptop, she successfully received email confirmation of that order on the old laptop, and forwarded that email confirmation to her computer technician on that old laptop. Hmmm.

 

Once her computer technician set up the new laptop, Ms. Kvitka THREW THE OLD LAPTOP IN THE TRASH.   (I guess she couldn't pull a Torvald and burn it?)  Mere days later, the court inquired about the status of the original emails Ms. Kvitka supposedly sent from the old laptop. Ms. Kvitka failed to inform the court of the destruction of the old laptop, and instead abruptly terminated the state court litigation and refiled her claims in federal court.

 

Ms. Kvitka successfully concealed the fate of her old laptop until January 2008, when Defendants moved for an order of inspection of her new laptop. She then claimed that, although she had not deliberately transferred any data between laptops, "some" emails had mysteriously made their way from the old laptop to the new laptop, while others had just as mysteriously disappeared forever.

  

Although such magical things may happen in dolly-land, they don't happen in the real world of ESI, and the court wasn't buying it either. Finding that Ms. Kvitka had acted in bad faith and "with the greatest degree of fault" in destroying her old laptop, the court imposed sanctions for the intentional spoliation of evidence, including dismissal of Ms. Kvitka's claims and an adverse inference instruction on Defendants' cross-claims.

 

Naturally - and much like your dear blogger - the court couldn't resist quoting Ibsen. Noting with dismay Ms. Kvitka's many implausible attempts to conceal her malfeasance, the court counseled her that "[m]any a man can save himself, if he admits he's done wrong and takes his punishment." (I was hoping for "it would be the greatest miracle of all if you avoided sanctions here, lady.")

Digital Medical Records: The Cure for What Ails?

The debates concerning President Obama’s plan to computerize medical records within 5 years have tended to focus on a few key issues. Those in favor of the plan suggest that it will create jobs, improve treatment, reduce errors, and reduce costs. Those opposed argue that it will be too costly and burdensome to implement and that it will be compromise the security of patients’ private information.  But what about the effect on e-discovery?

As Craig Ball notes on Law Technology News’ EDD Update blog, "medical records are evidence." They are often sought and produced by parties to all kinds of lawsuits, including cases involving malpractice, personal injury, insurance disputes, employment law issues and disability claims. Because medical records are evidence, digital medical records will be subject to the rules and procedures regarding electronic discovery.

If you don’t immediately catch the significance of the proposed change in terms of litigation expenses consider this: Assuming you knew what you were looking for, how long would it take you to read several boxes full of your doctor’s hand-written notes written on whatever form your doctor happened to be using at the time? Compare that to the amount of time it would take you to run a keyword search of a single field (e.g. “Prescriptions”) of several uniform digital forms. If you were billed for the time spent running the searches, for which would you rather pay?

 

In his post, Mr. Ball, a computer forensic expert and e-discovery consultant, correctly points out that currently, the fees associated with collecting, reviewing, cataloging and labeling hard-copy medical records can often represent a significant litigation expense. In part, the fees are high because the records are often incomplete, irregular and not readily-accessible. Mr. Ball sees the change to computerized records as an opportunity to fix these problems. He pleads with the Administration to adopt policies and procedures that require complete, uniform, readily-available records. 

Admittedly, electronic discovery is not cheap. And in the hypothetical suggested above, you would likely have to pay a vendor to process the digital forms or obtain software to run the proposed search. But, if computerized medical records are the wave of the future, as an associate who spends at least one day per week reviewing documents, I sincerely hope Mr. Ball gets what he’s asking for: a considered response to the e-discovery issues concerning digital medical records.

Big Trouble in the Big Easy

Hurricane Katrina was the storm of the century down in the Ninth Ward, but in downtown New Orleans, a different kind of storm is brewing. Just in time for the February 24th Mardi Gras celebration, the party in City Hall has come to an abrupt halt, and the Krewe of Nagin has brought Trouble to River City. 

The city’s records retention policy and state public records law requires that all email and public records must be preserved. In fact, under the "enforcement" section of the Nagin administration's recommendations for preserving e-mail, the city's technology office suggested that "any employee found to have violated this policy might be subject to disciplinary action, up to and including termination of employment." Moreover, violations of the state law requiring the emails to be kept for three years is punishable by as long as five years in prison and fines up to $5,000.

Can you say “Uh-oh?” On February 19, 2009, Frank Donze reported in the New Orleans Times-Picayune, http://www.nola.com/news/index.ssf/2009/02/email_deletions_violate_nagins.html, that the Mayor’s office has disregarded its own policy, by deleting six months of the Mayor’s own emails, totaling over 1,500. The Nagin administration's only comment came from the city attorney, Penya Moses-Fields, who blamed the destruction of e-mail on "server storage and capacity problems, which have temporarily limited the city's capabilities to retain employee e-mails for any extended period of time."

Huh? Can’t Mayor Nagin or someone on his staff simply purchase a flash drive? A former city official, Tommy Milliner, compared the Nagin administration's assertion that lack of space is the reason for the deletions to saying, "you have files and then you leave them out in the rain because you think you can't afford a storage room to put them in." Milliner wasn’t the only one scratching his head; local technology and legal professionals were also puzzled by the argument that limited storage space was the underlying issue.

"Lack of storage is an easily solvable problem," said Stephen Segari, a senior developer at Carrollton Technology Partners, a New Orleans technology firm. "It's not an issue of money or time. If you say you don't have space, it's an excuse, not a reason." He also said that for approximately $100, he could install a 1-terabyte hard drive that is capable of storing more than 107 million typical e-mail messages. Similarly, Loyola professor Dane Ciolino said, "This mayor has often touted his administration as being very tech-savvy…and yet, what has happened in this case is inexcusable. The basic, fundamental thing you do is to make sure your data is secure and backed up."

The moral of the story is that data storage is cheap and easy. Make sure that your storage solution is adequate for all corporate records, including email.  Otherwise, you could face a Katrina sized flood of trouble when your records are examined more closely than a strand of mardi gras beads on Bourbon Street.

 

Keep Your Documents Close and Your Flash Drives Closer

In 1969, when Mario Puzo published his novel “The Godfather,” his line “A lawyer with his briefcase can steal more than a hundred men with guns” became highly quoted and recognized because of the innate truth it contained: it’s easier to rob a company through information than through violence.

He could not have imagined that, just forty years later, enough information to take over, bring down, or steal from a company could be contained on a device the size of a pack of gum. Flash drives have made it possible for corporate espionage to reach new heights, and for any disgruntled employee - from the receptionist to the president of the company - to succumb to temptation, download and walk away with the company’s data in a format so small that it can be hung on a keychain. If not accounted for in a document retention policy, flash drives present a significant risk of comprising the integrity and negating the purpose of a document retention plan. 

In a posting called “Deter the Use of Flash Drives to Avoid Corporate Espionage” by James Koopman on the DCIG website, Koopman says,

The portability and high capacity of flash drives is creating headaches for many companies. The Net is swarming with stories of the ill-use, illegal activities, and security concerns as more and more of these devices are lost and stolen or used to steal sensitive information.

The site links to reports on the theft or loss of flash drives containing information as diverse as military secrets, patient data, and confidential child welfare cases, all because the drives are convenient, easy to use, take up no space, are inexpensive and easily obtainable in any electronics store.

 

What all this means to legal departments, of course, is that flash drives have to be accounted for when complying with record retention policies, and in planning electronic document production for litigation purposes. In some environments - the Pentagon being a notable example ("Pentagon Bans Flash Drives"), flash drives have been outlawed entirely due to security concerns.  

But even if national security isn’t your bailiwick, record retention policies should take into account information stored on flash drives and all other e-document locations, as noted by Robert Miller, in The Why and How of Document Retention Programs,” e-files can be stored using an array of portable media such as microfilm, flash drives, CDs and DVDs; or on devices such as Blackberries, Palm Pilots, laptops or even iPods. Additionally, files can be housed on systems such as workstations, servers, corporate e-mail systems, shared network drives, or even the company’s voicemail system.  Clearly, the chore of locating and identifying all discoverable documents is a lot more complicated now than when they existed solely in a metal file cabinet!

 

It does not take a “stab” in the dark to create a sound document retention policy because specific document retention periods are set forth in several sources of law which include the Sarbanes-Oxley Act, the Federal Rules of Civil Procedure, and other federal and state statutes. You can minimize the risk of unknowingly having a “smoking gun” document act as a “silencer” at a time when you least expect it by ensuring that your company has developed a document retention policy that covers the retention and disposition of physical records and all sources of electronic records. By doing so, you’ll certainly sleep easier - and you won’t wake up to a horse’s head in your bed.

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.

Quite instructive are Canon's and Keithley's examples
Of "lackadaisical attitude" of defendants. As samples:
Do not find that hard drive behind the client's home door,
When discovery has been ongoing for a year or for more.

Do not stumble on computer reports you said "did not exist"
In an e-folder marked "Reports" that you for some reason missed.
And periodically remind clients and their IT personnel
Of the need to preserve the source code that was written on that Dell.

When you don't produce e-mails, the court said in Peskoff
Explain your search method and why, at production, you scoffed.
But if you contributed to information deletion or loss
And the court orders recovery, you won't get your costs!

Do not say you've e-searched when it's just a tall tale:
This was sanctioned under Rule 26 in R&R Sails.
There were costs sanctions also in Ajaxo, among a larger plethora.
And sanction of termination in Arteria and also Pandora.

In Keithley sanctions were imposed even on a party pro se
And in Schwarzenegger for "foot dragging" and a "litany of delays."
But take heed, warned O'Keefe -- don't request termination on whim.
Do not "strike at a king" unless you're sure you'll "kill him."

O'Keefe (plus Equity, Victor) gave lawyers heart attacks.
For saying that search term effectiveness is for experts to crack;
And that if lawyers pick and evaluate the key words instead
They are moving toward places "where angels fear to tread."

The courts warned that when using a method of searching
Learn first of its weaknesses through prior researching.
This was why D'Onofrio rejected what both experts said
And created a brand new search protocol method instead.

Rule 502 on preventing waiver through "reasonable steps"
Saw decisions pronouncing judgment on various missteps.
Alcon acknowledged that the Rule's very recent debut
Was designed to avoid "expensive, painstaking review."

Despite this pronouncement, some courts have cried "waived"
As to attempts made in hindsight to have privilege saved.
Rhoads found possible waiver for documents mistakenly produced
If they were not in the privilege log – there could be no excuse.

And failure to take measures that could prevent waiver
Like claw-back agreements, or Sedona-type saviors
Led to Victor’s conclusion, which uncommonly held
That the attorney-based privilege at issue was quelled.

Moving on, Mancia addressed the Rule 26 obligation
To meet early on regarding e-preservation,
Proclaiming "adversarial conduct" in e-discovery condemned
As a "burden to the American judicial system."

Some courts dove in early to prevent such discord,
Ordering forensic exams to preserve evidentiary records.
To conserve ephemeral info in Xpel, it was fair;
And when defendants were evading service, it was ordered in Allcare.

Other examples included when a party was unable
or unwilling (in Canon) to preserve/produce on the table.
Just remember: as emphasized in Sterle and Square D
Do not interfere with a court-ordered forensic decree.

Rodman, Reinhard and Younessi addressed nonparty subpoenas
And the protection of confidential, trade secret arenas.
Where nonparties are concerned and offer up much resistance
In-house searches are fine, or neutral expert assistance.

The debates continue on metadata versus non-native tracks
And Aquilar labeled metadata as being "the new black."
That court ordered re-production of non-natives with meta
Though the recipient was required to pay costs, as pro rata.

But not all courts required conversion to a metadata mode.
Extra burden led D'Onofrio to an "only if necessary" ode.
And Autotech said doc requests must actually require "native" --
You can't ask for it in hindsight by getting creative.

Yet if e-documents already exist in original native form
And the requests do not contain any language that informs,
White condemned the conversion to non-native in litigation
Since this is done just to increase the opponent's frustration.

Finally, social networks are making an appearance in law
And becoming a most popular e-discovery draw.
The field is wide open on the extent to which these
Are discoverable and admissible, or cannot be seized.

Flagg required defendants to give ISPs consent
And to produce ISP-retrieved records of texts that it sent.
And in Australia a court made clients even more nervous
By allowing Facebook to be used as a method of service!

We hope you've enjoyed this short "Year in Review"
And that all of this knowledge is useful to you.
We await more developments in two thousand and nine;
And wonder whether and where courts will draw any lines.

 

**For a complete list of the cases discussed above, please contact the author.
 

"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.

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!

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.  

European nations, having experienced first-hand the horrors related to invasions of privacy and release of personal information in World War II, are more protective of individual privacy than the United States to begin with. To compound matters, United States discovery obligations are more demanding -- by far -- than those in virtually every other jurisdiction in the world.  In response, foreign nations have scrambled to protect their citizens' privacy by placing stringent legislative restrictions on the transmission of electronic data.  French privacy “blocking statutes" (as observed by numerous courts) were designed solely for "frustrating the jurisdiction of the United States" and "provid[ing foreigners] with tactical weapons and bargaining chips" in U.S. courts.  Other countries have enacted similar legislation. 

The resulting differences between U.S. and non-U.S. discovery limits are considerable. For example, when a domestic corporation is required to submit to discovery obligations within the United States, e-mails sent to and received by that corporation's employees can be fair game. But under the European Union Privacy Directive, the privacy of employees is sacred, and electronic transmission of information across international borders can be prohibited without the express consent of the subject of the communication. Because the subordinate nature of the employer-employee relationship may render any such consent inherently coerced, it can be impossible to obtain the required consent of an E.U. corporation's employees in order to produce company e-mails and documents. While the U.S. enjoys a "safe harbor" of sorts with the E.U., this is not a fail-safe solution. The Directive, which has been adopted by numerous countries, is not the only impediment. Recently, China considered similar legislation. At times, U.S. e-discovery has also been threatened by privacy and secrecy laws in Japan, France, Switzerland, Belgium, Germany and Spain.

Surprisingly, there are few court decisions on overseas e-discovery. As a general rule, courts consider a variety of factors in weighing U.S. discovery requests against the stringent privacy requirements of foreign nations. These include: (1) the importance of the documents to the litigation; (2) the respective interests of the United States and the foreign national where the information is located; (3) the degree of specificity in the request; (4) whether the information originated in the United States; (5) the availability of alternate means to obtain the information; (6) the hardship of the foreign party or witness in complying with the discovery requests; and (7) the good faith of the foreign party or witness resisting discovery.

Going forward, corporations and their attorneys should be aware that even an in-depth knowledge of U.S. e-discovery rules is often not enough when requesting e-documents and information from overseas.  As international e-discovery gains traction, a key issue is when and whether the interest of a United States court or litigant is important enough to override the very real foreign state interest presented by foreign privacy legislation.  Courts will have to continue to be mindful of the tension between broad U.S. discovery rules and the restrictive privacy laws of foreign nations.

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.

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.

The International Institute for Conflict Prevention and Resolution

The arbitration committee for the International Institute for Conflict Prevention and Resolution has proposed guidelines for preventing overzealous discovery in arbitral proceedings. Section 1(a) of the protocol reads: "[a]rbitration is not for the litigator who will 'leave no stone unturned…' [Z]ealous advocacy must be tempered by an appreciation for the need for speed and efficiency… [D]isclosure should be granted only as to those items that are relevant and materials for which a party has a substantial, demonstrable need." Id. The guidelines state that the disclosure of electronic documents shall follow the general principles of narrow focus and balancing cost, burden and accessibility with the need for disclosure. "Production of e-materials from a wide range of users or custodians, which is both costly and burdensome, should not be permitted without a showing of extraordinary need." Id. 

 

The guidelines also contain a list of various "levels" of disclosure from which the parties may select. Mr. Aldrich summarizes the levels or "modes" of disclosure succinctly when he states:

"Mode A, the narrowest scope, provides for no prehearing disclosure other than copies of printouts of e-documents to be presented in support of each party's case. Mode B provides that each side produce e-documents maintained by an agreed limited number of designated custodians, that the disclosure be limited to e-documents created from the date of signing the arbitration agreement to the date of filing the request for arbitration, and that production be limited to e-documents from primary storage facilities. In other words, no documents from backup servers, backup tapes, cell phones, personal digital assistants or voicemails will be produced. And no information obtained through forensic methods will be admitted in evidence." Id.

"Mode C provides for a larger number of specified custodians and a wider time period than Mode B, and also provides that the parties may agree to allow documents obtained through forensic methods to be admitted. Finally, Mode D provides for disclosure of electronic information regarding nonprivileged matters relevant to any party's claim or defense, subject to limitations of reasonableness, duplicativeness and undue burden. It is a broad level of disclosure similar to that required or permitted under FRCP Rule 26." Id. 

 

The Chartered Institute of Arbitrators

 

The article also discusses the Chartered Institute Protocol for E-Disclosure in Arbitration, which was put into effect in October 2008. See Chartered Institute Protocol for E-Disclosure. The purpose of the Protocol is "(1) to achieve early consideration of disclosure of documents in electronic form ('e-disclosure') in those cases where early consideration is necessary and appropriate for the avoidance of unnecessary cost and delay; (2) to focus the parties and the tribunal on e-disclosure issues for consideration, including the scope and conduct of e-disclosure (if any); and (3) to address e-disclosure issues by allowing the parties to adopt this protocol as part of their agreement to arbitrate a potential or existing dispute." Id. The Protocol delineates what is necessary for "early consideration;" the necessary contents of a request for disclosure of electronic documents; how electronic documents are to be produced; and the procedure and allocation of costs associated with electronic disclosure of documents. Id. 

 

International Centre for Dispute Resolution

 

Mr. Aldrich also discusses the rules for the exchange of information promulgated by the ICDR, the international arm of the American Arbitration Association. See ICDR Guidelines for Arbitrator Concerning Exchanges of Information. The Guidelines provide that "while arbitration must be a fair process, care must also be taken to prevent the importation of procedural measures and devices from different court systems, which may be considered conducive to fairness within those systems, but which are not appropriate to the conduct of arbitrations in an international context and which are inconsistent with an alternative form of dispute resolution that is simpler, less expensive, and more expeditious." Id. Under the Guidelines, the only documents to be exchanged are those on which a party relies. The Guidelines specifically address electronic documents, and state:

 

"When documents to be exchanged are in electronic form, the party in possession of such documents may make them available in the form (which may be paper copies) most convenient and economical for it, unless the tribunal determines, on application and for good cause, that there is a compelling need for access to the documents in a different form. Requests for documents maintained in an electronic form should be narrowly focused and structured to make searching for them as economical as possible. The Tribunal may direct testing or other means of focusing and limiting any search." Id. 

 

Conclusion

 

While it is obvious that some arbitral institutions are taking steps to regulate discovery in arbitration proceedings, others lag behind. Even with these protocols, it is up to the parties and the arbitrators to enforce them, "stem the tide of runaway e-discovery in arbitration" and preserve the benefits associated with alternative dispute resolution. For a full discussion of these issues, click here to read "Arbitration's E-Discovery Conundrum" by Thomas J. Aldrich.

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.
  • The effectiveness of electronic search terms and methods may be a growing area for expert testimony in both civil and criminal cases, per United States v. O'Keefe, 2008 WL 449729 (D.D.C. Feb. 18, 2008).  Applying the civil e-discovery rules to a criminal prosecution, Magistrate Judge John M. Facciola ordered the parties to collaborate to reach an agreement on production after the co-defendant filed a motion to compel claiming the government failed to meet its discovery obligations.  Judge Facciola further suggested that any judicial review of search methods may demand the services of an expert witness, observing that lawyers and judges who attempt to determine whether search terms are effective venture "where angels fear to tread."
  • Another Judge Facciola decision makes Kroll's top-five list:  Peskoff v. Faber, 2008 WL 2649506 (D.D.C. July 7, 2008).  Peskoff involved an ongoing discovery dispute involving Faber's failure to produce certain emails without explaining why they were not produced or what efforts he had undertaken to locate them.  Finding that Faber's search had been inadequate, the court orderd the parties to seek bids from forensic computer technicians to determine whether the cost of searching for, restoring, and converting the emails from Faber's computers was justified.  Since the court found that defendant's inadequate search efforts, failure to preserve ESI, and overall unwillingness to take "discovery obligations seriously" had caused the need for forensic examination, the court refused to shift costs.
  • Last, but certainly not least, my personal favorite e-discovery cautionary tale of 2008 goes to Keithley v. Homestore.com, Inc., 2008 WL 3833384 (N.D.Cal. Aug. 12, 2008).  A "lackidasical attitude" towards e-discovery doesn't pay, as the defendant in patent infringement litigation learned when the court awarded plaintiffs their attorney fees, expert witness fees and costs that could total over $1 million for re-doing tasks made necessary by defendants’ misconduct and ordered a mandatory adverse inference jury instruction against defendants.  Why?  A litany of e-discovery misconduct that the court described as "among the most egregious this court has ever seen," including:  
    • a defendant employee who "suddenly remembered" after well over a year of discovery demands, court orders and sanctions hearings that he had stored a crashed hard drive that contained some of the source code sought at his home;
    • computerized reports that defendants claimed "did not exist" suddenly surfacing in a hard drive under a directory labeled "reports";
    • defendants' failure to remind technical personnel of the need to preserve crucial source code information, resulting in the loss of backup information when the backup tapes for a failed computer continued to be overwritten;
    • defendants failure to ask the person responsible for transferring files to a new source code control system about the availability of source code until after a sanctions hearing.

Fodder for some 2009 e-discovery resolutions, indeed!

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.

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.” 

My Boss May Own My Facebook Page !?

Social networking websites have taken the world by storm.  On MySpace and Facebook, users lovingly chronicle the intimate details of their lives, post their current relationship status and feelings, provide spontaneous opinions, and upload off-the-cuff photographs.  Even the more professional networking site LinkedIn, is now trying to become more social by adding a blog application.  Unfortunately, users often post without considering the trail of evidential bread crumbs they leave in their wake.  Just last week, Virgin Atlantic Airways fired 13 members of a cabin crew after they allegedly posted inappropriate comments on Facebook.  And today, investigators visit these sites as a matter of course when looking into an individual for purposes of employment, college admission, background checks for criminal activity, and so on.

This growing use of social network information raises two important questions for the corporate world in this new age of electronic discovery:

1. Are social networking sites accessed using an employer's computer, fair game when it comes to electronic discovery and document production?

2. If social networking pages are produced as part of electronic discovery, would this information then be admissible in court?

First, employees will notice that their personal workplace computers sometimes "remember" their MySpace or Facebook password -- not to mention gmail, hotmail, yahoo, and other accounts -- when they sign on.  That's because the website browser takes note of and saves the password.  But here's the catch.  Because the password exists on the employer's hard drive, that password and therefore access to the social networking page, are literally within the possession, custody, and control of the employer.  With the right IT know-how, the employer can easily access the site.  The unanswered question is, is the social network page in the legal "possession, custody and control" of the employer?  What happens when the employee or employer gets sued, and the social networking page becomes responsive to document requests?

It may depend on whether the adverse party is the employer or a third entity.  In the case of the employer being sued, perhaps the employee is alleging discrimination in the workplace, and has a discussion on his Facebook page about how he made up the whole story.  Does the employer have the right to access the Facebook page on its own?  If not, does the employer have the right to demand images of the page in their document requests?  The employer's argument would be that by accessing the page at work, the employee waived any right to claim that the site is private and personal.  An even broader argument is that by posting personal information on a world-wide web, the employee has automatically given up any pretense of personal privacy at all, to the world at large.

A different implication arises if the employer is being sued by a third party for, say, legal malpractice.  The third party does not have direct access to the Facebook page or the password. Does the third party have the right to request the employee's Facebook website through document requests to the employer?  The employer, who has the password in its records, may be able to access the Facebook page.  The answer hinges on whether the Facebook page is in the possession, custody or control of the employer, thereby requiring the employer to produce it to the third party.

Second, even assuming that the Facebook page must be produced, it still may not be admissible in court.  Because websites are amorphous creatures, one must take a "snapshot" of the page in order to preserve a site as it existed at a particular moment.  This process raises numerous evidentiary issues under the admissibility rules for standard electronically stored information. This includes considerations of relevancy, hearsay, authenticity, the "best evidence" rule and undue prejudice. See Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 538 (D. Md. May 2007).

In sum, more people sign up for social networking websites every day.  It is only a matter of time before attorneys routinely request social networking pages during certain types of lawsuits.  The law is still uncertain as to when and whether such pages must be produced, and whether those pages are going to be admissible in court.  Employers should be mindful of these issues, and should impress upon their employees the dangers of posting inappropriate materials on their social networking pages.  Similarly, employees should be aware that what they post -- even if they explicitly limit access to their page to friends only -- may someday come back to haunt them.

Slaying the e-Discovery Dragon: Are Law Schools Up to the Task?

Ask any lawyer whether the typical law school course is "practical," and you'll likely receive a resounding "No!" - after they stop laughing, of course. But bloggers have stumbled onto a novel idea - why not teach law students practical skills for dealing with e-discovery issues before they are sent out into the legal community? In a recent article, William Hamilton, a commercial litigator at Holland & Knight and an adjunct professor at the University of Florida's Levin College of Law, pointed out that "e-discovery failures continue, apparently unabated" and "many of the dramatic e-discovery failures of the past two years have involved firms at or near the top of the profession." See The E-Discovery Crisis: An Immediate Challenge to Our Nation's Law Schools, November 5, 2008." Some experts believe that "attorney incompetence in e-discovery is so widespread that it presents a massive ethical crisis across the entire legal profession." Id.  So why not educate the next generation of lawyers about the best methods for dealing with e-discovery? These law students can bring a new level of e-discovery competence to law firms, government agencies, and clients. Id. It may be the best method by which the profession can slay the e-discovery dragon and avoid the pitfalls and sanctions of the "e-discovery crisis." 

In his article, published as a guest feature on the e-Discovery Team blog and the Paralegal Profs blog, Professor Hamilton does a thorough analysis of the impact law schools can have on the legal profession by teaching courses on e-discovery. Hamilton himself teaches a course on e-discovery at the University of Florida's Levin College of Law. He points out that most law schools are "blithely continuing to teach civil procedure as if nothing or little is happening 'out there.'" Id. All while the civil justice system "flounders under the weight of digital revolution." Id. Hamilton compares the inaction of law schools to "fastidiously arranging the deck chairs while the Titanic goes under." Id. He calls on law schools to educate young lawyers about the importance of e-discovery. After all, law schools are best equipped to address the e-discovery crisis, because they "operate in an educational environment absent crushing time and business restraints. Law students have the time to think, work, and struggle with e-discovery in a tolerant, incubating environment." Id. Practicing lawyers, on the other hand, are forced to attempt to learn best practices for dealing with e-discovery through CLE programs and seminars, all while trying to deal with the "crush of billable hours and the economics of the modern law firm." Id. Hamilton goes on to describe what a "practical" e-discovery course would look like.  He insists that "teaching e-discovery means working through each of the e-discovery phases outlined in the EDRM model with similar hands-on experimental approaches." Id. He also emphasizes that the students must not be lectured, they must "do." In his own course, Hamilton emphasizes practical experience, and the students conduct mock "interviews" using IT professionals from the University of Florida's Legal Technology Institute as their subjects. See Hamilton's article for a full walk-through of a course in his classroom. 

Professor Hamilton's point is a good one: the legal profession can begin to stop the bleeding from the e-discovery crisis by insisting that the new generation of lawyers be educated about e-discovery issues. Some law schools, like the Levin College of Law at the University of Florida, are already on board. But how likely are law schools across the country to answer Hamilton's call? After all, law schools have been historically slow to offer practical coursework for their students. But as sanctions from e-discovery violations build, law schools may be forced to pull their heads out of the sand and address the critical role they could play in educating the profession about e-discovery. Only time will tell if law schools will answer the call.

What U Txt Can Hurt U OMG!

It would appear that Detroit public officials have a real problem with text messages.  In addition to the current indictment against mayor Kwame Kilpatrick involving his alleged cover-up of text messages linking him romantically with his former chief of staff, text messages play a central role in another current case with Kilpatrick ties, and were the subject of a recent court decision that outlined how they would be disclosed.

The problems began with allegations of a 2002 party at the Kilpatrick's mansion involving exotic dancers.  When one of the dancers who claimed that she was at the party was shot to death in 2003, her family filed a $150 million lawsuit against the city.  The family claimed that the shooting was an attempt to cover up the dancer's role in the party, and further claimed that a Detroit police officer was the shooter.  The family issued two subpoenas to SkyTel, which supplied the city's text messaging devices.  The subpoenas sought text messages to and from all city officials and employees on the night of the shooting and text messages from a list of 34 city officials for certain periods between 2002 and 2007.  The court allowed discovery of the text messages from the night of the shooting, but narrowed the second request.

The court issued an order on March 20, 2008 setting forth a procedure for discovery of the text messages.  The procedure seems well-reasoned, and strikes a sensible balance between the family's right to access information relevant to its claim, as well as the city's interest in maintaining evidentiary privileges and protecting confidentiality in what is, obviously, a very sensitive matter.

The court's order sets forth the following steps:

1.  The city must provide Skytel with the PIN number used by every city employee so that Skytel can access the accounts.

2.  Next, the text messages will be turned over to magistrate judges (on CDs, not in paper format, the court is careful to note) for review and an initial determination as to discoverability under Federal Rule of Civil Procedure 26(b)(1).  The magistrate judges will also have the authority to set reasonable limits on the scope of discovery sought.

3.  After the magistrate judges issue their initial determination as to discoverability, the city will have a chance to make any objections, which will be ruled upon by the district court judge.

4.  Any text messages that the court orders produced will be maintained subject to a stipulated protective order, and returned to Skytel at the conclusion of the case.

This sounds simple, but is sure to lead to many squabbles given the high stakes of the proceeding.  We will keep track of developments to see how the judge's procedure plays out.