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. 

Avoiding an E-Discovery Disaster

This summer the whole country, particularly those of us living on the gulf coast, anxiously watched the seemingly endless images of oil leaking into the Gulf of Mexico following the deadly explosion on the BP oil rig Deepwater Horizon.  While the leak has only recently been capped, litigation stemming from the oil spill has already commenced.

In a recent article on law.com, Fred Blum and Nader Mehizadeh noted that much of the litigation stemming from the BP oil spill will depend on volumes of electronically stored information in BP's control.  After noting the potential e-discovery disaster that may come upon BP if its electronically-stored information (ESI) is not properly handled, the authors outlined the following six factors that can help anyone avoid an e-discovery disaster:

1.  Preserve Relevant ESI. 

2.  Confer with your opponent.

3.  Collect Data Intelligently.

4.  Rely on your vendor.

5.  Consider using hosted databases.

6.  If all else fails, go to court.

The underlying principle behind all six factors is that retention and production of relevant ESI is something that parties in litigation simply cannot afford to ignore.  The risks are simply too high.  However, electronic discovery disasters can be averted if parties are willing to take the time, and expense, to ensure that relevant information is preserved, communicate with the opposing party and experts in the field, and utilize technology to their advantage. 

 

 

"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.

Edmund Hillary Knows Beans About Metadata

"Because it is there" may be a perfectly adequate response to the question of why you want to scale a mountain (although it invites the follow-ups of "are you crazy?" and "does your spouse know you spent four thousand dollars on climbing gear?"). It does not, however, cut it when a judge asks why you want a mountain of metadata. 

The court in Dahl v. Bain Capital Partners, LLC, 2009 U.S. Dist. LEXIS 52551 (D. Mass. June 22, 2009) reminds us of this fact.  In that case, a requesting party sought every last scrap of metadata associated with the electronically stored information produced by the other side. The producing party refused, instead offering to hand over just 12 fields of metadata. Ignoring the inevitable follow-up question, "Does your client know you spent four thousand dollars on a discovery dispute over metadata?", the requesting party took the issue before the court. 

The Dahl court explained that the goal of discovery is still to uncover admissible evidence, no matter how many new and exciting areas of information may exist for attorneys and their clients to fight over.  Not all metadata leads to admissible evidence, and so sweeping requests for metadata (regardless of its likely utility) are unnecessarily costly and burdensome -- a fact also recognized in the Rule 34 Advisory Committee Notes.  Accordingly, the court ruled that the requesting party should tailor its metadata requests to specific word documents, emails, or sets of email in an effort to reduce the burdens of production, thereby increasing the likelihood of prudent and efficient litigation.

As has been noted on this very same website, about three inches down from this post, attorneys should be aware that a successful discovery process requires knowledge of both the technological peculiarities of ediscovery and the established procedures and limits of discovery.  The Dahl opinion confirms that observation.

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.
 

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.

Coming Soon to a Wisconsin Courtroom Near You?

It looks like Wisconsin will soon join a number of states (roughly half of the country) who have amended or adopted rules of civil procedure to include specific provisions regarding discovery of electronically stored information. 

After considering the issue for several months, the Wisconsin Judicial Council filed a petition with the state Supreme Court proposing amendments to the state statutes that provide the rules of civil procedure. 

In general, the proposed amendments are consistent with, and based on the 2006 amendments to the Federal Rules of Civil Procedure regarding electronic discovery.  For example, the proposed amendments:

  1. Encourage the parties to discuss electronically stored information early in the discovery process;
  2. Address the format in which electronically stored information should be produced;
  3. Limit the information that must be produced to reasonably accessible information; and
  4. Contain a safe harbor provision to protect a party who destroys information in good faith according to a routine records retention policy.

Despite these general similarities, the proposed amendments differ from their federal counterparts in three important respects. Unlike their federal counterparts, the proposed amendments:

  1. Provide a definition for "electronically stored information" that is "intended to be broad enough to cover all current types of computer based information yet flexible enough to encompass future changes and technological developments." 
  2. Do not require the parties to discuss electronically stored information at a discovery conference because Wisconsin does not require a discovery conference.  Instead, the proposed amendments "encourage the courts to address the management of electronic discovery early by adding electronically stored information to the list of items that can be addressed by scheduling order, although it is not required."
  3. Do not contain a claw-back procedure to protect parties who inadvertently produce privileged or protected information. According to the Judicial Council, "waiver of privilege is more properly addressed under the rules of evidence, including the attorney client privilege and the work product doctrine, than in the discovery rules."  

The Supreme Court is expected to hear public comment on the proposed amendments soon, but the hearing date has not yet been scheduled.  Stay tuned!

ESI Storage Blues

If you're like me, when I run out of space in my house, I sort through things, toss them out, give them away or hold a rummage sale. Even then I end up with items that not even Goodwill will accept-- in the trash they go. Unfortunately, you can't do that with your client's or your own corporate data.

So what to do when you run out of storage for the all important bits and bytes? Two options: buy more storage or rent disk space. Sounds simple enough but both of which can have a significant impact on e-discovery data management and retrieval. I will briefly examine both options.

Purchasing more servers or storage peripherals spells ownership but it also has a hardware depreciation and upgrade element to consider. It also means more upkeep that might even require more staffing to maintain the systems. In cost accounting lingo, it is described as the Total Cost of Ownership (TCO). The goal is to decrease TCO, not increase it.

However, this might be the only viable avenue to store data if your client insists on absolute security and confidentiality, despite the fact this might only provide a perception that the data is more safe and secure than being stored somewhere else. No one wants to admit the fact that neither security nor confidentiality can be guaranteed in today's hacker and virus-proned environments. There's simply no absolutes in the IT world.

On the other hand, renting disk space translates into paying someone to be the custodian of your data. This is an increasingly attractive proposition due to the growing terabytes or even petabytes of electronically stored information (ESI) that can overburden internal IT infrastructures. Data organization and ease of retrieval should be one of the key criteria to consider before engaging a vendor to take on this critical task.

The advantage of using a third-party vendor is that there's minimal costs or overhead associated with hardware, software maintenance or potential staffing issues. Since these vendors specialize in storage, they also tend to be very efficient at it. Regardless, hiring a vendor to handle your data is not as easy as it may sound. Before signing the service agreement on the dotted line, consider the following factors:

  • Hardware - Does the vendor's system integrate well with your IT infrastructure? It is critical that the vendor system "talks" to your internal document management system (DMS), your email servers and Intranet portal storage elements such as Microsoft SharePoint. All of which involve SQL databases to a great extent.
  • Searching - How receptive is the vendor's system when it comes to "data-on-demand"? Is the storage system fully searchable and in what manner? How fast can data be retrieved and produced? How is the data being indexed, migrated or archived in the vendor's system. All of which affect your company's ability to comply with e-discovery requests pertaining to F.R.C.P. Rule 26(f) and/or court subpoenas.
  • Administration - Does the vendor's system impose a shift on how you manage your data internally? If so, how easily can your organization and/or vendor adapt to this new paradigm. Do you need adjustments to your IT framework in order to make full use of the vendor's system? Inadequate planning can easily turn "Plug-and-Play" into "Plug-and-Pray."
  • Leverage - Does outsourcing data storage provide a better solution than insourcing? In this down economy, IT budgets are closely scrutinized and a misstep can spell a million dollar disaster (think cost effectiveness and client buy-in). In addition, outsourcing data storage potentially provides a justification in passing some of the costs to clients. At the minimum, your expenditure can show up on the client's invoice as a line item even your company might decide to write it off for the client's benefit-- Seeing is believing.
  • Collaboration - How well can the vendor's system work with other multi-platform systems that your e-discovery team potentially encounter. The more compatible the vendor, the higher chance of success. Industry standard is king or queen.
  • Continuity - Do you have a plan B (or C) if the vendor goes out of business (especially without notice)? How functional is your business without vendor support? What about your vendor's business partners? Can they provide support when the parent has gone fishing?

All of these are not easy questions to answer. However, with adequate planning, some, if not all, of the risks mentioned above can be minimized. If you abide by productivity expert Denis Waitley's  motto of "Expect the best but plan for the worst," at least you can say you have done your best when things go wrong. And they will.

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!

Shameless Plug: E-Discovery Seminar/Webinar

Our very own, Kelly Twigger, will be one of the presenters at  "Law and Practice of Electronic Discovery," an electronic discovery seminar sponsored by the Milwaukee Bar Association, the Eastern District of Wisconsin, and Marquette Law School on November 6, 2008.  Topics include litigation holds and the preservation of electronically stored information, responding to requests to produce electronic information, best practices for reviewing electronic information, and ethical issues involved with the inadvertent production of privileged documents.  The seminar also includes a mock discovery session offering you the chance to observe lawyers in action as they demonstrate a discovery conference, a motion in limine hearing and the examination of an expert witness on electronic discovery issues. 

Here is a link to the seminar information including information on how to view the seminar via the MBA's live webcast.

Discovery of electronically stored information is unavoidable. With more than 90% of records now being created in a digital format, plaintiffs, defendants, and third parties must be knowledgeable about the myriad of legal and technical issues affecting electronic discovery.

Rule 502: Curbing the Cost of E-Discovery

Although the proposed Federal Rules of Evidence 502 aims at reducing the cost of e-discovery, businesses can also play a critical role in managing this process.

In an article entitled "Preparation and Communication are Key to Managing E-Discovery Costs," (published in 25 No. 22 Andrews Toxic Torts Litigation Reporter 3, December 5, 2007), Richard Friedman of Dreier LLP explains the various ways businesses may prepare to produce electronically stored information (ESI) and thereby controlling both their costs and reducing the potential for expensive errors. Some pointers--

  • Adopt uniform procedures makes e-discovery a more manageable process with more predictable costs.
  • Through communication and negotiation, counsels can reach agreements on the scope of electronic discovery as early as possible resulting in significant cost savings for both sides, by reducing litigation costs as well as the volume of ESI that must be reviewed.
  • Identify the information that the organization collects and generates and the means by which it is stored. Organizations that lack adequate knowledge of both their inventory of information and their information technology systems risk seriously disadvantaging themselves at the initial Rule 16(b) scheduling conference and subsequent pretrial conferences.
  • Limit the kinds of information that are generated on a daily basis to reduce their potential exposure or to control their storage and retrieval costs, organizations may want to prevent certain kinds of information from being generated.
  • Initiate and enforce litigation holds to preserve relevant information in the event of a lawsuit. This step is necessary to prevent potentially responsive information from being routinely destroyed or deleted when there is a reasonable expectation of imminent litigation and certainly after litigation is pending.
  • Take advantage of techniques and technology that will reduce the universe of ESI that needs to be reviewed, as well as what needs to be produced in litigation.

While it remains to be seen whether Rule 502 will be adopted, businesses and law firms alike can certainly follow Mr. Friedman's advice on e-discovery cost control.