Bob Robinson General Counsel Renew Data Corp. (512) 458-3004

1. Fundamental Issues Of Electronic Discovery Bob Robinson General Counsel Renew Data Corp. (512) 458-3004

2. Electronic Discovery • I. Technical Basics and Practical Matters • II. Elec. Discovery Under the Civil Rules • III. Spoliation Issues • What to Do Now

3. Fast-Changing Environment Exploding amounts of electronic data Emerging body of EE case law and rules Sarbanes-Oxley Act and USA Patriot Act Abundance of disputes where source data is primarily electronic

4. Emerging Risks Information is discoverable in its native format 30(b)6 deposition of SysAdmin Process attacks are more common New emphasis on cooperation with investigators “Don’t Ask, Don’t Tell” is history

5. BEWARETHE THREE-HEADEDMONSTER! • PCs & Servers • + E-mail system • + Backup system • = A de-facto data repository!

6. Electronic - Better Than Paper • Searchable • Keyword searches are essential • More certain, costs less & saves time • More information than just the text • Efficient for sharing and copying • Can be protected from alteration • Candid behavior

7. 31 Flavors of Elec. Data • Backup tapes • PC (home/office), laptop hard drives • Network file servers • FAX servers • Voicemail systems • Palm Pilots, PDAs • Mobile Internet Devices • Kleiner v. Burns, 48 Fed. R. Serv.3d 644, 2000 WL 1909470 (D. Kan., 2000)

8. Deleted Files • Sectors & Clusters • What are deleted files? • What can be undeleted? • Deleted files & fragments searchable • History/record of deletions is important • Data constantly changes as the machine is used • Take a forensically sound “image” right away to avoid data alteration and destruction • Data can be preserved at low cost

9. Civil Rules • Electronic information clearly is discoverable • Rowe Entertainment, Inc. v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) • Electronic format may be required - paper production alone may not be sufficient • Anti-Monopoly Inc. v. Hasbro, Inc., 94 Civ. 2120, 1996 WL 22976 (S.D.N.Y. Jan.23, 1996) • Storch v. IPCO Safety Products Co., 1997 U.S. Dist. LEXIS 10118, 1997 WL 401589 (E.D. Pa. July 16, 1997)

10. Civil Rules • Backup tapes required if relevant • See generallyIn re CI Host, Inc., 2001 WL 34047373 (Tex. Nov. 21, 2002) • Copies of files aren’t enough – need forensic images • See generallyTaylor v. State, 2002 WL 31318065 (Tex. App. Oct. 17, 2002) • Deleted data requires extra relevance • Rule 34 – requests extend to records “reasonably available in the ordinary course of business” • Antioch Co. v. Scrapbook Borders, 2002 WL 31387731 (D. Minn. April 29, 2002)

11. Time is of the essence Note for the discovering party • Key – get producing party to preserve data as soon as practicable, with proper forensic techniques • Gates v. Bando, 167 F.R.D. 90 (D. Colo. 1996) • Taylor v. State, 2002 WL 31318065 (Tex. App. Oct. 17, 2002) • Crucial factors: • Get the forensic image of each hard drive • Get them to stop recycling backup tapes

12. Time is of the essence Note for the discovering party • Immediately send a letter to ask opposing counsel for preservation • Forensic image duplicate • Stop recycling backup tapes • Don’t delete files • Don’t defragment or compress any hard drives • Don't add new software or operating systems • Don't access subject files until imaged • If you get one of these letters, watch out!

13. After Preservation • Propose a discovery plan • Electronic searching - keywords • Residual data areas - agree to search or not • Restoration of deleted files - may be important • Method for review of privileged/private docs. • Method for production (specify data and media formats) • Archival and disposal of electronic data • Retention of third-party service provider - cost

14. Systems Administrator Deposition • Alexander v. F.B.I., 188 F.R.D. 111 (D.D.C. 1998) • Things to investigate: • Network and backup system overview • Email system and backup • Backup system specifics (policy and hardware, software) • Records retention / litigation response (who is in control?) • Web server info • Voicemail or fax server info. • PDAs issued & used

15. Responding in Discovery • Don’t open files, use forensic image process • Stop recycling backup tapes • Try to limit search to active files • TX Rule 196.4; Rowe Entertainment, Inc. v.William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) • Describe your response plan (in detail) • Seek protection from burdensome requests

16. Responding in Discovery Chain of Custody Issues • Was the file altered during copying process? • Was the file altered during analysis? • Reliability of copying process? • Was a forensic image taken, or should it have been? • Data preservation and security? • Who handled and processed the data, and how can you prove it is “as-was”?

17. Bearing the cost • Cost elements. • Imaging of hard drives and servers • Restoration/retrieval of backup data • Restoration/recovery of deleted files • Searching tapes & hard drives, sorting, de-duplicating and other processing work • Is on-site work needed? • Costs may be allocated between the parties. • Rowe Entertainment v. William Morris Agency,205 F.R.D. 421 (S.D.N.Y. 2002)

18. Spoliation of electronic data • The Duty to Preserve • Party on notice when it reasonably foresees or anticipates litigation, even before the plaintiff manifests an intent to sue. National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) • Totality of the circumstances test will be used. Trevino v.Ortega, 969 S.W.2d 950 (Tex. 1998) • Rule 3.04(a) of TX Disciplinary Rules: a lawyer may not unlawfully obstruct access to, delete, or alter relevant information, or counsel others to do so. • Good article: Judge Curt B. Henderson, The Duty toPreserve Electronic Data, 66 Tex. B.J. 24 (Jan. 2003)

19. Spoliation of electronic data • Real Consequences • Financial sanctions, including personal liability • Danis v. USN Communications, Inc., 2000 WL 1694325 (N.D. Ill. Oct. 23, 2000) • Adverse inference instruction • Default judgment • Sarbanes-Oxley – potential criminal sanctions • PR – avoid the trust crisis spawned by Enron!

20. Using an expert • Retained as a neutral expert - • Officer of the Court • Assists in defining scope and process • Creates images with proper chain of custody • Performs agreed searching/filtering • Provides data for privilege review • Formats and provides data to requesting party

21. Using an expert • Retained directly by a party - • Gives tactical & strategic advice in discovery • Preserves hard drives via forensic imaging • Inspection agent for other party’s expert • Assists in defining scope and process • Creates images with proper chain of custody • Performs agreed searching/filtering • Provides data for privilege review

22. Advising Clients about Retention • Data retention/destruction policies and practices • Remember both! • Counsel’s role when litigation is anticipated • What is reasonable for the future? • Costs are coming down with new technology • Law is coalescing to give guidance for production and cost allocation • Lawyers and judges are more savvy • Result: judges will require more productions

23. Best Practices – What to do now • You will have to produce data – plan for it • Implement data retention policies • Move quickly to preserve data to avoid spoliation/obstruction charges • Become familiar with EE solutions and providers – shop around • Counsel’s role – remember Nancy Temple!