E-Discovery:The New Demands of a Wireless World Lisa Ketai James Smith Lynette Fons Beirne, Maynard & Parsons, L.L.P.
What Kinds of Electronic Data Are We Talking About? • Includes all relevant electronic data: • E-mail messages • Word-processing files • Databases • Internet history files • Calendars and schedules CALENDAR SOFTWARE
This is a Hot Topic! E-Discovery is a hot topic.
We’re Talking About Serious E-Mail Volume! Worldwide e-mail traffic per day totals about 141 billion messages. - Source: The Radicati Group, Inc.
E-Mail v. Paper Mail • Authors think “send” means the e-mail is gone; they don’t see the paper trail. • Tendency to be informal in e-mails and use more colloquial language than would be used in a letter. • E-mails are not treated with the same sanctity as paper correspondence. • E-mails potentially last forever.
E-Mail as Friend or Foe? • E-mail can be an issue before or after litigation arises. • Problem with e-mail: people act as if they were their private property. • E-mail can be very damaging, but it also protect you in future litigation.
Merck: Vioxx Dr. Edward Scolnick wrote an e-mail acknowledging that cardiovascular links to Vioxx were “clearly there” before he reviewed all of the data regarding the risk. After reviewing additional data, Dr. Scolnick joined the company line, i.e., there were no cardiovascular risks posed by Vioxx. Nevertheless, he wrote to the Vioxx project team: “I will tell you that my worry quotient is high... I am actually in minor agony.” Houston Chronicle 12/6/05
Merck: Vioxx In another internal e-mail, Scolnick referred to FDA as “bastards” and “devious” for requesting additional safety data and for considering adding a black box warning label to Vioxx. In testimony, Dr. Scolnick tried to explain the emails. He said he took issue with the regulators’ push for a black box warning because the FDA advisory committee had not recommended the labeling change. His explanation did not erase the black and white of the e-mails. The Texas jury returned a verdict for $253 million.
When the Impact of E-Mail Discovery is Not Understood A 1996 e-mail from a Wyeth-Ayerst administrator regarding the side-effects of their diet drug, Phen-Fen: “...can I look forward to my waning years signing checks for fat people who are a little afraid of a silly lung problem?”
Zubulake: Seminal Case In 2001, after Laura Zubulake, a senior salesperson at UBS Warburg, filed an EEOC claim, a USB Warburg employee sent an e-mail to a company human resources specialist suggesting that Zubulake be fired “ASAP,” in part so she would not be eligible for year-end bonuses. – See Zubulake v. UBS Warburg, 2003 WL 21087884 (S.D.N.Y. May 13, 2003)
Response to Anticipated Litigation / Discovery Request • 1999: 93% of information was in digital format – only 7% paper. • 2003: Survey of records management professionals found 47% did not include electronic records in their retention schedules; 46% did not have a formal system for implementing legal holds; 65% reported that legal holds did not include electronic records. Institute a Litigation Hold Once a party reasonably anticipates litigation, they must suspend routine document retention/destruction policies and institute a litigation hold to ensure preservation of relevant documents.
Response to Anticipated Litigation / Discovery Request Understand the business functions involved and appreciate the supporting software: • Insurance Information • Accounting Information • Medical Records • Maintenance Records • Quality Control Records • Purchasing Information • Personnel Files • Grant Writing Files • Product Research • Accrediting and Compliance Records Determine the Scope and Sources of Documents
Response to Anticipated Litigation / Discovery Request Active Data • Visible in directories or applications • Recycle Bins • History Files Latent Data • Deleted Files • Temporary Files • Printer Spools • Meta Data • Hard Drive Archival Data • Back Up Tapes • CDs • Zip Disks • Network Servers Determine the Scope and Sources of Documents
Discovering Deleted Data • Deleted data may be reconstructed from: • Hard drives • Network servers • Storage media • Cost can be very high Remember: Parties seeking information without first establishing a reasonable basis for the belief that it exists may have to bear the cost of the discovery effort.
Response to Anticipated Litigation / Discovery Request Focus on storage devices, storage media and the storage locations of the electronic information: • Desktops • Laptops • Cell phones • Home computers • CDs • Diskettes • Handheld devices • Backup media of all sorts • Voice-mail systems • Memory sticks • iPods Determine the Scope and Sources of Documents
Response to Anticipated Litigation / Discovery Request • Must be reasonable • Must be routinely observed Institute Appropriate Retention Policies
Response to Anticipated Litigation / Discovery Request • Incorporate custodian interviews or questionnaires. • Keep a description of the guidelines and procedures followed in collecting the documents. • Make sure the party doing the collecting understands the need to maintain the integrity of the electronic data. • Seek ways to avoid disruption of normal business. • Keep a record of collection efforts. Develop a Sound Collection Protocol
Response to Anticipated Litigation / Discovery Request • In Texas state courts, to obtain electronic or magnetic information, the requesting party must specifically request electronic or magnetic data and specify the form in which the he wants it produced. • Objections including those based upon burden and expense are available. The Basic Rules of Discovery Apply Scope Relevance
Response to Anticipated Litigation / Discovery Request • Take advantage of technology to make your review more efficient: • Identify • Locate • Categorize • Caution: Electronic data may be altered when accessed. Review
Do Not Attempt Document Collection Yourself! • You should not try to collect or process electronic data yourself, unless you have been trained and are well versed in computer forensics. • Spoliation is a real danger. • Evidence collectors are frequently called to testify on collection methods, storage and preservation of the chain of custody.
Do Not Attempt Document Collection Yourself! • Computer forensics / investigative • Recovering material previously thought to have been deleted or lost • Restoring to usable format data contained in outdated formats, e.g., old e-mail systems • Electronic discovery / litigation support • Data collection and conversion • Data hosting • Filtering and searching data • Consulting • Advising on electronic discovery issues • Acting as special masters Three Main Categories of Service Offerings
Response to Anticipated Litigation / Discovery Request • Discuss options with a computer expert. • Consider how your opponent will process the data after it has been accessed. • Negotiate the scope of production. Production Note: By forwarding documents - whether or not in the context of production - you may be sending data about its creation.
What Kind of Data Can Be Found? Data about data: Detailed information describing a document or e-mail message, even if that e-mail has been deleted.
Potential Criminal Liability In Texas, if you know that an investigation by a governmental entity has begun, and you knowingly destroy or allow to be destroyed evidence, you may be criminally liable – even if you did not know that the “evidence” was relevant to the specific legal action in question.
Not Just a Defense Issue Remember: Parties seeking information without first establishing a reasonable basis for the belief that it exists may have to bear the cost of the discovery effort.
In Case You Thought They Were Kidding! Microsoft.Microsoft balks at the government's frequent requests for e-mails because many revealed aggressive business tactics. Microsoft eventually settles. Morgan Stanley. Court imposes sanctions against Morgan Stanley and Ronald Perelman obtains $1.45 billion award. UBS Warburg. In Zubulake v. UBS Warburg, U.S. District Judge Shira Scheindlin makes an adverse inference ruling against UBS, leading to a $29.3 million verdict. Merck. Jury returns $253 million verdict against Merck & Co. Inc., when a scientist's e-mail suggests that the company knew two years before it put Vioxx on sale that it might cause heart problems.
Possible Sanctions for E-Discovery Errors • Adverse inference instruction, which allows a jury to infer from the fact that a party destroyed certain evidence that the evidence would have been favorable to the party’s opponent. • Precluding a party from introducing any evidence or argument pertaining to a specific topic. • Monetary sanctions, such as costs, expert fees, and attorneys’ fees incurred as a result of the discovery abuse. • Striking a party’s pleadings and entering judgment against it.
When Litigation is Even Suspected • Unless clear instructions are given immediately upon the expectation of legal action, people will continue to act as if their e-mails are private correspondence and not subject to discovery. • All impacted individuals must be immediately advised of potential or pending legal action and instructed to use caution in with their e-mails.
E-Discovery Information For a searchable database of e-discovery cases, go to: http://www.ediscoverylaw.com/
We’re Talking About Serious E-Mail Volume! “When President Bush leaves office after eight years, the White House is expected to turn over more than 100 million emails to the National Archives, the government body entrusted with preserving America's official recorded history.” - Wall Street Journal 12/29/05
Back to the Fundamentals • Some common sense is necessary or our entire civil jurisprudence system will come to a grinding halt. • Virtually every judge with significant exposure to electronic discovery issues knows this. • Individual judges with no technical training have tremendous power and discretion in this area. • It is imperative to be open and to appear open in dealing with electronic discovery issues. • The appearance of not playing fair in this context can have serious adverse consequences.
Acknowledgement We would like to acknowledge the work of Fios Inc. and of Sharon Caffrey, John Coughlin, and Michael Krueger of Duane Morris, which served as the source for some of the information in this presentation.