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E-Discovery: Approaching the Problems Head On. Laurence Z. Shiekman Pepper Hamilton LLP January 5, 2009. Why Are We Here?. E-Discovery amendments became effective December 1, 2006 Affected Federal Rules: Rule 16, Rule 26, Rule 33, Rule 34, Rule 37, Rule 45 and Form 35. Why Are We Here?.

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e discovery approaching the problems head on

E-Discovery: Approaching the Problems Head On

Laurence Z. Shiekman

Pepper Hamilton LLP

January 5, 2009

why are we here
Why Are We Here?
  • E-Discovery amendments became effective December 1, 2006
  • Affected Federal Rules:
    • Rule 16, Rule 26, Rule 33, Rule 34, Rule 37, Rule 45 and Form 35
why are we here3
Why Are We Here?
  • What did the 2006 Amendments actually change?
    • Not Much
    • Institutionalized and defined the role of ESI in the discovery process
    • Provided a mechanism for the Court to approve clawback agreements
why are we here4
Why Are We Here
  • But why discuss electronic discovery?
    • The growth of Electronically Stored Information has caused dramatic changes in the discovery process
    • Corporate email users send and receive an average of 133 email messages per day
      • Mail, telephone, faxes
why are we here5
Why Are We Here
  • In 2006, the world created 161 exabytes of information:
    • 12 stacks of paper stretching from the earth to the sun
  • Between 2002 and 2006, there was an 800% annual growth in the amount of ESI produced in the world
  • 25% of all e-discovery opinions involved sanctions
  • The Rule Changes
  • The Litigation Hold
  • The Duty to Preserve ESI
  • The Production of ESI
  • Special Issues With Privileged Material
  • What’s the Deal With Metadata?
  • The Admissibility of E-evidence
rule changes rule 26 a
Rule Changes-Rule 26(a)

Fed. R. Civ. P. Rule 26(a)(1)(B): Initial Disclosures

  • Except in categories of proceedings specified in Rule 26(a)(1)(E), or the extent otherwise stipulated or directed by order, a party must, without awaiting a discovery request, provide to other parties:
    • (B) a copy of, or a description by category and location of, all documents, electronically stored information, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to supports its claims or defenses, unless solely for impeachment…
rule changes rule 34 a
Rule Changes-Rule 34(a)
  • (a) Scope
    • Any party may serve on any other party a request (1) to produce … electronically stored information – (including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations stored in any medium from which information can be obtained ….
rule changes rule 26 b 2
Rule Changes-Rule 26(b)(2)
  • 26(b)(2) Discovery Scope and Limits
    • A party need not provide discovery of ESI if not reasonably accessible because of undue burden or cost
      • Good cause exception
rule changes rule 34 b
Rule Changes-Rule 34(b)
  • Rule 34(b)
    • The request may specify the form or forms in which electronically stored information is to be produced
      • Native format
        • Web-based production
      • PDF, TIFF, JPEG
        • Tagged Image File Format
rule changes rule 34 b11
Rule Changes-Rule 34(b)
  • Rule 34(b)(ii)
    • If a request does not specify the form or forms for producing electronically stored information, a responding party must produce the information in a form or forms in which it is ordinarily maintained or in a form or forms that are reasonably usable.
rule changes rule 26 b 5 b
Rule Changes-Rule 26(b)(5)(B)
  • If information is produced in discovery that is subject to a claim of privilege or of protection as trial-preparation material, the party making the claim may notify any party that received the information of the claim and the basis for it. After being notified, a party must promptly return, sequester, or destroy the specified information and any copies it has and may not use or disclose the information until the claim is resolved.
the litigation hold
The Litigation Hold
  • “Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.”

Zubalake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003)(“Zubulake IV”)

when must the hold begin
When Must the Hold Begin?
  • No clear definition for “reasonably anticipated”
  • Can’t always wait for a complaint to be filed
  • Mere knowledge may be enough
    • Doe v. Norwalk Community College, 2007 U.S. Dist. LEXIS 51084 (D. Conn. July 16, 2007)
scope of the litigation hold
Scope of the Litigation Hold
  • “Corporations are not obligated, ‘upon recognizing the threat of litigation,’ to ‘preserve every shred of paper, every e-mail or electronic document . . . .”
  • “. . . It is under a duty to preserve what it knows, or reasonably should know, is relevant in the action, [or] is reasonably calculated to lead to the discovery of admissible evidence . . . .”
    • Samsung Electronics Co. v. Rambus, 439 F. Supp. 2d 524, 542-543 (E.D. Va. 2006)
scope of the litigation hold16
Scope of the Litigation Hold
  • Ever-increasing list of discoverable data-types
    • Data in RAM is electronically stored information under Rule 34
    • Rule 34 read expansively to cover future developments in computer technology
      • Columbia Pictures Industries v. Bunnell, 2007 WL 2702062 (C.D. Cal. Aug. 24, 2007)
duty to preserve esi
Duty to Preserve ESI
  • “Must a corporation, upon recognizing the threat of litigation, preserve every shred of paper, every email or electronic document, and every backup tape? The answer is clearly ‘no.’ Such a rule would cripple large corporations, like UBS, that are almost always involved in litigation.”

Zubulake IV, 220 F.R.D. 212, 217 (S.D.N.Y. 2003)

duty to preserve esi18
Duty to Preserve ESI
  • Rule 26(a) limited to documents that “are in the possession, custody, or control of the party”
  • “Control comprehends not only possession, but also the right, authority, or ability to obtain the documents”
    • Tomlinson v. El Paso Corp., 2007 U.S. Dist. LEXIS 64783 (D. Colo. Aug. 31, 2007)
duty to preserve esi19
Duty to Preserve ESI
  • “[A] party and her counsel must make certain that all sources of potentially relevant information are identified and placed ‘on hold,’ . . . To do this, counsel must become fully familiar with her client’s document retention policies as well as the client’s data retention architecture.”
    • Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004) (“Zubulake V”)
duty to preserve esi20
Duty to Preserve ESI
  • “[C]ounsel should communicate directly with the ‘key players’ in the litigation, i.e., the people identified in a party’s initial disclosure and any subsequent supplementation thereto. Because these ‘key players’ are the ‘employees likely to have the relevant information,’ it is particularly important that the preservation duty be communicated clearly to them.”
    • Zubulake V, 229 F.R.D. at 433-34 (S.D.N.Y. 2004)
duty to preserve esi21
Duty to Preserve ESI
  • “A party’s discovery obligations do not end with the implementation of a ‘litigation hold’ – to the contrary, that’s only the beginning. Counsel must oversee compliance with the litigation hold, monitoring the party’s efforts to retain and produce the relevant documents.”
    • Zubulake V, 229 F.R.D. at 432 (S.D.N.Y. 2004)
duty to preserve esi22
Duty to Preserve ESI
  • “Finally, counsel should instruct all employees to produce electronic copies of their relevant active files. Counsel must also make sure that all backup media which the party is required to retain is identified and stored in a safe place.”
    • Zubulake V, 229 F.R.D. at 434 (S.D.N.Y. 2004)
duty to preserve esi23
Duty to Preserve ESI
  • Failure to properly preserve ESI can have severe consequences for both client and counsel
  • As noted, 25% of reported e-discovery decisions involved sanctions for mishandling and lack of document retention policies
the consequences of a failed litigation hold
The Consequences of a Failed Litigation Hold
  • “A spoliation sanction is proper where:
    • (1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and
    • (2) the adverse party was prejudiced by the destruction of the evidence.”

Ernest v. Lockheed Martin Corp., 2008 U.S. Dist. LEXIS 59985, at *3 (D. Colo. July 28, 2008)

  • Some states recognize spoliation of evidence as an independent tort
    • See, e.g., Hadi v. State Farm Ins. Co., 2008 U.S. Dist. LEXIS 28177, at *6 (S.D. Ohio Mar. 11, 2008)
duty to preserve esi25
Duty to Preserve ESI
  • Possible penalties
    • Default Judgment
      • Krumwiede v. Brighton Assoc., 2006 U.S. Dist. LEXIS 31669 (N.D. Ill. May 8, 2006)
    • Monetary sanctions against both client and counsel
      • In re September 11th Liab. Ins. Coverage Cases, 234 F.R.D. 114 (S.D.N.Y. 2007)
the collection of esi
The Collection of ESI
  • Involve opposing counsel in creating “keyword” searches to identify responsive documents
    • “Identifying relevant records and working out technical methods for their production is a cooperative undertaking, not part of the adversarial give and take.”

In re Seroquel Prods. Liab. Litig., 244 F.R.D. 650, 660 (M.D. Fla. 2007)

the collection of esi27
The Collection of ESI
  • Courts are reluctant to second guess a party’s well-reasoned “keyword” searches
    • “…interplay, at least, of the sciences of computer technology, statistics and linguistics….”
      • United States v. O’Keefe, 537 F. Supp. 2d 14, 24 (D.D.C. 2008)
the production of esi
The Production of ESI
  • Court can limit discovery of ESI where it would place an undue burden on the producing party
  • Burden of proof is on the party attempting to prevent production
the production of esi29
The Production of ESI
  • Is the ESI Reasonably Accessible?
  • Three factors the Court will weigh:
    • (i) Less burdensome and less expensive alternative sources
    • (ii) Previous opportunity to obtain the information through discovery
    • (iii) Does the burden or expense outweigh the likely benefit
the production of esi30
The Production of ESI
  • No clear standard for “reasonably accessible”
    • Reproduction of e-mails at a cost of $37,500 was reasonably accessible
      • PSEG Power N.Y., Inc. v. Alberici Constructors, Inc., 2007 U.S. Dist. LEXIS 66767 (N.D.N.Y. Sept. 7, 2007)
    • Production that would cost $80,000 not reasonably accessible
      • W.E. Aubuchon Co. v. Benefirst, 2007 U.S. Dist. LEXI 44574 (D. Mass. Feb. 6, 2007)
the production of esi31
The Production of ESI
  • “[I]t is not a valid ground for objection that relevant, non-privileged, electronic data can be produced in paper form, when the requesting party has specified production in an electronic format.”
    • Auto Club Family Ins. v. Ahner, 2007 U.S. Dist. LEXIS 63809, at *10 (E.D. La. Aug. 29, 2007)
the production of esi32
The Production of ESI
  • Must show diligence in producing ESI
  • Failure to institute a litigation hold can force a party to undertake time-consuming and expensive multiple productions
  • Be careful when selecting an e-discovery vendor
the production of esi33
The Production of ESI
  • Court will not look kindly upon mishandled productions
    • Qualcomm, Inc. v. Broadcom Corp. (Fed Cir. Dec. 12, 2008)
      • E-discovery not produced until trial; counsel fees assessed
      • Counsel referred to disciplinary board
    • Disability Rights Council of Greater Washington v. Washington Metro. Transit Auth., 242 F.R.D. 139, 147 (D. D.C. 2007)
special issues regarding privileged material
Special Issues Regarding Privileged Material
  • The problem of inadvertent disclosure of privileged material
  • Use of clawback agreements sanctioned by Rules 16(b)(5) and 26(f)
  • Procedure provided by Rule 26(b)(5)
special issues with privileged material
Special Issues With Privileged Material
  • Sheer volume of electronic discovery may result in inadvertent disclosures
  • “inadvertent disclosure of privileged information does not automatically result in waiver of the privilege.”
    • Pinnacle Pizza Co. v. Little Caesar’s Enter., Inc., 2007 U.S. Dist. LEXIS 48845 (D. S.D. July 3, 2007)
inadvertent disclosure balancing test
Inadvertent Disclosure Balancing Test
  • Most courts use a five factor balancing test to determine whether the privilege has been waived:
    • The reasonableness of the precautions taken
    • The number of inadvertent disclosures
    • The extent of the disclosures
    • The promptness of measures taken to remedy the problem
    • Whether justice is served by relieving the party of its error
special issues with privileged material fre 502
Special Issues With Privileged Material-FRE 502
  • Inadvertent disclosures do not constitute a waiver if:
    • The disclosure was inadvertent;
    • The holder of the privilege or protection took reasonable steps to prevent disclosure; and
    • The holder promptly took reasonable steps to rectify the error
      • Rhoads Industries v. Building Materials Corp, No. 07-4756 (ED Pa, November 14, 2008)
  • A Federal court’s determination that a privilege has not been waived is binding on all other Federal and State courts
clawback agreements
Clawback Agreements
  • Authorized by:
    • Rule 26(f)(4)
      • Requiring parties to confer to “discuss any issues relating to preserving discoverable information”
    • Rule 16(b)
      • Scheduling order may include clawback agreements and provisions for ESI
clawback agreements39
Clawback Agreements
  • Prior agreement between the parties over procedures following inadvertent disclosures
  • Can take many forms
clawback agreements40
Clawback Agreements
  • Problems:
    • Cannot unring the bell
    • Even if the document is returned, other party has still seen it
    • Problem of governmental agencies and other authorities
clawback agreements41
Clawback Agreements
  • Problems:
    • “[E]ven if [clawback agreements] are enforceable as between the parties that enter into them, it is questionable whether they are effective against third-parties.”
      • Hopson v. Mayor and City Council of Baltimore,

232 F.R.D. 228, 235 (D. Md. 2005)

clawback agreements42
Clawback Agreements
  • Problems:
    • Advisory Committee Notes states that courts do not have the authority to require a clawback agreement
    • But, the court is free to enter a discovery schedule that without a clawback agreement would be impossible to meet
what s the matter with metadata
What’s the Matter with Metadata?
  • “Metadata, commonly described as ‘data about data,’ is defined as ‘information describing the history, tracking, or management of an electronic document.’”
    • Williams v. Sprint/United Management, 230 F.R.D. 640, 646 (D. Kan. 2005) (quoting Amendment to F.R.C.P. Rule 26(f))
what s the matter with metadata44
What’s the Matter with Metadata?
  • Rule 34(a)(1) states that ESI “includ[es] writings, drawings, graphs, charts, photographs, sound recordings, images, phonorecords, and other data or data compilations stored in any medium from which information can be obtained. . . .”
  • The Committee Note states that “Rule 34(a)(1) is expansive and includes any type of information that is stored electronically.”
what s the matter with metadata45
What’s the Matter with Metadata?
  • “[T]he producing party should produce the electronic documents with their metadata intact, unless that party timely objects to production of metadata, the parties agree that the metadata should not be produced, or the producing party requests a protective order.”
    • Williams v. Sprint/United Management Co., 230 F.R.D. 640, 652 (D. Kan. 2005)
what s the matter with metadata46
What’s the Matter with Metadata?
  • “[E]merging trends of electronic discovery appear to articulate a general presumption against the production of metadata.”
    • Kentucky Speedway, LLC v. Nat’l Assoc. of Stock Car Auto Racing, 2006 U.S. Dist. LEXIS 92028 (E.D. Ky. Dec. 18, 2006)
it can t hurt to ask
It Can’t Hurt to Ask
  • Courts are unlikely to require the production of metadata where it has not been specifically requested initially
    • “Ordinarily, courts will not compel the production of metadata when a party did not make that part of its request.”
      • Autotech Techs. Ltd. P’ship v. Automationdirect.com, Inc., 248 F.R.D. 556, 559 (N.D. Ill. 2008)
what s the matter with metadata48
What’s the Matter with Metadata?
  • However, more recent cases have held that metadata must be produced when it is relevant
    • In re Payment Card Interchange Fee & Merchant Discount Trust Litig., 2007 U.S. Dist. LEXIS 2650 (E.D.N.Y. Jan. 12, 2007)
what s the matter with metadata49
What’s the Matter with Metadata?
  • TIFF (tagged image file format) documents do not satisfy discovery requests because they lack metadata
    • Hagenbuch v. 3B6 Sistemi Elettronici Industrali, 2006 U.S. Dist. LEXIS 10838 (N.D. Ill. Mar. 8, 2006)
the emerging issue of e evidence
The Emerging Issue of E-evidence
  • “Very little has been written, however, about what is required to insure that ESI obtained during the discovery is admissible into evidence at trial.”
    • Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 537 (D. Md. 2007)
the emerging issue of e evidence51
The Emerging Issue of E-evidence
  • Due to the “wide diversity of such [electronic] evidence, there is no single approach to authentication that will work in all instances.”
  • As a result, “[w]hether ESI is admissible into evidence is determined by a collection of evidence rules that present themselves like a series of hurdles to be cleared by the proponent of the evidence.”
      • Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 537 (D. Md. 2007)
the emerging issue of e evidence52
The Emerging Issue of E-evidence
  • Rules of Evidence that may be relevant to the admissibility of electronic evidence:
      • Relevance (F.R.E. 401)
      • Prejudice (F.R.E. 403)
      • Hearsay (F.R.E. 801)
      • Hearsay Exceptions (F.R.E. 803, 804 and 807)
      • Authenticity (F.R.E. 901(a))
      • Secondary Evidence (F.R.E. 1001-1008)
the emerging issue of e evidence53
The Emerging Issue of E-evidence
  • Tips for establishing the admissibility of electronic evidence
    • Use technology to image and date stamp website content such as web-crawlers
    • Establish authenticity through use of traditional discovery tools
      • Depositions
      • Requests for Admissions
      • Stipulations
    • Consider asking the court to request the parties to stipulate to the authenticity of documents
practical pointers summary
Practical Pointers Summary
  • Before Litigation is Commenced
    • Work with the client to develop a comprehensive document retention policy
    • Once litigation is reasonably anticipated, send a litigation hold letter to personnel who may have relevant documents – err on the side of caution
    • Formulate a method of ensuring compliance
practical pointers summary55
Practical Pointers Summary
  • Work With Opposing Counsel
    • Discuss the possibility of a clawback agreement
    • Work together on compiling a list of relevant custodians and “keyword” searches – create a written record
    • Discuss a presumption of authenticity for documents produced by the other party
practical pointers summary56
Practical Pointers Summary
  • Cooperation with opposing counsel may now be mandated by the federal rules
  • Damages sought may drive scope of discovery
    • Mancia v. Mayflower Textile Services Co., 253 F.R.D. 354 (D. Md. 2008)
practical pointers summary57
Practical Pointers Summary
  • During the Discovery Period
    • Continually ask yourself how each piece of evidence will be authenticated
    • If you want documents to be produced with their metadata – remember to specifically ask for it
practical points summary
Practical Points Summary
  • Authenticating Electronic Evidence For Use at Trial
    • Identify and prepare the proper custodian to testify regarding the authenticity of documents on a computer system
    • Good things do not come to those who wait: authenticate electronic evidence as early as possible
practical pointers summary59
Practical Pointers Summary
  • E-discovery compliance is responsibility of both lawyer and client
  • Build a knowledgeable, experienced and consistent e-discovery team
  • Document what you intend to do
  • Never state you have produced all responsive documents
  • Do not rely on vendors to perform flawlessly