Electronic Discovery - Managing Documents and Litigation Under the Amended Rules By: Mark Henriques

1. Electronic Discovery - Managing Documents and Litigation Under the Amended RulesBy: Mark Henriques

2. Hypothetical Ms. Hernandez sues Carolina Service Company (“CSC”) for employment discrimination. She is a 55 year old hispanic female. CSC receives a discovery request for all documents relating to Ms. Hernandez’ employment.

3. What does CSC produce?

4. 1965 Traditional paper documents.

5. 1975 Traditional paper documents, PLUS data compilations (for example, print outs from a computer).

6. Today Traditional paper documents, data compilations, PLUS e-mails, Excel spreadsheets, metadata and other information that might have never been reduced to paper.

7. Electronic Paper 7% 10% Paper Electronic 90% 93% Document Creation – 1990 versus 2008 93+% electronic form only! 1990 2008

8. Where do we look for guidance: • Sedona Conference • Judge Scheindlin’s Zebulake opinions • Advisory Committee Report • Recent Case Law / Reporters

9. Managing E-Discovery is crucial: • Most new cases will involve e-discovery. • Almost all newly created information is stored electronically. • Expensive and time consuming, but potential source of key discovery.

10. Back to the hypothetical . . . • Under the Rules, before discovery requests are propounded: - Lawyer consults with IT. - Lawyer meets with opposing counsel.

11. IT Meeting • Lawyer must obtain information about: - Servers. - Back up systems and tapes. - Storage devices (Palm Pilots, Treos, Thumb Drives, Laptops, etc.). - E-mail retention.

12. Network Data Retention Architecture

13. Litigation Off Switch Immediate stop of the deletion of email and other electronic documents

14. Identify the KEY PLAYERS at CSC . . . We’re meeting with them on Day 1! The Litigation Holds begins with their e-mails, documents and data.

15. Timeline under FRCP Amendments First 90-120 days after Service • Scheduling Order may include: • modifications of the times for disclosures under Rules 26(a) and 26(e)(1) and of the extent of discovery to be permitted; • (5) provisions for disclosure or discovery of electronically stored information; • any agreements the parties reach for asserting claims of privilege or protection as trial-preparation material after production; Complaint Served Rule 26(f) Meet and Confer RULE16(b) The order shall issue as soon as possible but in any event within 90 days after the appearance of a defendant and within 120 days after the complaint has been served on a defendant. Form 35 Report Report of Planning Meeting Rule 16(b) Scheduling Conference Rule 26(a)1) Initial Disclosures and Discovery

16. Rule 26(f) – Meet and ConferThe Three “P”s • Preservation of electronic information. • Production of electronic information. • Privilege issues.

17. Topics to Discuss • Topics for such discovery. • Time period for electronic discovery. • Various sources of each party’s electronic data. • Reasonable accessibility of such information. • Form of production. • Preservation of electronic information. • Privilege issues relating to such data.

18. Company Data Systems (from Convera website) Office Documents File Systems Groupware Servers Document Management Databases Multimedia Scanned Materials Intranets/Internet Expert Systems and more . . .

19. After Meet and Confer, present suggestions to Judge at scheduling conference.

20. Rule 16(b) Order • May include e-discovery agreements. • Helpful to avoid delay and excessive cost. • Provisions for disclosure or discovery of electronically stored information. • Any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation.

21. Agreements to consider include: • Clawback Agreements • Quick Peek Agreements

22. Clawback Agreement • An agreement that inadvertently produced privileged material will be returned without asserting waiver. • Pitfalls.

23. Quick Peekor “Sneak Peek” • Allows review of data before privilege review. • After items are selected, they are reviewed for privilege. • Agreement that initial production does not waive privilege. • Pitfalls.

24. Also consider including: • Preservation issues. • Search terms. • Plans to share or reduce costs.

25. Back to the hypothetical . . . Ms. Hernandez worked at the company for 5 years: - E-mails on back up tapes. - Files on obsolete computers. - Box of floppy disks. - Old desktop/laptop.

26. Email Production Options (not including privilege search/ assumes keyword relevancy search) Active Files – July 2004 to Present $50K Archivedfiles – Jan 2002- June 2004 Option A – Quarterly tapes 80-85% $73K/year $182.5K Option B – Monthly Tapes 91-95% $158K/year $395K Legacy files – 1999-2001 Option A – Quarterly tapes 80-85% $500K/year $1.5MM

27. Reasonably Accessible Data If data is not reasonably accessible, burden shifts to requesting party. Need to show good cause because benefits outweigh costs.

28. Attorney for CSC will want to: • Determine if reasonably accessible. • If not, identify sources not being searched. • Continue to preserve.

29. To determine if data is “reasonably accessible”: • Conduct sampling of information. • Depose IT person. • Allow Court or third party inspection.

30. Parties then need to discuss: • The costs and burdens of accessing the data; • The needs that may establish “good cause” for accessing the data if it is not reasonably accessible; and • Potential conditions on obtaining and producing the information.

31. Factors to determine “good cause”: • Specificity of the document request. • Quantity of information available from other and more easily accessed sources. • Failure to produce relevant information that seems likely to have existed but no longer available on more easily accessed sources; • Likelihood of finding relevant, responsive information that cannot be obtained from other more easily accessed sources; • Predictions as to the importance and usefulness of the further information; • The importance of the issues at stake in the litigation; and • The parties’ resources.

32. Back to the hypothetical . . . • Producible data identified. • Next, must decide the form of production: - Native - Paper - TIFF files - Interactive

33. Amendments to Rules 33(d) and 34 • Requesting party may specify the format. • If no format specified, production should be in the format in which the data is ordinarily obtained or is reasonably useable.

34. Production buzzwords: • Legacy data • Metadata

35. Privilege Issues • 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. • A receiving party may promptly present the information to the court under seal for a determination of the claim.

36. Recent Ruling: May 29, 2008 • Victor Stanley v. Creative Pipe Originally a paper production • Court ordered forensic experts to devise search: came up with 5 pages of search terms • 165 privileged docs missed in review • Too Bad!

37. Warning: Rule 26(b)(5) doesnot change the substance of current privilege law. Proposed FRE 502 would address this issue.

38. Rule 45: E-discovery changes also apply to non-parties: • A subpoena may now “command each person to whom it is directed to attend and give testimony or to produce and permit inspection, copying, testing or sampling of designated books, documents, electronically stored information, or tangible things . . .” • A subpoena may also “specify the form or forms in which electronically stored information is to be produced.”

39. Rule of Thumb for Production Format • Hard copy (paper) documents – single page TIFF or pdf files. • Electronic data – Native format with all metadata.

40. Form Problems E-Mail Options: Hard copy print out No Metadata Loses connection with attachments Single page TIFF Privilege and redaction; bates numbering difficulties Native

41. Native .pst production favored by some courts: • Verisign: .pst produces in ordinary course of business. • CP Solutions: .pst to maintain connections with attachments.

42. Excel Spreadsheets • Excel spreadsheets are created to be “active” – with cells that can be manipulated, calculated and sorted. • Static TIFF or hard copy production disables this interaction. • Williams: Improper to lock cells and scrub metadata.

43. Is the format searchable? • TIFFs on DVDs - Pro: Ordinary course of business - Con: Difficult to search.

44. Courts differ . . . • Residential Contractors: - Must provide index or table of contents. • Eastman Kodak: - If produced in ordinary course of business, further formatting or indexing not required.

45. Is the Data Accessible? Judge Scheindlin’s Hierarchy Most accessible Active, online data Near-line data to Offline storage/archives Back up tapes Least accessible Erased, fragments or damaged data

46. Rule of Thumb Explain to the Court what was searched and what would be required to obtain the data. Peskoff:Judge ordered affidavit regarding back ups. Quinby: Judge allowed cost shifting for some restoration and searching of back-up tapes.

47. Sanctions • Most Commonly Sanctioned Behavior: - Destruction of evidence (84%) - Delayed production (16% Most Common Sanction: -Attorney’s fees and costs are the most commonly granted sanction (60%) - Evidentiary preclusion (30%) - Adverse inference instructions (23%) - Dismissal or default (23%)

48. Extreme Cases Plasse: Plaintiff’s bad behavior included: deleting files, failure to produce files, modifying files, manipulating metadata. Case dismissed, Plaintiff ordered to pay sanctions. Krumwiede: Spoiled evidence by modifying, altering, deleting and accessing thousands of files. Default Judgment. Samsung: Document retention policy put in place because of threatened litigation – led to wrongful destruction of evidence. Sanctions.

49. Adverse Inference Instruction You have heard that UBS failed to produce some of the email sent or received by UBS personnel in August and September 2001. Plaintiff has argued that this evidence was in defendants’ control and would have proven facts material to the matter in controversy. ..continued

50. Adverse Inference Instruction (cont.) If you find that UBS could have produced this evidence, and that the evidence was within its control, and that the evidence would have been material in deciding facts in dispute in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to UBS . . .