CHAPTER ❖ 3
Practical Legal
Implications
3.1
3.2
3.3
3.4
3.5
3.6
3.7
3.8
3.9
3.10
3.11
ESI Legal Overview .....................................................................
Early Case Assessment ...............................................................
Discoverability ............................................................................
Duties of Counsel .......................................................................
Data Locations and Accessibility .............................................
Retention, Preservation, and Sanctions for Spoliation ...........
Privilege and Inadvertent Waiver ............................................
Requesting and Responding ......................................................
Review and Production Considerations ..................................
Cost Allocation ............................................................................
Trial Issues ...................................................................................
56
57
60
67
72
82
95
104
125
135
142
By the end of this chapter, you will be able to:
• Understand the special characteristics of ESI and challenges
faced in e-discovery.
• Prepare for litigation by implementing a document preservation
plan to avoid sanctions.
• Know the standards counsel must follow during e-discovery to
meet judicial expectations.
• Partner with IT experts and ESI consultants to achieve costsavings in the e-discovery process when gathering data not
readily accessible.
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• Minimize e-discovery disputes over contentious issues such
as production, privilege, cost allocation, and protocols through
early discovery discussions.
• Craft winning arguments when disputes do arise.
• Ensure that your data is admitted into evidence through compliance with legal requirements.
• Understand the importance of hiring a jury consultant and using
effective trial presentation methods.
3.1 ESI Legal Overview
The practice of law around the world is at a tipping point, driven
by the changing way in which the world stores and handles information.
The statistics are a bit varied, but the quantity of electronically stored
information (“ESI”) being created every year is undeniably massive. A
recent report revealed that the digital universe in 2007 was 281 billion
gigabytes large, and that the size of the digital universe in 2011 will be
ten times the size it was in 2006. See The Diverse and Exploding Digital
Universe: An Updated Forecast of Worldwide Information Growth through
2011 (March 2008), available at http://www.emc.com/leadership/
digital-universe/expanding-digital-universe.htm.
In-house counsel has identified unmanageable volumes of ESI as
the biggest challenge for legal departments. Twenty-eight percent of
U.S. survey respondents (as compared to twenty-one percent in 2007)
and twenty-three percent of UK respondents (compared to eleven
percent in 2007) stated ESI volume was their greatest concern. Second
Annual ESI Trends Report, Kroll Ontrack (2008). Putting the statistics
aside, the punch-line is undeniable—companies are acutely aware of
the growing burden that ESI could have on their organizations. There
is an enormous amount of data making its way around the globe each
day, and this data is fully discoverable in civil litigation.
In the legal realm, the term “ESI” is used to describe this colossal volume of digital information. The terms “electronic discovery”
and “e-discovery” simply refer to the discovery of ESI in legal matters. Characteristics unique to ESI (its potential to be inadvertently
destroyed by normal computer usage, metadata, the costs associated with its Herculean volume, etc.) have forced the law to reconsider how it treats the discovery of ESI rather than merely treating
it in the traditional manner it has handled paper document discovery.
When the previous edition of this book was published in 2004, the
universe of e-discovery was controlled by case law trickling from the
courts in response to dealing with e-discovery issues. The first edition
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of this book included a list of case summaries of every decision concerning e-discovery that we could find, and it totaled approximately
sixty pages. At that time, we considered ourselves fortunate if we were
able to find two to three cases a month relevant to e-discovery. Today,
there are two to three relevant cases published each day! Moreover,
legislators have formally recognized the need for legal guidelines to
govern e-discovery and have amended the Federal Rules of Civil Procedure accordingly.
It is vitally important to stay up-to-speed on the law regarding the
discovery of ESI. In many cases, discovery is the most expensive aspect
of litigation. Lawyers today are responsible for requesting and producing ESI at the same levels of competency as paper discovery, and courts
have little tolerance for lawyers who fail to meet these responsibilities.
The law and best practices governing e-discovery are still developing, and lawyers must stay abreast; the consequences of falling behind
could be catastrophic.
This chapter provides a comprehensive overview of the case law
and rules governing e-discovery as they exist today. As you read this
chapter, pay attention to the facts of the cases discussed, how these
cases have applied the recent rules changes, and how the facts of these
cases compare to your situation.
3.2 Early Case Assessment
WHAT IS EARLY CASE ASSESSMENT?
Often the first question many lawyers, paralegals or litigation support professionals facing an ESI discovery project ask is, “Where do
we start?” A document request or preservation order arrives on your
desk and, like a racehorse out of the starting block, you are expected
to sprint down the track. In most cases involving ESI discovery, the
racetrack is not clearly defined and many ligation teams feel like
they are racing in the Kentucky Derby with a young, untrained horse
who has a tendency to run back to the starting gate and not the finish line.
With the FRCP amendments in 2006 came a new term that has
been championed as the official starting line for any e-discovery
exercise—early case assessment (“ECA”). Most traditionally this term
was connected to the early meet and confer provisions in Rules 16(b)
and 26(f); many legal professionals then used this term to refer to the
plethora of preparation prior to meeting with opposing counsel before
a scheduling conference is to be held or a scheduling order is due.
Very quickly, however, this term has grown to reflect a much broader
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definition, encompassing almost everything from pre-litigation preparedness, before a suit is even commenced, to looking at documents,
interviewing witnesses, examining pleadings, and preparing a damages analysis in the first sixty days of a case.
In the e-discovery realm, a whole suite of early case assessment
software tools have emerged designed to aid counsel in understanding the pervasiveness of a claim, investigating the scope of employees
involved in a matter, and reducing document volumes for discovery
review. Such tools boast features that allow users to see e-mail usage
reports and graphs, search document management archives for potentially responsive information, and group unstructured sets of documents and e-mail into thematic topic folders. Akin to several other en
vogue terms in pop-culture, the term early case assessment caught on
in the e-discovery community and today various audiences use it to
convey innumerable ESI concepts.
MEET AND CONFER
Despite this development in our legal lexicon, the question still remains—
where does one start when it comes to e-discovery? Turning back to
the FRCP amendments, the Advisory Committee sought to encourage
legal teams to start by taking stock of their client’s situation and then
prudently communicating with the opposing party to avoid e-discovery
disputes down the road.
As the Committee Notes to Rule 26(f) succinctly state, the purpose of the amendment to Rule 26(f) is to “direct the parties to discuss
discovery of electronically stored information during their discovery-planning conference.” This early case assessment rule establishes
a timeframe for discussing ESI issues early on in the case. However,
the specific provisions of Rule 26(f) do not dictate a precise formula
for early electronic discovery planning. Rather, the Rule directs the
parties to meet as soon as practicable (but no later than twenty-one
days before a scheduling conference) in order to develop a plan that
addresses essentially any and all foreseeable discovery issues.
As a lawyer, when you sit down face to face with your counterpart
on the other side, what topics will you discuss? To what level of detail
will you delve? How long will the discussion last? The FRCP provisions are silent when it comes to the specifics, so it is up to the litigation
teams to collaboratively design their own discovery framework early
on in the case. At a minimum, attorneys should use the Rule 26 conference as an opportunity to:
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• Clarify expectations regarding document preservation, sampling, search strategies, collection, keyword lists, processing,
and cost-allocation;
• Establish which sources of data they expect to receive from
their opponent, and the format in which they expect to
receive it;
• Discuss how privileged documents will be handled and
what happens if privileged documents are inadvertently
produced; and
• Raise issues pertaining to volume, cost, time, and other factors
affecting the accessibility and burden of producing the data in
their client’s possession or control.
Besides seeking to develop a discovery plan, proficient litigators will
take a strategic approach to these seemingly innocuous meetings.
Counsel should take this time to learn the opponent’s perspective on
e-discovery and exactly how savvy they are when it comes to the issues
surrounding electronically stored information.
Most importantly, counsel should move beyond high-level
e-discovery conversations and engage in detailed discussions with the
opposing party. For instance, instead of agreeing to produce metadata
generally (which could mean anything given the vast differences in
metadata fields across operating systems and applications), counsel
should come to an agreement on which metadata fields are the most
important and must be produced.
As with any technical subject matter, the firm’s litigation support
team and the client’s information technology staff will be instrumental in identifying and raising any issues it determines may complicate
the electronic data collection, review, and production processes. For
example, this team of individuals can begin to identify technical hurdles that may arise if proprietary databases or complicated spreadsheet data is involved in the collection. Litigation support and IT can
help counsel understand the limitations associated with the native file
format for production. Lastly, litigation support and IT also can prepare counsel for the questions they will have to answer about their
own client’s information technology infrastructure, which are likely to
be asked by the opposing party. In addition, consider consulting with
an ESI expert to lend a hand in preparing for these important early
planning conferences.
The bottom line: the discovery provisions decided at the early case
assessment meetings will affect all electronic discovery activities going
forward. Be prepared.
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Figure 3.1 Practice Point: Making the Most of the Meet and Confer
When preparing for the first meet and confer session, counsel will want to
have a checklist of facts and issues prepared relating to the following issues:
• Preservation Practices
• What is being done to preserve ESI?
• Is a protective order necessary?
• Scope of Discovery
• Will there be any deviations from the default initial disclosures
specified in Rules 26(a)?
• What file types and time range is the opposing party seeking?
• Who are the main data custodians the opposing party is interested in?
• Will any data sampling protocols be used?
• What will be the timing for exchanging discoverable ESI?
• Accessibility
• What type of data is the opposing party interested in? Backup tapes?
Hard drives? Servers? Removable media? Deleted data?
• How easy will it be to access this data?
• Will the use of an e-evidence expert be necessary?
• Production of Metadata
• What fields will be exchanged for the various file formats?
• Costs and Burdens
• Who will bear the costs associated with gathering, restoring, and
producing the ESI?
• Form(s) of Production
• In what format or formats will the ESI be produced?
• Privilege Issues and Waiver
• How will inadvertently produced privileged documents be handled?
• Variations from FRCP rules
• Are there any local rules that apply in the jurisdiction?
• Inventory of opponent’s IT infrastructure
•
•
Which operating systems and software packages were used
to develop key data? Are those systems still be used?
What are the opponent’s document retention policies? Are
they being enforced?
• Other
•
Is there any other information that may be important to the
e-discovery activity in the case?
3.3 Discoverability
The 2006 Advisory Note to FRCP 34 states, “Rule 34(a) is amended to
confirm that discovery of electronically stored information stands on
equal footing with discovery of paper documents.” What exactly these
new statutory rules mean to practitioners is being flushed out by case
law; however, there is one inescapable truth that is absolutely certain
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today when it comes to the discoverability of ESI. ESI is every bit as
discoverable as paper documents and practitioners must be prepared
to request and produce it.
Federal Rule of Civil Procedure 34(a), which explicitly makes ESI
discoverable, provides in relevant part:
A party may serve on any other party a request within the scope of Rule
26(b): (1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding
party’s possession, custody, or control: (A) any designated documents or
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 either directly
or, if necessary, after translation by the responding party into a reasonably
usable form;
Fed.R.Civ.P. 34(a)(1) (emphasis added).
This rule makes it clear beyond dispute that ESI is broadly discoverable. As you may have noticed, Rule 34 provides a list of things that
are included in the category ESI, but does not limit what is included in
the category. In fact, nowhere in the Federal Rules of Civil Procedure
is an attempt made to define “electronically stored information.” Thus,
practitioners are left wondering what the term ESI encompasses. Does
the rule make metadata discoverable? Voicemail messages? Instant
messages? Text messages? Web sites?
Contrary to being an oversight, the absence of a definition of electronically stored information is critical to fulfilling the broad intent of
the ESI amendments to the Federal Rules of Civil Procedure. The Advisory Notes to the 2006 amendment states, “Rule 34(a)(1) is intended to
be broad enough to cover all current types of computer-based information, and flexible enough to encompass future changes and developments.” By not pigeon-holing the definition of what constitutes
electronically stored information, Congress allows for the unforeseen
(e.g., holographic images, fingerprint payment records, black-box
recorders from space flights, etc.) to be discoverable years, even centuries, from now. Who knows what data type will contain the most
salient discoverable information in civil cases in 2059?
Naturally, disputes as to what is discoverable still arise. The task of
resolving these disputes, just as naturally, falls squarely onto the courts.
It is left up to case law to flush out the exact details of Rule 34’s intent and
to determine what is discoverable and under what circumstances. The
prevalence of ESI in litigation has caused the case law concerning ESI discoverability to develop at a breakneck speed. Some of the discoverability
cases that were cutting-edge when this book was previously published
in 2004 are now sitting on the bookshelf collecting dust.
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DISCOVERABILITY—HOW BROAD IS THE RULE?
It is important to understand the foundation of the discoverability of
electronic documents, and that foundation developed in the case law
long before the Federal Rules of Civil Procedure created the statutory
duty to produce ESI in discovery. In 1985 (just one year after the 3.5
inch floppy disk drive was introduced to the public), the Federal District Court in Utah foresaw that computer data was valuable and could
not be overlooked in discovery:
“[C]ertain propositions will be applicable in virtually all cases, namely,
that information stored in computers should be as freely discoverable
as information not stored in computers, so parties requesting discovery
should not be prejudiced thereby.”
Bills v. Kennecott Corp., 108 F.R.D. 459 (C.D. Utah 1985).
Linnen, the seminal case for the discoverability of electronically
stored information, confirmed the principle that electronic evidence is
discoverable. Linnen held, “A discovery request aimed at the production of records retained in some electronic form is no different in principle, from a request for documents contained in any office file cabinet.”
The court reasoned that to permit a corporation, such as the responding party in Linnen, to “reap the benefits of such [computer] technology
and simultaneously use that technology as a shield in litigation would
lead to incongruous and unfair results.” Linnen v. A.H. Robins Co., 10
Mass. L. Rptr. 189 (Mass. Super. 1999).
An important dispute arose early in the evolution of the case law
when parties argued that all the “good evidence”—meaning all the
important evidence—had already been printed and produced in paper
form, thus there was no need to allow ESI to be discovered. However,
requesting parties saw the value in receiving electronic documents in
electronic form even if previously produced in paper form because
electronic documents are: easy to transport, easy to import into existing
case management systems, searchable and contain valuable metadata
that paper copies do not contain.
Case law shows that antitechnology arguments are no longer successful. In 1995, the court in Anti-Monopoly stated, “The law is clear that
data in computerized form is discoverable even if paper ‘hard copies’
of the information have [already] been produced.” Anti-Monopoly, Inc.
v. Hasbro, Inc., 1995 WL 649934 (S.D.N.Y. Nov. 3, 1995). The bottom line
is that litigants today should be prepared to produce electronic evidence in electronic form. For a more complete discussion of production
considerations, please refer to section 3.9 of this chapter.
As mentioned above, Federal Rule of Civil Procedure 34(a) makes electronically stored information discoverable but does not explicitly define
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what that term encompasses. It is well-established that, “The Federal
Rules of Civil Procedure should be liberally construed, but they should
not be expanded by disregarding plainly expressed limitations.” Schlagenhauf v. Holder, 379 U.S. 104 (1964). In accordance with this principal of
liberal construction, courts have been very accepting of the discoverability
of evidence produced by various technologies. Courts have largely considered virtually all evidence produced by technology to fall within the
ESI label and thus be discoverable under the Rules, and we predict that
the remaining and emerging technologies will virtually all be deemed discoverable as they come before the courts. Let’s look at several examples:
E-Mail: Evidence of e-mail communications form the bread and
butter of the majority of e-discovery cases. Courts have uniformly
accepted records of e-mail communications as ESI.
RAM: The defendant in Columbia Pictures argued that server log data
stored in random access memory (RAM) is not “electronically stored
information.” The defendant argued that to constitute ESI information
must not just be stored, but stored purposefully for later retrieval. The
defendant also argued that the period of storage for RAM, which may
be as much as six hours, is too temporary to constitute ESI. The court
held that information held in a computer’s RAM does constitute ESI
and is within the scope of discoverable information, citing the broad
intended scope of the amendment to Rule 34. Columbia Pictures, Inc. v.
Bunnell, 2007 WL 2702062 (C.D. Cal. Aug. 24, 2007).
Text Messages: The discoverability of text messages has not been
fully flushed out by the courts at this time. Flagg, arguably the most
important case to discuss the discoverability of text messages, determined that text messages are discoverable if they are relevant. The
court further stated that the relevancy of a text messages turns on the
content of the communication and set up protocols for reviewing text
messages, including reviewing some text messages under seal. Flagg
v. City of Detroit, 2008 WL 787061 (E.D. Mich. Mar. 20, 2008); 2008 WL
3895470 (E.D. Mich. Aug. 22, 2008).
Instant Messages/Chat Rooms/Message Boards/Social Networking Sites:
The discoverability of information contained in instant messages,
internet chat rooms, online message boards and social networking
sites has not been heavily disputed in the case law. Rather, the discoverability of these live time communications seems to be assumed
if the evidence can be located and meets general discoverability
requirements applicable to all evidence. The disputes that have arisen
around these internet communications largely involve authentication. For instance, how do you authenticate that a message posted
on an internet bulletin board truly came from the user shown? Other
disputes have arisen regarding whether evidence of communications that occur in chat rooms or by instant messaging fall within the
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meaning of a “meeting” subject to the Freedom of Information Act
(FOIA) prohibitions and protections. In Beck, the Court held that an
e-mail exchange was not a meeting within the meaning of the FOIA,
but in its dicta speculated that the virtually simultaneous nature of
instant messaging may place it, unlike e-mail, within the meaning of
a meeting for purposes of the FOIA. Beck v. Shelton, 593 S.E.2d 195
(Va. Sup. Ct. 2004).
Sound Recordings: Federal Rule of Civil Procedure 34(a), since the
2006 amendments took effect, explicitly states that sound recordings are
discoverable. Sound recordings are an emerging issue in the law of discoverability, and case law has not yet had much opportunity to address
the burgeoning technologies that can phonetically search sound recordings. Phonetic searching technologies obviously have the potential to
make the discoverability of sound recordings much more feasible, and
thus much more prevalent. In two notable decisions, the courts both
held that preserving audio recordings does not constitute an undue burden and ordered their preservation in audio format. See Del Campo v.
Kennedy, 2006 WL 2586633 (N.D. Cal. Sept. 8, 2006); In re Vioxx Litig.,
N. J. Super. Ct. Case No. 619 (order dated Sept. 8, 2006).
LIMITATIONS ON ESI DISCOVERABILITY
The universe of e-discovery looks bright with the potential to discover
just about any form of electronically stored information that a practitioner can imagine. The e-discovery world is your oyster. But that is
not to say that litigants are afforded unfettered access to all electronically stored evidence in the possession of their opposing parties.
All the discovery limitations that apply to paper discovery apply
with equal force to e-discovery. These limitations include, but are not
limited to the following: the best evidence rule (discussed in section
3.11), foundation and authentication requirements (discussed in section
3.11), hearsay (discussed in section 3.11), the attorney-client privilege
and work product doctrine (discussed in section 3.7), the requirement
that discovery be relevant, and the requirement that the discovery be
reasonable (discussed below and further discussed in section 3.8).
Relevancy Requirement
The threshold question for any discovery matter is whether the discovery sought is relevant. The principle that “discovery rules are not a
hunting license to conjure up a claim that does not exist” has stood the
test of time and remains as true today as when it was stated in 1987.
Avnet, Inc. v. American Motorists Ins. Co., 115 F.R.D. 588 (S.D.N.Y. 1987).
This principle was aptly demonstrated in the context of e-discovery in
the case of Ex Parte Wal-Mart.
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In Ex Parte Wal-Mart, the plaintiff brought a personal injury suit
against Wal-Mart after a falling merchandise incident, and sought
discovery of Wal-Mart’s electronic database containing customer incident reports and employee accident review forms. The district court
granted the request without limitation, but the appellate court held
that the discovery order granted was overly broad and should have
been restricted to falling merchandise incidents within a set geographical area and temporal period. Basically, the other incident reports and
review forms were not relevant to the plaintiff’s case and thus not discoverable. Ex Parte Wal-Mart, Inc., 809 So.2d 818 (Ala. 2001).
More recently, the importance of the concept of relevancy was demonstrated in the case ClearOne Communications, where the plaintiff moved
for entry of a search protocol order that would allow the search of keywords pertaining to specific names, technologies, licensing agreements,
and the defendants’ source code. The defendants objected that the keyword search would produce overly broad and intrusive results. The court
tailored its order to allow some of the proposed keyword searches to
be used and others to be used only in conjunction with other keywords
in order to produce only results that are likely to be relevant. ClearOne
Commc’ns, Inc. v. Chiang, 2008 WL 920336 (D. Utah Apr. 1, 2008). In summation, parties do not have special access to non-relevant information
just because it is stored electronically. While litigators are frequently given
access to their opponents’ electronic records in discovery, they cannot
ask for the moon—ESI is not any more accessible than traditional paper
discovery.
An interesting development in the law of relevancy in the world of
e-discovery is the ability of litigants to gain access to personal data on
home computers, rather than just the business computers of their opponents and third parties. In the world of paper discovery, only in the most
extraordinary cases would business litigants be permitted (or have the
need) to go to the homes of employees in search of responsive documents.
However, the current reality of today’s business practice is that employees
can and frequently do conduct business at home from their computers.
This reality has influenced the discoverability of home computers, and
courts recognize the relevancy of information stored on these computers.
In illustration, let’s look at a few cases. In a relatively early case, Northwest
Airlines, flight attendants used their home computers to organize an illegal
“sick out” during a labor dispute. The court granted access to the flight
attendants’ home computer even though the computers also contained
personal data because the computers contained relevant information; the
court sought to protect the personal data by fashioning a protocol where
a neutral third party collected and imaged the personal computers and
then provided the parties with the relevant data. Northwest Airlines v. Local
2000, C.A. No. 00-08DWF/AJB (D. Minn. Feb. 29, 2000).
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A myriad of cases have confirmed that courts have little to no hesitation ordering the production of relevant information stored on home
computers or personal laptops; however, courts often seek to provide
some sort of protection for non-relevant, personal information. In an
employment discrimination case, the court ordered the plaintiff to produce her personal computer for inspection by a forensic specialist to
search for responsive evidence. Benton v. Dlorah, Inc., 2007 WL 3231431
(D. Kan. Oct. 30, 2007). In a trade secrets misappropriation case, the
court allowed the plaintiff to conduct a computer forensics analysis
of the defendant’s home laptop and home computers. Keystone Fruit
Mktg., Inc. v. Brownfield, 2007 WL 788358 (E.D. Wash. Mar. 14, 2007). In a
case where a teacher had allegedly exchanged sexually explicit e-mails
with students, an administrative law judge ordered production of all
computers in the teacher’s household. The judge sought to protect the
teacher’s rights by allowing the teacher to have his own expert present
at the inspection and by prohibiting the school board’s expert from
retaining any privileged communications.
Reasonableness Requirement
Lastly, it is worth mentioning the reasonableness requirement that
must be met before any evidence is discoverable (discussed further
in section 3.5). The reasonableness or proportionality rule is arguably
the most powerful tool for a litigator seeking to not produce electronically stored evidence. The reasonableness rule, or proportionality test,
is codified in Federal Rule of Civil Procedure 26(b)(2)(C), which reads
in relevant part:
When Required. On motion or on its own, the court must limit the frequency or extent of discovery otherwise allowed by these rules or by local rule
if it determines that: (i) the discovery sought is unreasonably cumulative or
duplicative, or can be obtained from some other source that is more convenient,
less burdensome, or less expensive; (ii) the party seeking discovery has had ample
opportunity to obtain the information by discovery in the action; or (iii) the
burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the
importance of the issues at stake in the action, and the importance of the discovery
in resolving the issues.
Fed.R.Civ.P. 26(b)(2)(C) (2008) (emphasis added).
Rule 26(b)(2)(C) embodies practical considerations, those of burden
and expense, which necessarily have legal ramifications. In short, if the
evidence sought is not worth the burden and expense, the discovery
must be prohibited. In contrast, the previously mentioned requirements
(relevancy, best evidence rule, hearsay, privilege, etc.) are legal considerations that ask whether the evidence is legally competent.
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The court in McPeek, a landmark case, summarized the rationale of
the reasonableness requirement:
“[E]conomic considerations have to be pertinent if the court is to remain
faithful to its responsibility to prevent ‘undue burden or expense’. . . .
If the likelihood of finding something was the only criterion, there is a
risk that someone will have to spend hundreds of thousands of dollars to
produce a single email. That is an awfully expensive needle to justify
searching a haystack.”
McPeek v. Ashcroft, 202 F.R.D. 31, 34 (D.D.C. 2001).
Just as in the paper world, the legal and other costs incurred in
retrieving and producing electronically stored information must be proportionate to the size of the claim and the value of the evidence sought.
In the special context of e-discovery, however, litigators must be able
to grasp the technical realities of e-discovery in order to adequately
demonstrate burden and expense (or lack thereof) to the court. Litigators must be able to show concretely that it would be unreasonable for
a producing party to search through electronically stored information
(such as e-mail or electronic documents) from every hard drive, server,
backup tapes, etc. in light of the relative need for the information. In
the final analysis, electronically stored information is discoverable, but
not any more discoverable than hardcopy evidence; however, special
attention must be paid to the unique characteristics of ESI when making arguments that apply the traditional reasonableness rule.
3.4 Duties of Counsel
Like any other aspect of a lawsuit, counsel has oversight duties associated with the preservation and production of electronically stored information in discovery, and a lawyer can be held individually responsible
for discovery failures in the form of professional discipline (i.e., bar
reprimands, license suspension, etc.) and sanctions. See Qualcomm Inc.
v. Broadcom Corp., 2008 WL 638108 (S.D. Cal Mar. 5, 2008).
These duties as they have evolved in relation to e-discovery arise
from a plethora of sources, including: court orders and opinions, discovery rules, and professional responsibility guidelines. A practitioner’s responsibilities with regard to e-discovery can be categorized into
four distinct duties: (1) duty to locate, preserve, and produce electronic
data; (2) duty to monitor conformity with the discovery obligations;
(3) duty to communicate about the discovery process; and (4) duty to
disclose information to the court. Notably, a landmark case, Zubulake v.
UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004), provides attorneys guidelines about how to fulfill their e-discovery duties.
As a threshold matter, before delving into what each of the individual duties entails, it is extremely important to note that each of
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Figure 3.2 Duties of Counsel
the duties of counsel with regard to e-discovery are affirmative duties.
This means that counsel must actively pursue the fulfillment of each
duty, and it is insufficient to wait until a discovery issue is impossible
to ignore before addressing it. Rather, counsel must proactively seek
information to meet their discovery duties.
DUTY TO LOCATE, PRESERVE, AND PRODUCE
ELECTRONIC DATA
The first duty is the duty to locate, preserve, and produce electronic
data, as illustrated in Zubulake V where the court determined that
defense counsel was partly to blame for the document destruction
because it had failed in its duty to locate relevant information, to preserve that information, and to timely produce that information.
The first step to fulfilling this responsibility is to locate sources of
relevant information. To successfully locate data, counsel must familiarize themselves with the client’s document retention architecture and
policies—or in some cases the unfortunate lack of an organized architecture or established policies. If an organization has not previously created a “data map” showing where information within its organization
is stored, counsel should consider advising the client to hire an outside,
experienced consultant to locate the data quickly before data is destroyed.
An additional benefit of hiring an outside consultant, especially once
data is being located for the purpose of litigation, is the appearance of
objectivity that comes from using a third party consultant.
Regardless of whether counsel personally performs this task or
utilizes an outside provider, it is essential to communicate with IT
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personnel to learn about the client’s backup and recycling procedures.
IT personnel have a wealth of technical information about the day-today operations of an organization and are a precious resource for attorneys looking to fulfill their data location, preservation, and production
duties. Lastly, it is absolutely necessary to also communicate with the
key players in the litigation or investigatory matter to understand how
they store their information. For example, if the company president is a
key player, ask whether they ever perform any work from a home computer or store their information in removable storage mediums.
After the relevant electronic data is located, counsel must follow
proper preservation protocols with regard to that data. The first thing
counsel must do (immediately!) upon notice of litigation or a credible
threat of litigation is to issue a litigation hold. The events that trigger a
litigation hold are discussed in further depth in section 3.6 of this chapter.
The litigation hold should suspend ordinary business document destruction policies until a defensible preservation plan is implemented.
Moreover, the extent of the preservation duty must be clearly communicated with the key players to the litigation, and a standardized
method of preservation should be implemented among all custodians
of potentially relevant data. Unfortunately, preservation efforts that
depend solely on individual custodians to preserve their data are prone
to oversights and failures. Therefore, it is prudent to safeguard potentially relevant information by backing it up on backup tapes. Once data
is preserved, it will be processed for relevant data, which must be produced unless it constitutes an undue burden or expense under FRCP
26. Lastly, it is important to note that counsel’s duty to preserve is an
ongoing duty, which largely takes on the form of the duty to monitor
discovery obligations.
DUTY TO MONITOR DISCOVERY CONFORMITY
Attorneys have an ongoing duty to monitor their client’s discovery
efforts for conformity with preservation duties, production duties,
agreements between the parties, court orders where applicable, etc. In
Zubulake V, Judge Scheindlin declared that “it is not sufficient to notify
all employees of a litigation hold and expect that the party will retain
and produce all relevant information. Counsel must take affirmative
steps to monitor compliance so that all sources of discoverable information are identified and searched.”
DUTY TO COMMUNICATE ABOUT DISCOVERY PROCESS
Practitioners have a duty to communicate with their clients about
the discovery process. Communication is a requirement because it is
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necessary to ensure compliance with their discovery obligations. As
you have probably noticed at this point, the various duties of counsel
are all closely related and intended to together ensure that evidence
preservation and production obligations are met.
Communication, as any student enrolled in “Communications
101” will tell you, is a two way street. After you inform your client
about their preservation duties and assist them in implementing a
litigation hold, insist that your client communicate back to you how
those measures are working. Make a point to receive regular status
reports from your chosen e-discovery service provider, or in house IT
team, who are actually performing the data location, collection and
processing. Moreover, have the individual custodians and employees
of your client communicate to your client, preferably to a designated
e-discovery response team composed of multidisciplinary professionals. A more detailed discussion of creating an e-discovery response
team can be found in section 3.6 of this chapter.
The court in Zubulake V summed up the importance of communications before issuing monetary sanctions and an adverse spoliation inference sanction: “Counsel failed to communicate the litigation hold order
to all key players. They also failed to ascertain each of the key players’
document management habits. By the same token, UBS employees—for
unknown reasons—ignored many of the instructions that counsel gave.
This case represents a failure of communication, and that failure falls
on counsel and client alike.” Proper communication between counsel
and their clients demonstrates to a court your good faith effort to satisfy
discovery obligations and will reasonably ensure that all relevant information is discovered, retained on a continuing basis, and all relevant,
non-privilege documents ultimately produced to the opposing party.
DUTY TO DISCLOSE INFORMATION TO THE COURT
The final duty of counsel with regard to discovery is the duty to disclose information to the court. To be clear, this duty does not require
lawyers to volunteer every piece of information learned in the course
of the attorney-client relationship; clearly, that would destroy the
relationship. The duty does, however, require that a lawyer not lie or
perpetuate a lie, both of which would constitute a fraud on the court
and violate the lawyer’s duties as an officer of the court, even if to do
so would be a breach of confidence otherwise protected. See Model
Rules of Prof’l. Responsibility. § 3.3(c) (2008).
An example of a fraud in the context of discovery would be if counsel represented or certified to the court that his or her client had made
a good faith effort to locate, preserve, and produce relevant information when the counsel knows that is not the case. See Coleman (Parent)
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Holdings, Inc. v. Morgan Stanley & Co., 2005 WL 679071 (Fla. Cir. Ct. Mar.
1, 2005) (“Aware of the tapes’ discovery, Mr. Riel knew when he executed the certification that it was false.”). For another example, a lawyer
would be committing fraud on the court if he or she intentionally hid
evidence or presented evidence known to him or her to be altered by
spoliation. See Qualcomm Inc. v. Broadcom Corp., 2008 WL 66932 (S.D.
Cal. Jan. 7, 2008) (court sanctioned six attorneys for intentionally hiding
or recklessly ignoring relevant documents and blindly accepting their
client’s claims that the discovery searches were adequate).
Many states have adopted, in whole or in part, the American Bar
Association’s Model Rules of Professional Responsibility. Rule 3.3
outlines the duties of counsel with respect to disclosure to the courts.
As with all of the Rules of Professional Responsibility, take the time
to familiarize yourself with it. If you are unsure whether a particular
course of action may violate the Rules, most states have a Bar organization you can call for ethical advice. Consulting this organization and
acting in good faith reliance on that advice serves as a valid defense
against potential ethical violations.
Figure 3.3 ABA Model Rules of Professional Conduct: Rule 3.3
Candor Toward The Tribunal
(a)
A lawyer shall not knowingly:
(1) make a false statement of fact or law to a tribunal or fail to correct a
false statement of material fact or law previously made to the tribunal
by the lawyer;
(2) fail to disclose to the tribunal legal authority in the controlling jurisdiction known to the lawyer to be directly adverse to the position of the
client and not disclosed by opposing counsel; or
(3) offer evidence that the lawyer knows to be false. If a lawyer, the lawyer’s client,
or a witness called by the lawyer, has offered material evidence and the lawyer
comes to know of its falsity, the lawyer shall take reasonable remedial measures,
including, if necessary, disclosure to the tribunal. A lawyer may refuse to offer
evidence, other than the testimony of a defendant in a criminal matter, that the
lawyer reasonably believes is false.
(b) A lawyer who represents a client in an adjudicative proceeding and who knows
that a person intends to engage, is engaging or has engaged in criminal or fraudulent conduct related to the proceeding shall take reasonable remedial measures,
including, if necessary, disclosure to the tribunal.
(c) The duties stated in paragraphs (a) and (b) continue to the conclusion of
the proceeding, and apply even if compliance requires disclosure of information otherwise protected by Rule 1.6.
(d) In an ex parte proceeding, a lawyer shall inform the tribunal of all material
facts known to the lawyer that will enable the tribunal to make an informed
decision, whether or not the facts are adverse.
Model Rules of Prof’l. Responsibility § 3.3 (2008) (emphasis added).
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CONCLUSION
The bottom line with regard to counsel’s discovery duties is that they
are real and the consequences of failing to meet them are likewise real.
Many counsel linger under the impression that their duty is to tell the
client that it has to preserve relevant data and the burden then fully
shifts to the client. The truth of the matter is that discovery is a responsibility shared by both counsel and their clients, and both must work
together in a cooperative fashion.
3.5 Data Locations and Accessibility
The process of discovery necessarily involves discovering the location of
relevant information and collecting that information. In the days of yesteryear when paper documents comprised the core of discovery production,
the discovery team focused their efforts on locations where paper would
be stored, such as: filing cabinets, boxes, warehouses, and even behind
bookcases and desks where relevant papers may have fallen. Counsel today who face e-discovery production duties must similarly know
where ESI resides in order to find the responsive materials in response
to a discovery request. Unlike paper documents which must physically
reside somewhere, the locations where ESI can reside are virtually endless. Moreover, the potential storage locations where ESI can reside change
almost daily as new technologies develop. The graphic below lists just a
few of the possible locations where electronic data can reside.
Figure 3.4 Data Sources and Storage Locations
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Electronically stored data differs fundamentally from paper documents in terms of its potential range of accessibility. For example,
although a paper document stored in a warehouse that caught fire is
irrevocably gone, a laptop computer that was stored in a warehouse
that caught fire still may contain electronic documents that can be
retrieved through the use of computer forensics. This greater number
of locations where ESI can be stored and the increased accessibility
challenges of some ESI make finding and retrieving electronic evidence
more challenging than finding and retrieving paper documents in certain circumstances.
The Federal Rules of Civil Procedure recognize that greater accessibility challenges can arise in the context of discovery of ESI due to the
greater number of storage locations and potential greater accessibility
challenged. Moreover, the Rules recognize that sometimes the burden
of recovering inaccessible electronically stored information simply is
not reasonable and should not be required. Federal Rule of Civil Procedure 26(b)(2)(B) provides in relevant part:
Specific Limitations on Electronically Stored Information. A party need not
provide discovery of electronically stored information from sources that
the party identifies as not reasonably accessible because of undue burden
or cost. On motion to compel discovery or for a protective order, the party
from whom discovery is sought must show that the information is not
reasonably accessible because of undue burden or cost. If that showing is
made, the court may nonetheless order discovery from such sources if the
requesting party shows good cause . . . .
Rule 26(b)(2)(B) embodies a practical consideration of undue
burden or cost. In short, if the data sought is not worth the burden
and expense of discovering it because it is not reasonably accessible
and will cost more than it is worth to locate and retrieve, the court
has discretion to prohibit the discovery. Therefore, every attorney who
engages in electronic discovery must understand not only where electronic data potentially can be located but also must understand what
accessibility barriers, if any, exist in locating and retrieving that data in
order to make convincing arguments to prohibit or permit discovery
under Rule 26(b)(2)(B).
The good news is that an attorney does not need a technical background or an exhaustive understanding of how computers operate to
effectively navigate discovery in today’s electronic age. The simplest,
and indeed best, approach to locating evidence and making Rule
26(b)(2)(B) arguments is to concentrate on the types of media that can
store electronic evidence. Concentrating on media storage devices is
more straightforward than the alternative of analyzing data collection
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from an IT topography point of view, which focuses on the role that a
computer plays in the larger network system. Describing accessibility
in terms of media storage devices and categories of data is also easier
for judges, who also do not necessarily have a comprehensive understanding of how computers operate, to understand.
THE ACCESSIBILITY SPECTRUM
The current rule that is embodied by Rule 26(b)(2)(B) is that documents are discoverable if they are reasonably accessible. The foundation for the current rule was laid forth in the landmark case of Zubulake
v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003). Understanding this
case is essential to understanding the law as it currently applies Rule
26(b)(2)(B). The court in Zubulake stated, “[W]hether production of
documents is unduly burdensome or expensive turns primarily on
whether it is kept in an accessible or inaccessible format (a distinction
that corresponds closely to the expense of production).”
The Zubulake court created a two-tier system for determining
whether information sought in discovery is reasonable to discover. The
first tier is comprised of information that is identified as accessible. Accessible information in the first tier must be automatically produced when
requested. The responding party bears the burden of proof to show that
information should be identified as inaccessible rather than accessible
due to undue burden or cost associated with production. If the responding party successfully meets this burden, the information sought is identified as inaccessible. The second tier is comprised of information that is
not inaccessible. The burden of proof in the second tier shifts to the party
requesting the information to show good cause for production in spite
of the burden and cost. This two-tier system was largely adopted in the
reasonable accessibility language of Rule 26(b)(2)(B).
As stated above, the analysis of whether evidence may be deemed
non-discoverable by a judge due to under burden and expense under
Rule 26(b)(2)(B) comes down to the single question of whether the
information sought is reasonably accessible. So what is reasonably
accessible?
The determination of what is reasonably accessible is a fact specific
determination unique to each case. In many circumstances, the importance of the ESI sought makes data that has been erased, fragmented,
or damaged reasonably accessible. Likewise, active data may not be
reasonably accessible if the data sought is so unimportant that even
the relatively straightforward search is not reasonably justified. The
determination whether ESI is reasonably accessible is a balancing of
the accessibility of and the importance of the data sought.
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The Zubulake court identified five categories of data, listed them
in the order it deemed most accessible to least accessible, and stated that
the first three categories are “typically identified as accessible and the
latter two as inaccessible.” It is important to note that the court says the
categories are typically identified one way or another; the guidelines
are not fast, hard rules. Nevertheless, the categories are extremely useful in determining the accessibility of the data that can then be weighed
against the importance of the data sought. The five categories of data
are the following:
1.
2.
3.
4.
5.
Active, online data: Data that can be seen and accessed upon
normal booting of the computer is known as active, online
data. This data is generally stored on desktop, laptop, and
server hard drives. Active data is accessed frequently and
quickly by users.
Near-line data: Near-line data typically consists of a removable
storage device that houses data. Data can be created on and
read from the storage device if placed into a computer system.
Today, the most common type of removable media, the 3.5 inch
floppy disk, has virtually gone the way of the dinosaur due
to the small amount of data these disks can hold. The more
likely find is the floppy disk’s descendants, the CD-ROM and
DVD or their high density counterparts such as the Zip disk
and USB memory cards. Near-line data is easily accessible if
already placed in the appropriate read device.
Offline storage/archives: Offline storage media is a removable
optical disk or magnetic tape, which can be labeled and stored
in a shelf or rack. Offline storage of electronic records is traditionally used for making disaster copies of records. Likelihood of retrieval of offline storage is minimal and accessibility
is much slower than online or near-line storage.
Backup tapes: Backup tape data is created by a device much
like a tape recorder that reads data from the computer system
and writes it onto a tape. As with offline storage, organizations typically back data up to tape to archive electronic information in the event of catastrophic loss or disaster recovery.
Tape drives have data capacities of anywhere from a few hundred kilobytes to several gigabytes. Data contained on backup
tapes is not very accessible because the lack of data organization on the tape and the special restoration software needed to
restore the tape.
Erased, fragmented, or damaged data: Media storage devices
may contain deleted data contained in temporary files or
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damaged data. This data is not accessible to the common
computer user. Instead, skilled computer forensic engineers
are needed recover and analyze the data in order to make it
accessible.
The most useful way to think about the five categories above is as
a spectrum. On this accessibility spectrum, the data on the left is generally the most accessible and the data on the right is generally the least
accessible. As a general rule, information deemed “accessible” is stored
in a readily usable format and does not need to be restored or manipulated to be usable. Inaccessible data, on the other hand, is not readily
usable and must be restored, recovered or repaired to be usable. The
spectrum drawn below provides examples of media storage devices
that typically fall beneath each category.
Somewhere on this spectrum a line exists that determines whether
data should be identified as accessible or inaccessible. Where this line
should be drawn is fact intensive and will differ from case to case. For
example, damaged data may be reasonably accessible if it is not that
badly damaged and can be easily retrieved by a computer forensic
expert, even though it is typically inaccessible. Rule 26(b)(2)(B) negotiations and arguments before a court are in fact arguments about where
the line should be drawn given the specific facts of a case. It is prudent
to consult an ESI consultant to determine the true accessibility of the
data sought when making these arguments.
Figure 3.5 Categories of Data Accessibility
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DATA DOWNGRADING
The failure to prevent the downgrading of discoverable data may lead
the court to order production of data that is otherwise inaccessible,
or impose sanctions. In Treppel v. Biovail Corp., 233 FRD 363 (S.D.N.Y.
2006), the court indicated that parties who fail to prevent data downgrading after reasonable anticipation of litigation violate preservation
obligations and may be liable for sanctions. Another case demonstrating the unwillingness of some courts to use data downgrading as an
acceptable inaccessibility defense is Disability Rights Council of Greater
Wash. v. Wash. Metro. Transit Auth., 242 F.R.D. 139 (D.D.C. 2007). In this
case, Magistrate Judge John Facciola stated:
“[T]he newly amended Federal Rules of Civil Procedure initially relieve
a party from producing electronically stored information that is not reasonably accessible because of undue burden and cost, I am anything but
certain that I should permit a party who has failed to preserve accessible
information without cause to then complain about the inaccessibility of
the only electronically stored information that remains.”
However, in Quinby v. WestLB AG, 245 F.R.D. 94 (S.D.N.Y. 2006), the
court did not sanction the defendant for deleting accessible data
because it had maintained a backup copy of the information. Since the
responding party could still “produce the electronic evidence by restoring it from an inaccessible format, albeit at a higher cost,” the downgrading was not tantamount to spoliation. While downgrading did not
constitute spoliation in Quinby, the magistrate judge determined that
“if a party creates its own burden or expense by converting it into an
inaccessible format data that it should have reasonably foreseen would
be discoverable . . . then it should not be entitled to shift the costs of
restoring and searching the data.”
THE GOLD MINE PROBLEM
The use of consultants can largely help you determine how much effort
it will require to retrieve information sought, although not entirely. On
the other hand, it is far more difficult to determine the importance of the
information sought before the information sought has been retrieved.
In other words, how do you determine whether the responding party’s
discovery efforts will produce gold, fool’s gold, or just a bunch of dirt?
It is difficult to make an effective Rule 26(b)(2)(B) argument when you
do not know the value of the information sought to weigh against the
expense of obtaining the information.
The solution to this problem is to survey the land. Gold surveyors rely on geographical readouts, reports of prior gold findings, and
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samples of the terrain to determine whether the likelihood of finding
gold justifies the expense of digging. Similarly, attorneys engaged in
discovery can conduct depositions, request interrogatories, and conduct data samplings to determine what information is likely to be discovered should discovery be conducted.
MEDIA STORAGE DEVICES
Each media storage device has unique characteristics that may be relevant to: (1) how to search for data to meet production duties; (2) the
accessibility of data storage on the devices; and (3) the likelihood of
discovering important information. The following is a brief discussion
of various considerations for common types of media storage devices.
Laptop and Desktop Hard Drives
In the world of paper discovery, an individual’s most recent and perhaps most valuable information would be the papers and files lying
directly on their desk. These files are considered “active files” in the
paper world, and are usually a good indication of what an individual
has been working on at that point in time. In the e-discovery world,
data that can be seen and accessed upon normal booting of the computer is known as active data. Today, the active data contained on an individual’s desktop or laptop computer is usually the best place to begin
an electronic evidence investigation when attempting to ascertain an
individual’s most recent pursuits.
In addition to active data, a laptop or desktop hard drive can contain important deleted data. Deleted data can be found in either the
form of slack data (i.e. fragments of data found in the unused portions
of a hard drive) or data created automatically by the computer system
(i.e. swap and temporary files). The process of recovering and analyzing this data, which is not accessible to the common user, is known
as computer forensics; see chapter five for an in-depth discussion of
computer forensics. Often, an electronic evidence production will take
on both electronic discovery and computer forensics aspects in relation
to laptop and desktop hard drives.
Networks and Servers
In addition to an individual’s paper files, an organization will likely
have a common file room where paper documents and other resources
can be shared amongst all users. In the information age, this file room
concept can be compared to an organization’s computer network.
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Rarely does an individual in a corporate environment operate his or
her computer in a stand-alone state. Typically, the single desktop or
laptop is connected to a network server. A network allows users to
share hardware, software, and files, in addition to having group scheduling and messaging capabilities.
An organization’s IT department can arrange the network in
countless ways. However, most networks are arranged in a clientserver arrangement where each individual’s computer is a “client” of
a centralized server (i.e. a large computer infrastructure with a large
amount of hard disk space). In this configuration, each individual user
has access to information placed on the network, but cannot access the
hard drives of other individuals. Just as counsel would examine a central file room for responsive or privileged paper documents, counsel
must search an organization’s server hard disks when conducting electronic discovery.
Backup Tapes
Organizations typically back up data to magnetic tape and archive the
electronic information. This is done most often so that the data can
be retrieved in case of a catastrophic event that destroys the original
data. Also, organizations backup data to magnetic tape in order to free
up space on their active computer systems while still retaining the
data in case it is needed for an investigation or litigation. In the precomputer era, this would be similar to making copies of important
files and storing them off-site in case of a fire or flood at the organization’s main center of operations.
Usually, an IT staff member is charged with implementing the
organization’s backup policy and procedures. Backup software
programs are used to copy system information to magnetic tape or
another removable archival device. Backups are completed according
to a backup procedure or calendar. Most organizations create nightly
backups, using a different tape for each night’s backup which will
capture only changes that occurred during that day. Often, an organization’s backup policy requires these nightly backup tapes to be recycled or overwritten after one week. In addition to nightly incremental
backups, organizations usually conduct full weekly or monthly backups, copying everything that exists on their systems at that time. These
backups are stored, sometimes offsite, for longer periods of time,
sometimes up to one year or more if the backup tape storage policy
goes unchecked.
Both the courts and parties in litigation are coming to recognize that archival data is valuable in discovery because it provides a
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complete snapshot of the documents and e-mail communications at a
single point in time. Backup data may be most beneficial when comparing it to active hard drive data to detect data deletion, file modifications,
evidence tampering, or to reveal a string of e-mail communication that
no longer exists in a user’s e-mail system. Backup tapes often contain
evidence that is no longer available from any other source.
Backup tapes, however, are not always a panacea for gathering
electronic evidence from a single point in time. In certain circumstances, data important to a legal proceeding will be missed if backup
tapes are the sole source of gathering evidence. For example, a potentially responsive e-mail that is received and deleted on the same day
will not reside on the backup tape archives for either the day prior, day
of, or day after the e-mail is received and deleted. However, a forensic
investigation of the hard drive of either the sender or the recipient of
that e-mail may yield a copy of that e-mail, depending on the amount
of time elapsed since its deletion.
Removable Media
In order to conduct a comprehensive search for all paper evidence,
lawyers need to consider whether any documents have been physically removed from the main premises that are the subject of the search
for documents. In a search for responsive ESI, lawyers face a similar
challenge in the form of removable media. Removable media includes
such storage devices as CD-ROMs, DVDs, Zip drives, and USB flash
drives, just to name a few. Also, although the 3.5 inch floppy disk has
gone the way of the dinosaur in today’s computer world, the floppy
disk was the most common type of removable media in the 1990s and
could still be floating around an office containing valuable information
that can be found nowhere else.
Attorneys must make reasonable inquires into whether any removable storage devices exist that may contain information responsive to
a discovery request. Because documents can grow legs and travel, a
simple search of a premise will not necessarily locate relevant data on
removable storage devices. The following are questions that counsel
must pose directly to their clients or to the opposing party about evidence contained on removable media to ensure that relevant evidence
is located:
• Do the users in question typically store data on any removable
devices?
• Has any person downloaded excessively large amounts of data
since commencement of the suit?
• Is there a central storage location for archived removable media?
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Cell Phones, PDAs, and BlackBerry Smartphones
The depth and breadth of this category of electronic evidence sources
runs the gamut of technology’s latest and greatest developments—
personal digital assistants (“PDAs”) with and without e-mail capabilities, cell phones with e-mail or other computing functions, handheld
computers, and electronic tablets, just to name a few. The existence of
these electronic evidence sources should be explored in discovery and
the wording of counsels’ discovery requests should be expanded to
include relevant evidence stored therein.
Antiquated Data Locations
Because technology changes so quickly, today’s high-tech gadgets are
tomorrow’s relics. Yet, the data contained on these antiquated data
sources might contain the smoking gun piece of evidence in litigation. As such, it is important that out-of-date media sources are not
overlooked, especially if they reside in close proximity to or have some
other strong connection to other relevant evidence. Such antiquated
data locations might include optical disks or older desktops or laptops that have been exchanged for newer models. In addition, do not
neglect seemingly “broken” hard drives, computers, or media sources.
Oftentimes, qualified computer forensic experts can retrieve data that
is outwardly inaccessible to the average person.
THIRD PARTY SOURCES AND ACCESSIBILITY
Whether searching for paper based evidence or electronic evidence,
the last location attorneys should consider when uncovering discoverable information is third parties. In the paper world this means investigating whether any documents were mailed or distributed to people
outside the company. In the electronic world, the important questions
to ask differ only slightly. For example, were the files e-mailed to someone who might still have them saved on their computer? Did the e-mail
travel through an internet service provider (“ISP”) who might possess
a copy of the information? Did a third party save a copy to a disk and
store it at another location? Is a third party operating a database of
information that might be relevant? Oftentimes data that has been
destroyed by a party, either pursuant to a document retention policy
or intentionally in bad faith, the data might still exist somewhere with
a third party. Federal Rule of Civil Procedure 45 allows parties to subpoena third parties to produce responsive ESI; for a more complete
discussion of Rule 45 third party subpoenas see section 3.10.
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Whether looking for one single e-mail or searching for every relevant document, it is important that counsel think globally rather than
restrict themselves to only the desktop of the key individuals involved.
Counsel should ask broad questions that help ascertain how the targeted individuals and their companies use technology on a day to day
basis. Just as a good forensic scientist would not go straight for the
dead body and ignore the blood spatters, fingerprints, and bullets scattered on the ground, an electronic evidence investigator cannot proceed straight for the desktop computer and ignore removable media,
servers, and backup tapes. With a little “Perry Mason” creativity, an
attorney can develop a discovery strategy that encompasses the wide
range of potential locations where ESI may be stored.
3.6 Retention, Preservation, and
Sanctions for Spoliation
Attorneys who go to trial must be aware of the unique spoliation hazards that are particular to electronic data. The unique characteristics
of ESI are of critical importance when it comes to the topics of retention, preservation, and sanctions for spoliation, which all are critical to
sound electronic document management that is necessary to protect an
organization’s informational assets. Retention is the routine practice
of appropriately destroying stale documents in the ordinary course of
business. Preservation refers to the duty to preserve relevant evidence
once litigation is reasonably anticipated. Spoliation is the alteration or
destruction of a document so as to make it invalid or unusable as evidence. Sanctions are court-imposed penalties that can be imposed on
a party when the party fails to abide by court rules, including rules
against spoliation of electronic evidence.
This section provides practitioners step-by-step advice on how to
manage the potential pitfalls specific to the spoliation of electronic evidence. The law regarding a party’s duties to preserve electronic evidence and the potential sanctions for failure to meet that duty are still
evolving in the case law. It is vital that lawyers representing organizations with significant electronic records collections keep abreast of this
evolution, and follow current best practices relating to retention and
preservation.
The key to a successful electronic document management is to have
a plan and to follow it. Electronic document management should be
seen as a business initiative that is continually reviewed, updated, and
audited. Because of the threat of sanctions for non-compliance with
retention and preservation rules, this topic should garner top-priority
for corporate leadership and counsel.
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An interesting, but hardly surprising, finding is that in-house counsel cited lack of time and lack of budget as the top two barriers to executing ESI policies. Specifically, thirty-one percent of U.S. and twenty-seven
percent of UK respondents cited lack of time and resources as the largest barrier. Additionally, eighteen percent of U.S. and twenty percent
of UK respondents cited lack of budget/investment as their number
one barrier. Second Annual ESI Trends Report, Kroll Ontrack (2008). These
findings show a lack of understanding that the investment in the frontend effort to create a retention and preservation plan can pay off many
times over in the form of saved collection costs and frustrations that
will likely occur without a plan. Moreover, courts tend to view conduct
in accordance with a plan as far more reasonable and far less suspect
than conduct that occurs ad hoc; adherence to a reasonable electronic
document management policy can be a convincing defense against
sanctions.
ELECTRONIC DOCUMENT MANAGEMENT:
WHAT NOT TO DO
A good example of what an organization should not do with regards
to electronic document management was played out in the corporate
scandals of 2002. Throughout 2002 and well into 2003, prominent newspapers across America headlined stories of companies encouraging
their employees to delete files in the wake of a lawsuit or government
investigation. For example, in the wake of a pending federal investigation into an initial public stock offering, Frank Quattrone sent an
e-mail containing the following language to hundreds of workers, “We
strongly suggest that before you leave for the holidays, you should
catch up on file cleanup.” United States v. Quattrone, 441 F.3d 153, 166
(2d Cir. 2006).
For this act, Mr. Quattrone was sentenced to eighteen months
imprisonment for obstruction of justice, obstruction of agency proceeding, and witness tampering. However, the sentence was vacated
and remanded for a new trial because of a bad jury instruction, and
Mr. Quattrone reached a deferred prosecution deal on August 22, 2006,
prior to a new trial. Nonetheless, this case—and the hundreds of others
exactly like it—illustrates that spoliation can have severe consequences,
including criminal charges, in some cases.
RETENTION
Defensible document retention requires the development, implementation, and continued monitoring of a thorough and thoughtful
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electronic document retention policy that is tailored to an organization’s particular needs. A thoughtful retention policy requires the systematic review, retention, and destruction of documents received or
created in the course of business.
Implementing and following a document retention policy is crucial
because it can be a mitigating factor in litigation when documents are
destroyed in accordance with the policy. Courts see destruction of electronic documents according to a plan as permissible while destruction
of electronic documents that occur haphazardly or contrary to a plan
is viewed suspiciously. For example, in Hynix Semiconductor, the court
found that documents destroyed pursuant to a retention policy did not
constitute spoliation. The court stated, “[The defendant’s] adoption
and implementation of its content neutral Document Retention Policy
in mid-1998 was a permissible business decision.” Hynix Semiconductor,
Inc. v. Rambus, Inc., No. C-00-20905 RMW (N.D. Cal. Jan. 4, 2006).
Having the document retention policy in place well before litigation or the threat of litigation arises is also important. Courts are understandably suspicious of retention policies that look like housecleaning
campaigns conveniently established with the possibility of litigation
on the horizon. As one court warned, “[A company cannot] make a
document retention program an integral part of its litigation strategy
and, pursuant thereto, target for destruction documents that are discoverable in litigation.” Samsung Elecs. Co., Ltd. v. Rambus, Inc., 439 F.
Supp. 2d 524 (E.D. Va. 2006).
An initial question that might be asked is, “Why not retain everything forever? What’s wrong with being overly inclusive in document
retention?” There are several things wrong with an overly-inclusive
document retention policy that will make an organization that chooses
this option regret it. First, it is completely unnecessary to retain “everything forever.” An overly inclusive document retention policy ties up
resources by requiring vast amounts of computer storage space and
decreases system efficiency. Second and more importantly, courts can
and do demand that you produce what you have even when it is not
reasonably accessible because of undue burden or cost. See Fed. R. Civ. P
26(b)(2)(B) (“the party from whom discovery is sought must show that
the evidence is not reasonably accessible because of undue burden [in
order to exclude evidence]. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good
cause”) (emphasis added). On the other hand, if the documents were
destroyed pursuant to a reasonable document retention policy prior to
the time when a preservation duty arises, the courts cannot demand that
you produce it because it does not exist. As you probably grasp by now,
retention and preservation sometimes feels like walking a tight rope.
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Steps to Create a Document Retention Policy
Having a document retention policy, clearly, is critical. What organizations need to know to create an effective electronic document retention
policy, however, is not as complicated as one thinks. The following are
a few simple steps that can guide your organization in creating its
own policy:
Step One: Create an Inventory: The best place to start when creating
an electronic document retention policy is to create an inventory of
your organization’s ESI. This inventory provides a “table of contents”
for the document retention policy—supplying an outline of the company’s electronic framework. The more information you have about
your organization’s informational status and needs, the better you can
plan for your document retention policy. Inventories are also sometimes referred to as “data maps.” Regardless of what you call or how
you organize this inventory, it should include the following:
• All active storage devices in use throughout the company (e.g.
laptops, cell phones, PDAs, etc.) and their locations;
• All archived electronic data storage formats and locations; and
• All methods in which data can be transferred to/from the
organization.
Step Two: Classify Your Records: Every organization should define
specific classifications of business records. Differing types of business
records have different purposes and different “useful life” periods. It is
important to know what the useful life of a record is so that the person
creating a retention policy can make a reasonable decision as to how
long the record should be retained; documents should be destroyed
sometime after their useful life period expires. Setting up record classifications and corresponding useful life periods will streamline record
keeping decisions after the record retention policy is in place.
Step Three: Determine Retention Periods and Procedures: This step is
the bulk of any retention policy. A retention policy must specify retention periods from different classifications of records and procedures for
destroying those records. Moreover, a retention policy should include
a method for determining retention periods so that a reviewing court
can understand the rationale behind the determination so as to be able
to judge its reasonableness.
In determining appropriate retention periods first determine whether
there are any statutory or regulatory retention requirements. Many documents (such as tax documents and SEC filings) must be retained for a
certain period of time by law. The statutory retention requirements vary
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by jurisdiction and can differ for each company. Organizations should
consult their in-house or external counsel to conduct their due diligence
and find any applicable statutory requirements.
The standard for all records not governed by regulations is reasonableness. What is reasonable is determined according to individual business practices, industry standards, and relevant statute of limitations
periods. All categories of records do not have to be treated equal. Some
data, such as e-mail, can be retained for relatively short time periods,
such as thirty to ninety days. Other categories of data, such as financial
records and legal documents, may need to be permanently preserved,
depending on their contents. The majority of routine business correspondence and project files, such as purchase orders, human resource
files, vendor reports, sales reports, inventory/production schedules,
etc., can be retained anywhere from one to five years depending on the
document’s useful life period as reasonably defined in step two.
Retention procedures are also important to determine at this stage.
One critical procedure that should accompany all document retention policies is the maintenance of a destroyed records log book that
details what was destroyed, when, and by whom. Another important procedure to determine in advance is where and in what format
the documents should be retained, and when the documents should
be converted to that format, if applicable. The storage requirements
for mass amounts of data often require that electronic documents be
stored on backup tapes rather than in an active format such as a harddrive. While it is frequently a practical necessity to store documents
on backup tapes, keep in mind that it is typically a timely and expensive process to convert data from backup tapes into a readable format
again. Also, keep in mind the importance of maintaining an electronic
document’s metadata when retaining the document.
Step Four: Choose a Records Custodian: An electronic document
retention policy should also include appointing a records custodian for
each department. Similar to a company’s main organizational chart,
the company should set up a records management reporting structure
that determines which individuals in the company are directly responsible for developing and enforcing records management policies.
Step Five: Create a Discovery Response Team to Ensure Ongoing Compliance: Additionally, an organization should appoint a discovery response
team to handle records management issues in the event of pending or
impending litigation. Such litigation response teams should be comprised of outside counsel, corporate counsel, human resource supervisors, business line managers, and IT staff. This team should be officially
authorized to quickly alter any document retention policy in the event of
an emergency and ensure compliance with record preservation duties.
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Figure 3.6 E-Discovery Response Team
It is important that your discovery response team document the
day-to-day operations of the retention policy. A compliance monitoring
program is an essential component of a document management policy.
Also, the team should be responsible for making sure that new and
existing employees are training on how the retention policy impacts
the day-to-day operations of their work. For example, it is a good idea
to educate employees about how often they are allowed to delete e-mail
and under what circumstances e-mail files must be retained. The team
should work closely with human resources and IT to have a posted
policy and informational materials on the company’s Intranet website
for employees to easily be able to access.
PRESERVATION
There is a common law duty to preserve evidence that is relevant to
litigation. Once the duty to preserve comes into place, counsel should
initiate a litigation hold to preserve all relevant documents and communications. The litigation hold should encompass all documents
within the scope of the litigation that are held by both the parties to the
litigation and reasonably identifiable third parties.
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Before the invention and widespread use of the computer and other
technologies, document preservation was rather straightforward; counsel gathered the important documents contained in the client’s filing
cabinets and informed them not to put any documents through the
paper shredder until after the suit was resolved. However, the problem
of spoliation of evidence has grown more acute in the context of electronic evidence because the dynamic nature of evidence allows evidence
destruction (i.e. spoliation) to occur inadvertently. Destruction of ESI
can occur by simply maintaining the status quo. For example, computers will overwrite deleted data when it needs the space for new data.
The duty to preserve electronic evidence is triggered, in some
instances, even before litigation or an investigation ensues. For sure, a
litigation hold must be put in place once notice that litigation has been
filed or an investigation has begun is received. The emerging view was
stated by the court in Zubulake IV, “The obligation to preserve evidence
arises when the party has notice that the evidence is relevant to litigation or when a party should have know that the evidence may be
relevant to future litigation.” Zubulake v. UBS Warburg, 220 F.R.D. 212
(S.D.N.Y. 2003).
In essence, the emerging standard triggers the duty to preserve
evidence when there is a reasonable or credible threat of litigation. Not
every complaint by an unhappy employee or every rumor is a credible
threat of litigation. When a situation arises that may be a credible threat
of litigation, an organization should turn to their in-house counsel or
outside counsel immediately for advice on whether the duty to preserve evidence has been triggered. That counsel, in turn, can look into
the jurisdiction-specific case law and see how the courts in that jurisdiction have treated events with regard to triggering a preservation duty.
Generally, examples of situations short of actual notice of litigation or
an investigation that trigger the preservation duty include notice of the
occurrence of an event which typically results in litigation (i.e. a train
crash, a malfunctioning medical device that caused injury, the filing of
an insurance claim over a disputed insurance payment, etc.).
A litigation hold should be initiated immediately after it is determined that the duty to preserve evidence has been triggered, and that
determination should be made as quickly as possible. This is true
because electronic records may be inadvertently destroyed by simply maintaining the status quo. It is therefore vital that preservation
efforts begin as soon as possible. Unfortunately, many organizations
are unprepared and unable to quickly suspend automated document
destruction, which regularly occurs due to backup tape recycling procedures. The potential consequences of this automated destruction are
severe, both in terms of potential lost evidence to support your case
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and sanctions. Therefore, it is very important for counsel representing organizations with electronic records collections (which is virtually
every organization doing business) to advise clients prior to notice of
litigation to evaluate their retention policies, specifically their automated tape recycling protocols.
Determining the scope of a preservation duty means determining
what evidence must be preserved. The first thing to note is that the
duty to preserve evidence encompasses evidence in the possession
of your client and in the possession of third parties. A party’s preservation duties include a duty to reasonably identify and notify nonparties of their duties to preserve potentially relevant information. See
In re Flash Memory Antitrust Litig., 2008 WL 1831668 (N.D. Cal. April
22, 2008). The triggering of a litigation hold should prompt an attorney
to notify anyone that potentially has possession of relevant information, including: third parties, opponents, and potential opponents. This
notification should occur at the earliest possible point in time; again,
the earlier preservation efforts begin the more likely it is that the inadvertent destruction of relevant evidence will occur.
The second thing to note is that the scope of the duty to preserve
evidence is an ongoing duty that continues throughout the litigation. An
attorney has not meet his or her obligations simply by notifying all potential parties of a litigation hold, but rather an attorney must also monitor
compliance. See Zubulake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004)
(“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.”).
The third, and most important, thing to note is that the scope of
a litigation hold should be determined as early as possible, and the
determination should involve the agreement of the opposing party if
possible. In fact, a good faith attempt to work through discovery issues
(including the scope of a preservation duty) is mandated by Federal
Rule of Civil Procedure 26(f), which requires a conference between the
parties as soon as possible and at least twenty-one days before a scheduling conference or the due date of a scheduling order. Rule 26(f)(2)
reads in relevant part:
In conferring, the parties must . . . discuss any issues about preserving discoverable information; and develop a proposed discovery plan. The attorneys
of record and all unrepresented parties that have appeared in the case
are jointly responsible for arranging the conference, for attempting in
good faith to agree on the proposed discovery plan, and for submitting
to the court within 14 days after the conference a written report outlining
the plan. . . .
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Should the parties be successful in reaching an agreement at a
Rule 26(f)(2) conference or otherwise as to the scope of preservation
duties, the agreement will be submitted as a written report to the court
within thirteen days after the conference. Fed. R. Civ. P. 26(f)(2) (2008).
The court may then issue a scheduling order pursuant to Federal Rule
of Civil Procedure 16. However, in the event an agreement is made
that occurs outside of the Rule 26(f) framework, it is prudent to put
the agreement with your opponent into a written stipulation. These
stipulations can and should be specific with regard to date ranges,
individuals, or organizational groups within each party engaged in
the litigation. Either a court scheduling order issued pursuant to Rule
16 or a stipulation will provide a framework for each organization
to adequately preserve the electronic evidence that is relevant to the
case, while avoiding any undue business interruption which would
certainly occur if each party were required to suspend all backup tape
recycling organization-wide.
Should a good faith attempt to reach agreement regarding the
scope of the duty to preserve relevant information fail, a party should
seek court intervention as early as possible. Although document production under the Federal Rules of Civil Procedure is intended to take
place without judicial intervention, see Margel v. E.G.L. Gem Lab Ltd.,
2008 WL 2224288 (May 29, 2008), sometimes judicial intervention is
necessary and courts are extremely unlikely to penalize you for going
to them so long as you first made a good faith effort on your part to
resolve the discovery issues.
There are several forms judicial intervention can take. First, a party
may seek a preservation order from the court, seeking preservation
of the opponent’s data. In some instances, these orders may be maintained on an ex-parte basis. When requesting a preservation order for
an opponent’s electronic data, a practitioner should be certain to make
the request with sufficient specificity as to dates, places, individuals,
and topics so as to prefect a reasonable request to the court. Requests
that are overbroad or do not define data that can be visibly segregated
by one’s opponent are unlikely to be granted.
A second option for judicial intervention is to seek an order from
the court defining the scope of both parties’ duty to preserve ESI. This
motion to the court can include suggestions as to date ranges, lists of
individual electronic documents, custodians, and keywords to narrow the duty to preserve. An order defining the scope of preservation
duties may be necessary on your end when faced with the challenge
of advising a client regarding the proper preservation of relevant electronic evidence, while at the same time ensuring that the business of
the client is not unduly interrupted.
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A third option for judicial intervention is to ask the court to
appoint a special master. A special master is appointed by an order
of the court, as authorized by Federal Rule of Civil Procedure 53(a),
to assist with discovery. Generally, in an electronic discovery dispute,
a special master will regulate electronic discovery proceedings, conduct evidentiary hearings, issue orders and sanctions if necessary,
and conclude by issuing a Special Master’s Order, Report, or Recommendations to the court. A special master will have technical expertise
and experience with ESI issues and can often save parties money by
efficiently resolving discovery issues. See Appendix H for a sample
special master appointment order.
Similarly, the early stages of litigation provide a good opportunity
for parties to consider utilizing a third party neutral electronic evidence
expert to handle the parties’ electronic data. Such an expert can assist
the parties with capturing and storing data, providing the data to the
court for in-camera review, and production. A neutral expert can be
appointed by the court and be designated as an officer of the court. See
Simon Prop. Group L.P. v. mySimon, Inc., 194 F.R.D. 639 (S.D. Ind. 2000).
Alternatively, parties may agree to use a third party neutral to assist
them with discovery issues without court appointment. The benefit of
having the third party neutral be court-appointed is court supervision
and approval of the third party’s role. However, obtaining a third party
neutral without a court order may be an attractive option in smaller
cases where attorneys are more cost sensitive because it will avoid the
costs associated with obtaining the court order; nonetheless, make sure
you stipulate any agreement in writing. See Appendix G for a sample
third party neutral appointment order.
A final note about the duty to preserve electronic data is that the
duty ends when a matter (litigation or investigation) concludes. Attorneys should advise the client to end the preservation hold and resume
routine document destruction in accordance with the organization’s
document retention police when the duty to preserve ends. Failure to
resume a document retention policy increases storage costs and the
amount of available information that may need to be searched for discovery in future litigation or investigations.
SANCTIONS FOR SPOLIATION
Sanctions are penalties imposed by a court on a party or on a party’s
attorney for violation of a court rule. Courts have authority to issue
sanctions against parties that violate the law or a previous court order
both under their inherent judicial authority and under the Federal Rules
of Civil Procedure. Sanctions can be issued for a plethora of discovery
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misconduct (e.g. untimely production, providing production in a format contrary to agreement, or court order, etc.). In this section, however, we shall narrowly discuss sanctions for spoliation of evidence.
Spoliation is the alteration, destruction, or failure to preserve evidence so as to make the evidence unavailable for litigation. See Zubulake
v. UBS Warburg, 220 F.R.D. 212, 216 (S.D.N.Y. 2003). Spoliation often
results in unfair prejudice to the opposing party because the lack of evidence can make it impossible for a party to prove out his or her case.
Rule 37(e) Safe Harbor Provision
New provisions were added to Federal Rule of Civil Procedure 37 as
part of the 2006 amendments to the Rules that establish a “safe harbor”
from sanctions. Rule 37(e) provides in relevant part:
Failure to Provide Electronically Stored Information. Absent exceptional cir-
cumstances, a court may not impose sanctions under these rules on a
party for failing to provide electronically stored information lost as a
result of the routine, good-faith operation of an electronic information
system.
The addition of this safe harbor provision to the Federal Rules of
Civil Procedure offers limited protection against sanctions for a party’s
good faith inability to produce ESI that was lost as the result of “routine” data management practices. Rule 37(e) expresses a clear intent
that parties should not generally be sanctioned for spoliation that
occurs despite good faith.
It is important to note that the rule does not preclude the possibility of sanctions for all non-intentional spoliation for several reasons.
First, loss of ESI that is the result of a reckless or negligent electronic
information system can hardly be said to be loss due to a “good-faith
operation.” Second, the rule allows for sanctions to be issued when
information is lost despite a party’s good-faith routine operation of a
computer system in “exceptional circumstances.” Third, the phrase,
“routine, good-faith operation of an electronic information system” is not
defined in the rules and thus leaves room for courts to exercise discretion
in issuing sanctions by interpreting “routine” and “good-faith” either narrowly or broadly. Importantly, however, the Committee Note to Rule 37
offers that the routine operation refers to “the ways in which such systems are generally designed, programmed, and implemented to meet
the party’s technical and business needs.” With regard to good faith,
the Committee Note explains that steps taken by a party “to comply
with a court order in the case or party agreement requiring preservation of specific electronically stored information” should be considered
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“among the factors that bear on a party’s good faith.” Fourth, Rule
37(e) does not preclude the court from imposing sanctions for negligent
spoliation derived from the court’s inherent judicial authority. Finally,
keep in mind that Rule 37(e) governs federal proceedings and state
proceedings are governed by jurisdiction-specific rules, which may not
include any safe harbor provisions.
Generally, courts are adhering to Rule 37 and declining to issue
sanctions if spoliation is the result of routine, good-faith data management practices. For example, in Diabetes Center of America, the court
denied requests for sanctions after determining there was an absence
of bad faith in a case where both parties failed to backup or otherwise
preserve relevant e-mails. Diabetes Ctr. of Am. v. Healthpia Am., Inc., 2008
WL 336382 (S.D. Tex. Feb. 5, 2008). On the other hand, courts that find
deliberate destruction of electronic evidence have little hesitation issuing sanctions. See Hawaiian Airlines, Inc. v. Mesa Air Group, Inc., 2008
WL 185649 (Bkrtcy. D. Haw. Jan. 22, 2008).
Severity of Sanctions
Courts have granted very severe sanctions against parties for committing spoliation of electronic evidence. Potential sanctions for spoliation
include, but are not necessarily limited to, the following:
• Monetary sanctions;
• Preclusion of evidence sanctions;
• Adverse jury instructions allowing an adverse inference that the
destroyed evidence would have been harmful; and
• Default judgment, summary judgment, or dismissal.
See Linnen v. A.H. Robins Co., 1999 WL 462015, (Mass. Super. June 16,
1999).
The severity of sanctions is a determination “confined to the sound
discretion of the trial judge, and is assessed on a case-by-case basis.”
Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003). There are
a number of factors, however, that courts will likely consider when
evaluating motions for sanctions and determining whether to issue
sanctions, and the appropriate severity of the sanctions. These factors
include, but are not necessarily limited to, the following:
• The nature and scope of the preservation duty (e.g. was the scope
of the preservation duty reasonable, was there a court order to
preserve that was broken by the spoliation, etc.);
• The circumstances surrounding the breach of the preservation
duty (e.g. is there evidence that the breach by the spoliation was
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willful, reckless, negligent, or due to the routine, good-faith
operation of a computer system, whether there was adequate
notice that the documents should have been preserved); and
• The consequences of the breach (e.g. the extent of the prejudice
to the opposing party).
The key factor in determining whether more severe sanctions (e.g.,
default judgment) versus less severe sanctions (e.g., monetary sanctions) are warranted seems to be the level of culpability or intent in
the destruction of the electronically stored information. A good example of a case where the most severe sanction of default judgment was
found appropriate is William T. Thompson Co. In this case, an electronic
document preservation order was issued by the court. In contravention of that order, executives within the organization directed their
employees to continue with backup tape recycling procedures, indicating that this was permissible under the order. The court disagreed,
ordering default judgment against the party and individually sanctioning the executive issuing the memo in the amount of $450,000. This
decision is of particular note because it is not a new case; rather, the
case was decided in 1984. William T. Thompson Co. v. General Nutrition
Corp., 593 F. Supp. 1443 (C.D. Cal. 1984). More recently, in Ingoglia,
the court found the severe sanction of dismissal appropriate based on
the plaintiffs’ conduct of deleting numerous files from his home computer following a request for production but preceding the production. Ingoglia v. Barnes & Noble Coll. Booksellers, Inc., 2008 WL 458504
(N.Y. App. Div. Feb. 19, 2008).
Use of Sanctions as a Trial Tactic
For better or for worse, a common tactic used by counsel engaged in
complex litigation involving e-discovery is setting up the other party
for potential sanctions relating to spoliation of evidence. It is important
to note that when responding to requests, one should consider whether
the requesting party has sought the particular information with the
intent of establishing that the opposing party has not retained or preserved all relevant e-evidence.
CONCLUSION
The potential consequences of spoliation are severe both in terms of
lost evidence that can help you prove out your case and potential sanctions, and necessitate that retention and preservation efforts play a predominant role in any trial attorney’s case strategy. The key to avoiding
lost evidence and sanctions is to have a retention policy, preservation
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plan, and discovery response team in place long before the threat of
litigation arises. Having a plan in place, following that plan, and documenting that you are following that plan will go a long way in convincing a court that your discovery conduct was reasonable, and that any
spoliation was the result of routine, good-faith operation of an electronic
information system that should thus fall within the safe harbor provision
of Rule 37(e).
3.7 Privilege and Inadvertent Waiver
The concepts of attorney-client privilege, work-production protection,
and inadvertent waiver are extremely familiar to practicing attorneys.
For those who may not be as familiar with the concepts, attorneyclient privilege is a legal doctrine that protects communications
between an attorney and his or her client about the subject matter of
the representation, with a few narrow exceptions. Similarly, the workproduct protection protects from discovery any materials prepared
under an attorney’s direction in anticipation of litigation, with a few
narrow exceptions. However, both attorney-client privilege and workproduct protection can be waived, thus allowing the previously protected communications and materials to become discoverable. Waiver
can be made knowingly with a party’s consent or inadvertently by disclosing privileged information accidently.
The danger of inadvertent waiver is particularly high in the context
of e-discovery. The volume of responsive electronically stored evidence
was previously unknown in the paper world. Any lawyer who has
engaged in large scale document review understands that reviewing
every single document contained in every electronic file to determine
whether it contains privilege is a Herculean task. Teams of temporary
attorneys and paralegals are often necessary to assist in the review of
tens of thousands, or even millions, of electronic documents. With so
many reviewers, there is bound to be differences in judgment as to
whether a particular document is privileged or responsive. The sheer
volume of documents reviewed in a certain day can allow privileged
documents to slip unnoticed into the production set.
The potential consequences of allowing a privileged document containing damaging information to slip past you are severe. As discussed
below in the section regarding the substantive law of waiver, there is a
real danger in some state jurisdictions that the waiver of privilege will
extend to all documents pertaining to the subject matter disclosed by
the inadvertently produced document. This could have catastrophic
results for the client, and could even result in a successful malpractice
action by the client against his or her counsel if it is determined that
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the attorney acted negligently in inadvertently producing privileged
documents.
The federal legal framework governing inadvertent privilege is
best thought of as having two counterparts that act together in symphony. First, Federal Rule of Civil Procedure 26(b)(5) provides the
procedural law governing privilege; Rule 26 determines the procedural
framework for treating an inadvertent production after it has already
occurred. Second, newly enacted Federal Rule of Evidence 502 provides the substantive law governing privilege, including: the scope of
privilege waiver, the determination of waiver in the event of inadvertent disclosure, the effect of waiver agreements and court orders, and
the interplay between waiver determinations in federal courts and
state courts. Counsel must understand both parts of this framework in
order to fashion a strategic plan to avoid inadvertent disclosure whenever possible and to mitigate damages when inadvertent waiver nonetheless occurs.
RULE 26 AND THE PROCEDURAL LAW OF WAIVER
Federal Rule of Civil Procedure 26(b)(5) provides a framework for the
producing party to notify the court and their opponent of an inadvertent production, should it occur, and to belatedly seek determination of
attorney-client privilege or work-product protection. Rule 26(b)(5)(B)
provides:
Information Produced. If information produced in discovery 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; must not use or disclose the information until the claim is resolved;
must take reasonable steps to retrieve the information if the party disclosed it before being notified; and may promptly present the information
to the court under seal for a determination of the claim. The producing
party must preserve the information until the claim is resolved.
Rule 26(b)(5) is a procedural rule that provides that the receiving
party of information subject to a claim of privilege or protection cannot
use or disclose the information automatically. Rather, the information
must be returned to the producing party, sequestered by the court, or
destroyed. The court must then make a determination whether waiver
due to inadvertent disclosure has occurred. Keep in mind that damage has likely already occurred when privileged information has been
inadvertently produced as the likelihood that the information has been
seen by the opposing party is great. Even if the information is returned,
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you cannot erase that information from the memory or minds of counsel despite a court order to disregard the contents. In other words, you
cannot put toothpaste back into the tube.
RULE 502 AND THE SUBSTANTIVE LAW OF WAIVER
In response to the widely-disparate common law treatment of
privilege issues in federal courts and real inadequacies in the previously
existing framework, Congress recently enacted Federal Rule of
Evidence 502, titled “Attorney-Client Privilege and Work Product;
Limitations on Waiver.” Since Rule 502 was signed into law by the
president on September 19, 2008, at the time of the printing of this
book, the exact impact of the new rule as it will be interpreted by the
courts has yet to be determined. Without a doubt, however, Rule 502
will provide much needed uniformity to federal privilege law and significantly increase the prevalence of privilege agreements and privilege court orders in discovery practice.
Rule 502 aims to increase efficiency and decrease the risks and
costs associated with document production by providing protections
against inadvertent disclosure and broad waiver. The rule was proposed by the Judicial Conference Rules Committees who have “long
been concerned about the rising costs of litigation, much of which has
been caused by the review, required under current law, of every document produced in discovery, in order to determine whether the document contains privileged information.” Committee on Rules of Practice
and Procedure of the Judicial Conference of the United States, Advisory Letter to Hon. Patrick J. Leahy, Chairman, Committee on the Judiciary
United States Senate, Sept. 26, 2007, available at http://www.uscourts.
gov/rules/Hill_Letter_re_EV_502.pdf#page=16. The newly enacted
Rule 502 has the potential to achieve its stated goals of costs savings
and to significantly change the way parties and courts manage privilege disputes.
Subject Matter Waiver under Rule 502
Prior to the enactment of Rule 502, federal courts varied in their treatment of when a privilege disclosure constituted subject matter waiver
(i.e. the waiver of privilege over documents when one related privileged document is disclosed). Some federal courts strictly held that any
disclosure, no matter how innocent, waived privilege over all related
documents while other courts held that a privileged disclosure must
be intentionally made to constitute subject matter waiver. Rule 502(a),
which reads as follows, limits subject matter waiver to instances where:
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“(1) the waiver is intentional; (2) the disclosed and undisclosed communications or information concern the same subject matter; and (3)
they ought in fairness to be considered together.”
Several important things should be noted by practitioners regarding Rule 502(a). First, by limiting the circumstances under which inadvertent disclosure can constitute subject matter waiver, Congress has
significantly relieved the fear that the inadvertent disclosure of one
innocent document can legitimately force the producing party to turn
over a smoking gun. This provision strongly supports a notion of fairness, especially in light of the increased likelihood of inadvertent disclosure given the enormous volume of ESI which frequently must be
reviewed in modern litigation. Second, Rule 502(a) requires state courts
to honor federal court determinations regarding the scope of privilege
waiver. The binding effect of the federal determinations provides certainty to litigants in trying their cases insomuch as a later court cannot second guess a privilege determination and mandate full subject
matter disclosure in a separate action. In short, subject matter waiver
will occur less frequently under Rule 502 than it would have under the
previously existing common law in many jurisdictions.
Inadvertent Disclosure under Rule 502
Rule 502(b) requires all courts to follow a consistent framework in analyzing inadvertent waiver claims. Rule 502(b) provides:
Inadvertent Disclosure—When made in a Federal proceeding or to a Federal office or agency, the disclosure does not operate as a waiver in a Federal
or State proceeding if: (1) the disclosure is inadvertent; (2) the holder of the
privilege or protection took reasonable steps to prevent disclosure; and
(3) the holder promptly took reasonable steps to rectify the error, including (if applicable) following Federal Rule of Civil Procedure 26(b)(5)(B).
Rule 502 adopts the balancing approach previously taken by the
majority of federal courts in analyzing waiver claims when privileged
documents are inadvertently disclosed. The crucial component of
Rule 502(b) is that it still requires the holder of the privilege to take
“reasonable steps to prevent disclosure.” As with any new rule, judicial interpretation, advocacy, legal scholarship, and circumstance will
undoubtedly mold the meaning of the phrase “reasonable steps” into
a term of art. However, rules do not exist in a vacuum and courts will
look to existing precedent to determine standards of reasonableness.
The recent judicial trend under the common law balancing test has
been to demand high standards of privilege review. Moreover, the common law balancing approach placed the burden of showing reasonable
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precautions to avoid inadvertent waiver on the producing party. See
Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May
29, 2008); See also In re Sealed Case, 877 F.2d 976 (D.C. Cir. 1989).
The Victor Stanley case, recently decided by Chief Magistrate Judge
Paul Grimm, analyzed the inadvertent production of 165 privileged
documents under the balancing approach. The 165 privileged documents slipped through a keyword search undertaken to recognize
privileged documents. The court in this case focused most of its analysis on the reasonableness of precautions taken to prevent inadvertent
disclosure and found that the producing party had not met its burden
of proving that it took reasonable precautions.
The Victor Stanley court found the producing party had not met its
burden because it failed to provide the court with information regarding
the keywords used when conducting the privilege search, the rationale for the keyword selection, the sophistication level of the keyword
search, the qualifications of the persons who made the keyword selection, or whether any sampling was done to ensure the accuracy of the
keyword selection results. Keyword searches for privilege are becoming increasingly common, and this case was significant insomuch as it
set a high standard for privilege searches. The case also gave concrete
guidance on what characteristics of a keyword search is required for
a keyword search to be considered a reasonable precaution under the
intermediate approach.
Accordingly, it is unlikely that courts will read Rule 502 to allow
for a decreased standard of reasonableness. In fact, it is more likely that
courts will continue to order parties to produce specific evidence of
cautionary measures (i.e. “reasonable steps”) taken to avoid inadvertent disclosure.
Party Agreements and Court Orders
Regarding Privilege under Rule 502
Rule 502 clarifies the effect of non-waiver orders and agreements. Prior
to the enactment of Rule 502, sophisticated counsel were increasingly
forming clawback agreements and attempting to obtain clawback court
orders. A clawback agreement is a non-waiver agreement in which the
parties agree that the inadvertent disclosure of a privileged document
does not constitute a waiver of privilege, that the privileged document
should be returned or a certificate should be provided that the document was destroyed, and that any copies or notes about the document should be destroyed. Some courts, but far from all, sanctioned
the clawback agreements by issuing them in the form of a stipulated
order. Prior to Rule 502, forming a clawback agreement or obtaining a
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clawback order was sometimes prudent, but there was no guarantee
that the agreement or order would be honored by state courts or in
proceeding brought by a third party. The significance of Rule 502 with
regard to privilege agreements and orders cannot be stressed enough—
Rule 502 changes everything!
Under Rule 502(d), a court order regarding privilege is binding on
the entire world, including third parties and state courts. The security of
knowing that Rule 502(d) privilege orders will be enforced will allow
counsel to enter into them more freely than ever before. By entering
into these agreements, counsel hugely protect their privileged documents and also decrease the likelihood of costly discovery disputes
over privilege waiver. Rule 502(d) provides:
Controlling Effect of a Court Order. A Federal court may order that the
privilege or protection is not waived by disclosure connected with the litigation pending before the court–in which event the disclosure is also not a
waiver in any other Federal or State proceeding.
In sum, Rule 502(d) provides attorneys with a powerful legal
tool to prevent waiver by incorporating a clawback or other privilege
agreement into a court order. Notably, however, Rule 502(d) provides
that a court may order privilege not waived by disclosure; the Rule
does not require that an order must be issued in any situation. Importantly, it also appears from a reading of the Rule’s plain language that
courts may issue Rule 502(d) orders sua sponte or in response to privilege disputes.
Accordingly, practitioners should be prepared to advocate for their
clients and argue why the court should or should not incorporate their
privilege agreements into a binding order. Courts will most likely grant
these orders with increasing frequency given the clear intent of Congress in passing this statute of encouraging privilege orders, provided
counsel can articulate the reasonableness of the requested order.
Rule 502(e) also addresses the effect of a party agreement:
Controlling Effect of a Party Agreement—An agreement on the effect of
disclosure in a Federal proceeding is binding only on the parties to the
agreement, unless it is incorporated into a court order.
Note that Rule 502(e) agreements are binding only on the parties
to the agreement; Rule 502(e) provides no protection in subsequent
proceedings or against third parties. It is hard to imagine a situation
in which an attorney would not want to take the extra step of obtaining a Rule 502(d) order, which enforces the agreement against the
entire world instead of just the agreeing parties. Absent extraordinary circumstances, the only time a Rule 502(e) agreement should be
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entered into instead of a Rule 502(d) order is when the order is denied
by the court.
As a final note, the common law prior to the enactment of Rule 502
decreed that negotiated non-waiver agreements did not excuse parties
from undertaking pre-production privilege review or taking less than
reasonable precautions to avoid the inadvertent disclosure of privileged documents. See Hopson v. Mayor & City Council of Baltimore, 232
F.R.D. 228 (D.Md. 2005). In other words, a clawback agreement should
be used as a backup defensive strategy, not as a first line of defense.
Interplay Between Federal and State Courts under Rule 502
Rule 502 is unprecedented in that it mandates that state courts honor
federal court determinations regarding scope of privilege waiver under
Rule 502(a), determinations regarding waiver due to inadvertent disclosure under Rule 502(b), and Rule 502(d) court orders. Rule 502(f)
further provides that these federal determinations are binding on federal-annexed and federal court-ordered arbitration proceedings.
Furthermore, Rule 502(c) provides that federal courts will be
bound by state court privilege determinations under application of the
law that is most protective against waiver, be that either Rule 502 or
the law of the state where the disclosure occurred. Notably, however,
Rule 502 does not provide that a state court determination is binding
on another state. The binding effect of federal and state privilege determinations is essential to achieving Congress’ goal of decreased costs
associated with discovery; it allows holders of privileged documents
to rely on the Rule’s protections without fear of being overruled by
another court.
Conclusion
Rule 502 revolutionizes the law of privilege in federal courts in a much
needed way, by providing consistency in federal standards and allowing
attorneys to reasonably predict how courts will rule in privilege matters.
Accordingly, the rule should relieve much of the anxiety that accompanies
privilege review of massive amounts of ESI by providing clear expectations of what one can expect in the event of an inadvertent disclosure.
However, nothing in Rule 502 excuses sloppy discovery practices.
To the contrary, the finding of waiver through inadvertent disclosure
falls under the court’s discretion and requires attorneys to be prepared
to defend their discovery conduct. Moreover, Rule 502 will not remedy
the uncomforting reality that, waiver or no waiver, disclosures provide
your legal opponent with potentially case-compromising information
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they would not otherwise have. Accordingly, taking reasonable steps
to prevent inadvertent waiver is a requirement to responsible discovery practice, as mandated by Rule 502(a).
STRATEGIES TO PREVENT INADVERTENT WAIVER
There are several strategies that counsel can take to minimize the likelihood that inadvertent documents will be produced or to mitigate the
consequences of the disclosure. The following is a discussion of strategies counsel should consider.
Use Rule 502(d) and Rule 502(e)
As discussed above, privilege orders issued by courts under Rule 502(d)
now have a binding effect on the entire world, and are great tools to
protect against inadvertent waiver. Counsel should attempt to obtain
a Rule 502(d) order to protect against privilege waiver unless circumstances provide that an order would not be in the client’s best interests.
For example, counsel may be confident in the adequacy of their privilege review and believe it is substantially likely that their opponent’s
privilege review will produce evidence harmful to their case—this is a
gamble however, so be careful! In the event a Rule 502(d) order cannot
be obtained, counsel should consider entering into a Rule 502(e) agreement with the opposing party.
Try to Limit Production
Examine the scope of the requests and potential production to see if
there are ways to limit the production. A colossal volume of electronic
documents, such as e-mail, exists in many organizations. Often, a complete review is unnecessary when the anticipated costs are weighed
against the importance of the entire data set. Try to limit the production
in some manner, such as: stipulate an agreement between the parties,
use technology keyword searches to narrow the responsive production,
object to production arguing that the production is “not reasonably
accessible because of undue burden or cost” pursuant to Federal Rule
of Civil Procedure 26(b)(2)(B), etc. Limiting production will allow you
to devote more resources to a careful privilege review of the smaller set
of documents you do review.
Utilize Quality Controls in Your Privilege Review System
Perhaps the most important thing you can do to avoid inadvertently
producing documents is to utilize quality controls in your privilege
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review system. One way to achieve quality control is to do a random
sampling of documents that are deemed privileged and not privileged to ensure that the review produced accurate results. Your review
manager should be able to craft such quality control processes. Also,
it is a good idea to do a final review of the production set just before
delivery to the opponent. Having a production system with sufficient
checks and balances will help you withstand the light of judicial scrutiny when a reviewing court evaluates your review and production
conduct for reasonableness. You will need to work closely with your
electronic discovery consultants and experts to ensure quality control,
as determining whether the review and production systems are well
organized and meet industry standards often requires expertise.
Use Technology
New evolutions in technology can also assist in reducing the risk of
inadvertent disclosure by segregating potentially privileged data for
review. For example, if a firm engages an electronic discovery expert to
assist in the collection, processing, and production of e-mail and other
electronic documents, that expert may be able to set aside potentially
privileged documents so that a reviewer is able to be “on guard” that
certain documents he or she reviews on a particular occasion may be
privileged. This is accomplished through the use of keyword searching of electronic documents to find keywords that suggest a document
may be privileged (e.g. attorney, litigation, privilege, confidential, etc.).
The technology can also set aside documents created by or received
by named attorneys. The overall goal of this technology is to avoid
the most common type of inadvertent disclosure—that which results
from fatigue or inattention to detail in a large scale document review in
which reviewers spend long days looking at a myriad of documents.
Have a Response Plan In Place
Develop a plan to react in the event you determine that a privileged document has been inadvertently produced. Both technologies and human
reviewers make mistakes, and sometimes inadvertent production will
occur no matter how careful you are in your review. In this eventuality, you need to be able to assert the claim in a timely manner. A timely
claim of privilege is important for several reasons. First, it decreases the
likelihood the opposing side has already reviewed the information and
learned damaging information that you cannot erase from their memories. Second, the timeliness in which you invoke your claim of privilege is
a factor in the reasonableness inquiry under the common law balancing
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approach to determining whether there was a waiver by inadvertent
disclosure, and is also a requirement under the Federal Rule of Evidence
502 for an inadvertent disclosure not to constitute a waiver (“the holder
promptly took reasonable steps to rectify the error”).
Educate Your Clients
Ensure that clients are aware of the risks and the decisions made in the
production process so that there are no “surprises” in the event of an
inadvertent disclosure. Involve the client in each step so that the client understands attorney client privilege and waiver issues. This will
accomplish two purposes. First, understanding the waiver issue and
its potential consequences will likely serve as a motivation for your
client to support a more careful review procedure, even if it is more
expensive. Also, educating your clients about the dangers of inadvertent waiver in advance may make them less likely to be surprised in
the event that inadvertent waiver occurs, and thus less likely to bring
a malpractice lawsuit.
3.8 Requesting and Responding
There is an art and a science to obtaining and delivering all critical electronic documents in litigation. Successful practice of this art involves a
complicated dance, using all the traditional tools of discovery available
to litigators. The steps to this intricate dance—which has two versions—
will be discussed at length in this section. The following is an overview
of the steps involved in each of the two stages:
Requesting Electronic Documents in Discovery
• Enforcing initial disclosure requirements;
• Participating in and gaining agreements during the early “meet
and confer” sessions;
• Framing initial interrogatories;
• Taking depositions of technical staff;
• Issuing requests for production and onsite inspections;
• Enforcing compliance with motions to compel and motions for
sanctions.
Responding to E-Discovery Requests
• Understanding your client’s technical architecture;
• Developing proportionality arguments to negotiate limitations
on discovery;
• Using sampling techniques wherever possible .
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What follows herein is a practical, step-by-step guide to help
litigation teams obtain and deliver the most relevant and complete
set of discovery documents possible. These steps may be expanded
upon or otherwise modified to fit one’s specific case strategy, but
they are designed to afford practitioners the best odds at obtaining
critically important ESI and limiting overbroad ESI requests from
your opponent.
REQUESTING ELECTRONIC DOCUMENTS IN DISCOVERY
Step One—Requesting: Enforce Compliance with
Rule 26 Disclosure Requirements
Federal Rule of Civil Procedure 26(a)(1)(A) requires the initial disclosure of “electronically stored information” (e.g., electronic files, databases, e-mails). Rule 26(a)(1)(A) reads in relevant part:
In General. Except as exempted by Rule 26(a)(1)(B) or as otherwise stipulated or ordered by the court, a party must, without awaiting a discovery
request, provide to the other parties: (ii) a copy—or a description by category and location—of all documents, electronically stored information,
and tangible things that the disclosing party has in its possession, custody,
or control and may use to support its claims or defenses, unless the use
would be solely for impeachment.
This means that litigators must disclose, at a minimum, all sources
and locations of electronic data. Data will commonly be located on individual desktops and laptops, network server hard drives, removable
media (e.g., USB drives, floppy discs, and CDs), backup tapes, and personal digital assistants (e.g., Palm Pilots, BlackBerries). Data may also
be in the possession of third parties, such as Internet service providers,
and on the computer systems of other peripherally involved entities.
See section 3.4 in this chapter for more information on data locations.
Having knowledge of how much, what type, and where data
exists is essential to effective discussions in the Rule 16 and Rule 26(f)
“meet and confer” conferences regarding the timing, form, and limitations on discovery. Given the requisite technical expertise necessary to competently evaluate electronic data locations, it may be in
your best interest to work with someone technical—be it an IT person
charged with assisting with e-discovery or an outside ESI consultant—
to help you evaluate the completeness of your opponent’s initial disclosures. Whether on the producing or receiving side of a document
request, forming a solid relationship with someone technical will only
improve your e-discovery advocacy. Lastly, from an offensive position, enforcing your opposing party’s Rule 26 disclosures is critical
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Figure 3.7 Practice Points: Disclosure of ESI Experts
A subtle issue within the broader topic of requesting electronic information is the
question of whether a party must disclose its retained ESI consultants and experts
under the requirements of Rule 26. FRCP 26(a)(2) calls for the disclosure of any person who may be used at trial to present evidence under Federal Rules of Evidence
702, 703 or 705. Counsel must make a determination as to whether to disclose any
retained electronic evidence experts involved in the case under this rule.
In analyzing the text of the rule and its construing case law, as well as the
Federal Rules of Evidence relating to experts, some guidance is found. The basic
questions which one must ask are:
1)
2)
3)
Will any testifying expert rely on computer data provided by either
party, or will the expert rely on data obtained through his or her own
investigations?
Will any testifying expert use custom, proprietary, or publicly-available
software to process data, generate a report, or present to the court?
Does counsel anticipate requesting discovery of either the underlying
data or the software used by any testifying expert?
See KENNETH J. WITHERS, COMPUTER BASED DISCOVERY IN FEDERAL CIVIL LITIGATION (Federal Courts Law Review) (2000).
Computer forensic experts likely fall within the gamut of the Rules given their
similarity to other types of scientific or technical expert witnesses (e.g. medical experts, engineering experts, fire experts) and therefore should be disclosed
under FRCP 26(a)(2). Examples of testimony from a computer forensic expert
include opinion testimony regarding the source of a particular data fragment on
a hard drive, or the date an electronic file was originally created.
Electronic discovery experts, on the other hand, likely fall outside the scope
of the FRE requirements. Since e-discovery experts assist with the collection, filtering, review, and production of electronic documents, they may possess the kind
of “scientific, technical, or other specialized knowledge” contemplated by Federal Rule of Evidence 702. However, a parallel can be drawn between such an
expert and a records-custodian who simply retrieves, photocopies and certifies
hard copy documents. A discovery expert used in the simple records-custodian
capacity should only perform duties that fall squarely within the work product
doctrine. To the extent such an expert is necessary to establish chain of custody, he
or she becomes a foundational witness and need not be disclosed under Rule 26.
in helping you frame further document requests later on down the
e-discovery road.
Step Two—Requesting: Participate in and Gain Agreements
During the Rule 26(f) Conference
One of the most useful electronic discovery management tools may
be the early planning provisions now mandated by the Federal Rule
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of Civil Procedure Rule 26(f) pretrial conference; see section 3.2 for a
more complete discussion of Rule26(f) conferences. At this conference,
lawyers should be prepared to discuss the realities of their own clients’ electronic data, as well as take this opportunity to gain good background information about how opposing parties are storing electronic
information.
Topics for discussion at the Rule 26(f) conference may include:
• Preservation of evidence (including whether backup, archival
and “deleted” files will be exchanged);
• Preliminary disclosures as to the parties' computer systems
and specific inventories of your opponents’ IT infrastructure
(including numbers, types, and locations of computers, operating systems in use, and backup schedules);
• Scope of discovery, including accessibility arguments
• E-document processing, review, and production formats and
protocols;
• Cost allocations and whether any cost shifting arguments will be
made to the court; and
• Any anticipated evidentiary disputes (including inadvertent
waiver of privilege).
Being adequately prepared to address these topics at the Rule 26(f)
conference will likely assist counsel in limiting the scope of discovery
required from one's own client while maximizing the disclosures from
opposing parties. In many situations it may be necessary to provide
the court with expert testimony as to the nature, location, and volume
of electronic data, as well as the time and cost involved in producing
it. Further, take advantage of the conferences associated with Rule 16,
which was designed to help both the parties and the court prepare for
and seek agreement on electronic discovery issues at the outset of litigation. Know that savvy opponents will use the Rule 16 conference as
an opportunity to ensure the court understands the potential technological issues involved in collecting, reviewing, processing, and producing any electronic data you may request.
Step Three—Requesting: Frame Interrogatories to Obtain Technical
Information about Your Opponent’s ESI Practices
Based upon the information gained through the process of the Rule
26(a)(1) initial disclosures, or the Rule 26(f) conference (or any similar state court mechanisms for conferring with other parties and the
court), attorneys should frame a few interrogatory questions. Note
that if you are running short on allocated interrogatories you can
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alternatively frame a few written deposition questions. These probes
should be aimed at obtaining information about how one’s opponent
manages their ESI, in essence helping to clarify the opponent’s procedures, systems, and policies.
An interrogatory directed at gaining more information about the
opponent’s e-mail system, might look something like this:
Identify all e-mail systems in use, including but not limited to the
following:
(a) List all e-mail software and versions presently and previously
used by you and the dates of use;
(b) Identify all hardware that has been used or is currently in use
as a server for the e-mail system including its name;
(c) Identify the specific type of hardware that was used as terminals into the e-mail system (including home PCs, laptops,
desktops, cell phones, personal digital assistants [“PDAs”],
etc.) and its current location;
(d) State how many users there have been on each e-mail system
(delineate between past and current users);
(e) State whether the e-mail is encrypted in any way and list passwords for all users;
(f) Identify all users known to you who have generated e-mail
related to the subject matter of this litigation; and
(g) Identify all e-mail known to you (including creation date,
recipient(s), and sender) that relate to, reference or are relevant
to the subject matter of this litigation.
For additional sample interrogatories, see Appendix D.
A good starting place in formulating these interrogatories is a list
of electronic evidence issues generated by Kenneth J. Withers, formerly
of the Federal Judicial Center. This list provides an exhaustive roadmap of the types of information that might be obtained through your
interrogatories. Consider the following inquiries for the subject of your
interrogatories:
• Number, types, and locations of computers currently in use;
• Number, types, and locations of computers no longer in use, but
relevant to the facts of the case;
• Operating system and application software currently in use;
• Operating system and application software no longer in use, but
relevant to the facts of the case;
• Name and version of network operating system currently in use;
• Names and versions of network operating systems no longer in
use, but relevant to the facts of the case;
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•
•
•
•
•
•
•
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File-naming and location-saving conventions;
Disk or tape labeling conventions;
Backup and archival disk or tape inventories or schedules;
Most likely locations of records relevant to the subject matter of
the action;
Backup rotation schedules and archiving procedures, including
any backup programs in use at any relevant time;
Electronic records management policies and procedures;
Corporate policies regarding employee use of company computers and data; and
Identities of all current and former personnel who had access
to network administration, backup, archiving, or other system
operations during any relevant time.
See Kenneth J. Withers, Computer Based Discovery in Federal Civil
Litigation FCLR (2000).
You may also desire to inquire about the following:
• IT infrastructure and systems architecture (including organizational charts or network configuration diagrams);
• Password protection and encryption policies;
• Use of data compression mechanisms;
• E-mail mailbox management, including size limitations and
retention policies; and
• Litigation response policies, including any response if given
notice of a duty to preserve data.
If properly phrased, an opponent’s response to these interrogatories should provide direction for a follow-up FRCP Rule 30(b)(6) deposition, Rule 34 document requests, or subpoena duces tecum. These
follow up steps are discussed below in this section.
Conducting the appropriate inquiry into the realities of an opponent’s data management and retention is absolutely critical to the
ultimate success of attempts to obtain electronic evidence. In litigation—
like in life—you have to walk before you can run. If counsel does not
have a basic understanding, early in the case, of what data and information is in the possession of the opponent, it will be very difficult
to adequately enforce requests for production and to ensure that all
relevant information has been produced.
Step Four – Requesting: Take 30(b)(6) Depositions of IT Representatives
Following the receipt of responses to the initial interrogatories, counsel
should utilize the Rule 30(b)(6) deposition relating to the opponents’
computer systems and e-document management (a.k.a. the “person
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most knowledgeable” deposition). The subparts of Rule 30(b)(6) provide in relevant part:
Notice or Subpoena Directed to an Organization. In its notice or subpoena, a
party may name as the deponent a public or private corporation, a partnership, an association, a governmental agency, or other entity and must
describe with reasonable particularity the matters for examination. The
named organization must then designate one or more officers, directors, or
managing agents, or designate other persons who consent to testify on its
behalf; and it may set out the matters on which each person designated will
testify. A subpoena must advise a nonparty organization of its duty to make
this designation. The persons designated must testify about information
known or reasonably available to the organization. This paragraph (6) does
not preclude a deposition by any other procedure allowed by these rules.
Fed. R. Civ. P. 30(b)(6) (2008) (emphasis added).
The real beauty of this type of deposition is most apparent in the
e-discovery context. Rule 30(b)(6) requires the opposing party to evaluate the deposition notice and put forth the person or persons within
the organization who are truly able to provide full and complete
answers on the topics described in the notice. Typically, mid-level IT
managers are the most knowledgeable about where and how to find
their organization’s relevant data. If upon deposition the deponent is
unable to answer key questions, counsel is able to require the opponent to produce another individual who is capable of answering the
questions completely.
A distinct advantage in using this discovery mechanism is, as
we have found in our experience, that internal IT professionals often
exhibit a high degree of both knowledge and candor with respect to
their employer’s computer systems. For example, one of our clients,
several years ago, experienced a situation in which she deposed the
opponent’s Director of IT following her receipt of a discovery response
indicating that all relevant e-mail had been produced. In the deposition, our client inquired at length about backup tape recycling policies
and the existence of archival copies of e-mail. The deponent IT Director
indicated, quite proudly from his perspective, that his department had
indeed suspended backup tape recycling practices in order to ensure
that they had a complete copy of all past backups. In fact, he indicated
that the company had several hundred additional backup tapes containing e-mail from the target individuals for the target time period. He
further went so far as to ask counsel if she would like a copy.
It is important to note, however, that some corporations, with
heavy dockets of litigation have taken a more proactive role in handling their e-discovery obligations. Many of these corporations have
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created IT positions with no day-to-day IT duties, and instead these
technical personnel are completely responsible for working with
the general counsel’s office and outside counsel when it comes to
e-discovery productions on behalf of the corporation. Should you
encounter this type of IT role in your Rule 30(b)(6) depositions, be
prepared, as these individuals are typically exceptionally versed in
ESI best practices.
Consider preparing for these technical depositions using an IT or
ESI consultant of your own, or have your ESI consultant accompany
you to the deposition as an expert resource. We propose closely evaluating each of your opponent’s interrogatory responses, as discussed
above. These responses will serve well as an outline for inquiry during
the Rule 30(b)(6) deposition. Further, in taking the deposition, it is critical that counsel not simply cease questioning after the policies in place
are revealed. Instead, it is crucial that counsel determine whether and
to what degree the organization is complying with these policies.
Successful completion of one or more Rule 30(b)(6) depositions
will be a tremendous help in guiding the future requests for production of documents and interrogatories. Equally important, information
gained through these depositions will prepare counsel to formulate a
plan for receiving, processing, and reviewing the data that will be produced by the opponent.
Step Five – Requesting: Issue Rule 34 Requests
for Production and Onsite Inspections
Once the groundwork has been laid by completing steps one through
four, counsel is ready for the meat of discovery—the Rule 34 request
for production of documents and onsite inspections. The subparts of
Rule 34(a) provide in relevant part:
A party may serve on any other party a request within the scope of Rule
26(b): (1) to produce and permit the requesting party or its representative to inspect, copy, test, or sample the following items in the responding
party’s possession, custody, or control: (A) any designated documents or
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 either directly or, if necessary, after translation by the responding
party into a reasonably usable form; or (B) any designated tangible things;
or (2) to permit entry onto designated land or other property possessed
or controlled by the responding party, so that the requesting party may
inspect, measure, survey, photograph, test, or sample the property or any
designated object or operation on it.
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Document Requests
We suggest consideration of the following issues when framing FRCP
34(a)(1)(A) requests for production of electronic documents:
1.
2.
3.
4.
5.
6.
7.
8.
Proportionality: Ensure that the requests are broad enough to
cover the necessary electronic documents but not so overly
broad as to result in legitimate burden and expense objections
from your opponent.
Search terms and custodians: Consider narrowing requests by
providing specific keywords to be used in document searches,
precise data locations or media types to be searched, key personnel to be focused on, or exact date ranges by which the
search for information can be restricted.
Data locations: Consider all of the various potential locations for
relevant data, as discussed in detail in section 3.4 of this text.
Version control: Be sure to request prior versions and drafts
of word processing documents, e-mail, and other important
documents so that you can be assured that you have all the
relevant information which may be contained in multiple draft
documents.
Unique file types: Request specific information or native
copies of files for documents which originate in electronic
formats that are unique, or which contain additional valuable information that is not necessarily available on the face
of the documents. This typically includes spreadsheet and
database files.
Production format: Specify the format that is preferred for
the production of the information. For example, specifically
request either .tiff or .pdf images, litigation support load files,
native document productions, printed documents, or other
formats as appropriate.
Forensic analysis of deleted files: Where appropriate, consider
requesting that a complete mirror image of media be produced
in order to facilitate a forensic review and analysis. Depending on the circumstances, this type of production may require
the appointment of a third party neutral expert to facilitate the
implementation of a protocol for the review and production
of this data in order to preserve privilege and relevance objections. See chapter 5 on computer forensic analysis.
Document retention policies: Request an actual copy of adversary’s electronic information retention policy, and compare it
to that which was learned in the Rule 30(b)(6) depositions of
the IT staff.
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It is important to note here that any Rule 34 document requests
must be narrow in scope and closely defined. It is our experience
from first-hand conversations with several federal court judges that
courts have little difficulty telling to a party seeking “all relevant
electronic documents” that they need to go back to the drawing
board. There is plenty of case law to support a responding party’s
objections in this regard as well. See Palgut v. City of Colorado Springs,
2007 WL 4277564 (D. Colo. Dec. 3, 2007) (denying motion to compel
as discovery requests were overbroad and unduly burdensome, noting requesting party no more entitled to the producing party’s ESI
than to an entire warehouse storing paper documents); State ex rel.
Gehl v. Connors, 2007 WL 3024436 (Wis. Ct. App. Oct. 18, 2007) (finding request for production was overbroad and overly burdensome);
Menke v. Broward County Sch. Bd., 916 So.2d 8 (Fla. Ct. App. 2005)
(quashing production order of computer search issued by administrative law judge as overbroad); Wright v. AmSouth Bancorp, 320 F.3d
1198 (11th Cir. 2003) (denying motion to compel as overly broad and
unduly burdensome).
Onsite Inspections
In addition, consider requesting inspection of your opponent’s physical premises and computer infrastructure through a Rule 34(a)(2)
onsite inspection. Rule 34(a)(2) provides, “A party may serve on any
other party a request . . . to permit entry onto designated land or other
property possessed or controlled by the responding party, so that
the requesting party may inspect, measure, survey, photograph, test,
or sample the property or any designated object or operation on it.”
Onsite inspections are common and seldom disputed; in rare circumstances, on site inspections are disputed on individual privacy or corporate confidentiality grounds. For example, in John B. vs. Goetz 531
F.3d 448 (Tenn. 2008) an onsite inspection that ordered plaintiffs’ computer expert to enter state agencies and the offices and homes of state
officials was overruled on privacy and state sovereignty grounds. John
B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007). See also GTFM,
Inc., v. Wal-Mart Stores, 2000 WL 1693615 (S.D.N.Y. Nov. 9, 2000); Lawyers Title Ins. Co. v. United States Fidelity & Guar. Co., 122 F.R.D. 567
(N.D. Cal. 1988).
Onsite inspections will be particularly useful if, for example, the
opponent has a unique and proprietary computer system (e.g., a database) such that the retrieval of the information would be particularly difficult and burdensome. This fact is true because data stored in a database
is often difficult to produce in discovery because of the inherent archi-
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tecture of databases. Because a database is merely a grouping of data,
as opposed to a series of actual documents, a simple Rule 34(a)(1) document request will not typically afford access to the information sought.
The optimum approach to obtaining access to database information is to inspect the database onsite with a qualified database expert
who can formulate the proper queries to identify and extract the relevant data in a usable format. Typically, the court or parties will establish detailed protocols for such an inspection so that non-responsive,
privileged, and proprietary information is protected. It is important to
note, however, that your opponent may resist such onsite inspection
requests, stating that the database’s reporting mechanisms will be sufficient to generate information to the requesting party.
A Kroll Ontrack case comes to mind which provides a practical example of this type of situation. In the matter, a large corporate
defendant had a legacy version of a complex database which the
plaintiff, a competitive corporation, believed contained relevant and
discoverable information. The database was no longer in use in the
defendant’s business. The plaintiff made a motion to compel discovery of the information contained in the database. In response to the
motion, an electronic evidence expert retained by the defendant indicated that the data in the database was no longer accessible because
it was no longer in use and no one within the defendant organization
knew or had the technology to make the data available. However, Kroll
Ontrack, retained by the plaintiff in this case, believed that it could
gain access to the database with one of our database experts. The judge
in the case ruled that the database might contain discoverable information, and suggested that Kroll Ontrack immediately put its expert on
the plane to the defendant’s location in order to inspect the database to
see what could be done. We did so, and in fact recovered discoverable
information from the database.
Step Six—Requesting: Enforce Compliance with Motions
to Compel and Motions for Sanctions
In analyzing your opponent’s disclosures and Rule 34 productions,
you might be able to determine if your opponent undertook a complete and good-faith search for electronic documents. For example,
in Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) it became
clear to the Plaintiff that the Defendant had not searched for and produced all relevant electronic documents. In this case, the Defendant
responded to the Plaintiff’s electronic document request by producing approximately 350 pages of documents, including approximately
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100 pages of e-mails, and claimed that its production was complete.
However, the Plaintiff knew that there were additional responsive
e-mails that the Defendant had failed to produce because she herself had produced approximately 450 pages of relevant e-mail correspondence. Clearly, numerous responsive e-mails were not produced
by the Defendant.
If your opponent’s response to your discovery request does not
seem adequate, there are plenty of cases to support your motion to
compel. For example, in Two Bank Accounts the court granted the party’s motion to compel, admonishing that discovery is “not a game” but
is a “two-way street” that must be diligently followed. United States v.
Two Bank Accounts, 2008 WL 2696927 (D.S.D. July 2, 2008); see also Dean
v. New Werner Holding Co. Inc., 2008 WL 2560707 (D. Kan. June 26, 2008)
(ordering production within thirty days for failure to produce complete
initial production and disclosures); Race Tires Am., Inc., a Div. of Specialty
Tires of Am., Inc. v. Hoosier Racing Tire Corp., 2008 WL 2487835 (W.D. Pa.
June 16, 2008) (ordering completed production within seven days noting the production was four months overdue and warning sanctions
would be imposed if further discovery abuses were to occur).
Moreover, courts have repeatedly found sanctions appropriate
for failure to provide complete and adequate responses to discovery
requests. Most often, counsel should seek sanctions in the form of attorney’s fees and costs for the opposing party’s failure to produce ESI. For
example, in Attard the court awarded monetary sanctions requiring
the defendant to pay reasonable attorneys’ fees and costs accrued by
the plaintiff to enforce discovery due to the defendant’s production of
defective data. Attard v. City of New York, 2008 WL 1991107 (E.D.N.Y.
May 5, 2008). However, requesting more severe sanctions is also appropriate in cases where the responding party’s conduct has been egregiously inadequate, intentional, or otherwise contrary to the spirit of
liberal discovery. For example, the court in a recent case granted default
judgment sanctions against the defendants for failure to comply with
court-ordered production, as well as a history of discovery abuses, and
ordered the defendants to pay judgment in favor of the plaintiffs in the
amount of $5.2 million dollars plus nearly $650,000 in attorneys’ fees
and costs. S. New Eng. Tel. Co. v. Global NAPs, Inc., 2008 WL 2568567 (D.
Conn. June 23, 2008).
Conclusion
The revised Federal Rules of Civil Procedure and the transformation
from paper to electronic document discovery does not change the
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manner in which discovery practices have been conducted for years.
When seeking electronically stored information, do not stray from the
tried and true discovery tools from the paper discovery world. According
to the Federal Judicial Center, the most frequently used discovery
devices are:
•
•
•
•
•
•
Document production: 84%
Interrogatories: 81%
Depositions: 67%
Initial disclosures [FRCP 26(a)(1)]: 58%
Expert disclosure [FRCP 26(a)(2)]: 29%
Expert discovery: 20%
Source: Federal Judicial Center, Discovery and Disclosure Practice, Problems and Proposals for Change: A Case-based National Survey of Counsel in
Closed Federal Civil Cases. Nov. 1997.
These same discovery tools should be your best means for securing information in the electronic world. Following the six steps discussed in the sections above will assist counsel in navigating the sea of
electronic discovery—everything from initial disclosures through interrogatories, depositions, document production, and onsite inspections.
If counsel foregoes even one step in the process, he or she might have
difficulties evaluating whether the opponent has truly “produced”
everything requested.
RESPONDING TO REQUESTS FOR ELECTRONIC
DOCUMENTS IN CIVIL LITIGATION
Typically, a party issuing a discovery request will also likely need to
respond to a discovery request at some point during the lawsuit; it is
the proverbial goose and gander phenomenon. In other words, what
is demanded of one party may well be eventually requested of the
other. Like requesting electronic documents, responding to document
requests requires a high degree of savvy in order to ensure your client does not bear the burdens associated with a “fishing expedition”
discovery production. The steps associated with responding to a document production, which will be discussed for the remainder of this
chapter, include:
• Understanding your client’s technical architecture;
• Developing proportionality arguments to negotiate limitations
on discovery;
• Using sampling techniques wherever possible.
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Step 1—Responding: Understanding Your Client’s
Technical Architecture
As has been discussed in previous chapters and sections of this book,
the importance of understanding both your opponent’s and client’s
technical environments cannot be understated. This intricate knowledge is perhaps most critical when it comes to responding to document
requests on behalf of your client. However, this is one of those areas
that seems so simple to state in black-and-white text on a page, yet is so
complex in the real world.
Truly understanding your client’s IT systems will require that you
develop a close partnership with the teams charged with setting up
and maintaining those systems. Interestingly, the recent trend has been
to give more responsibility to IT departments with regard to not only
maintaining the systems that manage ESI but also in the development
and enforcement of ESI policy. Thirty-five percent of in-house counsel in the U.S. and twenty-five percent of in-house counsel in the UK
attribute primary ESI responsibility to the IT staff. This percentage is
up from 2007, when eighteen percent of U.S. respondents and fourteen
percent of UK respondents attributed ESI responsibility to IT personnel. Second Annual ESI Trends Report, Kroll Ontrack (2008).
This transfer of authority over ESI policy is a testament to the highly
technical nature of ESI and also a sign that organizations are maturing and
taking a more collaborative approach to ESI to achieve superior results.
However, without significant involvement of and guidance from lawyers,
this trend is potentially dangerous. While IT personnel are extremely
skilled at the technical aspects of maintaining ESI, they lack the legal training and experience to know what needs to be preserved or produced in
response to a production request. The responsibility of the trial attorney or
in-house counsel is to communicate with and work cooperatively with IT
staff to ensure the ESI policy that is developed meets all legal requirements.
This is where the rubber often hits the road. In a general sense, IT staff
and lawyers have nothing in common and could be likened to Mars and
Venus. They do not speak the same language (e.g., Dell PowerEdge 1955
Blade Servers with Quad-Core Intel® Xeon® 5000 Sequence processors and
32 GB of Ram v. expressio unius est exclusio alterius). They did not receive
the same types of educational training (e.g., a degree in information
systems v. a Juris Doctor law degree). They do not have the same
types of hobbies or groups of friends (online gaming groups with other
“techies” v. golfing events with judges). While this may be a colossal oversimplification and generalization, the underpinnings cannot be ignored.
In the ordinary course of running a business, the IT and legal teams
are not going to organically interact on a day-to-day basis. Only in the
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artificial realm of litigation are these two teams thrown together for the
good of the business.
So what is a lawyer to do? Grab your “Legalese-to-Techie” dictionary
and dig in. Help them understand your world and strive to understand
theirs. Together, work to build best practices and hire the best suited
service providers for your needs. Remove barriers and achieve some
e-discovery document production successes under both of your belts.
(In full disclosure, one of the authors of this book is married to a
computer programmer—proving that technical and legal professionals
can truly coincide in harmony.)
Step 2—Responding: Developing Proportionality Arguments
to Negotiate Limitations on Discovery
Armed with a concrete knowledge of their client’s technical architecture behind them, attorneys facing a discovery request should consult
the provisions of Federal Rules of Civil Procedure 26(b) and its subparts. Specifically, the FRCP 26(b)(1) provides, “All discovery is subject
to the limitations imposed by Rule 26(b)(2)(C).” The subparts of Rule
26(b)(2)(C) provide in relevant part:
Limitations on Frequency and Extent
(C) When Required. On motion or on its own, the court must limit
the frequency or extent of discovery otherwise allowed by
these rules or by local rule if it determines that:
(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is
more convenient, less burdensome, or less expensive;
(ii) the party seeking discovery has had ample opportunity to
obtain the information by discovery in the action; or
(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the
case, the amount in controversy, the parties’ resources,
the importance of the issues at stake in the action, and the
importance of the discovery in resolving the issues.
Fed. R. Civ. P. 26(b)(2).
As a threshold matter, it is absolutely critical that practitioners
understand that both the accessibility provisions in Rule 26(b)(2)(B) and
the proportionality provisions in Rule 26(b)(2)(C) apply to responses for
requests for discovery of electronically stored information. The majority
of the following discussion deals with Rule 26(b)(2)(C) because Rule
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26(b)(2)(B) was previously discussed along with data locations and accessibility in section 3.6 of this chapter. However, it is important to note how
the Rule’s subsections work in tandem yet are also distinguished from
one another.
Rule 26(b)(2)(B) was a new addition to the Federal Rules of Civil
Procedure on December 1, 2006. The addition recognized that the
unique features of ESI (the enormous volume of potentially discoverable information, the many locations in which it can be found, etc.) and
granted courts the discretion to take the undue burden and expense
these unique features may cause into consideration and deem the electronic evidence not reasonably accessible (thus not discoverable) without good cause. Rule 26(b)(2)(B) provides an additional argument for a
responding party to contest a production request that is not reasonably
accessible due to undue burden or cost, which is a lower hurdle to
cross than the proportionality requirements of Rule 26(b)(2)(C).
Rule 26(b)(2)(C) is a rule that mandates limitations on a production request if its proportionality requirements are met, unlike Rule
26(b)(2)(B) which is largely left in the discretion of the court. Application of Rule 26(b)(2)(C) and its proportionality considerations, embodied in subparts (i), (ii), and (iii), play a predominant role in responses to
requests for discovery of electronic information.
Rule 26(b)(2)(C)(i) provides that discovery must be limited if
the court determines that the discovery is unreasonably cumulative,
duplicative, or obtainable from another source that is more convenient, less burdensome, or less expensive. Historically, parties responding to requests for electronic documents have argued that the request
for their documents in electronic form is cumulative to the request for
documents in paper form. Due to the special nature of electronic documents (as described at length in other sections of this text), this argument has largely been unsuccessful, particularly in recent years.
Electronic documents contain metadata specific to their creation,
including information relating to who created the documents, when
they were created, when they were saved, when they were modified,
and to whom they were sent. This and other valuable information is
contained only in documents in their electronic form. Therefore, arguments that electronically created documents that have been previously
produced in paper should be sufficient, often fail. However, as with all
discovery, if the party has already produced information in one electronic format, or in the electronic format most convenient to it, it is a
valid argument to assert that such information should not also be produced in multiple other electronic formats.
Subsection (ii) of FRCP 26(b)(2)(C) permits the court to limit discovery where the requesting party has had ample opportunity to obtain
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the information sought. As stated before, electronic documents are very
often the best and only source of some information. The best example of this is e-mail documents. E-mail represents a uniquely accurate
source of evidence and information relating to the individual’s opinions, thoughts, and actions contemporaneous to the events. Electronic
documents also contain a degree of candor, which is not often seen in
other forms of communication. Therefore, any argument that a party
has had ample opportunity to obtain information may have only marginal success if it is used to defeat the production of electronic records,
unique by their very nature.
By far the most used subset of Rule 26(b)(2)(C) is subpart (iii). This
subpart provides the meat of all objections to discovery, particularly
document discovery in the electronic context. The rule provides an
opportunity for advocacy on behalf of one’s client and the demonstration of the specific burden or expense associated with the proposed
production of electronic records. As known by any party who has
engaged in substantial electronic record productions, the task can be
both burdensome in time, effort, and expense. Therefore, an objection
to the production of one’s electronic records has the most chance of
success if it is couched in a context of subpart (iii) of this rule.
However, it is of the utmost importance to note that blanket objections of burden and expense have been largely unsuccessful in thwarting the discovery of electronic records. This fact is increasingly true
as courts, counsel, and highly litigated organizations become more
e-discovery savvy. As players in the civil litigation industry become
increasingly educated on how exactly e-discovery production works,
courts will be less receptive to parties crying wolf—claiming that it is
plainly too expensive and burdensome to produce the requested data.
Any objection to the production of electronic records based on burden
and expense must be supported by an accurate and credible demonstration of that burden or that expense.
With respect to the burden and expense of producing electronic
records, counsel would be well advised to seek the assistance of an
and IT staff member or ESI consultant to provide an affidavit or testimony as to the extent of the burden and expense associated with a
particular ESI production, using specific factual data to support the
burden assertions.
Consider a request for production of e-mail from several company
executives relating to customer accidents for a two-year period in a
product liability litigation. This is not an uncommon request. The expert,
which provides the demonstration of burden and expense related to the
production of electronic records should, at a minimum, include statements in their affidavit or testimony which specifically address:
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2.
3.
4.
121
The type of e-mail package used by the executives or users
in question and the technological tools available to access that
e-mail.
If archival media (i.e., backup tapes) must be accessed in order
to obtain e-mail for a past time period, the expert affidavit
or testimony should specifically address any technological
limitations in accessing data from the software and hardware
platform used to create the backup tape. The expert statement should specifically state the amount of time necessary
to restore each of the backup tapes as well as a mathematical calculation as to the number of backup tapes that must be
restored in order to gain access to the subject e-mail.
The expert’s statement should specifically include reference to
the structure of the data on any backup tapes or media as to
the time period at issue in the case. If the two-year time period
in question spans several tapes, the expert’s statement should
calculate any additional time or effort required to restore those
tapes individually, as well as any other technological hurdles to
the production of the data, including whether the target individual’s e-mail is maintained on separate servers and separate
locations, thus necessitating additional tape restoration.
The expert’s statement used to demonstrate the burden and
expense should specifically state whether any keyword terms
will be applied to the data set in order to extract information
relevant to the case.
The expert report should also provide an accounting for the costs
of the production based on its expertise. A party can then rely on the
specific statements of its retained e-evidence expert in order to make
recommendations to the court and opposing parties as to specific limitations on its duty to produce electronic records.
This premise was amply demonstrated in Ex Parte Wal-Mart, Inc.,
809 So. 2d 818 (Ala. 2001). In the case, an individual was struck by a
falling nineteen-inch television set in a Wal-Mart store a few days after
Christmas. In his personal injury action against Wal-Mart, the plaintiff
requested that Wal-Mart produce a wide variety of electronic documents maintained in its corporate database. Wal-Mart objected to the
request for production on the grounds that the requests were overly
broad, unduly burdensome, and not relevant to the case. The plaintiff moved the trial court to compel Wal-Mart to answer the questions
and produce the documents. The court entered an order requiring WalMart to produce all of its customer incident reports and employee accident review forms, limiting the production to stores within the state
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of Alabama and to a five-year period prior to the incident. Wal-Mart
vigorously opposed this order, making motions at the trial court and
appellate level. On appeal to the Supreme Court of Alabama, the Court
held that the trial judge was authorized to order discovery of all of the
falling merchandise incidents within the geographical and temporal
limits he imposed. In so holding, the Court confirmed that within the
context of the electronic document production it was appropriate to
place these geographic and temporal limits.
Limiting production to a narrower subject matter or set of search
terms (e.g. date range, locations, relevant individuals’ computers,
etc.) is par for course in modern discovery motions. For example, the
court in Petcou limited the retrieval of ESI to two narrow categories of
e-mail (undeleted e-mail of current employees specifically named
by the plaintiffs, and any relevant e-mails of the nature cited by the
plaintiff of which the defendants were aware of and had retained) in
order to avoid undue burden and expense. Petcou v. C.H. Robinson
Worldwide, Inc., 2008 WL 542684 (N.D. Ga. Feb. 25, 2008). Note that
it is very hard to make compelling arguments regarding undue burden and expense without an expert to back you up when the subject
matter (i.e. how much a search of computer systems will cost) is so
highly technical.
In light of the case law and our practical experiences, we propose
that any objection to the production of electronic records be specific in
requesting the following limitations:
1.
2.
3.
4.
Time;
Geography of incidents or locations within an organization;
Specific individuals and organizational elements relevant to
the case; and
Specific to the issues of the case including the potential inclusion of keyword terms
Inclusion of these elements in one’s objection or response to discovery of electronic records will significantly advance the probability
that the argument will be successful in placing limits on discovery.
Further, it is always critically important to provide specifically supported arguments with regard to the remainder of Rule 26(b)(2)(C)(iii)
dealing with matters addressing the marginal utility of a request such
as: (1) the needs of the case, (2) the amount in controversy, (3) the parties’ resources, and (4) the importance of the issues at stake in litigation.
These specific factors were confirmed as important to the production
of electronic records in the landmark Zubulake decision by Judge Shira
Ann Scheindlin from the Southern District of New York. Zubulake v.
UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003).
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Figure 3.8 Data Sampling
RESPONDING—Step 3: Using Sampling
Techniques Wherever Possible
When faced with a request for production of ESI that seems overly
broad in scope, one should consider proposing that the client first provide a sample of representative electronic data for review and evaluation.
Then, the court can have a statistically sound basis to determine whether
additional data should be produced. The concept of sampling has gained
particular popularity and momentum in the context of electronic discovery. One of the first cases in which the data sampling protocol was
explored and used extensively was McPeek v. Ashcroft, 202 F.R.D. 31 (D.C.
2001). A “must read” e-discovery case, McPeek contains a succinct analysis of the realities of backup tape procedures within organizations and
comments on the proportionality issues specific to this type of evidence.
It also addresses this concept of data sampling discussed herein.
McPeek involved a suit by a Department of Justice employee relating to his alleged discrimination while employed by the Department.
In the context of his suit, the plaintiff requested e-mail and other
electronic documents be produced from backup tapes of the Department’s e-mail system. In evaluating the request and response, the court
engaged in an important discussion of the nature of backup tape data.
The court stated that:
Using traditional search methods to locate paper records in a digital world
presents unique problems. In a traditional “paper” case, the producing
party searches where she thinks appropriate for the documents requested
under Fed.R.Civ.P. 34. She is aided by the fact that files are traditionally organized by subject or chronology . . ., such as all the files of a particular person, independent of subject. Backup tapes are by their nature
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indiscriminate. They capture all information at a given time and from a
given server but do not catalogue it by subject matter.
McPeek v. Ashcroft, 202 F.R.D. 31 at 32-33.
This random nature of data storage on backup tapes creates problems
unique to electronic evidence. Backup tapes from multiple locations and
time periods must be restored and searched in order to obtain relevant
e-mail even if it is requested for a specific person and time. In order to
properly address the competing needs of the plaintiff to obtain critical
evidence, which may only have existed in e-mail form on the backup
tapes, and the needs of the Department to control costs in alignment
with the case issues, the McPeek court ordered the use of a data sampling protocol. Specifically, the McPeek court ordered the Department to
perform a backup restoration of e-mails attributable to a specific Department individual during a specific time period—July 1, 1998, to July 1,
1999. The court ordered that the Department should pay for the restoration of the backup tapes necessary to retrieve information for the sample.
The court stated that the Department should then search and produce
the sample data for e-mails responsive to the plaintiff’s request.
Importantly, the court required that the Department “carefully document the time and money spent in doing the search” and the results
of the search. Upon completion of the search, the court stated that it
would permit the parties an opportunity to argue why the results did
or did not justify a further search for e-mail evidence.
The McPeek decision was followed by McPeek II. McPeek v. Ashcroft, 212 F.R.D. 33 (D.D.C. 2003). In this opinion, the court analyzed
the arguments of both plaintiff and defendant as it related to the
production of additional e-mail evidence following the evaluation
of the sample. The court specifically considered the issues relevant
to the case, for which contemporaneous information may have been
recorded via e-mail, and the time periods for which backup tapes still
existed. The Court ordered the search and production of some information while denying the plaintiff’s request for search and production of other information.
Other courts have expanded upon the protocols discussed in
McPeek, determining the extent to which electronic records should be
produced. Data sampling is continuing to grow in judicial and party
popularity, and as it does so the acceptable protocols for data sampling continue to evolve. Generally speaking, however, data sampling
should be conducted scientifically using statistically sound principles so that the result is one the court and parties can reasonably rely
upon. In Farmers Insurance Company, for example, the court ordered
the defendant to use a statistical sampling technique to meet the trial
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court’s “muster for integrity of the process and protect both litigants
from distortive effects” to produce discovery. Farmers Ins. Co. v. Peterson, 81 P.3d 659 (Okla. 2003).
For another example, the court in J.C. Associates ordered random
file-sampling of claim files to determine relevance. J.C. Assoc. v. Fidelity
& Guar. Ins. Co., 2006 WL 1445173 (D.D.C. May 25, 2006). Additionally,
two notable cases employing the data sampling protocols are Murphy
Oil USA, Inc. v. Fluor Daniel, Inc., 2002 WL 246439 (E.D. La. Feb. 19,
2002) and Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003).
In sum, these cases illustrate that data sampling represents an important mechanism at the counsel’s disposal in responding to requests for
electronic documents. With data sampling, counsel can attempt to limit
its duty to restore backup tapes. First, the issues in the case should be
translated into actionable technology tasks, such as restoring backup
tapes for specific time periods, individuals, and topics. The results of
these sample searches should then be used to advocate on behalf of
one’s client as to the scope of any additional search and production,
which is warranted.
Conclusion
The bottom line when it comes to responding to requests for document
production is that understanding the data and the data environment
that you are working with is crucial to making persuasive arguments
against production. The three most common grounds on which production can be limited is lack of relevance, privilege, and undue burden.
To make relevance or privilege arguments, you must show the judge
that the data you are dealing with is either non-relevant or privileged,
which can be accomplished by a comprehensive data map or data sampling. To make undue burden arguments, you must show the judge
the size, layout, and features (e.g., not reasonably accessible due to extensive restorative procedures that would be needed to access the data) of
the technical architecture on which your data is stored. Following the
three steps discussed in this section will enable counsel, often with the
aide of an IT expert or ESI consultant, to make these arguments persuasively. Limiting production will allow discovery to proceed more quickly
in a less expensive manner, goals that a client will no doubt share.
3.9 Review and Production Considerations
REVIEW AND PRODUCTION OPTIONS
After all the legal and technical negotiations are complete comes the
actionable task of physically reviewing the volume of documents for
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responsiveness and privilege and then making the production to the
opposing party. Attorneys not riding the wave of e-discovery law and
technology advancements may believe that “old school” document
review methods are best utilized here; yet, nothing could be further
from the truth. FRCP rule changes and technology innovations have
bread opportunities and challenges, dramatically altering the way
discovery sets are reviewed and produced today. For both review and
production, litigation teams have five options:
•
•
•
•
•
Litigation support software;
Online review tools;
Printed documents;
Native files; and
A hybrid option, involving more than one method above.
Both the legal and technical aspects of these review and production options will be discussed for the remainder of this section.
Litigation Support Software
Before the dawn of e-discovery, many law firms chose to implement a
localized litigation support database to assist litigation teams in managing sets of discovery documents, deposition transcripts, kits, case
chronologies, privilege logs, and more. The law firm is responsible for
loading the software onto its users computers, ensuring there is enough
disk space for the database, training the users, and maintaining the
system. For smaller discovery sets, these tools can be used for document review. Over the years, “load files” for these tools have grown
to become the standard for exchanging sets of documents. Litigation
teams produce the responsive documents (native and images), metadata, extracted text, and a load file that helps the tool import all the
information into the litigation support database.
Online Review Tools
With the advent of e-discovery filtering and processing and the surge
in volume of e-discovery sets, many service providers started developing online review tools to aid in the document review and production process. These online review repositories allow litigation teams
to search, categorize, highlight, redact, and annotate documents all
within a web-based, secure database hosted by the service provider.
The litigation team is provided a web-URL and a series of logins and
passwords to access their discovery set. Most of these tools preserve
and display the document in its native form, along with a TIFF image,
original metadata (to, from, cc, bcc, create date, last accessed date,
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etc.), and even can assist with basic reporting and privilege log creation. Most service providers strive to improve their online review
tools, adding cutting-edge features and functionality to the tool to
gain market differentiation. Cutting-edge features in some tools
include, conceptual searching, advanced visualization graphs and
charts, multilingual support, and auto-translation for documents in
other languages.
When it comes time to the produce documents, some parties will
take advantage of the online repository format for production purposes
as well. The service provider copies and transforms the review database into a production database by locking down the categorizations
and redactions, hiding comments, annotations, and other work product, and removing all non-desired functionality (except basic searching
perhaps). The locked database then can be copied to a new and distinct
database for the requesting party to review. This option maintains the
security of the data and annotations while allowing the receiving party
to review the produced data with the benefits of technology.
Print
Some parties are still choosing to review and produce electronic documents in a printed format. While this option is quickly going the way
of the dinosaur for large discovery sets, many small and mid-size cases
are still printing documents for review and production purposes. It is
important to note that should a party choose to transfer an electronic
document to a paper format that certain cautions apply. For example,
when an electronic document is printed, certain behind the scenes
metadata fields are lost, resulting in an incomplete review and production of this piece of discoverable ESI. If this is your review and production format of choice, metadata must accompany printed pages in a
separate table, slip sheet, or branded on the corners of the document.
Native Files
A number of recent cases demonstrate that parties are increasingly
requesting production of electronic documents in the native file format
during discovery. In fact, according to the American Bar Association’s
2005 corporate counsel survey, thirty percent of survey respondents
reported they agreed to produce electronically stored information in
native format. See http://www.digev.e-symposium.com/papers/
karticle5.pdf. This survey was conducted prior to 2006 when the new Federal Rules of Civil Procedure took effect, specifically requiring counsel
to address ESI production format in Rule 34(b). But what is native file
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production? What are the advantages and disadvantages lawyers need
to consider when producing files in their native format? What types of
arguments should lawyers expect on this issue given current case law
and the changes to the Federal Rules of Civil Procedure?
Native file review and production can be defined as reviewing and
producing electronic files or other ESI in the original format in which
they were created by the specific software applications used to create
them. For example, if you are required to produce the entire contents of
someone’s e-mail box, this would include the e-mail type—e.g., Microsoft Outlook 2003, and may also include various other file types that
are stored in the mail box (typically as attachments to the e-mails), e.g.,
word processing documents, spreadsheets, presentation slides, database files, sound and video clips, etc.
When files are reviewed in their raw native format, they are typically copied from a hard drive to CD-ROM, DVD, or an online repository so that they can be reviewed for responsiveness and privilege. The
documents appear the same way they did when they were originally
created on a computer, complete with metadata, embedded data, and
other salient elements. Native documents have not been processed or
converted to a standard file type such as TIFF. Native documents are
highly susceptible to spoliation because of their fragile state; when
opening a native file, a user has all of the features to edit the file at his
or her fingertips.
Files reviewed in a converted file format, on the other hand, are a derivative of the original file. The native files are converted to a standard file format and the file text and metadata is captured for searching. Converted file
review can improve the efficiency of a document review because the review
team can search across the entire set of documents, applying redactions,
categories, notes, and Bates numbering schemes as needed. Converted file
review also ensures the documents and their associated metadata and text
are unaltered when opened during document review.
With respect to the advantages of the native file format, in some
instances native file production may be a cost effective option. If you
do not produce files natively, you need to convert them to some type
of image format (TIFF is common), or print them out to paper. In either
case, there will be some cost involved. It bears noting, however, that
money saved by the producing party may become a cost born by the
requesting party, if for any reason the requesting party needs to convert some or all of the native files to another format in order to conduct
their review (for instance, if they do not have access to the applications
used to create the documents, as discussed below).
Whether you are the producing or receiving party, other advantages to native file production are that you are able to see the document
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as it appeared in its original format and that you have access to all
file attributes. This means you will be able to access potentially relevant metadata, such as formulas used to create spreadsheets, or track
changes information. This is information that often is not apparent on
the face of a document, and may not be available depending upon the
production format. Parties producing native files will certainly want to
review any metadata or embedded data before producing native files,
and receiving parties should consider scanning this information for a
good behind the scenes history of a document.
At this point, it may seem that native file production is the way
to go. But let’s consider some of the challenges it presents as well.
First, as discussed previously, ESI is easily altered. Even the act of
collecting native files, such as burning them to a CD-ROM or DVD,
can modify the file metadata without anyone even having opened the
files. Opening the files to review their contents will also necessarily
alter the files. Consider that in many electronic discovery cases you
may be producing hundreds or sometimes thousands of electronic
files. It will be very difficult to maintain and verify the authenticity
of files that are so easily manipulated, whether that manipulation is
intentional or not.
Second, and related to the issue of authentication, is the inability
to easily index native files. Native files cannot be Bates stamped without altering the file itself. Even if you assign a Bates number at the file
level (e.g., by re-naming the file to include a number), you cannot Bates
stamp at the page level. Also, be aware that you cannot redact native
files without altering the file text and metadata.
Third, keep in mind that you will need the native application(s)
used to create the files in order to view them. As previously mentioned,
this may require some expense and effort to acquire licenses and install
software on reviewers’ machines.
Finally, another consideration is the ability to search and sort documents for quicker and more efficient access to data about your case.
With native file production you may not be able to search and sort
through multiple file types with one global search, as is the case when
you have converted all files to a common format.
Regardless of which production format is ultimately used in a
case, the producing party’s counsel should not agree to a native production without being informed about the implications it will have on
the effort, time and expense associated with the review and production
process. Counsel opposing a native production request must be prepared to assert substantive arguments in support of their position—
or face the possibility of a court order compelling compliance with the
production request.
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Hybrid
In the course of an e-discovery project, most legal teams today quickly
realize that when it comes to review and production format options,
one size does not fit all. Different cases require different forms of production depending on the type of documents involved, the number of
documents, the specific discovery request, the deadlines for production, the type of litigation or government investigation, and the preferences of the court, opposing party or government agency. On large
discovery projects with thousands of documents and widely divergent
file types, a hybrid approach is likely necessary. For example, some file
formats such as e-mail and word processing documents (which are the
bulk of most projects) render themselves nicely to a TIFF image format
and the advantages of that review and production format can be realized. Spreadsheets and databases, on the other hand, are complex and
dimensional file types that are best reviewed and produced natively.
Understand that in any mid-to-large size e-discovery project, a hybrid
review and production approach will be needed.
REVIEW AND PRODUCTION LEGAL ISSUES
Unless claims of an incomplete production arise, courts typically steer
clear of instructing parties on their chosen review methods based on
the fact that typically the producing party bears all costs associated
with the act of physically reviewing the documents. However, when it
comes to production format, there is much guidance from the Federal
Rules of Civil Procedure and bench.
Federal Rule of Civil Procedure 34(b)(1)(C) provides that the requesting party “may specify the form or forms in which electronically stored
information is to be produced.” Rule 34(b)(2)(E) provides responses and
objections to the production of ESI, which reads in relevant part:
Producing the Documents or Electronically Stored Information. Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information: (i) A party must
produce documents as they are kept in the usual course of business or
must organize and label them to correspond to the categories in the request; (ii) If a request does not specify a form for producing electronically
stored information, a party must produce it in a form or forms in which it
is ordinarily maintained or in a reasonably usable form or forms; and (iii)
A party need not produce the same electronically stored information in
more than one form.
The first lesson to be learned from Rule 34(b)(2)(E) is that production disputes can be largely avoided by having the requesting party
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specify in their request the desired form of production, so that any production format disputes can be worked out prior to forcing the producing party to undergo the time and expense of production and review.
Production format is a topic that should be brought up at an early Rule
26(f) “meet and confer” conference. In a recent case, Autotech Techs. Ltd.
P’ship, the court denied a request for native production made after the
documents at issue had previously been produced in both PDF and in
paper format. Finding no previous specific production format request,
the court determined the plaintiff had the option to produce the document in the form in a reasonably usable form. Additionally, the court
stated the defendant “was the master of its production requests [and] it
must be satisfied with what it asked for[.]” Autotech Techs. Ltd. P’ship v.
Automationdirect.com, Inc., 2008 WL 902957 (N.D. Ill. April 2, 2008).
However, in the event that production format is not determined in
advance, Rule 34(b)(2)(E) provides that production should be either in
“the form or forms in which it is ordinarily maintained” or in a “reasonable useable form or forms.” Although the “ordinarily maintained”
language of Rule 34(b)(2)(E) smacks of a requirement of native file production, it is important to note that it is just one option. Rule 34(b)(2)(E)
also gives the responding party the alternate default option of producing ESI in a “reasonably usable” format. Thus, there is a solid argument
that Rule 34 intends to allow production in either the native or TIFF
format so long as any corresponding and relevant text and metadata
are also produced.
Production in the “ordinarily maintained” form (assuming that is
synonymous with the native format of ESI) generally has the connotation of not requiring any conversion and thus less processing costs
prior to production. However, this rarely bears out in reality, and production in TIFF format has several advantages that should be taken
into account when choosing or arguing for a production format with
opposing counsel. Consider that it is possible to produce partial text
and metadata in order to protect privileged and/or non-relevant information in TIFF format. A producing party could produce a redacted
image or a database with only those electronic documents and metadata fields that the party is required to produce.
Largely in response to Rule 34(b), courts are ordering native file
format productions more than ever before—often using the “ordinary
course of business” requirement in Rule 34 as a basis for their analysis.
For example, in In re VeriSign, a magistrate judge found a TIFF image
document production was insufficient and ordered the defendants
to produce the documents in a searchable electronic format—such as
a native format. Objecting to the order, the defendants argued production in native format rather than in TIFF format was contrary to
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Rule 34. The district court judge rejected this argument and declared
the Rule “required [the producing party] to produce responsive electronic documents in their native .pst format if that is how they were
stored in [the producing party’s] usual course of business.” In re VeriSign, Inc. Sec. Litig., 2004 WL 2445243 (N.D. Cal. Mar. 10, 2004); see also
In re Pemstar, Inc. Secs. Litig., Civ. No. 02-1821 (DFW/SRN) (D. Minn.
Apr. 23, 2004).
When determining a production format, look at the case law in the
jurisdiction where your case is being brought to see whether those particular courts have required native file production; by no means have
all federal courts or state courts taken to demanding native file production. The determining factor in many jurisdictions, rather, is whether
the produced documents contain metadata and extracted text, often
finding that metadata and extracted text are necessary to constitute a
“reasonably usable form” under Rule 34(b).
There are many cases that illustrate the importance of metadata
in production format. For example, in Hagenbuch the court granted
a motion to compel native production noting that the TIFF production lacked metadata, e-mail attachments, and recipients, and was not
produced in the “usual course of business.” Hagenbuch v. 3B6 Sistemi
Elettronici Industriali S.R.L., 2006 WL 665005 (N.D. Ill. Mar. 8, 2006).
Interestingly, in In re Priceline, the court did not require an outright
native file production. Instead, the court ordered the producing party
to produce responsive documents in TIFF or PDF format along with
searchable metadata. However, the court did order the producing
party to maintain the original data in native format during the litigation and provided that it would consider future requests for native
file production of specific files if the requesting party demonstrated a
need to “view or comprehend” the information contained in the nonnative production. In re Priceline.com Inc. Sec. Litig., 233 F.R.D. 88 (D.
Conn. 2005). The bottom line is that any non-native production should
be accompanied by metadata information; otherwise, the producing
party runs a severe risk of running afoul of Rule 34(b)’s requirement
that production be in a “reasonably usable” format.
Courts have been particularly intolerant of conduct by the producing party that appears to be an intentional effort to deprive the requesting party of metadata. For example, in Williams v. Sprint, the producing
party produced spreadsheets after using software to “scrub” (i.e.,
remove) metadata and locking cells in the spreadsheets, thus preventing access to formulas. The court ordered Sprint to produce the metadata as well as “unlocked” versions of the spreadsheets, holding that
an order directing production of electronic spreadsheets as they are
kept in the ordinary course of business requires the producing party to
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turn over electronic documents with metadata intact. Williams v. Sprint/
United Mgmt Co., 230 F.R.D. 640 (D. Kan. 2005).
An increasing number of cases have sternly rejected the production of ESI in paper format, at least when the metadata does not accompany the printed pages as described above, as violating Rule 34(b). For
example, in In re Payment Card Interchange Fee, the court chastised the
producing party conduct in printing ESI and then scanning the pages
to TIFF images and created a searchable text file through the use of
Optical Character Recognition (“OCR”) software. The court noted,
“[The producing party] have rather laboriously stripped their textsearchable electronic documents of metadata that would not appear in
printed form, and then converted them back into text-searchable electronic documents without that subset of metadata.” In re Payment Card
Interchange Fee & Merchant Discount Antitrust Litig., 2007 WL 121426
(E.D.N.Y. Jan. 12, 2007).
Several recent cases have suggested that a producing party may
be forced to comply with a native production request if the producing
party fails to offer a substantive basis for objecting to the request. In
Treppel, for instance, the requesting party’s counsel sent the producing
party’s counsel a proposed e-discovery preservation order that, among
other things, declared accessible data would be produced in native
format. The producing party’s counsel declined to agree with the
preservation order, arguing that the proposed order was onerous. Furthermore, the producing party argued it was inappropriate to consider
production format in the absence of specific production requests. The
court, however, determined native production was appropriate as the
defendant failed to offer a substantive basis for its objection to native
format. Treppel v. Biovail Corp., 2006 WL 278170 (S.D.N.Y. Feb. 6, 2006)
Similarly, in a patent infringement case, the requesting party
asserted native production was mandated by a local patent rule requiring a party defending a patent infringement claim to make available
“[s]ource code, specifications, schematics, flow charts, artwork, formulas, or other documentation . . . .” The court ordered native production
after finding that the producing party failed to offer relevant reasons
why the documents should not be produced in their native format.
Nova Measuring Instruments Ltd. v. Nanometrics, Inc., 2006 WL 524708
(N.D. Cal. Mar. 6, 2006).
As illustrated by Treppel and Nova, courts are increasingly placing
the burden on the producing party to show why it should not produce
documents in their native format. Accordingly, merely objecting to a
native file production request without offering concrete reasons for the
objection is insufficient. Rather, you must be prepared to articulate the
specific technical limitations associated with native file production and
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not found with a converted file format production. When crafting an
objection to a native file production request, counsel should consider
the following substantive arguments:
• Alterability and Spoliation. Once files are converted to a TIFF
format, they cannot be altered. Native files, however, can be
changed very easily—either intentionally or unintentionally.
For example, simply opening a document can change the metadata of a native file. Ensuring a natively produced document
has not been altered requires the use of a mathematical hashing
algorithm.
• Bates Numbering. Native file productions make it impossible to
Bates number documents, precluding parties from having an
effective audit trail of the documents that were produced. In addition to being time-consuming, an attempt to add Bates numbers
to the native document set modifies the document from its original form. In contrast, a TIFF image production allows for Bates
numbering and accurate tracking of documents produced.
• Viewing Platform. Raw native file review requires the review team
to have each of the original software applications for every document in the review set. Thus, in order to view a Microsoft Word
file, a Microsoft Word license needs to be purchased for each
member of the review team. On the other hand, a TIFF review
or rendered native review does not require any native software
applications, resulting in decreased costs as the producing party
does not need to have all applications loaded on their review
systems.
• Creating Redactions. A TIFF image review and production allows
parties to redact confidential or privileged information. When
documents are produced natively, however, there is no effective
way to place a redaction on the native file. Thus, a native file
production can undermine and compromise a party’s efforts to
protect proprietary or privileged information.
• Searching Text and Metadata. Because all files have been converted
to the same format, the ability to search across all documents
and metadata in a TIFF image review and production set can
easily be accomplished. Thus, whether a document is a Lotus
Notes, Microsoft Word, or Microsoft Outlook file format, it can
be searched as easily as any other file, in one comprehensive
search query. In a raw native file document set, on the other
hand, this task is very difficult and sometimes next to impossible
because very few applications exist for searching across thousands or millions of native files in different formats from multiple
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computer users. Counsel should also be aware that producing
TIFF images with corresponding searchable text and metadata
has been found acceptable by courts nationwide.
CONCLUSION
It is important to remember that the fundamental basics of document production and review remain unchanged with the dawn of
e-discovery. Litigation teams must still analyze the document set and
determine which ones are responsive to the document requests and
which ones are privileged or otherwise protected. Yet, today a majority of this work is not taking place anymore in a dusty warehouse with
freight trucks delivering boxes every thirty minutes. Instead, review
teams are provided a computer and Internet connection to facilitate
their work.
As you think about review and production options, remember that
no method is the silver bullet. You must realize the limitations associated with each of the different review and production formats and
choose the option or options that work best for your case. Many times
this means using different formats concurrently for a busy docket of
cases. Most importantly, gain consensus with your opponent early on
with regard to production format, as it will guide decisions about various options for collecting, processing, and reviewing ESI.
3.10 Cost Allocation
The price tag connected to an electronic discovery project can be significant, depending on the circumstances of the case. Not surprisingly,
some of the most intense arguments ensue over which party should
bear the costs associated with e-discovery. As Judge Scheindlin noted,
“The more information there is to discover, the more expensive it is to
discover all the relevant information until, in the end, ‘discovery is not
just about uncovering the truth, but also about how much of the truth
the parties can afford to disinter.’” Zubulake v. UBS Warburg, 217 F.R.D.
309 (S.D.N.Y. 2003) (citing Rowe Entm’t, Inc. v. William Morris Agency,
Inc., 205 F.R.D. 421, 423 (S.D.N.Y. 2002).
This section will look at the various common law approaches the
case law has taken with regard to which party bears the costs of discovery in litigation—the traditional rule, the cost-shifting approach, and
the balancing test approach. All courts have the authority to require a
party requesting discovery to pay the costs that will be incurred by the
responding party; it is in the court’s discretion whether to exercise this
authority, and under what circumstances. Thankfully, guidelines have
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emerged from the case law to guide courts in this endeavor and to provide counsel with arguments and reasonable expectations.
THE TRADITIONAL RULE
The traditional rule is that each side bears its own costs during the
discovery process. See Jay E. Grenig and William C. Gleisner, III, eDiscovery & Digital Evidence Database § 9.2 (Sept. 2007). The traditional rule
is represented in Federal Rule of Civil Procedure 34(a), which reads in
relevant part:
A party may serve on any other party a request within the scope of Rule
26(b): (1) to produce . . . the following items in the responding party’s possession, custody, or control: (A) any designated documents or electronically stored information . . . stored in any medium from which information
can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form; or (B) any designated tangible things . . . .
Fed.R.Civ.P. 34(a) (2008).
Furthermore, FRCP 34(b)(2)(E) reads in relevant part:
Unless otherwise stipulated or ordered by the court, these procedures
apply to producing documents or electronically stored information: (i) A
party must produce documents as they are kept in the usual course of
business or must organize and label them to correspond to the categories
in the request . . . .
Fed.R.Civ.P.34(b)(2)(E) (2008).
The language in Rule 34 does not contemplate cost-shifting; rather,
the language supports the common law traditional cost allocation
approach that places the costs associated with reviewing documents
for responsiveness or privilege, organizing the documents, printing
the documents, and then shipping the documents for production onto
the producing party.
However, these rules—specifically Rule 34(a)(1)—limit the universe
of data that must be generated by the producing party to things that are
in its “possession, custody, or control.” In other words, producing parties cannot be forced to bear the costs of producing anything outside their
“possession.” Based on this limitation, many litigators have attempted to
argue that electronic documents, files, and e-mails that have been deleted,
archived, or are otherwise burdensome to produce are not within their
“possession” and should not have to be produced.
Courts that follow the traditional rule have been largely unsympathetic to arguments that a producing party should not have to bear the
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costs associated with production when the fact that responsive material is
deleted, archived, or otherwise burdensome to produce is due to actions
or inactions taken by the producing party. As a general rule, if a party
chooses to maintain records in a relatively inaccessible format, that party
must bear the financial consequences of producing any potentially relevant data contained therein. There are a myriad of cases that have determined cost-shifting is inappropriate in e-discovery cases when the cost is
due to an inadequate record-keeping scheme, including the following:
• “A court will not shift the burden of discovery onto the discovering party where the costliness of the discovery procedure
involved is entirely a product of the defendant's record-keeping
scheme over which the plaintiff has no control.” Delozier v. First
Nat’l Bank of Gatlinburg, 109 F.R.D. 161 (E.D. Tenn. 1986).
• “[A] party cannot avoid discovery when its own recordkeeping
system makes discovery burdensome. If a party chooses to store
information in a manner that tends to conceal rather than reveal,
that party bears the burden of putting the information in a format useable by others.” Toledo Fair Hous. Ctr. v. Nationwide Mut.
Ins. Co., 703 N.E.2d 340, 354 (Ohio C.P. 1996).
• “[The court] cannot relieve [the producing party] of its duty to
produce these documents merely because [the producing party]
has chosen a means to preserve the evidence which makes ultimate production of relevant documents expensive.” AAB Joint
Venture v. United States, 2007 WL 646157 (Fed. Cl. Feb. 28, 2007)
(stating it would later consider cost-shifting after a data sampling of e-mails produced).
THE COST-SHIFTING APPROACH
Although the Federal Rules of Civil Procedure do not explicitly reference the concept of cost-shifting, courts may require a party requesting
discovery to pay some of the costs that will be incurred by the responding party. (It is important to note that some states have taken affirmative
steps to address the issue of cost allocation, and you should research the
laws of the jurisdiction you are in before beginning a discovery matter
that may involve cost-shifting. See e.g. Tx. R. Rcp. 196.4 (2008)).
Rationale behind the Cost-Shifting Approach
Courts using a cost-shifting method aim to fairly and economically
allocate electronic discovery costs between the parties. The foundational rationale behind the cost-shifting approach was first laid forth
by the Supreme Court of the United States in Oppenheimer Fund when
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it stated, “We do not think a defendant should be penalized for not
maintaining his records in the form most convenient to some potential future litigants whose identity and perceived needs could not have
been anticipated.” In this case, the Court focused on the fact that the
expense of creating computer programs that would locate the desired
data was the same for both parties, and ultimately ordered that the
party seeking the information must bear the cost of production. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340 (1982).
A second rationale has emerged for the cost-shifting approach
which focuses on the utility of the evidence and the effort/expense
involved in obtaining it—a burden versus benefit analysis. For example, in Zonaras, the court held that because the admissibility of the
electronic information in question was still undecided, the requesting
party should pay half of the production costs incurred by the producing party. Zonaras v. Gen. Motors Corp., 1996 WL 1671236 (S.D. Ohio Oct.
17, 1996). This proportionality test provides the court with the ability
to shift costs when it deems the economic burden on the producing
party to be too great relative to the potential probative value derived
from it.
Federal Rule of Civil Procedure 26(b)(2)(B)
Federal Rule of Civil Procedure 26(b)(2)(B) provides the opportunity
for courts to shift e-discovery costs to protect a party from “undue burden or expense.” Rule 26(b)(2)(B) reads:
A party need not provide discovery of electronically stored information
from sources that the party identifies as not reasonably accessible because
of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the
information is not reasonably accessible because of undue burden or cost.
If that showing is made, the court may nonetheless order discovery from such
sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.
Fed. R. Civ. P. 26(b)(2)(B) (2008).
Rule 26(b)(2)(B) is packed with important, relevant considerations
for cost-shifting that need to be examined more closely. First, the statement that the “court may specify conditions for the discovery” implicitly includes the condition of who pays for discovery. Second, the rule
clearly places the burden on the producing party to show why the traditional rule should not apply in the language, “the party from whom
discovery is sought must show that the information is not reasonably
accessible because of undue burden or cost . . . .” Third, the language
that, “the court may nonetheless order discovery . . . if the requesting
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party shows good cause” ultimately leaves the issue of cost allocation
to the court’s discretion in light of the specific facts surrounding the
case before it. Finally, the language “not reasonably accessible because
of undue burden or cost” recognizes the two-tiers of discovery set
forth in Zubulake. Under Zubulake, electronic data that is deemed accessible is automatically producible (as discussed in section 3.5) and also
should not be considered for cost-shifting. Zubulake v. UBS Warburg,
217 F.R.D. 309 (S.D.N.Y. 2003). The Zubulake decision, along with other
recent decisions, has set forth a more formal cost-shifting approach
than is embodied by Rule 26(b)(2)(B), which provides merely a skeleton framework to allow courts to develop the case law as appropriate.
THE BALANCING TEST APPROACH
The more nuanced cost-shifting approach that recent decisions have
set forth is a balancing test that mandates consideration of several
factors when determining the appropriate cost allocation of electronic
data. The factors that attorneys need to know come out of an eightfactor test set forth in Rowe and a seven-factor test modifying Rowe set
forth in two Zubulake decisions. See Rowe Entm’t, Inc. v. William Morris
Agency, 205 F.R.D. 421 (S.D.N.Y. 2002); Zubulake v. UBS Warburg, 216
F.R.D. 280 (S.D.N.Y. 2003); Zubulake v. UBS Warburg, 217 F.R.D. 309
(S.D.N.Y. 2003).
The court in Rowe recognized that the traditional rule that the producing party bears the costs of discovery production needed to be reevaluated in light to the unique characteristics of electronically stored
information:
[E]ven if this principle is unassailable in the context of paper records, it
does not translate well into the realm of electronic data. The underlying
assumption is that the party retaining information does so because that
information is useful to it, as demonstrated by the fact that it is willing
to bear the costs of retention. That party may therefore be expected to locate specific data, whether for its own needs or in response to a discovery
request. With electronic media, however, the syllogism breaks down because the costs of storage are virtually nil. Information is retained not because it is expected to be used, but because there is no compelling reason
to discard it. And, even if data is retained for limited purposes, it is not
necessarily amenable to discovery.
The Rowe court held that consideration of eight factors was relevant to determine whether discovery costs should be shifted to the
party requesting the information. In the year after publication, Rowe
unquestionably became the “gold standard” for courts resolving electronic discovery cost allocation disputes. See Murphy Oil USA, Inc. v.
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Fluor Daniel, Inc., 2002 WL 246439 (E.D. La. Feb. 19, 2002); In re Livent,
Inc. Noteholders Sec. Litig., 2003 WL 23254 (S.D.N.Y. Jan. 2, 2003). It
was therefore reasonable that the parties in an employment discrimination case (Zubulake) agreed that the eight-factor Rowe test be used
to determine whether cost-shifting for their electronic discovery was
appropriate. Judge Scheindlin, who presided over the Zubulake case,
noted an imbalance in the decisions that applied the Rowe test when
she stated:
“[O]f the handful of reported opinions that apply Rowe or some
modification thereof, all of them have ordered the cost of discovery to
be shifted to the requesting party. In order to maintain the presumption that the responding party pays, the cost-shifting analysis must be
neutral; close calls should be resolved in favor of the presumption.”
Seeing an opportunity to redress perceptions of imbalance in the
decisions that followed Rowe, Judge Scheindlin issued an opinion
modifying the Rowe test. Judge Scheindlin eliminated one of the Rowe
factors, combined two Rowe factors, and added a new factor to form
the following seven factor test:
1.
2.
3.
4.
5.
6.
7.
The extent to which the request is specifically tailored to discover relevant information;
The availability of such information from other sources;
The total cost of production compared to the amount in controversy;
The total cost of production compared to the resources available to each party;
The relative ability of each party to control costs and its incentive to do so;
The importance of the issue at stake in the litigation; and
The relative benefits to the parties of obtaining the information.
Judge Scheindlin furthermore stated that each of the seven factors
should not be treated equally as the courts applying the Rowe test had
generally been doing: “Whenever a court applies a multi-factor test,
there is a temptation to treat the factors as a check-list, resolving the
issue in favor of whichever column has the most checks. But ‘we do
not just add up the factors.’” Instead, the Zubulake factors are weighted
roughly in descending order of importance, with the first two factors
being the most important. Since Zubulake was decided in 2003, it has
largely replaced Rowe as the “gold standard” in cost-allocation analyses across the country. See Haka v. Lincoln County, 2007 U.S. Dist. LEXIS
64480 (W.D. Wis. Aug. 29, 2007); IO Group, Inc. v. Veoh Networks, Inc.,
2007 WL 1113800 (N.D. Cal. Apr. 13, 2007); Quinby v. WestLB, 2006 WL
2597900 (S.D.N.Y. Sept. 5, 2006); Hagemeyer North Am., Inc. v. Gateway
Data Sciences Corp., 222 F.R.D. 594 (E.D. Wis. 2004); Wiginton v. CB
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Richard Ellis, Inc., 229 F.R.D. 568 (N.D. Ill. 2004); Multitechnology Servs.
v. Verizon Sw., 2004 WL 1553480 (N.D. Tex. July 12, 2004); OpenTV v.
Libertate Techns, 219 F.R.D. 474 (N.D.C.A. 2003); Xpedior Credit Trust v.
Credit Suisse First Boston, 2003 WL 22283835 (S.D.N.Y. Oct. 2, 2003).
NON-PARTY PRODUCTION AND COST SHIFTING
Although the traditional rule that producing parties pay for the cost of
discovery conventionally also applies to production from non-parties,
attorneys need to be aware that courts are generally more lenient with
non-parties than parties when it comes to cost-shifting. Federal Rule of
Civil Procedure 45 was amended in 2006 to explicitly allow parties to
request ESI from non-parties via a subpoena, as had been the common
law practice. However, the Rules recognized the unique role of nonparties in litigation and included language meant to protect non-parties
from undue burden and expense. Rule 46(c)(3)(A) allows a court to quash
or modify a subpoena that “subjects a person to undue burden” upon
timely motion. Moreover, Rule 45(c)(1) provides in relevant part:
A party or attorney responsible for issuing and serving a subpoena must
take reasonable steps to avoid imposing undue burden or expense on a
person subject to the subpoena. The issuing court must enforce this duty
and impose an appropriate sanction—which may include lost earnings and
reasonable attorney’s fees—on a party or attorney who fails to comply.
Fed. R. Civ. P. 45(c)(1) (2008).
The rules and common law tendency to treat non-parties that are
subpoenaed to produce discovery more leniently make common sense.
Because non-parties generally have nothing at stake in litigation and
nothing to benefit from the litigation, it does not make a lot of sense to
force them to bear the expense of discovery. As the court in Guy Chemical Company recently stated:
[N]ot only is it fundamentally unfair for non-parties to bear the significant
litigations costs of others, but also if this Court were to allow litigating parties like [the defendant] to impose such a burden on non-parties, then the
likelihood of cooperation by non-parties in the future would be placed in
jeopardy.
Guy Chem. Co. v. Romaco AG, 2007 WL 1521468 (N.D. Ind. May 22, 2007).
The most important thing for attorneys to take away from this section is the knowledge that non-parties are treated differently than
parties to the litigation, and sanctions may be imposed unless parties
take extra efforts to protect non-parties from undue burden or expense
in responding to a discovery production request. Therefore, counsel
should define the scope of ESI as narrowly as possible when requesting
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production from non-parties, or be prepared to pay the costs associated
with that production.
CONCLUSION
Why has the advent of electronic evidence caused judges around the
country to take a closer look at the traditional way in which discovery
costs are allocated? Perhaps it is the perceived high cost of conducting
electronic discovery. In fact, however, collecting sorting, and producing electronic documents may be cheaper and easier to address than its
paper counterparts in many cases. As Judge Scheindlin stated, “Electronic evidence is frequently cheaper and easier to produce than paper
evidence because it can be searched automatically, key words can be
run for privilege checks, and the production can be made in electronic
form obviating the need for mass photocopying.” Zubulake v. UBS Warburg, LLC, 217 F.R.D. 309, 318 (S.D.N.Y. 2003).
Another possibility, perhaps, is the relative unfamiliarity most
courts have with electronic evidence. Or perhaps it is even the fundamentally flawed view that e-discovery is somehow a luxury that
the propounding party should not enjoy without some responsibility
for costs. Regardless of the reason, the boom of electronically stored
information in today’s world and the increasing reliance on it today
in civil litigation has impacted the cost-shifting analysis, and today’s
practitioner must be prepared to make and respond to cost-shifting
arguments in e-discovery cases.
3.11 Trial Issues
The practice of law is ultimately about getting results for your client.
Clients hire lawyers to represent them because they have an objective
they want to achieve—winning! While clients do care about the discovery and litigation process that gets you to the results (i.e., costs associated with discovery, the impact of litigation on business operations,
etc.), clients at the end of the day want results that justify the expenses
associated with litigation. The end of the litigation journey is trial (if
the case does not previously settle through negotiations or alternative
dispute resolution). The following sections discuss important electronic evidence admissibility and trial technology considerations trial
attorneys should be focused on in the digital age.
ADMISSIBILITY OF EVIDENCE
After what is potentially a long discovery period, you are finally at trial.
You have produced your discovery to your opponent, and visa versa.
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However, the production of documents, both electronic and otherwise,
does not necessarily mean they will be admitted into evidence. As recognized by Magistrate Judge Paul W. Grimm, the admissibility of electronically stored information 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
(D. Md. 2007). The four primary hurdles that must be cleared are relevancy, authentication, the best evidence rule, and hearsay. Please refer
to section 3.3 of this chapter on discoverability of ESI for a discussion of
the relevancy hurdle; the remaining hurdles are discussed below.
Authentication
All evidence must be authenticated before it is considered by the jury
(or judge in the case of a bench trial). Federal Rule of Evidence 901(a)
provides: “The requirement of authentication or identification as a
condition precedent to admissibility is satisfied by evidence sufficient
to support a finding that the matter in question is what its proponent
claims.” Fed. R. Evid. 901(a) (2008).
In the context of ESI, authentication requires establishing evidence’s integrity in addition to its identity. Integrity refers to soundness of evidence; for instance, that a document has not been altered or
corrupted. Electronic document integrity is a huge concern given how
easily ESI can be altered, both purposefully and inadvertently. The
authentication concern—as it relates to forensics and e-discovery—
is that the evidence presented at trial is the same as the evidence originally collected.
To authenticate or lay a foundation for the identity of a document,
counsel must engage in the same protocols used for laying foundation
of a paper document. This includes testimony about who created the
document, when it was created, who received the document, where it
was located, how it pertains to the relevant legal issues in the case, etc.
To authenticate or lay a foundation for the integrity of a document,
counsel must show that the electronic documents presented for admission as evidence at trial have not been altered. Authentication of an electronic document’s integrity can be challenging since electronic data can
be easily altered, often unintentionally and often without leaving a trace.
Thus, the danger is that the electronic document may appear to be true
and accurate, but actually has been altered. The proponent of evidence
should be prepared to answer questions from their opponent regarding
steps taken to ensure that the electronic document at issue was not falsified, such as questions regarding the document’s method of collection,
storage, processing, review, and whether there is a documented chain of
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custody for the electronic document. Thankfully, following the computer forensics and electronic discovery best practices throughout this text
will go a long way to ensure successful authentication at trial.
The single best thing you can do to ensure no integrity authentication issues arise is to make a forensic copy of the original medium
at collection using forensically sound imaging techniques and do
all processing to the forensic copy. That way, the original medium is
always available to be compared to the forensic copy to determine
whether the copy has indeed been altered from the original by comparing their hash values. The second best measure you can take to ensure
no integrity authentication issues arise is to document chain of custody
of the evidence from collection to presentation at trial using a detailed
chain of custody log. Chapter five of this text contains an in-depth discussion of computer forensics best practices that should be utilized to
ensure authentication.
In most cases, the authentication hurdles have not stopped courts
from admitting electronically stored information as evidence. As the
court in Lorraine stated, “A party seeking to admit an exhibit need only
make a prima facie showing that it is what he or she claims it to be. Id.
at § 901.02[3]. This is not a particularly high barrier to overcome.” The
court, however, went on to say, “Ironically, however, counsel often fail
to meet even this minimal showing when attempting to introduce ESI,
which underscores the need to pay careful attention to this requirement. Indeed, the inability to get evidence admitted because of a failure to authenticate it almost always is a self-inflicted injury which can
be avoided by thoughtful advance preparation.”
The bottom line is that you do not want to be the attorney who
cannot admit a smoking gun because you failed to follow computer
forensics and electronic discovery best practices. As the court in Lorraine
lamented, “It makes little sense to go to all the bother and expense to get
electronic information only to have it excluded from evidence . . . .”
The Best Evidence Rule
The Best Evidence Rule proves an additional hurdle to the admissibility of evidence and bears mentioning at this point. Federal Rule of Evidence 1002 provides: “To prove the content of a writing, recording, or
photograph, the original writing, recording, or photograph is required,
except as otherwise provided in these rules or by Act of Congress.”
At first glance, this rule appears to require the production of original
electronic data. Thankfully, however, this rule does not require counsel
to bring the original custodian’s computer, monitor, and other equipment into the courtroom to display the document in question. Rather,
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Federal Rule of Evidence 1001(3) specifically states, “If data are stored
in a computer or similar device, any printout or other output readable
by sight, shown to reflect the data accurately, is an ‘original.’” Consequently, hard copy printouts of documents, e-mail and other digital
data stored electronically qualify as originals under the Federal Rules
of Evidence even if not produced on their original storage mediums.
In addition, Federal Rule of Evidence 1006 provides that voluminous writings and recordings may be presented in a chart, summary,
or calculation. This rule helps computerized data contained in large
databases overcome the limitations of the Best Evidence Rule. Finally,
note that the Best Evidence Rule only applies when the contents of a
writing or electronic evidence are at issue. For these reasons, it is not
surprising that the Best Evidence Rule has diminished in importance in
modern litigation, and is something that litigators seeking admission
of electronically stored information during trial need not focus on.
Hearsay
The final hurdle litigators frequently encounter when attempting to
admit electronically stored information as evidence into trial is hearsay objections. There is an important distinction between computergenerated and computer-stored electronic evidence. The Federal Rules
of Evidence specify that a hearsay statement can only be made by a
person. Rule 801(c) provides: “‘Hearsay’ is a statement, other than one
made by the declarant while testifying at the trial or hearing, offered in
evidence to prove the truth of the matter asserted.” Fed. R. Evid. 801(c)
(2008). Rule 801(a) provides the following clarification: “A ‘statement’
is (1) an oral or written assertion or (2) nonverbal conduct of a person,
if it is intended by the person as an assertion.”
In other words, something that is not communicated by a person
cannot be an assertion and thus cannot be hearsay. Hearsay is not an
issue with regard to evidence gathered from parrots, radar guns, or
computers, because these things cannot make statements. Therefore, if
a computer automatically generates records (such as a toll both recording the number of cars that drive through it), the computer-generated
records cannot be hearsay. On the other hand, electronic evidence that
takes the form of computer-stored records can be hearsay since there
was a human author who made the assertion that is being recorded.
There is no special hearsay exception for electronically stored information. However, an exception commonly used for e-mail and other
electronically stored records is the business records exception memorialized under Federal Rule of Evidence 803(6). Under this exception,
exactly the same as with paper evidence, the electronic record must
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have been made in the course of a regularly conducted business activity by a person with knowledge of the information contained in it, at
or near the time the information was obtained, to be admissible as a
hearsay exception. Other exceptions to the hearsay rule also apply to
electronically stored information, the same as they generally apply to
all evidence. Other hearsay exceptions frequently used when admitting electronic evidence include: admission of party opponent under
Federal Rule of Evidence 801(d), present sense impression under Federal Rule of Evidence 803(1), and excited utterances under Federal Rule
of Evidence 803(2).
TRIAL STRATEGY AND TECHNOLOGY
The ultimate goal for any legal team, again, is to get results for your
clients that justify the expense of the discovery and litigation processes.
Trial is the last few miles in your litigation marathon. At this time, it
is not uncommon for parties to feel fatigued from the lengthy journey
they have already completed (i.e., discovery, preparation of litigation
strategies, negotiation attempts). Do not let frustration with or fatigue
from the process cause you to fail to put forth your best effort at trial. It
makes no more sense to come to trial after going through the discovery
and litigation process and not undergo best trial practices than it makes
to travel from the continental United States to Australia on vacation
and then spend all your time in an inland Australian hotel room rather
than taking the effort to drive a few more miles to a beachside resort.
While trial may be the last leg of your litigation journey, it is a crucial
stretch of your journey upon which success is ultimately achieved or
lost. Therefore, effective litigators should consider utilizing consultants
with cutting-edge technology and juror decision-making expertise.
Jury Research
A major hurdle to readying a case for trial is translating all of the relevant evidence and information into an understandable and convincing
story that jurors can relate to. This is even more so the case when volumes of e-mail or other technical electronic documentation are involved
in the matter. When the preparation for a single case sometimes lasts
for years, a trial team becomes expert in the litigation’s minutiae along
the way. There is a real risk that a trial team may miss seeing the forest
for the trees when months of preparation must be whittled into just
weeks, or even days, in the courtroom.
Jury research is the best was to ensure that you are including the
right information in your argument, and in the most coherent manner
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possible. Jury research is the process of presenting your case, the case’s
issues, or aspects of the case before trial arrives to a group of people
matched to the demographics of the case’s venue and your jury pool—
commonly known as a mock trial or focus group research. There is a
difference between practicing your statements in front of paralegals, or
friends and family, and getting feedback from a carefully selected mixture of people—the difference is that the likely jury’s reaction to your
case matters much than the reaction of your friends and co-workers.
Jury research can be as simple or as elaborate as needed. It can be
useful as early as the discovery period of a case or as late in the game
as a week before trial. A jury consultant specifically trained in the social
sciences is able to determine the most advantageous research protocol
based on the facts of the case, the concerns of the trial team, and the
specific hurdles faced in a particular venue.
During an actual research exercise, a combination of technology and
human expertise is required to cull the necessary information from the
mock jurors. Oftentimes, jurors’ reactions to the case are recorded with
handheld electronic dials. These dials, commonly referred to as real-time
technology, are also used in market research and during political debates
to measure reactions to the candidate as the candidate is speaking. In
exactly the same manner, these dials are used to gauge juror reaction to
specific case issues and trial presentation techniques, allowing jury consultant and trial teams to immediately receive feedback. Jurors may turn
their dials during an attorney’s presentation in accordance with how
convincing they find the information to be at a given moment.
After the presentation of a specific issue, the mock jurors answer
verdict questions as well as questions regarding their emotions relating to the parties and their opinions on various aspects of the case. All
of these answers can be seen on a screen the moment the jurors enter
them, which means the trial team and their consultants can see how the
mock jurors’ opinions change as they hear information from each side.
Jury consultants later analyze the data from the mock jurors’ answers
and reactions more thoroughly to formulate specific case strategy recommendations.
Jury research can be tailored to specific concerns for trial such
as witness evaluation and juror profiling. For example, mock jurors’
opinions of witness depositions can be a valuable platform for witness
preparation. Additionally, if an acceptably substantial number of mock
jurors attend the research exercise, jury consultants may be able to construct a statistically significant profile of favorable and adverse jurors
for use in jury selection, which is discussed in more depth below.
It is the combination of hard data with observations of the jurors
during their deliberations, focus sessions, and perhaps interactive
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question-and-answer sessions with the attorneys that lays the groundwork for jury consultants to discern how potential jurors in the actual
jury pool are likely to make their decisions about the case. Also, this
same information provides valuable insights into what points must be
emphasized, elaborated upon, or explained more thoroughly in order
for jurors to be persuaded by your arguments. In conclusion, the forest
becomes clearer once you’ve seen it through the eyes of mock jurors, not
clouded by an undue focus on a particular tree or the wrong group of
trees. Jury research eliminates the risk of debuting what may be a confusing or haphazard case in front of the actual jury when it matters.
Jury Selection
The outcome of your litigation comes down, ultimately, to how a handful of jurors selected from the community perceive the merits of your
case. The law has developed a process known as voir dire, originating
from the Latin oath to tell the truth—verum dic re, to allow parties to
reject unsuitable potential jurors based on the potential jurors’ backgrounds and potential biases. The voir dire process works by allowing
each party and their counsel to strike potential jurors either by mounting a challenge for cause or by exercising a finite number of peremptory challenges that allow a potential juror to be excluded from the jury
without a specific reason that would be needed to satisfy a challenge
for cause.
The importance of the voir dire process cannot be stressed enough.
Allowing a juror with pre-existing bias against your case or, worse yet,
a “loose cannon” juror to slip through the jury selection process into
the jury box could devastate an otherwise winning case. The art of jury
selection is not one that comes naturally. Effective jury selection techniques take years to practice and hone. No matter how seasoned one’s
intuition, empirical data and jury selection research remain the most
reliable predictors of potential jurors’ predisposition. Because social
research techniques are not skills learned in law school, but rather skills
exercised by social scientists, partnering with specially trained social
scientists, or jury consultants, can significantly increase your likelihood
of successful jury selection and thus a successful outcome at trial.
The goals of effective voir dire are twofold—to weed out potential jurors who are biased against your case and to create rapport and
trust with future jurors. Jury consultants can partner with counsel to
assist in all aspects of the jury selection process to accomplish these
dual goals. Jury consultants can assist in jury selection through the
development of supplemental written juror questionnaires tailored
voir dire questions specific to your case, as well as evaluating the
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potential jurors’ responses in court. Your chosen jury consultant can
help you make selection decisions based on the makeup of the jury
holistically—not just individual jurors—by anticipating how the group
might work together and who the group leaders will likely be.
Attorneys should also consider utilizing real-time jury intelligence
during voir dire. Real-time jury intelligence is a powerful tool in a jury
consultant’s toolbox that utilizes cutting-edge technologies to provide
timely and actionable background intelligence on prospective jurors.
This intelligence can be delivered either out-of-court or electronically
while the trial team is conducting voir dire. This intelligence utilizes
the expertise of professional investigators who can provide your legal
team with important information about prospective jurors, such as:
criminal, civil litigation, and bankruptcy history; political and religious affiliations; current and previous occupations; education; family
history; property and residency history; media appearances; Internet
profiles; and other customized information. The benefit of utilizing
real-time jury intelligence comes from being able to research information that arises in initial voir dire questioning immediately and often
receive the results of that research while it actually matters.
Attorneys with or without the aid of a jury consultant must plan
ahead for voir dire or pay later. For example, it is a good idea for attorneys to prepare a “top 10” list of questions to ask jurors. Preparation of
this relatively short list allows attorneys to remember important questions without relying on notes, thus making the attorneys appear polished and confident to future jurors.
Lastly, all attorneys conducting voir dire should adhere to simple
guidelines to build rapport with future jurors. For example, take the
time to introduce yourself and your client. This introduction personalizes both you and your client and provides a great opportunity to make
a positive first impression. Also, do not revert to a cross-examination
style of questioning during voir dire. Stick to open-ended questions in
order to give jurors the opportunity to talk. You want your jurors to
feel as if you are an ally, not an opponent, after emerging from the jury
selection process. Keep voir dire as brief as possible. Succinctness makes
you appear more prepared and polished, and jurors also appreciate it
when attorneys do not waste their time.
Trial Presentation
Another important factor to consider once you have reached trial is how
you will present your legal arguments and the electronic evidence you
have collected during discovery to maximize the persuasive impact.
Trial presentation consultants understand how best to communicate
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Figure 3.9 Juror Retention
persuasively with the jury and can help you employ an effective presentation strategy through the use of demonstrative exhibits, customized to your particular jury.
While there is no best way to educate every single person because
people have different learning styles, visual images as opposed to
words tend to dominate most Americans’ thinking. Jurors retain only
twenty percent of what they hear versus eighty percent of what they
hear and see. See Lisa Brennan, “Pitching the Gen-X Jury,” National
Law Journal (June 4, 2004). The brain is designed to move smoothly
back and forth between auditory and visual memory sites when it is
presented with both visual and auditory information in an integrated
format. When the brain is confronted with both auditory and visual
information, working memory increases thus improving both retention
and comprehension (e.g., facts, circumstances, inferences, etc.) of the
information presented. The use of demonstratives can be particularly
critical when presenting complex or technical information about which
the average juror will lack a frame of reference. For these reasons and
more, demonstrative exhibits are effective tools to illustrate, organize,
reinforce, and emphasize points in a visual manner your jury is more
likely to understand and find persuasive.
The most seamless way to present an effective combination of exhibits, demonstratives, video clips, photographs, and other such audiovisual presentation material is to load it all into a multimedia presentation
system with the ability to display any item as quickly as the click of a
button. These systems are not just “PowerPoint on steroids”—they are
sophisticated tools that are constantly growing in capability.
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Practical Legal Implications
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There is an apprehension among some attorneys that the use of
technology and demonstrative exhibits in trial presentation may cause
jurors to view the case as a “paper-and-pencil David” versus a “hotshot Goliath.” This fear is simply unfounded.
The truth is, when presentation systems are used effectively, jurors
appreciate the aid in comprehension and recall key points more easily
than through hearing them alone. Nationwide survey research involving thousands of jurors, who regularly watch television and conduct
business on the Internet, expect high quality presentations and do not
consider the “too slick” factor to be an issue. In fact, ninety-five percent
of participants in a recent survey view the use of computer systems in
the courtroom as professional and only five percent as too flashy. If a
trial team is planning to use a presentation system in court, it is certainly advisable to notify the judge and the opposing counsel of your
intention before trial begins.
Presentation system software can be bought or leased and run by
attorneys themselves. Some systems are run via a bar code reader; each
exhibit is assigned a unique bar code and can be called up with a handheld scanner to appear on a screen in the courtroom. Tools such as a
light pen can be used to highlight key words and phrases in documents
by enlarging them on the courtroom screen, that is, if a demonstrative
has not already been created to highlight that information. The versatility of a presentation system is handy when reacting to the other
side’s argument.
Another option is to hire a presentation consultant, which is particularly advantageous for complex litigation. Hiring an outside firm to
create the database and run it in the courtroom is the best option when
working with multiple types of files and video and audio clips. Every
document must be scanned into an electronic format, old VHS video
must be digitized and all digital materials must be optimized for compatibility. But once it is all together in a database, there is no hitting rewind,
no flipping through charts—just a well-timed click here and there.
Practice is essential to running an effective electronic presentation,
however. Under-preparing and then bumbling through the database
during trial is a surefire way to undermine your message. Overpreparing runs the risk of sounding scripted and not allowing yourself
to think on your feet. The purpose of a multimedia presentation system
is to enhance the case, not control it.
Not all demonstratives or exhibits are most effective when viewed
on a screen. A complex timeline, even if shown on the highest quality
monitor, is easier to read on a large printed board. Trial teams who have
prepared a list of key case-related definitions are better off displaying
them on a foam-core poster board that remains in view of the jury so that
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they may refer to it any time during trial. Presentation consultants are
able to discern which exhibits belong in the database and which do not.
Courtroom technology has improved by leaps and bounds over
recent years, but not every courtroom is fully stocked. The trial team or
their presentation consultant must inquire as to the courthouse’s capabilities and what types of outside equipment are allowable. As courts
have become more used to trial teams taking advantage of technology and have recognized the benefits, resistance has decreased. Judges
have noted that when attorneys employ multimedia presentation systems, a trial’s length is markedly reduced.
CONCLUSION
In the final analysis, discovery should not be viewed in isolation
from trial issues as they are both means to achieve the same end—a
positive outcome on your case. Comprehensive and defensiblyconducted discovery (i.e. proper chain of custody and use of procedures that meet the governing standards of care) will exponentially
increase an attorney’s ability to admit the electronic data procured during discovery as evidence for a jury to consider. A failure, however,
to consider the benefits of a deliberate trial strategy and use of trial
technologies for the purpose of jury research, voir dire, and trial presentation is a failure to fully utilize the ESI you have taken the effort to
collect, filter, process, review, produce, and introduce as evidence. The
bottom line is that embracing technology to make informed decisions
as to jury selection and trial strategies and presentation, including
embracing technology to create powerful demonstrative exhibits and
run an effective audiovisual presentation, will significantly increase the
likelihood of success at trial—the ultimate objective in any litigation.
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