Background to Electronic Data Discovery (EDD)

Michael Hamilton 2006/07

Objectives

Background – 6 Key Areas— Discoverability— Admissibility— Discovery Techniques— Sanctions— Cost Shifting— Privilege and Confidentiality Review

Beat to death topics— File Deletion Software

— Backup Tapes

— Court Rules

— Time Zone Confusion

— Discoverability & Ability to Process

Instant Messaging Video/Audio PDAs

— Concept Searching / Linguistic based searching applications

Discoverability

Are electronic documents discoverable?— FRCP 34: Since 1970 amendment, yes

How does a party get discovery of e-documents?— Ask and ye shall receive . . .

But ask carefully (specifically tailor discovery request to e-docs)

— Media: hard drives, servers, backup tapes, etc.

— Storage form: .doc files, .xle files, .pst files, IM archives, etc. And specify requested format for production

— Under current rule, earlier paper production not preclusive Milwaukee Police Assoc. v. Jones (Wis. Ct. App. 2000) (digital format more useful

than analog); National Union Elec. Corp. v. Matsushita Elec. Ind. Co., (E.D. Pa. 1980) (e-data more useful than paper)

— But note, especially under recently proposed FRCP amendments, failure to specify production format in original request may result in party having to settle for particular electronic format supplied

Admissibility – Electronic Evidence

What’s admissible – electronic file? paper printout?—Originals & duplicates both generally admissible (FRE 1001, 1003)—While e-file is true original, printouts generally count as originals

If metadata is at issue, printout or image may not “reflect data accurately” and therefore may not be admissible

—Imaged (scanned) documents, like photocopies, are generally admissible as duplicates

Foundation – what is required to admit e-evidence?—Document forensic & acquisition efforts—Document chain of custody—Preserve pristine originals; work from images (copies)

Discovery Techniques

What’s the best way to gain access to the data?— Thoughtful search protocol can yield valuable results with minimal burden

Tulip Computers Int'l. v. Dell Computer Corp. (D. Del. 2002)

How should the data be gathered?— First rule of discovery: do no harm to existing evidence

— Sound technique critical to avoid spoliation Gates Rubber Co. v. Bando Chem. Ind. (D.Colo. 1996)

How should data be reviewed?— Timely review is critical

Pay attention to every type of information produced, regardless of format— Symantec v. McAfee (N.D. Cal. 1998) (Jaz disk)

Electronic review of electronic documents greatly speeds review

Sanctions

What is the risk of spoliation (destruction or loss of responsive data)?—Possible issue preclusion or default judgment—Competent forensic assistance can be critical

Residential Funding Corp. v. DeGeorge (2nd Cir. 2002)

What is the risk of failure to produce in a timely manner?—Generally fines, fees, but may result in preclusion of evidence

Crown Life Ins. Co. v. Craig (7th Cir. 1993) (failed to produce database of raw data preclusion of evidence, testimony) National Assn. of Radiation Survivors v. Turnage (N.D. Cal. 1987) (omissions due to lack of effective discovery response

system costs, fines, oversight by special master)

Cost Shifting

Can a producing party shift e-discovery production costs to requesting party?— FRCP 26(b)(2) mandates that a party does not have to produce electronic information that is “not reasonably

accessible.” Includes modified Zubulake test for reasonable accessibility based on “undue burden or cost” of producing the information.

— In Zubulake I, J. Scheindlin adopted a 7-factor cost-shifting test to apply Rule 26(b)(2) to the discovery of electronic information

Applies only to inaccessible data (such as backup tapes) Factors not weighted evenly

— Most important: specifically tailored request and availability from other sources— Next most important: expense versus (a) amount in controversy and — (b) resources of each party

Sample set required before full analysis (McPeek v. Ashcroft (DDC 2001))— As applied by Zubulake III and other courts, generally results in partial shift in costs

But note: cost shifting applies only to data extraction – not to review expenses

Privilege and Confidentiality

What’s special about attorney-client privilege and client confidentiality in the context of e-discovery?

— Heightened risk of inadvertent production Vast increase in amount of information to be reviewed “Hidden” metadata or text fields invisible without proper tools or system settings

If waiver of privilege can be excused, what is required?— Reasonable review of documents prior to production

Ciba-Geigy Corp. v. Sandoz, Ltd. (D.N.J. 1995)

How can likelihood of inadvertent production be minimized?— Use electronic discovery-specific software

Lessens likelihood of inadvertent production Bolsters argument for excuse of waiver

Recent Cases

Privilege not waived where emails drafted and sent through company email system— In re Asia Global Crossing, Ltd., 322 B.R. 247 (S.D.N.Y. 2005).

Work product privilege not waived for inadvertent production of email—Banks v. United States, 2005 WL 974723 (W.D.Wash. Mar. 22, 2005).

More Recent Cases

Magistrate recommends adverse inference instruction and sanctions for e-discovery misconduct—E*Trade Securities LLC v. Deutsche Bank AG, et al., No. 02-3711

RHK/AJB and No. 02-3682 RHK/AJB (D. Minn. Feb. 17, 2005).

Supreme Court Overturns Arthur Andersen's Document Destruction Conviction—Arthur Andersen LLP v. United States, 125 S.Ct. 2129 (U.S. 2005).

Hot Topics

Use & Abuse of File Deletion Software

Backup Tapes

Court Rules

Time Zone Confusion

Discoverability & Ability to Process—Instant Messaging—Video/Audio—PDAs

Concept Searching / Linguistic based searching applications

Use and Abuse of File Deletion Software

What’s the best way to get on the court’s bad side?—Use of specialized software especially suspicious

CyberScrub: Anderson (Minnesota 2004) – adverse inference Evidence Eliminator: Kucala (Illinois 2003) – declaratory judgment on most

claims

—Deletion outside of retention policy always dangerous Adopt and implement retention policy

Backup Tapes

Must tapes be preserved?—Zubulake IV (companies should not have to retain all backup tapes –

only portions with data related to issues/key players)—Zubulake V (Adverse inference where employees improperly deleted

emails, and backup tapes that would have enabled recovery of emails were recycled)

Proposed “Safe harbor” under FRCP 37—A proposed amendment to FRCP 37 would preclude spoliation if

Party takes reasonable steps to prevent loss of data; and Loss results from “routine operation of the party’s electronic information

system.” (may apply to tape recycling or may be limited to writing over deleted files, etc.)

Backup Tapes

What can a law firm or company do to be safe?—Adopt and implement records retention policy, complete with

appropriate litigation hold Keep limited backups Go to court for protective order allowing destruction in accordance with

existing records retention policy and procedures.

— But court may order preservation of all electronic data. Dodge, Warren & Peters Ins. Services, Inc. v. Riley, (Cal. App. 4th Dist. 2003)

Court Rules

Proposed Amendments to the FRCP— Could go into effect as early as December 2006— Key proposals:

Early Discussion of Electronic Discovery Issues (Rules 16(b), 26(f) and Form 35) Definition of Electronic Stored Information (Rule 34(a)) Production Format (Rule 34(b) Producing Electronically Stored Information in Response to Interrogatories (Rule 33) Production of Reasonable Accessible Information (Rule 26(b)(2)(b)) Belated Assertion of Privilege (Rule 26(b)(5)(b)) “Safe Harbor” from Sanctions (Rule 37(f)) Subpoena for Electronically Stored Information (Rule 45)

New Technology

Discoverability & Ability to Process—Instant Messaging—Video/Audio—PDAs

Concept and linguistic-based searching applications

More effective approaches to reviewing huge amounts of data

Conclusion

Courts are not afraid to hold companies & their budgets accountable for deficient discovery practices.

Courts consider electronic data a part of mainstream discovery & are unwilling to tolerate destruction of relevant information.

Counsel, organizations & individuals must take affirmative steps to prevent intentional and negligent spoliation.

Spoliation as a result of document mismanagement is no excuse.