the ethics of esi - association of corporate counsel · the ethics of esi david j. walton, ... •...

Presented By:

The Ethics of ESI

David J. Walton, Esq., Cozen O’Connor

Scott Bradley Schwartz, General Counsel, Dansko

August 8, 2013

Discussion Overview

• The Rules in Relation to eDiscovery

• Practical Tips for Managing ESI Obligations and Outside Counsel

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The Rules in Relation to eDiscovery

Ethics & Electronic Evidence• Ethical obligations exist when it comes

to eDiscovery

• Courts are more clearly articulating counsel’s affirmative duty to act competently and diligently

• Counsel should expect to be held to a higher standard than ever before

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The Rules in Relation to eDiscovery

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Amended Ethics Rules

• In August 2012, The ABA House of Delegates approved recommendations sponsored by the ABA Commission on Ethics 20/20

– Of special interest to eDiscoverypractitioners is Recommendation 105A, which amends existing rules as follows:

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• Rule 1.0 – “Writing” now includes an “electronic communication”

• Rule 1.1 – Comment [8] adds an attorney’s duty to stay informed about changes in practice and relevant litigation technology

• Rule 1.6 – Adds section (c), identifying duty to prevent inadvertent disclosure of confidential client information

• Rule 4.4 – Adds “electronically stored information” to provision about sending prompt notice when lawyer receives third party information

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Amended Ethics Rules (con’t)

Rule 1.1: Competence

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Rule 1.1, Cmt. [8]: Maintaining Competence

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Duty of Competence• Competence in locating, reviewing and

producing ESI in litigation and regulatory work is among the greatest challenges for lawyers today

• Counsel’s ability to examine and produce ESI is central to managing discovery in the modern age

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Duty of Competence: EDiscoveryKnowledge is an Obligation

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Duty of Competence: Legal Knowledge & Skill

• When to hire a consultant:– Anytime training and experience of your staff

or your client’s staff would make you uncomfortable if you had to call them as witnesses

– Anytime conflicts of interest might really hurt your case

– Anytime the current workload of your staff would prevent them from focusing on your case

– Anytime your staff lacks the tools and equipment to handle the job

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Rule 1.6: Confidentiality of Information

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Duty of Confidentiality: Privilege Issues

• Protecting privilege in the era of electronic discovery is growing increasingly difficult given the volume of data

• Counsel should consider entering into a protective order, clawback agreement or quick peek agreement

• Counsel should also familiarize themselves with Fed.R.Evid. 502

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Duty of Confidentiality: Attorney Beware

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PA Formal Opinion 2009-100Metadata

• Must take “reasonable care” to remove unwanted metadata from electronic documents before sending them to a third party

• Also triggers the duty of competence, duty of supervision, duty of advocacy, and rights of third parties

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Cloud Computing

• Cloud computing raises legal ethics issues, particularly around competence and confidentiality of information as information stored in the cloud is outside the lawyer’s control, and is often in numerous locations, including different countries

• Lawyers must ensure steps are taken to safeguard security and confidentiality of client information

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PA Formal Opinion 2011-200

• Attorneys may store confidential information in the Cloud

• Attorneys must take “appropriate measures” to protect client’s confidential information

• Must confirm that third-party service provider will keep information confidential

• May need client consent in some cases

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Rule 3.3: Candor Toward The Tribunal

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Duty of Candor: Dishonesty Will Cost You

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Rule 3.4: Fairness

Unobstructed Process & Access to Evidence; Preservation

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Rule 3.4: Fairness

Non-Frivolous Litigation Tactics

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Courts Require Good Faith Efforts

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Courts Are Losing Patience for Uncooperative Counsel

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Rule 4.4: Respect for Rights of Third Persons

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Respect for Rights of Third Persons

• Court determined attorneys’ retention of a computer forensic expert to retrieve the privileged e-mails and the subsequent use of those e-mails violated Rule 4.4(b)

– Attorneys’ did not set aside the arguably privileged messages and failed to notify the plaintiff or seek court permission for use

• Referred to trial court what remedy was appropriate (including disqualification of the firm)

• Stengart v. Loving Care Agency, Inc., 2010 WL 1189458 (N.J. Mar. 30, 2010).

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PA Formal Opinion 2009-100Metadata

• If the receiving party concludes that the sending of metadata was inadvertent, then she must promptly notify sender

• If yes, then receiving party must:

– Look at substantive law to see if she can use the metadata

– Consider potential impact on client if she does so

– Advise and consult with the client

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Rule 8.4: Maintaining the Integrity of the Profession

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Maintaining the Integrity of the Profession

• Plaintiff’s “flagrant defiance” of numerous court orders and warnings, intentional destruction of computers and hard drives, and blatant disregard of discovery obligations resulted in a “tremendous waste of resources”

– Dismissal was only viable sanction

– Aliki Foods, LLC v. Otter Valley Foods, Inc.,

2010 WL 2982989 (D. Conn. July 7, 2010).

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Maintaining the Integrity of the Profession

• Court awarded $1,049,850.04 in attorney’s fees and costs as a sanction for discovery abuse

– Defendants’ misconduct affected the entire discovery process since the commencement of this case.”

– Victor Stanley, Inc. v. Creative Pipe, Inc., No. MJG-06- 2662 (D. Md. Jan. 24, 2011) (part of the “Victor

Stanley II” decisions that began in September 2010). Order was affirmed by the District Court: Victor Stanley, Inc. v. Creative Pipe, Inc., Case 8:06-cv-02662-MJG (D. Md. June 15, 2011).

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Social Networking & Blogs

• Use of social networking sites and blogs creates potential for ethical violations or disciplinary action for misconduct

– Raises confidentiality, integrity and propriety issues

– Attorneys cannot “friend under false pretenses” to gain access to profiles and information otherwise kept private

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Social Networking & Blogs

• As an example, the Florida Bar reprimanded and fined an attorney $1,200 for violating ethics rules, by writing on a courthouse blog the judge was an “evil, unfair witch” with an “ugly, condescending attitude”

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What is Predictive Coding?

Predictive Coding/Technology Assisted Review


“[C]omputer-assisted coding involves a senior partner (or team) who review and code a ‘seed set’

of documents. The computer identifies properties of those documents that it uses to code other

documents. As the senior reviewer continues to code more sample documents, the computer

predicts the reviewer’s coding.”

Da Silva Moore v. Publicis Groupe & MSL Group, 2012 U.S. Dist. LEXIS 23350 (S.D.N.Y. Feb. 24, 2012) (approving of the

use of predictive coding).


• Courts have approved of the use of predictive coding, BUT, ethical issues remain

• Protocol for selecting the seed set

• Meet and confer with opposing counsel

• Attorney’s qualifications to supervise technology assisted review

• Attorney’s ability to understand technology and communicate technology to client

• Discovery certifications

• Violations of Federal Rule of Civil Procedure 26(g) are sanctionable

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Keys to Ethically Managing ESI & Outside Counsel

Practical Tips

• Start early and have a process

• Use targeted collections to manage ESI

• Use transparency strategically

• Use proportionality as a shield

• Use Clawback Agreements

• ESI is a two-way street

• Know BYOD Obligations

• Understand Custody and Control

Spoliation Statistics• Survey of 401 cases involving motions for

sanctions:– 230 sanction awards

– More e-discovery sanctions and awards in 2009 than in any other year prior

• More e-discovery sanction cases in 2009 than in all years prior to 2005 combined.

– Addressed by multiple courts:• All federal appellate courts have issued opinions on

e-discovery sanctions.

• 183 District Court Judges and 111 Magistrates from 75 districts in 44 states have issued written opinions.

Spoliation Statistics

• Most common violation: Failure to preserve ESI

– Other common violations:

• Failure to produce

• Delay in production

– Defendants are sanctioned almost 13 times more than plaintiffs.

*Dan H. Willoughby, Rose Hunter Jones, Gregory R. Antine,

60 Duke L.J. 790 (2010).

Practical Tips









Have a process.

Follow the process.

Implement the process.

Document the process.

Practical Tips









1 GB = 9,000 e-mails + 3,000 attachments1 GB = 75,000 pages

Average review time is180-240 pages per hour

1 GB = 312½ hrs1 GB = $78,125

($250 per Hour)

Managing ESI

=

Preserve Collection Review

Practical Tips









Transparency

• Transparency shows strength.

• Figure out what you have.

• Tell the other side.

• Make you own determination of what is reasonable.

• Negotiate limits and protocols to ease the burden.

• Start with the most likely sources to be relevant.

– In an aviation case, this might include the aircraft certification file, communications with the FAA, any customer-specific files or communications, and/or the accident investigation file.

• Use staged or phased discovery.

• Be willing to fight for what is reasonable.

Practical Tips









Rule 1

“These rules govern the procedure in all civil actions and proceedings in the United States district courts, except as stated in Rule 81. They should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”

Fed. R. Civ. P. 1

Proportionality

• Rule 26(b)(2)(C)

• Court must limit discovery if:

• Discovery sought is unreasonably cumulative or duplicative or same information can be secured by another, cheaper source;

• Party seeking the discovery has had ample opportunity to seek the information through the discovery phase of the case; or

• Burden/expense outweighs likely benefit considering:

– Needs of the case

– Amount in controversy

– Parties’ resources

– Issues a stake

– Importance of the discovery in resolving the issues

Using Proportionality

• Rule 26(f) conferences and discovery plan

• Rule 16(b) orders

• Discovery protocols and protective orders

• Court imposed limits (GBs, custodians, pages)

• Phased discovery – start with most likely sources

• Untimely requests

• Use hit reports to show overbreadth

• Agreements on scope and breadth of privilege logs

Practical Tips









FRE 502 Corrects Gap in 26(b)(5)(B)

• Fed.R.Evid. 502 provides that inadvertent disclosure in a federal proceeding does not waive attorney-client privilege provided:

• The disclosure was indeed inadvertent

The holder of the disclosure took reasonable steps to prevent the disclosure

• The holder promptly took steps to rectify the error

Clawback

Waiver of privilege found where in-house counsel made no attempt to review a CD before it was produced and waited two weeks after being notified of the inadvertent production before taking corrective action. Gail v. New

England Gas Co., 243 F.R.D. 28 (D. R.I. June 27, 2007).

-- Do not use blanket confidentiality obligations.

Practical Tips









Discovery is a Two-Way Street

– EEOC v. HoneyBaked Ham, 2013 US DistLEXIS 26997 (D. Colo. Feb. 27, 2013) (EEOCsanctioned under Rule 16 for discovery delays, including failing to produce class claimants’ social media). See also, EEOC v. HoneyBaked

Ham, 2012 U.S. Dist. LEXIS 160285 (D. Colo. Nov. 7, 2012)

– Getto v. United Air Lines, Inc., 2013 U.S.DistLEXIS 41909 (D.NJ March 25, 2013) (plaintiff sanctioned for deleting Facebook account)

Case Law UpdateeDiscovery is a Two-Way Street/Social Media

Practical Tips









BYOD Challenges

• Mobile device security

• Securely connecting employee devices

• Enforcing access rights based on user, device,

and application

• Protecting proprietary information and trade

secrets

• Identifying and controlling the risks of BYOD

Consider limitations on

cloud computing…

• Prohibit use of cloud storage for certain types of

information

• Require employees to disclose which sites they are

using

• Review employee used sites prior to employee’s

departure

• Adopt a private cloud solution: Embrace the trend

instead of resisting the inevitable

Practical Tips









Possession, Custody & Control Category 1 A party must produce

information that it has

the legal right to obtain

on demand.

District of Columbia, 1st, 3rd,

6th, 7th, 8th, 9th, and 10th

Circuits.

Category 2 A party must produce

information that it has

the legal right to

demand as well as the

“right, authority or

practical ability” to

obtain from a non-party.

2nd, 4th, 5th, and 11th

Circuits.

Category 3 In addition to the

above, these Circuits

require a party to notify

its adversary about

evidence in the hands

of third parties.

1st, 2nd, 6th, and 10th

Circuits.

Custody or Control…

• Passlogix, Inc. v. 2FA Tech., LLC (S.D. N.Y. 2010): Employer responsible for employee’s deletion of emails, text messages, and Skype messages when deleted from personal device

• Pension Committee (S.D. N.Y. 2010): Party had duty to search employee’s home files

• Koosharem Corp. v. Spec Personnel (D.S.C. Sept. 29, 2008): Requiring inspection of home computers when employees used home computers for work and were not issued company laptops

• In re Hitachi Optical Block Cases (S.D. Cal. Aug. 12, 2011): Spoliation found when employee deleted materials from his home computer

• Easton Sports, Inc. v. Warrior LaCrosse, Inc. (E.D. Mich. Sept. 28, 2006): Employer responsible for employee’s deletion of relevant emails from his personal email account

Custody or Control…

• Interpreted broadly

• Based on right to access

• Need to retain right for cloud storage

• Don’t play games

• Must preserve all personal media with potentially relevant information

• Litigation holds must apply to personal devices

• Duty to collect from personal devices

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