ADVANCED ARBITRATION ACADEMY E Discovery Segment...reviewed –e.g., a redwell, a banker’s box, 10...

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USC‐JAMSArbitrationInstitute

ADVANCEDARBITRATIONACADEMY

July27,2017PreparedbyBekiCallahan

E‐DiscoverySegment

JudgeJudithO.HollingerPrograminAlternativeDisputeResolutionUSCGouldSchoolofLaw


1. WhatisE‐Discovery?

2. 9reasonswhyarbitratorsshouldcareaboutE‐Discovery

DealingwithE‐DiscoveryIssuesinArbitration– SelectedTopics:

3. FramesofreverenceforunderstandingtheE‐Discoveryprocess

4. LimitationsonthediscoveryofESI

5. Thedutytopreserveandthe“litigationhold”notice

6. Sanctionableconductand“safeharbors”

7. OverridingconceptsreE‐Discoveryinarbitration

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8. WhatcanarbitratorsdotomanageE‐Discovery?

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GenericallySpeaking

E‐Discovery isshortfor“electronicdiscovery,”andreferstotheprocessofcollecting,processing,producingandpresentingevidencethatexistsinelectronic/digitized

WhatisE‐Discovery?

p g, p g p g / gformats– i.e.,electronicallystoredinformationorESI.

HowESIiscollected,processedandhandledatthefrontendofthedisputemaycreateissuesandbecomethesubjectofrequeststoexcludeevidence,awardsanctionsand/ordrawnegativeinferencesatthebackendoftheprocess.

ESIincludes“rawdata”or“metadata,”whichis

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dataaboutdatathatforensicinvestigatorscanreviewforhiddeninformationtoconfirmthatitiswhatitpurportstobe.


ESIissomethingthathasbecomepartofourordinarypersonal/professional/businesslives.Afewexamples:• Emails• Accounting databases such as QuickBooks• Interface programs that dump bank and credit card transaction data into e ace p og a s a p a a c e ca a sac o a a o

accounting databases• Databases such as Outlook, Excel, TimeMap• Computer-generated “documents” created using programs such as Word,

WordPerfect, PDF, Adobe and Microsoft Publisher• Snap Chat, text messages and other instant

messaging formats• Cell phone digital photos and videos• Websites and other internet based profiles

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• CAD/CAM files and project management and design software

ESIisusuallyvoluminous,difficulttolocate,fragile,andsomethingusers/custodiansroutinelyaccess,modifyanddelete.

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Therules,processes,practicesandproceduresthathavedevelopedconcerningESIinthelitigationcontextarefocusedoncommerce.

Howdoyoucaptureandpreservewhatisonacomputerorserverthatmayberelevanttoprovingordisprovingadisputedfactinalitigationmatter,and‐ atthesametime‐ allowthecomputerorservertostayonlineandbeusedforitsdailybusinesspurpose?

BecauseESItendstobevoluminousandishighlymanipulatable,thisisachallengeforparties,theirattorneysandthecourts!

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LegallySpeaking

FRCPRule34 allowsdiscovery/compelledproductionof“electronicallystoredinformation.”However,itdoesnotprovideaspecificdefinitionforESIbeyondstatingthatitincludes“writings,drawings,graphs,charts,h t h d di i d th d t d t il tiphotographs,soundrecordings,images,andotherdataordatacompilations– storedinanymedium…”

CCP§ 2031.010(e) allows discovery of ESI in the form of a demand to “inspect, copy, test, or sample” such information.

CCP§2016.020 provides a definition of ESI, which is defined as “information that is stored in an electronic medium.” “Electronic” is then defined as “relating to technology having electrical, digital, magnetic,

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defined as relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” Note:Byincludingthecatch‐allphrase“similarcapabilities,”presumablythelegislatureintendedthisdefinitiontobeopen‐endedenoughtoencompassnewlydevelopedtechnologiesforstoringinformation.

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Reason#1

Wenowcommunicatebyemail– notpost– sotoday’sdiscoveryabout“communications”generallyinvolvestheretrievalandproductionofemails.

8reasonswhyarbitratorsshouldcareaboutE‐Discovery

AccordingtoTheRadicatiGroup’s“EmailStatisticsReport,2013‐2017”:

● Email remains the go‐to form of communication in the business world with over 929 million business email accounts. This figure is expected to reach over 1.1 billion by the end of 2017.

● The majority of email traffic comes from business email which, in 2013, accounted for over 100 billion emails being sent and received per day.

● It is estimated that

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business email willaccount for over132 billion emailssent and receivedper day by the endof 2017.


Reason#2

Mostofourpersonalandbusinesstransactionsareconductedelectronically,sodisputesinvolvingsuchmatterswillnaturallyinvolveESI:

h ith dit d d bit d● purchases with credit and debit cards

● timekeeping

● payroll

● automatic deposit and bill pay

● financial record keeping (e.g., QuickBooks)

● tax reporting

● medical records and scheduling

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g

● insurance records

● design services

● project management

● etc.*

*Can you think of anything that has not gone “paperless”?

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Reason#4

Whatisquicklybecominga“paperless”societyhasrenderedour“manual”/“paper”methodsofsearchandreviewunsustainable.

ESIhasalsochangedhowweestablishchainofcustody,foundationandauthenticitybecausesomuchinformationanddatais(1)sharedthroughnetworkedand“cloud”servers,and(2)carriedonportableequipmentlikecellphones,I‐pads,andlaptops.

Ithasalsochangedourframeofreferenceintermsofthesizeoftheworldofevidencewe’redealingwith.Wenolongermeasurethesizeofaproductionbyhowmanypiecesofpapermustbecollectedandreviewed– e.g.,aredwell,abanker’sbox,10banker’s

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g , , ,boxes.Wenowmeasureintermsofgigabytesandhowmuchserverspacewillbeneeded.

Indeed,somelawfirmshavewholeservers dedicatedtohousingdocumentproductionsonly‐ theirclient’scollecteddataandeventualproductionandtheotherside’sproduction!


Reason#5

Sometimestheparties’pre‐disputeagreementprovides/allowsforsuchdiscoveryinarbitrationasisavailableasamatterofstateorfederallaw–therebybringingtheFRCPorCCPintothearbitration.

Sometimesthepartiesagree– post‐dispute‐ tomodifytheirpre‐disputearbitrationagreementtospecificallyincludecertaintypesofdiscoveryasisavailableunderstateorfederallaw– therebybringingtheFRCPorCCPintothearbitration.

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Reason#6

Ithasbecomemorecommonplaceforlitigation‐stylediscoveryandmotionstobeutilizedinarbitration– evenwhennotspecificallyprovidedforintheparties’arbitrationagreement‐ andforarbitratorstobeaskedto:p g

• includeESIinrequiredvoluntaryexchanges

• allowformaldocumentrequestsincludingESI,requiringtheothersidetorespondwitha(1)production,and(2)attestationofcompletenessanddisclosureofanydocuments/ESIwithheld

• ruleoninadvertentproduction/disclosureofprivilegedcommunications,includingthosecontainedinESI

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• manage/stagetheESIdiscoveryprocessbydeciding(1)therelevanceandutilityoftheESIdiscoverybeingsought,and(2)theproportionalityoftheburdenandexpenseofproducingrelevantESIascomparedtotheparties’ resources and relative access to theparties resourcesandrelativeaccesstotheinformation,aswellastheimportanceoftheinformationtotheparties’claimsanddefenses.

• shiftorreallocatethecostsassociatedwithcollectionandproductionofESI

• sanctionpartiesand/orcounselforfailuretocomplywithadiscoveryorderorfortheloss,destruction oralterationofESIid th h f il t t k ffi ti t t

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evidencethroughafailure totakeaffirmativestepstopreserve(e.g.,byturningoffautodeletefunctions;byissuinga“litigationhold”memointernally;byissuinga“litigationhold”noticetothirdpartyvendors,affiliatesoragents)

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Reason#7

Many providerrulesincludeESIwithinthescopeofdocumentsthatmustbeexchangedaspartofthevoluntaryexchange.E.g.,

• JAMS Rule 17 provides that the parties “shall cooperate in good faith in• JAMSRule17providesthattheparties shallcooperateingoodfaithinthevoluntaryandinformalexchangeofallnon‐privilegeddocumentsandotherinformation(includingelectronicallystoredinformation(“ESI”)relevanttothedisputeorclaim.”

• AAACommercialRules,Rule22(b)(i) providesforavoluntaryexchangeofdocuments onwhichthepartiesintendtorelyifthearbitratorsoorders.Rule22(b)(iv) providesthatwhendocumentstobeexchangedorproducedaremaintainedinelectronicform,the arbitratormayrequire that such documents be made available in the form most

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requirethatsuchdocumentsbemadeavailableintheformmostconvenientandeconomicalfortheproducingparty,unlessthearbitratordeterminesthatthereisgoodcauseforrequiringthedocumentstobeproducedinadifferentform.


Reason#8

Asof2015,havingabasicunderstandingofandfacilitywithE‐DiscoveryisconsideredtobeamongaCalifornia’sattorney’scorecompetenciesandethicalduties.

E‐DiscoveryandthehandlingofESIinlitigationhasbecomesuchabigdealthatin2015,theStateBarofCaliforniaadoptedaformalopinionin2015[OpinionNo.2015‐193] concludingthatattorneyswhohandlelitigationhaveanethicaldutyofcompetenceandmust,ataminimum,haveabasicunderstandingof,andfacilitywith,E‐Discovery– presumablythatsameethicaldutywouldapplytoattorneyswhoworkinthearbitralfieldofcivildisputeresolutionasadvocatesandarbitrators!

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p

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• AssessE‐Discoveryneedsandissuesattheoutset

• Analyzeandunderstandtheclient’sESIsystemsandstorage

Id if di f i ll l ESI

TheStateBarOpinionlistsnine E‐Discoveryskillsforlawyercompetence:

• IdentifycustodiansofpotentiallyrelevantESI

• ImplementESIpreservationprocedures

• AdvisetheclientonavailableoptionsforcollectionandpreservationofESI

• Engagein“competentandmeaningful”meet‐and‐conferwithopposingcounselconcerninganE‐Discoveryplan

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• Directtheperformanceofdatasearches– forbothrelevantandprivilegedinformation

• Producenon‐privilegedESIinaresponsiveandappropriatemanner


ABAModelRulesofProfessionalConduct,CommenttoRule1.1reanAttorney’sDutyofCompetence,takesasimilarposition,butnotin the same degree of detail:inthesamedegreeofdetail:

“Tomaintaintherequisiteknowledgeandskill,alawyershouldkeepabreastofchangesinthelawanditspractice,includingthebenefitsandrisksassociatedwithrelevanttechnology,engageincontinuingstudyandeducationandcomplywithallcontinuinglegal

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p y g geducationrequirementstowhichthelawyerissubject.”

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FramesofreferenceforunderstandingtheE‐Discoveryprocess

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1. TheElectronicDiscoveryReferenceModel(EDRM)

2. TheSedonaPrinciplesofProportionality

3. ThefederalrulesgoverningE‐DiscoverycontainedintheFederalR l f Ci il P d R l 16(b) 26(b) d 34(b) d dRulesofCivilProcedure– Rules16(b),26(b)and34(b),asamendedinDecember2015

4. ThestaterulesgoverningE‐discoverycontainedintheElectronicDiscoveryAct– CCP§§ 1985.4, 2016.020, 2017.020, 2023.030, 031.010, 2031.060, 2031.280, 2031.300, 2031.310 and 2031.320 and CRC 3.724 – asenactedin2009andamendedin2013.

5. The 7th Circuit E‐Discovery Pilot Program

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5. The7 CircuitE DiscoveryPilotProgram

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ElectronicDiscoveryReferenceModel

• IdentificationofsourcesofESIandtheirlocation(s)

• Preservation

• Thearbitration/litigation“hold”

• Collectionusingdefensiblemethods

• Process/Review/Analyze

• Productiontotheotherside

• Presentationasevidence– needtobeable to explain the ESI protocol

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abletoexplaintheESIprotocol(identification,preservation,collection,production),searchtermsandproceduresused,listofESIcustodianscollectedfrom;chainofcustodyandactivitylog


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Assoonasapartyreasonablyanticipateslitigation(orsimilarevent,suchasagovernmentalinvestigation)overasubject,thatpartyhasanimmediatedutytopreserve bothhardcopymaterialsandESIrelevanttothat subject

Preservation:

thatsubject.

Courtspayattentiontotheform,substanceandtimingofthisobligation,andthefailuretosatisfyitmayinviteandwarranttheassessmentofbothmonetaryandnon‐monetarysanctionsthatcouldaffecttheoutcomeofthecase.

GoldenRule:Itischeapertopreserve

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thantoexplainwhyyoudon’thaveandcannotproducematerialinformation.


NotallPRESERVEDinformationisPRODUCED– Thedutytopreserveislargerthanthedutytoproduce.

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PreservationDrivers

• Reasonableness– judgedbythecircumstancespresented

• Efficiency– looktoreducecumulativeandduplicativeeffort

• Auditable use special tools and practices so as to be able to• Auditable– usespecialtoolsandpracticessoastobeabletoshowthatthatwhichwaspreservedisauthenticandhasnotbeenmanipulatedoralteredinanyway

• Affordable– costofcollectionandpreservationmustbearaproportionalrelationshiptowhatisatstake

• Realistic– doestheeffortbearareasonablerelationshiptothedisputeresolutionprocess,objectivesandneeds

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TypesofInformationSubjecttoPreservation

• Emails– #1formofESI

• Textsandinstantmessages

• Structured data meaning data organized in a dynamic database• Structureddata,meaningdataorganizedinadynamicdatabase–e.g.,Outlook,Excel,QuickBooks

• Unstructureddata,meaningdataorganizedinasoftwareapplication– e.g.,Word,PDF,TIFandJPEGfiles

• MetaData,meaningdataaboutdata– e.g.,informationaboutadocumentthatdescribeshow,whenandbywhomadocumentwascreated,accessed,modified,andcollected;also

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informationaboutitssizeandformatting

Again, just because you preserve it does not mean you collect, review, analyze and produce it!

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PlacesWhereESIisStored• Workcomputers/PC’s

• Companyservers

• Homecomputers/PC’s

• Laptops

• Externalmediahostedbythirdparties

• Cellphones

• PDA’s

• Backuptapesanddrives

• Cloud‐based storage

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• Cloud‐basedstorage

Note:NeedtodistinguishbetweenACTIVEdata– thatwhichisinuseandreadilyaccessible– andINACTIVE,ARCHIVED,RESIDUALandLEGACYdata.Doesanyofthelatterneedtobepreserved?InvitesdiscussionreCOST.


CollectionMethods

• Preserveinplace– turnoffautodelete

• Preservebyremoval– e.g.,alaptop,aparticularemployee’sPC,abackuptape,aharddrive.Butactiveserverscan’tbetakenoutofservice.

• Preservebycopy– usea“writeblocker,”aphysicaldevicethatgoesbetweenthecomputerandthejumpdrivetotransferthedata.Doesn’tprotectthedata,justinsuresthatwhatwascollectisasitwasonthesource.Ifyoucopyandsaveadocumentdirectly,youjustmessedwiththemetadata.

• BulkcollectionbyITspecialist(inhouseoroutsidevendor)– e.g.,ll f d ’ l

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all ofacustodian’semail

• Self‐collection–representstheminimum standardforpreservation;definitelynota“bestpractice,”notappropriateforahigh‐stakescase.

Note:Preservationandcollectionmaybethesamethinginasmallcase.

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CollectionMethods

• Preserveinplace– turnoffautodelete

• Preservebyremoval– e.g.,alaptop,aparticularemployee’sPC,abackuptape,aharddrive.Butactiveserverscan’tbetakenoutofservice.

• Preservebycopy– usea“writeblocker,”aphysicaldevicethatgoesbetweenthecomputerandthejumpdrivetotransferthedata.Doesn’tprotectthedata,justinsuresthatwhatwascollectisasitwasonthesource.Ifyoucopyandsaveadocumentdirectly,youjustmessedwiththemetadata.

• BulkcollectionbyITspecialist(inhouseoroutsidevendor)– e.g.,ll f d ’ l

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all ofacustodian’semail

• Self‐collection–representstheminimum standardforpreservation;definitelynota“bestpractice,”notappropriateforahigh‐stakescase.

Note:Preservationandcollectionmaybethesamethinginasmallcase.


TheSedonaPrinciplesofProportionality

TheSedonaConferenceisanonprofitresearchandeducationalinstitutededicatedtothestudyoflawandpolicyforcomplexliti ti It l k th l d i th f Elitigation.ItlooktheleadintheareaofE‐Discoverybydeveloping“theSedonaPrinciplesofProportionality,”whichmakerecommendationsfor“bestpractices”inelectronicdocumentdiscoveryandproductionthathavebeenwidelyacceptedinavarietyofcontexts,butmostimportantlythecourts.

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Therearesixguidingprinciples.Theseprinciplesandtheircommentaryarefrequentlyreferredtobythefederalcourtswhendecidingandexplainingwhatisorisnot“proportional”discovery.

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Principle#1:Theburdensandcostsofpreservingrelevantelectronicallystoredinformationshouldbeweighedagainstthepotentialvalueanduniquenessoftheinformationwhendeterminingtheappropriatescopeofpreservation.

Principle#2:Discoveryshouldfocusontheneedsofthecaseandgenerallybeobtainedfromthemostconvenient,leastburdensome,andleastexpensiveresources.p

Principle#3:Undueburden,expense,ordelayresultingfromaparty’sactionorinactionshouldbeweighedagainstthatparty.

Principle#4: Theapplicationofproportionalityshouldbebasedoninformationratherthanspeculation.

Principle#5: Nonmonetaryfactorsshouldbeconsideredintheproportionalityl i

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analysis.

Principle#6:Technologiestoreducecostandburdenshouldbeconsideredintheproportionalityanalysis.

https://thesedonaconference.org/publication/The%20Sedona%20Conference%20Commentary%20on%20Proportionality


InDecember2015,theFederalRulesofCivilProcedurewereamended,andattheheartoftheamendmentswereprovisionsdirectedspecificallyatE‐Discoverypractices– withaviewtowardscontainingcostsandencouragingcooperationbetween/amongtheparties.

FRCP

g g p / g p

Thelong‐standing“reasonablycalculated”languagewasremovedand“proportionality”wasputinitsplace.NewRule26(b)(1)setsforthsixfactorsthataretobetakenintoaccountwhendefiningthescopeofpermissiblediscovery:

• theimportanceoftheissuesatstakeintheaction

• theamountincontroversy

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• theparties’relativeaccesstorelevantinformation

• theparties’resources

• theimportanceofthediscoveryinresolvingtheissues

• Whethertheburdenorexpenseoftheproposeddiscoveryoutweighsitslikelybenefit

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Atitscore,proportionalityisabalancingtest thatweighstheparties’needforinformationtoproveuptheirclaimsanddefensesagainstthetimeandexpenseassociatedwiththeproposeddiscoveryendeavor.

As concerns E‐Discovery, the new federal rules are just that – new – and theAsconcernsE Discovery,thenewfederalrulesarejustthat new andthefederalcourtsaregrapplingwiththeapplicationof“proportionality”inamyriadofchallengingcontexts.

In2016,thereweresomanydecisionsconcerningthe“proportionality”thatsomehavedubbed2016as“theyearofproportionality.”JudgeGrewaloftheU.S.DistrictCourt/NorthernDistrictofCalifornia,offeredthefollowingperspectiveonnewRule26(b)(1):

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“ProportionalityindiscoveryundertheFederalRulesisnothingnew.OldRule26(b)(2)(C)(iii)wasclearthatacourtcouldlimitdiscoverywhenburdenoutweighedbenefit,andoldRule26(g)(B)(iii)wasclearthatalawyerwasobligatedtocertifythatdiscoveryservedwasnotundulyburdensome.NewRule26(b)(1),…simplytakesthef li i i li i i h ld i fi hfactorsexplicitorimplicitintheseoldrequirementstofixthescopeofalldiscoverydemandsinthefirstinstance.

Whatwillchanges– hopefully– ismindset.Nolongerisitgoodenoughtohopethattheinformationsoughtmightleadtothediscoveryofadmissibleevidence.Infact,theoldlanguagetothateffectisgone.Instead,apartyseekingdiscoveryofrelevant,non‐privilegedinformationmustshow,beforeanythingelse,thatthediscovery sought is proportional to the needs of the case”

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discoverysoughtisproportionaltotheneedsofthecase.

GileadSciencesv.Merck&Co.,2016WL146574(N.D.Cal.,Jan.13,2016)

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California'sElectronicDiscoveryActislargelyanalogousto– butnotidenticalwith– theamendmentstotheFRCP,andaddressesissuessuchasdataaccessibility,privilege"clawback",andproportionality.

CCP

TheRulesofCourtwereamendedin2009toprovideameetandconferrequirementatRule3.724.

In2013,“safeharbor”provisionswereaddedthatpreventsanctionsforgood‐faithlossordamagetoESI,withoutwaivingtheobligationtopreserve.

In2015,California'sStateBar'sStandingCommitteeonProfessional

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ResponsibilityissuedOpinion2015‐193(discussedabove).ThisopinionledthenationinholdingthatbeingcompetentinE‐Discoveryisnowanethicalissueforlitigationattorneysthatcannotbedelegatedtoothers.


The7th CircuitElectronicDiscoveryPilotProgram

The7th CircuitElectronicDiscoveryPilotProgramwascreatedin2009asamulti‐year/multi‐phaseproject.Itisnowinitsthirdphase.

Borrowing from the “Sedona Principles ” the 7th Circuit has a standing EBorrowingfromthe SedonaPrinciples, the7th CircuithasastandingE‐Discoveryorderandincludesthefollowing:

• Thatcounsel shallcooperateinfacilitatingandreasonablylimitinge‐Discoveryrequestsandresponses;

• ThatrequestsforproductionofESIandrelatedresponsesshallbereasonably targeted,clear,andasspecificaspossible;

• Thatpriortotheinitialstatusconferencewiththecourt,counselshallmeet and confer in order to identify relevant and discoverable ESI the

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meetandconfer inordertoidentifyrelevantanddiscoverableESI,thescopeofdiscoverableESItobepreservedbytheparties,theformatsforpreservationandproductionofESI,thepotentialforconductingdiscoveryinphases,andproceduresforhandlinginadvertentproductionofprivilegedESI;

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• Thatattorneysare expectedtobeknowledgeableabouthowtheirclients’ESIisstoredand retrieved;

• Thatinmostcasesthepartiesshouldappointane‐Discoveryliaisontoperformvarioustasks,includingparticipationintheresolutionofanye‐Discoverydisputes;y p ;

• Thatvagueandoverlybroadpreservationordersshouldnotbesoughtorenteredandthatpreservationrequestandresponsesshouldtransmitspecificandusefulinformation;and

• Thatallpartiesandtheircounselshouldtake reasonableandproportionatestepstopreserverelevantanddiscoverableESIwithintheirpossession,custodyorcontrol.

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Self‐ImposedRegulation

Asamatterofbothstateandfederalrules,thepartiesareexpectedtomeet‐and‐conferearlyinthecasetodiscussandagreeuponadiscoveryplan–

LimitationsonthediscoveryofESI

y g p y pwiththeCaliforniaRulesofCourtRule3.724beingquiteabitmoredetailedthanFRCPRule26(f).

Rule26(f)simplyrequiresthepartiestoconferassoonaspracticable,butnolaterthan21daysbeforetheschedulingconference,andtodevelopadiscoveryplanstatingtheparties’i d l i di

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viewsandproposalsonanyissuesregardingdiscovery,includingESI.

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• issuesrelatingtothepreservationofESI;

• theformorformsinwhichESIwillbeproduced;

Rule3.724oftheCaliforniaRulesofCourtrequirespartiestomeetnolaterthan30calendardaysbeforetheinitialCMCandtospecificallyconsider:

p ;

• thetimewithinwhichtheinformationwillbeproduced;

• thescopeofdiscovery(e.g.,thecollectionofdatatobesearchedandsearchparameters);

• themethodforassertingandpreservingclaimsofprivilege;

• themethodforassertingandpreservingconfidentiality,tradesecrets,etc.;

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• howthecostofproductionofESIistobeallocated/sharedamongtheparties;and

• any otherissuesrelatingtothediscoveryofESI.


InaccessibleInformation

Federalandstatelawdiffermarkedlyonthissubject!

TheFRCPexplicitlyacknowledgesthatnodutyexiststoproduceinformationfromaninaccessiblesource(e.g.,legacydatanolongerretrievableorretrievableonlyatgreatexpense),providingthatapartyrespondingtorequestsforproductionneednotproduceESIfromsourcesthatitidentifiesasnotreasonablyaccessiblebecauseofundueburdenorcost.Rule26(b)(2)(B).Therequestingpartymustbringamotiontocompelifitwantstheinformation,inwhichcasetheburdenthenshiftstotherespondingpartytodemonstratethattheinformationisnotreasonablyaccessible.

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UndertheCCP,itisassumedthatallESIisaccessible.Itthusshiftsthebalancebynotrequiringtherequestingpartytobringamotiontocompeland,instead,requiresthattherespondingpartyformallyobjectandbringamotionforaprotectiveorder.CCP§2031.060(c).

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Proportionality

FederalandstatelawbothpermitthecourttolimitthefrequencyandextentofESIdiscovery.

FRCP Rule 26(b)(1) provides that parties may obtain discovery regardingFRCPRule26(b)(1)providesthatpartiesmayobtaindiscoveryregardinganynonprivilegedmatterthatisrelevanttoanyparty’sclaimordefenseandproportionaltotheneedsofthecase,givingconsiderationto:

• theimportanceoftheissuesatstakeintheaction

• Theamountincontroversy

• Theparties’relativeaccesstorelevantinformation

Th ti ’

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• Theparties’resources

• Theimportanceofthediscoveryinresolvingtheissues

• Whethertheburdenorexpenseoftheproposeddiscoveryoutweighsitslikelybenefit


CCP§2031.060(f) provides that the courtshalllimitthefrequencyorextentofdiscoveryofESI,evenfromasourcethatisreasonablyaccessible,ifthecourtdeterminesthatanyofthefollowingconditionsexist:

• theESIisobtainablefromanothersourcethatislessburdensome expensive or more convenient;burdensome,expensiveormoreconvenient;

• theESIsoughtisunreasonablycumulativeorduplicative;

• therequestingpartyhashadampletimeandopportunitytodiscovertheinformationsought;or

• thelikelyburdenorexpenseoftheproposeddiscoveryoutweighsthelikelybenefit,takingintoconsideration:

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accounttheamountincontroversy,

theresourcesoftheparties,

theimportanceoftheissuesinthelitigation,and

theimportanceoftherequestedESIinresolvingthoseissues.

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ClosingNotereProportionality

Whiletheconceptofproportionalityseemssimpleenough,puttingitintoactioninthecontextofE‐Discoveryhasproventobenotsoeasyorclear‐cutforpartiesorthecourts.

Theapplicationofthe“factortest”underboththeFRCPandCCPisjuststartingtoworkitswaythroughthecourtsinamyriadofcontexts– withmanyofthereporteddecisionsemanatingfromtheSecondCircuit.Thereisno“brightline”test,butthefollowingdoseemtohaveconsistentsupportamongthecourts:

• It’snotenoughtobeatthedrumofrelevancytojustifyadiscoveryrequest.See,NobleRoman’sInc.v.Hattenhauer

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y q ,Distrib.Co.,2016WL1162553(S.D.Ind.Mar.24,2016).Relevancestillmatters,butitnolongerstandsalone.Courtsarenowmorelikelytosay“no”torequeststhataredesignedtoburdenpartiesandhaverelativelylittlevalue.


• Thecourtsarenottaking“no”for“the”answer.Inadditiontoexplainingwhydiscoveryisdisproportionateorburdensomeorotherwiseobjectionable,courtsexpecttheresponding/objectingpartytoofferasuggestionastohowarequestcanbealteredinsomeway.See,Wagonerv.LewisGaleMed.Ctr.,LLC,y , g , ,No.7:15‐cv‐570(W.D.Va.July13,2016).

• Towardstheendof2016,thecourtswereincreasinglyremindingpartiesthatthecourtisaplaceoflastresort– notfirst– whenitcomestomanagingthescopeofdiscovery,includingE‐Discovery.Parties,throughtheircounsel,areexpectedtoconferandtodosomeaningfully. (Noreasonforarbitrationtooperateanydifferently!)See,Venturedynev.

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p y ff y ) , yCarbonyx,No.2:14‐cv‐351(N.D.Ind.Nov.15,2016).Note:Inthiscase,thedefendantsimplyobjectedthatarequestwas“burdensome.”Thecourtexpectedthepartiestogettheirhandsinthedigitalmud,actuallyrunsomesearchesanddosomeanalysis,andexplainwhytherewasa“falsepositives”problem.

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Asamatterofcommonlaw,allparties in a lawsuit have a duty to

Thedutytopreserveandthe“litigationhold”notice

partiesinalawsuithaveadutytopreserveevidence.Thedestruction‐ orspoliation‐ ofevidenceisoftenviewedprejudiciallyandinvitesthefollowingassumption:theonlyreasontodestroyevidenceisabelief it could be incriminating or

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beliefitcouldbeincriminatingorexculpatory.


Surprisingly,neithertheCaliforniaCivilDiscoveryActnoranycaselawspecificallybarstheintentionaldestructionofevidencepriortothefilingofalawsuit.ThereisauthorityinCaliforniasuggestingthedutytopreserveevidencedoesnotariseuntil(1)alawsuithasbeenfiled,and(2)thepartyhasbeenservedwithdiscoverydemands. NewAlbertsonsInc.( ) p y yv.Sup.Ct.,168Cal.App.4th1403,1403‐1431(2008)(theCourtrejectedsanctionsforthedestructionofvideorecordingswheretherewasnofailuretoobeyanordercompellingdiscovery).TheCourtreliedonCaliforniaCodeofCivilProcedureSection2031.310(e)and2031.320(c),whichauthorizesanctionsonlywhereaparty“failstoobeyanordercompellingafurtherresponseoranordercompellinganinspection.”TheCourtfoundnosuchorderinthiscase.Furthermore,theCourtlookedattheCaliforniaCivilDi A t th i i ti l “t th t t th i d b th

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DiscoveryActasauthorizingsanctionsonly“totheextentauthorizedbythechaptergoverninganyparticulardiscoverymethod.”Note:TherearenodiscoverymethodsauthorizedbytheCivilDiscoveryActwhichaddressdestructionofevidencepriortoserviceofadiscoverydemand.

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Federallawdiffers!Thefederalcourtshavefoundthatadutytopreserveevidencearisesonceaparty reasonablyanticipates litigationor contemplatesfiling alawsuit.Thisappliestoboth prospectiveplaintiffsanddefendants.

In Zubulakev.UBSWarburgLLC (S.D.N.Y.2003)220F.R.D.212,218,theCourtg ( ) , ,stated“onceapartyreasonablyanticipateslitigation,itmustsuspenditsroutinedocumentretention/destructionpolicyandputinplacealitigationholdtoensurethepreservationofrelevantdocuments.”

Thisruleappliestobothprospectiveplaintiffs and defendantsinafederallawsuit.“Would‐be”plaintiffs’dutytopreserveevidenceistriggeredatanevenearlierpointintimeasl i tiff di t t h liti ti b i d bl

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plaintiffsdictatewhenlitigationbeginsandareabletoanticipatelitigationbeforethelawsuitisfiled(e.g.,whenthepartymeetswithanattorneyforthepurposeofexploringthefilingofalawsuit).


“Would‐be”plaintiffsanddefendantsdon’talwaysknowandfrequentlycan’tcontrolwherealawsuitisfiledorwhereitmightendup(e.g.,potentialremovalandvenuechanges).So,somemightsaythatthemoreconservativefederalstandardshouldbetheoneadoptedwhentryingtodefinetheclient’sd ( ff d l )dutytopreserve(e.g.,turnoffautodelete,ataminimum).

Notsurprisingly,thefailureofthedutytopreserve– atthefrontend– canhaveseriousconsequencesattheback‐endintheformofsanctions.

BecauseESIishighlymanipulatable,easilytransported,routinelychangedordeletedinthenormalcoursebymultiplecustodians,the“litigationhold”notice has taken on a special role in E‐Discovery in terms of demonstrating a

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noticehastakenonaspecialroleinE Discoveryintermsofdemonstratingaparty’saffirmativeeffortstopreserveevidence.

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Componentsofa“Hold”Notice:

• Shouldbeinwriting– Handout

• Sentto“custodians”– meaningpeoplewhoarelikelytohaverelevantevidence/ESIandwhoareunderthecontrolanddirectionofaparty(employee)orundercontractwithaparty(outsidevendor)

• “Bestpractices”requiretheretobeareceiptandacknowledgmentfromthecustodianthattheholdnoticewas received read understood willbecompliedwith

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• Foracaseoflongduration,“bestpractices”suggestsremindernoticeswithanacknowledgmentofreceipt


EarlyDataAssessment/“EDA””

Seekstounderstandthedatalandscapebeforemakinganyrepresentationstoatribunaloropposingcounsel– e.g.,what dataispotentiallyrelevant;whohasaccesstoorcontroloverthatdata;onwhatdevices isthedatastored,where arethosedeviceslocatedandwho hasaccesstothem

Prioritizespotentialdocumentcustodians

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Estimatesreviewandproductioncoststosupportargumentforreducedscope

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AnswersquestionsabouttheoverallITsystem– e.g.,howoldistheESI,isthere“legacy”dataand,ifso,whereandhowstored,hastherebeenanypurging,deletionoroverwriting,whatisthenativefileformatoftheESI,whereisemailstored,whereareuser’sdocumentsstored(Word,Excel,PPT,Visio,etc.),whataretheparty’sbackuppoliciesandprocedures,whatisthecompany’spolicyredepartingemployees,etc.

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HastheclientinvestedinthecreationofadatamapordatasurveyofitsITsystems?

Canbeusedinanticipationoflitigationsoastohavean“actionplan”inplace.


Sanctionableconductand“safeharbors”

Destructionofevidence

Materialalterationofevidence

Spoliationconsistsof:

Failuretopreserveforanother’suseasevidenceinpendingorreasonablyforeseeablelitigation

andisgenerallysanctionablewithregardtoanytypeofevidencenotjustESI.

E Di i th i f ti h ESI i l t d t f il

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E‐DiscoveryraisestheissueofsanctionswhenESIislostduetoafailuretotakeaffirmativeactiontopreserve(e.g.,turningoffauto‐delete)atthefrontend.Whiletherearecertainlyextremesituationsofpurposefulspoliation,alotofthecasesdealwithfindingthelinebetween“goodfaith”lossandactionsthatdon’tpassmuster– i.e.,thisareaofthelawisclearasmudrightnow!

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UnderrecentlyamendedFRCP37(e),theremustbeafindingof1.“prejudiceresultingfromthelossofinformation,”or2.“intenttodeprivetheotherofinformation”beforesanctionsmaybeawarded.[EffectiveDec.2015]

Thelossofdataisnotnecessarilyasanctioningoffense– bothfederalandstatelawprovidefora“safeharbor.”

Inthefirstinstance,thesanction“remedy”issuchreliefasmaybenecessarytocuretheprejudice.Inthesecond,itisanegativeinference,dismissal,defaultoraninstructiontothejurythatitmustpresumethatthelostinformationwasunfavorabletothepartywholostit.

TheCCPprovidesthat“absentexceptionalcircumstances,”thecourtmaynotimposesanctionsforfailuretoprovideESIthathasbeenlost,damaged,alteredoroverwrittenastheresultofroutine,goodfaithoperationofanelectronicinformation system CCP §§2031 060(i)(1) 2031 300(d)(l) 2031 310(j)(1) and

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informationsystem.CCP§§2031.060(i)(1), 2031.300(d)(l), 2031.310(j)(1) and 3021.320(d)(1), but the statute is clear that this “good faith loss” exception does not alter any obligation to preserve. CCP§§2031.060(i)(2), 2031.300(d)(2), 2031.310(j)(2) and 3021.320(d)(2.)

Earlydataassessment,prompt“hold”notices,turningoffautodeleteandbroadpreservation/collectionareallkeytoavoidinglostdataand/ordemonstratingnointentdeprivetheotherofinformation.


Generallyspeaking– yes!

Doarbitratorshavesanctionauthorityfornon‐production,loss,alterationordestructionofESI?

Mostcourtsrecognizetheinherentpowerofarbitratorstoimposemonetarysanctionsandtodrawnegativeinferenceswhentheirordersareviolatedorapartydoesnotparticipateinthearbitrationprocessingoodfaith.Thekeyhereistheissuanceofanorderbythearbitratorand arequestforsanctionsbytheotherside.

Rule R‐58 of the 2013 AAA Commercial Rules

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RuleR 58 ofthe2013AAACommercialRulesandRule29 oftheJAMSComprehensiveArbitrationRulesexpresslyprovidethearbitratorwiththeauthoritytoimposesanctions– inabroadsense,notjustlimitedortiedtoE‐Discoveryviolations.

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AAARule58

“(a)Thearbitratormay,uponaparty’srequest,orderappropriatesanctionswereapartyfailstocomplywithitsobligationsundertheserulesorwithanorderofthearbitrator.

(b)Thearbitratormustprovideapartythatissubjecttoasanctionrequestwiththeopportunitytorespondpriortomakinganydeterminationregardingthesanctionsapplication.”

Note:Thereisno“obligation”undertheAAARulesforapartytoprovideE‐Discovery,sothissanctioning“power”isonlyavailableif(a) itisclear

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thatthevoluntaryexchangeobligationunderRule22includesE‐Discovery,and/or(b) partiesrequestandaregrantedtherighttodiscoverythatincludesESI,and(c) ineitherevent,theobligationtoproduceESIissetforthinanarbitratororder,AND(d)apartymakesthesanctionsrequest.


JAMSRule29

“TheArbitratormayorderappropriatesanctionsforfailureofaPartytocomplywithitsobligationsunderanyoftheseRulesorwithanorderoftheArbitrator.Thesesanctionsmayinclude,butarenotlimitedto,

t f A bit ti f d A bit t ti dassessmentofArbitrationfeesandArbitratorcompensationandexpenses,assessmentofanyothercostsoccasionedbytheactionableconduct,includingreasonableattorney’sfees,exclusionofcertainevidence,drawingadverseinferences,or,inextremecases,determininganissuesubmittedtoArbitrationadverselytothePartythathasfailedtocomply.”

f

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Note:UnliketheAAARule,anawardofsanctionsisnot dependentonapartyrequest,thescopeofavailablesanctionsisbroader,andanorderreE‐DiscoveryisnotnecessarysincetheexchangeofESIisanobligationundertheJAMSRule17.

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IstheexchangeofESIrequiredinarbitration?

Noeasy/onesizefitsallanswer.Itdepends…

1. onwhatthearbitraltribunal’srulesprovide

2. onwhattheparties’arbitrationagreementprovides(e.g.,doesitprovidefordiscoveryrightsundertheCCPorFRCP)

3. onwhattheparties,throughtheircounsel,mightagreetoandrequestbeorderedpertheirstipulation

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4. onwhatthearbitratororders


OverridingConcept– ArbitrationisNOTLitigation

IstheproductionofESInecessaryintheparticularcase?Ifso,withrespecttowhatdisputedissues?

If th h f ESI i ll d h it b t ll d / IftheexchangeofESIisallowed,howcanitbecontrolled/limited?Forexample,doesitmakesensetostartwithafirstlevelexchangeofemailsofaselectgroupofkeyplayersandtousealimiteddaterange?

IftheexchangeofESIisallowed,whatsearchmethodsandcriteriaaregoingtobeusedandwhataretheestimatedcostsassociated with those methods? What ESI discovery plan is

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associatedwiththosemethods?WhatESIdiscoveryplaniscost‐effectiveandproportionaltothecase?

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No“fishing”expeditions– ESIrequestsneedtobesubstantiated:

WhydoyouthinktheESIsoughtexists?

IstheESIreasonablyaccessible?*y

Howcriticalistheinformationandtowhatdisputedissues?

Whatisthecosttocollectandsearch– time,moneyandhumanresources?Andwhoshouldberesponsibleforthatcost?

Whatistheamountincontroversy?

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y

Whataretheresourcesoftheparties?

Istheinformationavailablefromothersources?

Shoulddiscoverybestagedand,ifso,inwhatorderofpriority?


WhataresomethingsthatArbitratorscandotohelpmanageE‐Discovery?

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6TopicstoPutonthePreliminaryHearingAgenda

1. Havetheparties’counseldiscussedanddefinedthescopeofpreservation?Havetheydiscussed“hold”and“preservation”notices?Ifnot,putthediscussiononthetable– dothesemattersneedtobediscussedinthiscase?

2 If ESI i t b th bj t f di d/ h h th ti ’2. IfESIistobethesubjectofdiscoveryand/orexchange,havetheparties’counseldiscussedandagreedonthescopeandformatofproduction?*Ifnot,havethemmeetandconferandreportbackonadiscoveryplantheycanagreetoandasummaryofwhatdiscoverytheyareindisagreementaboutandwhattheirrespectivepositionsareandwhy.

3. HowlargeorsmallistheproposedESIrequest?Iflarge,shouldcollection/processing/review/analysis/productionbedoneinstages?

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E.g.,are“documents”goingtobebatesnumbered?Are“documents”goingtobeprovidedinelectronicandhardcopyformat?Havethepartiesdiscussedandagreedupontheelectronicformatforproduction(e.g.,nativev.PDForTIFF)?


3. Havetheparties’counseldiscussedandagreeduponhowtohandleprivilegedinformation– e.g.,a“clawback”agreementandnon‐waiverprotocolsforinadvertentproductionofattorney‐clientcommunications,workproductandotherprivileged/protectedinformation?information?

4. WhatsearchtoolsandmethodologiesaregoingtobeusedtocollectandprocesstheESI?Andwhatisthetimeandcostassociatedwiththateffort?Isthattimeandexpensereasonable/warrantedinrelationtotheamountatissueinthecase?Ifnot,whatarethealternatives?

5. IsthisacasethatwarrantsanESIliaison– i.e.,someonetaskedbyeachsideas“theperson”todiscussproblemsandexplainissuesand

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optionstotheArbitrator?

Note:ThepointofincludingESIonthePHagendaistoavoidunnecessaryexpenseanddelayandworktowardspartyconsensusandcooperationsoastokeepthecaseontrackandmovingforward.Inalargecase,youmayevenwanttosuggestthatthepartieseachappointanESIliaison.

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AdditionalTopicsforthePreliminaryHearingAgenda:

1. ArbitratorcanhaveE‐Discoveryguidelinesandrequirecounseltomeet‐and‐conferanddevelopajointdiscoveryplanforpresentationanddiscussionatthepreliminaryhearing.Handoutsamplearbitratorid liguidelines.

2. Limitationonthenumberofrequests,andtheneedforspecific,targeteddescriptionswiththeaddedrequirementthatrequestsrelatetospecificclaims,defensesand/ordisputedfacts.

3. WhensubstantialESI,inaccessibledata(i.e.,restoration)and/ormultiplestoragesourcesareinvolved,requirethepartiestoprovidewrittencostandtimeestimates,especiallywhenITtechniciansand

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, p youtsideESIconsultantsareexpectedtobeneededforthejob.

4. Objectionprotocols

5. Whopaysforwhat,withmentionofArbitrator’spowertoallocate“costs”tothelosingpartyattheendofthecase?


Definingproportionalityandscope

Understandingthetechnologyand/ortechnicalterms

U d lifi i f ESI

ChecklistrecommonproblemsencounteredwithE‐Discovery

UseandqualificationofESIexperts

Amorphous“document”demands

LackofclarityreformofESIsoughtand/orlackofunderstandingaboutwhatESIis/isnotaccessible

Lackofcooperationbetween/amongcounsel

N d fi i l h ESI i d d d h i NotdefiningaclearpurposewhatESIisneededandhowitrelatestoaclaim,defenseordisputedfact

Selectingtheappropriatesearchtoolsandmethodologies

Costburdenandallocationofcosts

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Dealingwithpartypreservationobligations

ProducingESIinadmissible/defensible/usableform

Dealingwithallegationsofspoliation(loss,destructionand/orlt ti )alteration)

Dealingwithduplicateinformation/dataandlackofunderstandingrewhattechnologyisavailabletoproperlyculloutidenticalduplicatesfromcollectionandprocessing

Usingoverlybroadsearchtermsthatresultinproducinganelectronichaystack

Dealingwithinadvertentdisclosuresofattorney‐clientprivilegeand/orworkproductESI

Dealingwithcounseland/orpartyinexperiencewithESI

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GibsonDunnWebsiteArticles,including:• E‐DiscoveryBasics– 2011– WhyCareAboutE‐Discovery• E‐DiscoveryBasics– 2011– DiscoveryLifeCycle

ReferenceArticles/AdditionalReading:

• E‐DiscoveryBasics– 2011– LitigationPreparedness• E‐DiscoveryBasics– 2011–LegalHolds• E‐DiscoveryBasics– 2011– Preservation(Part1)• E‐DiscoveryBasics– 2011– Preservation(Part2)• E‐DiscoveryBasics– 2011– Collection• E‐DiscoveryBasics– 2011– Processing• E‐DiscoveryBasics– 2011– Production• E‐DiscoveryBasics– 2011– Admissibility• E‐DiscoveryBasics– 2011– Cross‐Border• E‐DiscoveryBasics– 2015– SpoliationStandardsUndertheNewRules

http://www.gibsondunn.com//practices/pages/PracticePublications.aspx?pg=%22Electronic%20Discovery%20and%20Information%20Law%22

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AndresHernandez,“CommonProblemswithE‐Discovery– andTheirSolutions,”TheFederalLawyer(September2016)

JenniferH.ReardenandGoutamU.Jois,“SpoliationStandardsUnderthe

ReferenceArticles/AdditionalReading:

NewRule37(e),”Law360(October28,2015)

GiyoungSong,“TheAdvantagesofEarlyDataAssessment,”E‐DiscoveryBulletin”(February/March2015)

MonicaMcCarroll,“E‐Discovery:WhatLitigationLawyersNeedtoKnow,”RiskManagementHandoutsofLawyersMutual(November2011)

GarethT.Evans,“AccessGranted,”TheRecorder(July15,2009)

MarkS.SidotiandReneeL.Monteyne,“TheEffectiveInternalLitigationHoldLetter,”In‐HouseDefenseQuarterly(Winter2007)

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Q&A

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ADVANCED ARBITRATION ACADEMY E Discovery Segment...reviewed –e.g., a redwell, a banker’s box, 10...

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