AMENDED FEDERAL RULES OF CIVIL AMENDED FEDERAL RULES OF CIVIL PROCEDURE ON ELECTRONICALLY PROCEDURE ON ELECTRONICALLY

STORED INFORMATIONSTORED INFORMATION

oror

““THE TALE OF RIP VAN LAWYER”THE TALE OF RIP VAN LAWYER”PASBO ANNUAL CONFERENCE PASBO ANNUAL CONFERENCE

March 6, 2008March 6, 2008Hershey, Pennsylvania Hershey, Pennsylvania

Howard L. Kelin, Esq.Howard L. Kelin, Esq.

Kegel Kelin Almy & Grimm LLPKegel Kelin Almy & Grimm LLP24 North Lime Street24 North Lime StreetLancaster, PA 17602Lancaster, PA 17602

Phone number: 717-392-1100Phone number: 717-392-1100Facsimile: 717-392-4385Facsimile: 717-392-4385E-mail: kelin@kkaglaw.comE-mail: kelin@kkaglaw.com

Sleeping Through 20 Years Sleeping Through 20 Years of Dramatic Changeof Dramatic Change

Rip Van Lawyer

SINCE 1985SINCE 1985

• Local and Wide Local and Wide Area NetworksArea Networks

• Email Email

• InternetInternet

19851985

• PC used PC used primarily for primarily for document document preparation, not preparation, not communicationcommunication

• Communication Communication by phone, U.S. by phone, U.S. mail, overnight mail, overnight delivery or delivery or facsimilefacsimile

Practical Impact on Practical Impact on DiscoveryDiscovery

• Greater Volume of DataGreater Volume of Data

• Access: Documents No Longer Access: Documents No Longer Maintained Primarily in File CabinetsMaintained Primarily in File Cabinets

• Expense of Discovering Electronically Expense of Discovering Electronically Stored InformationStored Information

• Email is Sought in Discovery, in Part Email is Sought in Discovery, in Part Due to Harmful Candor Due to Harmful Candor

FRANKENSTEIN’S MONSTER FRANKENSTEIN’S MONSTER ATTACKS MORGAN STANLEY!ATTACKS MORGAN STANLEY!

RESULTRESULT ––

Coleman (Parent) Holdings, Inc. v. Coleman (Parent) Holdings, Inc. v. Morgan Stanley & CompanyMorgan Stanley & Company, , 2005 WL 2005 WL 679071 (Fla. Cir. Ct., 15th Cir. March 1, 679071 (Fla. Cir. Ct., 15th Cir. March 1, 2005) and 2005 WL 674885 Fla. Cir. Ct., 2005) and 2005 WL 674885 Fla. Cir. Ct., 15th. March 23, 2005)15th. March 23, 2005)• Alleged that Morgan Stanley fraudulently failed to Alleged that Morgan Stanley fraudulently failed to

identify irregularities in stock valuationidentify irregularities in stock valuation

• Morgan Stanley missed deadlines to produce Morgan Stanley missed deadlines to produce electronic documentselectronic documents

• Effort to find, recover, analyze and produce files Effort to find, recover, analyze and produce files from THOUSANDS of disaster recovery backup from THOUSANDS of disaster recovery backup tapes stored throughout the countrytapes stored throughout the country

• Wrongly certified production completeWrongly certified production complete

• Perceived lack of good faith led to severe Perceived lack of good faith led to severe sanctionssanctions

CHANGES TO THE FEDERAL CHANGES TO THE FEDERAL RULES OF CIVIL PROCEDURERULES OF CIVIL PROCEDURE

• The Supreme Court amended Fed. R. The Supreme Court amended Fed. R. Civ. P. 16, 26, 33, 34, 37 and 45 Civ. P. 16, 26, 33, 34, 37 and 45 effective December 1, 2006effective December 1, 2006

• Changes can be addressed through Changes can be addressed through eight topicseight topics

1. Redefined Scope of 1. Redefined Scope of Information Subject to Information Subject to

DiscoveryDiscovery• Amended Rule 34(a) includes “electronically stored Amended Rule 34(a) includes “electronically stored information” within scope of discoveryinformation” within scope of discovery

• Production requests may include “writings, Production requests may include “writings, drawings, graphs, charts, photographs, sound drawings, graphs, charts, photographs, sound recordings, images, and other data or data recordings, images, and other data or data compilations stored in any medium from which compilations stored in any medium from which information can be obtained, translated, if information can be obtained, translated, if necessary, by the respondent into reasonably necessary, by the respondent into reasonably usable form.” usable form.”

• The foregoing description also includes “metadata” The foregoing description also includes “metadata” containing information about documents, emails, containing information about documents, emails, instant messages and anything else that is instant messages and anything else that is recorded and stored electronically.recorded and stored electronically.

2. Early Discussion Among 2. Early Discussion Among CounselCounsel• The need to preserve electronically The need to preserve electronically

stored information that may become stored information that may become subject to discoverysubject to discovery

• Form in which to produce that Form in which to produce that informationinformation

• How to protect privileged information How to protect privileged information stored electronically stored electronically

TIMING LOGISTICSTIMING LOGISTICS• Rule 16 – Court schedules pretrial and Rule 16 – Court schedules pretrial and

scheduling management conference scheduling management conference within 120 of service of complaintwithin 120 of service of complaint

• Rule 26(f) – at least 21 days before Rule 26(f) – at least 21 days before conference, counsel must conferconference, counsel must confer– Address preservation of discoverable Address preservation of discoverable

materials (a “litigation hold”)materials (a “litigation hold”)– Discovery schedule and plan Discovery schedule and plan – Submit a written discovery plan to the Court Submit a written discovery plan to the Court

14 days before the Rule 16 conference14 days before the Rule 16 conference

TIMING LOGISTICSTIMING LOGISTICS• Within 14 days of Rule 26(f) conference - Within 14 days of Rule 26(f) conference -

initial disclosure of information pursuant to initial disclosure of information pursuant to Rule 26(a) without the need for discovery Rule 26(a) without the need for discovery requestsrequests

• Rule 16(b) modified – Court order issued after Rule 16(b) modified – Court order issued after initial pretrial conference may address the initial pretrial conference may address the discovery of information & agreements by discovery of information & agreements by parties to protect privileged materials parties to protect privileged materials inadvertently disclosedinadvertently disclosed

• Default standard for discovery of Default standard for discovery of electronically stored information issued by electronically stored information issued by U.S. District Court for the Northern District of U.S. District Court for the Northern District of OhioOhio

3. Two-Tiered System Based 3. Two-Tiered System Based on “Accessibility” of Dataon “Accessibility” of Data

• Amended Rule 26(b)(2)(B) provides special Amended Rule 26(b)(2)(B) provides special rule for electronically stored information in rule for electronically stored information in data source that is “not reasonably data source that is “not reasonably accessible because of undue burden or cost”accessible because of undue burden or cost”– Discovery may occur only for “good cause” Discovery may occur only for “good cause” – Court has discretion to impose cost-shifting or Court has discretion to impose cost-shifting or

other conditionsother conditions

• Accessible electronically stored information Accessible electronically stored information subject to normal rules of productionsubject to normal rules of production

Zubulake v. UBS Warburg LLC, Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) 217 F.R.D. 309 (S.D.N.Y. 2003)

• Defendant company produced 100 Defendant company produced 100 printed pages of emailsprinted pages of emails

• Plaintiff presented evidence of Plaintiff presented evidence of additional emails on backup tapesadditional emails on backup tapes

• Defendant objected arguing excessive Defendant objected arguing excessive costcost

• Court ruled that data maintained in Court ruled that data maintained in format not reasonably accessible - format not reasonably accessible - apply 7 part testapply 7 part test

Not Reasonably Accessible –Not Reasonably Accessible –7-part test7-part test

• Request tailored to discover relevant dataRequest tailored to discover relevant data

• Availability of such data from other sourcesAvailability of such data from other sources

• Total cost of production relative to amount in Total cost of production relative to amount in controversy controversy

• Cost of production relative to resources Cost of production relative to resources available to each partyavailable to each party

• Relative availability & incentive for each party Relative availability & incentive for each party to control its own coststo control its own costs

• Importance of issues at stakeImportance of issues at stake

• Relative benefits to the parties in obtaining Relative benefits to the parties in obtaining datadata

Amended Rule 26(b)(2)(B)Amended Rule 26(b)(2)(B)• Provides that if electronically stored information Provides that if electronically stored information

“is not reasonably available because of undue “is not reasonably available because of undue burden or cost,” discovery is available only for burden or cost,” discovery is available only for “good cause” and based on considerations “good cause” and based on considerations identified at Rule 26(b)(2)(C)identified at Rule 26(b)(2)(C)– Discovery sought is unreasonably cumulative or Discovery sought is unreasonably cumulative or

duplicative – or is obtainable from more convenient duplicative – or is obtainable from more convenient sourcesource

– Burden and expense outweighs likely benefit, taking Burden and expense outweighs likely benefit, taking into account the needs of the case, the amount in into account the needs of the case, the amount in controversy, the parties’ resources, the importance of controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. of the proposed discovery in resolving the issues.

The Committee Notes from the The Committee Notes from the 2006 Amendments to the 2006 Amendments to the Federal Rules explain as Federal Rules explain as follows the reason for this two-follows the reason for this two-tiered approachtiered approach

The volume of – and the ability to search – much The volume of – and the ability to search – much electronically stored information means that in electronically stored information means that in many cases the responding party will be able to many cases the responding party will be able to produce information from reasonably accessible produce information from reasonably accessible sources that will fully satisfy the parties’ discovery sources that will fully satisfy the parties’ discovery needs. In many circumstances the requesting needs. In many circumstances the requesting party should obtain and evaluate the information party should obtain and evaluate the information from such sources before insisting that the from such sources before insisting that the responding party search and produce information responding party search and produce information contained on sources that are not reasonably contained on sources that are not reasonably accessible. accessible.

4. No New Duty Imposed to 4. No New Duty Imposed to Preserve Data/Safe Harbor Preserve Data/Safe Harbor

RuleRule• Amended Federal Rules do not create any special duty Amended Federal Rules do not create any special duty

to preserve electronically stored informationto preserve electronically stored information• What and how to preserve information left to individual What and how to preserve information left to individual

parties to decideparties to decide– Subject to document retention laws or regulations applicable to Subject to document retention laws or regulations applicable to

particular industries or types of informationparticular industries or types of information– Also subject to common law duty to impose “litigation hold” in Also subject to common law duty to impose “litigation hold” in

the event of litigation (or reasonably anticipated litigation) to the event of litigation (or reasonably anticipated litigation) to avoid “spoliation” problemavoid “spoliation” problem

– Must decide which type of email deletion and archival policy Must decide which type of email deletion and archival policy system best serve its needssystem best serve its needs

– The more information stored, the greater the volume of The more information stored, the greater the volume of information to be searched and restoredinformation to be searched and restored

New Rule 37(f) provides as New Rule 37(f) provides as follows:follows:

• Absent exceptional circumstances, a Absent exceptional circumstances, a court may not impose sanctions court may not impose sanctions under these rules on a party for under these rules on a party for failing to provide electronically failing to provide electronically stored information lost as a result of stored information lost as a result of the routine, good-faith operation of the routine, good-faith operation of an electronic information system.an electronic information system.

5. “Form” of Production5. “Form” of Production

• Amended Rule 34 permits requesting Amended Rule 34 permits requesting party to specify form - producing party party to specify form - producing party may objectmay object

• Absent Agreement – Default to Rule 34Absent Agreement – Default to Rule 34– Electronically produced “in a form or Electronically produced “in a form or

forms in which is it ordinarily maintained, forms in which is it ordinarily maintained, or in a form or forms that are reasonably or in a form or forms that are reasonably usable.”usable.”

– Need not produce the information in more Need not produce the information in more than one formthan one form

6. Answering Interrogatories 6. Answering Interrogatories with Electronically Stored with Electronically Stored

InformationInformation• Rule 33(d) appliesRule 33(d) applies

– Available when cost to derive answer to Available when cost to derive answer to interrogatory from records is interrogatory from records is substantially equal for both partiessubstantially equal for both parties

– Responding party may require Responding party may require requesting party to analyze records in requesting party to analyze records in lieu of providing written answer to lieu of providing written answer to interrogatoryinterrogatory

– Danger regarding electronic information Danger regarding electronic information – difficult to address issues of security, – difficult to address issues of security, confidentiality and privilegeconfidentiality and privilege

7. PRIVILEGE SCREENING7. PRIVILEGE SCREENING – – Inadvertent Production of Inadvertent Production of

Privileged Documents Privileged Documents • Amended Rules 16(b) and 26(f) encourage Amended Rules 16(b) and 26(f) encourage

parties to reach agreements for asserting parties to reach agreements for asserting claims of privilege or work product with claims of privilege or work product with respect to inadvertently produced discovery respect to inadvertently produced discovery materialsmaterials

• Rule 26(b)(5) provides that inadvertent Rule 26(b)(5) provides that inadvertent disclosure of materials later claimed privileged disclosure of materials later claimed privileged – receiving party must “return, sequester, or – receiving party must “return, sequester, or destroy the specified information” pending destroy the specified information” pending resolution of privilege claimresolution of privilege claim

• Amended rules do not provide guidance on Amended rules do not provide guidance on how courts should resolve claims of privilegehow courts should resolve claims of privilege

8. Discovery of Electronically 8. Discovery of Electronically Stored Information from Non-Stored Information from Non-

PartiesParties• Rule 45 has been revised to specify Rule 45 has been revised to specify

that non-parties may be directed to that non-parties may be directed to produce electronically stored produce electronically stored informationinformation

• Rule 45(c) specifies that requesting Rule 45(c) specifies that requesting party shall take reasonable steps to party shall take reasonable steps to avoid imposing undue burden or avoid imposing undue burden or expense on person subject to subpoenaexpense on person subject to subpoena

Some Cases Applying the Some Cases Applying the Amended Federal RulesAmended Federal Rules

• Cenveo Corp. v. Slater, Cenveo Corp. v. Slater, 2007 WL 442387 (E.D. 2007 WL 442387 (E.D. Pa., Jan. 31, 2007) Pa., Jan. 31, 2007) – Plaintiff alleged former employees used its Plaintiff alleged former employees used its

computerized confidential information and trade computerized confidential information and trade secrets to divert business to competitor.secrets to divert business to competitor.

– Court approved discovery plan: Court approved discovery plan: • (a) plaintiff’s data recovery expert will produce digital image (a) plaintiff’s data recovery expert will produce digital image

of all defendants’ computers;of all defendants’ computers;• (b) expert will provide both parties report describing (b) expert will provide both parties report describing

computers inspected and steps taken to create digital image; computers inspected and steps taken to create digital image; • (c) expert will recover all documents from digital image and (c) expert will recover all documents from digital image and

provide them to defendants; provide them to defendants; • (d) defendants review materials for privilege and (d) defendants review materials for privilege and

responsiveness; responsiveness; • (e) defendants will produce all non-privileged responsive (e) defendants will produce all non-privileged responsive

documents and a privilege log documents and a privilege log

•Scotts Co., Inc. v. Liberty Mutual Ins. Co.Scotts Co., Inc. v. Liberty Mutual Ins. Co., 2007 WL , 2007 WL 1723509 (S.D. Ohio, June 12, 2007)1723509 (S.D. Ohio, June 12, 2007)

–Court denied same type of discovery plan approved in Cenveo Court denied same type of discovery plan approved in Cenveo on the basis that the plaintiff had not established the on the basis that the plaintiff had not established the information being sought was within the usual scope of information being sought was within the usual scope of discovery or that the responding party had not already discovery or that the responding party had not already produced all responsive information:produced all responsive information:

[W]ithout a qualifying reason, plaintiff is no more entitled to [W]ithout a qualifying reason, plaintiff is no more entitled to access to defendant’s electronic information storage systems access to defendant’s electronic information storage systems than to defendant’s warehouses storing paper documents. than to defendant’s warehouses storing paper documents.

* * * ** * * *This court is therefore loathe [sic] to sanction intrusive This court is therefore loathe [sic] to sanction intrusive examination of an opponent’s computer as a matter of course, examination of an opponent’s computer as a matter of course, or on the mere suspicion that the opponent may be withholding or on the mere suspicion that the opponent may be withholding discoverable information. Such conduct is always a possibility discoverable information. Such conduct is always a possibility in any case, but the courts have not allowed the requesting in any case, but the courts have not allowed the requesting party to intrude upon the premises of the responding party just party to intrude upon the premises of the responding party just to address the bare possibility of discovery misconduct. to address the bare possibility of discovery misconduct. –Id. at 2.Id. at 2.

• In re Genetically Modified Rice In re Genetically Modified Rice LitigationLitigation, 2007 WL 1655757 (E.D. Mo., , 2007 WL 1655757 (E.D. Mo., June 5, 2007) June 5, 2007)

– This is an agreed upon order identifying This is an agreed upon order identifying steps the parties shall take to preserve steps the parties shall take to preserve documents, electronically stored documents, electronically stored information and tangible objects (i.e., information and tangible objects (i.e., modified rice) that is the subject of modified rice) that is the subject of litigation.litigation.

• Disability Rights Council of Greater Washington Disability Rights Council of Greater Washington v. Washington Metropolitan Transit Authorityv. Washington Metropolitan Transit Authority, , 2007 WL 1585452 (D.D.C, June 1, 2007) 2007 WL 1585452 (D.D.C, June 1, 2007) – Defendant failed to place a “litigation hold” on Defendant failed to place a “litigation hold” on

relevant employee emails – court ordered defendant relevant employee emails – court ordered defendant to restore back up tapes even though they were not to restore back up tapes even though they were not reasonably accessible:reasonably accessible:

While the newly amended Federal Rules of Civil Procedure While the newly amended Federal Rules of Civil Procedure initially relieve a party from producing electronically stored initially relieve a party from producing electronically stored information that is not reasonably accessible because of information that is not reasonably accessible because of undue burden and cost, I am anything but certain that I undue burden and cost, I am anything but certain that I should permit a party who has failed to preserve accessible should permit a party who has failed to preserve accessible information without cause to then complain about the information without cause to then complain about the inaccessibility of the only electronically stored information inaccessibility of the only electronically stored information that remains. It reminds me too much of Leo Kosten’s that remains. It reminds me too much of Leo Kosten’s definition of chutzpah: “that quality enshrined in a man, definition of chutzpah: “that quality enshrined in a man, who, having killed his mother and his father, throws himself who, having killed his mother and his father, throws himself on the mercy of the court because he is an orphan.”on the mercy of the court because he is an orphan.”

Id. Id. at 8. at 8.

• Krause v. United StatesKrause v. United States, 2007 WL 1597937 , 2007 WL 1597937 (Bkrtcy. D. Kan., June 4, 2007) (Bkrtcy. D. Kan., June 4, 2007) – Court granted Trustee summary judgment Court granted Trustee summary judgment

against debtor due to debtor’s deliberate against debtor due to debtor’s deliberate spoliation of electronically stored information:spoliation of electronically stored information:

So was Krause obligated to preserve each and every So was Krause obligated to preserve each and every e-mail or electronic document he generated or e-mail or electronic document he generated or existed on his hard drive? Not necessarily. He was, existed on his hard drive? Not necessarily. He was, however, “under a duty to preserve what [he] knows, however, “under a duty to preserve what [he] knows, or reasonably should know, is relevant in the action, or reasonably should know, is relevant in the action, is reasonably calculated to lead to the discovery of is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be admissible evidence, is reasonably likely to be requested during discovery and/or is the subject to a requested during discovery and/or is the subject to a pending discovery request.”pending discovery request.”

Id.Id. at 19, quoting at 19, quoting Zubulake v. UBS Warburg, LLC, Zubulake v. UBS Warburg, LLC, 220 220 F.R.D. 212, 217 (S.D.N.Y. 2003) F.R.D. 212, 217 (S.D.N.Y. 2003) (Zubulake IV)(Zubulake IV)..

Practical Tips for School Practical Tips for School DistrictsDistricts

• School District should confer with its School District should confer with its legal counsel about amended Federal legal counsel about amended Federal Rules and the District’s document Rules and the District’s document retention practices and policy – retention practices and policy –

PROMPTLY!PROMPTLY!

Practical Tips for School Practical Tips for School DistrictsDistricts

• Special focus regarding “litigation Special focus regarding “litigation hold” to preserve electronically hold” to preserve electronically stored information stored information

Practical Tips for School Practical Tips for School DistrictsDistricts

• School Districts should contact their School Districts should contact their solicitor early in process when solicitor early in process when litigation appears to be reasonably litigation appears to be reasonably likely – and engage IT personnel in likely – and engage IT personnel in the processthe process

Practical Tips for School Practical Tips for School DistrictsDistricts

• School Districts should adopt a policy School Districts should adopt a policy that – taking into account operating that – taking into account operating needs and budget – identifies rules needs and budget – identifies rules for (1) archiving of email backup for (1) archiving of email backup tapes, and (2) document retention.tapes, and (2) document retention.

Practical Tips for School Practical Tips for School DistrictsDistricts

• School Districts should identify the School Districts should identify the type and location of its electronically type and location of its electronically stored informationstored information

Practical Tips for School Practical Tips for School DistrictsDistricts

• School Districts should train ALL School Districts should train ALL employees on importance of employees on importance of complying with policies on complying with policies on acceptable computer and email use – acceptable computer and email use – do not say anything in an email you do not say anything in an email you would not want to be cross-examined would not want to be cross-examined onon

Practical Tips for School Practical Tips for School DistrictsDistricts

• School Districts need to ensure their School Districts need to ensure their IT systems are capable of addressing IT systems are capable of addressing the challenges of managing the challenges of managing electronically stored informationelectronically stored information

NEW PSBA POLICY 800NEW PSBA POLICY 800

On Records Management and On Records Management and Document RetentionDocument Retention