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E-Discovery: Rules, Principles & Practices

Consultants & authors of

* Linda Volonino

* Ian J. Redpath

Learning the Language

Federal Rules of Civil Procedure (FRCP): amended in Dec. 2006 to specifically involve e-discovery in civil cases.

Figure 1

Figure 2

E-discovery (electronic discovery): The process of identifying, collecting, reviewing, & producing electronically stored information (ESI) that has been requested by regulators or litigators for use in a legal proceeding, audit, or investigation.

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The e-discovery rules rocked the legal and corporate landscape by

making ESI discoverable. Government investigations of fraud or

misconduct invariably dig into e-mail, texting, tweets,

smartphones, social networks, GPSs, blog posts, documents,

memos, appointment calendars……

Figure 3 e-Discovery Processes

With e-discovery playing the key role in corporate litigation, data

retention policies are needed as part of the duty to preserve to ensure

the reasonable retention, safe storage, and accurate retrieval of ESI.

Figure 4 Timeline showing when the duty to preserve attaches

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*Time minus zero: Duty to preserve. You need to take affirmative action--

active and timely measures--to prevent the destruction or

alteration of what might be relevant e-evidence. This duty

generally begins when a legal action is reasonably anticipated.

That’s a tough duty to comply with. Clairvoyance would be

helpful since the scope of what needs to be preserved and as of

when are not clear.

Accept the fact that it’s difficult even under the best of

circumstances to know when a duty to preserve has triggered or

what to preserve. Regardless, the courts consistently require

counsel to be aware of these issues, and to have guided their

clients appropriately in regard to the duty to preserve ESI.

*Day 1: Complaint served. You’re on solid ground here since there’s no

mistaking that a lawsuit is in play. When the lawsuit is filed and

complaint is served on the defendant, it starts a clock that counts

off days, although sometimes you need to count backwards.

*By Day 99: Meet and Confer conference. The meet and confer conference is

also a duty. Litigants must participate in a meet and confer

conference to negotiate an e-discovery plan. The list of topics to

negotiate include the following:

* Any issues relating to preserving discoverable ESI.

* Any issues relating to search, disclosure, or discovery of ESI.

* Format in which ESI should be produced.

* Scope of ESI holdings

* Estimated costs in terms of difficulty, risk, time, and money

of producing the ESI.

Agreements made at the meet and confer and that are listed in

Form 35 need to be conducted. Form 35 was amended by the new

FRCP to include a report to the court about any agreements that

the parties have reached.

*By Day 120: Scheduling conference. A scheduling conference is a hearing

attended by the prosecuting attorneys, defendants, defendant’s

attorneys, and the judge to schedule certain dates and deadlines

for the case. This event is generally the first time the litigants and

their attorneys come before the Court.

You have no choice except to be ready to move forward with e-

discovery at the start of a case.

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Know the Rules You Must Play By

Throughout the entire e-discovery process you should be considering

how ESI will affect the outcome of your case. Just because you got it

doesn’t mean you can use it. You may be right but can you prove it?

What is admissible in court is determined under the rules of evidence.

In federal cases that is the FRE. Each state has its own rules of

evidence. In most situations they are similar to the federal rules but

not exact. It is important that the attorney is familiar with the

applicable evidentiary rules. The case can be won or lost here.

In Federal Court, all federal rules apply to a lawsuit. Thus in any case, all the

FRCP must be considered and reviewed.

Table 4-1 Comparison of Applicable Rules for e-discovery

Type of

Case

Apply

FRCP

Apply

F.R.

Crim.

P.

Apply

State

Rules of

Procedure

Apply Any

Local

Rules of

Procedure

Apply

FRE

Apply

State

Rules of

Evidence

Federal Civil

Yes No No Yes Yes No

Federal Criminal

Reference Only

Yes No Yes Yes No

State Civil

Reference Only

No Yes Yes No Yes

State Criminal

Reference Only

No Yes Yes No Yes

Deciphering the FRCP

The FRCP set out a path to manage a lawsuit from the filing of a

complaint to its conclusion. Civil cases are commenced by the filing

of a complaint by a Plaintiff. The party sued is the Defendant. The

failure to properly follow the FRCP can result in everything from

sanctions to actually losing the case. Don't rely on the forgiveness of

a judge, strict adherence to the rules is always your best policy.

Think of your relationship with the FRCP like that of a parent/child.

You may not agree with a rule, but follow it because it says so.

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FRCP 1

The first rule of the FRCP is often overlooked because of its simplicity. But

it sets forth a clear statement of the purpose of the rules. They are “ to

secure the just, speedy and inexpensive determination of every action”.

When you stop laughing, remember this when considering establishing your

plan of discovery or possible cost shifting. Costs can be reduced by

applying best practices (Chapter 3) proper planning (Chapters 6 and 8) or

possible cost shifting approaches (Chapter 12).

FRCP 1 has been used successfully to force such things as more definite

pleadings (Gordon v Impulse Mktg., 2007) and the format of production

(Ayers v SGS Control Services, 2006). It can always be used in cost shifting

arguments.

FRCP 16 and 26

The Courts manage e-discovery through Rule 16. This rule is coordinated

with the “meet and confer” of Rule 26. The Court’s Scheduling Order sets

the time to complete discovery and may provide for the following.

* limits on the extent of discovery

* provisions on disclosure or discovery of ESI

* any agreements of the parties asserting claims of privilege or protection

after production such as clawback or quick peek agreements

* the dates of future conferences or the trial

* any other matter appropriate to the court to include.

Being unprepared or failing to effectively participate in a conference puts

you at risk of being sanctioned. Judges have great latitude in sanctions

including the costs and expenses incurred by the other side as a result of

your actions. These cost penalties may be in addition to the sanctions

related to Rule 37. It should be remembered that the ultimate sanction could

be losing the case.

The bottom line is that there is a 120-day window for the lawyers to learn

the client’s ESI issues and the IT professionals to learn about e-discovery.

It is said that knowing is half the battle. In e-discovery knowing Rule 26

may be most of the war. Rule 26 is essential in discovering a party’s ESI.

One of the most important aspects of discovery is the so called "meet and

confer". Rule 26(f) requires the parties to have a conference at least 21 days

before the Scheduling Conference. This can be a make it or break it for your

case. At this "meet and confer" all issues in discovery should be addressed.

You must be prepared and come with a plan.

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If you are a party to litigation, Rule 26(a) requires that you either

provide a copy or a categorical description and location of any ESI

that may be used to support your claims or defenses. This is a

mandate without the need for discovery. This should be viewed as a

positive as the other side must also do the same thing and that should

help reduce the costs. The disclosure must be in writing and made at

or within 14 days of the “meet and confer”. Don’t panic, you don’t

need to know everything so soon. Just disclose what you know then

and tell them the rest later. Disclosure is an on-going requirement. All

pre-trial disclosures are due within 30 days of the trial date and the

other party has 14 days to object. Failure to object could result in a

waiver of objections for trial purposes.

Generally under Rule 26(b)(1) you can discover any nonprivileged

matter relevant to your claim or defense. There some limitations. If

you can demonstrate that the ESI is "not reasonably accessible

because of undue burden or cost" the ESI may not have to be

produced. The court may still order it produces if, for example, the

benefit from production outweighs the cost. The court may consider

cost shifting.

Tip: You may be able to withhold ESI if it is privileged or protected. It is an important

aspect of e-discovery.

You must be familiar with the rules applicable to properly protecting

that ESI. The large volume of ESI makes it difficult to avoid an

inadvertent disclosure of privileged or protected ESI. There are ways

to undo what you just did. You may be able to get it back with no

harm, no foul.

FRCP 33 and 34

A party may be requested to answer written questions,

interrogatories" from the other party. Rule 33(d) allows the

responding party to respond by specifying the records to be reviewed,

there location and give a reasonable opportunity to examine, audit and

make copies of the records. This applies only if the answer to the

question may be determined from the records and the burden of

getting the answer would be the same for either party.

Rule 34(b) allows a party to request the form in which ESI is to be

produced. A party may also "inspect, copy, test or sample the other

parties' ESI. If you are the responding party you may object to the

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requested form and tell them the form you intend to use. You must

"translate" ESI into a "reasonably useable form. If there is no form

requested then:

* in the form in which the ESI is ordinarily maintained, or

* in a form that is reasonably useable.

Assessing your position and strengths

If you’re a party to a lawsuit, here are the logical steps to follow.

1. Determine what you must legally prove to win your case.

2. The IT and legal teams must meet to determine what ESI is essential to winning the case.

3. Establish what ESI you may have that the other party wants.

4. Figure out what ESI the other party has that you want.

5. Establish the form you want to get the ESI from the other party and what form you may want to give ESI to them.

6. Determine if there will be issues of privilege or protection and how to deal with it.

7. Consult the appropriate rules - state or federal and any local rule that may apply

8. Estimate the costs of e-discovery.

9. Prepare a plan of e-discovery, your roadmap and

10. Revise the plan as necessary going forward.

If you’re not a party, you may still be involved if you have ESI a

party wants. Non-party discovery is handled by subpoena in Rule 45.

There’s no meet and confer, but in most cases, you can negotiate with

the parties concerning the scope of the discovery or resort to

obtaining an Order of Protection. You will be entitled to your own

claims of privilege, protection and the "not reasonably accessible due

to undue burden or cost." Cost shifting is appropriate. Keep in mind

that failure to abide by the subpoena may result in contempt of court.

Defining Privilege and Privacy

Like any game, there are established rules and penalties for breaking

them. When litigation triggers, you’re in a high-stakes game.

Consider e-discovery the Super Bowl of discovery controlled by

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FRCP and FRE and refereed by the Courts. In state cases, state rules

apply that may vary from the federal rules. General concepts apply to

both so we concentrate on federal rules.

You can envision the explosion in the number of servers and hard

drives of handhelds that retain a copy of e-mail messages that have

been cc’d to a lot of people who then forward it on and on. There’s no

scenario indicating a curbing of the exponential growth of business

and personal text messaging via iPhones, Blackberries, and social

networks. More e-mails are exchanged in one day than mail handled

by the United States Postal Service in a year.

Because of digital deluges, it’s not unusual to have hundreds of

thousands of documents that must be culled and reviewed for

potential confidential information or privileged communication.

Think of the e-mails you sent within the past day to a colleague or

associate. Determine the degree of formality you used. Did you

consider the possible impact your language may have if the e-mail

was produced in litigation? Probably not! Informality makes it harder

to scrub potential confidential information or privileged

communications.

Private and privacy are not the same. You only have to look at the

civil and criminal actions that arose out of the discovery of private

text messages of high profile people. Former Mayor of Detroit,

Kwame Kilpatrick and his Chief of Staff Christine Beatty exchanged

over 14,000 text messages, using City-owned devices, over a period

of time totaling four months. Did any City work get done? Their for-

your-eyes-only texts dealt with various issues involving the City,

including those contradicting the Mayor’s account of the dismissal of

the former police chief as well as their relationship. Graphically-

detailed texts between Kilpatrick and Beatty were evidence of lying

under oath.

Recognizing privileged communication

“I thought I could trust you?” Well, that trust can only go so far when

litigation starts. Only communications recognized as privileged

communications are not subject to e-discovery. The privilege is meant

to protect certain relationships as developed under common law.

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Duty to Make a Diligent Effort

Electronic discovery has been front and center in many recent high

profile cases from Merck, Phillip Morris, Adelphia, Arthur Anderson,

Martha Stewart and Enron. Once the case has been filed, both sides

begin the search for the smoking gun. The smoking gun may exist.

In Ernst v Merck & Co., Inc. e-mails showing that Merck scientists

had concerns over the drug were introduced in the case which resulted

in the plaintiff being awarded over $253million dollars. An e-mail

turned out to be crucial in the Zubalake decision. In most cases it is

nothing more than an episode of Indiana Jones and the search for the

smoking gun.

FRCP 26(a)(1) establishes an obligation on a party to provide a copy

or description by category and location of all documents, ESI and

tangible things in its possession and control that it may use to support

its claim. The scope of discovery is broad as long as what is sought is

relevant, even if not admissible in court.

FRCP 26(b)(2) permits you to withhold ESI that is not reasonably

accessible because of undue burden or cost. The FRCP Rule 26 "meet

and confer" initial obligation is on the party.

e-Discovery bottom line

Case law tells us that …. IT, legal, and internal audit departments need to cooperate on electronic records management & take a risk-based proactive approach to e-discovery.

Why? To meet the reasonableness standard.

Companies should take a risk-based approach to e-discovery policies and procedures; and then make decisions based on its risk assessment.

Tip: When you’re up to your neck in alligators, that’s not the time to start

thinking about draining the swamp.