The Essentials of E-Discovery

Discovery Solutions and Labor and Employment Groups

WebinarMay 7, 2009

12:00 to 1:00 p.m.

James P. Anelli, Esq.William B. Belt Jr., Esq.

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Today’s attorneys and some notes...

Welcome. With the high number of attendees, please note all lines have been muted for the event. Q&A can be posted at the right ofyour screen, but any questions (time permitting) will be addressed at the end of the event. If using Q&A – please send to both the host and the presenter. You can send direct questions (including request for copy of slides) to seminars@leclairryan.com with Essentials of E-Discovery Webinar in the subject for reply after the event.

Jim Anelli

Newark

Bill Belt

Richmond

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Usage

This webinar slide show provides general information and is not legal advice and should not be used or taken as legal advice for specific situations. You should consult legal counsel before taking any action or making any decisions concerning the matters in this show. This communication does not create an attorney-client relationship between LeClairRyan, A Professional Corporation, and the recipient.

Copyright 2009 LeClairRyan, A Professional Corporation. All rights reserved.

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At the end of the seminar, send an email to seminars@leclairryan.com if you need the HRCI certificate. It will be sent the following day after confirmation of attendance.

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Important for Virginia MCLE Credit

We have applied for 1.0 hours of Virginia MCLE credit for this program. When the course is approved, we will notify you with instructions on how to receive this credit.

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The Essentials of E-Discovery

Introduction to Discovery Solutions Practice

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Terminology

ESI – Electronically Stored Information Megabytes – a Paperback

• Emails, PDF’s Gigabytes – a Pickup Truck of Paper Backs

• Email “stores” like PST’s and OST’s and Terabytes – a Library Floor

• Servers and Backup Tapes

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Key Dates

2000 – Judge Scheindlin coins term “ESI” in BC Law Review Article.

2000 – Chair of the Advisory Committee lays out mission to create changes in rules for ESI.

October 2002 - Sedona Conference forms. May 2005 – Advisory Committee submits proposed changes to

Standing Committee on Rules of Practice November 2005 – Standing Committee approves Advisory

Committee’s proposed changes without amendment. April 2006 – United States Supreme Court approves changes

without amendment. December 1, 2006 – Effective Date for New Rules September 8, 2008 – FRE 502 passes House

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Why This Matters

Evidence is Electronic

• 95% of documents are electronic• Most never get printed

Electronic Evidence is Different

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Why Electronic Discovery is Different

Sheer volume of electronically stored information (ESI)• Newly stored electronic information grew at an

estimated 30% per year from 1999 to 2002 (per 2003 Berkeley study). Still growing.

• Typical 2 gigabyte (GB) user mailbox = about 17,000 emails & 6,000 attachments = about 50,000 – 100,000 pages

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Discovery is Different

ESI from 20 EmployeesPaper from 20 Employees

Data from back-up tapes (2 million pages)

Paper from “Cold Storage”75 boxes (about 175,000 pages)

Total – 5 million pagesTotal – 400,000 pages

Data from servers (databases, shared drives)(1 million pages)

Paper from each department: average about 10 boxes X 5 departments (about 125,000 pages)

2 gigs of emails from each hard drive plus electronic documents(1 - 2 million pages)

Paper from each individual: average about 2 boxes per witness (about 100,000 pages)

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It’s Qualitatively Different

Informal – email partial substitute for meetings & telephone. Can contain off-hand comments, half-jokes, and other statements lacking reflection

Dynamic – changes/deletes, often automatically• Email retention policies on Inbox: auto-delete after 90

days• VM auto-delete• Browser history• Backup tapes routinely recycled

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Difficult to “Find”

Many copies, which are scattered (and across different kinds of storage)

Related: hard to truly “delete” Related: often disorganized; ESI often in

myriad subjects in same “container”; often not in particular subject-based files, like paper

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Finding Email is Difficult “Enterprise” E-Mail Solutions

• Microsoft Outlook (Exchange Server) • Novell Groupwise; • Lotus Notes (IBM) (Domino Server) • Archiving systems (e.g. Enterprise Vault “KVS”,

EmailXTender, Zantaz, UMB) Other Locations:

• Hard Drives: Archives, Personal Folders, OST’s; • BlackBerries – devices and BlackBerry Enterprise

Server• Home Computers, ISP’s, Thumb Drives, Disks

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Electronic Documents Matter

• Microsoft Word, Excel, PowerPoint; PDFs• Stored locally or on network’s individual share;

&/or on network shared drive. • Some people organize their documents; others

don’t• SharePoint• E-Rooms• Thumb Drives, Disks, External Drives

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Other Types of Electronic Information Databases Document management and imaging systems

• E.g. Documentum (in pharmas.)• E.g. IBM’s FileNet (imaged contracts or human services case

management system) Some tendency for construction contractors to image their

materials on large projects• E.g. Microsoft SharePoint

Browser history, cookies, cache• Employment cases (allegedly hostile work environment)

VM• Sometimes in email (.wav files, “unified messaging”)

Instant messaging Video (YouTube)

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ESI Special Cases

Backup tapes• Usually, not always, for disaster recovery (instead of

archival)• Often run nightly, usually overwritten on a schedule• Generally not searchable by text• Index Engines• May have to restore entire email database to restore a

single email– vendors– Backup tapes for documents (on file servers) better:

identify user, path, & filename

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More ESI Special Cases

Forensic Deep Dives• Deleted/fragmentary files

– Recovery bin– File allocation table entry deleted but file still whole– Partially overwritten (fragments)

• Will need forensic recovery

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The Rules

This matters because courts say it matters

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FRCP E-Discovery Practice

Rules 16 and 26(f)• Meet and Confer at least 21 days before Rule

16(b) scheduling conf. Rule 26(f)

Initial Disclosures & Early Meeting of Parties• Preservation • Production format• Clawbacks

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Preservation

“Preservation”: duty to preserve relevant evidence arises when a party should have known that the evidence may be relevant to future litigation. Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 435 (2d Cir. 2001).

– Defendant has notice of foreseeable litigation at time of complaint and sometimes earlier

– Plaintiff foresees litigation well before service of complaint– Preservation (“litigation hold”) notice

• To whom (besides IT)? Who are custodians?• Preserve what?• Stop overwriting backup tapes?• Any particularly ephemeral ESI? VM?? Employee deleting

email/files of work computer?

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Initial Status Report to the Court

• ESI added to list of initial disclosures that parties must provide to other party w/o waiting for discovery request, under Rule 26(a)(1)(B) “a copy of, or description by category and location of … ESI …that the disclosing party may use to support its claims or defenses”

• Pretrial scheduling order may include “provisions for disclosure or discovery of [ESI]” and may include any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation material after production”(Rule 16(b))

– W/i 90 days after defendant’s appearance & w/i 120 days after service of complaint

– Note: 30(b)(6) witness might be senior IT representative

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Extent of Production – Undue Burden• “Undue burden”: “A party need not provide discovery of [ESI] from

sources that the party identifies as not reasonably accessible because of undue burden or cost….If [such] showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause … The court may specify conditions for the discovery.’ Rule 26(b)(2)(B)

– “Good cause” to order production of inaccessible information: Advisory Committee factors: “(1) the specificity of the discovery request; (2) the quantity of information available for other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of the further information; (6) the importance of the issues at stake in the litigation; and (7) the parties’ resources.”

• Re parties resources: note “deep pocket” defendants

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Cost Shifting

Extent of Production – Rules 26(b)(2)(B) and 45(d)(1)(D)• Cost shifting: case law factors: extent to which request is

specifically tailored to discover relevant information; the availability of such info from other sources; the total cost of production, compared to the amount in controversy; total cost of production, compared to the resources available to each party; relative ability of party to control costs and its incentive to do so; importance of the issues at stake in the litigation; relative benefits to the parties of obtaining the information. Zubulake v. UBS Warburg, 217 F.R.D. 309 (SDNY 2003) (Zubulake I).

– Plaintiff (individual) pays 25% of $166K tape restoring cost. Zubulake, 216 FRD 280 (SDNY 2003)(Zubulake II)

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Production Format - Critical

Form of Production –Rules 33, 34, & 45• “Form of production” Rule 34(b).. “The [document] request

may specify the form or forms in which [ESI] is to be produced. …[Objections shall] include [any] objection to the requested form or forms … If objection is made … -- or if no form was specified in the [document request – the responding party must state the form or forms it intends to use. … Unless the parties otherwise agree, or the court otherwise orders: …(ii) if a [document] request does not specify the form or forms…, a responding party must produce … in a form or forms in which it is ordinarily maintained or … that are reasonably usable; and (ii) a party need not produce the same [ESI] in more than one form.”

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Legal Standard for Productions

“Reasonably useable” means can’t be more difficult or burdensome for requesting party. Committee Note.

TIFF’s, Text and Designated Fields• Image file format commonly used in major lit support

software (Concordance, Summation)• Searchable Text• Designated metadata fields

OR:

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Natives

OR: Leave in “Native” format– File format as producing party used it, e.g. Word (.doc), Excel

(.xls), Exchange email (basically .msg), etc.– Usually searchable– Includes all/most metadata; though query what % is important– Easier to alter w/o detection, absent hashing. Workarounds for

Bates stamping; really none yet for redacting; Suggested compromise:

– TIFF plus text of emails and other searchable documents)– Natives of spreadsheets, Word, PowerPoints, Wav, Video (on

request)

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“Protection” of Privileged Information

“Clawback” agreement: stip that production doesn’t mean privilege waiver; and if producing party identifies documents inadvertently produced, responding party should return them.

“Quick peek”: stip that receiving party gets to look at documents before privilege review and production, and to designate documents believed responsive.

Problems:• Opposing counsel learns what they shouldn’t; can’t unring this bell• Third parties (e.g. in related cases) will be able to use material, despite

clawback • Doesn’t modify underlying privilege law of how long producing party has

to realize error, how wide waiver is.• Ethical duty to preserve client secrets

Similar “protections” for subpoenaed third parties under Rule 45(d)(2)(B)

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FRCP: Sanctions

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FRCP: Sanctions

• Sanctions can be severe; e.g adverse inference jury instruction; i.e. that the jury may infer that the lost ESI would have been unfavorable to the sanctioned party. (Zubulake)

• Sanctions can be on counsel: failure to oversee client, who (even as an apparent power user) did not realize there were parts of the file server other than his network share. (Phoenix Four v. Strategic Resources Corp., 2006 U.S. Dist. Lexis 32211 (SDNY 2006))

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FRCP: Sanctions

Rule 37(f)’s shallow “safe harbor”: “Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide [ESI] lost as a result of the routine, good faith operation of an electronic information system.”

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FRCP: Sanctions

“absent exceptional circumstances”• unclear; extreme prejudice?

“sanctions under these rules”• court could still order additional depositions, other

discovery to make up for lost ESI; not “sanctions” “on a party”

• note absence of protection by this rule on third-parties

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FRCP: Sanctions

“[ESI] lost as a result of the routine, good-faith operation”• Committee Notes cite as factors: Steps taken to implement

litigation hold; accessibility of system; whether party should have known of loss; and whether unavailable from any other source.

• High-value case: set aside backup tape, forensic copy, etc.?– Set aside all backup tapes??

• “Whether good faith would call for steps to prevent the loss of information on sources that the party believes are not reasonably accessible under Rule 26(b)(2) depends on the circumstances of each case. One factor is whether the party reasonably believes that the information on such sources is likely to be discoverable and not available from reasonably accessible sources.”Committee Note on Rule 37(f).

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FRCP: I just got a new case: Collection

Self-collection vs. by client IT vs. by lit support vendor• Users didn’t know of server partition to which they didn’t

have access; drive mapping on that PC not configured to map to partition. 25GB of data discovered late. $10K sanctions against them and counsel. Phoenix Four v. Strategic Resources Corp., 2006 U.S. Dist. Lexis 32211 (SDNY 2006)

• IT: how will they come across as witnesses?• Lit support vendor: problem of cost in lesser cases

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FRCP: I just got a new case (con’t):Collection

Forensic collection Costly. Consider it when important files may

be at least partially overwritten or where tampering with evidence a possibility

Can help show good faith if concerned about possibly having spoliated evidence

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FRCP: I just got a new case:Production

Examples of native file formats (and metadata)• Word

– Last “author”, last saved, create date, template, etc. Not usually very probative.

– Tracked changes, comments• Excel

– Word kinds of metadata, plus …– Formulas, hidden rows/columns

• Good case for native production or review: Lotus Notes used as document management system

– In re Telxon Corp. Sec. Litig., 2004 U.S. Dist. LEXIS 27296 (N.D. Ohio 7/16/2004). Tracked real author, date modified, types of documents; links to other documents.

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Team Coordination

Client – General Counsel and IT

Electronic Discovery VendorsOutside Trial and Electronic

Discovery Counsel

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Make Use of Excellent Resources

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E-Discovery Tools

ILTA 2008 Technology Survey (tool used in last 12 mos.)

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Example of native review tool:kCura Relativity

www.kCura.com

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E-Discovery Readiness

Goals• Prevent judgments and settlements that are higher than

necessary because of the misunderstanding of electronic evidence

• Control spending on e-discovery costs (service bureaus; contract attorneys and outside counsel reviewing hundreds of thousands of pages of email)

• Control time you and IT must spend on e-discovery

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E-Discovery Readiness:Medium Run

Catalog and understand IT systems from which most common e-discovery ESI comes. Helps when you’re short of time • E.g. leading up to FRCP 26(f) meet-and-

confers• E.g. new document request received• E.g. preparing to defend Rule 30(b)(6) IT

witness

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E-Discovery Readiness:Medium Run

Lawyers should make friends with IT well in advance• Very different cultures• Both concerned with fire-fighting, but very different kinds of

fires• Many litigators don’t understand difficulty of running an

enterprise• IT doesn’t always understand need to support litigation; still

new• Lawyers should ask (nicely) to see network diagrams, data

centers, understand architecture• IT should learn more about e-discovery obligations

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E-Discovery Readiness:Long Run

Topics to focus on include … Retention policies

• Email– Go-forward email– How to apply retention on 100+ emails a day on different subjects?

• journal email?• What to do with existing e-mail

– What is typical amount of existing email people have?– Litigation holds: How much anticipated litigation? Specific to particular

business units?– Manual review of existing email vs. Auto-categorization??

Backup tapes• Just for disaster recovery, not archiving• Index Engines for review of old tapes

Problems of VM, video.

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E-Discovery Readiness:Long Run

Possible partial solution: Increasing centralization of email & documents• Buy enough server storage that you can eliminate

PSTs and also force saves to a network drive (not to local C: drive). Saves money on collection costs.

• Systems to do Lexis-like searches across multiple mailboxes

– E.g. Clearwell Intelligence?• System to put litigation holds on individual emails and

documents• Email retention folder-by-folder

– Exchange 2007 – has some basic retention capabilities

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E-Discovery Readiness:Long Run

Consider requiring users to have email and document structure that follows standardized structure by subject. Note big cultural change.

Possible partial solution: Document management systems• Documentum, IBM/FileNet, Interwoven• Enterprise-wide organization, by matter/project; granular

security; searchable• Advantage: One source for documents• Advantage: fewer documents to process; saves $• Advantage: Can put individual emails in; though not a

substitute for email server or enterprise email archive• Advantage: can be attached to RM system to delete

documents after retention period has run

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Resources

The Sedona Conference working papers; see www.TheSedonaConference.com

BNA’s Electronic Discovery Practice Under the Federal Rules

Michael Arkfeld, Electronic Discovery and Evidence

www.EDRM.net http://www.Law.com/jsp/LegalTechnology/eDiscov

eryRoadmap.jsp

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The Essentials of E-Discovery

If you would like a copy of the PowerPoint or need a certificate of attendance for HRCI credit, please send an email to seminars@leclairryan.com.

Any questions not posted during the webinar can also be emailed to this address. Thank you.

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The Essentials of E-Discovery

Questions

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Thank You