Whos Afraid of E-Discovery? Cautionary Tales Every CIO and Every IT Person Need to Know to Survive...

Who’s Afraid of E-Discovery?Cautionary Tales Every CIO and Every IT

Person Need to Know to Survive into FY08 . . . and Beyond

IT Quarterly Forum GSA Central Office Auditorium

August 14, 2007Washington, D.C.

Jason R. Baron, Director of Litigation, NARAJonathan M. Redgrave, Partner, Redgrave Daley Ragan &

Wagner, LLPRachel Spector, Senior Attorney, Department of the Interior

Please see notes sections if necessary for more details on images and other non accessible items.

GSA IT Quarterly Forum -- Aug 2007 2

ITQF Panelists

Jason R. Baron (chair) Jason Baron serves as Director of Litigation for the National Archives

and Records Administration, and is a frequent lecturer and author on e-records and e-discovery topics. Between 1988 and 1999, Jason held successive positions as trial attorney and senior counsel in the Civil Division of the Justice Department, where he litigated cases involving White House e-mail. He serves as NARA’s representative to The Sedona Conference®, where he is Co-Chair of the Sedona Conference® Search and Retrieval Sciences Team and Editor-in-Chief of the Sedona Best Practices Commentary On the Use of Search and Information Retrieval Methods in E-Discovery. Jason also recently has co-authored a law review article entitled “Information Inflation: Can The Legal System Adapt?,” 13 RICH. J.L. & TECH. 10 (2007),http://law.richmond.edu/jolt/v13i3/article10.pdf. Mr. Baron serves on the Georgetown U. Law Center Advanced E-discovery Institute advisory board, is an Adjunct Professor at the U. of Maryland, and currently coordinates the NIST TREC Legal Track, a multi-year international research project on text retrieval methods.


ITQF Panelists (continued) Jonathan M. Redgrave

Jonathan Redgrave has been involved in litigation and complex litigation management for over 14 years. He served as one of the lead private counsel in several major tobacco lawsuits, including in a Minnesota state case, as well as in the case brought by the Justice Department, US v Philip Morris. Jonathan is a nationally and internationally recognized expert on electronic discovery and electronic information and records management issues. He was one of the original architects and currently serves as Chair of the Sedona Conference Working Group on Best Practices for Document Retention and Production. Jonathan previously was a partner at Jones Day, a Principal at Gray Plant Mooty, and law clerk to the Hon. Gary L. Crippen, Minnesota Court of Appeals. Currently, Jonathan serves as chair of Redgrave Daley Ragan & Wagner LLP.

Rachel SpectorRachel Spector is a Senior Attorney in the Division of General Law at the United States Department of the Interior, where she provides legal counsel to the Department in a variety of areas including administrative, appropriations, and information law. Rachel joined the Office of the Solicitor in 2003, after practicing law in the private sector for approximately ten years. Prior to assuming her current position in the Division of General Law, she served as the Assistant Solicitor for the Branch of Trust Reform and Litigation in the Division of Indian Affairs where she served as lead agency counsel in the Cobell litigation.


Overview

Intro remarks PANELIST ROUND 1: Cautionary tales PANELIST ROUND 2: Best practice recommendations

(or, Can’t lawyers and IT folks just learn to get along?)

Q & A (your turn)

[Note: The presentations given at the GSA IT Quarterly Forum reflected the speakers’ own views, not the official views of any government agency. The attached powerpoints represent a combined set of slides presented by all three panelists.]

The Statutory + Oversight Environment We Work In

FRA FOIA Privacy Act GPEA

GPRA E-Gov Act

ITRMA (Clinger-Cohen)

PDD-63 (Critical Infrastructure Protection)

OMB GAO IGs Congress

A New Legal Term of Art Under the Federal Rules of Civil Procedure:Electronically Stored Information or

“ESI”

“Electronically stored information”: -The wide variety of computer systems currently in use, and the rapidity of technological change, counsel against a limiting or precise definition of ESI…A common example [is] email … The rule … [is intended] to encompass future developments in computer technology. --Advisory Committee Notes to Rule 34(a), 2006 Amendments

Common Forms of ESIEmail with attachments (all kinds)

Text files, powerpoint, spreadsheets

Voice mail, instant and text messaging

Databases, proprietary applications

Internet, intranet, wikis, blogs, RSS feeds

(plus cache files, slack space data, cookies)

Data on PDAs, cellphones

Videoconferencing & webcasting

Metadata

Common Sources of ESI

Mainframes, network servers, local drives (including network activity logs)

DVDs, CD ROMs, floppy disks

Laptops

Backup tapes

External hard drives (e.g., flash, Zip, Jazz, ipods)

Third party storage

The Supreme Court on Record Retention“’Document retention policies,’ which are created in part to keep certain information from getting into the hands of others, including the Government, are common in business * * * It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.”--Arthur Andersen LLP v. U.S., 125 S. Ct. 2129 (May 31, 2005)

“Digital information lasts forever, or five years – whichever comes first”

--Jeff Rothenberg, senior computer scientist, RAND

(1999)

Round1 Cautionary Tales

Challenges in Litigation

Preserving evidence Retrieving and processing massive amounts of dataProviding support to help vindicate claims and defenses


Not a simple “off” switchEver-changing electronic recordsSelf-purging e-mail systemsDynamic databasesCollaborative work spacesRoutine recycling of back-up media“Easy Button” mentality


Preservation is not a cost-free operationPreservation is not a foolproof operationPreservation could be cripplingCommunicating those facts to the Court (Cobell; Jinks-Umstead v. England; Landmark Legal v. EPA; McPeek v. Ashcroft; Pueblo of Laguna; Renda Marine)

What Can Go Wrong?

Without a plan, everything…Typically, courts look at “spoliation” of evidence -- an assessment of the loss of relevant evidence and the identification of who, if anyone, should bear a consequence, as well as what that consequence should be.Monetary Sanctions (Prudential; Philip Morris)Exclusion of Evidence (Trigon; Philip Morris)Adverse Inference Instruction (Linnen; Zubulake; MOSAID; Morgan Stanley)Default Judgment (Metropolitan Opera; Keir)Contempt Sanctions (Landmark Legal v. EPA)

Anatomy of Failure

United Medical Supply Co. v.

United States2007 WL 1952680

(Fed. Cl. June 27, 2007)


Just the facts…

In 2001, Plaintiff, supplier to government medical treatment facilities (MTFs), filed (a) two adversarial proceedings against Defense Supply Center-Philadelphia (DSCP) and (b) a series of requests under the Freedom of Information Act.

In 2002, Dept. of Justice (DOJ) attorney (on behalf of DSCP) used faulty e-mail list to notify MTF personnel of the litigation and need to preserve relevant information. Response was requested but attorney never followed-up with non-respondents.

DOJ attorney sent two more e-mails (including request for response) using same faulty list; attorney again did not follow-up with non-respondents.

Result: Relevant information was destroyed because many MTFs claimed they received no “notice of the filing of the lawsuit until four to five years* after the filing of the adversary complaint…”

*emphasis in opinion; final MTF received notice of the lawsuit in August of 2006.


And there’s more… The Court found that the DOJ Attorney and

paralegal repeatedly misrepresented their actions and demonstrated an attitude perceived as cavalier. When asked about MTFs that had not been contacted,

primary case paralegal for the U.S. “assertedly replied, ‘[m]y bad.’”

Significant breakdowns in communication were found between DOJ, DSCP and MTFs particularly in regards to document retention and preservation.


And more… Document retention problems were found to be “far more extensive

than previously disclosed”: Boxes of relevant documents were not marked for preservation even

after the MTF received notification and thus were destroyed; Some destruction occurred after the Dec. 5, 2005 hearing on spoliation

(as late as May 2006); Palletized boxes of documents marked for preservation were destroyed; An MTF rep destroyed relevant documents when she misunderstood a

Justice Department attorney to suggest some documents were “useless”;

Many of the found documents should have been destroyed, had current policies been followed;

Documents continued to be found after repeated representations by U.S. attorney that all documents had been provided to plaintiff.

No steps were taken to communicate relevant case information and preservation notice to successor MTF representatives


Spoliation Question

Can you be sanction without a showing of bad faith?


“While defendant may be wrong in asserting that it acted in good faith, it most certainly is wrong in thinking that it can recklessly disregard its obligations to preserve evidence without legal consequence.”

YES!


Yes!!“Guided by logic and considerable and growing precedent, the court concludes that an injured party need not demonstrate bad faith in order for the court to impose, under its inherent authority, spoliation sanctions. . . . These objectives are hardly served if the court, in effect, is constrained to say to the injured party—“sorry about that, but there is nothing I can do, except to let you present your case, such as it remains.” Indeed, while some commentators have asserted otherwise, the history of the spoliation doctrine suggests that it was not designed solely to punish those who consciously destroy inculpatory documents, but also to address the manifest unfairness inherent in the loss of relevant evidence.”


Yes!!!

The court also used the amendments to Rule 37 as further evidence that bad faith is unnecessary for sanctions: “That the Advisory Committee would need to adopt a limited ‘good faith’ faith exception to the imposition of sanctions belies the notion such sanctions should be imposed only upon a more traditional finding of ‘bad faith.’”


Sanctions imposed

1. “In any trial in this matter, Defendant is prohibited from cross-examining plaintiff’s expert to the extent that he or she, seeking to overcome the spoliation that occurred herein, attempts to extrapolate the total amount of diversions that occurred with respect to the requirements contract in question.

2. Defendant shall also be precluded from introducing its own expert testimony …Defendant may examine plaintiff’s witnesses and produce its own expert testimony to the extent that the testimony relates solely to documents that are available to plaintiff.”

3. Defendant must reimburse plaintiff for any discovery-related costs, including attorney’s fees, incurred in pursuing the spoliation matter.


Anatomy of a Failure – Lessons Learned

No one – not even the United States government – is above “the duty…to ensure, through its agents, that documents relevant to a case are preserved.”

Have a reasonable, defensible and effective litigation hold program Update and enforce communication and compliance with

document retention and preservation policies Follow-up regarding preservation (litigation hold) notices

Lessons from Mom: Do your homework Tell the truth Never use the phrase “my bad” when responding to a

question in class (i.e., litigation)

The Original Email Case…

Armstrong v. EOP (1989)

The Crisis: Last minute TRO at end of Reagan Administration start of 7+ years of litigation

The Result: Injunctions, restoration of backups at huge expense, plus WH email archiving

Takeaways:

-- recognized importance of managing e-mail

-- WH email archiving with record tagging

-- importance of metadata

-- legacy issue of backup tapes

Public Citizen v Carlin (1998)

The Crisis: Threat of “no delete” rule applied government-wide while thousands of records schedules reviewed

The Result: GRS 20 upheld on appeal

Takeaway: GRS 20 & 24 now allow email and other forms of ESI to be deleted and/or recycled assuming recordkeeping obligations are otherwise met

Alexander v. FBI (2000)

The Crisis: Missing WH email due to technical issues with email archiving

The Result: Huge restoration project for EOP backup tapes + GAO investigation

Takeaway: QC measures a must

Landmark Legal Foundation v. EPA (2003)

The crisis: contempt & sanctions motion filed in FOIA lawsuit after erasure of backups and deletion of email occurred post-injunction to preserve documents

The result: motion granted

Takeaways: primacy of need for good communication channels between IT & legal


Preservation Order "Documents, data, and tangible things" is to be interpreted broadly

to include writings; records; files; correspondence; reports; memoranda; calendars; diaries; minutes; electronic messages; voicemail; E-mail; telephone message records or logs; computer and network activity logs; hard drives; backup data; removable computer storage media such as tapes, disks, and cards; printouts; document image files; Web pages; databases; spreadsheets; software; books; ledgers; journals; orders; invoices; bills; vouchers; checks; statements; worksheets; summaries; compilations; computations; charts; diagrams; graphic presentations; drawings; films; charts; digital or chemical process photographs; video; phonographic tape; or digital recordings or transcripts thereof; drafts; jottings; and notes. Information that serves to identify, locate, or link such material, such as file inventories, file folders, indices, and metadata, is also included in this definition. --Pueblo of Laguna v. U.S. 60 Fed. Cl. 133 (Fed. Cir. 2004).

Cobell v. Kempthorne1996- Present

Government has managed trust funds for individual Indians and tribes since early 20th Century.

Class action lawsuit brought by individual Indians seeking accounting of trust funds going back 100 years.


Cobell v. Kempthorne

E-mail

Print and file is standard (most agencies)

Recovering messages from back-up tapes is expensive and problematic

Electronic archiving of messages may also be expensive and problematic

Round2 Best Practices

Best practices at the E-records/E-discovery nexus

Definition of federal record under 44 USC 3301

…all books, papers, maps, photographs, machine readable materials, or other documentary materials, regardless of physical form or characteristics, made or received by an

agency of the United States Government under Federal law or in connection with the transaction of public business and

preserved or appropriate for preservation by that agency . . . as evidence of the organization, functions, policies,

decisions, procedures, operations or other activities of the Government or because of the informational value of data in

them. (Italics added.)

Foundational elements of recordkeeping in government

+ Agency file plans and agency records schedules+ Appraisal decisions signed off by Archivist on what constitute permanent records (eventually accessioned into NARA), and what constitute temporary records (stored by agencies during active use and then at offsite federal or other record centers for the duration of the retention period of the records) + Record schedules subject to public notice in Federal Register+ General Records Schedules for admin. recordsSee 44 USC 3303, 3303a(a), (d)


Lifespan of Federal Records

The definition of what constitutes a federal record (44 USC 3301) allows for tremendous flexibility in what is considered to be “record” material, spanning from ephemeral records (retained for hours/days) thru to short term temporary (weeks/months), long term temporary (years or decades) to permanent records (forever)

Problem: matching up the retention span of various e-records with the working life of information technology


Transitory Email Reg

NARA final regulations published in the Federal Register on February 21, 2006 (71 F.R. 8806), modifying 36 CFR 1234.24

Email records appropriate for preservation for less than 180 days may be managed on live email systems and allowed to be deleted as part of automatic processes, without a user further needing to print out or electronically archive.

Special legal or compliance obligations may require that additional preservation actions taken

Backup tapes

General Record Schedule 24, Item 4 treats backups as temporary records that may be recycled in the ordinary course of business

A legal hold may require IT staff taking a range of additional actions (e.g. from pulling one day’s worth of backups to shutting down recycling)


Hot topic: Metadata

What is it? Email header information (possibly hidden) Proprietary features of word processing (e.g. summary

fields) Embedded & shadow data Deleted keystrokes Tracking info Spreadsheet formulas

Format issues and metadata Metadata ethics: “inadvertent” production


Impact of Technology on E-Records Management: Snapshot 2007 A universe of proprietary products exists in the

marketplace: document management and RMAs DoD 5015.2 compliant products However, scalability issues exist Utopia is records mgmt without extra keystrokes Agencies must prepare to confront significant

front-end process issues when transitioning to electronic recordkeeping

Records schedule simplification is key

The Intersection of the Federal Records Act and E-Discovery

+ As a baseline, the FRA already requires appropriate preservation of all electronically stored information which falls within the federal record definition (44 USC 3301)+ Agencies must anticipate demands for preservation of evidence in litigation and compliance/oversight settings that go beyond baseline record retention requirements

What do the new Federal Rules mean for agency management of federal records?

+ Agencies will be confronting requests for initial disclosure of ESI on their electronic systems early on, including for how e-mail is stored, how backups are performed, how other networked applications and databases are preserved+ Federal ESI may be subject to production in particular requested formats (native, PDF, TIFF, etc.), with or without metadata + Important that key designated IT and RM personnel know scope of their agency’s holdings & retention of records under existing schedules, to serve as trusted reporters


Zubulake V: “What we’ve got here is a failure to communicate”


Rosetta Stone Approach


What’s an Agency to do? Best practices at the erecords/ediscovery nexus:

* Inventorying for the purpose of obtaining intellectual control over your Agency’s electronic systems (network applications, backups & legacy media)

* Understanding existing records schedules & retention periods (and updating & simplifying schedules in anticipation of transition to electronic recordkeeping)

* Consider appointing “Knowledge Counsel” in General Counsel and Solicitor offices to act as agents of change, working with CIOs, IT staff, and records officers

* Formulating explicit e-records guidance on what constitute records, including guidance on how legal holds will be implemented

* Incorporating records mgmt & e-discovery issues in end-user training


Additional E-discovery and RM Resources

Title 44 U.S. Code, Chaps 21, 29, 31, 33 36 C.F.R. Part 1234 E-Records Mgmt http://www.archives.gov/records-mgmt/ (comprehensive

records management website, with toolkit of best practice white papers, including on transitioning to enterprise electronic recordkeeping; also FAQs on many subjects, including scanning documents, instant messaging, wikis)

NARA free courses for IT staff and for lawyers DoD 5015.2 --

www.archives.gov/records-mgmt/resources www.thesedonaconference.org (Sedona Guidance and

Sedona Principles, 2d edition white papers, plus many other products)


Best Practices for E-Discovery at Department of the Interior

E-discovery teams:

Organized by bureau;Composed of one or more attorneys

familiar with the bureau, a bureau IT professional, and a records official.


Best Practices for E-Discovery at Department of the Interior

Leverage existing capabilities to meet e-discovery obligations;

Departmental Enterprise Architecture Repository (DEAR).


The Sedona Principles: Best Practices Recommendations & Principles for Addressing Electronic

Document Production (Second edition, June 2007)

The Sedona Guidelines: Best Practices Guidelines &

Commentary for Managing Information and Records in the Electronic Age

(Sept. 2005)


The Sedona Conference

What is it? A nonprofit 501(c)(3) research and educational

institute, dedicated to the advanced study of law and policy in the areas of antitrust, intellectual property, and complex litigation

Founded in 1997 by Richard Braman: Director (Lawyer, Entrepreneur)

Started as a new form of CLE: small, discussion group settings focused on dialogue not debate

Goal to eventually be a “think tank” Interim evolution to include “Working Groups”


The Sedona Conference Working Group on Best Practices for Electronic Document Retention and Production

Founded in 2002 First Sedona “Working Group”

No talking heads: aim is useable working papers Collaborative discussion, not debate Evolving, continuing, not static

Currently more than 600 members, participants and observers; includes representatives from in-house; outside counsel and e-discovery consultants. Observers include judges and people from other branches of government


The Sedona Principles First work product of working group Draft published in 2003 for comment; revised in

2004; first edition published in 2005; second edition published June 2007; annotated version published by Pike & Fisher

They are: Important background and roadmap of issues Presumptive guidance on e-discovery issues Flexible

They are not: Absolute statements of law Unchangeable


The Sedona Principles What is the impact of The Sedona Principles?

Cited by courts (e.g., Zubulake) Cited in the national and local rules process Cited in numerous articles addressing e-discovery Cited in briefs and submissions to courts Used as resource in numerous judicial and legal

education programs You need to be aware of the Principles and how they

may apply to your case.


The Sedona Principles - 2007

1. Electronically stored information is potentially discoverable under Fed. R. Civ. P. 34 or its state law equivalents. Organizations must properly preserve electronically stored information that can reasonably be anticipated to be relevant to litigation.



2. When balancing the cost, burden, and need for electronically stored information, courts and parties should apply the proportionality standard embodied in Fed. R. Civ. P. 26(b)(2)(C) and its state equivalents, which require consideration of the technological feasibility and realistic costs of preserving, retrieving, reviewing, and producing electronically stored information, as well as the nature of the litigation and the amount in controversy.



3. Parties should confer early in discovery regarding the preservation and production of electronically stored information when these matters are at issue in the litigation and seek to agree on the scope of each party’s rights and responsibilities.



4. Discovery requests for electronically stored information should be as clear as possible, while responses and objections to discovery should disclose the scope and limits of the production.



5. The obligation to preserve electronically stored information requires reasonable and good faith efforts to retain information that may be relevant to pending or threatened litigation. However, it is unreasonable to expect parties to take every conceivable step to preserve all potentially relevant electronically stored information.



6. Responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for preserving and producing their own electronically stored information.



7. The requesting party has the burden on a motion to compel to show that the responding party’s steps to preserve and produce relevant electronically stored information were inadequate.


The Sedona Principles - 2007 8. The primary source of electronically

stored information for production should be active data and information. Resort to disaster recovery backup tapes and other sources of electronically stored information that are not reasonably accessible requires the requesting party to demonstrate need and relevance that outweigh the costs and burdens of retrieving and processing the electronically stored information from such sources, including the disruption of business and information management activities.



9. Absent a showing of special need and relevance, a responding party should not be required to preserve, review, or produce deleted, shadowed, fragmented, or residual electronically stored information.



10. A responding party should follow reasonable procedures to protect privileges and objections in connection with the production of electronically stored information.



11. A responding party may satisfy its good faith obligation to preserve and produce relevant electronically stored information by using electronic tools and processes, such as data sampling, searching, or the use of selection criteria, to identify data reasonably likely to contain relevant information.


The Sedona Principles - 2007 12. Absent party agreement or court order

specifying the form or forms of production, production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form, taking into account the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case.


The Sedona Principles - 2007 13. Absent a specific objection, party

agreement or court order, the reasonable costs of retrieving and reviewing electronically stored information should be borne by the responding party, unless the information sought is not reasonably available to the responding party in the ordinary course of business. If the information sought is not reasonably available to the responding party in the ordinary course of business, then, absent special circumstances, the costs of retrieving and reviewing such electronic information may be shared by or shifted to the requesting party.



14. Sanctions, including spoliation findings, should be considered by the court only if it finds that there was a clear duty to preserve, a culpable failure to preserve and produce relevant electronically stored information, and a reasonable probability that the loss of the evidence has materially prejudiced the adverse party.


The Sedona Guidelines Second work product of working group Draft published in September 2004 for public

comment; published in September 2005. They are:

Important background and roadmap of issues Link between RIM, IT and Legal Perspectives Flexible, Scalable and Reasonable

They are not: Standards or minimum requirements Unchangeable


The Sedona Guidelines

1. An organization should have reasonable policies and procedures for managing its information and records.



2. An organization’s information and records management policies and procedures should be realistic, practical and tailored to the circumstances of the organization.



3. An organization need not retain all electronic information ever generated or received.



4. An organization adopting an information and records management policy should consider including procedures that address the creation, identification, retention, retrieval and ultimate disposition or destruction of information and records.



5. An organization’s policies and procedures must mandate the suspension of ordinary destruction practices and procedures as necessary to comply with preservation obligations related to actual or reasonably anticipated litigation, governmental investigation or audit.


• Jason R. Baron, Director of Litigation, NARAtel. (301) 837-1499Email: [email protected]

• Jonathan M. Redgrave, Esq., Redgrave Daley Ragan & Wagner LLP tel. (202) 742-6767 Email: [email protected]

• Rachel Spector, Senior Attorney, Dep’t of Interior• tel. (202) 208-6029 Email: [email protected]

Whos Afraid of E-Discovery? Cautionary Tales Every CIO and Every IT Person Need to Know to Survive...

Documents

Transcript of Whos Afraid of E-Discovery? Cautionary Tales Every CIO and Every IT Person Need to Know to Survive...