The Evolution of Electronic Discovery

Transcription

1 CHAPTER 2 The Evolution of Electronic Discovery 2.1 Introduction The Sedona Principles The Zubulake Cases The Morgan Stanley Decisions The Amendments to the Federal Rules of Civil Procedure The Development of Guidelines for State Courts The Approval for Enactment of the Uniform Rules Relating to the Discovery of Electronically Stored Information Pension Committee, Victor Stanley, and Other Recent Developments nd Edition i

2 MASSACHUSETTS E-DISCOVERY & EVIDENCE 2 ii 2nd Edition 2011

3 CHAPTER 2 The Evolution of Electronic Discovery 2.1 INTRODUCTION When first arrived as a form of communication it was typical for counsel to both agree that its production was unnecessary. In other words, mutually agreeing to avoid an unfamiliar and burdensome subject gave each attorney a sense of comfort. As the use of became more widespread, counsel opted for the production of hard copies of s. However, has evolved to the point where it is the usual method of communication. Moreover, data associated with the data one sees visually on the (i.e., metadata as opposed to text) is a fruitful area of discovery. For example, assume counsel is involved in a securities fraud case. Changes to numbers embedded in an Excel spreadsheet may be important evidence. This evidence is metadata. The proliferation of the use of as well as other forms of communication involving electronically stored information (ESI) has prompted some attorneys to devote their careers to this area of the law. However, all lawyers who handle civil or criminal litigation, arbitrations, and regulatory proceedings must be conversant with e-discovery in order to avoid traps for the unwary that can have draconian consequences, including sanctions for spoliation of evidence, prosecutions for obstruction of justice, and civil suits for violations of statutes such as HIPAA. The focus of this chapter is the evolution of e-discovery. Knowing the history of e-discovery gives context to the practitioner for a better understanding of the purposes of the current rules and further legal developments. In addition, it is crucial that litigants appreciate the importance of developing a proactive e- discovery plan so when litigation is confronted the task of pretrial discovery is not overburdening and perilous to a party s case. See The Honorable Shira A. Scheindlin & Jonathan M. Redgrave, The Importance of Pre-litigation Planning Records and Information Management Policies Should Address Electronic Records, Business and Commercial Litigation in Federal Courts (Robert L. Haig, Editor-in-chief) 3 Business & Commercial Litigation in the Federal Courts 22:4 (Thomson-West, 2d ed. 2005). 2nd Edition

4 2.2 MASSACHUSETTS E-DISCOVERY & EVIDENCE 2.2 THE SEDONA PRINCIPLES The mission of the Sedona Conference ( is as follows: The Sedona Conference exists to allow leading jurists, lawyers, experts, academics and others, at the cutting edge of issues in the area of antitrust law, complex litigation, and intellectual property rights, to come together in conferences and mini-think tanks (Working Groups) and engage in true dialogue, not debate, all in an effort to move the law forward in a reasoned and just way. Our hallmark is our unique use of the dialogue process to reach levels of understanding and insight not otherwise achievable. Our Working Group Series is designed to focus the dialogue on forward-looking principles, best practices and guidelines in specific areas of the law that may have a dearth of guidance or are otherwise at a tipping point. The goal is that our Working Groups, the open Working Group Membership Program, and our peer review process, will produce output that is balanced, authoritative, and of immediate benefit to the Bench, Bar and general public. Consistent with its mission, in January 2004 the Sedona Conference published Working Group 1 s The Sedona Principles for Electronic Document Production (see which promulgates and discusses the following principles: 1. Electronically stored information is potentially discoverable under Fed. R. Civ. P. 34 or its equivalent at the state level. 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 equivalent at the state level, 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 nd Edition 2011

5 THE EVOLUTION OF ELECTRONIC DISCOVERY 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. 8. The primary source of electronically stored information for production should be active data and information. Resorting 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. 2nd Edition

6 2.2 MASSACHUSETTS E-DISCOVERY & EVIDENCE 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. 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. Working Group 1 has continued to produce extremely instructive publications which can be found on the Sedona Conference Web site, including The Sedona Conference Commentary on Preservation, Management and Identification of Sources of Information that are Not Reasonably Accessible (Aug. 2008); The Sedona Conference Cooperation Proclamation (July 2008); An Open Invitation to Participate in the TREC Legal Track (May 2008); The Sedona Conference Commentary on Non-Party Production & Rule 45 Subpoenas (Apr. 2008); The Sedona Conference Commentary on ESI Evidence & Admissibility (Mar. 2008); The Sedona Conference Glossary: E-Discovery & Digital Information Management (2d ed. Dec. 2007); 2 4 2nd Edition 2011

7 THE EVOLUTION OF ELECTRONIC DISCOVERY 2.2 The Sedona Conference Commentary on Management (Aug. 2007); The Sedona Conference Commentary on Legal Holds (Aug. 2007, public comment version); The Sedona Principles after the Federal Amendments (Aug. 2007); The Sedona Principles Addressing Electronic Document Production (2d ed. June 2007); Navigating the Vendor Proposal Process: Best Practices for the Selection of Electronic Discovery Vendors (June 2007); Overview of Changes in the 2005 Version of The Sedona Guidelines on the Management of Electronic Information (Sept. 2005); The Sedona Guidelines for Managing Information and Records in the Electronic Age (Sept version); The Sedona Principles Addressing Electronic Document Production (July 2005 version); Overview of Changes to The Sedona Principles in 2004 (Jan. 2005); The Sedona Guidelines: Best Practice Guidelines & Commentary for Managing Information & Records in the Electronic Age (Sept. 2004, public comment version); and Interview of Judge Shira A. Scheindlin (Mar. 2004). The last publication listed above is a good transition into the next topic in this chapter: Judge Scheindlin s holdings regarding e-discovery in the Zubalake line of cases. 2.3 THE ZUBULAKE CASES Prior to the amendments to the Federal Rules of Civil Procedure referred to below and discussed in Chapter 3, lawyers were guided by case law, most notably the Zubulake line of cases, which addresses areas of cost-shifting, preservation, and production obligations. The five opinions are referred to as Zubulake I through Zubulake V. In these cases, plaintiff Laura Zubulake was an employee of 2nd Edition

8 2.3 MASSACHUSETTS E-DISCOVERY & EVIDENCE UBS Warburg in New York City where she complained to management about disparate treatment, harassment, and other employment discrimination matters. Ms. Zubulake filed a complaint with the Equal Employment Opportunity Commission. The court addressed various issues relating to e-discovery in this line of cases. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003) (Zubulake I), addresses the legal standard for determining the consequences of failing to preserve missing backup tapes and deleted s. Ms. Zubulake moved for evidentiary and monetary sanctions against UBS Warburg for its failures. The court found that the defendant had a duty to preserve the ESI at issue since it should have known that this evidence may have been relevant to future litigation. Ms. Zubulake did not file her charges with the EEOC until August 2001; however, the court found that almost everyone associated with Zubulake recognized the possibility that she might sue. The court also found that had it complied with its own electronic filing retention policy, the defendant would have preserved the ESI sought by plaintiff s counsel. The court went on to find that although the defendant had a duty to preserve all of the backup tapes at issue, and destroyed them with the requisite culpability, the plaintiff could not demonstrate that the lost evidence would have supported her claims. Therefore, it was inappropriate to give an adverse inference instruction to the jury. However, the court did order UBS Warburg to pay the plaintiff s costs associated with taking additional depositions of certain witnesses previously deposed in the litigation for the limited purpose of inquiring into the destruction of ESI as well as any newly discovered s. In Zubulake v. UBS Warburg LLC, 230 F.R.D. 290 (S.D.N.Y. May 13, 2003) (Zubulake II), the court held that Ms. Zubulake could not obtain the confidential transcript of another employee s deposition regarding UBS Warburg s retention and retrieval policy taken in a proceeding conducted by securities regulators. The court held that the contents of the deposition were designated by the employer as confidential pursuant to stipulation, and the employee had no reporting obligation regarding the former employer s compliance with document retention obligations of the Securities Exchange Act since she was not member of New York Stock Exchange (NYSE) or National Association of Securities Dealers (NASD). Although it involves an issue which is not commonplace, this decision should be read in order to fully understand the Zubulake line of cases. Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. July 24, 2003) (Zubulake III), explains the approach for allocating backup tape restoration costs between the plaintiff and defendant. The court held that shifting of one-fourth of the estimated $166,000 cost of restoring and searching seventy-seven backup tapes to the plaintiff employee was appropriate, but that shifting the estimated 2 6 2nd Edition 2011

9 THE EVOLUTION OF ELECTRONIC DISCOVERY 2.3 $108,000 cost of producing s restored from backup tapes was not appropriate. Especially instructive in Zubulake III is the seven-factor cost-shifting analysis (Zubulake v. UBS Warburg LLC, 216 F.R.D. at 284): In order to determine whether cost-shifting is appropriate for the discovery of inaccessible data, the following factors should be considered, weighted moreor-less in the following order: 1. The extent to which the request is specifically tailored to discover relevant information; 2. The availability of such information from other sources; 3. The total cost of production, compared to the amount in controversy; 4. The total cost of production, compared to the resources available to each party; 5. The relative ability of each party to control costs and its incentive to do so; 6. The importance of the issues at stake in the litigation; and 7. The relative benefits to the parties of obtaining the information. In Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. October 22, 2003) (Zubulake IV), the court ordered sanctions against defendant UBS Warburg for violating its duty to preserve, among other things, evidence pertaining to ESI. Lastly, Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. July 20, 2004) (Zubulake V), explains, among other issues, counsel s duty to effectively communicate to the client its discovery obligations to ensure information is discovered, retained, and produced. Zubulake V is one of the most cautionary opinions addressing a party s obligation to preserve ESI and engage in good faith discovery practices: [T]he jury empanelled to hear this case will be given an adverse inference instruction with respect to e- mails deleted after August 2001, and in particular, with respect to s that were irretrievably lost when UBS s backup tapes were recycled. No one can 2nd Edition

10 2.3 MASSACHUSETTS E-DISCOVERY & EVIDENCE ever know precisely what was on those tapes, but the content of s recovered from other sources along with the fact that UBS employees willfully deleted s is sufficiently favorable to Zubulake that I am convinced that the contents of the lost tapes would have been similarly, if not more, favorable. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, THE MORGAN STANLEY DECISIONS In addition to the Zubulake line of cases, practitioners across the country have learned the importance of avoiding severe sanctions resulting from e-discovery mismanagement through Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., No CA005045XXOCAI, 2005 WL , at *7 (Fla. Cir. Ct. Mar. 1, 2005), rev d on other grounds sub nom. Morgan Stanley & Co., Inc. v. Coleman (Parent) Holdings, Inc., 955 So. 2d 1124 (Fla. Dist. Ct. App. 2007) cost judgment rev d, 974 So. 2d 631 (Fla. Dist. Ct. App. 2008) (hereinafter Morgan Stanley ). The Morgan Stanley litigation was initiated in 1998 in Florida state court. The outcome has become the benchmark by which all e-discovery disasters are being measured. Despite mixed opinion as to the extent of the sanctions imposed by the court, the impact it has had on how litigants handle e-discovery across the country has become paramount. Morgan Stanley, 2005 WL , at *7. The allegations involved financier Ron Perelman who had acquired a significant amount of Sunbeam stock in a transaction; however, the securities lost most of their value after the market discovered that Sunbeam s former executives had engaged in financial fraud. Morgan Stanley was the investment bank in the transaction, and Mr. Perelman claimed that Morgan Stanley was a participant in the joint venture to falsify the value of the Sunbeam stock. Morgan Stanley strongly denied these allegations. Morgan Stanley gained a lot of attention when the court sanctioned the firm after a pattern of e-discovery mishaps which the court found constituted deceptive and bad-faith discovery practices. The court essentially mandated the jury to find that Morgan Stanley s failure to produce s and other ESI to the plaintiff was tantamount to fraud. To make things worse for Morgan Stanley, the Financial Industry Regulatory Authority (commonly referred to as FINRA) (which resulted from the merger of the former regulatory bodies under the National Association of Securities Dealers, Inc. and the New York Stock Exchange) instituted a disciplinary action against Morgan Stanley seeking $12.5 million in fines to resolve the firm s blatant mishandling of s. Additionally, FINRA found 2 8 2nd Edition 2011

11 THE EVOLUTION OF ELECTRONIC DISCOVERY 2.4 that Morgan Stanley destroyed many of the pre September 11 s in its possession by overwriting backup tapes that had stored s from eleven of its twelve servers and by allowing users to permanently delete s. Morgan Stanley neither admitted nor denied the charges. Morgan Stanley s ultimate settlement with FINRA included the establishment of a $9.5 million fund to be distributed to two groups of customers who had filed claims in arbitrations against the firm. According to FINRA s press release in September 2007, several thousand customers may be eligible to receive this money. Morgan Stanley will also have to pay $3 million as a fine for failing to provide and supervisory materials during arbitrations. See Morgan Stanley to Pay $12.5 Million to Resolve FINRA Charges that it Failed to Provide Documents to Arbitration Claimants, Regulators (FINRA, Sept. 7, 2007) ( Moreover, the Securities and Exchange Commission in 2002 found that Morgan Stanley was not fully compliant with regulations that require companies to retain and have access to corporate . Since then, the company has been involved in ongoing litigation related to its practices. 2.5 THE AMENDMENTS TO THE FEDERAL RULES OF CIVIL PROCEDURE The Sedona Principles along with the Zubulake and Morgan Stanley decisions were central to the codification of rules of court at the federal level relating to the handling of ESI. These rules were enacted on December 1, 2006 and have become widely known in the legal community as the new Federal Rules of Civil Procedure on e-discovery. It is crucial for litigants to keep in mind that according to the U.S. Supreme Court, the amendments that took effect in December 2006 govern in all proceedings thereafter commenced and, insofar as just and practicable, all proceedings then pending. See Amendments to the Federal Rules of Civil Procedure available at orders/courtorders/frcv06p.pdf. As discussed further in Chapter 3, the following rules were amended: Rule 16 (pretrial conferences; scheduling; management); Rule 26 (general provisions governing discovery; duty of disclosure); Rule 33 (interrogatories to parties); Rule 34 (production of documents, ESI, and things and entry upon land for inspection and other purposes); 2nd Edition

12 2.5 MASSACHUSETTS E-DISCOVERY & EVIDENCE Rule 37 (failure to make disclosures or cooperate in discovery; sanctions); and Rule 45 (subpoenas). In addition to the December 2006 rules, amended Form 35 (Report of Parties Planning Meeting) addresses the discovery plan which must include the handling of the disclosure or discovery of ESI and claims of assertion of privilege or protection as trial preparation material after production. Subsequent to the December 2006 amendments to Fed. R. Civ. P. 16, 26, 33, 34, 37, and 45, effective December 1, 2007, the new Restyle Amendments completely rewrote the text of Rules 1 through 86 and the Appendix of Forms. In addition, there are style/substantive amendments to Rules 4, 9, 11, 14, 16, 26, 30, 31, 40, 71.1, and 78, as well as a new Rule THE DEVELOPMENT OF GUIDELINES FOR STATE COURTS In 2007, the National Center for State Courts published a reference for state court trial judges across the country to consult, entitled Guidelines for State Trial Courts Regarding Discovery of Electronically-Stored Information (hereinafter the Guidelines, see Exhibit 1A). See EDiscCCJGuidelinesFinal.pdf. The Guidelines are an extremely useful resource for both the bench and bar practicing in Massachusetts state courts. Notably, under the umbrella of the National Center for State Courts, the Guidelines were drafted, approved, and endorsed by the Conference of Chief Justices (CCJ). Established in 1949, the CCJ promotes the vitality, interests, and effectiveness of state judicial systems through its focus on current legal issues and judicial administration, and development of policies and educational programs designed to improve court system operations. See The CCJ is the primary representative of the state courts before Congress and the federal executive agencies. The Guidelines were produced by an e-discovery task force created in 2004 and chaired by Chief Justice Marshall of the Massachusetts Supreme Judicial Court. In August 2006, the CCJ approved the Guidelines to assist trial judges who must deal with the increasingly frequency of e- discovery disputes. See Barbara Rabinovitz, State s trial courts to offer guidelines on e-discovery, Massachusetts Lawyers Weekly Vol. 35, Issue No. 18 (Dec. 25, 2006). The Guidelines are discussed in Chapter 4 of this book. Additionally, the Uniform Law Commission (ULC), also known as National Conference of Commissioners on Uniform State Laws (NCCUSL), developed nd Edition 2011

13 THE EVOLUTION OF ELECTRONIC DISCOVERY 2.6 the Uniform Rules Relating to the Discovery of Electronically Stored Information (hereinafter the Uniform Rules, see Exhibit 1B). The NCCUSL is the group that promulgated, among many others, the Uniform Commercial Code and Uniform Interstate Enforcement of Domestic-Violence Protection Orders Act. The NCCUSL provides states with nonpartisan legislation introducing clarity and stability to critical areas of state statutory law common among the jurisdictions, which makes it a very appropriate organization for developing common practices among the courts and litigants for the handling of ESI. The Uniform Rules may also be brought to the attention of Massachusetts state court judges for their guidance. The Guidelines and the Uniform Rules draw upon the Sedona Principles (Exhibit 1C) and the December 2006 amendments to the Federal Rules of Civil Procedure. Both the Guidelines and the Uniform Rules are extremely informative, but practitioners must keep in mind that they are not binding on any court and serve only as a suggested roadmap for navigating e-discovery matters in state courts. Although the principles governing pretrial exchange of ESI among litigants in federal court have been codified into the Federal Rules of Civil Procedure, the Guidelines and the Uniform Rules pioneered a wave of state-level action codifying rules pertaining to the handling of e-discovery along the lines of the amended Federal Rules of Civil Procedure. See Lexis-Nexis, Discovery Book, available at =Discovery%20Book (addressing the states which have developed and are developing e-discovery rules). Massachusetts has not as of yet codified e-discovery rules. Furthermore, litigants must not lose sight of ethical standards when dealing with e-discovery issues. E-discovery ethics opinions and initiatives are being issued to caution counsel that all forms of discovery, including those containing digitally forensic characteristics (e.g., metadata), need to remain intact to assure the fair resolutions of disputes. Counsel should become familiar with the various ethics opinions issued across the country and by the American Bar Association regarding proper conduct for handling e-discovery and its associated ESI. See Lexis-Nexis, Comparison Chart of Metadata Ethics Opinions, available at 2nd Edition

14 2.7 MASSACHUSETTS E-DISCOVERY & EVIDENCE 2.7 THE APPROVAL FOR ENACTMENT OF THE UNIFORM RULES RELATING TO THE DISCOVERY OF ELECTRONICALLY STORED INFORMATION The National Conference of Commissioners on Uniform State Laws (NCCUSL) has provided the states with the Uniform Rules Relating to the Discovery of Electronically Stored Information (the Uniform Rules ) The NCCUSL is widely known for drafting the well-established Uniform Commercial Code in addition to other nonpartisan legislation aimed at creating uniform legal approaches to critical areas of state statutory law across jurisdictions throughout the United States. Similar to the Guidelines, the Uniform Rules propose cutting-edge guidance on the discovery of electronic documents and evidence in civil litigation. The spirit of the Uniform Rules provides litigants with protocols adverse parties can jointly follow (e.g., preservation of ESI, form of discovery production, and the time frames during which ESI must be produced). In alignment with the Sedona Principles, the Guidelines, and the language codified at Fed. R. Civ. P. 37(e), the Uniform Rules limit the sanctions to impose on a litigant for its failure to produce ESI to an adversary when it has been lost as the result of routine, good-faith operation of an information system. Additionally, the Uniform Rules address the common challenges litigants face as discussed in Zubulake, such as cost of production, expense shifting, and whether a party has standing to object to producing ESI that is not reasonably accessible. 2.8 PENSION COMMITTEE, VICTOR STANLEY, AND OTHER RECENT DEVELOPMENTS The Sedona Conference has graciously provided the authors with a comprehensive compilation of e-discovery case law from January 1, 2009 through March 31, For the convenience of the reader, these case summaries are contained in Appendix B which the authors urge readers to review. Among the various interesting and important cases relating to ESI issued by courts across the United States since 2009, are the headlining decisions of Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010) and Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. 2010) ( Victor Stanley II ) which nd Edition 2011

15 THE EVOLUTION OF ELECTRONIC THROUGH TRIAL 2.8 followed Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251 (D. Md. 2008) ( Victor Stanley I ). In Pension Committee, Judge Scheindlin of the U.S. District Court for the Southern District of New York found that a party s failure to issue a written legal hold notice may be considered gross negligence per se. The court s rationale is that such a failure to issue a hold notice would clearly result in the destruction of relevant information, including ESI. Pension Committee provides a comprehensive discussion of spoliation and sanctions with reasoning that an adverse inference instruction as a sanction for such negligence is appropriate. Additionally, in Victor Stanley II, Magistrate Judge Grimm of the United States District Court for the District of Maryland issued a cutting-edge analysis of improper e-discovery conduct, including a chart appended to the sanctions order delineating sanctions guidelines by federal circuit. In Victor Stanley I, the plaintiff sued the defendant for copyright infringement concerning defendant s downloading design drawings and specifications from the plaintiff s Web site. After years of protracted discovery, spoliation claims, and voluminous court filings, the court found that the defendant and its president intentionally spoliated evidence by instructing a business contact to destroy all s related to the plaintiff (the s were destroyed; however, instructions from the president of the company to delete them were produced). In addition to other egregious discovery misconduct, the president of the defendant company withheld an external hard drive from the defendant s own digital forensics expert, claiming to have later returned it to the place of purchase because he did not like some of the hardware s features. Notably, the court found a myriad of other reprehensible actions by the defendant which led the magistrate judge to recommend that the trial judge enter a default judgment against the defendant on the plaintiff s copyright claim. The magistrate judge also ruled that the company s president be personally found in civil contempt and ordered imprisonment for a period not to exceed two years unless and until he paid the significant fees and costs that the magistrate judge awarded the plaintiff. Notably, Victor Stanley II addresses the concerns generated by recent spoliation decisions and a lack of uniform standards governing the imposition of spoliation sanctions across jurisdictions. In addition to concerns surrounding proper litigation hold practices and spoliation avoidance, courts have more routinely been grappling with inadvertent production of ESI during the e-discovery process. See Exhibit 6G ( Rule 502: Attorney-Client Privilege and Work Product; Limitations on Waiver ). A good example of inadvertent production being raised with claims of privilege under Fed. R. Evid. 502 was in the trademark infringement action of Datel Holdings, Ltd. v. 2nd Edition

16 2.8 MASSACHUSETTS E-DISCOVERY & EVIDENCE Microsoft Corp., 2011 WL (N.D. Cal. Mar. 11, 2011). In Datel, the defendant, Microsoft, learned of an chain created at the direction of defense counsel which had been inadvertently produced. The defendant objected to the use of the based on a technological glitch in connection with the production; however, the plaintiff then moved to compel production of the chain arguing that privilege was waived when the defendant produced other s in discovery. Granting the motion in part and denying it in part, the court stated that [m]istaken production due to an unexpected software glitch that occurred despite the use of standard discovery software falls squarely on the inadvertent side of the divide between intentional disclosure under [Federal] Rule [of Evidence] 502(a) and unintentional disclosure under Rule 502(b). Datel Holdings, Ltd. v. Microsoft Corp., 2011 WL , at *3. With respect to s containing privileged content, the court found the privilege was not waived; however, it ordered the defendant to produce the nonprivileged portions of the thread because the plaintiff had a substantial need for the information and would not be able to ascertain it through alternate means without experiencing undue hardship nd Edition 2011