Electronic Discovery, Meet Prof. Heisenberg

Transcription

1 Electronic Discovery, Meet Prof. Heisenberg Selected Thoughts on Practice & Pitfalls Prepared for the No. Ky. Univ. Salmon P. Chase College of Law Robert W. Dibert Rebecca Bates Manno February 18, 2014 Views expressed in these materials are those of the authors individually, and should not be considered to be legal or any other formal advice. Particularly in e-discovery, no one size fits all. See The Sedona Guidelines: Best Practice Guidelines & Commentary for Managing Information & Records in the Electronic Age, at 15 (2d ed. Nov. 2007); Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534 (D. Md. 2007) 1

2 For Thousands Of Years, Science & Law Concurred: The World And Its Documents Were Flat 2

3 The Concurrence Was Incorrect 3

4 Introduction: Responsibilities Precede the Rules Courts became concerned terrified, even with spoliation or other loss of electronic information. See United Medical Supply Co. v. U.S., No C (Fed. Cl. 6/27/2007): Aside perhaps from perjury, no act serves to threaten the integrity of the judicial process more than the spoliation of evidence [defendant] most certainly is wrong in thinking that it can recklessly disregard its obligations to preserve evidence. [I]t is beyond question that a party to civil litigation has a duty to preserve relevant information, including ESI, when that party has notice that the evidence is relevant to litigation or should have known that the evidence may be relevant to future litigation. John B. v. Goetz, 531 F.3d 448, 459 (6th Cir. 2008) (citations omitted). See also, Jones v. Bremen High School District 228, 2010 WL (N.D. Ill.) ( a party has a duty to preserve evidence that it has control over and which it reasonably knows or can foresee would be material (and thus relevant) to a potential legal action ) Every party to litigation and its counsel are responsible for taking reasonable and proportionate steps to preserve relevant and discoverable ESI within its possession, custody or control. Determining which steps are reasonable and proportionate in particular litigation is a fact specific inquiry that will vary from case to case. The parties and counsel should address preservation issues at the outset of a case, and should continue to address them as the case progresses and their understanding of the issues and the facts improves. 7th Cir. Electronic Discovery Committee, Principles Relating to the Discovery of Electronically Stored Information, at Principle 2.04(a) (rev. 8/1/2010). 4

5 E-discovery Requires Balancing People & Technology 1. Courts expect parties to have document & data retention practices in order See Rules 16(b)(2); 26(f)(1) (requiring pre-discovery conference & scheduling order within days of the beginning of an action); In re Direct Southwest, Inc. FLSA Litigation, 2009 U.S. Dist. LEXIS (E.D. La.) (requiring execution of supplemental search terms, production of documents & production of privilege log within 10 days) 2. Courts expect parties to employ technology to meet judicial requirements In re Vioxx Prod. Liabil. Lit. Steering Cm., No , 2006 WL , Slip Op. at 8, n.5 (5th Cir.) (approving random sampling to assist privilege review of more than 500,000 pages of disputed documents, but By random sampling, we mean adhering to a statistically sound protocol ); Da Silva Moore v. Publicis Groupe, No. 1:11-cv-1279, Conf. TR (S.D.N.Y. 2/8/2012) (implementing parties agreement to use predictive coding in Phase I discovery, but I m not prepared to rule on where you stop until I see those relevance rankings ); Matter of the Search of 3817 W. West End, 321 F. Supp.2d 953, 956 (N.D. Ill. 2004) ( the Court raised possible ways of focusing the search of the computers, including: limiting the search to specific time periods; using key word searches; and/or limiting the search to text files and excluding graphics files ) 5

6 The Rules Reflect Judicial Demands for Accountability By signing [a disclosure or discovery response], an attorney or party certifies to the best of the person s knowledge, information and belief formed after reasonable inquiry: (A) with respect to a disclosure, it is complete and correct as of the time it is made[.] Fed. R. Civ. P. 26(g)(1). Counsel may rely on assertions by the client and on communications with other counsel in the case as long as that reliance is appropriate under the circumstances. Pinstripe, Inc. v. Manpower, Inc., 2009 U.S. Dist. LEXIS 66422, at *7-8 (N.D. Okla.) (quoting 1983 Advisory Committee Notes to Rule 26). what is required is something other than a lawyer's guesses, without client input, and without any quality control testing to see if the search terms produce reasonably all the responsive ESI and limited false positives. Wm. A. Gross Constr. Assoc. v. Am. Mfrs. Mut. Ins. Co., 256 F.R.D. 134, 135 n.3 (S.D.N.Y. 2009). 6

7 The Rules (A): General Intent 1100 West, LLC v. Red Spot Paint & Varnish Co., No. 1:05-cv-1670, 2009 U.S. Dist. LEXIS (S.D. Ind.) Defendant argued it relied on its attorneys... for advice in discovery; therefore, any error or failure to produce documents is [former counsel s] responsibility (Slip Op. at 1-2). Counsel had opportunities to steer [Defendant]... on a different path and it never did (id., at 58). where three partners of the firm had knowledge of its client s apparent disregard for [discovery] rules and failed to properly supervise an associate and paralegal who had knowledge of adverse facts that remained undisclosed to the opposing party... the firm must be held accountable (id., at 62). Bray & Gillespie Mgt. LLC v. Lexington Ins. Co., 2009 WL (M.D. Fla.) (Plaintiff, outside counsel individually & the firm sanctioned for fees & costs of motion to compel & remedial discovery) [B]lindly relying on outside counsel falls short of the duty [local counsel] has as an officer of the court, as counsel of record, and as an advocate for his client (id., at *22). Outside counsel continued this pattern of deliberate misrepresentation through willful blindness in his testimony... about the metadata on the Introspect database, even though he never examined the database to determine what it contained (id., at *24). 7

8 The Rules (B): Trust, But Verify [A]ttorney oversight of the process, including the ability to review, sample, or spot-check the collection efforts is important. Pension Comm. v. Banc of America Securities, LLC, No. 05-cv-9016, 2010 U.S. Dist. LEXIS 4546, Slip Op. at 29, n.68 (S.D.N.Y.). Counsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched." Zubulake v. UBS Warburg LLC, 2004 U.S. Dist. LEXIS 13574, at *35 (S.D.N.Y.). Rosenthal Collins Group, LLC v. Trading Technologies Int l, Inc., No. 05 C 4088, 2011 U.S. Dist. LEXIS (N.D. Ill.) (dismissing Complaint, striking counterclaim defenses, ordering $1 million fine against Plaintiff, and ordering Plaintiff s counsel to pay fees & costs incurred in litigating the motion; where Plaintiff failed to prevent destruction of evidence and its counsel had a duty to preserve the evidence, which they could have done by taking physical possession of, or obtaining forensic images, of the evidence ) (Slip Op., at 21). Green v. Blitz USA, Inc., 2011 WL (E.D. Tex.) (civil contempt sanction of $250,000 plus other relief, where party relied solely upon custodian interviews for documents without conducting electronic searches for documents, and failed to suspend document retention & media recycling policies pending litigation). Gates Rubber Co. v. Bando Chemical Industries, Ltd., 167 F.R.D. 90, (D. Colo. 1996) (sanctions for spoliation of evidence in part because the party failed to use imaging software to copy a target computer hard drive. The file by file restoration method that actually was used, resulted in the overwriting of 7-8% of the target drive). 8

9 The Rules (C): Who Assumes The Risk? Mt. Hawley Ins. Co. v. Felman Production, Inc., No. 3:09-cv-481, 2010 U.S. Dist. LEXIS (S.D. W.Va.) (manufacturer & counsel unable to explain why database built an incomplete index of potentially privileged documents, and Court found waiver of privilege based upon selective production vs. assertion of privilege); but see, Heriot v. Byrne, 257 F.R.D. 645, 660 (N.D. Ill. 2009) ( Plaintiffs had no reason to suspect the Vendor would inadvertently produce documents that Plaintiffs had already designated as privileged ) (no waiver where vendor miscoding resulted in the inadvertent production of privileged documents, and producing party promptly discovered inadvertent production and followed Rule 26 sequestration procedure) Ky. Bar Assoc. v. Helmers, 2011-SC KB, 2011 Ky. LEXIS 126 (Permanent disbarment where attorney had followed instructions of senior lawyers & assisted in fraudulent settlements of Fen-Phen litigation as a fourth-year associate) Coquina Inv. v. Rothstein, No Civ, 2012 WL (S.D. Fla.) (Party & outside counsel sanctioned for inadequate data searches & failure to produce documents in a proper format preserving material information); Id., at *1 ( it often times appears that this litigation was conducted in an Inspector Clouseaulike fashion. However, unlike a Pink Panther film, there was nothing amusing about this conduct and it did not conclude neatly ) 9

10 Verifying Risk: Rendering Matters Coquina Inv. v. Rothstein, No Civ (S.D. Fla. 8/3/2012) Two evidentiary hearings on motions for sanctions, in which client representatives, five outside attorneys, and outside counsel s discovery vendor, testified in opposition to sanctions. The first issue was based upon failure to process & produce a document in color, instead of rendered black & white, in order to reproduce a red-banner High Risk notice on the document and embedded information relating to editing & archiving of the document. Slip Op, at 6-8. [Counsel] misrepresented the nature of document control & metadata production in opposing a motion to compel native format production. Id., at [Counsel] acted negligently in failing to produce the CDD form in a manner that preserved the document s qualities. It is clear that, to preserve all its original qualities, the CDD form should have been produced in native format or color tiff. Id., at 23. The second issue involved [counsel s] denial of the existence of a material document for two years, because its litigation database had not been searched for the document by title. [F]ailure to open all of the documents attached to the ... resulted in continued denial, deception, and delay. Slip Op., at

11 Case in Point: University Medical Center, Inc. v. Beglin, 375 S.W.3d 783 (Ky. 2011) Patient was terminated from life support after catastrophic blood loss during surgery, which caused irreversible brain damage after a delay in obtaining a transfusion. During discovery, a dispute arose regarding whether a nurse had prepared a standard occurrence report describing the blood loss & delay in transfusion. A report was required according to hospital procedures, but testimony was conflicting about whether it had been prepared at all. 11

12 Beglin (2) The trial court instructed the jury: If you find from the evidence that an incident report was in fact prepared... about Mrs. Beglin's surgery, and if you further find from the evidence that University Medical Center... intentionally and in bad faith lost or destroyed the incident report, you may, but are not required to, infer that the information recorded in the incident report would be, if available, adverse to University Medical Center and favorable to the plaintiffs. 375 S.W.3d, at 787. The jury returned a verdict for about $5.3 million compensatory & $3.75 million punitive damages. On appeal, UMC argued that the missing evidence & punitive damages instructions were improper. The Kentucky Court of Appeals upheld the trial court. 12

13 Beglin (3) The Kentucky Supreme Court unanimously upheld the missing evidence instruction and compensatory damages. By a 5-2 vote, the Court held that the case did not warrant punitive damages. The two dissenters would have allowed punitive damages. The trial court s instruction remains the approved instruction in both criminal and civil cases. 375 S.W.3d, at 788. The occurrence report... went missing, and University Hospital was unable to provide a reasonable explanation for its disappearance. Id., at 791. [W]e favor... A standard that deters the loss of evidence and encourages parties in litigation or expecting litigation to protect and preserve evidence, even when doing so may not be to their advantage in litigation. Id. 13

14 Beglin (4) [W]hen it may be reasonably believed that material evidence within the exclusive possession and control of a party, or its agents or employees, was lost without explanation or is otherwise unaccountably missing, the trier of fact may find that the evidence was intentionally and in bad faith destroyed or concealed by the party possessing it and that the evidence, if available, would be adverse to that party or favorable to his opponent. 375 S.W.3d, at 792. A trial court may use normal inferences and suppositions, and may rely upon circumstantial evidence in deciding whether to admit missing evidence testimony or give a corresponding instruction. Id., at 790. [T]here are certain circumstances in which... a missing evidence instruction should not be given. Among these is when the proof shows that the evidence was lost as a result of mere negligence.... [O]ther common types of cases where the instruction will not be warranted include loss of evidence as a result of... destruction in the normal course of file maintenance, particularly in accordance with industry or regulatory standards. Id., at

15 Beglin (5) Innocent explanations: Ordway v. Commonwealth, 391 S.W.3d 762, 703 (Ky. 2013): When it is established that the evidence was lost due to mere negligence or inadvertence, which, in effect, negates a finding of bad faith, the missing [evidence] instruction should not be given. Here, the disappearance of the evidence appeared to result from negligence arising out of the consolidation of the [Medical Examiner & State Police forensic] labs. Pursuant to the foregoing rules Appellant was not entitled to a missing evidence instruction. (Allowing admission of testimony about existence & seizure of crack cocaine that was lost while in Staete custody). Custody & handling in the usual course of business: Evans v. Bradley, 2011-CA MR (Ky. App. 2/22/2013) (unpublished) (no missing evidence instruction in malpractice action where individual defendants did not have exclusive possession and custody of the documents and vermin had damaged boxes while in warehouse storage ); id. ( storage of records is the responsibility of the university's records retention department -- not physicians ); id. ( Even if every box in existence had been searched, the records might not be found due to damage by vermin. The situation did not merit the missing evidence instruction. ) Materiality: Perry v. Commonwealth, 2011-SC MR, (Ky. 12/20/2012) (unpublished) (no missing evidence instruction in DUI prosecution where wrecked vehicle was accidentally crushed during storage, and any exculpatory value... is purely speculative ). 15

16 Case in Point (II): J-M Mfg. Co. v. McDermott, Will & Emery, No. BC (Super. Ct. Los Angeles County, Cal.) McDermott represented J-M in a qui tam action styled United States ex rel Hendrix v. J-M Mfg. Co., No. 06-cv-55 (C.D. Cal.). McDermott hired two e-discovery consulting firms for computer-assisted document review. At the time, the consultants were top-rated in reviews by both technology and legal consulting commentators. The first production of documents to the government allegedly resulted in the inadvertent production of attorney-client privileged documents. Upon discovering the alleged mis-production of privileged documents, McDermott hired another top-rated e-discovery consulting firm to review documents through the use of outside contract attorneys. 16

17 J-M (2) Outside contractor review allegedly resulted in production of about 3,900 allegedly privileged documents among a population of 250,000 documents (~1.5% error rate). J-M sued McDermott and two e-discovery vendors for allegedly failing to supervise and quality-control the work of the outside technology and contract attorney vendors. The federal court in the qui tam action ruled that the inadvertent productions resulted in waiver of privilege & work product as to those documents. After a 30-day trial plus five days of deliberations, the federal jury found J-M liable for making false statements of compliance with certain performance specifications. Post-trial, the federal court confirmed by Order that it prohibited Plaintiffs counsel from using J-M s witness interview memoranda. The state-court malpractice action has been held in abeyance, set for a status conference in May

18 Metadata in the Courts Classic Definition: Data about the data (distinct from embedded data ) Expanded Definition: Data typically stored electronically that describes characteristics of ESI, found in different places in different forms.... Can be altered intentionally or inadvertently. Some metadata, such as file dates and sizes, can easily be seen by users; other metadata can be hidden or embedded and unavailable to computer users who are not technically adept. Metadata is generally not reproduced in full form when a document is printed to paper or electronic image. Sedona Conference Glossary 34, (3 rd ed. 2010). Black s Law Dictionary 1080 (9 th ed. 2009): Secondary data that organize, manage, and facilitate the use of primary data. Functional Definition: Any information contained within a document that the reader ordinarily would not see reproduced on a printed page. 18

19 Why Metadata Might Matter Aguilar v. Immigration & Customs Enf. Div., 255 F.R.D. 350, 354 (S.D.N.Y. 2008) ( while metadata may add little to one s comprehension of a word processing document, it is often critical to understanding a database application. A spreadsheet lies somewhere in the middle ) (citation omitted). If the officials responded by forwarding their s... the original metadata was altered in the process.... If the was saved as an.msg or.pst file which was, in turn, sent to the contact person, the original metadata was preserved. Id., at 359. See Local Rule 26(f)(4) (W.D.N.Y. 1/1/2011): Metadata. Except as otherwise provided, metadata, especially substantive metadata, need not be routinely produced, except upon agreement of the requesting and producing litigants, or upon a showing of good cause in a motion filed by the requesting party. But see, Favors v. Cuomo, 285 F.R.D. 187, 223 (E.D.N.Y. 2012) ( there is no good reason why privilege logs should not include... readily accessible metadata for electronic documents, including, but not limited to: addressee(s), copyee(s), blind copyee(s), date, time, subject line, file name, file format, and a description of any attachments ); Coquina, supra. 19

20 Sample File Metadata 20

21 File (1a)... 21

22 File (1b)... 22

23 File (1c)... 23

24 System Metadata (Recently Accessed) 24

25 System (Recent Devices) 25

26 Device Metadata (Unallocated Space) 26

27 (Today s) Conclusions Most approaches & tools are good for something. No single approach or tool works for everything. See also, M. Bay, EDI-Oracle Study: Humans Are Still Essential in E-Discovery, Law Technology News 11/20/2013, 04:24 PM, Technology providers using similar underlying technology, but different human resources, performed in both the top-tier and bottom-tier of all categories. Conclusion: Software is only as good as its operators. Human contribution is the most significant element (emph. in original). So the art of e-discovery is balancing technology and human resources to preserve, identify, collect & produce the material information in an appropriate form that is reasonably necessary to resolve the case. Attorneys are responsible for finding the balance in a particular matter. 27