Electronic Discovery. The New Frontier MEYER, SUOZZI, ENGLISH & KLEIN, P.C. Kevin Schlosser. Presented by

Transcription

1 Electronic Discovery The New Frontier MEYER, SUOZZI, ENGLISH & KLEIN, P.C.

2 Exploding Sedona Conference Statistics: billion pieces of paper mail processed by the US Post Office - 47 million users sending 500 million s a day That s billion s that year 90 times as many as US Postal Service million users sending over 1.5 billion s per day That s billion s per year!

3 Devastating s It was nearly 6 years ago that the Microsoft Antitrust Trial made Headlines: After facing days of grueling depositions at the hands of David Boies, Microsoft s s Bill Gates lamented at a news conference: I I had expected Mr. Boies to ask me about competition in the software industry, but he didn t t do that. Instead, he put pieces of paper in front of me and asked about words s from that were three years old. from s

4 Devastating s The New York Times Never mind monopoly power in the marketplace; the real lesson corporate America is taking away from the Microsoft antitrust trial is that old can be a minefield of legal liability, not to mention a source of public embarrassment. Front Page, Nov 11, 1998

5 Devastating s Keep Rearing Their Ugly Heads What about the found in the Fen- Phen Litigation from the defendant s accounting personnel: Am I off the hook or can I look forward to spending my waning years writing checks to fat people worried about a silly lung problem.

6 Devastating s Keep Rearing Their Ugly Heads What better example than the prosecution of the wellknown investment banker Frank Quattrone. Quattrone brought public some of the biggest companies of the dot.com age and is credited with predicting the technology boom of the 1990s A guy who was making a reported $120 million a year... How was he forced to resign and eventually convicted of interfering with a government investigation?

7 Devastating s Keep Rearing Their Ugly Heads By forwarding an to his colleagues to clean up their files in the face of a to their files in the face of a federal investigation!

8 Devastating s Keep Rearing Their Ugly Heads Monday, Oct. 18, 2004 This idea and of throwing the quote by quoting artificially high numbers in some predetermined arrangement for us to lose is repugnant to me, not so much because I hate to lose, but because it is basically dishonest. And I basically agree with the comments of others that it comes awfully close to collusion and price-fixing.

9 Other Incriminating Computer Evidence State v. Guthrie, a reported criminal case Guthrie accused of killing his wife, who apparently died in a bathroom accident. The purported typed suicide note found in one of the wife s books was actually typed into the hard drive of a computer three months after the death. If that wasn t bad enough, a computer connected to the defendant contained evidence of internet searches on household and bathtub accidents.

10 What Does It Mean to Us? As Lawyers, we must counsel our clients: On the risks of inappropriate s: Remember e stands for embarrassing To Avoid pressing that send key To come clean when asked about s or computer-generated information to avoid having it come back to haunt them

11 The Legal Framework The Important Issues: 1. Is this Data Discoverable? 2. How is it produced and who pays for its production? 3. If it is not produced, what happens?

12 Is it Discoverable? What is it just what is electronic evidence? First, we need to define the types of electronic information available.

13 The Geek s s Guide to E-Lingo E... ACTIVE DATA Information readily available and accessible to computer users through file manager programs. EMBEDDED DATA or METADATA Information contained within an electronic version of a document that may not be apparent in a print-out, such as the date the document was created, the identity of the author, the identity of subsequent editors, the distribution route for the document, or the history of editorial changes.

14 The Geek s s Guide to E-Lingo E... RESIDUAL DATA Deleted files to which the reference has been removed from the directory listings and the file allocation table, but which have not been overwritten. BACK-UP DATA Information copied to removable media in the event of a system failure, usually only of data on a centralized storage medium or network, and frequently in compressed form.

15 The Geek s s Guide to E-Lingo E... BOOKMARKS are one-click shortcuts created by the user and stored on the user's computer. CACHE FILES are a record of internet addresses visited by the user and graphic elements on those pages created and stored automatically by the user's computer. COOKIES are information about the user placed in a file by a web-site operator.

16 More Unknown Computer Hijinks! When reviewing the other party s s hard drive, certain software can copy your files into that hard drive without you even knowing it. The John Rigas (President of Adelphia) case in point, just reported in the Law Journal yesterday

17 More Unknown Computer Hijinks! The backup copy was generated using Peersync software, from Hauppage, N.Y.'s Peer Software Inc. It creates a backup after a designated user logs on to the network. When Government paralegal installed one of the Adelphia hard drives into the investigator s s computer, he unknowingly triggered a change in the way that computer's existing hard drive was partitioned. As a result, the Adelphia drive became the drive receiving the copy and Peersync replicated the files of the designated user (the paralegal) on to that Adelphia drive rather than the computer's own existing hard drive.

18 Is it Discoverable? The Courts are in universal agreement that electronic information is discoverable. discoverable. Raw computer data or electronic documents are discoverable. Justice Leonard B. Austin in Lipco Electrical Corp v. ASG Consulting Corp., 4 Misc.3d 1019(A), 2004 WL (N.Y.Sup( N.Y.Sup.),.), 2004 N.Y. Slip Op (U).

19 Is it Discoverable? Having answered the question that electronic data is discoverable only starts the inquiry How must the data be produced? Paper form hard copy of s Native form original computer format PDF or TIFF image

20 Is it Discoverable? Federal Rules have been analyzed for years by advisory committee Do they need to be changed to address e-discovery directly? See Judge Shira A. Scheindlin, NYLJ, Sept 13, 2004, Electronic Discovery Takes Center Stage

21 Costs of Production Under [the Federal] rules, the presumption is that the responding party must bear the expense of complying with discovery requests. Oppenheimer Fund, Inc. v. Sanders,, 437 U.S. 340, 358 (1978).

22 Costs of Production Rowe Entertainment v. William Morris Agency,, 205 F.R.D. 421 (S.D.N.Y. 2002) Magistrate Judge Francis: 1. The specificity of the discovery requests; 2. The likelihood of discovering critical information; 3. The availability of such information from other sources; 4. The purposes for which the responding party maintains the requested data; 5. The relative benefit to the parties of obtaining the information; 6. The total cost associated with production; 7. The relative ability of each party to control costs and its incentive to do so; and 8. The resources available to each party. 8. The resources available to each party.

23 Costs of Production Zubulake v. UBS Warburg, LLC.,, No. 02 CIV. 1243, 2003 W.L (S.D.N.Y. May 13, 2003), Judge Scheindlin: 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.

24 Costs of Production In State Court, we are still in the wild, wild west Case law has not developed Analysis still in its infancy stages The issues have not been focused

25 Costs of Production Lipco Electrical Corp v. ASG Consulting Corp., Justice Leonard B. Austin : [U]nder the CPLR, the party seeking discovery should incur the costs incurred in the production of discovery material. Therefore, the analysis of whether electronic discovery should be permitted in New York is much simpler than it is in federal courts. The court need only determine whether the material is discoverable and whether the party seeking the discovery is willing to bear the cost of production of the electronic material.

26 Costs of Production Creditriskmonitor.com,, Inc. v. Fensterstock,, Justice Ira B. Warshawsky: Appointed an independent computer forensics expert to examine defendant s s home computer and palm pilot and to report to the court on the relevant findings. Insofar as there is a conflict in the assertions of each parties compliance with production of [the electronic discovery], the cost of the forensic discovery [shall] be shared in equal measure by the parties.

27 Costs of Production Second Department persuaded plaintiff s counsel to agree during oral argument that all costs related to the recovery of the [defendants ] ] hard drive data shall be borne solely by the plaintiff in order to ascertain whether any relevant s that were deleted could be retrieved. Samide v. Roman Catholic Diocese of Brooklyn,, 5 A.D.3d 463, 773 N.Y.S.2d 116 (2d Dep t 2004).

28 Spoliation: No Cause for Celebration What happens if a party does not preserve discoverable e-data? e Traditional Doctrine of Spoliation Federal Courts: the destruction or significant alteration of evidence, or the failure to preserve property for another s s use as evidence in pending or reasonably foreseeable litigation. West v. Goodyear Tire & Rubber Co.,, 167 F.3d 776, 779 (2d Cir. 1999)

29 Spoliation: No Cause for Celebration State Court: Where a party destroys essential physical evidence such that its opponents are prejudicially bereft of appropriate means to confront a claim with incisive evidence, the spoliator may be sanctioned by the striking of its pleading. Klein v. Ford Motor Co., 303 A.D.2d 376, 377, 756 N.Y.S.2d 271 (2d Dep t t 2003)

30 Spoliation: No Cause for Celebration Remedies for spoliation: Dismissal of complaint or answer Precluding the use of evidence Adverse inference Imposing costs and/or attorneys fees Admonition

31 Residential Funding Co. v. DeGeorge Financial, 306 F.3d 99 (2d Cir. 2002): Spoliation: No Cause for Wake up call to parties and their attorneys faced with requests to produce Celebration

32 Spoliation: No Cause for Celebration At issue: The sufficiency of a party s s efforts to retrieve relevant and responsive from backup tapes. The Court gave clear notice that a party s s efforts to search for and retrieve , even from complicated backup tapes, would be placed under great judicial scrutiny. Hiring an expert to identify and retrieve responsive was not deemed sufficient if the expert did not accomplish the task requested. Imposition of adverse inferences.

33 Spoliation: No Cause for Celebration Zubulake V, Judge Shira A. Scheindlin imposed three basic sanctions against the defendant for destroying during the pendency of the litigation and failing to produce other s in a timely manner: (1) instructing the jury that the evidence in question would have been unfavorable to the defendant; (2) ordering the defendant to pay the costs of any depositions or re-depositions required by the late production of evidence; and (3) ordering the defendant to pay the costs of the motion required by the spoliation.

34 Spoliation: No Cause for Celebration State Court: Again, very little guidance thus far Look to Federal case law Try to avoid being the poster child of future sanctions analysis

35 Practical Considerations Think about how electronic evidence may be relevant to your case Focus specific discovery requests on particular types of electronic data Consult with Experts Tap web-based based resources

36 Electronic Discovery The e-nd MEYER, SUOZZI, ENGLISH & KLEIN, P.C.