Tips on Electronic Discovery and How to Persuade Judges Michael R. Fitzpatrick, Rock County Circuit Judge

Transcription

1 Tips on Electronic Discovery and How to Persuade Judges Michael R. Fitzpatrick, Rock County Circuit Judge 1 - Fitzpatrick

2 Tips on Electronic Discovery and How to Persuade Judges Wisconsin Defense Counsel July 2015 Michael R. Fitzpatrick, Rock County Circuit Judge Please Note: There will be detailed discussions at the live presentation concerning, among other issues, the perspective of a Judge, best practices concerning ESI, and tips on discovery disputes as noted in the outline and at many other points in the presentation. Those discussions will be presented with PowerPoint slides and will significantly expand on the outline. 2 - Fitzpatrick

3 I. UPON PETITION OF THE WISCONSIN JUDICIAL COUNCIL, AND IN ORDERS DATED JULY 6, 2010 AND NOVEMBER 10, 2010, THE WISCONSIN SUPREME COURT MADE SIGNIFICANT CHANGES TO VARIOUS STATUTES CONCERNING THE MANAGEMENT AND DISCOVERY OF ELECTRONICALLY STORED INFORMATION. SEE ORDERS AND 09-01A IN THE APPENDIX, REPORTED AT 2010 WI 67 AND 2010 WI 129. A. The revised, or newly created, statutes are: 1. Sec (3)(jm) Discussion of ESI at the scheduling conference. 2. Sec (2)(e) Discovery of ESI only after mandatory conference; protective orders. 3. Sec Production of ESI in response to interrogatories. 4. Sec Production of ESI in response to requests for production. 5. Sec (4m) Destruction of ESI and sanctions. 6. Sec Use of Special Master in ESI disputes. 7. Sec (2) Discovery of ESI from third parties. B. These statutes, and even more recent changes to Wisconsin Statutes on privilege and work product which are noted in detail later, are interrelated and work together toward the Wisconsin Supreme Court s goal to efficiently and fairly manage the discovery and use of ESI. II. THE FOUR P s OF E-DISCOVERY ARE RECURRING THEMES. A. Proportionality B. Preservation C. Privilege D. Privacy 1. HIPAA 2. Human Resources records 3. Laws of other countries E. The ubiquitous nature of ESI F. The unique aspects of ESI as compared to other types of evidence 3 - Fitzpatrick

4 1. Volume 2. Difficulties in preservation 3. Multiple locations of some ESI 4. Deleted vs. hidden 5. Metadata 6. Changes in technology 7. Now, everybody has ESI III. WHAT IS ELECTRONICALLY STORED INFORMATION (ESI)? A. Codified at Sec (1)a)1 B. Modeled on FRCP 34(a)(1)(A) C. Sec (1) states, in relevant part: (1) Scope. A party may serve on any other party a request within the scope of s (2): a) to produce and permit the requesting party or its representative to inspect, copy, test or sample the following items in the responding party's possession, custody, or control: 1. any designated documents or electronically stored information, including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations stored in any other medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form... D. The Judicial Council Note with this change states: [This statute] is amended to confirm that discovery of electronically stored information stands on equal footing with discovery of paper documents. The change clarifies that [this statute] applies to information that is fixed in a tangible form and to information that is stored in a medium from which it can be retrieved and examined. A... request for production of "documents" should be understood to encompass, and the response should include, electronically stored information unless discovery in the action has clearly distinguished between electronically stored information and "documents." E. The Judicial Council Note makes it clear that this definition of ESI applies to all ESI references in Wisconsin Statutes: 4 - Fitzpatrick

5 References elsewhere in the rules to "electronically stored information" should be understood to invoke this expansive approach. F. The Wisconsin Supreme Court did not adopt the Judicial Council Notes for these statutory changes but, importantly, the Wisconsin Supreme Court ordered that the Judicial Council Notes shall be printed for informational purposes. The Judicial Council Notes adopted portions of the Notes of the Federal Advisory Committee on Civil Rules regarding these subjects. G. So, there is now no question that, in Wisconsin State Courts, ESI is discoverable and there is even a definition of ESI. 1. The definition was intended to be broad to encompass future changes in technology which are unforeseen as of today. H. With that basic background, the details of the mechanics of ESI discovery in Wisconsin Courts are examined in the following sections. IV. A NEW PROVISION: SEC (3)(jm). A. This new addition to the statute on scheduling and planning states that a Court should consider the need for discovery of ESI. B. This addition is modest because the introduction to subpart (3) of Sec states that a Court may consult with counsel and make orders on certain issues. However, the real change is the focus on ESI mentioned in the Judicial Council Notes: Sub. (3) has been amended to encourage courts to be more active in managing electronic discovery. C. Remember, though, that a Judge almost certainly cannot tell from the few pleadings in the file at the time of the Scheduling Conference whether management of ESI will be needed in that particular case. 1. Discussion on how and when to raise the issue of ESI discovery with the Judge before the Scheduling Conference. V. A MAJOR SHIFT IN WISCONSIN DISCOVERY: NEW PROVISION SEC (2)(e). A. Sec , generally, allows discovery in civil actions and provides a broad outline of how discovery proceeds in Wisconsin courts. A change to Sec is important and is a major shift in Wisconsin practice B. Sec (2)(e) has been created and reads: (e) Specific limitations on discovery of electronically stored information. 5 - Fitzpatrick

6 1. No party may serve a request to produce or inspect under s seeking the discovery of electronically stored information, or respond to an interrogatory under s (3) by producing electronically stored information, until after the parties confer regarding all of the following, unless excused by the court: a. The subjects on which discovery of electronically stored information may be needed, when such discovery should be completed, and whether discovery of electronically stored information shall be conducted in phases or be limited to particular issues. b. Preservation of electronically stored information pending discovery. c. The form or forms in which electronically stored information shall be produced. d. The method for asserting or preserving claims of privilege or of protection of trial-preparation materials, and to what extent, if any, the claims may be asserted after production of electronically stored information. e. The cost of proposed discovery of electronically stored information and the extent to which such discovery shall be limited, if at all, under sub. (3) (a). f. In cases involving protracted actions, complex issues, or multiple parties, the utility of the appointment by the court of a referee under s or an expert witness under s to supervise or inform the court on any aspect of the discovery of electronically stored information. 2. If a party fails or refuses to confer as required by subd. 1., any party may move the court for relief under s (1). 3. If after conferring as required by subd. 1., any party objects to any proposed request for discovery of electronically stored information or objects to any response under s (3) proposing the production of electronically stored information, the objecting party may move the court for an appropriate order under sub. (3). C. This new portion of the statute creates a requirement now unique in Wisconsin law that counsel must confer before certain discovery may occur. Consideration of some important questions is now helpful. 6 - Fitzpatrick

7 D. When must a conference occur? 1. Before a party serves on another party requests to produce ESI. 2. Before a party produces ESI in response to an interrogatory under Sec (3). 3. But, some discovery may go forward before the ESI Conference occurs. No conference is required before the taking of depositions or sending Requests to Admit. See the unique Supreme Court Note after Sec While the Judicial Council Notes have been published but not adopted by the Supreme Court, this Supreme Court Note appears to be a direct statement from the Supreme Court. E. What might happen if counsel do not confer about ESI discovery as required? 1. If one party fails or refuses to confer, another party can request sanctions. See Sec (2)(e)2. 2. If a party still refuses to confer, further sanctions may be imposed under Secs (2) and , including the striking of pleadings, dismissal, etc. 3. The party responding to requests to produce might wait until the response time to raise the objection that no conference has occurred and, as a result, withhold discovery; this will delay discovery of ESI. 4. A Court may not allow the requesting party to file a Motion to Compel until the ESI discovery conference occurs. 5. If a party responding to interrogatories produces ESI rather than a substantive answer to the interrogatory, the producing party may be required to produced ESI twice (more about this later). F. Which subjects must be discussed at the conference? Please note: Each of these subjects are important in ESI discovery and are implicated in many ESI-related disputes. 1. Subject matter of ESI (or limitations to particular issues). 2. Dates for completion of discovery. 3. Phasing of ESI discovery. 4. Preservation of ESI. 5. Forms in which ESI will be produced. 6. Assertion of privilege and clawback provisions for privileged information produced. 7. Costs and protective orders. 7 - Fitzpatrick

8 8. Appointment of referee or expert witness to assist the Court with ESI. G. Keep in mind that no one has to agree to anything at the mandatory ESI discovery conference; counsel simply have to confer. H. Sec (2)(a)1 states that the mandatory ESI discovery conference need not occur if the parties are excused from that requirement by the Court. 1. Discussion about when and how the Judge should be approached for an exception to the mandatory ESI discovery conference. VI. REQUESTS FOR PRODUCTION OF ESI. A. The mandatory conference has been held and the parties are ready to request and produce ESI. This section and the next sections address practical concerns about ESI production. B. The new portions of Sec concern the form and organization of the production of ESI. C. Sec (2)(a) states: The request may specify the form or forms in which electronically stored information is to be produced. 1. Form may be PDF, native, or require the use of proprietary software to put it in a reasonably usable form (remember the definition of ESI discussed earlier). D. Sec (2)(b)1. states: The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form, or if no form was specified in the request, the party shall state the form or forms it intends to use. 1. Response may object to form requested but, if not agreed, the response must state the forms the party intends to use. E. How should a responding party decide which form to use? 1. Sec (2)(b)2.b. states that the producing party shall produce ESI in a form... in which it is ordinarily maintained or in a reasonably usable form Sec (2)(b)2.c. states that the same ESI need not be produced in more than one form. 3. Discussion of practical issues related to the form of ESI. 8 - Fitzpatrick

9 F. The next section of the statute concerns the organization of the produced ESI; in other words, the way it is packaged for the adverse party. Sec (2)(b)2.a. states: 2. Unless otherwise stipulated or ordered by the court, these procedures apply to producing documents or electronically stored information: a. A party shall produce documents as they are kept in the usual course of business or shall organize and label them to correspond to the categories in the request G. The Judicial Council Note makes excellent points which should be kept in mind when requesting or producing ESI. 1. Don t raise needless obstacles in producing ESI (or it may cost your client time and money). [The statute] provides that a party must produce documents as they are kept in the usual course of business or must organize and label them to correspond with the categories in the discovery request. The production of electronically stored information should be subject to comparable requirements to protect against deliberate or inadvertent production in ways that raise unnecessary obstacles for the requesting party.... The option to produce in a reasonably usable form does not mean that a responding party is free to convert electronically stored information from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information efficiently in the litigation. 2. Everything produced need not be in the same form. The rule recognizes that different forms of production may be appropriate for different types of electronically stored information. Using current technology, for example, a party might be called upon to produce word processing documents, messages, electronic spreadsheets, different image or sound files, and materials from databases. Requiring that such diverse types of electronically stored information all be produced in the same form could prove impossible, and even if possible could increase the cost and burdens of producing and using the information. The rule therefore provides that the requesting party may ask for different forms of production for different types of electronically stored information. 9 - Fitzpatrick

10 3. Inform the other party of the form to be used before production occurs to avoid disputes and to avoid more than one production of the same ESI. H. Discussion: Stating the intended form before the production occurs may permit the parties to identify and seek to resolve disputes before the expense and work of the production occurs. A party that responds to a discovery request by simply producing electronically stored information in a form of its choice, without identifying that form in advance of the production... runs a risk that the requesting party can show that the produced form is not reasonably usable and that it is entitled to production of some or all of the information in an additional form. Additional time might be required to permit a responding party to assess the appropriate form or forms of production. 1. How to avoid problems in production (and avoid frustrating the Judge). VII. INTERRELATIONSHIP OF INTERROGATORY ANSWERS AND ESI. A. The recent changes to Sec (3) are modeled after FRCP 33(d): (3) Option to produce business records. If the answer to an interrogatory may be determined by examining, auditing, compiling, abstracting, or summarizing a party's business records, including electronically stored information, and if the burden of deriving or ascertaining the answer will be substantially the same for either party, the responding party may answer by: (a) specifying the records that must be reviewed, in sufficient detail to enable the interrogating party to locate and identify them as readily as the responding party could; and (b) giving the interrogating party a reasonable opportunity to examine and audit the records and to make copies, compilations, abstracts, or summaries. B. So, under that statute, the responding party need not give a substantive answer to an interrogatory if two tests are met. 1. An answer to an interrogatory may be determined by reviewing business records of a party, including ESI, and 2. The burden of ascertaining the answer will be substantially the same for either party. C. If those two tests are met, then the responding party may: 1. Specify the records in sufficient detail to enable the adverse party to locate and identify those as readily as the responding party could; and 10 - Fitzpatrick

11 2. Give the adverse party a reasonable opportunity to examine the records and make copies. D. Keep in mind a large practical consideration in using this method. As the Judicial Council Note points out, as readily as the party served may require the responding party to provide technical support or assistance so the requesting party can actually use the information. E. Discussion about practical problems inherent in this process, and the protection of privileged and trade secret information during this process. VIII. THIRD-PARTY DISCOVERY OF ESI. A. Sec (2) now clarifies that ESI is discoverable from third-parties through a subpoena. B. The changes are modeled on FRCP 45. C. In what form must the ESI be produced by the third party? Sec (2)(a) states: A subpoena may specify the form or forms in which electronically stored information is reproduced. D. In addition, Sec (2)(c) states: (c) If a subpoena does not specify a form for producing electronically stored information, the person responding shall produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms. The person responding need not produce the same electronically stored information in more than one form. 1. Unlike party production of ESI, this statute does not specifically mention the producing party s option to object to the form requested. Does this mean that, once the form of ESI is stated in the subpoena, the responding party must produce the ESI in that form? 2. No, Sec (3) states that the responding party may seek a protective order. That gives the Court authority to order that the ESI be produced in a given form. 3. Note that the duty to confer under Sec (2)(e) does not apply to third-party discovery. However, the prudent course would be to confer. IX. WHAT HAPPENS IF THERE IS A DISPUTE ABOUT ESI PRODUCTION? A. Now that the mechanics of ESI discovery have been reviewed, assume the parties have reached an impasse on ESI discovery. What are the procedural vehicles available to 11 - Fitzpatrick

12 resolve the issue and what factors must a Judge balance in resolving a dispute about ESI? B. If the parties cannot agree, or there is an objection on an issue about production of ESI, the procedures available are that a party may: (1) request a protective order; or (2) file a motion to compel. See Sec (2)(e)3. C. The Supreme Court Note following Sec details the factors it is appropriate for Courts to consider in deciding ESI discovery disputes. These were drawn from the Federal Advisory Committee on Civil Rules and a Wisconsin case. The list is not meant to be exclusive and it takes Wisconsin discovery law into new directions. 1. The costs and potential benefits of the discovery. 2. The specificity of the discovery request. 3. The quantity of information available from other and more easily accessed sources. 4. The failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources. 5. The likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources. 6. Predictions as to the importance and usefulness of the requested information. 7. The importance of the issues at stake in the litigation. 8. The parties resources. D. There is a wealth of helpful case law from the federal Courts. The federal Courts have dealt with these issues for years and federal case law gives specific, concrete examples of trial court Judges exercising their discretion in balancing the appropriate factors. 1. A wonderful example of a trial court Judge balancing numerous factors and practical aspects of a difficult ESI discovery dispute is in a set of cases from the Southern District of New York: Zubalake v. UBS Warburg. The cites are: 217 F.R.D. 309 (Zubalake I); 230 F.R.D. 290 (Zubalake II); 216 F.R.D.280 (Zubalake III); 220 F.R.D. 212 (Zubalake IV); and 229 F.R.D. 422 (Zubalake V). E. Wisconsin Courts accept as persuasive authority federal case law about the procedural counterparts to Wisconsin s discovery rules. Wilson v. Continental, 87 Wis. 2d 310, 316 (1979). 1. Discussion on the usefulness of federal case law and how to maximize the use of such case law with Wisconsin Circuit Judges Fitzpatrick

13 F. Circuit Judges are given a large amount of discretion in resolving discovery disputes and Judges have various methods to resolve discovery disputes. State v. Beloit Concrete, 103 Wis. 2d 506, 513 (Ct. App. 1981). G. Now that the factors which should be balanced by Wisconsin Circuit Judges are known, the following is a list of questions which should be answered for the Judge in order to help him/her exercise their discretion (and to help you prevail). 1. What is the relevance of the proposed ESI discovery to the issues in this case? 2. How specific is the ESI discovery request? 3. What are the potential benefits of the requested ESI discovery? a. Does the requested ESI relate to a key time period? b. Does the requested ESI discovery relate to an important issue? 4. Is the ESI available from other, and more easily accessed, sources? a. What is the likelihood of finding relevant, responsive information from this source as compared to other sources? 5. What are the burdens on the parties and the costs involved in finding and producing the ESI discovery? a. What is the amount in controversy in the suit? b. What is the total cost of production compared to the amount in controversy? c. What are the relative resources of the parties? d. What is the relative ability of each party to control costs for production of the ESI? H. Discussion about best practices: preparing for and successfully arguing ESI discovery motions. I. What tools might Circuit Judges use to balance the various interests and factors? 1. Sequencing or staging of ESI discovery. 2. Sampling. 3. Vincent and Vincent, 102 Wis. 2d 266, scenario on cost shifting. 4. Key word searches. 5. Attorneys-eyes only orders Fitzpatrick

14 6. Appointment of Special Master (Referee). 7. Cost sharing, Hake v. Lincoln Co., 246 F.R.D. 577 (W.D. Wis. 2007). 8. Other methods. J. Discussion about the advantages and disadvantages of each of these methods and why various methods of resolving ESI discovery disputes are more or less likely to be preferred by Judges. X. USE OF SPECIAL MASTER FOR ESI DISPUTES. A. The use of a Special Master to supervise or inform the Court on any aspect of the discovery of ESI is specifically noted in the topics for discussion at the mandatory conference: f. In cases involving protracted actions, complex issues, or multiple parties, the utility of the appointment by the court of a referee under s or an expert witness under s to supervise or inform the court on any aspect of the discovery of electronically stored information. B. However, Special Masters are to be used rarely. See Sec (2): (2) A reference shall be the exception and not the rule. In actions to be tried by a jury, a reference shall be made only when the issues are complicated; in actions to be tried without a jury, save in matters of account and of difficult computation of damages, a reference shall be made only upon a showing that some exceptional condition requires it. C. Discussion about the advantages and disadvantages of a Special Master and how best to approach the Judge about the appointment of a Special Master. XI. A SHORT DISCUSSION ABOUT METADATA. A. What is it? 1. Electronically stored information about: a. Who created/changed the information? b. How was it changed? c. Who deleted it? d. Who looked at it? e. When did these events occur? 14 - Fitzpatrick

15 f. Who sent or received the ESI? B. Metadata may make a difference in litigation in various ways, including: 1. Shows a sequence of events. 2. Evidence of knowledge or intent. 3. Evidence of destruction or changes. C. Does metadata come within the definition of ESI under Wisconsin law? Is it discoverable? 1. No Wisconsin case, published, unpublished, or in the Circuit Courts, has been found which has decided whether metadata is discoverable. 2. The federal courts do not take a uniform approach to this issue. D. Discussion on discovery of metadata and uses of metadata. XII. A DISCUSSION ABOUT SPOLIATION. A. Ramkus Consulting v. Cammarata, 688 F. Supp. 2d 598, 607 (S.D. Tex. 2010): Spoliation of evidence particularly of electronically stored information, has assumed a level of importance in litigation that raises grave concerns. Spoliation allegations and sanction motions distract from the merits of a case, add costs to discovery, and delay resolution. The frequency of spoliation allegations may lead to decisions about preservation based more on fear of potential future sanctions than on reasonable need for information. B. In many federal courts, sanctions for spoliation of ESI have taken on a life of their own with enormous sums of money ordered as sanctions. There is little or nothing from Wisconsin courts on sanctions for spoliation of ESI. However, there is case law about spoliation issues and, unless and until the Supreme Court carves out special rules for ESI spoliation, Circuit Judges must work within this framework on spoliation. C. What is Wisconsin law, generally, on the issue of spoliation? 1. American Family v. Golke, 319 Wis. 2d 397 (2009) is an important, recent case from the Supreme Court. Some relevant highlights from Golke include: a. Every party or potential litigant is duty-bound to preserve evidence essential to a claim that will be litigated... Spoliation is the intentional destruction, mutilation, alteration, or concealment of evidence... [S]anctions serve two 15 - Fitzpatrick

16 main purposes: (1) to uphold the judicial system s truth-seeking function and (2) to deter parties from destroying evidence. Golke at 21. b. We hold, therefore, that a party or potential litigant with a legitimate reason to destroy evidence discharges its duty to preserve relevant evidence within its control by providing the opposing party or potential litigant: (1) reasonable notice of a possible claim; (2) the basis for that claim; (3) the existence of evidence relevant to the claim; and (4) reasonable opportunity to inspect that evidence... [t]he trial court must use its own judgment, its own discretion, to determine whether the content of the notice is sufficient in light of the totality of the circumstances. Relevant facts might include the length of time evidence can be preserved, the ownership of the evidence, the prejudice posed to possible adversaries by the destruction of the evidence, the form of the notice, the sophistication of the parties and the ability of the party in possession of the evidence to bear the burden and expense of preserving it. This framework serves the judicial system s truth-seeking function and effectively prevents parties from prematurely destroying evidence. Golke at c. We affirm that dismissal as a sanction for spoliation is appropriate only when the party in control of the evidence acted egregiously in destroying that evidence... Egregious behavior is a conscious attempt to affect the outcome of the litigation or a flagrant, knowing disregard of the judicial process.... Lesser spoliation sanctions, such as pre-trial discovery sanctions and negative inference instructions, however, may be appropriate for spoliation where a party violated its duty to preserve relevant evidence, but where the destruction of such evidence did not constitute egregious conduct. Golke at Morrison v. Rankin, 305 Wis. 2d 240 (Ct. App. 2007) contains a good discussion about when a party should be aware that potential evidence should not be destroyed: a. When a party deliberately destroys documents, the court may find spoliation by applying a two-part analysis. First, the court should consider... whether the party responsible for the destruction of evidence knew, or should have known, at the time it destroyed the evidence that litigation was a distinct possibility.... Second, the court should consider whether the offending party destroyed documents which it knew, or should have known, would constitute evidence relevant to the pending or potential litigation. Morrison at There is a five-step process in Wisconsin law for evaluating the destruction of evidence and whether it constitutes spoliation Fitzpatrick

17 (1.) Identification, with as much specificity as possible, of the evidence destroyed; (2.) The relationship of that evidence to the issues in the action; (3.) The extent to which such evidence can now be obtained from other sources; (4.) Whether the party responsible for the evidence destruction knew or should have known at the time it caused the destruction of the evidence that litigation against the opposing parties was a distinct possibility; and (5.) Whether, in light of the circumstances disclosed by the factual inquiry, sanctions should be imposed upon the party responsible for the evidence destruction and if so, what those sanctions should be. Milwaukee Constructors II v. Milwaukee Metro Sewerage District, 177 Wis. 2d 523, 532 (Ct. App. 1993). 4. Recap of Wisconsin case law on spoliation and discussion of the limitations of case law on spoliation of tangible things as opposed to spoliation of ESI. D. The following are excellent federal cases which show the need for a detailed, practical approach to spoliation and sanctions: 1. Ramkus Consulting v. Cammarata, 688 F.Supp. 2d 598 (S.D. Tex. 2010). 2. Victor Stanley v. Creative Pipe, 269 F.R.D. 497 (D. Md. 2010). E. New Statute Sec (4m) concerns ESI and spoliation. It reads: 1. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system. 2. Modeled on FRCP 37(e). 3. If the ESI is not lost in a routine and good faith manner, then Sec (4m) does not apply. So, the statue is limited and does not displace case law on spoliation. The Judicial Council Note states: The rule applies to information lost due to the routine operation of an information system only if the operation was in good faith. Good faith in the routine operation of an information system may involve a party s intervention to modify or suspend certain features of the routine operation to prevent the loss of information, if that information is subject to a preservation obligation. A preservation obligation may arise from many sources, including common law, statutes, regulations, or a court order in the case. The good faith requirement... means that a party is not permitted to exploit the routine operation of an information system to thwart discovery 17 - Fitzpatrick

18 obligations by allowing that operation to continue in order to destroy specific stored information that it is required to preserve. 4. As the Judicial Council Note makes clear, even if the deletion was made in good faith and by a routine operation, this statute only limits the sanctions : This rule restricts the imposition of sanctions. It does not prevent a court from making the kinds of adjustments frequently used in managing discovery if a party is unable to provide relevant responsive information. For example, a court could order the responding party to produce an additional witness for deposition, respond to additional interrogatories, or make similar attempts to provide substitutes or alternatives for some or all of the lost information. 5. The statute works in the following manner. See Fabco v. Kreilkamp, 352 Wis. 2d 106, 21 (Ct. App. 2013): a. The moving party has the initial burden of showing the ESI was lost. b. The burden then shifts to the producing party to show that the ESI was lost as a result of the routine, good faith operation of an electronic system. c. If that burden is met, the burden shifts back to the moving party to convince the court that exceptional circumstances warrant sanctions anyway. F. Discussion of preservation orders, requests for sanctions, and how judges view requests for sanctions. RECENT CHANGES TO STATUTES ON PRIVILEGE AND WORK PRODUCT XIII. UPON PETITION OF THE WISCONSIN JUDICIAL COUNCIL, AND IN AN ORDER DATED NOVEMBER 1, 2012, THE WISCONSIN SUPREME COURT MADE SIGNIFICANT CHANGES TO SEVERAL STATUTES REGARDING THE INADVERTENT OR INTENTIONAL DISCLOSURE OF WORK PRODUCT MATERIALS AND ATTORNEY-CLIENT PRIVILEGED COMMUNICATIONS. SEE 2012 WI 114 (IN THE APPENDIX). A. The revised, or newly created, statutes are: 1. Sec (2)(c)1, Wis. Stats. Work product materials; 2. Sec (7), Wis. Stats. Recovering information inadvertently produced in discovery ( clawback ); 3. Sec (2)(d), Wis. Stats. Recovering information inadvertently produced in response to a subpoena ( clawback ); and 18 - Fitzpatrick

19 4. Sec (5), Wis. Stats. Forfeiture of attorney-client privilege; effect of disclosure. B. The Supreme Court did not adopt the Judicial Council Notes to the Petition but the Supreme Court published the Judicial Council Notes so those... may be consulted for guidance in interpreting and applying the rule. 1. The Judicial Council Notes, in turn, adopted the Federal Advisory Committee on Civil Rules Notes concerning analogous changes to the Federal Rules of Civil Procedure. As a result, those Federal Advisory Committee notes published in the Supreme Court Order may also be consulted for guidance in interpreting and applying the new statutes. C. What is the effective date for the changes adopted pursuant to the Supreme Court Order? The new rules... apply to all proceedings commenced after the effective date of this rule and, insofar as is just and practicable, in all proceedings pending on the effective date. The effective date of the Order was January 1, So, if a proceeding was commenced after January 1, 2013, these new rules must apply. 2. For proceedings commenced prior to January 1, 2013, the new rules apply if, in the Judge s discretion, application of the new rules is just and practicable. D. Assume ESI has been produced in discovery. However, some of the materials produced constituted attorney-client privileged communications or work product. The Wisconsin Supreme Court has adopted changes to these statutes because, with the advent of ESI discovery and the production of enormous amounts of data, problems of scale and scope of discovery previously unknown in Wisconsin law have arisen. These changes are attempts to balance various interests of fairness and efficiency in light of practical problems unforeseen even 25 years ago. E. To put these changes in context, it is helpful to briefly review Wisconsin law on the attorney-client privilege and the work product doctrine. These doctrines overlap in various ways but are driven by different policies. XIV. ATTORNEY-CLIENT PRIVILEGE. A. Codified at Sec , Wis. Stats. B. Sec (2), Wis. Stats. is the main part of the statute. It reads: GENERAL RULE OF PRIVILEGE. A client has a privilege to refuse to disclose and to prevent any other person from disclosing confidential communications made for the purpose of facilitating the rendition of professional legal services to the client: between the client or the client's representative and the client's lawyer or the lawyer's representative; or between the client's lawyer and the 19 - Fitzpatrick

20 lawyer's representative; or by the client or the client's lawyer to a lawyer representing another in a matter of common interest; or between representatives of the client or between the client and a representative of the client; or between lawyers representing the client. C. Sec (1)(d), Wis. Stats., helps define the term confidential communication : A communication is "confidential" if not intended to be disclosed to 3rd persons other than those to whom disclosure is in furtherance of the rendition of professional legal services to the client or those reasonably necessary for the transmission of the communication. D. Who may claim the privilege? 1. The client (or client s representative); and 2. The client s lawyer. See Sec (3), Wis. Stats. E. Does the privilege belong to the client, the client s lawyer, or both? 1. The attorney-client privilege belongs to the client. H. Sampson Children s Trust v. L. Sampson 1979 Trust, 271 Wis. 2d 610, 22 (2004); State v. Meeks, 263 Wis. 2d 794, 28 (2003). 2. Only the client can waive the privilege. Sampson, 271 Wis. 2d 610 at and Sec , Wis. Stats. F. What are the public policy reasons for the attorney-client privilege? 1. The purpose of the attorney-client privilege is to promote full and frank communication between client and attorney. Full and frank communication is in turn promoted by endowing the communication with confidentiality. Sampson, 271 Wis. 2d 610 at If the privilege did not exist, every one would be thrown upon his own legal resources. Deprived of all professional assistance, a man would not venture to consult with any skillful person, or would only dare to tell his counselor half his case. Sampson, 271 Wis. 2d 610 at 43 (quoting 8 Wigmore on Evidence, Sec at 546) 3. Complex laws and technically-refined doctrine require the assistance of trained lawyers and sound legal advice depends on a complete knowledge of the facts. Blinka,Wisconsin Evidence, Sec Fitzpatrick

21 G. Is the attorney-client privilege to be narrowly or broadly construed? 1. Because it is an obstacle to the investigation of the truth, it should be narrowly construed. Lane v. Sharp Packaging, 640 N.W.2d 788, 798 (2002) and Jax v. Jax, 73 Wis. 2d 572, 579 (1976). H. The party claiming the privilege has the burden of establishing the privilege by a preponderance of the evidence. Franzen v. Children s Hospital, 169 Wis. 2d 366, 386 (Ct. App. 1992) and Sec (1), Wis. Stats. I. If there is a dispute about the existence or the extent of the attorney-client privilege, a Court should hold an evidentiary hearing. Jax, 73 Wis. 2d at 581. XV. THE WORK PRODUCT DOCTRINE. This doctrine is set out in Sec (2)(c)1, Wis. Stats., and states: 1. Subject to par. (d) a party may obtain discovery of documents and tangible things otherwise discoverable under par. (a) and prepared in anticipation of litigation or for trial by or for another party or by or for that other party's representative (including an attorney, consultant, surety, indemnitor, insurer, or agent) only upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and that the party seeking discovery is unable without undue hardship to obtain the substantial equivalent of the materials by other means. In ordering discovery of such materials when the required showing has been made, the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation. This protection is forfeited as to any material disclosed inadvertently in circumstances in which, if the material were a lawyer-client communication, the disclosure would constitute a forfeiture under s (5). This protection is waived as to any material disclosed by the party or the party's representative if the disclosure is not inadvertent. A. The Work Product Doctrine is a creature of statute but Wisconsin case law is an independent basis for the doctrine. Dudek v. Circuit Court for Milwaukee County, 34 Wis. 2d 559 (1967) and Lane, 640 N.W.2d at 811. B. What is work product? 1. In Ranft v. Lyons, 163 Wis. 2d 282, 302 (Ct. App. 1991), a three-part test was set out: a. The materials are within the scope of discoverable materials under Sec (2)(a), Wis. Stats.; 21 - Fitzpatrick

22 b. The materials were prepared in anticipation of litigation; i. The test should be whether, in light of the nature of the document and the factual situation in the particular case, the document can fairly be said to have been prepared or obtained because of the prospect of litigation. Lane, 640 N.W.2d at 811. c. The materials were prepared by or for a party or a party s attorney. C. There are two types of work product. 1. Ordinary work product consists of materials gathered during investigations, including photos, statements of witnesses, etc. 2. Opinion work product contains mental impressions, conclusions, opinions, or legal theories of an attorney. D. When can a party obtain the work product of an adverse party? 1. The party seeking production must show that the information contained in the work product is not available without undue hardship from other sources or by other means. Lane, 640 N.W.2d at 811 and Sec (2)(c)1, Wis. Stats.; and 2. The party seeking production must show a substantial need for the materials for the preparation of the case for trial or the denial of production will greatly prejudice the movant s preparation for trial. Lane, 640 N.W.2d at 811 and Sec (2)(c)1, Wis. Stats. 3. The work product of the lawyer usually is privileged and not subject to discovery except where the objectives of pretrial discovery are unnecessarily frustrated and where good cause is shown to make exception to the rule... We recognize that application of the work product doctrine is a question of fairness tempered by the basic concepts of our adversary system and the desirable aspects of pretrial discovery. Lane, 640 N.W. 2d at 811. E. The work product doctrine is different than the attorney-client privilege. 1. The work product doctrine is narrower than the attorney-client privilege. The attorney-client privilege concerns all legal advice (transactions, taxation, etc.) and not just materials prepared in anticipation of litigation. Lane, 640 N.W. 2d at ; and Secs and (2)(c)1, Wis. Stats. 2. The work product doctrine is broader than the attorney-client privilege. The work product doctrine protects materials which are not communications between a lawyer and a client. See, as an example, State v. Hydrite, 582 N.W. 2d 411 (Ct. App. 1988) Fitzpatrick

23 3. Unlike the attorney-client privilege, the work product doctrine is a qualified privilege and may give way to the appropriate showing of need. Lane, 640 N.W. 2d at 811. XVI. FORFEITURE OF THE ATTORNEY-CLIENT PRIVILEGE: NEW PROVISION SEC (5), WIS. STATS. A. This new addition to the attorney-client privilege statute reads: (5) FORFEITURE OF PRIVILEGE. (a) Effect of inadvertent disclosure. A disclosure of a communication covered by the privilege, regardless of where the disclosure occurs, does not operate as a forfeiture if: 1. the disclosure is inadvertent; 2. the holder of the privilege or protection took reasonable steps to prevent disclosure; and 3. the holder promptly took reasonable steps to rectify the error, including, if applicable, following the procedures in s (7). (b) Scope of forfeiture. A disclosure that constitutes a forfeiture under sub. (a) extends to an undisclosed communication only if: 1. the disclosure is not inadvertent; 2. the disclosed and undisclosed communications concern the same subject matter; and 3. they ought in fairness to be considered together. B. The changes are modeled on relatively recent changes to Federal Rule of Evidence 502. C. Note the title: Forfeiture of Privilege. 1. This statutes employs the distinction between waiver and forfeiture drawn relatively recently by the Wisconsin Supreme Court. See, as an example, State v. Ndina, 315 Wis. 2d 653, 29: Although cases sometimes use the words forfeiture and waiver interchangeably, the two words embody very different legal concepts. Whereas forfeiture is the failure to make the timely assertion of a right, waiver is the intentional relinquishment or abandonment of a known right. United States v. Olano, 507 U.S. 725, 733 (1993) (quotation marks and citation omitted) Fitzpatrick

24 D. No discussion of this change in Wisconsin law would be complete without a discussion of Sampson. This new subsection of does not change or alter any holding of Sampson. This is stated explicitly in the Judicial Council Notes with the Supreme Court Order which created this statutory addition. What were the facts in Sampson and why is the Sampson holding distinguishable from this statute? 1. Sampson concerned a deliberate and voluntary act of a lawyer which sent attorneyclient privileged materials to opposing counsel without knowledge or consent of the client. Sampson, 271 Wis. 2d 610, The only mistake of the lawyer was his conclusion that the documents were not privileged. Sampson, 271 Wis. 2d 610, Only the client can waive the attorney-client privilege and, as a result, Sampson holds that those specific facts do not constitute a waiver of the privilege under Sec , Wis. Stats. Sampson, 271 Wis. 2d 610, 32, 46, The Supreme Court Opinion in Sampson, 28, specifically held that the Sampson situation is distinguishable from an inadvertent disclosure of privileged: Because the attorney intended to release the documents in issue, we agree with the Court of Appeals that the rules applicable to inadvertent disclosure adopted by other jurisdictions do not apply to the case at hand. The only mistake seems to have been the attorney s conclusion that the documents were not privileged. 5. Sampson foreshadowed the change in the Wisconsin attorney-client privilege statute we see now. E. Why did the Supreme Court believe this change in the law was needed? 1. There needs to be a balance between a lawyer s duty to protect a client s confidences (see SCR 20:1.6) and the practicalities of the production of information in digital form. 2. With the production of millions of documents, a privilege review of each may be prohibitively expensive and cause attorney fees for the privilege review to be greater than the value of the case. 3. The strict approach, which some state and federal courts have adopted, calls for a forfeiture of the entire attorney-client privilege, or at least permission to use privileged materials produced in discovery, regardless of the care taken by the lawyers or the number of documents produced. Sampson, fn. 15, citing Int l Digital Systems v. Digital Equip. Corp., 120 F.R.D.445, 449 (D. Mass. 1988). 4. Under the lenient approach, an attorney s negligence in disclosure cannot destroy the privilege owned by the client and the materials cannot be used. Sampson, fn. 15, citing Mendenhall v. Barber-Greene, 531 F.Supp. 951, 954 (N.D. Ill. 1982) Fitzpatrick

25 5. Wisconsin has adopted the intermediate or totality of the circumstances approach to this problem. F. Pursuant to the new portion of Sec , Wis. Stats., a disclosure of a privileged communication is not a forfeiture of the privilege if each part of the three-part test is met: 1. The disclosure is inadvertent. a. Inadvertent is not defined but it seems to be the opposite of the deliberate disclosure noted in Sampson. 2. The holder of the privilege took reasonable steps to prevent disclosure; and 3. The holder promptly took reasonable steps to rectify the error. a. In reviewing tests 2 and 3 concerning reasonable steps to prevent disclosure and reasonable steps to rectify an error, the Judicial Council Note cites nine nondispositive factors may be considered: i. the reasonableness of precautions taken, ii. the time taken to rectify the error, iii. the scope of discovery, iv. the extent of disclosure, v. the number of documents to be reviewed, vi. the time constraints for production, vii. whether reliable software tools were used to screen documents before production, viii. whether an efficient records management system was in place before litigation; and ix. any overriding issue of fairness. b. Judges must balance the applicable factors to determine if reasonable steps were taken to prevent disclosure and to rectify any error; also Judges must exercise their discretion and consider issues of fairness. 4. Please note: The nine factors mentioned above are in the context of production of documents in discovery. However, that is only one context in which disclosure may occur. The operative word is disclosure and not production. Disclosure is a broader term than production. There may be disclosure to third persons outside discovery and the same three-part test must be used. 5. The burden is on the disclosing party to meet each test set out in the statute by the greater weight of the credible evidence. 6. Discussion on practical approaches to this area both in and out of Court Fitzpatrick

26 G. Subpart (b) of (5), Wis. Stats., concerns the scope of the forfeiture. In other words, when could the disclosure of privileged communications lead to the disclosure of even more privileged communications? 1. Three tests must be met. a. The disclosure is not inadvertent in other words, the producing party gave up the privileged documents deliberately; and b. The disclosed and undisclosed communications concern the same subject matter; and c. The disclosed and undisclosed communications ought in fairness to be considered together. 2. The burden (probably) is on the party who wants more privileged communications produced. 3. Why would a party ever deliberately give up privileged communications? a. In cases in which a party raises advice of counsel as a defense and puts into evidence selected communications from counsel. Some examples are: i. Crimes regarding non-payment of taxes ( My lawyer told me I could take that deduction ); or ii. Patent infringement suits (Parties sometimes have two sets of lawyers; one firm gives them an opinion on infringement and another firm litigates the suit; the opinion on infringement goes to whether the infringement was willful) 4. In sum, section (5)(b) allows a judge discretion to determine if, in fairness, other privileged communications about the same subject matter must be produced if a disclosing party selectively gives out some but not all privileged communications. XVII. CHANGES TO THE WORK PRODUCT DOCTRINE UNDER SEC (2)(c)1, WIS. STATS. A. This sentence has been added near the end of the work product statute: This protection is forfeited as to any material disclosed inadvertently in circumstances in which, if the material were a lawyer-client communication, the disclosure would constitute a forfeiture under Sec (5). 1. What this means is that, if the disclosure of work product is inadvertent, then there may be a forfeiture but a Judge is to use the same analysis as was discussed previously for privilege forfeitures under Sec (5) Fitzpatrick