What Happens When Litigation Starts? How Do You Get People Not To Generate the Bad Documents?

Transcription

1 Document Retention and Destruction in Oregon What Happens When Litigation Starts? How Do You Get People Not To Generate the Bad Documents? Timothy W. Snider (503) Stoel Rives LLP E t bli h d i i l ffi i 1907 i P tl d Established original office in 1907 in Portland 350 Attorneys in 12 Offices Portland, Seattle, Salt Lake City, Boise, Sacramento, Minneapolis, Denver, San Diego, Lake Tahoe, Anchorage Top Ranked Oregon Law Firm in Chambers USA, Corporate Board Member Magazine, Numerous Other Publications Litigation Practice Focuses on Representing Businesses and Business Owners in All Manner of Disputes

2 Two Recurring Litigation Nightmares The First Nightmare: The Missing Document The Second Nightmare: The Bad Document

3 Missing or Destroyed Documents Are Serious Business... Aside perhaps from perjury, no act serves to threaten the integrity of the judicial process more than the spoliation of evidence. Our adversarial system is designed to tolerate human failings erring judges can be reversed, uncooperative counsel can be shepherded, and recalcitrant witnesses compelled to testify. But, when critical documents go missing, judges and litigants alike descend into a world of ad hocery and half measures and our civil justice system suffers. To guard against this, each party in litigation is solemnly bound to preserve potentially relevant evidence. United Medical Supply, 77 Fed. Cl. 257 (Jun. 2007). For the current good faith discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and s are maintained and to determine how best to locate, review, and produce responsive documents. Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search. Producing 1.2 million pages of marginally relevant documents while hiding 46,000 critically important ones does not constitute good faith and does not satisfy either the client s or attorney s discovery obligations. Similarly, agreeing to produce certain categories of documents and then not producing all of the documents that fit within a category is unacceptable. Qualcomm s conduct warrants sanctions. Qualcomm Inc. v. Broadcom Corp., 2008 WL (S.D. Cal. 2008). With Serious Consequences Default Judgment on Liability Perlman v. Morgan-Stanley Payment of Opposing Parties Fees and Costs Qualcomm

4 How Do We Avoid the Missing Document Nightmare? When sued or when you know suit is likely, reasonably search for and take steps to preserve relevant documents and electronically stored information. When Is the Duty to Preserve Documents and Relevant ESI Triggered in the Litigation Context? The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation most commonly when suit has already been filed, providing the party responsible for the destruction with express notice, but also on occasion in other circumstances, as for example when a party should have known that evidence may be relevant to future litigation. Kronish v. United States, t 150 F.3d 112, 126 (2d Cir. 1998).

5 What is the Scope of the Preservation Duty? Preservation v. Continuing Business Operations The next question is: What is the scope of the duty to preserve? Must a corporation, upon recognizing the threat of litigation, preserve every shred of paper, every or electronic document, and every backup tape? The answer is clearly, no. Such a rule would cripple large corporations, like UBS, that are almost always involved in litigation. Zubulake IV, 220 F.R.D. 212, 217 (S.D.N.Y. 2003). The Duty to Preserve is Very Broad and Includes ESI That is Not Reasonably Accessible A party s identification of sources of electronically stored information as not reasonably accessible does not relieve the party of its common-law or statutory duties to preserve evidence. Committee Notes, Rule 26(b)(2)

6 Not Reasonably Accessible Legacy data Disaster recovery backup tapes Burden and expense data What Steps Should Be Taken to Preserve Potentially Relevant Documents and ESI? The Litigation Hold What is the Litigation Hold? Why send a Litigation Hold? Who Should Receive a Litigation Hold? What Should the Litigation Hold Communicate?

7 Litigation Counsel s Duties [C]ounsel must become fully familiar with her client's document retention policies, as well as the client's data retention architecture. This will invariably involve speaking with information technology personnel, who can explain system-wide backup procedures and the actual (as opposed to theoretical) implementation of the firm's recycling policy. It will also involve communicating with the key players in the litigation, in order to understand how they stored information. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 432 (S.D.N.Y. 2004)

8 What Steps Should Be Taken to Preserve Potentially Relevant Documents and ESI? Identifying Identifying Sources Hard Drives Servers Backup Tapes Boxes of Bytes Putting It All in Perspective Assumptions: Average banker s box holds 2,500 sheets of paper 1 page of information on average = (.02 megabytes) Typical Server Hard Disk Typical PC Hard Disk = = File Sizes 1 2, , , , , , ,000, ,250,000, 25 1,000 2,500, ,000 5,000, ,000 12,500, ,000 25,000, ,000 50,000, , ,00, , ,000,000 3 Megabytes Gigabytes Terabytes

9 Examples of ESI Web logs Word processing documents Spreadsheets messages and attachments Graphic images Plus other data created and stored on computers and networks Custodian Interviews T f d Types of records Locations ESI Inventory Other persons with relevant records Litigation Hold

10 Discovery Planning Conference Rule 26(f) [T]he parties must confer to discuss any issues relating to preserving discoverable information, and to develop a proposed discovery plan that indicates the parties views and proposals concerning: (3) Any issues relating to the disclosure or discovery of electronically stored information Checklist Rule 26(f) Conference Preservation Litigation Hold Records custodian Disclosure Reasonably available Not reasonably available Timing of disclosures

11 Checklist for Rule 26(f) Conference Collection & Production Scope Form Privilege Schedule Safe Harbor Provision [A]bsent exceptional circumstances, a court may not impose sanctions when electronically stored information has been lost as a result of routine, good faith operation of an electronic information system. Fed. R. Civ. P. 37(e)

12 Handling of Privileged Materials Preserving the Attorney-Client Privilege Waiver Privilege Logs Quick Peek and Claw Back Agreements Inadvertent Production of Privileged Materials Notice Duty to return, sequester, or destroy Court review Agreements Quick Peek and Clawback Rule 26(b)(5) Committee Notes Rule 26(b)(5),26(f)

13 The Risks You Run Civil Sanctions Fee Shifting Qualcomm Q l The Adverse Inference Instruction ORS (1)(c) ( Evidence willfully suppressed would be adverse to the party suppressing it. ) Evidentiary Preclusion Striking a Claim or Defense Leon v. IDX, 464 F.3d 951 (9th Cir. 2006) Default Judgment Perlman Civil Tort Action Marcum v. Adventist Health System The Risks You Run Criminal Sanctions in Federal Investigations and Bankruptcy Whoever knowingly alters, destroys, conceals, falsifies, or makes a false entry in any record, document, or tangible object with the intent to impede, obstruct, or influence the investigation or proper administration of any matter within the jurisdiction of any department or agency of the United States or any case filed under title 11, or in relation to or contemplation of any such matter or case, shall be fined under this title, imprisoned not more than 20 years, or both USC 1519

14 The Second Nightmare The Smoking Gun Document The Draft Document The Diary The Joke Document The Bad Document Nightmare Why Documents Are Such Powerful Evidence D t C t B I h d f M L Bi Documents Cannot Be Impeached for Memory Loss, Bias or Self-Interest Documents Are Eye-Witnesses A Bad Document Becomes the Centerpiece of the Opponent s Case Bad Documents Are Powerful With a Jury Bad Documents Are Not Easy to Explain Away

15 The Nemesis is Discoverable The Spontaneity of Speech and the Permanence of a Formal Business Record Humor and Sarcasm The New York Times Rule How To Avoid the Bad Document Management Training Training and Policies Proper Business Communication The Draft Document Problem Non-Lawyers Opining on Legal Questions Preserving Privileged Documents

16 How To Avoid the Bad Document Proper Purge Programs Witt Written Policy The Document Life Cycle Software Solutions for ESI Questions?

17 Document Retention and Destruction in Oregon What Happens When Litigation Starts? How Do You Get People Not To Generate the Bad Documents? Timothy W Snider Timothy W. Snider (503) twsnider@stoel.com