José Ramón González-Magaz jrgonzalez@steptoe.com E-Discovery Best Practices www.steptoe.com November 10, 2010
Importance of E-Discovery 92% of all data is ESI. Source: Berkeley Study. 97 billion e-mails sent every year. Source: IDC Study. 60% of business-critical information is stored in corporate e-mails. Source: Berkley Study. Less than 33% of ESI is printed. Source: Berkeley Study. International energy company stores 800 terabytes of ESI - equivalent to 400 billion typewritten pages. Source: 2007 press statement.
E-Discovery Worries Cost Uncontrollable ESI storage flow Smoking gun ESI will never disappear Most companies lack ESI management policies; policies are not enforced; enforcement not monitored; etc. Risk of litigation failure because of e-discovery error FRCP imposes a mad sprint Judges inpatient with pure heart, empty head Difficulty explaining/arguing e-discovery issues Counsel held responsible for ESI holds Inadvertent production/waiver of privileged ESI
U.S. v. Arthur Anderson E-mail: I suggested deleting some language that might suggest we have concluded the release is misleading, wrote a lawyer about an Enron financial release.
An Ounce of Prevention Train the company staff; emphasize that e-mails should: Be accurate and truthful (avoid exaggerations) Avoid humor better safe than funny Avoid informality newspaper front page test Not mix work matters with personal life Never Reply To All ; always Forward Cut e-mail strings as appropriate No expectation of privacy for e-mails Assume e-mails will be forwarded Uniformly mark e-mails to/from counsel as Privileged
ESI Retention Policy ESI need not be retained forever. Appropriate retention policies blessed in Arthur Andersen, LLP v. U.S., 125 S.Ct. 2129 (2005). BUT memorialize and be prepared to justify the technical and business needs for the policy per FRCP 37(e). Ensure that the retention protocol provides attorneys and IT staff easy access to all available ESI in the event of litigation, and the ability to move promptly to a document/esi hold order. Preferable to have outside counsel develop retention policy Implementation of ESI retention policy must be objective and consistent. Consider independent audit of consistent application of policy in the ordinary course of business
Document/ESI Hold Orders Upon notice of litigation pending or threatened, the party must preserve hold the relevant ESI. Zubulake v. UBS Warburg, LLC, 2003 U.S. Dist. Lexis 18771 (S.D.N.Y. 2003). Issue written document/esi hold order ASAP. If available, consider tracking the language of written discovery requests Outside counsel to issue hold order Keep a written record of the directives (assume discoverable) Preserve ESI of former employees Alert agents, consultants, and vendors regarding ESI preservation Hold orders in 3 rd party discovery
Discovery Planning Conference FRCP 26(f)(3): discovery conference must include a discussion of any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced. FRCP 26(f)(4): discovery conference must also include a discussion of any issues relating to claims of privilege or of protection as trial-preparation material, including if the parties agree on a procedure to assert such claims after production whether to ask the court to include their agreement in an order.
Limiting E-discovery Early Share with opposing counsel the methodology for limiting the ESI? ESI custodians Electronic storage systems that will not be searched Selected topics, keyword searches, Boolean limitators, conceptual search engines Form/format of production Is the ESI in native format really necessary? Accessibility of native ESI (e.g., backup tapes circa 1988) Is metadata relevant? Protective order (confidential and proprietary ESI) Attorneys eyes only? Third parties may want to review ESI prior to discovery (e.g., joint defense agreements, trade secrets)
Limiting E-discovery Early Clawback Agreements Privilege and non-waiver agreement Clawback! Establish clawback protocol Only counsel may review ESI for a time period? Clawback of tagging and attorney work product Preclude subject matter waiver
Limiting E-discovery Early Clawback Agreements Figueras v. P.R. Electric Power Authority, 250 F.R.D. 94 (D.P.R. 2008)(J. Besosa) Prior to FRE 502 amendment PREPA inadvertently produced privileged e-mail; then sought protective order Discussion of never waive, strict accountability, and balancing tests Balancing, Court ruled that privilege was waived, as: (i) proper precautions not taken; (ii) delay in noticing the inadvertent disclosure; (iii) volume of production not unusually large ; and (iv) scope of production, extent of disclosure, and fairness favored waiver. Puerto Rico Evidence Rule 505(C), as amended No waiver of privilege for disclosure if: (1) inadvertent; (2) as part of judicial/administrative proceeding; (3) reasonable caution taken to avoid disclosure; and (4) reasonably prompt measures to rectify disclosure. Puerto Rico Evidence Rule 505(D), as amended Parties agreement to preserve privilege if inadvertent disclosure only applicable to the litigation, unless incorporated into court order per Rule 505(E).
Limiting E-discovery Early Redaction agreement and log (e.g., irrelevant personal information) Cost shifting or sharing 7-factor test for determining whether to shift the cost of production per Zubulake v. UBS Warburg, LLC, 2003 U.S. Dist. Lexis 18771 (S.D.N.Y. 2003) Do not commit to reviewing/producing all ESI processed Supervise the EDD vendor
Limiting E-discovery Early Metadata Issues What is metadata? Information about the ESI Automatically generated, so accurate and reliable Benefits of Metadata Authenticity verification Puerto Rico Evidence Rules 901(B)(13-14) and 902(L) May show revisions made Provides tract of the electronic file Allows for objective coding Advanced searchability Metadata is created in the ordinary course of business. BUT is it reprocessed in that ordinary course?
Limiting E-discovery Early Metadata Issues Is the metadata really relevant to the litigation? Puerto Rico Civil Procedure Rules 31.1 and 31.2 (effective July 1, 2010) ESI to be produced in one format: (1) as kept in the ordinary course of business; or (2) that may be usable or reasonably comprehended. Privilege and Privacy of Third Parties Cleaning the ESI (removal of metadata) Permissible if in the ordinary course of business
ESI Discovery Work Flow Company ESI Collection (e.g., by custodian, date range, keywords and Boolean filtering) Potentially Relevant ESI Processing Relevant, Nonprivileged ESI Production of ESI Legal Review and Analysis Potentially Relevant ESI to be Reviewed Processing (e.g., culling, hashing, deduplication, keyword and Boolean filtering)
ESI Review and Analysis Quality Assurance Quality assurance for FRE 502 purposes Appropriate staffing Training and reference materials (assume discoverable) Management and over-the-shoulder supervision Implement immediate corrective action Defensibility of the review U.S. standard: reasonable efforts Trend to counsel certifying completeness EDD processing (objective) vs. reviewers analysis (subjective)
ESI Review and Analysis Train the Reviewers Techniques for reviewing different documents/esi efficiently and reliably (e.g., e-mails vs. spreadsheets vs. memoranda) Preparation of privilege and redactions log Confidentiality classification per protective order Substantive parameters of the review Detection of important ( hot ) documents/esi Uniform parameters for tagging/coding Handling of close-call documents/esi Use of review software platform (e.g., relational platforms)
ESI Review and Analysis Cost Containment Structure of the review First vs. second level review Separate privilege review Rate of review metrics (i.e., files reviewed per hour per reviewer) Complexity of the ESI Native review faster than images, but more costly to process Advanced review platforms (e.g., conceptual, relational) Progress reports Schedule vs. Budget Status alert upon reaching 75% of Budget Daily delivery of hot documents/esi ESI review as component of litigation strategy
Responding to Interrogatories by Producing Business Records ESI per FRCP 33(d) Where the answer to an interrogatory may be derived or ascertained from the business records, including electronically stored information, of the party upon whom the interrogatory has been served it is a sufficient answer to such interrogatory to specify the records from which the answer may be derived or ascertained.
E-Discovery Motion Practice Keep clean hands - good faith ESI production Abuse of FRCP 33(d) discovery responses No trickling or dumping Show diligent ESI discovery management Memorialize the methodology and process Demonstrate best-efforts review of ESI prior to, and following, production Show the court samples of low grade ore ESI Statement from EDD vendor on inaccessibility of ESI and costs of collection/processing Certification by party seeking discovery that it will review the totality of the ESI demanded
E-Discovery Motion Practice Rodríguez-Torres v. GDB, Civil No. 09-1151 (D.P.R.)(January 19, 2010)(J. Pieras) Plaintiff sought ESI production in native format (with metadata) Court-required ESI Report included statement from local EDD vendor that production would cost $35K Applying FRCP 26(b)(2)(B), Court denied motions to compel production and for sanctions, as $35K was too high a cost Puerto Rico Civil Procedure Rule 23.3 (effective July 1, 2010) Analogous to FRCP 26(b)(5)(B), but adds duty to recover ESI divulged prior to notification of inadvertent disclosure.
José Ramón González-Magaz jrgonzalez@steptoe.com Q&A and Comments www.steptoe.com November 10, 2010