The Essentials of E-Discovery

The Essentials of E-Discovery Discovery Solutions and Labor and Employment Groups Webinar May 7, 2009 12:00 to 1:00 p.m. James P. Anelli, Esq. William B. Belt Jr., Esq.

Today s attorneys and some notes... Jim Anelli Newark Bill Belt Richmond Welcome. With the high number of attendees, please note all lines have been muted for the event. Q&A can be posted at the right of your screen, but any questions (time permitting) will be addressed at the end of the event. If using Q&A please send to both the host and the presenter. You can send direct questions (including request for copy of slides) to seminars@leclairryan.com with Essentials of E- Discovery Webinar in the subject for reply after the event. 2

Usage This webinar slide show provides general information and is not legal advice and should not be used or taken as legal advice for specific situations. You should consult legal counsel before taking any action or making any decisions concerning the matters in this show. This communication does not create an attorney-client relationship between LeClairRyan, A Professional Corporation, and the recipient. Copyright 2009 LeClairRyan, A Professional Corporation. All rights reserved. 3

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Important for Virginia MCLE Credit We have applied for 1.0 hours of Virginia MCLE credit for this program. When the course is approved, we will notify you with instructions on how to receive this credit. 5

The Essentials of E-Discovery Introduction to Discovery Solutions Practice 6

Terminology ESI Electronically Stored Information Megabytes a Paperback Emails, PDF s Gigabytes a Pickup Truck of Paper Backs Email stores like PST s and OST s and Terabytes a Library Floor Servers and Backup Tapes 7

Key Dates 2000 Judge Scheindlin coins term ESI in BC Law Review Article. 2000 Chair of the Advisory Committee lays out mission to create changes in rules for ESI. October 2002 - Sedona Conference forms. May 2005 Advisory Committee submits proposed changes to Standing Committee on Rules of Practice November 2005 Standing Committee approves Advisory Committee s proposed changes without amendment. April 2006 United States Supreme Court approves changes without amendment. December 1, 2006 Effective Date for New Rules September 8, 2008 FRE 502 passes House 8

Why This Matters Evidence is Electronic 95% of documents are electronic Most never get printed Electronic Evidence is Different 9

Why Electronic Discovery is Different Sheer volume of electronically stored information (ESI) Newly stored electronic information grew at an estimated 30% per year from 1999 to 2002 (per 2003 Berkeley study). Still growing. Typical 2 gigabyte (GB) user mailbox = about 17,000 emails & 6,000 attachments = about 50,000 100,000 pages 10

Discovery is Different Paper from 20 Employees ESI from 20 Employees Paper from each individual: average about 2 boxes per witness (about 100,000 pages) Paper from each department: average about 10 boxes X 5 departments (about 125,000 pages) Paper from Cold Storage 75 boxes (about 175,000 pages) Total 400,000 pages 2 gigs of emails from each hard drive plus electronic documents (1-2 million pages) Data from servers (databases, shared drives)(1 million pages) Data from back-up tapes (2 million pages) Total 5 million pages 11

It s Qualitatively Different Informal email partial substitute for meetings & telephone. Can contain off-hand comments, halfjokes, and other statements lacking reflection Dynamic changes/deletes, often automatically Email retention policies on Inbox: auto-delete after 90 days VM auto-delete Browser history Backup tapes routinely recycled 12

Difficult to Find Many copies, which are scattered (and across different kinds of storage) Related: hard to truly delete Related: often disorganized; ESI often in myriad subjects in same container ; often not in particular subject-based files, like paper 13

Finding Email is Difficult Enterprise E-Mail Solutions Microsoft Outlook (Exchange Server) Novell Groupwise; Lotus Notes (IBM) (Domino Server) Archiving systems (e.g. Enterprise Vault KVS, EmailXTender, Zantaz, UMB) Other Locations: Hard Drives: Archives, Personal Folders, OST s; BlackBerries devices and BlackBerry Enterprise Server Home Computers, ISP s, Thumb Drives, Disks 14

Electronic Documents Matter Microsoft Word, Excel, PowerPoint; PDFs Stored locally or on network s individual share; &/or on network shared drive. Some people organize their documents; others don t SharePoint E-Rooms Thumb Drives, Disks, External Drives 15

Other Types of Electronic Information Databases Document management and imaging systems E.g. Documentum (in pharmas.) E.g. IBM s FileNet (imaged contracts or human services case management system) Some tendency for construction contractors to image their materials on large projects E.g. Microsoft SharePoint Browser history, cookies, cache Employment cases (allegedly hostile work environment) VM Sometimes in email (.wav files, unified messaging ) Instant messaging Video (YouTube) 16

ESI Special Cases Backup tapes Usually, not always, for disaster recovery (instead of archival) Often run nightly, usually overwritten on a schedule Generally not searchable by text Index Engines May have to restore entire email database to restore a single email vendors Backup tapes for documents (on file servers) better: identify user, path, & filename 17

More ESI Special Cases Forensic Deep Dives Deleted/fragmentary files Recovery bin File allocation table entry deleted but file still whole Partially overwritten (fragments) Will need forensic recovery 18

The Rules This matters because courts say it matters 19

FRCP E-Discovery Practice Rules 16 and 26(f) Meet and Confer at least 21 days before Rule 16(b) scheduling conf. Rule 26(f) Initial Disclosures & Early Meeting of Parties Preservation Production format Clawbacks 20

Preservation Preservation : duty to preserve relevant evidence arises when a party should have known that the evidence may be relevant to future litigation. Fujitsu Ltd. v. Federal Express Corp., 247 F.3d 423, 435 (2d Cir. 2001). Defendant has notice of foreseeable litigation at time of complaint and sometimes earlier Plaintiff foresees litigation well before service of complaint Preservation ( litigation hold ) notice To whom (besides IT)? Who are custodians? Preserve what? Stop overwriting backup tapes? Any particularly ephemeral ESI? VM?? Employee deleting email/files of work computer? 21

Initial Status Report to the Court ESI added to list of initial disclosures that parties must provide to other party w/o waiting for discovery request, under Rule 26(a)(1)(B) a copy of, or description by category and location of ESI that the disclosing party may use to support its claims or defenses Pretrial scheduling order may include provisions for disclosure or discovery of [ESI] and may include any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation material after production (Rule 16(b)) W/i 90 days after defendant s appearance & w/i 120 days after service of complaint Note: 30(b)(6) witness might be senior IT representative 22

Extent of Production Undue Burden Undue burden : A party need not provide discovery of [ESI] from sources that the party identifies as not reasonably accessible because of undue burden or cost.if [such] showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause The court may specify conditions for the discovery. Rule 26(b)(2)(B) Good cause to order production of inaccessible information: Advisory Committee factors: (1) the specificity of the discovery request; (2) the quantity of information available for other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of the further information; (6) the importance of the issues at stake in the litigation; and (7) the parties resources. Re parties resources: note deep pocket defendants 23

Cost Shifting Extent of Production Rules 26(b)(2)(B) and 45(d)(1)(D) Cost shifting: case law factors: extent to which request is specifically tailored to discover relevant information; the availability of such info from other sources; the total cost of production, compared to the amount in controversy; total cost of production, compared to the resources available to each party; relative ability of party to control costs and its incentive to do so; importance of the issues at stake in the litigation; relative benefits to the parties of obtaining the information. Zubulake v. UBS Warburg, 217 F.R.D. 309 (SDNY 2003) (Zubulake I). Plaintiff (individual) pays 25% of $166K tape restoring cost. Zubulake, 216 FRD 280 (SDNY 2003)(Zubulake II) 24

Production Format - Critical Form of Production Rules 33, 34, & 45 Form of production Rule 34(b).. The [document] request may specify the form or forms in which [ESI] is to be produced. [Objections shall] include [any] objection to the requested form or forms If objection is made -- or if no form was specified in the [document request the responding party must state the form or forms it intends to use. Unless the parties otherwise agree, or the court otherwise orders: (ii) if a [document] request does not specify the form or forms, a responding party must produce in a form or forms in which it is ordinarily maintained or that are reasonably usable; and (ii) a party need not produce the same [ESI] in more than one form. 25

Legal Standard for Productions Reasonably useable means can t be more difficult or burdensome for requesting party. Committee Note. TIFF s, Text and Designated Fields Image file format commonly used in major lit support software (Concordance, Summation) Searchable Text Designated metadata fields OR: 26

Natives OR: Leave in Native format File format as producing party used it, e.g. Word (.doc), Excel (.xls), Exchange email (basically.msg), etc. Usually searchable Includes all/most metadata; though query what % is important Easier to alter w/o detection, absent hashing. Workarounds for Bates stamping; really none yet for redacting; Suggested compromise: TIFF plus text of emails and other searchable documents) Natives of spreadsheets, Word, PowerPoints, Wav, Video (on request) 27

Protection of Privileged Information Clawback agreement: stip that production doesn t mean privilege waiver; and if producing party identifies documents inadvertently produced, responding party should return them. Quick peek : stip that receiving party gets to look at documents before privilege review and production, and to designate documents believed responsive. Problems: Opposing counsel learns what they shouldn t; can t unring this bell Third parties (e.g. in related cases) will be able to use material, despite clawback Doesn t modify underlying privilege law of how long producing party has to realize error, how wide waiver is. Ethical duty to preserve client secrets Similar protections for subpoenaed third parties under Rule 45(d)(2)(B) 28

FRCP: Sanctions 29

FRCP: Sanctions Sanctions can be severe; e.g adverse inference jury instruction; i.e. that the jury may infer that the lost ESI would have been unfavorable to the sanctioned party. (Zubulake) Sanctions can be on counsel: failure to oversee client, who (even as an apparent power user) did not realize there were parts of the file server other than his network share. (Phoenix Four v. Strategic Resources Corp., 2006 U.S. Dist. Lexis 32211 (SDNY 2006)) 30

FRCP: Sanctions Rule 37(f) s shallow safe harbor : Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide [ESI] lost as a result of the routine, good faith operation of an electronic information system. 31

FRCP: Sanctions absent exceptional circumstances unclear; extreme prejudice? sanctions under these rules court could still order additional depositions, other discovery to make up for lost ESI; not sanctions on a party note absence of protection by this rule on third-parties 32

FRCP: Sanctions [ESI] lost as a result of the routine, good-faith operation Committee Notes cite as factors: Steps taken to implement litigation hold; accessibility of system; whether party should have known of loss; and whether unavailable from any other source. High-value case: set aside backup tape, forensic copy, etc.? Set aside all backup tapes?? Whether good faith would call for steps to prevent the loss of information on sources that the party believes are not reasonably accessible under Rule 26(b)(2) depends on the circumstances of each case. One factor is whether the party reasonably believes that the information on such sources is likely to be discoverable and not available from reasonably accessible sources. Committee Note on Rule 37(f). 33

FRCP: I just got a new case: Collection Self-collection vs. by client IT vs. by lit support vendor Users didn t know of server partition to which they didn t have access; drive mapping on that PC not configured to map to partition. 25GB of data discovered late. $10K sanctions against them and counsel. Phoenix Four v. Strategic Resources Corp., 2006 U.S. Dist. Lexis 32211 (SDNY 2006) IT: how will they come across as witnesses? Lit support vendor: problem of cost in lesser cases 34

FRCP: I just got a new case (con t): Collection Forensic collection Costly. Consider it when important files may be at least partially overwritten or where tampering with evidence a possibility Can help show good faith if concerned about possibly having spoliated evidence 35

FRCP: I just got a new case: Production Examples of native file formats (and metadata) Word Last author, last saved, create date, template, etc. Not usually very probative. Tracked changes, comments Excel Word kinds of metadata, plus Formulas, hidden rows/columns Good case for native production or review: Lotus Notes used as document management system In re Telxon Corp. Sec. Litig., 2004 U.S. Dist. LEXIS 27296 (N.D. Ohio 7/16/2004). Tracked real author, date modified, types of documents; links to other documents. 36

Team Coordination Client General Counsel and IT Outside Trial and Electronic Discovery Counsel Electronic Discovery Vendors 37

Make Use of Excellent Resources 38

E-Discovery Tools ILTA 2008 Technology Survey (tool used in last 12 mos.) 39

Example of native review tool: kcura Relativity www.kcura.com 40

E-Discovery Readiness Goals Prevent judgments and settlements that are higher than necessary because of the misunderstanding of electronic evidence Control spending on e-discovery costs (service bureaus; contract attorneys and outside counsel reviewing hundreds of thousands of pages of email) Control time you and IT must spend on e-discovery 41

E-Discovery Readiness: Medium Run Catalog and understand IT systems from which most common e-discovery ESI comes. Helps when you re short of time E.g. leading up to FRCP 26(f) meet-andconfers E.g. new document request received E.g. preparing to defend Rule 30(b)(6) IT witness 42

E-Discovery Readiness: Medium Run Lawyers should make friends with IT well in advance Very different cultures Both concerned with fire-fighting, but very different kinds of fires Many litigators don t understand difficulty of running an enterprise IT doesn t always understand need to support litigation; still new Lawyers should ask (nicely) to see network diagrams, data centers, understand architecture IT should learn more about e-discovery obligations 43

E-Discovery Readiness: Long Run Topics to focus on include Retention policies Email Go-forward email How to apply retention on 100+ emails a day on different subjects? journal email? What to do with existing e-mail What is typical amount of existing email people have? Litigation holds: How much anticipated litigation? Specific to particular business units? Manual review of existing email vs. Auto-categorization?? Backup tapes Just for disaster recovery, not archiving Index Engines for review of old tapes Problems of VM, video. 44

E-Discovery Readiness: Long Run Possible partial solution: Increasing centralization of email & documents Buy enough server storage that you can eliminate PSTs and also force saves to a network drive (not to local C: drive). Saves money on collection costs. Systems to do Lexis-like searches across multiple mailboxes E.g. Clearwell Intelligence? System to put litigation holds on individual emails and documents Email retention folder-by-folder Exchange 2007 has some basic retention capabilities 45

E-Discovery Readiness: Long Run Consider requiring users to have email and document structure that follows standardized structure by subject. Note big cultural change. Possible partial solution: Document management systems Documentum, IBM/FileNet, Interwoven Enterprise-wide organization, by matter/project; granular security; searchable Advantage: One source for documents Advantage: fewer documents to process; saves $ Advantage: Can put individual emails in; though not a substitute for email server or enterprise email archive Advantage: can be attached to RM system to delete documents after retention period has run 46

Resources The Sedona Conference working papers; see www.thesedonaconference.com BNA s Electronic Discovery Practice Under the Federal Rules Michael Arkfeld, Electronic Discovery and Evidence www.edrm.net http://www.law.com/jsp/legaltechnology/ediscov eryroadmap.jsp 47

The Essentials of E-Discovery If you would like a copy of the PowerPoint or need a certificate of attendance for HRCI credit, please send an email to seminars@leclairryan.com. Any questions not posted during the webinar can also be emailed to this address. Thank you. 48

The Essentials of E-Discovery Questions 49

Thank You 50