Electronic Discovery
in Civil Litigation
Stanley D. Ference III
Ference & Associates
Topics to be Covered
Topics to be Covered
n
Types of Electronic Information
n
Significant Differences Between Traditional and
Electronic Discovery
n
Should You Pursue Electronic Discovery?
n
Preservation Issues and Orders
n
Discovery Process
Types of Electronic
Types of Electronic
Information
Information
n
Active Data
– Program and operating system files
– User created data - e-mail messages, word processing documents, spreadsheets, databases, electronic calendars, etc.
– System generated copies of user data - temporary files created by operating system, copies of files saved as
revised documents, auto created archives, etc.
Types of Electronic Information (
Types of Electronic Information (
Cont’d
Cont’d
)
)
n
Residual Data
- includes “deleted” files that
may still exist on a drive surface
n
Backup Data
- information copied to portable
media (usually tape) to provide users with access to
their data in the event of a system failure
Significant Differences between Traditional
Significant Differences between Traditional
and Electronic Discovery
and Electronic Discovery
n
Electronic information is easily
altered/manipulated/intercepted
n
Almost impossible to completely
destroy or eliminate
n
Storage and retrieval methods for
Significant Differences between Traditional
Significant Differences between Traditional
and Electronic Discovery
and Electronic Discovery
(
(
Cont’d
Cont’d
)
)
n
Electronic communications are less
formal and thus may yield more candid
information
n
Electronic communications tend to be
more widely distributed
n
More information is available
about
electronic information (
i.e,
meta-data)
than what exists on a tangible
Importance of E-mail
Importance of E-mail (
Importance of E-mail (
Importance of E-Mail (
Importance of E-Mail (
Cont’d
Cont’d
)
)
n
Sarbanes-Oxley Act
, 15 U.S.C. § 7211
n
Compels public companies, corporate counsel, and
accounting and auditing professionals to consider the
impact of electronic evidence in relation to certain
records
n
Sections 802 and 1102 compel mandatory document
retention (including electronic documents) for
certain accounting records
n
Criminal penalties for individuals who destroy or
alter documents relating to certain official
Meta
Meta
Comments - Microsoft Word
Meta
Should You Pursue Electronic Discovery?
Should You Pursue Electronic Discovery?
n
Is there a benefit to be gained?
n
Preliminary discovery may be required to decide
n
May have to share in costs – could be very
expensive for little of probative value
n
If you want to go through opponent’s files, they will
want to go through yours
n
May be worth waiving –
i.e.,
agreeing with other
side
n
Admissibility of electronic evidence by no means
guaranteed
Preservation Issues and Orders
Preservation Issues and Orders
n
Parties have affirmative duty to
preserve relevant evidence
n
But notify your opponent that you will
be seeking electronic information and
request that they preserve such
information
n
Parties should seek to reach agreement
on the scope of electronic preservation
(e.g., third parties)
Preservation Issues and Orders (
Preservation Issues and Orders (
Cont’d
Cont’d
)
)
n
Parties should seek court intervention if
agreement cannot be reached
–
Rule 16(c) Pretrial Conference Agenda
• Subjects for consideration include “such other matters as may facilitate the just, speedy, and inexpensive disposition of the action”
–
Rule 26(a)(1) Initial Disclosures
• a party must, without awaiting a discovery request, provide to other parties … “a copy of, or a description by category and location of, all documents, data compilations, and tangible things that are in the possession, custody, or control of the party and that the disclosing party may use to support its claims or defenses”
Policing the Preservation
Policing the Preservation
n
Attorney letter to employees
n
Role of IT staff and outside experts
n
Employee affirmative responses
n
Audit
n
Retention policies
n
Disclosure of breaches
n
Preservation of terminated employee
records
Sanctions
Sanctions
n
Spoliation
n
Exclusion of evidence
n
Monetary
n
Dismissal/default
n
Possible obstruction
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n
Metropolitan Opera v. Local 100
,
212 F.R.D. 178 (S.D.N.Y. 2003)
– Defendant failed to conduct reasonable investigation to respond to discovery requests.
– Allowed computers subject to discovery to be replaced with new computers shortly before scheduled on-site inspection.
– Court found that the defendant’s behavior constituted a “combination of outrages” and ordered judgment against the defendant with attorneys’ fees.
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n Anderson v. Crossroads Capital Partners,
2004 WL 256512 (D. Minn.).
– Sexual harassment and whistleblower suit in which defendant requested and obtained access to the plaintiff’s personal computer.
– Defendant’s examining expert reported that the hard drive found in the plaintiff’s computer had been manufactured more than two years after the alleged events and that the plaintiff had recently installed and used a file wiping program called “CyberScrub.”
– Plaintiff, in response, claimed that she had been using the same computer for throughout the litigation despite changing the hard drive and
disclaimed any intent to use Cyber-Scrub to destroy potential evidence.
– The judge found the while plaintiff’s “exceedingly tedious and disingenuous claim of naïveté... defies the bounds of reason,” her behavior was not egregious enough to warrant dismissal. The court
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n Keir v. UnumProvident,
2003 WL 21997747 (S.D.N.Y. Aug. 22, 2003).
– ERISA class action suit in which parties agreed to a data preservation order after several conferences.
– Order very narrowly drawn and concentrated on preserving six days of email records which were contained on the defendant's backup tapes and hard drives.
– Defendant's upper management did not communicate the order to its IT staff for nearly two weeks and most of its data management functions had been outsourced to IBM, which failed to implement the required
preservation.
– While the court found that the defendant's failure to preserve was unintentional, it criticized the defendant's poor compliance with the
preservation order. The court recommended that further action be taken to determine the feasibility of retrieving the lost data and the extent of
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n Renda Marine, Inc. v. United States, 58 Fed. Cl. 57 (2003)
– Contract dispute filed by a marine dredging contractor against the US Army Corps of Engineers.
– Plaintiff moved to compel production of backup tapes and for permission to make a bitstream image of contracting officer’s hard drive, based on admissions by the Corps that it did not search hard drives or backup tapes to answer previous discovery requests, and by the contracting officer that he routinely deleted emails before and after suit was filed.
– Plaintiff also requested that, as a sanction for spoliation, the Corps be ordered to pay costs associated with recovery of deleted emails from the backup tapes and hard drive.
– Corps countered that spoliation could not be found where the Corps followed its records management program, did not act in bad faith, and where there was no showing that evidence relevant and material to the defendant’s case had been destroyed.
– Court found that the Corps’ records management program was inconsistent with its obligations to preserve evidence when litigation is reasonably anticipated, which in this case was two years before suit was filed. The Corps was ordered to produce the
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n Procter & Gamble Co. v. Haugen,
2003 WL 22080734 (D. Utah) (Aug. 19, 2003)
– P&G sued several independent distributors of rival Amway products, claiming unfair trade practices for allegedly distributing email associating P&G with Satanism.
– P&G immediately informed the defendants of their duty to preserve computer evidence crucial to the case, but neglected to impose a similar duty upon itself, resulting in the destruction of email records of five key P&G employees.
– Without citing Rule 37, the court granted the defendant’s motion to dismiss the case on three grounds, each of which the court stated were sufficient alone to grant dismissal.
• (1) that the plaintiff failed to preserve evidence it knew was “critical” to the case
• (2) the plaintiff’s actions rendered an effective defense “basically impossible” • (3) the plaintiff destroyed the very evidence it would need to support its
Sanctions (
Sanctions (
cont’d
cont’d
)
)
n Theofel v. Farey Jones, 2003 WL 22020268 (9th Cir.)
– In a commercial lawsuit, the defendant issued a subpoena to the plaintiff’s Internet Service Provider (ISP) requesting “all copies of e-mail sent or received by anyone” at the plaintiff, with no limitations of time or scope.
– The ISP, which was unrepresented by counsel, complied, producing many privileged and irrelevant messages. The plaintiff moved to have the subpoena quashed and for sanctions for discovery abuse, which the Magistrate Judge granted.
– Individual employees of the plaintiff also filed civil suits against the defendant under the Stored Communications Act, Wiretap Act, and Computer Fraud and Abuse Act, which the district court dismissed.
– The appellate court reversed the dismissal of the claims under the Stored
Communications Act and Computer Fraud and Abuse Act, stating that the subpoena, although purporting to be a valid request under Fed. R. Civ. P. 45, so “transparently and egregiously” violated that standards of Rule 45 that the “de-fendants acted in bad faith and with gross negligence in drafting and deploying it,” negating any argument that the ISP knowingly consented to the request.
– By remanding the statutory claims to the district court, the appellate court left open the possibility of civil penalties against the defendant.
PDA/Palm top
Contact manager files Zip and Jazz drives CD ROMs
Floppy disks
Laptops & personal (home) PCs Tape backups and restored data Active computer files
Undeleted (recovered) files Browser cache and bookmarks Internet postings
External hard disk drives
Web-based storage “Free Drive”
Sources Often Overlooked
Sources Often Overlooked
Minicomputer files
Mainframe computer files Network server files
“Recipient” E-mail messages Firewall logs
Email server files
Web-based email (e.g. “Hot Mail”) Building access control system CCTV security systems
PBX/CDR reports Voice mail messages
Governing Rules
Governing Rules
n
Federal Rule of Civil Procedure Rules 26 and
34(a) – Scope includes electronic
information
n
Reasonably available in the ordinary course
of business
n
Electronic versions of documents may be
discoverable even if the hard copy
On Site Inspections
On Site Inspections
n
Gates Rubber Co. v. Bando Chemical Indus., Ltd
,
167 F.R.D. 90 (D. Colo. 1996)
– a botched on-site inspection resulted in the loss of possibly critical data by the party seeking discovery.
– To examine one particularly important computer, the expert used a program that erased, at random, 7 to 8 per cent of the information that might otherwise have been available.
– The expert also failed to obtain and preserve the creation dates of essential files and failed to use accepted computer evidence preservation procedures.
Favored Inspection Procedure
Favored Inspection Procedure
n
Parties agree on a neutral, third-party expert who
will actually carry out the inspection as an officer of
the court.
n
Parties, with expert assistance, agree on the scope of
the inspection, including target computers or servers;
target individuals, departments, or data collections;
date ranges; search terms; or other scope
scope-defining criteria. They also agree upon the form of
eventual production.
n
Expert creates a "mirror image" of the computer data
using accepted computer forensic procedures that
Favored Inspection Procedure (
Favored Inspection Procedure (
Cont’d
Cont’d
)
)
n
Expert executes the search on the "mirror image"
and identifies relevant data according to the
agreed-upon specifications.
n
Expert turns over the responsive data to the
respondent's counsel.
n
Respondent's counsel reviews the responsive data
for relevance and privilege.
n
Respondent's counsel produces relevant,
non-privileged data to the requesting party in the form
agreed upon by the parties.
Favored Inspection Procedure (
Favored Inspection Procedure (
Cont’d
Cont’d
)
)
n
Rowe Entertainment, Inc. v. William Morris
Agency, Inc.
, 205 F.R.D. 421 (S.D.N.Y.
2002)
n
Simon
Property Group, L.P. v. MySimon,
Inc.
, 194 F.R.D. 639 (S.D. Ind. 2000)
n
Playboy Enterprises, Inc. v. Welles,
60 F.
Supp.2d 1050, 1054 (S.D. Cal. 1999)
Proportionalty
Proportionalty
n
Limit discovery “if the burden or
expense of the proposed discovery
outweighs its likely benefits” under
Rule 26(b)(2)
Proportionalty
Proportionalty
(
(
Cont’d
Cont’d
)
)
n
Parties
-
Kaufman v. Kinko’s Inc.
, Civ. Action
No. 18894-NC (Del. Ch. Apr. 16, 2002)
n
Granted motion to compel production of e-mail
messages retrievable from backups
–
“Upon installing a data storage system, it must be
assumed that at some point in the future one may
need to retreive the information previously stored.
That there may be deficiencies in the retrieval
system … cannot be sufficient to defeat an
otherwise good faith request to examine relevant
information”
Proportionalty
Proportionalty
(
(
Cont’d
Cont’d
)
)
n
Non-Parties
-
Braxton v. Farmers Insurance
Group
, 2002 WL 31132933 (N.D. Ala.Sept. 13,
2002)
n
Plaintiff subpoenaed e-mail from non-party
insurance agents. Defendant objected, claiming
agents subjected to undue burden
n
Nonparty agents not required to comb “through their
email files and other records in search of the
documents sought by plaintiff.”
n
Defendant required to locate and produce relevant
e-mail, newsletters, and other electronic
Cost Shifting
Cost Shifting
n
Responding party has traditionally
assumed expense of complying with a
discovery request
n
Courts have power to shift some or all
of the cost of production to requesting
party
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n
Rowe Entertainment, Inc. v. William
Morris Agency, Inc.
, 205 F.R.D. 421
(S.D.N.Y. 2002)
n
In denying defendant’s motion to shift
costs of responding to discovery to
plaintiff, court adopted eight factor
balancing test.
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n
Rowe
balancing test
–
the availability of data from other sources;
–
the parties’ financial resources;
–
the specificity of the request;
–
the likelihood of of success in retrieving the
information;
–
the reason the data was retained;
–
the relative benefit from the process of
production;
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n
Byers v. Illinois State Police
,
2002 WL 1264004 N.D. Ill. June 3, 2002)
–
applied Rowe in narrowing request and allocating
cost of data restoration to requesting party
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n
Murphy Oil USA v. Flour Daniel
,
2002 WL 246439 (E.D. La. 2002)
–
followed Rowe analysis in determination of who
should bear costs of producing e-mail
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n
Computer Associates Int’l. v. Quest Software, Inc
.,
2003 WL 21277129 (N.D. Ill. 2003)
– Plaintiffs in software copyright and trade secret
infringement case requested that the defendants image the hard drives of six key employees.
– After the imaging, the defendant spent between $28,000 and $40,000 to remove privileged emails from the backups and create a privilege log.
– Defendants then filed a motion to require the plaintiffs to pay these preparation costs.
– Court reviewed the eight Rowe factors, and determined that none of them favored cost shifting, analogizing these
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n Zubulake v. UBS Warburg LLC, 217 F.R.D. 309
(S.D.N.Y. 2003) (“Zubulake I,” Opinion dated May 13, 2003)
– Sex discrimination suit against a financial services company and plaintiff requested email beyond the approximately 100 pages produced by the defendants.
– Plaintiff presented substantial evidence that more
responsive email existed, most likely on backup tapes and optical storage media created and maintained to meet SEC records retention requirements.
– Defendants objected to producing email from these sources, which they estimated would cost $175,000 exclusive of
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n Zubulake v. UBS Warburg LLC, 217 F.R.D. 309
(S.D.N.Y. 2003) (“Zubulake I,” Opinion dated May 13, 2003)
– Court held that plaintiff's request was clearly relevant to her claims, but both parties raised the question of who would pay for the discovery and urged the court to apply the Rowe factors.
– The court held that for data kept in an accessible format, the usual rules of discovery apply: the responding party should pay the costs of producing responsive data.
– A court should consider cost-shifting only when electronic data is relatively inaccessible, such as in backup tapes. Further, requiring the responding party to restore and
produce responsive documents from a small sample of the requested backup tapes is a sensible approach in most cases.
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n Zubulake v. UBS Warburg LLC, 217 F.R.D. 309
(S.D.N.Y. 2003) (“Zubulake I,” dated May 13, 2003)
– Rejected Rowe factors and substituted a seven factor test:
• 1. The extent to which the request is tailored to discover relevant data.
• 2. The availability of that data from other sources.
• 3. The total cost of production, relative to the amount in controversy.
• 4. The total cost of production, relative to the resources available to each party.
• 5. The relative ability and incentive for each party to control its own costs.
Cost Shifting (
Cost Shifting (
Cont’d
Cont’d
)
)
n Zubulake v. UBS Warburg LLC, 216 F.R.D. 280
(S.D.N.Y. 2003) ("Zubulake III," dated July 24, 2003) – Defendants restored and reviewed five backup tapes selected by the
plaintiff at a cost slightly over $19,000. 600 email messages were deemed to be responsive to the plaintiff's discovery request.
– Defendant estimated that the cost for production of the entire 77-tape collection would be $165,954.67 for restoration and $107,694.72 for review.
– Court determined that the balance tipped slightly against cost shifting, and that requiring the defendant to bear 75% of the costs would be fair.
– None of the costs for attorney review of the data, once it had been made accessible, should be borne by the requesting party.
Privilege Issues
Privilege Issues
n
Inadvertent Disclosure
n
Production Protocols
Privilege Issues
Privilege Issues (
Privilege Issues (
Cont’d
Cont’d
)
)
n
Does Use of Experts Waive Privilege?
•
appointment of a computer expert and
subsequent review of all retrieved documents
by the producing party's attorney prior to
production would insure that privileged
documents were not produced.
–
Rowe Entertainment v. William Morris
Agency, Inc.,
205 F.R.D. 421, 433
(S.D.N.Y. 2002);
–
Playboy Enterprises, Inc. v. Welles,
60
F.Supp.2d 1050, 1054 (S.D. Cal. 1999)
Privilege Issues (
Privilege Issues (
Cont’d
Cont’d
)
)
n
Does Use of Experts Waive Privilege?
–
"[Al protective order is an inadequate surrogate
for the privilege. If an adverse party is provided
access to privileged material, then a pertinent
aspect of confidentiality will be lost.”
•
In re Dow Corning Corp.,
261 F.3d 280, 284
(2d Cir. 2001)
Privilege Issues (
Privilege Issues (
Cont’d
Cont’d
)
)
n
Document Databases
n
In re Diet Drugs Prods. Liab. Litig
., No. 1203, 1999
U.S. Dist. LEXIS 1797 (E.D. Pa. Feb. 10, 1999)
– plaintiffs in any actions eligible for state-federal coordination … shall be entitled to receive … upon payment of the actual cost of providing copies … CD-ROMs reflecting searchable images of the key documents … a bibliographic database providing a “coded” index of such key documents … abstracts and subjective analyses of the depositions … timelines … and … reports of “generic experts” ...
Privilege Issues (
Privilege Issues (
Cont’d
Cont’d
)
)
n
Document Databases
n
Skebo v. Ford Motor Co.
,
No. 92VS67182E (Ga. State Ct. Oct. 22, 1993)
– Plaintiff entitled to discovery of information contained in defendant’s databases
– Ford ordered to provide plaintiff with conference room, computer, and “knowledgeable” operator to identify and conduct searches of Ford’s databases
– Documents found to be reviewed by Ford and instant
decisions made regarding privileged nature of documents; non-privileged documents to be immediately produced
