ELECTRONIC DISCOVERY BASICS. John K. Rubiner and Bonita D. Moore 1. I. Electronically Stored Information (ESI) Is Virtually Everything

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1 ELECTRONIC DISCOVERY BASICS John K. Rubiner and Bonita D. Moore 1 I. Electronically Stored Information (ESI) Is Virtually Everything A. s B. Text messages and instant messenger conversations C. Computer files 1. Word processing documents (i.e., Word, WordPerfect files) 2. Databases (Excel files, etc.) 3. Accounting files 4. Calendar files (i.e., Outlook or a company s master calendar system) 5. Other computer files and programs that may be specific to a particular business (i.e., Lotus Notes or proprietary software packages and databases) D. Web pages 1. Current web pages 2. Prior web pages E. Digital Photographs F. Voice Mails G. Any other computerized program or file II. Where to find ESI A. Corporate Networks B. File Servers 1 John K. Rubiner is a principal and Bonita D. Moore is an associate at Bird, Marella, Boxer, Wolpert, Nessim, Drooks & Lincenberg, PC, a business and employment litigation as well as a white collar criminal defense firm in Los Angeles, California. 1

2 C. Laptop Computer D. Desktop computers E. Blackberries, Treos, Palm Pilots, and other hand held devices F. Cellular telephones G. External tapes and drives (such as thumb drives or flash drives) H. Compact Flash Memory (such as is used on a digital camera) I. Surveillance Cameras J. Unconventional files 1. Browser information (cache of visited sites or bookmarks) 2. Banking and/or ATM records 3. Data concerning key card usage K. Back up media III. Applicable Federal Rules Related To ESI A. Fed. R. Civ. P. 26(f) requires that, during the early conference of counsel, the parties are to discuss any issues relating to the disclosure or discovery of electronically stored information. B. Fed. R. Civ. P. 26(1) Initial Disclosures requires the parties to disclose a copy of, or a description by category and location of, all documents, electronically stored information, 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. C. However, the Federal Rules also make clear that a party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. Fed. R. Civ. P. 26(2)(B). D. Failure to comply with a party s obligations concerning electronic discovery is grounds for sanctions. Fed. R. Civ. P. 37(f). E. Litigation Holds 2

3 1. Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D. N.Y. 2004) One of a series of published decisions related to preservation of ESI After finding that the defendant violated its duty to preserve, protect and disclose relevant electronic evidence, the Court ordered the defendant to (1) pay for the re-deposition of relevant employees, limited to the subject of newly discovered evidence; (2) restore and produce relevant documents from relevant backup tapes; and (3) pay reasonable expenses, including attorneys fees related to discovery issues The Court allowed the jury to draw a negative inference against defendant for lost electronic documents if the jury found defendant to be at fault for such losses F. California State Rules 1. The Judicial Council is still analyzing the issue 2. Proposed change to Cal. Rule of Court 212 to adopt rules which are substantially similar to the federal rules is currently on hold pending a review of the impact of the revised Federal Rules of Civil Procedure 3. The Judicial Council Recently proposed comprehensive changes to the Code of Civil Procedure to make the rules very similar to the federal rules. See Article on the California State Bar Website ( 4. As a practical matter, if other side will agree, attempt to negotiate a protocol early in the case in the same way you would do under the federal rules IV. Issues to consider A. Understand your client s ESI 1. Know what types of information and computer systems your client uses 3

4 2. Know your client s document retention policy and ask specific questions about the litigation hold (your client s policies need to be periodically reissued) 3. Talk to your client s technical person(s) make sure that they truly understand the dangers of inadvertent spoliation of potentially responsive electronic material 4. Counsel should communicate with the key players directly and make sure that they know and understand (and receive periodic reminders) of document preservation requirements 5. Even plaintiffs counsel need to understand their clients computers and available ESI (and what they might have from the defendant) B. Spoliation 1. Duty to preserve Litigation Hold Need to make sure that your client has placed a litigation hold on ESI As you become aware of new facts or witnesses, ensure that ESI related to those facts or witnesses is held 2. Culpability 3. Fed. R. Civ. P. 37(e) Safe Harbor 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. Fed. R. Civ. P. 37(e). Review each of the limits on the rule (i) (ii) (iii) routine... operation good faith operation under these rules. C. Breadth of requests D. Burden of production 4

5 1. Courts will require parties to incur some burden 2. Courts will more likely have sympathy for documented burden E. Privilege Issues 1. Attorney-client privilege 2. Privacy Personal privacy Privacy of third parties (i.e., customers, other employees) 3. Waiver issues Employer policies concerning waiver Waiver of privilege in method of production Be cognizant of United States Magistrate Judge Paul Grimm s discussion of waiver of attorney-client privilege through poor use of search techniques. See Victor Stanley, Inc. v. Creative Pipe, Inc., F.R.D., 2008 WL (D. Md. May 29, 2008) F. Format of production 1. Hard copy 2. Native format 3. Metadata Was it specifically called for in the document requests? How burdensome will it be to produce? Is it really necessary? G. Production Costs 1. The costs of production and review can be enormous and cost shifting is a hotly litigated issue 2. Presumption is that the producing party will pay the cost of its own production 5

6 3. Given the difficulty in obtaining electronic discovery, there have been several approaches to the issue of when cost shifting is appropriate. Courts will look at the following types of factors: (d) (e) (f) (g) The extent to which the request is specifically tailored to discover relevant information; The availability of such information from other sources; The total cost of production, compared to the amount in controversy; The total cost of production, compared to the resources available to each party; The relative ability of each party to control costs and its incentive to do so; The importance of the production to the issues at stake in the litigation; and The relative benefits to the parties of obtaining the information. 2 V. ESI Protocol 2 A. Early in the case, the attorneys should negotiate a protocol for the preservation, collection and production of ESI 1. An agreed-upon protocol protects against second guessing 2. Negotiate an early safe harbor procedure so there are defined rules related to document preservation. See Zubulake v. UBS Warburg, LLC, 217 F.R.D. 309, 322 (S.D. N.Y. 2004); Zubulake v. UBS Warburg, LLC, 216 F.R.D. 280, 284 (S.D.N.Y. 2003); see also Section of Litigation, American Bar Association, Civil Discovery Standards, American Bar Association, 2004 Amendments, 29(iv) (2004); THE SEDONA PRINCIPLES ADDRESSING ELECTRONIC DOCUMENT PRODUCTION (The Sedona Conference, July 2005) available at See Working Group Series, WG1: Electronic Document Retention and Production; Richard Van Duizend, CONFERENCE OF CHIEF JUSTICES, GUIDELINES FOR STATE TRIAL COURTS REGARDING DISCOVERY OF ELECTRONICALLY-STORED INFORMATION (NCSC Publications 2006) available at 6

7 B. Negotiate the search techniques and methods C. Negotiate ESI related discovery 1. Interrogatories focused on the discovery of ESI 2. Deposition of MIS person Is a deposition necessary? Consider agreeing to an informal meeting or phone call Be prepared to bring a computer expert to discovery motion hearings and/or status conferences D. Negotiate format of production 1. Paper production 2. Scanned images 3. Native format only way to ensure a full production of available metadata E. Negotiate a clawback provision 1. In order to speed up production, Fed. R. Civ. P. 26(5)(B) provides a mechanism for marking information as privileged even after it is produced. 2. Parties can negotiate a clawback or quick peek agreement so that production can take place more quickly without a loss of privilege. 3. However, clawback and quick peek agreements even if incorporated into court orders are not necessarily binding on third parties and courts could find broad privilege waivers including subject matter waivers. 3 F. Select an e-discovery vendor (consider sharing certain costs) 3 There is a proposed amendment to Fed. R. Evid. 502 to ensure that court orders in this context will bind third parties and even state courts. The bill (S. 2450)passed the United States Senate on February 28, 2008 and is currently pending in the United States House of Representatives. 7

8 1. May also provide document management and repository services 2. Probably the most critical decision related to the overall costs of electronic discovery 3. Determine if forensic work will also be required VI. Admissibility of ESI A. Always think about how you will ensure the admissibility of your evidence at trial (or at a motion hearing) B. Review United States Magistrate Judge Paul Grimm s opinion Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534 (D. Md. 2007) 1. Court denied cross-motions for summary judgment because both parties failed to present admissible ESI evidence. 2. Before it can be admitted as evidence, a court must find that the ESI is: (d) Relevant; Authentic; Not hearsay or admissible hearsay; The best evidence ; and (e) Not unduly prejudicial. 4 4 See The Next Frontier: Admissibility of Electronic Evidence, Linda L. Listrom, Eric R. Harlan, Elizabeth H. Ferguson & Robert M. Redis (ABA Summer 2007) available at 8