INFORMATION MANAGEMENT:

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1 INFORMATION MANAGEMENT: As cases become more complex and as e-documents abound, how can lawyers, experts and clients, meet the opportunities and challenges of electronic data management? Q. We have your report, but we also requested that you provide us with drafts of your report and notes you have taken, particularly of your discussions with counsel that preceded your preparation of this report. Yet none have been produced to us. Could you explain how that could be? A. Certainly. Once I had prepared the final report, I did not have any use for the notes or for the drafts, so I did what I always do I tossed them out. Q. Can you tell me what was in the notes? A. I am sure I could not, at this point. But whatever it was, to the extent that it bears on my final thinking, you will find it in my report. Q. Can you tell me how the original draft report differed from the final report we were provided? A. No. but it was just some details, nothing significant. This exchange, which has occurred in many expert depositions, may now be problematic. The handwritten notes may be beyond redemption if they are incinerated, but if they were on a laptop or other computerized device, deleting them may not have eliminated them. The computerized record, including drafts of reports and changes preserved keystroke by keystroke has likely been preserved. If the report was sent by the witness to the attorney by attachment, and from the attorney to the opposing counsel by attachment, and remained in the original word processing document, opposing counsel may already have a record of the changes in the report. If, on the other hand, the information is no longer available because it was destroyed, there is a risk that the court could draw inferences adverse to the expert s side because of that destruction. Provided by Michael J. Leech, Talk Sense Mediation

2 Source of the Problem 1. The relationship between a consulting expert and an attorney confers a work product protection against disclosure of the communications between the two. But upon being designated as a testifying expert, the relationship loses its privileged character. i. This relationship and its privileged character should be documented from the initial discussion, especially if the client is paying the invoices of the expert directly. i Any required protective order compliance should be completed before any substantive information at all is provided. Failure to do so could open the door to potential sanctions and to discovery. Consulting experts are often confided in and provide assistance in formulating strategy, developing discovery requests, and deciding on deposition questions for other witnesses. 2. Once the consultant is designated to testify, the privilege disappears. i. The discussions about the case with counsel cannot, as a practical matter, be detached from the information about the case in general that the expert is relying on to render an opinion and can become subject to discovery. i iv. Can limiting the expert to testimony on one aspect of the dispute allow the consultant privilege to be retained as to other aspects of the dispute? The attorney can argue that to the extent that the consultant discussions pertain strictly to the mental impressions of counsel, the information is not discoverable. Opposing counsel can argue that there is a substantial need for the information since it could have affected the opinions of the expert (on the 2

3 facts of a particular case) and there is no other way to find out if those discussions shaped the opinions being offered. I. The Old-Fashioned Approach: Destruction of Evidence 1. The expert s practice of discarding drafts and notes is and has always been subject to challenge as spoliation of evidence, justifying the court in allowing the jury to infer that the information made unavailable by the destruction was harmful to the party destroying the evidence. i. Such attacks are not common, likely because the attorney encountering the destruction has not typically perceived the lost information to be material. Recent decisions in the U.S. District Court in New York dealing with this subject in the context of electronic discovery (discussed in more detail below) will alert counsel to this issue and make it more likely that such activity will be challenged. 2. The expert s prior conclusions, changes in conclusions, and the like are presumptively relevant to an exploration of the expert s opinions and the basis for them during cross-examination. 3. Case law indicates there is a legal duty to preserve documents that are likely to become evidence in a case, even before the case is filed. Case law imposes on both counsel and client the obligation to ensure the preservation of evidence. Deliberately destroyed evidence ( I tossed them out. ) gives rise to a presumption that the destroyed materials were relevant to the issues in the case, while negligently destroyed materials must be shown to have likely been related to the issues in the case. 3

4 Where a showing of destruction of relevant evidence is made, either by negligent or deliberate conduct, the trier of fact may be permitted to draw an adverse inference that the information withheld was harmful to the position of the party who destroyed it. Where the destruction was deliberate, dismissal of the action may be warranted, depending on the circumstances, particularly the prejudice to the party deprived of evidence. 1 Review of Case Law: 4. Spoliation of evidence is a body of law dealing with the steps courts take to preserve the integrity of the judicial fact-finding process. It is not a separate legal claim in itself. Sylvestri v. General Motors Corp., 271 F.3d 583, th Cir. 2001) 5. Where destruction of evidence occurs, the court has discretion to select an appropriate sanction, which should be molded to serve the prophylactic, punitive and remedial rationale underlying the doctrine. Id.; i. The principle of drawing an adverse inference is recognized by Wigmore as based on the common-sense notion that a party s destruction of evidence that could be used against it suggests that it was harmful to that party. Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998). The punitive and prophylactic rationales are based on the proposition that such an outcome will deter destruction of evidence and will place on the party taking that action the risk of making an erroneous judgment about destruction of potential evidence. Id. 1 This is unlikely to occur where only expert testimony is in issue, since the remedy of striking the expert testimony is available. In a proper case, however, these two sanctions amount to the same thing. 4

5 i The remedial aspect of this doctrine is that the party who has been harmed ought to be restored to the position it would have occupied absent the wrongful conduct. Id. 6. No adverse inference may be drawn, however, unless the party destroying the evidence was violating a duty to preserve the evidence. However, as discussed below, the duty to preserve evidence is imposed early and is a heavy burden. 7. The adverse inference is not license for wild speculation, but typically requires some independent evidentiary basis for the conclusion sought to be argued. Kronisch v. United States,150 F.3d 112, (2d Cir. 1998) But where the destruction is so substantial that the party seeking the inference is unable to identify the particular item that has been destroyed, the prejudiced party is entitled to an inference so long upon production of evidence suggesting that a document supportive of its case would have been among the items destroyed. Id. 8. Moreover, where a plaintiff is unable to prove an essential element of her case due to [wrongful] loss or destruction of evidence by an opposing party, it is proper for the court to create a rebuttable presumption establishing the missing elements of the case that could only have been satisfied by the destroyed evidence. Rogers v. Samson Comm. Hosp.,276 F.3d 228, 232 (6 th Cir. 2002). 9. A safe harbor available to a party contemplating destruction of evidence is simply giving notice of the intended action in advance to those whose interests could be affected. Fujitsu Limited v. Federal Express Corp., 247 F.3d 423, 436 (2d Cir. 2001). 10. On the other hand, even dismissal of the entire action can be available as a sanction. The sanction is permitted where there has been bad faith or other like action, or where merely negligent destruction of evidence has resulted in sufficient prejudice to the opposing party s ability to prove its case or defense. Sylvestri v. General Motors Corp., 271 F.3d 583, 593 (2d Cir. 2001). 5

6 II. The Advent of Electronic Discovery 1. Computer records are documents subject to production upon request within the discovery rules. The rules impose on parties the obligation to locate and produce documents that are reasonably available to the party in response to document requests in discovery unless doing so would impose an undue burden. 2. Computer records do not typically disappear when you click or push DELETE. The data remains on the hard drive and the server unless and until it has been overwritten by new data. Even then, sophisticated technology can often reconstruct it, although sometimes at great expense. 3. The most widely used personal computer operating system actually records EVERY KEYSTROKE made. Even if the documents themselves were deleted, this data would remain to allow it to be reconstructed. 4. Computer systems are typically set up to be replicated on a regular basis, usually daily or weekly. All of the contents of the system are copied onto backup tapes for preservation, partly because of disaster recovery needs, and partly because computer science is an anal retentive field that loves to archive. 5. The fact that data is preserved on computer tapes, however, does not mean that it is readily available. Searches take time and trouble and systems people have more important duties. Thus, a casual inquiry will often be met with a dismissive statement that the data cannot possibly be retrieved, when the truth is that it may be troublesome and time-consuming to locate and produce the data, but is by no means impossible. 6. Since demands for archived material are unusual, random activity ( We ran out of room to store the old tapes so we ditched them ), as opposed to slavish or automated adherence to a document retention/destruction policy, may be the basis on which backup data is preserved. Documents that should no longer be available may be available, others that should be available may not be. 6

7 7. Counsel should be persistent in cross-examining information systems people who insist that data cannot be found. Some suggestions: i. Find out precisely what is preserved, in what form, and brainstorm ways to locate the items you seek. Often the problem is not with whether the data is there, but with how to locate it. i iv. Be sure you are talking to people with firsthand knowledge not the information systems executive, but the person in operations who has intimate knowledge of the systems. Intimate to information systems people that the items you seek could be helpful to the company, indeed, that they are likely to be, as a means of encouraging production. Point out how even documents that may look unfavorable at the outset can counter more exaggerated versions advanced by the opposing party and that should this occur, failure to produce the document at the outset will bring its genuineness and the company s veracity into question. Challenge the computer people: I ll bet there is no way you could get those s out of the system and backups at this stage of the game. They are systems engineers, and engineers often respond to a find a way to do it challenge with ingenuous approaches. III. The Wages of Destroying E-Documents 1. The New York court, in a series of decisions culminating in Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), applied this case law to the realm of e-documents, reaching the following conclusions: The obligation to preserve evidence arises when the party had notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. (Id., at 216) 7

8 [A]nyone who anticipates being a party or is a party to a lawsuit must not destroy unique, relevant evidence that might be useful to an adversary. While a litigant is under no duty to keep or maintain every document in its possession, it is under a duty to preserve what it knows, or should reasonably know, is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request. (Id., at 217) Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and place a litigation hold to ensure the preservation of relevant documents. (Id., at 218) Once a duty to preserve attaches, any destruction of documents is, at a minimum, negligent [except] where due to events outside the party s control. (Id., at 220) 2. The court also applied these standards to a typical corporate e-document management system: i. No firm-wide duty to preserve documents is imposed simply because one or two employees contemplate the possibility of litigation. But documents referencing attorney-client privilege (where it did not apply) or admissions indicating that a dispute has risen to the level of potential litigation can trigger the duty to preserve. i messages that deal with the subject matter of the litigation based on caption summaries (the re: line) are required to be maintained. messages of key players in the case are covered by the duty. 8

9 iv. Drafts, but not multiple copies, must be retained. v. Litigants are free to choose how to ensure preservation, given the multiplicity of document management systems and techniques. vi. v vi A litigant could choose to retain all then-existing backup tapes for the relevant personnel, catalogue subsequently created documents in a separate electronic file, and make a mirror image of the computer system at the time the duty arises to provide a complete set of documents. Disaster recovery and other backup tapes need not be preserved even when litigation is anticipated. However, there is one exception: if the system can identify where particular employee documents are stored on the backup tapes, then the backup tapes for key players should be preserved unless the information is all available elsewhere. If followed, a directive at the time the duty arises directing preservation of all backup tapes and preservation of new documents pertaining to the subject matter of the dispute will be sufficient compliance with the duty. 3. But the court ultimately decided not to authorize an adverse inference. Authorizing an adverse inference was described as a severe sanction that would be imposed only if i. The party having control over the evidence had an obligation to preserve it at the time it was destroyed; i The records were destroyed with a culpable state of mind (in the Second Circuit, the court noted, negligence is a culpable state of mind for these purposes);. The destroyed evidence was relevant to the party s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense (where the destruction is intentional or wilful in bad faith then that alone is sufficient to support a presumption of relevance). 9

10 iv. In Zubulake, because a number of the deleted s had been located on backup tapes and none of them supported the claims being made, the court concluded that there was no reason to expect that those that could not be found would support the plaintiff s claims. IV. E-Documents of Expert Witnesses 1. The expert should first be aware of meta-data. This refers to the record of revisions in a word processing document. When such a document is sent by e- mail as an attachment, the meta-data goes along with it. A sophisticated user on the other end can review what changes were made and may be able to unravel the development process and use that information in cross-examination. 2. The drafts of the expert report may, if opposing counsel is sufficiently persistent, become available through electronic discovery of the expert s computer system. i. If the drafts show that (1) there were revisions that originated with counsel rather than the expert, or (2) that counsel has corrected sloppy work of the expert, or (3) that the expert s own recorded thoughts suggest equivocation on an important point (4) This is all grist for the mill on cross-examination. If the expert seeks to prevent the discovery of the information but is ultimately unsuccessful, that story can be recounted to the jury on crossexamination and will portray the expert as a biased advocate for one side. b. If the information is not available, then the court may give an adverse inference instruction to the jury on the expert s drafts and notes. i. This seems an extreme step, and counsel can argue against it, and point out that the jury should consider the merits of the expert s testimony and not be distracted by the gamesmanship of litigation. 10

11 It may be difficult for counsel, absent deliberate destruction, to prove that the information that has been destroyed would have been meaningfully adverse to the expert s testimony. V. Proposals For Revision to Federal Rules: E-Document Discovery Is Here To Stay 1. A preliminary Draft of revisions to the Federal Rules of Civil Procedure that deal specifically with discovery of e-documents has been submitted for comments (due on February 15, 2005) by the Advisory Committee of the Judicial Conference. Comments may be submitted to Public hearings will be conducted in San Francisco and Dallas in January, and in Washington, D.C. in February. 2. The first element of the rules is to mandate consideration of the problems associated with electronic documents at an early stage of a case. Rule 26(f) is amended to require discussion of this issue in the discovery planning conference, with specific emphasis on the form of production and preservation of such evidence. 3. The most important revision, in Rule 26(b)(2)(C), is a provision stating that a party need not provide electronically stored information in response to a discovery request if the information is not reasonably accessible. If a refusal to produce based on this provision is challenged by a motion to compel, the responding party must demonstrate that the information is not reasonably accessible. 4. Where a showing that the information is not reasonably accessible, the court may nevertheless order its production upon a showing of good cause. As with any other discovery request, the court is authorized to (and can be expected to) shift the cost of production of the information to the requesting party. 5. Past experience suggests that technical concerns will be important to the resolution of these kinds of disputes. For instance, in Fennel v. First Step Designs, Inc., 83 F.3d 526 (1 st Cir. 1996), the District Court s denial of additional 11

12 discovery in a sexual harassment case in hopes of locating evidence that a key defense memo was backdated was upheld because the plaintiff s proof that the memo was auto-dated for a later date did not suggest that the memo had been created or modified on a date different from the one it bore. 6. McPeek v. Ashcroft,202 F.R.D. 31 (D. D.C. 2001) suggests in a proper case to a sampling approach may be employed. In that case, the court responded to defense objection to production of computer backup tapes covering an eight-year time span with a direction that the tapes for one computer in one targeted year be produced to determine whether there was reason to believe the larger effort was likely to lead to the discovery of relevant evidence. When nothing meaningful emerged from the sample, further discovery of backup tapes was denied. 7. The present standard governing production is premised on the undue burden exception to the requirement that relevant and potentially relevant documents be produced. A reasonableness standard based on case-by-case analysis is applied, Bills v. Kennecott Corp., 108 F.R.D. 459, 462 (D. Utah 1985). 8. In an earlier decision in the Zubelake case, the court ranked information according to accessibility as follows: (1) active; (2) online data; (3) near-line data; (4) offline storage; (5) backup tapes; and (6) erased, fragmented or damages data. The court concluded that the first three categories would be viewed as accessible and the remainder as inaccessible. Zubelake v. UBS Warburg LLC, 2003 U.S. DIST. LEXIS 7939 at *32 (S.D.N.Y. 2003). i. This provides a hint, at least, of how the courts might interpret the standard of the proposed new rule 26(b)(2)(C) provision. It also raises a thorny problem: a producing party can still examine the inaccessible data. This could lead to concealment of relevant evidence harmful to the producing party or to selective disclosure of evidence in the inaccessible category. 12

13 i If this does become a concern, diligent counsel can find ways to combat this potential abuse by various means, such as determining the source of electronic documents as a foundational inquiry regarding documents that are produced, questioning information systems witnesses concerning any examination of inaccessible e-documents and through obtaining records of who has accessed documents designated as inaccessible and when. 9. Rule 34 would be amended as well, distinguishing between documents and electronically stored information. i. Rule 34(b) would permit a party to designate in a document request the format in which electronically stored information would be produced, subject to objection by the responding party. i In the absence of such a request or an agreement on the format for production, the producing party would have the option of producing the information in the form in which it is ordinarily maintained or in an electronically searchable form. Rule 33 makes clear that the option to produce documents in lieu of answering an interrogatory will extend to producing electronically stored information, on the same terms. 10. There is a proposed revision, Rule 37(f), that protects against sanctions for failing to provide electronically stored information where the information has been lost because of the routine operation of the party s computer system. This protection does not apply where a party has violated an order to preserve information or has failed to take reasonable steps to preserve the information after it knew or should have known that the information was discoverable. 11. The revisions, if adopted, would provide courts with a framework for analysis and decision of e-document discovery, but do no more than lay out a playing field on which discovery disputes like those already taking place may be conducted. This problem will not go away. 13