Presenting a live 90 minute webinar with interactive Q&A. Td Today s faculty features:

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1 Presenting a live 90 minute webinar with interactive Q&A Employment Record Retention and Destruction: Guidance for Employment Counsel Implementing Document Management Policies to Mitigate Risk, Reduce Costs and Minimize Discovery Challenges WEDNESDAY, MAY 8, pm Eastern 12pm Central 11am Mountain 10am Pacific Td Today s faculty features: Jonathan D. Wetchler, Partner, Duane Morris, Philadelphia Charles H. Wilson, Member, Cozen O Connor, Houston The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions ed to registrants for additional information. If you have any questions, please contact Customer Service at ext. 10.

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5 RECORD RETENTION AND DESTRUCTION* Presented by Jonathan A. Segal, Esq. and Jonathan D. Wetchler, Esq. *Participation in this conference does not establish an attorney-client relationship between Duane Morris LLP (or the Duane Morris Institute) and any participant (or his or her employer.) Further, no statements t t made in this conference or in the materials should be construed as legal l advice, including as pertaining i to specific factual situations. ti 2012 Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP. Duane Morris Firm and Affiliate Offices New 2012 York Duane London Morris Singapore LLP. All Rights Los Angeles Reserved. Chicago Duane Morris Houston is registered Hanoi Philadelphia service mark San of Duane Diego Morris San Francisco LLP. Baltimore Boston Washington, D.C. Duane Morris Las Vegas Firm and Atlanta Affiliate Miami Offices Pittsburgh New York Newark London Boca Singapore Raton Wilmington Los Angeles Cherry Chicago Hill Lake Houston Tahoe Hanoi Ho Chi Philadelphia Minh City Duane San Diego Morris San LLP Francisco A Delaware Baltimore limited liability Boston partnership Washington, D.C. Las Vegas Atlanta Miami Pittsburgh Newark Boca Raton Wilmington Cherry Hill Lake Tahoe Ho Chi Minh City Duane Morris LLP Delaware limited liability partnership DM2/

6 Current State of Your Efforts? 6

7 Determining Period for Retention 1. Statutory requirements 2. Statutes of limitations 3. Internal consistency 4. Practicality in implementation 7

8 Determining Period for Retention State limitations period typically is longer than statutory requirements PA breach of contract 4 years NJ breach of contract 6 years EEO: 1 year from date of decision Affirmative Action: 2 years under 41 C.F.R ] but 3 years as practical matter* * Data must be retained for current and preceding affirmative action year. 8

9 Separate Files 1. Personnel 2. Medical 3. Immigration 4. Payroll 5. EEO demographics 6. Investigations 7. Attorney-Client Communications 9

10 Personnel Files Content (examples) Application for Employment Resume Interview notes Verifications of education, licenses etc. References 10

11 Personnel Files Content (examples) Offer of Employment Job Description Benefits enrollment forms (excluding PHI) Authorizations for required withholdings from pay (Form W-4) 11

12 Personnel Files Content (examples) Authorizations for deductions from pay Performance appraisals Change of status documentation (e.g., promotions) Changes in personal information (e.g., home address) 12

13 Personnel Files Content (examples) Attendance records Training Disciplinary memos COBRA notices Other documents relating to the employee s employment history, including termination documents 13

14 Personnel Files Exclusions (examples) Medical records (broadly defined) Employment demographics I-9s 14

15 Personnel Files Retention Options Employment,,p plus 3 (minimum) Employment, plus 4 (1981) Employment plus, longest likely state statute of limitations but no less than 3/4 15

16 Personnel Files Retention Options Employment, plus 6 * Consistency for multi-state Consistent with medical records, below * Subject to longer retention in certain states based on contract statutes tes of limitations 16

17 Medical Files Security Separate and distinct 42 U.S.C (d)(3)(A) Locked and secured 17

18 Medical Files Separating HIPPA from non-hipaa records Strongly gyrecommended by EEOC Key is to make sure HIPAA documents are not improperly used or disclosed 18

19 Medical Files Content (examples) Results of pre- or post-employment p examinations 19

20 Medical Files Content (examples) Medical documentation submitted by employee relative to: ADA accommodations FMLA or other leaves of absence Documents relating to STD, LTD and Workers Compensation Health insurance election and claims forms Other doctor s notes (with medical information) 20

21 Medical Files Retention Options Hybrid HIPAA 6 years from date created or in effect* Non-HIPAA 3 years Employment plus 6 (consistent with personnel files) * HIPAA: 6 years from date created or date in effect, whichever is later [45 C.F.R j(2)] 21

22 Medical Files Special OSHA Retention Rules Employment plus 30 years for certain medical and employee exposure records [29 C.F.R (d)] Does not include: Health Insurance records maintained separately from employer s medical program First aid records of one-time treatment for certain minor injuries 22

23 EEO Investigations Content (examples) Complaint Notes of interviews Witness statements Findings of fact Memos to employees 23

24 EEO Investigations Retention Options Employment, plus 3 (minimum) Employment, plus 4 (1981) Employment, plus 6 * Consistency for multi-state Consistent with medical records, below Check with counsel * Subject to longer retention if litigation hold is required and in certain states based on contract statutes of limitations 24

25 Payroll Records Content (examples) Payroll stubs (or equivalent) Time records (or equivalent) 25

26 Payroll Records Time frame Retain on rolling basis Not employment, plus 26

27 Payroll Records Retention Options 3 years for FLSA or state wage payment, whichever is longer (minimum) 6 years longest statute of limitations for likely common law claim* Accountants suggest 7 years from date of filing of the federal tax return for the year covered *S Subject tto longer retention ti in certain states t based on contract t statutes t t of limitations 27

28 EEO Demographic Information Content (examples) Voluntary AA Forms EEO-1 Data RIF EEO analysis Accommodations or protected leave logs 28

29 EEO Demographic Information Exclude From Consideration in decision-making regarding g Compensation Promotion/demotion Evaluations and discipline Termination Other terms and conditions of employment Personnel files Files relating to decision-making 29

30 EEO Demographic Information Retention Options/Requirements EEO-1 Reports 6 calendar years after December 31 of the year in which the report is filed EEO (required) 30

31 Retention Options Retention Options/Requirements Analysis/logs consult with counsel regarding g purpose of specific document Affirmative Action: 2 years [41 C.F.R ]* * Practical effect for affirmative action employers is 3 years when you maintain affirmative action data, including applicant flow, for current plan year and preceding plan year 31

32 Attorney Client Communications Label Outside counsel Inside counsel 32

33 Attorney Client Communications Security Separation of files Access limitations 33

34 Attorney Client Communications Content (examples) Notes s Letters 34

35 Attorney Client Communications Retention Options Discuss with Counsel 35

36 Pre-Employment Records Content (examples) Advertisements Postings For applicants not hired Resumes Applications Employment agency orders and communications 36

37 Pre-Employment Records Federal retention requirements EEO: 1 year from date of decision Affirmative Action: 2 years [41 C.F.R ]* * Because employer must maintain applicant flow and other affirmative action data for current and preceding affirmative action year, practical effect is 3 years. 37

38 Pre-Employment Records Retention Options from date of decision 1 year (unless more than 1 required by state law) 2 years (required for affirmative action employers and recommended for other employers to ensure adequate comparators)* * Practical effect for affirmative action employers is 3 calendar years from year of employment decision when you maintain affirmative action data, including applicant flow, for current plan year and preceding plan year. 38

39 Pre-Employment Records Retention Options from date of decision 4 years (1981) 4 years or longest statute of limitations for likely common law claim, whichever is longer 39

40 Immigration Records Content (examples) Completed Form I-9 Back-up information upon which form is based 40

41 Immigration Records Retention IRCA Active employment, plus 1 year, but no less than a total of 3 years [Title 8 U.S.C. 1324a(b)(3)] Law requires retention of I-9s only but recommend retention of back-up documents too Electronic storage: final rules effective August 23, 2010; see 8 CFR 274(a).2(e)(4) 41

42 Retention of Supervisors Informal Employees Files Coextensive with length of employment of employee Collection upon termination of employee 42

43 Retention of Attendance Records No less than 3 years or state wage payment statute of limitations, whichever is greater 43

44 Retention of Benefits Forms Retirement participation plus 6 years LTD benefits plus 6 years Life insurance life plus 6 years Retiree medical benefits plus 6 years 44

45 Retention of Benefits Forms COBRA notices and other forms: Regulations are silent Since COBRA amended ERISA, recommend following ERISA ERISA: 6 years from the date of the record 45

46 Retention of Benefits Forms Grandfathered health plans under Health Care Reform: Must retain indefinitely records that document coverage in effect on March 23, 2010 as well as other documents that establish grandfathered d status 46

47 Special Considerations On site versus off site Control Security 47

48 Special Considerations Hard copy versus scanned Legal significance Retention off site 48

49 Special Considerations When and how to Shred Assigned dates Use of assigned calendar dates to implement rolling periods Documenting dates Destruction method Best practices State laws 49

50 How Not To Shred 50

51 Special Considerations Electronically Stored Information (ESI) Broad definition General rule delete/overwrite after specified time frame (e.g., 6 months) 51

52 Special Considerations Electronically Stored Information (ESI) Exceptions to General Rule Electronic records subject to litigation hold Electronic records required to be retained by government statute or regulation Electronic required valuable business information 52

53 Duty to Preserve 1. A party has a duty to preserve evidence relevant to current or reasonably foreseeable future litigation 53

54 Duty to Preserve 2. Good faith effort must be made to identify and preserve all documents which are: a. Relevant to the action; b. Reasonably calculated to lead to the discovery of admissible evidence; c. Reasonably likely to be requested in discovery; and/or d. Subject of a pending discovery request 54

55 Duty to Preserve 3. Spoliation is the destruction or significant alteration of evidence or the failure to preserve property for another s use as evidence in pending or reasonably foreseeable litigation. Mosaid Technologies, Inc. v. Samsung Electronics Co., Ltd., 348 F.Supp. 332, 335 (D.N.J. 2004) (quoting Zubulake v. UBS Warburg LLC, 2004 U.S. Dist. LEXIS (S.D.N.Y. 2004)) 55

56 Duty to Preserve 4. Triggers for Duty to Preserve Notice of: a. Lawsuit b. Administrative charge c. Government investigation 56

57 Duty to Preserve 5. Possible Triggers for Duty to Preserve a. Letter from opposing counsel b. Complaint by employee or non-employee i. Formal ii. Informal c. Certain occurrences 57

58 Duty to Preserve 6. What Kinds of Documents, ESI and Other Tangible Things May Be Subject to Litigation Hold? a. Hard copy documents b. Electronic documents c. Hardware d. Media e. Recordings f. Other tangible things 58

59 Duty to Preserve 7. Key Components of Duty to Preserve a. Determine who may have documents which must be preserved b. Issue litigation hold on destruction or alteration of documents within scope of duty to preserve until further notice c. Reissue litigation hold periodically d. Monitor compliance e. Document your efforts 59

60 Result of Ignoring Document Management 60

61 Action Plan Step One: Identify Litigation Holds a. Identify existing holds Determine whether each is still needed Ideally, an inventory of all litigation holds should be kept in one place 61

62 Action Plan Step One: Identify Litigation Holds b. Identify any holds that should be implemented Ask in-house counsel Consider whether this inquiry should extend to other areas, such as HR 62

63 Action Plan Step Two: Gather Existing Document Retention Policies a. Which features of the old policy worked? Which didn t? b. What is outdated? Consider changes in technology Consider changes in the law 63

64 Action Plan Step Three: Address Legal/Regulatory Concerns a. Identify any legal and/or regulatory reasons for keeping records b. Areas to consider include, but are not limited to: tax, corporate and employment c. Note that legal/regulatory issues will apply equally to s and hard copy documents 64

65 Action Plan Step Four: Address Business Concerns a. Identify records that should be kept for business reasons b. Examples: Contracts but consider discarding drafts and keeping only final, executed version of each contract Medical Records 65

66 Action Plan Step Four: Address Business Concerns (continued) b. Examples (continued): Accounting Records Personnel Records Policy Manuals Corporate Records (minutes and the like) c. Note that for some records there could be both legal and business reasons for retention 66

67 Action Plan Step Five: Revise Document Retention Policy a. Policy should be comprehensive Covering all types of records (HR, medical, accounting, etc.) And covering all types of information (hard copies on site, hard copies in storage, s, back-up tapes, hard drives, voic , etc.) b. Make sure policy states the process for enacting litigation holds 67

68 Action Plan Step Six: Do a Final Sweep for Litigation Holds Make sure nothing has come up since the initial survey 68

69 Action Plan Step Seven: Alert Employees of New Policy a. Some companies elect to implement in stages (e.g., tackle hard-copy documents first) b. Some companies schedule a clean-up day/week/month 69

70 Action Plan Step Eight: Identify and Conduct Necessary Training Possible issues Use of home computers Use of personal address Compliance with litigation hold 70

71 Action Plan Step Nine: Document the Plan a. It is wise to document that each of the above steps was taken, when, and by whom b. Some companies keep a binder with relevant memos detailing the plan, along with appendices, such as certificates of record destruction from off-site storage facilities 71

72 Action Plan Step Ten: Push the Button! 72

73 Thank You! Jonathan D. Wetchler Partner 30 South 17th Street Philadelphia, PA Duane Morris LLP. All Rights Reserved. Duane Morris is a registered service mark of Duane Morris LLP. Duane Morris Firm and Affiliate Offices New 2012 York Duane London Morris Singapore LLP. All Rights Los Angeles Reserved. Chicago Duane Morris Houston is registered Hanoi Philadelphia service mark San of Duane Diego Morris San Francisco LLP. Baltimore Boston Washington, D.C. Duane Morris Las Vegas Firm and Atlanta Affiliate Miami Offices Pittsburgh New York Newark London Boca Singapore Raton Wilmington Los Angeles Cherry Chicago Hill Lake Houston Tahoe Hanoi Ho Chi Philadelphia Minh City Duane San Diego Morris San LLP Francisco A Delaware Baltimore limited liability Boston partnership Washington, D.C. Las Vegas Atlanta Miami Pittsburgh Newark Boca Raton Wilmington Cherry Hill Lake Tahoe Ho Chi Minh City Duane Morris LLP Delaware limited liability partnership

74 Employment Record Retention and Destruction: Guidance for Employment Counsel Presented By: Charles H. Wilson Cozen O Connor Houston, Texas 2013 Cozen O Connor. All Rights Reserved

75 AGENDA 1. Litigation Holds 2. Data Preservation and Spoliation 3. Discovery Responses 75

76 76 LITIGATION HOLDS

77 What Is A Litigation Hold? A legal obligation to preserve documents relating to current or impending litigation. Daniel Renwick Hodgman, Comment, A Port in the Storm?: The Problematic and Shallow Safe Harbor for Electronic Discovery, 101 Nw. U. L. Rev. 259, 260 (2007). 77

78 Timing of Litigation Holds Once a party is or should be reasonably aware of anticipated i t litigation, the party must suspend its document destruction policy and preserve documents relevant to the litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003). 78

79 Timing of Litigation Holds A litigation hold should be issued whenever a party is or should be reasonably aware of anticipated i t litigation. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, (S.D.N.Y. 2003). 79

80 Timing of Litigation Holds Litigation is reasonably anticipated when an organization is on notice of a credible probability that it will become involved in litigation, seriously contemplates initiating litigation, or when it takes specific actions to commence litigation. Sedona Conference Commentary on Legal Holds, Guideline 1. 80

81 Filing of EEOC charge. Defendant s Triggers Chirdo v. Minerals Techs., Inc., No , 2009 WL , at *2 3 (E.D. Pa. July 23, 2009). Receipt of a summons or complaint. Official notice of a government investigation. Discovery requests. MOSAID Techs. Inc. v. Samsung Elecs., Co., 348 F.Supp.2d 332, 336 (D.N.J. 2004). 81

82 Defendant s Triggers May arise before a charge is filed. Employee told employer she retained an attorney and intended to sue. EEOC v. Smokin Joe s Tobacco Shop, Inc., No , 2007 WL , at *4 (E.D. Pa. Apr. 27, 2007). Employee s litigious history. Almost everyone associated with employee was aware of her potential suit. Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003). Asking employees to sign a waiver of legal rights. Scott v. IBM Corp., 196 F.R.D. 233, 249 (D.N.J. 2000). 82

83 Plaintiff s Triggers Seeking advice of counsel. Sending a cease and desist letter. Commencing litigation. Sedona Conference Commentary on Legal Holds, Guideline 1. 83

84 Gray Area Triggers Receipt of a preservation notice from an opposing party. Information that the corporation is a target of litigation. Sedona Conference Commentary on Legal Holds, Guideline 1. 84

85 Consider: Credibility of the information. Specificity of the information. Industry standards. Awareness of litigation by others (public, competitors, coverage). Party making the claim. Type of threat (direct, implied, inferred). Sedona Conference Commentary on Legal Holds, Guideline 4. 85

86 Issue an Effective Notice Sedona Conference Commentary on Legal Holds, Guideline 8. 86

87 Target Personnel Key custodians and witnesses Employees Secretaries Others with access to main custodian s ESI Former employees Contact t person for all preservationrelated questions Members of the IT department who are responsible for overseeing the hold Arrange face-to-face meetings. 87

88 Effective Communication Describe the litigation generally. Describe how to preserve ESI in plain-english. Explain consequences for non-compliance compliance. Avoid legal and technical jargon. Broadly describe sources of ESI. Pin-point types of data to preserved. Paper and electronic documents 88

89 Appropriate Form Issue written litigation hold. Receive written acknowledgements. Received hold Understand hold Agree to hold Identify one person for preservation-related related questions. 89

90 Direction on Preservation Give specific instructions on how to preserve data. Stress the continuing nature of the hold. Explain the importance of not destroying or altering data. 90

91 Litigation Hold Litigation Holds: 1. Suspend routine document/data destruction. 2. Save/suspend recycling of back-up tapes. 3. Notify archival facilities to suspend destruction and to preserve ESI. 4. Monitor compliance and send periodic updates/reminders. 91

92 Litigation Hold 5. Notify employees of the hold. 6. Get bit-map images for key and departing employees. 7. Certifications from IT personnel to establish chain-of-custody. 8. Form ESI discovery/document-retention team. 92

93 Periodic Review Review scope of legal hold notice. Review sufficiency of legal hold notice. Consider changes in types of data. Determine if new players are involved. Sedona Conference Commentary on Legal Holds, Guideline 7. 93

94 Counsel s Duty to Monitor Some courts require outside counsel to supervise and monitor the litigation i i hold: Communicate with parties and witnesses. Secure backup media. Directly instruct employees on documents to be preserved via the litigation hold. 94

95 Document Enforcement Efforts Documenting a litigation hold, and steps taken tk to enforce the hold, helps demonstrate a corporation s reasonableness and good faith in implementing the hold. Sedona Conference Commentary on Legal Holds, Guideline 9. 95

96 Releasing The Litigation Hold When Is party is no longer required to preserve data? Passage of time Judicial resolution Conduct inconsistent with anticipation of litigation 96

97 Discovery of Litigation Holds Generally not discoverable unless there is a spoliation issue. Document retention notices were not discoverable, but plaintiff s could ask questions about the facts regarding g individual efforts to collect evidence and preserve responsive information, including the identities of persons who received the notices In re ebay Seller Antitrust Litigation, 2007 U.S. Dist. LEXIS (N.D.Cal. Oct. 2, 2007). 97

98 DATA PRESERVATION & SPOLIATION 98

99 Avoid Spoliation Once you are on notice of a potential claim, you must preserve all potentially relevant documents and ESI. A document retention policy is a key factor to determining if documents have been destroyedin badfaith faith. 99

100 Preservation Plan Design a process to preserve data that can withstand scrutiny of opposing counsel and judicial review Timing Audience Message Creating a compliance record Follow-up 100

101 Where is Key Data Found? The Desktop Environment: Active Files Current documents, files, and programs Deletion Activity Deleted files and partially overwritten fragments Use of wipe/defrag/scrubbing / utilities i Folders Locally archived , contact lists, calendar Internet and Search History Surfing and web-based activity System, Peripheral Activity it Sign-in logs; files printed or saved to CD, floppy Installed programs or devices (e.g., thumb drive) Metadata t Accessed, Created, Modified, Author

102 Where e else is data located? Desktops Laptops BlackBerry s and other PDA s Storage Devices (DVDs, CDs, Floppy Discs, Flash Cards, Thumbdrives) Servers (FTP, Web, , File,) Voic Backup Tapes Digital Fax Machines Cell Phones Digital Cameras Off-site Storage Retired Computers

103 Microsoft exchange server; Lotus notes Get snapshot of custodial in-boxes Look for evidence that confidential information was sent home Mass deletions check the dumpster Use of web-based 103

104 Search Protocols Use third party/neutral expert Develop search terms Apply to data set Conduct privilege/relevance review Privilege/relevancy logs 104

105 Back-up Tapes Find out the rotation and media that is backed-up Stop rotation immediately Get oldest tape with snapshot of relevant s, etc. Get all retention policies; find out retention practices 105

106 Phone Records Shut-off immediately Testing issues Look for evidence of conspiracy/collaboration Secure land-line phone records Unusual patterns especially immediately before resignation Phone number search services 106

107 Less Obvious Sources Web 2.0 Wikis, blogs, and other collaborative tools Backup Tapes Enterprise databases Servers (FTP, Web, , File) Server logs Digital cameras Building access cards Video surveillance 107

108 What are the consequences if documents are not properly preserved? 108

109 Spoliation 109

110 What is Spoliation? Spoliation is the destruction or significant ifi alteration ti of evidence, or the failure to preserve property for another's use as evidence. West v. Goodyear Tire and Rubber, Co., 167 F.3d 776, 779 (2d Cir. 1999). 110

111 Types of Spoliation Sanctions Permissive and mandatory inferences Stricken pleadings and defenses Admitted facts Attorney s fees Contempt Fines 111

112 Spoliation of Evidence FRCP 37(e) governs sanctions for spoliation of electronic discovery* Failure to Provide Electronically Stored Information: 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. 112

113 What Does This Mean? Rule 37(e) creates a safe harbor if the destruction of electronically stored information is the result of a routine operation of an electronic storage system and the destruction was in good dfaith. Thus, sanctions may be appropriate if an opposing party can prove destruction was intentional or reckless. 113

114 Rule 37(e) Safe Harbor Limited protection against sanctions for failure to disclose relevant, electronically- stored information. No sanctions for routine destruction of ESI due to the routine-good-faith operation of an electronic information system. The destruction must be in good faith. Not a deep harbor -- very limited Understand how clients systems work. 114

115 Shallow Harbor Advisory Committee: Safe harbor provision does not apply when party fails to suspend document destruction policy. Court refused to allow the defendant d to claim the protections of the Rule 37 safe harbor because it failed to suspend its deletion policy upon notice of litigation. Doe v. Norwalk Cmty. Coll., 2007 WL , at *7-8 (D.Conn. July 16, 2007). 115

116 Determining Spoliation Sanctions 1. Fault of the party that destroyed relevant evidence 2. Extent of prejudice suffered 3. Whether a less severe sanction is available, and whether that sanction will deter future offensive conduct 116

117 Pension Committee General failure to preserve, and submission of false declarations relating to collection and production efforts. Failure to issue a written litigation hold is per se gross negligence. If gross negligence or willful relevance and prejudice are presumed; burden shifts to alleged spoliator to show no relevance or no prejudice. Second Circuit allows for severe sanctions based on negligent destruction of evidence. Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am.Sec., LLC, 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. Jan. 15, 2010). 117

118 Cammarata Terminating sanctions only if irreparable prejudice and bad faith. Granted adverse inference instruction and costs/fees Jury must decide if lost information would have been unfavorable to the defendants. If bad faith destruction, the jury can presume lost information would have been unfavorable. Sliding scale analysis between culpability vs. level of prejudice. Courts generally allow bad faith to substitute for relevance and prejudice avoids spoliator s s argument. Rimkus Consulting Group, Inc. v. Cammarata, 2010 U.S. Dist. LEXIS (S.D. Tex. Feb. 19, 2010). 118

119 More Spoliation Cases No spoliation sanctions where the defendant s failure to preserve evidence was culpable, but did not result in permanent prejudice. May v. Pilot Travel Ctrs., LLC, 2006 U.S. Dist. LEXIS 94507, at *12-13 (S.D. Ohio Dec. 28, 2006). Where insurance company lost a laptop that may have contained potentially relevant information, court allowed plaintiff to inform the jury of defendant s actions and lowered plaintiff s burden to prove the terms of disputed d insurance policy. Great Am. Ins. Co. of NY v. Lowry Dev., LLC, 2007 WL , at *4 (S.D. Miss. Nov. 30, 2007). Where wiping of laptops was done for maintenance purposes, court fund insufficient evidence for spoliation sanctions. Maxpower Corp. v. Abraham, 557 F.Supp.2d 955, 964 (W.D. Wis. 2008). 119

120 DEFENSIBLE COLLECTION Avoid Spoliation Copying Captures Active Data by using standard application tools but will always change some metadata fields like last accessed date/time. Harvesting Captures Active Data by using specific tools that preserves metadata. Could be handled by knowledgeable Client IT staff or Outside Expert. Forensic Image Uses specific tools to take a bit stream copy image of data on hard drive. Allows for recovery of deleted data. Searches slack and unallocated space. Must be handled by Forensic Expert. 120

121 Defensible Collection Must have data collection plan! Identify all potential Players (prioritize key players from entire universe and review first which may uncover new facts and strategies) Interview all potential Players and IT Staff (understand d how the company network is structured and how each individual creates and saves his/her data) Where is the data located (multiple l office sites, storage locations) Proper chain of custody documented Metadata is preserved and not inadvertently altered 121

122 DISCOVERY RESPONSES 122

123 Rule 26(b)(2)(B) -- Costs PRODUCING party generally must pay costs for producing information from accessible sources. REQUESTING party may have to pay for all or part of the costs of producing information from inaccessible sources. Costs for relevance and privilege reviews should be factored. 123

124 FRCP 26(b)(2)(B): Specific Limitations on ESI A party need not provide discovery of ESI when not reasonably accessible. Burden on the responding party to demonstrate inaccessibility Too difficult or too expensive to provide the data Not likely to find much responsive information Burden shifts to the requesting party demonstrate t good cause for production in spite of the burden and cost May lead to cost-shiftingshifting arrangement 124

125 Rule 26(b)(2)(B) Information Source Accessible w/o Undue Burden/ Cost? Must Intervene to Preserve? Must Produce w/o Order? Active Yes Yes (key actors and issues) Yes Databases, Not necessarily Depends Not necessarily websites Near-line archival storage Probably Yes (key actors and issues) Yes Deleted data on hard drives No No No Magnetic No Not unless known No Disaster to contain unique Recovery Tapes information Off-line storage Probably Yes (key actors and No issues) 125

126 The Costs $396,000 to select, catalog, restore and process a sampling of . $43,000 to $84,000 to produce requested . $395,000 to produce requested . Costs did not include time for attorney review, just ! Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228 (D.Md. 2005) (citing cases) No corporate president in her right mind would fail to settle a lawsuit for $100,000, if cost of e-discovery would be $300, McPeck v. Ashcroft, 202 F.R.D. 31, 35 (D.D.C. D 2001) 126

127 Undue Burden Factors 1. Specificity of the discovery request. 2. Quantity of information available from accessible sources. 3. Failure to produce relevant information that seems likely to have existed but is no longer available on an easily- accessible source. 127

128 Undue Burden Factors 4. Likelihood of finding relevant, responsive information that cannot be obtained from easily-accessible sources. 5. Importance and usefulness of the requested information. 6. Importance of issues. 7. Parties resources. 128

129 Proportionality Rule 26(b)(2)(C) Court must limit discovery if: Discovery sought is unreasonably cumulative or duplicative or same information can be secured by another, cheaper source; Party seeking the discovery has had ample opportunity to seek the information through the discovery phase of the case; or Burden/expense outweighs likely benefit 129

130 Contact Information Charles H. Wilson Cozen O Connor LyondellBasell Tower 1221 McKinney Street Suite 2900 Houston, TX cwilson@cozen.com Direct: Mobile