pp&d The quantity and types of electronically stored information In 2003 and 2004, Judge Shira Scheindlin of the Southern

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1 pp&d THE COMMITTEE ON PRETRIAL PRACTICE & DISCOVERY American Bar Association In This Issue Trends Section of Litigation Volume 18, Number 4 Summer 2010 Message from the Chairs... 2 Message from the Editors... 2 Post-Pension Committee Discovery Practice A Strict Liability Standard?... 4 Justin N. Joy Civil Subpoenas in Federal Court Part I: Successful Preparation and Service of Subpoenas... 8 Erin E. Rhinehart Spoliation of Electronic Evidence: A Judicial Boiling Point? By Emily Duke and Cynthia Moyer The quantity and types of electronically stored information (ESI) that can be used in litigation are continuously expanding and have exploded since the turn of the millennium. Indeed, just a few years ago, only technogeeks had BlackBerry devices, Twitter did not exist, and Facebook was almost unheard of. Now, most professionals won t be caught without their smartphone. People tweet their every move. Litigators frequently search for information about their clients or adversaries on Facebook. And cloud computing is being touted as the next frontier. As the pace of technological development has accelerated, the legal profession has struggled to keep up. How does new technology affect litigants and attorneys obligations in the discovery process? Guidance from the courts has been coming since at least 2003, when the first of five landmark Zubulake 1 decisions brought technology and its impact on litigation into the common legal discourse. Then in 2006, the Federal Rules of Civil Procedure were amended to address discovery of electronic evidence and provide a modicum of clarity to parties obligations regarding production of ESI. More recently, in 2009, in a joint effort of the bench and bar, the Seventh Circuit started phase one (Continued on page 20) Civil Subpoenas in Federal Court Part II: Complying with Third-Party Subpoenas Erin E. Rhinehart Authentication of s: Beware of Improper Alterations Patricia L. Davidson The End of Expert Practice as Usual: Proposed Changes to Federal Rule Calvin Cheng Pension Committee: Degrees of Culpability and Discovery Sanctions By Jennifer Ide and Angie Fox In 2003 and 2004, Judge Shira Scheindlin of the Southern District of New York issued her oft-cited series of opinions in Zubulake v. UBS Warburg that influenced the landscape of e-discovery practices throughout the federal court system. 1 In her latest discovery decision, Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 2 subtitled Zubulake Revisited: Six Years Later, Judge Scheindlin provides a framework for when acts or omissions in preserving, collecting, and producing documents may breach current standards of care in discovery practice and when such acts or omissions may lead to the imposition of sanctions. Background Pension Committee was filed in the U.S. District Court for the Southern District of Florida in It involves federal securities fraud and New York state-law claims by a large group of investors seeking to recover $550 million in losses arising out of the liquidation of two offshore hedge funds in which they held shares: Lancer Offshore, Inc. and Omnifund Ltd. The funds were managed by Lancer Management Group LLC and its principal, who for a period of time retained Citco Fund Services (Curacao) N.V. to act as the administrator. Citco N.V., (Continued on page 24)

2 Committee on Pretrial Practice & Discovery Summer 2010 Message from the Chairs Does your client have in place adequate procedures to keep track of data reposed on third-party or shared sites, and do its contracts with any Internet-based service providers and data repositories include adequate safeguards to ensure that it will be able to preserve and access its data if a court later determines that information stored by the client on the provider s servers is within the client s control for purposes of Fed. R. Civ. Proc. 34(a)? Do your associates recognize that by asserting work-product protection for pre-litigation records, they are establishing a clear trigger date for the client s document-preservation obligations? Are you comfortable that the keyword searches and search protocols used by your client to locate and collect responsive electronically stored information (ESI) are adequate and were developed with sufficient transparency to allow you to overcome subsequent discovery challenges by your opponent? Have you identified the key record custodians within your client with respect to your case and taken appropriate steps to ensure that all ESI on their assigned PCs, laptops, and mobile data devices are properly preserved? These are but a few of the questions that those of us representing organizational and sophisticated individual clients need to be asking ourselves on a routine basis in civil litigation. Being able to answer these questions affirmatively can mean the difference between building valuable credibility with the court and facing the prospect of significant monetary or even case-dispositive sanctions. Keeping you informed as to the latest issues, innovations, and developments concerning e-discovery and the numerous other items involved in modern pretrial practice are at the heart of what the Pretrial Practice and Discovery Committee is all about. And keeping up to date is no small matter these days. We are a little more than halfway through 2010, and already a number of extremely significant decisions have been handed down in the area of e-discovery, including several truly landmark decisions concerning the preservation (and spoliation) of evidence, such as Pension Committee of University of Montreal Pension Plan v. Banc of America Securities, 685 F. Supp. 2d 456 (S.D.N.Y. Jan. 15, 2010) and Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598 (S.D. Tex. Feb. 19, 2010). The issue of preservation of electronic records has also been the subject of recent proposals for a new federal rule on the topic, an idea that has already garnered significant support among both lawyers and judges. For many, the need for uniform and accessible standards governing such things as the trigger for preservation obligations, how different types of ESI subject to preservation should be maintained, the availability of safe harbors, and the applicable standard (gross negligence versus bad faith) for the imposition of sanctions vastly outweighs the complicity of trying to draft a uniform rule that can meaningfully regulate prelitigation as well as post-litigation prosecution issues. Message from the Editors Wise people keep their eye on trends. That s true for politicians, stockbrokers, salespeople, lawyers, students, parents, and many others. Knowing what has happened in the past, as well as what is happening now, is enormously important to help predict what will happen in the future. Legal trends are the lifeblood of a practicing attorney and are the key to future success. This Summer 2010 edition of PP&D focuses on trends in some very focused, and consistently critical, areas. We start with a compendium of articles on what is required to preserve, disclose, and produce electronically stored information (ESI) and what happens when things don t go right. These articles focus on the recent cases of Pension Committee of the University of Montreal v. Bank of America Securities, LLC, and Rimkus Consulting Group, Inc. v. Cammarata, which provide further guidance on ESI, what could be the most discussed discovery issue of this new century. In Spoliation of Electronic Evidence: A Judicial Boiling Point?, Emily Duke and Cynthia Moyer survey the growing judicial consensus that outside and in-house counsel must work together to proactively manage the preservation of ESI. Our next two articles provide detailed examinations of two topics explored in Pension Committee. Jennifer Ide and Angie Fox explore the critical issue of what conduct can merit the imposition of the draconian sanction of an adverse-inference instruction in Pension Committee: Degrees of Culpability and Discovery Sanctions. In Post-Pension Committee Discovery Practice A Strict Liability Standard?, Justin N. Joy considers the prospect that Pension Committee established something akin to a strict liability standard for certain discovery errors. We follow this terrific overview with twin articles by Erin E. Rhinehart on Rule 45 discovery: Successful Preparation and Service of Subpoenas and Complying with Third-Party Subpoenas. Erin s articles provide both practical and legal guidance in addressing this key area of discovery. These instructive and well-written articles are worthy of review by new and experienced attorneys alike. We continue with Patricia L. Davidson s cautionary and useful article: Authentication of s: Beware of Improper Alterations. All litigators can benefit from Patricia s insights. We round out this newsletter with The End of Expert Practices as Usual: Proposed Changes to Federal Rule 26, by Calvin Cheng. For ages, attorneys have fretted over what to disclose to potentially testifying experts and developed creative ways to control what had to be disclosed to adverse parties. Calvin s article highlights proposed amendments to Rule 26 designed to better work through these thorny and pervasive issues. * * * This newsletter is the last edition for Sam Thumma, who has

3 Summer 2010 Committee on Pretrial Practice & Discovery PP&D Editorial Board A formal proposal for just such a rule recently emerged from the 2010 Conference on Civil Litigation sponsored by the Advisory Committee on Civil Rules of the Judicial Conference of the United States. As articulated by a unanimous panel of leading authorities on e-discovery that included Judge Shira Scheindlin of the U.S. District Court for the Southern District of New York, Magistrate Judge John M. Facciola of the District of Columbia, and the ABA Section of Litigation s own Gregory P. Joseph and John M. Barkett, the conference proposal endorses a new rule that would address at least the following topics: general and specific triggers for attachment of the obligation to preserve information, including ESI the scope of the preservation duty, including both time frame and the types of covered data and data sources the form or format in which data subject to preservation should be maintained limitations and guidance for determining the individual database users and data custodians for whom detailed data must be captured and preserved preservation standards applicable to non-parties limitations as to the duration of preservation duties and their applicability to post-suit records and data (Continued on page 10) served as editor for several years. It has been Sam s pleasure to be involved with the newsletter. He has served ably in producing a quality newsletter and in the Pretrial Practice and Discovery Committee more broadly. We thank him and wish him well in his future endeavors. This edition is also the first for our new editor Seth Row. We warmly welcome Seth to our publication. We are certain that he will be a great asset. We are proud to present this compendium on ESI, and our other articles. We are always looking for timely, helpful articles to include in the newsletter. For planning purposes, the theme for our next issue will be Advocacy and also will include an update on post- Iqbal issues. If you are interested in writing an article, or if you have other information to share with PP&D, please contact Greg Boyle ( or gboyle@jenner.com). Please also be sure to visit the PP&D webpage at for past newsletters, practice pointers, and periodic updates on cuttingedge legal developments, more information from the Iqbal Task Group, as well as general information about the PP&D Committee. Erica L. Calderas Chair Hahn Loeser & Parks LLP 3300 BP Tower 200 Public Square Cleveland, Ohio (216) elcalderas@hahnlaw.com Ian H. Fisher Chair Schopf & Weiss LLP One South Wacker Drive, 28th Floor Chicago, Illinois (312) fisher@sw.com Kent Lambert Chair Baker Donelson 201 Saint Charles Avenue, Suite 3600 New Orleans, Louisiana (504) klambert@bakerdonelson.com Honorable Samuel A. Thumma Editor Maricopa County Superior Court 3131 West Durango Street Phoenix, Arizona (602) thummas@superiorcourt.maricopa.gov Gregory M. Boyle Editor Jenner & Block LLP 330 N. Wabash Avenue Chicago, Illinois (312) gboyle@jenner.com Seth Row Editor Parsons Farnell & Grein LLP 1030 SW Morrison Street Portland, Oregon (503) srow@pfglaw.com PP&D (ISSN: ) is published quarterly by the Pretrial Practice & Discovery Committee, Section of Litigation, American Bar Association, 321 N. Clark Street, Chicago, IL 60654; The views expressed within do not necessarily reflect the views or policies of the American Bar Association, the Section of Litigation, or the Pretrial Practice & Discovery Committee. Copyright 2010 American Bar Association. All rights reserved. For permission to reprint, contact ABA Copyrights & Contracts, 321 N. Clark Street, Chicago, IL 60654; fax: (312) ; copyright@abanet.org. Address corrections should be sent to the American Bar Association, c/o ABA Service Center, 321 N. Clark Street, Chicago, IL ABA Publishing J.R. Haugen Associate Editor Andrea Siegert Art Director Samuel A. Thumma Gregory M. Boyle Seth H. Row

4 Committee on Pretrial Practice & Discovery Summer 2010 Post-Pension Committee Discovery Practice A Strict Liability Standard? By Justin N. Joy As noted by Judge Shira Scheindlin in her recent opinion in The Pension Committee of The University of Montreal Pension Plan v. Banc of America Securities, LLC from the U.S. District Court for the Southern District of New York, 1 no discovery process is perfect, and courts should not expect perfection. However, Pension Committee appears to establish a strict liability standard in discovery practice at least as to certain specific discovery missteps. Under the reasoning and analysis in this case, regardless of how carefully a party or its counsel conducts discovery, if relevant evidence is lost or destroyed, the offending party is, at best, guilty of discovery negligence. 2 The fact pattern involving the discovery problems in Pension Committee could arise in nearly every case, especially in document-intensive matters such as commercial, intellectual-property, or securities litigation. Additionally, cases such as Pension Committee, where relevant documents may span several years or even a decade or more, are particularly susceptible to discovery pitfalls. Accordingly, it is unlikely that courts will decline to follow Pension Committee based upon an argument that the case presents a set of unique and rarely applicable facts. 3 This article focuses on the problems that commonly occur in discovery efforts of any significant size and provides suggestions for addressing these issues to avoid the fate of the plaintiffs in Pension Committee. 4 Discovery Sanctions Imposed The imposition of discovery sanctions for destroyed evidence is not a new concept. But in most cases where sanctions are imposed, there is some evidence of intent. At the outset of the opinion, Judge Scheindlin noted that this was not a case where a party purposefully destroyed evidence. Instead, at issue was the plaintiffs failure to take certain steps to preserve documents and their careless and indifferent collection efforts after the duty to preserve arose. 5 The court concluded that there was little doubt that documents had been lost or destroyed that should have otherwise been produced. Based on that fact alone, and despite any proof of intentional spoliation, the court nevertheless determined that sanctions should be imposed. To determine what sanctions were appropriate, the court set out to determine whether the offending parties conduct was negligent, grossly negligent, or willful. Continuum of Discovery Misconduct The establishment of a continuum of misconduct in the discovery context may be the most significant contribution of Pension Committee to discovery jurisprudence. Judge Scheindlin Justin N. Joy is an associate at Thomason, Hendrix, Harvey, Johnson & Mitchell, PLLC in Memphis, Tennessee. noted that negligence, gross negligence, and willfulness had not previously been defined for purposes of determining the nature of a party s discovery misconduct. After examining the labels used for various degrees of misconduct in the realm of tort law, the court concluded that the standard of conduct for parties engaged in discovery is to do that which other courts have determined a party must do to participate meaningfully and fairly in the discovery phase of a judicial proceeding. 6 Even if counsel proceeds with a pure heart and an empty head, the failure to meet this standard constitutes negligence in the discovery-misconduct context. 7 On the other extreme of the misconduct continuum, the intentional destruction of documents after a party has a duty to preserve evidence constitutes willful conduct. In what may become one of the more frequently quoted statements in the opinion, Judge Scheindlin stated, A failure to preserve evidence resulting in the loss or destruction of relevant information is surely negligent, and, depending on the circumstances, may be grossly negligent or willful. 8 In other words, under Pension Committee, if a party does not preserve discoverable documents or information, the party, and its counsel, is negligent at best. Perhaps more strikingly, the court stated that a failure to adhere to contemporary standards may constitute gross negligence after a duty to preserve evidence attaches. Although Judge Scheindlin did not state precisely what constitutes contemporary standards or what factors should be considered in determining such standards, at least a couple of courts, including Pension Committee, have looked to non-judicial authorities for guidance in deciding whether counsel and parties have properly conducted discovery. 9 Judge Scheindlin did discuss and apply standards derived from her previous series of decisions in the Zubulake case, which was a complex and high-dollar-value employment dispute. 10 Some have questioned whether the standards applied in Zubulake are applicable in other kinds of jurisdictions and other types of cases. However, a party s common-law duty to preserve evidence applies in every type of case from family-law matters to intellectual-property disputes regardless of the amount in controversy. As a result, especially in the context of a party s obligation to preserve evidence, courts following Judge Scheindlin s reasoning in Pension Committee likely may require adherence to discovery standards that may be foreign to attorneys who are unfamiliar with new and often dynamic technical terms and concepts pertaining to the preservation, collection, and production of electronically stored information (ESI). Particularly if a strict liability standard applies to discovery conduct, counsel and parties must educate themselves on current best practices in discovery, or retain outside counsel

5 Summer 2010 or experts with the requisite knowledge of such practices, regardless of the type of case or size of case. 11 Under the Pension Committee decision, any of the following failures in the discovery process would support a finding of gross negligence based upon the admonishments in the final applicable Zubulake decision in July 2004: to issue a written litigation hold; to identify all of the key players and to ensure that their electronic and paper records are preserved; to cease the deletion of or to preserve the records of former employees that are in a party s possession, custody, or control; and to preserve backup tapes when they are the sole source of relevant information or when they relate to key players, if the relevant information maintained by those players is not obtainable from readily accessible sources. 12 Specifically, the court stated that after July 2004 (when the last of the seminal series of Zubulake 13 opinions was issued), failing to issue a written litigation hold constitutes gross negligence because of the likelihood of a resulting destruction of discoverable documents and information. Therefore, Pension Committee appears to establish a strict liability standard as to the duty to preserve evidence if specific steps, such as issuing a written litigation hold, are not taken. Imposition of Discovery Sanctions Judge Scheindlin s analysis of the burdens of proof that apply to the range of possible discovery sanctions provides insight into how making an otherwise relatively minor misstep in discovery may result in a significant discovery-related sanction. An understanding of the various burdens of proof and presumptions will aid in avoiding discovery sanctions by a court adopting the reasoning of the Pension Committee decision. If (and, more likely, when) a discovery mistake occurs, an understanding of the applicable burdens will also be helpful in defending against the imposition of sanctions. In its analysis of the sanctions to be imposed for discovery violations by the offending parties, the Pension Committee court first set forth the three-fold purposes of discovery sanctions in the Second Circuit. Discovery sanctions should deter spoliation, place the risk of an erroneous judgment because of the lost evidence on the offending party, and restore a party prejudiced by the lost evidence to the same position it would have been but for the destruction of evidence. Judge Scheindlin next noted that a court should always impose the least sanction available that would provide an adequate remedy to the prejudiced party. Terminating sanctions are only warranted in the most egregious cases when an offending party has engaged in intentional discovery misconduct such as perjury, evidence tampering, and intentionally permanently destroying evidence by burning or shredding or by erasing hard drives. The court observed that discovery sanctions range from further discovery, cost-shifting, and fines on one end, to special jury instructions, preclusion, and terminating sanctions such as a default judgment or dismissal on the other end. The applicable burden of proof depends on the severity of the sanction sought. For lesser sanctions involving monetary assessments in the form of fines and cost-shifting, the primary Committee on Pretrial Practice & Discovery consideration is the conduct of the offending party rather than the relevance of the lost documents and any resulting prejudice. In cases of greater sanctions such as case-dispositive (i.e., dismissal or default) or case-limiting sanctions such as an adverse-inference jury instruction, the focus is on whether the lost or destroyed evidence was relevant and whether the complaining party was prejudiced as a result of the loss. In the discovery context, Judge Scheindlin noted that, at least in the Second Circuit, relevancy for purposes of spoliated evidence was broader than suggested by Rule 401 of the Federal Rules of Evidence. 14 However, a party seeking discovery sanctions must establish that the lost evidence was more than simply responsive to a request for production or interrogatory. A party must demonstrate that the destroyed evidence would have been helpful in proving the complaining party s claim or defense. Further, the court stated that proof of relevance does not, standing alone, satisfy the requirement for proof of prejudice to the complaining party. When a party has acted willfully or with gross negligence, relevance and prejudice may be presumed. The intentional destruction of evidence gives rise to the presumption that the destroyed evidence was unfavorable to the party. In the case of negligent conduct, however, a complaining party must prove both relevance and prejudice before a court would impose a severe sanction under the Pension Committee decision. Proof of relevance and prejudice will necessarily have to be demonstrated by extrinsic evidence as, at least in nearly all cases, direct proof of relevance i.e., the content of the missing document will necessarily, and by definition, be unavailable. The court stated that a presumption of relevance or prejudice is rebuttable and the offending party should be provided the opportunity to present proof that the complaining party had not been prejudiced by the destruction of the evidence at issue. Judge Scheindlin emphasized the importance of requiring a party seeking serious sanctions prove relevance and prejudice because otherwise, sanctions could potentially be awarded in every instance where a document has not been produced, thus shifting the focus of litigation from the merits of a case to a hunt for discovery deficiencies. However, even in instances where the presumption is rebutted, lesser or monetary sanctions may nonetheless be imposed. Discovery Practice under a Strict Liability Standard As discussed above, the Pension Committee decision appears to essentially set forth a strict liability standard in the discovery context. Although acknowledging that no discovery effort of any significant size will be without flaws, Judge Scheindlin unequivocally stated that if a relevant document is not produced, the party is at least negligent. Furthermore, if a proper litigation hold is not issued, a party is grossly negligent. Although an offending party may have a defense to such liability that, despite the party s culpability, the complaining party was not prejudiced and no relevant documents were destroyed, if other courts follow the reasoning and analysis of the Pension Committee decision, discovery challenges will likely become more frequent and intensive because of the sanctions at stake. Accordingly, as

6 Committee on Pretrial Practice & Discovery Summer 2010 stated many times before, parties and counsel would be well served by giving thoughtful consideration of their preservation and production duties before their obligation to preserve evidence arises. Below are a few subjects that likely merit consideration (or reconsideration) following and in light of the Pension Committee decision. 15 Substantiate Any Conclusory Statements about Discovery Efforts The offending parties in the Pension Committee decision were criticized for submitting what were determined to be misleading and inaccurate affidavits. In nearly each instance, the declarant stated that all responsive documents had been produced. To be sure, the parties efforts to document their discovery efforts were noted in the case. There is an inherent risk, however, in having a witness conclude that all responsive documents in a party s possession, custody, and control have been produced. A subsequent (and in the Pension Committee case, a court-ordered) and hindsight If relevant evidence is lost or destroyed, a party may be subject to sanctions. examination of the party s discovery efforts may reveal that such a conclusion is inaccurate. If possible, following the Pension Committee case, a party will now be better served by providing documentation of what data sources have been searched, the nature of data sources searched, and how those data sources were searched, leaving adverse parties and the court to draw their own conclusion about whether all documents have been produced. Presumption of Undisclosed Documents In cases where, based upon the nature of the litigation, it would be presumed that a party would have a considerable volume of documents, there may be a presumption that relevant documents are being withheld or were lost if a party s document-production set is unexpectedly small. The Pension Committee court was clearly skeptical at the small size of the production of at least one party to the litigation. 16 A party in such a situation may need to be prepared to explain, perhaps at the Rule 26(f) meet-and-confer stage or the Rule 16(b) scheduling conference, why an expected volume of documents will not be or was not produced. Litigation Holds and Preservation Efforts The Pension Committee court determined that an directing employees to preserve documents was not a sufficient substitute for a formal written litigation hold. 17 Some parties were also criticized for their failure to preserve relevant evidence from key former and current employees, as well as inappropriate delegation of preservation duties. Counsel must be involved in the preservation process from the beginning and continuously throughout the litigation to advise the client in determining what information must be preserved and how it is to be preserved. As in the case of Pension Committee, a formal stay or a lull in activity in a case does not relieve a party of its preservation duties. Simply issuing a written litigation hold to company management or inside counsel at the outset of litigation is not sufficient. Counsel must get involved and stay involved in a party s preservation efforts at both the management level as well as ensure preservation compliance at the key employee or custodian level. Production of Multiple Copies of Documents Copies of documents, even from assistants and non-key players, should be preserved and searched. Interestingly, on May 28, 2010, Judge Scheindlin entered an order amending the previous Pension Committee order addressing the discovery issues that are the subject of this article. The May 28, 2010, amendment narrowed the previous order by requiring preservation of information from all those employees who had any involvement with the issues raised in the litigation or anticipated litigation instead of requiring preservation of records from all employees. 18 As noted throughout the Pension Committee opinion, the defendants were able to prove their motion for sanctions against the plaintiffs by pointing to copies of s obtained from other plaintiffs but not produced by the offending parties. 19 An agreement with or among counsel at the outset of a case on whether or not duplicate copies should or should not be searched and produced may be helpful. In any case, however, it appears to be a prudent course of action to preserve multiple copies of documents from different sources following Pension Committee. Knowing the Universe of Data and Where Data Resides No document preservation and production effort is perfect and, as Judge Scheindlin noted, courts should not demand that parties conduct discovery flawlessly. Based upon the Pension Committee decision, however, parties must take verifiable (and, as the opinion reveals, documented) steps to comply with their preservation and production obligations. The court repeatedly criticized the custodians and declarants for their lack of knowledge about the preservation-and-search process. For both parties and counsel to participate in meaningful efforts to preserve and produce ESI, a comprehensive understanding of a party s information system is required. Additionally, in cases where backup tapes and other archival media are the only source of relevant data, such information must be preserved, even if the data on the archival storage systems is not reasonably accessible. The location of important data is not only helpful in counseling a party about preservation and production obligations, but knowledge is often required to craft a discovery plan at the meetand-confer stage early in the course of litigation. 20 Document-Retention Policy Revisions and Administration While not necessarily new ideas, a number of passages in the Pension Committee decision highlight some of the difficulties in information management in the organizational context. Document-retention policies must be administered uniformly throughout an organization. If a representative certifies that he or she, on behalf of the corporation, has searched for and

7 Summer 2010 Committee on Pretrial Practice & Discovery produced everything from the organization, but individuals within the organization have different retention practices, such a declaration will likely prove to be false. Obviously, certain documents and information must be retained for extended periods, and perhaps, especially if subject to a litigation hold, indefinitely. However, for those documents that have little evidentiary value for either prosecuting a claim or proving a defense, minimum retention periods should be considered. There was a range of retention periods and methods illustrated in the Pension Committee decision. Dealing with inconsistent retention periods and methodologies across an organization or subsidiaries can complicate the preservationand-production process. While one department or subsidiary may keep a certain file on an active network drive for two years, another department may move the same type of file to an offsite backup after six months, while another area of the company may leave document retention and disposition up to the individual custodian. In the Pension Committee decision, the differing retention periods and methods may have contributed to the apparent difficulty in preparing accurate declarations regarding parties preservation and production efforts. A thoughtful and deliberate decision needs to be made at an organization s management level as to what documents need to be retained and for what periods and then implement the policy uniformly across the organization. Furthermore, considerations as to where documents are stored are important in regard to preservation concerns. For instance, if it is difficult or impractical to suspend an automatic-deletion function as to specific documents stored in a data-storage system, any documents critical to a potential claim or defense in litigation should not be stored on such a system without a copy stored elsewhere. Conclusion While the Pension Committee opinion did not fundamentally change discovery practice, Judge Scheindlin s opinion will likely make it easier for courts following the decision to find that a party has committed discovery negligence or more egregious discovery misconduct. Although under the court s reasoning, sanctions are not to be automatically imposed upon the finding of discovery misconduct, sanctions will likely be increasingly sought despite the judge s admonition against proliferating discovery disputes. While it is unlikely that every court will closely follow Judge Scheindlin s reasoning, the Pension Committee opinion nevertheless sets forth a standard in discovery practice under which a party and counsel can be liable for discovery sanctions regardless of efforts, or the lack thereof, to preserve evidence. 21 Simply put, if relevant evidence is lost or destroyed, a party may be subject to sanctions. If the extent of adoption by state and federal courts of Judge Scheindlin s series of opinions in Zubulake is any indication, courts in other jurisdictions may consider applying the apparent strict liability discovery standard set forth in Pension Committee in virtually any type or size of civil litigation. Counsel and parties, especially those routinely involved in discovery involving substantial discovery efforts, would be well served to evaluate and, as necessary, reconsider, the potential consequences of future discovery efforts in the wake of Pension Committee. Endnotes 1. No. 05 Civ (SAS), 2010 U.S. Dist. LEXIS 4546 (S.D.N.Y. Jan. 15, 2010) (as amended May 28, 2010). 2. From a tort-law perspective, a party s fault, or negligence, is irrelevant in the context of strict liability. See Babbitt v. Sweet Home Chapter of Cmtys. for a Great Or., 515 U.S. 687, 712 (1995) ( Strict liability means liability without regard to fault[.] ) (O Connor, J., concurring). Although the Pension Committee opinion uses the term negligent to describe a party s failure to preserve relevant documents, the court is clear that it is the loss or destruction of documents that triggers potential liability for discovery sanctions regardless of the conduct causing the loss of the evidence. 3. Indeed, less than two months after the issuance of the Pension Committee decision, at least two other courts have cited the Pension Committee analysis in reviewing discovery efforts. See Field Day, LLC v. Cnty. of Suffolk, No , 2010 U.S. Dist. LEXIS 28476, at *42 45 (E.D.N.Y. Mar. 25, 2010); Rimkus Consulting Group, Inc. v. Cammarata 688 F. Supp. 2d 598, 611 (S.D. Tex. 2010). 4. For an earlier article providing a more comprehensive discussion of the facts involved in the Pension Committee decision, see Christopher M. Hannan, PP&D (ABA), Spring 2010, at Pension Committee, 2010 U.S. Dist. LEXIS 4546 at *6. 6. Id. at *9. 7. Id. 8. Id. at * See id. at *38 (stating that preservation hold did meet standard for litigation hold and citing Shira A. Scheindlin, et al., Electronic Discovery and Digital Evidence: Cases and Materials (2009)); Cache La Poudre Feeds, LLC v. Land O Lakes Farmland Feed, LLC, 244 F.R.D. 614, 620 (D. Colo. 2007) (stating [c]ommentators have proposed practices and standards for discovery that reflect the explosion in electronic documents and data and citing The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Production (Sedona Conference Working Group Series July 2005) and ABA, Civil Discovery Standards (2004)). The court also discussed the general concept of standards of conduct in discovery practice. Pension Committee, 2010 U.S. Dist. LEXIS 4546 at *8 9 (stating, In the discovery context, the standards [of conduct] have been set by years of judicial decisions analyzing allegations of misconduct and reaching a determination as to what a party must do to meet its obligation to participate meaningfully and fairly in the discovery phase of a judicial proceeding. ). 10. See Pension Committee, 2010 U.S. Dist. LEXIS 4546 at *10 (citing to Zubulake IV and Zubulake V decisions); see also Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 215 (S.D.N.Y. 2003) (briefly describing nature of case). 11. Of course, the burdens associated with production of ESI must be considered in the context of the amount in controversy and the parties resources. See Fed. R. Civ. P. 26(b)(2)(C). A party s preservation obligations, however, are generally not subject to such considerations. 12. Id. at * Zubulake v. UBS Warburg, LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) (this opinion has been frequently referred to as Zubulake V ). 14. Rule 401 states, Relevant evidence means evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence. Fed. R. Evid To be clear, this article is not, and is not intended to be, a critique of the discovery efforts of the parties at issue in Pension Committee. It is intended to be a discussion of the areas, which can and will likely arise in future cases, of the parties discovery efforts that the court found troubling. 16. See id. at * See id. at * See Pension Committee, No. 05 Civ (SAS), slip op. at 1 2 (S.D.N.Y. May 28, 2010) (correcting Amended Opinion and Order filed January 15, 2010). 19. Of course, a complaining party in such instances will not likely (Continued on page 16)

8 Committee on Pretrial Practice & Discovery Summer 2010 Civil Subpoenas in Federal Court Part I: Successful Preparation and Service of Subpoenas By Erin E. Rhinehart Discovery is typically a large part of litigation associates respective workloads. A majority of case strategy is evaluating what discovery should be conducted and when. For example, seeking out third-party discovery early in a case may be strategically beneficial because information may be obtained that can be used later against opposing parties. Therefore, early evaluation of which third parties may provide useful information, as well as how that information will best be conveyed (e.g., documents, testimony, or both), usually will prove fruitful for the case and demonstrate initiative and critical thinking to a supervising attorney. Obtaining discovery from non-parties is often achieved by issuing a subpoena. This article the first of two addressing third-party subpoenas provides guidance for the preparation and execution of subpoenas served within the United States for civil cases pending in federal court. The second article discusses responding and objecting to federal civil subpoenas. Applicable Rules Governing Federal Subpoenas Federal Rule of Civil Procedure 45 governs subpoenas. Rule 45 contains a significant amount of information and requires careful attention to the details. Depending on the jurisdiction from which a subpoena is issued, local rules also may provide necessary information. For example, the court from which the subpoena is issued may provide, either via its clerk s office or on its website, a civil subpoena form that summarizes all necessary information required by that court. Local rules may also provide specifics relating to timing, meet-and-confer obligations, and related issues. See, e.g., S.D. Fla. Local Rule 26.1(F)(2) ( Written discovery requests and subpoenas seeking the production of documents must be served in sufficient time that the response is due on or before the discovery cutoff date. ); N.D. Ohio Local Rule 16.1(b)(6) ( Counsel must initiate discovery requests and notice or subpoena depositions sufficiently in advance of the discovery cut-off date so as to comply with this rule, and discovery requests that seek responses or schedule depositions after the discovery cut-off are not enforceable except by order of the Court for good cause shown. ); N.D. Ca. Local Rule 30-1 ( A party noticing a deposition of a witness who is not a party or affiliated with a party must also meet and confer about scheduling, but may do so after serving the nonparty witness with a subpoena. ). Further, although Rule 45 governs subpoenas, other federal rules relating to discovery also may apply, including Rules 26, 30 and 34. Erin E. Rhinehart (erhinehart@ficlaw.com) is an associate at Faruki Ireland & Cox P.L.L. in Dayton, Ohio. Determine the Appropriate District Court from Which the Subpoena Must Issue Rule 45 directs a key, fundamental issue: From which district court must a subpoena issue? The determinative factor is what is being commanded of the witness (e.g., production of documents or things, attendance, or both). If the subpoena commands attendance at a deposition, then Rule 45(a)(2)(B) controls and the subpoena must issue from the court for the district where the deposition is to be taken. If the subpoena commands production or inspection and is separate from a subpoena commanding a person s attendance then Rule 45(a)(2) (C) controls, and the subpoena must issue from the court for the district where the production or inspection is to be made. Therefore, if the subpoena commands both attendance and production of documents, then the jurisdiction of the deposition controls. See also Fed. R. Civ. P. 45(a)(1)(C) (permitting subpoenas commanding attendance to be combined with subpoenas commanding production or inspection). Identify the Proper Method of Service Improper service is an easy way for a witness to object and delay the process; therefore, careful attention to effectuating proper service is important. Rule 45(b)(1) provides that [a]ny person who is at least 18 years old and not a party may serve a subpoena. Serving a subpoena requires delivering a copy to the named person. Although a majority of courts require personal service under Rule 45, some courts permit service by certified mail. See Franklin v. State Farm Fire and Cas. Co., No , 2009 U.S. Dist. LEXIS 90687, at *3 4 (E.D. Mich. Sept. 30, 2009) ( The majority of courts hold that Rule 45 requires personal service.... The growing number of cases that have determined that Rule 45 does not require personal service have permitted service by certified mail and other means if the method of service is made in a manner designed to reasonably insure actual receipt of the subpoena. ) (internal citations omitted); Halawani v. Wolfenbarger, No , 2008 U.S. Dist. LEXIS , at *9 10 (E.D. Mich. Dec. 10, 2008) (certified mail acceptable method of service); Windsor v. Martindale, 175 F.R.D. 665, 670 (D. Colo. 1997) (finding that service via regular mail is improper and a basis on which to quash the subpoena). Employing a method of service other than personal, however, should reasonably insure actual receipt of [the] subpoena by the witness. Franklin, 2009 U.S. Dist. LEXIS 90687, at *4. As discussed below, preliminary communications with the witness may be helpful, because the witness may agree to accept service by mail. Any agreement relating to alternative service should be documented. Personal service requires the retention of an appropriate process server. If the witness is local, then finding a process server

9 Summer 2010 will likely not be difficult. If, on the other hand, service must be effectuated in an unfamiliar jurisdiction, research of potential process-service companies may be necessary. The Internet is a good source for locating process-service companies and obtaining contact information. Contact potential process servers and inquire as to applicable fees, practice, procedure, familiarity with the area in which the witness resides, timing of service, proof of service, and notification when service is effectuated. Rule 45(b)(4) provides that, when necessary, proof of service requires filing with the issuing court a statement showing the date and manner of service and the names of the persons served. The statement must be certified by the server. Although proof of service may never need to be filed with the court, it is important to retain written proof of service, including the certification statement by the process server (or the return receipt if served via certified mail), should an objection ever be raised regarding service. Consider Communicating with the Witness Prior to Issuing the Subpoena It may be beneficial to contact the witness prior to issuing the subpoena. Third parties generally have no real stake in the outcome of the underlying litigation; therefore, making their lives easier, and compliance with the subpoena less cumbersome, may make the process less adversarial. For example, several potential issues may be negotiated prior to issuance of the subpoena. First, it may be beneficial to allow the recipient of the subpoena to suggest a reasonable compliance deadline or dates on which to schedule a deposition. Second, consider whether to offer to pay for or negotiate the costs of copying the requested documents. Third, determine whether the recipient is willing Third-party discovery provides ample opportunities to further build a case; however, sufficient preparation and attention to detail is necessary to successfully subpoena a witness or documents. The following checklist will serve as a good reminder: 1. Identify third-party witnesses and objectives of discovery (e.g., documents, testimony, or both). 2. Review applicable rules (e.g., Rule 45, local rules). 3. Identify appropriate jurisdiction from which the subpoena must issue. 4. Consider communicating with the witness prior to service of the subpoena. 5. Identify method of service (e.g., personal or certified mail). 6. Identify applicable fees. 7. Prepare requests for documents. 8. Prepare notice to parties. 9. Effectuate service of notice and subpoena. 10. File the notice of service, or proof of service, if required by local rules. Committee on Pretrial Practice & Discovery to accept an alternative method of service (e.g., certified mail or regular mail). Finally, be willing to negotiate the scope of the requested material or stipulate to a protective order, particularly if the information sought will implicate proprietary or tradesecret material. Not only may the recipient appreciate your flexibility and accommodations, but also potential objections to the subpoena may be avoided. Individuals are also usually thankful to have someone explain to them that a process server will be delivering documents to them personally, an experience that may be unsettling or make the witness feel as though he or she has done something wrong. In addition, the specific timing and location of service can be agreed upon. It is important, however, to explain to the witness that you do not represent him or her. Preparing a Subpoena Duces Tecum A subpoena commanding the production of documents is often referred to as a subpoena duces tecum. Although preparation of a subpoena duces tecum is similar to preparing a request for the production of documents to an opposing party, be careful to tailor the requests appropriately. Often, attorneys are fearful of missing something, meaning requests for documents are drafted more broadly than necessary. Courts generally weigh a recipient s third-party status in favor of upholding objections based on over-breadth or undue burden. Englar v. 41B Dist. Ct., No. 04-CV-73977, 2009 U.S. Dist. LEXIS , at *16 (E.D. Mich. Oct. 29, 2009) (non-party status weighs in favor of a finding of undue burden). Anticipate such objections and draft the requests appropriately to avoid, or reduce the likelihood of success on, such objections. Like document requests served on a party, subpoenas duces tecum directed to third parties should include appropriate definitions and instructions. Beyond the general definitions and instructions typically included such as Rule 34 s definition of writing, party names, relevant abbreviations, relevant time period(s), and instructions relating to necessary privilege logs it is also important to include definitions and instructions relating to electronically stored information (ESI). In particular, Rule 45(a)(1)(C) provides that a subpoena may specify the form or forms in which electronically stored information is to be produced. If the subpoena does not specify the form, then Rule 45(d)(1)(B) provides that the individual or entity responding may produce all ESI in the manner in which it is ordinarily maintained. See also Fed. R. Civ. P. 34(a), (b). Finally, do not forget to attach as exhibits all applicable protective orders active in the underlying litigation, as well as a copy of the operative complaint. These documents will further educate recipients on the underlying litigation, as well as guide them in preparing their response. Preparing a Subpoena Commanding Testimony Subpoenas commanding a witness to give testimony may not require as much written preparation as a subpoena duces tecum; however, additional procedural requirements must be followed to effectuate successful service of the subpoena. First, Rule 45(a)(1)(B) requires that a subpoena commanding deposition testimony specify the method of transcription (e.g., written or

10 Committee on Pretrial Practice & Discovery Summer 2010 videotape). As explained in the Advisory Committee notes to Rule 45 (Amendment 2005), the purpose of providing notice to the deponent is to close the gap between Rule 45 and Rule 30(b)(2), and to allow the deponent an adequate opportunity to object to the method of transcription. Second, Rule 45(b)(1) provides that if the subpoena requires that person s attendance, tendering the fees for 1 day s attendance and the mileage allowed by law is required at the time of service. In other words, witness and mileage fees must be prepaid to the witness upon service of the subpoena; otherwise, proper service has not been effectuated. In re Stratosphere Corp. Sec. Litig., 183 F.R.D. 684, 687 (D. Nev. 1999) (denying motion to compel deposition testimony, in part, because failure to pay witness and mileage fees required by Fed. R. Civ. P. 45(b)(1) renders service incomplete ); see also 28 U.S.C (providing further guidance on applicable fees). Finally, if the subpoena compelling testimony is issued to a corporation, then the subpoena must also comply with the requirements of Rule 30(b)(6). Provide Notice to All Parties All parties to the underlying litigation must be provided notice of the subpoena prior to service. Rule 45(b)(1) provides that [i]f the subpoena commands the production of documents, electronically stored information, or tangible things or the inspection of premises before trial, then before it is served, a notice must be served on each party. See also Fed. R. Civ. P. 45, 2007 Advisory Committee notes (stressing that notice must be given to the parties before service of the subpoena to provide an opportunity for objection). Further, Rule 30(b) (1) requires that reasonable written notice of a deposition be provided to all parties. The notice is a separate document from the subpoena and is provided to the parties only not to the recipient of the subpoena. Among other items, the notice should identify the recipient of the subpoena, time and location for production or deposition, and include a copy of any requests for production. Options if the Witness Fails to Comply with the Subpoena Rule 45 provides two options if a witness fails to comply with a subpoena. First, Rule 45(c)(2)(B)(i) provides that the issuing party may move for an order compelling production. Second, Rule 45(e) provides that the issuing court may hold in contempt a witness for noncompliance. Rule 45(e) may also be used as the basis for a motion for sanctions or costs. See Halawani, 2008 U.S. Dist. LEXIS , at *15. Prior to filing a motion with the court, extrajudicial attempts to resolve any discovery dispute should be exhausted. Fed. R. Civ. P. 45(c)(2)(B)(i) (providing that a motion to compel production or inspection may be filed [a]t any time, on notice to the commanded person.... ). Applicable local rules may provide guidance as to extrajudicial resolution of discovery disputes. S.D. Ohio Local Rules 37.1, 37.2 (requiring parties to exhaust all extrajudicial means for the resolution of the discovery dispute among parties). Although certain local rules may apply only to discovery disputes among parties, attempting such extrajudicial resolution (and noting such efforts in a motion to compel) undoubtedly will be appreciated by the court and will further support an order compelling production. Message from the Chairs (Continued from page 3) the contours of a safe harbor for organizations using formal litigation-hold procedures the extent to which internal efforts to ensure and accomplish proper preservation should be protected as work product the consequences and related procedural requirements applicable in instances of alleged breaches of the preservation duty The bottom line for most of us is that e-discovery remains an increasingly important but often frustratingly elusive and rapidly evolving concern that cuts across most, if not all, aspects of pretrial practice. Indeed, as demonstrated by a recent Seventh Circuit decision addressing federal pleading requirements under the U.S. Supreme Court s decisions in Ashcroft v. Iqbal, 129 S.Ct (2009) and Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007), e-discovery concerns are even influencing how parties are expected to plead their cases at the outset of discovery. See Swanson v. Citibank, N.A., No , 2010 WL (7th Cir. July 30, 2010). In Swanson, both the majority and the dissent made a point of noting that the Supreme Court s heightened plausibility standard under Rule 8 was informed, at least in part, by a desire to limit access to potentially extortionate discovery in cases that are not substantiated by adequate pre-filing investigations reflected in the parties pleadings. Id. at *9. The Pretrial Practice and Discovery Committee continues to offer a wealth of resources to help our members keep abreast of the latest developments affecting pretrial practice, as the current edition of PP&D reflects. In addition, the committee s website, offers a wealth of resources, updates, and practice aids. Elsewhere, the committee has sponsored a number of CLE programs, including several on e-discovery at the ABA Section of Litigation Annual Conference in New York City in April, and cosponsored the ABA National Institute on E-Discovery in May. As we move into a new bar year, we are renewing our commitment to provide you, our members, with the most topical and timely resources possible. To that end, we would love to hear from you with any ideas, suggestions, or comments you may have to offer. Erica L. Calderas Ian H. Fisher Kent A. Lambert

11 Summer 2010 Committee on Pretrial Practice & Discovery Civil Subpoenas in Federal Court Part II: Complying with Third-Party Subpoenas By Erin E. Rhinehart As discussed in Successful Preparation and Service of Subpoenas, discovery is a large part of a litigation associate s workload. While there is strategy associated with the selection and service of third-party discovery, successfully responding and objecting to third-party subpoenas provides many opportunities for an associate to shine. In particular, successfully responding to subpoenas may limit a client s exposure to unnecessary litigation, as well as offer associates a unique opportunity to gain client contact, develop client relationships, and provide a favorable outcome for the client in a relatively short time. This article provides guidance relating to compliance with third-party subpoenas served within the United States for civil cases pending in federal court. Evaluate Whether Your Client Has Standing to Object Generally, your client will have been the recipient of the subpoena, and standing to respond and object will not be an issue. However, if your client is a party to the underlying litigation and you received notice of the third-party subpoena on your client s behalf, then there may be an issue as to whether your client has standing to object (and, if so, to what specifically your client may object). The general rule is that a party lacks standing to quash a subpoena served on a third party, except as to claims of (1) privilege relating to the documents being sought, (2) an applicable privacy interest, (3) an applicable personal interest, or (4) an applicable proprietary interest. See, e.g., Windsor v. Martindale, 175 F.R.D. 665, 668 (D. Co. 1997); Halawani v. Wolfenbarger, No , 2008 U.S. Dist. LEXIS , at *3 (E.D. Mich. Dec. 10, 2008). A party also has standing to enforce the court s orders and rules when subpoenas issued to non-parties violate the court s order or rule (e.g., scheduling orders, protective orders). The Hartz Mountain Corp. v. Channelle Pharma. Veterinary Prods. Mft. Ltd., 235 F.R.D. 535, 536 (D. Me. 2006) (finding plaintiffs had standing to enforce court s scheduling order). Know the Compliance Deadline Federal Rule of Civil Procedure 45(c) governs a third party s responses and objections to a subpoena. After a client receives a subpoena, the first item to review is the compliance date set forth in the subpoena. Close attention to deadlines is necessary because serving objections late even by one day may result in a waiver. Halawani, 2008 U.S. Dist. LEXIS , at *12. Rule 45(c)(3)(A)(i) requires only that the issuing party provide for a reasonable time to comply with a subpoena. Erin E. Rhinehart (erhinehart@ficlaw.com) is an associate at Faruki Ireland & Cox P.L.L. in Dayton, Ohio. What is reasonable depends on the circumstances of each case. Parrot, Inc. v. Nicestuff Distrib. Int l, Inc., No , 2009 U.S. Dist. LEXIS 8528, at *10 11 (S.D. Fla. Jan. 26, 2009) ( [C]ourts make the determination of reasonableness on a caseby-case basis, considering factors at work in the given case. ); Fox v. Traverse City Area Pub. Schs. Bd. of Educ., No. 1:07- cv-956, 2009 U.S. Dist. LEXIS 18095, at *3 4 (W.D. Mich. Mar. 10, 2009) (citing various authority on what constitutes a reasonable time for subpoena compliance). Generally, third parties are provided 30 days within which to comply. Less time, however, may be specified, and it may be necessary to contact the issuing party to request an extension. If the issuing party is not receptive to negotiating an extension, then an objection and motion to quash the subpoena may be necessary. Fox, 2009 U.S. Dist. LEXIS 18095, at *2 ( Rule 45(c)(3)(A)(i) requires a court to quash or modify a subpoena that fails to allow a reasonable time to comply. ). Preparation of Responses and Objections to a Subpoena Duces Tecum Third parties have several options when responding to a subpoena duces tecum (i.e., a subpoena commanding the production of documents). Rule 45(c)(2)(B) provides that objections must be served before the earlier of the time specified for compliance or 14 days after the subpoena is served. In other words, a third party must serve objections within 14 days of service of the subpoena; or, if less than 14 days is provided within which to comply, then prior to the time specified for compliance. Absent unusual circumstances and good cause shown, [t]he failure to serve written objections to a subpoena within the time specified by Rule 45 typically constitutes a waiver of such objections. Halawani, 2008 U.S. Dist. LEXIS , at *11. There are three common types of objections: 1) general objections applicable to each request, 2) procedural objections, and 3) substantive objections. Although general objections may overlap with more specific objections, it is important to include a list of general objections that may be repeated, as applicable, in a concise manner throughout the response to ensure that all potential objections are preserved. This practice also makes for a more efficient and thorough response. An initial review of the subpoena should focus on whether there are any procedural defects. Although most defects in service must be cured for the subpoena to be enforceable, such defects almost always can be cured with comparative ease. Accordingly, it is worth considering negotiating a waiver of service defects to obtain additional time to comply with the subpoena. Once you are confident that the subpoena was properly served and there are no procedural defects to cure, review the subpoena for substantive objections. Commonly cited objections

12 Committee on Pretrial Practice & Discovery Summer 2010 include (1) privileged or confidential; (2) irrelevant; (3) vague, ambiguous, or overbroad; and (4) undue burden. Privilege and confidentiality must be claimed for any documents or testimony commanded to prevent waiver of any potential privilege or confidentiality claim. Review any applicable protective orders provided with the subpoena. If none was provided, contact the attorney responsible for service of the subpoena and discuss whether there are any operative protective orders. If no applicable protective order is in effect, then evaluate whether a stipulated protective order may be needed or whether a motion for a protective order is necessary. Fed. R. Civ. P. 26(c)(1) ( any person from whom discovery is sought may move for a protective order... to protect a party or person from annoyance, embarrassment, oppression or undue burden or expense ). If it is necessary to claim privilege over any documents or testimony, then preparation and service of a privilege log is required. Minnesota Sch. Bds. Ass n. Ins. Trust v. Employers Ins. Co., 183 F.R.D. 627, 630 (N.D. Ill. 1999) ( Courts interpreting Rule 45(d)(2) have held that a party claiming privilege may provide a privilege log within a reasonable time as long as objections are asserted within the fourteen-day time frame. ). Apart from privilege and confidentiality, all requests should be reviewed to ensure compliance with the relevancy rules set forth in Rule 26(b). A request for discovery... should ordinarily be allowed unless it is clear that the information sought can have no possible bearing on the subject matter of the action. Halawani, 2008 U.S. Dist. LEXIS , at * Although understandably broad, all discovery including thirdparty discovery has its limits. Along with these possible objections, evaluate whether any requests are vague, ambiguous, or overbroad. Courts that have upheld objections based on over-breadth have sometimes predicated the ruling based on language such as and all documents relating thereto. Parrot, 2009 U.S. Dist. LEXIS 8528, at * Requests that create any undue burden on the recipient also are objectionable. Courts may evaluate Proper response to a third-party subpoena requires an efficient yet detailed analysis of the subpoena served. Therefore, the following checklist serves as a good reminder: 1. Review the deadline for compliance. 2. Review the subpoena and evaluate what it is requesting (e.g., documents, testimony or both). 3. Prepare responses and objections. 4. Evaluate whether a protective order may be needed. 5. If there is a need for a protective order, or to limit the subpoena, then discuss with opposing counsel. 6. If the meet-and-confer is unsuccessful, then evaluate whether to prepare a motion for protective order, motion to modify, or motion to quash. several factors when considering whether the subpoena creates an undue burden on the recipient, including non-party status, whether the discovery is unreasonably cumulative or duplicative, whether the discovery sought is obtain[able] from some other source that is more convenient, less burdensome, or less expensive, and whether the cost of the discovery outweighs its benefit. See, e.g., Fed. R. Civ. P. 26(b)(2)(C); Englar v. 41B Dist. Ct., No. 04-CV-73977, 2009 U.S. Dist. LEXIS , at *16 (E.D. Mich. Oct. 29, 2009) (non-party status weighs in favor of a finding of undue burden); Watts v. SEC, 482 F.3d 501, 509 (D.C. Cir. 2007) ( The Rule 45 undue burden standard requires district courts supervising discovery to be generally sensitive to the costs imposed on third parties ); Whitlow v. Martin, No. 04-CV-3211, 2009 U.S. Dist. LEXIS 96011, at *10 (C.D. Ill. Oct. 15, 2009) (refusing to sustain third party s objection that documents sought may be obtained from more convenient alternative sources because no alternative source was identified). Finally, requests for electronically stored information (ESI) have become the subject of much negotiation and litigation. If the subpoena commands the production of ESI, then review with your client, and their appropriate information technology personnel, the scope of any potentially responsive and relevant electronic information, as well as the procedure, time, and cost for retrieving and producing such ESI. Fed. R. Civ. P. 45(d)(1) (D); Whitlow, 2009 U.S. Dist. LEXIS 96011, at *14 15 ( [A] person responding to a subpoena need not provide discovery of electronically stored information from sources that the person identifies as not reasonably accessible because of undue burden or cost. However, the Court may order discovery from such sources if the requesting party shows a good cause, considering the limitations of Rule 26(b)(2(C). ) (internal quotations and citations omitted). Production of ESI can be time-consuming and costly. Paying close attention to what is being requested and negotiating with the requesting party over the payment of costs is essential to maintaining control over the production. Preparation of Responses and Objections to Testimonial Subpoenas Responding to a subpoena commanding the attendance of a witness to give deposition testimony may be less cumbersome than responding to a subpoena duces tecum. Often, responding to a testimonial subpoena will require only the resolution of any scheduling conflicts among the parties and the deponent. Nevertheless, a review of the subpoena for any procedural deficiencies, including payment of all applicable fees, should be conducted to ensure that service was proper and your client is subject to the subpoena. Otherwise, any objections will be waived. Also, Rule 45 s privilege and undue-burden standards, as discussed above, apply to both document and testimonial subpoenas alike and, therefore, should such objections be necessary, the same general rules apply. Watts, 482 F.3d at 508 (citation omitted) If a testimonial subpoena is served on a corporation, then Rule 30(b)(6) also applies. A review of the areas of examination identified will probably require more substantial responses and

13 Summer 2010 objections, as well as assistance to the company in selecting the appropriate deponent to testify on the company s behalf. Evaluate the Need for a Motion to Modify or Quash the Subpoena If the issuing party is unwilling to negotiate a more limited request for information or accommodate the needs of your client, or objections alone are insufficient to protect the recipient of the subpoena, then a motion to modify or quash the subpoena may be necessary. Extrajudicial efforts to resolve the dispute, however, should be exhausted prior to filing a motion to modify or quash. Rules 45(c)(3)(A) and (B), which govern motions to modify and quash, provide both mandatory and discretionary rules relating to when orders granting such motions are appropriate. Regardless which subsection of Rule 45(c)(3) is used to file a motion, such motions may be required to be filed before the time set to comply with the subpoena, absent excusable delay. It is better practice to file the motion before the date set for compliance. Committee on Pretrial Practice & Discovery Therefore, both a careful attention to detail, as well as a quick analysis, is necessary to respond successfully to subpoenas. Finally, motions to quash or modify should be brought in the issuing court if different from the forum in which the underlying litigation is pending. Hartz Mountain Corp., 235 F.R.D. at 536 (holding that, even if the 14-days-after-service deadline imposed by Fed. R. Civ. P. 45(c)(2)(B) applied to motions to quash, failure to meet deadline was excusable because such failure resulted from attempts to reach an extrajudicial agreement). As noted in Hartz Mountain Corp., it is within the discretion of the issuing court to transfer motions involving the subpoena to the district court in which the action is pending; or, to stay the motion pending a related resolution necessary by the other court. Usually, issuing courts are more receptive to motions to transfer or stay if the litigation surrounding the subpoena is between the two parties to the underlying litigation. If the non-party brought the motion to quash or modify, however, then the issuing court may be less likely to transfer or stay the motion. Control how you receive your member periodicals Manage your periodicals by linking to the Subscriptions Portal. Select between print and electronic delivery options if available.

14 Committee on Pretrial Practice & Discovery Summer 2010 Authentication of s: Beware of Improper Alterations By Patricia L. Davidson Imagine sitting in a deposition or on the witness stand. Opposing counsel presents you with a document containing the now very familiar format of a printed . On the top left-hand corner you see your name. Sure enough, next to From is your name again and maybe your address. Then you look at the text of the . It is entirely unfamiliar. Maybe it uses phrases that you never use. Maybe it makes a shocking claim about something you have done. Or maybe it looks very much like an that you did write but a word or two has changed, forever mutating the meaning and intent of the . The result could be outrage or embarrassment or worse. But the certainly looks like it came from your account. Does the judge or jury get to see it? Printouts of are commonplace in trials. Litigants, judges, and jurors are familiar with sorting through chains and accepting s as business records, binding offers and acceptances, proof of public government actions, and as evidence of virtually any type of communication. However, familiarity can create complacency, and lawyers should be aware that the ease of changing an header or content can raise several authentication issues at trial. When an author of an agrees that the printout is an accurate representation of the digital communication, authentication is straightforward: A proponent must show that the is complete, unchanged, and originated from the claimed source. Admissibility is then governed by the usual evidentiary rules. However, if an alleged author denies the accuracy of the content of the , or if an opposing party claims that a proffered is not what it purports to be, then authentication challenges arise. Bogus s and Bigamy A rather extraordinary case of alleged fraud arose in the litigation of a case in the Massachusetts Superior Court for fraud and related claims arising out of a bigamist marriage. 1 In the case, the defendant married the plaintiff in an elaborate wedding ceremony in Sri Lanka after a long-distance courtship. Unbeknownst to the plaintiff and her family, the defendant was already legally married and living with a wife in Massachusetts. Both before and after the wedding ceremony, and before the plaintiff discovered the bigamy, the defendant had sent the plaintiff numerous s that purported to be from third parties, but were actually authored by the defendant. The defendant concocted fictional characters with his own fictional addresses and his own fictional voices. The cast of characters included a reverend who glowingly spoke of the defendant s good character and Patricia L. Davidson (pdavidson@mirickoconnell.com) is a partner at Mirick O Connell in Worcester, MA. Christian predilections; the defendant s loving mother who opined that the defendant was a good boy ; and a nurse in Mexico who allegedly treated the defendant for dehydration. At trial, the defendant admitted that he had set up fake addresses for these fictional characters. By this point in the trial, his status as prevaricator extraordinaire was well established. More challenging, however, were hundreds of printouts purportedly between the plaintiff and the defendant dated after the plaintiff discovered the bigamy. The defendant claimed that these s were legitimate. The s purported to show an ongoing relationship and an intent by the plaintiff to have a future with the defendant. Those representations could not have been any further from the truth. But the printed s were quite convincing. The s looked like they originated from the plaintiff s account, appeared to be part of sometimes lengthy exchanges, and looked and sounded very much like some of the plaintiff s legitimate s. The plaintiff was horrified by the phony s attributed to her. To advance the defendant s elaborate con, the defendant apparently used the plaintiff s account (he set it up and knew her password) to communicate with himself. The fraud was not surprising given the nature and extent of the defendant s prior lies, but the extraordinary volume and detail of the fake s were very surprising. Forensic evidence was unavailable because the defendant claimed that his hard drive crashed and that he no longer had the computer he claimed he used at the time. The plaintiff s computer was also long gone. Thus, the plaintiff needed to challenge authentication without the assistance of forensic analysis. At trial, the plaintiff emphatically testified that she did not author the s. Notwithstanding the fact that the s probably came from the plaintiff s account, the defendant, in view of the plaintiff s protestations, was unable to establish that the s came from the plaintiff herself. Consequently, the s were not authenticated and thus the court did not admit them into evidence. Of course, at this point in the trial, the defendant s credibility had been obliterated and his penchant for fabricating s had been well established. 2 Common Authentication Challenges Problematic s generally fall into three categories. The first concerns an allegation that an has been altered. Such changes are very easy: Smith sends Jones an . Jones easily changes Smith s and then either saves it, prints it, or forwards it. Certainly many lawyers have on occasion cleaned up typos in s sent by another lawyer in their firm before forwarding it to a client or have corrected typos in their own s that they sent to one party before sending the to a second recipient. But it is certainly just as easy to doctor s

15 Summer 2010 for sinister motives as it is to edit some sloppy typing. Another problem is when a party alleges that an is fabricated, for example, as in the bigamy case, someone uses the account of another to write and send bogus s. Despite the admonitions of Internet service providers and IT departments everywhere, computer users are often lackadaisical or unimaginative with their passwords. With sufficient motivation, it is not difficult for someone with a modicum of technical savvy to access someone else s personal information or create a phony account to embody that person s virtual identity for a host of untoward purposes. His status as prevaricator extraordinaire was well established. A similar authentication issue arises when an user tries to generate an after the fact to advance a legal position. It is not uncommon for computer users to create an that looks like it was sent by a certain person on a certain date, but actually was not. Usual Authentication Principles Govern Authentication of allegedly fraudulent or altered documents is nothing new. Casebooks are full of cases dealing with alleged forgeries or fabricated evidence. Any analysis of the authentication of s thus begins with the principles applicable to the authentication of any evidence. The mere possibility of alteration does not and cannot be the basis for excluding s as unidentified or unauthenticated as a matter of course, any more than it can be the rationale for excluding paper documents (and copies of those documents). 3 Similar uncertainties exist with more traditional written documents: A signature can be forged, a letter can be typed on another s typewriter, or stationery can be copied. 4 Authentication is an aspect of relevancy and is often a first step in determining admissibility. Fed. R. Evid. 901(a) instructs that the requirement of authentication or identification as a condition precedent to admissibility is satisfied by evidence sufficient to support a finding that the matter in question is what its proponent claims. 5 A court does not need to find that the s are necessarily what the proponent claims, only that there is evidence sufficient for the jury to make such a finding. 6 Authentication is within the discretion of the trial court, and should not be disturbed on appeal absent a showing that there is no competent evidence in the record to support it. 7 Once an is authenticated and admitted into evidence, parties may still challenge the credibility of the . A jury can use its own knowledge of how exchanges work and may consider testimony offered to explain, for example, an atypical response, such as s that appear outside chronological order. 8 Under Fed. R. Evid. 901, authentication can be accomplished in many ways. To buttress authentication and ultimately the Committee on Pretrial Practice & Discovery credibility of evidence, a proponent of the may employ more than one authentication method. Self-identification occurs when the sender confirms the accuracy of an attributed to him. If no one objects, the will be authenticated. Authentication also can be accomplished by a recipient who testifies that he or she received a message and responded to it. Self-identification by the recipient may corroborate claims by the alleged sender. If the sender initiated an exchange, the recipient may simply testify that he or she received an from a particular address and replied to that same address. Such testimony may not prove that an is what the proponent claims, but it may lay the foundation for authentication. s that are not clearly identifiable by the sender or recipient may be authenticated under Fed. R. Evid. 901(b)(3), which provides that such evidence may be authenticated by comparison with specimens which have been authenticated. Thus, a fact finder can compare headers, fonts, typeface, tone, word choice, signatures, etc. in determining whether an is actually from the alleged author. Context and content may also establish authentication. s, like other evidence, can be authenticated pursuant to Fed. R. Evid. 901(b)(4) by appearance, contents, substance, internal patterns, or other distinctive characteristics, taken in conjunction with circumstances. For example, the may refer to facts known only by the sender. Or the may follow a similar oral representation. The substance of the may make sense within the topics of an chain. There are limits on the extent to which a witness can comment on the characteristics of an . In United States v. Safavian, 9 the District Court for the District of Columbia considered the authenticity of s in conjunction with the prosecution of David Safavian, a former government official tied to the Jack Abramoff lobbying and political-corruption scandal. In that case, the court determined that an FBI agent through whom the government planned to offer certain s could not testify from personal knowledge as to whether a particular address belonged to the defendants. Similarly, the FBI agent could not testify about the meaning of internal codes. In some situations, Fed. R. Evid. 902 may be used to authenticate s. Fed. R. Evid. 902 delineates categories of documents that are self-authenticating, that is, documents that do not require extrinsic evidence of authenticity as a condition precedent to admissibility. Pursuant to Fed. R. Evid. 902(11), business records, including s, may be authenticated if the records constitute regularly conducted activity. s generated in a business context require careful consideration. The fact that an was sent or received in the ordinary course of business does not, in the absence of additional factors, authenticate an Testimony from IT departments or computer forensic experts that an came from a company s server or from a specific computer terminal does not sufficiently link an to a sender. In United States v. Siddiqui, 11 the Eleventh Circuit addressed several ways that s can be authenticated. The case concerned the appeal of Siddiqui s conviction for fraud, false statements to a federal agency, and obstruction in connection with Siddiqui s

16 Committee on Pretrial Practice & Discovery Summer 2010 fraudulent application for a $500,000 National Science Foundation award. Siddiqui s application included false recommendations purportedly from professors in Japan and Switzerland. As part of his defense, Siddiqui challenged the authenticity of certain s in which he asked the professors to (falsely) tell a government agent that they gave Siddiqui permission to sign their names to the award application. In affirming the district court s authentication of the s, the court stressed the professors testimony about the characteristics of the s. The professors testified that at about the same time that Siddiqui sent the s, Siddiqui contacted the professors by phone and made the same request. The professors testified that they understood that the s came from Siddiqui because they contained his address and were signed with his nickname, Mo. The context of the sent to the two foreign professors showed that the author of the was someone who had knowledge of the defendant s conduct and other details of his life. In addition, during the Japanese professor s cross-examination, Siddiqui s counsel introduced an from the professor to Siddiqui containing the same address as the sent by Siddiqui to the professor. 12 Considering those details, the Eleventh Circuit concluded that the district court did not abuse its discretion in ruling that the documents were adequately authenticated. Computer Forensic Analysis In addition to the usual authentication issues arising in more conventional documentation, forensic computer analysis can yield a wealth of information about the origin of an . Any computer activity usually leaves a digital footprint. By examining hard drives or data from Internet service providers, a forensic expert can often determine the origin and date of an , whether changes to the have been made, or whether a network has been corrupted internally or via the Internet. Even deleted s can often be recovered. Testimony from these experts can be invaluable in authenticating . If a hard drive or network is not accessible, a party may be able to subpoena header information for a specific account from Internet service providers such as Yahoo or Hotmail. Very generally, header information tracks how moves around the Internet and shows where s originate and where they are delivered. With header information, a computer expert can attempt to trace an via transmission control protocol (TCP) and Internet protocol (IP) addresses to locate the servers the was routed through to attempt to identify the geographical location of the origin of an . Tracking s through Internet service providers can be very difficult. There are software programs that allow the user to hide or change his or her IP address. (There is a reason why computer spam is still so prevalent!) It is also easy to mask registration information on free services such as Yahoo and Hotmail; thus, it is difficult to trace an to a specific user. In addition, Internet service providers are notoriously reluctant to provide information about individual accounts, citing privacy concerns. Most will object to a subpoena and will require a court order before releasing the requested information. Authentication of s through a computer forensic expert requires much of the same expert foundation as in other matters. Walking an expert through steps taken to confirm or refute the authentication of an is technical, but can provide a powerful challenge if the authenticity of an is at issue. Conclusion The bigamy case is an extreme example of how easily a party with self-serving interests can manipulate . But it highlights how core authentication principles and credibility ultimately determine whether or not a fact finder may get to consider whether an is what it purports to be. Printouts from websites, text messages, or any type of data stored on a computer raise similar authentication issues. The technology may be new and ever-changing, but the process of figuring out who is telling the truth is not. Endnotes 1. Turner v. Viveiros, No. CV B (Mass. Super. 2006). 2. Id. The jury ultimately found the defendant liable for fraud, battery, intentional and negligent infliction of emotional distress, and conversion. The jury awarded the plaintiff and her mother $550,000 in damages. 3. United States v. Safavian, 435 F. Supp.2d 36 (D.C. 2006). 4. See In re F.P., 878 A.2d 91, (Pa. Super. 2005). 5. See United States v. Riley, 33 F.3d 1396, 1404 (3d. Cir. 1994) ( [t]he burden of proof or authentication is slight ); United States v. Coohey, 11 F.3d 93, 97 (8th Cir. 1993) ( [t]he proponent need only demonstrate a rational basis for his claim that the evidence is what the proponent asserts it to be ) Federal Rules of Evidence Manual, [1], to (8th ed. 2002). 7. United States v. Munoz, 16 F.3d 1116, (11th Cir.), cert. denied sub. nom., Rodriguez v. United States, 513 U.S. 852 (1994). 8. Safavian, 435 F. Supp.2d at Id. at CCP Ltd. P ship v. First Source Fin., Inc., 856 N.E.2d 492, 496 (Ill. App. 2006). 11. United States v. Siddiqui, 235 F. 3d 1318 (11th Cir. 2002). 12. Id. at A Strict Liability Standard? (Continued from page 7) be able to prove prejudice to justify the imposition of severe sanctions as a result of the lost evidence because the offended party had copies of the otherwise unavailable documents. 20. The Sedona Conference s Jumpstart Outline, (2008) available at is a useful document in aiding in the familiarization of a client s information system as well as an adversary s information system. 21. For example, in a recent case from the Southern District of Texas, noted in the Fifth Circuit, negligence alone does not justify the imposition of an adverse-inference instruction and therefore, [t]he circuit differences in the level of culpability necessary for an adverse inference instruction limit the applicability of the Pension Committee approach. Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp. 2d 598, 615 (S.D. Tex. 2010). The Rimkus Consulting Group opinion also stated, Judge Scheindlin has again done the courts a great service by laying out a careful analysis of spoliation and sanctions issues in electronic discovery. Id. at 611.

17 Summer 2010 Committee on Pretrial Practice & Discovery The End of Expert Practice as Usual: Proposed Changes to Federal Rule 26 By Calvin Cheng On September 15, 2009, the Judicial Conference of the United States, the principal policy-making body concerned with administration of the U.S. courts, met and approved the recommendations of the Committee on Rules of Practice and Procedure, including the proposed amendments to Federal Rule of Civil Procedure 26 concerning expert witnesses. 1 These amendments will dramatically alter expertwitness practice when they take effect on December 1, The proposed amendments to Rule 26 would impose two reforms. First, they would extend work-product protection to the discovery of draft reports by testifying expert witnesses and, with three important exceptions, communications between those witnesses and retaining counsel. Second, the proposed amendments would require an attorney who is relying on a testifying expert who is not required to provide a Rule 26(a)(2) (B) report to disclose the subject matter and summarize the facts and opinions that the witness is expected to offer. Each of these proposals is discussed below in more detail. Rule 26(b)(4): Work-Product Immunity Extended to Drafts and Communications Rule 26(a)(2)(B) currently requires that an expert-witness report should disclose the data or other information considered by the witness in forming the opinions. The accompanying 1993 committee notes recite that [g]iven this obligation of disclosure, litigants should no longer be able to argue that materials furnished to their experts to be used in forming their opinions whether or not ultimately relied upon by the expert are privileged or otherwise protected from disclosure when such persons are testifying or being deposed. This passage of the committee notes resulted in the widespread practice of permitting discovery of all communications between attorney and expert witnesses and of all drafts of expert reports. The rationale for this broad discovery is that the fact finder needs to know the extent to which the expert s opinion has been shaped by attorney influence. The practical effect of the current rule, however, is that lawyers and experts often take elaborate steps to avoid creating any discoverable record. These steps often include hiring two sets of experts one for consultation and one for testimony to avoid creating a discoverable record of the collaborative interaction with experts. These steps also may include prohibiting the expert from taking any notes, making any record of preliminary analyses or opinions, or producing any drafts of the report. Instead, the only record is a single, final report. Calvin Cheng is an associate with Weil, Gotshal & Manges LLP in Houston, Texas. These steps hamper efficiency, adding to the costs and burdens of discovery, preventing proper use of the experts, needlessly lengthening depositions, detracting from cross-examination into the merits of the expert s opinions, reducing the pool of qualified individuals willing to serve as experts, and reducing the overall quality of expert work product. In addition, attorneys frequently take elaborate steps to attempt to discover the other side s drafts and communications. For example, attorneys devote large chunks of time during depositions, trying to discern information about the development of the expert s opinions, attempting (and often failing) to show that the expert s opinions were shaped by the attorney retaining the expert s services. Testimony and statements presented to the Advisory Committee before and during the public-comment period showed that such questioning during depositions is rarely successful, ending up unnecessarily prolonging the questioning. Spending time asking questions about the retaining lawyer s involvement in the expert s opinions, instead of on the strengths or weaknesses of the expert s opinions, does little to expose substantive problems with those opinions. Instead, the most successful means to discredit an expert s opinions are by cross-examining the substance of those opinions and presenting evidence showing why the opinions are incorrect or flawed. The inefficiencies of the current practice have led to calls for reform from various quarters. The American Bar Association issued a resolution recommending that federal and state procedural rules be amended to prohibit the discovery of draft expert reports and limit discovery of attorney-expert communications, without hindering discovery into the expert s opinions and the facts or data used to derive or support them. The state of New Jersey enacted such a rule and, according to the information obtained by the Advisory Committee, the practicing attorneys reported a remarkable degree of consensus in enthusiasm for and approval of the amended rule. The New Jersey practitioners emphasized that discovery had improved since the amended rule was promulgated, with no decline in the quality of information about expert opinions. Finally, many attorneys now regularly stipulate at the outset of a case that they will not seek to discover such communications and expert report drafts. The amendments to extend work-product immunity address the inefficiencies of the current practice. Under the proposed amendments, any draft of a Rule 26(a)(2) report or disclosure is given work-product protection (regardless of the form in which the draft is recorded). Further, communications between the party s attorney and any witness required to provide a Rule 26(a) (2)(B) report are also protected by the work-product immunity, with three exceptions. The amended rule specifically denies work-product protection to communications that: (1) relate to

18 Committee on Pretrial Practice & Discovery Summer 2010 compensation for the expert s study or testimony; (2) identify facts or data that the party s attorney provided and that the expert considered in forming the expressed opinions; and (3) identify assumptions that the party s attorney provided and that the expert relied upon in forming his or her expressed opinions. The main argument against the proposed amendments, raised by a group of legal academics, is that the amendments could prevent a party from learning and showing that the opinions of an expert witness were unduly influenced by the lawyer retaining the expert s services. After extensive study, however, the Advisory Committee was satisfied that the most effective method of evaluating the merits of an expert s opinions is by cross-examining the expert on the substantive strength and weaknesses of the opinions and by presenting evidence bearing on those issues. The Advisory Committee was satisfied that discovery into draft reports and communications between the expert and retaining counsel was not an effective way to learn or expose the weaknesses of the expert s opinions, was time-consuming and expensive, and led to wasteful litigation practices to avoid creating such communications and drafts in the first place. The Advisory Committee concluded that establishing workproduct protection for draft reports and some categories of attorneyexpert communications would not impede effective discovery or examination at trial. The committee recognized that in some cases, a party may be able to make the showings of need and hardship that overcome work-product protection. But in all cases, the parties remain free to explore what the expert considered, adopted, rejected, or failed to consider in forming the opinions to be expressed at trial. And, as observed in the committee note, nothing in the Rule 26 amendments affects the court s gatekeeping responsibilities under Daubert v. Merrell Dow Pharmaceuticals, Inc. 2 Disclosure of No-Report Expert Witnesses Rule 26 currently identifies two types of testifying experts: (1) those that are retained or specially employed to provide expert testimony in the case or... whose duties as the party s employee regularly involve giving expert testimony; and (2) those who fall outside the former category (e.g., a treating physician or a government accident investigator). PP&D on the Web View our directories of leadership and subcommittee listings Find additional resources View our newsletter archive Plan to attend committee events Visit the Section of Litigation Pretrial Practice & Discovery Committee Website Those in the former category are required by Rule 26(a)(2) (B) to provide an expert report, but those in the latter category are not. According to the 1993 committee notes, the purpose of the expert report is to clarify the substance of the expert testimony. Ideally, the thought was that the expert report would remove the need to depose the expert or, alternatively, would improve the conduct of the deposition. In keeping with this purpose, Rule 26(b)(4)(A) requires that an expert cannot be deposed until after the report is provided. Some courts have so admired the advantages gained from requiring expert reports, however, that they have gone beyond Rule 26(a)(2)(B) and required all testifying experts to provide reports, not just those that were retained or specially employed to provide expert testimony in the case. The problem with this approach is that testifying experts not covered by Rule 26(a)(2) (B) (including hybrid witnesses non-retained witnesses who also qualify as experts) may find it difficult or impossible to draft the reports because they have careers that are devoted to causes other than giving expert testimony. Despite this, courts still recognize the usefulness of having advance notice of an expert s testimony. Rule 26(a)(2)(C) strikes a compromise between these two considerations. If an expert witness is not required to provide a written report under 26(a)(2)(B), Rule 26(a)(2)(C) would require the (a)(2)(a) disclosure to state the subject matter on which the witness is expected to present evidence under Evidence Rule 702, 703, or 705, and a summary of the facts and opinions to which the witness is expected to testify. The summary of facts should only include the facts that support the expert s opinions (and not the facts a hybrid witness would testify to). As stated above, drafts of the summary of facts would be protected by the work-product provisions of Rule 26(b)(4)(B). Conclusion Both sets of amendments to Rule 26 are broadly supported by lawyers and bar organizations, including the American Bar Association, the council of the ABA Section of Litigation, the American College of Trial Lawyers, the American Association for Justice (formerly the American Trial Lawyers Association), the Federal Magistrate Judges Association, the Lawyers for Civil Justice, the Federation of Defense & Corporate Counsel, the International Association of Defense Counsel, and the U.S. Department of Justice. Absent any congressional action to reject, modify, or defer the proposed amendments, they will become law on December 1, Endnotes 1. The committee s report and appendices containing the proposed amendments may be accessed at Combined_ST_Report_Sept_2009.pdf. 2. Daubert v. Merrell Dow Pharm., Inc., 509 U.S. 579 (1993). 3. The status of the rule adoption process is posted at The End of Expert Practice as Usual: Proposed Changes to Federal Rule 26 by Calvin Cheng, 2010, Minority Trial Lawyer 8:3, pp Copyright 2010 by the American Bar Association. Reprinted with permission.

19 Work more effectively with expert witnesses LITIGATORS ON EXPERTS Strategies for Managing Expert Witnesses from Retention through trial Wendy Gerwick Couture and Allyson W. Haynes, Editors 2010; 6 x pages; paperback ISBN: Product Code: Regular Price: $89.95 ABA Member Price: $71.95 This volume collects the thoughts and experience of excellent advocates from around the country. It offers cogent insights and guidance from pre-engagement of the expert through preparation and testimony, or deposition and cross. It is an invaluable addition to every trial lawyer's library. Gregory P. Joseph To order, call the ABA Service Center at (800) or visit our website at American Bar Association Phone: Fax: Publication Orders P.O. Box Chicago, IL 60610

20 Committee on Pretrial Practice & Discovery Summer 2010 Spoliation of Electronic Evidence (Continued from front cover) of an electronic discovery pilot program 2 intended to help litigants and the courts balance the costs of e-discovery with reasonableness and feasibility in each case. Thus, litigators have been aware of and wrestling with the concepts surrounding ESI. What about corporate America? Today, most companies know about their preservation obligations, but they have trouble managing them. In a recent survey of IT and in-house counsel regarding corporate practices for managing ESI in litigation, Kroll Ontrack, Inc. found that 87 percent of companies in the United States have a documentretention policy. 3 So, companies are aware of the need to look to document-retention policies as a starting point for managing e-discovery. But, nearly half of U.S. companies have not updated their retention policies in the past year to include new devices (e.g., mobile devices) and new communication channels (e.g., instant and text messaging). Practitioners still have questions about their ESI discovery obligations. The survey also found that just over half of U.S. companies have a procedure to suspend their document-retention/destruction policies in the event of litigation, but 22 percent of IT and in-house counsel for U.S. companies do not know if they have such a procedure in place, and another 21 percent do not have one. According to the study, few companies have actually developed policies, procedures, and tools designed to readily identify and preserve ESI for litigation or regulatory proceedings. Finally, less than one-third of the companies surveyed feel strongly that their ESI-disclosure policies are repeatable and defensible. So, more than three years after the Federal Rules were amended, and more than six years after the initial Zubulake decision, practitioners and litigants still have questions about their ESI discovery obligations, and how to reconcile those obligations with efforts to resolve disputes quickly and inexpensively. The Judicial Boiling Point Is it any wonder, then, that courts are reaching the boiling point? As is clear from three recent high-profile decisions regarding ESI (Qualcomm, Pension Committee, and Rimkus), courts are increasingly frustrated with the failure by parties and their counsel to take what the courts consider to be well-established, reasonable steps to preserve ESI when litigation is reasonably anticipated. Some of these steps include issuing a written litigation-hold letter; having clearly articulated preservation Emily Duke and Cynthia Moyer are shareholders with Fredrikson & Byron, P.A. in Minneapolis, Minnesota. instructions; preserving backup tapes when they are the sole source of potentially relevant information; having outside counsel oversee the collection and preservation of ESI rather than delegating to company employees without instruction; and monitoring preservation efforts throughout the litigation. 4 Before discussing these three new decisions, let s review where we have been and try to understand why the courts may be frustrated with the lack of progress. Where Have We Been? Since the Zubulake decisions were handed down in 2003 and 2004, practitioners have been aware of the basic framework for analyzing clients ESI obligations. When evidence has been destroyed, a party seeking any severe sanction (e.g., adverseinference instruction) must establish three things: (1) that the opposing party had a duty to preserve the evidence (2) that the opposing party had a culpable state of mind (3) that the destroyed evidence was relevant The second factor culpability encompasses intentional, grossly negligent, reckless, or negligent behavior. The third factor relevance does not simply mean relevance as that term is ordinarily understood, but also that the destroyed evidence would have been favorable to [the party seeking the instruction]. 5 Cost-Shifting For Inaccessible ESI Zubulake I 6 and III 7 reinforced the presumption that the cost of producing documents lies with the responding party even when ESI is involved. Engaging in a cost-shifting analysis is appropriate only when inaccessible ESI is sought, and after going through the fact-specific seven-part cost-shifting analysis. Parties Preservation Obligations and Backup Tapes In Zubulake IV, the court explained that the duty to preserve arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation. 8 Once a company recognizes the threat of litigation, it need not preserve every shred of paper, every or electronic document, and every backup tape because such a requirement would cripple large corporations... that are almost always involved in litigation. 9 But, it does need to put a hold on the destruction of relevant documents, including some backup tapes: Once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a litigation hold to ensure preservation of relevant documents. As a general rule, that litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company s policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold. However,... [there is] one exception to this general rule. If a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents

21 Summer 2010 of key players to the existing or threatened litigation should be preserved if the information... is not otherwise available. This exception applies to all backup tapes. 10 Duty to Monitor Compliance and Appropriate Sanctions In Zubulake V, Judge Scheindlin discussed the culpability and relevance prongs of the spoliation analysis. When the level of culpability is intentional or willful, that fact alone is sufficient to demonstrate relevance and justifies a presumption of relevance. 11 However, when a party is only negligent in destroying evidence, the party seeking sanctions must prove relevance. The relevance prong serves a corroboration role because one cannot infer, from negligent conduct, that the evidence would have been harmful to the spoliator. 12 Counsel (and the client) must ensure that all sources of potentially relevant information are identified and placed on hold, and counsel must oversee [the client s] compliance with the litigation hold, monitoring the party s efforts to retain and produce relevant documents. 13 While perfection at the outset of the case is not required, counsel and the client must take reasonable steps to identify and preserve sources of potentially relevant information, and they must do so periodically throughout the litigation process. Proportionality Standard The Federal Rules were amended in 2006 to clarify that only reasonably accessible ESI need be produced in discovery. Under the 2006 amendments to the Federal Rules, parties are required to exchange information about ESI in their Rule 26(f) conference. But, judges recognize that it may be necessary to test a party s assertion that information is not reasonably accessible. An incremental or tiered approach to discovery, whereby easily accessed sources of ESI are sorted first, and then the parties (with or without the court s assistance) determine whether it is necessary to search less accessible sources for discovery, helps parties and courts determine whether inaccessible ESI satisfies the proportionality requirement of Rule 26(b)(2)(C). 14 Rule 26 does not address the preservation obligations of parties. In fact, the advisory notes to the Rule leave the scope of preservation up to the judgment and risk tolerance of the decisionmakers and parties holding ESI. 15 Generally speaking, however, there is no per se rule, and preservation obligations also have a proportionality component that is dependant on the case. 16 Judges Are Frustrated In the face of continued failures by litigants to preserve, locate, and/or produce relevant ESI, three courts (Qualcomm, 17 Pension Committee, 18 and Rimkus 19 ) have recently discussed, in painful detail, how lawyers both in-house and outside attorneys failed to ensure that their clients met discovery and preservation obligations. When these obligations are not met, the integrity of the judicial process is harmed and the courts are required to fashion a remedy. 20 Qualcomm and Qualcomm II In January 2008, the Qualcomm court assessed sanctions for a series of discovery abuses, which culminated in misrepresentations to the court during a patent-infringement trial. The court clearly felt that Qualcomm s and its attorneys Committee on Pretrial Practice & Discovery conduct in the litigation undermined the legitimacy of the litigation process, particularly the discovery process: The [Federal Rules Advisory] Committee s concerns are heightened in this age of electronic discovery when attorneys may not physically touch and read every document within the client s custody and control. For the current good faith discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and s are maintained and to determine how best to locate, review, and produce responsive documents. Attorneys must take responsibility for ensuring that their clients conduct a comprehensive and appropriate document search. Producing 1.2 million pages of marginally relevant documents while hiding 46,000 critically important ones does not constitute good faith and does not satisfy either the client s or the attorney s discovery obligations. 21 In addition to suppressing critical documents, Qualcomm failed to search the computers or s of designated 30(b)(6) corporate representatives for documents potentially relevant to the designated topics. Counsel who prepared the witnesses did not provide them with documents relevant to their topics in preparation for their depositions and made no effort to ensure that each person was, in fact, knowledgeable about the designated topics. The court found that Qualcomm s conduct warranted sanctions and awarded Broadcom all its litigation costs, fees, and expenses $8 million. The court also noted that Qualcomm could not have achieved this goal without some type of assistance or deliberate ignorance from its retained attorneys. Specifically, the court noted that the Federal Rules impose an affirmative duty upon lawyers to... conduct a reasonable inquiry to determine whether discovery responses are sufficient and proper. Because the client had conducted its own due diligence as to the location of and search for relevant electronic records, the attorneys should have insisted on reviewing Qualcomm s records regarding the locations searched and terms utilized. Delegating the document search to the client, without direct oversight by outside counsel, did not satisfy the attorneys discovery obligations. 22 The court referred certain of the attorneys to the California State Bar for intentionally hiding or recklessly ignoring relevant documents, ignoring or rejecting numerous warning signs that Qualcomm s document search was inadequate, and blindly accepting Qualcomm s unsupported assurances that its document search was adequate 23 It later sanctioned them. The sanctioned attorneys objected. In a decision released in April 2010, after over a year of discovery relating to communications between the client and outside counsel, in Qualcomm II, 24 the court found that four factors led to the massive discovery failure: (1) an incredible breakdown in communication ; (2) a lack of agreement regarding who would be responsible for document collection and production; (3) an incredible lack of candor on the part of the principal Qualcomm employees ; and (4) inadequate follow-up by the outside attorneys in response to contradictory, or potentially contradictory, evidence. Qualcomm II strongly criticized the outside attorneys for the manner in which they managed the discovery process:

22 Committee on Pretrial Practice & Discovery Summer 2010 The Court was not presented with any evidence... that either in-house lawyers or outside counsel met in person with the appropriate [key employees]... at the beginning of the case to explain the legal issues and discuss appropriate document collection. Moreover, outside counsel did not obtain sufficient information from any source to understand how Qualcomm s computer system is organized: where s are stored, how often and to what location laptops and personal computers are backed up, whether, when and under what circumstances data from laptops are copied into repositories, what type of information is contained within the various databases and repositories, what records are maintained regarding the search for, and collection of, documents for litigation, etc. Finally, no attorney took supervisory responsibility for verifying that the necessary discovery had been conducted... and that the resulting discovery supported the important legal arguments, claims, and defenses being presented to the court. 25 Nevertheless, based on the new evidence, the court found that the attorneys did not act in bad faith and reversed the attorney sanctions. Pension Committee Pension Committee, a securities case involving the liquidation of a hedge fund, also stresses the theme that outside attorneys must oversee and monitor a client s preservation, collection of, and search for documents relevant to litigation as soon as litigation is reasonably anticipated. The facts in Pension Committee pointed to a pervasive lackadaisical attitude toward preservation and search efforts regarding relevant records. In the opinion, which she subtitled Zubulake Revisited: Six Years Later, Judge Scheindlin clearly expressed her frustration with this attitude, particularly in light of the extant jurisprudence on the topic of ESI and preservation. In Pension Committee, the plaintiffs attorneys issued a litigation hold that did not direct employees to preserve or collect relevant records. Instead, it place[d] total reliance on the employee to search and select what that employee believed to be responsive records without any supervision from Counsel. 26 Moreover, despite sending the client monthly status reports and requests for additional documents, counsel never specifically instructed [the client] not to destroy records so that Counsel could monitor the collection and production of documents. 27 Indeed, managers delegated the document preservation and collection efforts to inexperienced subordinates with little or no instruction on how to adequately take on these efforts. No comprehensive search for documents was conducted. And, there were no knowledgeable witnesses who could testify about which files were searched, how the search was conducted, who was asked to search, what they were told, and the extent of any supervision. 28 The court found this conduct grossly negligent, presumed the relevance of the destroyed records, and issued adverse-inference instructions. Rimkus On the heels of the Pension Committee decision, U.S. District Judge Rosenthal of the Southern District of Texas issued her decision in the Rimkus case, which centered around breach of a non-competition agreement and misappropriation of tradesecrets claims. Rimkus involved allegations of intentional destruction of evidence, unlike Pension Committee, which involved allegations of negligent or grossly negligent destruction of evidence. Nevertheless, in Rimkus, Judge Rosenthal was notably more circumspect in her willingness to impose severe sanctions. She noted that the culpability and relevance prongs of the spoliation analysis are important checks and balances on spoliation and sanctions motions seeking severe sanctions because, in many cases, there are sources from which at least some of the allegedly spoliated evidence can be obtained, and the party seeking discovery can also obtain extrinsic evidence of the content of at least some of the deleted information from other documents, deposition testimony, or circumstantial evidence. 29 When other sources exist, the remedy for the spoliation is more appropriately monetary, because sanctions should be no harsher than necessary to respond to the need to punish or deter and to address the impact on discovery. 30 Pointing to a split amongst the circuits, the court noted that in the Fifth and Eleventh Circuits, severe sanctions can only be imposed where there is evidence of bad faith. Other circuits that appear to require bad faith to support an adverse-inference instruction include the Eighth, Tenth, and D.C. Circuits. In Rimkus, the court ultimately concluded that some defendants intentionally deleted s after a duty to preserve had clearly arisen. The court ordered that the jury would be allowed to hear about the destruction of evidence and the concealment/delay tactics, and that the jury would be instructed that if it decides the defendants intentionally deleted s to prevent their use in litigation, [it]... may infer that the... s would have been adverse to defendants. 31 Furthermore, the defendants had to reimburse the plaintiff for the excess discovery costs caused by their deletion, concealment, and delay. Conclusion These recent cases point to a growing judicial frustration that outside counsel and in-house counsel continue to misapprehend their obligations regarding e-discovery. Outside and in-house counsel must affirmatively and proactively manage the document-preservation process. During that process, counsel must educate themselves as to their clients computer and electronic-device architecture, as well as who the key players in litigation are and where they store their ESI. Counsel need to instruct their clients to preserve all reasonably accessible sources of relevant records and inaccessible backup tapes containing relevant records if no readily accessible source is available (the litigation hold). Counsel should monitor clients preservation and collection efforts and provide specific instructions on what needs to be preserved. A best practice is to have counsel either conduct searches for relevant and responsive records themselves, or minimally confirm what the client has given them by conducting their own random searches or audits of the client-identified records. Another best practice is to document the efforts taken to identify, locate, preserve, and search records containing relevant ESI, and to prepare a client representative who is knowledgeable about those efforts and company systems in the event that discovery on the issue becomes necessary. Recognizing that some courts may have reached a boiling point

23 Summer 2010 and taking these kinds of steps will help your clients avoid the outcome faced by the parties in Qualcomm, Pension Committee, and Rimkus. Endnotes 1. Zubulake v. UBS Warburg, LLC, 217 F.R.D. 309 (S.D.N.Y. 2003) (Zubulake I); Id., 230 F.R.D. 290 (S.D.N.Y. 2003) (Zubulake II); Id., 216 F.R.D. 280 (S.D.N.Y. 2003) (Zubulake III); Id., 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV); Id., 220 F.R.D. 422 (S.D.N.Y. 2004) (Zubulake V) See Kroll Ontrack Third Annual ESI Trends Report 2009; available at 4. See Judge Shira A. Scheindlin, FAQ s of E-Discovery, Federal Judges Assoc. Newsletter, November 29, 2006, available at inavgeneral?openpage&url_r=/public/home.nsf/pages/ Zubulake IV, 220 F.R.D. at Zubulake I, 217 F.R.D. 309 (S.D.N.Y. May 13, 2003). 7. Zubulake III, 216 F.R.D. 280 (S.D.N.Y. July 24, 2003). 8. Zubulake IV, 220 F.R.D. at Id. at Id. at 218 (emphasis added). 11. Zubulake V, 229 F.R.D. 422, 431 (S.D.N.Y. July 20, 2004). 12. Pension Committee s only significant departure from the Zubulake I V opinions is that now, at least in the Southern District of New York, gross negligence in the preservation of evidence, including ESI, will support a presumption that the destroyed documents were relevant and detrimental to the destroying party s case, such that an adverseinference instruction may be given to the jury. Previously, only a willful destruction supported such a presumption. 13. Zubulake V, 229 F.R.D. at 432. Committee on Pretrial Practice & Discovery 14. Barbara J. Rothstein, Ronald J. Hedges, and Elizabeth C. Wiggins, Managing Discovery of Electronic Information: A Pocket Guide for Judges, Federal Judicial Center (2007), available at inavgeneral?openpage&url_r=/public/home.nsf/pages/ See Rule 26(b)(2)(B), Advisory Committee note. 16. See Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp.2d 598 (S.D.Tex., February 19, 2010) (Judge Lee H. Rosenthal). 17. Qualcomm, Inc. v. Broad Com Corp., 2008 WL (S.D. Cal. January 7, 2008) (hereinafter Qualcomm ). 18. The Pension Committee of the University of Montreal Pension Plan vs. Band of America Securities LLC, 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010), as amended by 2010 WL (S.D.N.Y. January 15, 2010) (docket no. 320) and subsequently amended May 28, 2010 (sanctioning plaintiff with an adverse-inference instruction for failing to preserve relevant ESI; applying a gross-negligence and negligence standard to various conduct; presuming culpability and relevance for grossly negligent destruction of documents). 19. Rimkus Consulting Group, Inc. v. Cammarata, 688 F. Supp.2d 598 (S.D.Tex., February 19, 2010). 20. Pension Committee 2010 WL at * Qualcomm at (emphasis added). 22. Id. at 17, Id. at Qualcomm, Inc. v. Broadcom Corp., 2010 WL (S.D.Cal. April 2, 2010)(Qualcomm II). 25. Qualcomm II at Pension Committee at Id. at Id. at Rimkus at Id. at Id at 653. The Benefits of Membership Are You Missing Out? If the ABA does not have your on file, you could be missing out on important ABA Section of Litigation committee news and announcements. By registering your address, you will be eligible to receive CLE program announcements, Litigation News monthly s, the ABA Journal and more from the Section and the ABA. Log on to MyABA today to ensure your address is up to date.

24 Committee on Pretrial Practice & Discovery Summer 2010 Degrees of Culpability and Discovery Sanctions (Continued from front cover) its parent organization, and former Lancer directors who were Citco N.V. officers were names as defendants. The case was transferred to the U.S. District Court for the Southern District of New York in 2005, but was then stayed for two years under the Private Securities Litigation Reform Act. After the stay was lifted and discovery commenced, it became apparent to the Citco defendants that there were gaps in the plaintiffs document productions. In response to a court order, the plaintiffs filed declarations regarding their efforts to locate, preserve, and produce documents. The declarations outlined the steps plaintiffs took to preserve documents and averred that no documents were destroyed after a particular date. The Citco defendants then deposed the declarants and other individuals and discovered that numerous documents that should have been produced had not been. They also showed that almost all of the declarations were false and misleading and/or executed by a declarant without personal knowledge of its contents. After the close of discovery, the Citco defendants moved for sanctions against 13 of the 96 plaintiffs based on their deficient document productions and misleading declarations. The Citco defendants sought dismissal or any other sanction the court deemed appropriate. In what Judge Scheindlin herself characterizes as a long and complicated opinion, she lays out an analytical framework for analyzing whether the plaintiffs behavior was unacceptable and what sanctions, if any, were appropriate. As described below, this analysis begins with a three-tiered categorization of unacceptable behavior in the discovery context: negligence, gross negligence, and willfulness. Next, Judge Scheindlin reviews the relationship between the duty to preserve evidence and a finding of spoliation. Third, she defines which party bears the burden of proof in establishing that missing evidence is relevant and its absence prejudiced the innocent party. Finally, Judge Scheindlin identifies various remedies available to address culpable behavior when evidence is missing due to discovery violations. Judge Scheindlin s Three Tiers of Culpability Judge Scheindlin categorizes culpable behavior in document collection, preservation, and production into three tiers: negligence, gross negligence, and willfulness. In doing so, she notes that determining how bad unacceptable conduct is will be a judgment call made by courts with the benefit of hindsight and cannot be measured with exactitude and might be called differently by a different judge. Judge Scheindlin defines negligence as involving unreasonable conduct that creates a risk of harm to others, which, in the discovery context, means failing to participate meaningfully and fairly in the discovery phase of a judicial proceeding. She notes that the failure to conform to this Jennifer Ide (jennifer.ide@sutherland.com) is counsel and Angie Fox (angie.fox@sutherland.com) is an associate at Sutherland Asbill & Brennan LLP in Atlanta, Georgia. standard is negligent even if it results from a pure heart and an empty head. Examples of negligent behavior provided by Judge Scheindlin include a failure to preserve evidence resulting in the loss or destruction of relevant information (which could also rise to the level of gross negligence), a failure to collect evidence, a sloppy review that results in the loss or destruction of evidence (which could also rise to the level of gross negligence or willfulness), a failure to obtain records from all those employees who had any involvement with the issues raised in the litigation or anticipated litigation 3 a failure to take all appropriate measures to preserve ESI, and a failure to assess the accuracy and validity of selected search terms. 4 Gross negligence is defined by Judge Scheindlin as conduct that fails to exercise even that care which a careless person would use. She notes that, at least after July 2004 when Zubulake V was issued, the failure to issue a written litigation hold will constitute gross negligence. Other examples of gross negligence include the failure to collect records either paper or electronic from key players, the destruction of or certain backup tapes after the duty to preserve has attached (both of which could rise to the level of willfulness), and the failure to collect information from the files of former employees that remain in the party s possession, custody, or control after the duty to preserve has attached. The most egregious level of culpable behavior is willful conduct, which Judge Scheindlin defines as intentional or reckless conduct that is so unreasonable that harm is highly likely to occur. In addition to the examples provided above, Judge Scheindlin notes that willfulness would include acts such as the intentional destruction of relevant records, either paper or electronic, after the duty to preserve has attached. Sanctions under Pension Committee Where a party fails to preserve documents once litigation is reasonably foreseen, spoliation of evidence may occur, which Judge Scheindlin defines as the destruction or material alteration of evidence or... the failure to preserve property for another s use as evidence in pending or reasonably foreseeable litigation. The right to impose sanctions for spoliation arises from a court s inherent power to control the judicial process and litigation. Judge Scheindlin notes, however, that the court s power is limited to that necessary to redress conduct which abuses the judicial process. Two separate concerns come into play in the decision to impose sanctions. First, did a party abuse the judicial process by acting unreasonably in conducting discovery? Second, did the offending party s conduct result in the loss of relevant evidence, and has the innocent party been prejudiced by the loss? An abuse of the discovery process even without a showing of relevance and prejudice may warrant lesser sanctions such as further discovery, cost-shifting, or fines. For the severest of sanctions such as an adverse-inference instruction, preclusion, or dismissal to be imposed, however, an innocent party must show the missing evidence was relevant and the innocent party was prejudiced by the loss of evidence. 5 To ensure the punishment fits the crime, Judge Scheindlin ties the burden in establishing spoliation and the applicable sanctions to whether the conduct at issue was negligent,

25 Summer 2010 grossly negligent, or willful. Where a party has acted willfully in destroying or failing to preserve evidence, Judge Scheindlin opines that both bad faith and relevance should be presumed. Where gross negligence is found, this presumption may be made, but it is not required. Under either tier of culpability, the presumption is rebuttable if the spoliating party can show there has been no prejudice. An example of evidence that may rebut this presumption would be a showing that the innocent party had access to the evidence alleged to have been destroyed or that the evidence would not support the innocent party s claims or defenses. The innocent party may then offer evidence to counter this assertion. The Zubulake sequel may not have had quite the bite first anticipated. Where a spoliating party acts with negligence, the harshest sanctions may be imposed if there is a showing that the offending party s conduct resulted in the loss of relevant evidence, but there is no presumption of relevance or prejudice and the innocent party bears the burden of proving both. To do so, the innocent party must present extrinsic evidence tending to show that the destroyed [documents] would have been favorable to [its] case. 6 Judge Scheindlin notes that the innocent party should not be held to too strict a standard of proof regarding relevance and prejudice because to do so would reward the spoliating party. Finally, where the harshest sanctions are not warranted, Judge Scheindlin remarks that less severe sanctions, such as fines or cost shifting, may be appropriate. With these types of sanctions, the focus is less on a finding of relevance and prejudice and more on the conduct of the spoliating party. Outcome of the Pension Committee Decision After laying out this analysis, Judge Scheindlin goes through the allegations brought against each of the 13 plaintiffs. Ultimately, Judge Scheindlin concludes that most plaintiffs conducted discovery in an ignorant and indifferent fashion and should be sanctioned. 7 She determines that with respect to the plaintiffs who acted with gross negligence those who failed to issue a timely written litigation hold; failed to preserve or collect any electronic documents prior to 2007; continued to delete electronically stored information (ESI) after the duty to preserve arose; failed to request documents from key players; delegated search efforts without any supervision from counsel or management; destroyed backup data potentially containing responsive documents of key players otherwise unavailable; and/or submitted inaccurate or misleading declarations a charge to the jury that it could presume that the lost evidence was relevant and would have been favorable to the Citco defendants was warranted. Judge Scheindlin finds that the other plaintiffs behavior constitutes simple negligence. While these plaintiffs had failed to issue a written litigation hold until 2007, Judge Scheindlin Committee on Pretrial Practice & Discovery notes that the case was originally filed in Florida where it was less well established than in New York at the time that a written litigation hold was required. Judge Scheindlin, therefore, examines these plaintiffs conduct on the whole to determine whether it was negligent or grossly negligent. In doing so, she determines that the additional acts and omissions such as failing to understand how electronic documents are stored, failing to supervise document searching and retrieval in a meaningful manner, failing to search the s of all employees with involvement in the matter, failing to search documents sent and received on handheld devices, and failing to conduct a full and complete search of ESI under the specific facts at issue, constituted negligence rather than gross negligence. Judge Scheindlin imposes monetary sanctions against both the negligent and grossly negligent plaintiffs, awarding the Citco defendants their costs and fees in bringing the discovery motion, including the taking of depositions that showed the discovery inadequacies. Finally, Judge Scheindlin orders that certain plaintiffs be required to respond to further discovery where there was reason to believe that additional searching may be productive. Considering the underlying facts, the ultimate outcome of Pension Committee is not particularly surprising. However, the analytical framework established by Judge Scheindlin in Pension Committee has left some practitioners wondering if the harsh sanction of an adverse-inference instruction may be imposed in the future on plaintiffs who act in a merely negligent manner and under what circumstances. Preservation Duties Texas-Style: Judge Rosenthal Reins in Pension Committee On the heels of the Pension Committee decision, Judge Lee H. Rosenthal, chair of the Federal Judicial Conference Advisory Committee for the Federal Rules of Civil Procedure, issued a thoughtful opinion in Rimkus Consulting Group v. Cammarata 8 suggesting that Judge Scheindlin s Zubulake sequel may not have had quite the bite first anticipated. As distinguished from the negligent acts underlying Pension Committee s holding, Rimkus imposes an adverse inference against a party for intentionally destroying ESI conduct that most courts agree may warrant such a sanction. Notwithstanding this rather unremarkable ultimate holding, however, Rimkus is a must-read opinion because Judge Rosenthal broadly discusses the analytical issues underlying spoliation claims, and in doing so, tethers Pension Committee to its facts and the Second Circuit s minority view concerning when an adverse-inference instruction is an appropriate discovery sanction. Rimkus: A Brief Summary In Rimkus, a forensic-engineering company sued its former employees who started a rival company, alleging breach of fiduciary duty, misappropriation of trade secrets, and breaches of noncompetition and nonsolicitation agreements. 9 The former employees were plaintiffs in an earlier-filed Louisiana suit seeking declaratory judgment that the noncompetition and nonsolicitation provisions were unenforceable. Judge Rosenthal finds the employees duty to preserve evidence was triggered no later than when they began discussing the preemptive Louisiana action. Despite this duty, the defendant employees made no effort

26 Committee on Pretrial Practice & Discovery Summer 2010 to preserve relevant documents, even after the Louisiana and Texas suits had been filed. Instead, the record demonstrated that the defendant employees took affirmative steps to destroy ESI containing evidence favorable to the plaintiff s claims. Judge Rosenthal finds sufficient evidence that the documents were destroyed in bad faith because, among other things, the defendants gave inconsistent explanations for the deletions; failed to disclose personal accounts later shown to have been used to transmit proprietary information; and denied taking proprietary information later contradicted by recovered s. Judge Rosenthal concludes that the plaintiff corporation is entitled to an adverse-inference instruction because there was sufficient evidence from which a jury could find the defendant employees willfully and in bad faith destroyed relevant documents. Judge Rosenthal further awards the plaintiff its costs and attorneys fees reasonably incurred in investigating the spoliation, obtaining s from third-party subpoenas, and taking the additional depositions of [defendants] on the issues of deletion. In contrast to Pension Committee s complicated burdenshifting jury instruction, Judge Rosenthal rules that the jury first determine whether the employees willfully destroyed ESI. If the jury determines there was willfulness, Judge Rosenthal empowers the jury to make the ultimate decision, considering all the evidence, on whether to infer that the lost information would have been unfavorable to the spoliating party s case. Rimkus Tethers Pension Committee to Its Facts Judge Rosenthal introduces the concept of proportionality into her discussion of the spoliation analysis in Pension Committee. Citing the Sedona Principles, 10 Judge Rosenthal holds that whether the loss of ESI is actionable depends on what is reasonable, and that in turn depends on whether what was done or not done was proportional to that case and consistent with clearly established applicable standards. 11 She also emphasizes that the extent to which the spoliation may be sanctioned by courts defies bright-line rules and depends on both the degree of culpability and the extent of prejudice, tailored to be no harsher than needed to serve the goals of compensation or deterrence. At first blush, Judge Rosenthal s use of a more traditional negligence standard (e.g., reasonableness) appears at odds with Judge Scheindlin s categorical approach (e.g., failure to preserve evidence resulting in the loss or destruction of relevant information is surely negligent and a post-2004 failure to issue a written litigation hold constitutes gross negligence ). Judge Rosenthal seems to suggest, however, that Pension Committee s culpability standard implicitly embodies a proportionality requirement when viewed in its factual context. Discussing the need for proportionality, Judge Rosenthal notes the reasonableness of discovery burdens in a $550 million case arising out of the liquidation of hedge funds, as in Pension Committee, will be different than the reasonableness of discovery burdens in a suit to enforce noncompetition agreements and related issues, as in the present case. By highlighting the factual basis upon which Judge Scheindlin based her spoliation analysis, Judge Rosenthal suggests Pension Committee does not create per se culpability standards. Instead, Judge Rosenthal seems to take Judge Scheindlin at her word that determining whether a party s e-discovery conduct is unacceptable must be determined on a case-by-case basis and is a call that cannot be measured with exactitude and might be called differently by a different judge. 12 Circuits Are Split In addition to underscoring the need to balance the burdens of discovery against the nature of the case and the amount in controversy, Rimkus is important because it charts a clear path for litigants in other circuits, seeking to diminish the precedential weight of Pension Committee and to avoid an adverse-inference instruction. In issuing an adverse-inference instruction for grossly negligent conduct, Judge Scheindlin applied Second Circuit precedent that holds [t]he sanction of an adverse inference may be appropriate in some cases involving the negligent destruction of evidence because each party should bear the risk of its own negligence. 13 By contrast, in Rimkus, Judge Rosenthal was bound by Fifth Circuit precedent, which generally requires a showing of bad faith before a court may issue an adverse-inference instruction. 14 This rule, in essence, is shared by the Seventh, Eighth, Tenth, Eleventh, and D.C. Circuits. For this reason, Judge Rosenthal asserts [t]he circuit differences in the level of culpability necessary for an adverse inference instruction limit the applicability of the Pension Committee approach. In accordance with the policy rationale underlying an adverse inference that certain conduct supports an inference of consciousness of a weak case other circuits seem to agree something more than negligence is required. In the First, Fourth, and Ninth Circuits, bad faith is not required if the innocent party is severely prejudiced. Nevertheless, as Judge Rosenthal notes, these circuits often emphasize the presence of bad faith when issuing an adverse inference. The Third Circuit employs a hybrid standard balancing the degree of culpability and the extent of prejudice. Parties before the Sixth Circuit, however, may want to brush up on their so-called Zubulake duties because Pension Committee is more likely to influence the extent to which Sixth Circuit courts issue an adverse inference for negligent e-discovery conduct. Recently, overturning its prior ruling, the Sixth Circuit in Adkins v. Wolever joined other circuits in holding that federal spoliation law applies to diversity cases litigated in federal court. 15 Given the lack of prior cases interpreting federal spoliation law in the Sixth Circuit pre-adkins, Sixth Circuit district courts have looked outside their jurisdiction for guidance on federal spoliation standards. In doing so, there has emerged a split among the district courts regarding the degree of culpability required for an adverse-inference instruction. 16 In developing their federal spoliation jurisprudence, several district courts in the Sixth Circuit have interpreted Second Circuit case law as permitting an adverse inference for ordinary negligence. 17 These courts find that bad faith is unnecessary but useful for establishing the necessary element of relevance. 18 The U.S. District Court for the Southern District of Ohio, however, has recently stated that [g]enerally, a court will not impose an adverse inference with respect to destroyed evidence, unless the party did so in bad faith. 19

27 Summer 2010 If past is prologue, the Sixth Circuit is likely to resolve such split in favor of adopting the Second Circuit approach. When construing state spoliation law pre-atkins, the Sixth Circuit permitted a rebuttable adverse-inference instruction when a plaintiff [wa]s unable to prove an essential element of her case due to the negligent loss or destruction of evidence by an opposing party. 20 Given the Sixth Circuit s willingness to grant an adverse inference for negligent conduct, and the policy rationale employed to do so, it is likely the Sixth Circuit will resolve any conflict among the district courts in favor of the Second Circuit approach in light of Judge Scheindlin s holding in Pension Committee. Avoiding an Adverse-Inference Instruction Outside the Second Circuit In addition to the circuit split over the level of culpability required for an adverse inference, Judge Rosenthal s Rimkus opinion reveals a diverging view regarding the burden of proof necessary for such sanction. 21 Generally, the innocent party is required to prove, among other things, that the lost information was both relevant and prejudicial to its case. 22 In Pension Committee, Judge Scheindlin held that the jury could presume relevance and prejudice if the spoliating party acted with gross negligence, allowing the innocent party to rebut the presumption. 23 Unlike the Second Circuit, Judge Rosenthal states, in dictum, that Fifth Circuit precedent likely forecloses courts from such burden shifting, even where a party has willfully destroyed information. 24 Instead, the Fifth Circuit approach favors a strong check on frivolous spoliation allegations. Perhaps most controversially, however, Judge Rosenthal insinuates that Second Circuit case law (and by association Pension Committee) may contravene the U.S. Supreme Court decision Chambers v. NASCO, Inc., 25 by imposing an adverse inference in the absence of bad faith to the extent sanctions are based on inherent power. 26 In Chambers, the Supreme Court held that a federal court may impose sanctions in the form of attorney fees pursuant to its inherent authority. 27 In so holding, the Supreme Court emphasized that a court s inherent power to issue the less severe sanction of an assessment of attorney s fees only may be exercised in narrowly defined circumstances. These narrow exceptions effectively limit a court s inherent power to impose attorney s fees as a sanction to cases in which a litigant has engaged in bad-faith conduct or willful disobedience of a court s orders. Conclusion While it is indisputable that the Zubulake opinions have had a far-reaching impact on the world of e-discovery Zubulake IV has been cited over 1,600 times the same may not prove true for the entirety of the Pension Committee decision. Judge Scheindlin s thorough opinion lays out a helpful and wellreasoned approach to discovery sanctions. However, with respect to merely negligent behavior, courts outside the Second and Sixth Circuits are likely to diverge from Pension Committee and continue to require a finding of bad faith before imposing an adverse-inference instruction for the spoliation of evidence. Endnotes 1. Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) (Zubulake I); Zubulake v. UBS Warburg, 230 F.R.D. 290 (S.D.N.Y. Committee on Pretrial Practice & Discovery 2003) (Zubulake II); Zubulake v. UBS Warburg, 216 F.R.D. 280 (S.D.N.Y. 2003) (Zubulake III); Zubulake v. UBS Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV); Zubulake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004) (Zubulake V) F. Supp. 2d 456 (2010 S.D.N.Y.). Judge Scheindlin initially issued an opinion in Pension Committee January 11, 2010 but subsequently withdrew that opinion and replaced it with a January 15, 2010, opinion, which was again amended on May 28, On May 28, 2010, Judge Scheindlin entered a second amendment to the Pension Committee opinion and replaced [b]y contrast, the failure to obtain records from all employees (some of whom may have had only a passing encounter with the issues in the litigation, as opposed to key players), likely constitutes negligence as opposed to a higher degree of culpability with [b]y contrast, the failure to obtain records from all those employees who had any involvement with the issues raised in the litigation or anticipated litigation, as opposed to key players, could constitute negligence. 4. Pension Comm., 685 F. Supp. 2d at Id. (citing Residential Funding Corp. v. De-George Fin. Corp., 306 F.3d 99, 109 (2d Cir. 2002).) 6. Id. at 468 (quoting Toussie v. Cty. of Suffolk, No. 01 Civ. 6716, 2007 WL , at *8 (E.D.N.Y. Dec. 21, 2007)). 7. Id. at F. Supp. 2d 598 (S.D. Tex. 2010). 9. Id. at The Sedona Principles: Second Edition, Best Practices Recommendations & Principles for Addressing Electronic Document Production 17 cmt. 2.b. (2007). 11. Rimkus, 688 F. Supp. 2d at Pension Comm., 685 F. Supp. 2d at Residential Funding Corp., 306 F.3d at Rimkus, 688 F. Supp. 2d at F.2d 650, 652 (6th Cir. 2009). 16. See Dilts v. Maxim Crane Works, LP, Civ. A. No , 2009 WL , at *3 (E.D. Ky. Sept. 28, 2009) (recognizing the split among district courts). 17. See, e.g., Bancorpsouth Bank v. Herter, 643 F. Supp. 2d 1041, 1061 (W.D. Tenn. 2009). 18. Id. 19. In re Nat l Century Fin. Enter., Inc., No. 2:03-md-1565, 2009 WL , at *3 (S.D. Ohio July 16, 2009). 20. Welsh v. United States, 844 F.2d 1239, (6th Cir. 2002) (emphasis added), overruled on other grounds by Adkins v. Wolever, 554 F.2d 650, 652 (6th Cir. 2009) (holding federal spoliation law applies to cases litigated in federal court). In a more recent pre-adkins unpublished opinion, the Sixth Circuit noted that, while bad faith is not required, [i]n general, a court may not allow an inference that a party destroyed evidence that is in its control, unless the party did so in bad faith. Tucker v. Gen. Motors Corp., 945 F.2d 405, No , 1991 WL , at *2 (6th Cir. Sept. 30, 1991). Harmonizing these somewhat conflicting opinions, the Sixth Circuit noted the failure to preserve evidence one knows, or should know, to be relevant to potential litigation could be described as acting in bad faith. One Beacon Ins. Co. v. Broad. Dev. Group, Inc., 147 Fed. Appx. 535, 541 n.3 (6th Cir. 2005). 21. Rimkus, 688 F. Supp. 2d at See Zubulake IV, 220 F.R.D. at Pension Comm., 685 F. Supp. 2d at Rimkus, 688 F. Supp. 2d at U.S. 32, 43 46, 111 S. Ct. 2123, (1991). 26. Rimkus, 688 F. Supp. 2d at Chambers, 501 U.S. at 36, 111 S. Ct. at

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