M12S12 - A Talk with the Fox - Before He Gets Into the Hen House: How I Would Attack Your Electronic Records Management Program in Discovery & Trial

Cohasset Associates, Inc.

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2012 Managing Electronic Records Conference 12.1

A Talk With the FoxA Talk With the FoxYour ERM Program’s Exposure to Attack at Discovery and at TrialYour ERM Program’s Exposure to Attack at Discovery and at Trial

Steven W. Teppler, Esq.Edelson McGuire, LLCMER Conference 2012May 8, 2012

But First, a Few Very Boring Moments Discussing the Law

• My Pack’s Rules are The Federal Rules of Civil Procedure:– Rule 1: Proportionality

– How much eDiscovery depends on the case

» Simple Cases» Simple Cases

» Complex Cases – mass tort, class actions

» Patent, Trademark, Copyright

» Commercial Disputes

» Discrimination cases

» HIPAA, Sarbanes Oxley, Data Breach

» Whistleblower (Dodd-Frank) cases

Discussing the Law (2)

• Rule 26– Initial Disclosures

• Discovery scope and limits– Non-privileged ESI that is relevant evidence or could

lead to evidencelead to evidence

– Not duplicative, excessively burdensome

– The Lawyers Meet and Confer

• Attorneys for parties must “meet and confer” before starting discovery

• Counsel must discuss any issues about disclosure or discovery of ESI


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• Rule 26 Counsel Meet and Confer (cont’d): • I’ll have a technology expert present to discuss

discovery context (about your enterprise ERM program)

• Your counsel will (hopefully) have a tech expert• Your counsel will (hopefully) have a tech expert present (that might be you) to discuss discovery context

• My first opportunity to negotiate eDiscovery to ensure production transparency

• My first opportunity to learn about your ERM program – and you haven’t produced a thing.


• Rule 29 - Stipulations About eDiscovery– Parties can agree to limit or expand scope

– Stipulations are contracts

– Contracts will bind the parties throughout discovery and trialand trial

– I’ll negotiate for an expansive scope to the extent permitted by the rules

– The parties might enter into an stipulation for and ESI production protocol

• This is a more extensive contract


• Rule 33 – Interrogatories About eDiscovery– If I don’t get enough information through the Rule 26

meet and confer process, I’ll ask written questions about your ERM program

– You’ll probably be needed to formulate the responses– You ll probably be needed to formulate the responses

– I’ll ask about

• Document retention/destruction program

• Data silo(s) identified, who are data custodians

• How they are maintained

• What identification, search and collection methods are used to respond to eDiscovery


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• Rule 34 – Records and ESI Discovery Requests– I can (and will) request to inspect, test, copy or sample

ESI in your enterprise’s custody control or possession

• All relevant ESI or information that could lead to the discovery of relevant ESIdiscovery of relevant ESI

– I can designate format of production

• I will request native format

– If I request structured data, I’ll confer with your lawyers to arrive at appropriate

• I will request to see search query results

– You will be required to assist counsel in providing responsive ESI. You will be part of the process.


• Rule 30 - Conversations About eDiscovery– If I believe that initial disclosures, responses to

interrogatories or responses to ESI production requests are deficient, I’ll invite you over to discuss these responses in a depositionp p

• Before a court reporter

• For the record

• Where you will be under oath to tell the truth under penalty of law


• Rule 29 - Stipulations About eDiscovery– Parties can agree to limit or expand scope

– Stipulations are contracts

– Contracts will bind the parties throughout discovery and trialand trial

– I’ll negotiate for an expansive scope to the extent permitted by the rules


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• Rule 37 – Court Sanctions (or penalties) for Failure to Comply with eDiscovery Requests– If your discovery responses are deficient, I will file

a motion to compel proper responsesa motion to compel proper responses

– The Court may order you to produce the proper ESI responses

– Your enterprise may have to pay legal fees in connection with the motion

– If your responses to the Court order are still defective, the Court can impose evidentiary penalties, making it difficult or impossible to prevail at trial


• Rule 37 and Evidence Destruction– If ESI has been destroyed, and…

• if it turns out that you have a poorly designed, enforced, or monitored ERM program, sanctions may be imposed on your enterprise (think $$$may be imposed on your enterprise (think $$$ and losing)

• if it turns out that you have a defensible ERM program directed to records retention and destruction, and that program is operated in good faith, you can take shelter under a “safe harbor” rule and no sanctions will be imposed


• Rule 37 and Evidence Destruction– The Court will likely hold a hearing on motions to

compel or motions for sanctions for destruction (or withholding) of evidence

– There will be witness testimony taken at these– There will be witness testimony taken at these hearings

– Check your schedule because you may likely be witness at these hearings


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Plain English, Please

• Why will court hearings to compel production or for evidence destruction occur and sanctions ensue?– You failed to respond to a discovery request

Y f il d t di l d t il t di f l t– You failed to disclose data silos, custodians for relevant information

– You disclose that ESI has been destroyed, and indefensilby so

– Typically these occur as a result of an ERM program failure

Did I Mention ESI Preservation?

• A court will impose sanctions for failure to preserve ESI relevant to a lawsuit– Your ERM document retention/destruction policy was

designed in bad faith, resulting in the destruction of relevant ESI after litigation commencesrelevant ESI after litigation commences

– Your ESI retention/destruction program was operated in bad faith, resulting in the destruction of evidence after litigation commences

– The severity of sanction will generally depend on the degree of bad faith

What About ESI Preservation Before Litigation Starts?

• Federal courts can impose sanctions for failure to preserve relevant ESI prior to the beginning of a lawsuit. The same rules apply:– Your ERM document retention/destruction policy was

designed in bad faith resulting in the destruction ofdesigned in bad faith, resulting in the destruction of relevant ESI before litigation commences

– Your ESI retention/destruction program was operated in bad faith, resulting in the destruction of evidence before litigation commences

– Again, the severity of sanction will generally depend on the degree of bad faith


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Let’s Talk Litigation Holds

• Litigation holds are ESI preservation mandates

• Litigation holds typically take place at the commencement of litigation– An aspect of information governance

– Fundamental component for preservation of evidence

– Require proper design, deployment and enforcement

• Well designed, they can provide robust defensibility of good faith management of electronic information infrastructure– But first, a pictorial walkthrough…

Information Governance?

A.K.A. - Information lifecycle management

OLD – Litigation Hold Targets


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NEW – Litigation Hold Targets

Litigation Holds and ESI

• Litigation holds also include storage media identified as repositories of potentially relevant electronically stored information.

And the point is…

This is Where Storage Lives


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A New Litigation Hold Place

In the Cloud

Litigation Hold Triggers

• Federal Common Law– Zubulake and progeny

• Federal Law– Sarbanes Oxley §802; §1102 (codified as 18 USC

§1519 and 18 USC §1512(c)

• Implied Litigation Holds –– HIPAA/HITECH

– Breach Notification Statute Compliance

Litigation Holds –and the Three Irascible “Reasonables” An ERM Program Should incorporate

• The First Reasonable – “Reasonably Anticipated Litigation”

» Zubulake IV-V – 220 F.R.D. 212 (S.D.N.Y. 2003) 229 F.R.D. 222 (S.D.N.Y. 2004)

» Pension Committee v. Banc of Montreal, 685 F.Supp. 2d 456 (S.D.N.Y. 2010)

– Prior to litigation– When represented by counsel, Sanofi-Aventis v Glenmark

Pharma., 2010 2652412 (D. N.J. 2010)

– When not (or not yet) represented by counsel?

– Scope issues (broad or limited)

– Duration of anticipation issues: (how much, how long before, and after litigation)

– Format Issues - (old, new, migrated) whew!


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Litigation Holds –and the Three Irascible “Reasonables”

• The Second “Reasonable” - Reasonably Usable Format – Fed.R.Civ.P. Rule 34 – If a requesting party does

not specify a form for producing ESI, the responding “party must produce it in a form orresponding party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.” Fed.R.Civ.P. 34(b)(2)(E)(ii)

– See also, Aguilar v. Immigration and Customs Enforcement Div. of U.S. Dept. of Homeland Sec., 255 F.R.D. 350, 355 (S.D.N.Y. 2008)

Reasonably Usable Format

• Query:– Does a litigation hold put into place prior to the

onset of litigation require

• Preserve “As Is” – i.e., preservation in status quo ante?quo ante?

• Preserve with view to production – i.e., preservation as “reasonably usable” in anticipation of litigation?

• Maintenance of format to maintain “reasonable” usability for anticipated production?

• The Third “Reasonable’ – Reasonable Accessibility– How should litigation holds address potential

reasonable accessibility issues raised by Fed R Civ P Rule 26?

Litigation Holds –and the Three Irascible “Reasonables

Fed.R.Civ.P. Rule 26?

“Fed.R.Civ.P. 26(b)(2)(B) provides the following: A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost.)” Goodman v. Praxair Services, Inc., 632 F.Supp.2d 494, 525 (D.Md. 2009)


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Reasonable Accessibility

• The determination of reasonable accessibility arises after the fact, and during litigation

• “On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonablyshow that the information is not reasonably accessible because of undue burden or cost.” Goodman v. Praxair Services, Inc., 632 F.Supp.2d 494, 525 (D.Md. 2009)

– Cautionary Note: The determination of preserving reasonable accessibility is an after the fact gamble; you should consult with your counsel about this

Failure to Implement Hold

• Evidential Sanctions:– Thus, having found that (1) BCT had a duty to preserve

evidence at least when the complaint was filed in this case, and over 18 months before the deletions at issue occurred; (2) Philips was prejudiced by the destruction of the evidence; and (3) BCT acted in bad faith the courtevidence; and (3) BCT acted in bad faith, the court concludes that spoliation sanctions are appropriate in this case, including an inference that production of the destroyed documents would have been unfavorable to BCT. Having concluded that a sanction is appropriate for spoliation and for violating the court's discovery order, and having found that BCT acted in bad faith and that an adverse inference is thus warranted in this case...“ Philips Electronics v BC Technical, 2011 WL 677462 (SD FL 2011)

Litigation Holds

• Counsel will receive the preservation letter

• You will propagate the litigation hold according to a properly designed, implemented and monitored ERM program– Modes

• Oral – not a great choice

• Written – preferable

• Informal – open to challenge

• Memorialized - defensible


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Preservation Letters vs. Litigation Hold Letters

• Distinguishing points– Timing

– Purpose

– Does the content of one dictate the content of the other?other?

• Litigation strategy: discovery or… fear factor….?

• Does Your ERM Program for document retention/destruction address these?

Elements of an Effective Enterprise Litigation Hold Letter

• Know Thyself!• Know Thine ERM Program

– Nature of the business

– ESI Custodians

– Retention/destruction policies (if any…..)

– Never a one-size-fits-all situation

Document – A Litigant’s Definition

The terms "document" or "documents" refer to, without limitation, any written, printed, typed, recorded, filmed, taped, or other graphic matter readable or viewable with or without the aid of machines, computers, or other electronic devices, and includes originals, all drafts, and copies bearing notations not found on the original or on other copies, whether or not printed, sent, or received (including, without limitation, correspondence, letters, envelopes, memoranda, reports, records, returns, e-mail, financial statements, notes, drawings, charts, contracts, diagrams, indices, telegrams, tabulations, receipts, studies, statistics, analyses, evaluations, checks, projections, prospectuses, work p , , , y , , , p j , p p ,papers, statements, summaries, opinions, journals, calendars, schedules, appointment books, diaries, logs, lists, offers, comparisons, books, pamphlets, brochures, booklets, instructions, interoffice and intra office communications, notices, bulletins, manuals, minutes, transcriptions, transcripts, manuals, notations of any sort regarding conversations, telephone calls, meetings or other communications, computer printouts, teletypes, telefax, invoices, purchase orders, quotations, bids, bills of lading, warranties, bonds, surveys, graphs, photographs, microfiche, microfilm, mechanical or electric records or representations of any kind, including, without limitation, tapes, cassettes, discs, recordings and motion pictures photographs, and items residing solely on computer disks, or other electronic storage media, and all drafts, alterations, modifications, changes and amendments of any of the foregoing) to which you have or have had access and/or control. Without limiting the foregoing, the term “document” is also defined as to be synonymous in meaning and equal in scope to the usage of this term in Federal Rule of Civil Procedure 34(a), including, without limitation, electronic or computerized data compilations, as well as “electronically stored


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Communications – A Common Perception

Communications – A Litigant’s Definition

• The term “communication” refers to, without limitation, writings, conversations, correspondence, memoranda, discussions, telexes, telegrams, facsimiles (faxes), speeches presentations press and otherspeeches, presentations, press and other releases, emails, voice-mails, ICQ messages, real-time internet communications, bulletin board postings, blog postings, notes, and any other means of exchanging or parting information, whether made in person telephonically, electronically or otherwise.

Sources of Information Subject to Litigation Holds

• PDA’s and beyond…..– File drawers

– Desks drawers

– Files at home

Offi d l l ll– Office computers and laptops - locally

– Servers

– Active emails

– Filed (“foldered”) email

– Attachments to emails

– Portable media, including floppy disks, CD’s, memory sticks…….


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You’ve Identified and Found ESI…What’s Next?

• Give clear direction as to how to handle the materials.

• Ensure appropriate preservation policies and processes are put into place

Oh, and one more thing…

What’s Next? (cont’d.)

• Monitor, monitor, monitor!– “Counsel must oversee compliance with the litigation

hold, monitoring the party's efforts to retain and produce relevant documents…”

• “Zubulake V” 229 FRD 422 439 (SDNY 2004)• Zubulake V , 229 FRD 422, 439 (SDNY 2004), quoted in Sanofi-Aventis Deutschland GmbH v. Glenmark Pharmaceuticals Inc., 2010 WL 2652412 (D. N.J. 2010)

A Fed.R. Civ.P. 26(f) eDiscovery Meet and Confer Request (I)

• Keeping in mind Defendant’s preservation duties, and when this matter advances to the formal discovery mode, Plaintiff intends that the first Fed.R.Civ.P. Rule 26(f) meet and confer between counsel and other necessary persons will address the nature and context of the eDiscovery Plaintiffs will seek. To that end, we will have present and participating at this conference (and any subsequent conference, where necessary) a technology expert to assist in this process. We also intend to discuss the nature, form and format for ESI p ,that will be produced by Defendant in connection with its Fed. R. Civ. P. 26(a)(1) Initial Disclosures. We suggest that Defendant attend with its respective technology expert(s), who should be thoroughly familiar and able to discuss, where applicable to this matter, items “a” through “t,” below. In proceeding with a conference attended by each party’s technology expert, we intend to minimize the potential for misinterpretation of discovery requests, defective discovery responses, and discovery-related motion practice, with the objective of reaching mutual agreement on a stipulated ESI production protocol. If Defendant does not agree with this proposal, please so advise, so that we may, at the appropriate time bring this to the Court’s attention for guidance and resolution at an early stage of litigation.


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A Fed.R. Civ.P. 26(f) eDiscovery Meet and Confer Request (II)

Plaintiff’s counsel and its expert will be prepared and intend to discuss:

• a. Agreement as to general definitions to be used by the parties;

• b. Identification of individuals, including any non-party or third-party individuals, who can testify to eDiscovery issues, including network and computing infrastructure, electronic records management and retention, and sources of potentially relevant ESI;

• c. Identification of all data storage, whether connected or not connected to Defendant’s network mapping that may be a source of ESI;

• d. Acquisition of Defendant’s documentation of processes that are used to manage the Defendant’s system(s) that generate and store ESI. Examples include back-up and business

• continuity policy, data retention policy, as well as internally and externally prepared audit reports documenting adherence to these policies;

• e. Acquisition and examination of all pertinent versions of uncompiled source code;

• f. The necessity for restoration of previously deleted information;

A Fed.R. Civ.P. 26(f) eDiscovery Meet and Confer Request (III)

• g. Determining whether or not back-up and archive information is within the scope of discovery

• h. Defendant’s data protection policies and methodologies, such as continuous data protection, data base snapshot or other rollback technologies;

• i. Existing and continuing necessity for ESI preservation;

• j. Existing and or future necessity for forensic evidence collection, and j g ypreservation orders, and other extraordinary ESI preservation activities;

• k. ESI search, terms, search protocols, sampling and error testing;

• l. Nature, form, and format of ESI production to be produced by Defendant;

• m. Production (where applicable) of structured data, including search queries;

• n. Form and format for initial disclosures of ESI;

• o. Description of the processes of production;

A Fed.R. Civ.P. 26(f) eDiscovery Meet and Confer Request (IV)

• p. Production schedule and costs;

• q. Privilege log format, timing, and privileged document metadata;

• r. Clawback and Fed.R. Evid. R. 502 issues;

• s. Entry into an appropriate protective order;

• t. Documenting efforts to reach an accord regarding eDiscovery disputes.

Wh t ill t chn l ff What will technology offer tomorrow? Next month? Next

Year?Will Your ERM Program Prepare You

to Ask The Right Questions??


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Points to Ponder

• I will inquire as to all these matters

• Where appropriate, I will seek court assistance to obtain responses to my discovery requests

But

• I would much rather not do so.

• I wouldn’t won’t need to engage in this Kabuki dance if your enterprise had has a defensible ERM program

What Do I Really Want?

• FOR MYSELF: Relevant, non-privilege information and relevant facts (including ESI) for my client’s case

• FOR YOU: A defensible ERM program so that I don’t have to engage in discovery abuse or evidence destruction practice before the Court.

Appendix - Case Law Update

• Zubulake IV - 220 F.R.D. 212 (SDNY 2003) –Reasonable anticipation of litigation

• John B. v. Goetz – 531 F. 3d 448 (6th Cir. 2003) – Meaningful preservation

• Zubulake V – 229 F.R.D. 222 (SDNY 2004) “ItZubulake V 229 F.R.D. 222 (SDNY 2004) It is well established that the duty to preserve evidence arises when a party reasonably anticipates litigation

• Pension Committee v Banc of America 685 F. Supp. 456 (SDNY 2010)– Failure to time implement litigation hold


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Case Law Update

• Zubulake IV - 220 F.R.D. 212 (SDNY 2003) –Reasonable anticipation of litigation

• John B. v. Goetz – 531 F. 3d 448 (6th Cir. 2003) – Meaningful preservation

• Zubulake V – 229 F.R.D. 222 (SDNY 2004) “ItZubulake V 229 F.R.D. 222 (SDNY 2004) It is well established that the duty to preserve evidence arises when a party reasonably anticipates litigation

• Pension Committee v Banc of America 685 F. Supp. 456 (SDNY 2010)– Failure to time implement litigation hold

Case Law Update

• Robbins & Myers, Inc., Plaintiff, v. J.M. Huber Corporation, 2011 WL 206593 (W.D. NY 2011)

• Duty to supplement means duty to extend litigation holds

Phili El t i BC T h i l 2011 WL• Philips Electronics v BC Technical - 2011 WL 677462, 40 (D. Utah 2011)

• Failure to preserve will inevitably lead to spoliation of evidence

• Perfection not required

• Simply sending emails not sufficient

Case Law Update

• Liberman v. FedEx Ground Package System, Inc., 2011 WL 145474, 3 (E.D.N.Y. 2011)– Litigation hold (and preservation duty) extends to

second action on similar facts after first lawsuit dismisseddismissed

• Sanofi-aventis Deutschland GmBH v. Glenmark Pharmaceuticals, 2010 WL 2652412 (D. NJ 2010) – Reasonable Anticipation of litigation triggers litigation

hold

– Just the “beginning”


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Case Law Update

• Rhea v Washington Department of Corrections, 2010 WL 5395009 (WD Wash. 2010). – (a.k.a. why this all matters): Attorneys required to know

client information systems, documents retention policies (and litigation holds that ensue) and certify pursuant to Fed.R.Civ.P. Rule 26(g)

Questions?

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M12S12 - A Talk with the Fox - Before He Gets Into the Hen House: How I Would Attack Your Electronic Records Management Program in Discovery & Trial