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Doug Austin

eDiscovery Best Practices: Issuing the Hold is Just the Beginning

Yesterday, we discussed identifying custodians, preparing a written litigation hold, issuing the hold and tracking responses.  Today, we’ll discuss interviewing hold notice recipients, follow up on notices, releasing holds when the obligation to preserve is removed and tracking all holds within an organization.  Here are the rest of the best practices for implementing a litigation hold.

Interviewing Hold Notice Recipients: Depending on the case, follow-up interviews (with at least the key custodians) are generally accepted as a best practice and may be necessary to ensure defensibility of the notice.  The point of these interviews is to repeat the duty to preserve, provide a detailed explanation of the requirements of the hold, answer the recipient’s questions (if any), and confirm that the recipient understands and agrees to adhere to the notice. You should keep written records of each of these interviews and document the reasoning for determining which individuals to interview.

Follow-Up on Hold Notices: For a litigation hold plan to be successful and defensible, it needs to include periodic follow-up reminders to recipients of the notices to inform them that the data in question remains under hold until the case concludes. Follow-up reminders could simply be a retransmission of the original notice or they could be a summary of all of the notices the individual has received, if there are multiple cases with holds for that individual. There is no specific requirement on how often the reminders should be sent, but it’s best to send them at least quarterly.  For some cases, it may be necessary to send them monthly.

Release the Hold: Not to be confused with “release the hounds”, it is just as important to inform people when the duty to preserve the data expires (typically, when the case is completed) as it is to notify them when the duty to preserve begins.  Releasing the hold is key to ensure that information doesn’t continue to be preserved outside of the organization’s document retention policies – if it is, it may then become subject to litigation holds in other litigations unnecessarily.  Releasing the hold also helps keep custodians from being overwhelmed with multiple retention notices, which could cause them to take the notices less seriously.  However, the release notification should be clear with regard to the fact that data subject to hold in another matter should continue to be preserved to meet discovery obligations in that matter.

Hold Tracking System: It’s important to have a reliable “system” for tracking litigation holds across all matters within the organization. Depending on your needs, that could be a customized application or a simple database or spreadsheet to track the information.  You should keep historical tracking data even for completed matters as that information can be useful in guiding hold issuance on new matters (by helping to identify the correct custodians for new matters that are factually similar or related to current closed or open matters).  At a minimum, a tracking system should:

  • Track responses from individual custodians and identify those who have not yet responded,
  • Track periodic reminder notices and release notices,
  • Provide ability to report a list of people with a duty to preserve for a specific matter as well as all matters for which a person is under retention.

So, what do you think?  Do you have a solid “hold” on your hold process?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: Hold It Right There!
 

When we reviewed key case decisions from last year related to eDiscovery, the most case law decisions were those related to sanctions and spoliation issues.  Most of the spoliation sanctions were due to untimely or inadequate preservation of the data for litigation.  As noted in Zubulake, Judge Shira Sheindlin ruled that parties in litigation have an obligation to preserve potentially relevant data as soon as there is a reasonable expectation that data may be relevant to future litigation.  However, even if the party reacts in a timely manner to take steps to preserve data through a litigation hold, but executes those steps poorly, data can be lost and sanctions can occur.  Here are some best practices for implementing a litigation hold.

The most effective litigation hold plans are created before actual litigation arises and applied consistently across all matters. While cases and jurisdictions vary and there are not many hard and fast rules on implementing litigation holds, there are generally accepted best practices for implementing holds.  Implementation of a litigation hold generally includes each of the steps identified below:

Identify Custodians: As we learned in Voom HD Holdings v. EchoStar Satellite LLC, 600292/08, It’s important to completely identify all potential custodians and suspend any automatic deletion policies that might result in deletion of data subject to litigation.  In this case, EchoStar put a litigation hold in place, instructing employees to save anything that they deemed potentially relevant to the litigation, but did not extend this hold to stopping automatic deletion of eMails from EchoStar's computers until four months later in June 2008.  As a result of their untimely and incomplete hold, EchoStar was given an adverse inference sanction (their second one!).

Custodians can be individuals or non-custodial (i.e., not held by a specific individual) sources such as IT and records management departments.  To determine a complete list of custodians, it’s generally best to conduct interviews of people identified as key players for the case, asking them to identify other individuals who are likely to have potentially relevant data in their possession.

Prepare Written Hold Notice: Hold notices should be in writing, and should typically be written in a standard format.  They should identify all types of data to be preserved and for what relevant period.  Sometimes, hold notices are customized depending on the types of custodians receiving them (e.g., IT department may receive a specific notice to suspend tape destruction or disable auto-deletion of emails).

Distribute Hold Notice: It is important to distribute the notice using a communication mechanism that is reliable and verifiable. Typically, this is via email. It’s rare to use paper notices anymore as they are more difficult to track. Distribution should occur only to the selected and specific individuals likely to have potentially relevant information, usually not company-wide, as not everyone will understand the parameters of the hold.  Notices with overly broad distributions have, in some cases, been deemed inadequate by courts.

Track Responses: It is advisable to require recipients of the litigation hold notice to confirm their receipt and understanding of the notice via a method that can be tracked.  Receipt and read notifications or voting buttons in emails could be used for this purpose, but they may not always be acceptable, since there is no guarantee that the recipient actually read or understood the notice.  Perhaps a better approach is to send each recipient an attached form that enables them to acknowledge each instruction within the hold notice to confirm a more complete understanding – these forms can even be set up as enterable PDF forms that even enable digital signatures so that no printing is required.

Tomorrow, we’ll discuss follow up on notices, releasing holds when the obligation to preserve is removed and tracking all holds within an organization.  Hasta la vista, baby!

So, what do you think?  Do you have a solid “hold” on your hold process?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Daily Is Eighteen! (Months Old, That Is)
 

Eighteen months ago yesterday, eDiscovery Daily was launched.  A lot has happened in the industry in eighteen months.  We thought we might be crazy to commit to a daily blog each business day.  We may be crazy indeed, but we still haven’t missed a business day yet.

The eDiscovery industry has grown quite a bit over the past eighteen months and is expected to continue to do so.   So, there has not been a shortage of topics to address; instead, the challenge has been selecting which topics to address.

Thanks for noticing us!  We’ve more than doubled our readership since the first six month period, had two of our biggest “hit count” days in the last month and have more than quintupled our subscriber base since those first six months!  We appreciate the interest you’ve shown in the topics and will do our best to continue to provide interesting and useful eDiscovery news and analysis.  And, as always, please share any comments you might have or if you’d like to know more about a particular topic!

We also want to thank the blogs and publications that have linked to our posts and raised our public awareness, including Pinhawk, The Electronic Discovery Reading Room, Unfiltered Orange, Atkinson-Baker (depo.com), Litigation Support Technology & News, Next Generation eDiscovery Law & Tech Blog, InfoGovernance Engagement Area, Justia Blawg Search, Learn About E-Discovery, Ride the Lightning, Litigation Support Blog.com, ABA Journal, Law.com and any other publication that has picked up at least one of our posts for reference (sorry if I missed any!).  We really appreciate it!

As we’ve done in the past, we like to take a look back every six months at some of the important stories and topics during that time.  So, here are some posts over the last six months you may have missed.  Enjoy!

eDiscovery Trends: Is Email Still the Most Common Form of Requested ESI?

eDiscovery Trends: Sedona Conference Provides Guidance for Judges

eDiscovery Trends: Economy Woes Not Slowing eDiscovery Industry Growth

eDiscovery Law: Model Order Proposes to Limit eDiscovery in Patent Cases

eDiscovery Case Law: Court Rules 'Circumstantial Evidence' Must Support Authorship of Text Messages for Admissibility

eDiscovery Best Practices: Cluster Documents for More Effective Review

eDiscovery Best Practices: Could This Be the Most Expensive eDiscovery Mistake Ever?

eDiscovery 101: Simply Deleting a File Doesn’t Mean It’s Gone

eDiscovery Case Law: Facebook Spoliation Significantly Mitigates Plaintiff’s Win

eDiscovery Best Practices: Production is the “Ringo” of the eDiscovery Phases

eDiscovery Case Law: Court Grants Adverse Inference Sanctions Against BOTH Sides

eDiscovery Trends: ARMA International and EDRM Jointly Release Information Governance White Paper

eDiscovery Trends: The Sedona Conference International Principles

eDiscovery Trends: Sampling within eDiscovery Software

eDiscovery Trends: Small Cases Need Love Too!

eDiscovery Case Law: Court Rules Exact Search Terms Are Limited

eDiscovery Trends: DOJ Criminal Attorneys Now Have Their Own eDiscovery Protocols

eDiscovery Best Practices: Perspective on the Amount of Data Contained in 1 Gigabyte

eDiscovery Case Law: Computer Assisted Review Approved by Judge Peck in New York Case

eDiscovery Case Law: Not So Fast on Computer Assisted Review

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Not So Fast On eDiscovery Cost Reimbursement
 

Yesterday, we noted a potential reversal in the case approving computer-assisted review of electronically stored information (“ESI”) in the Southern District of New York.  Today, we look at another eDiscovery ruling where a significant reduction in award amount was ruled.

One of the emerging trends for 2011 was the growing number of cases where the prevailing party was awarded reimbursement of eDiscovery costs, including this case and this case.  Another case of eDiscovery cost reimbursement reported in this blog was Race Tires Amer., Inc. v. Hoosier Racing Tire, Corp., No. 2:07-cv-1294, 2011 WL 1748620 (W.D. Pa. May 6, 2011), where U.S. District Judge Terrence F. McVerry in Pittsburgh ruled that the winning defendants in an antitrust case were entitled to reimbursement of more than $367,000 in eDiscovery costs. 

The plaintiff had argued previously that the costs should be disallowed because "electronic document collection, hard drive imaging and indexing and searching, commonly referred to as 'eDiscovery charges,' are not enumerated under Section 1920(4), and thus are not properly deemed recoverable costs."  But Judge McVerry found that Congress, in the Judicial Administration and Technical Amendments Act of 2008, modified the wording of Section 1920(4), changing the phrase "fees for exemplifications and copies of papers" to read "fees for exemplification and the costs of making copies of any materials."  Since that amendment, Judge McVerry said, "no court has categorically excluded eDiscovery costs from allowable costs."

Given the extent of the defendant’s eDiscovery activities, including copying nearly 500 gigabytes of data in response to over 400 search terms and creation of a litigation database, the court awarded $367,000 of the $389,000 eDiscovery costs requested by the defendants.

Naturally, the plaintiffs appealed that ruling to the Third Circuit Court of Appeals.

In a ruling that will undoubtedly not be popular with corporate defendants, the Third Circuit ruled that only an isolated portion of eDiscovery costs was taxable. As noted by the appeals court:

“The decisions that allow taxation of all, or essentially all, electronic discovery consultant charges, such as the District Court‘s ruling in this case, are untethered from the statutory mooring. Section 1920(4) does not state that all steps that lead up to the production of copies of materials are taxable. It does not authorize taxation merely because today‘s technology requires technical expertise not ordinarily possessed by the typical legal professional. It does not say that activities that encourage cost savings may be taxed.”

As a result, the appeals court significantly reduced the eDiscovery costs that the plaintiffs would have owed Hoosier and DMS under the lower court’s decision:

“We conclude that of the numerous services the vendors performed, only the scanning of hard copy documents, the conversion of native files to TIFF, and the transfer of VHS tapes to DVD involved copying, and that the costs attributable to only those activities are recoverable under § 1920(4)‘s allowance for the costs of making copies of any materials. Those costs total $30,370.42. We find that none of the charges imposed by DMS‘s vendor are taxable, and that the award in favor of Hoosier should be reduced by $95,210.13, the difference between the  electronic discovery vendors‘ charges awarded by the District Court ($125,580.55) and the charges of Hoosier‘s electronic discovery vendors we find taxable ($30,370.42).” {emphasis added}

So, what do you think?  Do you agree with the narrow ruling of taxable eDiscovery costs or do you think the original, more expansive ruling was correct?  Will this lead to more cases settling?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Not So Fast on Computer Assisted Review
 

A few weeks ago, in Da Silva Moore v. Publicis Groupe & MSL Group, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y. Feb. 24, 2012), Magistrate Judge Andrew J. Peck of the U.S. District Court for the Southern District of New York issued an opinion approving of the use of computer-assisted review of electronically stored information (“ESI”) for this case, making it likely the first case to recognize that “computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.”  However, last Tuesday (March 13), District Court Judge Andrew L. Carter, Jr. granted plaintiffs’ request to submit additional briefing on their objections to the ruling.

On February 8, the parties attended a hearing to discuss their discovery protocol, and in particular the use of computer-assisted review (also referenced as “predictive coding”).  At the hearing, Judge Peck issued a ruling, approving the use of computer-assisted review, and instructed the parties to submit a draft protocol for court approval.  Judge Peck approved the proposed protocol on February 22 that had been submitted, over the plaintiffs’ objections.  On February 24, Judge Peck issued his written opinion detailing his rulings from the February 8th hearing.

On February 22 (the same day the protocol was approved, but before Judge Peck’s written opinion), the plaintiffs filed their 24 page objections to the February 8th discovery rulings, indicating their argument that the “Magistrate’s decision to adopt MSL’s predictive coding protocol is clearly erroneous and contrary to law.”  The plaintiffs specifically argued that “sanctioning the use of predictive coding in this employment discrimination case violates Federal Rule of Civil Procedure 26” and also argued that the court’s adoption of a “novel discovery methodology” without “supporting evidence” or “standards for assessing reliability” was “clearly erroneous and contrary to law”.  On March 7, the defendant filed its opposition to plaintiffs’ objections.

Then, on March 9, the plaintiffs submitted a letter to District Judge Carter, requesting an opportunity to “file a ten-page reply brief” to the defendant’s response.  In the letter, the plaintiffs argued that Judge Peck’s written ruling, issued two days after their objections were filed, “expanded on the reasoning for the rulings he had made from the bench,” including relying on “a number of articles that were not addressed in the parties’ submissions” and making observations about plaintiffs’ objections.  As a result, the plaintiffs requested the opportunity to “squarely address Magistrate Judge Peck’s complete rulings.”  In addition, the plaintiffs argued that allowing their reply would not result in prejudice where the defendant had “the benefit” of filing its opposition to plaintiffs’ objections after the written ruling was issued and thus had the opportunity to consider Magistrate Judge Peck’s analysis when crafting their response.

Which brings us to last Tuesday (March 13), Judge Carter granted plaintiffs’ request and ordered their reply be submitted by March 19 (that’s today!).  Then, we’ll see what happens next.

So, what do you think?  Do the plaintiff’s objections have merit?  If Judge Carter throws out predictive coding, will there be hand wringing and wailing from the predictive coding vendors?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery History: A Look Back at Zubulake
 

Yesterday, we discussed a couple of cases within a month’s time where the New York Appellate Division has embraced the federal standards of Zubulake v. UBS Warburg LLC, 220 FRD 212.  Those of us who have been involved in litigation support and discovery management for years are fully aware of the significance of the Zubulake case and its huge impact on discovery of electronic data.  Even if you haven’t been in the industry for several years, you’ve probably heard of the case and understand that it’s a significant case.  But, do you understand just how many groundbreaking opinions resulted from that case?  For those who aren’t aware, let’s take a look back.

The plaintiff, Laura Zubulake, filed suit against her former employer UBS Warburg, alleging gender discrimination, failure to promote, and retaliation. Southern District of New York Judge Shira Sheindlin's rulings in this case are the most often cited in the area of electronic discovery, and were issued prior to the 2006 amendments to the Federal Rules of Civil Procedure. That’s somewhat like establishing laws before the Ten Commandments!  The important opinions related to eDiscovery are commonly known as Zubulake I, Zubulake III, Zubulake IV and Zubulake V.  Here is a summary of each of those opinions:

Zubulake v. UBS Warburg, 217 F.R.D. 309 (Zubulake I) and Zubulake v. UBS Warburg, 216 F.R.D. 280 (S.D.N.Y. 2003) (Zubulake III)

The plaintiff argued that key evidence was located in various emails exchanged among employees of UBS, the defendant. Initially, the defendant produced about 350 pages of documents, including approximately 100 pages of email, but the plaintiff produced approximately 450 pages of email correspondence on her own. To address the discrepancy, the plaintiff requested for UBS to locate the documents that existed in backup tapes and other archiving media.

The defendant, arguing undue burden and expense, requested the court to shift the cost of production to the plaintiff, citing Rowe Entertainment v. The William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002). In May 2003, the court ruled stating that whether the production of documents is unduly burdensome or expensive "turns primarily on whether it is kept in an accessible or inaccessible format". The court determined that the issue of accessibility depends on the media on which data are stored. It described five categories of electronic media, as follows:

  1. Online data, including hard disks;
  2. Near-line data, including optical disks;
  3. Offline storage, such as magnetic tapes;
  4. Backup tapes;
  5. Fragmented, erased and damaged data.

The last two categories were considered inaccessible as they were not readily available and thus subject to cost-shifting. Discussing the Rowe decision, the court concluded that it needed modification and created a new seven factor balance test for cost-shifting:

  1. The extent to which the request is specifically tailored to discover relevant information;
  2. The availability of such information from other sources;
  3. The total cost of production, compared to the amount in controversy;
  4. The total cost of production, compared to the resources available to each party;
  5. The relative ability of each party to control costs and its incentive to do so;
  6. The importance of the issues at stake in the litigation; and
  7. The relative benefits to the parties of obtaining the information.

The defendant was ordered to produce, at its own expense, all responsive email existing on its servers, optical disks, and five backup tapes as selected by the plaintiff. The court would only conduct a cost-shifting analysis after the review of the contents of the backup tapes.

In July 2003, Zubulake III applied the cost-shifting test outlined in Zubulake I based on the sample recovery of data from five backup tapes.  After the results of the sample restoration, both parties wanted the other to fully pay for the remaining backup email. The sample cost the defendant about $19,003 for restoration but the estimated costs for production was $273,649, including attorney and paralegal review costs. After applying the seven factor test, it determined that the defendant should account for 75 percent of the restoration and searching costs, excluding attorney review costs.

Zubulake v. UBS Warburg, 220 F.R.D. 212 (S.D.N.Y. 2003) (Zubulake IV)

During the restoration effort, the parties discovered that some backup tapes were no longer available. The parties also concluded that relevant emails created after the initial proceedings had been deleted from UBS's email system and were only accessible on backup tapes. The plaintiff then sought an order requiring UBS to pay for the total costs of restoring the remaining backup tapes and also sought an adverse inference instruction against UBS and the costs for re-deposing some individuals required because of the destruction of evidence.

In October 2003, Judge Scheindlin found that the defendant had a duty to preserve evidence since it should have known that it would be relevant for future litigation. However, at the time, she concluded that the plaintiff failed to demonstrate that the lost evidence supported the adverse inference instruction claim. But, she did order the defendant to cover the costs as claimed by the plaintiff.

Zubulake v. UBS Warburg, 2004 WL 1620866 (S.D.N.Y. July 20, 2004) (Zubulake V)

In July 2004, Judge Scheindlin ruled that UBS had failed to take all necessary steps to guarantee that relevant data was both preserved and produced, and granted the plaintiff's motion for adverse inference instruction sanctions, sought in Zubulake IV, due to the deleted evidence (emails and tapes) and inability to recover key documents during the course of the case.

The court also indicated that defense counsel was partly to blame for the document destruction because it had failed in its duty to locate and preserve relevant information. In addressing the role of counsel in litigation, the court stated that "[c]ounsel must take affirmative steps to monitor compliance so that all sources of discoverable information are identified and searched" by ensuring all relevant documents are discovered, retained, and produced and that litigators must guarantee that relevant documents are preserved by instituting a litigation hold on key data, and safeguarding archival media.

In the final instructions to the jury Judge Scheindlin instructed in part, "[i]f you find that UBS could have produced this evidence, the evidence was within its control, and the evidence would have been material in deciding facts in dispute in this case, you are permitted, but not required, to infer that the evidence would have been unfavorable to UBS." In addition, monetary sanctions were awarded to the plaintiff for reimbursement of costs of additional re-depositions and of the motion leading to this opinion, including attorney fees. The jury found in the plaintiff’s favor on both claims awarding compensatory and punitive awards totaling $29.2 million.

Judge Scheindlin’s opinions in Zubulake, including definitions of accessible and inaccessible data, the seven factor balance test for cost shifting and definition of counsel’s obligation for preserving data, have been referenced in numerous cases since and have provided guidance to organizations preparing for litigation.  For any of you who may not have fully understood the significance of the case, I hope this look back was helpful.

So, what do you think?  Did you learn something new about Zubulake?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: The Zubulake Rules of Civil Procedure
 

As noted in Law Technology News (N.Y. Appellate Division Continues to Press 'Zubulake' EDD Standard) recently, the New York Appellate Division has embraced the federal standards of Zubulake v. UBS Warburg LLC, 220 FRD 212 in two case rulings within a month’s time.

In Voom HD Holdings v. EchoStar Satellite LLC, 600292/08, the decision, written by Justice Sallie Manzanet-Daniels, was the first by a New York state appellate court to apply the standard for spoliation of electronic evidence applied by Judge Shira Scheindlin in Zubulake in 2003.  As defined by Judge Scheindlin, the Zubulake standard asserts that "once a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a 'litigation hold' to ensure the preservation of relevant documents."

The case relates to a 2005 contract dispute between EchoStar and Cablevision subsidiary Voom HD Holdings, within which Voom agreed to provide EchoStar rights to broadcast Voom's programming.  Once the case was filed by Voom in February 2008, EchoStar put a litigation hold in place, instructing employees to save anything that they deemed potentially relevant to the litigation, but did not extend this hold to stopping automatic deletion of eMails from EchoStar's computers until four months later in June 2008.

Voom moved for spoliation sanctions against EchoStar for failing to preserve its eMails and Manhattan Supreme Court Justice Richard Lowe granted the motion, citing Zubulake, finding that EchoStar should have put in place a litigation hold (including a stop to automatic deletion of e-mails) in June 2007, when its corporate counsel sent Voom a letter containing a notice of breach, a demand and an explicit reservation of rights (i.e., reasonably anticipated litigation).  Therefore, EchoStar was given an adverse inference sanction (they had also received a similar sanction in 2005 in Broccoli v. EchoStar Communications Corp., 229 FRD 506).

EchoStar appealed and requested the appellate court to adopt a rule that a company must preserve documents when litigation is pending or when it has "notice of a specific claim."  However, that argument was rejected by The First Department, which ruled that “EchoStar and amicus's approach would encourage parties who actually anticipate litigation, but do not yet have notice of a 'specific claim' to destroy their documents with impunity” and upheld the sanction.

In U.S. Bank National Association v. GreenPoint Mortgage Funding Inc., 600352/09, the First Department held that the producing party should bear the initial costs of "searching for, retrieving and producing discovery," but that lower courts may permit cost shifting based on the factors set forth in Zubulake.  The case was filed by U.S. Bank, NA (indenture trustee for the insurers and holders of the mortgage-backed notes issued by GreenPoint Mortgage Funding Inc., a now defunct mortgage lender specializing in "no-doc" and "low-doc" loans) against GreenPoint.

U.S. Bank served its first document production request on GreenPoint along with its original complaint; however, GreenPoint did not produce the requested documents.  Instead, they moved for a protective order arguing that U.S. Bank should pay the costs associated with its document requests including the cost of attorney review time for confidentiality and privilege assertions.  The court upheld GreenPoint's argument that the "party seeking discovery bears the costs incurred in its production" but rejected GreenPoint's request for U.S. Bank to also bear the attorney costs for privilege and confidentiality determinations.

Upon appeal, the First Department reversed the lower court's conclusion that the requesting party bear the cost of production, finding that, per the Federal Rules of Civil Procedure and Zubulake, the producing party should “bear the cost of the searching for, retrieving, and producing documents, including electronically stored information.”  In the February 28 ruling, Justice Rolando Acosta wrote that the court was “persuaded that Zubulake should be the rule in this Department.”  However, the court also ruled that the lower court could order cost shifting under CPLR Article 31 between the parties by considering the seven factors set forth in Zubulake.

What are those seven factors?  Tune in tomorrow, when we will provide a refresher to the Zubulake case and its various opinions!

So, what do you think?  Is the Zubulake standard appropriate for these two cases?  Is it appropriate for cases in general?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Case Law: Plaintiff Not Compelled To Turn Over Facebook Login Information
 

In Davids v. Novartis Pharm. Corp., No. CV06-0431, (E.D.N.Y. February 24, 2012), the Eastern District of New York ruled against the defendant on whether the plaintiff in her claim against a pharmaceutical company could be compelled to turn over her Facebook account’s login username and password.

Plaintiff claimed ongoing suffering from osteonecrosis of the jaw (a severe bone disease that affects the maxilla and the mandible) against the defendant. Defendant served Plaintiff with its Second Set of Requests for Production of Documents, which requested Plaintiff’s log-in information to all of her social-networking websites and a release allowing Defendant to obtain documents directly from those websites so that Defendant could inspect all documents that relate to her claim.  In responding to the request, the Plaintiff only produced materials that were available to all Facebook users — not items hidden through Facebook’s privacy settings — claiming that the request was overbroad and a fishing expedition. As a result, the Defendant filed a motion to compel the Plaintiff to turn over her login information, including login for Facebook.

Why did the Defendant request the additional access?  As noted in the transcript:

“Defendant argues that Plaintiff's log-in information is discoverable because statements or pictures on her Facebook page relate directly to her claim of ongoing suffering from osteonecrosis of the jaw. Defendant's claim is predicated on Ms. Davids' profile picture, in which Defendant claims she is smiling. Defendant did not inquire about Ms. Davids' social networking activity at her deposition.”

In the process of determining whether the Defendant could compel such discovery, Magistrate Judge William Wall first noted that “[n]o cases in the Second Circuit or the Eastern District of New York have directly addressed this issue”.  The Defendant based its argument on two cases where access to social media information was granted: Largent v. Reed, 2011 WL 5632688, (Pa. C.P. Franklin Co. Nov. 8, 2011) and Romano v. Steelcase Inc., 907 N.Y.S.2d 650 (N.Y. Sup. Ct. 2010).  In both cases, “publically available content on the individual plaintiffs’ public Facebook profiles provided sufficient relevant information for the courts to infer that further discovery was necessary”; however, as the court noted in this case, “no such evidence exists”.  Therefore, the court ruled as follows:

“Defendant's argument that Plaintiff smiling in her profile picture on Facebook satisfies its burden in this motion to compel is without merit. Even if Plaintiff is smiling in her profile picture, which is not clear to the court, one picture of Plaintiff smiling does not contradict her claim of suffering, nor is it sufficient evidence to warrant a further search into Plaintiff's account.”

As a result, the court denied the defendant’s motion to compel.

So, what do you think?  Was the lack of publically available content sufficient justification for not granting the motion to compel?  Or should this case have been handled in the same manner as Largent and Romano?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: The Rest of the Team
 

When beginning a new eDiscovery project, it's important to start by estimating the various tasks that will need to be performed and the type of personnel that will be needed. As the project unfolds, the tasks required to complete it may change, so it is important to revisit the project tasks and assignments to determine whether additional personnel are needed or if you can cut back. Yesterday, we began discussing the types of roles that could be associated with a typical eDiscovery project, here are some more:

Processing Personnel: After your team has identified and collected the ESI, it will usually be necessary to process that ESI with one or more software applications to prepare the data for searching and review to reduce or cull the data volume (such as an early case assessment tool like FirstPass®, powered by Venio FPR™) and limit review to the most highly relevant documents. There are several tools and/or service providers available to process your ESI; it’s simply a matter of selecting the best tool(s) for your organization. For each case, key decision makers on the team will need to evaluate the specific needs of that case to determine whether additional software or an outside vendor is needed and select the appropriate software to license and/or vendor to engage, if so.

Document Review Personnel: After identifying, collecting and processed the ESI, it needs to be reviewed by qualified review personnel to at least determine if it is responsive to the production request from opposing counsel and if it should be withheld due to a claim of privilege. Depending on the case, the ESI may need to be reviewed for other reasons or the review for responsiveness and/or privilege may be more in-depth.  Usually, the reviewers are licensed attorneys; though, experienced paralegals are used in some cases. Either way, they will require training and guidance regarding the expectations of their job in general, receive instructions on the specific review project which they are working on, and be properly trained on use of the selected review application.

Hosting Provider: Depending on the case, you may use a hosting provider for the ESI from as early as collection through production. Large volume of ESI to be processed and reviewed, requirement to distribute review tasks across personnel who may be in different geographical locations, and the arrangements between the parties concerning the method and format of production are factors for deciding to use a hosting provider and also for selecting the desired provider.

Attorney(s): Did you think I forgot the attorneys?  Of course, potentially complicated legal questions and issues arise in just about any discovery project, so you need an attorney who understands the legal rules and complexities associated with discovery of ESI. If the lead attorney doesn’t have the requisite knowledge in this area, it may be necessary to add an attorney with specialized eDiscovery knowledge to the team to provide advice and coordination on discovery issues.  Many corporations have designated attorneys or paralegals on their in house legal staff who work on all eDiscovery matters; however, some organizations may also use outside eDiscovery counsel to work on discovery-related matters even if they’re not part of the firm representing the organization.

Each case will have unique requirements that affect the make-up and size of the team, so not all of the roles discussed over the past two days will be required for every case and the number of personnel in each role may also vary.

So, what do you think?  Do you estimate the team members needed for your project before it begins?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

eDiscovery Best Practices: Who’s On Your Team?
 

When beginning a new eDiscovery project, a good place so start is to estimate the various tasks that will need to be performed and identify the type of personnel that will be needed. Every project is different and unique, so the requirements of each project must be assessed. As the project unfolds, the tasks required to complete it may change – not just in terms of tasks added, but also tasks removed if the work is deemed to be unnecessary.  So, it is important to revisit the project tasks and assignments to determine whether additional personnel are needed or if you can cut back. Here are the types of roles that could be associated with a typical eDiscovery project:

Client Contact(s): It’s important for the client to be involved in the process, so the team should include at least one client representative that can serve as the link between the internal and external teams, providing guidance on internal company workings and contact personnel. Typically, the client contact is from the in-house legal department, usually either a paralegal (to handle routine tasks) or an attorney (to discuss issues and coordinate decision making).  When preservation and collection are required, the client contact(s) generally assist with litigation hold procedures, locating and collecting ESI, and conducting interviews of custodians. It is up to the client contact(s) to involve key managers and custodians as needed to provide guidance during this process.

IT Personnel: When responding to requests for ESI, let’s face it – you need your trusty geek.  Or geeks.  It’s important to include personnel who understand technical details about the client’s various computer systems and data.  Depending on the case, you need one or more individuals who understand any and all of the above: email and email archiving, storage of employee ESI, servers, clients, intranets, and databases. It’s typical for IT personnel in larger organizations to specialize; for example, to have one or more that is more knowledgeable about structured data (i.e. database programs) while others may understand and have access to email systems. 

IT personnel should be involved in all issues related to the technology for the responding party to increase efficiency and optimize the approach to each new case. For many corporations, this is typically one or more individuals already employed as a member of the IT staff.  It’s important for IT personnel to have at least a basic understanding of the legal processes and requirements of discovery.  If they don’t have that, it may be necessary to provide some training before a case arises or employ an outside consultant.

Forensic Collection Personnel: In some cases, it’s necessary to perform forensic analysis on various types of ESI (or at least collect the ESI in a forensic manner in the event that’s required). Examples of cases that may require forensic collection of electronic data include internal integrity investigations, situations where fraud and data deletion are suspected (such as trade secret cases) and government civil or criminal investigations. To enable the forensic specialist to testify (if required) to the work that was performed and exactly how it was done, companies often use a vendor not employed by the company or by the outside law firm.

See at least one critical team component missing?  Tomorrow, we’ll talk about the rest of the team.  Same bat time, same bat channel!

So, what do you think?  Do you estimate the team members needed for your project before it begins?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.