eDiscovery ROI and ESI Archiving


The Cost of Collection:

Medium to large sized organizations are being driven to lower their overall litigation costs by bringing more of the eDiscovery processes in-house. To do this, organizations need to understand and proactively plan for the eDiscovery process. The most cost effective way to quickly lower eDiscovery costs are to prepare for the collection phase by putting in place an ESI archive to capture and manage those ESI silos that are most requested…Email, File System and SharePoint ESI.

The average cost to acquire all potentially responsive ESI from all corporate infrastructure locations including email servers, file shares, SharePoint systems, as well as from all custodian locations including desktop/laptops, local external storage devices, portable media such as USB thumb drives, CDs and DVDs in a defensible manner is between $1000 and $2000 per custodian discovered.

Realistically, the cost of eDiscovery can be reduced dramatically if your organization understands the eDiscovery process and proactively plans for it. Some areas to look at include:

  1. The number one way to reduce e-discovery expense (besides not getting sued/investigated) is having less data to collect/review
  2. Create, follow and enforce an ESI records retention policy to control legacy data including backup retention which should be in sync with the retention ESI retention policies
  3. Eliminate custodian PSTs. These little bombs are the biggest contributor to the cost of collection and review
  4. Develop and implement a litigation hold policy and have all custodians review and signoff on it
  5. For medium to large organizations, the most effective cost and risk reducer, besides reducing the amount of ESI in your organization, is to put a centrally managed ESI archive in place with centrally managed ESI retention policies. If, for example, you have an ESI archive which collects and manages your email data, file system data and your SharePoint data, the most requested ESI data types in discovery, then for those data types, you no longer have to search every custodian’s workstations, removable media, etc. A simple query of the archive will let you find, place legal holds, cull, review and export responsive ESI in a fraction of the time you normally take.
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Anatomy of an Adverse Inference


In the investor related action, Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Secs, No. CIV. 05-9016, 2010 U.S. Dist. LEXIS 1839 (S.D.N.Y. Jan. 11, 2010) the defendants, who were connected to a hedge fund that lost money, sought sanctions against the plaintiffs for failing to preserve and produce documents, including ESI, and for submitting false declarations regarding their collection and production efforts. The Judge in this case was the Honorable Shira A. Scheindlin.

This case came down to two questions about litigation holds: when should a litigation hold be initiated, and what actions are required in the placement and tracking of the litigation hold.

In addressing the charges of spoliation, the court’s opinion included:

“[i]t is well established that the duty to preserve evidence arises when a party reasonably anticipates litigation. “‘[O]nce 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.’” A plaintiff’s duty is more often triggered before litigation commences, in large part because plaintiffs control the timing of litigation.

When the spoliating party’s conduct is sufficiently egregious to justify a court’s imposition of a presumption of relevance and prejudice, or when the spoliating party’s conduct warrants permitting the jury to make such a presumption, the burden then shifts to the spoliating party to rebut that presumption.

“[i]n short, the innocent party must prove the following three elements: that the spoliating party (1) had control over the evidence and an obligation to preserve it at the time of destruction or loss; (2) acted with a culpable state of mind upon destroying or losing the evidence; and that (3) the missing evidence is relevant to the innocent party’s claim or defense.”

The Court issued the following adverse inference instruction to the jury:

The Citco Defendants have demonstrated that most plaintiffs conducted discovery in an ignorant and indifferent fashion. With respect to the grossly negligent plaintiffs – 2M, Hunnicutt, Coronation, the Chagnon Plaintiffs, Bombardier Trusts, and the Bombardier Foundation – I will give the following jury charge:

The Citco Defendants have argued that 2M, Hunnicutt, Coronation, the Chagnon Plaintiffs, Bombardier Trusts, and the Bombardier Foundation destroyed relevant evidence, or failed to prevent the destruction of relevant evidence. This is known as the “spoliation of evidence.”

Spoliation is the destruction of evidence or the failure to preserve property [*104] for another’s use as evidence in pending or reasonably foreseeable litigation. To demonstrate that spoliation occurred, the Citco Defendants bear the burden of proving the following two elements by a preponderance of the evidence:

First, that relevant evidence was destroyed after the duty to preserve arose. Evidence is relevant if it would have clarified a fact at issue in the trial and otherwise would naturally have been introduced into evidence; and

Second, that 2M, Hunnicutt, Coronation, the Chagnon Plaintiffs, Bombardier Trusts, and the Bombardier Foundation were grossly negligent in their failure to preserve the evidence.

I instruct you, as a matter of law, that each of these plaintiffs failed to preserve evidence after its duty to preserve arose. 250 As a result, you may presume, if you so choose, that such lost evidence was relevant, and that it would have been favorable to the Citco Defendants. In deciding whether to adopt this presumption, you may take into account the egregiousness of the plaintiffs’ conduct in failing to preserve the evidence.

However, each of these plaintiffs has offered evidence that (1) no evidence was lost; (2) if evidence was lost, it was not relevant; and (3) if evidence was lost and it was relevant, it would not have been favorable to the Citco Defendants.

If you decline to presume that the lost evidence was relevant or would have been favorable to the Citco Defendants, then your consideration of the lost evidence is at an end, and you will not draw any inference arising from the lost evidence.

However, if you decide to presume that the lost evidence was relevant and would have been unfavorable to the Citco Defendants, you must next decide whether any of the following plaintiffs have rebutted that presumption: 2M, Hunnicutt, Coronation, the Chagnon Plaintiffs, Bombardier Trusts, or the Bombardier Foundation. If you determine that a plaintiff has rebutted the presumption that the lost evidence was either relevant or favorable to the Citco Defendants, you will not draw any inference arising from the lost evidence against that plaintiff. If, on the other hand, you determine that a plaintiff has not rebutted the presumption that the lost evidence was both relevant and favorable to the Citco Defendants, you may draw an inference against that plaintiff and in favor of the Citco Defendants – namely that the lost evidence would have been  favorable to the Citco Defendants.

Each plaintiff is entitled to your separate consideration. The question as to whether the Citco Defendants have proven spoliation is personal to each plaintiff and must be decided by you as to each plaintiff individually.

The Court also noted, “[w]hile litigants are not required to execute document productions with absolute precision, at a minimum they must act diligently and search thoroughly at the time they reasonably anticipate litigation. All of the plaintiffs in this motion failed to do so and have been sanctioned accordingly.”

The courts are moving towards being much less lenient in the question of when should ESI be protected from deletion due to potential civil litigation and also whats expected of the attorneys in protecting potentially responsive ESI.   Corporate Attorneys should always be conservative in their handling of the litigation hold question.

Place holds quickly, communicate the holds to custodians quickly, even those at the periphery of the case, track the custodians actions around the hold communication, and lastly, document everything.

Taking litigation holds seriously will lower your overall litigation cost and risk.

Employer’s Email Use Policy an Important Factor in Privilege


In a recent article in Law Technology News written by Anthony E. Davis titled “More Privilege Issues With Employee Email”, an interesting issue was posed: Should an employee expect that emails between themselves and their attorney be privileged when using the company’s email system?

Mr. Davis pointed to a case, Leor Exploration & Production LLC, et al., v. Aguiar, 2009 WL 3097207 (S.D. Fla.)(doc), where the court considered this question. The court cited another case, In Re Asia Global Crossing, Ltd., 322 B.R. 247, 257 (SDNY 2005), where four factors were listed:

  1. does the corporation maintain a policy banning personal or other objectionable use,
  2. does the company monitor the use of the employee’s computer or email,
  3. do third parties have a right of access to the computer or e-mails, and
  4. did the corporation notify the employee, or was the employee aware, of the use and monitoring policies?”

In this case, if the answer was yes, then the employee should have had no reasonable expectation of privacy. This highlights the need to a corporate email use policy with documented processes. If through widely disseminated policies, the company did notify the employee of potential monitoring of email and stated that the corporate email system should not be used for personal use, then attorney client privilege is hard to prove.

Companies in the U.S. need to prepare themselves for the eDiscovery process by proactively collecting ESI including employee email so that they can quickly and effectively place legal holds and query that ESI archive for eDiscovery responce.

What should companies do to better protect themselves? Obviously they should develop email use policies that plainly state the above practices and train their employees on the email use policy.