The duty to preserve ESI is not always cut and dried

The amendments to the Federal Rules of Civil Procedure (FRCP) describe the duty to preserve potential evidence when litigation can be reasonably anticipated. The term “reasonably anticipated” is a key idea and one that has caused many arguments over the last four-plus years. To make the point that organizations need to be conservative and take this seriously, it makes sense to look at a case that has gone on for several years.

On April 17, 2008, Phillip M. Adams & Associates L.L.C. (Adams) filed a motion for sanctions against ASUSTEK Computer, Inc. and ASUS Computer International for spoliation (destruction) of evidence. Adams claimed that “ASUS has destroyed the source code and documents relating to ASUS’s test programs, as well as other documents that would have conclusively demonstrated ASUS’ piracy.” On March 30, 2009, the magistrate judge issued a decision granting in part Adams’s motion. The magistrate judge found that “the universe of materials we are missing is very large,” and that “we have very little evidence compared to what would be expected.” In this case, the court reaffirmed its earlier holding regarding the trigger for defendants’ duty to preserve, namely that “in late 1999 the entire computer and component manufacturer’s industry was put on notice of a potential for litigation regarding defective floppy disk components (“FDCs”) by the well publicized settlement in a large class action lawsuit against Toshiba.”  In this ongoing case, a litigation hold responsibility was triggered by a settlement years before. The magistrate judge further found that “ASUS’ practices invite the abuse of the rights of others, because the practices tend toward loss of data.” In other words when the case was in process in 2008, the defendants should have applied a litigation hold to specific data back in 1999-2000, eight to nine years before the case showed up in court.

A related recent ruling: Phillip M. Adams & Assoc., LLC v. Windbond Elecs. Corp., 2010 WL 3767318 (D. Utah Sept. 16, 2010)

What does this mean for organizations today? Well, it’s difficult to “anticipate” future litigation so be conservative in your litigation hold triggering events meaning if even the slightest possibility exists of litigation based on external events, news stories etc. lock down that potentially responsive ESI as soon as possible. That’s easy to say but difficult to accomplish. The first step as pointed out in this case is to train your staff and employees to be sensitive to these “events” and to not be shy about pointing them out to your corporate legal department. The point is to manage your ESI more effectively. If you have control of your data you have a better chance of reacting to and finding responsive ESI when you need to and securing it.


French Email Privacy Restrictions Not Always FRCP Obstruction

The two blog entries below point out some slightly different views of an interesting case about employee email privacy decided in France on Dec 15, 2009. The case was: Bruno B. vs. Giraud et Migot, Cour de Cassation, Chambre Sociale, Paris, 15 Dec. 2009, No. 07-44264

From the Hogan & Hartson blog: The French high labor court (the Cour de Cassation Chambre Sociale) may have provided some grounds for arguing that a party in France can review a French employee’s e-mails and electronically stored information to determine whether the data is relevant to a U.S. litigation, without the employee’s knowledge or presence.  This is a significant development in the perennial tension between EU privacy law and U.S. discovery principles.

French employee privacy protection policies usually block U.S. FRCP eDiscovery requests that request French employee email for a case in the United States.  This case, on the face of it, seemed to set a precedent in the ruling saying the employer could review French employee email and ESI without the employees knowledge.

From the e-Disclosure Information Project Blog: There is no doubt, however, that many will use it as a reason to ignore everything they have heard about EU privacy. The case may well have implications for US litigants, but I do not think that a single Labour Court case in which an employee neglected to mark private e-mails as such will open the floodgates to FRCP discovery. It’s most likely consequence, I suspect, is that all French employees will start marking the e-mails” Private”, making it harder rather than easier to discriminate between those which are and those which are not genuinely private.

The bottom line for this case was this; the French employee’s email and ESI was searchable and reviewable without the employee’s approval or knowledge because the documents had not been marked as “Private” by the employee. My guess is that French employee committees will quickly instruct French employees on the proper marking of all emails and ESI as “Private”.

Early Case Assessment and Concept Search

There has been an ongoing argument as to the validity of concept search verses keyword search in discovery searches. The main arguments I have seen are:

  1. Keyword searches tend to miss relevant documents and are under-inclusive in their search results.
  2. Concept searches tend to produce too many non-responsive documents and are considered over-inclusive in their search results.
  3. The other argument against concept searches for eDiscovery is that concept searches are a “black box” and are therefore very hard to explain to the court as to their validity.

I have not been able to find any cases where the eDiscovery response was conducted via a concept search.

While at LegalTech 2010 in New York, I spoke to several conceptual search/clustering vendors that were positioning conceptual search as the next big thing…that keyword search was falling in favor. I don’t believe that to be the case but I am curious whether conceptual search technology has a future.

I do believe there is an interesting possibility to use conceptual search capabilities in the area of Early Case Assessments (ECA). For ECA, the discoveree wants to “data mine” potentially responsive ESI to determine their going forward strategy; should we settle or should we fight? To make the best decision about legal strategy, I believe having access to the most complete and relevant data set is a top priority. One of the wraps against concept search is it is over-inclusive; a benefit in making sure you have reviewed all potentially responsive ESI when performing ECA.

10 Clues Corporate Counsel Should Take to Heart about eDiscovery

The following content was inspired by an article in Law Technology News in Oct 2009 by Tom O’Connor titled “Top 10 EDD Tips for General Counsel”.

  1. Read the Rules: Read the Federal Rules of Civil Procedure or at least the amendments passed in December of 2006. For most of you, the days of farming out all discovery preparation is quickly disappearing. You are going to be responsible to not lose the case against you in the first couple of weeks by screwing up the discovery process. Come on…you made it through law school and read (?) all those books as well as you probably have suffered through your share of mind numbing IP applications. The FRCP is not as bad as that. I also recommend taking a look at the Electronic Discovery Reference Model (EDRM), a great site for in-depth learning of the eDiscovery process.
  2. Learn from Others: Case decisions are a great place to learn what others assumed or tied and didn’t work. They are also a great place to determine Judge’s opinions and judicial thinking. There are many great blogs and websites. The one site I look at every day is Electronic Discovery Law which consistently has great write ups and analysis on current and past cases. I have been constantly amazed over the years to see how little corporate counsels pay attention to current legal actions. If nothing else, some of these decisions have a great deal of humorous revelations in them and will give you a chance to make fun of others. Another great organization to look at for information and leadership in the discovery process is the Sedona Conference organization.
  3. Understand the Terms: No, eDiscovery is not an electronic dating service; early case assessment (ECA) is not a process to determine if a case of wine in your basement has gained in value and “PST” is not a juvenile texting shortcut for “Please Stop Texting”. Knowing the legal terms is expected, generally knowing technical terms such as “Giga Byte” and “Thumb Drive” will be helpful and just might impress the Judge.
  4. Understand Where the Corporate ESI Could be Stored: Understanding all the places ESI could exist is the first step in lowering your risk in litigation. After you understand where all the ESI could exist, and it could be thousands of places that have little or no central control, limit the number of locations that ESI can be stored. This will lower your cost of collection a huge amount.
  5. Talk to your IT department: Take the key individuals in your IT department out once in a while, maybe to your club. This will impress the propeller heads enough so that the next time you incorrectly reverse sync your Blackberry and blow all your contacts out of your outlook, they might actually fix it quickly. You might also learn some other stuff that would be helpful like the fact that they are keeping backup tapes around for years (if you don’t know why this is a problem, you didn’t take the prerequisite to this class).
  6. Acknowledge (and work with) your Records Managers: They’re not bad people, just misunderstood. I have heard Records Managers often referred to as “Blue Hairs”. This is an obvious reference to the stereotype that all records managers are “mature” women. I won’t lie to you; this is sometimes true in certain industries but not everywhere. The Records Management department can be an important ally in your understanding of eDiscovery problems and ways to fix those problems. They are also important in the next clue.
  7. Create a Usable Records Management Policy and Schedule: I walked into a large company several years ago on a consulting engagement and asked them for their records retention schedule. After about a day and a half I was given a 212 page document that was full of record types and retention periods, all in 8 point type. When I asked them if they really thought every employee actually followed this schedule, they answered “absolutely” and they met it. After interviewing 40 or so employees I found that 34 on them didn’t know the company had a retention schedule and the other 6 employees just regularly kept everything for ever. Having a records retention policy and schedule is the first step in controlling your ESI. The idea is to manage and control it; not keep everything forever. A word of caution; a retention schedule that is not enforced is worse than not having one at all.
  8. Create a Litigation Hold Policy and Test It: Creating a litigation hold policy before you experience litigation should not be a revelation to anyone even though I know for a fact it is for many.  It just makes sense that being able to effectively stop the destruction of potentially responsive ESI would lower your risk of spoliation. A common sense next step would be to test it. A litigation hold policy that doesn’t work will not usually impress the Judge.
  9. Train Your Employees: Train your employees on the records retention policy and schedule as well as the litigation hold policy. Remember the example above in the “Create a Usable Records Retention Policy and Schedule” topic. Having a policy and not telling your employees about it will not get you an invitation to the next Mensa gathering. Employees should be trained regularly and asked to sign a document that says they understand the training.
  10. Automate Where You Can: The bigger your organization, the harder it will be to do things manually. I know “archive” is a dirty word to most legal types but the term archive does not mean save everything for ever. It is a way to manage your ESI so that it is eventually deleted. Put ESI management systems in place that will help you meet your legal, regulatory and business requirements.