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eDiscovery Case Law: Two Pages Inadvertently Disclosed Out of Two Million May Still Waive Privilege
 

In Jacob v. Duane Reade, Inc., 11 Civ. 0160 (JMO) (THK), Magistrate Judge Theodore Katz of the US District Court for the Southern District of New York found that a privileged, two-page email that was inadvertently produced did not have to be returned and that the privilege had been waived because the producing party, Duane Reade, had failed to request its return in a timely manner.  According to Defendants' counsel, the ESI production involved the review of over two million documents in less than a month; that review was accomplished with the assistance of an outside vendor and document review team.

The Plaintiffs in this matter are Assistant Store Managers pursuing a collective action for overtime wages, under the Fair Labor Standards Act ("FLSA"), against the Defendant, Duane Reade.  The email that was inadvertently produced (on November 8, 2011 and subsequently used in deposition) related to a meeting among several individuals within Human Resources, including an in-house attorney at Duane Reade (assumed to be Julie Ko). The defendants discovered the inadvertent production on January 17 of this year when Duane Reade’s HR Manager (an attendee at the meeting) was noticed for deposition.  The defendants argued that the email was inadvertently produced because it was neither from nor to an attorney, and only included advice received at a meeting from an in-house attorney, identified in the email only by the first name “Julie.”

With regard to whether the email was privileged, the court examined the email and found that the first half, where Ko received information from business managers and, in her role as legal counsel, gave legal advice on the requirements of the FLSA, was privileged.  However, the second half of the email, consisting of proposals that came out of the meeting, to get the Store Managers and Assistant Store Managers to view and treat the ASM's as managers, contained no legal advice and, therefore, was not privileged.

As to whether the Defendant’s waived attorney-client privilege when inadvertently producing the email, the Court referenced a summary of the law in this subject provided by Judge Shira Scheindlin, as follows:

“Although the federal courts have differed as to the legal consequences of a party's inadvertent disclosure of privileged information, the general consensus in this district is that the disclosing party may demonstrate, in appropriate circumstances, that such production does not constitute a waiver of the privilege or work-product immunity and that it is entitled to the return of the mistakenly produced documents. In determining whether an inadvertent disclosure waives privilege, courts in the Second Circuit have adopted a middle of the road approach. Under this flexible test, courts are called on to balance the following factors: (1) the reasonableness of the precautions to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) "the scope of the discovery;" (4) the extent of the disclosure; and (5) an over[arching] issue of fairness.”

The Court ruled that the production of the email was inadvertent and that Duane Reade had employed reasonable precautions to prevent inadvertent disclosures (such as drafting lists of attorney names, employing search filters and quality control reviews). However, given the over two month time frame for the Defendants to request return of the email, the Court determined that the privilege was waived because the Defendants did not act “promptly to rectify the disclosure of the privileged email.”

So, what do you think?  Was waiver of privilege fair for this document?  Or should the Defendants have been able to claw it back?  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 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 Law: Texas Model Order for Patent eDiscovery Now In the Public Comment Phase
 

In a blog post last October, we discussed the new model order proposed by Federal Circuit Chief Judge Randall Rader as a measure against the "excesses" of eDiscovery production. At that time, the "Model Order on E-Discovery in Patent Cases" had been unanimously voted on by the Federal Circuit Advisory Council and, as a result, could significantly alter the way discovery materials are used in such cases.  This version of the model order is included in proposed local rule amendment GO-12-06 for the Eastern District of Texas.  The amendment has been approved by the judges of the district, subject to public comment, the deadline for which is March 23, a little over two weeks from now.

Reviewed by a working group of the Eastern District's Local Rules Advisory Committee at the court's request to determine whether it should be included in the district's local rules, the working group recognized the "substantial work that went into the [Federal Circuit's] Model Order" and used it as its "baseline." The district created a redlined version of the Federal Circuit model order and provides detailed commentary explaining the reasons for the changes to the Federal Circuit model.  It has some fairly significant changes, some of which include:

  • Cost Shifting: Item #3, addressing circumstances for considering cost shifting, was stricken;
  • ESI Production Parameters: A new item #5 has been added to address production parameters, including document image format in TIFF, text-searchable documents, and native files (the way it’s currently written, you can apparently only request native files after receiving a TIFF production, absent agreement of the parties).  This section also notes that backup preservation and collection and preservation from voice mail and mobile devices is not necessary (absent a showing of good cause);
  • Email Production Requests: Item #7, indicating that email production requests will be only propounded for specific issues instead of general discovery, was stricken.  The next item, related to specifics of email production requests was expanded quite a bit to address information to be exchanged prior to email production and also allow one deponent per producing party to determine “the proper custodians, proper search terms, and proper time frame for e-mail production requests”;
  • Email Production Scope: Language was added to indicate that email requests will “identify the custodian, search terms, and time frame”.  It also bumped up the limit from five to eight custodians per producing party for each request and bumped up the limit from five to ten search terms per custodian per party.

It will be interesting to see whether any additional modifications are implemented as a result of the public comment period.

So, what do you think?  Will model orders become popular as a way to limit the eDiscovery in other types of cases?  Are model orders a good idea or are they too limiting? 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: Perspective on the Amount of Data Contained in 1 Gigabyte
 

Often, the picture used to introduce the blog post is a whimsical (but public domain!) representation of the topic at hand.  However, today’s picture is intended to be a bit instructional.

As we work with more data daily and we keep buying larger hard drives to store that data, one gigabyte (GB) of data seems smaller and smaller.  Today, you can buy a portable 1 terabyte (TB) drive for less than $100 in some places.  Is the GB smaller than it used to be?  Last I checked, it’s still about a billion bytes (1024 x 1024 x 1024 or 1,073,741,824 bytes, to be exact).

From a page standpoint, most estimates that I’ve heard have estimated 1 GB to be 50,000 to 75,000 pages.  Of course, that can vary widely, depending on the file types comprising that GB.  A GB of 1 megabyte (MB) one-page, high-resolution image files will only take about 1,000 pages to equal a GB, whereas a collection of 5 kilobyte (KB) text file and small emails (with minimal attachments) could take as much as 200,000 pages to equal a GB.  So, 50,000 to 75,000 is probably a good average.

A ream of copy paper is 500 pages and a case holds 10 reams (5,000 pages).  So, a GB is the equivalent of 100 to 150 reams of paper (10 to 15 cases), which is enough paper to fill a small truck.  Hence, today’s picture shows a truck full of paper.

There was a Gartner report that re-published Anne Kershaw’s analysis on the cost to manually review 1 TB of data.  Quoting from the report, as follows:

“Considering that one terabyte is generally estimated to contain 75 million pages, a one-terabyte case could amount to 18,750,000 documents, assuming an average of four pages per document. Further assuming that a lawyer or paralegal can review 50 documents per hour (a very fast review rate), it would take 375,000 hours to complete the review. In other words, it would take more than 185 reviewers working 2,000 hours each per year to complete the review within a year. Assuming each reviewer is paid $50 per hour (a bargain), the cost could be more than $18,750,000.”

If it costs $18.75 million to review 1 TB, one could extrapolate that to approximately $18,750 to review each GB.  Dividing by 1,000 (ignoring the 24), that extrapolates to: 75,000 pages / 4 = 18,750 documents / 50 documents reviewed per hour = 375 review hours x $50 per hour = $18,750.  I’ve mentioned that figure to clients and prospects and they almost always seem surprised that the figure is so high.  Then, I ask them how many hours does it take them to review a truckload of paper to determine relevancy to the case?  😉

Bottom line: each GB effectively culled out through technology (such as early case assessment, first pass review tools like FirstPass™, powered by Venio) can save approximately $18,750 in review costs.  That’s why technology based assisted review approaches have become so popular and why it’s important to remember how expensive each additional GB can be.

So, what do you think?  Did you realize that each GB was so large or so expensive?  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: Google’s Blunder Keeps Them Under the (Smoking) Gun

As we noted back in November, a mistake made by Google during discovery in its lawsuit with Oracle could cost the company dearly, perhaps billions.  Here’s a brief recap of the case:

Google is currently involved in a lawsuit with Oracle over license fees associated with Java, which forms a critical part of Google’s Android operating system.  Google has leveraged free Android to drive mobile phone users to their ecosystem and extremely profitable searches and advertising.

Despite the use of search technology to cull down a typically large ESI population, a key email, written by Google engineer Tim Lindholm a few weeks before Oracle filed suit against Google, was produced that could prove damaging to their case.  With the threat of litigation from Oracle looming, Lindholm was instructed by Google executives to identify alternatives to Java for use in Android, presumably to strengthen their negotiating position.

“What we’ve actually been asked to do (by Larry and Sergey) is to investigate what technical alternatives exist to Java for Android and Chrome,” the email reads in part, referring to Google co-founders Larry Page and Sergey Brin. “We’ve been over a bunch of these, and think they all suck. We conclude that we need to negotiate a license for Java under the terms we need.”

Lindholm added the words “Attorney Work Product” and sent the email to Andy Rubin (Google’s top Android executive) and Google in-house attorney Ben Lee; however, Lindholm’s computer saved nine drafts of the email while he was writing it – before he added the words and addressed the email to Lee.  Because Lee’s name and the words “attorney work product” weren’t on the earlier drafts, they weren’t picked up by the eDiscovery software as privileged documents, and they were produced to Oracle.

Judge William Alsup of the U.S. District Court in Oakland, California, indicated to Google’s lawyers that it might suggest willful infringement of Oracle’s patents and despite Google’s motion to “clawback” the email on the grounds it was “unintentionally produced privileged material”, Alsup refused to exclude the document at trial.  Google next filed a petition for a writ of mandamus with the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., seeking to have the appeals court overrule Alsup’s decision permitting Oracle to use the email as evidence in the trial.

On February 6, the Federal Circuit upheld Alsup’s ruling that the email is not privileged, denying Google’s mandamus petition. Observing that the email was written at the request of Google’s co-founders, Larry Page and Sergey Brin (who are not lawyers) and did not refer specifically to legal advice or the senior counsel’s investigation, the appeals court rejected Google’s petition.

As we noted before, organizing the documents into clusters based on similar content, might have grouped the unsent drafts with the identified “attorney work product” final version and helped to ensure that the drafts were classified as intended and not produced.

So, what do you think?  Could this mistake cost Google billions?  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 Trends: Jim McGann of Index Engines
 

This is the third of the 2012 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

  1. What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012?
  2. Which trend(s), if any, haven’t emerged to this point like you thought they would?
  3. What are your general observations about LTNY this year and how it fits into emerging trends?
  4. What are you working on that you’d like our readers to know about?

Today’s thought leader is Jim McGann.  Jim is Vice President of Information Discovery at Index Engines.  Jim has extensive experience with the eDiscovery and Information Management in the Fortune 2000 sector. He has worked for leading software firms, including Information Builders and the French-based engineering software provider Dassault Systemes.  In recent years he has worked for technology-based start-ups that provide financial services and information management solutions.

What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012?  And which trend(s), if any, haven’t emerged to this point like you thought they would?

I think what we're seeing is a lot of people becoming a bit more proactive.  I may combine your questions together because I'm surprised that people haven’t become proactive sooner.  LegalTech has included a focus on litigation readiness for how long? Ten years or so?  And we're still dealing with how to react to litigation, and you're still seeing fire drills occur.  There’s still not enough setting up of environments in the corporate world and in the legal world that would enable customers to respond more quickly.  It surprises me how little has been developed in this regard.. 

I think the reason for the slow start is that there are a lot of regulations that have been evolving and people haven't really understood what they need to prepare and how to react.  There’s been ten years of LegalTech and we're still struggling with how to respond to basic litigation requests because the volume has grown, accessibility arguments have changed, Federal rules have been solidified, and so forth.

What we're seeing when we go and talk to customers (and we talk to a lot of end-user customers that are facing litigation) is IT on one end of the table saying, ‘we need to solve this for the long term’, and litigation support teams on the other end of the table saying, ‘I need this today, I’ve been requesting data since July, and I still haven't received it and it's now January’.  That's not good.

The evolution is from what we call “litigation support”.  Litigation support, which is more on the reactive side to proactive litigation readiness, expects to be able to push a button and put a hold on John Doe's mailbox.  Or, specifically find content that’s required at a moment's notice.

So, I think the trend is litigation readiness.  Are people really starting to prepare for it?  Every meeting that we go into, we see IT organizations, who are in the compliance security groups, rolling up their sleeves and saying I need to solve this for my company long term but we have this litigation.  It's a mixed environment.  In the past, we would go meet with litigation support teams, and IT wasn't involved.  You're seeing buzz words like Information Governance.  You're seeing big players like IBM, EMC and Symantec jumping deep into it.

What's strange is that IT organizations are getting involved in formalizing a process that hasn't been formalized in the past.  It's been very much, maybe not “ad hoc”, but IT organizations did what they could to meet project needs.  Now IT is looking at solving the problem long term, and there’s a struggle.  Attorneys are not the best long term planners – they're doing what they need to do.  They've got 60 days to do discovery, and IT is thinking five years.  We need to balance this out.

What are your general observations about LTNY this year and how it fits into emerging trends?

We're talking to a lot of people that are looking at next generation solutions.  The problems have changed, so solutions are evolving to address how you solve those problems.

There's also been a lot of consolidation in the eDiscovery space as well, so people are saying that their relationship has changed with their other vendors.  There have been a lot of those conversations.

I'm not sure what the attendance is at this year’s show, but attendees seem to be serious about looking for new solutions.  Maybe because the economy was so bad over the past year or maybe because it's a new budget year and budgets are freeing up, but people are looking at making changes, looking at new solutions.  We see that a lot with service providers, as well as law firms and other end users.

What are you working on that you’d like our readers to know about?

We’ve announced the release of Octane Version 4.3, which preserves files and emails at a bit level from MS Exchange and IBM Lotus Notes, as well as indexing forensics images and evidence files at speeds reaching 1TB per hour using a single node.  Bit-for-bit email processing and forensic image indexing speeds are unprecedented breakthroughs in the industry.  Bit-level indexing is not only faster but also more reliable because email is stored in its original format with no need for conversion.  Index Engines can also now index terabytes of network data including forensic images in hours, not weeks, like traditional tools.  So, we’re excited about the new version of Octane.

We’ve also just announced a partnership with Merrill Corporation, to provide our technology to collect and process ESI from networks, desktops, forensic images and legacy backup tapes, for both reactive litigation and proactive litigation readiness.  Merrill has recognized the shift in reactive to proactive litigation readiness that I mentioned earlier and we are excited to be aligned with Merrill in meeting the demands of their customers in this regard.

Thanks, Jim, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

eDiscovery Trends: International Trade Commission Considers Proportionality Proposal
 

As eDiscovery costs continue to escalate, proposals to bring proportionality to the eDiscovery process have become increasingly popular, such as this model order to limit eDiscovery in patent cases proposed by Federal Circuit Chief Judge Randall Rader last year (which was adopted for use in this case).  In January, Chief Judge Rader and three members of the Council (Council Chairman Ed Reines of Weil, Tina Chappell of Intel Corporation, and John Whealan, Associate Dean of Intellectual Property Studies at the George Washington University School of Law) presented a proposal to the U.S. International Trade Commission (USITC) to streamline eDiscovery in section 337 investigations.

Under Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337), the USITC conducts investigations into allegations of certain unfair practices in import trade. Section 337 declares the infringement of certain statutory intellectual property rights and other forms of unfair competition in import trade to be unlawful practices. Most Section 337 investigations involve allegations of patent or registered trademark infringement.

The proposal tracks the approach of the district court eDiscovery model order that is being adopted in several district courts and under consideration in others. Chairman Reines described the proposal as flexible, reasonably simple, and easy to administer. Under the proposal, litigants would:

  • Indicate whether ESI such as email is being sought or not;
  • Presumptively limit the number of custodians whose files will be searched, the locations of those documents, and the search terms that will be used (if litigants exceed the specified limits, they would assume the additional costs);
  • Use focused search terms limited to specific contested issues; and
  • Allow privileged documents to be exchanged without losing privilege.

For more regarding the regarding the USITC proposal to streamline eDiscovery in section 337 investigations, including reactions from USITC members, click to see the USITC press release here.

So, what do you think?  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: Burn Your Computer and the Court Will Burn You
 

In Evans v. Mobile Cnty. Health Dept., No. CA 10-0600-WS-C, (S.D. Ala. Jan. 24, 2012), Alabama Magistrate Judge William Cassady granted a motion for sanctions, including an adverse inference instruction, where the plaintiff had burned and destroyed her computer that she used during the time she claimed she was harassed.

Evans sued the Mobile County Health Department alleging reverse discrimination. The court entered a scheduling order that instructed Evans to preserve all relevant information. In discovery, the health department asked Evans for all documents, including electronically stored information (ESI), related to her claims.

Initially, Evans did not produce any documents in response to the defendant's request, but at her deposition, she produced a small number of documents and admitted that she had others, including e-mails. After her deposition, the defendant renewed its request for Evans to produce all ESI in her possession and asked to inspect her personal computer. When the plaintiff did not comply, the defendant filed a motion to compel.

After the motion was filed, Evans' counsel told the defendant that Evans had destroyed her computer. Evans explained that her computer crashed about eight months after her complaint was filed. When she sought help from computer experts, who told her to buy another computer, she burned her computer to destroy the personal information it contained due to the "threat of identity theft." She then bought a new computer. The defendant filed a motion for sanctions and sought dismissal of the case.

Judge Cassady granted the defendant's motion to compel, finding that the plaintiff's claims that she had produced all relevant ESI difficult to believe in light of her deposition testimony and her other discovery violations. Accordingly, Judge Cassady required Evans to produce e-mails from her gmail account and a notebook she referenced in her deposition that contained relevant evidence. The plaintiff also had to produce her new computer for inspection and pay for the defendant's fees and costs in bringing the motion.

Judge Cassady also granted defendant's request for sanctions. In determining the appropriate punishment, he looked first to Eleventh Circuit law, but the court had not set forth specific guidelines for the imposition of sanctions. Therefore, Judge Cassady applied Alabama state law, since it was consistent with general federal spoliation standards. Alabama law requires courts to consider five factors in analyzing a request for sanctions: "(1) the importance of the evidence destroyed; (2) the culpability of the offending party; (3) fundamental fairness; (4) alternative sources of the information obtainable from the evidence destroyed; and (5) the possible effectiveness of other sanctions less severe than dismissal."

Judge Cassady found that Evans had destroyed the evidence in bad faith: her culpability was "excessively high." However, the judge stopped short of dismissing the case. Since the defendant could still defend itself against Evans' allegations, the magistrate judge decided that the court would give the jury an adverse inference instruction at trial. It also awarded defendant its attorneys' fees and costs for the motion.

So, what do you think?  Should the case have been dismissed or were the sanctions sufficient?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).

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.