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eDiscovery Case Law: Court Orders eDiscovery Evidentiary Hearing When Parties Are Unable to Cooperate
 

A month ago, in Chura v. Delmar Gardens of Lenexa, Inc., No. 11-2090-CM-DJW, 2012 U.S. Dist. LEXIS 36893 (D. Kan. Mar. 20, 2012), Magistrate Judge David J. Waxse ordered an evidentiary hearing to discuss the sufficiency of the defendant’s search for ESI and format of production in response to the plaintiff’s motion to compel additional searching and production.

The case involved an employment dispute with claims of sexual harassment, hostile work environment and other employment-based causes of action.  At a status conference, the parties had agreed to create a list of search terms in an attempt to resolve outstanding eDiscovery issues. However, the parties were unable to reach a consensus, and the plaintiffs filed a motion to compel the defendant to search for and produce ESI.

The plaintiffs’ Request for Production 1 requested the defendant to produce information from 10 individuals identified by the defendants with knowledge of the facts concerning the allegations in the complaint or answer; however, the defendants’ reply merely referred the plaintiffs to the complaints and personnel files of the plaintiffs.  In their motion to compel, the plaintiffs asserted that the defendant “failed to produce their written complaints, any emails or phone logs, the investigation files, and their personnel files”.  The plaintiffs also claimed that the defendant also “failed to produce responsive documents that one would expect to find in this type of litigation”, such as:

  • “emails between Defendant’s managers and witnesses regarding Plaintiffs’ allegations or Defendant’s defenses”;
  • “notes by the human resource director from the investigation she conducted as a result of Plaintiffs’ complaints about the alleged harasser and the environment at the nursing facility where Plaintiffs worked”; and
  • “reports and emails to the corporate office regarding the complaints”.

The plaintiffs noted that, “It does not make any sense that in response to numerous complaints from employees about the work environment that a corporate human resources manager would be sent to investigate and not create a single document reporting her findings to Defendant’s corporate managers.”  They also suggested that the defendant had searched for the agreed-upon search terms in Microsoft Outlook on the alleged harasser’s computer only and argued that the defendant should run a forensically sound search of “all computers used by employees of the facility and corporate office who participated in or were involved in Defendant’s investigation of the allegations”.

While noting that it “cannot determine whether Defendant met its duty to both preserve relevant evidence” (based upon the limited information provided in the parties’ briefing), the Court found that “Defendant’s failure to produce any ESI, such as emails, attachments, exhibits, and word processing documents, raises justifiable concerns that Defendant may have 1) failed to preserve relevant evidence, or 2) failed to conduct a reasonable search for ESI responsive to Plaintiffs’ discovery requests.”  Therefore, the court set an evidentiary hearing for April 30, at which the defendant was instructed “to be prepared to present evidence on the following topics”:

  1. At the time of the initial charge of discrimination, what did Defendant’s system of creating and storing ESI consist of;
  2. When and how a litigation hold was instituted;
  3. What employees were notified of the litigation hold;
  4. What efforts were made to preserve ESI;
  5. What or whose computers or components of the computer systems were searched for responsive ESI;
  6. How the computers of computer information systems were searched (e.g., keyword searches, manual review, computer-assisted coding); and
  7. Who performed the searches.

So, what do you think?  Was the evidentiary hearing an appropriate next step?  Should more cases conduct eDiscovery evidentiary hearings when there are disputes?  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.

Social Tech eDiscovery: Twitter Law Enforcement Policies Revisited
 

Back in January, we revisited Facebook’s Law Enforcement policies and found that they had changed quite a bit from the from the post we published back in September 2010 regarding those policies.

Private Information within Twitter

As most information in Twitter is publicly shared with everyone, private information kept within Twitter is limited.  From their Privacy Policy page, examples of information that is not public includes:

  • Email address;
  • Password;
  • Cell phone or address book (to enable Twitter to help you find Twitter users you know)
  • Location information (to track your location where you’re “tweeting” from); and
  • Log data (IP address, browser type, the referring domain, pages visited, your mobile carrier, device and application IDs, and search terms).

You can also set “Tweet privacy” so that only certain people will receive your “tweets” or send private messages through the direct message syntax in Twitter.  Sometimes, information meant to be private messages to one individual can be inadvertently published to all if you’re not careful – as former congressman Anthony Weiner found out (remember him?).  You can also now add photos to tweets directly in Twitter, which would be private if the tweets are private themselves (this does not apply to photos referenced in tweets stored on third party image providers like Flickr, Twitpic or yFrog).

Requesting Private Information from Twitter

If you’re considering requesting provide information from Twitter for litigation purposes, here is what you need to know (from the Guidelines for Law Enforcement page on the Twitter site):

  • Data Retention Information: Twitter doesn’t get very specific on its retention policies other than to say that it “retains different types of information for different time periods” and that “some information may only be stored for a very brief period of time”.  The Privacy Policy page does note that log data may be retained for up to 18 months.
  • Private Information Requires a Subpoena or Court Order: Non-public information about Twitter users is not released except “as lawfully required by appropriate legal process such as a subpoena, court order, or other valid legal process”.  Twitter notes that they don’t “require email verification or identity authentication”, so the information may not be valid for fake or anonymous profiles.
  • Emergency Requests for Information: Twitter evaluates these on a case-by-case basis, but will usually provide the information if there is “a good faith belief that there is an emergency involving the death or serious physical injury to a person”, assuming they have it.  Emergency requests can be emailed to  lawenforcement@twitter.com.  Twitter notes that only email from law enforcement domains will be accepted and all others will be disregarded.
  • Requests from Non-U.S. Law Enforcement: Twitter will honor requests for user information from foreign law enforcement agencies if they are requested through a U.S. court.
  • Notifying Users of Information Requests: Twitter will notify users of requests for their information prior to disclosure unless they’re prohibited from doing so by statute or court order.
  • Information to Be Included in Requests: Requests must include the username and URL of the Twitter profile in question, details about the specific information being requested and its relationship to the investigation and a valid email address for them to acknowledge receipt of the legal request.
  • Methods for Requesting Information: Twitter only accepts legal process from law enforcement agencies delivered by mail or fax.  That’s a very 1970s restriction for an organization whose business it is to provide 21st century technology to its customers.

Now you know how to request private user information, provided you’re a law enforcement organization or have a subpoena or court order to serve them with.

So, what do you think?  Have you needed to request information from Twitter for litigation purposes?  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: Better Late Than Never? Not With Discovery.
 

In Techsavies, LLC v. WFDA Mktg., Inc., 2011 U.S. Dist. LEXIS 152833 (N.D. Cal. Feb. 23, 2012), Magistrate Judge Bernard Zimmerman of the United States District Court for the District of Northern California sanctioned the defendant for repeated failures to produce responsive documents in a timely manner because of their failure to identify relevant data sources in preparing its initial disclosures.

The defendant produced approximately 32,000 documents in response to production requests on August 20, 2010. Five days later, the defendant sent plaintiffs a supplemental production of 1,100 documents, and notified them by letter that its document production was complete.  Over the next three months, the plaintiffs informed the defendant multiple times that there were omissions in their production, including following up with another production request on November 1.  On November 29, two days before the close of discovery, defendants produced roughly an additional 87,000 documents, yet the plaintiff still noticed that some documents were missing and notified the defendants.

Following the second incomplete production, defendants investigated and discovered that several data backup files were never provided to the eDiscovery vendor.  They also discovered a 4 to 6 inch stack of relevant documents in the basement of a former office building that had been forgotten.  Those additional documents were produced approximately ten days after the close of discovery.  The plaintiffs sought sanctions for the late production including “establishing that the minimum gross revenues attributable to Project632 are twice the credit card transactions through the site since its inception, given WDFA's failure to produce complete information regarding the co-payments received from MetroPCS”, as well as barring them “from offering any evidence of deduction or offset from that figure” and precluding their experts from using the late produced documents.

With regard to the late production, Judge Zimmerman noted:

“Pretrial Scheduling Order (Docket No. 20) also requires that ‘[t]hirty days prior to the close of non-expert discovery, lead counsel for each party shall serve and file a certification that all supplementation has been completed.’ WDFA did not file such a certification. Instead, WDFA improperly produced its late documents as well as its interrogatory response after fact discovery closed and without obtaining leave from the Court…[I]t appears to be an issue of first impression whether a party can correct its discovery responses after the close of discovery without seeking leave of Court. In my opinion, absent an approved stipulation, allowing one party to correct prior discovery responses without seeking leave of Court undermines the Court's ability to control the timely production of documents and assure that discovery issues are resolved in a timely fashion so as not to interfere with the impending trial.”

Judge Zimmerman also noted, however, that sanctions sought by the plaintiffs were “too broad” and “would be tantamount to giving Techsavies a directed verdict on many if not all of the damages issues”.  The court did grant the following sanctions against the defendant:

“1. WDFA is barred from introducing, either in defense of plaintiff's claims or in support of its counterclaims, any document which it should have produced in response to plaintiff's first set of document requests and which was not produced until after plaintiff filed its second set of document requests.”

“2. WDFA's expert witnesses cannot rely on any document, or information contained in any document, that is precluded by this Order unless WDFA can show that the information on which the witness relied was provided timely to Techsavies in some other form of discovery.”

So, what do you think?  Should the judge have allowed the late production?  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: Tips for Saving Money in Litigation
 

A recent article on The National Law Journal (entitled Top 12 tips for saving money in litigation, authored by Damon W.D. Wright) had some good tips for – you guessed it – saving money during litigation.  I thought it would be worth discussing some of these, especially those that relate to eDiscovery cost savings practices.

  1. Conduct targeted preservation and collection: As the author notes, the duty to preserve is “not supposed to cause business operations to grind to a halt” and “the focus should be on the specific subject matter, evidence and likely witnesses in the case”.  If you promptly investigate and quickly identify those likely custodians and act to preserve their data, you’re probably satisfying your duty to preserve.  Just don’t lose sight of organization-wide processes that affect those likely witnesses, such as automated deletion policies, and suspend them for those witnesses, at least.  Don’t make the same mistake that EchoStar did.
  2. Calibrate the budget to the amount and importance of the case:  Ralph Losey, in his interview with eDiscovery Daily, spoke about bottom line proportional review and the idea of setting a budget based on the size and potential exposure of each case.  It simply doesn’t make sense to spend the same amount of effort in routine cases as it does for the “bet your company on the outcome” cases.
  3. File in a fast-moving court: Or pursue transfer if you’re the defendant.  Certainly, the longer a case drags out, the more expensive it is, and that includes for eDiscovery.
  4. Know the court: The author addresses this from a general perspective, but it could be important from an eDiscovery perspective, as a part of that.  Enough case law related to eDiscovery exists now that many judges have started to establish at least some track record with regard to issues such as spoliation, proportionality and sharing of eDiscovery costs.  It’s important to know how your judge views those issues.
  5. Have a key client liaison: Nobody knows the client better than the client themselves, so identifying the right person to serve as a liaison between the client and counsel can not only improve communications, but also streamline process and save costs.  As the author noted, the ideal client liaison will “know the organization well and have the authority, perseverance and communication skill needed to get the attention of others.”
  6. Select vendors and experts with care: The author notes that “you should always obtain price estimates (comparing ‘apples to apples’)” when considering eDiscovery vendors.  As a part of that, it’s important to make sure those comparisons are truly “apples to apples” and comprehensive.  Are per GB processing charges for the original (compressed) GB size or expanded?  Do hosting charges include per user fees or other ancillary charges or are they strictly per GB?  It’s important to make sure those distinctions are clear when comparing. 
  7. Try to get along with opposing counsel: While some are easier to get along with than others, the ability to cooperate with opposing counsel and discuss various discovery issues in the Fed.R.Civ.P. 26(f) conference (such as limits to discovery, form of production, privilege, etc.) will save considerable costs up front if the parties can agree.
  8. Allow opposing counsel to inspect and copy documents at their expense: Although most collections are predominantly in electronic form, there are still paper documents to be addressed and if you can make a non-privileged collection available for them to go through and select and copy the documents they want, that saves on your production costs.
  9. Limit e-mail production by custodians, search terms and date range: As the author noted and eDiscovery Daily previously noted, it’s not only a good idea for producing parties to limit production scope, but model orders to limit scope in patent cases are now being adopted in various jurisdictions, including Texas.
  10. Seek agreement on a narrowed privilege log and a no-waiver order: If you’re successful in #7 above, this should be part of what you try to negotiate.  It helps if both parties have similar concerns regarding the effort and cost to determine privilege and prepare a privilege log.
  11. Pursue cost-shifting for discovery: As yesterday’s post reflects, courts are more often expecting requesting parties to share in the discovery costs when the requests for information result in an undue burden or cost for the producing party.  And, as the author noted, the model order establishes specific parameters for patent cases and the expectation for requesting parties to pay for additional discovery.
  12. Stipulate to facts not in dispute: Why conduct discovery on facts not in dispute?  The author’s recommendation for early stipulations is a great idea for eliminating discovery in areas where it’s not necessary.

So, what do you think?  Did you get some good ideas?  Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Daily will resume with new posts on Tuesday after the Easter holiday.  Have an eggs-cellent weekend!

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: Tennessee Court Orders Split eDiscovery Costs, Plaintiff Bond for Additional Discovery
 

In considering the allocation of costs in this contentious business dispute, Tennessee Magistrate Judge Joe B. Brown (not to be confused with TV’s Judge Joe Brown) ordered the parties to split the expenses related to material they had not already produced in Lubber Inc. v. Optari, LLC, No. 3:11-0042, (M.D. Tenn. Mar. 15, 2012).

The defendants asked the court to enter a protective order that did not require them to search for electronically stored information (ESI) outside the set period of October 4, 2010 through February 8, 2011; in the alternative, they asked the court to require the plaintiff to pay for the costs of the discovery. The defendants complained that the costs of the additional searches the plaintiff requested might “run at least $10,000 and produce gigabytes of ESI material.”

Judge Brown observed that Federal Rule of Civil Procedure 26(b)(2)(C)(iii) allows for “a great deal of latitude in controlling discovery.” He also noted that the general rule of discovery is that the producing party bears the costs of discovery. Even so, Judge Brown continued by offering the following commentary on discovery costs:

“One of the concerns of discovery is the allocation of costs. In general, costs are borne by the producing party. While this works in the vast majority of cases, the requesting parties have little incentive not to ask for everything possible. This leads to interrogatories and requests for production that are expressed in the broadest possible terms.

It is the Magistrate Judge’s experience and the view of a number of economists who have studied this issue that where the requesting party bears a part of the cost of producing what they request, the amount of material requested drops significantly. When a party has to contemplate whether the last possible bit of information will cost them more than it is worth, they quit asking for items of marginal relevance. As long as requesting the last bit of information costs them nothing they have little, if any, incentive not to request it. Even if they choose never to look at it, they have put the opposing party to the cost of production. In some cases discovery becomes a tool with which to bludgeon the other side into submission. The Magistrate Judge believes that both sides are doing that in this case.”

Judge Brown denied the defendants’ motion and required each party to bear one-half of the costs of producing materials going forward.

So, what do you think?  Was the ruling to share discovery costs and the bond for compelling discovery appropriate?  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.

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 Trends: Delaware Has a New Standard for eDiscovery
 

On Dec. 8 of last year, the U.S. District Court for the District of Delaware revised the "Default Standard for Discovery, Including Discovery of Electronically Stored Information (ESI)" for the third time to reflect recent changes in technology and to address concerns of attorneys regarding the discovery of ESI.  The new Default Standard expects the parties to reach agreements cooperatively on how to conduct discovery under Fed. R. Civ. P. 26-36. If the parties are unable to agree on the parameters and/or timing of discovery, the default standards will apply until further order of the Court or the parties reach agreement (which is why it’s a default standard).

The Revised Default Standard addresses several provisions for conducting discovery of ESI, including:

  • Proportionality: Parties are expected to preserve, identify and produce relevant information in a proportional manner.
  • Preservation: Each party’s normal policies and procedures in place for the preservation and backup of information will not be altered unless the party requesting the information provides good cause and that information current when the request is made must be preserved by the producing party. The preservation requirement doesn’t extend to data only discoverable by forensics, voice mails, information stored on mobile devices, RAM, and data from obsolete systems.
  • Privilege: The parties are expected to confer on the nature and scope of privilege logs for the case, including whether categories of information may be excluded from any logging requirements and whether alternatives to document-by-document logs can be exchanged.
  • Initial Discovery Conference: The new Default Standard provides guidelines for the timing (before the "Rule 16 Conference”) and content (issues, sources of potentially relevant ESI, production formats, handling of privileged information, categories of ESI to preserve, etc.) of the Initial Discovery Conference.
  • Initial Disclosures: Within 30 days after the Rule 16 Conference, each party is required to disclose a ranked list of the 10 custodians most likely to have discoverable information in their possession, a ranked list of the non-custodial data sources that are most likely to contain non-duplicative discoverable information and any issues related to ESI, third-party discovery under Fed. R. Civ. P. 45 and production of information subject to privacy protections.
  • Patent Litigation Discovery Requirements: The timing, starting within 30 days after the Rule 16 Conference, for the plaintiff and defendant obligations are detailed.  In patent litigation proceedings, discovery is limited to 6 years before the complaint unless the information in question relates to the conception of the invention in question.
  • On-Site Inspection of Electronic Media:  Not permitted without good cause.
  • Search Methodology: Producing parties must disclose their search terms to the requesting party and the requesting party may request no more than ten additional terms which must not be overbroad (e.g., product and company names).
  • Format: ESI and non-ESI should be produced to the requesting party as text searchable image files (e.g., PDF or TIFF) unless they are not easily converted to image files (e.g., Excel and Access files).
  • Metadata Fields: The only fields required to be produced (if available) are – Custodian, File Path, Email Subject, Conversation Index, From, To, CC, BCC, Date Sent, Time Sent, Date Received, Time Received, Filename, Author, Date Created, Date Modified, MD5 Hash, File Size, File Extension, Control Number Begin, Control Number End, Attachment Range, Attachment Begin, and Attachment End (or the equivalent thereof).

So, what do you think?  How do these standards compare to those in your state?  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 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.