What’s New Since December 1?

1. What’s New Since December 1? Ten Emerging Trends in E-Discovery

2. Presenters • Browning Marean • Attorney, DLA Piper, us, San Diego • Stephen Dooley • Electronic Discovery, Sullivan & Cromwell, New York • Arthur L. Smith • Attorney, Husch & Eppenberger, LLC., St. Louis • Debbie McReynolds • Legal Assistant, Husch & Eppenberger, St. Louis

3. New Rules, New Challenges • F.R.Civ.P. Amendments effective 12/1/06 • Basic Rule: • “If relevant document exists in electronic form, it must be located and produced in electronic form” • Paradigm Shift • Early attention to discovery of potential sources of relevant Electronically Stored Information (“ESI”) • Early attention paid to preservation obligations and implementation of “legal hold” • Several trends clearly emerge

4. Trend No. 1:Courts Set Minimum Standards

5. Trend No. 1:Courts Set Minimum Standards • Rule 26(f) forces party to confer early and reach agreement on key e-discovery issues • Courts issue guidelines setting minimum standards • Local court rules on discovery and production of E.S.I. supplementing FRCP • Suggested protocols mandating early discussions and disclosures regarding E.S.I. • Updated list at www.ediscoverylaw.com

6. Trend No. 1:Courts Set Minimum Standards • Maryland District Court’s “Suggested Protocol” represents best thinking • Minimum standards for the kind of information to be exchanged by the parties • Suggests each party have ESI coordinator • Developed by cross-sectional group led by Magistrate Paul Grimm • Sets defaults to be applied if parties can’t agree • Protocol followed by • Northern District of Ohio • www.ohnd.uscourts.gov/Clerk_s_Office/Local_Rules/AppendixK.pdf • Western District of North Carolina • O'Bar v. Lowe's Home Centers, Inc., 2007 WL 1299180 (W.D.N.C. May 2, 2007)

7. Trend No. 1:Courts Set Minimum Standards • Protocol suggests that Rule 26(f) conference include discussion of: • Scope of the litigation hold • Identification of key custodians • Nature and types of E.S.I. involved • Metadata concerns • Network infrastructure, back-ups etc. • Legacy systems with potentially discoverable E.S.I. • Records management policies • Form of production • De-duplication issues • Preservation of data on “dynamic” systems and application of the Rule 37 “safe harbor” • Quick peek or claw back strategies for privileged documents • E.S.I. “deemed not reasonable accessible” • Document tracking or Bates numbering • Cost sharing issues • Possibility of two-tiered discovery • Protective orders for confidential information • Earlier Rule 30(b)(6) depositions on IT systems

8. Trend No. 2:Discovery Battles Take Center Stage

9. Trend No. 2:Discovery Battles Take Center Stage • “Attorneys who can build a case of spoliation, therefore, may gain a significant advantage in the presentation of his or her case to the jury, even in the absence of a separate cause of action or formal sanction by the court.” • From “Maximizing Damages from the Defendant's Spoliation of Evidence” by Maury and Steve Herman, Trial Magazine May, 2005

10. Trend No. 2:Discovery Battles Take Center Stage • Why the interest in sanctions? • Consider the ease with which electronically stored information can be lost

11. Trend No. 2:Discovery Battles Take Center Stage

12. Trend No. 2:Discovery Battles Take Center Stage

13. Trend No. 2:Discovery Battles Take Center Stage • Spoliation is the loss or destruction of potentially relevant evidence at a time when the party was under a duty to preserve • Sanctions can include: • Monetary penalties • Preclusion of evidence • Adverse inference instruction • Default judgment

14. Trend No. 3:Sanctions Become Meaningful Threat

15. Trend No. 3:Sanctions Become Meaningful Threat • Recent Case of Note • United Medical Supply Co., Inc. v. United States • 2007 WL 1952680 (Fed. Cl. June 27, 2007) • Scholarly review of case law among the circuits on the imposition of sanctions under: • Rule 11 • Rule 37 • Inherent Power of the Court • Slaps sanctions on U.S. for “reckless disregard of its duty to preserve evidence”

16. Trend No. 3:Sanctions Become Meaningful Threat • Recent Case of Note • In Re September 11th Liability Insurance Coverage Cases • 2007 WL 1739666 (S.D.N.Y. June 18, 2007) • Imposes Rule 11 Sanction of $750,000 against attorneys and insurer for asserting unfounded denials and preventing discovery • Imposes Discovery Sanction of $500,000 against attorneys and insurer For delays in disclosing relevant documents and unjustifiably increasing cost of discovery

17. Trend No. 4:Erosion of the Attorney Client Privilege

18. Trend No. 4:Erosion of the Attorney Client Privilege • “[W]here legal advice of any kind is sought from a professional legal advisor in his capacity as such, the communications relevant to that purpose, made in confidence by the client, are . . . permanently protected from disclosure [unless] the protection be waived.” • Diversified Indus. v. Meredith, 572 F.2d 596, 602 (8th Cir. 1978).

19. Trend No. 4:Erosion of the Attorney Client Privilege • Courts lifting the veil of protection on preservation and production • Production of hold memos • Depositions of house counsel on production issues • Depositions of witnesses on instructions from counsel regarding document collection • Transparency is the name of the game • See, e.g.,Cache La Poudre Feeds, LLC v. Land O’Lakes, Inc. et al., 2007 WL 684001 (D. Colo. March 2, 2007); School-Link Technologies, Inc. v. Applied Resources, Inc., 2007 WL 677647 (D. Kan. Feb. 28, 2007) • See, also,Wachtel v. Guardian Life et al., 2007 US Dist. LEXIS 43842 (D. N.J. 2007), applying the crime fraud exception to the privilege to permit piercing the privilege veil

20. Trend No. 5:Inaccessible Data Not Really Inaccessible

21. Trend No. 5:Inaccessible Data Not Really Inaccessible • Rules permit part to object to production of ESI “not reasonably accessible by reason of undue burden or costs” • For courts, this is really just an opportunity to consider cost shifting

22. Trend No. 6:“Best Practices” Standards Begin to Emerge

23. Trend No. 6:“Best Practices” Standards Begin to Emerge • Sedona Principles Updated • http://www.thesedonaconference.org/ • First issued 2004 • Often cited by the Courts • Attempt to capsule the issues involved in e-Discovery • Major Changes: • Original principles unchanged • Case law annotations updated • Explanatory notes updated

24. Trend No. 6:“Best Practices” Standards Begin to Emerge • Electronic Discovery Reference Model Project • Found At: • http://www.edrm.net/wiki/index.php/Main_Page • Multiple Modules • Main Page • Records Management • Identification • Preservation • Collection • Processing • Review • Analysis • Production • Presentation • Other EDRM Projects • Code of Conduct • Metrics • XML Schema for Metadata

25. Trend No. 6:“Best Practices” Standards Begin to Emerge

26. Trend No. 7:Electronic Resources Abound

27. Trend No. 7:Electronic Resources Abound • Lawyer blogs, vendor websites and e-mail listservs making it easy to stay current • A few favorite sites: • www.ediscoverylaw.com • www.krollontrack.com • www.applieddiscovery.com • www.electronicdiscoveryblog.com/ • www.discoveryresources.org • www.craigball.com • What the judges are reading: • http://www.fjc.gov/public/pdf.nsf/lookup/eldscpkt.pdf/$file/eldscpkt.pdf • What are your favorites?

28. Trend No. 8:Firms Adopt New Approaches to Staffing

29. Trend No. 8:Firms Adopt New Approaches to Staffing • Firms form interdisciplinary teams • Lawyers, Lit Support Professionals and Experts • Blending expertise • Goals • Consistency • Provide expert support for all litigators

30. Trend No. 8:Firms Adopt New Approaches to Staffing • Firms turn to contract lawyers to cut document review costs • Fighting the “boredom factor” for young associates and paralegals • Firms look for ways to keep e-discovery processing in-house • Risk-reward analysis to handling processing internally

31. Trend No. 8:Firms Adopt New Approaches to Staffing • Difficult management lie ahead to cope with the demands of e-discovery • Managing the many challenges of e-discovery is “like herding cats ”

32. Trend No. 9:Corporations Finally Recognize the Risks

33. Trend No. 9:Corporations Finally Recognize the Risks • Early surveys showed that most of corporate America unprepared for challenge of e-Discovery • E-Discovery rarely an issue in the 80’s and 90’s • “Don’t ask, don’t tell” agreements

34. Trend No. 9:Corporations Finally Recognize the Risks “The Motion has been made and seconded that we stick our heads in the sand.”

35. Trend No. 9:Corporations Finally Recognize the Risks • Now they’re getting ready • Appointing e-discovery liaison within the corporate hierarchy • Updating records retention policies on electronic records • Adopting new tools for data recovery • Installing apps like Encase Enterprise, Veritas, Digit, Kazeon, etc. • Adopting new content management strategies • Selecting preferred vendors • National e-Discovery counsel

36. Trend No. 10:Vendors Consolidate and Expand

37. Trend No. 10:Vendors Consolidate and Expand • Moving from specialty vendors to full service firms • From records creation and retention to • Collection • Review • Production • Strengthening search capabilities • Meeting challenges of extraterritorial discovery

38. Trend No. ??:What Lies Ahead?

39. Trend No. ??:What Lies Ahead • Will there be unintended consequences of e-Discovery and its costs? • Moving business and records off shore? • Writing arbitration clauses with strict limits on discovery? • Will litigation as we know it collapse under the weight of the e-Discovery burden?

40. Your turn to share…. • What additional trends do you see? • What changes are on the horizon?