CONQUERING THE NEW FRONTIERS OF E-DISCOVERY

1. CONQUERING THE NEW FRONTIERS OF E-DISCOVERY Rodger W. Moore The Drew Law Firm September 23, 2010

2. The Agenda • Electronic discovery • Preservation Obligations • Spoliation • Changes in FRCP, ORCP • Five Tips

3. E-discovery • What is it? • Why do we care? • Metadata

4. E-discovery • Increase in the use of e-mail • Increasingly complex technology • Ease of deletion/editing of e-mail • Ease of inadvertent disclosure • Informality of e-mail • Who “owns” e-mail? • What is “metadata?”

5. E-discovery • Increasingly complex technology • Blackberries • Cell phones • Pagers • Jazz drives, zip drives, flash drives, optical disks • Voice mail • Other PDAs (Bluetooth)

6. E-discovery • Increase in the use of e-mail • Over 90% of corporate communications only sent via electronic delivery • Average person sends and receives between 50 and 150 e-mails every day • 2 trillion e-mails sent in US in 2006 • 50 billion e-mails sent daily worldwide • 92% of information is never converted to paper form

7. Why do we care?

8. Why do we care? • Dramatic increase in volume of electronic files • More complex storage and retrieval • Courts are increasingly holding attorneys responsible for electronic media issues • Little – but quickly developing – case law regarding electronic media

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13. Why do we care? • March 1, 2010: “I am a f**king failure.” “I love you … I was terrified of where we were going and my outbursts and the potential for damage.” • Morning after January 6 fight: “How’s your tooth?” “I want to tell you how unspeakably sorry I am.”

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17. Duty to Preserve

18. Duty to Preserve • Rule of Professional Responsibility Rule 3.4: “[a lawyer shall not] unlawfully obstruct another party’s access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act.” • Zubulake v. UBS Warburg, LLC series of cases

19. Duty to Preserve • Zubulake “V”: • “the obligation to preserve evidence runs first to counsel, who then has a duty to advise and explain to the client its obligations to retain pertinent documents that may be relevant to the litigation.” Zubulake v. UBS Warburg LLC, 2004 U.S. Dist. LEXIS 13674 (S.D.N.Y. July 20, 2004)

20. Duty to Preserve • When does the duty attach? • When litigation is commenced, or when a party “reasonably should know that the evidence may be relevant to anticipated litigation.” • R of P R comment: “in a pending proceeding or one whose commencement can be foreseen…” • Zubulake: “when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.”

21. Duty to Preserve • Document Retention and Destruction Policies • ARE a successful defense to spoliation claim, if: • Formal policy • Reasonable • Clearly articulates • Uniform enforcement • Halted upon notice or reasonable anticipation of litigation

22. Duty to Preserve • U.S. Supreme Court, in Arthur Andersen LLP v. United States, 125 S. Ct. 2129 (U.S. 2005): • “’Document retention policies,’ which are created in part to keep certain information from getting into the hands of others, including the Government, are common in business. … It is, of course, not wrongful for a manager to instruct his employees to comply with a valid document retention policy under ordinary circumstances.”

23. Duty to Investigate

24. Duty to Investigate • A party must conduct an analysis to determine the status of document storage • GTFM v. Wal-Mart, 2000 U.S. Dist LEXIS 3804 (S.D.N.Y. 2000)

25. Spoliation: why do we care? • Increasing sanctions for spoliation of electronic data: “Big Scary Cases” • U.S. v. Philip Morris, No. 99-2496 (Dist. Ct. D.C.) • Zubulake v. UBS Warburg LLC, 2004 U.S. Dist. LEXIS 13674 (S.D.N.Y. July 20, 2004) • Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., No. CA 03-5045, 15th Jud. Cir., Palm Beach Cty., Fla, Mar. 23, 2005. • Credit Suisse/Quattrone investigation

26. Spoliation – Sources of Authority for Remedies • Ohio Rule of Civil Procedure 37(B)(2) • Federal Rule of Civil Procedure 37 • Case law applying and interpreting rules • “Inherent Authority” • State ex rel. Left Fork Mining v. Fuerst, 1999 Ohio App. LEXIS 6356 (Ohio Ct. App., 8th Dist. 1999).

27. Spoliation – Factors Weighed in Considering • Court has broad discretion. • Generally, courts try to minimize degree of harm to spoliating party. • Ohio courts try to follow policy of imposing least severe sanction. • Intent of offending party • Degree of fault of spoliating party

28. Spoliation – Factors Weighed in Considering • Reasonableness of offending party’s actions • Level of prejudice suffered by aggrieved party • Need to deter such conduct in the future • Relative importance of evidence • Inadequacy of alternative sanctions

29. Spoliation – Specific Remedies • Intentional spoliation of evidence. • Elements: • Pending or probable litigation involving the plaintiff; • Knowledge on the part of defendant that litigation exists or is probable; • Willful destruction of evidence by defendant designed to disrupt the plaintiff’s case; • Disruption of the plaintiff’s case, and • Damages proximately caused by the defendant’s acts. • Smith v. Howard Johnson Co., Inc., 615 N.E.2d 1037 (Ohio 1993).

30. Spoliation – Defenses • No proximate causation • No damages • Other remedies are adequate • No duty to preserve • Res judicata • Nonphysical evidence • Record Retention Policies

31. Spoliation – Defenses • No proximate causation • Plaintiff’s lack of due diligence in the underlying suit caused the loss or reduced recovery, not the spoliation. • Petrik v. Monarch Printing Corp. (1986), 150 Ill. App.3d 248, 501 N.E.2d 1312

32. Spoliation – Defenses • No damages • Plaintiff cannot prove damages to a reasonable certainty, but relies to an excessive extent on estimates or projections. • Plaintiff prevailed in the underlying suit. • Plaintiff’s loss or failure to fully recover are because of a weak case rather than spoliated evidence.

33. Spoliation – Defenses • Other remedies are adequate • LaRaia v. Superior Court of County of Maricopa (1986), 150 Ariz. 118, 722 P.2d 286.

34. Spoliation – Defenses • Res judicata • Spoliation claim brought in separate lawsuit. • Davis v. Wal-Mart Stores, Inc. (2001), 93 Ohio St.3d 488, 756 N.E.2d 657.

35. Spoliation: why do we care? • Award of attorneys’ fees • Adverse inference • Expert or fact witness preclusion • Default judgment • Stricken pleadings • Court order requiring alternative discovery methods

36. FRCP Amendments • (1) Incorporate ‘electronic documents’ into FRCP; • (2) Require early discussion of electronic discovery; • (3) Create “safe harbor” for systematic, routine destruction of information; • (4) Allow party requesting documents to specify “form of production”; • (5) Provide relief for attorney-client privilege waiver; and • (6) Create “two-tier” level of electronic information.

37. ORCP Amendments • Very similar to FRCP changes (effective July 1, 2008). • (1) No formal conference requirement, but “are appropriate topics for pretrial conferences”; • (2) Generally includes electronic information in all references to “documents”; • (3) Provides mechanism for challenging burdensome or costly requests, and withholding information based on privilege claim; • (4) Clock for time required to respond to interrogatories and requests for admission doesn’t start “ticking” until both paper AND electronic requests are received; • (5) Allows party requesting documents to specify “form of production”; • (6) Provides factors a judge should consider in determining whether sanctions are proper when a party withholds electronic evidence; and • (6) Rule 45 changes includes all previous changes in subpoena process.

38. Five Tips - #1 • Implement litigation response plan

39. Electronic Document Discovery: Strategies • Litigation Response Plans • Which employees should be interviewed, and which electronic storage systems should be investigated? • Should electronic storage media be “mirrored” (copied in its entirety), or should the team “drag and drop” files (copy only selected portions of the storage media type)?

40. Electronic Document Discovery: Strategies • Litigation Response Plans • Can the review team use a date filter to eliminate electronic files that were created or edited outside the producible date range? • Should the review team use a keyword search list to eliminate non-responsive documents?

41. Electronic Document Discovery: Strategies • Litigation Response Plans • Should the law firm’s review team review files using the “native file format” (reviewing them using their original program), or convert the files to a picture-type file (PDF, TIF)? • Does the law firm have the expertise in its in-house IT staff to load and administer electronic files for the review team, or should the firm use an experienced electronic discovery vendor as a resource?

42. Electronic Document Discovery: Strategies • Litigation Response Plans • Should a law firm host the party’s electronic files on its network to review them, or should it use an electronic discovery vendor, which can host the files on its network and allow a review team to securely access and review files over the Internet?

43. Electronic Document Discovery: Strategies • Litigation Response Plans • “Clawback” agreements • “Quick peek” agreements

44. Five Tips - #2 • Implement record retention program

45. Five Tips - #3 • Consider using alternative data collection and storage techniques

46. Five Tips - #4 • Use the Rule 26(f) conference strategically: • Create an affirmative defense against any potential spoliation claim; • Understand the client’s file management system; • Force the opposing party to fulfill their discovery and preservation obligations; • If appropriate, raise the possibility of cost-shifting; and • Raise any problematic issues now for early resolution.

47. Five Tips - #5 • When litigation arises, use technology to your benefit • Attorney-client or “hot doc” term searches • Instead of costly litigation holds, consider using “mirror imaging” to fulfill preservation obligations • Use metadata date filters to narrow production review