All posts tagged ESI

It’s Your Turn! Vote Today for the National Law Journal’s ‘Best of 2016’

The polls are open, and it’s awards season. Whatever your persuasion, it’s your turn to vote. The National Law Journal recently announced the finalists for its ‘Best of 2016,’ and Kroll Ontrack is proud to be nominated in NINE categories!

  • Best end-to-end litigation consulting firm
  • Best end-to-end ediscovery provider
  • Best technology assisted review ediscovery solution
  • Best data and technology management ediscovery provider
  • Best data recovery solution provider
  • Best managed document review services
  • Best managed ediscovery and litigation support services provider
  • Best online review platform
  • Best case management software

From now until Friday, February 5, you can vote in the annual reader’s choice survey. This is your chance to rate the products and services you’ve been using in litigation. And it’s an opportunity for those of us in the industry to receive valuable feedback.

While you don’t have to answer every question, we greatly appreciate your support and your feedback – thank you for taking the time!

It’s time to vote.

Ediscovery Competency Standard Addressed by California Bar

“Electronic document creation and/or storage, and electronic communications, have become commonplace in modern life…attorneys who handle litigation may not ignore the requirements and obligations of electronic discovery. A lack of technological knowledge in handling ediscovery may render an attorney ethically incompetent to handle certain litigation matters involving ediscovery, absent curative assistance.”

New California Ethics Opinion

With those words, earlier this summer the California State Bar officially addressed the ethical duties of counsel during ediscovery, and finally established competency standards for counsel in the Golden State. Although the opinion is advisory and non-binding upon courts, the opinion provides a much needed support structure in a field that has historically been faced with varied interpretations; it further serves as a major triumph for ediscovery gurus that have been pushing for a core standard for ediscovery.

Set within the parameters of a hypothetical bar exam question, the committee of the state bar’s opinion went on to discuss the 9 defined skills that attorneys should be able to perform in ediscovery (either “by themselves or in association with competent co-counsel”):

  1. Initially assess ediscovery needs and issues, if any;
  2. Implement/cause to implement appropriate ESI preservation procedures;
  3. Analyze and understand a client’s ESI systems and storage;
  4. Advise the client on available options for collection and preservation of ESI;
  5. Identify custodians of potentially relevant ESI;
  6. Engage in competent and meaningful meet and confer with opposing counsel concerning an ediscovery plan;
  7. Perform data searches;
  8. Collect responsive ESI in a manner that preserves the integrity of that ESI;
  9. Produce responsive non-privileged ESI in a recognized and appropriate manner.

Expand your knowledge and expertise

Ultimately, this opinion reiterates that attorneys’ obligations evolve as new technologies develop and become integrated with the practice of law. To make sure you are staying up to speed, let us share our expertise with you. Kroll Ontrack offers customized Continuing Legal Education (CLE) courses on a myriad of EDRM (Electronic Discovery Reference Model) topics, free of charge. These 60 to 90 minute courses – taught by expert legal and technology professionals – are held in your office, exclusively for your legal and IT teams. If you are interested, contact our events team.

 

 

 

SCOTUS Approves Proposed FRCP Amendments

On April 29, 2015 amendments to the Federal Rules of Civil Procedure (FRCP) took another step forward in the process. In a letter to U.S. Senate and House of Representatives leadership, Chief Justice John Roberts submitted the proposed amendments to the FRCP for final congressional approval. Chief Justice Roberts stated that the amendments “[H]ave been adopted by the Supreme Court of the United States,” rendering them effective December 1, 2015 absent any legislation to reject or modify the rules. You can find a copy of the Supreme Court’s submission to Congress here.

FRCP Amendments: A Look Back

As I blogged previously in a multi-part series, these amendments have travelled a long and winding road spanning multiple years. After being approved by the Standing Committee in May 2014 and the Judicial Conference in September 2014, the Supreme Court’s blessing was the next major hurdle.

FRCP Amendments: Impacts on Ediscovery

Unless modified by an act of Congress, legal professionals should expect several new civil procedure rules coming soon, with changes to Rule 37(e) likely driving the most impact on ediscovery.

The amendments to FRCP 37(e) seek to impose a uniform standard relating to the remedies available by a court when ESI is not properly preserved.  Rule 37(e) is applicable when three criteria are met:

  1. ESI is lost that “should have been preserved in the anticipation or conduct of litigation,”
  2. Because of a failure to take “reasonable steps,” and
  3. The loss cannot be remedied by “additional discovery” designed to replace or restore the ESI.

After this three part test is established, then a court—finding prejudice to the impacted party—can determine a remedy “no greater than necessary to cure the prejudice.” Only if the court finds intent to destroy ESI do the following grave remedies apply: adverse inference, jury instruction or dismissal.

In addition to these changes, other FRCP amendments emphasize the importance of cooperation, proportionality, and reasonableness in discovery. Make sure you subscribe to “Everything Ediscovery” by Kroll Ontrack for future posts about the new FRCP rules as December 1, 2015 draws near.

Part II – FRCP Amendments: The Long and Winding Road

After a few twists and turns, we can finally say that there is light at the end of the tunnel and  amendments to the Federal Rules of Civil Procedure (FRCP) are nearing completion.  On May 29 and 30, the Committee on Rules of Practice and Procedure (the “Standing Committee”) adopted the proposed FRCP amendments.

To say the least, this was not the quickest or easiest process, but, with most of it behind us, we are almost finished. The next stop along this trek is the Judicial Conference in September, then the Supreme Court of the United States shortly thereafter, and finally Congress.  If all goes as planned, and it usually does after this point in the journey (fingers crossed), the new rules will go into effect December 1, 2015.

The Hot Ticket Item: Rule 37(e) – Failure to Preserve

The most noted and widely debated rule amendment is the complete overhaul of Rule 37(e).  As previously discussed in FRCP Amendments: The Long and Winding Road, Rule 37(e) has had quite the transformative journey. The new Rule 37(e) entirely replaces the original version and was unanimously approved by the Standing Committee.

The revised rule is designed to ensure a more uniform response from Federal Courts regarding the loss of Electronically Stored Information (ESI). The rule, broken into two sections, gives courts power to undertake “measures” – AKA sanctions and other similar procedures – when a party loses ESI because they failed to take “reasonable steps” to preserve it during the anticipation of impending litigation.

The first section, Section 37(e)(1), allows a court to take measures when a party is prejudiced by the opposing party’s loss of ESI. The court is permitted to take reasonable action that sufficiently cures the party’s prejudice even though the loss of the ESI may not have been the opposing party’s fault.

Similarly, the second section, Section 37(e)(2), authorizes a court to take measures when a party intentionally loses ESI.  However, it does not require a showing of prejudice to the adverse party. The court can assume that the ESI was unfavorable, instruct the jury that the ESI was unfavorable, or grant default judgment or dismiss the case.

Section 37(e)(1) and Section 37(e)(2) are not alternatives to one another and can both be used in combination by the court if necessary.  Overall, Rule 37(e) will offer more uniformity in the measures Federal Courts take when a party fails to preserve ESI.

Ediscovery Related Amendments: Rules 1 and 26

Other rule amendments relevant to  ediscovery  are Rule 1 and Rule 26. Rule 1 was amended to stress the importance of cooperation between adverse parties and the court to promote a “just, speedy, and inexpensive” resolution to every action and case. Additionally, the newly revised Rule 26(b)(1) aims to ensure that the scope of discovery is proportional and relevant to the case. By combining Rule 26(b)(2)(c)(iii) with Rule 26(b)(1), the importance of an appropriate scope is emphasized and will no longer be easily overlooked.

Additional Amendments: Rules 4, 16, and 34

Amendments to Rules 4, 16, and 34 were also adopted by the Standing Committee during the May 2014 meeting. For a full draft of the entire amended rules package – including the previously discussed rules – see Tom Allman’s latest FRCP amendments treatise. Tom is a former general counsel, current adjunct law professor, and foremost ediscovery rules guru, and with his permission, Kroll Ontrack has posted Tom’s paper for our blog readers’ enlightenment.

Before we know it, December 1, 2015, will be here and we will have a whole new set of FRCP guidelines for ediscovery.  With that said, stay tuned to theediscoveryblog.com and ediscovery.com for all the latest developments on the FRCP amendments and ediscovery.

The Five Biggest Ediscovery Issues to Watch in 2014

1. Converging tools and processes blur lines between early data assessment (EDA) and review

Does an organization really need two separate tools for EDA and review? For over 15 years, organizations have been adopting litigation technologies a la carte (e.g., a review tool) that solve maybe one piece of a much larger ediscovery puzzle. Only now are practitioners finally stepping back to see the forest for the trees: this cycle of one-off adoption has bred a lot of inefficiency.  Every time electronically stored information (ESI) is exported, processed, and ingested into a different tool downstream, time and money is lost. If one tool empowered legal teams to filter, test and review in one place, many of these inefficiencies could be reduced. With an eye toward repeatability and long-term project management, expect industry leaders in 2014 to critically reexamine what is—and, perhaps more importantly, what is not—really necessary to react to ediscovery.

2.       The lack of legal avenues to shift ediscovery costs will become unavoidable

One of the biggest concerns ediscovery experts voiced in 2013 was that there are no well-paved paths for seeking ediscovery costs in court. In 2013, the Fourth and Federal Circuit joined the Race Tires America court in reasoning that 28 U.S.C.  § 1940(4) only applies to ediscovery functions that can be construed as “exemplification” or “making copies”—thereby excluding the bulk of ediscovery costs. At the same time, the rules espoused in Zubulake III and found in Federal Rule 26(b)(2)(B) are conditioned on a finding of some level of data inaccessibility, which, quite frankly, is becoming less of a problem than the gobs and gobs of accessible data increasingly wreaking havoc on producing parties. In 2014, expect more legal professionals to take issue with this rigid cost-shifting framework. Given the emphasis on increased proportionality radiating from the current federal rulemaking efforts, courts will probably become more creative and comfortable using less clear forms of authority and clever ESI protocols to rein in disproportionate discovery.

3.       Search law will move forward

One issue left in the wake of Da Silva Moore is whether a party may obtain discovery of training decisions made during the machine learning stage of a predictive coding case. The court in In re Biomet tackled this question for the first time in 2013, reasoning that a party’s request for the identification of coding decisions made on training documents was unfounded because parties are not permitted discovery of irrelevant and potentially privileged documents. Touching on the permissible bounds of the work product doctrine as it applies to the most talked about next-gen review tool, this exemplifies the type of intricate search dispute that will likely be opinion worthy in 2014. Because district courts from independent circuits so often look to each other for support in ediscovery opinions, it wouldn’t be surprising to see this hot-button issue revisited multiple times in the new year.

4.       Proposed amendments to the Federal Rules shake up preservation and sanctions standards

There is undeniable inconsistency across the nation with regard to the culpability standards required for different levels of spoliation sanctions. Proposed Federal Rule 37(e)—one of a handful of ediscovery amendments under public commentary—essentially replaces this inconsistency by requiring a showing of substantial prejudice plus willfulness or bad faith to allot serious sanctions. This is a higher standard than those imposed in many circuits and notably forecloses courts from issuing serious sanctions where gross negligence or negligence resulted in the loss of potentially relevant ESI. Despite the fact that the Committee on Rules of Practice and Procedure wants to wrap up this process by early 2015, many question whether any of these amendments will actually change anything, while others wonder whether the threshold for serious sanctions as espoused by Proposed Rule 37(e) has been set too high.

 5.       Predictive coding will become a question of when, not if

Predictive coding has been around since 2010. It was first endorsed for use in the ‘right cases’ in Da Silva Moore and was later ordered to be used sua sponte in EOHRB. In 2013, courts went even further by: (1) accepting—over the opposition’s objection—a party’s decision to apply predictive coding after culling the majority of a data set with keyword search (In re Biomet), and (2) opining that disclosure of training documents was not required (In re Biomet). Outside of the judicial arena, the notion of curbing costs with modern technology has spurred amendments to the ABA Model Rules, proposed amendments to many provisions of the Federal Rules, and amendments to several state rules of civil procedure (e.g., Minnesota). If one looks to recent commentary about how to really get to the nub of proportionate discovery, predictive coding is increasingly being offered as a potential answer. While 2014 probably won’t be the year this technology goes mainstream, massive change has probably become inevitable.

The Most Critical Decision: Who do we work with and how do we start?

Perhaps the most critical point of time in an ediscovery matter is when the attorneys and litigation teams learn ediscovery will play a significant role in the case. Whether the red flag comes from a client’s dust-coated legacy email system, or from a haystack of Electronically Stored Information (ESI), three basic paths lie ahead: team up with a software or service provider, start identification and collection using in-firm or in-house resources, or just sit and think for a second.

For most cases and teams, the first two options are often (and should be) foreclosed due to a lack of knowledge about ediscovery, technology, vendor pricing, or the case at hand. Instead, they opt for choice three, until they know enough to make a well-informed decision.

While this may seem perfectly ordinary, when you revisit this ediscovery purgatory every single case, it also becomes painstakingly inefficient.[1] One way around this “hurry-up and wait” game is to plan ahead – invest in technology and people that are “at the ready” should ediscovery ensure. To learn more, visit ediscovery.com to see how you can address these massive inefficiencies and transform your ediscovery practices from an art to a science.



[1] Kroll Ontrack surveyed its Advisory Board members in 2013 and found that these companies were dealing with a crushing load of 46 new ediscovery projects each year. Because many chose a technology approach on a case-by-case basis for each project, the companies spent 460 hours a year simply determining who to work with and what approach to take.

Fun With SnapChat Spoliation and Preservation

Imagine an app that lets you send 10-second picture messages… and then the pictures get deleted forever. Welcome to SnapChat, the app allegedly used by Wall Street moguls for insider trading and a platform for new fashion debuts. The little app-that-could began less than two years ago. Today, SnapChat transmits over 150 million photos a day.

SnapChat may be an ingenious little program, but it perplexes ediscovery experts and general counsel: are “snaps” discoverable? Do parties have a duty to preserve snaps when they have little to no control over the “deletion” of the data? And even when snaps can be recovered, is the cost too burdensome?

The problem with SnapChat is its auto-deletion factor. To add fuel to the fire, some tech writers have suggested that these images leave metadata and are “recoverable” at a high price tag. It’s not far-fetched to imagine a scenario where a picture is relevant to a lawsuit is sent through SnapChat and “disappears.” As the argument goes, “I see a history of this image. I’m not sure how your custodian’s SnapChat app affected the image, but it’s relevant to my claim—please produce it.” How would a motion for spoliation sanctions against either the receiving or sending party play out? While I’m confident that a Snap-Chat case is brewing somewhere between the cell towers, it certainly is a testing muse—one that can support many different plausible solutions.

How could a party sending an innocuous little snap chat possibly be held accountable for the spoliation of ESI?  Imagine if the sender had intentionally sent snaps to avoid “creating” evidence. Say a spouse is having an extramarital affair and takes snaps that would prove his infidelity in divorce proceedings. Is that discoverable? Those snaps would likely fall under Fed. R. Civ. P. 26(b)(1), which permits discovery of electronically stored information (ESI) “regarding any non-privileged matter that is relevant to any party’s claim or defense.”  If the divorce proceedings are reasonably anticipated, the spouse could be under a duty to preserve. Moreover, if a court found that the spouse acted with sufficient culpability by choosing to send a snap instead of an MMS, for example, the spouse could be on the hook for sanctions. It’s hard to imagine that a party using SnapChat to willfully destroy evidence could take advantage of the safe harbor exception at Fed. R. Civ. P. 37(e), however, it could plausibly offer relief in the right cases.

Realistically, SnapChat users typically do not intentionally, willfully, or in bad faith delete snaps – it is out of their hands. For now, it seems, compelled discovery of snaps is plausible but not practical – until the next tech wiz teaches us how to save snaps for good.

For an in-depth dive on the many complexities of ediscovery, check out Greg Buckles’ article Defining Multi-Matter Discovery and the upcoming Kroll Ontrack Webinar on Electronic Discovery Portfolio Management.

Sekisui Am. Corp. v. Hart: Judge Scheindlin’s Latest Footprint in Spoliation Case Law – Part 2

Part II: The Implications

What level of culpability should trigger sanctions? Negligence? Gross negligence? Bad faith? What arises to the level of prejudicing the non-producing party’s case? This case brings to light two conflicting perspectives on a critical spoliation issue—one that has the full attention of federal rule makers addressing potential amendments to Federal Rule37(e). Magistrate Judge Maas opines that sanctions are not appropriate if the non-producing party does not “appear” or cannot show that their case has been prejudiced by the loss of information – even if the actions taken are determined to be grossly negligent. Judge Schiendlin, on the other hand, basically states that bad acts should not go unpunished and that (absent some of the hardcopy documents in this case) it could be difficult for the non-producing party to show that they have been prejudiced – you cannot build an argument or a case around information you cannot access, i.e. how do you know what you don’t have if you don’t have it?

Rule 37(e) currently “requires” the showing of “exceptional” circumstances as well as evidence that the loss of ESI occurred as the result of “routine, good-faith operation(s)”. The issue has been that the application of the rule has been inconsistent. As a result of these inconsistencies, the proposed changes to FRCP 37(e), include new subsection 37(e)(1)(B)(ii) that would allow the imposition of sanctions if the court finds a party’s actions to have “irreparably deprived a party of any meaningful opportunity to present or defend against the claim(s) in the litigation.” Under the amended rule, the party seeking sanctions bears the burden of showing that the loss of the identified data “irreparably” impacts their ability to advance their case or assert certain defenses. This is a significantly higher standard than exists today and will likely lead to a very narrow application of the rule. The standard under subsection 37(e)(1)(B)(ii) is more onerous than the “substantial burden” standard proposed for revised rule 37(e)(1)(B)(i), which requires a showing of bad faith or willfulness. Further complicating the analysis, the proposed amendments also remove the original language permitting the imposition of sanctions against the non-producing party where the court finds that the lost information “reasonably should have been preserved by the party.”

In sum, it is interesting to read the divergent viewpoints of two members of the bench who are well versed in ediscovery (Maas v. Schiendlin). It will be even more interesting to see how the proposed rule changes (assuming they are approved) impact the analysis and whether we will actually see more consistency regarding the imposition of sanctions.   Be sure to listen to our latest podcast where Adam and Catherine Losey explore this case in more detail and examine how it could affect litigants across the nation.

Sekisui Am. Corp. v. Hart: Judge Scheindlin’s Latest Footprint in Spoliation Case Law – Part 1

Judge Shira Scheindlin’s latest opinion, Sekisui v. Hart, marks a major development for the latest footprint in spoliation case law and is sure raise eyebrows among federal rule makers tasked with reworking Federal Rule 37. The breach of contract claim in Sekisui stemmed from the plaintiff’s acquisition of the defendants’ company.  Notably, the plaintiff sent a notice of potential claims to the defendants in October 2010, but did not file suit until May 2012. During this time frame, the plaintiff directed its vendor to permanently destroy the emails of Hart, the acquired company’s former president, and another former employee.  Additionally, the plaintiff revealed that it had not put in place a litigation hold until January 2012, nearly fifteen months after sending a Notice of Claim to the defendants. It did not notify the vendor managing its ESI of the lawsuit until July 2012, three months after the claim was filed. While a former HR executive did print (and the company later produced) hard copies of any emails “deemed pertinent to the company,” the plaintiff lost an undeterminable amount of ESI associated with Hart and the other former employee. Crucial to the court’s spoliation analysis was that the destruction stemmed from the plaintiff’s business-level decision to streamline business operations.

Judge Scheindlin cited Residential Funding Corp. v. DeGeorge Financial Corp. to begin her analysis. To warrant an adverse inference instruction, a party must establish three things:

  • Control and a duty to preserve (not disputed here)
  • Culpability by the destroying party
  • That the destroyed evidence was relevant

Prominent ediscovery Magistrate Judge Frank Maas, wrote the underlying opinion denying sanctions. While he reasoned that the conduct may have risen to the level of gross negligence, he found that sanctions were not warranted because the defendants failed to show that they had been prejudiced by the destruction of ESI.

Judge Scheindlin departed from the Magistrate Judge’s analysis at several points of the opinion. Chastising recent proposed amendments to FRCP 37(e),  the court again cited the Residential Funding decision to state that the state of mind factor is established when the destruction was intentional or even negligent.  Because the plaintiff’s employee directly requested the deletion of ESI, Scheindlin found the destruction of the emails of the two key custodians “willful” and “intentional.” As such, Sekisui’s good faith excuse—to save space on its servers—was irrelevant.

Turning to the relevancy of the missing ESI, the court quickly found that “it is not difficult to envision” many ways in which the destroyed emails “might be relevant.” While Magistrate Judge Maas also came to this conclusion, he ultimately declined to impose sanctions because the defendants could not show that any emails were, in fact, missing. Judge Scheindlin took issue with this analysis and centered her discussion on the risk of loss rationale lying at the heart of spoliation case law. The fact that potentially relevant information was willfully destroyed is enough to presume prejudice to the innocent party (for the limited purpose of determining whether an instruction will be given)—flipping the burden the other way “would allow parties who have destroyed evidence to profit from that destruction.” As Judge Scheindlin noted, the defendants can no longer use the emails to show compliance with the terms of the contract that was allegedly breached. Because the plaintiff “willfully and permanently destroyed the ESI of at least two key players,” failed to impose a timely litigation hold, and waited too long to inform its vendor of its obligations, the court granted the defendants’ request for an adverse inference instruction.  Stay tuned for Part II of this blog:  The Implications.

There’s No Place Like Home: Kansas Courts Issue New Ediscovery Guidelines

Cooperation, proportionality and efficiency. Oh my!

One of the first lessons we are taught as a child is how to share. Unfortunately, for decades, the opposite has been drilled into litigation professionals. Judicial patience has worn thin and judges have taken it upon themselves to re-teach lawyers the crucial lesson of cooperation. In Alford v. Rents, the court did not hesitate in making two attorneys personally liable for a monetary fine of $3,750 for a “conscious effort to maximize litigation” and making it as “unpleasant and expensive as possible.” Indeed, the exasperated warning of the court in B&B Hardware, Inc. v. Fastenal Co., that parties stop behaving as “armed combatants” and more like “professionals”, is no longer an aberration but rather common.

It was with concerns in mind such as these that the United States District Court for the District of Kansas appointed the Rule 1 Task Force who recently published new guidelines for ediscovery. The Task Force, a committee of three lawyers and two federal judges, is dedicated to strengthening Rule 1 of the Federal Rules of Civil Procedure which calls for litigation to be handled in a “just, speedy, and inexpensive” way.  While the guidelines are not binding, lawyers would do well to follow them.

In an introduction aimed at highlighting the importance of cooperation in the new guidelines, the Task Force explicitly endorsed the Sedona Conference Cooperation Proclamation and noted that they have already been adopted by seven Kansas judges. Throughout the guidelines, the Task Force bade counsel to “engage with opposing counsel in a respectful, reasonable, and good faith manner.”  The Task Force also recognized that the discovery of ESI “is unduly expensive if not managed properly.” Therefore, they recommended that counsel become knowledgeable about client’s information management systems before the discovery conference so they can effectively discuss the storage and retrieval of the ESI. The guidelines also noted that the parties should presume that the producing party will bear all costs for “reasonably accessible ESI” and that there will be cost-shifting for ESI that is not reasonably accessible.

The guidelines do not endorse any one method of reviewing documents, but the Task Force did point out that the proportionality principle must be considered and parties must confer and agree on a “reasonably specific protocol for retrieving and producing ESI.” With this in mind, the Task Force recommended that the parties agree on a neutral vendor and/or use one search protocol to reduce costs, noting, “an attorney’s representation of a client is improved by conducting discovery in a cooperative manner.

Whether or not your practice or docket brings you to litigate in the land of Dorothy and Oz, Kansas’ new approach to ediscovery will likely serve as a template for other jurisdictions across the country. To keep up on ediscovery developments in Kansas and other jurisdictions across the United States, visit the ediscovery Local Rules & Statutes guide.  Further, for more information on cooperation and the ethical challenges of ediscovery, check out a recent presentation Ethical Challenges in Ediscovery.

 
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