For Monday we will be rounding up some e-discovery odds and ends.
Please read the following:
37(f) Safe Harbor and related spoliation issues
In re Krause 367 B.R. 740 (2007) - You can skip to page 765 and read to the end.
Arthur Andersen LLP v. United States 544 U.S. 696 (2005)
International:
Court Holds U.S. Discovery Rules Trump French Law and Hague Convention
Gucci America, Inc. v. Curveal Fashion 2010 WL 808639 (S.D.N.Y.) (PDF)
Overreaching subpoena and statutory protections:
In re Subpoena Duces Tecum to AOL
(18 U.S.C. 2703)
Wednesday, April 7, 2010
Tuesday, April 6, 2010
Prelitigation expenses
There was a question in class on Monday about legal holds, especially in the pre-litigation phase. Basically, the question was - is there any relief from the expense of a legal hold, particularly in a pre-litigation situation? Does it really happen that companies are stuck disrupting their usual practices for a long time when there is a danger that litigation might occur? If so, is this fair?
I struggled with the answer in class, but basically stuck to the "yes" side - Yes a potential litigant has to hold on to relevant information no matter what.
That's basically the case now. As an extreme example, take Adams v. Dell. Dell received notice in 2005 that Adams was thinking of suing the company based on alleged patent infringement happening roughly around 2000 and before. Dell argued that the date for the legal hold should have been the receipt of the demand letter in 2005. The court held that, for a number of reasons, Dell should have known sometime in 1999 or 2000 that a suit was likely.
E-discovery and legal hold expert John Jablonski suggested in an episode of ESI Bytes that the case might be an anomaly, or that one of the defendants might have rubbed the judge the wrong way.
Even if the temporal limits of a litigation hold can be rather tough, there are some things a potential litigant (probably the defendant) can do.
In the same podcast, Jablonski touted the importance of carefully constructed litigation holds. He said a common misstep is to over-preserve, successfully avoiding sanctions, but spending a ton in the process.
"A legal hold with a narrow scope is probably the best way for defendants to save money," he said.
Using IT staff and a "data map" parties (usually defendants on this end of it) can make an argument why a limited legal hold was suitable. To take an example I'm making up, if a case involved events at the San Francisco office, there might be no need to preserve from the New York office. With more precision, a company could get even more specific, down to the level of "John Smith's emails from April 2006." The company would need IT staff or someone knowledgeable to testify as to the efforts it had taken and basically how it would be impossible for relevant e-mails to be missing.
Using a "scope analysis" a company could tailor its litigation hold to a level sufficient to avoid sanctions, but hopefully not wasteful. Of course, there will still be some balancing involved as to what the right level is.
The Sedona Conference (not binding, but pretty persuasive) also has a document called The Sedona Conference Commentary on Legal Holds. The Commentary lists a number of "Guidelines" to be considered when crafting a legal hold. Guideline 7 states: "In determining the scope of information that should be preserved, the nature of the issues raised in the matter, experience in similar circumstances and the amount in controversy are factors that may be considered."
This question brings up issues of proportionality in e-discovery, which could open the door to wide-ranging policy debates of the type hinted at in our reading from Monday.
The answer to what a reasonable response is might not be the same for every litigant either. In another ESI Bytes podcast, on proportional e-discovery, Judge James Rosenbaum (Dist. of Minnesota) differentiated between "professional defendants" (think railroads, chemical companies, insurance carriers), and others. Companies that have been through litigation with an e-discovery component before, he said could reasonably be held to a higher standard than individuals or businesses that have never been in such litigation.
Bear in mind also that if there are going to be sanctions for spoliation the mental element needs to be satisfied. (See Zubulake IV Section II "Legal Standard"). Up through and including reckless, the party seeking a spoliation sanction still has to prove that the destroyed evidence would have been relevant. Only at "willful" does it become presumed that "spoliator's mental culpability itself evidence of the relevance of the documents destroyed." (Some state courts apply a different standard playing around with the mental states a bit.)
There has also been some controversy between companies and their insurance carriers about what pre-litigation expenses should come under their insurance policies. This could include litigation holds.
Since e-discovery is a world populated by so many vendors, there are also many options for for companies that want to apply software in-house to reduce legal hold and e-discovery costs. (See here, and here).
Finally, in the first podcast noted above Jablonski mentioned that defendants (usually the ones subject to the legal hold) have been agitating at the policy level for changes to the FRCP that might make their load easier, such as perhaps pushing back "trigger dates."
I struggled with the answer in class, but basically stuck to the "yes" side - Yes a potential litigant has to hold on to relevant information no matter what.
That's basically the case now. As an extreme example, take Adams v. Dell. Dell received notice in 2005 that Adams was thinking of suing the company based on alleged patent infringement happening roughly around 2000 and before. Dell argued that the date for the legal hold should have been the receipt of the demand letter in 2005. The court held that, for a number of reasons, Dell should have known sometime in 1999 or 2000 that a suit was likely.
E-discovery and legal hold expert John Jablonski suggested in an episode of ESI Bytes that the case might be an anomaly, or that one of the defendants might have rubbed the judge the wrong way.
Even if the temporal limits of a litigation hold can be rather tough, there are some things a potential litigant (probably the defendant) can do.
In the same podcast, Jablonski touted the importance of carefully constructed litigation holds. He said a common misstep is to over-preserve, successfully avoiding sanctions, but spending a ton in the process.
"A legal hold with a narrow scope is probably the best way for defendants to save money," he said.
Using IT staff and a "data map" parties (usually defendants on this end of it) can make an argument why a limited legal hold was suitable. To take an example I'm making up, if a case involved events at the San Francisco office, there might be no need to preserve from the New York office. With more precision, a company could get even more specific, down to the level of "John Smith's emails from April 2006." The company would need IT staff or someone knowledgeable to testify as to the efforts it had taken and basically how it would be impossible for relevant e-mails to be missing.
Using a "scope analysis" a company could tailor its litigation hold to a level sufficient to avoid sanctions, but hopefully not wasteful. Of course, there will still be some balancing involved as to what the right level is.
The Sedona Conference (not binding, but pretty persuasive) also has a document called The Sedona Conference Commentary on Legal Holds. The Commentary lists a number of "Guidelines" to be considered when crafting a legal hold. Guideline 7 states: "In determining the scope of information that should be preserved, the nature of the issues raised in the matter, experience in similar circumstances and the amount in controversy are factors that may be considered."
This question brings up issues of proportionality in e-discovery, which could open the door to wide-ranging policy debates of the type hinted at in our reading from Monday.
The answer to what a reasonable response is might not be the same for every litigant either. In another ESI Bytes podcast, on proportional e-discovery, Judge James Rosenbaum (Dist. of Minnesota) differentiated between "professional defendants" (think railroads, chemical companies, insurance carriers), and others. Companies that have been through litigation with an e-discovery component before, he said could reasonably be held to a higher standard than individuals or businesses that have never been in such litigation.
Bear in mind also that if there are going to be sanctions for spoliation the mental element needs to be satisfied. (See Zubulake IV Section II "Legal Standard"). Up through and including reckless, the party seeking a spoliation sanction still has to prove that the destroyed evidence would have been relevant. Only at "willful" does it become presumed that "spoliator's mental culpability itself evidence of the relevance of the documents destroyed." (Some state courts apply a different standard playing around with the mental states a bit.)
There has also been some controversy between companies and their insurance carriers about what pre-litigation expenses should come under their insurance policies. This could include litigation holds.
Since e-discovery is a world populated by so many vendors, there are also many options for for companies that want to apply software in-house to reduce legal hold and e-discovery costs. (See here, and here).
Finally, in the first podcast noted above Jablonski mentioned that defendants (usually the ones subject to the legal hold) have been agitating at the policy level for changes to the FRCP that might make their load easier, such as perhaps pushing back "trigger dates."
Monday, April 5, 2010
E-Discovery resources online
If you think e-discovery is interesting at all, we have only scratched the surface. The law is still developing very quickly. I get a lot of my information from the web. Here are a few suggested sources:
- This pocket guide for judges is helpful.
- There are a number of electronic discovery blogs. Two good ones are:
- EDD update
- Electronic discovery blog
- Craig Ball is a lawyer and electronic discovery expert whose web page is full of useful information.
- Finally, ESI Bytes is a good all-purpose page. I mentioned this one early in the semester because I like to listen to the podcasts. You can also get to the podcasts through iTunes.
I'm sure there plenty more out there, and since this is just a very quick overview, if you are interested at all, you might want to do some of your own hunting.
- This pocket guide for judges is helpful.
- There are a number of electronic discovery blogs. Two good ones are:
- EDD update
- Electronic discovery blog
- Craig Ball is a lawyer and electronic discovery expert whose web page is full of useful information.
- Finally, ESI Bytes is a good all-purpose page. I mentioned this one early in the semester because I like to listen to the podcasts. You can also get to the podcasts through iTunes.
I'm sure there plenty more out there, and since this is just a very quick overview, if you are interested at all, you might want to do some of your own hunting.
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