Electronic Document Electronic Document DiscoveryDiscovery

NCHELP Legal MeetingNCHELP Legal Meeting

Palm Springs, CaliforniaPalm Springs, California

March 20, 2006March 20, 2006

ParticipantsParticipants

Steven Brower, Steven Brower, Esq.Esq. Litigation AttorneyLitigation Attorney Orange County, CAOrange County, CA sbrower@sortm.co

m Mark D. Mark D.

GershensonGershenson Litigation AttorneyLitigation Attorney Palm Springs, CAPalm Springs, CA mdg@mdglaw.com

What Does The Legal System What Does The Legal System Expect Of Document Production?Expect Of Document Production?

Rational ExpectationsRational Expectations The ability to produce potentially relevant The ability to produce potentially relevant

documentary evidence, in a timely documentary evidence, in a timely manner, in a form which provides manner, in a form which provides credibility to the documentscredibility to the documents

The ability to provide persuasive The ability to provide persuasive testimony confirming the abovetestimony confirming the above

Extreme ExpectationsExtreme Expectations The ability to produce and explain all The ability to produce and explain all

documentary evidence which the documentary evidence which the opposing party claims might be helpful to opposing party claims might be helpful to their casetheir case

What Documents Must Be What Documents Must Be Produced?Produced?

Any Representation Of Data In A Form Any Representation Of Data In A Form Which Can Be Converted For Use By Which Can Be Converted For Use By PeoplePeople Formally Retained Documents, Including Formally Retained Documents, Including

ElectronicElectronic Documents Which Should Have Been Documents Which Should Have Been

Destroyed, But Were NotDestroyed, But Were Not Document Retention Policies Allow Destruction, Document Retention Policies Allow Destruction,

But Only If The Destruction Already HappenedBut Only If The Destruction Already Happened Informal Personal FilesInformal Personal Files ““ScratchScratch”” Notes Of Telephone Conversations Notes Of Telephone Conversations Notes Scribbled On A NapkinNotes Scribbled On A Napkin

Document Retention - NapkinsDocument Retention - Napkins

Text from FAQ on website of TFT:Text from FAQ on website of TFT:

Electronic Data Is A Electronic Data Is A ““WritingWriting””

Federal Rules of Evidence, Rule 1001Federal Rules of Evidence, Rule 1001““For purposes of this article the following For purposes of this article the following

definitions are applicable:definitions are applicable:

(1) (1) ““WritingsWritings”” and and ““recordingsrecordings”” consist of consist of letters, words, or numbers, or their letters, words, or numbers, or their equivalent, set down by handwriting, equivalent, set down by handwriting, typewriting, printing, photostatting, typewriting, printing, photostatting, photographing, photographing, magnetic impulse, magnetic impulse, mechanical or electronic recording,mechanical or electronic recording, or or other form of data compilation.other form of data compilation.””

Electronic Data Is Subject To Electronic Data Is Subject To Rule 34 DiscoveryRule 34 Discovery

Federal Rules of Civil Procedure, Rule 34Federal Rules of Civil Procedure, Rule 34““Any party may serve on any other party a Any party may serve on any other party a

request (1) to produce and permit the party request (1) to produce and permit the party making the request, or someone acting on the making the request, or someone acting on the requestorrequestor’’s behalf, to inspect and copy, any s behalf, to inspect and copy, any designated documents designated documents (including . . . other (including . . . other data compilations from which information can data compilations from which information can be obtained, translated, if necessary, by the be obtained, translated, if necessary, by the respondent through detection devices into respondent through detection devices into reasonably usable form) reasonably usable form) . . .. . .””

19197070 Revisions to FRCP 34 Revisions to FRCP 34 Advisory Committee NotesAdvisory Committee Notes

““The inclusive description of The inclusive description of ““documentsdocuments”” is revised to accord with changing is revised to accord with changing technology. It makes clear that Rule 34 technology. It makes clear that Rule 34 applies to electronic data compilations applies to electronic data compilations from which information can be obtained from which information can be obtained only with the use of detection devices, only with the use of detection devices, and that when the data can as a and that when the data can as a practical matter be made usable by the practical matter be made usable by the discovery party only through respondendiscovery party only through respondentt ’’s devices, respondent may be required s devices, respondent may be required to use his devices to translate the data to use his devices to translate the data into usable form.into usable form.””

2006 Federal Rules Revisions2006 Federal Rules Revisions

New rules for electronic discovery New rules for electronic discovery will be effective as of December 1, will be effective as of December 1, 2006 if approved by the Supreme 2006 if approved by the Supreme CourtCourt More involvement, at an early time in More involvement, at an early time in

the case, by information technology the case, by information technology personnelpersonnel

What Are Documents?What Are Documents? Any Representation Of InformationAny Representation Of Information

Scanned Documents (and all earlier Scanned Documents (and all earlier forms)forms)

FaxFax EmailEmail Instant MessagingInstant Messaging SoftwareSoftware Voice MailVoice Mail SpreadsheetsSpreadsheets Databases (from Quicken to Sabre)Databases (from Quicken to Sabre) Personal Information DevicesPersonal Information Devices

Document Retention PoliciesDocument Retention Policies

Document retention policies canDocument retention policies can’’t t conflict with legal requirementsconflict with legal requirements

Document retention should not be Document retention should not be perceived as evidence destructionperceived as evidence destruction Do the policies make sense? (Instant Do the policies make sense? (Instant

destruction of email, for example)destruction of email, for example) The cost of retaining the records isnThe cost of retaining the records isn’’t t

the problem – it is the cost of reviewing the problem – it is the cost of reviewing the records in litigationthe records in litigation

Consistent RetentionConsistent Retention

Standards should be enforced in a Standards should be enforced in a consistent mannerconsistent manner ““ReminderReminder”” messages, which are first messages, which are first

sent out once there is already a reason sent out once there is already a reason to suspect a problem, have been trouble to suspect a problem, have been trouble in some casesin some cases

Cannot destroy documents after you Cannot destroy documents after you know about issues, even if they know about issues, even if they ““should should have beenhave been”” destroyed before destroyed before

California Federal BankCalifornia Federal Bank

California Court of Appeal, 2002 California Court of Appeal, 2002 Cal.App. LEXIS 3077 (3/14/02 – Cal.App. LEXIS 3077 (3/14/02 – Unpublished)Unpublished)

Class action filed in 1997 regarding Class action filed in 1997 regarding reconveyance practices and feesreconveyance practices and fees

More California Federal BankMore California Federal Bank ““The trial court made certain findings The trial court made certain findings

concerning CalFedconcerning CalFed’’s conduct during s conduct during discovery. First, CalFed destroyed computer discovery. First, CalFed destroyed computer databases used to track the reconveyance databases used to track the reconveyance process and collection of reconveyance fees process and collection of reconveyance fees for the period of October 1, 1991 through for the period of October 1, 1991 through April 1, 1997. They destroyed these April 1, 1997. They destroyed these databases databases afterafter claiming in sworn discovery claiming in sworn discovery responses and in meet-and-confer responses and in meet-and-confer conferences that the databases did not exist. conferences that the databases did not exist. CalFed also destroyed other databases and CalFed also destroyed other databases and withheld other information relevant to the withheld other information relevant to the litigation, and it provided false or misleading litigation, and it provided false or misleading declarations and answers to interrogatories.declarations and answers to interrogatories.””

Technical Issues - Voice MailTechnical Issues - Voice Mail

Nature of DataNature of Data Digital Voice RecordingDigital Voice Recording Digital DataDigital Data

Date/Time StampDate/Time Stamp Recipient InformationRecipient Information Sender InformationSender Information PriorityPriority Read/Not ReadRead/Not Read

No IndexNo Index

Technical Issues - ContinuedTechnical Issues - Continued

Backup RetentionBackup Retention Generally PeriodicGenerally Periodic

Mirroring Is Not PermanentMirroring Is Not Permanent Deleted Are Often GoneDeleted Are Often Gone

Reuse of BackupReuse of Backup Customer Controlled InformalCustomer Controlled Informal Often Third-Party ControlOften Third-Party Control

Identification of Voice DataIdentification of Voice Data

Assume You Got Lucky!Assume You Got Lucky! Determine the Volume of DataDetermine the Volume of Data

50 Active Phones, 10 50 Active Phones, 10 Messages/Day, 1 Minute Messages/Day, 1 Minute Average/Message, 1 Year (250 Average/Message, 1 Year (250 days) = 125,000 Minutes of Voice days) = 125,000 Minutes of Voice or 2,000 Actual (Not Billable) or 2,000 Actual (Not Billable) HoursHours

Identification of Voice Data - Identification of Voice Data - ContinuedContinued

RequiresRequires ““SameSame”” Voice Mail Machine Voice Mail Machine

Configuration Data With Extensions, Configuration Data With Extensions, Etc.Etc.

Screening for Privilege, Etc.Screening for Privilege, Etc. Persons with Knowledge of VoicesPersons with Knowledge of Voices

Language SkillsLanguage Skills Technology does not yet give a Technology does not yet give a

solutionsolution

Big Companies Have IssuesBig Companies Have Issues

GTFM v. Wal-Mart Stores, 2000 US GTFM v. Wal-Mart Stores, 2000 US Dist. LEXIS 16244, SDNY 11/9/00Dist. LEXIS 16244, SDNY 11/9/00 Sanctions of Sanctions of ““onlyonly”” $110,000 (would $110,000 (would

have been $280,000 but for settlement) have been $280,000 but for settlement) for failure to disclose capabilities of for failure to disclose capabilities of Walmart computers to assist with Walmart computers to assist with discovery in case involving purchase discovery in case involving purchase and sale of alleged counterfeit goodsand sale of alleged counterfeit goods

More With Wal-MartMore With Wal-Mart

Ex-Parte Wal-Mart, 2001 Ala. LEXIS Ex-Parte Wal-Mart, 2001 Ala. LEXIS 283, Supreme Court of Alabama 283, Supreme Court of Alabama (2/21/02 Publication)(2/21/02 Publication) Falling merchandise casesFalling merchandise cases Issue of whether Wal-Mart should be Issue of whether Wal-Mart should be

required to provide information which is required to provide information which is readily available due to computer, readily available due to computer, answered in the affirmativeanswered in the affirmative

More With Wal-MartMore With Wal-Mart

Testa v. Wal-Mart, 1Testa v. Wal-Mart, 1stst Circuit, 144 Circuit, 144 F.3d 173F.3d 173 Truck driver who fell at a Wal-MartTruck driver who fell at a Wal-Mart Issue of notice of potential litigationIssue of notice of potential litigation

Lombardo v. Broadway StoresLombardo v. Broadway Stores

2002 Cal.App. LEXIS 662 2002 Cal.App. LEXIS 662 (1/22/02 unpublished)(1/22/02 unpublished) Case study in mishandling of Case study in mishandling of

discovery request for electronic discovery request for electronic datadata

Class action relating to payment Class action relating to payment of accrued vacation benefitsof accrued vacation benefits

Broadway – ChronologyBroadway – Chronology

1/95 and 7/95 (before litigation) sent 1/95 and 7/95 (before litigation) sent preservation letterpreservation letter

10/95 suit filed10/95 suit filed 11/95 Broadway responded to 11/95 Broadway responded to

discovery saying that it would discovery saying that it would produce documentsproduce documents

2/96 got some payroll documents2/96 got some payroll documents 2/97 new set of discovery requests2/97 new set of discovery requests

Broadway – ChronologyBroadway – Chronology 5/97 5/97 ““Broadway provided unverified Broadway provided unverified

responses that consisted almost entirely of responses that consisted almost entirely of unmeritorious objections and a false unmeritorious objections and a false statement all such documents had been statement all such documents had been providedprovided””

6/97 Broadway agreed to produce in 6/97 Broadway agreed to produce in exchange for motions to compel being exchange for motions to compel being withdrawnwithdrawn

8/97 Broadway first admitted 8/97 Broadway first admitted ““problemsproblems”” in in retrieving recordsretrieving records

9/97 Claimed HR was off-line for conversion9/97 Claimed HR was off-line for conversion

Broadway – ChronologyBroadway – Chronology 11/97 In response to motions to compel 11/97 In response to motions to compel

Broadway said it had been acquired by Broadway said it had been acquired by Federated and documents have been Federated and documents have been ““lost, misplaced or destroyedlost, misplaced or destroyed””

1/98 Plaintiff sent new discovery 1/98 Plaintiff sent new discovery requests, got boilerplate objectionsrequests, got boilerplate objections

Parties went to mediation, given some Parties went to mediation, given some pages of payroll recordspages of payroll records

10/98 Motions to compel granted with 10/98 Motions to compel granted with monetary sanctions now up to $12,000monetary sanctions now up to $12,000

Broadway – ChronologyBroadway – Chronology 2/99 Broadway says that records had 2/99 Broadway says that records had

been sent to Georgia in 1996 and been sent to Georgia in 1996 and cancan’’t be located, didnt be located, didn’’t give other t give other informationinformation Broadway says there are about 5 million Broadway says there are about 5 million

pages of records relating to 90,000 class pages of records relating to 90,000 class membersmembers

7/99 Plaintiff wants Broadway to pay 7/99 Plaintiff wants Broadway to pay to reconstruct the computerized to reconstruct the computerized recordsrecords

Broadway – ChronologyBroadway – Chronology 8/99 Broadway explains that records 8/99 Broadway explains that records

sent to Federated data center in sent to Federated data center in Georgia in 2/96, then storage Georgia in 2/96, then storage devices were reviewed in summer, devices were reviewed in summer, ““when it was determined they could when it was determined they could not be read because they were not be read because they were damaged or the software to read damaged or the software to read them could no longer be obtained, them could no longer be obtained, they were destroyed.they were destroyed.””

Broadway – ConclusionsBroadway – Conclusions ““Broadway urges the hard copy payroll Broadway urges the hard copy payroll

documents were the same as the documents were the same as the computerized data. Not so. The hard copy computerized data. Not so. The hard copy may have contained the same information, may have contained the same information, but that information was not equally but that information was not equally accessible. As [plaintiff] notes in her accessible. As [plaintiff] notes in her motion, it would be virtually impossible to motion, it would be virtually impossible to manually extract all of the necessary and manually extract all of the necessary and pertinent information from five million pertinent information from five million pages of records.pages of records.””

Broadway – Rest of the StoryBroadway – Rest of the Story 4/02 Determined that Broadway was using 4/02 Determined that Broadway was using

different data than what had ever been different data than what had ever been provided to Lombardoprovided to Lombardo’’s counsels counsel

9/02 Discovery referee agreed that a 9/02 Discovery referee agreed that a ““terminating sanctionterminating sanction”” was appropriate as was appropriate as to Broadway due to discovery abuseto Broadway due to discovery abuse

11/03 Parties were getting ready for trial 11/03 Parties were getting ready for trial when case was finally settledwhen case was finally settled

AttorneysAttorneys’’ fees were about $6 million, plus fees were about $6 million, plus over $1 million in expensesover $1 million in expenses

Questions And AnswersQuestions And Answers

We have discussed We have discussed what the legal what the legal system expects of system expects of document document productionproduction

Hopefully we Hopefully we inspired you to inspired you to think about this think about this aspect of your aspect of your profession in a new profession in a new mannermanner