luxembourg coc e discovery presentation

SOBEL & FELLER LLP | www.sobelfeller.com 1

Beware What Lurks:Key Points About Electronic Discovery in U.S. Litigation

Jonathan M. SobelOctober 18, 2011

SOBEL & FELLER LLP 444 Madison Ave., 17th Floor

New York, NY 10022(212) 308-0600

www.sobelfeller.com

http://www.sobelfeller.com/

• Electronically Stored Information (ESI) make up most all of a company’s communications and data – perhaps 95%

• Relevant and responsive ESI must be produced in litigation if it exists and is reasonably accessible

• ESI must be preserved once litigation is anticipated• Strict guidelines for compliance• Sanctions for noncompliance• Expensive and burdensome to address in litigation• Need to think about before litigation happens

– records management program

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Why Do We Care About This?

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• Computers and file servers – organize and segregate• Removable media – e.g., thumb drives• Smart phones / PDAs • Home laptops/computers• Email (the biggie) / Metadata / Deleted Files!• Voice mail• Intranets / Internet information• Instant messenger communications• Legacy data (old accounting or email systems)• Backup systems

– Start with the active data and preserve the relevant backups once litigation is anticipated

– Reasonable accessibility vs. need to restore or manipulate to use

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Sources of ESI – More Than You Might Think


• Once litigation is threatened or anticipated, obligation to preserve relevant ESI

• Identify key employees (Zubulake)• Provide a preservation (“litigation hold”) letter to key

employees, plus others who might be involved– Nature of matter (parties, nature of claims)– Scope: identify specific areas of ESI that need to be preserved– Instructions to suspend manual and automatic deletion of emails and

documents– Suspend recycling of relevant backup tapes– Caution - Don’t have employees self-select

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Preservation of ESI


• In a word, Very.• Every court will look for one.• Follow up on preservation is mandatory

– Zubulake decisions (SNDY) (Judge Scheindlin)– Attorneys must ensure that employees likely to relevant

ESI have received and read the preservation letter– Must communicate with each – Efficiency – combine notification with start of collection

process– Send periodic follow-up reminders

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How Important is Preservation (“Legal Hold”) Memo?


• Adverse inference instructions to jury

• Preclusion of evidence

• Reversal of burdens of proof

• Fines / penalties

• Dismissal of claims or defenses

• Narrow exception: Safe Harbor if ESI is lost in good faith as a result of routine operation of information system

Upshot: Have a document retention procedure in place that is automated, but suspend it as appropriate to meet preservation obligations

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Sanctions for Spoliation – They’re Not Just for Bad Faith Anymore


• First, even if not sanctioned, being on the receiving end of a spoliation motion can undermine your credibility and be expensive to defend.

• Coleman Holdings v. Morgan Stanley (Florida Cir. Ct. 2005) – reversed burden of proof against Morgan Stanley in fraud case; Jury returned verdict for plaintiff of 1.5 billion dollars; Court awarded 15 million dollars in fines for failure to comply with discovery obligations.

• Zubulake v. USB Warburg (SDNY 2004) – adverse inference instruction (emails not produced would have negatively impacted case); defense counsel partly to blame for not locating and producing emails; $29 million damages awarded to plaintiff by jury.

• U.S. v. Philip Morris USA, Inc. (D.D.C. 2004) – Defendants ordered to pay costs related to spoliation of relevant e-mails in addition to $2.75 million in monetary sanctions. Key employees precluded from testifying.

• TR Investors v. Genger (Del. Ch. Dec. 2009) – Defendant was sanctioned for "wiping“ the unallocated space on his company's computer server despite a court order barring any disposal of company-related documents. The sanctions included a raised burden of proof for defendant on any defense or counterclaim, production of documents that defendant claimed were privileged, and payment of plaintiffs‘ reasonable attorney fees and costs, which the court suggested should be $750,000.

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Spoliation Examples


• Hire lawyers and e-discovery vendors who care about being cost-effective and understand the e-discovery review and production process

• Search terms are key -- garbage in, garbage out

– Run each term and see if results look out of whack

– Sample the search term hits, especially if lopsided

• Privileged documents – search for them– Claw back provisions of the rules help (FCRP 26(b)(5))

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What Do You Do With All This Stuff?


• Efficient and cost-effective review– What do you really care about locating?– Do you need a search tool/software to locate key

documents?– Can you combine the production review with case

preparation and deposition prep review • Tagging - topics• Flagging – levels of urgency

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Review and Production


• Be comprehensive, but be efficient• Combine the document preservation process

with the collection process• Combine the document review process with

the case preparation process (e.g., depositions, evidence marshalling)

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Name of the Game - Efficiency


First a word from Greg Cancilla of RVM…

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Questions and Comments?


For more information, please contact us or visit our website

Sobel & Feller LLP444 Madison Ave., 17th Floor

New York, NY 10022(212) 308-0600

www.sobelfeller.com

12SOBEL & FELLER LLP | www.sobelfeller.com

Jonathan M. [email protected]

http://www.sobelfeller.com/

luxembourg coc e discovery presentation

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