Transcript The Federal Civil Rules & Electronic Discovery: What's It

The Federal Civil Rules &
Electronic Discovery: What's It
to Me?
2007 Legal Breakfast Briefing
Presented to
Employers Resource Association
by
Robert Reid, Esq.
Partner, Labor and Employment Law Department
Dinsmore & Shohl LLP
July 17, 2007
© 2007 Dinsmore & Shohl LLP
Zubulake v. UBS Warburg
• Why is Electronic Discovery an Issue?
– Zubulake v. UBS Warburg LLC, 229 F.R.D.
422 (S.D.N.Y. 2004)
– Zubulake v. UBS Warburg is a prime example
of what the amended Federal Rules of Civil
Procedure seek to prevent -- spoliation of
relevant evidence. This case illustrates the
potential harm improper discovery practices
can have on an employer defendant.
Zubulake v. UBS Warburg
• In Zubulake, a female employee filed a lawsuit
against her former employer (UBS) alleging
gender discrimination, failure to promote, and
retaliatory discharge. When Zubulake brought
an EEOC charge in August 2001, UBS counsel
gave instructions to UBS employees to preserve
relevant materials (including e-mails).
• It was not until August of 2002, however, that
Zubulake requested e-mails stored on backup
tapes. UBS counsel then issued instructions to
preserve backup tapes.
Zubulake v. UBS Warburg
• Over time, without proper structure, e-mails,
backup tapes, and relevant evidence were
destroyed. While some evidence was recovered
through expensive technologies, other evidence
was lost for good.
• The Zubulake Court held that UBS violated its
discovery duties to preserve, protect, and
disclose relevant evidence.
Zubulake v. UBS Warburg
• The Court ordered UBS to:
– (1) pay for the re-deposition of relevant UBS
personnel and key players, limited to the
subject of newly discovered e-mails over time;
– (2) restore and produce relevant documents
from relevant backup tapes; and
– (3) pay plaintiff’s reasonable expenses,
including attorney’s fees related to these
issues.
Zubulake v. UBS Warburg
• Additionally, and extremely costly to any
employer defendant, the Court permitted the jury
to draw a negative inference against UBS for
lost documents if the jury found UBS to be at
fault for such losses.
Zubulake v. UBS Warburg
• Consequences in the wake of Zubulake v.
UBS Warburg:
– To avoid court sanctions for failing to produce
relevant electronic information, be aware of
the implications of the amended Federal
Rules of Civil Procedure regarding discovery
of electronically stored information ("ESI").
– Take steps to identify and preserve ESI if
litigation may be reasonably anticipated.
II.
Changes to the Federal Rules of Civil
Procedure Pertaining to Discovery of
Electronically Stored Information ("ESI")
• The December 1, 2006 amendments to the
Federal Rules of Civil Procedure change the
way the discovery rules are applied to
electronically stored information ("ESI").
Federal Rule Changes
• Rule 26 - mandatory disclosures, pretrial
disclosures, discovery scope and Rule 26
conference.
• Rule 16 - scheduling order
• Rule 34 - scope of document requests
• Rule 37 - sanctions and safe harbor
Rule 37 Failure to Make or Cooperate in
Discovery; Sanctions.
• 37(f) Electronically Stored Information
– Absent exceptional circumstances, a court
may not impose sanctions under these rules
on a party for failing to provide electronically
stored information lost as a result of the
routine, good-faith operation of an electronic
information system.
III. What Is "ESI"?
• "ESI" is electronically stored information, including emails, web pages, word processing files, and databases
stored in the memory of computers, magnetic disks,
optical disks, and flash memory.
• The volume of "ESI" is generally exponentially greater
than paper information, and it may be located in multiple
places.
• A single paper memorandum may be stored on the
computer hard drives of the document's creator,
reviewers, and recipients; on the company server; on lap
tops and home computers; and on back up tapes.
III. What Is "ESI"?
• The dynamic nature of "ESI" makes it vital that a
data producer institute a document retention
policy to address creation, identification,
retention, retrieval, and ultimate disposition of
information and records.
• A company's retention policy must require the
suspension of ordinary destruction practices to
comply with preservation obligations related to
reasonably anticipated litigation.
III. What Is "ESI"?
• Know your own technology infrastructure and
information storage systems.
• Because deleted or backup information may be
available, parties may request its production,
even though restoring, retrieving, and producing
it may require expensive and burdensome
computer forensic work that is disproportionate
to the discovery needs of the requesting party.
III. What Is "ESI"?
•
It is important to “know your own stuff:”
•
•
•
•
•
Type of internal network and hardware used
Software used, including email programs
Computer files on network servers
Computer files on desktop or local hard drives
Laptop computers, home computers, and other
satellite locations
III. What Is "ESI"?
• Hardware which contain records that may have
been deleted, but are recoverable using
reasonable efforts
• Backup and archival methods and retention
• Who maintains the system - IT personnel inside or
outside
• Rules and policies regarding use and retention
(and whether they are followed)
• Security procedures
IV.
•
•
Implement Effective Document
Retention Policies
Every company should have a document
retention policy that limits how long to keep
information and sets forth the procedures for
uniform and timely destruction of both paper
documents and electronic data.
The policy should define what types of
information are to be retained and destroyed,
where retained information is to be stored, and
who shall have access to retained information.
IV.
•
Implement Effective Document
Retention Policies
Do's and Don'ts of document retention policies:
–
–
Do reserve the right to delete e-mail messages
saved in users' folders because of e-mail storage
limits or other improper content, especially large
graphic files, interactive greetings and/or offensive
materials.
Do print e-mail that is important enough to be saved
and keep e-mail that should be retained in speciallydesignated files.
IV.
Implement Effective Document
Retention Policies
– Do locate and preserve all relevant e-mail as soon as
you know the e-mail may be needed for litigation,
audit, or investigation.
– Don't destroy e-mail evidence that may be relevant to
pending or future litigation.
IV.
Implement Effective Document
Retention Policies
• E-mail document retention policies should be
consistent with other document retention
policies.
• E-mail retention/destruction policies should not
be intended to lessen exposure to investigation
or litigation. The proper justification is the high
cost of retaining and storing unneeded e-mail.
• Information and records retention policies and
practices should be documented.
IV.
Implement Effective Document
Retention Policies
• The policy should inform employees about the
company's "litigation hold" procedure and that
they should not continue to follow the document
retention/destruction policy when a "litigation
hold" comes into effect.
• Consider attaching a sample "litigation hold"
letter to the document retention/destruction
policy so recipients recognize the letter and
know what to do if they receive a similar letter.
IV.
Implement Effective Document
Retention Policies
• Be able to show good faith compliance with a
reasonable document retention policy.
• Consider conducting periodic compliance
reviews of the company's information and
records management policies and procedures
and responding to the findings of those reviews
as appropriate.
• Safe harbor is the key here.
IV.
•
Implement Effective Document
Retention Policies
E-mail Document Retention Policy:
– E-mail messages may be temporary
communications, which are non-vital and
may be discarded routinely.
– E-mail messages, depending on their
content, may also be considered a more
formal record and should be retained
pursuant to a company’s record retention
schedule.
IV.
Implement Effective Document
Retention Policies
• Employees should be aware that when they
delete a message from their mailbox, it may not
be deleted from the e-mail system. The
message may be residing in the recipient's
mailbox or forwarded to other recipients.
Furthermore, the message may be stored on the
computer's back-up system.
V.
Be Aware of Obligations to Preserve
Documents and Data
• Identifying the boundaries of the duty to
preserve information articulated in
Zubulake v. UBS Warburg involves two
related inquiries: when does the duty to
preserve attach, and what evidence must
be preserved?
V.
Be Aware of Obligations to Preserve
Documents and Data
• Once a party “reasonably anticipates” litigation, it
must suspend its document retention/destruction
policy, and put in place a "litigation hold" to
ensure the preservation of relevant documents.
• The filing of an EEOC charge or even a letter
from an attorney threatening litigation on behalf
of an employee are events that can trigger
litigation hold procedures, and thus a company
should institute these procedures whenever it
reasonably anticipates litigation, even before the
filing of a lawsuit.
V.
Be Aware of Obligations to Preserve
Documents and Data
• As a general rule, the litigation hold does
not apply to inaccessible backup tapes
(e.g., those typically maintained solely for
the purpose of disaster recovery), but if
the back up tapes are accessible (i.e.,
actively used for information retrieval),
then such tapes would likely be subject to
the litigation hold.
V.
Be Aware of Obligations to Preserve
Documents and Data
–
–
A party's failure to implement a "litigation hold" may
deprive the party of safe harbor under Rule 37(f)
(i.e., “a court may not impose sanctions under these
rules on a party for failing to provide electronically
stored information lost as a result of the routine,
good-faith operation of an electronic information
system”).
If the company followed its document retention
policies prior to identifying the likelihood of litigation,
there is no sanction for lost information.
V.
Be Aware of Obligations to Preserve
Documents and Data
– Despite the protection of Rule 37(f), an
employer's blind continuance of a routine
document destruction policy might provide
grounds for sanctions where the employer
acted in bad faith or knew, or had reason to
know, about potential litigation.
VI. Create an Effective Litigation
Preservation/Collection Work Plan
•
•
Once the obligation to preserve
documents and electronic data arises,
the company should take the initiative to
create an effective work plan.
The first steps for all types of litigation
preservation/collection work plans should
be:
VI. Create an Effective Litigation
Preservation/Collection Work Plan
•
•
•
Meet with the IT staff immediately to make them
aware of the preservation obligation, and identify
an IT Staff project manager.
Identify the scope of assistance, if any, needed
by outside e-discovery specialists in the
preservation/collection efforts.
Identify any automatic deletion processes,
planned system upgrades or equipment
replacements for electronic data in any form.
VI. Create an Effective Litigation
Preservation/Collection Work Plan
• Halt automated destruction/wiping/overwriting of
any media where relevant data resides. This
commonly requires a halt to back-up tape recycling
at least until the opposing parties have reached
agreement on initial preservation obligations.
VI. Create an Effective Litigation
Preservation/Collection Work Plan
• Identify potential storage media both internally and
externally.
• In addition to the company's internal computer
data and storage systems, become familiar with
any external means and mechanisms of storing
and backing up information.
VI. Create an Effective Litigation
Preservation/Collection Work Plan
•
•
The company should have procedures in place to
track ESI that may exist outside the company's
storage systems.
Relevant ESI may appear in many transient
media, including an employee's office computer,
laptop, and PDA or other media storage device.
VI. Create an Effective Litigation
Preservation/Collection Work Plan
• Use a checklist for system administrator review.
Collect any and all documents associated with the
project and consider the following sources of
stored information: e-mail, desktop HDD, laptops,
CDs, DVDs, flash drives, hard copies, notebooks,
file cabinets, notes, presentations, voice mails,
documents you have at home, calendars,
planners, day timers, instant message logs, and
mapped drives.
VII. Litigation Hold Memos and Data
Preservation Letters
• Litigation hold memos to employees notify recipients of
their legal obligation as employees of the company to
preserve relevant documents and data relating to the
matter, transaction, business unit, and product from all
sources.
• Data preservation letters from counsel notify recipients of
the duty to preserve relevant electronic information
stored within the technology infrastructure and
information assets of the company.
VIII. Have Litigation Hold
Procedures In Place
– Distribute the litigation hold to custodians:
• Provide instructions regarding preservation
• Identify key topics, issues, and events for preservation
• Consider the kinds of information people are creating, using,
and saving (e-mail, Word files, Excel, hard copies, calendars,
voice mail, multiple computers)
• Identify IT personnel for employees to contact if employees
have questions.
• Communicate importance of retention and potential sanctions
if information is altered or deleted.
VIII. Have Litigation Hold
Procedures In Place
• Develop a Litigation Action Plan for IT
Personnel. Identify IT personnel, including all
custodians of stored information and back-up
systems.
• Key IT personnel can assist with issues that
arise in future litigation by keeping counsel
apprised of the most recently acquired
technologies that affect data storage or relate to
the company's document-retention program.
CONCLUSION
• Now, here’s another type of letter you
hope you do not see: