Transcript FEDERAL RULES OF CIVIL PROCEDURE CONCERNING …

AMENDED FEDERAL RULES OF CIVIL
PROCEDURE ON ELECTRONICALLY
STORED INFORMATION
or
“THE TALE OF RIP VAN LAWYER”
PASBO ANNUAL CONFERENCE
March 6, 2008
Hershey, Pennsylvania
Howard L. Kelin, Esq.
Kegel Kelin Almy & Grimm LLP
24 North Lime Street
Lancaster, PA 17602
Phone number: 717-392-1100
Facsimile: 717-392-4385
E-mail: [email protected]
Rip Van Lawyer
Sleeping Through 20 Years of
Dramatic Change
1985
• PC used primarily
for document
preparation, not
communication
• Communication by
phone, U.S. mail,
overnight delivery
or facsimile
SINCE 1985
• Local and Wide Area
Networks
• Email
• Internet
Practical Impact on Discovery
• Greater Volume of Data
• Access: Documents No Longer Maintained
Primarily in File Cabinets
• Expense of Discovering Electronically
Stored Information
• Email is Sought in Discovery, in Part Due
to Harmful Candor
RESULT –
FRANKENSTEIN’S MONSTER
ATTACKS MORGAN STANLEY!
Coleman (Parent) Holdings, Inc. v. Morgan
Stanley & Company, 2005 WL 679071 (Fla. Cir.
Ct., 15th Cir. March 1, 2005) and 2005 WL
674885 Fla. Cir. Ct., 15th. March 23, 2005)
• Alleged that Morgan Stanley fraudulently failed to
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identify irregularities in stock valuation
Morgan Stanley missed deadlines to produce
electronic documents
Effort to find, recover, analyze and produce files from
THOUSANDS of disaster recovery backup tapes stored
throughout the country
Wrongly certified production complete
Perceived lack of good faith led to severe sanctions
CHANGES TO THE FEDERAL RULES
OF CIVIL PROCEDURE
• The Supreme Court amended Fed. R. Civ.
P. 16, 26, 33, 34, 37 and 45 effective
December 1, 2006
• Changes can be addressed through eight
topics
1. Redefined Scope of Information
Subject to Discovery
• Amended Rule 34(a) includes “electronically stored
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information” within scope of discovery
Production requests may include “writings, drawings,
graphs, charts, photographs, sound recordings,
images, and other data or data compilations stored in
any medium from which information can be obtained,
translated, if necessary, by the respondent into
reasonably usable form.”
The foregoing description also includes “metadata”
containing information about documents, emails,
instant messages and anything else that is recorded
and stored electronically.
2. Early Discussion Among Counsel
• The need to preserve electronically stored
information that may become subject to
discovery
• Form in which to produce that information
• How to protect privileged information
stored electronically
TIMING LOGISTICS
• Rule 16 – Court schedules pretrial and
scheduling management conference within 120
of service of complaint
• Rule 26(f) – at least 21 days before conference,
counsel must confer
– Address preservation of discoverable materials (a
“litigation hold”)
– Discovery schedule and plan
– Submit a written discovery plan to the Court 14
days before the Rule 16 conference
TIMING LOGISTICS
• Within 14 days of Rule 26(f) conference - initial
disclosure of information pursuant to Rule
26(a) without the need for discovery requests
• Rule 16(b) modified – Court order issued after
initial pretrial conference may address the
discovery of information & agreements by
parties to protect privileged materials
inadvertently disclosed
• Default standard for discovery of electronically
stored information issued by U.S. District Court
for the Northern District of Ohio
3. Two-Tiered System Based on
“Accessibility” of Data
• Amended Rule 26(b)(2)(B) provides special rule
for electronically stored information in data
source that is “not reasonably accessible
because of undue burden or cost”
– Discovery may occur only for “good cause”
– Court has discretion to impose cost-shifting or other
conditions
• Accessible electronically stored information
subject to normal rules of production
Zubulake v. UBS Warburg LLC, 217
F.R.D. 309 (S.D.N.Y. 2003)
• Defendant company produced 100 printed
pages of emails
• Plaintiff presented evidence of additional
emails on backup tapes
• Defendant objected arguing excessive cost
• Court ruled that data maintained in format
not reasonably accessible - apply 7 part
test
Not Reasonably Accessible –
7-part test
• Request tailored to discover relevant data
• Availability of such data from other sources
• Total cost of production relative to amount in
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controversy
Cost of production relative to resources available to
each party
Relative availability & incentive for each party to
control its own costs
Importance of issues at stake
Relative benefits to the parties in obtaining data
Amended Rule 26(b)(2)(B)
• Provides that if electronically stored information “is not
reasonably available because of undue burden or
cost,” discovery is available only for “good cause” and
based on considerations identified at Rule 26(b)(2)(C)
– Discovery sought is unreasonably cumulative or duplicative –
or is obtainable from more convenient source
– Burden and expense outweighs likely benefit, taking into
account the needs of the case, the amount in controversy,
the parties’ resources, the importance of the issues at stake
in the litigation, and the importance of the proposed
discovery in resolving the issues.
The Committee Notes from the
2006 Amendments to the Federal
Rules explain as follows the reason
for this two-tiered approach
The volume of – and the ability to search – much
electronically stored information means that in many
cases the responding party will be able to produce
information from reasonably accessible sources that
will fully satisfy the parties’ discovery needs. In many
circumstances the requesting party should obtain and
evaluate the information from such sources before
insisting that the responding party search and produce
information contained on sources that are not
reasonably accessible.
4. No New Duty Imposed to
Preserve Data/Safe Harbor Rule
• Amended Federal Rules do not create any special duty to
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preserve electronically stored information
What and how to preserve information left to individual parties
to decide
– Subject to document retention laws or regulations applicable to
particular industries or types of information
– Also subject to common law duty to impose “litigation hold” in the event
of litigation (or reasonably anticipated litigation) to avoid “spoliation”
problem
– Must decide which type of email deletion and archival policy system best
serve its needs
– The more information stored, the greater the volume of information to
be searched and restored
New Rule 37(f) provides as follows:
• 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.
5. “Form” of Production
• Amended Rule 34 permits requesting
party to specify form - producing party
may object
• Absent Agreement – Default to Rule 34
– Electronically produced “in a form or forms in
which is it ordinarily maintained, or in a form
or forms that are reasonably usable.”
– Need not produce the information in more
than one form
6. Answering Interrogatories with
Electronically Stored Information
• Rule 33(d) applies
– Available when cost to derive answer to
interrogatory from records is substantially
equal for both parties
– Responding party may require requesting
party to analyze records in lieu of providing
written answer to interrogatory
– Danger regarding electronic information –
difficult to address issues of security,
confidentiality and privilege
7. PRIVILEGE SCREENING –
Inadvertent Production of
Privileged Documents
• Amended Rules 16(b) and 26(f) encourage
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parties to reach agreements for asserting claims
of privilege or work product with respect to
inadvertently produced discovery materials
Rule 26(b)(5) provides that inadvertent
disclosure of materials later claimed privileged –
receiving party must “return, sequester, or
destroy the specified information” pending
resolution of privilege claim
Amended rules do not provide guidance on how
courts should resolve claims of privilege
8. Discovery of Electronically
Stored Information from NonParties
• Rule 45 has been revised to specify that
non-parties may be directed to produce
electronically stored information
• Rule 45(c) specifies that requesting party
shall take reasonable steps to avoid
imposing undue burden or expense on
person subject to subpoena
Some Cases Applying the Amended
Federal Rules
• Cenveo Corp. v. Slater, 2007 WL 442387 (E.D. Pa.,
Jan. 31, 2007)
– Plaintiff alleged former employees used its computerized
confidential information and trade secrets to divert business
to competitor.
– Court approved discovery plan:
• (a) plaintiff’s data recovery expert will produce digital image of all
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defendants’ computers;
(b) expert will provide both parties report describing computers
inspected and steps taken to create digital image;
(c) expert will recover all documents from digital image and provide
them to defendants;
(d) defendants review materials for privilege and responsiveness;
(e) defendants will produce all non-privileged responsive documents
and a privilege log
•Scotts Co., Inc. v. Liberty Mutual Ins. Co., 2007 WL 1723509
(S.D. Ohio, June 12, 2007)
–Court denied same type of discovery plan approved in Cenveo on the
basis that the plaintiff had not established the information being sought
was within the usual scope of discovery or that the responding party had
not already produced all responsive information:
[W]ithout a qualifying reason, plaintiff is no more entitled to access to
defendant’s electronic information storage systems than to defendant’s
warehouses storing paper documents.
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This court is therefore loathe [sic] to sanction intrusive examination of
an opponent’s computer as a matter of course, or on the mere suspicion
that the opponent may be withholding discoverable information. Such
conduct is always a possibility in any case, but the courts have not
allowed the requesting party to intrude upon the premises of the
responding party just to address the bare possibility of discovery
misconduct.
–Id. at 2.
• In re Genetically Modified Rice Litigation,
2007 WL 1655757 (E.D. Mo., June 5, 2007)
– This is an agreed upon order identifying steps the
parties shall take to preserve documents,
electronically stored information and tangible
objects (i.e., modified rice) that is the subject of
litigation.
• Disability Rights Council of Greater Washington v.
Washington Metropolitan Transit Authority, 2007
WL 1585452 (D.D.C, June 1, 2007)
– Defendant failed to place a “litigation hold” on relevant
employee emails – court ordered defendant to restore
back up tapes even though they were not reasonably
accessible:
While the newly amended Federal Rules of Civil Procedure
initially relieve a party from producing electronically stored
information that is not reasonably accessible because of undue
burden and cost, I am anything but certain that I should permit a
party who has failed to preserve accessible information without
cause to then complain about the inaccessibility of the only
electronically stored information that remains. It reminds me too
much of Leo Kosten’s definition of chutzpah: “that quality
enshrined in a man, who, having killed his mother and his father,
throws himself on the mercy of the court because he is an
orphan.”
Id. at 8.
• Krause v. United States, 2007 WL 1597937
(Bkrtcy. D. Kan., June 4, 2007)
– Court granted Trustee summary judgment against
debtor due to debtor’s deliberate spoliation of
electronically stored information:
So was Krause obligated to preserve each and every e-mail
or electronic document he generated or existed on his hard
drive? Not necessarily. He was, however, “under a duty to
preserve what [he] knows, or reasonably should know, is
relevant in the action, is reasonably calculated to lead to
the discovery of admissible evidence, is reasonably likely to
be requested during discovery and/or is the subject to a
pending discovery request.”
Id. at 19, quoting Zubulake v. UBS Warburg, LLC, 220
F.R.D. 212, 217 (S.D.N.Y. 2003) (Zubulake IV).
Practical Tips for School Districts
• School District should confer with its legal
counsel about amended Federal Rules and
the District’s document retention practices
and policy –
PROMPTLY!
Practical Tips for School Districts
• Special focus regarding “litigation hold” to
preserve electronically stored information
Practical Tips for School Districts
• School Districts should contact their
solicitor early in process when litigation
appears to be reasonably likely – and
engage IT personnel in the process
Practical Tips for School Districts
• School Districts should adopt a policy
that – taking into account operating needs
and budget – identifies rules for (1)
archiving of email backup tapes, and (2)
document retention.
Practical Tips for School Districts
• School Districts should identify the type
and location of its electronically stored
information
Practical Tips for School Districts
• School Districts should train ALL
employees on importance of complying
with policies on acceptable computer and
email use – do not say anything in an
email you would not want to be crossexamined on
Practical Tips for School Districts
• School Districts need to ensure their IT
systems are capable of addressing the
challenges of managing electronically
stored information
NEW PSBA POLICY 800
On Records Management and Document
Retention