Law Office Management
Jun. 2, 2008
The E-Minefield
With California's electronic-discovery rules still in flux, e-discovery can be a minefield of dos and don'ts for both law firms and their clients. Here's what you need to know to move safely through the process.
If Jerry Seinfeld were teaching an MCLE course, he might begin with a question: "So what's the big deal about e-discovery?"
In one sense, of course, e-discovery is nothing new: It's still old-fashioned discovery involving the collection, review, and production of information relevant to a lawsuit. But with digital storage so cheap, people these days save just about everything by default. This means that records of emails and Internet chat sessions-which didn't exist in previous decades-can accumulate in overwhelming proportions, creating untold e-discovery hazards.
Just look at what recently happened to Qualcomm in its legal battle against Broadcom. After finding that the company's lawyers had "participated in an organized program of litigation misconduct and concealment" by failing to produce some 200,000 pages of emails and other electronic documents, a federal magistrate ordered Qualcomm to pay its adversary's $8.5 million legal bills (Qualcomm, Inc. v. Broadcom Corp., 2008 U.S. Dist. LEXIS 911 (S.D. Cal. Jan. 7, 2008)). But even if one were to blame this outcome on lawyers behaving badly, the fact remains that attorneys in the digital age face massive and unprecedented amounts of documentary evidence.
NEW REGULATIONS
How can law firms and their clients avoid this kind of trouble? For starters, of course, they need to understand the latest federal and proposed state rules, which pose a minefield of dos and don'ts. Specialized software also can help in navigating that minefield. But let's start with surveying the regulatory terrain.
On December 1, 2006, seven amendments to the Federal Rules of Civil Procedure took effect. These address such issues as which electronically stored information (ESI) is subject to discovery, what to do about privileged information that is inadvertently revealed, and where the burden of proof lies for determining whether information is accessible. As the rule changes make clear, electronic documents are entirely equivalent to paper documents when it comes to mounting good faith efforts at collection and preservation in the early stages of discovery. But with only a year and a half of case law, there's little defining exactly what is required in practice.
Meanwhile, California-like other states-has been developing its own e-discovery rules. Last year the state Judicial Council proposed e-discovery amendments to the California Code of Civil Procedure and the California Rules of Court to cover information stored in an "electronic medium." (Public comments were collected and are now being considered; the final amendments are expected to be announced sometime next year.)
California's proposed regulations mirror the federal regulations in most respects, but there are important differences, not the least of which involves the ESI that's deemed to be "inaccessible." This is information that may be stored off-site or in a backup format that makes it very difficult and costly to produce.
Under the federal rules, such material is presumed to be exempt from discovery unless a litigant shows good cause in court, and perhaps a willingness to assume the cost of producing it. The proposed California rules, by contrast, place the onus on the respondent to show that inaccessible data would be too burdensome to produce.
"The only way to explicitly avoid producing inaccessible data [under state law] is to request a protective order," says Erin Smart, who specializes in litigation and e-discovery at Bingham McCutchen in East Palo Alto. Problem is, a court may have to rule on one of these protective orders without being able to effectively assess the value of what is being sought.
The federal rules also more explicitly define what factors the court should weigh in deciding a good cause argument. Both the federal and the proposed California rules let the court limit the extent of discovery based on considerations such as whether the same information is available from other, more accessible sources, or whether the requester has already had the oppor-tunity to get the information some other way. But only the federal rules explicitly apply those considerations to e-discovery and questions of inaccessibility; the California proposals are silent on the matter.
The two sets of rules also are in potential conflict over the form the produced ESI must take. Both permit the requester to specify the format in which the material will be provided, such as PDF, TIFF, native file format, etc. Both sets of rules also specify default formats that apply when the requester doesn't make an explicit request. Advisory committee notes on the federal rules, however, indicate that the defaults also take precedence if there is a dispute over the form of production. The California proposal doesn't address the issue at all.
THE NATURE OF DISCOVERY
In 2005, back before the federal rules took effect, e-discovery experts George Socha and Tom Gelbmann, along with more than 300 other e-discovery experts, vendors, and end users, founded the Electronic Discovery Reference Model project (EDRM). Together they came up with a guide to e-discovery that breaks up the process into nine steps (see "The Nine Steps of E-Discovery," above).
As these experts advise, the first three steps-records management, identification, and preservation-should be incorporated into general business strategies. The final step-presentation-is the same as it has always been with discovered paper documents. It is the five steps in between, however, that present novel technological challenges. Fortunately, there are technological solutions for collection, processing, review, analysis, and production.
Both the federal and state rules demand that attorneys meet before their first case-management conference to identify the ESI sources the case will involve, and estimate the volume of data concerned. This means determining which issues are most relevant at an earlier stage than the participants may be used to. Defendants, especially, should press plaintiffs to define the scope of discovery early on.
Data isn't the only thing at stake. Throughout the process, it's also important to preserve whatever metadata is in the records. Metadata is information about the file (as opposed to information in the file); it might reveal, for example, who created a particular electronic document and when. Like the records themselves, metadata is subject to discovery-but it's also easy to ruin. Even dragging a file from one folder to another, or copying it to a CD, can alter this crucial information in a heartbeat.
Collecting ESI, therefore, must be done using techniques and software that make "bit-for-bit," or identical, copies of the files involved. Law firms that don't want to do this painstaking data collection themselves often hire a technology firm with specialized tools and expertise for ESI collection. Wright Robinson Osthimer & Tatum is such a law firm. Says Stuart Jones, a principal in its San Francisco office who specializes in intellectual property law and construction, "What I don't want to do is to be testifying to the authenticity of the files. I don't want to be a witness in the chain of evidence. So I hire a vendor to do the copying." Other law firms may leave data collection to the client, but they most likely must monitor the process closely.
THE HARD STUFF
Although steps 5 through 7-processing, review, and analysis-can be done manually, this can be both laborious and error-prone. Service bureaus can offer assistance. And at large enterprises such as pharmaceutical or insurance firms, in-house counsel themselves may use specialized software. But it's more common for law firms and their clients to go to an outside vendor to handle e-discovery preparation. At San Rafael based Neil and Associates, the first thing owner Judy Neil does for a client is make a bit-for-bit copy of the ESI on all relevant storage devices. Technicians put the copies onto their own servers and then put the originals away for safekeeping. Neil's staff then generates an index of the client's files on their server disk. The index can be viewed in a browser to select which directories or files to include or exclude from the next stage.
Once the files are selected, Neil converts the ESI to PDF documents using conversion utilities that work with more than 200 file types. Finally, Neil prepares the documents for the client's review in an industry-standard style that allows a client or attorney to sort files by various criteria, tag them with identifying information, and decide which ones are relevant. In Neil's reviewing platform, the PDF file is displayed on one side of the screen and the metadata on the other. There's also an area for fields, or tags. Some of these are extracted from the metadata (for example, a list of the users who created the files), and some are standard for the type of litigation in question. Customers can also generate their own, custom information fields.
ESI STRATEGIES
Electronic discovery has historically been a reactive process: A plaintiff requested ESI, and the respondent scrambled to produce it. Now, however, businesses are being forced to think about potential requests beforehand and to have a "litigation readiness program."
For clients, there are three imperatives to such a program. First, know where the data resides and how to retrieve it. Second, the time to shop for an e-discovery vendor is before it's needed. And third, establish not only a regular retention policy but a destruction policy as well.
In fact, when it comes to e-discovery, destruction is at least as important as preservation. Nobody expects businesses and law firms to preserve all ESI, any more than they were expected to preserve all paper documents. But it's critical to avoid even the hint that ESI was destroyed in response to pending litigation. The easiest way to get into trouble with e-discovery is to be unable to produce requested ESI-and have no good explanation for why it's been destroyed. Clients and attorneys alike need to establish defensible, repeatable processes for managing ESI; train their staffs to follow the processes; and monitor the results to make sure the policies are complied with. That kind of proactive behavior can help keep firms from making headlines as part of the next e-discovery scandal.
Jake Widman is a freelance writer based in San Francisco.
Alexandra Brown
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