Basics of E-Discovery - NYSBA
Transcript of Basics of E-Discovery - NYSBA
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Basics of E-Discovery
Constance M. Boland
July 15, 2014
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Why is E-Discovery Still a Hot Topic?
Deluge of data Sanctions Costs
BYOD Preservation and
Privilege Privacy and Security
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Duty of Competence
Do practicing lawyers need to be experts in
e-Discovery?
“To maintain the requisite knowledge and skill, a
lawyer should keep abreast of changes in the
law and its practice, including the benefits and
risks associated with relevant technology. . .”
NY Rules of Professional Conduct Rule 1.1,Comment 6
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Duty to Preserve
When is the Duty to Preserve triggered?
• When a party “reasonably anticipates litigation”
• Could arise prior to litigation
• Failure to preserve relevant accessible ESI when duty
is triggered may result in sanctions
Zubulake v. UBS, 220 FRD 212 (SDNY 2003); VOOM HD Holdings
v. EchoStar Satellite, 93 AD3d 33 (1st Dep’t 2012); NY City Housing
Auth. v. Pro Quest Security, 108 AD3d 471 (1st Dep’t 2013)
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Once Duty to Preserve Is Triggered,
What Is a Lawyer’s Obligation?
• Immediately turn off routine deleting programs;
• Save what you “know or reasonably should know will
likely be requested in reasonably foreseeable
litigation”
• ID sources
• Accessible v. not reasonably accessible
• ID custodians
• ID time periods
• Confer with custodians, IT personnel and counsel
• Make a record
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BYOD – Bring Your Own Device
Companies allow employees
to use personally-owned
smart phones and tablets
for corporate work.
• Problems:
› Who owns data?
› Which data?
› Where is the data?
• Solution:
› Save data on corporate
network
› Inventory devices
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BYOD – Bring Your Own Device
How to access data?
• Use applications?
• Ask manufacturers of devices?
• Ask e-Discovery providers?
• Format issues?
Develop new applications
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Litigation Hold
• In writing
• Claims and defenses
• What to preserve
• When
• From where
• Instructions
• Contact
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Monitor Client’s Compliance with
Litigation Hold
• Communicate
• Who IDs relevant ESI?
• Litigation hold notices: Privileged or discoverable?
• Custodians’ actions: Privileged or discoverable?
• Notice to adversary
• Litigation hold applications
Tracy v. NRV, 2012 U.S. Dist. LEXIS 44350 (WDNY 2012); Major
Tours v. Colorel, 2009 U.S. Dist. LEXIS 68128 (DNJ 2009)
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Proposed Amendments to the
Federal Rules of Civil Procedure
Proposed amendments to FRCP 1, 4, 6, 16, 26, 30,
31, 33, 34, 36, 37, 55 and 84:
• Narrow the scope of discovery
• Proportionality
• Sanctions standard
• Limit other discovery
• Clarity in responses
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Amendments to FINRA’s Discovery
Guide
FINRA’s Discovery Guide amended December 2, 2013
• Form of production
• More document production
• Party affidavit if no production
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Meet and Confer
Before preliminary conference:
• Fed. R. Civ. P. 26(f)
• Rules of the Commercial Division,
22 NYCRR §202.70(g), Rule 8(b)
• Proposed amendment to NYS rules
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Meet and Confer
In federal court:
• Discovery plan
• Confer on “any issues”
• Form of production
• Privilege
In state court:
• Data preservation plan
• Claw-back agreements
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Proposed Orders
• Joint Electronic Discovery
Submission and Proposed Order
(SDNY)
• Nassau County Commercial Division,
Preliminary Conference Order
• NY Commercial Division Electronic
Discovery Order (J. Oing)
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Form of Production
Federal Court:
• Fed. R. Civ. P. 34(b)(1)(C) and 34(b)(2)(D):
party may specify the form in which ESI will
be produced in document request or in
response and objection to a document
request
• If no form is specified by either party,
produce ESI in the form in which it is
ordinarily maintained or reasonably usable
form. R. 34(b)(2)(E)(ii)
• No requirement to produce ESI in native
format
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Form of Production
New York State Court:
No rule defining form of production
Best Practice: Agree on form
of production early
Protocol: Written agreement on form of
production, with metadata categories
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Metadata
• Data about data
• Embedded
• Not visible
• May be confidential
• May be privileged
Aguilar v. ICE, 255 FRD 350, 354 (SDNY 2008)
Williams v. Sprint, 230 FRD 640, 646 (Kan. 2005)
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Produce Metadata Strategically
• Best practice: Agree on metadata categories
› File name
› Date
› Date created
› Date last modified
› Author
› Recipient(s)
› CCs
• ID metadata with privileged information
• Native format: excel spreadsheets
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Ethical Issues Regarding Metadata
• NYS Bar Op. 782 (12/8/04): use reasonable care in
sending privileged info by e-mail
• ABA Rule 1.6(c): make reasonable efforts to
prevent the inadvertent or unauthorized disclosure of
info regarding clients
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Providing Notice If Metadata
Is Inadvertently Sent
• Ass’n of Bar of City of NY, Formal Op. 2003-04 (2/18/04): lawyer
receiving privileged info inadvertently sent must “promptly
notify” sender
• ABA Rule 4.4, Comment 2 and NY Rule 4.4(b): lawyer receiving
privileged metadata shall “promptly notify” sender if
inadvertently sent
• ABA Formal Op. 05-437: privileged document inadvertently sent
• But see ABA Formal Op. 11-460 (8/4/11): if employer receives
employee’s privileged communications, no duty to notify counsel
• FRCP 26(b)(5)(B)
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May a Lawyer “Mine” Metadata?
• NYS Bar Op. 749 (12/14/01) & NYCLA Op. 738 (3/24/08):
lawyers MAY NOT mine metadata or trace e-mail
• ABA Formal Opinion 06-442 (8/5/06):
› lawyers receiving ESI with metadata MAY mine metadata
› limited by Rule 4.4: only mine metadata if intentionally sent
• Other states have different rules regarding notifying adversary
and “mining” metadata. See ABA website; Sedona Conference,
Commentary on Ethics & Metadata, June 2013
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Metadata Best Practices
• Install scrubbing software
• Turn off scrubbing software when appropriate
• Address privileged metadata in confidentiality
agreements;
• Review electronic redactions for accuracy;
• If litigating outside NY, check rules
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Cooperation
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Cooperation
• Limited cooperation on discovery
• Result: increased costs of litigation
• Now cooperation expected
› Rule 26.4 of SDNY and EDNY Local
Civil Rules;
› Rule 14 of Commercial Division Rules;
› Sedona Conference
Cooperation Proclamation.
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Proportionality
• Overarching theme in e-discovery
• Proportionate relationship between
the costs of e-discovery and the
likely benefit if ESI produced
• FRCP 26(b)(2)(C)(iii): limit
discovery if burden/expense
outweigh benefit
• Proposed Amendments to FRCP
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Costs of E-Discovery
• Producing party pays
• Cost shifting is allowed in federal and NYS court based on a
seven-factor test:
1. Whether request is tailored to seek relevant information
2. Availability of information from other sources
3. Cost of production compared to amount in controversy
4. Cost of production compared to parties’ resources
5. Ability of parties to control costs
6. Importance of issues at stake in litigation and
7. Benefits of obtaining ESI
Rowe v. William Morris, 205 FRD 421 (SDNY 2002); Zubulake v. UBS, 217
FRD 309 (SDNY 2003); U.S. Bank v. GreenPoint, 94 A.D.3d 58 (1st Dep’t
2012); Kennedy Assocs. v. JP Morgan Chase, 2014 NY Misc. LEXIS 52
(NY Cty. Jan. 7, 2014)
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Technology-Assisted Review (TAR)
• Predictive Coding is one type of TAR
• Any tool using “sophisticated algorithms to enable the computer
to determine relevance, based on interaction . . . with a human
reviewer.” Da Silva Moore v. Publicis Groupe, 287 FRD 182
(SDNY 2012) (Peck, M.J.)
• Is opposing counsel entitled to production of the “seed set” ?
• Is the “seed set” work product?
• Compare Moore, 287 FRD at 199-200 with In re: Biomet M2a
Magnum Hip Implant Prods. Liability Litig., 2013 U.S. Dist.
LEXIS 172570 *3-6 (N.D. Ind. Aug. 21, 2013) and Hinterberger
v. Catholic Health Sys., 2013 U.S. Dist. LEXIS 73141 *7-8
(WDNY May 21, 2013)
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Document Requests
• Plain, precise language
• No boiler plate “forms”
• ID form of production
• Rule 26.5 of SDNY/EDNY Local Civil Rules
Confidentiality Agreements
• NY County Commercial
Division has its own form
• Add claw-back provision
Other Discovery Issues
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FRE 502: Limits on Waiver of Attorney-
Client Privilege
FRE 502:
a)no waiver unless intentional;
b)no waiver if disclosure inadvertent and
reasonable steps to prevent & fix
c)if state court, no waiver if no waiver
FRE 502 or state law
d)federal court may order privilege is not
waived by disclosure; order effective in other
federal and state courts
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FRE 502(d) and Claw-Back Agreements
• In state court, best practice is to enter into a claw-back
agreement:
› Party that inadvertently produced privileged information can claw it
back without waiving privilege
› Plainly state procedure for clawing back
› Specifically state that privilege is not waived
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FRE 502
• Federal Judges note that FRE 502(d) claw-back
agreements are not frequently used:
› Chevron Corp. v. The Weinberg Group, 286 FRD 95 (DDC Oct. 26,
2012);
› Rajala v. McGuire Woods, 2013 U.S. Dist. LEXIS 1761 (D. Kan. Jan.
3, 2013);
› Brookfield Asset Mgmt. v. AIG Financial Products, 2013 U.S. Dist.
LEXIS 29543 (SDNY Jan. 7, 2013).
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Produce ESI in 5 Steps
1. Initial identification and preservation
2. Collection
3. Process and culling
4. Review by counsel, including
searching and
5. Produce in a form usable by
all parties
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Collection
• Collecting ESI could inadvertently
alter, damage, or destroy ESI and
its metadata
• Collecting ESI in a forensically
sound manner avoids altering,
damaging or destroying ESI
• Proportionality considered before
retaining a vendor to collect ESI
• Document how ESI was collected
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Searching
• Agree on search terms with adversary
• Put search terms in writing and
document results
• Iterative process of conferring and
refining searches to limit volume and
identify relevant ESI
• National Day Laborer Org. Network v.
U.S. ICE, 2012 U.S. Dist. LEXIS 97863
(SDNY July 13, 2012); American Family
Mut. Ins. v. Gustafson, 2009 U.S. Dist.
LEXIS 22685 (Colo. March 10, 2009);
U.S. v. Galpin, 720 F.3d 436 (2nd Cir.
2013) (search warrants for ESI must be
sufficiently particular)
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Constructing Search Terms
1. Names or email addresses of custodians
2. Name of transaction, or property, or project
3. Names of entities in case, and all iterations thereof
4. Nicknames or code words
5. Segregate attorney communications for
privilege review
6. Work with IT personnel or vendor, if available
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Place ESI on Platform for Attorney
Review
• Relativity, Case Logistix, other programs
• Tags:
1. Responsive
2. Non-Responsive
3. Privileged
4. Partially Privileged (Redact)
5. Partially Confidential (Redact)
6. Further Review by Senior Attorney
7. Hot Docs
• Quality Control of Attorney Review
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Privilege Review: When Does the
Attorney-Client Privilege Apply?
• Communication between attorney and client
• Client is seeking legal advice
• No third-party copied on communication. Ebin v. Jenkins, 2013
US Dist LEXIS 166819 (SDNY Nov. 2013)
• No crime/fraud exception
When in-house counsel is acting as a business person and when in-house
counsel is acting as a lawyer. Varughese v. Mount Sinai Med. Ctr., 2014 US
Dist LEXIS 12628 (SDNY Jan. 31, 2014)
More efficient methods of communicating information on privilege logs.
SDNY/EDNY Local Civil Rule 26.2 & Note; Commercial Division Rule 11-b
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Spoliation and Sanctions
• Sanctions for negligent or intentional failure to
preserve or destruction of relevant ESI:
› Monetary fines
› Adverse inference
› Evidentiary preclusion
› Strike pleading or enter default judgment against spoliator
• Sound litigation hold policy is best defense
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Spoliation and Sanctions
Spoliation Cases:
Sekisui American Corp. v. Hart, 945 F. Supp. 494 (SDNY 2013);
Pension Comm. v. Banc of Amer., 685 F. Supp.456 (SDNY 2010);
VOOM HD Holdings v. EchoStar, 93 A.D.3d 33 (1st Dep’t 2012);
Zest IP Holdings v. Implant Direct, 2013 US Dist LEXIS 169014
(SD Cal Nov. 25, 2013)
Dunbar v. Google, Inc., 2013 US Dist LEXIS 48630 (ND Cal April
2, 2013)
Roberts v. Corwin, 2014 N.Y. App. Div. LEXIS 4465 (1st Dep’t
June 19, 2014);
Pegasus Aviation v. Varig Logistics, 987 N.Y.S.2d 350 (1st Dep’t
June 5, 2014);
Strong v. City of NY, 112 A.D.3d 15 (1st Dep’t 2013).
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Spoliation as an Independent Tort
• New York does not recognize spoliation as an
independent tort. Ortega v. City of New York, 9 NY3d 69,
83 (NY 2007); MetLife v. Joe Basil Chevrolet, 1 NY3d
478 (NY 2004); Penberg v. Healthbridge Mgmt, 2010 US
Dist LEXIS 70826 (EDNY March 29, 2010).
• Other states recognize either
intentional or negligent spoliation,
or both, as torts: California,
Connecticut, New Jersey, D.C.,
Florida, Ohio, and others.
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Production of ESI by Non-Parties
Federal Court:
• Fed. R. Civ. P. 45: Subpoenas may seek ESI
• As of Dec 1, 2013, Rules 37 and 45 of FRCP
were amended to streamline service
of subpoenas
• Costs, if burdensome, usually shift to requesting party
State Court:
• CPLR 3119: Uniform Interstate Depositions and Discovery Act
simplifies non-party discovery in state court;
• NY, California, Texas, Florida and many other states
• Tener v. Cremer, 89 A.D.3d 552 (1st Dep’t 2011)
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Authentication
• FRE 901(a): Authenticated by “evidence sufficient to
support a finding that the item is what its proponent
claims it is”
• Best evidence: author of
email identifies it, or
someone saw author
send email
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Authentication
• If not, use circumstantial evidence, such as:
› identification of author’s email address;
› Identification of recipient’s email address;
› previous emails between the parties;
› context of the email supported by testimony.
Devbrow v. Gallegos, 735 F.3d 584 (7th Cir. 2013); United
States v. Fluker, 698 F.3d 988 (7th Cir. 2012); United States v.
Siddiqui, 235 F.3d 1318 (11th Cir. 2000); New York v. Pierre, 41
A.D.3d 289 (1st Dep’t 2007).
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Admissibility
Admissibility of electronic evidence:
Lorraine v. Markel Am. Ins. Co.,
241 F.R.D. 534 (D. Md. 2007)
(Chief Mag. J. Paul Grimm)
• Website postings (FRE 901(b))
• Chat Room Content and Text Messages
• Computer stored records and data
• Computer animation and computer simulations
• Digital Photographs
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What is Cloud Computing?
• “The practice of using a network of remote servers hosted
on the Internet to store, manage, and process data, rather
than a local server or a personal computer”
• The computer user is relying on another computer system
to run its programs and store its data
• Having an email account with a web-based service such
as gmail, Hotmail, or Yahoo! is an example of cloud
computing
• Smartphone apps use cloud computing technology to
store and access data; video game companies are trying
to use it
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Pros of Cloud Computing
• Computer user can access data from anywhere simply by
accessing the Internet
• Saves money on hardware; no need for expensive
computers with speed and large memory because user uses
computers in the “Cloud” and data is stored in the “Cloud”
• Saves money on software; most cloud computing companies
provide clients with company-wide access to applications
• Saves IT support costs
• NYSBA Op. 842 (9/10/10) allows a lawyer to store
confidential client information in the Cloud provided
reasonable care is taken that confidentiality is maintained
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Cons of Cloud Computing
• Security: another company
holds all of your data
• Privacy: easy access may mean
your data is an easy target for
hackers
• Who owns the data, the client or
the Cloud computing company?
• Could the Cloud computing
company deny the client access
to its data?
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What is Big Data?
• Not clear whether there is only one definition
“a collection of data sets so large and complex that it
becomes difficult to process using on-hand database
management tools or traditional data processing
applications”
• Data growth is three dimensional
› Increasing volume
› Increasing speed and
› Increasing variety
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