In This Issue:

	RECENT E-DISCOVERY AND COMPUTER FORENSIC COURT DECISIONS
	PRACTICE POINTS: E-DISCOVERY FORECAST - FIVE TRENDS TO WATCH FOR IN 2006
	KROLL ONTRACK NEWS & EVENTS

RECENT E-DISCOVERY AND COMPUTER FORENSIC COURT DECISIONS

Court Addresses E-Discovery Issues and Orders Parties to Meet and Confer
Hopson v. Mayor and City Council of Baltimore, 2005 WL 3157949 (D.Md. Nov. 22, 2005). In an action based on racial discrimination allegations, the plaintiffs requested hard copy and electronic records and issued interrogatories with questions “specifically designed to discover the nature, extent, and location of electronically stored records, the [d]efendants' IT capabilities, the nature of archived data, e-mail, and records retention policies.” Based on concerns about performing pre-production privilege review, the defendant claimed undue burden and expense. Referencing the proposed Federal Rules of Civil Procedure amendments, the court declared that both parties had a duty to negotiate a reasonable discovery plan and present the plan to the court. The court asserted, “[t]he days when the requesting party can expect to ‘get it all’ and the producing party to produce whatever they feel like producing are long gone…electronic discovery is not played on a level field. The plaintiff typically has relatively few electronically stored records, while the defendant often has an immense volume of it. In such cases, it is incumbent upon the plaintiff to have reasonable expectations as to what should be produced by the defendant.” The court ordered the parties to meet and confer within 30 days about e-discovery matters, including discovery scope and issues relating to privilege review. After that meeting, the court indicated it would conduct a follow-up hearing to discuss those issues.

Sanctions Issued for Failure to Adopt Comprehensive Document Retention Policy
In re Old Banc One Shareholders Sec. Litig., 2005 WL 3372783 (N.D. Ill. Dec. 8, 2005). The plaintiffs sought default judgment or an adverse inference instruction based on the defendant’s failure to preserve relevant documents relating to underlying data, calculations and drafts of relevant documents. Specifically, the plaintiffs argued that the defendant’s document retention policy allowed for destruction of these essential documents and data. Despite being unable to locate and produce many of these documents, the defendant claimed it had met its preservation obligations. In evaluating the defendant’s document retention handling, the court noted the defendant was not obligated to preserve “every scrap of paper.” The court, however, stated the defendant should have implemented a comprehensive document retention policy to ensure relevant documents were retained and should have distributed that policy to its employees. The court found the defendant did not comply with these requirements and determined the appropriate remedy was precluding the defendant from cross-examining the plaintiffs' financial expert at trial.

Court Refuses to Sanction Defendant for Failing to Produce "Email Envelope"
Holt v. Northwestern Mut. Life Ins. Co., 2005 WL 3262420 (W.D.Mich. Nov. 30, 2005). The plaintiff, an emergency room physician, alleged the defendant, an insurance company, failed to produce an email that contained an investigative report relating to an insurance dispute. The plaintiff requested an adverse inference instruction as a sanction for the alleged non-production. At a hearing, one of the defendant’s employees testified that if the email had contained substantive information, a copy would have been placed in the claim file and produced during discovery. The employee further testified it would have been unusual for substantive information to be sent in an email as such information was typically attached in a memorandum and merely transmitted by email. Thus, the defendant argued the email was merely an “envelope” for the substantive report – which was already previously produced to the plaintiff – and not subject to the discovery request. Citing Zubulake, the court agreed with the defendant and stated, “[A] corporation is not required to preserve ‘every shred of paper, every e-mail or electronic document, and every backup tape’ because to require such would ‘cripple large corporations ... that are almost always involved in litigation’.” The court found the email was merely an “email envelope” and contained no substantive information. Additionally, the court declared that even if the non-production was improper, the plaintiff failed to demonstrate the email would have been favorable to the plaintiff.

Court Sets Forth Protocols for Non-Party Electronic Document Productions
In re Natural Gas Commodity Litigation, 2005 WL 3036505 (S.D.N.Y. Nov. 14, 2005). In a lawsuit relating to natural gas price fixing, the plaintiffs sought to compel production of published trade data from two non-parties. The non-parties objected arguing, inter alia, that producing the information would be unduly burdensome. The court found the subpoena was not unduly burdensome with respect to one of the non-parties, and noted the non-party had already produced redacted and un-redacted electronic versions of requested spreadsheets to the government in connection with a criminal matter. The court stated, “While those spreadsheets themselves will not satisfy plaintiffs' subpoenas here, they do show the [non-party] can produce this information in electronic format and still redact information about companies other than the target sources...” The court also pointed out that the non-party had an outside document management firm overseeing the production and that the plaintiff agreed to pay for associated costs. The other non-party claimed some of the historical data sought was located on “old” and “antiquated individual computers.” In addressing this issue, the court required the parties to use a sampling protocol, “perhaps searching one of the ‘old’ computers, with leave to re-visit the burden vs. utility question based on information from that process.”

Parent Company Ordered to Respond to E-Discovery Requests on Behalf of Subsidiary
In re ATM Fee Antitrust Litig., 2005 WL 3299763 (N.D. Cal. Dec. 5, 2005). In addition to document production and admission requests, the plaintiffs sought interrogatories and 30(b)(6) depositions concerning document and electronic data storage and management issues. The defendant conceded that one of its wholly-owned subsidiaries, which was not a named party to the suit, would be the most likely source of this information. However, the defendant objected to providing the requested information and argued such a measure would be unduly burdensome and expensive. The defendants stated the plaintiffs should directly request the documents themselves by subpoenaing the subsidiary or by adding them as a party to the suit. Rejecting this claim, the court ordered the defendant to respond to the plaintiffs’ discovery requests on behalf of its subsidiaries, stating the defendant had access to and control over this information. The court further found the defendants failed to show responding to the request would be unduly burdensome.

PRACTICE POINTS: E-DISCOVERY FORECAST - FIVE TRENDS TO WATCH FOR IN 2006

As 2006 progresses, the e-discovery landscape promises to be filled with cutting-edge technology transformations as well as best practice judicial decisions and statutory clarifications. Indeed, the forecast for the coming year is filled with new opportunities for counsel tasked with managing data during litigation. Practitioners should keep an eye out for developments relating to everything from handling metadata to high-tech advancements aimed at assisting legal professionals in managing and producing both electronic and paper documents. Watch for these important electronic evidence topics and more in 2006!

1. Adoption of the long-awaited federal rule changes. During the last several years, civil practitioners have watched the proposed changes to the Federal Rules of Civil Procedure addressing electronically stored information move toward adoption. The 2006 headline likely will be that these Rules will be promulgated by the U.S. Supreme Court and Congress by December 1, 2006. With the adoption of the U.S. federal rules, litigators can expect to see federal and state courts and lawmakers across the country and abroad develop their local e-discovery rules, based on the guidelines set forth in the federal rules. Practitioners also should watch for finalization of other local court rules, such as the recently released “Guidelines for State Trial Courts Regarding Discovery of Electronically-Stored Information” and the Canadian draft of the “Guidelines for the Discovery of Electronic Documents in Ontario.”
2. Managing parent-child relationships. A landmark decision from 2005, the Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., 2005 WL 679071 (Fla. Cir. Ct. Mar. 1, 2005) case specifically discussed email during discovery and flagged the need to address “parent-child relationships,” an issue likely to come to the legal forefront in 2006. The court found Morgan Stanley’s failure to produce all email attachments negligent and ultimately issued an adverse inference instruction against Morgan Stanley. Cautious counsel should learn from this case in managing discovery practices in the coming year. While a clear standard regarding parent-child relationships has not yet been defined, if counsel produces an email without its accompanying attachments, as implied by the Morgan Stanley court, some courts may find the production deficient.
3. Clarification on the role of metadata in litigation. Now that courts across the country have clarified a broad list of basic e-discovery subjects, they are beginning to issue opinions discussing the more detailed aspects of e-discovery. Last year’s newsworthy decision, Williams v. Sprint/United Mgmt Co., 230 F.R.D. 640 (D. Kan. 2005) (requiring parties to produce metadata in “ordinary course of business” document productions absent an objection, agreement or protective order), identified metadata as a key topic for continued discussion and clarification in 2006. Going forward, courts likely will expect parties to understand this important decision and may impose sanctions for failing to comply with metadata production requirements.
4. Communicating effectively with opposing parties. As in past years, courts in 2006 likely will reiterate the importance of early communication between parties. Topics courts have flagged for discussion between parties include preservation duties and scope, cost shifting, production requirements, and privilege handling. As electronic document production continues to become commonplace in discovery, courts will continue to place an onus on parties to initiate communications without court assistance – or face increasingly harsh judicial reprimand.
5. Integrating ground-breaking technology tools. This next year guarantees exciting technology developments designed to help practitioners manage e-discovery projects. Legal professionals should be on the look out for heightened power and functionality in tools used for gathering, filtering, reviewing and producing electronic data. Specifically, anticipate improvement to online repository databases, increasingly popular tools among law firms and corporations for managing both paper and electronic data sets.

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KROLL ONTRACK NEWS & EVENTS

Kroll Ontrack Expands Electronic Discovery Education Courses for 2006
Kroll Ontrack has announced an expanded schedule of electronic discovery continuing legal education programs for 2006. With the addition of new courses for advanced litigation support professionals and attorneys, Kroll Ontrack is offering a more comprehensive curriculum for legal professionals of varying skill levels.

The popular "Electronic Discovery Certification Course" which began in 2003, again will be offered quarterly throughout 2006. A new bi-annual "Advanced E-Discovery Certification Course" has been added for 2006 specifically for litigation support professionals seeking a more advanced curriculum of e-discovery techniques. And for attorneys seeking an intense immersion in e-discovery essentials, the "Attorney E-Discovery Training Course" will be offered two more times this year. Each course will be held on Kroll Ontrack’s campus in Eden Prairie, Minnesota, giving each attendee the ability to tour a state-of-the-art electronic discovery processing facility.

Kroll Ontrack’s new "Advanced E-Discovery Certification Course" course will be offered to litigation support professionals who have completed the basic certification course, or have demonstrated expertise in e-discovery processes and procedures. With new technologies, case law and practices available nearly every day, this course will work to further enhance their grasp of practical applications and make them more skilled e-discovery practitioners.

In response to requests from practicing attorneys, Kroll Ontrack also has begun offering the "Attorney E-Discovery Training Course". This intense, one-day course guides attorneys through the entire e-discovery process and explains the latest case law and technology developments. Upon completion of this course, attorneys will be able to better manage e-discovery issues in litigation as well as offer sound advice to their organizations or clients.

2006 Course Dates and Tuition:

"E-Discovery Certification Course"
February 9-10, June 12-13, September 14-15, December 4-5
Early-bird tuition - $995, regular tuition - $1500

"Advanced E-Discovery Certification Course"
March 23-24, November 13-14
Early-bird tuition - $995, regular tuition - $1500 (special discounts given to past attendees)

"Attorney E-Discovery Training Course"
April 7, October 12
Early-bird tuition - $345, regular tuition - $495

To find more details on all Kroll Ontrack’s educational offerings or to sign up for an upcoming course, visit the Kroll Ontrack events Web site at www.krollontrack.com/upcoming-events.

New York’s Commercial Division Courts Adopt Statewide Uniform Rules Addressing Electronic Discovery
The New York Administrative Board of the Courts has established statewide uniform rules governing the jurisdiction and procedures of the Commercial Division courts. Among other things, the new Rules address the topic of e-discovery and will take effect January 17, 2006. Under Rule 8 of § 202.70 Rules of the Commercial Division of the Supreme Court, attorneys are required to meet and confer about e-discovery issues including data preservation plans, relevant data identification, data production, cost allocation, identification of individuals responsible for data preservation, confidentiality and privilege issues, and designation of experts. A copy of the Rules is available at www.krollontrack.com/rules-statutes/.

Meet Kroll Ontrack Representatives at the Following Events:

Visit /www.krollontrack.com/upcoming-events for more information on these events and others.

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WE REQUEST YOUR INPUT

This newsletter is written by Michele C.S. Lange, an Ontrack® Discovery staff attorney with Kroll. Ms. Lange has published numerous articles and speaks regularly on the topics of electronic discovery, computer forensics, and technology's role in the law. She can be contacted by writing to mlange@krollontrack.com.

For more information about electronic discovery and computer forensics services, please call 800 347 6105 or www.krollontrack.com.

For more information about electronic discovery and computer forensics services, please call 800 347 6105 or visit www.krollontrack.com. To view a complete archive of Case Law Update & E-Discovery News e-newsletters, please visit the newsletter archive.