In This Issue:

	Recent ESI Court Decisions
	Practice Points: Data Collection Considerations for Multilingual E-Discovery – Part I
	News & Events

Recent ESI Court Decisions

Court Adopts Special Master's Report Finding Waiver of Work Product Protection
In re Intel Corp. Microprocessor Antitrust Litig., 2008 WL 2310288 (D. Del. June 4, 2008). In this antitrust litigation, the plaintiffs moved to compel production of notes from the defendants' attorneys who interviewed the defendants' custodians as part of an investigation regarding compliance with electronic evidence preservation obligations. The special master found that the parties did not agree to extend an earlier privilege waiver agreement to these notes. However, the special master found that the privilege was waived with regard to the substance of the custodian statements that were voluntarily disclosed by the defendants. It was determined that to find otherwise would allow the defendants to "use its sword to assert facts while at the same time shield" the plaintiffs from the defendants' assertion that it had discovered human errors in its execution of its document preservation plan. The special master ultimately concluded that the protection of the non-core work product was waived, so the plaintiffs were entitled to the information. Judge Joseph Farnan, United States District of Delaware, adopted the special master's report and recommendation regarding privileged and work product information.

Court Finds Voluntary Production of Privileged ESI Constitutes a Waiver and Provides Suggestions for Avoiding Inadvertent Waiver
Victor Stanley, Inc. v. Creative Pipe, Inc., 2008 WL 2221841 (D. Md. May 29, 2008). In this copyright infringement case, the plaintiff sought a ruling that 165 electronic attorney-client privileged and work-product protected documents produced in discovery were discoverable. The plaintiff claimed privilege was waived because the defendants failed to conduct a reasonable privilege review prior to production. The defendants claimed the waiver of privilege was inadvertent, since they conducted a reasonable search using seventy keyword search terms to review potentially discoverable documents. Noting "all keyword searches are not created equal," the court used the intermediate test mentioned in Hopson v. Mayor of Baltimore balancing several factors to determine whether the waiver of privilege was inadvertent. Determining the defendants did not take reasonable precautions to prevent inadvertent disclosure, the court found the defendants waived their privilege. Additionally, the court noted several measures could have helped prevent this waiver, including the usage of a clawback (or other non-waiver) agreement the defendants voluntarily abandoned and/or complying with the Sedona Conference Best Practices for use of search and information retrieval.

Court Orders Electronic Data Production In Addition to Report of Data Previously Produced
Margel v. E.G.L. Gem Lab Ltd., 2008 WL 2224288 (S.D.N.Y. May 29, 2008). In this trademark litigation, several discovery disputes were raised including the defendants' assertion that the plaintiffs failed to respond fully to production requests and the plaintiffs' application to compel additional discovery. Finding that the defendants failed to establish sufficient evidence of the existence of additional relevant documents, the court denied the defendants' motion. However, the court ordered the plaintiffs to pay reasonable attorneys' fees and expenses associated with the motion, noting the second production by the plaintiffs' new counsel produced almost four times the information previously produced. Addressing the plaintiffs' motion, the court ordered the defendants to produce the electronic data from which the report in question was generated.

Court Shows No Sympathy for Voluminous Production that Resulted from Overly Broad Keyword Search
Perfect Barrier LLC v. Woodsmart Solutions Inc., 2008 WL 2230192 (N.D. Ind. May 27, 2008). In this litigation alleging breach of contract, the plaintiff filed a motion to compel protective order compliance and for sanctions, claiming the defendant's production abused the protective order. The defendant produced 75,000 pages worth of e-mail based on search terms supplied by the plaintiff and designated every document for attorney eyes only. Finding the defendants sufficiently complied with the protective order, the court determined if the plaintiff wanted a more selective designation of the documents it should have drafted the protective order more clearly. Additionally, the court determined the plaintiff had "no entity to blame except itself" for providing an expansive search request that returned a voluminous amount of documents. However, the court left open a challenge by the plaintiffs to the appropriateness of the "attorney eyes only" designation after the documents have been examined. Finally, the court rejected the plaintiff's request for production in hard copy form, finding the defendant's production of e-mails on a disc adequate under Fed.R.Civ.P. 34. The court also warned both parties that a special master may be used, funded by the wrongful party, if this type of dispute continues.

Court Determines Voluntary Disclosure of ESI Waives Work-Product Protection
St. Cyr v. Flying J, Inc., 2008 WL 2097611 (M.D. Fla. May 16, 2008). In this negligence litigation, the plaintiff filed a motion to prevent the defendant from using the plaintiff's work-product correspondences to his expert. Previously, the plaintiff's expert furnished a four-page letter and an e-mail authored by the plaintiff's counsel to the defendant in paper format. The defendant argued that this voluntary disclosure waived work-product protection, and also argued that Fed.R.Civ.P. 26(b)(5)(B) applies only within the context of electronically stored documents. The court disagreed, holding that Fed.R.Civ.P. 26(b)(5)(B) applies to both paper and electronic documents. However, the court held that Fed.R.Civ.P. 26(b)(5)(B) merely provides a procedure for addressing the issue of waiver and "the voluntary disclosure of a work product document into the hands of the adversary results in a waiver of the privilege."

Court Finds Requested Documents Relevant, Orders Production
Hope for Families & Cmty. Serv., Inc. v. Warren, 2008 WL 2074425 (M.D. Ala. May 15, 2008). In this gaming regulation dispute, the plaintiffs filed a motion to compel production. The defendants provided numerous defenses to the plaintiffs' motion, claiming the documents and electronic information were protected by attorney-client privilege; the request sought trade secret and competitive information; the documents sought were not relevant; and the request was overbroad and unduly burdensome. Granting in part the plaintiffs' motion to compel, the court ordered production of specified requested documents finding the documents to be relevant. The court referenced a previously entered protective order to ease the defendants' fears regarding a potential exposure of trade secrets. Additionally, the court stated that a future review will be completed to determine attorney client privilege issues.

Court Finds Privilege Logs Inadequate and Issues Sanctions for Production of PDF Files in a Non-Searchable Format
L.H. v. Schwarzenegger, 2008 WL 2073958 (E.D. Cal. May 14, 2008). In this class action litigation, the plaintiffs filed a motion to compel an inadequate privilege log and sought sanctions. The plaintiffs claimed some of the defendants' privileges were inadequately asserted and the defendants produced electronic documents in a non-searchable PDF format that were searchable in their native format. The defendants asserted they substantially complied with previous production orders and were not required to provide files natively because the plaintiffs did not specifically request that production format. Finding the defendants' behavior representative of "purposeful foot dragging," the court determined the defendants' production of non-searchable documents violated Fed.R.Civ.P. 34's requirement that electronic documents be produced in a reasonably usable form and ordered monetary sanctions. Additionally, the court found the previously produced privilege logs lacking in substance and usability, and ordered the defendants to produce a final omnibus privilege log. Finally, the court warned the defendants that it would allow the plaintiffs to bring a motion for sanctions or a waiver of privilege if the defendants continue to "abuse the privilege log procedure."

Court Notes the "Changing Face of Discovery"
Eckhardt v. Bank of America Corp., 2008 WL 1995310 (W.D.N.C. May 6, 2008). In this disability discrimination litigation, the plaintiff filed a motion for discovery sanctions and additional discovery. The plaintiff alleged the defendant did not fully comply with a previous court order requiring the defendant to identify the computers used by decision makers in the plaintiff's employment termination. The defendant claimed all documents of known locations were produced and the relevancy of the documents of unknown locations had not been established. Finding relevant documents were not produced, the court allowed the plaintiff to seek documents from the defendant's backup tapes of electronically stored material. However, the court did not find that the defendant acted in bad faith, but rather commented that the discovery problem "highlights the changing face of discovery in an electronic world." The court ordered the defendant to pay costs associated with making its current and former employee deponents available.

Court Awards Fees Citing Parties' Failure to Comply with Discovery Involving Statistical Data
Attard v. City of New York, 2008 WL 1991107 (E.D.N.Y. May 5, 2008). In this age discrimination litigation, the plaintiff filed second and third motions for sanctions, citing the defendants' repeated failure to comply with court-ordered discovery and failure to serve a timely opposition to the second motion. After analyzing the case history, the court found that the defendants "forced [the] plaintiffs to endure lengthy delays, struggle with defective data production and expend valuable resources to compel [the] defendants to comply with the law." The court found the statistical data produced was not in a usable form because it contained flawed data that made accurate analysis impossible. Subsequently, the court awarded monetary sanctions requiring the defendant to pay reasonable expenses associated with the plaintiff's use of expert witnesses, and attorneys' fees and costs accrued by the plaintiff to enforce discovery.

Court Denies Motion for Additional Discovery Because the Party Seeking Discovery Failed to Demonstrate Diligence
Peterson v. Union Pacific R.R. Co., 2008 WL 1930453 (C.D. Ill. May 1, 2008). In this wrongful death litigation, the plaintiffs filed a motion to compel additional discovery and sought sanctions. The plaintiffs sought additional depositions, alleging that the defendant concealed data or engaged in spoliation of three potential sources of electronic data. Determining that no discovery abuse existed, the court found that the plaintiffs failed to diligently pursue the requested information. Additionally, the court found that additional discovery was not needed at this stage of litigation. The court ordered the plaintiffs to show why their motion to compel was substantially justified in response to the defendant's request for fees associated with opposing the motion.

Court Denies Sanctions for Spoliation of Paper Documents in Part Because Content was Stored Electronically
Whitney v. JetBlue Airways Corp., 2008 WL 2156324 (E.D.N.Y. April 29, 2008). In this negligence litigation, the plaintiff sought sanctions alleging that the defendant willfully destroyed a critically relevant handwritten report. The defendant argued the handwritten document was destroyed after it was entered into an electronic database as part of a bulk destruction of documents. Finding the defendant acted negligently in allowing destruction of the handwritten report, the court nevertheless denied the plaintiff's request for sanctions. The court noted that the plaintiff did not sufficiently establish the report's relevance nor prove that the report contained information beyond what was produced in electronic form. However, the court awarded to the plaintiff the attorney's fees and costs in connection with the motion due to the defendant's destruction of the document.

Court Recommends Preclusion of ESI Evidence Found After a Discovery Deadline
R&R Sails, Inc. v. Ins. Co. of Pa., 2008 WL 2232640 (S.D. Cal. April 18, 2008). In this insurance litigation, the plaintiff sought sanctions and preclusion of ESI that the defendants produced after the discovery deadline. The defendants argued that sanctions were inappropriate because the untimely production was an "honest mistake" as they initially did not realize the logs existed, and then belatedly realized they failed to produce six pages of computer notes from the electronic claim logs. Finding sanctions appropriate under Fed.R.Civ.P. 26(g), the magistrate judge determined a reasonable inquiry into potentially discoverable material must be made and that an "honest mistake" is not a substantial justification for an incorrect certification made by an attorney. Additionally, the magistrate justified sanctions under Fed.R.Civ.P. 37(c), citing the defendants' failure to timely supplement initial disclosures without substantial justification. The magistrate ordered monetary sanctions and recommended precluding the defendants from introducing or relying on documents and ESI that were not produced on time.

To view additional case summaries visit http://www.krollontrack.com/case-summaries.

Practice Points: Data Collection Considerations for Multilingual E-Discovery - Part I

The world in which we live is rapidly becoming globalized. No longer do oceans create boundaries over which communication is impractical. The technology revolution and the realities of the modern legal and business environment have brought the practice of law to a tipping point. Today's lawyers and corporations are responsible for litigation without borders and discovery without language barriers. This first article in a three-part series is a must-read for any legal team that wishes to avoid common e-discovery pitfalls in cases involving multilingual documents.

The first issue a litigation team involved in multilingual e-discovery will face is data collection. There is a strong likelihood the data you need to collect will contain non-English characters, irrespective of whether you collect the data in France, China or the United States. The primary data collection considerations include: location, people, tools and laws.

Location: It is important to identify as early as possible where the data you need to collect is located in order to create an efficient discovery strategy. In many cases, the data is scattered throughout several countries and is comprised of multiple languages. Understand that for each location, you may need a separate plan of attack for gathering the data.

People: The next challenge you will face is transporting your collection team to the various locations where the data is located. Because thorough and defensible, yet timely, collection is of vital importance to your discovery efforts, be sure to send only qualified and experienced people to work on the collection, especially when the collection occurs abroad. If possible, look to leverage a data collection effort by utilizing local collection experts.

Tools: Certain collection tools commonly used for electronic English-language data collection do not support collecting data in other languages. Computers use two main methods to store computer data: code pages and Unicode. Using the same underlying data, different code pages generate different language characters. Unicode is a standard agreed to by computer hardware and software makers where each character in nearly every possible language is assigned a number; however, not all data is maintained in Unicode. You must ensure that your collection tools support any languages or character sets you might encounter in collection.

Laws: Collecting data on foreign soil may raise legal roadblocks not common in the US. It is prudent to confer with local counsel to fully identify local data transfer rules, privacy regulations and jurisdictional issues specific to that location before you deploy your collection team. For example, the European Union (EU) and many Asian countries have strict data privacy laws which may limit transportation of data outside the country.

To address these restrictions, the EU and the US have developed a safe harbor that allows organizations to certify to the US Department of Commerce that they will provide adequate privacy protections when transferring personal data outside the EU. While the safe harbor may allow for certain types of data collection, it is important for your legal team to fully understand its provisions and requirements prior to deployment of your data collection team.

The bottom line is that your legal team will minimize the likelihood of delays and other pitfalls by determining where data needs to be collected, the tools necessary to collect the data and the legal requirements specific to that location prior to deploying your data collection team.

News & Events

Kroll Ontrack Expands Electronic Discovery Support for Documents With Asian Languages
Kroll Ontrack announced on June 25, 2008 the addition of Unicode processing support and multilingual search features to its electronic discovery services. With expanded capabilities that include languages such as Simplified Chinese, Traditional Chinese, Japanese and Korean, Kroll Ontrack is helping global legal teams more quickly and efficiently identify, process, search, review and produce multilingual documents, resulting in time and cost savings.

Kroll Expands Legal Technologies Practice in Asia
Kroll announced on July 1, 2008 the expansion of its Hong Kong office to include Legal Technologies services provided by Kroll Ontrack, a wholly-owned subsidiary of Kroll. Kroll Ontrack has appointed Ben Pasco as managing director of the Legal Technologies practice in Asia. Pasco will be based in Hong Kong, which serves as the region's headquarters. As the recognized world leader in helping companies manage their electronically stored information (ESI), Kroll Ontrack will specifically aid businesses in the Asia Pacific region with their electronic discovery and computer forensics needs for litigation, regulatory matters and internal investigations. US, UK and European companies and law firms will also benefit from this expansion when their matters require data collection or in-country data handling in the Asia-Pacific region.

Kroll Ontrack ESI Trends Report Reveals Valuable Insights
A report based on an independent survey conducted by Canvasse Opinion on behalf of Kroll Ontrack reveals valuable insights into ESI management and e-discovery corporate practices in the United States and the United Kingdoms. Three key themes with regard to in-house counsel ESI practices emerged from the survey: preparedness, ownership and challenges. Notably, the survey revealed a severe lack of understanding, preparedness and enforcement by organizations regarding how to manage their ESI. The report exposed immense confusion over who within a company is responsible for creating an ESI policy and who is accountable should the policy fail, along with many other significant findings. To download a complimentary copy of the ESI Trends Report, please visit: http://www.krollontrack.com/esitrends.

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This newsletter is written by Gina Jytyla and Joni Shogren, Kroll Ontrack staff attorneys, with assistance from Meridith Socha and Kelly Kubacki, law clerks. Ms. Jytyla can be contacted by writing to gjytyla@krollontrack.com.

For more information about electronic discovery and computer forensics services, contact Kroll Ontrack at 800 347 6105 or visit http://www.krollontrack.com.