In This Issue:

	Recent ESI Court Decisions
	Practice Points: Near De-Duplication & E-Mail Threading – Overcome Redundant Data Woes and Gain a Better Understanding of Your Case
	News & Events

Recent ESI Court Decisions

Court Orders Search of Server Data Contingent on Possibility of Keyword Search
Feig v. Apple Org., Inc., 2009 WL 1515506 (S.D.Fla. May 29, 2009). In this wrongful termination litigation, the plaintiff sought production of the defendant's communications, including e-mails to and from the plaintiff. The defendant claimed that production of employee e-mails referencing the plaintiff was burdensome and would produce irrelevant documents. The defendant also argued that its server was shut down when it went out of business and that if the employee e-mail accounts were recreated, they would be impossible to search by keyword. Rejecting the defendant's irrelevancy argument, the court found that e-mails sent by the plaintiff's co-workers could be reasonably calculated to lead to admissible evidence. Thus, the court ordered an electronic search of the defendant's server data. The court noted that if a keyword search proved impossible, the defendant could seek a protective order provided it had support from a computer forensic expert.

LA Supreme Court Finds Court of Appeal Erred in Vacating Preliminary Injunction Regarding Dissemination of Privileged E-Mails
Council of the City of New Orleans v. Washington, 2009 WL 1492869 (La. May 29, 2009). In this litigation, the Supreme Court of Louisiana held that the Court of Appeal erred when it vacated the preliminary injunction issued by the District Court since it considered a constitutional issue that was not raised on appeal. Previously in Council of the City of New Orleans v. Washington, 2009 WL 1300747 (La. App.4 Cir. May 12, 2009), the Court of Appeal considered the defendant's appeal of the preliminary injunction preventing the defendant from disseminating e-mails. The plaintiff argued the e-mails were not sanitized for privilege, that ethical rules require return of the documents, and that the temporary nature of the injunction did not violate the defendant's First Amendment rights. Finding the injunction violated the defendant's constitutional rights since the records had already been released pursuant to a written public records request, the Court of Appeal vacated the injunction. The court recognized that ethical and procedural violations would likely be asserted against the defendant if the inadvertently privileged documents—by definition not public records—were disseminated but found the constitutional issues overrode any ethical concerns.

Court Imposes Sanctions for "Wasteful Wild Goose Chase"
Beard Research, Inc. v. Kates, 2009 WL 1515625 (Del.Ch. May 29, 2009). In this tortious interference with business relations litigation, the plaintiffs sought spoliation sanctions claiming a computer was irretrievably altered after the defendants' preservation duty arose. Specifically, the plaintiffs alleged the repeated reformatting of a personal computer and the loss of a hard drive caused the destruction of relevant incriminating e-mails and a presentation. The defendants argued there was no obligation to preserve one of the defendant's computers since there was no request for it. Finding this "mistaken view" let the defendants "off the hook too easily," the court determined the defendants were responsible for the evidence destruction. The court also found the defendants liable for the loss of an original hard drive. Based on these discovery abuses that led the plaintiffs and their IT expert on a "wasteful wild goose chase," the court granted an adverse inference sanction with regard to the presentation but declined to sanction the loss of e-mails as the plaintiffs did not adequately prove their existence. The court also awarded attorneys' fees and expenses associated with the sanctions motion.

Court Rules Data on Backup Tapes Is Not Necessarily Not Reasonably Accessible
Omnicare, Inc. v. Mariner Health Care Mgmt. Co., 2009 WL 1515609 (Del.Ch. May 29, 2009). In this breach of contract litigation, the plaintiff moved to compel restoration and production of e-mails contained on backup tapes at the defendant's expense and to comply with the terms of a non-executed e-discovery stipulation regarding search terms. The defendant's e-mails were stored on backup tapes pursuant to an internal data retention policy. The court denied the plaintiff's motion to compel backup tape restoration and to shift costs to the defendant, finding that data stored on backup tapes are not necessarily non-reasonably accessible and that the defendant had not adequately demonstrated that the e-mails were not reasonably accessible. However, the court was not convinced that relevant data would be retrieved from restoration of the backup tapes. Accordingly, the court ordered production from the defendant's active data stores in order to assess the likelihood of finding relevant data on the backup tapes, noting that it found no impropriety in the defendant's data retention policy. Turning to the search term dispute, the court declined to resolve the issue as it had not been adequately informed about the dispute and lacked a sufficient basis to resolve the parties' impasse. The court noted the search term dispute may best be resolved by "a neutral third party with recognized expertise in searching complex databases."

Court Orders Forensic Imaging and Searching of Database and E-Mail Servers
Covad Commc'ns. Co. v. Revonet Inc., 2009 WL 1472345 (D.D.C. May 27, 2009). In this ongoing trade secrets misappropriation litigation, the plaintiff sought forensic images of the defendant's drives and computers as well as forensic searches of its database and e-mail servers. The defendant argued that its servers were too fragile for forensic images and that imaging constituted an undue burden. The defendant also objected to the forensic search of its servers, claiming it may reveal information that the defendant is obliged by contract to keep confidential. Disregarding the defendant's arguments, the court granted the plaintiff's request for forensic imaging, finding the imaging would not stress the servers any more than day-to-day use. The court also ordered the forensic search of the defendant's servers, stating that no alternative way existed and that any confidential material could be safeguarded by a protective order. Regarding the e-mail servers, the court determined insufficient authority existed to conclude ESI deficiency allegations automatically warranted forensic searches. The court reserved decision on whether forensic examination was appropriate until the plaintiff's expert's report was submitted. The court also ordered a comparison between servers to determine what data existed on non-operational servers that did not exist on the remaining operational one.

Court Stops Short of Default Judgment in "Textbook Case" of Discovery Abuse but Awards More Than One Million Dollars in Monetary Sanctions
Kipperman v. Onex Corp., 2009 WL 1473708 (N.D.Ga. May 27, 2009). In this constructive transfer and fraud case, the plaintiff sought sanctions in the form of a default judgment against the defendant for discovery abuses. The plaintiff asserted that the defendant repeatedly defied court orders, unilaterally narrowed the scope of restoration and production of court-ordered backup tapes, unilaterally redacted court-ordered produced documents to the point that such documents became unusable and misrepresented to the court the likely relevance of e-mails sought. The defendants maintained that their redactions were in compliance with the court's orders and insisted that the broad discovery requested by the plaintiff would likely be fruitless. The court agreed with the plaintiffs that the defendant had blatantly disregarded court orders by making misrepresentations during discovery and stated it was deeply disturbed by the defendant's discovery conduct in what it regarded as "a textbook case of discovery abuse." However, the court declined to order default sanctions, citing novel issues of liability and noting that granting a default judgment in this case might be a grant of the largest default judgment sought in United States history. The court alternatively awarded $1,022,700 in monetary sanctions against the defendant to be paid to the plaintiff.

Court Denies Discovery of Documents Protected by Israeli Confidentiality Laws
Linde v. Arab Bank, 2009 WL 1456573 (E.D.N.Y. May 22, 2009). In this case arising out of the Anti-Terrorism Act and the Alien Tort Claims Act, the defendant sought production of documents from three non-parties. The defendant first sought production of documents from Israel Discount Bank New York (IDBNY) held in Israel by IDBNY's parent company Israel Discount Bank (IDB). The defendant also sought production of documents from Bank Hapoalim, which objected to production citing various Israeli laws including laws against self-incrimination. Citing IDB's insignificant relationship to the litigation and that IDBNY was not a "mere department" of IDB, the court refused to allow jurisdictional discovery of documents held by IDB. Turning to the second request, the court rejected the non-party's claims of self-incrimination and commercial secrets laws violations but felt the other legal arguments raised constituted "prohibitions on disclosure that raise a true conflict between United States discovery rules and Israeli confidentiality laws." The court considered five factors contained within the §442 of the Restatement (Third) of the Foreign Relations Law of the United States: the importance of the investigation of the documents, the specificity of the request, whether the information originated in the United States, the availability of alternative means of securing the information, and the extent to which noncompliance would undermine American interests or compliance would undermine the interests of the state in which the information is located. Noting all factors, except for the specificity requirement, weighed in favor of the non-party, the court denied discovery of the materials protected by Israeli confidentiality laws but ordered production of the remaining materials.

Court Issues Evidence Preclusion Sanction for Preservation Failure
Innis Arden Golf Club v. Pitney Bowes, Inc., 2009 WL 1416169 (D.Conn. May 21, 2009). In this environmental law litigation, the defendant sought sanctions alleging the plaintiff failed to preserve electronic data packages associated with soil sample testing. Noting the data at issue was indisputably destroyed, the court analyzed whether a preservation obligation existed and whether sanctions were warranted. The court found a duty to preserve arose by mid-2005 at the latest, when the plaintiff's documents evinced an understanding that the evidence would be critical to the upcoming litigation. Citing the plaintiff's own recognition of the importance of the evidence, the court rejected the plaintiff's argument that destruction should be excused since the defendant did not demonstrate an intent to rely on the evidence during litigation. Noting an adverse inference would be an insufficient remedy, the court found the appropriate sanction to be preclusion of the evidence.

Court Imposes Adverse Inference Citing Party's Failure to Preserve Relevant ESI
Plunk v. Village of Elwood, IL, 2009 WL 1444436 (N.D.Ill. May 20, 2009). In this civil rights action, both parties filed a "slew of pretrial motions." The defendants argued the court should bar the plaintiffs' expert from testifying unless discovery was re-opened. The plaintiffs requested an examination of the defendants' computer system by their expert to determine if any deleted ESI was backed up. The plaintiffs also sought default judgment sanctions based on the defendants' destruction of an audio recording, failure to preserve data on computers and hard drives, and failure to back up relevant ESI. Addressing the defendants' motion, the court found the defendants' discovery failures and withdrawn expert statement that certain hard drives were not wiped clean necessitated testimony from the plaintiffs' expert, and thus allowed a short deposition from the plaintiffs' expert at cost to the defendants as a "fair discovery sanction for defendants' failure to follow the rules." Turning to the plaintiffs' motions, the court denied the examination request as expensive and futile. Regarding sanctions, the court rejected the defendants' arguments that evidence erasure was inadvertent and found the defendants breached their preservation obligations. The court determined an adverse inference sanction was appropriate, using the plaintiffs' expert's identification of e-mail chains suggesting relevant documents were destroyed accidentally or intentionally as partial justification.

Motion to Re-Produce Documents in Native Format Denied Despite Initial Native Production Request After Unreasonable Delay in Objection
Ford Motor Co. v. Edgewood Properties, Inc., 2009 WL 1416223 (D.N.J. May 19, 2009). In this environmental litigation, the defendant moved for re-production in native format of the plaintiffs' entire ESI production previously produced in TIFF format and for a keyword search by a forensic expert to confirm the adequacy of the plaintiffs' manual document collection process. The plaintiffs had demanded native production in their initial document request and argued the keyword search was appropriate to confirm the adequacy of the defendant's collection, as certain documents were noticeably absent from production. The court denied the defendant's motion for re-production, finding the defendant waived its objection to production format by failing to make a timely objection; the defendant waited eight months to first object to the requested production format and an additional two months before bringing the matter to the court's attention. Turning to the second motion, the court found that the defendant had not made a colorable showing that documents had been withheld because of inadequate collection. The court accordingly held that it would not grant the burdensome discovery requested based on "nefarious speculation" of missing documents this "late in the game."

Court Grants Adverse Inference Sanction Finding Intentional or Reckless Destruction of Computers and Thumb Drive
Triton Constr. Co. v. Eastern Shore Elec. Servs., Inc., 2009 WL 1387115 (Del.Ch. May 18, 2009). In this breach of fiduciary duty litigation, the plaintiff sought an adverse inference instruction claiming the defendant intentionally destroyed ESI on his work computer and did not produce his personal laptop or thumb drive. The plaintiff retained a computer forensic expert who found a wiping program installed on the computer that made certain files and deleted e-mails irretrievable. The defendant argued he never used wiping software and no longer owned the home computer or thumb drive. Finding the defendant intentionally, or at least recklessly, destroyed relevant evidence on his work computer and intentionally failed to preserve evidence on the other media forms, the court imposed an adverse inference sanction.

Court Denied Motion to Compel and Refused Cost-Shifting, Citing Lack of Bad Faith
Robert v. Board of County Comm'rs of Brown County, Kan., 2009 WL 1362530 (D.Kan. May 14, 2009). In this employment litigation, the plaintiff moved to compel production of a single e-mail. The plaintiff argued the court should order a forensic search for the e-mail by an outside expert at the defendants' expense. The defendants had offered to allow the plaintiff to conduct a forensic search at her own expensive but the plaintiff rebuffed the offer, citing insufficient resources. The defendants asserted they had been unable to recover the e-mail and additional searches were futile because the hard drive had been irreparably damaged. The court denied the motion and refused to shift the costs, finding no evidence of bad faith by the defendants. The court further rejected the plaintiff's alternative request that the defendants contact their e-mail provider to acquire the message, reasoning the defendants are only obligated to produce documents in their possession or control.

Mere Speculation of Destruction of Relevant E-Mails Insufficient to Justify Sanctions
Phillips v. Potter, 2009 WL 1362049 (W.D.Pa. May 14, 2009). In this sexual discrimination case, the plaintiff filed a motion for sanctions based on the defendant's failure to preserve electronically stored information; the defendant admitted that a litigation hold was not put into place after litigation became foreseeable and that e-mails were destroyed by an automatic deletion system as a result. The defendant argued that sanctions were nevertheless inappropriate because the e-mails destroyed were not relevant. The court agreed with the defendant that there was no evidence of destruction of relevant documents and refused to order sanctions arising out of "mere speculation" that relevant documents were destroyed, noting also that there was no indication of any bad intent on the part of the defendant.

Court Orders Mirror-Imaging of Hard Drive in File Sharing Case
Capitol Records, Inc. v. Alaujan, 2009 WL 1292977 (D.Mass. May 6, 2009). In this copyright infringement case, the defendant moved for a protective order to prevent the mirror imaging of two computers. The defendant argued the discovery was overbroad, an invasion of privacy and violated attorney-client privilege. The plaintiffs sought inspection of the computers to determine whether they were used for file sharing. The court granted the protective order and denied imaging with regard to one of the computers that was barely addressed by the plaintiffs in their response to the defendant's motion. The court allowed imaging of the second computer subject to a protective order whereby the plaintiffs would select a computer forensic expert to examine relevant, non-privileged data on the computer, citing the centrality of the second computer to the litigation alongside the defendant's substantial privacy concerns. The court ordered the expert would provide a report describing any relevant files to the defendant's counsel, who would have five days to lodge any objection before disclosing the report to the plaintiffs.

Court Chastises All Parties in E-Discovery Dispute for "Procedural Wrangling"
Technical Sales Associates, Inc. v. Ohio Star Forge Co., 2009 U.S. Dist. (E.D.Mich. May 1, 2009). In this sales contract dispute, a third-party forensic examination corporation sought attorneys' fees and costs for its defense against an unsuccessful motion for contempt filed by the defendant. The defendant had moved for contempt arguing that the third party's disclosure of findings of spoliation to the plaintiff directly, without noticing the defendant, was a violation of the stipulated order. The court ruled that the third party had not violated the stipulated order because the order dealt narrowly with the discovery of actual data and did not govern the discovery of wrongdoing. The court, however, determined that the third party was not "free from taint" and should have provided the substance of the report to the defendant. The court further noted that all the parties had behaved poorly by engaging in "procedural wrangling" during discovery, resulting in an electronic discovery dispute that "has become the sideshow which eclipses the circus." The court ordered the third party to submit its billing records but reserved decision on the motion until the end of the case consistent with the determination of the sanctions motion.

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

Practice Points: Near De-Duplication & E-Mail Threading – Overcome Redundant Data Woes and Gain a Better Understanding of Your Case

Redundant data is everywhere and can be a major problem in electronic discovery, as reviewing substantially similar documents often requires extensive time and money. However, emerging technologies such as content-centric near de-duplication and e-mail threading are available to more efficiently organize, analyze and economize an otherwise unstructured redundant data set

The Problem of Redundant Data
Redundant data is a natural by-product of creating documents and communicating electronically. Consider a business contract that is drafted and distributed to ten people for review via e-mail. There are now ten identical documents and ten duplicate e-mails on ten computer systems. Assuming the recipients amend the contract slightly and e-mail it back to the sender, the number of near-duplicate contracts and e-mails has grown dramatically. After several communications back and forth, the number of related e-mails and near duplicate documents (i.e., redundant data) has expanded exponentially.

The problem of redundant data painfully manifests itself in the context of e-discovery. Conceptualize a simple document review where five attorneys are each given an unstructured set of responsive documents containing a dozen versions of the contract and ten random e-mails pertaining to it. Not only will the unstructured review of this redundant data be exorbitantly expensive as each document will need to be reviewed, but the legal team will lack a comprehensive understanding of the data as none of the reviewers have seen every relevant e-mail or contract version necessary to gain a complete picture of the events surrounding the contract creation. Thankfully, cutting-edge near de-duplication and e-mail threading technologies have emerged that provide a powerful solution to the problem of redundant data.

Near De-Duplication Solution
Near de-duplication tools use conceptual search (a technology that retrieves documents conceptually related to the search term rather than only documents with exact keyword matches to the query) to intelligently identify near duplicates. Near duplicates are documents which differ only slightly from each other, such as the contract in the above scenario. Documents that differ by a few words or paragraphs, by formatting, or by document type can all be identified by near de-duplication tools; these documents would all fall outside the reach of standard de-duplication tool.

Advanced near de-duplication software will identify a core document that is most representative of the near-duplicate document set, allowing one reviewer to quickly determine whether review of the entire set is necessary. If review of the entire set is necessary, one reviewer can efficiently review the entire set by focusing solely on the differences that are highlighted in the document without needing to read through the entire document. Importantly, these differences might have been missed due to the "glazed eye" syndrome if attorneys had to review each document in its entirety.

E-Mail Threading Solution
E-mail threading allows document review teams to view all related e-mail, sent and received, in a single conversation thread. Advanced e-mail threading tools identify e-mail threads based on the documents' content, again utilizing conceptual search rather than relying on the e-mail subject line. The tools determine the end-point e-mail for each thread, allowing users to review a single e-mail conversation inclusively contained in the end point e-mails and reducing the volume of e-mail that need be reviewed. These tools are invaluable in understanding complex conversations with multiple branches and end points. In the contract creation scenario discussed above, a single attorney could review all related e-mail chains and gain a better understanding of the case as it pertains to the contract and surrounding communication.

Conclusion
Near de-duplication and e-mail threading capabilities empower legal teams to overcome the problem of redundant data. These smart technologies enhance the accuracy and consistency of review decisions by facilitating the consistent treatment of similar documents that are logically and comprehensively organized into near duplicate document sets and e-mail threads. Moreover, the structured review of similar documents and e-mail threads enable legal teams to gain a greater understanding of the data – and thus the facts and legal arguments involved in a case. These tools also dramatically increase efficiency by decreasing the total number of documents that must be reviewed, resulting in significant cost savings. In the final analysis, a legal team facing redundant data can overcome the associated woes by turning to the aid of these powerful new technologies.

News & Events

Download Kroll Ontrack's Recent Podcast, "Legal, Economic, and Pragmatic Considerations in Cross-Border E-Discovery"
Want to know more about cross-border e-discovery in the current economy? In this edition of the ESI Report, host Gina Jytyla, Managing Staff Attorney in the Legal Technologies division at Kroll Ontrack, welcomes e-discovery experts Tracey Stretton, Legal Consultant with Kroll Ontrack's UK office, and Mark Surguy, a UK solicitor at Pinsent Masons LLP specializing in large scale multi-party litigation. They will explore international litigation and investigations, specifically addressing the legal and pragmatic challenges of cross-border e-discovery in today's economy. In Bits & Bytes, Kroll Ontrack Legal Correspondent Kelly Kubacki will take a look at the discovery order issued in Mintel International Group, Ltd. v. Neergheen. To listen to the podcast, visit www.krollontrack.com/legal-technologies-podcasts.

Upcoming Webinar: Rule 502, Best Practices & Technologies – All You Need to Know About Privilege
Join us tomorrow, Wednesday, July 8, 2009 at 1:00 pm EDT/12:00 pm CDT to hear from experts during a one-hour webinar focused on the complex issues surrounding privilege. With the rapid proliferation of electronically stored information, preventing the inadvertent production of privileged information has never been more difficult. Recognizing this difficulty, Congress enacted Federal Rule of Evidence 502 last fall with the intent to provide some protection against waiver of privilege and work product protection in cases involving inadvertent disclosure. Congress also intended that Rule 502 decrease the financial burden of litigation by changing the law regarding subject matter waiver, the effect of court privilege decisions on other jurisdictions and cases, and the role of court orders and party agreements. This begs the question – in practice does Rule 502 really provide sufficient protections? Has the application of this rule shown promise to accomplish Congressional goals? This presentation will discuss these questions, provide an overview of Rule 502, address lessons learned from recent court decisions applying Rule 502, and present solutions that can help prevent inadvertent disclosure. For more information and to register, please visit www.krollontrack.com/webinar-070809.

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

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This newsletter was written by Kelly Kubacki and Meridith Socha, Kroll Ontrack Law Clerks, with assistance from Regina Jytyla, Kroll Ontrack Managing Staff Attorney. 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 www.krollontrack.com.