In This Issue:

	RECENT E-DISCOVERY AND COMPUTER FORENSIC COURT DECISIONS
	PRACTICE POINTS: GUEST ARTICLE BY JEANE A. THOMAS, ESQ.: TIPS FROM THE TRENCHES – PRESERVATION OBLIGATIONS
	KROLL ONTRACK NEWS & EVENTS

Court Denies Unsubstantiated Request for Computer Forensic Examination
Advante Int’l Corp. v. Mintel Learning Tech., 2006 WL 1806151 (N.D. Cal. June 29, 2006). The defendant brought a motion to compel examination of the plaintiff’s computer hard drives, contending the plaintiff was concealing evidence and misrepresenting facts. Although recognizing a forensic examination may be appropriate upon a showing that the opposing party has deleted electronic evidence, the magistrate judge observed, “a party would not be given an unfettered right to conduct its own examination of the opposing party's computers. Rather, a protocol would have to be established to protect legitimate privacy, privilege, safety concerns, and to minimize disruption.” The magistrate judge ultimately denied the defendant’s motion, noting the defendant’s unsubstantiated accusations of discovery misconduct did not warrant the remedy of a forensic examination.

Fifth Circuit Orders Re-Examination of Documents for Privilege Claims
In re: Vioxx Prods. Liab. Litig. 2006 WL 1726675 (5th Cir. May 26, 2006). In a product liability litigation, the defendant sought interlocutory appeal and a writ of mandamus of the district court’s ruling regarding the defendant’s attorney-client privilege claims. Out of more than 2,000,000 documents produced in response to the plaintiff’s discovery request, the defendant withheld approximately 30,000 claiming attorney-client privilege. After conducting an in camera, document-by-document review of the 30,000 documents, the district court determined only 491 documents were privileged and ordered the remainder be produced to the plaintiff. On appeal, the court only examined the trial court’s review process rather than the merit of the privilege claim on any single document. The Fifth Circuit found the district court judge’s efforts commendable, but inadequate, and determined that a continuation of the current review process without modification would constitute an abuse of discretion. The Fifth Circuit granted the defendant’s motion for a re-examination of 2,000 documents and instructed the defendant to supplement the privilege log and offer assistance in easing the burden of review on the district court judge. The Fifth Circuit allowed the district court discretion in determining whether further review of the documents would be necessary.

Court Finds Plaintiff May Retain Inadvertently Disclosed E-mail
Crossroads Sys., Inc. v. Dot Hill Sys. Corp., 2006 WL 1544621 (W.D. Tex. May 31, 2006). In a patent infringement action, the plaintiff sought an order compelling the defendant’s witness to testify about communications in relation to an e-mail inadvertently produced during discovery. Filing a counter motion, the defendant claimed the e-mail was protected by attorney-client privilege and demanded return of the document. The court denied the defendant’s counter motion, finding the privilege had been waived after the defendant had repeatedly failed to take steps in securing the return of the e-mail after first learning the document had been inadvertently disclosed. Noting that the plaintiff had deposed one of the defendant’s witnesses about the substance of the e-mail without objection from the defendant in July of 2004, the court chided the defendant’s counsel for failing to assert a claim of attorney-client privilege at the deposition. The court observed that the substance of the e-mail should have placed the defendant on notice that it had produced a document containing privileged communications seeking legal advice. The e-mail contained attachments specifically labeled “Confidential-Attorney’s Eyes Only” and was addressed to a law firm. Not until February of 2005, when the e-mail was introduced again at another deposition, did the defendant assert attorney-client privilege. Still, the defendant waited three months to petition the court for return of the document and only after the plaintiff refused to return the e-mail and brought a motion to compel further testimony. The court determined the plaintiff was entitled to keep the e-mail and demand further testimony in relation to it.

Court Awards Monetary Sanctions for Failure to Timely Produce Documents
Cardenas v. Dorel Juvenile Group, Inc., 2006 WL 1537394 (D. Kan. June 1, 2006). In this product liability case, the plaintiffs sought sanctions under FRCP Rule 37 against the defendant for providing false responses to discovery requests, failing to supplement discovery requests, failing to comply with a court order compelling discovery and for withholding a crucial document damaging to the defendant’s case. The plaintiffs first learned the defendant had failed to provide a key document when they examined communications contained in an internal e-mail, produced in response to other discovery requests. Although the defendant produced the document after the plaintiffs specifically requested it be turned over, the plaintiffs asserted they were unfairly prejudiced by the document’s untimely production. The plaintiffs moved the court to prohibit the defendant from asserting affirmative defenses, in effect granting a default judgment, or alternatively, to issue adverse inference jury instructions against the defendant. However, the court found the sanctions requested by the plaintiff to be unwarranted, as the defendants had not withheld the key document willfully or in bad faith. Still, the court observed, “parties cannot be permitted to jeopardize the integrity of the discovery process by engaging in halfhearted and ineffective efforts to identify and produce relevant documents.” Finding that the defendant’s counsel were under obligation to review all documents in their possession to determine the existence of other potentially relevant undisclosed documents, the court awarded the plaintiff reasonable attorney’s fees and expenses incurred as a result the defendant’s noncompliance and untimely production.

Court Directs Plaintiff to Provide a Table of Contents or Index for Document Production
Residential Constructors, LLC v. Ace Prop. & Cas. Ins. Co., 2006 WL 1582122 (D. Nev. June 5, 2006). In this case, the plaintiffs produced documents in both paper and electronic form, presenting the defendants with a CD-ROM of imaged files, numbered according to the order in which they were scanned. Although the plaintiff did not provide an index or table of contents, the plaintiff maintained that the imaged documents were formatted so the defendant could perform keyword searches for information. The plaintiffs argued they had satisfied their Rule 34 obligations by presenting the documents in the manner in which they were maintained in the ordinary course of business and were not required to organize or label the documents to correspond with categories in the defendant’s discovery request. However, in recognizing the documents had been gathered from different locations, the court found that a table of contents was “reasonably necessary to determine…from which entity or department the documents have been produced or the type of file in which they are contained.” While the court refused to award attorney fees for delays in discovery, which were “unavoidable in view of the voluminous nature of the documents in issue,” the court warned the plaintiffs that failure to timely comply with the order could result in future sanctions.

A current and comprehensive archive of case law summaries pertaining to electronic discovery and computer forensics is available at http://www.krollontrack.com/case-summaries/.

PRACTICE POINTS: GUEST ARTICLE BY JEANE A. THOMAS, ESQ.: TIPS FROM THE TRENCHES – PRESERVATION OBLIGATIONS

*** Written by Jeane A. Thomas, Esq. Ms. Thomas is a Partner in the Washington, D.C. office of Crowell & Moring LLP and a member of the firm's Antitrust group.***

One of the most difficult and high-risk areas of electronic discovery is identifying and complying with the obligation to preserve electronic material. Much has been written and said about when the obligation to preserve begins, what data must be preserved, how the data should be preserved, and who should do the preserving. Given the pending amendments to the federal rules and dramatic growth in the volume of electronic material, we expect much more litigation in this area and many more significant fines and sanctions for failure to meet preservation obligations.
The following guidelines will help reduce risk:

1. Upon notice that a claim may exist, actively preserve the electronic files (including back-up and archived data) of key custodians and other key sources of relevant data (e.g., shared databases). At a minimum, a litigation "hold order" should be issued and preservation instructions should be specifically reviewed with key custodians and IT personnel.

2. A litigation "hold order" may not be sufficient. For key custodians, consider imaging hard drives and collecting data from network servers within days or hours of identifying the preservation obligation.

3. Carefully maintain the chain of custody for all data collected and segregate relevant back-up tapes and collection media from all other IT operations -- for example, in counsel's office.

4. Designate an expert to supervise the preservation process from beginning to end. That individual may need to serve as a witness in later litigation and should have careful records of all steps taken. Consultants are particularly useful in this role.

A copy of the proposed rule is available at www.krollontrack.com/rules-statutes/.

KROLL ONTRACK NEWS & EVENTS

Legal IQ's 2nd E Discovery – September 18-20, 2006 in New York City
Back by popular demand, Legal IQ and Kroll Ontrack will address the huge challenges associated with document retention and production and will show you how to proactively manage data and minimize your risks at Legal IQ’s 2nd E Discovery conference. Featuring all new speakers, case studies, best practices, and the latest updates in the regulatory landscape, Legal IQ's 2nd E Discovery is a must-attend event.

As a subscriber of Kroll Ontrack’s Case Law Update, you are eligible for a 10% discount off the registration fee. For more information or to register, click here or call Legal IQ at 1-800-882-8684. When registering, please be sure to mention your DISCOUNT CODE: L001. Offer valid for new registrations only.

Meet Kroll Ontrack Representatives at the Following Events:

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

KROLL ONTRACK REQUESTS YOUR INPUT

This newsletter is written by Michele C.S. Lange, staff attorney with Kroll Ontrack, with assistance from Melanie Bradshaw, a Kroll Ontrack law clerk. 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, contact Kroll Ontrack at (800) 347-6105 or www.krollontrack.com