In This Issue:

	Recent ESI Court Decisions
	Practice Points: Make Your Case by Leveraging ESI Experts at Trial
	News & Events

Recent ESI Court Decisions

Court Imposes Sanctions for Litigation Hold Failure, Orders Funding of E-Discovery Seminar on Proper Preservation
Pinstripe, Inc. v. Manpower, Inc., 2009 WL 2252131 (N.D. Okla. July 29, 2009). In this litigation, the plaintiff sought default judgment or adverse inference sanctions claiming the defendants failed to preserve and destroyed relevant documents, and also sought punitive monetary sanctions. The defendants' attorneys drafted a litigation hold, which the defendants failed to issue, and subsequently hired an outside vendor to recover deleted e-mails after the defendants' internal information technology (IT) department failed to recover the documents. Finding the defendants' local counsel had little to do with discovery responses, and that the other firm drafted the litigation hold policy and made efforts to confirm client compliance, the court declined to sanction the attorneys. Addressing the defendants' conduct, the court held that while the defendants failed to meet preservation obligations by failing to issue the litigation hold, the conduct was not intentional and therefore did not warrant imposition of a default judgment or an adverse inference. However, the court determined some sanctions were appropriate and awarded future deposition costs, excluding attorneys' fees, to the plaintiff. Additionally, if the plaintiff discovered a specific, relevant e-mail had not been produced, it would be allowed to petition the court for further relief. Finally, the defendants were ordered to pay $2,500 to the Tulsa County Bar Association to fund a seminar on litigation holds and preservation of electronic data.

Court Declines to Impose Sanctions for Spoliation, Citing Lack of Showing of Bad Faith or the Destruction of Crucial Evidence
Se. Mech. Servs., Inc., v. Brody, 2009 WL 2242395 (M.D. Fla. July 24, 2009). In this computer fraud and abuse litigation, the defendants sought adverse inference and preclusion sanctions striking allegations in the plaintiff's complaint and barring plaintiff testimony regarding alleged spoliation by the defendants for the plaintiff's failure to issue a litigation hold and subsequent destruction of data. The defendants contended the only evidence related to the plaintiff's claim that the defendants improperly deleted data was lost because the plaintiff did not put a litigation hold into place to halt the automatic overwriting of its backup tapes. The plaintiff argued sanctions were inappropriate because the defendants' request came too late to preserve the relevant data from automatic overwriting and its failure to implement a litigation hold was not in bad faith. The court found that the plaintiff had a duty to preserve evidence and should have initiated a litigation hold that would suspend the routine overwriting of its backup tapes at the time it sent the defendants a demand letter. Despite the finding of spoliation, the court denied the defendants' motion to impose sanctions against the plaintiff because it found the plaintiff did not act in bad faith and the defendants failed to show that any "crucial evidence" existed on the destroyed backup tapes.

Court Finds Party's Cost Estimations Exaggerated, Orders Production of ESI
Spieker v. Quest Cherokee, LLC, 2009 WL 2168892 (D. Kan. July 21, 2009). In this dispute over royalty payments, the plaintiffs renewed their motion to compel production of electronically stored information, addressing relevance, cost and accessibility. Previously the court recommended the parties consider conducting searches using the defendant's software and in-house IT staff and Rule 502 to minimize expenses of a detailed privileged review. The defendant argued the software was untested and that in-house IT staff had no experience producing ESI. Addressing relevance, the court determined the plaintiffs' arguments demonstrated that the requested ESI was relevant to class certification issues and that the defendant failed to timely oppose the requested discovery. Finding the defendant's arguments regarding the court's previous recommendations unpersuasive, the court noted it was not aware of any case where a party was excused from producing discovery because it had not been previously asked to do so. The court also found the defendant's estimate of $250,000 for a privilege review "greatly exaggerated" and found the defendant failed to prove the data were not reasonably accessible. Finally, the court held the defendant did not show the discovery was duplicative or that the information could be more efficiently obtained through depositions, and therefore granted the plaintiffs' motion to compel.

Finding a Warrant Unnecessary, Court Orders Internet Service Provider to Comply with Government Subpoena Seeking E-Mail
United States v. Weaver, 2009 WL 2163478 (C.D. Ill. July 15, 2009). In this unlawful materials prosecution, the Government subpoenaed the Internet service provider (ISP) seeking the contents of electronic communications, including previously opened or sent e-mail that belonged to the defendant. After the ISP failed to produce e-mails that had been stored for fewer than 181 days, the Government moved to compel production of the e-mails' content. The ISP argued the information sought required a warrant. Analyzing the issue using the Stored Communications Act (SCA), the court determined the ISP must comply with the Government's subpoena if the e-mails are held or maintained solely to provide the customer storage or computer processing services. The court also determined that previously opened e-mails stored by the ISP for web-based e-mail systems—as distinguished from other e-mail systems—are not in "electronic storage," which is defined by the Wiretap Act as storage incidental to electronic transmission and for the purposes of backup protection of the e-mail. Based on this finding, the court ordered the ISP to comply fully with the Government's subpoena.

Court Grants Adverse Inference Sanction for Destruction of Laptop, Failure to Preserve E-Mails
Goodman v. Praxair Servs., Inc., 2009 WL 1955805 (D. Md. July 7, 2009). In this breach of contract dispute, the plaintiff, a pro se litigant, sought spoliation sanctions alleging the defendant failed to issue litigation holds and preserve relevant evidence, destroyed employees' computers and failed to search disaster recovery tapes. The defendant argued a litigation hold was properly issued, there was no duty to preserve employees' computers, the plaintiff's motion was untimely and the plaintiff failed to provide proof regarding the disaster recovery tapes claim. Despite finding the plaintiff brought his motion for spoliation more than five months after discovery's conclusion, the court denied the defendant's argument that the motion was untimely because the dispositive motions had not yet been ruled on. The court then determined that the duty to preserve arose when the plaintiff sent a letter informing the defendant that he had consulted attorneys regarding the matter. Next, the court held that the defendant failed to issue litigation holds to key players and, as a result, three computers were discarded in violation of the preservation duty. The court determined that, while the defendant did not act in bad faith, it acted willfully when it intentionally destroyed the computers and e-mails. Finding only one of the destroyed computers contained relevant evidence, the court issued an adverse jury instruction for the evidence contained on that particular computer. Finally, the court allowed the plaintiff to compile a list of expenses incurred in filing the instant motion, excluding attorney's fees because the plaintiff was pro se.

Court Issues Adverse Inference Sanction for Failure to Implement a Litigation Hold
KCH Servs., Inc. v. Vanaire, Inc., 2009 WL 2216601 (W.D.Ky. July 22, 2009). In this copyright infringement action, the plaintiff moved for sanctions in the form of a default judgment or, in the alternative, an adverse inference instruction for spoliation. The court found that an October 2005 phone call from the plaintiff and the November 2005 filing of a complaint were both notice of litigation, and that the defendant subsequently failed to preserve potentially discoverable e-mails by continuing to delete and overwrite data even after the receipt of a preservation letter. The court held that the defendant's deletion of data and failure to implement a litigation hold fell beyond the scope of the routine, good faith operation of an electronic information system and constituted spoliation. Finding that an adverse inference instruction would redress the spoliation, the court granted the motion for adverse inference sanctions but denied awarding default judgment.

Court Declines to Shift Burden of Document Translation and Orders Responses to Interrogatories Under Rule 33
Sungjin Fo-Ma, Inc. v. Chainworks, Inc., 2009 WL 2022308 (E.D.Mich. July 8, 2009). In this contract dispute, the defendant moved to compel responses to interrogatories. In regard to several of the disputed interrogatories, the plaintiff had produced English and nontranslated Korean language documents under Fed.R.Civ.P. 33, which provides the option to produce business records in response to an interrogatory provided the burden of ascertaining the answer will be substantially the same for either party. The court held that the plaintiff's failure to specify which of the disclosed documents are responsive to which interrogatories does not satisfy Rule 33's specificity requirement. Moreover, the court held that the burden of ascertaining the answers to the interrogatories was not substantially similar for the parties, noting that the plaintiff can readily refer to its documents—which it should be familiar with—and extract the information necessary to provide an English language answer to the defendant's interrogatories while the translation burden would be great on the defendant.

Magistrate Judge Declines to Bifurcate Class Certification from Merits Discovery
In re Rail Freight Fuel Surcharge Antitrust Litig., 2009 WL 1904333 (D.D.C. July 2, 2009). In this antitrust action, the defendants moved for bifurcated discovery between class certification and merits discovery. The defendants contended that bifurcated discovery was possible through the use of search terms to effectively isolate electronically stored information (ESI) relevant to "certification" but not "merits" discovery. The defendants argued that bifurcated discovery would facilitate early resolution of the certification issue and reduce the burden of subsequent merits discovery. In opposition, the plaintiffs argued that certification and merits discovery are indistinguishable as evidence regarding the merits was also crucial to certification. The plaintiffs also argued that bifurcated discovery would forced the defendants to conduct document review to classify ESI as either class certification or merits discovery as no search engine could effectively distinguish between the two, and thus simultaneous discovery would be more efficient and cost effective. Magistrate Judge Facciola agreed with the plaintiffs' contention that the issues involved in certification and merits discovery were closely intertwined. The court expressed doubt that the defendants' could effectively distinguish between the two categories of documents, noting that the defendants did not propose exactly how the lawyers will "create a search engine so refined and exquisite." The court also held that bifurcation would delay the proceedings and hinder judicial economy, citing the delays and costs associated with continued need for judicial supervision and the increased number of disputes over discovery in a bifurcated case. Accordingly, the court denied the motion for bifurcated discovery.

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

Practice Points: Make Your Case by Leveraging ESI Experts at Trial

Preparing for and responding to electronic discovery is a complex undertaking and thus very difficult for courts and jurors without technical backgrounds to fully comprehend. As disputes over electronically stored information (ESI) take an increasingly prevalent role in litigation, attorneys are turning to ESI experts to explain and justify their e-discovery conduct when it is attacked. Moreover, the Judiciary has begun to suggest that having third-party ESI professionals serve as expert witnesses is a best practice.

Trial attorneys need to understand how to qualify ESI experts for testimony, when to examine an ESI expert and considerations in choosing the right expert for their case. Attorneys who understand these three aspects of expert testimony will be empowered to persuasively "make their case" regarding e-discovery conduct by leveraging ESI experts at trial.

Qualifying an ESI Expert
ESI experts must be qualified to testify. Pursuant to Federal Rule of Evidence 702, titled Testimony by Experts, a witness qualified as an expert by knowledge, skill, experience, training or education may testify as to scientific, technical or other specialized knowledge. Rule 702 further provides that expert testimony must be useful to a trier of fact and be based upon sufficient facts or data as well as reliable principles and methods.

A recent case, Mintel v. Int'l Group, Ltd. v. Neerghen, 2009 WL 1033357 (N.D.Ill. Apr. 17, 2009), is instructive regarding judicial standards governing the qualification of ESI experts under Rule 702. In Mintel, the court rejected the defendant's argument that the plaintiff's expert testimony should be barred because it was based merely on experience and thus was not testable. In reaching its decision, the court noted that Rule 702 explicitly permits expert testimony based on experience and testability is not a requirement to establish reliability. Rather, the court focused on whether the expert's testimony would be helpful to the trier of fact and readily concluded that the expert's testimony regarding spoliation would be extremely helpful, especially considering the complexity of the electronic evidence issues involved in the case.

The conclusion to be drawn from Mintel is that when courts rule whether to qualify an ESI expert to testify, they will look at both the reliability of an expert's testimony and whether the testimony is relevant. Mintel makes clear that experience is a valid method of qualifying an ESI expert. Currently, there is not a uniform credentialing system that can be used by courts as a benchmark for determining whether an ESI expert is qualified; therefore, courts will continue to look toward an ESI expert's training and experience.

When to Examine an ESI Expert
In light of Mintel's emphasis on the pragmatic value of ESI expert testimony in explaining complex issues to lay jurors, the question arises: what can ESI experts testify about that would be helpful to a trier of fact?

• Sanctions. Were preservation efforts sufficient? Was destruction of electronic evidence intentional? Were production efforts reasonable? Are sanctions warranted for these or any other reasons?
• Privilege Waiver. Did a party waive privilege or work product protection over inadvertently produced documents by failing to conduct reasonable steps such as competent keyword searches to prevent the disclosure?
• Authentication. Is there sufficient support that ESI is what it purports to be in order to be authenticated as evidence for trial? Is there a proper chain of custody? Is there other technical support such as metadata, history or hash values?

Choosing the Right Expert
There are two types of experts that can potentially be called to trial – consulting and testifying experts. A consulting expert is one who has worked with the case at trial in some capacity, from document retention planning through production. Consulting experts may be called upon to testify regarding their e-discovery conduct and its defensibility. In contrast, a testifying expert is one who was not personally involved in the case. A testifying expert is often an ESI consultant from a noninvolved organization or someone with a doctorate in statistics. A testifying expert is meant to provide a more objective, unbiased analysis.

The decision regarding whether to use a consulting expert or a testifying expert is one left to the sound discretion of the trial attorney in a particular case. The decision will depend on a number of factors including what aspect of e-discovery is being attacked and the credibility of the consulting expert.

Regardless of whether a consulting or testifying expert is examined, choosing an expert with prior testifying experience is advisable. An expert who has previously testified is likely to be easily qualified and will also more likely present persuasive testimony. It is also crucial to make sure that any ESI expert you retain to assist in the e-discovery process rigorously documents his or her activities as this will greatly strengthen his or her credibility and persuasiveness if examined at trial.

Conclusion
Trial attorneys cannot ignore the benefits that flow from providing an ESI expert to explain their e-discovery conduct at trial. Electronic evidence issues are increasingly becoming case-determinative or, at least, very expensive as courts deal out sanctions for e-discovery misconduct and negligence. Be prepared to make your case that your e-discovery conduct was reasonable and should not be sanctioned by leveraging ESI experts at trial.

News & Events

Upcoming Webinar: Safeguarding Sensitive Information: Preparing and Responding to a Growing Risk of Data Breaches
Join us Thursday, September 10, at 1 p.m. EDT/12 p.m. CDT to hear from experts during a one-hour webinar on the growing risk of data breaches. This presentation will provide an overview of the growing threats to corporate data security and will discuss best practices for companies who wish to strengthen data security. Despite the tough economic conditions, it is possible to take steps to implement reasonable and cost-effective data safeguards. By investing in these measures, an organization can help ensure it is less vulnerable to external attacks, insider crimes and/or accidents by its own employees. Taking the time to strengthen security measures before an incident transpires allows for an efficient response that may save the company valuable time and money. For more information and to register, please visit www.krollontrack.com/webinar-091009.

Enhanced E-Discovery Certification Course Propels Litigation Teams to New Heights
Given the current economic condition, corporate clients are being forced to cut back legal and IT budgets, while the threat of sanctions due to improper ESI handling continues to rise. Become an e-discovery expert to prevent your firm or corporation from becoming the next headline. Kroll Ontrack's 2009 E-Discovery Certification Course is ideal for legal and technical professionals of all levels, especially in-house counsel, law firm attorneys, litigation support professionals, paralegals, IT staff, and members of the judiciary. Upon completion of this program, you will be able to make informed decisions regarding ESI, be prepared to negotiate at the meet and confer and understand the most current e-discovery law. For more information and to register for the September 17-18 or an upcoming course, visit www.krollontrack.com/certification-courses.

Award-Winning Document Review Tool Ontrack Inview Supplies Legal Teams with Control and a Simplified Review Process
Kroll Ontrack announces the release of Ontrack^® Inview^™ 6.0, an enhanced version of its industry leading online document repository. Building on its already robust suite of features, Ontrack Inview now has near-duplicate identification, e-mail threading, Eastern European language support and machine translation capabilities, giving legal teams the ability to more effectively manage e-discovery review. Legal teams looking for seamless e-discovery support, global review capabilities and the ability to minimize review costs will benefit from this online tool's cutting-edge secure functionalities and advanced search technologies. For more information, please visit www.krollontrack.com/ontrack-inview.

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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. Socha can be contacted by writing to msocha@krollontrack.com.

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