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In This Issue:
 Recent ESI Court Decisions
Court Orders Defendant to Produce Data in Third-Party's Possession
Tomlinson v. El Paso Corp., 2007 WL 2521806 (D.Colo. Aug. 31, 2007). In this retirement benefits litigation, pension plan participants sought production of electronic pension plan records from the defendant employer. The defendant maintained it could not produce the data because it was in the possession of a third-party plan record-keeper. The plaintiffs argued that the defendant had a duty under the Employment Retirement Income Security Act (ERISA) to maintain the data for inspection or examination. In light of the defendant's obligations under ERISA, the Court held the data was in the defendant's possession, custody or control within the meaning of Fed. R. Civ. P. 26(a)(1)(B) and subsequently ordered production of the requested documents.
Court Orders Parties to Split Cost of Search 50/50
Haka v. Lincoln County, 2007 U.S. Dist. LEXIS 64480 (W.D.Wis. Aug. 29, 2007). In this wrongful termination suit, the defendants motioned the court for a protective order to limit their discovery obligations. The plaintiff sought all documents, notes, memos, e-mails and metadata from all officials, board members and officers regarding the reorganization of the Lincoln County Child Support Agency. Documents responsive to this request, which existed on two external hard drives containing about four terabytes of data extracted from computer servers, accounted for approximately 500 billion typewritten pages. The parties' attempts to limit the production based on keyword searching were unsuccessful as they could not agree on which words to use. The court considered the Zubulake factors as well as the Advisory Committee Notes to Rule 26(b)(2) and found that although the issues were important, the potential damages were low and the cost of production was disproportionate. The court granted the defendants' motion in part by ordering the plaintiff to determine the keywords to be used and the parties to split the cost of the search 50/50. The defendants were required to pay for the cost of the privilege and relevance review.
Court Denies Non-Party's Motion to Quash Subpoena and Orders Electronic Production
Auto Club Family Ins. Co. v. Ahner, 2007 WL 2480322 (E.D.La. Aug. 29, 2007). In this insurance dispute, the defendants subpoenaed evidence from a third party, Rimkus Consulting Group, which investigated their home for property damage following Hurricane Katrina. Rimkus motioned the court to quash the subpoena and instead issue a protective order and argued for production in paper to prevent any compromise in the authenticity or integrity of its engineering reports. The court denied the motion as the files were stored electronically in the ordinary course of business and the defendant requested an electronic production. The court further noted Rimkus failed to provide sufficient evidence that the electronically stored information was not reasonably accessible. While recognizing Rimkus as a non-party entitled them to protection from undue burden and expense, the court noted Rimkus must show that the requested electronic information would be unduly burdensome to produce. In applying Fed. R. Civ. P. 45(d)(1)(D), the court refused to find the mere statement of an attorney sufficient evidence to establish undue burden or expense.
Court Upholds Discovery Order Classifying Data Stored in RAM as Discoverable
Columbia Pictures, Inc. v. Bunnell, 2007 WL 2702062 (C.D.Cal. Aug. 24, 2007). In this copyright infringement litigation, the defendant sought review of a magistrate's order requiring production of server log data stored in random access memory (RAM). The defendant argued that data stored in RAM is too ephemeral and temporary to be considered electronically stored information (ESI) within the meaning of Fed. R. Civ. P. 34(a). Citing the Advisory Committee Notes to the Rules, the court explained that Fed. R. Civ. P. 34(a) was to be read expansively and denied the motion. Responding to concerns about the potential impact of the decision with respect to individual and business record-keeping obligations, the court held the decision was limited to the defendant in this case, who, only after the issuance of a court order, was obligated to preserve and produce the server log data.
Court Imposes Sanctions for Purposeful Sluggishness in Discovery
In re Seroquel Prod. Liab. Litig., 2007 WL 2412946 (M.D.Fla. Aug. 21, 2007). In this multidistrict product liability litigation, the plaintiffs motioned the court to impose sanctions on the defendant for failing to comply with discovery obligations. The plaintiffs pointed to numerous instances where the defendant failed to produce documents in an accessible or useable format, in addition to missing numerous deadlines. While the court found two of those instances to be excusably negligent, the other behavior warranted sanctions. The court was extremely displeased with the defendant's failure to discuss keyword search terms with the plaintiffs, failure to include page breaks between documents it did produce and failure to produce usable single-page tiff documents. The court also noted the defendant's omission of attachments and relevant e-mails and purposeful sluggishness in making an effective production. The court stayed its determination of which sanctions it should impose to allow the plaintiffs an opportunity to present evidence as to their damages or prejudice.
Court Orders Defendant to Search and Produce ESI
Butler v. Kmart Corp., 2007 WL 2406982 (N.D.Miss. Aug. 20, 2007). In this case, the plaintiff motioned the court to order the defendant to comply with earlier discovery requests and argued that the defendant's mere attempt to locate documents did not sufficiently discharge its discovery obligations. The defendant produced affidavits attesting to its search efforts for documents at the relevant locations and lack of results, but mentioned very little about whether it conducted searches of its computer systems. The court ordered the defendant to produce responsive ESI or demonstrate unsuccessful diligent searching. The plaintiff also sought open access to the defendant's home office databases but the court denied the motion based on the lack of evidence of improper action.
Court Appoints Special Master and Special Counsel to Handle Privilege Issues
In re Vioxx Prod. Liab. Litig., 2007 WL 2309877 (E.D.La. Aug. 14, 2007). In this multidistrict product liability suit, Merck, the producer of the pain medication at issue in this dispute, claimed attorney-client privilege on numerous electronic documents and refused production. Specifically, Merck produced over two million documents and claimed privilege as to approximately thirty thousand, all of which the court reviewed individually in camera, making individual privilege rulings. Merck sought review of the courts privilege rulings via a petition for writ of mandamus to the Fifth Circuit Court of Appeals. The writ was denied on jurisdictional grounds, but the Appeals Court suggested the lower court reexamine a subset of disputed documents, selected by Merck, pursuant to a different review protocol. Subsequently, the court appointed a special master and a special counsel to reexamine the subset of documents, promulgate substantive guidelines and issue a set of initial recommendations regarding the documents claimed as privileged. Following Merck's time to object to the special master's recommendations, the court entered the report into the record and reproduced substantive portions of the special master's report. The report was attentive to the issues faced by corporations where their in-house legal department assists on numerous fronts and that drug companies are heavily regulated by the food and drug administration when individual privilege decisions were made for each document at issue. The court adopted in part the special master's recommendations on individual representative documents and modified it in part based on the objections.
Other New Case Summaries Added to the Kroll Ontrack Case List This Month:
- Keyword Search of Computer Files Pursuant to Warrant is Not Digital "Rummaging" — United States v. Bhownath, 2007 WL 2570199 (D.Utah Aug. 31, 2007).
- Court Orders Hearing to Determine if Government Relied on Privileged Information to Obtain Evidence — United States v. Warshak, 2007 WL 2417407 (S.D.Ohio Aug. 21, 2007).
- Court Orders Defendant to Produce Work E-mails in his Care, Custody or Control — Modern Eng'g, Inc. v. Peterson (C.D.Ill. July 16, 2007).
To view additional case summaries visit: http://www.krollontrack.com/case-summaries/
Practice Points: How Safe is the "Safe Harbor" in Federal Rule of Civil Procedure 37(f)?
The 2006 amendments to the Federal Rules of Civil Procedure contain a provision commonly referred to as the "safe harbor". Specifically, Rule 37(f) provides "absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system." Since its inception, much debate has ensued over the sufficiency of the safe harbor and the amount of protection afforded when parties destroy documents. Prior to the new 37(f) provision, when documents subject to a preservation obligation were destroyed, parties were at risk for spoliation sanctions no matter the circumstances surrounding the destruction. Common sanctions issued for spoliation include an adverse jury instruction, exclusion of evidence at trial, monetary awards and, in extreme cases, judgment for the prejudiced party. However, under the new Rule 37(f), a court is prohibited from imposing such sanctions (absent exigent circumstances) where the destruction was due to the routine good-faith operation of their systems. The following elements must be established to receive protection: 1) the loss must be due to the routine operation of an electronic information system and 2) the operation must be in good faith.
What is routine operation of an electronic information system?
Many corporations have electronic record retention policies that reflect decisions as to how long information is to be kept. Electronic information systems commonly contain overwriting, deletion and alteration features that enable the corporation to maintain massive amounts of data in a usable and organized format. These features are acceptable to have in place, and in many circumstances are likely required to operate a business efficiently given the sheer volume of electronic information today. The routine operation of these systems relates to the manner in which the system is designed, used and often times contained in a company's written records retention policy. The easiest way to establish this element under the new rule will be to provide this retention policy and supporting testimony that the policy is routinely followed. If you are unable to provide either of these, you will likely have a difficult time establishing that any lost information was destroyed due to the routine operation of your electronic information system.
What is good faith operation?
The second requirement to ensure protection under the Rule 37(f) safe harbor is to provide proof that the loss was in good faith. This includes not only good faith operation but also good faith intervention of the routine operation of the system. Even if your system was established with a business purpose and not in attempt to thwart discovery obligations, once a party reasonably anticipates litigation, they are required to alter their information management systems to prevent destruction of relevant information. Relevant factors include steps taken to comply with a court order or party agreement regarding preservation, whether the information will likely be discoverable and whether the information is available from other reasonably accessible sources.
What have the courts said?
In the ten months since this addition was made to the Federal Rules of Civil Procedure, courts have had the chance to weigh in on this provision. For example, the court in Doe v. Norwalk Community College, 2007 WL 2066497 (D.Conn. July 16, 2007), refused to allow the defendant to claim the protections of Rule 37(f) because it failed to suspend its deletion policy upon notice of litigation. Another court refused protection in In re Krause, 367 B.R. 740 (Bkrtcy.D.Kan. June 4, 2007), since the wiping feature was not disabled once the duty to preserve attached. Had the wiping feature been disabled, the computer would not have been automatically deleting files. The court in Oklahoma ex. rel. Edmondson v. Tyson Foods, Inc., 2007 WL 1498973 (N.D.Okla. May 17, 2007), went as far as to warn the parties to be "very cautious in relying upon any 'safe harbor' doctrine as described in new Rule 37(f)," when it refused protection.
Considering all of the points above, the question remains — how safe is the safe harbor? It appears that the safe harbor provides only limited protection under a narrow set of circumstances. There seems to be no protection for preservation mistakes, oversights or intentional destruction activities. The best advice for corporations and their counsel is to remain vigilant in preserving electronic information and addressing e-discovery issues. In navigating the e-discovery waters, do not be lulled into a false sense of safety under the Rule 37(f) harbor.
News & Events
Kroll Acquires TrialGraphix
Kroll recently announced that it acquired TrialGraphix®, a best-of-breed provider of trial consulting and presentation services, headquartered in Miami, Florida. TrialGraphix will operate as part of the Legal Technology business of Kroll Ontrack. The acquisition expands Kroll's litigation service offering to include trial graphics, courtroom presentation technologies and jury consulting services. This ultimately enables law firms and corporations to engage one expert for their litigation consulting and technology needs from pre-litigation preparedness through discovery and trial. This combination eliminates the need to select multiple experts or to transfer evidentiary materials between service providers throughout the litigation timeline, advancing Kroll's objective to provide comprehensive services to the litigation community. Documents that are preserved and collected before litigation can now be filtered, processed, reviewed and produced for discovery, and then seamlessly presented at trial. More information about TrialGraphix can be accessed at: http://www.trialgraphix.com/
Sedona Conference PublishesBest Practices Commentary on the Use of Search & Information Retrieval Methods in E-Discovery for Public Comment
The Sedona Conference Search and Retrieval Sciences Special Project Team released best practices commentary for public comment last month.
The mission of this team is to explore the landscape of electronic searching and information retrieval amidst the massive volume of electronically stored information that is subject to discovery during civil litigation. The article points out both the advantages and disadvantages of keyword searching and introduces readers to other search methods, such as concept searching. The Sedona Conference is a non-profit organization that strives to serve the legal community as a knowledge repository where academia, attorneys, judges and others can debate issues and exchange information. To view this publication, visit: http://www.thesedonaconference.org/dltForm?did=Best_Practices_Retrieval_Methods___revised_cover_and_preface.pdf
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This newsletter is written by Michele C.S. Lange,
Kroll Ontrack Legal Technologies Director, with assistance from Joni Heikes, a Kroll Ontrack staff attorney. 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 visit http://www.krollontrack.com.
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