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Key Concepts in E-Discovery
Under the “two-tier rule” established under FRCP 26(b)(2)(B), a party need not provide discovery of ESI from sources that the party identifies as not reasonably accessible because of undue burden or cost; on motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.
The admissibility of electronic records is still evolving as most organizations strive to move from paper to paperless records. However, the admissibility of electronic information is somewhat more complex, raising issues as to the methodology used in data collection and the chain of custody of the electronic data once it has been collected.
Chain of Custody
Failure to maintain a complete chain of custody may result in the inadmissibility of electronic information.
Understanding where your information lives and the information governance policies and procedures in place within your organization is critical to successful arguments for cost shifting and cost sharing. Discovery requests may cover email, databases, voice mail, instant messaging systems and other proprietary applications. These systems are rapidly evolving and do not represent the same burden for all companies when making arguments for cost shifting. Implementing legal holds or producing records from traditional voice mail systems takes considerable time and money; newer unified messaging systems often make responding to the same request relatively easy. Similarly, restoring records from traditional tape backup systems can be time and cost intensive; near-line storage, by contrast, does not present the same challenges.
Electronic evidence must be delivered to multiple parties involved in a legal matter, including opposing counsel, partner firms, requesting government agencies and others. Depending on the recipients, you may require different delivery formats.
A showing of good faith has always been necessary when responding to discovery or any other court-ordered instruction; however, the burden of showing good faith is now significantly greater on the part of the responding party. Attorneys cannot claim that they did not know about those backup tapes stored in a closet or have proper access to IT personnel. Counsel must have proactive conversations with ESI custodians and IT stewards to create and maintain documentation regarding what preservation actions were taken when the obligation arose, how chain of custody was assured and how both custodians and relevant ESI repositories were systematically identified.
The convergence of globalization, technology proliferation and evolving e-discovery rules creates challenges for organizations with internationally dispersed operations. Demands from U.S. courts and government agencies often conflict with foreign privacy and data protection laws, leaving a corporation and its outside counsel uncertain of their rights and obligations. The following cases represent a selection of decisions that address cross-border e-discovery.
A legal hold is an essential element of a company’s overall records management program, particularly when it comes to electronic information. It needs to be issued to demonstrate a company’s good faith and reasonable effort to comply with its discovery obligations. The reality, however, is that the full implications of the legal hold process may not be fully understood by all parties, particularly outside the legal department. Proactive coordination and planning among corporate counsel, outside counsel, IT and other key stakeholders are imperative to ensure good faith compliance in the face of anticipated litigation.
Meet and Confer 26(f) Conference
The “meet and confer” conference for electronic discovery has moved from a nice-to-have to a requirement under the amended Federal Rules of Civil Procedure. A major component of preparing for a 26(f) meet and confer conference is a “map” of the litigant’s ESI content: where it is, what it is, how to preserve it, how to collect it, etc. This defensive requirement can be turned into a strategic advantage when counsel is well informed as to the location and nature of ESI, as well as the costs necessary to produce it.
Handling and processing electronic evidence present new and unique challenges that are vastly different from working with traditional printed documents. Unique among these is the handling of metadata – document attributes as to creation, modification, authorship and potentially more details based on the application used to create the electronic documents. Metadata may be used for admissibility purposes, demonstrating the chain of custody for a particular piece of ESI. It may also be used in the preservation and review processes, identifying information to be held and facilitating the culling of duplicate documents respectively. Simply opening a file or copying it to another location may modify the hidden metadata. In order to prevent spoliation, proper methods must be used in the collection and review of electronic documents. Similarly, metadata that represents privileged information must be carefully removed prior to production. This can be a complex process requiring deep technical expertise and experience.
Technology, when properly applied, has the ability to rapidly increase the rate of productivity exponentially. However, when improperly utilized, small mistakes can have large-scale effects – particularly when dealing with the inadvertent disclosure of privileged documents. Clawback and quick-peek agreements may help buffer the risk, but are only partially effective. And without proper steps to maintain privilege, courts may find it has been unintentionally waived.
The preservation of ESI can be costly for many large organizations. Over-preservation may result in escalating costs as information is produced at an exponential rate. Failure to preserve enough can result in a wide range of possible penalties, including monetary, issue, expert and case-related sanctions. Companies need to develop defensible processes that strike the balance between preservation and business needs. Such policies must also be effective and supportive of good faith efforts to identify and preserve potentially responsive ESI.
While FRCP 37(f) provides a safe harbor for routine, good faith deletion of e-discovery, FRCP 37 also provides for sanctions where the producing party fails to provide e-discovery outside of the safe harbor. In addition to sanctions, spoliation of ESI may result in an adverse inference, an award of attorneys’ fees and possibly an adverse judgment. These risks can be mitigated through documented good faith efforts to preserve potentially responsive ESI.