Electronic Discovery

Megabits, gigabits, back-up tapes,
metadata—these words, although generally foreign to most lawyers,
are beginning to appear in legal opinions and even in the Federal Rules
of Evidence. The only computer training offered when I was in law
school, so long ago, was using Lexis and/or Westlaw for research. As
times have changed and technology invades the courtroom, law schools
today might be smart to offer programming degrees along with the J.D.

</p><p>Today, computers in the workplace are the norm, not the exception.
Employees share documents, pass along hundreds of thousands of e-mails,
save voice mail messages and utilize instant messaging to communicate.
In order to preserve corporate records, documents and the various forms
of communication, corporations are forced to store all of this
information electronically. Attempting to store it using paper copies
would be a financial and logistical nightmare.

</p><p>In response to the massive amounts of electronic data, an area of law
that has been developing along with the use of computers is electronic
discovery. Most practicing lawyers or their clients have received
discovery requests for paper documents, but today these requests include
electronic data, files, communications and documents. Decisions on how
to respond to a request need to be made early on to determine the most
effective response strategy.

</p><h4>Choose a Format</h4>

<p>You can resort to the old-fashioned method of document
production—providing a hard copy—but keep in mind that in the
long run it may end up costing more. You have to consider the printing,
photocopying, transcription of voice mail, shipping and labor costs
involved for every document or file. Strategically though, you may not
want to make life easy for your opponent. However, making life difficult
for the other side may also make life difficult for you.

</p><p>Some electronic formats may have higher up-front costs, but in the
end those costs could save everyone a lot of time—including you!
Electronic production can be as simple as providing non-searchable image
files such as tiff or pdf files (there are some pdf files that are
searchable). On the other end of the cost spectrum, production can be as
extensive as employing an outside vendor to create an online file room.
The latter can be shared by both the plaintiff and defendant and can
include searchable image files, voice mail recordings and corresponding
metadata.

</p><h4>Metadata?</h4>

<p>In simple terms, metadata is the embedded data that is stored
electronically about a document. For example, you can print a hard copy
of an e-mail, but all you know about the document is what is printed on
that page. Metadata can tell you exactly who sent the e-mail, what time
it was sent, who received the e-mail (including who received blind
copies), who forwarded the e-mail (when and to whom), who made changes
to the e-mail and what those changes were—you get the point. The
metadata may be more informative than the actual e-mail itself. A recent
court decision has found that the production of the metadata in
electronic format was necessary because the hard copies didn't contain
that information. (<i>See Zenith Electronics Corp. v. WH-TV Broadcasting
Corp.,</i> 01 C 4266, 2004 WL 1631676 (ND Ill. July 19, 2004)).

</p><p>Just imagine that you have advised your client to provide everything
in hard copy and they spent weeks copying and printing documents.
Opposing counsel files a motion to compel requesting production in
electronic format, which will likely be approved by the judge in your
case. The entire process must begin again, taking time, money and
resources. Now you can see why hard-copy production might be more
expensive in the long run.

</p><h4>Retention Policies</h4>

<p>In order to have the ability to produce documents in either
electronic format or hard copy, the information must still exist. Every
company has, or should have, a retention policy in place. The length of
that policy will of course depend on the nature of the business, size of
the business, amount of data, etc. As bankruptcy professionals, you most
likely aren't going to be involved in establishing a company's retention
policy. However, case law is extremely clear that where there is pending
or reasonably foreseeable litigation, there is a duty to preserve
evidence. <i>West v. Goodyear Tire and Rubber Co.,</i> 167 F.3rd 776 (2d
Cir. 1999). In the bankruptcy context, if you are working with a client
in preparation for a chapter 11 filing, it can easily be argued that
there is reasonably foreseeable litigation. The best thing you can do
for yourself and your client is to advise, in writing (you'll be glad to
have a copy of this later), that your client not destroy or delete any
information, documents or files, including back-up tapes, that relate to
the case, or in the bankruptcy context, to the company and its financial
situation. Any destruction is called "spoliation," which was defined in

<i>West v. Goodyear</i> as the "destruction or significant alteration of
evidence, or the failure to preserve property for another's use as
evidence in pending or reasonably foreseeable litigation." <i>Id.</i> at
779. Examples include the shredding of documents, deletion of e-mails
and even revisions of e-mails. Remember, the metadata, which is
discoverable, will show those revisions!

</p><p>The penalties for spoliation can range from a simple fine to the most
severe: default or summary judgment. These severe penalties are usually
reserved for cases where a party has intentionally destroyed or altered
evidence, but judges have wide latitude in determining the appropriate
sanctions for spoliation.

</p><p>Even if you have advised your client not to destroy anything, you
can't just walk away and assume they will listen. A recent case in the
Southern District of New York has made it clear that attorneys must take
affirmative steps to assure that their clients preserve evidence.
<i>Zubulake v. UBS Warburg,</i> 2004 WL 1620866 (S.D.N.Y. July 30,
2004), deals with an employment discrimination suit where the employer
intentionally destroyed e-mails relevant to the plaintiff's suit. Both
in-house and outside counsel advised the defendant not to destroy or
delete any files that were relevant to the former employee's claims;
however, against this advice, USB employees deleted the relevant
e-mails. The <i>Zubulake</i> court repeated its finding from an earlier
decision in the same case that "once a party reasonably anticipates
litigation, it must suspend its routine document retention/ destruction
policy and put in place a 'litigation hold' to ensure the preservation
of relevant documents." <i>Id.</i> at 9. The court went further by
adding that "a party's discovery obligations do not end with the
implementation of a 'litigation hold'; to the contrary, that's only the
beginning. Counsel must oversee compliance with the litigation hold,
monitoring the party's efforts to retain and produce the relevant
documents." <i>Id.</i> Although the court found that counsel should have
been more diligent, there were no penalties assessed against the
attorneys in the case. There were, however, numerous penalties assessed
against the defendant, including adverse jury instructions with respect
to the missing e-mails and all costs associated with the motion before
the court, including expenses and attorneys' fees. In a postscript to
the opinion, the <i>Zubulake</i> court stated:

</p><blockquote>
The subject of the discovery of electronically stored information is
rapidly evolving. When this case began more than two years ago, there
was little guidance from the judiciary, bar associations or the academy
as to the governing standards. Much has changed in that time. There have
been a flood of recent opinions—including a number from appellate
courts—and there are now several treatises on the subject. In
addition, professional groups such as the American Bar Association and
the Sedona Conference have provided very useful guidance on thorny
issues relating to the discovery of electronically stored information.
Many courts have adopted, or are considering adopting, local rules
addressing the subject. Most recently, the standing Committee on Rules
and Procedures has approved for publication and public comment a
proposal for revisions to the Federal Rules of Civil Procedure designed
to address many of the issues raised by the discovery of electronically
stored information. <i>Id.</i> at 18.
</blockquote>

<p>The public comment period with respect to these proposed amendments
to the Federal Rules of Evidence has just recently ended, and the
earliest these changes could take effect would be late in 2006. However,
these rules are just codifying practices being utilized in a number of
courts today.

</p><p>Electronic discovery is rapidly becoming a way of life in the legal
world. As the courts become more comfortable with the procedures, and
the standards are developed and defined, electronic discovery will
become as natural as sending an e-mail request. To prepare, be sure you
understand your options and develop strategies to best respond to
discovery requests in this modern technology era.