Electronic discovery changes everything

The proposed California Electronic Discovery Act will amend the CCP to address electronically stored documents. 

The line between discovery and e-discovery is no more. There remains only discovery. Today, most documents and other information are created, used, transmitted, stored, saved – and dis-covered – electronically, without ever being printed, stapled and stuck in the back of a file drawer.

To catch up to reality, the law regarding discovery of documents and other tangible things has been expanded to include a new category: “electronically stored information” (ESI). The Federal Rules of Civil Procedure were amended effective December 1, 2006, to address ESI explicitly.

California will soon follow suit, perhaps even before this article reaches your mailbox. The proposed Electronic Discovery Act would amend the California Code of Civil Procedure (CCP) by explicitly addressing the discovery of electronically stored information. AB 5 would establish procedures for a party’ to obtain discovery of “electronically stored information,” in addition to the current categories of “documents, tangible things, and land or other property.” AB 5 would also permit discovery by the means of “copying, testing, or sampling,” in addition to that of “inspecting.” (Previously, the California Code of Civil Procedure only explicitly addressed the use of technology in discovery in complex or large cases.)

Small business lawyer in Los Angeles will find that California courts are likely to find federal court opinions interpreting and applying the federal rules regarding discovery of ESI persuasive in that the California code, by design, will track most of the same language.

What applies to your adversary also applies to your client

The discussion and recommendations below must be kept in mind regard-less of your client’s status as plaintiff or defendant, requester or respondent. For example, at the time your adversary should be initiating a litigation hold, so should your client – and to the same degree of implementation and monitoring as you will demand of your adversary. Everybody makes mistakes. Play nice.

What is ESI? How is it the same?

How is it different?

AB 5 offers the following definitions for ESI in a revised Code of Civil ,

Procedure section 2016.020.

(d) “Electronic” means relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.

(e) “Electronically stored information” means information that is stored in an electronic medium.

One factor that makes ESI different from paper files is the sheer volume. One gigabyte of MS Word documents equals roughly 75,000 pages, if printed. 

Another critical difference is that ESI now makes discovery potentially very costly and more complex, radically changing the economics of litigation, said motorcycle accident lawyer at the Nakase Law Firm. This is mainly because of the huge volume of ESI and the difficulty and time expended in finding, collecting, and reviewing it As one experienced litigator told me, “There are no longer any small (i.e., “cheap to litigate’) cases. Those days are GONE/7

Here are some other ways ESI differs from paper documents.

  • Metadata (see below) can offer more information than a mere paper copy • some things can be done only with electronic data

‘Word searchable,” with and without metadata

Fancy tools

Text mining (a k.a. data mining and concept culling) or computational linguistics

Social and concept cartography (diagrams showing connections among key individuals (who links to whom), ideas, or both)

  • Certain kinds of recordable data are found only in ESI

Another difference, experienced by business attorney in San Diego – but one that can yield golden nuggets in discovery – is the casual nature of certain communications captured as ESL For example, e-mail, instant messaging, and voice-mail are usually informal and often unguarded. Other ESI contains passively recorded data, such as the bottle of Jack Daniels your client bought at Vons last Saturday night, four hours before he was charged as driving under the influence. One reason to bone up on ESI is that you and your client may be unaware of certain classes or instances of ESI – at least until your adversary helps you make the acquaintance.

Paper documents are usually easy to see and find (mostly in offices, at home, or a specific off-site). In contrast, ESI is neither readily visible nor filed in a readily visible place.

Another difficulty in collecting and reviewing ESI is that much of it is not organized by subject, or if it is, only nominally so. Think of your e-mail files. This is even truer for ESI found on portable media, such as on a Blackberry, a cell phone, a key/thumb drive, a stand-alone external drive, and CDs and DVDs used to keep backup copies of files.

With ESI, not just Santa Claus sees you when you’re sleeping and knows when you’re awake (So be good for goodness sake!). As I write this, the breaking news is that Representative Jane Harman was overheard on telephone calls intercepted by the National Security Agency agreeing to seek lenient treatment from the Bush administration for two pro-Israel lobbyists who were under investigation for espionage. ESI is more than just e-mails, PowerPoint, and spreadsheets. It also includes data from hospital monitoring devices, the chip in your rental car recording your speed and location, and the ATM around the corner.

Consider e-mail it’s both ephemeral and permanent, everywhere and nowhere. Easily copied and easily deleted. Copies of an otherwise deleted email, however, may be found backed up on a local PC, a central server, backup tape and other media, an Internet service provider (ISP) such as AOL, and places you do not even know exist – and all of these locations for every recipient of the original e-mail.

Remember, regarding e-mail, you have the right to remain silent. Anything you write can and will be used against you. You have the right to have an attorney present, but that is of little comfort if you’re the attorney, and it’s your e-mail.

The form in which the information is produced is much more important in the world of ESI. With paper, the main choices were black-and-white or color. With ESI, the form(s) in which it is pre-served, collected, reviewed, and produced (and the methodology used to do these tasks) affects its integrity, authenticity, and accessibility.

What to do before litigation arises

Some things you should do long before a matter lands on your desk.

The revised rules have affected a sea change in how discovery is done. The change has been more drastic under the federal rules because of the requirement of early disclosure. Even under the new California rules, one should be prepared to deal with ESI discovery as soon as litigation may be reasonably anticipated.

Find an e-data expert or two with whom you are comfortable, one who also understands what you do and how you approach a case, and one who can also act as your mentor. Build relationships with eDiscovery vendors and advisers, so that you are at least somewhat prepared when next retained regarding potential litigation. You won’t have time to learn enough once litigation commences, or is even near.

Develop a plan with your client beforehand, especially with clients that may be regularly engaged in litigation. For significant clients, learn about their ESI, e.g., where it’s located and how it’s preserved. As discussed below, there is a great risk of spoliation with ESI, accompanied by a great risk of sanctions if not dealt with properly.

Embrace the inevitable: Teach your-self about ESI. There are valuable resources that can provide an excellent education. The more you know, the better questions you’ll be able to ask of those on your side as well as of the opposition.

The duty to preserve ESI and the litigation hold

Because one can easily delete, alter, and otherwise modify ESI (including the associated metadata), one must take particular care to preserve it. A party has always had the obligation to preserve all potentially relevant evidence once one learns that litigation is probable or has commenced. Indeed, the duty to preserve can arise months before the actual commencement of litigation. The preservation duty includes issues of compliance, monitoring, enforcement, supervision, review, modification and (eventual) suspension.

The obligation to retain potentially relevant evidence is an affirmative one. At the time a party’ or its key employees reasonably anticipate litigation, “[the party] must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.” (Zubulake v. UBS Warburg LLC (S.D.N.Y. 2003) 220 ER.D. 212 Zubulake IV”) [ordering sanctions against UBS for violating its duty to preserve evidence]; see also Goetz v.John IL (6th Cir. 2008) 531 E 3d 448.)

AB 5, as with the corresponding federal rules, creates one exception to this general rule of mandatory, universal preservation:

(1) . . . absent exceptional circumstances, the court shall not impose sanctions on a party or any attorney of a party for failure to provide electronically stored information that has been lost, damaged, altered, or overwritten as a result of the routine, good faith operation of an electronic information system.

(2) This subdivision shall not be construed to alter any obligation to preserve discoverable information.

As can be seen, paragraph 2 appears to vitiate paragraph 1. The best course appears to be to preserve all that you can and then build the best record possible to prove that any lost ESI was the result of routine, good faith operations.

With paper documents, it was fairly obvious one should not shred them. But ESI is much more fragile, and its destruction or alteration can be accomplished without even its custodian’s awareness.

I’ll say it again:

One must not destroy, conceal, alter, or fail to preserve ESI, documents, data, information, and other evidence reasonably known to be relevant to the issues or subject matter of reasonably knowable, pending, or probable litigation. One must act with a reasonable concern for preserving such evidence.

The duty to preserve attaches not just to your client (and its employees, officers, partners, and directors), but certain other related entities and personnel. These may include agents, contractors, attorneys, accountants, auditors, affiliates, divisions, subdivisions, parents and subsidiaries.

All of this means that you must initiate a “litigation hold” with your client as soon as it may reasonably anticipate litigation, whether defendant or plaintiff. It also means that if you represent a likely plaintiff, you should send an explicit letter to any potential defendant (or counsel thereof) with notice of the imminent filing of suit. In addition, consider requesting the court to issue a preservation order.

Do not leave the task of preserving evidence to the client, especially not to its IT department. The very act of turning on a computer, for example, can change certain metadata. Copying files can change even more. If the changes by your client significantly affect your ability to prove the integrity’ or authenticity of the ESI, it’s not your day to buy a lottery ticket.

If great expense is involved and the stakes are moderate, perfection in handling ESI may not be required, but you don’t want to find that out too late. Work with your expert to make sure that what must be preserved is preserved as it should be.

Such precautions are of enormous importance in light of the cascade of cases in which clients – and their outside counsel – have been sanctioned for failing to preserve discoverable ESI, often called spoliation. If any failure to preserve has been reckless or intentional, the costs to the client can be devastating. As outside counsel, if you did not yourself ensure that the litigation hold/preservation orders were properly administered and obeyed, the court may hold you responsible and report you to the State Bar.

To give you a flavor of what the law requires each party to do to preserve all potentially discoverable ESI, here are some of the duties imposed. Each party (and any related third parties that may- have ESI that would be deemed to be in the possession, custody, or control of the party):

  • Must not alter, delete, cause the loss of, or otherwise modify any ESI, including ESI that may still exist as file fragments or remnants, despite apparently having been deleted or otherwise modified ;
  • Must not perform any other procedures that may affect any ESI (including the related metadata), including data compression, disk defragmentation or other optimization routines, and reformatting  as well as any rotation, destruction, overwriting, or erasure of such ESI or the media on which it resides;
  • Must not dispose of any data storage devices and media that might other-wise be replaced, for example, due to upgrading;
  • Must preserve copies of all application programs and utilities that may be used to access, process, read, display, copy, or otherwise use any discoverable ESL

So that your client can continue with its business and you need not permanently confiscate every USB drive, iPod, and laptop, have forensic copies made (by an experienced vendor). In fact, making a forensic copy of, for example, a computer’s hard drive is not only the better practice, it’s faster, simpler and cheaper than if one had copied the potentially discoverable files one by one.

You would also be wise to maintain a proper chain of custody record, especially for all moveable/removable items, like the CEO’s Blackberry. And keep logs of everything you do, step by step, so that when you discover responsive ESI the day before trial, you can persuade the judge that its late appearance was due solely to innocent mistake rather than intentional mischief.

Metadata

In the land of ESI, metadata can have vital importance. In simple terms, metadata are data about other data. With paper documents, the subject is of much less importance, in part because the metadata are often right on the face of the document (e.g., the date and author). But in the creation of ESI, all sorts of interesting, useful, and potentially dam-aging information is also created. For example, with metadata one may: •Track potentially damaging changes to a document

  • Learn when a document has been created, modified, accessed, and the number of revisions including the total editing time (see, e.g., “Advanced document properties” in MS Word 2007).
  • Follow the Internet route of an e-mail (by viewing the “full header” (a.k.a. Internet header))
  • The hidden formulas and comments in a spreadsheet
  • See who was sent a blind copy (bcc) of an e-mail

The metadata also include a hash value, a kind of digital fingerprint, which will change if any part of the document, including its other metadata, is changed.

A major benefit of having the meta-data is one’s ability to do more effective searches. Some metadata are easily accessed, for example, by going to “properties” in an MS Word document, or the “to” and “from” fields in an e-mail.

Other metadata may be accessed by those with special knowledge.

The general rule is that one cannot give the other side less information concerning a document without that party’s agreement. Hence, in whatever form the other side has produced ESI to you, with-out you’re waiving your claim to such meta-data, you should also receive all of a file’s associated metadata. And your client must do the same in turn. Note, however, that you may be limited to the form(s) in which the ESI exists in the possession or under the control of your client. In practical terms – if only because of ignorance or carelessness — you may not receive most if any of the metadata unless you insist on getting them. And this is certain if you only seek or receive paper.

Typically, the best way to obtain the metadata associated with the produced ESI is to specify that it is to be produced in raw native file format. For example, an MS Word document in native file format should have the same functionality and content (including most if not all of the same metadata).

Once the suit hits the fan

Once the suit hits the fan, if you have not already initiated a litigation hold with your client and implemented procedures to preserve all potentially relevant ESI and other evidence, do it now.

Immediately discuss with your client the many issues arising from discovery now that ESI is both inherent and critical in any discovery. You will also soon want to have similar conversations with opposing counsel and the court. By the time of the first case management conference, your case management statement (prefer-ably jointly agreed with opposing counsel) should derail how the parties will handle ESI. Under the federal rules, you must do this, in addition to disclosing significant information about your client’s ESI at this very early stage. You should also consider potential motions regarding cost shifting/allocation of the expense of ESI discovery. 

The case management order

The best way to deal with issues arising from the discovery of ESI is to specify how it is to be handled as part of preparing the Case Management Statement (CM-110 [Rev. January’ 1, 2009]. Among other issues, consider •the preservation of ESI;

  • The form or forms in which ESI should be produced; and
  • The negation of any waiver of privilege through inadvertent production, including a stipulated ‘‘claw back” provision (which might not tactically favor a party’ with little ESI against a party with a lot of ESI).

Whenever you stipulate or otherwise agree with the opposing party regarding ESI, you should always have by your side your own computer expert. Indeed, when courts hear disputes over ESI, they want each party’s technical expert to be present. In the words of one judge, he wants the parties to be dancing “geek to geek?

Collection and admissibility

You should collect ESI with admissibility in mind. Although this is also true for paper, it is much more important for ESI.

Your initial challenge is to determine the locations in which may be found potentially relevant ESI. On your side, you can no longer simply go through a set of office files and the client’s garage. In most offices, you will find an employee’s local, “desktop” computer, a linked business-wide server, and backups. Those, at least, will be relatively easy to locate and access. But there are a wide variety of standalone devices and media, for example, laptops and Blackberries, DVDs and iPods. These may be found within an office – or found almost anywhere.

For your client’s collection, keep a detailed log of the process and results of collection. You can ask the same questions to your adversary’ as you must of your own client: •what?

  • How?
  • Who?
  • When?
  • Where?
  • Why?

The best guide to questions of admissibility of ESI is the 101-page opinion in Lorraine v. Markel American INS, Co. (D. Md. 2007) 241 F.R.D. 534. Chief 

United States Magistrate Judge Paul W. Grimm analyzes in extensive detail the evidentiary foundations required for ESI under the Federal Rules of Evidence. Essentially, the same basic rules apply to ESI as to other, more traditional written evidence. Magistrate Judge Grimm applies them in the context of ESI, illuminating the additional considerations one must take into account. For the relevant criteria with the sections of the California Evidence Code that correspond to the relevant sections of the Federal Rules of Evidence, see the chart below.

Requests and objections

In general the substance of most requests and objections remain the same whether you seek ESI or other information, except

Specify the form(s) in which the requested ESI is to be produced. See AB 5 revision of §2031.030(a) (2). You get one bite at the form of the bytes. The responding party may, in turn, object to the form specified. See AB 5*s revisions to §2031.280(c) & (d).

For you to access/read the produced ESI, it must be in a form reasonably accessible with software (e.g., MS Word,

AOL e-mail) you or your client either has or can readily obtain at nominal cost. If not, require the producing party to pro-vide application software to access the ESI produced, or have it produced in a more accessible form.

Discovery related specifically to the location, nature, and extent of a company’s ESI. For such discovery, early in the litigation, consider deposing those with knowledge regarding the location, nature, and extent of a company’s ESI.

Discovery of preservation efforts or instructions re the party’s litigation hold. Although this is fertile ground even for the old paradigm of paper documents, the ease with which one can hide, delete, or alter ESI creates an area of great vulnerability.

In addition to the objections avail-able regardless of the form of the information sought, AB 5 proposes another ground for a protective order regarding ESI. A producing party may object on the basis that the requested ESI “is from a source that is not reasonably accessible because of undue burden or expense.” See the AB 5 revisions at 2031, 060(c)-(f), and the alternatives available to the par-ties and the court.

 

Written by Peter Jones