Neil Alexander and Christie Kriegsfeld

LeadingAge Arizona Annual
Conference
May 28-30, 2014
eDiscovery
Presented by:
Neil Alexander
Christie Kriegsfeld
Presented by:
Neil Alexander
Shareholder
Littler Mendelson, P.C.
Phoenix Office
602-474-3612
[email protected]
Christie Kriegsfeld
Of Counsel
Littler Mendelson, P.C.
Phoenix Office
602-474-3654
[email protected]
How Much Data is Generated
in 1 Minute?
• 217 people become new users of the mobile web
(smart phones, tablets, etc.);
• YouTube users upload 48 hours of new video
content;
• 204,166,667 email messages are sent;
• 2,000,000 search queries are conducted via Google;
• Facebook users share 684,478 pieces of content;
• Wordpress users publish 347 blog posts;
• 571 new websites are created;
• Foursquare users “check-in” to 2,083 locations;
• Flicker users add 3,125 new photos;
How Much Data is Generated
in 1 Minute?
• Instagram users share 3,600 new photos;
• Tumblr blog owners publish 27,778 new posts;
• Brands and organizations on Facebook receive
34,722 “Likes”;
• 47,00 apps are downloaded via Apple’s App
Store;
• Twitter users send over 100,000 tweets; and
• Consumers spend $272,070.00 web shopping.
– Sources: http://news.investors.com/.royal.pingdom.com,
blog.grovo.com, blog.hubspot.com, simplyzesty.com,
pcworld.com, biztechmagazine.com, digby.com
Those Little Things On Your Desk...
• In 2004, the volume of e-mail messages sent by
businesses worldwide exceeded 1 Exabyte (1
billon gigabytes) for the first time.
• Beyond e-mail, a standard desktop computer
today can store the equivalent of 40,000,000
typewritten pages of information.
Those Little Things On Your Desk...
According to a Workplace E-mail and Instant
Messaging Survey of 840 U.S. companies
conducted by American Management and The
ePolicy Institute:
− 1 in 85 employers have had e-mail and instant
messages subpoenaed in the course of a lawsuit or
regulatory investigation.
− 13% have had lawsuits triggered by employee e-mail.
Those Little Things On Your Desk...
• 60% of business intellectual property is in the email system.
• The typical user stores more than two-thirds of
his/her critical business information within the
confines of the company e-mail system.
Electronic data is a large and growing part of the
information pool which must be sifted for relevant
evidence in a give piece of litigation.
You either learn this stuff or deploy the other
available option:
Or phrased a better way:
Consequences of
E-Discovery Misconduct
• Trial Court reversed burden of proof for fraud based on the
Defendant’s “willful and gross abuse of its discovery obligations.”
• Plaintiff allowed to read a statement to the jury detailing Defendant’s
efforts
to
hide
its
e-mails as evidence of evil intent.
• After more e-discovery violations: 12 page adverse inference
instruction from Amended Complaint, describing fraudulent scheme
in extensive detail.
• $8.5 million sanction against
Qualcomm for e-discovery
misconduct.
• Outside counsel referred to the
State Bar of California “for
investigation of possible ethical
violations” based on their ediscovery misconduct.
• Outside counsel and in-house
lawyers ordered to appear before
the Court to develop a CREDO.
• Patent infringement action brought by Qualcomm H.264 standard
• Broadcom’s primary defense waiver because Qualcomm
participated in JVT in 2002.
• Qualcomm adamantly and repeatedly claimed that it did not
participate in the JVT in 2002 and early 2003:
–
–
–
–
Written discovery
Depositions
Motions in Limine
Throughout Trial
–
–
–
–
Summary Judgment
Expert reports
Pretrial Memos of Fact and Law
Motion for Judgment as a Matter of Law
• As the case progressed, Qualcomm became “increasingly
aggressive” in its claim that it did not participate in the JVT during
the time it was creating the H.264 standard.
• Discovery:
30(b)(6) witness on issue of participation
in JVT → did not search computer.
• Discovery: 2nd 30(b)(6) witness on same issue → did not search
computer.
• Trial: Associate preparing key witness
– 8/6/02 e-mail re: JVT mailing list
– Basic search of laptop locates 21
e-mails that demonstrate Qualcomm’s
JVT in November 2002
previously unproduced
active participation in
– 21 e-mails ultimately produced to Broadcom during trial
• In a letter to the trial judge, GC admitted that Qualcomm had
thousands of unproduced relevant documents that revealed facts
that appear to be “inconsistent” with certain arguments Qualcomm
made at trial.
• Post-trial
search
of
Qualcomm employees:
e-mail
archives
of
21
– 56,000 electronic documents totaling over 300,000 “pages” that
were not previously produced in discovery, produced to
Broadcom.
– Even after that production, Qualcomm continued to search for
and locate additional relevant electronic documents that had not
previously been produced in discovery.
– Much of this data undercut Qualcomm’s primary claim that there
was “no evidence” that it had participated in the JVT prior to
September 2003.
“The Federal Rules of Civil Procedure require parties to
respond to discovery in good faith . . . . [This responsibility
is] heightened in this age of electronic discovery when
attorneys may not physically touch and read every
document within the client’s custody and control. For the
current ‘good faith’ discovery system to function in the
electronic age, attorneys and clients must work together
to ensure that both understand how and where electronic
documents, records and emails are maintained and to
determine how best to locate, review, and produce
responsive documents.”
• “Qualcomm employees were integral participants in hiding
documents and making false statements to the court and jury.”
Accordingly, Qualcomm’s in-house lawyers needed to be involved in
the CREDO process because they were in the unique position of:
– having unlimited access to all Qualcomm employees, as well as the emails and documents maintained, possessed and used by them;
– knowing or being able to determine all of the computers and databases
that were searched and the search terms that were utilized, and
– having the ability to review all of the pleadings filed on Qualcomm’s
behalf which did (or should have) alerted them to the fact that either the
document search was inadequate or they were knowingly not producing
tens of thousands of relevant and requested documents.
WHAT DO YOU NEED TO DO?
Prompt Preservation
• 18 million lawsuits last year
• Most companies do not:
– have a method to suspend
document retention when sued
– enforce document retention
policies or keep them up to
date
– know where all of
information is located!
their
Prompt Preservation
•
•
•
•
“Front End” Litigation Hold
“Back End” Litigation Hold
Track/Document Receipt of all Holds
Conduct Audits of Key Custodians (documenting
same)
• Periodically Re-issue Holds (documenting same)
and Revalidate Lists of Key Custodians
• Addressing the issue with your adversary and
the Court early (Rule 26(f) and Rule 16)
Preservation → Less Tolerance
Pension
Committee
(S.D.N.Y. Jan. 15, 2009)
v.
Banc
of
America
Securities
•
Judge Scheindlin → “Zubulake Revisited: six years later”
•
The following e-Discovery standards are now so well entrenched, that the
failure to adhere to them is not merely negligent, but instead constitutes
gross negligence for purposes of imposing severe sanctions:
–
–
–
–
the failure to issue a written litigation hold when litigation is reasonably
anticipated.
the failure to identify all of the key players and to ensure that their electronic
and paper records are preserved.
the failure to cease the deletion of email or to preserve the records of former
employees that are in the party’s possession, custody, or control.
the failure to preserve backup tapes when they are the sole source of
relevant information or when they relate to key players, if the relevant
information maintained by those players is not obtainable from readily
accessible sources.
Preservation → Less Tolerance
Rimkus Consulting Group, Inc. v. Cammarata (S.D.Tx. Feb. 19, 2010)
•
•
•
•
•
•
Judge Rosenthal → Chairs the Judicial Conference Committee on Rules
of Practice and Procedure.
Important counterbalance to one of the primary contentions of Pension
Committee, i.e., whether the negligent – including grossly negligent –
failures to preserve, collect and produce ESI justify severe sanctions like
granting default judgments, striking pleadings, or giving adverse
inference instructions.
In the Fifth Circuit, a party must prove “bad faith” (as opposed to
negligent or grossly negligent conduct) before severe discovery sanctions
Most other circuits (including the First, Third, Fourth, Seventh, Eighth,
Ninth, Tenth, Eleventh, and D.C. Circuits) require some form of bad faith
and prejudice before severe sanctions will issue (but Federal Arizona
courts have done so based on a negligence standard).
Also underscored that proportionality and reasonableness – based upon
the specific facts and circumstances in particular cases – are
fundamental factors that must be considered in every sanctions analysis.
Tremendous judicial discretion on the appropriate sanction.
Prompt Preservation → Triggers
FACT SPECIFIC ANALYSIS
“reasonable anticipation of litigation”
•
Unambiguous
–
–
–
–
–
–
–
•
Emerging (Clear Cut)
–
•
Complaint
Arbitration Demand
Demand letter
Administrative Charge (EEOC Charge)
Pre-litigation meetings that fail to resolve a dispute
Government Agency subpoena
Internal correspondence discussing potential litigation
Claims of Work Product/Retention of Counsel to evaluate claims
Gray Area
–
–
–
–
–
–
Deals that go south
Threats/Complaints by Employees, residents, family members
Discussions about instituting lawsuit (e.g., Board Meeting)
Oral Threats
Copycat/industry litigation
RIF’s (especially with threats of discrimination)
What Does Not Trigger?
•
Vague rumor
•
Indefinite threat
•
Threat of litigation that is not credible or not made in good faith
– Nature of the threat itself
– Past experience regarding the type of threat, the person who
made it
– Lack of legal basis upon which threat is purportedly founded
•
Vague demand letter
•
Routine audit
•
Claims made in the normal course of business (family complaints re:
care without legal demand or claims)
•
Grievance letter to HR (without legal demands or claims)
HR, Risk Management, and Your Outside Counsel Need
to Know the Intricacies of Your Information Technology
Systems
• All sources of
electronic data
• Current back-up
procedures
• Legacy systems
• Current document
retention/destructio
n policies
• Work closely with
IT staff
When Drafted by Attorneys Litigation
Holds are Generally Privileged
•
•
•
•
In the hold, a lawyer is identifying for a client its legal obligations with respect to
preservation and spelling out the actions that need to be taken to comply with those
obligations. Further, the content of the hold is required to be communicated to key
players that possess or control potentially relevant evidence.
Muro v. Target, 2007 WL 3254463 (N.D.Ill. Nov. 2, 2007) (in camera review of
litigation hold notices: “Each seem to be communications of legal advice from
corporate counsel to corporate employees regarding document preservation . As
litigation hold notices, on their face, appear to be privileged material [the Magistrate
Judge did not err in holding they were privileged and do not have to be produced]”)
Major Tours, Inc. v. Colorel, 2009 U.S. Dist. LEXIS 68128 (D.N.J. Aug. 4, 2009)
(holding that litigation hold letters are generally protected from discovery as privileged
or attorney-work product unless a preliminary showing of spoliation is made)
Tracy v. NVR, Inc., 2012 U.S. Dist. LEXIS 44350 (W.D.N.Y. Mar. 26, 2012) (in FLSA
collective action, citing Major Tours for the proposition that litigation hold letters are
generally protected from discovery as privileged or attorney-work product unless a
preliminary showing of spoliation is made, and denying plaintiffs' motion for an order
compelling production of NVR's litigation hold notices or a list of recipients of such
notice because plaintiffs failed to make a threshold preliminary showing of spoliation).
When Drafted by Attorneys Litigation
Holds are Generally Privileged
However . . .
It is a best practice to draft holds understanding that they may become public or
divulged
(voluntarily
or
as
a
result
of
a
court
order)
•
•
In re: eBay Seller Antitrust Litigation, 2007 WL 2852364 (N.D.Cal. Oct 2, 2007) (actual litigation
hold notice – i.e., what employees’ were told – is privileged, however: neither what 600 relevant
employees were supposed to be doing and that facts of what they were doing to preserve and
gather documents were not privileged, nor were the identities of the 600 employees that received
the litigation hold)
Cannata v. Wyndham Worldwide Corp., 2011 U.S. Dist. LEXIS 88977 (D. Nev. Aug. 10, 2011) (In
general," according to the court, "unless spoliation is at issue, a litigation hold letter is not
discoverable, particularly where it is shown that the letter includes material protected by the
attorney-client privilege or the work product doctrine." On the other hand, plaintiffs are entitled to
know what kinds and categories of electronically stored information were to be preserved:
“[P]laintiffs seek answers concerning what has actually happened in this case, i.e., when and to
whom the litigation hold letter was given, what kinds and categories of ESI were included in
defendants' litigation hold letter, and what specific actions defendants' employees were instructed
to take to that end. Although the letters themselves may be privileged, the basic details
surrounding the litigation hold are not. These requests are reasonable and may ultimately benefit
defendants if questions ever arise concerning defendants' efforts to preserve relevant ESI.”)
Electronic Discovery Reference Model
Based on the Electronic Discovery Reference Model from www.edrm.net
Processing
Records
Management
Identification
Collection
Review
Production
Analysis
Preservation
Presentation:
Briefs;
Depositions;
Hearings;
Settlement;
Arbitration;
Mediation; Trial
= client focused process
= law firm focused process
Trigger Date
When Is Litigation Reasonably Likely to Occur?
– Stray comment by employee?
– Informal internal complaint?
– Formal internal complaint?
Problems With Jumping The Gun
– Burdensome for client
– Increased risk of spoliation
Trigger Date
01/01:
EE complains to supervisors about
sexually harassing conduct by local HR
Administrator
07/01: EE complains to Regional HR Manager
11/01: After being terminated, EE hand delivers
complaint letter to harasser
12/01: Harasser forwards complaint letter to upper
management
Broccoli v. Echostar Communications, 229 F.R.D.
506 (D.MD. 2005)
Trigger Date
12/20/01: EE’s girlfriend sends complaint letter to
company executives
02/02: Charge filed with EEOC
Trigger Date?
Holding: January 2001
Initial “Heads Up” Letter
Recommendations:
 Tell your attorney what information she
needs to know:
– Who are the key players?
– Who is the “best” IT rep?
– What are existing e-discovery procedures?
Recommendations
Learn your case as in the past
Identify pertinent electronic systems:
– E-mail
- PDAs
– Laptops
- Network servers
Recommendations
Work with your attorney and talk to the “right”
I.T. person
– Where are documents saved?
– For how long?
– What happens at the end of that time
period?
– Accessible v. Inaccessible information
Recommendations
E-Mail: Server
1. Are emails stored on a company server?
2. What is the retention schedule?
3. What is the back-up schedule?
4. What is the recycle schedule for back-ups?
5. Can destruction of recycling be stopped?
Recommendations
E-Mail: User
1. Can the user delete e-mail on the server?
2. If yes, can the function be disabled?
3. Do users save e-mail locally?
4. Is the local storage backed up?
5. What is the back-up and recycling schedule?
Recommendations
Word/Excel/PowerPoint
1. Are documents stored on a shared network
server?
2. User Habits: Can/do users save locally?
3. What is the retention schedule for documents
on the server and for documents stored
locally?
4. What are
schedules?
the
back-up
and
recycling
Recommendations
Other issues to discuss
•
Automated destruction processes
•
Saving data
employees
•
Documents in custody of third-party
vendors
created
by
terminated
Recommendations
• Relevant time period
• “Key players”
- Material witnesses
- Records custodians
• Relevant subject matters
• Relevant electronic systems
• Terminated employees
• Third-party vendors
Questions?
Presentation Name
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