TAKING CHARGE OF ESI <ul><li>Seth Randle and Howard Nirken </li></ul><ul><li>DuBois, Bryant & Campbell, LLP </li></ul><ul>...
Overview <ul><li>What’s the hype around new FRCP rules </li></ul><ul><li>Electronically Stored Information (ESI)  </li></u...
Federal Rules of Civil Procedure <ul><li>1970   2006 </li></ul><ul><li>“ data compilations” = “electronically stored infor...
Quick Glance at the Rules <ul><li>26(a)(1) and (3)   </li></ul><ul><li>Lawyers must discuss ESI in the initial planning co...
Omnia Presumuntur Contra Spoliatorem <ul><li>All things are presumed against a spoliator </li></ul><ul><li>Don’t be the Sp...
What is ESI? <ul><li>ESI includes all electronic information generated in connection with your organization including elec...
Challenges of Managing ESI <ul><li>Enormous volume of information </li></ul><ul><li>Information exists in multiple formats...
Reasons to Retain ESI <ul><li>Business Requirements </li></ul><ul><ul><li>Legitimate need to conduct business and preserve...
Costs and Risks Associated with ESI <ul><li>Increased storage costs </li></ul><ul><li>Operational inefficiencies </li></ul...
Retention Issues in Litigation © DuBois, Bryant & Campbell LLP What is a litigation hold? A communication within an organi...
Don’t be the Spoliator <ul><li>Must institute a “litigation hold” when litigation is “reasonably anticipated” </li></ul><u...
Failures have resulted in >$1 billion awards <ul><li>Ineffective method of communicating a preservation order (i.e., bulk ...
<ul><li>Any party may serve on any other party a request to produce... any designated documents or electronically stored i...
“ Reasonably Accessible” = Discoverable <ul><li>A party need not provide discovery of electronically stored information fr...
What ESI is Reasonably Accessible? <ul><li>The specificity of the discovery request </li></ul><ul><li>The quantity of info...
What ESI is Reasonably Accessible? <ul><li>Predictions as to the importance and usefulness of the further information </li...
Safe Harbor from Sanctions   © DuBois, Bryant & Campbell LLP Absent exceptional circumstances, a court may not impose sanc...
Ten steps to a routine, good-faith operation <ul><li>Form a working group </li></ul><ul><li>Host workshop to educate worki...
Conclusion: Take Charge of ESI <ul><li>ESI issues have the potential to grow exponentially </li></ul><ul><li>Serious conse...
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Managing Electronically Stored Information

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Legal Considerations in the Retention of Electronically Stored Information

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  • Email Application files Voice mail Instant messages Web pages Within your organization’s IT System hard drives, laptops, servers, voice mail, back-up systems Outside of your organization’s IT System home computers, cell phones, pda’s, flash drives, the internet…
  • RESULTING IN
  • A litigation hold is a communication within an organization ordering that all information relating to a dispute that is the subject of current or reasonably anticipated litigation be preserved for possible production in the litigation.
  • Profile ESI and relevant communication and storage system infrastructure Assess infrastructure needs and automated software tools Develop storage strategy that is consistent with RMP
  • Managing Electronically Stored Information

    1. 1. TAKING CHARGE OF ESI <ul><li>Seth Randle and Howard Nirken </li></ul><ul><li>DuBois, Bryant & Campbell, LLP </li></ul><ul><li>700 Lavaca Street, Suite 1300 </li></ul><ul><li>Austin, Texas 78701 </li></ul><ul><li>Phone: (512) 457-8000 </li></ul><ul><li>Email: srandle@dbcllp.com </li></ul><ul><li>Email: hnirken @dbcllp.com </li></ul>© DuBois, Bryant & Campbell LLP Legal Considerations in the Retention of Electronically Stored Information
    2. 2. Overview <ul><li>What’s the hype around new FRCP rules </li></ul><ul><li>Electronically Stored Information (ESI) </li></ul><ul><li>Challenges Managing ESI </li></ul><ul><li>Retention Issues in Litigation </li></ul><ul><li>Best Practices for Managing ESI </li></ul><ul><li>Conclusion </li></ul>© DuBois, Bryant & Campbell LLP
    3. 3. Federal Rules of Civil Procedure <ul><li>1970 2006 </li></ul><ul><li>“ data compilations” = “electronically stored information” </li></ul><ul><li>Organizations now are being told how and when to produce in litigation. </li></ul>© DuBois, Bryant & Campbell LLP
    4. 4. Quick Glance at the Rules <ul><li>26(a)(1) and (3) </li></ul><ul><li>Lawyers must discuss ESI in the initial planning conference and specifically included in the initial mandatory disclosures </li></ul><ul><li>26(a) (2) </li></ul><ul><li>Disclosure can only be denied when not “reasonably accessible”. </li></ul><ul><li>34(b) </li></ul><ul><li>The requesting party can specify the form in which ESI is to be produced (e.g. in native format). </li></ul><ul><li>37(f) Safe Harbor </li></ul><ul><li>No sanctions if not produced as a result of routine, good faith operation of a computer system. </li></ul>© DuBois, Bryant & Campbell LLP
    5. 5. Omnia Presumuntur Contra Spoliatorem <ul><li>All things are presumed against a spoliator </li></ul><ul><li>Don’t be the Spoliator of ESI </li></ul>© DuBois, Bryant & Campbell LLP Your job is to avoid that from ever being muttered
    6. 6. What is ESI? <ul><li>ESI includes all electronic information generated in connection with your organization including electronic copies of records and electronic communications. </li></ul>© DuBois, Bryant & Campbell LLP <ul><li>General Corporate: accounting & tax documents </li></ul><ul><li>General Administrative: personnel, benefits, payroll, </li></ul><ul><li>Engineering & Manufacturing: quality control, IP, patents </li></ul><ul><li>Information Technology: license agreements, policies </li></ul><ul><li>Sales & Marketing: contracts, proposals </li></ul><ul><li>Procurement: contracts, import/export documentation </li></ul><ul><li>Legal: correspondence, deposition, discovery, settlement agreements </li></ul>
    7. 7. Challenges of Managing ESI <ul><li>Enormous volume of information </li></ul><ul><li>Information exists in multiple formats and locations </li></ul><ul><ul><li>Internally: Hard drives, laptops, servers, voice mail, backups </li></ul></ul><ul><ul><li>Externally: Home PCs, cell phones, PDAs, flash drives, Internet </li></ul></ul><ul><li>Hard to destroy </li></ul><ul><li>Easily copied and transmitted </li></ul><ul><li>User history captured in metadata </li></ul>© DuBois, Bryant & Campbell LLP
    8. 8. Reasons to Retain ESI <ul><li>Business Requirements </li></ul><ul><ul><li>Legitimate need to conduct business and preserve organizational knowledge </li></ul></ul><ul><li>Statutory or Regulatory Requirements </li></ul><ul><ul><li>Typically dictate a minimum retention period </li></ul></ul><ul><li>Litigation Requirements </li></ul><ul><ul><li>Inability to produce documents during litigation can have dire consequences </li></ul></ul>© DuBois, Bryant & Campbell LLP
    9. 9. Costs and Risks Associated with ESI <ul><li>Increased storage costs </li></ul><ul><li>Operational inefficiencies </li></ul><ul><li>Difficulty searching and locating key information </li></ul><ul><li>Increased response time during litigation </li></ul><ul><li>Risk of “smoking gun” emails </li></ul>© DuBois, Bryant & Campbell LLP You can store too much electronic information…
    10. 10. Retention Issues in Litigation © DuBois, Bryant & Campbell LLP What is a litigation hold? A communication within an organization that orders all information relating to a dispute that is the subject of current or ‘reasonably anticipated’ litigation be preserved for possible production during litigation
    11. 11. Don’t be the Spoliator <ul><li>Must institute a “litigation hold” when litigation is “reasonably anticipated” </li></ul><ul><ul><li>This may occur before an initial court filing </li></ul></ul><ul><ul><li>A litigation hold is a communication within an organization ordering that all information relating to a dispute that is the subject of current or reasonably anticipated litigation be preserved for possible production in the litigation. </li></ul></ul><ul><ul><li>Elements of Spoliation </li></ul></ul><ul><ul><ul><li>An act of destruction </li></ul></ul></ul><ul><ul><ul><li>Discoverability of the evidence </li></ul></ul></ul><ul><ul><ul><li>An intent to destroy the evidence (recklessness and negligence count) </li></ul></ul></ul><ul><ul><ul><li>Destruction of the evidence after the party was on notice to preserve it </li></ul></ul></ul><ul><ul><li>Penalties: </li></ul></ul><ul><ul><ul><li>Civil: court sanctions, legal fees, adverse inference instructions </li></ul></ul></ul><ul><ul><ul><li>Criminal: obstruction of justice </li></ul></ul></ul>© DuBois, Bryant & Campbell LLP
    12. 12. Failures have resulted in >$1 billion awards <ul><li>Ineffective method of communicating a preservation order (i.e., bulk email) requiring preservation of certain sales data led to widespread destruction of evidence and sanctions, including a $1 million fine, attorneys’ fees award, and an adverse inference instruction. In re Prudential Insurance , 306 F.3d 99, 110 (2nd Cir. 2002). </li></ul><ul><li>Eleven officers and managers continued their routine practice of deleting emails more than 60 days old for two years after a blanket data-preservation order was entered. The eleven were prohibited from testifying and a $2.75 million fine was levied. United Stated v. Phillip Morris USA Inc. , 327 F. Supp. 2d 21 (D.D.C. 2004). </li></ul><ul><li>Failure to produce executive e-mails in a timely manner resulted in order to pay $1.45 billion in punitive and compensatory damages. Coleman (Parent) Holdings Inc. v. Morgan Stanley & Co. , 2005 WL 679071 </li></ul><ul><li>Willful destruction of potentially relevant evidence led to sanctions, an adverse inference instruction and $29 million in damages. Zubulake v. UBS Warburg LLC, 231 F.R.D. 159 (SDNY 2005). </li></ul><ul><li>Initial conviction hinged on whether document destruction was part of an established policy or obstruction of justice. Arthur Andersen, LLP v. United States , 125 S. Ct. 2129, (2005). </li></ul>© DuBois, Bryant & Campbell LLP
    13. 13. <ul><li>Any party may serve on any other party a request to produce... any designated documents or electronically stored information including: </li></ul><ul><ul><li>writings, </li></ul></ul><ul><ul><li>drawings, images, photographs, </li></ul></ul><ul><ul><li>charts and graphs </li></ul></ul><ul><ul><li>sound recordings, </li></ul></ul><ul><ul><li>other data </li></ul></ul>© DuBois, Bryant & Campbell LLP Scope: Source: FRCP 35(a ) “ Reasonably Accessible” = Discoverable
    14. 14. “ Reasonably Accessible” = Discoverable <ul><li>A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. </li></ul><ul><li>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. (If it is shown that they are not reasonably accessible, the court can shift the cost of such production to the party requesting the documents) </li></ul><ul><li>FRCP 26(b)(2)(B) </li></ul>© DuBois, Bryant & Campbell LLP Standard:
    15. 15. What ESI is Reasonably Accessible? <ul><li>The specificity of the discovery request </li></ul><ul><li>The quantity of information available from other and more easily accessed sources </li></ul><ul><li>The failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources </li></ul><ul><li>The likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources… </li></ul>© DuBois, Bryant & Campbell LLP Courts determine what is ‘reasonably accessible’ by balancing the following considerations:
    16. 16. What ESI is Reasonably Accessible? <ul><li>Predictions as to the importance and usefulness of the further information </li></ul><ul><li>The importance of the issues at stake </li></ul><ul><li>7. The Parties’ resources (Not reasonably accessible documents include records on legacy systems no longer in use, records on certain back up tape systems) </li></ul>© DuBois, Bryant & Campbell LLP Continued… Sampling of ESI may be required to gauge the likelihood of finding relevant information.
    17. 17. Safe Harbor from Sanctions © DuBois, Bryant & Campbell LLP Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide ESI lost as a result of the routine, good-faith operation of an electronic information system. FRCP 37(f)
    18. 18. Ten steps to a routine, good-faith operation <ul><li>Form a working group </li></ul><ul><li>Host workshop to educate working group </li></ul><ul><li>Identify current storage practices </li></ul><ul><li>Develop a Retention Management Policy (“RMP”) with detailed retention schedules & policies </li></ul><ul><li>Develop storage configuration plan </li></ul><ul><li>Prepare implementation plan </li></ul><ul><li>Communicate policy and plans </li></ul><ul><li>Implementation </li></ul><ul><li>Strictly enforce destruction schedule and litigation holds </li></ul><ul><li>Follow up with periodic training and audits to ensure proper implementation </li></ul>© DuBois, Bryant & Campbell LLP
    19. 19. Conclusion: Take Charge of ESI <ul><li>ESI issues have the potential to grow exponentially </li></ul><ul><li>Serious consequences result from failing to address ESI </li></ul><ul><li>A Retention Management Policy is an essential first step to managing ESI </li></ul>© DuBois, Bryant & Campbell LLP

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