Seventh Circuit Ediscovery Pilot Program

Seventh Circuit’s Ediscovery Pilot Program Steven M. Puiszis

Seventh Circuit’s Ediscovery Pilot Program Developed principles relating to the discovery of electronically stored information (ESI) that were codified into a standing order. Principles serve as supplemental procedural guidelines in selected cases. Thirteen judges will participate in selected cases during Phase 1 of the program through May 1, 2010.

Seventh Circuit’s Ediscovery Pilot Program The Institute for the Advancement of the American Legal System developing questionnaires to assess the principles. Questionnaires to be completed by participating judges and lawyers. Results will be presented to the Seventh Circuit at its annual meeting in May 2010. Principles will be reviewed, modified as needed and applied during Phase II, June 2010 to May 2011.

Principle (1.01)- Purpose of the Program To assist in the administration of Fed. R. Civ. P 1 and secure a “just speedy and inexpensive determination” of every civil case. To promote the early resolution of ediscovery disputes without court intervention.

Principle 1.02 - Cooperation An attorney’s zealous representation is not compromised by cooperating in discovery. Failure of counsel or a party to cooperate “in facilitating and reasonably limiting discovery requests and responses” contributes “to the risk of sanctions.” Practical tip: read Fed. R. Civ. P. 26(g) and Mancia v. Mayflower Textile Servs. Co., 253 F.R.D. 354 (D.Md. 2008)

Principle 1.03 – Proportionality Fed. R. Civ. P. 26(b)(2)(C)’s proportionality standard should be applied in formulating a discovery plan. ESI production requests and responses “should be reasonably targeted, clear, and as specific as possible.” Tip: Remember the proportionality standard applies to all discovery, even to “accessible” sources of ESI.

Rule 26(b)(2)(C) Court “must limit the frequency or extent of discovery” if: It is unreasonably cumulative, duplicative or can be obtained from a less expensive, less burdensome or more convenient source; The party had ample opportunity to obtain the information by discovery; or Its burden or expense outweighs its benefit when considering the amount in controversy, the needs of the case, the parties resources, the importance of the issues at stake and the importance of the requested discovery in resolving the issues.

Principle 2.01 – Meet and Confer Requires parties to meet prior to the initial status conference and discuss the application ediscovery rules and these Principles to their case. Issues to discuss include: Identification of relevant/discoverable ESI; Scope of ESI to be preserved; Potential for conducting discovery in phases or stages as a method for reducing costs; Procedures for handling inadvertent disclosure of privilege material under F.R.E. 502.

Principle 2.01- Meet and Confer Requires unresolved ESI issues be presented to the court at the initial status or scheduling conference or as soon thereafter as possible. If a party fails to participate or cooperate in good faith or is impeding these principles, the court may require additional party discussions before discovery begins or impose sanctions if appropriate. ESI disputes will be resolved more efficiently if attorneys know how the client’s data is stored and retrieved.

Practical tips for limiting ediscovery costs and burdens. If you have filed a potentially dispositive motion, consider bringing a motion to stay discovery pursuant to Rule 26(c) . See Practical Ediscovery blog post from February 09 addressing the Ellington Credit Fund, Ltd. v. Select Portfolio Servs., Inc., 2009 WL 274483 (S.D.N.Y. Feb. 3, 2009) and Stone v. Lockheed Martin Corp., 2009 WL 267688 (D. Colo. Feb. 2, 2009) decisions which discuss this type of motion.

Practical tips for limiting ediscovery costs and burdens See Principles 2.04 and 2.05 (discussed below) for other topics to discuss with opposing counsel at your initial conference including limiting the amount of accessible ESI to be produced by date range, custodians, file types, de-duplication, keyword searching and the application of Rule 26(b)(2)(C) proportionality.

Practical tips for limiting ediscovery costs and burdens. Obtain a settlement demand – this will provide the court with a rough idea of the amount in controversy for purposes of applying Rule 26(b)(2)(C)’s proportionality standard. See Mancia v. Mayflower Textile Servs. Co.

Principle 2.02 – Ediscovery Liaisons Should an ESI dispute occur, parties are required to designate ediscovery liaisons. Liaison can be an in-house or outside counsel, third party consultant or company employee.

Principle 2.02 – Ediscovery Liaisons Liaison must be: (a) prepared to participate in dispute resolution; (b) knowledgeable about the party’s ediscovery efforts; (c) have access to those familiar with the party’s systems and answer relevant questions; and (d) have access to those who are knowledgeable about the technical aspects of ediscovery.

Principle 2.03 - Preservation Requests and Orders Vague and overbroad preservation requests are disfavored. Vague and overbroad preservation orders should not be sought or entered. Tip: See Frey v. Gainey Transp. Servs. Inc., 2006 WL 2443787 (N.D. Ga. Aug. 22, 2006) (“Such an extensive request for materials certainly would lend itself to an effort … to sandbag a defendant in the event that any of those materials were not preserved. …so it is difficult to allow a potential plaintiff to make an end run around the Federal Rules of Civil Procedure by filing a preemptive ‘spoliation’ letter.”).

Principle 2.03 - Preservation Requests and Orders To the extent preservation is sought through a pre-suit letter, it should include “specific and useful information” such as: (1) the names of parties; (2) factual background of the potential claim, (3) the putative legal theories, (4) names of potential witnesses and those having relevant evidence, (5) the relevant time frame and (6) other information that can assist in determining what information to preserve.

Duty to preserve ESI When litigation is “reasonably anticipated.” General concern over litigation or theoretical threat of a suit does not trigger duty to preserve. See Realnetworks, Inc. v. DVD Copy Control Ass’n, Inc., 2009 WL 1258970 (N.D.Cal. May 5, 2009); Goodman v. Praxair Servs. Inc., 632 F.Supp. 2d 494 (D.Md. 2009). See See Guideline 4 from Sedona Conference’s “Commentary on Litigation Holds, The Trigger & The Process” for a series of factors to consider when assessing if/when a duty to preserve was triggered.

Duty to preserve ESI Pre-suit letter that merely identifies a dispute and “expresses an invitation to discuss or otherwise negotiate” or inquires if the situation can be “resolved without litigation and media exposure” does not trigger a duty. See Goodman, 632 F.Supp. at 511, citing Cache LaPoudre Feeds LLC v. Land O’Lakes, Inc. 244 F.R.D. 614, 622 (D.Colo. 2007) and Practical Ediscovery blog posts discussing these decisions. If in doubt, advise client to preserve and promptly issue a litigation hold letter.

Principle 2.03 - Preservation Requests and Orders Principles do not require either the sending of a preservation request or a response thereto. If you send a response, take care not to assume a duty for your client or disclose privileged information or work product. Attorney litigation hold letters are privileged. See Muro v. Target Corp., 250 FRD 360 (N.D. Ill. 2007).

Principle 2.04(a) - Scope of Preservation Parties and their counsel “are responsible for taking reasonable and proportionate steps to preserve” relevant ESI “within its possession custody or control.” Determining what steps are reasonable and proportionate is a fact specific inquiry that varies from case to case. Parties should address preservation issues at the outset and should continue to address them as the case progresses.

Principle 2.04(b) – Discovery about preservation efforts. May be appropriate but can cause unnecessary expense and delay and inappropriately implicate attorney work-product and privileged matters. Before such discovery occurs the parties must confer about: (1) the need for such discovery and its relevance to issues likely to arise; and (2) the suitability of alternative means to obtain that information. Does not exempt a deponent from answering questions about preservation and collection of ESI.

Principle 2.04(c) – Preservation discussion at initial meet and confer. Parties should be prepared to discuss “targeted discovery” that each anticipates requesting. Parties should also be prepared to discuss “reasonably foreseeable preservation issues that relate directly” to the ESI the other party is seeking. Query: How can this be accomplished without knowing the client’s information system and how the client preserves its data and for how long? Tip: Discuss whether there is any duty to preserve inaccessible ESI. See Rule 2.04(d) and be prepared to explain why a source is inaccessible. Consider whether to bring a “technologist” to the meeting.

Principle 2.04(d) – Scope of Preservation Categories of ESI that are not generally discoverable in most cases: (1) Deleted, slack, fragmented or unallocated data; (2) Random access memory (RAM) or ephemeral data; (3) Temporary internet files, history, cache, cookies; (4) Metadata fields that are frequently updated; (5) Backup data substantially duplicative of data that is more accessible; (6) Other forms of ESI which requires extraordinary measures to preserve and not utilized in the ordinary course of business.

Principle 2.04(e) – Dispute over scope of preservation efforts. Requires the parties to meet and fully explain their reasons for believing that additional efforts are or are not “reasonable and proportionate, pursuant to Rule 26(b)(2)(C).” If the parties are unable to resolve a preservation issue, they should raise it promptly with the court. Tip: If you or your client appear to be taking an unreasonable position and are failing to cooperate, you will likely lose this battle, could be sanctioned under Principle 2.01(d) and it may color the court’s view of your client throughout the course of the litigation.

Principle 2.05 – Parameters of ESI Search and Production At the Rule 26(f) conference or promptly thereafter, parties “shall discuss” potential methodologies to: Eliminate duplicative ESI (horizontal or vertical de- duplication); Filter data by file type, date ranges, custodians, senders, search terms; Use of keyword searching, concept searching or other advanced culling technologies. Note: take care when contemplating the use of keyword searching for privileged documents. See Victor Stanley v. Creative Pipe, Inc., 250 F.R.D. 251, 261 (D.Md. 2008).

Principle 2.06 – Production Format Requires a good faith effort to agree on the format of ESI production at the initial Rule 26(f) conference. If unable to agree, the issue should be raised promptly with the Court. ESI stored in a database can be produced by querying the database for information resulting in a report or a reasonably useable and exportable electronic file.

Principle 2.06 – Production Format If ESI and other tangible or hard copy documents in a party’s possession are maintained in a format that is not text searchable, it does not need to be made text searchable. If ESI is maintained in a text searchable format by a party, the Advisory Committee Notes to Rule 34 explain that it cannot be produced in a different format that eliminates or significantly degrades this feature.

2.06 - Production Format (Costs) Requesting party is generally responsible for the incremental cost of creating its copy of the requested information. Discussion of cost sharing encouraged when the addition of optical character recognition (OCR) or other upgrades of paper documents or non-text- searchable electronic information is contemplated by the parties.

Native Format Imaged Format Can be altered. Can’t be altered. Can’t be redacted or bates Can be bates numbered stamped (in theory). and redacted. Contains metadata and No metadata unless “load embedded data. file” added to image. May require specialized More costly and takes software to view if created longer to produce. in unique or proprietary Not searchable unless format. “OCR” added.

Principle 3.01- Educational It is “expected” that in any “litigation matter” all counsel will become familiar with: The federal rules on ediscovery; The 2006 Advisory Committee Report concerning the federal ediscovery amendments at: http://www.uscourts.gov/rules/EDiscovery_w_Notes. pdf; and The Seventh Circuit’s Pilot Program Ediscovery Principles.

Ediscovery resources/assistance The Sedona Conference® publications on ESI: http://www.thesedonaconference.org/publications/ Kroll Ontrack: http://www.krollontrack.com/resources/ Hinshaw’s ediscovery response team headed up by Alan Lipton; Hinshaw’s Litigation Support department headed up by Tom Proctor; Hinshaw’s blog – Practical Ediscovery found at: http://www.practicalediscovery.com.

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Seventh Circuit Ediscovery Pilot Program

by Hinshaw & Culbertson LLP on Feb 08, 2010

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Seventh Circuit Ediscovery Pilot Program Presentation Transcript