CMCP: The Price and Perils of E-Discovery


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Digital Dilemmas: The Price and Perils of E-Discovery.

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CMCP: The Price and Perils of E-Discovery

  1. 1. Breakout Session A<br />Alison Tsao<br />Jason Yurasek<br />Jonathan Palmer<br />Mark L. Smith<br />Alex Ponce de León<br />Dean Vanech<br />
  2. 2. Introduction<br />Three Areas of Analysis<br />California’s New eDiscovery Rules<br />Controlling Costs<br />Ethics of eDiscovery<br />2<br />
  3. 3. Introduction<br />Over 92% of all corporate information is generated electronically…<br />…most organizations “keep” everything<br />Source: How Much Information? 2003, UC Berkeley<br />3<br />
  4. 4. Introduction<br />4<br />
  5. 5. California's New e-Discovery Rules<br />ESI Defined Broadly<br />Electronically Stored Information (ESI).<br />“Information that is stored in an electronic medium.” (Cal. CCP § 2016.020(e))<br />“Electronic” broadly defined as “relating to technology having electrical, digital, magnetic, wireless, optical, electromagnetic, or similar capabilities.” (Cal. CCP § 2016.020 (d))<br />Voice mails, texts, Tweets, Facebook…<br />5<br />
  6. 6. California's New e-Discovery Rules<br />Scope of Production: Accessibility of ESI.<br />In contrast to the Federal Rules, which considers certain ESI as “inaccessible” such that the responding party needs not produce it, there is a presumption under the California rules that ALL ESI is accessible.<br />6<br />
  7. 7. California's New e-Discovery Rules<br />Scope of Production: Accessibility of ESI.<br />Responding party has the right & burden to object to the production of ESI on the grounds that the ESI is inaccessible or to move for a protective order.<br />Requesting party can decide to file a motion to compel or challenge the protective order.<br />Under the new California rules, the burden is on the responding party to prove inaccessibility.<br />Under the Federal Rules, requesting party can challenge the failure to produce ESI as inaccessible, but requesting party has burden of proving accessibility.<br />7<br />
  8. 8. California's New e-Discovery Rules<br />Accessibility Factors<br />It is possible to obtain the information from a more convenient, less burdensome or expensive source.<br />The discovery sought is unreasonably cumulative or duplicative.<br />The party seeking the discovery has had ample opportunity to previously obtain the information sought.<br />The likely burden or expense outweighs the likely benefit, taking into account the amount in controversy, the resources of the parties, the importance of the issues, and the importance of the requested information in resolving the issues.<br />8<br />
  9. 9. Controlling Run-away Costs<br />9<br />
  10. 10. Controlling Run-away Costs<br />Source: Deloitte<br />10<br />
  11. 11. Controlling Run-away Costs<br />11<br />
  12. 12. Controlling Run-away Costs<br />Sources: Socha-Gelbmann 2009 E-Discovery Survey<br />12<br />
  13. 13. The Ethics of e-Discovery<br />Rule 26(g)<br />Signing Disclosures and Discovery Requests, Responses, and Objections.<br />Signature Required; Effect of Signature.<br /> Every disclosure under Rule 26(a)(1) or (a)(3) and every discovery request, response, or objection must be signed by at least one attorney of record in the attorney's own name — or by the party personally, if unrepresented — and must state the signer's address, e-mail address, and telephone number. By signing, an attorney or party certifies that to the best of the person's knowledge, information, and belief formed after a reasonable inquiry: <br />(A) with respect to a disclosure, it is complete and correct as of the time it is made; and<br />(B) with respect to a discovery request, response, or objection, it is: <br />(i) consistent with these rules and warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law, or for establishing new law; <br />(ii) not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and <br />(iii) neither unreasonable nor unduly burdensome or expensive, considering the needs of the case, prior discovery in the case, the amount in controversy, and the importance of the issues at stake in the action. <br />13<br />
  14. 14. Efficient eDiscovery<br />14<br />
  15. 15. Preserving Attorney-Client Privilege<br />California’s New e-Discovery Rules<br />Cal. R. Prof. Conduct 3-100<br />Two new provisions:<br />Cal. CCP § 2031.285(a)-(d) (parties)<br />Cal. CCP § 1985.8(i) (non-parties).<br />Each provides procedure for asserting a/c privilege or work-product doctrine protection after inadvertent production.<br />If producing (non-)party’s assertion is contested, recipient has 30 days to go to court to seek resolution.<br />15<br />
  16. 16. Preserving Attorney-Client Privilege<br />The CA e-Discovery Rules are similar to the Federal Rules with respect to procedure.<br />Goals of 2006 FRCP Amendments:<br /><ul><li>26(b)(5)(B) – “[D]oes not address the substantive questions whether privilege or work product protection . . . waived or forfeited. Instead . . . sets up a procedure to allow the responding party to assert a claim of privilege or of work-product protection after production.”Rules Report at App. C-54
  17. 17. 45(d)(2)(B) – same for third-party subpoena recipientsId. at App. C-91</li></ul>16<br />
  18. 18. Preserving Attorney-Client Privilege<br />Rule 502(b)<br />F.R.E. 502 rejected strict-liability approach – such that inadvertent disclosure CANNOT be an automatic-subject matter waiver.<br />Under Rule 502, no waiver of the privilege if:<br /><ul><li>Disclosure was not intentional (Rule 502(a)).
  19. 19. Holder of privilege/protection took:
  20. 20. Reasonable precautions to prevent disclosure; and
  21. 21. Reasonably prompt measures once knew or should have known of disclosure, to rectify the error, under FRCP 26(b)(5)(B) (Rule 502(b)).</li></ul>17<br />
  22. 22. Preserving Attorney-Client Privilege<br />Rule 502(b) One year later<br /><ul><li>At least one court has interpreted the inadvertence standard quite simply: if the material is clearly privileged, the court presumes that the party did not intend to produce it.Preferred Care Partners Holding Corp. v. Humana, Inc., 209 WL 182449 (S.D. Fla., April 9, 2009)
  23. 23. Other courts have made clear that the inadvertence inquiry focuses properly on the behavior of counsel, rather than other agents, such as discovery service vendors.</li></ul>18<br />
  24. 24. Preserving Attorney-Client Privilege<br />Rico v. Mitsubishi Motors Corp., 42 Cal. 4th 807, 68 Cal. Rptr. 3d 758 (12/13/07). <br /><ul><li>Issue may be resolved by agreement between the parties or resort to court.
  25. 25. Even if asked, a party need not return/destroy prior to court resolution.
  26. 26. State Comp. Ins. Fund v. WPS, Inc., 70 Cal. App. 4TH 644, 656 (1999)</li></ul>19<br />
  27. 27. Risks: Recent Court Guidance<br />Cases on Bad Faith Standard<br />Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of America Sec., LLC, 2009 WL 2921302 (S.D.N.Y. Sept. 8, 2009).<br />Rimkus Consulting Grp. v. Cammarata, 2010 U.S. Dist. LEXIS 14573 (S.D. Tex. Feb. 19, 2010).<br />D'Onofrio v. SFX Sports Group, Inc., et al., 2010 WL 3324964 (D.D.C. Aug. 24, 2010)<br />Victor Stanley, Inc. v. Creative Pipe, Inc., et al., cv-MJG-06-2662 (D. Md. Sept. 9, 2010) ("Victor Stanley II")<br />Fharmacy Records v. Nassar, 2010 WL 2294538 (6th Cir. June 7, 2010)<br />Southern New England Tel. Co. v. Global Naps Inc., No. 08-4518 cv (2nd Cir. Aug. 25, 2010)<br />20<br />
  28. 28. Pension Committee SDNY 2009<br />Issue was whether failure to issue legal hold was per se negligent<br />None of the plaintiffs was found to have acted intentionally, however, the court held that any failure to preserve is, at the least, negligence and warrants the imposition of some sanction.<br />Court does not talk about proportionality of FRCivP 26(b)(2)(c)(iii):<br /> "the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues "<br />Court does not even reference Rule 37!<br />Widely recognized Rule 37 takes into account proportionality<br />Court criticized the plaintiffs for their failure to issue written litigation hold notices and cautioned against reliance on self-collection by custodians.<br />21<br />
  29. 29. Rimkus S.D. Tex. Feb. 19, 2010<br />Treated as spoliation issue: alleged to have destroyed relevant information willfully to prevent use at trial<br />Admitted deleting immediately prior to filing complaint – testimony inconsistent on why<br />Recovered (not all) were both good and bad<br />Refers to Pension Fund (but says re negligence, this case about intentional)<br />Applies the "relevance" and "prejudice" factors of the adverse inference analysis are often broken down into three subparts: <br />"(1) whether the evidence is relevant to the lawsuit; (2) whether the evidence would have supportedtheinference sought; and (3) whether the nondestroying party has suffered prejudice from the destruction of the evidence." (which Pension Comm'ee did apply)<br />Left up to jury to decide willfulness, relevance, and prejudice and whether to infer destroyed emails would be bad evidence<br />Shifted fees on discovery and motions<br />22<br />
  30. 30. The panel’s PowerPoint presentation will be available throughSlideShare.<br />To get your copy, simply visit and look for the CMCP presentation.<br />23<br />
  31. 31. Breakout Session A<br />Alison Tsao<br />Jason Yurasek<br />Jonathan Palmer<br />Mark L. Smith<br />Alex Ponce de León<br />Dean Vanech<br />24<br />