Records Management and Electronic
Discovery
Ken Sperl ken.sperl@tsibouris.com
(614) 360-2023 www.tsibouris.com
Martin Susec susecm@nationwide.com
(614) 677-0593 www.nationwide.com
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Outline of Presentation
I.
Terminology
II.
Sources of Law
III. Discovery & E-Discovery
IV. Nightmare Scenarios
V.
Solutions
VI. Questions and Answers
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I. Terminology
• Electronically Stored Information or ESI
• Discovery
• Legal Holds (Litigation Holds or Record Holds)
• Metadata
• Record
• Records Management
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II. Sources of Law
• 2006 Amendments to the Federal Rules of
Civil Procedure
• State Counterparts – Ohio in July 2008
• Case Law
• Federal and State Record Management
Statutes and Regulations
• Sedona Principles
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III. Discovery & E-Discovery?
• Lawsuit commences
• Parties meet & confer
• Parties request information
(e.g. request for production of documents)
• Parties produce relevant unprivileged
information
• Failure may result in fines, sanctions, or
adverse inferences
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III. Discovery & E-Discovery
• Discovery requires the disclosure of
relevant information from all parties with
exceptions:
• Not unreasonably cumulative or duplicative
• Not information available from another
source that is more convenient
• Not when burden outweighs likely benefit
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III. Discovery & E-Discovery
• E-Discovery extends Discovery into the
electronic world
• 2 tier approach:
• Standard discovery rules apply
• Relevant ESI must be produced unless
unreasonably inaccessible because of
undue burden or cost
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III. Discovery & E-Discovery
E-Discovery differs from Discovery due to:
• Metadata
• Recovery
• Retention
• Size and amount
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IV. Nightmare Scenarios
Qualcomm v. Broadcom, 2008 U.S. Dist. LEXIS 911
(S.D. Cal. Jan. 7, 2008).
• Attorneys did not look in the correct locations
• Withheld tens of thousands of emails
showing that statements in Qualcomm’s
defense were false.
• Defendant awarded $8.5 million in fees and
costs
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IV. Nightmare Scenarios
Board of Regents v. BASF, 2007 U.S. Dist. LEXIS
82492 (D. Neb. Nov. 5, 2007).
• Counsel communicated to University
Professor to turn over all related documents
• Professor omitted all electronic data
• University “far from diligent” in production
• University ordered to pay for complete search
of electronic files and forensics expert fees
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IV. Nightmare Scenarios
Del Campo v. Kennedy, 2006 U.S. Dist. LEXIS 66728
(N.D. Ca. Sept. 8, 2006).
• Defendant call center recorded phone calls
but routinely destroys them after 2 weeks
• Plaintiff discovered that the tapes would be
destroyed
• Court ordered parties to meet and create a
document preservation plan
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IV. Nightmare Scenarios
Wingnut Films v. Katja Motion Pictures, 2007
U.S. Dist. LEXIS 72953 (C.D. Cal. Sept. 18, 2007).
• Attorneys did not conduct a proper search
• Documents were not appropriately preserved
• Did not suspend document destruction policy
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IV. Nightmare Scenarios
Wingnut Films v. Katja Motion Pictures, 2007
U.S. Dist. LEXIS 72953 (C.D. Cal. Sept. 18, 2007).
• Emails purged every 30 days, backup tapes
deleted
• Court ordered Defendant to retain outside
vendor to access servers and pay $125K in
attorneys fees
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IV. Nightmare Scenarios
Synergy Tech & Design v. Terry, 2007 U.S. Dist.
LEXIS 34463 (N.D. Cal. May 2, 2007).
• CEO provided 82 pages of emails without
attachments
• Later, forensic expert uncovered 36GB of
data
• Court ordered responses in 19 days, waives
objections, and levies $4275 in costs
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IV. Nightmare Scenarios
In re Seroquel Products Liability Litigation,
2007 U.S. Dist. LEXIS 61287 (M.D. Fla. Aug. 21, 2007).
• Pharma Co produces 3.75 million pages of
document without page breaks.
• Pharma Co defends with vendor errors
• Earlier production of 10 million pages were
inaccessible, unsearchable, unusable
• Sanctions were appropriate
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IV. Nightmare Scenarios
PML North America v. ACG Enterprises of NC, 2007 U.S.
Dist. LEXIS 54003 (E.D. Mich. Jul. 26, 2007).
• Misconduct by CEO and insolvency lead to personal
liability for the CEO
• CEO’s hard-drive disappeared from his laptop
• ACG became insolvent, could not pay Plaintiff’s
attorneys fees due to misconduct
• Court added CEO to defendant’s action and pierced
the corporate veil
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IV. Nightmare Scenarios
Doe v. Norwalk Community College, 2007 U.S. Dist. LEXIS
51084 (D. Conn. Jul. 16, 2007).
• Failure to Place Litigation Hold Resulted in Adverse
Inference
• Plaintiff’s forensic expert found that emails were
deleted, altered, or destroyed
• Duty to preserve arose
• Defendant did not create litigation holds
• Plaintiff was entitled to adverse inference
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IV. Nightmare Scenarios
Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 424
(D.N.Y. 2004).
• Failure to Clearly Communicate Litigation Hold Lead
to Sanctions
• Defendant’s personnel deleted relevant emails,
some of which were recovered from backup tapes.
• Personnel failed to preserve emails despite
adequate warning from counsel
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IV. Nightmare Scenarios
Zubulake v. UBS Warburg LLC, 229 F.R.D. 422
(D.N.Y. 2004).
• Court ordered adverse inference for some
emails, cost of depositions
• UBS ultimately lost the employment
discrimination case and the jury awarded
$29.3 million in damages
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V. Solutions
• Avoid Sanctions Using Appropriate Record
Management Policies
• Records Management policies must
• Be Reasonable
• Be Defensible
• Be Consistently Applied
• Be Efficient
• Avoid use of Disaster Recovery as Backup
• Comply with applicable laws
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V. Solutions
• Avoid spoliation through records management and
litigation hold policies.
• Duty to preserve arises with pending litigation or
threatened litigation
• Satisfy the Duty with
• Involving Legal, Records Retention Personnel,
and Information Security Personnel
• Clear and Timely Communication between Legal,
Key players, IT, and Records Retention
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V. Solutions
• Take advantage of the Safe Harbor Provision
within the Amended Federal Rules
• Absent exceptional circumstances, a court
may not impose sanctions under these rules
on a party for failing to provide electronically
stored information lost as a result of the
routine, good-faith operation of an electronic
information system.
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V. Solutions
• Be prepared to explain all systems of records
at the Pre-trial Conference with Opposing
Party During Litigation
• Be prepared to explain all electronic
communication, records management,
retention, and legal holds policies
• Be prepared to explain what ESI exists,
what is accessible and what is not
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V. Solutions
• At the Pre-trial Conference with Opposing
Party decide on preservation and production
of ESI
• Decide on the format of ESI if other that in
the format that the business ordinarily
maintains the records
• Agree to use data sampling and searching
where possible
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V. Solutions
•
Regularly update any records & information
management policies, procedures and
schedules
•
Conduct regular audits
•
Document good faith efforts
to maintain & destroy
records per the policies
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VII. Questions & Answers
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