Thomas R. Nolasco
Desktop PC
Smart phones
Thumb drives
Laptop
USB Storage devices
Portable hard drives
Tablet
Digital cameras
iPods/MP3 players
Network file servers
Digital video recorders
Xbox/Game Consoles
E-mail servers
Digital video cameras
Automotive EDRs
Legacy systems
Paging devices
Digital copy machines
Routine back-up tapes
Digital audio recorders
Cloud computing
Disaster recovery tapes
Voicemail
Social media sites
Security cameras
Medical devices
Home appliances
ESI Data
Paper Data
Native format
TIFF
Sedona Principles
De-NIST
Metadata
Load file
Parent-child relation
FRE 502
Quick peek
Claw back
Litigation hold
Predictive Coding
TAR
Zubulake
Unallocated space
Not reasonably accessible
• There is a steep learning curve;
• Expect some pushback:
o Different, more complex vs paper discovery;

“Why do you need to know/have that?”
o More Employees may be involved;


IT personnel, anyone who sends, receives or maintains
relevant ESI
“Why do you need to bother them?”
o Added expenses and stress for the client;

“Why does it cost so much more than before?”
• e-Discovery is the “new normal”;
o Rules have been in place since 2006
• Courts will impose sanctions on those who resist or
ignore e-Discovery rules;
• e-Discovery can become “weaponized”, much to
your client’s disadvantage.
• Before the Rule 16/26 conferences, you need to
know what you can commit your client to do!
o Timing of ESI disclosures, scope of production, form of
production, privilege, privacy, trade secret issues
o Consider how e-Discovery can become “weaponized”
due to asymmetrical ESI volumes or e-Discovery
expertise between the parties
• Does client have a document retention policy?
o Does the policy account for ESI? (If not, time to update!)
o Has it been followed:
• Has the client executed a litigation hold before?
o How did that work out?
o Was the IT staff included
• Does client understand its preservation duty?
• Courts will hold lawyers and clients jointly
accountable for e-Discovery failures
• Lawyers are expected to:
o Speak with client’s IT staff and “key players” who created,
received, sent and store ESI
o Understand the client’s system architecture, and
o Monitor and confirm their client’s compliance with eDiscovery duties
“…counsel must become fully familiar with her client’s
document retention policies, as well as the client’s data
retention architecture. This will invariably involve speaking
with information technology personnel, who can explain
system-wide backup procedures and the actual (as opposed
to theoretical) implementation of the firm’s recycling policy.
It will also involve communicating with the “key players” in
the litigation, in order to understand how they stored
information.”
Zubulake v. UBS, 229 F.R.D. 422 (S.D.N.Y. 2004)
• Employees, contractors, consultants controlled by
the client who created, received or stored ESI
o Anyone who holds relevant, company-controlled ESI
 Including current and former personnel
• Determine what ESI was created, sent, received and
stored, including locations and recipients
o Be thorough, and document your findings
• Expand the litigation hold, as needed
• Must be done. Part of counsel’s duty
• Obtain written acknowledgements from key players
and IT staff and store for later use.
• Schedule and implement regular reminders through
the life of the case.
o To remind existing employees
o To inform new employees
• Evidence Rule 502 responds to the complaint that litigation
costs necessary to protect against waiver of attorney-client
privilege or work product have become prohibitive due to the
concern that any disclosure (however innocent or minimal)
will operate as a subject matter waiver of all protected
communications or information.
• This concern is especially troubling in cases involving
electronic discovery. See, e.g. Hospon v. City of Baltimore,
232 F.R.D. 228, 244 (D. Md. 2005)
• Evidence Rule 502
o All e-Discovery plans/agreements should reference it;
malpractice otherwise???
o Applies when there is a disclosure of a communication or
information covered by attorney-client privilege or workproduct protection;
o May limit a privilege waiver, if not avoid it altogether;
• Evidence Rule 502(e):
• Allows parties to agree that there is no waiver
o Agreement alone is binding only on the parties
•
Incorporating the agreement into a Court order makes it
effective as to 3rd parties beyond the agreement
o “Clawback” Agreements
o “Quick Peek”/”Data Dump” Agreements
• Rule 16 scheduling conferences require a discussion
of e-Discovery;
o Courts expect substantive discussions at ESI issues
between counsel;
• You Need to prepare for e-Discovery anyway
o Rule 26 disclosures (federal)
• Possible e-Discovery topics to discuss at the Rule 16
conference:
o Limitations on ESI Production?
 Concept of “proportionality”
o
o
o
o
o
Format of ESI production? Timetable?
Scope of e-Discovery? Privilege issues?
Shared vendor? Search terms?
How many custodians? Cost sharing?
Protective Order? Rolling productions?
• Assess the client’s ESI situation:
o Its prior experience with e-Discovery
 Novice? Sophisticated?
 Good? Bad? Sanctions?
o What kind of ESI does it keep? How much?
o How many custodians may be involved?
o How much time will we need to collect, sort and produce
it?
 Will we need to retain an e-Discovery vendor?
• If you’re unprepared re ESI, you may:
o Unwittingly commit your client to obligations it cannot
meet;
 Possible discovery sanctions…unhappy client;
o Cause the “weaponization” of e-Discovery against our
client:
 You may create the appearance of vulnerability;
 Invite more aggressive e-Discovery tactics;
 Leading to sanctions, a “coercive” settlement outcome, or
worse…
• Permits the producing party(s) to forego a privilege
review altogether in favor of an agreement to return
(“clawback”) inadvertently produced privileged
material with no waiver of privilege.
• In large volume of ESI cases, it can expedite
production and avoid the high cost of a privilege
review by the producing party
• Allows a party to “pre-produce” documents or ESI
prior to reviewing them for privilege without
waiving its right to assert applicable privileges.
• The requesting party then performs a preliminary
relevance review of the produced material, allowing
it to tailor its discovery requests.
• Producing party can then assert privilege over
materials within what was requested. No waiver.
• (Old) Minority view: Failure to send a timely legal
hold letter is “gross negligence per se”; evidence
spoliation is presumed.
o Negative inference jury instructions given + possible
monetary sanctions + more.
• (Current) Majority View: It depends. Sanctions
warranted if evidence loss is proven due to lack of a
timely legal hold.
Sanctions Awarded in e-Discovery Cases 2012
50
40
30
44
20
10
Evidence
Preclusion
Adverse
Inference
Monetery
0
14
5
Other
10
Terminating
20
• Common e-Discovery sanctions involve:
o
o
o
o
o
Litigation hold shortcomings
Inadequate ESI searches, preservation and collection
Lack of supervision by counsel to confirm compliance
Lack of cooperation between the parties.
Intentional spoilation of evidence
• Litigation hold shortcomings:
o
o
o
o
o
o
o
o
Failure to issue one at all
Failure to issue one in writing
Failure to issue one in a timely manner
Failure to issue one to the IT department
Failure to issue one to all key players
Failure to issue one to all custodians of relevant ESI
Failure to verify receipt and compliance by recipients
Failure to issue reminders during the course of the case
Apple, Inc. v. Samsung Elec. Cos, Ltd.,
(N.D. Cal. July 25, 2012)
• Patent infringement case re smart phones;
• Both sides failed to timely implement proper legal
hold procedures, resulting in spoliation of evidence;
o Didn’t implement legal holds soon enough
o Didn’t include all the key players
o Didn’t notify the IT department to stop automatically
deleting emails
• Both sides were sanctions by the Court
• Apple won the trial - $900 million verdict
Northington v. H & M International
(N.D. Ill, January 12, 2011)
• Discrimination claims against employer; employer failed
to produce relevant documents and e-mails;
• Employer’s HR VP only collected documents that were
sent to her; ESI data collection was done ad hoc
• Court: Employer was “reckless” and “grossly negligent”
in failing to initiate legal hold to preserve relevant ESI;
• Sanction: Adverse inference jury instruction at trial +
attorneys’ fees and costs
Science Care, Inc. v. Donna Goyette
Maricopa County, Arizona, CV 2009-032397 (March 7, 2011)
• Intentional deletion of ESI from laptops by Defendant
o “Disk wiping” software used to try to hide deletions
o Plaintiff’s computer expert found evidence of wiping
software
• Court ruling: “Defendant’s conduct cannot, by any
stretch of the imagination be characterized as
innocent or unintentional.”
• Sanctions Imposed: Default Judgment
o No sufficient monetary sanctions or adverse inference to cure
the prejudice caused by ESI deletion
Questions?
Thomas R. Nolasco
Engelman Berger, P.C.
(602) 271-9090
trn@eblawyers.com