Always Explain “Why” to the Judge

A Plaintiff brought a motion to compel “access to electronic records,” claiming the Defendants had “withheld electronically stored information” and had not produced a “chronological e-mail history of any kind.” Murray v. Coleman, 2012 U.S. Dist. LEXIS 130219, 1-3 (W.D.N.Y. Sept. 12, 2012).

The Defense attorney claimed that the Defendant had produced “copies (free of charge) of the documents sought,” thus rendering the Plaintiff’s motion “moot.” Murray, at *2.

The Plaintiff countered that, “virtually no electronic records [were] included” in the discovery production.  Id. Moreover, the Plaintiff claimed there was never a “systemic search” of the Defendant’s databases and that he “has not received any chronological electronic records related specifically to a single Defendant and/or electronic communications concerning extensive claims” in the case. Murray, at *2-3.

Magistrate Judge Jonathan W. Feldman stated the Defense attorney’s “terse response” made it difficult to determine whether the Defendants had produced all the responsive email to the Plaintiff’s request for production. Murray, at *3. Moreover, the Court noted that the Defense Declaration had “not provide any details regarding how and where electronically stored information (“ESI”) is held, what efforts were made to preserve relevant ESI, and the method used by defendants to locate, search and produce relevant ESI.” Murray, at *3.

The Court referred to the “inadequacy” of the Defense response to the motion to compel and thus construed the response effectively argued that the electronically stored information was not produced because it was not “reasonably accessible.”  Murray, at *3.

In situations where a party resists the production of ESI, Federal Rule of Civil Procedure Rule 26(b)(2)(B) requires that “the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.”

Case law also requires responding parties to demonstrate how ESI is not reasonably accessible as follows:

[I]dentify, by category or type, the sources containing potentially responsive information that it is neither searching nor producing. The identification should, to the extent possible, provide enough detail to enable the requesting party to evaluate the burdens and costs of providing the discovery and the likelihood of finding responsive information on the identified sources.

Murray, at *3-4, citing Star Direct Telecom, Inc. v. Global Crossing Bandwidth, Inc., 272 F.R.D. 350, 358-59 (W.D.N.Y. 2011).

The Court ordered the Defendants to comply with Rule 26(b)(2)(B) by filing an affidavit by a person with direct knowledge of the Defendant’s document and email retention system stating:

 (1) The document/email retention policy used by DOCS currently and during the relevant time periods;

(2) The dates of emails “reasonably accessible” for production in this litigation;

(3) The back up or legacy system, if any, used by DOCS to preserve or archive emails that are no longer “reasonably accessible” and whether responsive documents or data may potentially be found on such back up or legacy systems;

(4) Whether accessing archived or back up emails would be unduly burdensome or costly and why; and

(5) The date when a litigation hold or document preservation notice was put in place by DOCS regarding this matter and either a copy of or a description of the preservation or litigation hold utilized by DOCS.

Murray, at *4-5.

Bow Tie Thoughts

I have met Federal and state court judges across the country with one unifying factor on ESI productions: they want to know what was done to find responsive electronically stored information. Gone are the days of lawyers merely telling a judge, “Your Honor, finding email is unduly burdensome and expensive.” Such statements need to be support with specific facts, not empty rhetoric.

Judges are heavily armed with a one word question when an attorney claims ESI is not reasonably accessible: Why?

Magistrate Judge Jonathan W. Feldman outlined excellent points that a party likely would have to answer in many cases. While cases obviously can vary, other possible factors to consider include:

Search methodology required to identify ESI;

Type of electronically stored information;

Technology required to render the ESI into a “reasonably accessible”;

Time required to performance the relevant work;

Cost estimate for process or translate the ESI into a reasonably useable form;

Review cost estimate

This is by no means an all-inclusive list. A person with eDiscovery knowledge can determine what is enough detail to enable a requesting party (and Court) to evaluate the burdens and costs of producing the discovery and the likelihood of finding responsive ESI under the facts of a given case.

eDiscovery Does Not Mean Esoteric Discovery

News Am. Mktg. In-Store Servs., is a breach of contract case involving multiple eDiscovery disputes.  According to the Plaintiff, the Defendant did the following:

Destroyed relevant email evidence, including an email server;

Failed to produce responsive documents in discovery due to the above failure; and

Failed to run appropriate ESI searches on Defendants’ computers.

News Am. Mktg. In-Store Servs. v. Floorgraphics, Inc., 2012 U.S. Dist. LEXIS 76543, at *3 (D.N.J. May 30, 2012).

The Plaintiffs further argued the Defendants needed to produce additional discovery and sanctions were warranted. Additionally, the Plaintiffs sought a neutral computer forensic expert to conduct an evaluation of Defendants’ computer systems. Id.

e-Discovery Mea Culpa

The Defendants countered that no discovery had been destroyed, but admitted that their discovery production was deficient.  News Am. Mktg. In-Store Servs., at *3-4.

The Defendants explained [conceded] that they searched the wrong computers and applied the wrong search terms. News Am. Mktg. In-Store Servs., at *4.

However, the Defendants stated they attempted to correct every deficiency and would continue to do so. Id.

Regarding the “destroyed” email server, the Defendants stated it was a “pass-through” server that had been reformatted.  Id. The Defendants explained the server would push incoming emails through the server to individual computers. Id. According to the Defendants, there was no ESI on this pass-through server. Id.

As part of their mea culpa, the Defendants proclaimed they would make witnesses available to be re-deposed and pay the reasonable attorneys fees for the depositions. Id. Moreover, any motions to compel were premature, because they were producing hundreds of thousands of documents. News Am. Mktg. In-Store Servs., at *5.

The Court’s Findings

The case should be about the merits not some esoteric electronic discovery issue.

Magistrate Judge Mark Falk

The Court’s conclusions on the dispute were direct and to the point:

One, the request to compel discovery is premature. Defendants admit that they used incorrect ESI search terms and did not search all of the appropriate avenues of electronic information. They have represented to the Court that 230,000 documents are in the process of being produced and that the production is being checked and re-checked by Defendants’ computer experts to ensure its accuracy. Thus, there is no basis for an order compelling the production of documents until, at least, Defendants’ production is complete.

Two, it appears that Defendants failed to meet their Federal Rule of Civil Procedure 26(f) ESI obligations at the outset of the case. See Fed. R. Civ. P. 26(f)(3)(C). The briefing discloses that Defendants’ counsel was not aware of the structure of Defendants’ computer systems until recently. It is inappropriate for Defendants to only now—three years after the case was filed and after discovery has closed—investigate their electronic systems.

Three, the Court is unable to determine whether information was contained on Defendants’ “reformatted,” “pass through” server. The parties’ positions on this are diametrically different and consist of unsupported conclusions laced with hyperbole.

Four, it is unclear whether ESI allegedly destroyed (or “passed through” Defendants’ server) may be recovered and, if so, the cost of doing so. This important issue is not adequately addressed in the papers.

Five, it is unclear whether the burden and expense of conducting the electronic discovery outweighs the benefit of doing so. See Fed. R. Civ. P. 26(b)(2)(C)(iii). The Court cannot discern from the papers whether a deep forensic search is justified.

Six, the appointment of a neutral computer expert is not called for at this time. In effect, it would transfer the ESI obligations of the parties to the Court. Stated another way, the issues are not sufficiently articulated for the Court to appoint an expert to embark on an unlimited search.

Seven, there is no basis for the Court to consider spoilation sanctions (or any sanctions) until, at least, Defendants complete their discovery production and the questions raised above are answered.

News Am. Mktg. In-Store Servs., at *5-7, (emphasis added).

The Court allowed the Plaintiff to take the 30(b)(6) deposition of the Defendants’ eDiscovery PMK that would be binding on the Defendant. The parties were directed to meet and confer on the deponent. Additionally, the PMK needed to be able to address whether any ESI could be recovered and the specific cost to do so. News Am. Mktg. In-Store Servs., at *7.

In the event there were still eDiscovery disputes after the deposition, the Court stated:

[T]he parties may simultaneously submit letters (double spaced, not to exceed ten pages) explaining the relevance and importance of the discovery and the benefits and burdens associated with the discovery—e.g., whether the costs and effort of securing the discovery is proportional to the expected result. Any letter from counsel must be accompanied by an affidavit from the party’s ESI expert which addresses the technical aspects of the dispute. The ESI expert’s affidavit must discuss the projected costs of proceeding with as much specificity as possible. General, conclusory statements—e.g., “it will be prohibitively expensive”—are unacceptable.

News Am. Mktg. In-Store Servs., at *7-8.

The Court’s opinion sent a very strong message on the discovery disputes between the parties: The case should be about the merits not some esoteric electronic discovery issue. News Am. Mktg. In-Store Servs., at *8 (emphasis added).

The Court was blunt in advising the parties it was “wary of the use of broad and ambiguous electronic discovery requests as a litigation tactic or as a ‘fishing expedition.’” Id. Moreover, the Court stated it was “troubling” for this level of discovery dispute to surface after 18 months of discovery.  Id. Additionally, the Court effectively sent an ethical message to the parties to “proceed in good faith, take reasonable positions, and attempt to resolve their dispute in accordance with the Guidelines For Litigation Conduct.”  News Am. Mktg. In-Store Servs., at *7-8.

The opinion concludes with the warning the Court “not hesitate to award substantial fees to the non-prevailing party or any party found to be proceeding in bad faith.”  News Am. Mktg. In-Store Servs., at *8-9.

Bow Tie Thoughts

I was impressed with Judge Mark Falk’s outlining of case issues and his order. Additionally, the Defendants attempts to correct their mistakes were very respectable.

This opinion highlights multiple eDiscovery issues that are taking place all over the United States: 1) The Duty of Competency in eDiscovery; 2) Providing the Court adequate information to make rulings; and 3) Do not forget the merits of the lawsuit with electronic discovery issues.

The Duty of Competency and eDiscovery has been slowly developing issue since December 2006. There are many attorneys who outright admit they do not understand preservation, review methodologies or discovery productions. One friend recently told me his firm just asks for paper productions because of the lack of knowledge in what to request.

In the current case, the Court stated, “It is inappropriate for Defendants to only now—three years after the case was filed and after discovery has closed—investigate their electronic systems.”  News Am. Mktg. In-Store Servs., at *5-6. Moreover, the Court it was “troubling” to have this sort of discovery dispute after 18 months of discovery. News Am. Mktg. In-Store Servs., at *8.

How can attorneys best meet their duty of competency in eDiscovery? While every client is different, it is important to have a discovery plan from the inception of the case. This may include in-depth client interviews with the parties, custodians, and IT staff (to name a few), to learn how the client uses technology. How does their email system work? Do they text or iMessage?  What sorts of computers do they use? Any tablets? Voicemail? Any personal devices used for business?

I believe the Duty of Competency requires attorneys to either understand their client’s technology themselves or at a minimum, hire a consultant to help the attorneys navigate the issues. Without such investigation, it is difficult to meet one’s ethical duty of candor to the court on the facts of the lawsuit and provide competent representation of their clients.

As to the second issue, lawyers cannot simply walk into court and tell a judge, “Your Honor, it’s expensive.”  The first questions from the Court will be “why and how much.” The answer cannot simply be “Because it is.”

Attorneys need to argue ESI is not reasonably accessible because of undue burden or cost (Fed. R. Civ. P. 26(b)(2)(B)) or that the burden and expense of conducting the electronic discovery outweighs the benefit of doing so (Fed. R. Civ. P. 26(b)(2)(C)(iii)), with specific information, most likely from an eDiscovery expert or IT professional.

The unofficial standard for demonstrating undue burden or expense might be from Judge Facciola’s United States ex rel. McBride v. Halliburton Co., 2011 U.S. Dist. LEXIS 6412, 1-2 (D.D.C. Jan. 24, 2011) opinion: “In excruciating, but highly educational and useful, detail.”

Judges want to have enough information that they can make the right decision. While there will be attorneys simply proclaiming searching a hard drive is expensive, the better litigation practice is to have a well documented affidavit outlining the process and cost to search for specific ESI.

Finally, Judge Falk’s statement The case should be about the merits not some esoteric electronic discovery issue,” should go on t-shirts at e-Discovery conferences. It is easy to become enamored with search technology, collection methodologies and every other eDiscovery issue. However, every eDiscovery issue should be framed around the facts of the lawsuit, the causes of action and be relevant to competently move the case forward. The technology exists to enable lawyers to practice law, not to overshadow the merits of the case.

Printing ESI & Scanning It Is Not OK

In Indep. Mktg. Group v. Keen, the Defendant-Requesting Party requested the corporate Plaintiff conduct targeted searches with specific key words on specific custodians on the Plaintiff’s server.  Indep. Mktg. Group v. Keen, 2012 U.S. Dist. LEXIS 7702 (M.D. Fla. Jan. 24, 2012).

The Plaintiff produced one multiple page PDF without any searchable text or metadata.  Indep. Mktg. Group., at *2.

The Defendant requested the Plaintiff do a reasonable search on their server for responsive ESI.  The Plaintiff responded by producing four “poor quality” PDF files without any search text.  The PDF’s were hundreds of pages long.  Indep. Mktg. Group., at *2.

In the course of the discovery dispute, the Plaintiff later refused to re-produce the ESI, claiming a $10,000 production cost was “a prohibitive cost that [Plaintiff] [was] not willing to incur for the production of the documents [Defendants] requested.” Indep. Mktg. Group., at *3.

The Plaintiff later produced disks with files that could not be opened, including system and temporary files. Indep. Mktg. Group., at *3-4, fn 1.

The Court was not thrilled with the Plaintiff’s discovery arguments.  The Plaintiff was a corporation seeking damages in the hundreds of thousands of dollars, plus punitive damages and attorneys fees. Indep. Mktg. Group., at *8.

The Court observed the Plaintiffs production methodology included identifying the responsive ESI on their computer, printing it as paper and then scanning the paper as a non-searchable PDF.  Indep. Mktg. Group., at *4-5.

The Court explained that the Plaintiff did not produce the ESI as it was ordinarily maintained by printing the ESI as paper and then scanning the documents as non-searchable PDF’s.  Indep. Mktg. Group., at *5.  Additionally, the ESI was not produced in a reasonably useable form, because it was non-searchable.  Id.

The Court rejected Plaintiff’s undue burden and cost arguments, noting that there is a presumption that the producing party incurs its own production costs.  Moreover, the Plaintiff never argued the data was not reasonably accessible, which would have been undercut by the fact they could search their computer for responsive ESI that was printed. Indep. Mktg. Group., at *6-7.

The Court ultimately granted to motion to compel, requiring the production to be re-produced in a reasonably useable form and denying an award of attorneys’ fees.

Bow Tie Thoughts

The Federal Rules of Civil Procedure and corresponding case law are abundantly clear that you cannot degrade searchable files.  Printing ESI and then scanning the paper as non-searchable PDF’s is simply not permitted by the discovery rules.

The other issue parties can end up in trouble over is arguing the cost of eDiscovery being unduly burdensome.  In a case worth hundreds of thousands of dollars, where the ESI is reasonably accessible, it is difficult to argue a production cost of $10,000 to be unduly burdensome.  It is more likely a party would spend a significant amount of money in motion practice, with the end result being the same discovery bill if the party simply produced the information correctly the first time.

Form of Production: (Almost) Anyway You Want It

A Plaintiff in an age discrimination case requested ESI be produced in native format.  Linnebur v. United Tel. Ass’n, 2011 U.S. Dist. LEXIS 88456 (D. Kan. Aug. 10, 2011).

The Defendants did not assert any objections, but produced the responsive ESI as PDF’s.  Linnebur, at 3.

The ESI at issue included company organization charts, email, payroll and work performance evaluations.  Linnebur, at 4.

As the Court noted, Federal Rule of Civil Procedure Rule 34 allows a requesting party to state the form of production in their request.  Linnebur, at *5, citing Fed. R. Civ. P. 34(b).

If the ESI is not reasonably accessible because of undue burden or cost, the producing party demonstrate any undue burden.  Linnebur, at *5-6, citing Fed. R. Civ. P. 26(b)(2)(B).

The Defendants argued the PDF production was sufficient.  Moreover, they argued it was the Plaintiff’s burden to show why they needed the native files. Linnebur, at *6.

As a preliminary matter, the Plaintiff argued that the timing of her being fired was a key issue in her lawsuit.  Linnebur, at *6-7.  The metadata in the discovery was vital to showing when ESI was created, who created it and the file’s history.  Id. This information was not in the PDF production. Id.

The Court took the Defendant to task on their position it was the Plaintiff’s burden to show why native files were needed:

Moreover, the plain language of Rule 26(b) imposes the burden on “the party from whom discovery is sought” to “show the information is not reasonably accessible because of undue burden or cost.” Defendant makes no such showing. Accordingly, Plaintiff’s motion to compel is granted with respect to the requested ESI.

Linnebur, at *7.

Bow Tie Law

There are Federal litigants across the United States that take the point of view they do not need to produce requested native files.  The plain language of the Federal Rules of Civil Procedure are squarely against this false proposition.

If a party requests ESI be produced in native file format, it is the producing party’s duty to object and demonstrate why such a production is unduly burdensome.  The producing party might argue the costs involved or whether the ESI needs to be converted to a static image for redactions. However, producing in native file format has a lower processing costs then converting to a non-searchable image.

Exotic Apples: Solutions in Collecting & Processing Apple ESI

My friend Charlie Kaupp at Digital Strata brought the following issue to me:

There is an increasingly prevalent amount of Apple ESI found in corporate environments, especially among executives, engineering, and marketing groups.

Most review platforms do not handle large portions of Apple ESI, including:

Mac email (Entourage, Outlook 2011, Mail.app, Thunderbird)

iWork files (Pages, Numbers, Keynote)

Mac chat transcripts (iChat, Adium)

While some data (MS Office documents, PDFs, plain text, RTF, etc.) can be handled by review platforms due to its cross-platform nature, these successes can obscure larger failures in processing.

For example, a processing/review service excepted out a large file called “Entourage Database” as an unsupported file type. This database contained all the custodian’s email.

This situation should cause attorneys to pause before figuratively leaving Apple ESI on the loading dock.

Given that Apple has sold approximately 7.33 million iPads, 16.24 million iPhones, 4.134 million Macs during the first quarter of 2011 alone, simply logging all Apple ESI as “unsupported” is a formula to ignore potentially relevant electronically stored information.

Apple ESI is discoverable, can be produced in a reasonably useable form (which might require translation into static images with associated extracted text for some file types and review platforms), and therefore should be treated like any other ESI production.  Categorically logging Apple ESI as “unsupported” raises a host of e-Discovery issues. Consider the following:

Duty of Competency & Federal Rule of Civil Procedure Rules 26(a), 26(g) & 34 Overview

An argument can be made that globally logging Apple data as “unsupported” can have both ethical violations under a lawyer’s duty of competency and Federal Rule of Civil Procedure Rules 26(a), 26(g) and 34.

Duty of Competence

A lawyer is ethically required to provide their clients with a duty of competency.  The ABA Model Rules of Professional Conduct, codified as law in many states, require the following:

Rule 1.1: Competence

A lawyer shall provide competent representation to a client.  Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation.

Initial & Supplemental Disclosures

Federal Rule of Civil Procedure Rule 26(a) requires that a party must disclose the discoverable information that the disclosing party may use to support its claims or defenses.  The Rule specifically requires the following on electronically stored information must be disclosed:

A copy — or a description by category and location — of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims or defenses, unless the use would be solely for impeachment; 

Fed. R. Civ. P. 26(a)(2).

A party must also supplement or correct their initial disclosures if they learn their original disclosure is incomplete or incorrect.  Federal Rule of Civil Procedure Rule 26(e)(1).

Federal Rule of Civil Procedure Rule 37(c)(1) can take a bite out of any Apple ESI by excluding the trial use of any non-disclosed ESI required by Rules 26(a) or 26(e).

 

 

Translation Into a Reasonably Useable Form

The Advisory Committee Notes to Federal Rule of Civil Procedure Rule 26 acknowledge that some electronically stored information as it is ordinarily maintained is not in a reasonably usable form, and thus requires translation into a form the requesting party can use.  See, Michael R. Arkfeld, Arkfeld on Electronic Discovery and Evidence, §7.7(F), 7-207-208.

Federal Rule of Civil Procedure Rule 34(a)(1)(A) defines electronically stored information as “data compilations–stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.”

Magistrate Judge John Facciola explained Federal Rule of Civil Procedure Rule 34(a)(1)(A) in D’Onofrio v. Sfx Sports Group, Inc., 247 F.R.D. 43, 47 (D.D.C. 2008):

In other words, electronic data is subject to discovery if it is stored in a directly obtainable medium. If, however, it is not stored in a directly obtainable medium, a request may be made of the responding party to translate the electronic data into a “reasonably usable form.” Because the step of translating this type of electronic data adds an extra burden on the responding party, the request may only seek for it to be done “if [the translation is] necessary.” It is not the case that this clause requires the responding party to produce data in its original form unless “necessary” to do otherwise.

Certifying Discovery is Complete & Correct 

Federal Rule of Civil Procedure Rule 26(g) requires that an attorney of record in a lawsuit sign every response or objection to a discovery request, including initial disclosures under Rule 26(a) (1).  Fed. R. Civ. P. 26(g)(1).

The attorney signature certifies that to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry:

(A) With respect to a disclosure, it is complete and correct as of the time it is made; and

(B) With respect to a discovery request, response, or objection, it is:

(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;

(ii)  Not interposed for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; and 

(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.

Fed. R. Civ. P. 26(g)(1)

Rule 26(g) requires an attorney “to stop and think about the legitimacy of a discovery request, a response thereto, or an objection.” Anderson v. Caldwell County Sheriff’s Office, 2011 U.S. Dist. LEXIS 62263, 10-11 (W.D.N.C. June 10, 2011), citing Fed. R. Civ. P. 26(g) advisory committee’s note to the 1983 amendments.

Furthermore, Rule 26(g) provides sanctions against the attorney, party, or both if a certification violates Federal Rule of Civil Procedure Rule 26 with the difficult burden to meet substantial justification. Fed. R. Civ. P. 26(g)(3).

Upsetting The Apple Cart

It is definite that a producing party that does not disclose or produce any Apple data because the ESI was categorically marked as “unsupported” will have problems, because the attorney arguably did not act completely in either disclosing or producing responsive electronically stored information in a reasonably useable form.  Software exists, such as the product line from Blackbag Technologies, for collecting and producing ESI collected from Apple computers and devices. Simply ignoring or being unaware of technology does not make ESI “unsupported.”

Furthermore, a party representing in a discovery response that Apple ESI is “unsupported” will run into problems, especially if the ESI was actually “supported” had processing technology designed for Mac data been used.  Consider the following “rotten apple” scenarios:

Situation 1: A Court finds a violation of Federal Rule of Civil Procedure Rule 34 if the “unsupported” Apple ESI’s existence was disclosed in a discovery response, but not produced in a reasonably useable form.

Situation 2: A Court finds violations of Federal Rule of Civil Procedure Rules 26(a), 26(g) and 34 if the Apple ESI was not disclosed as “unsupported” files that should been both disclosed under Rule 26(a) and produced in a reasonably useable form pursuant to a discovery request.

Situation 3: Court excludes a party’s Apple ESI that is learned to be both supported and exculpatory after the close of discovery and shortly before trial, because the Apple ESI was not disclosed under Rule 26(a) and thus excluded under Rule 37(c)(1).

Search & Preservation Obligations

Simply labeling Apple ESI as “unsupported” may also invoke very dreaded passages from both Qualcomm Inc. v. Broadcom Corp 1 and The Pension Committee of the University of Montreal Pension Plan, et al. v. Banc of America Securities LLC, et al.

Consider the following from Qualcomm 1:

Attorneys’ ethical obligations do not permit them to participate in an inadequate document search and then provide misleading and incomplete information to their opponents and false arguments to the court.

Qualcomm Inc. v. Broadcom Corp., 2008 U.S. Dist. LEXIS 911 (S.D. Cal. Jan. 7, 2008).

Consider the following from Pension Committee:

“By now, it should be abundantly clear that the duty to preserve means what it says and that a failure to preserve records – paper or electronic – and to search in the right places for those records, will inevitably result in the spoliation of evidence.”

“[D]epending on the extent of the failure to collect evidence, or the sloppiness of the review, the resulting loss or destruction of evidence is surely negligent, and, depending on the circumstances may be grossly negligent or willful.”

The Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Secs, LLC, No. 05-9016, 2010 U.S. Dist. LEXIS 4546, at *14 (S.D.N.Y. Jan. 15, 2010), as corrected, Docket # 358 (May 28, 2010) (court has the obligation to ensure that the judicial process is not abused).

Some Bad Apples

It would not take much to envision a situation where a producing party claims Apple ESI is “unsupported,” and thus cannot be searched or produced in a reasonably useable form. In the course of discovery, the requesting party learns the Apple ESI actually is reasonably useable and should have been processed, searched for responsive ESI and produced accordingly.  The following motion battle would likely invoke elements of “misleading arguments and incomplete information,” with the producing party likely pointing a finger at their service provider.

The Great Danger: Missing What Helps Your Case

A sailor who does not know which course to sail will put their vessel in danger.

Simply tagging all Apple ESI as “unsupported” will have a similar effect on a lawsuit.  Such a global categorization can miss a large body of relevant, responsive, or potentially exculpatory, electronically stored information.

The solution to this situation is very direct: Ask the service provider how they collect, process Apple ESI and address the issue of “unsupported” or “exotic” files.

For example, Charlie Kaupp at Digital Strata suggests the following:

Apple ESI Collection needs have been addressed with tools such as Macquisition from Black Bag, which is a bootable forensic image creation tool akin to Encase or FTK. 

Processing needs have been addressed with services such as Digital Strata’s Review-Ready Conversion service. These services will allow Mac data to be converted to file types that can be handled by review platforms while maintaining chain of custody and all metadata with a load file.

Apple ESI issues should be discussed at the meet and confer with the opposing party, because if one party has a significant amount of Apple ESI, it is a high likelihood the other side also has Apple ESI. Moreover, attorneys who are knowledgeable of the available technology to collect and process Apple ESI, have no reason to ignore Mac data any more.

Disclosure: The team at Digital Strata are personal friends and I have referred clients to them in the past.

A Standard for Undue Burden: Excruciating, But Highly Educational and Useful, Detail

Discovery Balancing Acts in a War Zone

United States ex rel. McBride v. Halliburton Co., is a qui tam action over alleged fraudulent billing for services provided to the US military in Iraq.  The case involved inflated headcounts in Morale, Welfare and Recreation (“MWR”) facilities and fraudulent billing for those costs to the United States government.  United States ex rel. McBride v. Halliburton Co., 2011 U.S. Dist. LEXIS 6412, 1-2 (D.D.C. Jan. 24, 2011).

Balancing Search Terms and Undue Burden

The discovery disputes were numerous, and in his trademark detailed fashion, Magistrate Judge Facciola addressed each one in turn. 

One dispute centered on the collection and searching of additional custodians who were “cc-ed” on relevant emails was justified or unduly burdensome on the producing party. McBride, at *12-22. 

The Defendants initially searched 20 custodians for responsive electronically stored information.  McBride, at *12.  The Defendants voluntarily searched the data a second time with expanded keywords.  McBride, at *13-14. 

The Plaintiff demanded additional information, which promoted the Defendants to run another expanded search.  McBride, at *14-15.  The Defendants searched 230 custodians, which included all custodians in all litigation involving the Defendants.  McBride, at *15.  The uber-search of did not result any hits for the desired custodian the Plaintiff wanted in their request.  Id.  The Defendant took the position that since the emails were not found in the custodians the parties agreed to search; the Defendants did not need to conduct any more searches.  Id. 

The Plaintiff demanded the Defendants conduct additional searches of anyone who had been “cc-ed” on the already relevant email messages with the relevant reports.  McBride, at *15. 

The Defendants objected, claiming that search would add another 35 custodians.  Moreover, the Defendants estimated the search process would take months.  McBride, at *15-16. 

Judge Facciola stated a phrase that will cast a shadow of what must be demonstrated for an effective undue burden argument: “In excruciating, but highly educational and useful, detail.”

The Defendants’ manager for the e-Discovery group submitted a declaration that explained process of how data is collected from employees, which might include the following sources of ESI:

 (1) The employee’s hard disk drive, which can include the original disk drive, a “ghosted” image of the drive, and self-collected copies of the drive, of which [the Defendants] may possess none, one, or several collections for each identified custodian;

(2) Copies of current or former employees’ electronic data made at different points in time in response to various audits, inquiries, and litigation, which copies may include information no longer on the employees’ hard drive today (or was not on the hard drive at the time of his or her departure); and

(3) The employee’s mailbox or “homeshare” (personal network folder), with the possibility that there could be multiple existent copies of both the mailbox and homeshare if the employee was a custodian in other matters; indeed, there are multiple sources of such data, and it is not usual for more than a dozen to exist.

McBride, at *16-17. 

The Court explained that after the data was found, it was then copied in “a forensically appropriate manner to preserve its metadata and prevent its alteration.” McBride, at *17. 

The collection of data in the US involved data being sent to a service provider from storage; however, things would be a little trickier for the data in Iraq.  McBride, at *17. 

The overseas ESI would need to be shipped back to the United States or harvested over network connections.  Id.  The collection over a network would take days from just one custodian.  The Defendants’ e-Discovery manager estimated that each custodian had 15 to 20 gigabytes of data.  Collecting the data could take two to ten days for each custodian.  McBride, at *17-18. 

The workflow would then include processing the data and de-duplication for review.  McBride, at *18.   The data would then be searched for relevance and privileged.  Id.

Utility vs. Cost of Searches

The Court gave a very succinct summary of discovery cost analysis: 

All discovery, even if otherwise permitted by the Federal Rules of Civil Procedure because it is likely to yield relevant evidence, is subject to the court’s obligation to balance its utility against its cost. Fed. R. Civ. P. 26(b)(2)(C). More specifically, the court is obliged to consider whether (1) the discovery sought is unreasonably cumulative or duplicative, or obtainable from a cheaper and more convenient source; (2) the party seeking the discovery has had ample opportunity to obtain the sought information by earlier discovery; or (3) the burden of the discovery outweighs its utility. Id. The latter requires the court to consider (1) the needs of the case; (2) the amount in controversy; (3) the parties’ resources; (4) the importance of the issues at stake in the action; and (5) the importance of the discovery in resolving the issues. Fed. R. Civ. P. 26(b)(2)(C)(iii).

McBride, at *18-19.   

The Court recognized a significant factor in favor of production: “Claims of fraud in providing services to military personnel raise important, vital issues of governmental supervision and public trust.” McBride, at *19.

However, the parties had spent $650,000 in discovery.  The “king’s ransom” in Judge Facciola’s words did not include attorneys’ fees. McBride, at *19.

The discovery already produced included two million paper documents, thousands of spreadsheets and half a million emails.  Id.

The Court denied the Plaintiff’s motion, because the Plaintiff had not demonstrated that the email messages not already produced were “critical to her proof.” McBride, at *19-20.  As such, the cost of the collection and search outweighed its utility. McBride, at *20.  In the words of the Court, “there is no showing whatsoever from what has been produced that those emails not produced will make the existence of some crucial fact more likely than not.”  Id.

The Federal Rules of Civil Procedure vs. Common Law Spoliation

The Plaintiff argued that the Defendants would violate a preservation order if they could not produce email messages from a specific custodian and should be sanctioned accordingly.  McBride, at *21.    The Court began its analysis with the following: 

It is important to keep separate, and not conflate, two distinct concepts: whether an additional search for certain information should be conducted, and whether or not the inability to find certain information should be sanctioned. The first is a question of interpreting the Federal Rules of Civil Procedure, while the second is a matter of the application of the common law principle of spoliation.

McBride, at *21.    

The Plaintiff’s sanction argument effectively would have a producing lose their right to argue against additional searches under Federal Rule of Civil Procedure Rule 26(b)(2)(C)(iii) if the producing party could not produce data they were asserted to preserve.  McBride, at *21-22.    

As the Court stated:

If that were true…then even an entirely innocent loss of information would deprive the party who occasioned the loss of reliance upon the balancing of the factors in Rule 26(b)(2)(C)(iii) to argue against an additional search. There is nothing in the Federal Rules that could possibly justify such an extraordinary sanction, and thereby rob Rule 26(b)(2)(C)(iii) of its intended universal application.

McBride, at *22.    

Bow Tie Thoughts

Proving undue burden requires specific documentation of the process used to collect data; where the data is location; time involved in collecting the ESI; and estimated cost.  While judges across the country will not be applying an “excruciating detail” test, parties need to demonstrate undue burden with evidence.

When “Undue Burden” Includes Back-Up Tapes from the Reagan Era

1987 was an important year: 

Baby Jessica was saved from a well;

Robert Bork was denied a seat on the Supreme Court; and

Teenagers across the world played air guitar to Whitesnake’s immortal “Here I Go Again.”  

It is also the year the Plaintiffs wanted to restore back-up tapes from in Makrakis v. Demelis.

The Plaintiff in Makrakis v. Demelis claimed he was improperly administered a drug in 2006, which caused him to develop kernicterus.  Makrakis v. Demelis, 2010 Mass. Super. LEXIS 223 (Mass. Super. Ct. July 13, 2010).

The Plaintiff brought a motion to compel back-up tapes from 13 hospital employees from 1987 to present.  Makrakis, at *1-2.  Moreover, the Plaintiff wanted the Defendants to hire a third-party vendor to search the back-up tapes with keywords.

The Defendants argued that restoring the back-up tapes would be unduly burdensome and cost prohibitive.  Makrakis, at *2.  Moreover, the Defendants had already obtained a large amount of discovery, including the following:

Hospital records of its investigation of the incident;

Plaintiff’s complete medical records from his five-month admission;

Deposition testimony of at least ten hospital employees; and

Copies of emails from the date of the incident that were preserved on the individual computers of several hospital employees. 

Makrakis, at *2-3. 

The Defendants also explained the cost of restoring the back-up tapes would be $550 per tape.  Makrakis, at *5.  The cost to restore back-up tapes for 16 months from 15 custodians would cost $575,000.  Moreover, the cost to restore back-up tapes going back to 1987 (approximately 264 months) would be “exponentially more expensive and time consuming.” Makrakis, at *5-6. 

The Court found the Plaintiff’s request to be unduly burdensome, because it was over a 22 year period of time.  Makrakis, at *6. 

The Court did strike a balance and allowed sampling of back-up tapes at the Plaintiff’s own expense.  Makrakis, at *6-7.  The Court specifically ordered the following: 

(1) The plaintiffs shall be entitled to obtain a sampling of relevant emails stored on the hospital’s backup tapes;

(2)  The plaintiffs shall determine the scope of the sampling by specifying (1) the applicable period of time, and (2) which email account or accounts must be restored;

(3) The plaintiffs shall bear the cost of restoring and searching the emails in this initial sample of backup tapes;

(4) The hospital shall restore the sampling of backup tapes as requested by the plaintiffs and shall produce all emails contained therein that are responsive to the plaintiffs’ discovery requests;

(5) Based on the information obtained from this sample, the plaintiffs may move for a further discovery order to compel further production of emails stored on backup tapes.

Makrakis, at *7-8. 

Bow Tie Thoughts

I think it is important to note that the cost of restoring the back-up tapes was only $550 a tape, which is actually a very reasonable number compared to 6 years ago in Toshiba America Electronics Components v. Superior Court, 124 Cal. App. 4th 762, 764 (Cal. App. 6th Dist. 2004). 

While restoring back-up tapes was considered “not reasonably accessible” because of cost several years ago, it is not necessarily the situation today.  Technology has improved to allow the indexing of back-up tapes at a fraction of the cost in the mid-2000’s (and sometimes lower than the amount cited in this opinion). 

However, when you factor in a request going back 22 years, the back-up tapes might as well contain data from the Apollo program.  One can imagine how many different generations of technology would be involved when the top personal computers in 1987 were running Windows 2.0 and the newest feature was the PS/2, the 6 pin port for a Mouse.

Discovery Games in Gaming Litigation

Discovery games were taking place in a gaming case in Mississippi. 

The Plaintiffs brought a motion to strike and a motion for sanctions for discovery misconduct in responding to requests for electronically stored information.  Maggette v. BL Dev. Corp., 2009 U.S. Dist. LEXIS 116789 (N.D. Miss. Nov. 24, 2009).  The Court did not grant the sanctions motion, but took a direct shot across the Defendant’s bow, stating:

This is not to say that sanctions will not ultimately be found to be warranted. The court has already imposed sanctions upon defendants for what it views as a casual, if not arrogant, rebuff to plaintiffs’ repeated efforts to obtain information which is ordinarily easily produced in litigation. Maggette at *6, fn 1.

The Court had earlier ordered the Defendants to “. . . search any available databases for responsive information and produce it to the plaintiffs.”  Maggette at *7.   

The Defendants claimed they had search for responsive ESI pursuant to the Court order, but failed to state what databases were searched, what methodology was used, what search terms were deployed or any expert report validating the position there was no responsive electronically stored information.  Maggette at *7-8.

The Court’s frustration was evident as it summarized the discovery issues at bar:

Further, the defendants have not provided any concrete reason or rationale for the numerous discrepancies within their discovery responses and the deposition testimony of their own employees. Nor has defendant articulated a satisfactory response to the court’s doubts expressed at the hearing that corporations as large and sophisticated as the defendants, which operate numerous gaming facilities across the country with various operations centers, do not have either paper files, electronic files or information or — even in light of Hurricane Katrina — backup measures and files for at least some of the information requested by plaintiffs. Maggette at *8.

Preservation Roulette: A Review

The Court noted that the Fifth Circuit Court of Appeals had not stated any standards for the preservation of electronically stored information and corresponding sanctions for the loss of ESI.  Maggette  at *8.

The Court looked to the Zubulake line of cases for guidance, citing the basic preservation obligation that the duty to preserve triggers when “the party has notice of the litigation or when it should have known that the evidence may be relevant to future litigation.” Maggette  at *8-9, citing Zubulake v. UBS Warburg, LLC, 220 F.R.D. 212, 216 (S.D.N.Y.2003).

Once there has been a triggering a reasonable anticipation of litigation, a party must suspend its records information management/destruction policy and enact a litigation hold.  Maggette  at *9.

Order for 3rd Party e-Discovery Expert

The Court had a big problem: It appeared the Defendants had not met their discovery obligations; however the Court could not hold so with certainty. Maggette  at *10.  As the Courts are to find the truth of an issue, the Court declined to rule on whether “the standards for preservation of electronic evidence and disclosure of all relevant evidence have been met or not met…” Maggette  at *11.

In what some experts would call a truly magnanimous Christmas gift, the Court stated it could not make “such a determination without further review by a third-party expert in the field of electronic discovery and who has knowledge of the gaming industry.”  Maggette  at *11.

Before any skeptics yell “Bah, Humbug,” the Court has very valid points in using a third-party expert to determine electronic discovery issues. 

The Court stated the Defendants had “failed to satisfy the court’s inquiries calculated to determine the legitimacy of their searches to date or whether they have in good faith attempted to use preservation techniques reasonably available to them…” right before ordering the costs to be paid by the Defendants.  Maggette  at *11.

The Court ordered the parties to agree on an expert who not only had knowledge or electronic discovery, but also the gaming industry, to “determine whether the defendants have met the standards for preservation of electronic evidence and disclosed all relevant evidence.”  Maggette  at *11.

Bow Tie Thoughts

When I was a young associate doing construction defect litigation, I did not personally rip out windows with a crowbar for destructive testing.  We had experts who could testify in court as to industry standards and how the work performed met or fell below those standards.  The same is true for issues with electronically stored information.

There are situations with electronic discovery requiring people with knowledge of SQL databases, CCE’s for collection of electronically stored information and strategies on what search terms will be effective or not.  This is a reality of the “digital age.”  The Court in Maggette not only realized this fact, but that it was necessary to have someone knowledgeable of the gaming industry as well.

Get Out the Check Book for Translating ESI into a Reasonably Usable Form in California

California Code of Civil Procedure 2031.280(e) states, in relevant part:

If necessary, the responding party at the reasonable expense of the demanding party shall, through detection devices, translate any data compilations included in the demand into reasonably usable form.

California Code of Civil Procedure 2031.280(e) might give anyone used to litigation in Federal Court pause.  The Federal Rules of Civil Procedure have no mention of “at the reasonable expense of the demanding party.” 

Reasonably Usable Form

The Advisory Committee Notes to Federal Rule of Civil Procedure Rule 26, and arguably CCP 2031.280(e), acknowledge that some electronically stored information as it is ordinarily maintained is not in a reasonably usable form, and thus requires translation into a form the requesting party can use.  See, Michael R. Arkfeld, Arkfeld on Electronic Discovery and Evidence, §7.7(F), 7-207-208.

Data Stream

Federal Rule of Civil Procedure Rule 34(a)(1)(A) defines electronically stored information as “data compilations–stored in any medium from which information can be obtained either directly or, if necessary, after translation by the responding party into a reasonably usable form.”

Magistrate Judge John Facciola explained Federal Rule of Civil Procedure Rule 34(a)(1)(A) in D’Onofrio v. Sfx Sports Group, Inc., 247 F.R.D. 43, 47 (D.D.C. 2008):

In other words, electronic data is subject to discovery if it is stored in a directly obtainable medium. If, however, it is not stored in a directly obtainable medium, a request may be made of the responding party to translate the electronic data into a “reasonably usable form.” Because the step of translating this type of electronic data adds an extra burden on the responding party, the request may only seek for it to be done “if [the translation is] necessary.” It is not the case that this clause requires the responding party to produce data in its original form unless “necessary” to do otherwise.

Traditional Rule for Discovery Costs

The traditional rule is that parties pay for their own discovery productions.  There are of course exceptions to this general rule.  Federal Rule of Civil Procedure Rule 26(b)(2)(C) gives a Federal Court the inherent authority to shift discovery costs to the requesting party or proportionally between the parties.   Additionally, Federal litigants may seek a protective order under Federal Rule of Civil Procedure Rule 26(c) if there is undue burden or cost.  See, Arkfeld, §7.4(G), 7-77.

Check Please

California & Cost Shifting

California provides a different, some might say clearer, others might say horrifying, solution when it comes to translating data compilations into a reasonably usable form and cost shifting:  The law requires mandatory cost shifting.  This requirement existed in the code prior to the Electronic Discovery Act and the major case addressing the issue is Toshiba America Electronics Components v. Superior Court, 124 Cal. App. 4th 762, 764 (Cal. App. 6th Dist. 2004).

In Toshiba, the parties fought over who would pay the cost to restore 800 back-up tapes spanning 8 years into a “reasonably useable form.”  The estimated cost was between $1.5 to $1.9 million. Toshiba, 765-766. 

The Requesting Party argued cost-shifting would be unfair, citing to Federal law and ignoring then California Code of Civil Procedure section 2031(g)(1).  Toshiba, 766. 

The lower court ordered the Producing Party to “produce all nonprivileged e-mails from its backup tapes within 60 days.” Toshiba, 767.

The Court of Appeals in Toshiba found that then California Code of Civil Procedure section 2031(g)(1) had mandatory language requiring cost-shifting.  As the Court of Appeals explained:

By enacting the cost-shifting clause of section 2031(g)(1) our Legislature has identified the expense of translating data compilations into usable form as one that, in the public’s interest, should be placed upon the demanding party. That is, section 2031(g)(1) is a legislatively determined exception to the general rule that the responding party should bear the cost of responding to discovery. When there is no dispute about the application of the statute, the statute automatically shifts the expense of translating a data compilation into usable form to the demanding party. The trial court’s decision, which was based upon the general rule that the responding party bears that expense, was based upon a faulty legal analysis and was, therefore, an abuse of discretion. Toshiba, 772.

California has continued the requirement for mandatory cost shifting for data compilations into a reasonably usable form with California Code of Civil Procedure section 2031.280(e).  While the provision does not have a built in mechanism to challenge the cost-shifting, a party can seek a protective order if there is undue expense or cost for translating the data into a reasonably usable form. Toshiba, 773.

So, if you are reqesting ESI that requires translation into a reasonably usable form, get the check book ready.

Rock Opera Discovery of Archived ESI

Rock HeroIn re In re Operadora DB Mex., 2009 U.S. Dist. LEXIS 68078 (M.D. Fla. May 28, 2009), is the story of an international legal dispute, arbitration and the Hard Rock Café.  While all of that makes for an exciting feature act, we will rock out to the electronic discovery issues. 

The Hard Rock Café was requested to produce electronically stored information and documents over 15 years, which included two changes in ownership and several document retention policies.  The Hard Rock argued that such a request was unduly burdensome and costly.  In re In re Operadora DB Mex., 14. 

Not withstanding the electronically stored information, the Hard Rock Café explained their “undue burden” in that it would take 10 to 20 days to review for responsive documents.  Moreover, the existing staff would have to perform the search, as there was no regular staff to search for responsive documents.  In re In re Operadora DB Mex., 14-15. 

Unduly Burdensome & Costly ESI

The Court found the Hard Rock Café made a preliminary showing that the archived ESI could be “costly and unduly burdensome.”  In re In re Operadora DB Mex., 31.  In separate litigation, the Hard Rock Café produced archived ESI and that the “opposing party incurred substantial costs in connection with searching same for relevant information.” In re In re Operadora DB Mex., 31-32. 

Failure to State the Form of Production

The requesting and producing parties both failed to state a form of production.  In re In re Operadora DB Mex., 32.  Pursuant to Federal Rule of Civil Procedure Rule 34, a responding party may specify the form of production.  ” Fed.R.Civ.P. 34(b)(1)(C).  If no form is specified, the producing party is required to state the form they intend to use.  Fed.R.Civ.P. 34(b)(2)(D).

Production of ESI Produced in Other Litigation

The Court’s options in resolving the discovery dispute for the archived ESI and determining the form of production included, “the implementation of a detailed and appropriately tailored discovery plan, ordering deposition(s) of personnel with the most knowledge of [Hard Rock Café]’s electronic data storage, retrieval, and search capabilities, and/or shifting the costs of discovery to the requesting party.”  In re In re Operadora DB Mex., 32. 

The Court ordered the Hard Rock Café to produce the ESI that it had “readily available in electronic format” from the separate litigation, solving part of the discovery dispute.  In re In re Operadora DB Mex., 33.

Good Faith Meet & Confer for Archived ESI

The Court stated it was premature to determine a form of production for the archived ESI.  The parties were ordered to meet and confer on a form of production.  In re In re Operadora DB Mex., 33.

The meet and conference needed to address the following:

  • A good faith disclosure of the archived data by [Hard Rock Café], including the medium on which the archived data is stored, the volume of the archived data, the practicability of searching the archived data for responsive data, the likely costs associated therein, and any other pertinent information available to [Hard Rock Café] regarding the most practical means and methods of facilitating a prompt and cost efficient search of the archived data files for information responsive to the subpoena;
  • Each party shall have IT personnel or individual(s) with expertise or specialized knowledge in the mechanics and likely costs of such data extraction at the good faith conference;
  • After [Hard Rock Café]’s disclosure, the parties shall jointly evaluate the costs associated with discovery of responsive archival data versus the need for said data at the Arbitration; and
  • The parties shall make a good faith effort to agree upon a resolution of the archived data discovery dispute without the Court’s involvement. 

 In re In re Operadora DB Mex.,33-34. 

Bow Tie Thoughts

I am a proponent that Federal Rule of Civil 26(b)(2)(B)’s definition of “not reasonably accessible” does not automatically make “unduly burdensome” equal costly.  In this case, part of the undue burdensome analysis included the lack of staff to conduct a search and the subsequently man hours lost in a review.  While this would ultimately have a dollar sign attached to it (because time equals money), showing up to court with an estimate from a vendor for preservation, collection or processing is not the only way to show ESI is not reasonably accessible.

It is also worth noting that the parties were required to have at the meet and confer “IT personnel or individual(s) with expertise or specialized knowledge in the mechanics and likely costs of such data extraction.”  In re In re Operadora DB Mex.,33-34.  This was not meant to sound as a holiday gift card to an e-Discovery service provider, but an acknowledgment that the electronically stored information can require specialized knowledge to resolve ESI issues.