As the volume of electronically stored information (ESI) being generated continues to eclipse the number of hard copy documents being created, the focus of modern discovery is on electronic documents. In the not too distant future, most of the information produced in discovery will be electronic and any distinction that may now exist between “discovery” and “eDiscovery” will have disappeared.
With the wide range of electronic devices and software being used by companies to conduct business, in addition to social media, the Internet and the cloud, the preservation and collection of electronic data from all the necessary sources can be a daunting task. While discovery sanctions are issued in only a small percentage of the cases filed each year, concerns about being sanctioned for spoliation of evidence are legitimate and cannot be ignored.
Fortunately, courts have made it clear that perfection is not the standard parties are held to in discovery. Courts expect litigants to have a reasonable, repeatable, defensible process for preserving, collecting and producing ESI. While each case is different, certain approaches can be taken and certain fundamental principles applied by companies to comply with their discovery obligations and reduce their chances of spoliating evidence.
Designing the Litigation Hold
When a company reasonably anticipates that it will be bringing a lawsuit or that it will be sued, it has a duty to preserve relevant documents and ESI. Often, it is difficult to determine exactly when a company “reasonably anticipates” litigation and when the duty is triggered. In-house counsel should be made aware of facts and circumstances that lead employees to reasonably believe that the company could be sued or could have a basis to sue someone. In-house counsel can then confer with outside counsel to determine if a litigation hold should be implemented.
Determinations about the scope of a litigation hold and the people who should be subject to the litigation hold are best made by a team consisting of outside counsel, in-house counsel, people at the company who have knowledge of the facts of the case, and members of the IT department.
The employees and agents of the company are in the best position to provide information about the facts underlying the dispute, the people at the company who were involved, how those people communicated with others (both inside and outside of the company) about the issues in dispute and what electronic documents relate to the dispute. This information will help counsel identify the people at the company who need to receive the litigation hold notice; the names and email addresses of the people inside the company and outside of the company whose data should be searched for to locate documents relevant to the case; the devices that will need to be preserved and searched, such as tablets, company-issued cell phones and personal cell phones; and the types of ESI that will be relevant in the case, such as emails, text messages, voicemail systems and audio recordings of customer calls.
The IT department can provide information that is critical to an effective litigation hold. This includes the number of servers where the relevant ESI exists and where those servers are located; the devices that have been issued to the likely custodians, including laptops, cell phones, tablets and external hard drives; which custodians use personal devices for work purposes (and, therefore, their devices may contain ESI that will be subject to the litigation hold); the company’s policies and procedures for backing up data and the location of relevant backup tapes; any cloud storage vendors used by the company; and the steps that need to be taken to suspend the auto-delete functions on the company’s computer systems and devices where relevant ESI may be located.
A lesson to be learned from the recent In re Pradaxa case, is the importance of understanding how the company’s data is maintained, what automatic deletion processes are in place, and which devices are issued to which employees. In that case, the court sanctioned the defendants for failing to suspend a program they had installed on the cell phones they issued to their sales representatives that automatically deleted text messages on those devices. In addition, the initial litigation hold notice defendants sent to their sales representatives did not expressly tell them to preserve text messages, even though a document showed that the defendants had directed their sales representatives to use text messages to communicate with their supervisors, district managers and others.
It is also advisable to consult with the company’s Human Resources department to find out whether a custodian will be retiring or leaving the company soon. They can then be interviewed by counsel before they leave the company, who can decide whether to image the employee’s laptop and can make sure that their laptop and cell phone are not wiped and given to another employee.
All this information will assist counsel in determining the scope of the factual information that is relevant to the case and must be preserved, where that information resides, the custodians whose information is subject to the hold, and the types of devices that must be preserved and searched. Based on their analysis of the legal issues in the case and the arguments they anticipate making on behalf of the company, counsel can identify additional categories of information that should be preserved and other custodians who should receive the hold notice and preserve their ESI. Once counsel drafts the litigation hold notice, the team members who are not lawyers are an invaluable resource for assessing the clarity of the notice. If the feedback from the non-lawyers is that they don’t understand what the notice is telling them to do or that it contains too much legalese, counsel should revise the notice to remedy those problems. Counsel also play an important role in making sure the custodians receive the litigation hold notice, understand it and comply with it.
Data Preservation Decisions
In determining what data should be preserved, many litigation technology consultants and providers will advise companies to “preserve wide and process narrow,” meaning, in part, to include a broad group of custodians in the litigation hold but, at the initial stage of the litigation, process the data of only the key custodians, as identified by the team.
Through custodian interviews and input from the IT department, the company’s attorneys will confirm the types of technology and electronic devices used by the key custodians for work purposes. They then can formulate a plan for preserving and collecting data from those sources. In circumstances where there appear to be data gaps or ESI appears to have been deleted from a device used by a custodian, the team should evaluate whether to take a full forensic image of the devices and related storage drives. The team may decide to image the data portion of the drive as well as empty or free space, as this may enable data to be recovered, undeleted or restored in the future.
Legal and IT Input
It is advantageous to have the team collaborate on developing the specifications for the processing and production of the data. Examples of those kinds of specifications include instructions to include or exclude data by date ranges, file types and source folders; to include or exclude hidden files and columns; and how to handle spreadsheets, calendar items and system files. It is important that the team understand the specifications that will be used before the data is processed, either by the company or by a service provider. The way in which data is processed and produced generally varies depending on a variety of factors including the type of case, the type of data, the preferences of the attorneys involved, and the forum in which the case is being litigated. For example, agencies such as the Department of Justice and courts, like the U.S. District Court for the District of Delaware, have specific requirements for how data must be produced in matters pending before them.
Regardless of the type of case or the forum in which it is being litigated, it is critical in every case that the specifications are determined at the outset of the matter, that they are documented, that they are clearly communicated to the person who will process the data (whether that is someone within the company or a service provider) and that the team verifies that the person tasked with processing the data has an accurate understanding of the specifications. Miscommunications can result in the data being processed incorrectly and needing to be re-processed, which causes delay and increased costs. The team may consider using a service provider that offers a database for processing specifications that is connected to the processing engine, which reduces the risks of transposition errors and omissions when the specifications are inputted. The same considerations and systems should be used for production specifications used to create and QC document productions. Those systems can also help with documentation, as they create online records detailing the specifications that were used to process each set of data. Those records can be used if the company’s review process is challenged in the litigation.
Team Approach to Searching
In cases involving ESI, the company will want to consider trying to reach an agreement with the opposing party on a list of search terms that both parties will use to search their databases to identify electronic documents that are likely to be relevant and should be produced.
In order to ensure that the search terms are appropriate and likely to identify the information that is relevant to the case, the company’s outside counsel, in-house counsel and the people at the company who have knowledge of the facts of the case (and who will most likely be custodians of the relevant information) should work together. The employees, who will include the individuals who drafted and read the documents that are being sought, are in the best position to advise the lawyers on the business terminology that was used: the keywords, abbreviations and project names that were used; the names of the people who were involved in the matter; and the connectors that can be used to increase the chances of locating relevant documents while limiting the number of irrelevant documents that get pulled in by the search.
After the list of search terms is created, the IT department should be brought in to give their input on the number of “hits” that each search term will generate. If certain search terms are likely to generate an unexpectedly large volume of data, the team can discuss ways to refine the search terms to try to reduce the number of irrelevant documents and focus in on the relevant documents.
The team should collaborate on the analysis of the search terms proposed by the opposing party. The custodians will be able to direct the lawyers’ attention to terms that may not be relevant to the issues in the case. Some of the search terms may remind custodians of a fact, conversation or document that they had not thought about before and that the rest of the team should know about, since the opposing party is interested in it. Based on the search terms, the lawyers may notice a new legal argument that the opposing party is pursuing and they can then get information about it from the custodians. The IT department should also review the search terms requested by opposing counsel. If they identify requests that are likely to yield an unduly burdensome number of hits, the IT department can provide outside counsel with detailed information about the burden and cost associated with those requests. Armed with that information, outside counsel can meet and confer with opposing counsel to try to get them to modify or withdraw those searches. If an agreement cannot be reached, outside counsel will use the information provided by the IT department to explain to the Court why the company should not be required to run those searches or why the costs associated with those searches should be shifted to the opposing party.
The importance of custodians participating in the creation of search terms is underscored by a recent order in a federal court case in Florida, Procaps S.A. v. Patheon Inc. The court held that a company’s outside counsel had failed to get input from the company’s ESI custodians about the appropriate search terms for the case. Due to that failure, the opposing party had to file a motion to compel them to do so. The court granted that motion and awarded the opposing party $3,750 in attorney’s fees, $1,000 of which the court ordered had to be paid by the company’s lead attorney and the remaining $2,750 of which had to be paid by the outside law firm.
Focus on Quality Control
At every stage of the process, it is important to document and verify the workflow and the technology being used. The technology that has previously been used to select, filter and cull data based on search terms is now being used to validate those terms prior to a “meet and confer” and prior to the processing and review of documents. This technology enables the team to run “what if” scenarios and develop metrics on the precision and recall of search terms as well as the volume of responsive and non-responsive documents captured by the search terms. The validation workflow can also allow the team to see how many responsive documents are not being included in the search results. Leveraging technology early in the case can help the team control costs, manage budgets and refine its litigation strategy.
The production of electronic data has become an accepted part of the discovery phase of litigation. The focus on electronic evidence will likely only increase as more companies conduct business online and communicate with their customers and employees through email, text messages, social media and other forms of technology. As new devices that run more applications and have more storage capacity come on the market, the challenges associated with preserving, collecting and producing corporate data will surely increase. This will also increase the importance of bringing outside counsel, in-house counsel, members of the IT department and business people together in teams so they can share their knowledge, experience and perspectives in order to achieve the best, most cost-effective outcomes for their companies.