Introduction: This is the second article in a series of short informational pieces relating to one of the hottest topics in litigation over the past five years - electronic discovery. The purpose of this series is to provide your business entity with some guidelines on how to most efficiently organize itself to deal with electronic discovery. These articles will continue to be emailed regularly over the next few months. If you are new to our distribution, or if you would like to view previous articles in this series relating to ESI, visit our website.
As noted in our first article of this series, we assume that you have already developed good faith policies and procedures for the preservation/retention/destruction of documents and Electronically Stored Information (ESI) in the regular course of business. This is largely a function of whether the policy is based on rational considerations of cost and benefit, whether the plan was applied consistently and whether there is a provision for the suspension of the plan when necessary. If you have done so, you will benefit from the "Safe Harbor" provisions of the Federal Rules of Civil Procedure, see Federal Rule 37(f) (no sanctions for destruction of ESI in good faith).
Having previously developed a document retention policy, and in anticipation of that day when your company almost assuredly will face a request for documents from the government, an adversary or a third-party, your ESI discovery team must focus on the following issues and plan for them.
What documents do we have?
Identify the scope, breadth, and depth of ESI that may be sought during discovery, taking potential claims and defenses into consideration.
What should be retained?
Reducing the amount of ESI that is retained will save cost of e-discovery. Limit the volume of information; save only important business records, documents required by law, regulatory records, and documents relevant to potential litigation. Personal records and communications should not be stored on company computers.
Where is it?
After determining the scope of ESI there must be an analysis of where the content resides in the organization's system. If organizations are not certain where ESI resides, the litigation hold will be too expansive resulting in extra disruption and costs. If you know where it is, you can find it more easily. This is often referred to as an "ESI Map."
How do we preserve it?
First, take control of the key players' media used in creating or keeping ESI, eg. phones, PDA's, laptops, etc. These "key players" are the ones who control the records. Second, suspend the document destruction procedures. This second step is also known as a litigation hold - the duty to preserve documents when litigation is reasonably anticipated, usually before the service of a lawsuit. We will be addressing litigation holds in a separate, upcoming article.
How do we find it and gather it?
Determine the best document collection strategy for your business. Are you going to gather the information in-house or use an outside vendor? Will you use software programs or perform manual searches? If you use software, will you use off-the-shelf programs or custom software?
After we find it, what form should we save it in?
The best way to preserve ESI is to first collect, then copy the media. There are numerous methods available to copy media, as referenced in the section above. Consult with your IT advisors to determine what software is best for your operation.
How do we review it?
Processing includes reviewing and analyzing the ESI. Tasks associated with processing include determination of duplicate information, relevance and privilege review and evaluation of ESI for more efficient use. This is often the most expensive part of electronic discovery. It can be helpful to convert ESI to a form that allows a more effective and efficient review. There are software programs that are designed to assist the process, but they are often very expensive.
How do we produce it?
Determine the best format for producing the ESI. Following are the four formats most commonly used:
- Native format: the format in which the file was created
- Quasi-native format: for example extracting part of a data base and loading it into another data base to produce a final format
- Quasi-paper: converting ESI into TIFF or PDF format
The need for pre-planning between counsel and client.
In order to fulfill legal obligations to ensure that all sources of potentially relevant client information are identified and preserved, counsel must become fully familiar with the client's document retention policies, as well as the client's data retention architecture.
Ultimately counsel, whether in-house or outside, must respond to the courts regarding the adequacy of ESI discovery. If counsel is not properly informed, or if inventories and records policies have not been properly prepared, counsel will be limited in their effectiveness. This involves risk both for the lawyer and the business client. Thus, a business litigant cannot avoid legal counsel involvement. The critical variable is timing - when should legal counsel be brought in to the discussion? Hopefully, the answer is obvious - sooner rather than later.
In the next Legal Watch Series: Preparing for E-Discovery newsletter, we will explore and discuss the parameters of accessibility. Accessibility is a key concept in the e-discovery landscape because ESI that in inaccessible due to burden and cost is presumed not to be discoverable. Stay tuned!
About the Author
For more information or questions regarding E-Discovery and the Rules for Electronically Stored Information Management, contact Michael R. Palumbo.
Michael R. Palumbo focuses his practice on commercial and real estate litigation. Particular areas of experience include banking (UCC Articles 3 & 4) litigation; title insurance, escrow agent and Deed of Trust litigation; and quiet title, adverse possession, homeowners' associations and real estate agent disputes. He has participated in more than 50 trials in the Superior Courts of Arizona and District Court of Arizona, in most of which he was lead counsel. Mr. Palumbo can be reached at 602.262.5931 or firstname.lastname@example.org.
Resources Used for This Legal Watch
- Stio and Quigley, Getting a Grip on the Litigation Hold, e-discovery, ABA Section on Litigation, 2007, p.20
- Zublake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y.)(Zublake V)