E-discovery thought leaders will discuss the impact of recent significant opinions such as the Pension Committee decision and Rimkus on legal requirements and show how to accurately identify preservation triggers, identify the right custodians and data sources at the right time, manage internal compliance risks, set-up a courtroom ready preservation process, and effectively utilize technology for cost savings and competitive advantage
2. Today’s E-Discovery Wranglers
Seth Rothman
Partner and Co-Chair of the E-Discovery Practice Group
Hughes Hubbard & Reed LLP
Thomas Mueller
Partner, Co-head of the E-Discovery Task Force
Morrison & Foerster LLP
William Belt
Shareholder and Leader, E-Discovery Solutions Practice Group
LeClairRyan LLP
Farrah Pepper
Of Counsel and Vice Chair, Electronic Discovery and Information Law Practice Group
Gibson Dunn & Crutcher LLP
Moderated By:
Sarah Centrella
Director of Fusion Cloud
Exterro Inc
3. Overview
The changing landscape of E-discovery
1 Recent rulings and opinions
2 The duty to preserve
3 Creating a courtroom ready preservation process
4 Practical advice
5 Preservation to-do list
4. Pension Committee Recap
PLAINTIFFS
Group of institutional Investors
DEFENDANTS
Two hedge funds et al
DISPUTE
$500 million securities fraud action
5. Pension Committee Case Summary
Oct. 2007:
Apr. – Jul. 03: Plaintiffs ordered to
Hedge fund placed into Feb. 12, 2004: Early 2007: provide declarations
Bankruptcy Receivership Plaintiffs bring Stay expires; regarding efforts to
action to recover plaintiffs institute preserve and
investment losses legal hold produce data
Oct. – Nov. 03:
Plaintiffs retain
counsel Aug. 2007:
Feb. 2004:
Plaintiffs’ depositions
PSLRA stay goes into effect;
reveal gaps in plaintiffs’
no legal hold issued before
document productions
or during stay
Oct. 07 – Jun. 08:
Additional depositions
reveal discovery
failures, misstatements
in declarations; some
declarations amended
6. Pension Committee Case Summary
WANTED! WANTED! WANTED!
2m Hunnicutt Coronation
Did not preserve or produce Ignored key employees; Ignored key witnesses;
documents prior to 07; made incorrect ignored repositories known to
produced large volume of declarations; deleted contain potentially relevant
emails on Aug. 09, after emails data; delegated collection to
opposing defendants’ motion untrained employees
REWARD REWARD REWARD
$550,000,000 $550,000,000 $550,000,000
7. Pension Committee Case Summary
WANTED! WANTED! WANTED!
Chagnon Bombardier Bombardier
Plaintiffs Trusts Foundations
Ignored key witnesses Ignored key witnesses; Failed to preserve files from
did not search or key players; back-up tapes
preserve files prior to overwritten; arbitrarily
2007 withheld documents
REWARD REWARD REWARD
$550,000,000 $550,000,000 $550,000,000
8. Pension Committee
The Good, The Bad, and The Ugly…
Backup tapes need not be Duty to preserve triggered It is gross negligence if you:
preserved, provided they before litigation Fail to identify key players
are not the sole source of commences, especially for and preserve their
relevant information plaintiffs documents
Self collection is Failure to issue document Fail to preserve data for
permissible, as along as hold is grossly negligent and former employees
there is attorney oversight sanctionable
Fail to preserve backup
Failure to suspend tapes that are the sole
document retention and source information
destruction policy is grossly
negligent and sanctionable
9. Rimkus Decision Recap
PLAINTIFFS
Consulting firm (forensic engineering)
DEFENDANTS
Two former employees
DISPUTE
Enforcement of non-competition and
non- solicitation agreements,
misappropriation of trade secrets
10. Rimkus Decision: Facts
June 2009:
Jan./Feb. 07: Apr. 2009: Defendants
Sept./Nov. 2006: Rimkus sues in Texas Rimkus moves Court to produce 60 emails
Defendants resign federal court for breach of compel search of personal
to create U.S. employment agreements email accounts; seeks
Forensics, Inc. and misappropriation of sanctions against counsel
trade secrets and defendants, including
Nov. 2006: monetary sanctions Jun. 2009:
Defendants sue in Search of personal
Louisiana state court for email results in
Mar. 2007: May 1, 2009:
declaratory judgment additional production
Discovery Court finds discovery
regarding enforceability of
begins in Texas efforts superficial and
employment agreements
permits subpoena to
Oct. 2007: search/collect email
Depositions begin — one maintained by third party
Defendant produces just service provider
two emails
11. Rimkus Decision: Facts
Aug. 6, 2009:
At discovery motion
hearing, Court orders Sept. 2009: Feb. 2010:
defendants to search At depositions,
Defendants sanctioned
accessible data; defendants reveal that
reopens depositions they’ve been following
their normal practice of
deleting emails and never
issued instructions to
Aug. 28, 2009:
preserve data
Depositions reveal
previously
undisclosed personal
email accounts Sept. 13, 2009:
One defendant produces
new loose media and
paper files
12. Rimkus
The Good, The Bad, and The Ugly…
Adopts proportionality Duty of preservation often Scope of preservation is
approach for judging triggered before litigation broad enough to cover all
conduct commences, especially for responsive documents
In 5th Circuit you need bad plaintiffs Rule 37(e) exceptions are
faith to support severe Litigants cannot ignore, but not applicable after the
sanctions must sample, sources of duty to preserve arises
Takes into account data that are not readily
prejudice and mitigation accessible
efforts
13. Key Takeaways
Legal holds are a must, courts require
more than a memo
Preservation obligations start early,
especially for plaintiffs
Sample data to determine scope of
preservation — backup tapes
Set a “standard of care” for eDiscovery
14. The Duty to Preserve
When is the duty to preserve triggered?
Receiving a Providing Notice to Filing of Claim with
Preservation Letter Insurance Carrier Administrative
Agency
•Palgut v. City of Colorado •Phoenix Four, Inc. v. •Zubulake IV, 220 F.R.D. 12
Springs, No. 06-cv-01142, Strategic Resources, Inc., (S.D.N.Y. 2003)
2007 WL 4277564 (D. Colo.
Dec. 3, 2007) Retaining No. 05-cv-4837 (S.D.N.Y. •Chirdo v. Minerals
Counsel and Experts May 23, 2006) Technologies, Inc. No. 06-
5523, 2009 WL 2195135
•Silvestri v. GM, 271 F. 3d 583 (E.D.pa July 23, 2009)
(4th Cir. 2001) •Scalera v. Electrograph
Sys., Inc. No. CV 08-50,
•Wade v. TifflinMotorhomes, 2009 WL 3126637 (E.D.N.Y.
Inc., No. 5:05-CV-1458, 2009 Sept 29, 2009)
US Dist. LEXIS 99831 (N.D.N.Y.
Oct. 27, 2009)
15. The Duty to Preserve
Identifying preservation triggers
Preservation duty Must be a probability When litigation is
may being when of litigation, not just probable, not merely
litigation is likely general concern possible
•Wm. Thompson Co. v. •Realnetworks Inc., v. •Willard v. Caterpillar
General Nutrition DVD Copy Control et Inc., 48 Cal. Rptr. 2d
Corp., 593 F. Supp. al., 2009 U.S. Dist. LEXIS 607, 620-21 (Cal. Ct.
1443, 1455 (C.D. Cal 38221, at *28 (N.D. Cal. App 1995)
1984). 2009)
•Rowe v. Albertsons,
116 Fed. App. 171, 175
(10th Cir. 2004)
(applying Texas law)
16. The Duty to Preserve
Application of this standard to Plaintiffs
Must necessarily
Duty to preserve Duty to preserve
anticipate litigation
triggered before arose when retained
before complaint is
litigation commences counsel
filed
•Pension Comm. Of the •Innis Arden Golf Club v. •Cyntegra, Inc. v. Idexx
Univ. of Montreal Pitney Bowes, Inc., 257 Labs, Inc. No. 06 Civ.
Pension Plan., 2010 F.R.D. 334, 340 (D. Conn 4170, 2007 U.S. Dist.
U.S. Dist LEXIS 4546 at 2009) LEXIS 97417 WL
*16 (S.D.N.Y January 15, 5193736, at *3 (C.D.
2010) Cal. Sept. 21, 2007)
17. Creating a Courtroom
Ready Preservation Process
Determine What Information Would be
Relevant to Dispute
Identify Each Data Source that
Potentially Contains Relevant
Information
IF DATA SOURCE LIKELY TO
IF DATA CONTAIN RELEVANT INFORMATION
SOURCE NOT
RESONABLY
LIKELY TO Determine Degree of Accessibility of IF THERE IS HIGH
CONTAIN Data Sources that are Likely to Contain DEGREE OF
Relevant Information ACCESSIBILITY
RELEVANT
INFORMATION
IF THERE IS LOW DEGREE
OF ACCESSIBILITY
YES Do Substantially Similar Copies of
Relevant Information Exists in More
Readily Accessible Data Source?
NO
YES In Cost or Burden of Preservation NO
Preservation Not
Excessive as Compared to the Preservation Required
Required
Relevance or Value of the Information?
* Source: The Sedona Conference®
19. Creating a Courtroom
Ready Preservation Process
Scoping for Key Players and Data Sources
Using interviews to determine preservation
data sources and custodians
Personal and automated interviews
Pros and cons of self-collection
Identifying outlier data
20. Creating a Courtroom
Ready Preservation Process
Monitoring and Tracking Compliance
Legal hold follow-up is critical
• Cache La Poudre Feeds, LLC v. Land O’Lakes Farmland Feed, LLC, 2007 WL 684001 (D.
Colo. Mar. 2, 2007)
• Green v. McClendon, No. 08-Civ-8496, 2009 WL 2496275 (S.D.N.Y. Aug. 13, 2009)
Periodic reminders
Modifications
Track responses
• Acorn v. Co. of Nassau,2009 WL 605859, (E.D.N.Y. Mar. 9, 2009)
21. Judicial Expectations
Preserve promptly and accurately informed by
facts
Send well-written hold notices
Think about non-custodial sources and processes
(e.g., back-up tapes, shared servers, ex- or exiting
employees)
Be able to articulate why your protocols are
defensible and reasonable
Leave no “red flags” unexamined
22. Practical Advice
Systematic protocols and processes may
mitigate risks and burdens
Be proactive versus reactive
Increasing importance of documentation
Utilize the meet-and-confer process wisely
Strive for reasonable, cooperative, transparent,
proportional and iterative e-discovery practices
23. Conclusion – Preservation “To Do” List
Recognize a trigger
Quickly and accurately determine scope
Effect protocols to properly preserve
Track follow-up and modify as needed
Document the process to defend against criticism
