2007 – Page 23 – Electronic Discovery Law

Creating a Strong Foundation for Your Company’s Records Management Practices

Oct 23 2007

K&L Gates partner Thomas J. Smith and William B. Dodero, Senior Counsel at Bayer HealthCare LLC in Wayne, New Jersey, have co-authored an article appearing in the November 2007 issue of the ACC Docket, entitled: “Creating a Strong Foundation for Your Company’s Records Management Practices.” The article provides valuable guidance on the proactive steps companies can take to develop policies and implement practices to improve their records management practices. View the complete article here.

Reprinted with permission of the authors and the Association of Corporate Counsel as it originally appeared: Thomas J. Smith and William B. Dodero, "Creating a Strong Foundation for Your Company’s Records Management Practices," ACC Docket volume 25, issue 9, (Nov. 2007): 52-64. Copyright © 2007, the Association of Corporate Counsel. All rights reserved. If you are interested in joining ACC, please go to www.acc.com, call 202.293.4103 x360, or email membership@acc.com.

Judicial Conference Submits Proposed New Evidence Rule 502 to Congress for Enactment

Oct 19 2007

On September 27, 2007, the Judicial Conference of the United States submitted proposed new Evidence Rule 502 to Congress through identical letters to the Committee on the Judiciary of the United States Senate and the Committee on the Judiciary of the United States House of Representatives. The letters provide a description of the process that led to the proposed rule, an explanation of the problems sought to be addressed, the protections against waiver of privilege or work product afforded by the proposed rule, and drafting choices made by the Advisory Committee on Evidence Rules in crafting the language of the proposed rule. The Judicial Conference recommended that proposed new Evidence Rule 502 be adopted by Congress “as a rule that will effectively limit the skyrocketing costs of discovery.”

Proposed new Evidence Rule 502 contains four main provisions. The first codifies the majority view and protects a party from waiving a privilege if privileged or protected information is disclosed inadvertently in a federal court proceeding or to a federal public office or agency, unless the disclosing party was negligent in producing the information or failed to take reasonable steps seeking its return. The second protects a party from waiving a privilege covering all documents dealing with the same subject matter as a document that was disclosed, unless fairness requires such an extreme result. The third protects a party from waiving a privilege or protection if the court enters an order providing that disclosure of privileged or protected information does not constitute a waiver. The order is enforceable against all persons in any federal or state proceeding. The fourth provides that parties in a federal proceeding can enter into a confidentiality agreement providing for mutual protection against waiver in that proceeding, binding only the parties.

Earlier, on September 18, 2007, the Judicial Conference approved proposed Evidence Rule 502 and agreed to transmit it to Congress with a recommendation that it be enacted according to law. At that time, the Judicial Conference considered the September 2007 Report of the Standing Committee, which explained the rationale behind the proposed rule as follows (beginning at p. 32):
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U.S. District Court for the District of Vermont Amends Local Rules to Address E-Discovery

Oct 19 2007

Effective September 1, 2007, the United States District Court for the District of Vermont amended its Local Rules to address the discovery of electronically stored information (“ESI”). Section (b) of Local Rule 26.1 now requires, where appropriate, the inclusion of deadlines for the disclosure of ESI, and affords an additional 15 days time in which the Discovery Schedule may be filed – Discovery Schedules are due within 45 days (instead of 30) after the filing of the Answer.

In addition, the Court’s Local Form, “Stipulated Discovery Schedule/Order,” has been amended to include language instructing parties to include deadlines for the disclosure of ESI, along with “any other agreements the parties reach, for example, agreements concerning the assertion of privilege or work product after production.”

The Clerk of Court’s Notice of Changes to Local Rules of Procedure is available here, and highlights the recent amendments.

Click on the following links to see amended LR 26.1 and the new local form:

Local Rule 26.1 Discovery

Local Form Rule 26.1(b): Stipulated Discovery Schedule/Order

For a complete listing of local federal rules and guidelines addressing electronic discovery, see our updated post on the subject here.

Finding Burden of Retention and Production Outweighs Benefit, Court Allows Recycling of Back Up Tapes

Oct 19 2007

Gulfstream Worldwide Realty, Inc. v. Phillips Elecs. N. Am. Corp., 2007 WL 5685128 (D.N.M. Oct. 19, 2007)

In this case, arising out of a claim for a commission on the sale of a semiconductors plant, Phillips Electronics North America (“PENAC”) moved the court for a protective order to allow NXP Semiconductors USA, Inc., a non party, to erase and reuse backup tapes that potentially contained information relevant to the lawsuit. NXP’s backup tapes are implicated by its relationship with Royal Phillips, PENAC’s parent company and the holder of a 19.9% interest in NXP, a company formed following Royal Phillips’s sale of its semiconductor business. Many of the former employee’s of Royal Phillip’s semiconductor business went to work for NXP.

Litigation Hold Notices Protected by Attorney-Client Privilege and Work Product Doctrine

Oct 09 2007

In re eBay Seller Antitrust Litig., 2007 WL 2852364 (N.D. Cal. Oct. 2, 2007)

Plaintiffs moved for an interim preservation order because, in their view, defendant eBay had failed to disclose sufficient information regarding the efforts it was making to ensure that relevant ESI was preserved and collected. Although the parties agreed that eBay would provide a witness to testify under Rule 30(b)(6) of the Federal Rules of Civil Procedure regarding its ESI preservation and collection efforts, they disagreed about whether eBay must produce the “document retention notices” (“DRNs”) it sent out to approximately 600 of its employees, and whether eBay must disclose the names and job titles of those approximately 600 employees.

The court ruled that eBay need not produce copies of the DRNs, nor any information about matters contained therein that were privileged or constituted work product. However, the court ruled that plaintiffs were entitled to inquire into the facts as to what the employees receiving the DRNs had done in response. The court elaborated:
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K&L Gates Lawyer Quoted in Paralegal Management Magazine

Oct 05 2007

In an article titled "The New Electronic Discovery Rules" in the July/August 2007 issue, K&L Gates lawyer Tom Smith spoke up on the need for proactive preservation and disclosure of electronically stored information.

"Lawyers cannot ‘punt’ the due diligence of searching for and identifying sources of relevant electronically stored information to their clients; nor can in-house counsel delegate the issue ot the IT staff. The new rules and related developing case law place the burden squarely on counsel to understand the client’s electronic information systems and to be prepared to explain to opposing counsel and the court where potentially relevant electronically stored information resides, how it is being preserved, and how it will be searched, reviewed and produced."

While the full text of the article is not online, back-issues can be ordered through the International Paralegal Management Association.

Morgan Stanley to Pay Millions for E-Mail Mismanagement

Sep 28 2007

By Elena Malykhina from InformationWeek, September 28, 2007:

"The Financial Industry Regulatory Authority this week said Morgan Stanley has to pay $12.5 million in fines to resolve charges for mishandling e-mail dated before the Sept. 11, 2001, terrorist attacks.

Morgan Stanley on numerous occasions failed to provide e-mails requested by claimants in arbitration proceedings and regulators, FINRA said.

The financial company previously had stated that its e-mail servers were destroyed in the 9/11 attacks, resulting in the loss of e-mails archived prior to that date. Morgan Stanley presumably had lost millions of pre-9/11 e-mails, but it was later discovered that they had been restored to the company’s active e-mail system using backup tapes, which were stored in another location. "

Click here to read the entire story on InformationWeek.

2007 Cohasset ARMA AIIM Electronic Records Management Survey Results Released

Sep 27 2007

From Cohasset: "The survey’s conclusions are based on data compiled from more than 1600 respondents in 2007 and a total of more than 5500 in the survey’s four prior years – 1999, 2001, 2003 and 2005.

Five major conclusions :

1. Most organizations have serious operational shortfalls regarding the processes by which they manage electronic records, one of their most important assets. The findings of Cohasset’s earlier surveys continue to be verified in this regard.

2. This year’s results confirm that some core deficiencies in records management program components have begun to be addressed – but the overall effectiveness of the programs with regard to life cycle management of electronic records remains bleak.

3. Evidence of "silos" of expertise persists; much greater awareness of risks and opportunities from the "C Level" down is needed. Traditional communications barriers must be broken down between stakeholders and a new commitment to collaboration around recordkeeping requirements and retention management must take place.

4. The number and magnitude of organizational and operational problems reflected in the survey findings collectively represent stunning business risks. Senior management must consider these risks unacceptable to have and untenable to continue.

5. The integration of electronic records into the organization’s records management program should be a priority, and electronic records control gaps should be the focus of immediate corrective action. "

Click here to download the white paper.

Court Denies Motion to Compel Production of Plaintiff’s Personal Computer

Sep 24 2007

Benton v. Dlorah, Inc., 2007 WL 2225946 (D. Kan. Aug. 1, 2007)

In this employment discrimination case, defendants moved to compel plaintiff to provide complete responses to requests for production, to produce the hard drive of her personal computer for inspection and copying, and to stop destroying emails and other relevant evidence. Defendants had requested all communications between plaintiff and defendant National American University or its employees, agents, or students. Plaintiff produced some documents as part of her initial disclosures and in response to defendants’ discovery requests. In subsequent discussions regarding the sufficiency of plaintiff’s production, plaintiff’s counsel informed defense counsel that plaintiff had deleted email correspondence with her students and could not produce any additional emails beyond what she had already provided in her initial disclosures. Prompted by concerns about recovering these emails, as well as the discovery responses, defendants requested that she produce the hard drive of her personal home computer to facilitate recovery of the deleted emails by a computer forensics specialist. Plaintiff refused to produce her computer hard drive without an order of the court. After further efforts to resolve the discovery dispute, defendants filed a motion to compel.

Court Denies Non-Party’s Motion to Quash Subpoena and Orders Production of Responsive ESI

Sep 24 2007

Auto Club Family Ins. Co. v Ahner, 2007 WL 2480322 (E.D. La., Aug. 29, 2007)

Non-parties Rimkus Consulting Group, Inc. and Rimkus Consulting Group, Inc. (collectively "Rimkus") filed a motion to quash the subpoena duces tecum served on them by defendants Christopher and Jennifer Ahner (“the Ahners”), and for a protective order. Rimkus had, on behalf of plaintiff Auto Club Family Insurance Company, investigated the hurricane-related damage to the Ahners’ home that was the subject of the lawsuit. Rimkus agreed to respond to the subpoena by producing a hard copy of its entire file concerning its investigation, but argued that it should not be required to produce its electronically stored information.

The court noted that Rules 26(c) and 45 governed the proceeding, and that, having sought a protective order, Rimkus had a burden to make “’a particular and specific demonstration of fact as distinguished from stereotyped and conclusory statements,’ in support of its motion.” Considering each of Rimkus’s arguments in turn, the court denied the motion to quash the subpoena. Read More

Archive - 2007