Catagory:Market Announcements

Last month, the Seventh Circuit’s Electronic Discovery Pilot Program Committee released its report on phase one of its Electronic Discovery Pilot Program.  Initiated as a “multi-year, multi-phase process to develop, implement, evaluate, and improve pretrial litigation procedures that would provide fairness and justice to all parties while seeking to reduce the cost and burden of electronic discovery consistent with Rule 1 of the Federal Rules of Civil Procedure”, the first phase of the program ended on May 1, 2010, after a seven month period in which the committee’s Principles Relating to the Discovery of Electronically Stored Information were tested in practice.  Although limited in its geographic scope and number of participants, the results of phase one provide valuable insight into possible ways to better the current civil system.  The second of three phases will begin on July 1, 2010 and may be expanded to increase the number of cases and participating judges.

Too lengthy to summarize, the full report is available here.

On May 28th, Judge Shira Scheindlin entered an order amending her recent opinion in Pension Comm. of Univ. of Montreal Pension Plan v. Bank of Am. Secs., LLC.  The order provides important clarification regarding the scope of a party’s obligation to collect records from its employees.  The order states:

At page 10, lines 7-10, replace <By contrast, the failure to obtain records from all employees (some of whom may have had only a passing encounter with the issues in the litigation), as opposed to key players, likely constitutes negligence as opposed to a higher degree of culpability.> with <By contrast, the failure to obtain records from all those employees who had any involvement with the issues raised in the litigation or anticipated litigation, as opposed to just the key players, could constitute negligence.>.

A full copy of the order is available here.

For anyone who hasn’t heard, a school district in Pennsylvania has recently come under fire for using the webcams on school-issued laptops to capture images of students both during and outside of school hours – about 56,000 of them, according to reports.  According to the complaint filed in this case, students and parents were not informed of the school’s ability to use the webcams.  In at least one instance, a student was called to the assistant principal’s office to discuss an image captured by the webcam on his laptop.  His family has now sued the district and hopes that other students will join them.  According to the school district, the webcams were intended for tracking lost or stolen computers.

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In what may be the first opinion of its kind, the North Carolina Bar Association has drafted a proposed ethical opinion addressing lawyers’ use of “software as a service” ("SaaS").  The proposed opinion concludes that lawyers “may contract with a vendor of software as a service provided the risks that confidential client information may be disclosed or lost are effectively minimized.”

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Effective May 1, 2010, New Castle County, Delaware, has created a new division known as the Complex Commercial Litigation Division.  Available for prescribed categories of cases, including cases with an amount in controversy of more than $1 million (excluding certain types of actions, including, e.g., claims for personal, mental or physical injury), the new division adheres to principles that shall govern the administration of each case.  These principles include assigning the case to the same Panel Judge for all purposes through final disposition and compliance with Panel-established “uniform procedures” such as mandatory disclosures similar to those under the federal rules and the consideration of electronic discovery early in the case, among others.

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In New York, Chief Judge Jonathan Lippman and Chief Administrative Judge Ann Pfau released a report recommending improvements for how electronic discovery is handled in New York State Courts.  The report, based on “extensive research and interviews with experts in electronic discovery”, addresses the problems of electronic discovery, including cost and delay, and provides several recommendations on how "the courts  can manage e-discovery in a more expert, efficient and cost-effective manner within the framework of existing law."

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By Bruce H. Nielson, K&L Gates Partner, Washington D.C.

What Does the Regulation Require?

Every business that “owns or licenses personal information” about a Massachusetts resident must “develop, implement, and maintain” a comprehensive written information security program (WISP).  “Owns or licenses” is defined as “receives, stores, maintains, processes, or otherwise has access to personal information in connection with the provision of goods or services or in connection with employment.”  “Personal information” (PI) means first name (or initial) and last name combined with a Social Security number, driver’s license or state-issued ID card number, or financial account or credit or debit card number (with or without any required password, security or access code, or personal identification number).

The WISP must contain administrative, technical and physical safeguards for PI that are “appropriate to (a) the size, scope and type of business . . .; (b) the amount of resources available . . .; (c) the amount of stored data; and (d) the need for security and confidentiality” of the PI. 

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One of the great things about the current rule-making process is the ability to see change on the horizon and adapt accordingly.  This year, absent any unforeseen objection or delay, Rule 26 will be amended to extend the scope of the work-product doctrine to encompass draft expert reports and most communications between experts and counsel.  Currently, the proposed amendment (and all proposed rule amendments, for that matter) is being considered by the Supreme Court.  Pursuant to statute, the Court must transmit prescribed amendments to Congress by May 1st.  Thereafter, absent legislation to reject, modify, or defer the rules, the prescribed amendments will take effect as a matter of law on December 1st.

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As of January 1, 2010, Ontario’s new Rules of Civil Procedure became effective, including significant changes to the rules of discovery.  Among the changes/additions is Rule 29.1.03(4) Principles re Electronic Discovery, which states that “In preparing the discovery plan,” as is required by Rule 29.1.03 (1), “the parties shall consult and have regard to the document titled ‘The Sedona Canada Principles Addressing Electronic Discovery’ developed and available from The Sedona Conference.”  In its explanation of the provisions of the newly effective Rules of Civil Procedure, the Ministry of the Attorney General specifically identified several of the Sedona Principles to be considered:

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