Showing 19 posts from 2009.

Top 10 Trends in eDiscovery

The e-discovery 2.0 blog recently posted its list of Top Ten Trends in Electronic Discovery.  Read them all, but here are a few that I particularly agree with:

3. Staffing roles continue to evolve with a newfound focus on project management. The role of an in-house e-discovery coordinator will emerge as more of a project management and analyst versus pure legal or IT. This shift will become increasingly necessary as e-discovery evolves from an ad-hoc fire drill to a standard business process that is repeatable, measurable, and defensible.Nostradamus

4. Data analytics and statistical methodologies gain traction to augment the type of subjective decision making approaches that have historically formed the backbone of the e-discovery search and review processes.  These objective methodologies have long been called on as best practices by the likes of the Sedona Working Group. In 2010, they now will start to move from theoretical to practical task as e-discovery tools increasingly move in-house and departments enhance defensibility and add elements such as sampling into the workflow

6. Associate-based review gradually goes extinct, as both clients and law firms tire of expensive, linear review processes.  More review work becomes either insourced or is managed with specialized contract attorneys, who are both cheaper and better trained for this type of work.

Also, a big thanks to The Posse List for including this blog in the Blogroll on their new site The Electronic Discovery Reading Room.  They are aggregating a lot of great material on the new site.  Take a look.

Vice Chancellor Strine Doles out the eDiscovery Pain

Some are calling the Court of Chancery’s decision in TR Investors LLC v. Genger, C.A. 3994-VCS, “the most important recent decision on the Court's handling of discovery of emails and other e-documents.” The Court of Chancery lays clear its comprehension of some of the subtleties of electronic data and the hardware that maintains it. In this well-reasoned and nuanced decision, Vice Chancellor Strine joins fellow Vice Chancellors Parsons and Noble in continuing to define the rules of eDiscovery in this most important Delaware Court.

Plaintiffs filed motions for contempt and spoliation, seeking sanctions against defendant for causing computer-wiping software to be used to destroy information contained on defendant’s computer and a company server.  The Court finds that defendant, Genger, ordered the wipe and knew what effect that would have on potentially relevant data, saying such conduct was reckless if not intentional. Because Genger's destructive conduct prevented plaintiffs’ access to the full array of information that should have been available, the Court (1) raises Genger’s burden of proof by one level, e.g. from preponderance to clear and convincing, (2) declares that, “because his secretive conduct has left… serious doubts about his credibility and because that conduct rendered the documentary record incomplete,” Genger’s uncorroborated testimony alone would not meet his burden of persuasion, (3) orders Genger to turn over documents he claimed as privileged, and (4) awards reasonable attorneys’ fees and expenses related to the motions for contempt and spoliation. On this last sanction, the Court suggests the parties agree to a figure of $750,000, otherwise

If the parties decide to haggle over that amount, the parties shall exchange information about their respective attorneys’ fees and costs in connection with the contempt and spoliation motions and attempt to reach accord in good faith. If no accord is reached, I shall appoint a special master who will address the fee dispute, with the costs of the master being charged in full against the party whose position as to the amount deviates the most from the final amount awarded by the court.

In considering the issues, the Court looks to Vice Chancellor Parsons’ decision in Triton v. Eastern Shore Electrical Services, Inc., 2009 WL 1387115 (Del. Ch. May 18, 2009) for the proposition that “no harm, no foul” is not a valid defense for spoliation in direct violation of a Court order.  One of Genger’s defenses was that, without affirmative proof that relevant documents were destroyed, he should not be found to have despoiled evidence, to which the Court replied

For a party to intentionally violate an order not to destroy or tamper with information and then to claim that he did little harm because no one can prove how much information he eradicated takes immense chutzpah. For a court to accept such a defense would render the court unable to govern situations like this in the future, as parties would know that they could argue extenuation using the very uncertainty their own misconduct had created.

In Genger’s defense, it seems that his drive wiping was not just the act of a guilty man trying to destroy damaging evidence. Rather, it seems, as Vice Chancellor Strine put it, that Genger is something of an “international man of mystery.”[FN1] Genger apparently “has high level contacts within the Israeli government for whom he performed sensitive tasks relating to Israel’s national security… Genger used TRI’s computer system to create and receive documents implicating Israel’s national security.” Even more intriguing is that, although he did this sensitive work within the United States, there was nothing in the record showing that the United States government was aware of his activities, and he had no diplomatic or other official credentials.

[FN1]Is it just me, or does Vice Chancellor Strine’s comparison of Genger to Austin Powers hint at a secret inner-geek? It could be, especially considering his lucid explanation of the principle that merely deleting an electronic document doesn’t destroy it. That explanation and other discussions often refer to email chains, allocated versus unallocated drive space, file encryption, and remote servers. Good stuff.

The Court also looks to Vice Chancellor Parsons’ decision this past May in Beard Research v. Kates, 981 A.2d 1175 (Del. Ch. May 29, 2009) to determine when a duty to preserve attached and the appropriate use of dispositive sanctions when that duty has been violated. The Court considered the fact that Genger’s conduct was at least partially motivated by a desire to protect non-relevant, personal information and the fact that he apparently only wiped unallocated space and not active files. Those mitigating factors persuaded the Court that default judgment or adverse inference was not warranted here. Another case of a spoliator “getting off easy” with a large fine.

We also have elements in this case of eDiscovery ineptitude by lawyers and vendors. Apparently, no one on plaintiffs’ side bothered to ask how the TRI email system was configured. It seems there was an off-site email server that was not collected. The Court points out that Genger and his accomplice did not offer the information, as they should have, but what about those charged with doing the collection? Did the lawyers and vendors forget about email or did they just assume they were collecting it in the pile of data somehow?

Friedman Kaplan hired legal technology consultants Kraft & Kennedy, Inc. to do the data collection, but just because an outfit does “legal technology” doesn’t make it qualified to do eDiscovery. The Court observed that Kraft & Kennedy "did not have a deep understanding of how TRI maintained its computer records." Preserving and collecting data are far different endeavors than helping law firms deploy technology solutions internally.

This is not necessarily a swipe at either Friedman Kaplan or Kraft & Kennedy, rather is illustrative of the ongoing lack of comprehension of the issues raised when handling data in the context of litigation. That this comprehension deficit is still so large bewilders me considering the eDiscovery boogeyman seems to be widely feared. Perhaps, with respect to plaintiffs’ errors, this is a case of not knowing what you don’t know.

I can easily envision Friedman Kaplan calling up a legal technology vendor (Kraft & Kennedy) they are familiar with, not knowing the limits of their expertise. (It’s all computers, right?) Then Kraft & Kennedy, not understanding the legal implications of the technical work, agree to do something they certainly know how to do—collect and encrypt electronic data.

And there we have the proverbial gap between legal and IT. Those of us working to bridge this gap tend to make the faulty assumption that it is a singularity. It isn’t. It’s a multiplicity. These gaps exist in almost every law firm and every Court house. We can’t be working to build one large bridge to span the gap. We need to develop many, many bridges and deploy them to every corner of the field. I’ll start printing the signs: BRIDGES WANTED.

Hard Drive Wiping Costs $79 Large

I previously discussed Beard v. Kates and have a brief update to report. First, a refresher:

Beard sued Kates for tortuous interference and asked the Court to impose sanctions on Kates for spoliation. Kates repeatedly reformatted his laptop’s hard drive, then replaced the drive (but kept it), then wiped the new drive on the eve of the hearing in which he was explicitly told he would be required to turn the laptop over. The Court awarded attorneys’ fees and imposed an adverse inference, and I opined "Kates should thank his lucky stars the Court decided to go easy on him."

Well, it wasn't that easy. In October, Vice Chancellor Parsons issued a letter decision setting the amount of attorneys' fees awarded to Plaintiffs: $76,906.80. Ouch!  Then again, that only comes out to about $26,000 per wipe.  Maybe Dr. Kates got a volume discount.

3rd Circuit Doesn't Dig 'Hiding the Ball' Game

Posted In Cooperation

In a case squarely pitting cooperation against adversarial discovery practices, a unanimous three-judge panel of the 3rd Circuit was not amused by defense counsels' obstructionism. Two of the three judges on the panel are members of the Delaware Bar: Judges Thomas L. Ambro and Kent A. Jordan.

[T]he defense lawyers walk away unsanctioned, but their victory didn't come without a price. Having taken the appeal to remove any smudge on their reputations, they succeeded in their two key legal arguments, but were made to endure a lecture on ethics and civility from the 3rd Circuit panel in a reported decision.

In the opening paragraphs of her 50-page opinion, Judge Dolores K. Sloviter set a tone of disappointment and finger-wagging. And she directed her ire at both defense counsel and the plaintiffs attorneys.

"It would be reasonable to expect ... that experienced attorneys, especially those who have handled major litigation, would be able to proceed through the discovery and pretrial stages with a conciliatory attitude and a minimum of obstruction, and that, under the guiding hand of the district court, the path to ultimate disposition would be a relatively smooth one," Sloviter wrote.

But the Grider case, Sloviter said, "shows exactly the opposite."

Joined by Judges Thomas L. Ambro and Kent A. Jordan, Sloviter found that "the spirit of the discovery disputes was hostile. At the very least, it lacked the civility and professionalism one expects from such experienced attorneys." The parties, Sloviter said, "were unable to reach agreement on even minor matters and the discovery was noncompliant, delayed, or protracted" and the "bickering among the parties ensured that the deadlines would not be met."

Hide the Ball trickMagicians and (some) lawyers say: "Have ball, will hide."

A Casual Conversation on Search and Collection

I'd like to thank Chris and Morris James for the opportunity to participate on this blog and share my thoughts.  Just the other day, Chris, as he is apt to do, sent me a provocative question: "Do you guys ever use keywords during collection?"  As a practitioner here in Wilmington, I enjoy this type of open ended question, because normally I can answer it and then riff on the topic like a jazz musician.  Here is the content of that improv we conducted via email:

VMC:  I wouldn't recommend keywords for standard collection from Email or other ESI repositories, but I would use searches for database applications to extract relevant info.  Also, there are some tools that, if you allow them the latitude, they can actually run searches in native stores such as server spaces.

CJS:  On one hand it makes sense to cull at collection to save loading costs, but you'd still have to pay to have it done, so maybe it's a wash?  It also seems easier to run searches on all the data at once after it's collected rather than multiple times on individual stores.

VMC:  I think if you have a relatively small universe (custodians in the 100's or one small business) using search tools to LOCATE rather than CULL is an interesting idea.  Provided all parties are cool with the terms, it would definitely cut down on review time and costs.  In theory, everything you collect would be responsive by the fact that it was hit by a search term.  Then your review can be very tactical in only looking for Privilege and concentrate on that.

CJS:  This is a bit semantic, but, if you otherwise would have collected everything then run keywords, isn't locating prior to collecting the functional equivalent of culling?  Also, while I agree it could cut down the review, wouldn't it still be difficult to implement?  I assume not all the employees are custodians, so we'd ID the custodians then run the searches on just their data?  Or would they be doing that?  Or would we be running the terms on all the employee data? Are we assuming all the data is in a single store?  Considering keywords aren't terribly accurate, would it be better to ask the custodians to collect their relevant docs?

VMC:  And so the questions continue along that line!  What I was suggesting is identification of data by using keyword searches by agreement.  This hypothetical search would take place across all data stores without the need to identify key custodians.  You are identifying records containing relevant terms.  Now, the adequacy of using terms to find relevant information has been debated.  So is there room for some sort of conceptual or analytical evaluation of the communication and not merely the terms used in the records? Culling occurs normally AFTER you have identified key custodians and key data locations.  By utilizing word searching, we are culling down the set of potentially relevant records to those containing the terms identified.  With the source search we are discussing, there would be no need for culling as you are doing that from the get-go.

We'd love to hear your thoughts on this.  Extend this conversation in the comments section.

What Every Businessperson Should Know About E-Discovery

This video has been on YouTube for a while and made the rounds before, but it's so straightforward I think it's worth sharing again here.

[embed]http://www.youtube-nocookie.com/v/eo03DWk4_lU&hl=en&fs=1&color1=0x2b405b&color2=0x6b8ab6[/embed]

Old ZyLAB Promotional Video from 1994

This is apparently a 15-year-old ZyLAB promotional video recently posted on YouTube.  The video covers some eDiscovery related technologies, including OCR, fuzzy searching, and automatic bates numbering.  I figured all you eDiscovery geeks would enjoy this peek into the past.  The eDiscovery specific stuff starts at 3:41.

 

[embed]http://www.youtube-nocookie.com/v/n6MhdqHlGzU&hl=en&fs=1&color1=0x2b405b&color2=0x6b8ab6[/embed]

 

Legal Project Management Goes Viral!

OK, maybe not, but it has been getting more action than usual.  I've been following a running conversation recently on the use of project management (PM) software in the practice of law.  The larger discussion on PM in the law is fascinating, and I highly recommend reading the whole conversation, but I only mention it here because the conversation touches on PM in eDiscovery at several points and provides some keen observations on that intersection.  I've tried to extract and present those nuggets below.

Rees Morrison, author of the Law Department Management blog, got things going with his post Lathe"Project management software doesn’t necessarily mean the discipline of project management." The title says it all, and prompted a further exploration of the subject by Paul Easton at the Legal Project Management blog.  Paul offered us his "Buying a Lathe Does Not Make You a Carpenter: Setting Realistic Expectations for Legal Project Management Software," in which he argues that using PM software doesn't mean you're doing true, standards-based project management.

The point that I would like to make in this post, however, is that implementing project management software does not equal implementing project management. Project management is not a tool. It is a culture built around a set of standards. It requires buy-in from an organization's shareholders and involves a lot of measurement, monitoring, training, and communication. Buying a lathe doesn't make you a master carpenter. Buying a case management application will not miraculously turn you into an effective lawyer. Similarly, buying a project management application does not make you a project manager.

That post was responded to at Lexician in "Rethinking Legal Project Management Tools." Author Steven Levy warns of the difficulty in applying PM to the practice of law generally but notes "Possible exception: project management/workflow tools to manage electronic discovery. If you do a lot of ediscovery work+management, you’re already using project management principles. Either that, or you’re not surviving."  Let's say that again: If you're not applying PM principles to the management of eDiscovery, you're not surviving.

'OK, you've gotten my attention Steven.  So how do I apply PM principles to my eDiscovery projects?' you ask.  We're not quite there yet, but Steven explains the three levels of PM and why using tools alone won't help you get where you need to be.

Levels of project management:

  1. Scheduling, resource allocation, costs, dependencies, deadlines (not the same as scheduling), risks, and, to be honest, a certain amount of CYA.
  2. Managing the people and resources to control and achieve the stuff in Level 1.
  3. Understanding and influencing the overall system so that you can be effective at Level 2.

I’m warning you off the tools. The tools are designed for managing Level 1 issues, but they will fail absent a rich understanding of Levels 2 and 3... If you get caught up in the tools, I believe you’ll go down a path that leads to failure, departmental self-destruction, and the CYA that lurks at Level 1... Rather, begin at Level 3. Strive to understand the system in place. Only then can you realistically map project management techniques against the ground of the law practice. Only then can you figure out what pieces of project management you can mesh with the practice’s culture, its people, its operations and practices.

Sage advice for us PM grasshoppers.  'OK, makes sense.  Now can you tell me how to get there?' you ask again.  Steven offers us some simple starting points in "Low-Tech 'Tools' for Legal Project Management."

Paul Easton responded with "Project Management Tools in the Legal Environment: Can Old Dogs be Taught New Tricks?"  Inside the larger discussion about the feasibility of implementing PM in law firms, Paul asserts that litigation support, and eDiscovery projects and processes especially, are the areas most amenable to PM implementations.  He reasons:

Those working in litigation support, especially electronic discovery, already use a lot of software to manage their work. Also, they are used to having to measure and report on a number of metrics and making cost and schedule estimates--even if they are only using MS Excel. Most would find that specifically tailored project management applications would make their lives easier and would welcome improved and better documented procedures. That is, so long as the budget and resources necessary to properly implement the new procedures and applications are made available.

Steven Levy caps the discussion in "Professional Project Management in a Legal Environment," in which he observes that legal project management is already invading the eDiscovery space.

As I said, these are just the eDiscovery hooks in the larger topic of legal project management (LPM).  I encourage you to read the whole conversation and to subscribe to these three highly informative blogs.

UPDATE: Thanks to LexBlog CEO Kevin O'Keefe's Real Lawyers Have Blogs blog for recognizing this as a Best in Law Blogs post.

*Flowchart image copyright held by Alphamu57 and provided under the terms of the GNU Free Documentation License, Version 1.2 or any later version published by the Free Software Foundation.

When is a clawback not a clawback?

When it's a quick peek, as was ordered in ACS State Healthcare, LLC v. Wipro, Inc. and Wipro, Ltd., No. 4385-VCP ( Del. Ch., July 23, 2009).  This is believed to be the first order of its kind in Delaware and continues the Court of Chancery's recent trend of providing eDiscovery guidance to Delaware practitioners.

The title of this post may be a bit misleading though and may simply reflect my own ignorance of the true distinction between quick peek and clawback.  (Or maybe I'm being pedantic.)  Certainly, there are clawback provisions in this order, but the production of documents without review is what makes this a quick peek.  The two are often presented as alternative means of protecting privilege waiver in eDiscovery, but it seems that clawback protects privilege while quick peek shifts costs.  So quick peek is really clawback plus cost-shifting?

eDiscovery Gets Rocked to the Core

I've been über busy the last few weeks.  Hence the short posts.  Things should clear up enough that I can resume dazzling you with my eDiscovery acumen next week.  To avoid going totally postless this week, I offer the following:

eDiscovery is cool.  But be on notice, eDiscovery is about to be pwned by Morris James.

Happy Labor Day!

Legal Project Management: Law Firm PM Watch

As I've noted previously, project management is rapidly gaining importance in the world of eDiscovery.  Some argue (and I agree) that project management has many applications in the practice of law.  Chief among the proponents of that prescient view is Paul Easton, author of the Legal Project Management blog.  As you can imagine, I am a regular reader of LPM and was doubly excited to see Paul's recent 3-part series on Six Sigma in law firms.  After commenting on Part 1 of the series, Paul emailed to followup on my comment about the use of PM and Six Sigma at Morris James, and he's been kind enough to post my reply as a standalone article.  I'm honored.  Thanks Paul, and keep up the great work!

The State of eDiscovery in Delaware: The Final Chapter

As I suppose we could have expected, 2009 has delivered the most important eDiscovery cases to date, and we’re only half way through the year (or we were when I started writing this series). The District Court started us off before the last of the New Year’s confetti had been swept up by issuing its decision in Micron Technology, Inc. v. Rambus, Inc., C.A. No. 00-792-SLR on January 9, 2009, declaring certain patents unenforceable as a sanction for spoliation. In a suit for patent infringement, Micron claimed Rambus employed a document retention policy that destroyed documents while they had a duty to preserve. The Court said that Rambus was an “aggressive competitor” so should have foreseen litigation as far back as December 1998. All relevant documents destroyed by Rambus after that time was spoliation. As a sanction, the Court decided the patents at issue were not enforceable against Micron.

Not to be out done, and what has really made 2009 interesting, the Court of Chancery has recently issued three opinions with significant eDiscovery implications. On May 18, the Court issued its decision in Triton Constr. Co. v. Eastern Shore Elec. Servs., Inc., 2009 WL 1387115, granting an adverse inference as a sanction for spoliation. In a suit for breach of fiduciary duty, Triton alleged that defendant Kirk had intentionally destroyed evidence on his office computer with a wiping program. Triton’s forensic expert found evidence that Kirk had used the program to annihilate files and emails. Kirk had also been required to produce his personal laptop and thumb drive, which he failed to produce claiming he no longer owned them. The Court didn’t buy it, and issued an adverse inference.

Just days later, on May 29, the Court issued two—yes, two—significant decisions: Omnicare, Inc. v. Mariner Health Care Mgmt. Co., 2009 WL 1515609; and Beard Research, Inc. v. Kates, 2009 WL 1515625. (Oh, what a glorious time it was for eDiscovery nerds everywhere!) In Omnicare, the Court ruled that just because data is on a backup tape doesn’t automatically make it ‘not reasonably accessible.’ Omnicare sued Mariner for breach of contract and moved to compel Mariner to restore backup tapes to retrieve old emails deleted pursuant to their data retention policy. Mariner asked the Court to force Omnicare to pay for the restoration or to allow it hold off on restoration and produce emails from its active files so the parties could assess whether the restoration could reasonably be anticipated to lead to relevant information. The Court looked to Zubulake to analyze the cost-shifting argument, and decided that cost-shifting was not warranted in this case, noting that just because “ESI is now contained on Backup Tapes instead of in active stores does not necessarily render it not reasonably accessible.” Nonetheless, the Court opted not to order the restoration, opting instead for the active file sampling Mariner proposed.

In Beard Research, the Court brought the hammer down on Kates for blatant, repeated, audacious spoliation. Beard sued Kates for tortuous interference and asked the Court to impose sanctions on Kates for spoliation. Kates repeatedly reformatted his laptop’s hard drive, then replaced the drive (but kept it), then wiped the new drive on the eve of the hearing in which he was explicitly told he would be required to turn the laptop over. The Court awarded attorneys’ fees and imposed an adverse inference, and Kates should thank his lucky stars the Court decided to go easy on him.

Ralph Losey posted an outstanding analysis of the issues involved in Beard Research.  Francis Pileggi also had Beard Research well covered along with Omnicare and Triton.

There we have it—the State of eDiscovery in Delaware. I’m off to the beach for a week.

The State of eDiscovery in Delaware, Pt. VI

In Part V of this series, we summarized the cases from late 2006 and all of 2007. Quick summary of those cases: the District Court concluded that imaged files should be the default form of production absent party agreement, the Bankruptcy Court issued summary judgment against a party found to have knowingly destroyed ESI despite reasonably anticipating litigation, the Superior Court declared spoliation requires intent not just negligence, and the Court of Chancery required discovery requests be supported by “a particularized showing of need.” On to 2008.

In a series of cases culminating in State v. Sisson, 2008 WL 162825 (Jan. 17, 2008), the Superior Court dealt with multiple issues of admissibility and validity of electronic evidence in a criminal case. Michael Arkfeld's eLaw Exchange provides the following concise summary:

At trial, Sisson filed a motion to suppress evidence collected at his home pursuant to warrant on four grounds: 1) the evidence was stale 2) the probable cause information was insufficient because the affidavit did not show that “emails sent by an internet ‘screen name’ linked to” Sisson were actually sent by him, nor did it demonstrate reliability of sources 3) ”police intentionally or recklessly omitted information” that Sisson may have been the victim of “spoofing” and 4) that the affidavit was recklessly or intentionally misleading in that it incorrectly suggested that the police had actual possession of “the illegal emails to which pornographic images allegedly were attached.”  In a ruling on the probable cause argument, the court held that AOL, an internet service provider, was a reliable informant as it was equivalent to a “citizen eyewitness to a crime” and thus no “independent corroboration” of the information it provided was necessary.  The court found that there were sufficient facts set forth in the affidavit to support a finding of probable cause “because the ‘screen name’ associated with the email and linked to Defendant was sufficient to allow a reasonable person to believe that ‘seizable property would be found at the address of the Internet subscriber with whom the name is registered’.”

Sisson subsequently challenged his conviction on several counts of Sexual Exploitation of a Child and Unlawfully dealing in Child Pornography to the Delaware Supreme Court and said conviction was affirmed on all grounds.  On Motion for Post Conviction Relief, Sisson argued, in pertinent part, that he suffered ineffective assistance of counsel because his attorneys either did not argue or improperly argued on appeal: that a password was not required for email “spoofing”; “that the detectives acted with reckless disregard for the truth by not stating in the search warrant that they did not have the IP address of the computer that sent the email”; that a username alone was not enough to establish a link between Sisson’s home and the computer that transmitted the email; and that the informants supplying the information for the search warrant (AOL and NCMEC) were unreliable.  Defendant’s motion was denied on all counts.

In a very short order in February 2008, the Court of Chancery requires a non-party to submit the credentials of its eDiscovery vendor/consultant. Solow v. Aspect Resources LLC, 2008 WL 441394. Competence of third party vendors and counsel is an issue we’re likely to see more of in the future. In a recent case out of Washington State, the court reduced attorney’s fees in connection with eDiscovery work for inexperience.

In the spring, in In re Kent County Adequate Pub. Facilities Ordinances Litig. (April 18, 2008), the Court of Chancery addresses the issue of attorney-client privilege waiver and applies a test that almost mirrors what will become new FRE 502 a few months later. In response to Petitioners’—landowners and developers—motion to compel in an underlying action, Kent County argued that some of the documents requested were privileged. Kent County asserted privilege over a set of documents it had voluntarily produced to support its motion to preclude the depositions of the individual respondents. The Court found that privilege had been waived for these documents. Another set of documents, however, was produced inadvertently, and Kent County sought to recover them as privileged. The Court, in agreeing to the return of the documents, applied the following test:

In order to determine whether the inadvertently disclosed documents have lost their privileged status, the Court must consider the following factors: (1) the reasonableness of the precautions taken to prevent inadvertent disclosure; (2) the time taken to rectify the error; (3) the scope of discovery and extent of disclosure; and (4) the overall fairness, judged against the care or negligence with which the privilege is guarded.

In applying this test, the Court cited the Delaware Superior Court’s decisions in Monsanto Co. v. Aetna Cas. & Sur. Co., 1994 WL 315238 (Del. Super.) (citing Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co., 104 F.R.D. 103 (S.D.N.Y.1985).

In summer 2008, in In re Intel Corp. Microprocessor Antitrust Litig., 2008 WL 2310288 (June 4, 2008), the District Court adopted a special master’s report finding waiver of work product protection. The plaintiffs moved to compel production of Intel’s attorneys’ custodian interview notes relating to litigation hold compliance.  The parties had previously reached a privilege waiver agreement, but the special master found that the agreement did not extend to these notes.  However, the special master found a privilege waiver for any custodian statements voluntarily disclosed by Intel.  The special master opined that finding otherwise would have allowed Intel to "use its sword to assert facts while at the same time shield" the plaintiffs from Intel’s claim of human errors in its performance of its duty to preserve evidence.  The special master concluded that protection of the non-core work product had been waived, so granted the plaintiffs motion for production.

Later that summer, the Court of Chancery, in Hexion Specialty Chemicals, Inc. v. Huntsman Corp., 2008 WL 3522445 (Aug. 18, 2008), enforces a “clawback” agreement. Huntsman inadvertently produced an email drafted by one of its outside counsel and sent to another of its outside counsel and its investment banker in connection with a merger with Hexion. The Court found the email privileged and allowed for its clawback pursuant to the confidentiality order.

About a month later, the Court of Chancery, in a letter decision in Kinexus Representative LLC v. Advent Software, Inc., C.A. 1161-CC, reiterates that native or OCR production is not required “without a particularized showing of need.”  Advent produced documents in non-searchable TIFF format. Kinexus moved to compel Advent to comply with an instruction to produce searchable ESI. The Court declined to find OCR required by court rules. The Court did find that Advent’s offer to produce “extracted text” was an acceptable compromise but ordered Kinexus to pay for the processing. It’s not clear what format the “extracted text” was provided in. If anyone if familiar with this case and knows how the extracted text was provided, please leave a comment. I’m sure I’m not the only one who is curious about that.

On September 19, 2008, President Bush signed FRE 502 into law. The newly adopted rule was identical to the one approved by the Judicial Conference of the United States in September 2007.

At last, we reach 2009! We’ll cover 2009 in the next and final installment of this series. In the meantime, if you know of significant Delaware eDiscovery cases from 2008 that you think I should have included, please post a comment to let everyone know.

On Project Management and Redskins Fans

I wanted to finish the "The State of eDiscovery in Delaware series before moving on to other subjects, but I've found it difficult (there's so many meaty issues to discuss) and finally cracked.  Please indulge this short diversion.

First, a warm and fuzzy congratulations to Gabe Acevedo, author of Gabe's Guide to the e-Discovery Universe, for being invited to regularly contribute to the excellent EDD Update blog.  Do yourself a favor and take a look at Gabe's first contribution.  He'll be a great addition to EDD Update.  I love reading Gabe's posts for his creativity and humor.  (Want proof?  Take a look at the title of his post announcing the launch of this blog.)  Congrats Gabe!  [UPDATE: I forgot to mention, I first found Gabe on Twitter (@GabeAcevedo) where you can follow him too.  Also look for me on Twitter (@cspizzirri).]

Second reason for breaking the series: project management.  "Of course," you say, "what lawyer wouldn't be excited about project management?"  Well, only a few of us geeky types who like workflows and metric and statistics and whatnot, but that will change.  There's a growing recognition of the importance of incorporating project management and other related techniques into the eDiscovery process to help control costs and reduce risks.

I began applying these techniques to our internal eDiscovery processes at Morris James several months ago and took up Six Sigma—with the guidance of a master black belt, mind you—more recently. Project management, quality control, sampling, etc. have been percolating to the top of the eDiscovery discussions, but when I saw a post about EDD and Six Sigma, well, I just couldn't contain myself anymore.  Remember:

What you do not measure, you cannot control. -Tom Peters

We'll resume the regularly scheduled programming shortly.

The State of eDiscovery in Delaware, Pt. V

In Part IV, we saw the District Court decide issues with production of unsearchable data, the Court of Chancery comment on the efficacy of printing out electronic documents en mass, and the Superior Court award fees as a sanction for a party’s efforts to frustrate discovery. Let's finish up 2006 then look at 2007.

In late October 2006, the District Court decided Wyeth v. Impax Laboratories, Inc., 248 F.R.D. 169 (Oct. 26, 2006), declining to order a native production. Wyeth had made production in TIFF format. Impax filed a motion to compel production in native format. Because the parties did not agree on a native production at the pre-discovery meeting, and defendant could not demonstrate a need for native files, the Court did not think plaintiff should be made to make an additional production. Relying on its Default Standard for Discovery of Electronic Documents (“E-Discovery”)—adopted after The Sedona Principles were published in 2004 but prior to the 2006 FRCP amendments—the Court declared that, in the absence of prior agreement of the parties, imaged files would be the default format.  Contrast with Sedona Principle 12, revised in 2006, which states that, absent agreement of the parties, "production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form."

The next day, in In re Quintus Corp., 2006 WL 3072982 (Oct. 27, 2006), the Delaware Bankruptcy Court issued a default judgment as a sanction for deleted ledgers. The Trustee alleged that the purchasers of debtor’s assets, Avaya, intentionally destroyed some of the debtor’s ledgers that would have shown what liabilities were assumed by Avaya and, of those, which remained unpaid. Avaya argued that the destruction came well before it could have reasonably anticipated litigation. The Court found that Avaya should have reasonably anticipated litigation because Avaya had not paid all the liabilities it assumed as of the time of the hearing. Concluding that Avaya’s willful destruction was overwhelmingly prejudicial to the Trustee, the Court granted summary judgment in favor of the Trustee.

Shortly after these decisions, on December 1, 2006, the FRCP eDiscovery amendments became effective. The changes were covered quite succinctly by K&L Gates on their Electronic Discovery Law blog.

In the winter of 2007, in Empire Financial Services, Inc. v. The Bank of New York, 2007 WL 625899 (Feb. 20, 2007), the Superior Court ruled that a spoliation claim requires showing of intent to suppress truth, not mere negligence. Empire sought and the Court ordered production of certain accounts in 2001, but Empire did not follow up on production of the remaining accounts. In 2005, Empire sought production of the remaining accounts, but the Bank had, by that time, archived them, making retrieval onerous. Empire alleged spoliation, but the Court found that it was reasonable for the Bank to assume Empire had abandoned its desire for the account data so lacked any intent to make the data inaccessible.

Almost a year later, in the fall of 2007, in RLI Ins. Co. v. Indian River Sch. Dist., 2007 WL 3112417 (D.Del. Oct. 23, 2007), the District Court decline to require adherence with its Default Standard for E-Discovery (“Default Standard”). RLI complained that it did not receive enough ESI(!) from defendants, so, seven months after document discovery had ended, filed a motion to compel defendants to comply with the Default Standard. The Court found, inter alia, that RLI had "depicted no specific instances where any of the defendants actually failed to produce relevant, discoverable email communications” and denied the motion.

About a month later, in Ryan v. Gifford, 2007 WL 4259557 (Nov. 30, 2007), the Court of Chancery, in line with the District Court’s ruling a year earlier in Wyeth, declares that native or OCR production is not required “without a particularized showing of need.” As with everything in eDiscovery, the standard is reasonableness. If you can’t articulate a reason for a discovery demand, you should reconsider. Don’t ask for backup tapes, metadata, or certain forms of production if you can say why you want them.

In the Part VI, we’ll cover seven cases from 2008. In the meantime, if you know of significant Delaware eDiscovery cases from 2007 that you think I should have included, please post a comment to let us know.