eDiscovery StraightTalk with James D. Shook, Esq.,”New Decision Orders Sanctions… But Provides Strong Guidance” February 10, 2010 By James D. Shook, Esq

In one of the earliest eDiscovery decisions in 2010, Judge Scheindlin provides the eDiscovery community with some clear guidance on appropriate litigation hold and collection procedures, as well as a framework for determining when sanctions are appropriate and the level of those sanctions.  (Pension Committee v. Bank of America Securities et. al.).  Although the decision is new and technically binding only in the Second Circuit, the case has sparked widespread discussion and is expected to be influential.

In reaching her decision to order sanctions, Judge Scheindlin discusses eDiscovery failures as a continuum, ranging from (at the low end) mere negligence, increasing to gross negligence and ultimately willful misconduct.  If sanctions are merited in a specific case, the sanction ordered then must be based in part upon the level of misconduct.  So in most cases, mere negligence will likely result in a low-level sanction such as fines or additional discovery, while a high degree of misconduct can result in adverse inferences or even a default judgment or dismissal of a case.

Historically, a stumbling block in obtaining a severe sanction has been that the injured party must provide some proof that the lost information would have been beneficial to it — a difficult task when, by definition, that evidence is gone.  Judge Scheindlin provides help to parties in these cases, holding that the level of proof required is very low in cases of higher misconduct (gross negligence or willful misconduct), in part to prevent the spoliating party from benefitting from its own bad acts (deleting the information).
This concept of gross negligence becomes even more important when combined with bright line “best practices” set by Judge Scheindlin, who holds that failing to meet the following standards is gross negligence:

• Issuing a written litigation hold;
• Identifying all of the key players to a case, and insuring that their electronic and paper records are preserved;
• Ceasing the deletion of email;
• Preserving the records of former employees in a party’s possession, custody or control;
• Preserving backup tapes when they are the sole source of relevant information – or when they relate to key players, if the relevant information they maintain is not obtainable from readily accessible sources.

While these seem to be very strict rules, they are actually helpful in providing a first level of best practices as part of an eDiscovery process.  Although processes and people are critical elements of any eDiscovery process, the Source One family is designed to provide the third piece — technology — to help to meet these requirements.  Let’s look at how Source One addresses each of the mandates from Pension Committee:

Issue Written Litigation Holds
The critical functionality with legal hold is the ability to quickly and efficiently issue litigation hold notices to custodians, by email, and obtain acknowledgements that they have received the notification.  All of the information relevant to the notification — the content of the notice, when it was sent, acknowledged, etc. — is all automatically maintained and available.  Reports make it easy to follow-up with custodians who have not responded.  Sending updates and periodic reminders are easy to do, which increases the strength of the overall process.  The technology must also make it easy to send the notice that usually gets missed — the final notification releasing custodians from legal hold.

Identify Key Players and Preserve Records
One of the difficulties in handling eDiscovery “right” is determining the scope of key players.  With Early Case Assessment (ECA) capabilities, counsel can quickly access electronic data, such as email, and determine whether others might have important information and should be part of the litigation hold.  Once they have been identified and confirmed, issuing and confirming written hold notices is critical to preserving some of the ESI.  In addition, the actual ESI from email servers, laptops, desktops, fileshares, Sharepoint, archives, etc. can be quickly identified and locked down to insure preservation.

Ceasing the Deletion of Email
Preserving relevant email can be a difficult process to perform accurately — and even more difficult to prove your diligence.  But the eDiscovery of email messages becomes straightforward with the right technology.  Any email existing in the server or in an archive (or even stored in local caches on desktops, laptops and fileshares!) at the time the hold begins can be located, preserved and quickly collected.  And for companies that are taking a proactive stance in Information Governance,  technology can insure that a reasonable policy and be put in place and followed — making email eDiscovery less risky and expensive, and also enabling better protection from the Safe Harbor provisions of FRCP 37(e).

Preserve the Records of Former Employees In Care, Custody and Control
Locating information from ex-employees can be a difficult process, and information may be expensive to locate or easy to miss.  For companies that have implemented Email Management, ex-employee email will be located in the archive subject to their retention policy.  Technology enables a simple search of the email server and archives for all email — whether sent or received – by ex-Employees.  Where great technology really proves its value is with finding unstructured data and local caches of email that may have been orphaned by the departure of these employees.  Content in fileshares and even on Sharepoint can quickly be searched to determine whether these past employees left data behind — and that data can be copied to a safe repository for preservation, all in the same step.

Preserve Backup Tapes (when required)
With an Information Governance and data lifecycle management strategy in place, it should be a rare occurrence when an enterprise actually needs to access its backup tapes for eDiscovery purposes.  Data can be quickly found, within minutes or hours, so the risk of its deletion, triggering the need to review backup tapes months later, is small.  However, in those rare cases where accessing backup tapes does become necessary, companies can use eDiscovery software to quickly search through restored data to help minimize the typically high costs that result from this process.

Conclusion

A defensible and repeatable Electronic Discovery strategy requires strong processes and people to run them.  However, the vast amounts of data contained in the enterprise and the high risk of “bad” eDiscovery requires tools to supplement those people and processes.  The great technology gives companies immediate help for eDiscovery, as well as creating the platform from which to build a proactive Information Governance strategy.