Electronic Discovery Law Firm : K&L Gates : Electronic Discovery Law

K&L Gates Pittsburgh partner David R. Cohen’s presentation at the recent RIMS 2008 Conference was highlighted in the May 5th edition of Business Insurance.  At the San Diego event, Mr. Cohen recommended to the insurance industry crowd that companies create an e-discovery team and institute a records management plan.  He also explained how the failure to produce electronic records timely and properly can result in significant penalties for litigants.

Read the complete article online here.

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The Seattle Times, April 29, 2008
By Benjamin J. Romano, Seattle Times technology reporter

Microsoft has developed a small plug-in device that investigators can use to quickly extract forensic data from computers that may have been used in crimes.

The COFEE, which stands for Computer Online Forensic Evidence Extractor, is a USB "thumb drive" that was quietly distributed to a handful of law-enforcement agencies last June.  Microsoft General Counsel Brad Smith described its use to the 350 law-enforcement experts attending a company conference Monday.

The device contains 150 commands that can dramatically cut the time it takes to gather digital evidence, which is becoming more important in real-world crime, as well as cybercrime.  It can decrypt passwords and analyze a computer's Internet activity, as well as data stored in the computer.

It also eliminates the need to seize a computer itself, which typically involves disconnecting from a network, turning off the power and potentially losing data.  Instead, the investigator can scan for evidence on site.

More than 2,000 officers in 15 countries, including Poland, the Philippines, Germany, New Zealand and the United States, are using the device, which Microsoft provides free.

Read the full article here on the Seattle Times website.

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On March 20, 2008, the court convened a status hearing and counsel reported their progress toward developing the CREDO protocol ordered by the court.  The court also conferred with the parties regarding the status of the case in light of Judge Brewster’s March 5, 2008 Order Remanding in Part Order of Magistrate Court re Motion for Sanctions Dated 1/07/08.  Because Judge Brewster vacated the 1/07/08 Sanctions Order to the extent it required the named Responding Attorneys to participate in the CREDO project, the Magistrate Judge observed that only Qualcomm remained responsible for completing the protocol.  Thus, the court ordered Qualcomm to submit a final version of the CREDO protocol by Thursday, April 10, 2008.  (If it was filed by the court's deadline, the protocol does yet not appear to be publicly available.)

On April 2, 2008, counsel for the Responding Attorneys and Broadcom submitted their Proposed Discovery Plan in preparation for the evidentiary hearing on attorney sanctions ordered by the District Judge.

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The U.S. Courts' website (www.uscourts.gov) has the following alert:

Reports have been received of bogus e-mail grand jury subpoenas, purportedly sent by a United States District Court.  The e-mails are not a valid communication from a federal court and may contain harmful links.  Recipients are warned not to open any links or download any information relating to this e-mail notice.  The federal Judiciary's email address is uscourts.gov.  The e-mails in question appear to be sent from a similar address that is not owned and operated by the federal courts.  Law enforcement authorities have been notified.

More information about the e-mail scam may be found in this New Jersey Law Journal article by Mary Pat Gallagher, "Businesses Hit With E-Mail Blast of Virus-Carrying Pseudo-Subpoenas," an excerpt from which follows:

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By K&L Gates partner David R. Cohen

This article appears in the March 2008 edition of BizTech Magazine, and begins:

If you’re not currently involved in litigation or an investigation and won’t be in the future, then e-discovery isn’t something your business needs to concern itself with.  The rub is that it’s often impossible to predict whether your business will be involved in a lawsuit or investigatory action.

Fortunately, the recent amendments to the Federal Rules of Civil Procedure do not impose any requirements on companies outside of the litigation process.  And because small and midsize businesses are less likely to be involved in litigation, they are at less risk.  However, if your business and IT departments aren’t prepared and you suddenly find yourself involved in a lawsuit, it may be too late to take the appropriate action.  Here are three best-practice steps that IT departments should keep in mind with regard to e-discovery and electronically stored information . . .

View the full article online, or as a .pdf here. 

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On March 5, 2008, District Judge Rudi M. Brewster issued his Order Remanding in Part Order of Magistrate Court re Motion for Sanctions Dated 1/7/08.  (View a copy of the decision from Westlaw here.)  The order vacated and remanded that portion of the January 7 Sanctions Order imposing sanctions against Qualcomm's six outside counsel.  In doing so, the District Judge instructed that, in any future hearing held by the Magistrate Judge, the attorneys would be allowed to defend their conduct by any and all means, and would not be prevented from doing so by the attorney-client privilege of Qualcomm.  The court further instructed that Qualcomm be permitted, but not required, to participate without any exposure to further sanctions.

In reaching its decision to allow the attorneys to defend themselves fully, the court concluded that the self-defense exception to the attorney-client privilege was applicable.  It found that the employee declarations Qualcomm's submitted in October in response to the Order to Show Cause Why Sanctions Should not be Imposed were "exonerative of Qualcomm and critical of the services and advice of their retained counsel."   The court continued:  

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Appearing in this week’s Legal Times, an article by K&L Gates partner Thomas J. Smith entitled:  Now Watch the Lawyers Blitz -- The NFL destroyed the tapes.  But it still hasn’t escaped the sack. (Free registration required to view.)

In the game of football, the greatest quarterbacks share some common traits.  Perhaps chief among them is an uncanny ability to anticipate the blitz.  Sensing the onrush of defenders, the savvy quarterback will sometimes throw the ball away to avoid a loss of yardage.

When legal counsel anticipate a blitz, in the form of a lawsuit or an investigation, “throwing the ball away” is not an option.  To the contrary, the destruction of potential evidence may constitute the improper act of spoliation.

Now football fans, including one U.S. senator, are asking whether the National Football League has done exactly that.  Did the NFL destroy evidence of cheating by the New England Patriots to avoid a bigger blitz on the game?

On Super Bowl Sunday, Feb. 3, the Patriots nearly completed only the second perfect season in NFL history, losing by three points to the New York Giants.  The Patriots’ season also had a less-than-perfect beginning, when the team was caught violating league rules by videotaping the New York Jets’ calling of defensive plays in a scandal dubbed “Spygate.”

The NFL demanded, and reportedly obtained, all tapes the Patriots still had of other teams’ defensive signals, including any that may have been made over the last seven years, during which time the Patriots won three Super Bowls.  The league required the team to “certify” that it had produced all such tapes and retained no copies.  After receiving the tapes and other materials, the NFL reviewed and then destroyed them, thereby eliminating the opportunity for any third party to examine the extent to which the tapes may have helped the Patriots to win games.

Read a copy of the full article here, reprinted with permission from Legal Times.

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On December 1, 2007, the amendments to the Federal Rules of Appellate, Bankruptcy, Civil, and Criminal Procedure that implement the E-Government Act of 2002 became effective.  The amendment to Appellate Rule 25, and new Bankruptcy Rule 9037, Civil Rule 5.2, and Criminal Rule 49.1 require that personal identification information be redacted from documents filed with the court — individuals' Social Security and taxpayer identification numbers, names of minor children, financial account numbers, dates of birth, and, in criminal cases, home addresses.

A memorandum briefly describing the new privacy rules, the text of the rules and committee notes, and additional information contained in the excerpt reports of the Rules Committees have been posted on the U.S. Court’s Federal Rulemaking website, and are also linked below.

Memorandum Describing the Privacy Rules and Judicial Conference Privacy Policy

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In its Reply to Broadcom Corporation’s Response to Objections of Responding Attorneys to Sanctions Order of Magistrate Judge filed on February 20, 2008, Qualcomm states that it acccepts the sanctions imposed by Magistrate Judge Barbara Lynn Major and is not appealing or filing any objections to the January 7, 2008 Sanctions Order.  Qualcomm further advises that it has now paid to Broadcom the full $8,568,633.24 monetary sanction ordered by the Magistrate Judge, and notes that it is participating in good faith in the CREDO program.

Qualcomm goes on to point out that Broadcom never requested that sanctions be imposed on the individual outside counsel who had formerly represented Qualcomm in the litigation.  “Accordingly, Broadcom has no basis for (a) complaining about Qualcomm’s compliance with the Sanctions Order since Qualcomm has in good faith done everything ordered by the Magistrate Judge; or (b) ‘responding’ to any objections to the Sanctions Order since those objections were filed only by the individual attorneys – not Qualcomm – and Broadcom did not even seek sanctions against the individual attorneys.”  Qualcomm rejected Broadcom’s suggestion that the district court might refer certain issues back to the Magistrate Judge so that she could consider additional sanctions against Qualcomm.  It stated that there had been no suggestion that the Magistrate Judge lacked authority to issue sanctions against Qualcomm, and now that Qualcomm had complied fully with the Sanctions Order, and had not objected to or appealed the sanctions, there is simply no need to re-open it.

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On February 27, 2008, the Senate approved by unanimous consent without amendment S. 2450, a bill adding new Evidence Rule 502 to the Federal Rules of Evidence.  The bill now goes on to be voted on in the House of Representatives. 

The legislation addresses waiver of the attorney-client privilege and work product protection and is identical to proposed Evidence Rule 502, which was approved by the Judicial Conference of the United States and transmitted to Congress for its consideration in September 2007.

On February 25, 2008, the Senate Judiciary Committee had reported favorably on the bill.  See Sen. Rept. No. 110-264.

Additional information about the legislation may be found on the Library of Congress "Thomas" website, and at http://www.govtrack.us/congress/bill.xpd?bill=s110-2450.

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We are pleased to announce that we have enhanced our searchable e-discovery case database and have added a number of new attributes – several of which correspond with the 2006 e-discovery amendments to the Federal Rules of Civil Procedure.  For example, you can now select the attribute “FRCP 37(e) Safe Harbor,” click “Search,” and view a list of cases that have cited or discussed the new “Safe Harbor” rule.  Other new attributes that we have added include:

• FRCP 26(b)(2)(B) “Not Reasonably Accessible”
• FCRP 34(b) Procedure or Format
• FRCP 26(b)(2)(C) Limitations
• FRCP 26(b)(5)(B) or Proposed FRE 502
• Early Conference or Discovery Plan
• Local Court Rule, Form or Guideline
• Motion for Preservation Order 

What’s more, the database now contains over 900 e-discovery cases from state and federal jurisdictions, with new cases being added every week.  Now more than ever, our database is an excellent source of information on developing e-discovery case law around the country.

The database is still searchable by keyword, or by any combination of 28 different case attributes.  Each search will produce a list of relevant cases, including a brief description of the nature and disposition of each case, the electronic evidence involved and a link to a more detailed case summary if available.

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On January 29, 2008, attorneys James R. Batchelder, Adam A. Bier, Kevin K. Leung, Christian E. Mammen, Lee Patch and Stanley Young, as well as certain Qualcomm in-house attorneys, appeared before United States Magistrate Judge Barbara L. Major, as directed in her January 7, 2008 Order.  Also appearing were outside counsel for Qualcomm, counsel for some of the sanctioned attorneys, and counsel for Broadcom.  The attorneys spent the day working to develop a comprehensive Case Review and Enforcement of Discovery Obligations ("CREDO") protocol, and at the end of the day, several attorneys appeared before the court again to report on their progress.  After reviewing counsel’s draft protocol and hearing their plans for developing it further, Magistrate Judge Major scheduled a status hearing for February 19, 2008 at 11 a.m.

Also on January 29, 2008, United States Senior District Judge Rudi M. Brewster issued an order requesting that the parties provide him with courtesy copies of all their filings related to the Magistrate Judge’s January 7, 2008 Order, in light of the objections and requests for reconsideration that were timely filed by the sanctioned attorneys.  (Qualcomm itself did not file a written objection to the January 7, 2008 Order.)  View the attorneys’ objections here:  Batchelder, Mammen & Leung Objection; Young Objection; Patch Objection; Bier Objection.

View Broadcom’s response to the attorney objections.

The court has not yet set a hearing date on the attorneys' objections and requests for reconsideration.

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The Virginia Supreme Court's Advisory Committee on Rules of Court has unanimously concluded that it should publish a Tentative Draft of possible rules amendments on the topic of electronic discovery.  The Tentative Draft takes into account the detailed comments on an initial discussion draft circulated several months ago.  It is the Advisory Committee's plan to consider these draft rules at its April, 2008 meeting and to discuss all comments and suggestions received concerning the structure and content of the proposed provisions.

If approved by the Advisory Committee, the rules proposals would be recommended to the Judicial Council of Virginia and the Supreme Court, which will decide whether the rules should be approved and promulgated as Rules of Court.

Comments on the Tentative Draft should be sent by March 15, 2008 to:

Karl R. Hade, Executive Secretary
Supreme Court of Virginia
00 North Ninth Street
Richmond, VA 23219

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The Alaska Supreme Court is now seeking public comment on a proposal to amend the Alaska Rules of Court to align Alaska’s discovery rules with the December 2006 federal rules amendments addressing the discovery of electronically stored information.  The Civil Rules Committee is recommending amendments to Alaska’s Civil Rules 16, 26, 33, 34, 37, and 45.

Comments are due by Friday, February 29, 2008, and may be submitted by mail, fax, or email:

Beth C. Adams
Court Rules Analyst
Snowden Administrative Office Building
820 West Fourth Avenue
Anchorage, AK 99501-2005

Fax number:  (907) 264-8291

Email address:  badams@courts.state.ak.us

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From a January 18, 2008 article by Pete Yost of the Associated Press:

A White House chart indicates no e-mail was archived on 473 days for various units of the Executive Office of the President, a House committee chairman says.

Rep. Henry Waxman, D-Calif., says a White House spokesman's comments suggesting no e-mail had disappeared conflicted with what congressional staffers were told in September.

On Thursday night, Waxman said he was scheduling a hearing for Feb. 15 and challenged the White House to explain spokesman Tony Fratto's remark that "we have absolutely no reason to believe that any e-mails are missing."

Fratto based his comment on the contents of a White House declaration filed in federal court casting doubt on the accuracy of a chart created by a former White House employee that points to a large volume of e-mail gone from White House servers.

Click here to read the full article.

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The Supreme Court of Ohio is now accepting public comments on proposed amendments to the Ohio Rules of Civil Procedure addressing electronic discovery.  The amendments to Rules 16, 26, 33, 34, 36, 37, and 45 are based on the December 2006 amendments made to the Federal Rules of Civil Procedure.  

Click to view the proposed amendments as published for public comment.

Comments on the proposed amendments must be submitted in writing to:  Jo Ellen Cline, Legislative Counsel, Supreme Court of Ohio, 65 South Front Street, 7th Floor, Columbus, Ohio 43215-3431 or ClineJ@sconet.state.oh.us and received no later than March 4, 2008.

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Citizens for Responsibility & Ethics in Washington v. Executive Office of the President, No. 1:07-cv-01707-HHK (D.D.C. Jan. 15, 2008)

On January 15, 2008, a declaration authored by the White House’s Chief Information Officer was filed in response to the Court’s January 8 Order, discussed in our January 10, 2008 post on the subject.  The declaration responds to four questions posed by Magistrate Judge John M. Facciola regarding the backup media being preserved by the White House for purposes of the litigation.  Among other things, the CIO confirms that emails sent or received during the 2003-2005 time frame should be contained on existing backup tapes.  However, the CIO states that her office “does not know if any emails were not properly preserved in the archiving process.”

The CIO further states that her office is undertaking an “independent effort” to determine whether there may be “anomalies” in Exchange email accounts for any particular days resulting from the potential failure to properly archive emails for the 2003-2005 time period.  The CIO states that this “independent assessment” is expected to be completed in the near term.

Click to view a Washington Post article on this most recent filing and for additional background.

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To modernize civil discovery law and improve the procedures for handling the discovery of electronically stored information, the Judicial Council of California has proposed amending California’s Civil Discovery Act and two rules in the California Rules of Court on the management of civil cases.

The proposal has two parts.  First, it would amend the Civil Discovery Act (Code Civ. Proc., §§ 2016.010 et seq.) to include new provisions relating to electronic discovery and would add two new sections relating to electronic discovery to the act.  Second, the proposal would amend two case management rules in the California Rules of Court (rules 3.724 and 3.728) to encourage parties to identify and discuss issues relating to electronic discovery early in the course of litigation and to encourage courts to address these issues in case management orders.  These rule amendments are closely connected with, and are intended to assist in implementing, the proposed legislation.  The rule proposals would not go forward without the legislation.

Click to view the full proposal and invitation to comment:  Electronic Discovery: Legislation and Rules

The deadline for comments is Friday, January 25, 2008.  Comments may be submitted through the Judicial Council’s online comment form, or by regular mail to the following address:

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On January 10, 2008, the Arkansas Supreme Court accepted the Committee on Civil Practice’s proposals for changes in the Arkansas Rules of Civil Procedure and Rules of Evidence to address the inadvertent disclosure of information protected by the attorney-client privilege, or any other evidentiary privilege, or the work product doctrine.  The amendments go into effect immediately.

The Reporter's Notes explain the rationale behind the amendments:

Lawyers do their best to avoid mistakes, but they sometimes happen.  Discovery has always posed the risk of the inadvertent production of privileged or protected material.  The advent of electronic discovery has only increased the risk of inadvertent disclosures.  This amendment addresses this risk by creating a procedure to evaluate and address inadvertent disclosures, including disputed ones.

Click to view the Arkansas Supreme Court Order approving the amendments, which sets out the full text of the amendments and the accompanying Reporter's Notes.

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Citizens for Responsibility & Ethics in Washington v. Executive Office of the President, No. 1:07-cv-01707-HHK (D.D.C. Jan. 8, 2008)

This case involves a claim by the National Security Archive (“the Archive”) and Citizens for Responsibility & Ethics in Washington that several million email messages were improperly deleted from White House computer servers.  Plaintiffs have requested that the court compel expedited discovery and a Rule 26(f) conference, and defendants have moved to dismiss the case.  On Tuesday, January 8, 2008, Magistrate Judge John M. Facciola ordered the White House to provide additional information about the backup media it is preserving in the litigation pursuant to an earlier court order.  The court explained the relevance of the information to its decision on plaintiffs’ pending discovery motion:

To the extent that the missing emails are contained on the back-ups preserved pursuant to Judge Kennedy’s order, there is simply no convincing reason to expedite discovery – particularly where, as here, there is a pending motion to dismiss.  If the missing emails are not on those back-ups, however, the relief likely to be requested by the Archive will be beyond the scope of the present Motion – and, indeed, beyond the scope of this referral.  The request for that relief will also be time-sensitive:  emails that might now be retrievable from email account folders or “slack space” on individual workstations are increasingly likely to be deleted or overwritten with the passage of time.

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Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co. Inc., No. SC07-1251 (Fla. Dec. 12, 2007)

In a brief order issued on December 12, 2007, the Florida Supreme Court denied Coleman (Parent) Holdings, Inc.’s petition for review of the Florida state appellate court decision which reversed the $1.58 billion against Morgan Stanley.  (View our March 21, 2007 post regarding that reversal, and read the appellate court opinion, here.)  The Florida Supreme Court advised that no motion for rehearing would be entertained.  A copy of the order is available here.

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From The Red Tape Chronicles, Posted:  Friday, November 30 at 05:15 am CT by Bob Sullivan:

"It's being called the worst data leak of the information age.  Earlier this month, U.K. officials had to admit they'd lost hard drives containing personal information on almost half the country's population, including nearly all families with children.  If that's not bad enough, the databases included the worst kind of information to lose -- consumer bank account numbers.

It's a data scandal fit for tabloids.  The price tag put on the loss is already $500 million.  Prime Minister Gordon Brown had to issue a public apology, and the head of Britain's Revenue and Customs office was forced to resign.  The U.S. audience might have missed the initial news because the story broke during the Thanksgiving holiday.  But the obvious question floating across the Pond is this:  Could something that dramatic happen in the United States?

Yes, most experts say.  And the consequences here would be even worse."

Click here to read the full article. 

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From the Wall Street Journal, November 28, 2007, Page A6, by John R. Wilke:

"The head of the federal agency investigating Karl Rove's White House political operation is facing allegations that he improperly deleted computer files during another probe, using a private computer-help company, Geeks on Call.

Scott Bloch runs the Office of Special Counsel, an agency charged with protecting government whistleblowers and enforcing a ban on federal employees engaging in partisan political activity.  Mr. Bloch's agency is looking into whether Mr. Rove and other White House officials used government agencies to help re-elect Republicans in 2006.

At the same time, Mr. Bloch has himself been under investigation since 2005.  At the direction of the White House, the federal Office of Personnel Management's inspector general is looking into claims that Mr. Bloch improperly retaliated against employees and dismissed whistleblower cases without adequate examination.

Recently, investigators learned that Mr. Bloch erased all the files on his office personal computer late last year.  They are now trying to determine whether the deletions were improper or part of a cover-up, lawyers close to the case said."

Click here to read the full article.  (Subscription may be required.)

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Citizens for Responsibility & Ethics in Washington v. Executive Office of the President, No. 1:07-cv-01707-HHK (D.D.C. Nov. 12, 2007)

On Monday, November 12, 2007, Judge Henry H. Kennedy, Jr. adopted the Report and Recommendation of Magistrate Judge John M. Facciola and ordered the White House to:  “preserve media, no matter how described, presently in their possess[ion] or under their custody or control, that were created with the intention of preserving data in the event of its inadvertent destruction.”  Judge Kennedy further ordered:  “Defendants shall preserve the media under conditions that will permit their eventual use, if necessary, and shall not transfer said media out of their custody or control without leave of this court.” 

In this consolidated action, Citizens for Responsibility & Ethics in Washington ("CREW") and The National Security Archive are seeking to preserve for history the records of the Bush presidency.  The organizations challenge as contrary to law "the knowing failure of the defendants to recover, restore and preserve certain electronic communications created and/or received within the White House."  The plaintiffs further allege:

The e-mails at issue were improperly deleted from servers maintained by the Executive Office of the President and currently exist only on back-up tapes, if at all.  Unless relief is granted and the e-mail expeditiously restored from the back-up tapes, these federal and presidential records may be lost forever.  This action also challenges the failure of the Archivist and the head of the Office of Administration to take enforcement action to ensure adequate preservation of all federal records.

[] In addition, this lawsuit seeks an order requiring the defendants to implement an adequate electronic records management system in compliance with federal law.  The current administration abandoned the previous electronic records management system in 2002 and has failed to implement another system, creating a situation in which emails that should have been preserved as either federal or presidential records were instead improperly deleted.  Moreover, in the absence of an adequate electronic records management system, e-mails continue to be deleted improperly from the servers. . . .

Complaint, at pp. 2-3.  Defendants have stated they intend to file a motion to dismiss for lack of subject matter jurisdiction.

A copy of today’s order is available here, and a copy of Magistrate Judge Facciola’s October 19, 2007 Report and Recommendation is available here.

An article about the ruling is available here.

CREW has also moved for expedited discovery and has asked the court to compel a Rule 26(f) conference.  A copy of the memorandum in support of that motion is available here.

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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.

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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.

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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.

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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.

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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.

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From The Recorder by Jessie Seyfer via Law.com:

"Attorneys who once represented Qualcomm Inc. in its ill-fated federal patent case against Broadcom Corp. have asked a judge to pierce their client's privileged communications.

With the threat of formal sanctions bearing down on them, lawyers at Heller Ehrman and Day Casebeer Madrid & Batchelder -- Qualcomm's former litigation counsel -- are asking for a rare exception to privilege so they can explain to the judge how their side failed to produce hundreds of thousands of relevant documents during discovery in the San Diego case. "

Click here to read the rest of the article on Law.com.

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This month, the Legal Ethics Committee of the District of Columbia Bar issued Ethics Opinion 341 on the review and use of metadata in electronic records. Attempting to create a compromise position on the issue of metadata mining, the committee found that a lawyer receiving electronic records from an adversary is prohibited from reviewing the records' metadata only when he has actual knowledge that the metadata was inadvertently sent. In such cases, the receiving lawyer should not review the metadata before consulting with the sending lawyer to determine whether the metadata includes work product of the sending lawyer or confidences or secrets of that lawyer’s client. The full text of the ethics opinion can be found here.

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By K&L Gates partner David R. Cohen

This article appears in the September 2007 issue of Metropolitan Corporate Counsel, and discusses the role of Special e-Discovery Counsel in complex litigation, as well as best practices for hiring and getting the most out of this specialized team. 

View the article online, or in .pdf format here.

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From a release posted by the Uniform Law Commission on August 2:

"A new act approved today by a national law group addresses the growing concern over the rules of discovery that courts must follow to access electronic information in civil cases.  The Uniform Rules Relating to Discovery of Electronically Stored Information was approved today by the Uniform Law Commission (ULC) at its 116th Annual Meeting in Pasadena, California.

The primary purpose of the new uniform rules is to provide states with up-to-date rules for the discovery of electronic documents in civil cases. "

Read the entire press release here.

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By Christopher S. Rugaber from the Associated Press via Washingtonpost.com:

"Federal regulators inadvertently released dozens of trade secrets in public court documents yesterday as they tried to block Whole Foods Market's $565 million purchase of Wild Oats Markets.

The Federal Trade Commission documents revealed that Whole Foods plans to close 30 or more Wild Oats stores in competitive markets, a move that the company thinks would nearly double revenue for some Whole Foods stores. "

Click here to read the entire story on Washingtonpost.com.  Free subscription required.

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Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B(BLM) (S.D. Cal. Aug. 13, 2007) (Order to Show Cause Why Sanctions Should Not Be Imposed)

Today, Magistrate Judge Barbara Lynn Major, United States District Court for the Southern District of California, signed and entered an Order to Show Cause directing 14 attorneys, “and any and all other attorneys who signed discovery responses, signed pleadings and pre-trial motions, and/or appeared at trial on behalf of Qualcomm,” to appear in her courtroom on August 29, 2007 at 9:30 a.m. to show cause why sanctions should not be imposed against them for failure to comply with the Court’s orders.  The Order provides that the attorneys may also file declarations regarding the imposition of sanctions on or before August 22, 2007.

The Order to Show Cause comes on the heels of the 54-page Order on Remedy for Finding of Waiver, entered August 6, 2007, by District Court Judge Rudi M. Brewster.  There, the District Judge found “by clear and convincing evidence that Qualcomm[’s] counsel participated in an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial before new counsel took over lead role in the case on April 27, 2007.”  Among other things, the Court highlighted Qualcomm’s production of over 200,000 pages of highly relevant emails and electronic documents four months post-trial.

A copy of today’s Order to Show Cause is available here.

A copy of Judge Rudi M. Brewster’s August 6, 2007 Order on Remedy for Finding of Waiver is available here.

A copy of Judge Rudi M. Brewster’s August 6, 2007 Order Granting Broadcom Corporation’s Motion for Exceptional Case Finding and for an Award of Attorneys’ Fees (35 U.S.C. § 285) is available here.

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In re Sept. 11th Liab. Ins. Coverage Cases, 2007 WL 1739666 (S.D.N.Y. June 18, 2007)

The perils of e-discovery once again made headlines last month – this time in connection with the insurance coverage battles resulting from the September 11, 2001 terrorist attack on the World Trade Center.  On June 18, United States District Judge Alvin K. Hellerstein, for the Southern District of New York, sanctioned Zurich American Insurance Company (“Zurich”) and its counsel, the law firms of Wiley Rein LLP and Coughlin Duffy LLP, $1.25 million upon finding that Zurich (i) asserted unsupported defenses, (ii) deleted electronic evidence, and (iii) delayed the production of a 62-page insurance policy (“the 9/11 document”) and other relevant documents.

At the heart of this complex insurance coverage action is the question whether the Port Authority of New York and New Jersey (“Port Authority”) and Westfield Corporation, Inc. (“Westfield”) are named insureds under a general liability policy issued to World Trade Center Properties LLP (“WTCP”).  Zurich alleged that they were not.  Zurich ultimately changed its position, however, when it produced documents that proved otherwise, long after those documents were first requested.  These critical documents were in Zurich’s counsel’s possession for almost three years before they were produced.  Concerned about the appearance of pleading and discovery abuses, the Court permitted the Port Authority and Westfield to seek sanctions under Rules 11 and 37 of the Federal Rules of Civil Procedure.

Continue Reading...

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In a June 19, 2007 article in the New York Law Journal (subscription required), and a June 27, 2007 article appearing on www.law.com, K&L Gates partner Kelly D. Talcott writes:

A recent e-discovery decision from the U.S. District Court for the Central District of California provides an opportunity to reflect a bit on the permanence of storage media.  It has also inspired debate as to when temporarily stored information becomes "electronically stored information" that needs to be preserved and, where relevant, produced in response to discovery requests.

The May 27, 2007, order directs defendants in an ongoing copyright infringement lawsuit to collect and produce information stored in the random-access memory of their servers.

Depending on the ideological and topical bent of the commentator, this decision (a) heralds a substantial victory in the war against copyright infringement; (b) sounds the death knell for Internet user privacy, or (c) could require anyone involved in a lawsuit to turn over information stored by their computers' RAM hardware.  Closer inspection of the federal magistrate judge's decision reveals the correct answer is probably (d) none of the above.

The article relates to the case of Columbia Pictures Industries v. Bunnell, CV 06-1093 FMC (JCx), U.S. District Court for the Central District of California. 

For those interested in reading the Court's now-unsealed order that is the subject of the article, it is available here.

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By Jesse Seyfer from The Recorder:

A federal magistrate's order that stops a Web site from routinely tossing relevant data could, if replicated, carry broad e-discovery implications.

Magistrate Judge Jacqueline Chooljian's May 29 order requires TorrentSpy to turn over customer data only ephemerally kept in its computers' random access memory, or RAM. It could result in floods of similar requests in other civil cases, according to Ira Rothken, the Novato, Calif.-based attorney for the TorrentSpy site.

The Los Angeles magistrate's order also has privacy watchdogs concerned.

Click here to read the entire article on Law.com.

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Effective June 4, 2007, the U.S. District Court for the Northern District of Ohio has incorporated a Default Standard for Discovery of Electronically Stored Information ("E-Discovery") as Appendix K to its Local Civil Rules.  Although the Court expects parties to cooperatively reach agreement on how to conduct e-discovery, in the event that such agreement has not been reached by the time of the Fed. R. Civ. P. 16 scheduling conference, the default standards will apply until such time, if ever, the parties reach agreement and conduct e-discovery on a consensual basis.  The newly adopted default standard is available on the court’s website, at: http://www.ohnd.uscourts.gov/Clerk_s_Office/Local_Rules/AppendixK.pdf

The Court has also revised its Local Civil Rule 16 regarding case management.  Among other revisions, LR 16.3(b)(2)(F) now specifically includes discussion of electronic discovery as an agenda item for the Case Management Conference.  Revised LR 16.3 is available at: http://www.ohnd.uscourts.gov/Clerk_s_Office/Local_Rules/lr16.3redline6-4-07.pdf

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

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On April 20, 2007, the Federal Reserve Board (the “FRB”) issued a proposal to withdraw portions of five interim final rules that address the electronic delivery of required consumer disclosures. The regulations are: B (implementing the Equal Credit Opportunity Act), E (implementing the Electronic Funds Transfer Act), M (implementing the Consumer Leasing Act), Z (implementing the Truth in Lending Act) and DD (implementing the Truth in Savings Act).

The withdrawal means that those who have attempted to comply with the interim rules, and those who ignored them, can and should now focus their attention on the requirements of the federal Electronic Signatures in Global and National Commerce Act (“E-Sign”). This creates both benefits and new ambiguities for financial institutions.

Click here to read the entire story by K&L Gates partners Jonathan Jaffe and Holly Towle.

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By Samar Srivastava From today's Wall Street Journal:

"Demand for software that can search and locate emails, text messages, videos and spreadsheets is expected to surge in the wake of federal legislation requiring companies to make such information readily available in court proceedings.

In December, Congress passed the Federal Rules of Civil Procedure, accelerating deadlines for companies to identify and describe electronically searchable information that can be used as evidence in a lawsuit. To comply with requests for such electronically stored information during litigation, companies need to have a plan and tools in place. "

Click here to read the entire article [subscription required.]

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By James D. Sherman and Lori E. Steidl in the May 4, 2007 issue of ALM's The Corporate Counselor.

"In today's litigation world, corporate counsel struggle to contain the ever-increasing costs of document discovery. The explosion of electronically stored information is often a huge contributor to the expense of discovery. Consultants, vendors and e-discovery software can help bring greater efficiencies and cost savings to the process. But while there's a dizzying array of options available, they're not all created equal. Finding the right solution requires that you do your homework.

Before deciding to outsource your next electronic discovery request, take a moment to examine the review practices of your legal service provider or outside counsel. Many legal service providers and law firms are relying on outdated and expensive methods to collect and analyze data for litigation. For example, be wary of solutions that involve conversion of documents into TIFF or PDF format before an initial review for relevance of the underlying data takes place. This practice needlessly creates additional electronic "copies" of vast amounts of data, most of which ultimately prove to be irrelevant and thus are never produced or otherwise used. It may also undermine your ability to take advantage of certain useful characteristics of native format documents that are lost in the conversion process. A step as simple as using e-discovery software that facilitates processing and review of electronic documents in their native format can save your company a great deal of money when it comes to document discovery. "

Click here to read the entire story online.

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Written by the Associated Press and posted on MSNBC on May 2, 2007:

"Leahy not accepting White House explanation some may have been lost

WASHINGTON - Senators subpoenaed Attorney General Alberto Gonzales Wednesday, ordering him to provide all e-mails related to presidential adviser Karl Rove and the firings of eight federal prosecutors.

"It is troubling that significant documents highly relevant to the committee's inquiry have not been produced," Judiciary Committee Chairman Patrick Leahy, D-Vt., wrote in a letter to Gonzales. The subpoena gives Gonzales until May 15 to turn over the information. "

Read the entire story on MSNBC.com here.

 

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By K&L Gates attorneys Thomas J. Smith and Michael J. Crossey, Jr.</