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

After previously vetoing a prior version of the bill for budgetary reasons, Governor Schwarzenegger signed California’s Electronic Discovery Act last night, to be effective immediately. Closely tracking the 2006 amendments to the Federal Rules of Civil Procedure, the act institutes procedures to guide the discovery of electronically stored information in California.

To read the full text of the Electronic Discovery Act, click here.

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By BECKY BOHRER

NEW ORLEANS (AP) — A state court judge on Thursday found Dell Inc. in contempt of court, saying the computer company was making a "mockery" of the system with its alleged piecemeal production of documents in a civil lawsuit over New Orleans' crime camera system.

Judge Rosemary Ledet also ordered Texas-based Dell to pay $25,000 in sanctions. Plaintiffs' attorneys had requested nearly $182,000 in fees and expenses.

Dell attorney Phillip Wittmann disputed claims that the company was dragging its feet and playing games in discovery, saying that more than 160,000 pages of documents have been produced, e-mail and other information has been handed over as it's been uncovered and that the company has been acting in good faith.

But Ledet called the company's conduct "unconscionable," after hearing arguments from plaintiffs' attorneys that searches using such keywords as "camera" were not done for e-mail and other documents that may have been sent to or by Dell executives, including Chief Executive Michael Dell.

Plaintiffs' attorney Gladstone Jones said he "wasted my time" in Texas last week for Michael Dell's deposition because of the quality of the records' search.

Ledet ordered a search using specific words and said the sides can discuss how to proceed if the search yields a huge amount of records. She did not order that depositions, like Michael Dell's, be taken again.

Click here to read the full article.

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On April 2, 2009, the Iowa Supreme Court approved the adoption of Evidence Rule 5.502 addressing the disclosure of information covered by the attorney-client privilege and work product.  Substantially similar to recently enacted Federal Rule of Evidence 502, the new rule outlines the effects of disclosure with regard to waiver, including the effect of inadvertent disclosure.  The rule became effective on June 1, 2009.

Click here to view the full text of the Supreme Court’s report.

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Council of the City of New Orleans v. Washington, 2009 WL 1492869 (La.  May 29, 2009)

In this case, attorney Tracie Washington and others appealed a preliminary injunction from the District Court preventing the dissemination of emails received in response to a public records request. The injunction was issued in light of the City’s failure to properly review the documents for privileged information before production. Upon Washington’s appeal, the court of appeal determined the injunction violated the First Amendment and thus vacated the order of the District Court. The City Council of the City of New Orleans appealed.

On appeal, the Supreme Court of Louisiana vacated the judgment of the court of appeal upon finding that the First Amendment arguments upon which the court relied were presented for the first time on appeal and were therefore improperly considered. Accordingly, the matter was remanded for further proceeding.

A copy of the full opinion is available here.

A summary of the court of appeal's opinion is available here.

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Citizens for Responsibility and Ethics in Washington v. Office of Admin., 2009 WL 1373612 (D.C. Cir. May 19, 2009)

Citizens for Responsibility and Ethics in Washington (“CREW”) alleged that “entities in the Office of Administration (OA) discovered in October 2005 that entities in the Executive Office of the President (EOP) had lost millions of White House emails.”  In April 2007, CREW filed a Freedom of Information Act (“FOIA”) request seeking OA’s production of “records related to the EOP’s email management system, reports analyzing problems with the system, records of retained e-mails and possibly missing ones, documents discussing plans to fine the missing e-mails, and proposals to instate a new e-mail records system.”  The OA initially agreed to produce the records but asked for an extended deadline to do so.  Upon missing the extended deadline, OA argued for the first time that it was not covered by FOIA “because it provides administrative support and services directly to the President and the staff in the EOP, putting it outside of FOIA’s definition of ‘agency.’”  Despite its resistance, the OA produced some records as a matter of “administrative discretion.”

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The Financial Industry Regulatory Authority (FINRA) announced this week that it has fined Centaurus Financial, Inc. $175,000 for failing to protect confidential customer information.  Specifically, between August 2006 and July 2007 Centaurus failed to employ adequate safeguards against infiltration of its fax server containing the information at issue.  Examples of the inadequate protection measures include the use of a “weak” username, “Administrator,” and the password “password.”  The company’s safety failures resulted in unknown persons conducting a “phishing” scam hosted by Centaurus’s fax server.  Additionally, Centaurus’s notification to customers regarding the breach in security was found to have been misleading.

To read the full text of FINRA’s press release regarding this decision, click here.
 

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Announced this week, Broadcom Corporation and Qualcomm Incorporated have entered into a settlement and multi-year patent agreement.  Under the terms of the settlement agreement, Qualcomm has agreed to pay Broadcom $891 million over four years.  Other notable terms of the agreement include dismissal of all litigation between the companies and Broadcom’s withdrawal of its complaints to the European Commission and the Korea Fair Trade Commission.  According to Qualcomm’s press release, the parties have also agreed to grant one another certain rights under their respective patent portfolios.

To read the full text of Qualcomm’s recent press release, Click Here.
 

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On March 11, 2009, the American College of Trial Lawyers released its report on discovery and issues impacting discovery.  The report is the final product of a joint project between members of the American College of Trial Lawyers Task Force on Discovery and The Institute for the Advancement of the American Legal System.  The project was “conceived as an outgrowth of increasing concerns that problems in the civil justice system, especially those relating to discovery, have resulted in unacceptable delays and prohibitive expense.”  The goal of project was to provide Proposed Principles that would “ultimately result in a civil justice system that better serves the needs of its users.”

The Final Report identifies problems in several areas including pleadings, discovery, experts, and dispositive motions and provides Proposed Principles intended to address and resolve those problems.  The report’s discussion of discovery includes several Proposed Principles directly addressing the perceived problems in electronic discovery. Among those Proposed Principles are:

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On March 12, 2009 California’s Assembly took steps toward the legislature’s approval of proposed amendments to California’s Code of Civil Procedure to include rules governing the discovery of electronically stored information, by approving House Assembly Bill 5 and sending the bill to the Senate for its approval.  The bill was then introduced in the Senate and has been sent to committee for hearings.

This is the second time California has considered such amendments.  On September 27, 2008, the original bill was vetoed by Governor Arnold Schwarzenegger for budgetary reasons.  House Assembly Bill 5 is virtually identical to the vetoed bill and was introduced to the Assembly by Assembly Member Noreen Evans on December 1, 2008.

To read the full text of Assembly Bill 5, click here.
To view the history of Assembly Bill 5, click here.

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On February 11, 2009, the EU Article 29 Working Party, set up under Article 29 of Directive 95/46/EC, released its working document addressing the difficulties of cross border discovery and providing guidance to EU data controllers on how to proceed.

Recognizing the “need for reconciling the requirements of US litigation rules and the EU data protection provisions,” the document is intended to provide guidelines for EU data controllers but also provides valuable insight to American practitioners regarding the difficulties they may face in cross border discovery, especially with European countries.  As stated in its introduction:

There is a tension between the disclosure obligations under US litigation or regulatory rules and the application of the data protection requirements of the EU.  There is also the issue of the contrast between the geographical and territorial basis of the EU data protection regime and the multinational nature of business where a corporate body can have subsidiaries or affiliates across the globe.  This is of particular relevance to the European affiliates of multinational companies which can be caught between the conflicting demands of US legal proceeding and the EU data protection and privacy laws which govern the transfer of personal information.

Specifically, the document discusses the differences between Common Law and Civil Code jurisdictions, making requests for information through the Hague Convention, and relevant Articles of Directive 95/46/EC of the European Parliament and of the Council on the protection of individuals with regard to the processing personal data and on the free movement of such data (a/k/a The Data Protection Directive).

A full copy of the Working Document is available here.

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The National Law Journal, Feb. 20, 2009
By Marcia Coyle

Despite reassuring statements by Attorney General Eric Holder on the issue of attorney-client privilege waivers in corporate investigations, a key senator is moving forward with legislation to put protection for the privilege and the work-product doctrine into law and throughout government.

Sen. Arlen Specter, R-Pa., the ranking minority member of the Senate Judiciary Committee, has reintroduced, with bipartisan support, the Attorney-Client Protection Act of 2009, S. 445.

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CNET News, Feb. 19, 2009
By Declan McCullagh, Chief Political Correspondent

Republican politicians on Thursday called for a sweeping new federal law that would require all Internet providers and operators of millions of Wi-Fi access points, even hotels, local coffee shops, and home users, to keep records about users for two years to aid police investigations.

The legislation, which echoes a measure proposed by one of their Democratic colleagues three years ago, would impose unprecedented data retention requirements on a broad swath of Internet access providers and is certain to draw fire from businesses and privacy advocates.

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Hynix Semiconductor Inc. v. Rambus Inc., 2009 WL 292205 (N.D. Cal. Feb. 3, 2009)

Beginning in 2000, Rambus Inc. (“Rambus”) alleged that several companies had infringed its patents and instituted legal action.  Among the companies accused by Rambus were Micron Technology, Inc (“Micron”) and Hynix Semiconductors, Inc. (“Hynix”).  In response to the allegations of infringement, both Micron and Hynix filed actions for declaratory judgment in Delaware and California, respectively.  Both Micron and Hynix also asserted the unenforceability of the patents and alleged that Rambus had unclean hands as a result of extensive document destruction.  In both cases, a bench trial was held on the unclean hands defense.

In January 2006, the California court ruled in Rambus’s favor holding that Hynix’s defense of unclean hands had failed.  Hynix Semiconductor, Inc. v. Rambus Inc., 2006 WL 565893 (N.D. Cal. Jan. 5, 2006).  In January 2009, the Delaware court ruled in Micron’s favor holding that Rambus had destroyed documents in bad faith and, as a sanction, ordered the patents unenforceable against Micron.  Micron Tech., Inc. v. Rambus, Inc., 2009 WL 54887 (D. Del. Jan. 9, 2009).

Based on the ruling of the Delaware court, Hynix moved for summary judgment on the basis of defensive non-mutual issue preclusion or, in the alternative, for reconsideration of the California court’s prior decision regarding Rambus’s actions.  Those motions were denied, leaving in place the conflicting rulings of the two courts.

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U.S. v. Nicholas, 2008 WL 5546721 (C.D. Cal. Dec. 29, 2008)

In this case, the United States District Court in the Central District of California denied defendant Henry Nicholas’s motion to block the production of an incriminating email and for an order preventing the use of the email for cross examination or impeachment should Nicholas testify.  Rejecting Nicholas’s argument that the email was protected from disclosure by marital privilege, the district court held that a Ninth Circuit ruling that the email was subject to some protection by the marital privilege did not preclude all potential use of the email.  Accordingly the district court held that because the email could constitute the admission of a co-conspirator and be admissible at trial under other limited circumstances, it must be disclosed to Nicholas’s co-defendant.

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On December 16, 2008, the Michigan Supreme Court adopted amendments to Michigan’s Court Rules to address discovery of electronically stored information in civil litigation.  The new rules became effective January 1, 2009.

The adopted amendments affect the following rules:

2.302 General Rules Governing Discovery
2.310 Requests for Production of Documents and Other Things; Entry on Land
for Inspection and Other Purposes
2.313 Failure to Provide or Permit Discovery; Sanctions
2.506 Subpoena; Order to Attend

The order approving the amendments is available here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

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Effective January 1, 2009, Louisiana has adopted amendments to several civil rules to specifically address the treatment of electronically stored information.

CCP 1354 Subpoena deuces tecum - was amended to govern the form of electronically stored information produced in response to a subpoena duces tecum and specifically addresses the format of production and production of documents not reasonably accessible, among other things.

CCP 1471 Failure to comply with order compelling discovery; sanctions - was amended to establish that where electronically stored information is lost as the result of a routine, good-faith operation of an electronic information system, a court may not impose sanctions pursuant to this rule.

CCP 1551 Pretrial and scheduling conference; order - was amended to specifically direct consideration of discovery of electronically stored information in the pre-trial order.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.
 

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State ex rel. Toledo Blade Co. v. Seneca County Bd. Of Comm’rs, 899 N.E.2d 961 (Ohio 2008)

This case arose from plaintiff’s request to review “all outgoing and incoming emails” of several Seneca County Commissioners following the board’s approval of plan that called for the demolition of the courthouse.  Plaintiff alleged that the county’s production was deficient and cited a lack of emails from a particular time frame as well as alleged admissions by particular commissioners that they had deleted relevant messages.

Following these allegations, the board discovered additional emails for production and subsequently undertook a search in “every single folder in the hard drives of the computers of every person from whom emails were requested” and produced all responsive documents. The board did not undertake efforts to recover deleted messages, however, arguing that “while it may be possible to retrieve additional information from a hard drive with very expensive forensic tools, that information would be considered deleted by the user and would not be available to the user.” At all relevant times, the board maintained a schedule for records retention that allowed for the deletion of email deemed to have “no significant value.” The determination of “value” was left to each individual “computer user” pursuant to that policy.

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On December 19, 2008, the Supreme Court of Alaska adopted amendments to Alaska’s Rules of Civil Procedure to address the discovery of electronically stored information.  The amendments affect rules 16, 26, 33, 34, 37, and 45 and become effective April 15, 2009.

The order approving the amendments is available here.

On October 1, 2008, the Supreme Court of Virginia adopted amendments to Virginia’s Rules of Civil Procedure.  The new rules address the discovery of electronically stored information.  The amendments affect rules 4:1, 4:4, 4:8, 4:9, 4:9A, and 4:13.  The rules became effective as of January 1, 2009.

The order approving the amendments is available here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

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Effective August 1, 2008, Maine has adopted amendments to its Rules of Civil Procedure to “address the need for specific treatment of the discovery of electronically stored information.”  As stated in the Advisory Committee Note to Rule 16, the amendments were taken largely from the 2006 amendments to the Federal Rules of Civil Procedure and practitioners are instructed that “guidance in the interpretation of the Maine rules may be obtained from the federal amendments, their Advisory Committee’s Notes, and cases applying to the federal rules.”  The amendments affect rules 16, 26, 33, 34, and 37.

To view the amended rules, click here.

Note:  Following adoption of the amended rules, the court adopted corrections to the amendments of rules 34 and 37.  To view the corrections to the amendments of Rule 34 and Rule 37, click here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

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On December 1, 2008 California Assembly Member Noreen Evans introduced Assembly Bill 5, the “Electronic Discovery Act” – a bill that would amend California’s Civil Discovery Act to include rules governing the discovery of electronically stored information.  As stated in AB 5:

This bill would establish procedures for a person to obtain discovery of electronically stored information, as defined, in addition to documents, tangible things, and land or other property, in the possession of any party to the action.  This bill would permit discovery by the means of copying, testing, or sampling, in addition to inspection of documents, tangible things, land or other property, or electronically stored information.

The proposed amendments closely track several of the 2006 e-discovery amendments to the Federal Rules of Civil Procedure.

This bill is virtually identical to the “original” e-discovery bill, Assembly Bill 926, vetoed by Governor Arnold Schwarzenegger earlier this year.  The notable exception is the inclusion of an urgency clause which would make the bill effective immediately upon signing.

To read the full text of Assembly Bill 5, click here.

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The risks associated with e-mail miscommunication and misdirection have been well documented. Because these risks originate from e-mail users, perhaps the best way to mitigate such risks is to help individual e-mail users remember and implement a checklist for sending e-mails safely. This client alert, authored by K&L Gates Partner Thomas Smith and Associate Daniel Miller, presents a simple mnemonic device for "SAFE E-MAIL" that can remind individual e-mail users of key issues to consider when drafting and sending e-mail messages.

To view the complete alert online, click here. 

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Arkansas
Effective January 10, 2008 Arkansas has amended Rule 26 to address inadvertent disclosure.

Rules 26 General Provisions Governing Discovery (See section 26(b)(5))

Iowa
Effective September 1, 2008 the Iowa District Court Trial Scheduling Order was amended to address the discovery of electronically stored information.

Rule 23.5 – Form 2: Trial Scheduling Order

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Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004 (Fed. Cir. 2008)

On December 1, 2008, the Court of Appeals for the Federal Circuit issued its opinion affirming the lower court’s findings that Qualcomm breached its duty to disclose the patents at issue in the underlying case and thus waived the enforceability of those patents.  The Court of Appeals also upheld the lower court’s finding that this constituted an “exceptional case,” and the resulting award of attorney’s fees to Broadcom.  The Court of Appeals took exception, however, to the scope of the waiver remedy articulated by the lower court, vacated that portion of the order and remanded the case with instructions to narrow the scope.

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According to a Revisor’s note:

The former Nebraska Discovery Rules for All Civil Cases have been renumbered in the revised Nebraska Court Rules as Chapter 6, Article 3, Nebraska Court Rules of Discovery in Civil Cases. Thus, former rule 26 is now Neb. Ct. R. Disc. § 6-326, etc., with the last two numbers of the newly renumbered sections corresponding to the former rule.

This affects recent amendments to former rules 33, 34, and 34A, addressing e-discovery issues. Those rules are now known as follows:

§ 6-333     Interrogatories to Parties
§ 6-334     Production of documents, electronically stored information, and things and
                   entry upon land for inspection and other purposes
§ 6-334A  Discovery from a nonparty without a deposition

Effective July 18, 2008

For a current list of all states that have enacted special e-discovery rules, see our updated post here.
 

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Arizona’s Supreme Court has approved amendments to Arizona’s Rules of Family Law Procedure that will address several major e-discovery issues.  The amended rules are based on Arizona’s Rules of Civil Procedure and will become effective January 1, 2009.  The amendments include changes to the following rules:

Ariz. R. Family Law P. 49      Disclosure
Ariz. R. Family Law P. 51      Discovery
Ariz. R. Family Law P. 52      Subpoena
Ariz. R. Family Law P. 62      Production of Documents and Things and Entry
                                                  Upon Land for Inspection and Other Purposes
Ariz. R. Family Law P. 65      Failure to Make Disclosure or Discovery; Sanctions

To read the order and see the amendments, click here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.
 

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Qualcomm Inc. v. Broadcom Corp., 2008 WL 4858685 (S.D. Cal. Nov. 7, 2008)

At trial in this case, Broadcom made an oral motion for sanctions related to Qualcomm’s failure to disclose documents corroborating its participation in the Joint Video Team (“JVT”), a standards body related to video coding specifications.  Qualcomm’s claimed lack of participation in the JVT was a core element of its claims for patent infringement against Broadcom.  Judge Brewster referred the discovery aspects of that motion to Magistrate Judge Major and then issued an Order on Remedy for Finding of Waiver based on his determination that Qualcomm’s attorneys had participated in a sequence of discovery misconduct throughout the litigation process.  However, because those attorneys had not had an opportunity to be heard before the order was issued impugning their behavior and in order to afford them an opportunity to be heard on the potential imposition of attorney sanctions, the court issued an Order to Show Cause Why Sanctions Should not be Imposed.

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At least 41 United States District Courts now require compliance with special local rules, forms or guidelines addressing the discovery of electronically stored information.  In some districts where there are no local rules or court-mandated forms, individual judges have created their own forms or set out their own preferred protocols for e-discovery.

The following Districts have just been added to our collection of United States District Court local rules, standards, guidelines and judge-mandated forms and protocols:

Northern District of Illinois
Judge Virginia Kendall’s Case Management Procedures, Discovery
Magistrate Judge P. Michael Mahoney’s Suggested Case Management Order

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State v. M.A., 954 A.2d 503 (N.J. Super. Ct. App. Div. 2008)

In this case of first impression in New Jersey, defendant argued that personal information found on his work computers should be suppressed because his employer had no authority to consent to the search.  Defendant argued that he, not his employer, owned the computers and that he therefore had a reasonable expectation of privacy as to the personal information stored on them.  Finding that the employer, in fact, owned the computers and therefore had every right to consent to the search, the court denied defendant’s motion to suppress.

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At the 2008 Vestige Annual E-Discovery Awards Gala in Cleveland, Ohio, on November 1, 2008, David Cohen, a K&L Gates Partner, received a "2008 ESI Technology Champion" award.  David was 1 of 4 award winners, out of over 80 lawyers, judges and consultants nominated for the awards.  He is based in the Pittsburgh office and co-chair of the firm’s e-DAT practice group.

The panel of 5 Judges included several lawyers, a forensic expert and a U.S. District Court Magistrate.  The Awards Gala was a black tie event held at the Renaissance Hotel in Cleveland.  The Honorable Thomas J. Moyer, Chief Judge of the Supreme Court of Ohio, served as the Keynote Speaker.

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Available now from PBI Press, e-Discovery provides guidance for practitioners of all levels of experience through the often complicated world of e-discovery.

Once again showcasing the depth of knowledge at the firm, four of the fifteen contributing authors to the publication are members of the K&L Gates e-Discovery Analysis and Technology Group.  Those members are Tom Smith, David Cohen, Daniel Miller, and Lynn Reilly.

To learn more about this valuable resource or to purchase a copy of your own, click here. 

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For the first time, the SEC has released its Enforcement Manual, also known as the "Red Book” to the public.  Although the manual is intended to provide guidance to members of the SEC’s Division of Enforcement, it is a valuable resource for anyone involved in a SEC investigation.

Several sections address the topic of electronic information.  For example, section 3.2.6.2, “Form of Production,” provides a detailed explanation of what is expected of those responding to an SEC subpoena, including a discussion of the SEC’s preference for electronic production.  Section 3.2.6.2.3, “Format for Electronic Production of Documents to the SEC,” provides even greater detail regarding the production of electronic information.  The manual also provides valuable guidance on privilege logs, bates stamping, records certifications and much more.

The full text of the Enforcement Manual is available here.
 

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Effective January 1, 2008, amended Local Rule 16.1 specifies appropriate topics for consideration at the Initial Pretrial Conference, including the production of electronically stored information (“ESI”).

Click on the following link to see amended rule:

Local Civil Rule 16.1 Pretrial Conferences (see subpart (G) Initial Pretrial Conference)

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

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Star, Inc. v. QFA Royalties LLC, No. 07-cv-02223-WYD-CBS (D. Colo. Filed Oct. 10, 2007)

In this case, the court granted an unopposed motion of the defendant to enter an order governing electronic discovery.  The proposed order adopted by the court was intended to “expedite the flow of discovery material and facilitate prompt resolution of disputes over production of electronic materials…”  Included in the order was a provision requiring each party to identify an “e-discovery liaison” through whom all discovery requests and responses would be made as well as provisions providing instruction regarding search methodology, timing of discovery, format of production, privilege review, document retention and costs.

A copy of the motion and proposed order is available here.

A copy of the court’s order is available here.
 

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The Supreme Court of Ohio has adopted several amendments to the Ohio Rules of Civil Procedure, including several related to electronic discovery.  The amendments, which took effect on July 1, 2008, include changes to Rules 16, 26, 33, 34, 37, and 45.  According to the Supreme Court’s press release, key amendments include:

clarifying that issues related to electronically stored information are appropriate topics for resolution during pretrial conferences; clarifying that discovery of electronically stored information is permitted; amending to provide factors a judge should consider in determining sanctions when a party has destroyed potentially relevant electronically stored information; and specifying that a subpoena may be used to obtain electronically stored information from nonparties.

View Ohio’s amended rules here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

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On September 27, 2008, Governor Arnold Schwarzenegger vetoed Assembly Bill 926 (Evans), which contained e-discovery amendments to California’s Civil Discovery Act .  In his veto message, the Governor explained:

The historic delay in passing the 2008-2009 State Budget has forced me to prioritize the bills sent to my desk at the end of the year’s legislative session.  Given the delay, I am only signing bills that are the highest priority for California.  This bill does not meet that standard and I cannot sign it at this time.

The amendments included in AB 926 closely tracked several of the 2006 e-discovery amendments to the Federal Rules of Civil Procedure.  Among other things, the amendments:

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Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B (BLM), United States District Court for the Southern District of California

On September 16, 2008, Magistrate Judge Barbara L. Major set a briefing schedule for the five pending discovery motions filed by the parties, requiring any oppositions to be filed on or before October 3, and any replies to be filed on or before October 10, 2008.  The discovery motions include Broadcom Corporation’s Motion to Compel Production of Documents by Qualcomm; three separate motions brought by the sanctioned attorneys to compel production of documents by Qualcomm, and Qualcomm’s Motion for a Protective Order.  Magistrate Judge Major will conduct a hearing on the motions on October 29, 2008 at 2:00 p.m.

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Assembly Bill 926 (Evans):  Passed the Senate July 10, 2008; Passed the Assembly August 7, 2008

The amendments included in AB 926 closely track several of the 2006 e-discovery amendments to the Federal Rules of Civil Procedure.  Among other things, the amendments:

-- Establish procedures for a person to obtain discovery of electronically stored information, as defined, in addition to documents, tangible things, or land or other property, in the possession of any other party to the action. 

-- Provide that if a party responding to a demand for production of ESI objects to a specified form for producing the information, or if no form is specified in the demand, the responding party shall state in its response the form in which it intends to produce each type of information.  If a demand for production does not specify a form or forms for producing a type of ESI, the responding party would be required to produce the information in the form or forms in which it is ordinarily maintained or in a form that is reasonably usable, but need not produce the same ESI in more than one form.

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Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B (BLM), United States District Court for the Southern District of California; No. 2008-1348, 1381 & 1382, United States Court of Appeals for the Federal Circuit

In May 2008, Qualcomm filed an appeal in the U.S. Court of Appeals for the Federal Circuit regarding Judge Rudi M. Brewster’s March 5, 2008 “Order Remanding in Part Order of Magistrate Court re Motion for Sanctions Dated 1/07/08."  On May 19, 2008, sanctioned attorneys Batchelder, Mammen, Leung and Patch filed cross appeals.  In light of these appeals, Magistrate Judge Barbara L. Major concluded that jurisdiction had been transferred to the Court of Appeals for the Federal Circuit.  In an order dated May 29, 2008, Magistrate Judge Major sua sponte vacated all pending briefing and hearing dates and stated the court would refrain from ruling on the pending motions until after the Federal Circuit had addressed the appeal and, if it found it appropriate to do so, remanded the case back to the district court.  Magistrate Judge Major later denied Broadcom’s motion for reconsideration of the May 29 order.

On June 3, Broadcom Corporation filed its Emergency Motion to Dismiss Appeal of Qualcomm Incorporated, and two days later, responding attorneys-appellees/cross appellants Batchelder, Mammen, and Leung filed their non-opposition.  Broadcom's Motion argued that Qualcomm’s appeal should be dismissed for lack of jurisdiction because it impermissibly seeks review of an interlocutory district court order remanding for further proceedings, i.e., a non-final order.  Broadcom argued that there is still much to be done in the district court, and that the parties were in the midst of discovery when Qualcomm’s notice of appeal halted the proceedings.  In addition, Broadcom argued that the CREDO process arising out of the sanctions proceedings was still underway, and that the final CREDO protocol would necessarily be informed by the ongoing sanctions proceedings before the magistrate judge.

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By K&L Gates attorneys Todd L. Nunn and Trudy D. Tessaro

This article appears in the August 2008 edition of the King County Bar Bulletin, and begins:

Want to understand more about e-discovery, other than that the “e” stands for “excitement?”  Need a little light summer reading?  Well, you are in luck.  Never before have there been so many sources of e-discovery law.

In the old days (a few years ago), only case law dealt with the important issues that are central to e-discovery: preservation, collection, search/review, protection of privilege and production.  Now these issues are addressed by federal rules, state rules, numerous scholarly best practices and guidelines, model rules and guides for judges, not to mention (and this article really doesn’t with one exception) innumerable articles and blogs.

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Newman McIntosh & Hennessy v. Bush, Civ. No. 08-00787 (CKK) (D.D.C.)

This lawsuit seeks declaratory and injunctive relief in order to gain certainty about whether the electronic transmission of data from the United States to a foreign legal services provider waives Fourth Amendment protection with respect to the data that is electronically transmitted.  See our original post about the lawsuit here, which includes a link to the Amended Complaint.

Acumen Legal Services, the India-based legal services company named as a defendant in the case, has now filed a motion to dismiss for lack of subject matter and personal jurisdiction.  In the motion, Acumen argues:

NMH's requested declaratory and injunctive relief, in addition to having no legal or factual justification, would reach far beyond NMH's obviously intended target, namely, low-cost foreign legal outsourcing companies, which NMH apparently perceives as competition.  The requested relief could have a substantial adverse effect on the operations of all U.S. law firms that have foreign offices, and all U.S. corporations that need to use foreign counsel to transact business abroad.  NMH's requested ruling that any foreign electronic transmission of data between clients and attorneys, or between attorneys, constitutes a waiver of constitutional rights and discovery privileges, would amount to an untenable and unwarranted interference with global commerce.

Moreover, NMH's request for an order requiring all attorneys in the United States, not excluding in-house counsel, (a) to search for every instance in which they ever transmitted any kind of data to any foreign national, and (b) to send a notification regarding the same in every case, presumably to the owner of the data, would amount to one of the most onerous and unjustified burdens ever imposed by any court in a civil proceeding.

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Nebraska
On June 4, 2008, the Nebraska Supreme Court adopted amendments to Neb. Ct. R. of Discovery, 33, 34, and 34A that address the discovery of electronically stored information.  The amended rules are available here, and went into effect June 18, 2008.

Iowa
On February 14, 2008, the Supreme Court of Iowa approved proposed amendments to the Iowa Rules of Civil Procedure addressing e-discovery.  The amendments, which took effect May 1, 2008, are available here and include changes to the following rules:

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The law firm of Newman McIntosh & Hennessey, LLP of Bethesda, Maryland, has filed a federal lawsuit seeking declaratory and injunctive relief in order to gain certainty about whether the electronic transmission of data from the United States to a foreign legal services provider waives Fourth Amendment protection with respect to the data that is electronically transmitted.  The complaint explains the nature of the action as follows:

India-based Acumen Legal Services (India) Pvt., Ltd. (“Acumen India”) has solicited Newman McIntosh & Hennessey, LLP (“NMH”) to provide litigation support services to NMH from its offices in India.  Acumen India is part of a fast-growing industry of Legal Process Outsourcers (“LPO”) that promise lower litigation support costs through outsourcing litigation support services to foreign nationals who live and work overseas.  Acumen India, and other such LPOs (“litigation process outsourcers”), provides its litigation support services through the electronic transmission of documents and other data from U.S.-based law firms to Acumen India’s offices.  In its solicitation of NMH’s business, Acumen India informed NMH that it already provides such litigation support to certain District of Columbia and U.S. based attorneys (herein designated as “John Doe, Esq. and Jane Doe, Esq.”).  On information and belief, John Doe, Esq. and Jane Doe, Esq. are competitors to NMH or are adverse to NMH clients in litigation.

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Proposal Would Set New Electronic Records Management Requirements for U.S. Companies

Yesterday, the Securities and Exchange Commission voted unanimously to formally propose using new technology to get financial information to investors faster, more reliably, and at a lower cost.  The proposed rule would require all U.S. companies to provide financial information using interactive data beginning next year for the largest companies, and within three years for all public companies.

The SEC's proposed schedule would require companies using U.S. Generally Accepted Accounting Principles with a worldwide public float over $5 billion (approximately the 500 largest companies) to make financial disclosures using interactive data formatted in eXtensible Business Reporting Language (XBRL) for fiscal periods ending in late 2008.  If adopted, the first interactive data provided under the new rules would be made public in early 2009.  The remaining companies using U.S. GAAP would provide this disclosure over the following two years.  Companies using International Financial Reporting Standards as issued by the International Accounting Standards Board would provide this disclosure for fiscal periods ending in late 2010.  The disclosure would be provided as additional exhibits to annual and quarterly reports and registration statements.  Companies also would be required to post this information on their websites.

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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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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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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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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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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 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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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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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.

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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.

It is now black-letter law that electronically stored information (“ESI” for short) is discoverable if relevant or likely to lead to relevant evidence.  Indeed, the revisions to the Federal Rules of Civil Procedure (“FRCP”) that went into effect on December 1, 2006 addressing the discovery of ESI confirm that the 21st Century is witnessing the transformation of traditional trial practice to accommodate ESI in all phases of litigation, from initial discovery and production through trial.  Given the vast amount of electronic information retained by most companies, the complex task of preserving, retrieving, and producing discoverable ESI and the prospect of extremely harsh sanctions for discovery missteps, the discovery of electronically stored information, or “e-discovery,” has become a major concern and potential liability for all companies.

Click here to read the entire article.

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Written by Pamela A. MacLean and posted on The National Law Journal, April 18, 2007:

"A major fight over alleged spoliation of evidence and the potential for sanctions over electronic discovery may be shaping up in San Francisco federal court for the Oracle Corp. securities class action.

The dispute centers on a British author's audio files of interviews with Oracle CEO Larry Ellison for "Softwar: An Intimate Portrait of Larry Ellison and Oracle" that now seem to have vanished. The digital recordings were made during the very period of class claims in In re Oracle Corp. Securities Litigation, No. C01-988MJJ."

Click here to read the entire story on the NLJ website.

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K&L Gates partner Todd Reuter penned the following article on document retention for the March 2007 issue of Spokane Business Catalyst magazine:

"Developments in communications technologies promised to free us from the printed word, but the paperless office never materialized. In fact, both paper and electronic records have increased, creating backlogged inboxes both on your computer and on your desk. And, if you’re like most people, that current set of documents likely grows exponentially every day

From a legal perspective, this might be a problem. The more documents you have, the more you will need to produce in “discovery” should you find yourself in the middle of a lawsuit."

Click here to read the entire article.

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The Richmond Journal of Law & Technology (JOLT) released its third Annual Survey of Electronic Discovery this week.  The issue features articles on a number of important issues relating to the new Federal Rules of Civil Procedure, including managing preservation obligations, accessible vs. inaccessable data, and creative approaches to cost-shifting.  Thanks to Jon Player, editor-in-chief, for bringing this to our attention. 

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Morgan Stanley & Co., Inc. v. Coleman (Parent) Holdings, Inc., No. 4D05-2606 (Fla. Dist. Ct. App. Mar. 21, 2007)

In a 2-1 decision, a Florida state appellate court today reversed the $1.58 billion judgment against Morgan Stanley in the litigation brought by Coleman (Parent) Holdings, Inc.  Judgment was reversed on the grounds that plaintiff failed to prove compensatory damages by not establishing the fraud-free value of the Sunbeam stock on the date of the merger transaction.  Since the decision on that issue was dispositive, the court did not reach the other issues on appeal, including whether the trial court improperly entered a partial default against Morgan Stanley as a sanction for discovery misconduct, and whether the trial court erred in denying Morgan Stanley a fair opportunity to contest and mitigate evidence of litigation misconduct presented during the punitive damages phase of the trial.

Accordingly, the appellate court reversed both the compensatory and punitive damage awards and remanded the case with directions to enter judgment for Morgan Stanley.  Note, the decision is not final until the disposition of a timely filed motion for rehearing.

A copy of the decision is available here.

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From the March 7 archives of eWeek.com:

"Updated: News Analysis: A judge gives the company 30 days to find missing e-mails; meanwhile, Intel's foibles reveal a prime example of what businesses of all sizes now face since the institution of new federal e-discovery court rules.

Intel is facing some big-time legal problems in its 2-year-old legal tussle with a major competitor, AMD—largely because its own internal e-mail archiving system apparently isn't doing the job.

A U.S. federal judge on March 7 gave the world's largest microprocessor maker 30 days to try to recover about 1,000 lost e-mails that it was required to keep for an antitrust lawsuit filed by its biggest competitor, AMD, in 2005.

Judge Joseph Farnan of the U.S. District Court in Delaware referred the lost e-mail matter to the so-called special master—a court official who follows up such orders for the judge. The judge also ordered Intel to file a detailed report on how it will try to recover the e-mail evidence."

To learn more about the "document retention lapses" that occurred at Intel, read Intel's counsel's letter to the court dated March 5, 2007, here.

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K&L Gates partner Todd Nunn, together with DATG & Records Management practice attorneys Ted Webber, Mike Goodfried and Trudy Tessaro, co-authored a chapter on the preservation of electronically stored information in DRI's recently published treatise, Understanding the New E-Discovery Rules.  This chapter examines the duty to preserve documents and other information, particularly electronically stored information, that is potentially relevant to litigation. It also examines the effect of the recent Amendments to the Federal Rules of Civil Procedure on the preservation of information, and gives practical instruction on methods of meeting the preservation obligation for electronic information. The treatise was published in December 2006 by DRI as part of the DRI Defense Library Series.

A .pdf copy of the chapter is available here.

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From Brad Stone at the New York Times:

"SAN FRANCISCO, Jan. 10 — Companies spend millions on systems to keep corporate e-mail safe. If only their employees were as paranoid.

A growing number of Internet-literate workers are forwarding their office e-mail to free Web-accessible personal accounts offered by Google, Yahoo and other companies. Their employers, who envision corporate secrets leaking through the back door of otherwise well-protected computer networks, are not pleased.

“It’s a hole you can drive an 18-wheeler through,” said Paul D. Myer, president of the security firm 8E6 Technologies in Orange, Calif.

It is a battle of best intentions: productivity and convenience pitted against security and more than a little anxiety.

Corporate techies — who, after all, are paid to worry — want strict control over internal company communications and fear that forwarding e-mail might expose proprietary secrets to prying eyes. Employees just want to get to their mail quickly, wherever they are, without leaping through too many security hoops.

Corporate networks, which typically have several layers of defenses against hackers, can require special software and multiple passwords for access. Some companies use systems that give employees a security code that changes every 60 seconds; this must be read from the display screen of a small card and typed quickly.

That is too much for some employees, especially when their computers can store the passwords for their Web-based mail, allowing them to get right down to business. "

Read the entire article here.

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From the December 20, 2006 issue of the NY Times:

"A federal court in Brooklyn overseeing product liability lawsuits against Eli Lilly's best-selling drug Zyprexa has ordered the lawyer who provided company documents to The New York Times and other organizations and individuals to return the documents.

The internal Eli Lilly documents and e-mail messages detailed efforts by the drug maker to play down the health risks of Zyprexa, a medication to treat schizophrenia and bipolar disorder, as well as to encourage primary care physicians to use it in patients who did not have the disorder. "

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

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From the New York Times:

By GRETCHEN MORGENSON
Published: December 20, 2006

"The NASD, the nation’s largest self-regulatory organization for the securities industry, accused Morgan Stanley yesterday of routinely failing to provide e-mail messages to aggrieved customers who had filed arbitration cases against the firm over three and a half years and with making false claims that millions of e-mail messages in its possession had been lost in the Sept. 11 attack on the World Trade Center.

The regulator also contended in its complaint against Morgan Stanley that the firm regularly destroyed millions of e-mail messages by overwriting its backup tapes and by allowing employees to delete messages. Securities and Exchange Commission rules require that firms keep all e-mails and business communications for three years. "

Continue reading here.

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Kirkpatrick & Lockhart Nicholson Graham LLP and Preston Gates & Ellis LLP Announce Combination Effective January 1, 2007

NEW YORK AND SEATTLE — Kirkpatrick & Lockhart Nicholson Graham LLP (K&LNG) and Preston Gates & Ellis LLP (PG&E) today announced that their partners have voted overwhelmingly in favor of a proposed combination of the two firms effective January 1, 2007. The name of the combined firm will be Kirkpatrick & Lockhart Preston Gates Ellis LLP, and the firm will be branded as "K&L Gates." K&L Gates will comprise approximately 1,400 lawyers and 21 offices located in North America, Europe and Asia. The combination will rank as one of the most substantial in the history of the legal profession, and it will create one of the world’s largest law firms. The firm will be expected to have revenue exceeding US$750 Million in 2007, its first full year of existence.

Click here to view the press release.

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The Associated Press recently turned to partner Martha Dawson as a source on new electronic discovery rules. The article, “Companies Face New Rules on Keeping Data,” appeared in national publications from The New York Times and The Wall Street Journal to other regional and online publications.

The new rules require that lawyers meet much earlier in the discovery process to discuss where the client’s data is stored and how accessible it is. This provision emphasizes the importance of being prepared ahead of time. Writes the AP reporter:

But Martha Dawson, a partner at the Seattle-based law firm of Preston Gates & Ellis LLP who specializes in electronic discovery, said companies will not have to alter how they retain their electronic documents. Rather, she said, they will have to do an “inventory of their IT system” in order to know better where the documents are. The new rules also provide better guidance on how electronic evidence is to be handled in federal litigation, including guidelines on how companies can seek exemptions from providing data that isn’t “reasonably accessible,” she said. This could actually reduce the burden of electronic discovery, she said.

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Preston Gates partner Helen Bergman Moure was quoted in today's Wall Street Journal in an article titled: New Rules Are Set for Federal Courts On Electronic Data.

"The changes "may serve as a wake-up call for some companies that haven't been in a case where electronic [evidence] has been produced," says Helen Bergman Moure, an attorney in the document analysis technology group at Seattle law firm Preston Gates & Ellis LLP. The rules govern only federal cases and leave penalty decisions to judges."

The article appears on page B3 of the print edition or in electronic format here [subscription required.]

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A November 2006 article by Preston Gates partner Julie Anne Halter for the Washington Legal Foundation:

"The proposed amendments to the Federal Rules of Civil Procedure will go into  effect on December 1, 2006, absent some affirmative act by Congress to prevent their  adoption. Among the amendments are provisions designed to address the everapparent  problem faced by corporate litigants: the volume of electronically stored  information and the varying ways it is maintained make it very difficult and often  cost-prohibitive to efficiently and effectively review it for privileged material prior to production. Under the current legal framework, the inadvertent production of  privileged or work-product protected material creates substantial risk; at the same  time, the effort and cost to conduct a comprehensive pre-production privilege review  often make such review impractical."

Click here to continue reading.

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[From the Associated Press, November 13, 2006 and posted on Law.com]

The Supreme Court on Monday refused to consider a case in which Qwest Communications International Inc. had been ordered to produce 220,000 pages of documents to shareholders in a civil securities fraud lawsuit.

Qwest attorneys had argued the documents were protected by attorney-client and work-product privilege.

Many shareholders involved in the lawsuit reached a $450 million class action settlement with Qwest, but claims are pending against former Chief Executive Officer Joseph Nacchio and former Chief Financial Officer Robert Woodruff.

The 10th U.S. Circuit Court of Appeals upheld a lower court's decision that the company waived its privilege when it gave the documents to the Securities and Exchange Commission and Justice Department.

The shareholders sued the company in 2001, about a year before the Securities and Exchange Commission and the Justice Department opened separate investigations into accounting improprieties that eventually led Qwest to remove billions of dollars in improperly reported revenue from its books.

Based in Denver, Qwest is the primary phone service provider in 14 mostly Western states.

The case is Qwest Communications International Inc. v. New England Health Care Employees Pension Fund, 06-343.

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From the November issue of the New Jersey Law Journal: "A Morristown, N.J., law firm will have to turn over client e-mails in a federal court battle between a former client and his ex-employer, as a judge has rejected the firm's assertions of privilege.

The messages were exchanged among Riker Danzig Scherer Hyland & Perretti, its former client, Warren Tobin of New Zealand, and Matthew Young, a "lay adviser" to Tobin in a related New Zealand proceeding.

Tobin and Young are defendants in Stayinfront Inc. v. Tobin, 05-Civ.-4563, in which U.S. District Judge Stanley Chesler held on Nov. 3 that there was no attorney-client privilege protection for the e-mails because the privilege had been waived by sharing the messages with Young.

Work-product privilege was also unavailable. Chesler found the defendants' "recalcitrance, willful noncompliance and disregard for the rules and authority of this Court" constituted exceptional circumstances that justified piercing the privilege to compel production."

Click here to read the rest [ALM subscription required.]

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These two opinions, both filed on November 1, 2006, discuss for the first time the extent to which inaccessible electronic data is discoverable and who should pay for its production under the North Carolina Rules of Civil Procedure.

Bank of America Corp. v. SR Int’l Bus. Ins. Co., Ltd., 2006 WL 3093174, 2006 NCBC 15 (N.C. Super. Nov. 1, 2006)

Analog Devices, Inc. v. Michalski, Case No. 01 CVS 10614, 2006 NCBC 14 (N.C. Super. Nov. 1, 2006)

The Analog Devices case addresses the issues in the context of a party-to-party request for production of documents, and the Bank of America decision addresses those issues in the context of a subpoena to a nonparty. “In some instances the considerations are the same, and in others they differ dramatically. In both contexts, trial judges should be guided by the language of the applicable Rules of Civil Procedure, supplemented by the Guidelines adopted by the Conference of Chief Justices.”

The case names contain links to the opinions on the court’s website, and summaries will be posted on www.ediscoverylaw.com.

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From the August Issue of KPMG Pharmaceutical Insider:

"As most large pharmaceutical companies face dozens of lawsuits at any given time, the rapid growth of electronic documents and e-mail has opened up the new legal frontier of electronic document discovery (EDD).

Drug companies also must take into account sanctions and other penalties. Companies are often subject to sanctions when they do not or cannot produce evidence upon demand, according to Todd Nunn, a partner in the Seattle law firm of Preston Gates & Ellis.

"Companies can really get into trouble for not having adequate policies in place for the retention of electronic documents," says Nunn. "It really affects their ability to respond effectively to litigation." "

Read the entire story here.

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From NPR's All Things Considered:

"Legal Liability: E-mails may travel from sender to receiver in a flash, but their digital trail lingers much longer -- and that has landed some firms in hot water. A 2006 survey of more than 400 companies found that 15 percent have fought a lawsuit triggered by a worker's careless correspondence. One in four firms has had a worker's e-mail subpoenaed, and about the same number say they've fired a worker for misusing electronic correspondence."

More here.

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As the Dec. 1 deadline for new Federal Rules of Civil Procedure draws closer, it's time to go tech or close shop.

""Everybody is a little terrified," said Martha Dawson, a partner with Seattle-based Preston Gates & Ellis. Dawson practices in the firm's document analysis technology group. With some litigants in recent cases subjected to harsh sanctions for bungling e-discovery demands, clients and attorneys are worried about their ability to organize unwieldy information systems, she said. "

Creating particular anxiety is one component of the rules that requires parties to meet and address the preservation of electronic information 21 days before their first scheduling conference. New Rule 26(f) calls for parties to discuss "any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced." "

Read the entire article from Leigh Jones at National Law Journal here.

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A great article on dynamic data by Microsoft's Tom Burt, Corporate Vice President and Deputy General Counsel, Litigation, and Greg McCurdy, Senior Attorney, in the August 2006 of The Pocket Part, the online supplement to The Yale Law Journal.

"The forthcoming Federal e-discovery Rules are a welcome advance, but they do not address all of e-discovery’s challenging issues. For example, how should the law treat instant messaging (IM) or other forms of real-time communications? When must organizations or individuals preserve dynamic data such as databases or work in progress? Practical realities and established legal principles from the age of typewriters and telephones teach us that businesses should need to preserve real-time communications and dynamic data only when they record them for business purposes."

Click here to read the entire article.

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An article by Martha Dawson in Law Technology News' August 2006 EDD Showcase:

"On December 1, 2006, assuming no last-minute action from Congress, new Federal Rules of Civil Procedure governing electronically stored information go into effect. The new rules will apply to all cases filed after December 1, and to all pending cases to the extent "just and practicable."

You've heard the news before, probably attended CLE programs discussing them, and may even have the text of the rules on your desk to read sometime soon. But do you understand what these rule changes really mean, as a practical matter, to you and your clients? Are you prepared?"

Click here to read the entire article.

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A story today by Larry Abramson on NPR's Day to Day:

"A number of recent high-profile lawsuits suggest that companies must preserve important email documents on their computer systems, or risk major court sanctions. Increasingly, companies are turning to outside vendors to ensure they don't accidentally destroy electronic documents that could come up in a lawsuit. "

Listen to the entire story here.

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From George Socha and Thomas Gelbmann's August 2 story in Law Technology News: "Results are in for the fourth annual Socha-Gelbmann Electronic Discovery Survey, and here are highlights of the report. In general, spending continues to grow, although with changing processes and tightening prices some providers are beginning to feel the pinch.

Consolidation continues as well, with larger electronic-data-discovery providers buying smaller ones, and companies from outside the market looking for opportunities to enter what they see as a lucrative area."

Read the highlights here or visit http://www.sochaconsulting.com/2006survey.htm for more detail.

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In a July 24, 2006 National Law Journal article, Andrew Rhys Davies writes, "Reviewing electronic documents for privilege can be horribly time-consuming and expensive; and experience teaches that privileged material often slips through the net, as reviewers miss privileged communications buried in long e-mail chains or in invisible metadata. Against that background, this article examines how pending and proposed amendments to the Federal Rules of Civil Procedure and Federal Rules of Evidence seek to address these problems. "

Click here to read the entire article.  Also seen on www.discoveryresources.org.

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In an article in the National Law Journal, Carolyn Southerland writes, "Lawyers accustomed to what has been described by at least one federal district judge as "drive-by" meet and confers under the federal rules should get ready to park and prepare for an extended conversation. Whether one is a data producer (traditionally defendants) or a data requester (traditionally plaintiffs), the amendments to Rule 26(f) of the Federal Rules of Civil Procedure are going to profoundly affect parties' discussions in "meet and confer" discussions concerning discovery.

For Luddite lawyers, these rule changes will require that they venture into a world that they dislike and perhaps on some level fear. But just as lawyers have survived past changes in the rules, they will survive these, too, and their clients and practices may well be better for it." 

Click here for the full story.

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From the New York Times:

"Wall Street powerhouse Morgan Stanley & Co. Inc. has agreed to pay a $15 million civil fine to settle federal regulators' charges that it repeatedly failed to provide tens of thousands of e-mails that they sought in major investigations over several years, federal regulators said Wednesday.

The Securities and Exchange Commission announced the settlement with Morgan Stanley, which neither admitted nor denied the allegations but did consent to a permanent injunction against future violations of the securities laws. In a civil lawsuit filed in federal court in Washington, the SEC also accused the investment firm of making "numerous misstatements" regarding the status of its efforts to preserve and produce the requested e-mails."

Read the entire story here.

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On Monday, April 24, 2006, the Advisory Committee on the Federal Rules of Evidence held a mini-conference on a proposed new rule concerning waiver of the attorney-client privilege and work product doctrine. The conference was held at Fordham Law School in New York City, and featured the following distinguished presenters:

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In an email to Martha Dawson last week, Hon. Richard E. Best provided his compliments and thanks to Preston Gates for publishing and maintaining our electronic discovery case database.

"What makes [the database] even better is the accuracy and precision in which cases are summarized. The site is not only a tribute to Preston Gates but a valuable contribution to lawyers throughout the nation who are just getting up to par on this topic. It is in my opinion an example of the best attributes of our profession where lawyers help lawyers to improve the competence of the profession as a whole."

Judge Best is a retired 29-year San Francisco Superior Court judge who is most commonly associated with law and motion hearings involving civil discovery. Today, he is a discovery consultant and private judge, as well as a commentator and frequent speaker on electronic discovery issues. His website, California Civil Discovery Law, can be found here.

On behalf of everyone at Preston Gates: thank you!

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A story by Jason Krause focusing on the effective use of search terms in electronic discovery on ABAJournal.com.

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On Wednesday, April 12, 2006, the United States Supreme Court approved, without comment or dissent, the entire package of proposed amendments to the Federal Rules of Civil Procedure concerning the discovery of "electronically stored information." The package includes revisions and additions to Rules 16, 26, 33, 34, 37, and 45, as well as Form 35. The proposed amendments were transmitted to the Supreme Court last September, after the Judicial Conference unanimously approved them.

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On April 24, 2006, from 9 a.m. until 1 p.m., the Advisory Committee on the Federal Rules of Evidence will conduct a hearing (or "mini-conference") on a proposed rule that would govern waiver of attorney-client privilege and work product protection. The hearing will take place at the Fordham University School of Law Amphitheater in New York City, and will consist of short statements by invited presenters, with time left for a discussion among the presenters and questions from the Committee. Interested members of the public are invited to attend the hearing and are free to attend the Committee meeting that will follow.

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In 2000, Credit Suisse First Boston Corporation ("CSFB") employed Frank Quattrone as head of its Global Technology Group (the "Tech Group"). In that capacity, Quattrone managed approximately 400 technology investment bankers from the firm's Palo Alto, California office. The Tech Group was responsible for CSFB's investment-banking activity related to technology companies, including underwriting services. The Tech Group provided services to two types of customers - tech company issuer-clients undertaking offerings of equity-based securities and individual customers who traded securities as clients of the Tech Group's Personal Client Services subgroup.

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The new Local Rule 26.1 creates a duty on the part of counsel to "inquire into the computerized information-management systems used by their clients so that they are knowledgeable about the operation of those systems, including how information is stored and how it can be retrieved." The new rule also requires counsel to "inform their clients of the need to preserve information stored in computerized information-management systems so that information relevant to the claims or defenses in the case is not in any way destroyed." In addition, the new rule sets out a number of e-discovery topics the parties must discuss in their Local Rule 16.3(a) conference of attorneys. Click "Continue Reading" below for the the full text of the new rule.

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The National Archives and Records Administration ("NARA") announced that it will be revising regulations to provide for appropriate management and disposition of very short-term email by allowing management of such records within the email system. Disposition of Electronic Mail Records with Short Retention Periods, Final Rule, 71 Fed. Reg. 8806-8808 (Feb. 21, 2006) (to be codified at 36 C.F.R. pt. 1234). The effective date for changes is March 23, 2006.

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Pike and Fischer's Electronic Evidence Update, a service of Pike and Fischer Digital Discovery and e-Evidence, reported today that the Advisory Committee on the Federal Rules of Evidence will consider a new rule during a meeting on April 24. Proposed Federal Rule of Evidence 502 codifies waiver of privilege and work product protection by disclosure, and includes exceptions to such waiver. An exception for inadvertent disclosure addresses the concern that the cost of privilege review has become prohibitive in cases involving electronic discovery. The rule also codifies the controlling effect of (1) court orders regarding the preservation or waiver of privilege or work product protection and (2) party agreements regarding the effect of disclosure. Court orders are made applicable to non-parties, and party agreements regarding the effect of disclosure are made binding on the parties to the agreement but not on other parties unless the agreement is incorporated into a court order.

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Preston Gates partner Helen Bergman Moure was recently featured as the expert on ComplianceResources.org's "Ask the Compliance Expert" column. The interview focuses on document retention and e-discovery.

In the Q&A, Helen notes that some of the major challenges facing corporations include the "volume of electronic data being created and stored by individual users, education of employees about the importance of effective document retention practices, and implementation of effective policies that balance business needs with legal requirements."

In the interview, she also addresses litigation hold procedure and provides some high-level recommendations for helping a company prepare for document productions and requests related to litigation or a governmental investigation.

Click here to read the full interview.

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The Federal Trade Commission ("FTC") issued an announcement today detailing reforms to the merger review process designed to reduce burdens associated with second requests for documents and data. Such burdens have increased substantially since the Hart-Scott-Rodino Act ("HSR Act") became operational in 1978 due to an increased reliance by agencies upon direct market analyses and advances in technology resulting in higher production volume. Parties and agencies often spend millions of dollars, and associated investigations can take six to nine months. Last fiscal year alone, the FTC received nine productions exceeding one million pages. New guidelines and procedures will take effect for all HSR Act filings submitted on or after February 17, 2006.

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We are pleased to announce our latest milestone: our Case Database now features descriptions and, in some cases, complete copies of the opinions from Westlaw, of more than 400 cases involving electronic discovery issues! Curious to know what e-discovery topics were most prevalant in our courts last year? Visit the database and enter "2005" in the search box for a complete overview of the 108 cases involving electronic discovery we tracked last year.

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"Uncertain and Unseen," a bylined article by Preston Gates partner Todd Nunn on the handling of metadata in litigation, appears in the January EDD Showcase issue of Law Technology News.

In his article, Todd outlines pending amendments to the Federal Rules of Civil Procedure and discusses their implications for handling metadata and other types of electronically stored information in litigation cases. While the proposed amendments do not specifically reference metadata, he notes "there are a number of amendments that should clarify issues related to its preservation and production."

If the rules are approved this year, they will become law on December 1, 2006. Either way, "even in the absence of amended rules," Todd advises, "parties can avoid risk by raising metadata issues with opposing counsel and the court early in the litigation."

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The Government Contracts, Construction and Procurement Policy group at Preston Gates recently launched Government Contracts Litigation, a blog on legal issues, news and best practices related to government contracts litigation. Dick Hanson and Mark Jackson, the attorneys directly responsible for managing the blog, have decades of litigation experience representing both contractors and federal agencies. Special thanks to Jason Miller in the firms' business development group for his help bringing govcontractslitigation.com online.

Welcome to the blogosphere!

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Eversheds litigators Jonathon Crook and Jonathan Tardiff, together with consultant Andrew Szczech, share their thoughts on the potential business implications of electronic discovery following the recent changes to the UK Civil Procedure Rules in the November 23 issue of Legal Week. The article is also linked to from Discovery Resources.

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Advanced Micro Devices said it has served subpoenas to 36 major U.S. tech companies seeking documentation to support its antitrust lawsuit against Intel. AMD expects to receive 6 to 8 terabytes of data in documentation from the subpoenaed companies, which is shaping up to be one of the largest U.S. cases involving electronically stored information.

"We are expecting a tidal wave of material," said Chuck Diamond, AMD's lead outside counsel for the case. Read the entire article from Computer Business Reveiew Online.

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How does Dilbert deal with e-mail in the face of litigation? Click here for your Friday Funny!

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Fulbright & Jaworski's annual survey of corporate counsel reflects a growing concern about the costs and consequences of electronic discovery. The 2005 litigation-trends survey found that e-discovery was the No. 1 new litigation-related burden for companies with revenues of more than $100 million. With e-mail and other digital data becoming more prevalent as evidence in lawsuits, effective record keeping is becoming a priority, and record retention policies and litigation hold policies are gaining in prevalence. Read the full 10.11.05 article by Petra Pasternak on CalLaw [subscription required.]

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In today's ABA Journal E-report, Richard Acello reports on proposed changes to the Rules of Civil Prodecure that govern e-discovery which were recently approved by the Judicial Conference. The article includes commentary regarding implications of specific rule changes and can be found here.

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An article by Conrad Jacoby in the September issue of Law Technology News: Collecting documents in response to internal investigations or civil litigation discovery requests has always been a challenge. The problem is not so much gathering the documents (though volume can be problematic), but rather identifying the data repository nooks and crannies where important information may be stored. Most difficult of all: The collecting party must develop logical and reproducible procedures for identifying relevant documents and separating them from the vast amount of other unrelated material. One particular challenge is sorting through e-mail messages and short messages sent from portable devices. Click here to read the entire article.

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The Judicial Conference today approved the package of proposed rule amendments addressing the discovery of electronically stored information. It was approved unanimously, without question or objection, and will now be considered by the Supreme Court. If promulgated by May 1, it will become effective on December 1, 2006 absent intervention by Congress.

The September 2005 report from the Committee on Rules of Practice and Procedure to the Judicial Conference, which includes a copy of the amendments, can be found here.

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AP Business reported Tuesday that Morgan Stanley ("Morgan") is facing a Securities and Exchange Commission ("SEC") fine of roughly $10 million in connection with a failure to preserve email.

The Wall Street Journal reported that the email may have been relevant to significant SEC actions against Morgan. It also reported that the SEC is alleging that Morgan falsely certified a document stating that it had produced all documents in connection with an investigation.

The AP story can be found here.

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On August 9, the Arkansas Democrat Gazette reported that Beverly Enterprises was ordered by the Arkansas Supreme Court to comply with Judge Phillips' ruling and post a $20 million bond for failure to produce documents. Judge Phillips reportedly ordered the bond after "becoming frustrated in obtaining documents in a nursing home care case." He had considered incarceration of Beverly executives in June, following defendants' failure to produce documents including email and other electronic data.

The story can be found here.

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Maybe Morgan Stanley was careless, or maybe it was unlucky. But if you think your organization is prepared to face a lawsuit, you may want to think again. Click here to read the full story from the July issue of Computerworld.

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Law Technology News, EDD Showcase, August 2005
By Helen Bergman Moure

On June 16, 2005, discovery practice took a huge step forward when the Standing Committee on Rules of Practice and Procedure approved a set of proposed amendments relating to electronic discovery. The proposed rules and their accompanying "Notes" now face three remaining hurdles: Judicial Conference of Senior Circuit Judges approval; Supreme Court approval; and Congressional review.

Assuming they are not delayed, amended, voided, or deferred during these remaining steps, the amendments will become effective on December 1, 2006. Click here to read the entire article.

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On July 13, 2005 the Securities and Exchange Commission ("Commission") issued an Order in connection with the alleged failure of UBS Securities LLC ("UBS") to preserve email. The Commission accepted an Offer of Settlement and UBS consented to entry of the Order without admitting or denying any findings of wrongdoing.

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The Monday, June 27, 2005 issue of The National Law Journal reports instant messaging (IM) carries its own set of legal implications for in-house law departments. Although many people think of IM as a fleeting conversation, similar to a telephone call, it's legally considered a document, and is subject to the same retention policies that cover other business records. Click here for the full text of the article [subscription required.]

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The Secure Access to Justice Act (H.R. 1751) was introduced by Rep. Louie Gohmert (Republican from Texas) on April 21, 2005. It was referred to the House Committee on the Judiciary followed by the Subcommittee on Crime, Terrorism, and Homeland Security where hearings were held as recently as June 30. It proposes amending Title 18 of the United States Code to protect judges, prosecutors, witnesses, victims, and their family members, and for other purposes.

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During the New York State Bar Association's Annual 2005 Meeting of the Commercial and Federal Litigation Law Section, a panel of attorneys and judges discussed current issues in connection with electronic discovery and differences in state and federal courts.

Federal and New York State electronic discovery cases were noted, with substantial discussion centered upon Judge Scheindlin's Zubulake decisions. Panelist comments covered topics including spoliation, litigation holds, cost shifting, rule changes, and procedural matters.

A transcript of the discussion, published in NYLitigator, can be found here.

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The Standing Committee on Rules of Practice and Procedure today approved the amendments submitted by the Civil Rules Advisory Committee addressing discovery of electronically stored information.

The proposed text of each rule was approved without change; some changes were made to the committee notes. The entire package of amendments will be posted here when available.

Further approval is still necessary before the rules go into effect. The Judicial Conference will consider the package at its September 20, 2005 meeting. Then, the Supreme Court will consider it for promulgation (probably by May 1, 2006). An effective date of December 1, 2006 is expected.

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In this month's issue of Corporate Counsel Magazine, Amy Kolz reports on the amazing technology used in connection with the Medtronic spinal surgical inventions litigation. The case resulted in a $560 million verdict against Medtronic, and a $1.35 billion settlement followed.

Attorneys worked from 9 AM to 8 PM piloting seven black computers from a conference room. These "Death Star Pilots," flying with Attenex Patterns software, sifted through 44 million electronic pages in less than four months. They succeeded in finding critical documents. "I remember seeing that [critical] document and thinking this is the reason we fought so hard for the electronic information."

The article can be found here.

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On May 27, 2005, the Civil Rules Advisory Committee submitted to the Standing Committee on the Rules of Practice and Procedure a comprehensive package of proposed amendments to the Federal Rules of Civil Procedure addressing discovery of electronically stored information, including revisions of Rules 16, 26, 33, 34, 37, and 45, as well as Form 35. The submission can be found here.

The Standing Committee will consider the proposals at its June 15-16, 2005 meeting. If all the remaining steps of the process proceed on schedule, the rules amendments would go into effect in December 2006.

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These damages bring the total awarded Perelman to $1.45 billion in this landmark case where Judge Maas ruled that Morgan Stanley had conspired with Sunbeam to defraud Perelman. Judge Maas' ruling was due to frustration caused by Morgan Stanley's failure to produce email.

In his closing argument, Morgan Stanley attorney Mark Hansen said that the failure to produce email was due to error and was not indicative of efforts to conceal evidence.

Click here for the story from Reuters.

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A Florida jury awarded these damages in connection with Morgan Stanley helping Sunbeam to falsely inflate its finances. An award for punitive damages is still expected. Morgan Stanley said it would appeal, and additional discussions with a mediator are planned.

Judge Maas had instructed the jury to assume that Morgan Stanley helped Sunbeam inflate its earnings, so Perelman only had to establish detrimental reliance. This instruction had been issued because Morgan Stanley failed to produce email.

More detail can be found here on Bloomberg's news site.

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Gillette Co. said it is "possible" that senior executives deleted e-mail that may have included discussions of the company's proposed $57 billion acquisition by Procter & Gamble Co. that are being sought by the Massachusetts regulators.

The company disclosed in a filing in Massachusetts Superior Court Monday that Gillette employees whose e-mail may be subject to a subpoena from Secretary of State William F. Galvin "simply did not retain e-mail and, instead, had a regular practice of deleting it."

Click here for the complete story from The Boston Globe, May 11, 2005.

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On April 14-15, 2005, the Civil Rules Advisory Committee met to discuss the fate of proposed amendments to Federal Rules of Civil Procedure relating to e-discovery. Taking into consideration feedback received during the recent public comment period, the Advisory Committee approved amendments to Rules 16, 26, 33, 34, and 45. The Committee also approved, in principle, amendments to Rule 37.

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This article, from the Chicago Tribune and posted on the discoveryresources.org website, provides further detail on the still evolving Morgan Stanley case. The piece also examines the increasingly visible role of email and electronic documents in litigation.

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This exceptionally large award was ordered in a landmark employee discrimination case that addressed important e-discovery issues including the preservation of email, cost-shifting, and the restoration of backup tapes.

Zubulake's counsel told the jury that UBS had destroyed email and its officials had lied in court.

Judge Scheindlin instructed the jury to assume that email not preserved by UBS after Zubulake filed her complaint with the EEOC would have hurt UBS' case.

UBS says that it will appeal.

The story can be found at here.

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Judge Maass issued this order on March 23 in Coleman v. Morgan Stanley, a case in which Coleman Holdings is seeking $680 million in losses and $2 billion in punitive damages in connection with Morgan Stanley helping Sunbeam to falsely inflate its finances.

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In this March/April 2005 article from Business Law Today, George L. Paul and Robert F. Copple outline steps for a business to follow in developing data life-cycle policies. Such policies are designed to ensure that necessary data is preserved (in connection with litigation and Sarbanes-Oxley, for example) yet the business does not "drown in its digital waste."

Full text of the article can be found here.

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An interesting article from PG Lewis & Associates' March 2005 e-Newsletter on the recently released American Bar Association corporate counsel survey. Among other findings, the survey brings to light that more than "80 percent of Corporate counsel members are not aware of or familiar with the e-discovery ammendments."

The original ABA survey report, ABA Digital Evidence Project Survey on Electronic Discovery Trends and Proposed Amendments to the Federal Rules of Civil Procedure, was published in February 2005.

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On February 11-12, 2005 in Washington, D.C., the Civil Rules Advisory Committee heard testimony from over 45 witnesses. This was the third and final set of public hearings on the proposed amendments to the Federal Rules of Civil Procedure relating to electronic discovery. Following are some highlights of the testimony from day two of the hearing, when the committee heard from 13 witnesses. The complete testimony for this hearing, and the previous hearings, can be found here.

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On February 11-12, 2005 in Washington D.C., the Civil Rules Advisory Committee heard testimony from over 45 witnesses. This was the third and final set of public hearings on the proposed amendments to the Federal Rules of Civil Procedure relating to electronic discovery. Following are some highlights of the testimony from day one of the hearing, when the committee heard from over 30 witnesses. The complete testimony for this hearing, and the previous hearings, can be found here.

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In an article appearing in the February 18-24 issue of the Puget Sound Business Journal, Martha Dawson points out that case law regarding e-discovery is slow to develop and often confusing. Additionally, federal guidelines that apply to document discovery were originally drafted in 1939 prior to today's computer environment. In the article, she discusses several issues under consideration as part of efforts to modernize e-discovery definitions and methodology within federal rules. Click here to view a .pdf of the article.

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On January 28, 2005 in Dallas, the Civil Rules Advisory Committee held the second of three public hearings on the proposed amendments to the Federal Rules of Civil Procedure relating to electronic discovery. The committee heard testimony from 18 individuals. Following are some highlights of the testimony. The complete testimony can be found at here.

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J.P. Morgan will pay a total of $2.1 million to settle three separate claims that it failed to preserve e-mail during a 2002-03 investigation of alleged conflicts of interest among several Wall Street investment firms. Read the full story in the LA Times online.

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On August 10, 2004, the Standing Committee on Rules of Practice and Procedure approved for publication and public comment several proposed amendments to the Federal Civil Rules that specifically address electronic discovery. The public comment period for these proposed amendments is now nearing its end. The last date for submissions is February 15, 2005.

A copy of the proposed amendments, and the corresponding Committee Notes, can be found here. Comments may be submitted electronically to the Secretary of the Standing Committee, via a link on the federal rulemaking website.

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On January 12, 2005 in San Francisco, the Civil Rules Advisory Committee heard testimony from 15 witnesses. This was the first of three public hearings on the proposed amendments to the Federal Rules of Civil Procedure relating to electronic discovery. The following are some highlights of the testimony. The complete testimony can be found here.

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The first of three scheduled public hearings regarding proposed changes to the FRCP addressing electronic discovery took place in San Francisco January 12, 2005. Fifteen members of the legal community took advantage of the opportunity to publicly voice their views of the proposed amendments.

The diverse group included in-house counsel from corporations such as Microsoft and Intel, private practitioners - including both plaintiff and defense attorneys, and a computer forensic specialist. Participants commented on what they saw as the pros and cons of a series of proposed amendments to the FRCP designed to provide additional guidance to the courts and litigants engaged in the ever-growing area of e-discovery.

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The rules of civil procedure are once again being amended, this time to update them for document production in the digital age. Judge Shira A. Scheindlin talks about what the proposed changes will mean for in-house counsel. She also gives advice and her top ten tips on conducting e-discovery in the current murky shadow of Rule 26, to avoid garnering sanctions for inadvertently violating a discovery order, or worse yet charges of spoliation of evidence. [Subscription to the ACC Docket required.]

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BusinessWeek Online, December 20, 2004

Tort reform is a hot topic again. Taking advantage of the most favorable political climate in years, business lobbyists are pushing for new federal laws that would mop up the asbestos mess, cap medical malpractice damages, and help companies steer class actions out of hostile state courts.

But there's another legal reform campaign that has attracted much less attention -- yet could be more significant than any of these measures. It is Corporate America's effort to get the Judicial Conference of the U.S. (JCU), the obscure group that makes the rules governing lawsuits, to enact special new procedures for electronic evidence. This broad category of digital information includes spreadsheets, databases, memos, letters, PowerPoint presentations -- and most important, the e-mail messages that have recently plagued so many companies in court. Read the entire article at BusinessWeek Online.

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By Tricia Bishop, The Baltimore Sun
December 27, 2004

Brian L. Moffet said he saw the writing on the wall about three years ago. The attorney was arguing a national class- action suit with 50,000 pieces of paper entered into evidence when the judge asked, "Where are the e-mails?"

That sent Moffet into scramble mode.

"It was the first time I realized it was something that was going to have to be addressed," recalled the lawyer with Gordon, Feinblatt, Rothman, Hoffberger & Hollander of Baltimore.

Read the entire article posted on latimes.com. [Subscription required.]

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E-discovery gurus George Socha and Dennis Kennedy discuss their simplified 8-step approach to effective discovery of electronic information [assessment, project management, forensics, conversion and storage, records management, search, integrating discovery into daily operations and trial prep] in this November 2004 Discovery Resources post.

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The Recorder
December 6, 2004

Litigants who demand expensive electronic data discovery have to pay for it, the Sixth District Court of Appeal ruled Friday. Noting that the issue is "bound to arise with increasing frequency," the appellate court reversed a trial court decision that had compelled Toshiba America Electronic Components Inc. to produce data at an estimated cost of $1.5 million to $1.9 million. Click here to continue reading [subscription required.]

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Article by Thomas F. Gleason and Patrick M. Connors published on Lexis Nexis Practice Area News
Let's skip the obvious and unanswerable question -- why anybody could believe there was joy in litigation in the first place -- and ask what prompts this now common sentiment. Is there truly an explosion of electronic evidence, creating mind-numbing discovery and inspection sessions and costs threatening to swamp the financial viability of commercial litigation? The answer, in these writers' opinions is yes, and the basic problem is the amount of "stuff" that computers create. Read more.

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By KATE KELLY
The Wall Street Journal
October 27, 2004, 10:09 AM EDT

One of New York Attorney General Eliot Spitzer's investigators was perusing a stack of subpoenaed documents in a Manhattan office last month when he let out a yelp, slammed down his coffee and sprinted down the corridor.

The find, people in the office recall: a Marsh & McLennan Cos. employee's e-mail soliciting a fake bid from an insurance company to help Marsh steer business to a favored provider.

The sleuth: Craig Winters, a 27-year-old intern.

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Oct. 14, 2004
By Greg Morcroft
CBS.MarketWatch.com

NEW YORK (CBS.MW) -- Eliot Spitzer clearly doesn't follow the edict of Henry Stimson, a 20th century U.S diplomat, who once famously stated, "Gentlemen don't read other people's mail."

Spitzer, New York's current attorney general and the bane of corporate wrongdoers, launched his latest salvo Thursday at several of the nation's largest insurance companies, using internal e-mails from several of the companies to buttress his case.

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Preston Gates attorney Martha Dawson and Senior Attorney for Microsoft Gregory McCurdy co-authored an article published in the June/July 2004 issue of The National Law Journal. Titled "Are Instant Messages Discoverable?," the article explores the questions raised by business use of instant messaging (IM).

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March 2003 cover story in AmLaw Tech , technology supplement to The American Lawyer. Seattle Sleuth highlights Preston Gates' achievements in advanced technology document review legal services.

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Two Tiers and a Safe Harbor, written by Ken Withers, August 23, 2004, sheds light on the beginnings of the proposed changes to the Federal Rules.

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