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Roundtable Discussion

Electronic Discovery

As computers have become the focal point for information storage, creation of documents and communication, litigators have had to turn their attention to the handling of electronic discovery. Courts are beginning to issue decisions explaining how this emerging area of discovery should be handled. Wisconsin Law Journal editor Tony Anderson sat down recently with a panel of people who have followed the development of electronic discovery. What follows is part one of their roundtable discussion.

Group Shot

(Front) Ross L. Kodner, Founder, MicroLaw, Inc.; Shawn R. Olley, Owner, Midwest Paralegal Services, Inc.; (Back) Stephen C. Odenthal, Founder, Odenthal Investigations, LLC; Stephen E. Kravit, Founder, Kravit, Hovel, Krawczyk & Leverson, s.c.,; William J. Mulligan, Shareholder, Davis & Kuelthau, S.C.

WISCONSIN LAW JOURNAL: What would you say to lawyers who think that they’re going to approach electronic discovery the same way as they would approach paper discovery?

WILLIAM J. MULLIGAN: If you are preoccupied with only paper discovery, which we still have, you are going to be potentially missing significant and substantial evidence in a case. We’re living in an era where there is an information explosion. There are studies that indicate that about 90 percent of all written documents are prepared on computers. And there are extensive volumes of computer-generated data that is never printed.

If you ignore the possibility that there is a significant amount of electronic evidence, you stand the chance that you will have a bad result in litigation, the potential of malpractice claims, and the potential of ethical concerns being raised. This electronic evidence may be more significant than paper documents because it will — with the metadata that is available with the electronic documents — indicate who initiated the document, whether it was obtained from an earlier draft of a document, who may have gotten blind carbon-copy or who got copies of the document electronically, revisions that were made, or changes that were made. There is significant evidence there that needs to be obtained.

STEPHEN E. KRAVIT: I would add that any lawyer who’s been practicing since the 1970s will find that the issue of documents in other than paper form is not new since two provisions in the Wisconsin Civil Procedure Code deal with such information. The first being the most general, 804.01(2)(a), which is the general provision governing discovery and relevancy. Everything we talk about today is going to be moderated by relevancy, the ordinary standard … that parties can obtain discovery regarding any matter, not privileged, which is relevant or reasonably calculated to lead to the discovery of relevant, admissible evidence.

You’ll note that in 804.01(2)(a), which is not a discovery provision, per se, it defines "relevant evidence" as, "including the existence, description, nature, custody, condition, and location of any books, documents, or other tangible things." Then if you move over to the actual Discovery of Documents provision … it says, that the scope of production of documents would include, among documents and other things, "data compilations from which information can be obtained, translated, if necessary, by the respondent through detection devices into reasonably usable form."

So the present rules and ones that have been in effect for a very long time have anticipated document discovery that would involve more than just a paper document. Anyone who has been not thinking about that for the last 20 years or so has not really been using the rules to their full degree.

MULLIGAN: The Federal Rules are substantially the same, except that they also contain a provision requiring that the parties meet for a discovery conference and make initial disclosures. That has been interpreted by the courts to require an absolute duty of disclosure that you possess your documents in electronic form.

There is a Bristol-Myers Squibb class action case in which the parties met and agreed to produce responsive documents [In re Bristol Myers Squibb Securities Litigation, 205 F.R.D. 437 (D.N.J. 2002)]. They were produced pursuant to an agreement that one party would pay so much per page for them. But what the drug manufacturer failed to disclose was that these documents all originally existed only in electronic form, and they blew back paper copies.

The court refused to require the payment of the fee —— the money for copying charges — and also sanctioned the parties and counsel for failure to disclose the existence of these documents in electronic form and required their later production in that electronic form.

ROSS L. KODNER: I predict, in relatively short order, that among all malpractice claims filed in every jurisdiction in this country, we will see the highest incidence shift away from issues related to trust fund management, et cetera, to litigation-related malpractice. When Bill mentions the Federal Rules and the absolute duty to disclose, there’s a big presumption there that the litigator who is managing that process, really understands what there is to disclose.

What we’re experiencing is this absolute head-on collision between what has traditionally been compartmentalized as technology in law practice with substantive law and procedural law. Today you can’t practice law —in any area of practice, but certainly in any area that has any litigation component — without understanding the underlying technology concepts of the forms that discoverable information can take, the kinds of experts to use and how to evaluate forensics experts to go out and find this information.

Let’s say that in a discovery situation, there are documents rife with metadata contained in Microsoft Word documents or in PowerPoint. Does an absolute duty to disclose incorporate the metadata that’s in those files? It certainly fits the definition of "tangible information" in the Wisconsin Statutes. I think the answer is "yes." And I think there are a shocking number of lawyers around this country, many who are experienced litigators, who have never even heard of these concepts. These are malpractice situations waiting to happen. …

It’s essential that lawyers understand from the perspective of simply counseling clients in the ordinary course of business about the kinds of electronic document retention and destruction policies they should have to make sure that there isn’t information that’s being kept inadvertently, which could expose their clients to risk before litigation is ever contemplated.

KRAVIT: I want to react to something Ross just said. I’m not sure the answer is clearly "yes" to whether metadata or other associated data to a discovery document is required to be produced, at least in the first instance. I want to back up a step and say that the discovery challenge involving electronic documents is really no different than other intrusive discovery devices that are well-settled within discovery law.

For example, what could be more intrusive than being required to take a physical examination and share the results of whatever your bodily functions are with another side in litigation? Yet that is already a standard rule and is subject to various reasonable procedures and protections. The same would be true of entry on land or entry into your property or your home.

In a civil context all of this can occur already within the rules that we have now. The courts have had little trouble over the years in figuring out what’s reasonable and what isn’t and what’s intrusive and what’s not. Electronic data discovery is no different.

The difference is that the volume of material that’s generated or potentially in the universe to review is so huge that there are incredible costs… When someone says, "Yes, you may review this," there’s a whole subset of questions as to how that’s going to be done. Who’s going to pay for it? Are routine things that occur within a network discoverable? Will the routine destruction of data somehow create an inference of criminality? Many groups have tried to analyze these questions.

One thing I’ve found on the Web that I thought was very useful was a group called The Sedona Conference. That organization’s work is available and free to anyone on the Web at www.thesedonaconference.org.

One of their principles is that, "Absent a showing of special need and relevance, a responding party should not be required to preserve, review, or produce deleted, shadowed, fragmented, or residual data or documents." So when you’re specifically saying metadata, there’s a whole mess of other stuff in that definition. What’s evolving is an understanding that there should be a secondary showing of need for that kind of information.

In an ordinary case, maybe you wouldn’t need that. But you might have a case where you need to know what changes were made in a document and you could show why you needed to know that…

With that showing, you might be able to get the metadata, or other data. I think that, because of sophisticated litigation around the country and the amount of money and talent that’s been thrown at this issue, there has to be kind of a pull back… There is the usual court filtering down of what is reasonable in the circumstance.

STEPHEN C. ODENTHAL: I have found in my cases that there almost always is some filtering down and narrowing of the scope. I mean, you can’t just go in and say, "I want everything on this computer." That’s impossible and costs too much money. Besides, there may be privileged communications and things like that — in civil litigation, in particular — where it is not appropriate for somebody to be looking at it or disseminating it.

There are provisions like Special Mastering … that can be done to narrow the scope of the search for particular documents and then letting the court decide whether these are privileged areas or not.

I’m a certified computer forensic examiner, so I have a little different take on this than most of you. But the question about approach to electronic discovery is different than paper in a couple regards. Electronic data is hard to destroy and, at the same time, easy to destroy. When you delete something, it’s not really gone.

It’s still there for a forensic examiner.

KODNER: It’s like a cockroach. It’s hard to kill.

ODENTHAL: It’s hard to kill. On the other hand, if time lapses and people are using the computer or special utilities are used against the computer, this data can be easily overwritten and completely erased. So I know you can take paper and burn it and throw it out and shred it and things like that. But with electronic discovery, there really is a time element in regards to how quickly you need to get at it and preserve the evidence, so that somebody can look through it even while the arguments are being made about, what metadata may be appropriate and not privileged or privileged, et cetera.

KODNER: This brings up an interesting question. When discovery commences, clearly people are put on notice and evidence needs to be preserved at that point. If part of that potential evidence is contained on a network hard drive or an individual workstation hard drive and the discovery order is specifically requesting information related to certain subjects and it’s clear that that information may exist on those drives subject to that discovery order; however, there are other things on that hard drive, where the hard drive is used in the ordinary course of business — I’m always wondering about the question of intentional spoliation of potential evidence.

The systems are being used. The company can’t shut down its operation. It agrees to keep the items that are subject to the discovery order untouched. But are they really untouched?

Underlying metadata, things like hidden cache files, which could have very relevant information, end up getting modified and changed just in the ordinary course of using the system. Do you have sanctionable activity happening that’s almost unavoidable?

ODENTHAL: That’s why I say … that time is of the essence in these cases. Because every minute that somebody uses that computer can overwrite and modify the metadata that’s on there.

MULLIGAN: The case law doesn’t seem to distinguish between unintentional and intentional spoliation or destruction — tamperi
ng with the evidence. The only role that that seems to play is in the type of sanction that a court may impose, whether they’re going to impose adverse inferences. It is sort of the death penalty in a civil case to get an instruction from the court that a party has deliberately destroyed evidence that could have been helpful to the other party in proving their case.

Sometimes they award costs, or limit proof, or issue other sanctions in the case.

Spoliation can kick in before the case is actually started. When you have knowledge of the possibility of a case — a claim being made, the spoliation doctrine would apply…

KRAVIT: Can I add one thing? The difference between this kind of electronic mass of information and what most lawyers would analogize to somebody’s document collection is that the document collection at least in physical terms is static. … People could move it around, reorganize it, hide it, throw it away, put it away in a drawer, all the things people do. … It’s there. But electronic data is a snapshot. The day that you look for it is the day it is in that form. Every other day and every other minute, it’s in some other form.

KODNER: There’s fluidity to it. It changes.

KRAVIT: Almost like when you do a garnishment on someone’s account. It may have money in it. It may not, depending on luck — the flow of money. … Once you’re informed that there’s an action pending and you should preserve your documents it’s different for electronics than it would be for paper.

For example, if you got an order today that you’re in litigation and you give orders to all your subordinates to preserve their paper documents, does that mean that they pick up literally the physical trash that they’ve thrown out that day and save it? No. Nobody would think that that’s true. So why would it be true in electronics that things that are deleted are discoverable?

The other point that I wanted to make regarding Bill’s point about spoliation is that there are obligations regarding spoliation that don’t relate to civil discovery. One of the things that I talk about a lot are the new obstruction of justice statutes that came out of Sarbanes-Oxley and the entire law of obstruction of justice… Law of obstruction of justice used to be that you had to know that there was an investigation in order to violate the law by destroying something related to the investigation.

That’s no longer the case. The language that was inserted in the statute, within Title 18 of the U.S. Code, relates to anyone who destroys, mutilates, conceals, covers up, falsifies a document, in electronic or other format, in relation to or contemplation of any matter or case. So now your criminal conduct is being measured by your knowledge of whether or not a case could be brought.

KODNER: It’s a realization of the state of the situation rather than the actual situation.

Steve, you said something really interesting. This is where I want to play devil’s advocate for a moment. You talked about the distinction between paper and paper in a garbage can. Would someone view the paper that’s been intentionally thrown away in the garbage can being subject to discovery? You’re the expert in these areas.

I’m not. But in a criminal matter, I believe the answer would be sure. If it’s on those premises, it could be taken.

At that point, if that company had a document destruction policy, that paper would have gone through a shredder. It wouldn’t be crumpled and sitting in the garbage for someone to grab. … There are two very different camps. One camp has said the electronic situation is so nightmarish in terms of data lurking all over the place and very difficult for people to manage — for the client to manage, let’s try and protect them by creating these … absurd distinctions, saying, it’s there, but we didn’t intend it to be there, and we shouldn’t have knowledge of it.

My view is exactly the opposite. Take metadata, for example. For a lawyer responsible for protecting the confidential client information and counseling their clients about these things to be able to stand up and say, I’ve never heard of it, your honor, so it’s not reasonable that I would have ever known or that my client would have ever addressed this issue, is ludicrous. It’s like saying, we don’t know that there are engines in cars because when we lift the hood all we see is plastic. Why should we know there’s an engine? Well, of course there’s an engine. There’s something underneath.

SHAWN R. OLLEY: But it’s happening all the time. The degree of sophistication between an attorney within a large law firm, sharing offices with other lawyers down the hall, compared to a sole practitioner — it’s a huge difference. We’ve found that attorneys are crippled by the fact they don’t have time to keep up with the technology because it’s changing month to month to month. The software is expensive. When they get the electronic data, it’s something they haven’t seen before and they’re intimidated…

MULLIGAN: There’s a federal decision that I think every lawyer should read, the Metropolitan Opera decision out of the Southern District of New York [Metropolitan Opera Assoc., Inc. v. Local 100, 212 F.R.D. 178 (S.D.N.Y. 2003)], where the attorney for the union in that case, who was the defendant, reacted to an electronic discovery demand in a very cavalier fashion and did very little in terms of oversight and monitoring.

The court went through in a very lengthy opinion, pointed out all the things that counsel had failed to do, leaving it entirely to the client to decide what the electronic data was that they were going to produce and how they were going to produce it. The court castigated the defendant and the counsel for the cavalier way that they handled it and imposed significant sanctions on the defendant in that case because of the way they had treated repeated demands for electronic discovery. Lawyers cannot just hide their head in the sand and think they’re going to get away with leaving it to the client or the client’s IT people. That just is not going to sail anymore in the courts.

OLLEY: I think it’s changed a lot even in the last six months, where attorneys are becoming much more educated, at least realizing they need to ask the questions. … Although their first reaction is "I want to force it to paper," they go to the people who have the expertise within their firms or to an outside vendor and are told to keep electron
ic documents in the native format in which they were created and maintain it in a database. It’s infinitely cheaper than forcing it to paper and coding it into a database manually.

KODNER: The New York State Bar is one of the first state bars that has made a specific overt statement regarding metadata contained in files. They consider it unethical to look at that information. I think that’s absurd. It’s a free pass for ignorance. … Saying that it’s too complicated to learn is like saying, there’s a new law — like Sarbanes-Oxley or a tax reform act — but it’s so complicated, we shouldn’t have to know it.

Just like learning a new body of law, we’re dealing with a new set of rules related to evidence and the production of evidence. It just means that people are going to have to go through some pain and effort and acknowledge they have a responsibility to learn these things to be able to practice law…

OLLEY: Well, think how many firms have dozens of attorneys and no IT support within the firm.

KODNER: What are people, who represent corporate clients, telling them in terms of electronic document storage and retention policies? Are they building up this massive relevant discoverable damaging information because they never counseled their clients? I don’t think this is a technology issue at all. This is a law practice issue.

What’s going to happen is somebody’s going to be on the cover of the National Law Journal or the Wisconsin Law Journal as one of the first lawyers sued for failure to advise their clients or failure to disclose this kind of information.

ODENTHAL: I’d like to respond to something that Shawn said about smaller law firms having IT people on their staff. A word of caution here — an IT staff is not the place to turn for this type of activity regarding electronic evidence.

KODNER: That’s right. Knowing how to maintain somebody’s network does not translate into understanding metadata.

ODENTHAL: It’s just like any other specialty. You have to have a specialized capability to be able to retrieve, collect, analyze and review.

OLLEY: I think it directly relates to how much value they put on a computer software that they maintain in their office and how they’re able to manage the documents that come to them, whether they are paper or electronic.

KRAVIT: I agree with you on retrieving and the details of finding stuff. But the basic chore of determining what’s relevant and what is discoverable and how to defend it or how to get it is the lawyer’s chore. It’s not the technologist’s chore.

I’m all for judicially imposed standards that are less than fabulous for lawyers, so that we can all practice without fear of suit. Nonetheless, I would say, if you take an example of a Word document that ends up being produced in a case where … it’s contained electronically, the document itself is what’s relevant. I don’t have trouble with a standard that says, without more, all you get is the document, not the metadata.

KODNER: It depends on how you define "documents." To me, the electronic document is the file. And whatever that file might contain, that’s the document.

KRAVIT: But I’m getting to relevance here. The relevant thing is what someone said in a document or e-mail, not the production or how many words were changed to get there. Now, somebody might get that as a bonus, and that might end up being relevant to them. But out of the box, what’s relevant is the document…

MULLIGAN: Steve, I have to disagree with you. When we talk about documents, the large percentage of them are now being exchanged between parties electronically. They’re not being sent by U.S. Mail in a paper document form. That being the case, what’s being electronically sent is fair game for production and is admissible relevant evidence, assuming that there is a relationship to the case.

Related Links

Roundtable – Part II

ODENTHAL: The metadata is an integral part of the document — when it was created, when it was possibly deleted, when it was modified and possibly prior content of the document. In 90 percent of my cases, those dates and other data like that are very relevant to the outcome of the case.

MULLIGAN: There is a committee of the Federal Judicial Conference that’s considering rule changes that would relate to the electronic discovery. The Sedona position is being advocated there. But there are conflicting views.

From discussing the matter with people who have attended those sessions and heard the testimony that’s been given, it’s really unlikely that the law is going to be changed at least in those respects. There may be a codification of some of the case law with regard to shifting of costs and things of that sort. But to see a change where you’re only going to be able to see what a printed version might look like is absolutely unlikely.

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