The "Zubulake" of Legal Holds

The Judge of Zubulake fame (various decisions in 2004 and 2005 which became the handbook on e-discovery obligations and the precursor to the amended Federal Rules of Civil Procedure in December 2006), has written a lengthy opinion outlining the obligations of parties to issue a properly worded, written legal hold to employees who might be relevant to an anticipated litigation.

In late 2003, plaintiffs’ counsel was retained for a lawsuit, which was filed in February 2004. The case was stayed for a number of years and finally a document production was made in 2007. This was found to be deficient and having gaps in what should have been produced.

While the Judge did not grant defendants’ motion to dismiss the case, she did grant an adverse jury instruction, stating that plaintiffs were grossly negligent and that relevant ESI had been destroyed, which the jury may presume was favorable to the defendants. She also imposed monetary sanctions of reasonable costs, including attorneys fees for dealing with the declarations, added depositions and this motion.

So what was the evil done by plaintiffs in their preservation efforts?

Plaintiffs’ counsel telephoned, e-mailed and distributed a memorandum instructing the relevant employees to be over, rather than under, inclusive, and noted that emails and electronic documents should be included. Counsel indicated that the documents were necessary to draft the complaint, although they did not expressly direct that the search be limited to those documents.

So how was the legal hold deficient?

  1. It did not specifically direct employees to preserve (and not destroy) relevant documents
  2. It did not create a mechanism for collecting the documents
  3. It placed total reliance on the employee to search and select what the employee believed to be relevant records

Problems were discovered when the defendants noticed gaps in the plaintiffs’ production. Follow up questions revealed some specific problems:

  1. Some plaintiffs destroyed backup tapes in 2004 after their duty to preserve arose
  2. Declarations on collection efforts were at best vague, lacked detail or at worst were an attempt to mislead
  3. Counsel failed to properly monitor/supervise the employee preservation and collection efforts. They could not identify which files were searched, how the search was conducted, who was asked to search or what they were told

A helpful reminder: The duties to preserve documents when litigation is anticipated are clear and they include a well-written instruction plan for preservation and collection and the guidance and supervision of counsel.

Don't Hit The Snooze Button On ESI Management

There’s almost nothing like the words ‘record retention policy’ to quickly put a group of grown adults asleep. If you’re lucky enough to be placed on the team to formulate said policy, you probably wonder who you ticked off and should remove from your holiday card list. Reminds me of the Dilbert where the boss starts a meeting and falls asleep while talking, slams his head on the desk only to wake up and ask what the meeting was about. They all said ‘the records retention policy.’

But hey, some of us actually like putting these policies and strategic plans together... they offer a lot of value when properly implemented.

I actually prefer to use the term ‘ESI Management Policy’ because that’s really where you get the most bang for your buck. While it’s important to know how long to keep certain vital records, almost nobody seems to care about the boxes piled up like the Pyramids in Egypt that you still pay monthly storage fees on. What they care about is the cost to store, identify, collect, review and produce electronically stored information (ESI).

In the old(er) days, the concern wasn’t about volume of ESI, but content. Everyone was concerned about the smoking gun e-mail – the stupid thing written that no one thought would ever see the light of day. While that’s still a major concern in this current era of extremely tight budgets, it’s not just the smoking gun that can cost the company, it’s also the mounting volume. There are real costs that must be identified and properly dealt with and managed via a policy that helps employees care about their own ESI management.

Don’t jump straight to technology for your solution, however. First, understand your company culture, where it is and where it needs to be regarding how employees create, send and store ESI. Second, create a policy that moves your company culture in the direction you want to go. Don’t try to make it all in one step; try the incremental approach. Grabbing for too much at one time only breeds unrest, and unrest breeds non-compliance. The only thing worse than not having an ESI management policy is to have one that no one follows.

Once you get the policy and the employees moving in the right direction, then it’s time to implement technology to help the company achieve its overall goals, which is cost savings through less volume, and, finally, organization of that remaining volume.

In a previous post, I stated that people and technology are both needed and must work together. Those words can be applied to most situations these days, but especially here. Training and buy-in on the part of your employees along with technology will help you achieve your goals.

It's Your Fault! No It's Your Fault!

I decided I would begin my Lawdable blogging career with a look at a somewhat light piece of e-discovery case law … if there is such a thing. I do follow case law and I hope that my future posts on the subject will offer more of a “this is the potential bottom-line effect” versus a strictly academic viewpoint – I find that to be much more practical (and interesting). In the meantime, I look forward to your suggestions or thoughts. Here we go:

Lawsuits are about conflict and not always just between the parties. Is there a client that hasn’t complained about its attorney, or a lawyer who hasn’t bemoaned the actions of his/her client? It’s just part of human nature. But what happens when one or both of you fail to fulfill your preservation obligations, and this leads to sanctions? Who pays the piper?

The obligations of the client and the lawyer are clear: you must preserve Electronically Stored Information (ESI) that is relevant to the case at hand. The lawyer must provide the legal advice on what is potentially relevant and the practical advice on how to preserve it – and then monitor the client’s implementation of that advice. Having and implementing consistent best practices will be your best shot at fulfilling this obligation.

In Green v. McClendon 2009 WL 2496275 (S.D.N.Y. Aug. 13, 2009), ESI was lost when the client had “the son of a friend” re-install the operating system on her computer. The lawyer apparently did not properly implement a litigation hold and did not properly inspect and search for relevant ESI on that computer before the son of a friend “helped out.”

The court sanctioned both the client and the lawyer for the costs of the motion to compel and noted that if the court found out later that bad faith was involved in the loss of the ESI, the court would impose an adverse inference.

The final issue for the court was this: how to allocate blame between the client and the lawyer? The court concluded that they should work it out amongst themselves and present the court with a plan. (Really, how do you think that conversation went?) If, however, they are unable to agree on cost allocation then they could present the issue to the court “for determination.” (If that were to happen, does anyone else see any potential conflict there?)

The bottom line is this: the lawyer and the client must understand their obligations to preserve ESI. The lawyer and the client must work together to implement the plan. Working together and following best practices to fulfill the preservation obligation will keep your side moving in the right direction and prevent sanctions – instead of battling each other when sanctions are imposed.

"IM" Reviewing That Data

All the discussion in e-discovery typically revolves around e-mails, and obviously that’s where the bulk of electronic communication takes place. But we can uncover some very helpful information from Instant Messaging, too.

Yes, that’s correct – all IM conversations can be collected and processed for review when using the right review software tool (and there are many good ones out there). That means all those employees who keep their Yahoo or AOL messaging open all day represent another significant source of data than can be classified as electronically stored information (ESI).

While there’s been a moderate amount of discussion about this issue, in many industries it has flown under the radar screen or been pushed to the side because it was seemingly too difficult of a matter to deal with properly. That’s not the case. A recent example: I managed a team of five attorneys that utilized Attenex software to review the e-mails and IMs of a corporate client. As a content analytic review tool, the challenge with IMs is that the slang used in texting is very distinct from normal communications and offers a different type of challenge when trying to organize these files by their concept. However, by segregating the IMs and combining them with advanced timeline and keyword searches, we were able to review the universe of IMs in context and with great efficiency. In fact, each reviewer averaged more than 3,000 document decisions per day (e-mails and IMs), which resulted in dramatic cost savings in reviewer expense for the client.

There are certainly some very robust tools that can make the IM part of the review go smoothly; the point is that it should not be forgotten (or avoided) in the process and to make sure your project manager is asking the right questions on the subject.