ESI Discovery for the Technically Challenged The Technology - - PowerPoint PPT Presentation

ESI Discovery for the Technically Challenged

The Technology Practice Committee

• f the Palm Beach County Bar Association

Presented by: Andrew S. Kwan Beasley Kramer & Galardi, P.A. West Palm Beach, Florida (561) 835-0900 kwan@beasleylaw.net

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A. 1

Overview

• What is ESI?
• How should ESI be preserved?
• How should ESI be harvested?
• How should ESI be produced?
• Who should pay?

2 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

What is Electronically Stored Information?

3

“The wide variety of computer systems currently in use, and the rapidity

• f

technological change, counsel against a limiting or precise definition of electronically stored information. [Federal Rule of Civil Procedure] 34(a)(1) is expansive and includes any type of information that is stored electronically…The rule covers…information ‘stored in any medium,’ to encompass future developments in computer technology.”

• -Committee Notes on 2006 Amendments to Federal Rules of Civil Procedure

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

What is Electronically Stored Information?

4 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

What is Electronically Stored Information?

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Practice Exercise – What ESI does your firm or organization possess?

• Individual computer hard drives of every staff member
• Portable devices - Laptops, iPads, iPhones, USB drives,

digital cameras, voice recorders

• Networked file server containing most files
• Cloud-based e-mail server
• Weekly backup tapes (reasonably accessible?)
• Web accounts (e-mail, Internet file storage, Facebook, etc.)

…And what if you have multiple offices? In different countries? [overseas privacy laws may greatly complicate ESI discovery]

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

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A party has the “affirmative responsibility to preserve any items or documents that are the subject of a duly served discovery request.” Strasser v. Yalamanchi (“Strasser II”), 783

• So. 2d 1087, 1093 (Fla. 4th DCA 2001).

In Strasser II, the defendant threw away a hard drive containing relevant information months after the plaintiff had requested it. The defendant claimed that the hard drive had been “damaged by lightning” and thrown out by an

• employee. Id. at 1090.

The plaintiff eventually recovered nearly $600,000 in damages for both the

• riginal breach of contract claim, and for the defendant’s negligent destruction of

evidence.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

FD Destiny, LLC v. AVP Destiny, 502009 CA029903 MB AG

Dispute arising out of invoices sent to the plaintiffs regarding a real estate project. Plaintiffs claimed that the invoices were falsified, defendants claimed that the invoices were generated to fund reserve accounts for the real estate project. But it was undisputed that nearly all invoices were missing as of eight months after the lawsuit started.

7 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

FD Destiny, LLC v. AVP Destiny, 502009 CA029903 MB AG

Plaintiffs filed the complaint on September 2, 2009 Preservation order on September 9, 2009 – defendants

• rdered to preserve “all books and records including

electronic files…” During discovery, defendants were ordered to produce all documents about the real estate project, including e-mail correspondence. But the invoices were missing…

8 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

FD Destiny, LLC v. AVP Destiny, 502009 CA029903 MB AG

Court appointed neutral computer expert, who found that defendants had done nothing to preserve ESI – no notice to employees, no preservation of evidence on reassigned computers, no preservation of potentially relevant electronic files. Many files had been deleted with no backup copies made, and several employee hard drives were missing. Expert also found 602,000 files that were potentially relevant, but which were not produced.

9 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

FD Destiny, LLC v. AVP Destiny, 502009 CA029903 MB AG

Plaintiffs moved to compel and for sanctions. Adverse inference may be appropriate if a party possesses evidence, has a duty to preserve it, and the evidence is then negligently lost or destroyed. See Golden Yachts v. Hall, 920 So. 2d 777, 781 (Fla. 4th DCA 2006).

10 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

FD Destiny, LLC v. AVP Destiny, 502009 CA029903 MB AG

The Court (Judge Crow): (1) awarded money paid to neutral computer expert; (2) raised the possibility of adverse inference/presumption instruction at trial; (3) awarded attorney’s fees and costs; and (4) found that privilege had been waived as to certain documents. Key Point – Take special care to preserve ESI.

11 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be preserved?

Best practices:

• 1. Send preservation letter to opposing party at the
• utset of litigation (not necessarily the filing of the

complaint; depends on jurisdiction and facts) that specifically identify relevant ESI to be preserved.

• 2. Discuss litigation hold procedures for ESI with your
• client. Is there an automatic deletion policy for files

and e-mail? Can you back up potentially discoverable information for safekeeping? How will employees be notified to preserve information?

12 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

13 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

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Goal: Develop a comprehensive “map” of a client’s ESI. With clients that have multiple offices and/or networks, it is helpful to diagram where files and e-mail are being sent and received. Miami Office Client: U.S. Corp (subsidiary) U.S. Corp (parent) Canadian Corp (sister) French Corp (sister) Other Offices

[Depending on facts, this ESI is likely not in the possession, custody, or control of U.S. Corp. Also, beware of EU/Int’l privacy laws]

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

Scoping Conference Work with client, client IT, and/or third party vendor. List all current and former custodians, and the ESI each possesses. Inventory relevant storage locations and devices. Watch out for ESI accessible only be one custodian, such as an employee’s individual hard drive, laptop, or personal folder on a shared drive.

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Device # Device Type Custodian Physical Location Information Stored

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

Scoping Conference Watch out for ESI which is no longer being actively used by your client, but which still exists: What happens to employee files after they leave the company? What happens to old or decommissioned computer workstations?

16 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

Factual Background: A Fortune 500 medical device company allegedly interfered with a contract between doctors, who had agreed to share royalties from a medical device that the doctors developed for the company. The medical device company claimed that it had produced all “agreements or contracts” between it and any of the doctors, “including drafts thereof,” for the relevant time period. The company’s ESI search plan did not discuss searching the hard drives of former employees.

17 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be harvested?

A former employee testified during deposition that there were emails between him and a doctor referencing their agreement. The company had failed to look at a PST (Microsoft Outlook file) in the “H drive” of the former employee, which contained an e-mail from one of the doctors referring to their agreement. The e-mail was specifically cited by the court in denying summary judgment on the tortious interference claim. Key Point: Coming up with a comprehensive harvesting plan can avoid surprises later on.

18 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

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(Partial)

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

United States v. Hirmer, 3:08cr79 (N.D. Fla.)*

• Background: criminal case based on defendants’

involvement in a scheme to fraudulently promote and sell various tax- and debt-elimination products. Charges included wire fraud, money laundering, and tax evasion. See generally United States v. Hirmer, 767 F. Supp. 2d 1305 (N.D. Fla. 2011).

• Defendants allegedly sent materials to customers

containing numerous false and misleading statements about the United States tax system.

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*Special thanks to Ben “Ziggy” Williamson, Holland & Knight LLP, for this case study.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

United States v. Hirmer, 3:08cr79 (N.D. Fla.)*

• The Government produced discovery to each

defendant on hard drives prepared by the IRS. Defendants advised that the hard drives were unorganized and difficult to review.

• The Government attempted to solve the problem by

identifying the subset of documents that it reserved the right to use at trial, which were produced on a series of four DVDs.

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*Special thanks to Ben “Ziggy” Williamson, Holland & Knight LLP, for this case study.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

United States v. Hirmer, 3:08cr79 (N.D. Fla.)

• However, the four DVDs comprised 16,000 pages of

documents (taken out of the original hard drive, which contained a total 365 gigabytes of data in over

• ne million files). The documents were produced

with each page as a separate, nonsearchable TIFF.

22 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

United States v. Hirmer, 3:08cr79 (N.D. Fla.)

• Defendants raised a due process challenge based on

the form of the discovery. See generally Fed. R.

• Crim. P. 16(a)(1)(E).
• The Court found that there was “no realistic way to

meaningfully review the government’s discovery within a reasonable period of time.”

• The Court ordered the Government to provide

indexed, relevant documents from the original hard drive on new discs.

23 eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

How should ESI be produced?

United States v. Hirmer, 3:08cr79 (N.D. Fla.)

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• The Government provided an index of the

documents contained on the original DVDs, but had no way to combine that index with the TIFF files in order to generate usable PDFs.

• The Court helped the Government to write code to

combine the documents using a script and the

• index. In the new discs, each document was in a

single file in PDF form, named according to Bates number.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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“The more information there is to discover, the more expensive it is to discover all the relevant information until, in the end, ‘discovery is not just about uncovering the truth, but also about how much of the truth the parties can afford to disinter.’”

• - Zubulake v. UBS Warburg, 217 F.R.D. 309 (S.D.N.Y. 2003) (“Zubulake

I”) (quoting Wendy R. Liebowitz, Digital Discovery Starts to Work, NAT'L L.J., Nov. 4, 2002, at 4)

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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FDIC v. Brudnicki, 291 F.R.D. 669 (N.D. Fla. 2013)

• The FDIC, as receiver for a closed bank, brought

negligence and gross negligence claims against the bank’s directors (and one officer/director).

• In preparation for litigation, the FDIC obtained

52,000 paper documents from the bank, which were converted to ESI (scanned as text-searchable PDFs into a database). The FDIC also put the bank’s native ESI (such as the e-mail server, file server, and internal loan software database) into the database.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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• All told, the database held 2.053 terabytes of ESI, which is more

than 60,000 bankers’ boxes worth of documents, roughly 2,000 pickup trucks:

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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FDIC v. Brudnicki, 291 F.R.D. 669 (N.D. Fla. 2013)

• The FDIC produced an initial group of roughly

60,000 pages of documents it identified as relevant in paper form, but objected to producing additional documents without a protocol for producing electronic information.

• The defendants had few or no responsive documents.

The costs of ESI production would fall mostly on the FDIC.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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FDIC v. Brudnicki, 291 F.R.D. 669 (N.D. Fla. 2013)

• The FDIC’s protocol called for the defendants to

provide search terms, which would be run across the entire database of ESI, in order to provide a large “pool” of potentially relevant documents.

• These documents would be loaded onto Relativity, a

commonly used document review platform. Defendants would be able to search, highlight, etc. from this pool of documents at will. Defendants would “tag” documents out of the pool for formal production.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.

Who should pay?

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FDIC v. Brudnicki, 291 F.R.D. 669 (N.D. Fla. 2013)

• Defendants would be required to pay the hosting fee

for the Relativity platform, as well as a per-page fee for documents which were “tagged” for Bates stamping and formal production.

• The Court recognized that while the ESI was not

traditionally “inaccessible” under Zubulake, thanks to the FDIC’s prelitigation collection efforts, cost- shifting was nevertheless appropriate under Rule 26(c) proportionality.

eDiscovery for the Technically Challenged – Andrew S. Kwan, Beasley Kramer & Galardi, P.A.