Gone are the days when parties and counsel could claim ignorance of the technical and legal issues involved in preserving electronic records associated with matters in litigation.
As Judge Shira Scheindlin wrote in Zubulake v. UBS Warburg LLC , 2004 WL 1620866 (S.D.N.Y. July 20, 2004) "Now that the key issues have been addressed and national standards are developing, parties and their counsel are fully on notice of their responsibility to preserve and produce electronically stored information."
Indeed, failure to understand and adhere to standards outlined in landmark cases, such as Rowe Entertainment, Inc. v. William Morris Agency, Inc ., 205 F.R.D. 421 (S.D.N.Y. 2002).
Zubulake, and more recent rulings, can lead to monetary sanctions, dismissals, adverse jury instructions, and high costs. Zubulake outlined many EDD issues, including obligations to preserve data, production, allocation of investigation and reproduction costs, and possible remedies for a party’s failure to follow these standards. Here are few recent decisions of import:
Courts continue to consider and award sanctions, including adverse jury instructions, where they believe a party or its counsel has failed to adhere to obligations to preserve or produce electronic records. See:
- Tantivy Communications Inc. v. Lucent Technologies Inc., 2005 WL 2860976 (E.D. Tex. Nov. 1, 2005): Court finds sanctionable conduct where a party or counsel allegedly tried to “hide the ball” with electronic discovery.
- Coleman (Parent) Holdings Inc. v. Morgan Stanley & Co. Inc., 2005 W.L. 679071 (Fla. Cir. Ct. March 1, 2005): Court finds "willful and gross abuse" of discovery obligations in connection with electronic discovery, and orders that extensive explanation be provided to the jury.
- E*Trade Securities LLC v. Deutsche Bank AG, 230 F.R.D. 582 (D. Minn. April 18, 2005): Sanctions awarded for failure to preserve hard drives, e-mail and other information.
- In re Telxon Corp. Securities Litigation, 2004 W.L. 3192729 (N.D. Ohio 2004): Magistrate recommends default judgment for alleged electronic discovery abuses. These cases and others make clear that courts are willing to strictly enforce EDD standards, and are often creative in finding what they believe to be appropriate sanctions.
Metadata can perhaps best be described as the information behind the document. It contains the unseen, but often discoverable, details of how, when, and by whom documents or other electronic data were prepared, modified, copied or otherwise handled. Depending on the need, metadata can be valuable evidence.
In Williams v. Sprint/United Management Co., 230 F.R.D. 640 (D. Kan. Sept. 29, 2005), the court held that an order requiring a party to produce an electronic document in the form in which it is regularly maintained requires that party to produce all metadata unless 1) that party timely objects to production of the metadata, 2) the parties agree that the metadata should not be produced, or 3) the producing party requests a protective order.
This ruling appears to conflict with Principle 12 of The Sedona Principles, ("unless it is material to resolving the dispute, there is no obligation to preserve and produce metadata absent agreement of the parties or order of the court.") Regardless, in this case, the party that scrubbed the documents (thereby deleting metadata) was not sanctioned, because of the lack of clear law on the issue at the time.
In reviewing and producing electronic data, parties and counsel continue to face the same privilege questions that exist with traditional documents. Ensure that proper privileges are claimed and preserved in accordance with the law of the relevant jurisdiction.
The waiver issue was recently addressed in Atronic Intl. GMBH v. SAI Semispecialists of America, Inc., 2005 W.L. 2738914 (E.D.N.Y. Oct. 18, 2005), where the court found that privileged e-mails produced in electronic discovery resulted in waiver of the privilege.
Among other things, the court focused on the party’s failure to take appropriate precautions in labeling the e-mails as privileged, and on its failure to exercise care in reviewing the emails before production.
As with traditional discovery, a party may not base a purported need for electronic discovery on rank speculation. Parties opposing production can always argue that requested data is overbroad in scope and not likely to lead to the discovery of admissible evidence. Courts have refused to compel requests for electronic discovery on these grounds. Williams v. Mass Mut. Life Ins. Co., 226 F.R.D. 144 (D. Mass. 2005); Stallings-Daniel v. N. Trust Co., 2002 W.L. 385566 (N.D. Ill. 2002). The fact that information is created, maintained, or stored electronically is not a valid ground for avoiding the traditional burdens of seeking discovery appropriately tailored to the dispute at hand.