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1 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 2 DARREN J. ROBBINS (168593) RANDALL J. BARON (150796) 3 A. RICK ATWOOD, JR. (156529) 655 West Broadway, Suite 1900 4 San Diego, CA 92101 Telephone: 619/231-1058 5 619/231-7423 (fax) [email protected] 6 [email protected] [email protected] 7 and JOHN C. HERMAN 8 RYAN K. WALSH JOSEPH BENZ III 9 JASON S. JACKSON 3424 Peachtree Road, N.E. 10 Suite 1650 Atlanta, GA 30326 11 Telephone: 404/504-6500 404/504-6501 (fax) 12 [email protected] [email protected] 13 [email protected] [email protected] 14 Attorneys for Plaintiff 15 UNITED STATES DISTRICT COURT 16 SOUTHERN DISTRICT OF CALIFORNIA 17 CARY A. JARDIN, ) No. 08-CV-1462-IEG-RBB 18 ) Plaintiff, ) PLAINTIFF'S MOTION FOR THE 19 ) PRESERVATION OF EVIDENCE vs. ) 20 ) DATALLEGRO, INC. and STUART FROST, ) 21 ) Defendants. ) 22 ) 23 24 25 26 27 28
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NOW COMES CARY A. JARDIN ("Jardin"), plaintiff in the above-styled case, and, hereby
2 makes and files this Motion for the Preservation of Evidence. Despite three written requests to 3 preserve evidence, plaintiff has received no assurance from defendants or their counsel that they 4 have taken any measures to do so. Moreover, it appears that certain relevant evidence on 5 defendants' website, www.datallegro.com, has been altered or deleted. Plaintiff therefore
6 respectfully requests the Court to order defendants to preserve all documents or things relevant to 7 this litigation, as set forth in the proposed Preservation Order, attached hereto as Exhibit A. In 8 support of this Motion, plaintiff files concurrently herewith its Memorandum of Points and 9 Authorities and the Declaration of John C. Herman. 10 WHEREFORE, Jardin respectfully requests that this Court grant the relief requested in the
11 proposed Preservation Order, attached hereto as Exhibit A. 12 DATED: August 22, 2008 13 14 15 16 17 18 19 20 21 22 23 24 25 26 Attorneys for Plaintiff 27 28 PLAINTIFF'S MOTION -108-CV-1462-IEG-RBB
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Respectfully submitted, COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP DARREN J. ROBBINS RANDALL J. BARON A. RICK ATWOOD, JR.
/s/ A. Rick Atwood, Jr. A. RICK ATWOOD, JR. 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP JOHN C. HERMAN RYAN K. WALSH E. JOSEPH BENZ III JASON S. JACKSON 3424 Peachtree Road, N.E., Suite 1650 Atlanta, GA 30326 Telephone: 404/504-6500 404/504-6501 (fax)
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EXHIBIT A
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 UNITED STATES DISTRICT COURT 16 SOUTHERN DISTRICT OF CALIFORNIA 17 18 19 20 21 22 23 24 25 26 27 28 ) ) Plaintiff, ) ) vs. ) ) DATALLEGRO, INC. and STUART FROST, ) ) Defendants. ) ) CARY A. JARDIN, No. 08-CV-1462-IEG-RBB ORDER GRANTING INJUNCTION TO PRESERVE EVIDENCE
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1
This matter having come before the Court on the Motion of plaintiff Cary A. Jardin
2 ("Jardin"); and 3 The Court having reviewed all of the pleadings filed by the parties and having heard the
4 arguments of counsel at the hearing before the Court on ___________________, 2008; and 5 IT APPEARING THAT defendants Datallegro, Inc. ("Datallegro") and/or Stuart Frost
6 ("Frost") have altered or deleted evidence relevant to plaintiff Jardin's claims in this litigation since 7 having notice of this litigation; and 8 IT FURTHER APPEARING THAT, without an injunction, it is likely that additional
9 relevant information or data could be irretrievably altered, deleted or otherwise lost or destroyed; 10 11 THE COURT HEREBY ORDERS the following: 1. Datallegro and Frost shall take all reasonable steps immediately to preserve all
12 documents and things within their possession, custody, or control, including but not limited to, 13 website information, that are reasonably likely to lead to the discovery of admissible evidence in this 14 litigation, including but not limited to, immediate segregation of all computer hard drives and 15 electronic mail servers that contain or prior to deletion did contain any data that is reasonably 16 likely to lead to the discovery of admissible evidence in this litigation; and 17 2. Datallegro and Frost shall take all reasonable steps to investigate and determine
18 whether any additional information, data, or documents relevant to the claims and/or defenses in this 19 litigation have been lost or destroyed and provide a report to the Court of their findings within thirty 20 (30) days of the entry of this Order. 21 22 IT IS SO ORDERED. ____________________________________ THE HONORABLE IRMA E. GONZALEZ UNITED STATES DISTRICT JUDGE
23 DATED: _________________________ 24 25 26 27 28 ORDER
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1 Submitted by, 2 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 3 DARREN J. ROBBINS RANDALL J. BARON 4 A. RICK ATWOOD, JR. 5 6 7 655 West Broadway, Suite 1900 8 San Diego, CA 92101 Telephone: 619/231-1058 9 619/231-7423 (fax) 10 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 11 JOHN C. HERMAN RYAN K. WALSH 12 E. JOSEPH BENZ III JASON S. JACKSON 13 3424 Peachtree Road, N.E., Suite 1650 Atlanta, GA 30326 14 Telephone: 404/504-6500 404/504-6501 (fax) 15 Attorneys for Plaintiff 16
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/s/ A. Rick Atwood, Jr. A. RICK ATWOOD, JR.
17 18 19 20 21 22 23 24 25 26 27 28 ORDER -208-CV-1462-IEG-RBB
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DECLARATION OF SERVICE BY UPS DELIVERY I, the undersigned, declare: 1. That declarant is and was, at all times herein mentioned, a citizen of the United States
4 and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested 5 party in the within action; that declarant's business address is 655 West Broadway, Suite 1900, San 6 Diego, California 92101. 7 2. That on August 22, 2008, declarant served by UPS, next day delivery, the
8 PLAINTIFF'S MOTION FOR THE PRESERVATION OF EVIDENCE to the parties listed on 9 the attached Service List. 10 I declare under penalty of perjury that the foregoing is true and correct. Executed this 22nd
11 day of August, 2008, at San Diego, California. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PLAINTIFF'S MOTION 08-CV-1462-IEG-RBB /s/ Alison K. Sloan ALISON K. SLOAN
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JARDIN-DATALLEGRO IP Service List - 8/22/2008 (08-0158) Page 1 of 1 Counsel For Defendant(s) Greg Williams General Counsel Datallegro, Inc. 85 Enterprise, 2nd Floor Aliso Viejo, CA 92656 Stuart Frost Pro Per 30 High Bluff Laguna Niguel, CA 92656
Counsel For Plaintiff(s) John C. Herman Ryan K. Walsh E. Joseph Benz III Coughlin Stoia Geller Rudman & Robbins LLP 3424 Peachtree Street, N.E., Suite 1650 Atlanta, GA 30326 404/504-6500 404/504-6501(Fax) Darren J. Robbins Randall J. Baron A. Rick Atwood Coughlin Stoia Geller Rudman & Robbins LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 619/231-1058 619/231-7423(Fax)
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1 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 2 DARREN J. ROBBINS (168593) RANDALL J. BARON (150796) 3 A. RICK ATWOOD, JR. (156529) 655 West Broadway, Suite 1900 4 San Diego, CA 92101 Telephone: 619/231-1058 5 619/231-7423 (fax) [email protected] 6 [email protected] [email protected] 7 and JOHN C. HERMAN 8 RYAN K. WALSH JOSEPH BENZ III 9 JASON S. JACKSON 3424 Peachtree Road, N.E. 10 Suite 1650 Atlanta, GA 30326 11 Telephone: 404/504-6500 404/504-6501 (fax) 12 [email protected] [email protected] 13 [email protected] [email protected] 14 Attorneys for Plaintiff 15 UNITED STATES DISTRICT COURT 16 SOUTHERN DISTRICT OF CALIFORNIA 17 CARY A. JARDIN, ) No. 08-CV-1462-IEG-RBB 18 ) Plaintiff, ) NOTICE OF MOTION FOR THE 19 ) PRESERVATION OF EVIDENCE vs. ) 20 ) DATALLEGRO, INC. and STUART FROST, ) 21 ) Defendants. ) 22 ) 23 24 25 26 27 28
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1 TO: 2
ALL PARTIES AND THEIR ATTORNEYS OF RECORD PLEASE TAKE NOTICE that plaintiff Cary A. Jardin hereby moves the Court to enter an
3 Order for the Preservation of Evidence. This hearing shall be held on October 20, 2008, at 10:00 4 a.m. in Courtroom B before the Honorable Ruben B. Brooks. 5 This motion is based on this Notice, the Memorandum of Points and Authorities, the
6 Declaration of John C. Herman, the pleadings and records on file herein, and such further evidence 7 as may be presented to the Court. 8 DATED: August 22, 2008 9 10 11 12 13 14 15 16 17 18 19 20 21 Attorneys for Plaintiff 22 23 24 25 26 27 28 NOTICE OF MOTION -108-CV-1462-IEG-RBB
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COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP DARREN J. ROBBINS RANDALL J. BARON A. RICK ATWOOD, JR.
/s/ A. Rick Atwood, Jr. A. RICK ATWOOD, JR. 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP JOHN C. HERMAN RYAN K. WALSH E. JOSEPH BENZ III JASON S. JACKSON 3424 Peachtree Road, N.E., Suite 1650 Atlanta, GA 30326 Telephone: 404/504-6500 404/504-6501 (fax)
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DECLARATION OF SERVICE BY UPS DELIVERY I, the undersigned, declare: 1. That declarant is and was, at all times herein mentioned, a citizen of the United States
4 and a resident of the County of San Diego, over the age of 18 years, and not a party to or interested 5 party in the within action; that declarant's business address is 655 West Broadway, Suite 1900, San 6 Diego, California 92101. 7 2. That on August 22, 2008, declarant served by UPS, next day delivery, the NOTICE
8 OF MOTION FOR THE PRESERVATION OF EVIDENCE to the parties listed on the attached 9 Service List. 10 I declare under penalty of perjury that the foregoing is true and correct. Executed this 22nd
11 day of August, 2008, at San Diego, California. 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 NOTICE OF MOTION 08-CV-1462-IEG-RBB /s/ Alison K. Sloan ALISON K. SLOAN
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JARDIN-DATALLEGRO IP Service List - 8/22/2008 (08-0158) Page 1 of 1 Counsel For Defendant(s) Greg Williams General Counsel Datallegro, Inc. 85 Enterprise, 2nd Floor Aliso Viejo, CA 92656 Stuart Frost Pro Per 30 High Bluff Laguna Niguel, CA 92656
Counsel For Plaintiff(s) John C. Herman Ryan K. Walsh E. Joseph Benz III Coughlin Stoia Geller Rudman & Robbins LLP 3424 Peachtree Street, N.E., Suite 1650 Atlanta, GA 30326 404/504-6500 404/504-6501(Fax) Darren J. Robbins Randall J. Baron A. Rick Atwood Coughlin Stoia Geller Rudman & Robbins LLP 655 West Broadway, Suite 1900 San Diego, CA 92101 619/231-1058 619/231-7423(Fax)
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1 COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 2 DARREN J. ROBBINS (168593) RANDALL J. BARON (150796) 3 A. RICK ATWOOD, JR. (156529) 655 West Broadway, Suite 1900 4 San Diego, CA 92101 Telephone: 619/231-1058 5 619/231-7423 (fax) [email protected] 6 [email protected] [email protected] 7 and JOHN C. HERMAN 8 RYAN K. WALSH JOSEPH BENZ III 9 JASON S. JACKSON 3424 Peachtree Road, N.E. 10 Suite 1650 Atlanta, GA 30326 11 Telephone: 404/504-6500 404/504-6501 (fax) 12 [email protected] [email protected] 13 [email protected] [email protected] 14 Attorneys for Plaintiff 15 UNITED STATES DISTRICT COURT 16 SOUTHERN DISTRICT OF CALIFORNIA 17 CARY A. JARDIN, ) No. 08-CV-1462-IEG-RBB 18 ) Plaintiff, ) MEMORANDUM OF POINTS AND 19 ) AUTHORITIES IN SUPPORT OF MOTION vs. ) TO APPROVE ORDER FOR THE 20 ) PRESERVATION OF DOCUMENTS AND DATALLEGRO, INC. and STUART FROST, ) ELECTRONIC EVIDENCE 21 ) Defendants. ) 22 ) 23 24 25 26 27 28
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1
NOW COMES PLAINTIFF, Cary A. Jardin, who respectfully requests that this Court
2 approve and enter the "Order for the Preservation of Documents and Electronic Evidence," attached 3 to his Motion as Exhibit A. In support, undersigned counsel respectfully shows the Court as follows: 4 I. 5 INTRODUCTION AND SUMMARY OF THE REQUESTED RELIEF This is an action for patent infringement of plaintiff's U.S. Patent No. 7,177,874 (the "`874
6 Patent"), entitled "System and Method for Generating and Processing Results Data in a Distributed 7 System." There is presently no agreement for the preservation of documents and electronic 8 evidence. Though such evidence is integral to the prosecution of plaintiff's case and a duty to 9 preserve documents arose upon service of process, defendants refuse to enter into a meaningful 10 preservation agreement delineating the specific scope and protocol of that preservation duty. In fact, 11 defendants and their counsel have refused to respond to the three written requests made by plaintiff's 12 counsel. Accordingly, plaintiff respectfully requests that the Court enter the proposed Order for the 13 Preservation of Documents and Electronic Evidence attached as Exhibit A to the accompanying 14 Motion. 15 II. 16 FACTUAL ALLEGATIONS AND STATUS OF THE PROCEEDINGS This action for patent infringement is brought by plaintiff Cary A. Jardin, a well respected
17 and highly successful database architecture expert. In 1997, Mr. Jardin founded IPivot, Inc., a 18 networking company, which was eventually sold to Intel for $500 million. After this sale was 19 completed, Mr. Jardin assumed the role of chief technology officer for Intel's network equipment 20 division. 21 In 2003, Mr. Jardin founded another company called XPrime, Inc., at which he developed
22 technology that facilitated high performance computing on a scalable basis. These inventions are 23 embodied in the `874 Patent. Mr. Jardin hired defendant Stuart Frost as the chief executive officer of 24 XPrime in 2003. While his tenure at XPrime was relatively short, Mr. Frost learned a great deal 25 about Mr. Jardin's intellectual property during his tenure there. Immediately upon leaving XPrime, 26 if not before, defendant Frost started a business to compete with XPrime in the database architecture 27 field called Datallegro. Defendant Frost then filed patent applications with the United States Patent 28 and Trademark Office naming himself as the inventor and not disclosing Mr. Jardin's prior art. MEMORANDUM OF POINTS AND AUTHORITIES -108-CV-1462-IEG-RBB
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1 Frost's patent applications were in the same database architecture field as Jardin's prior-filed `874 2 Patent. 3 Shortly after the filing of this lawsuit, plaintiff's counsel sent a letter to the Vice President
4 and General Counsel of Datallegro, Inc., requesting that relevant documents and electronic records 5 be maintained for purposes of this litigation. See Declaration of John C. Herman filed concurrently 6 herewith ("Herman Decl." or "Herman Declaration"), Ex. A. When defendants did not respond, a 7 second request was sent the following week requesting confirmation that defendants were 8 safeguarding documents. Herman Decl., Ex. C. Plaintiff's counsel also sent a letter to defendants' 9 patent counsel of record requesting that he preserve all relevant evidence. Herman Decl., Ex. B. To 10 date no confirmation has been received from any of these three letters. More troubling is that it 11 appears that certain documents have been altered or deleted from defendants' website. Id., ¶¶ 7-8 12 and Herman Decl., Exs. D, E. 13 III. 14 "In some cases, a preservation order that clearly defines the obligations of the producing 15 party may minimize the risk that relevant evidence will be deliberately or inadvertently destroyed, 16 may help ensure information is retrieved when it is most accessible (i.e., before it has been deleted or 17 removed from active online data), and may protect the producing party from sanctions." See Ex. 1 at 18 17. "Early in the case, the court should discuss with the parties whether an order is needed and, 19 if so, the scope, duration, method of data preservation, and other terms that will preserve relevant 20 matter without imposing undue burdens." Id. "In crafting the order, it is important to know from 21 the responding party what data-management systems are routinely used, the volume of data affected, 22 and the costs and technical feasibility of implementing the order." Id. at 17-18 (emphasis added). 23 Plaintiff in the instant action diligently attempted to obtain an agreed upon document 24 preservation plan with defendants without involving the Court. Copies of letters from counsel for 25 plaintiff to counsel for defendants are attached to the Herman Declaration. Defendants have refused 26 to respond to date and in fact appear to have altered certain electronic documents directly relevant to 27 this lawsuit on the website www.datallegro.com. Herman Decl., Exs. D, E. Defendants' refusal to 28 MEMORANDUM OF POINTS AND AUTHORITIES -208-CV-1462-IEG-RBB THE REQUESTED ORDER FOR THE PRESERVATION OF DOCUMENTS AND ELECTRONIC EVIDENCE SHOULD ISSUE
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1 even discuss, let alone enter into a specific preservation protocol that will ensure the preservation of 2 all potentially relevant documents, is troubling. 3 4 A. The Requested Preservation Order Is Narrowly Tailored
Entry of plaintiff's proposed "Order Granting Injunction to Preserve Evidence" will not
5 prejudice defendants. Instead, the Order will formalize defendants' preservation obligations and will 6 protect against any further alteration or destruction of important evidence. 7 Even before the 2006 amendments to the Federal Rules, the Manual for Complex Litigation
8 §11.442 (4th ed. 2004), provided that "[b]efore discovery starts, and perhaps before the initial 9 conference, the court should consider whether to enter an order requiring the parties to preserve and 10 retain documents, files, data, and records that may be relevant to the litigation." According to one 11 court, such preservation orders are "common in complex litigations," HJB, Inc. v. American Home 12 Prods. Corp., No. 93 C 6728, 1994 WL 31005, at *1 (N.D. Ill Feb. 1, 1994), and are increasingly 13 routine in cases involving electronic evidence, such as e-mails and other forms of electronic 14 communications. See Renda Marine, Inc. v. United States, 58 Fed. Cl. 57, 62-63 (2003); Wiginton v. 15 Ellis, No. 02 C 6832, 2003 WL 22439865, at *2 (N.D. Ill. Oct. 27, 2003); See also Manual for 16 Complex Litigation §11.442, at 73 n.161 (listing other cases in which such orders have been 17 entered); Kenneth J. Winters, Advance Discovery Issues: Discovery and Protection of Electronic 18 Data, 2003 ALI-ABA 737, 746, 752,53 (2003); Pueblo of Laguna v. United States, 60 Fed. Cl. 133, 19 135-36 (2004). 20 Plaintiff's letters to defendants and their counsel, in conjunction with the Complaint's
21 allegations, provided defendants with fair notice of the scope of potentially relevant evidence and a 22 meaningful preservation protocol. Defendants have refused to respond much less acknowledge their 23 obligations. The document preservation order requested is necessary, at the present time, in this 24 action to ensure compliance with defendants' duties, particularly in light of the fact that defendants 25 appear to have altered or deleted relevant evidence after the initiation of this lawsuit. Herman Decl., 26 Exs. D, E.. 27 As the recent case Qualcomm, Inc. v. Broadcom Corp., No. 05 cv 1958-B (BLM), 2008 U.S.
28 Dist. LEXIS 911 (S.D. Cal. Jan. 7, 2008), revealed, if the preservation methods suggested by MEMORANDUM OF POINTS AND AUTHORITIES -308-CV-1462-IEG-RBB
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1 plaintiff's counsel are taken now, the cost of locating and retrieving relevant material will be a 2 fraction of the cost at a later date and will prevent further spoliation. If inadequate steps are taken to 3 preserve the ESI, in an easy to retrieve location, vital documents such as email communications can 4 be deleted or destroyed. If that occurs, the only place responsive documents may still exist will be 5 on server back-up tapes. Retrieving documents from backup tapes is much more difficult and 6 expensive because, to obtain such documents, the back-up tapes must first be located for the 7 appropriate servers and then the data on the tapes must be restored to a useable format. 8 The requested preservation order merely commands the defendants to do what all litigants are
9 otherwise required to do. This presents no meaningful bar to entry of a preservation order. Id. 10 IV. 11 CONCLUSION All of these factors weigh in favor of entry of the proposed order. The proposed order is
12 narrowly drawn and is not unduly burdensome. While undersigned counsel has attempted to confer 13 with counsel for defendants seeking to establish a meaningful preservation protocol, there has been 14 no agreement about the scope of the defendants' preservation obligations or a specific electronically 15 stored information preservation protocol. As inadvertent destruction of important evidence will 16 likely occur in the absence of a preservation order, plaintiff respectfully requests that the Court enter 17 the attached "Order Granting Injunction to Preserve Evidence." 18 DATED: August 22, 2008 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES -408-CV-1462-IEG-RBB 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) /s/ A. Rick Atwood, Jr. A. RICK ATWOOD, JR. Respectfully submitted, COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP DARREN J. ROBBINS RANDALL J. BARON A. RICK ATWOOD, JR.
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1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MEMORANDUM OF POINTS AND AUTHORITIES -508-CV-1462-IEG-RBB
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COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP JOHN C. HERMAN RYAN K. WALSH E. JOSEPH BENZ III JASON S. JACKSON 3424 Peachtree Road, N.E., Suite 1650 Atlanta, GA 30326 Telephone: 404/504-6500 404/504-6501 (fax) Attorneys for Plaintiff
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Managing Discovery of Electronic Information: A Pocket Guide for Judges
Barbara J. Rothstein, Ronald J. Hedges, and Elizabeth C. Wiggins
Federal Judicial Center 2007
This Federal Judicial Center publication was undertaken in furtherance of the Center's statutory mission to develop and conduct education programs for judicial branch employees. The views expressed are those of the authors and not necessarily those of the Federal Judicial Center.
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Preface, v Introduction, 1 What Is Electronically Stored Information and How Does It Differ from Conventional Information? 2 Early Consideration of ESI--Rules 26(f) and 16, 4 ESI and Rule 26(a)(1) Disclosures, 5 ESI and Scope of Discovery Under Rules 26(b)(1) and 26(b)(2), 6 Allocation of Costs, 10 Discovery from Nonparties, 12 Form of Production, 13 Waiver of Privilege or Work-Product Protection, 14 Preservation of ESI, 16 Spoliation and Sanctions, 18 Conclusion, 20 Glossary, 22
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This pocket guide is designed to help federal judges manage the discovery of electronically stored information (ESI). It encourages judges to actively manage those cases involving ESI, raising points for consideration by the parties rather than awaiting the parties' identification and argument of the matters. The guide covers issues unique to the discovery of ESI, including its scope, the allocation of costs, the form of production, the waiver of privilege and workproduct protection, and the preservation of data and spoliation. As you are reading, you may encounter some unfamiliar terms. Many of these terms are defined in a glossary at the end of the guide. A note of appreciation goes to Judge Lee H. Rosenthal (S.D. Tex.), Ken Withers (the Sedona Conference), and John Rabiej (Administrative Office of the U.S. Courts) for their suggestions, which improved this publication. I hope you find the guide useful in meeting the challenges presented by the discovery of ESI. Barbara Jacobs Rothstein Director, Federal Judicial Center
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It is a fact of modern life that an enormous volume of information is created, exchanged, and stored electronically. Conventional documents originate as computer files, e-mail is taking the place of both telephone calls and postal letters, and many, if not most, commercial activities are transacted using computer-based business processes. Electronically stored information (ESI) is commonplace in our personal lives and in the operation of businesses, public entities, and private organizations. In the past decade, discovery involving word-processed documents, spreadsheets, e-mail, and other electronically stored information has become more routine: Once seen only in large cases involving sophisticated entities, it is now seen in routine civil cases and in many criminal cases. In some cases, ESI does not raise any issue, or it is converted to paper and is exchanged in the traditional manner. In other cases, disputes arise as to the scope of discovery, the form in which ESI is produced, whether inadvertent production of ESI will lead to waiver of attorneyclient privilege or work-product protection, the shifting of costs from producing to requesting parties, and the preservation of ESI and related spoliation allegations. For example, in some cases a dispute may surface when one party finds that digital files have been delivered in a format that is not readily usable. In other cases, technology issues may remain submerged until later in the pretrial process when one side accuses the other of spoliation because routine digital file management practices remained in place after the complaint was filed, resulting in the deletion of computer files. The court may minimize such disputes by encouraging lawyers and parties to identify, in the earliest stages of litigation, potential problems in the discovery of ESI and possible resolutions to those problems, and by intervening before misunderstandings and disputes lead to significant delay and costs. Case law addressing conventional discovery and ESI-related discovery, the Federal Rules of Civil Procedure, local rules,1 the Manual for Complex Litigation,
1. See, e.g., U.S. Dist. Ct. Rules E.D. & W.D. Ark., L. R. 26.1; U.S. Dist. Ct. Rules D.N.J., L. Civ. R. 26.1; U.S. Dist. Ct. Rules M.D. Pa., L. Civ. R. 26.1; and U.S. Dist. Ct. Rules D. Wyo., L. Civ. R. 26.1, App. D. See also Ad Hoc Committee for Electronic Discovery of the United States District Court for the District of Delaware, Default Standard for Discovery of Electronic Documents (http://www.ded.uscourts. gov/OrdersMain.htm); U.S. District Court for the District of Kansas, Guidelines for
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Fourth, and various legal publications offer management tools for the judge's use.2 Amendments to the Federal Rules of Civil Procedure that specifically address the discovery of ESI went into effect December 1, 2006.3 Discovery involving ESI may require more intensive judicial involvement than required by conventional discovery. The purpose of this guide is to identify problems that recur during the course of electronic discovery and to present management tools for responding to them.
What Is Electronically Stored Information and How Does It Differ from Conventional Information?
Among others things, ESI includes e-mails, webpages, word processing files, and databases stored in the memory of computers, magnetic disks (such as computer hard drives and floppy disks), optical disks (such as DVDs and CDs), and flash memory (such as "thumb" or "flash" drives). Federal Rules of Civil Procedure 26 and 34, which went into effect December 1, 2006, use the term "electronically stored information" rather than the term "data compilation" and identify it as a distinctive category of information subject to discovery obligations on par with "documents" and "things." ESI differs from conventional, paper information in several ways. The volume of ESI is almost always exponentially greater than paper information, and it may be located in multiple places. For example, draft and final versions of a single paper memorandum may be stored electronically in multiple places (e.g., on the computer hard drives of the document's creator, reviewers, and recipients; on the company server; on laptops and home computers;
the Discovery of Electronically Stored Information (http://www.ksd.uscourts.gov/ guidelines/electronicdiscoveryguidelines.pdf). 2. See also American Bar Association, Civil Discovery Standards 5776 (2004) (Standards 2933) (at http://www.abanet.org/litigation/discoverystandards/); The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Discovery (Sedona Conference Working Group Series Jan. 2004) [hereinafter The Sedona Principles] (updated version available at http://www.thesedonaconference.org/content/miscFiles/publications_html). 3. These rules can be found at http://www.uscourts.gov/rules/index.html.
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and on backup tapes). Market research tells us that the average employee sends or receives about 50 messages per working day,4 which translates into more than 1,200,000 messages a year for an organization of 100 employees. Also, although the possibility that paper documents may be damaged, altered, or destroyed has always been a concern, the dynamic, mutable nature of ESI presents new challenges. For example, computer systems automatically recycle and reuse memory space, altering potentially relevant information without any specific direction or even knowledge of the operator. Merely opening a digital file changes information about that file. Some aspects of ESI have no counterpart in print media, metadata being the most obvious. Metadata, which most computer users never see, provide information about an electronic file, such as the date it was How ESI differs from paper created, its author, when and by whom it information: was edited, what edits were made, and, in Volume the case of e-mail, the history of its trans- Variety of sources mission. Also, some computer-based trans- Dynamic quality actions do not result in a conventional Hidden information: metadata and embedded data document, but instead are represented in Dependent on system that integrated databases. Even less-complex created it ESI may be incomprehensible and unusable Deleting doesn't delete it when separated from the system that created it. For example, a spreadsheet produced in portable document format (PDF) may be useless because embedded information, such as computational formulas, cannot be seen or discerned. Finally, deleting an electronic document does not get rid of it, as shredding a paper document would. An electronic document may be recovered from the hard drive, to the extent it has not been overwritten, and may be available on the computers of other people and on archival media or backup tapes used for disaster recovery rather than archival purposes. These differences between ESI and conventional information have important implications for discovery. For example, the dynamic nature of ESI makes it vital that a data producer institute "lit-
4. Microsoft, Survey Finds Workers Average Only Three Productive Days Per Week (Mar. 15, 2005)
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igation holds" to preserve information that may be discoverable, often even before the lawsuit is filed. Moreover, the volume and multiple sources of ESI may lead to disputes about the scope of discovery and may make review to identify and segregate privileged information more difficult, increasing the likelihood of its inadvertent production even when the producing party has taken steps to avoid it. In addition, because deleted or backup information may be available, parties may request its production, even though restoring, retrieving, and producing it may require expensive and burdensome computer forensic work that is out of proportion to the reasonable discovery needs of the requesting party.
Early Consideration of ESI--Rules 26(f) and 16
Exchanging information in electronic form has significant benefits-- it can substantially reduce copying, transport, and storage costs; enable the requesting party to more easily review, organize, and manage information; facilitate the use of computerized litigation support systems; and set the stage for the use of digital evidence presentation systems during pretrial and trial proceedings. To ensure that these benefits are achieved and any problems associated with ESI are minimized, attorneys and parties should address ESI in the earliest stages of litigation, and judges should encourage them to do so. All too often, attorneys view their obligation to "meet and confer" under Federal Rule of Civil Procedure 26(f) as a perfunctory exercise. When ESI is involved, judges should insist that a meaningful Rule 26(f) conference take place and that a meaningful discovery plan be submitted. Amended Rule 26(f) directs parties to discuss any issues relating to disclosure or discovery of ESI, including the form or forms in which it should be produced. More specifically, the parties should inquire into whether there will be discovery of ESI at all; what information each party has in electronic form and where that information resides; whether the information to be discovered has been deleted or is available only on backup tapes or legacy systems; the anticipated schedule for production and the format and media of that production; the difficulty and cost of producing
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the information and reallocation of costs, if appropriate; and the responsibilities of each party to preserve ESI.5 Amended Rule 26(f) also directs parties to discuss issues related to claims of privilege or protection as trial-preparation material. If the parties agree on a procedure to assert such claims after production, they Discussion topics for a Rule 26(f) conference: should discuss whether to ask the court What ESI is available and to include their agreement in an order. where it resides (See related discussion, infra page 14.) Ease/difficulty and cost of For the "meet and confer" process to producing information be effective, attorneys must be familiar Schedule and format of production with how their clients use computers on Preservation of information a daily basis and understand what inforAgreements about privilege or mation is available, how routine computwork-product protection er operations may change it, and what is entailed in producing it. Attorneys need to identify those persons who are most knowledgeable about the client's computer system and meet with them well in advance of the Rule 26 conference; it may also be advisable to have those persons present at the conference. The Rule 16 conference and order afford the court the opportunity, early in the case, to discuss and memorialize the agreements or shared understandings that parties reach in their "meet and confer" session, and to resolve disputes that may have arisen. Amended Rule 16(b) provides that scheduling orders may include provisions for disclosure or discovery of ESI and any agreements the parties reach for asserting claims of privilege or of protection as trial-preparation material after production.
ESI and Rule 26(a)(1) Disclosures
Rule 26(a)(1) requires disclosure of the identities of individuals likely to have discoverable information, as well as "a copy of, or a description by category and location of, all documents, data compilations, and tangible things" that the disclosing party may use
5. Specific topics for discussion related to the preservation of information are listed in the Manual for Complex Litigation, Fourth § 40.25(2) (Federal Judicial Center 2004) [hereinafter MCL 4th].
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to support its claims or defenses, unless solely for impeachment. Effective December 1, 2006, the term "data compilations" was changed to "electronically stored information," clarifying a party's duty to include ESI in its disclosures. Automatic disclosures must be made "at or within 14 days after the Rule 26(f) conference unless a different time is set by stipulation or court order." The Manual for Complex Litigation, Fourth emphasizes that the parties have a duty to conduct a reasonable investigation pursuant to disclosure, particularly when a party possesses extensive computerized data, which may be subject to disclosure or later identification.6 This task may be daunting for a party with voluminous ESI to identify, especially if that information is not readily accessible. With respect to less-accessible ESI, Moore's Federal Practice suggests that the following disclosures and investigation should satisfy the basic requirements of Rule 26(a)(1):
The disclosing party should identify the nature of its computer system--including back-up system, network system, and e-mail system--as well as any software applications used to operate those systems. However, the disclosing party should not be required to attempt to search back-up systems or to retrieve deleted files in an exhaustive effort to locate all potentially relevant evidence as part of this initial disclosure obligation. Further, a party should not be held liable for sanctions or other penalties for failing to disclose this evidence as part of its initial disclosure obligation, even when that evidence is subsequently used in the litigation. The difficulty in retrieving this information provides "substantial justification" to excuse such an exhaustive search effort.7
ESI and Scope of Discovery Under Rules 26(b)(1) and 26(b)(2)
The central issue in almost all discovery management is the determination of scope. Under Rule 26(b)(1), parties may obtain discovery relevant to the "claim or defense of any party" that is not privi6. MCL 4th, supra note 5, § 11.13. 7. J.M. Moore, Moore's Federal Practice § 37A.21[1] (3d ed. 2005) (footnote omitted).
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leged or protected as trial preparation material. In addition, the court may order discovery of information relevant to the "subject matter involved in the action" for "good cause." Under either standard, the principles of proportionality set out in Rule 26(b)(2)(C) apply.8 Rule 26(b)(2)(C) provides:
The frequency or extent of use of the discovery methods otherwise permitted under these rules and by any local rule shall be limited by the court if it determines that: (i) the discovery sought is unreasonably cumulative or duplicative, or is obtainable from some other source that is more convenient, less burdensome, or less expensive; (ii) the party seeking discovery has had ample opportunity by discovery in the action to obtain the information sought; or (iii) the burden or expense of the proposed discovery outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties' resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues. The court may act upon its own initiative after reasonable notice or pursuant to a motion under Rule 26(c).
In the context of ESI, whether the proportionality analysis of Rule 26(b)(2)(C) is satisfied often turns on the type of computer data being sought. Assuming the requested information is relevant to the claims or defenses or the subject matter of the dispute and is not subject to a claim of privilege or protection, the production of active data, available to the responding party in the ordinary course of business, is most likely to satisfy the proportionality test. Active electronic records are generally those currently being created, received, or processed, or that need to be accessed frequently and quickly. Systems data, which include such things as when people logged on and off a computer or network, the applications and passwords they used, and what websites they visited, may be more remote and more costly to produce. Other types of data are even more removed from what is available in the ordinary course of business and may involve substantial costs and time and active intervention of computer specialists. These types of data include offline archival media, backup tapes designed for restoring computer systems in the event of disaster, deleted files, and legacy
8. Prior to December 1, 2006, Rule 26(b)(2)(C) was Rule 26(b)(2).
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data, which were created on now-obsolete computer systems with obsolete operating and computer software.9 Even active data may involve substantial burdens to produce--for example, when vast amounts are requested or when data are requested in a form that requires the reprogramming of databases. When hard-to-access information is of potential interest, the court should encourage lawyers to negotiate a two-tiered approach in which they first sort through the information that can be provided from easily accessed sources and then determine whether it is necessary to search the less-accessible sources. Rule 26(b)(2)(B) and the accompanying Committee Note embrace this two-tiered approach. The rule establishes the following procedure for the discovery of not reasonably accessible ESI:
(B) A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)(2)(C). The court may specify conditions for the discovery.
The requesting party may need discovery to test the assertion that the information is not reasonably accessible. Such discovery may involve taking depositions of those knowledgeable about the responding party's information systems; some form of inspection of the data sources; and requiring the responding party to conduct a sampling of information contained on the sources identified as not reasonably accessible. Sampling of the less-accessible source can help refine the search parameters and determine the benefits and burdens associated with a fuller search.10
9. See also Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 31819 (S.D.N.Y. 2003) (describing the media on which ESI is maintained, and distinguishing online, active data, nearline data, offline storage/archives, and backup tapes). 10. See McPeek v. Ashcroft, 202 F.R.D. 31 (D.D.C. 2001); McPeek v. Ashcroft, 212 F.R.D. 33 (D.D.C. 2003); Hagemeyer N. Am., Inc. v. Gateway Data Sciences Corp., 222 F.R.D. 594 (E.D. Wis. 2004) (all supporting the use of sampling to tailor the scope of further discovery).
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Even if it is determined that a source of ESI is not reasonably accessible, the requesting party may obtain discovery by showing good cause subject to the limitations of Rule 26(b)(2)(C). The Committee Note suggests that, in determining whether to allow the discovery, the judge consider the following:
(1) the specificity of the discovery request; (2) the quantity of information available from other and more easily accessed sources; (3) the failure to produce relevant information that seems likely to have existed but is no longer available on more easily accessed sources; (4) the likelihood of finding relevant, responsive information that cannot be obtained from other, more easily accessed sources; (5) predictions as to the importance and usefulness of the further information; (6) the importance of the issues at stake in the litigation; and (7) the parties' resources.
In making this determination, the court has a variety of available tools, including · ordering the parties to examine the information that is available from reasonably accessible sources before requiring discovery into sources that are identified as not reasonably accessible; · ensuring that the requesting party makes a specific and tailored discovery request; · ordering sampling of the sources identified as not reasonably accessible to assess the costs and burdens of production and the likelihood of finding responsive information and its usefulness to the litigation; · ordering limited discovery into the costs and burdens of accessing the information from the sources identified as not reasonably accessible and into the basis for believing that they do, or do not, contain information likely to be important to the case and not available from other, accessible sources, such as depositions of the responding party's computer system personnel; and · ordering the requesting party to pay all or part of the reasonable costs of producing the information from sources identified as not reasonably accessible. (See the discussion in the next section.)
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Allocation of Costs
In cases involving vast amounts of ESI, or ESI that is not available from reasonably accessible sources, the cost to the producing party in locating the information, reviewing it for privilege, and otherwise preparing it for production may be much greater than in conventional discovery. At the same time, the cost of copying and transporting the information is practically eliminated and the cost to the requesting party of searching the information may be reduced because it can be done electronically. In such cases, it may be appropriate to shift at least some of the production costs from the producing party to the requesting party. Two major cases--Rowe Entertainment, Inc. v. William Morris Agency, Inc.11 and Zubulake v. UBS Warburg LLC 12--have introduced multifactor tests to determine when cost shifting is appropriate. In Rowe, a racial discrimination case, the defendants objected to the production of e-mail information from backup media on the grounds that such discovery was unlikely to provide relevant information and would invade the privacy of nonparties, and they requested that the plaintiffs bear the costs if production was nevertheless required. The court concluded that the e-mail information sought by the plaintiffs was relevant and that a blanket order precluding its discovery was unjustified. However, balancing eight factors derived from case law, the court required the plaintiffs to pay for the recovery and production of the e-mail backups, except for the cost of screening for relevance and privilege. The eight Rowe factors were (1) the specificity of the discovery requests; (2) the likelihood of discovering critical information; (3) the availability of such information from other sources; (4) the purposes for which the responding party maintains the requested data; (5) the relative benefit to the parties of obtaining the information; (6) the total cost associated with production; (7) the relative ability of each party to control costs and its incentive to do so; and (8) the resources available to each party.13 Zubulake, a gender discrimination case, also involved the production of e-mails that existed only on backup tapes and other archived media. After concluding that the plaintiff's request was rel-
11. 205 F.R.D. 421 (S.D.N.Y.), aff'd, 53 Fed. R. Serv. 3d 296 (S.D.N.Y. 2002). 12. 217 F.R.D. 309 (S.D.N.Y. 2003). 13. Rowe, 205 F.R.D. at 42829.
0
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evant to her claims, the court held that the usual rules of discovery generally apply when the data are in accessible format, but that cost shifting could be considered when data were relatively inaccessible, such as on backup tapes, and substituted seven factors for the Rowe factors. The Zubulake factors, in order of importance, were (1) the extent to which the request is specifically tailored to discover relevant information; (2) the availability of such information from other sources; (3) the total cost of production, compared to the amount in controversy; (4) the total cost of production, compared to the resources available to each party; (5) the relative ability of each party to control costs and its incentive to do so; (6) the importance of the issues at stake in the litigation; and (7) the relative benefits to the parties of obtaining the information. The court emphasized that the factors should not be applied mechanistically and should be weighted according to their importance. Other courts have adopted or modified the Rowe and Zubulake formulations.14 Moreover, the Committee Note to Rule 26(b)(2)(B) makes explicit the authority to shift costs when information that is not reasonably accessible is being produced. Zubulake also set forth a sensible approach for assessing costs when a large number of backup tapes are involved. Following the order in the above case, the defendants restored and reviewed 5 of the 77 backup tapes of interest; they found approximately 600 messages deemed to be responsive at a cost of about $19,000. Based on this work, the defendants were able to estimate the cost of restoring and reviewing the entire 77-tape collection. Considering the seven factors, the court determined that the balance tipped
14. See Wiginton v. CB Richard Ellis, Inc., 2004 U.S. Dist. LEXIS 15722, *13 (N.D. Ill. Aug. 10, 2004) (adds the importance of the requested discovery in resolving the issues of the litigation to the Zubulake factors); Multitechnology Servs., L.P. v. Verizon Southwest, 2004 WL 1553480 (N.D. Tex. July 12, 2004) (analyzes application to shift costs for "relevant and discoverable" electronic information under Rule 26(c) and apparently rejects Zubulake's applicability and concludes that "requiring the parties to evenly shoulder the expense is the most effective resolution because it balances the benefit of the discovery . . . and provides . . . [an] incentive to manage costs it incurs"; also held that "it is appropriate to classify the expense as court costs that can be recovered by the prevailing party"); Hagemeyer N. Am., Inc. v. Gateway Data Sciences Corp., 222 F.R.D. 594, 599603 (E.D. Wis. 2004) (analyzes costshifting tests and concludes that "Zubulake brought the cost-shifting analysis closest to the Rule 26(b)(2) proportionality test" and adopts it).
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slightly against cost shifting and required the defendants to bear 75% of the restoration costs.15
Discovery from Nonparties
Discovery from nonparties is likely to be more frequent when the parties are seeking ESI than when they are seeking conventional paper documents. Many businesses and individuals depend on telecommunications companies, Internet service providers, and computer network owners for computer services, and these nonparties may be the source for relevant and discoverable ESI, especially e-mail messages. Even larger companies routinely outsource their computer-management and data-storage functions to contractors and consultants. Rule 45, effective December 1, 2006, conforms the provisions for subpoenas to other changes in the rules related to the discovery of ESI. Parallel to amended Rule 26(b)(2), Rule 45 introduces the concept of sources that are not reasonably accessible. It also addresses the form for the production of ESI, adds a procedure for asserting claims of privilege or of protection as trial-preparation materials, and allows for the testing or sampling of ESI. Although Rule 45 has no equivalent to the Rule 26(f) "meet and confer" process, parties seeking discovery under Rule 45 should be encouraged to meet informally with respondents and discuss the scope of the subpoena, the desired form of response, protection for privileged and protected information, and the allocation of discovery costs.
15. This case is commonly referred to as Zubulake III, 216 F.R.D. 280 (S.D.N.Y 2003). Zubulake II, 230 F.R.D. 290 (S.D.N.Y. 2003), addressed the plaintiff's request to release a sealed transcript. Zubulake IV, 220 F.R.D. 212 (S.D.N.Y. 2003), addressed the plaintiff's request for sanctions (including an adverse inference instruction) arising out of the failure to preserve backup tapes and deletion of isolated e-mails. In ruling on the request, the court considered the obligation of a party to preserve digital information. In Zubulake V, 229 F.R.D. 422 (S.D.N.Y. 2004), the court imposed sanctions for deleting relevant e-mail. In Zubulake VI, 231 F.R.D. 159 (S.D.N.Y. 2005), the court denied a defense motion (brought by new counsel) to assert an affirmative defense. In Zubulake VII, 382 F. Supp. 2d 536 (S.D.N.Y. 2005), the court addressed in limine motions. On April 6, 2005, a jury awarded the plaintiff $9.1 million in compensatory damages and $20.1 million in punitive damages.
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Form of Production
Electronically stored information can be produced in a variety of forms or formats, each with distinctive advantages and disadvantages. The form may have important implications for how easily, if at all, the information can be electronically searched, whether relevant information is obscured or sensitive information is revealed, and how the information can be used in later stages of the litigation. For example, ESI may be produced as a TIFF or PDF file, which is essentially a photograph of an electronic document. Alternatively, ESI may be produced in "native format," that is, the form in which the information was created and is used in the normal course of operations. Part Two of Effective Use of Courtroom Technology16 reviews in depth the various digital formats in which documents, photographs, videos, and other materials can be produced and the related issues of cost and usability.17 Recent decisions, including Hagenbuch v. Sistemi Elettronici Industriali S.R.L.18 and Williams v. Sprint/United Management Co.,19 have addressed the form of production. Rule 34 was amended to provide a procedure for addressing the form of ESI because this issue simply did not arise with respect to paper discovery. The rule permits the requesting party to designate the form or forms in which it wants ESI produced, and it requires the responding party to identify the form in which it intends to produce the information if the requesting party does not specify a form or if the responding party objects to a form that the requesting party specifies. It also requires the parties to meet and confer if there is a dispute about form of production and provides that in the absence of a party agreement or court order, the responding party must produce electronically stored information either in a form or
16. Effective Use of Courtroom Technology: A Judge's Guide to Pretrial and Trial (Federal Judicial Center 2001). 17. Also see the term file format in the glossary. 18. 2006 WL 665005 (N.D. Ill. Mar. 8, 2006) (holding that production of ESI as TIFF images was insufficient and ordering production of ESI in its original format). 19. 230 F.R.D. 640 (D. Kan. 2005) (holding that the production of spreadsheets in static format was insufficient because the mathematical formulas, text exceeding cell size, and metadata were eliminated, and that the defendant should have preserved and produced the spreadsheets in native format or taken other measures to preserve and produce the nonapparent information).
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forms in which it is ordinarily maintained or in a form or forms that are reasonably usable. In resolving disputes over the form of production, considerations for the court include the following: · What alternatives are available? What are their benefits and drawbacks for the requesting and responding parties? · If the responding party is not producing information in the form in which it is ordinarily maintained, is the party producing it in a form that is reasonably usable to the requesting party? If the requesting party disputes that the proposed form of production is reasonably usable, what limits its use? Has the responding party stripped features, such as searchability, or metadata or embedded data that may be important? If so, what is the justification?
·
Waiver of Privilege or Work-Product Protection
The volume of ESI searched and produced in response to a discovery request can be enormous, and characteristics of certain types of ESI (e.g., embedded data, metadata, threads of e-mail communications and e-mail attachments) make it difficult to review for privilege and work-product protection. Thus, the inadvertent disclosure of privileged or protected material during production is a substantial risk that persists even if expensive and time-consuming steps are taken to identify and segregate it. To facilitate discovery, parties have entered into agreements that help minimize the risk of waiver. Under what is commonly called a "quick peek" agreement, the responding party provides requested material without a thorough review for privilege or protection, but with the explicit understanding that its production does not waive any privilege or protection. The requesting party then designates via Rule 34 the specific documents it would like produced. The responding party then has the opportunity to review the documents that have been specifically requested and withhold those that are privileged or protected. Alternatively, under "claw back" agreements, the parties typically review the material for privilege or protection before
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it is produced but agree to a procedure for the return of privileged or protected information that is inadvertently produced within a reasonable time of its discovery. Amended Rule 26(f) encourages parties to discuss whether they can agree on these or similar arrangements, recognizing the increased likelihood of inadvertent production of privileged or protected information and the commensurately increased cost and delay required for effective preproduction review.20 Amended Rule 16(b) provides that if the parties are able to agree, the court may include their agreement in the case-management order. The rule, however, does not authorize the court to require the parties to enter into such an arrangement, absent their agreement. Because substantive privilege (and waiver) rules are beyond the scope of the Federal Rules of Civil Procedure, the rules recognize that although such an agreement is binding among the parties, it may or may not bind third parties.21 Including the parties' agreements in a court order clarifies the effect of inadvertent production on the waiver of privilege or protection between the parties and bolsters the argument that no waiver has occurred as to third parties in other litigation. In addition, amended Rule 26(b)(5) establishes procedures for asserting privilege or work-product protection claims after production. Under these procedures, the party claiming that already-produced information is subject to a claim of privilege or protection may notify any party that received the information of the claim and the basis for it. The receiving party must then promptly return,
20. Some early decisions have refused to enforce such agreements (MCL 4th, supra note 5, § 11.431). Other opinions and commentary have raised concerns or limitations about the use of such agreements. See R.J. Hedges, "A Critical Appraisal of Proposed Amendment to Federal Rule of Civil Procedure 26(b)(5)(B)," vol. 5, no. 2, Digital Discovery & e-Evidence 4 (Mar. 2005) (will production of privileged materials under an agreement be deemed a waiver vis-à-vis a third party?); Maldonado v. New Jersey, 225 F.R.D. 120, 141 (D.N.J. 2004) (such agreements may lead to the disqualification of attorneys if, even after a privileged document is returned, the attorneys' temporary possession of the document "creates a substantial taint on any future proceedings"). Also see The Sedona Principles, supra note 2, Comment 10.d, regarding concerns raised by claw back or quick peek agreements. 21. See Hopson v. Mayor and City Council of Baltimore, 232 F.R.D. 228 (D. Md. 2005) (reviewing the conflicting case law about whether an inadvertent disclosure of privileged or protected information constitutes a waiver and whether a confidentiality order binds third parties in parallel or future litigation, and describing the benefits of embodying any waiver agreement in a court order).
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sequester, or destroy the information and any copies it has and may not use or disclose the information until the claim is resolved; if the party has disclosed the information before being notified, it must take reasonable steps to retrieve it. The receiving party may promptly present the information to the court under seal for a determination of the claim. The accompanying Committee Note to Rule 26(b)(5) emphatically states that these procedures do not address the substantive questions of whether privilege or work-product protection has been waived or forfeited; courts should rely on developed principles to determine whether, and under what circumstances, waiver results from inadvertent production.22 For example, unreasonable delay in seeking the return of privileged information may give rise to a waiver. The note also emphasizes that agreed-on procedures under Rules 26(f) and 16(b) would take precedence over the rulebased ones. Any assertion of privilege raises the question of how that assertion is to be tested. The accepted practice is, of course, in camera inspection of the material by the court. In cases involving ESI, however, the judge may have to grapple with whether the sheer volume of information requires new methods of review, such as sampling or, in the most difficult cases, the use of a special master.
Preservation of ESI
As noted above, amended Rule 26(f) and the accompanying Committee Note direct parties to discuss issues regarding the preserva22. A proposed new Federal Rule of Evidence 502 was published for comment in August 2006. It (1) provides that inadvertent disclosure of privileged or protected information in connection with a federal proceeding constitutes a waiver only if the party did not take reasonable precautions to prevent disclosure and did not make reasonable and prompt efforts to rectify the error; (2) provides that when a confidentiality order governing disclosure is entered in a federal proceeding, according to terms agreed to by the parties, the order's terms are enforceable against nonparties in any other federal or state proceedings; and (3) codifies the proposition that parties can enter an agreement to limit the effect of waiver by disclosure between or among themselves, and makes clear that if the parties want protection from a finding of waiver by disclosure in separate litigation, the agreement must be made part of a court order. The proposed rule also limits the circumstances in which a subjectmatter waiver should be found and
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