ESI 2012 Case Law Update

Contents

IntRODUCtIOn 1

PROPORtIOnalIty 2

PReDICtIve CODIng 4

COst shaRIng 5

lItIgatIOn hOlD & tRIggeR Cases 6

FORmat OF PRODUCtIOn 8

sPOlIatIOn & sanCtIOns 10

sOCIal meDIa 13

InaDveRtent DIsClOsURe 14

ImPRessIOns & ReCOmmenDatIOns 15

OUR FIRm 16

OFFICe lOCatIOns 17

Wilson Elser, a full-service and leading defense litigation law firm (www.wilsonelser.com), serves its clients with more than 800 attorneys in 23 offices in the United States and through a network of affiliates in key regions globally.  Founded in 1978, it ranks among the top law firms identified by The American Lawyer and is included in the top 50 of The National Law Journal’s survey of the nation’s largest law firms.  Wilson Elser serves a growing, loyal base of clients with innovative thinking and an in-depth understanding of their respective businesses.

aUthORs

Jason Waters – McLean 

Jessica Collier – Denver 

Kelly Jordan – Washington, DC

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IntroductionIssues concerning the preservation, review and production of electronically stored information (ESI) continue to revolutionize the way parties prepare for and defend civil litigation. During 2011 and in the first quarter of 2012, courts throughout the United States issued numerous opinions concerning the problems that litigants confront every day regarding ESI. We are pleased to provide this summary of what we believe were the most significant ESI decisions and developments over the past year. Specifically, our summary will focus on ESI developments in these areas:

► Proportionality: Courts and parties continue to struggle with proportionality issues regarding the significant cost of preserving, reviewing and producing ESI.

► Predictive Coding: An emerging technology, computer-assisted review holds the promise of substantially reducing the cost of large ESI projects.

► Cost Sharing: Although the expense typically rests with the producing party, one court applied cost-shifting factors to ameliorate the frequently asymmetrical burden of ESI.

► Litigation Hold & Trigger Cases: Litigants continue to argue about what constitutes a trigger event for the purpose of beginning the data preservation process.

► Format of Production: 2011 saw two interesting opinions regarding the form of electronic production as it relates to issues such as emails, attachments and metadata.

► Spoliation & Sanctions: Spoliation of data continues to produce sanctions motions, and courts encountered a wide range of attitudes concerning parties’ duties to preserve ESI.

► Social Media: Social media has impacted nearly every aspect of modern life, and litigation is no exception. A Virginia state court issued strict sanctions against a party and his attorney for deleting discoverable information from Facebook.

► Inadvertent Disclosure: Two cases in 2011 caution parties and attorneys about the consequences of inadvertently disclosing privileged documents.

Several key themes emerge from the significant ESI developments of last year.

Courts will likely continue to require parties and their counsel to exhibit fluency with ESI issues. They will hold parties and their attorneys accountable for the failure to make reasonable and competent efforts to prevent the destruction of electronic data. And courts expect effective communication between attorneys and their clients and meaningful cooperation among opposing counsel to discharge their ESI obligations. Finally, because litigants have a compelling interest in controlling the cost and burden of ESI, we will begin our discussion of developments over the past year with a summary of key decisions regarding proportionality under Rule 26 of the Federal Rules of Civil Procedure (the Rules).

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ProportionalityProportionality is a crucial consideration in evaluating any request for ESI. As a result of the ubiquitous nature of ESI in modern litigation, the cost of preserving, reviewing and producing ESI can easily exceed the entire amount in controversy. Therefore, the parties’ ESI obligations potentially threaten the Rules’ essential goal of a “just, speedy, and inexpensive determination of every action and proceeding.”

To address this problem, Rule 26 includes a proportionality analysis. According to Rule 26(b)(2)(C), the court “must limit” otherwise permissible discovery upon conducting an evaluation of several factors, such as the burden, expense and importance of the requested information. Regarding ESI, Rule 26(b)(2)(B) states that a party “need not provide discovery” of ESI from sources that are “not reasonably accessible because of undue burden or cost.”

Although the Rules include a proportionality analysis of ESI, they do not provide concrete guidance to courts trying to apply this principle to specific situations. As a result, courts have reached differing opinions about how to balance discovery interests with the potentially high cost of ESI. Courts will continue to face these issues as ESI becomes increasingly common and expensive. Nevertheless, the best practice in these situations is to conduct the proportionality analysis early, confer meaningfully with opposing counsel and, if necessary, seek the court’s guidance as soon as possible.

Pippins v KPMG LLP, 2011 WL 4701849 (S.D.N.Y. Oct. 7, 2011)In Pippins, the plaintiffs claimed that KPMG engaged in a pattern of violating wage and hour laws. They commenced a collective action under the Fair Labor Standards Act (FLSA 28 U.S.C. §§ 201, et seq.) and a putative class action under New York law. KPMG sought an order clarifying its obligation to preserve computer hard drives for accountants previously employed in its audit department while the motion to certify the case as a class action was pending. Specifically, KPMG wanted to conduct a random sampling of a relatively small number of hard drives, instead of preserving thousands of hard drives.

KPMG’s main argument was that the burden of preserving the hard drives of all former and departing audit associates was disproportionate to the potential benefit. KPMG claimed that it had already spent more than $1.5 million

preserving its employees’ hard drives. KPMG also asserted that it would incur several million dollars more preserving the hard drives of the 7,500 former employees who were potential opt-in plaintiffs for the FLSA collective action. Additionally, according to KPMG, there were at least 1,500 putative class members in New York whose drives would need to be retained.

KPMG argued that a random sample would satisfy its preservation obligations. The plaintiffs were amenable to a random sample, but the parties could not agree about the method to be used. In fact, because the plaintiffs proposed to litigate the case on a “representative basis,” they conceded that it would be “unnecessary for KPMG to preserve indefinitely the hard drive of every departing Audit Associate.”

Despite the extraordinary cost and the plaintiffs’ apparent willingness to conduct a random sample, the court ordered KPMG to continue preserving the hard drives. Citing Orbit One Communications, Inc. v. Numerex Corporation, 271 F.R.D. 429, 426 (S.D.N.Y. 2010), the court stated that the proportionality test “may prove too amorphous to provide much comfort to a party deciding what files it may delete or backup tapes it may recycle.” The court observed that other cases in the Southern District of New York have “cautioned against the application of a proportionality test as it relates to preservation.” As such, the court concluded that “prudence favors retaining all relevant materials.” Although the judge imposed some temporal and geographic limitations, KPMG was directed to continue preserving hard drives for former or departing audit associates.

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Significantly, the court faulted KPMG for the outcome. Magistrate Judge James Cott observed, “at this point, it is not entirely clear what the hard drives contain, in part because of KPMG’s own efforts to keep that information at bay.” He continued:

Additionally, KPMG’s ongoing burden is self-inflicted to a large extent. It is suffering from the effects of its own reluctance to work with Plaintiffs to generate a reasonable sample that may well be less burdensome to maintain. KPMG is correct that “[t]he concept of sampling to test both the cost and the yield is now part of the mainstream approach to electronic discovery.” However, to date, KPMG has failed to work effectively with Plaintiffs in order to generate a potential means of constructing an appropriate sample.

After Magistrate Judge Cott issued his decision, the district court granted plaintiff’s motion to conditionally certify a nationwide opt-in class of audit associates on the FLSA claim. KPMG also filed a Rule 72 objection to Magistrate Judge Cott’s decision. On February 2, 2012, the district court overruled KPMG’s objections in their entirety. See Pippins v. KPMG LLP, 2012 WL 370321 (S.D.N.Y. Feb. 3, 2012). Judge McMahon felt that the order conditionally certifying the opt-in class made the prior discovery dispute moot because Judge Cott previously indicated that KPMG was free to renew its motion for a protective order once the certification issue had been decided. Instead of sending the issue back to the magistrate, however, Judge McMahon denied KPMG’s motion for a protective order. Judge McMahon ordered:

KPMG must preserve the hard drives – all of them, without exception, for all departed Audit Associates nationwide (since I certified a nationwide FLSA class) – until it either: (1) comes to some agreement with Plaintiffs over a sampling methodology, which both sides agree is the appropriate thing to do; or (2) formally abandons its litigation position that, even if Audit Associates generally are found to be non-exempt employees (an issue yet to be resolved), individual Audit Associates perform work that renders them exempt from the FLSA.”

The Pippins case serves as a warning about how the court’s proportionality analysis may favor discoverable information over the extraordinary cost of ESI. Particularly significant is the court’s distinction between preservation and production for the purposes of conducting a proportionality analysis. This distinction may encourage wasteful and costly over-preservation. But, it should also encourage counsel to work

together meaningfully to address ESI issues and disputes. KPMG had the opportunity to minimize the substantial costs of ESI by agreeing with plaintiffs’ counsel to an alternative and less-expensive preservation arrangement – a point that was reinforced in the district court’s decision on KPMG’s Rule 72 objection.

Thermal Design, Inc. v. Guardian Bldg. Prods, Inc., 2011 WL 1527025 (E.D. Wis. Apr. 20, 2011)Thermal Design is an example of a successful application of the proportionality rules for the party opposing ESI discovery. Thermal Design moved to compel additional ESI. At the time of plaintiff’s motion, Guardian Building Products had already produced more than 1.46 million pages of ESI at a cost of approximately $600,000. Thermal Design sought to have Guardian search all of its archived email accounts and shared networks. Defendants estimated that this would cost an additional $1.9 million, and review of the material would cost $600,000.

The court agreed that the cost made the requested ESI “not reasonably accessible.” The court stated that Thermal Design did not show the additional ESI was “justified in the circumstances of the case,” as required pursuant to Rule 26. The court rejected Thermal Design’s argument that there was no undue burden or cost because defendants were large companies with extensive resources. The court stated, “Courts should not countenance fishing expeditions simply because the party resisting discovery can afford to comply.”

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Predictive CodingComputer-assisted review through predictive coding holds the prospect of substantially reducing the expense and burden of large ESI projects. Predictive coding involves the use of computer algorithms to identify relevant materials in a collection of ESI based on interaction with or “training” by a human reviewer. Many vendors are already offering this service along with their review platform. And now, at least one court has approved its use in litigation.

Da Silva Moore v. Publicis Groupe, 2012 WL 607412 (S.D.N.Y. Feb. 24, 2012)Magistrate Judge Andrew Peck, in the Southern District of New York, recently “recognize[d] that computer-assisted review is an acceptable way to search for relevant ESI in appropriate cases.” In this discrimination case, defendants proposed to use predictive coding to cull more than three million electronically stored documents. Both parties generally agreed to use predictive coding. But the plaintiffs’ attorneys expressed several concerns about the methodology for predictive coding, and motion practice ensued.

Plaintiffs’ attorneys raised several issues. They were concerned about the custodians selected for the first phase of production. They questioned the sources of defendants’ ESI. Also, plaintiffs’ attorneys expressed concern about the predictive protocol for developing the “seed set,” which consists of a sample of manually reviewed documents that the algorithm uses to predict relevance. Plaintiffs’ vendor commented, “We don’t at this point agree that this is going to work. This is new technology and it has to be proven out.” In response, Judge Peck stated that computer-assisted review “works better than most of the alternatives, if not all of the [present] alternatives.” Although predictive coding is not a “magic, Staples-Easy-Button,” Judge Peck said, “[t]he idea is to make it significantly better than the alternatives without nearly as much cost.”

Plaintiffs’ attorneys also argued that predictive coding prevented defendant’s counsel from certifying that document production was complete under Rule 26(g)(1)(a). The court found that plaintiffs’ argument misconstrued Rule 26(g). Plaintiffs also claimed that predictive coding required an analysis under Rule 702 of the Federal Rules of Evidence, concerning the admissibility of expert testimony. In other words, plaintiffs’ attorneys argued that the court should exercise its gatekeeping function under Daubert to evaluate

the use of predictive coding for electronic discovery. The court disagreed.

Judge Peck determined that predictive coding was appropriate for several reasons. First, the parties initially agreed to use this technology. Second, the amount of ESI involved in the case justified computer-assisted review. Third, Judge Peck found computer-assisted review to be superior to the available alternatives. Fourth, the court found computer-assisted review promoted Rule 26’s proportionality objectives. Finally, the transparent process proposed by the defendant supported the use of this technology.

Judge Peck’s decision is currently being challenged on a Rule 72 objection to the district court. According to an order entered on April 2, 2012, plaintiffs’ counsel also requested Magistrate Judge Peck to recuse himself because his “public statements approving generally of computer assisted review make [Magistrate Judge Peck] biased.” He commented that if plaintiffs were to prevail, it would discourage judges from speaking on educational panels about electronic discovery “or any other subject for that matter.” Magistrate Judge Peck predicted that plaintiffs’ attorneys’ request will fall on “deaf ears,” and he encouraged the plaintiffs to “rethink their ‘scorched earth’ approach to this litigation.” See Da Silva Moore v. Publicis Groupe, Order, dated April 2, 2012, Docket No. 158 (S.D.N.Y. Case 1:11-cv-01279).

Although this dispute appears to be far from over, Magistrate Judge Peck’s opinion highlights the cost-savings potential of predictive coding compared with the inefficiency of traditional key-word searches and manual reviews. Judge Peck pointed out that his opinion did not mean that all cases must now use computer-assisted review, or that the particular ESI protocol described in this case was universally appropriate. Rather, computer-assisted review was one possible method for large-scale ESI document reviews. As with any technological solution to e-discovery, it is up to counsel to design a quality-control process that conforms to the court’s rules and local procedure.

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Cost SharingThe costs associated with ESI can be daunting. Documents are often inaccessible or difficult to obtain, and parties’ discovery requests can be vague and overly broad. Some litigants have proposed cost sharing as a means to reduce this burden. However, cost sharing is difficult to obtain. Nevertheless, parties should confer with each other about ESI early in the process. If one party is unwilling to cooperate and the production requirements appear asymmetrically skewed to the other party, then a motion seeking cost sharing may be appropriate.

Clean Harbors Environmental Services, Inc. v. ESIS, Inc., 2011 WL 1897213 (N.D.Ill. May 17, 2011)The Northern District of Illinois offered some relief for parties undergoing the expensive process of restoring backup tapes by shifting the cost of ESI. Normally, the party making the production bears the cost of ESI. See, e.g., Zubulake v UBS Warburg LLC, 217 F.R.D. 309, 317-318 (S.D.N.Y. 2003). However, in Clean Harbors, Magistrate Judge Suzan E. Cox held that a cost-sharing exception is available when “inaccessible data is sought.” And, according to Zubulake and Clean Harbors, backup tapes are “likened to paper records locked inside a sophisticated safe to which no one has the key or combination.”

Magistrate Judge Cox applied eight “cost shifting factors” in determining that both parties should share the expense of restoring Clean Harbors’ backup tapes:

► The likelihood of discovering critical information

► The availability of information from other sources

► The amount in controversy as compared to the total cost of production

► The parties’ resources as compared to the total cost of production

► The relative ability of each party to control costs and its incentive to do so

► The importance of the issues at stake in the litigation

► The importance of the requested discovery in resolving the issues at stake in the litigation

► The relative benefits to the parties of obtaining the information.

The court relied heavily on the proportionality and cost-control factors. Magistrate Judge Cox found that the $91,000 Clean Harbors spent on producing the documents was enough of a “financial burden” to warrant cost shifting. The cost was also not “significantly disproportionate” to the value of the case. Each party also had sufficient resources to bear the cost of production. Further, Clean Harbors involved ESIS in the vendor-selection process, and the parties agreed on the proposed search terms. More importantly, Clean Harbors and ESIS discussed cost sharing and developed search parameters before collecting the backup tapes. The court would not “punish” Clean Harbors for “relying on defendants’ indications that they might consider cost sharing.” As such, the court held that plaintiff Clean Harbors was to cover 50 percent of the discovery and both defendants were responsible for the remainder.

U.S. Bank N.A. v. GreenPoint Mtge. Funding, Inc., 2012 N.Y. Slip Op. 01515 (N.Y. App. Div. Feb. 28, 2012)New York’s Appellate Division, First Department declined to shift costs of ESI in February 2012. In U.S. Bank N.A. v. GreenPoint Mtge. Funding, Inc., the plaintiff appealed the lower court’s decision requiring it to bear the costs incurred with the production of discovery. The court upheld the cost-sharing precedent from Zubulake v. UBS Warburg LLC, 217 F.R.D.309, 317-318 (S.D.N.Y 2003), requiring the producing party to bear the initial cost of discovery, including searching for, retrieving and producing ESI.

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GreenPoint argued that the court should not adopt Zubulake’s cost-sharing test, asserting instead that the requesting party should bear all costs associated with discovery. The court disagreed and reasoned that requiring a party to bear its own cost of discovery favors resolving disputes on the merits. According to the First Department, “[t]he alternative of having the requestor pay may ultimately deter the filing of potentially meritorious claims particularly in circumstances where the requesting party is an individual.”

Consistent with the New York First Department’s recent decision in Voom HD Holdings LLC v. EchoStar Satellite LLC, 93 A.D.3d 33, 939 N.Y.S.2d 321 (N.Y. App. Div. Jan. 31, 2012), which adopted Zubulake’s standards for preservation and spoliation, U.S. Bank N.A. also followed Zubulake for its cost-shifting analysis. This appears to signal a level of deference that the First Department may continue to show to the cases from the Southern District of New York as persuasive authority on matters involving ESI.

Litigation Hold & Trigger CasesLitigants frequently disagree about when a trigger event has occurred such that a party has a duty to initiate the litigation-hold process. It is frequently difficult to determine when litigation is reasonably foreseeable and when to issue litigation-hold instructions. Although the conservative approach may lead to potentially costly over-preservation, it is the safest way to minimize the risk of spoliation and sanctions.

Micron Tech., Inc. v Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011)

Hynix Semiconductor Inc. v. Rambus Inc., 645 F.3d 1336 (Fed Cir. 2011)Two cases in two different courts arising from the same set of facts resulted in two dramatically different results. Both Micron and Hynix involve allegations that Rambus destroyed documents and evidence when it hosted “shredding parties,” destroyed backups tapes, and erased emails, while simultaneously formulating its litigation strategy for patent infringement claims. In Micron, the District of Delaware held that Rambus’s patents were unenforceable due to its spoliation of documents. In Hynix, however, the Northern District of California entered a final judgment of infringement and non-invalidity of Rambus’s patents, awarded damages in the amount of $349,035,842 plus prejudgment interest, and set a royalty rate for infringing products. Both cases were appealed to the Federal Circuit.

Rambus’s founders invented and patented a method to process computer memory, called dynamic random access memory (DRAM). Rambus believed that this invention was broad enough to encompass another type of memory technology, synchronous dynamic random access memory (SDRAM). Rambus attempted to commercialize its product, but SDRAM began to emerge as the industry standard.

At the same time it was trying to make DRAM the industry leader, in January 1998, Rambus directed its vice president of intellectual property to develop a strategy for licensing and litigation. The next month, he met with a litigation partner at an outside firm who advised him to “get battle ready” for litigation and implement a document-retention policy. Rambus’s vice president presented his litigation strategy to the company’s board of directors one month later. In August or September 1998, Rambus hired outside counsel to prepare for litigation. Rambus’s vice president issued a “nuclear winter” memo in December 1998 outlining the company’s plans to sue its competitors in the event major customers began to move away from DRAM in favor of SDRAM. In April 1999, Rambus’s vice president met again with outside counsel to discuss potential litigation.

Rambus also implemented a document-retention and -destruction policy. The policy stated that “destruction of relevant and discoverable evidence did not need to stop until the commencement of litigation.” This policy included

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the destruction of backup tapes of Rambus’s internal

emails. Even though a March 16, 1998, internal email

discussed a “growing worry” that the backup tapes were

discoverable, Rambus instituted a policy that would destroy

backup tapes after three months. And, from late 1998 until

mid-1999, Rambus held “shredding parties,” during which

hard-copy documents from patent prosecution files, draft

patent applications, amendments, attorney notes and

correspondence were destroyed. At one such shredding

party, Rambus destroyed between 9,000 and 18,000

pounds of documents in 300 boxes.

Rambus filed its first suit in January 2000 and continued to

litigate against other companies in the following months.

In August 2000, Micron and Hynix filed separate actions

against Rambus in the District of Delaware and the Northern

District of California, respectively. Both courts decided

the issue of whether Rambus had a duty to preserve the

documents it destroyed in 1998 and 1999 pursuant to its

document-retention/destruction policy.

In Hynix, the Northern District of California ruled that

Rambus did not “actively contemplate litigation … before

its negotiation with Hitachi failed, in November of 1999.”

Therefore, Rambus’s document-retention policy was a

permissible business decision, and the destruction of

documents did not constitute spoliation. On the other hand,

the District of Delaware held that litigation was foreseeable

“no later than December 1998,” when Rambus’s vice

president presented a timeline and litigation strategy to

the company. Further, Rambus’s destruction of documents

after December 1998 was found to be in bad faith, and as

a sanction, the court ruled that Rambus’s patents were

unenforceable.

The Federal Circuit Court of Appeals decided both appeals.

Rambus argued that its duty to preserve did not arise until

litigation was “imminent, or probable without significant

contingencies.” The court disagreed, stating that the duty

to preserve arises when “litigation is pending or imminent,

or when there is a reasonable belief that litigation is

foreseeable.” The court stated that this standard is not so

“inflexible” as Rambus suggested.

As such, the court affirmed the District of Delaware’s

decision in Micron that Rambus’s duty to preserve arose

before the “shred day” in December 1998. In support of

its holding, the court reasoned that Rambus’s document-

retention and -destruction policy was an “important

component of litigation strategy,” and thus it was “more

likely that litigation was reasonably foreseeable.” The court

also found that Rambus was on notice of several patent

infringements, which made litigation more likely to occur.

Rambus also took steps toward litigation before August

1999 when its vice president encouraged the company to

litigate the validity of its patents. Rambus’s counsel also

compiled a litigation timeline for the proposed suits. Given

that Rambus was the plaintiff in several suits, the court

found the foreseeability of litigation was directly related to

when Rambus chose to sue. Finally, because Rambus and

its manufacturers had a contentious relationship, it is more

likely that the destruction of evidence following repeated

business failures was spoliation.

The Federal Circuit remanded Micron to the District of

Delaware on the finding of bad faith and on the propriety of

its sanction. The Federal Circuit found the district court’s

analysis “sparse” on these issues and directed the court

to make several material factual findings on remand. The

court also vacated the decision of the Northern District of

California in Hynix, and held the district court “applied a

too narrow standard of foreseeability in determining that

litigation was not reasonably foreseeable until late 1999.”

In Hynix, the court restated its holding in Micron that “the

standard does not … require that litigation be imminent, or

probable without significant contingencies.”

Micron and Hynix highlight a significant consideration for

businesses involved in litigation. Typically, corporate parties

are not in the business of conducting litigation. Deleting

archived documents and data is a routine function in the

ordinary course of business. Companies are under no

obligation to incur the extraordinary burden of preserving

absolutely everything simply because there is a remote

chance they might get sued. The duty to preserve does

not arise until the litigation is reasonably foreseeable. As

demonstrated by the differing decisions from Delaware and

California, however, courts may disagree about when that

happens. Therefore, companies should take an objective

and conservative view of their preservation obligations. This

may lead to over-preservation, but it is better than being

sanctioned for spoliation.

Steuben Foods, Inc. v. Country Gourmet Foods, LLC, 2011 WL 1549450 (W.D.N.Y Apr. 21, 2011)In Steuben Foods, Inc. v. Country Gourmet Foods, LLC,

the Western District of New York held that the failure

to issue a written litigation hold did not justify “even a

rebuttable presumption that spoliation had taken place.”

In Steuben Foods, Campbell Soup, which had acquired

certain assets of Country Gourmet Foods, moved for

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spoliation sanctions on the basis that Steuben Foods failed to institute a written litigation hold directing employees not to destroy ESI. Steuben Foods argued that a litigation hold was implemented orally through conversations with senior management officers.

In finding for Steuben Foods, the court distinguished the holding in Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 2d 456, (S.D.N.Y.2010), which found that the absence of a written litigation hold supported the conclusion that plaintiffs had been grossly negligent in their efforts to preserve ESI. In Steuben Foods, the court “decline[d] to hold that implementation of a written litigation hold notice

is required to avoid an inference that relevant evidence has been presumptively destroyed by the party failing to implement such written litigation hold.”

This holding was buttressed by the fact that plaintiffs’ company was small, and in small companies a written litigation hold may be unnecessary or counterproductive. Moreover, because Campbell Soup had been provided with the documents it requested from its co-defendant, the court found no prejudice. Nevertheless, despite the holding in Steuben Foods, it appears that the best practice remains to issue a written litigation-hold letter as soon as litigation appears reasonably foreseeable.

Format of ProductionTwo notable opinions dealing with the format of ESI production were issued out of the Southern District of New York in 2011. Judge Scheindlin’s withdrawn opinion in National Day Laborer Organizing Network v. U.S. Immigration and Customs Enforcement Agency (10 Civ. 3488) indicated that metadata is now “considered to be an intrinsic part of the client’s record, which attorneys are expected to understand and produce.” Although Judge Scheindlin’s withdrawn opinion has no precedential value, the case raises important considerations regarding the appropriate form of ESI production. Additionally, Special Master Jonathan Redgrave considered the production of emails and attachments when reviewing and producing ESI in Abu Dhabi Commercial Bank v. Morgan Stanley & Co., 2011 WL 3738979 (S.D.N.Y. Aug. 18, 2011).

National Day Laborer Organizing Network v. U.S. Immigration and Customs Enforcement Agency, No. 10 Civ. 3488 (SAS), 2011 WL 381625 (S.D.N.Y. Feb. 7, 2011)Judge Shira Scheindlin addressed the question of what metadata should be preserved in this Freedom of Information Act (FOIA) dispute involving the Department of Justice and the Immigration and Customs Enforcement Agency.

Plaintiffs sent a 21-page FOIA request to four different federal agencies concerning the Secure Communities program, which enlists state and local governments in the enforcement of federal immigration law. Because the plaintiffs did not receive a response to their FOIA requests, they commenced a lawsuit in the Southern District of New York.

Defendants claimed the FOIA requests would require production of millions of pages of responsive documents. After negotiations, the parties reached an agreement about the government’s production. Plaintiffs claimed that the government’s production violated the agreement, and they moved to compel. Judge Scheindlin ordered the government to make a supplemental production.

Before the government made its supplemental production, plaintiffs sent a proposed formatting protocol. The plaintiffs included a demand for load files and metadata fields. The government did not respond to this request. Instead, it gave a supplemental production, which consisted of five PDF files totaling less than 3,000 pages. Plaintiffs then complained to the court that the government produced these documents in an unusable format. Specifically, they complained that the

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documents were not searchable, they were stripped of all metadata, and paper and electronic records were merged together indiscriminately.

Before addressing the merits, the court made the significant observation that the parties never conducted the equivalent of a Rule 26(f) conference. They never reached an agreement regarding the form of production. And they never brought a dispute about the form of production to the court’s attention before the issue arose with the government’s supplemental production. Despite the fact that the dispute concerned a FOIA request, Judge Scheindlin stated that “Rule 34 surely should inform highly experienced litigators as to what is expected of them when making a document production in the twenty-first century.” Under Rule 34, Judge Scheindlin reasoned, “certain metadata is an integral or intrinsic part of an electronic record” and that “such metadata is ‘readily reproducible’ in the FOIA context.”

Regarding the issue of what metadata must be produced, Judge Scheindlin stated, “[t]he best way I can answer the question is that metadata maintained by the agency as a part of an electronic record is presumptively producible under FOIA, unless the agency demonstrates that such data is not ‘readily reproducible.’” Judge Scheindlin’s opinion also outlined the specific types of metadata to be provided in future productions. She identified types of metadata, such as the file name, custodian, source device and modified date, to be included with all files. And she identified additional types of metadata to be included with emails and paper files.

The court emphasized that its order regarding these fields was limited to this particular case. Judge Scheindlin was careful to state that she was not suggesting this protocol should be used in all cases. But she also stated that “production of a collection of static images without any means of permitting the use of electronic search tools is an inappropriate downgrading of ESI.” As such, “it is no longer acceptable for any party … to produce a significant collection of static images without accompanying load files.”

Finally, Judge Scheindlin admonished counsel that their failure to meet and confer resulted in unnecessary motion practice. Apparently, the attorneys took the court’s advice because they later resolved their dispute regarding the format of production. Judge Scheindlin then decided to withdraw her prior opinion because subsequent submissions showed that the decision was not based on a full and developed record. Although the decision has no

precedential value, it still provides an excellent discussion of the considerations and analysis that parties and their attorneys should make regarding load files, file formats and metadata for any substantial production.

Abu Dhabi Commercial Bank v. Morgan Stanley & Co., 2011 WL 3738979 (S.D.N.Y. Aug. 18, 2011)The court’s decision in Abu Dhabi Commercial Bank v. Morgan Stanley & Co. raised important considerations regarding the coding and production of “parent” emails and their “children” attachments. Abu Dhabi addressed the issue of whether parties should produce attachments separately or together with parent emails. Special Master Jonathan Redgrave found that the prevailing practice is for parties to produce parent emails together with their attachments, if any one document in the “family” is relevant. Privileged emails and attachments, however, are typically treated separately.

The special master cited the “completeness” standard of Rule 106 of the Federal Rules of Evidence as support for the presumption that an attachment to a relevant email is likely also relevant and should be considered contemporaneously. The special master also found “some appeal” to the notion that producing a parent email along with its corresponding child attachment satisfies the course-of-business requirement in Rule 34(b)(2)(E)(i). The special master also recommended that parties meet and confer about the treatment of attachments as singular or separate items. Judge Scheindlin subsequently approved the special master’s report and recommendations.

Applying Abu Dhabi to other situations creates a significant risk of overproduction. If the parent email is responsive and the attachments are not, then the combined production may be unnecessary and wasteful. Counsel can reduce this risk by addressing these issues with each other during their initial conference and agreeing to review and produce responsive emails and attachments separately. Again, early and meaningful cooperation among counsel is essential to limiting the expense of ESI and avoiding wasteful overproduction.

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Spoliation & SanctionsIn 2011, there were some extreme examples of data spoliation and the creative power of the court to use sanctions as a deterrent, three of which are described below. Destroying a laptop may have seemed humorous to the employees involved in the Daynight case until the court ordered a default against their employer. Judge Ward in the Eastern District of Texas found another company’s ESI preservation methods so lacking in the Green case that he ordered a monetary sanction of $250,000 and directed the company to file his decision in every case in which the company is or will be a party for the next five years. And the United Central Bank case demonstrates the importance of close attorney involvement in supervising ESI preservation.

Daynight, LLC v. Mobilight, Inc., 248 P.3d 1010 (Ut. App. Jan. 27, 2011)In Mike Judge’s 1999 classic movie, Office Space, a disgruntled computer programmer and his co-workers destroy an office fax machine to vent their workplace frustrations. KK Machinery’s employees used a similar approach to preserving electronic data in this 2011 decision from the Utah Court of Appeals.

Rather than creating a forensic image of a company laptop, KK Machinery instead threw the laptop off a building. Then they went the extra mile and ran over the computer with an unidentified vehicle. They joked, “If this gets us into trouble, I hope we’re prison buddies.” In a company-produced video, KK Machinery’s employees also commented about their destruction of “potential[ly] harmful evidence that might link [them] to any sort of lawsuit.”

Not surprisingly, Utah’s Court of Appeals affirmed sanctions against KK Machinery. The court found this conduct “unquestionably demonstrate[d] bad faith and a general disregard for the judicial process.” The court affirmed an order of default, and it found no error in the lower court’s decision to award attorney fees and costs. It is somewhat surprising, considering the extraordinary and creative sanctions in Green v. Blitz U.S.A., Inc., that Utah’s Court of Appeals did not punish KK Machinery more severely.

Green v. Blitz U.S.A., Inc., 2011 WL 806011 (E.D. Tx. Mar. 1, 2011)Green v. Blitz U.S.A., Inc., illustrates the court’s ability to use spoliation sanctions as an ongoing deterrent. Specifically,

Judge T. John Ward ordered a corporate defendant to file the court’s sanctions opinion against it in every case in which the company is or will become a party for the next five years. Judge Ward also issued a $250,000 monetary sanction for civil contempt.

The Green case involved a product liability claim arising from a Blitz gas can. The key issue in discovery was Blitz’s failure to preserve and produce documents relating to a “flame arrester.” During trial, Blitz’s counsel stated, “Blitz hasn’t left anything out. They are not putting flame arresters in because they’re running amok. They are not putting in flame arresters because they don’t do anything affirmative and there are some potential problems with it.” He also stated that the flame arrester “serves no purpose.” After closing arguments, the parties entered into a high-low settlement agreement. The jury returned a verdict for Blitz, and the case was closed in 2008.

The same plaintiff’s attorney subsequently pursued other cases against Blitz. In one such case, counsel learned of the existence of documents concerning flame arresters that were not produced in the prior case. Plaintiff’s counsel then sought to recover sanctions in the prior case for the failure to produce these documents.

The court’s decision identified three exemplar documents that Blitz failed to produce. Blitz omitted a handwritten letter from Blitz’s chief executive officer, titled “My Wish List,” which stated the company’s plan to develop and introduce a “device to eliminate flashback from a flame source.” The second withheld document contradicted counsel’s assertion in closing statements that a flame arrester “serves

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no purpose.” This email identified its subject as “Flame Arrester” and stated that “the marine industry uses [flame arresters] in all the boat tanks. …” Finally, plaintiff identified an omitted document stating the company’s plan to “Exit gas can for 3-5 years, develop other business, and re-enter w/lower liability (?) [sic] and safer CARB product.”

Perhaps it is not surprising that these materials were not produced, considering the manner in which Blitz conducted its preservation efforts. Blitz used a single employee to search and collect documents responsive to the ongoing litigation. That employee described himself as “about as computer literate – illiterate as they get.” He did not institute a litigation hold, do any electronic word searches for emails, or talk with Blitz’s information technology department about how to search for electronic documents. The fact that the same employee was also copied on the “My Wish List” and “Flame Arrester” emails emphasizes the inadequacy of Blitz’s search and preservation efforts.

The court found multiple violations of Blitz’s discovery obligations. The court found it “shocking” how easy the “Flame Arrester” email could have been discovered and produced by “any competent electronic discovery effort,” such as a key-word search. Judge Ward concluded that “Blitz made little, if any, effort to discharge its electronic discovery obligations.” He also criticized Blitz for failing to preserve electronic documents. Instead of issuing a litigation hold, Blitz asked its employees to routinely delete electronic documents. Blitz also rotated its backup tapes every two weeks, permanently deleting employees’ emails. Judge Ward found “alarming” Blitz’s “lack of appreciation of the discovery process in general.” Blitz filed an appeal of the court’s decision. Before the appeal was decided, however, Blitz filed a suggestion of bankruptcy, and those proceedings are pending.

By compelling Blitz to pay $250,000 and file the decision sanctioning the company in every case in which Blitz appears over the next five years, Judge Ward designed a severe sanction that highlights the court’s expectation that the company will take its e-discovery responsibilities seriously and discharge them competently.

United Central Bank v. Kanan Fashions, Inc., 2011 WL 4396912 (N.D.Il. Mar. 31 2011)The suspicious circumstances of a computer server’s abrupt sale during litigation resulted in sanctions for the defendant, but not its attorneys, in this commercial case.

Mehul and Varsha Shah owned Kanan Fashions, along with several other businesses. Kanan Fashions imported and

sold clothes from Sri Lanka and China. Defendants stored the garments in a warehouse in Aurora, IL, which was owned by another Shah company, Creative Warehousing. Defendants secured a loan to build the warehouse and another loan to purchase a computer server and software.

Defendants defaulted on these loans, and litigation ensued. Upon being evicted from the warehouse, defendants removed several personal items, computers and other belongings from the warehouse. They did not remove the server. Defendants’ attorneys were aware of the server and the eviction, but they did not take action to secure the server because “it never occurred to [them] that Defendants would leave the server behind.”

Defendants’ attorneys, who were respondents in the sanctions motion, repeatedly advised their clients about their duty to preserve electronic information. They instructed the Shahs that they “absolutely must obtain custody” of the warehouse server. At this time, First Midwest Bank owned the warehouse where the server was located. Defendants assured their attorneys that the server was secure because First Midwest Bank’s vice president, David Clark, was their “internal source,” “friend” and “biggest advocate.” Mr. Clark also informed defendants and their counsel that the server was available and that the defendants “could pick it up anytime.”

Over the next four months, however, defendants’ attorneys sent numerous emails giving instructions and requesting status updates concerning the server. Ultimately, defendants’ attorneys advised plaintiff’s counsel and the court that they did not have custody or control of the warehouse server. Four days later, Mr. Shah informed his attorney that he had just learned from Mr. Clark that First Midwest Bank had sold the warehouse server to a buyer in Dubai.

Defendants’ and plaintiff’s attorneys investigated the sale of the warehouse server. Defense counsel learned that the purchaser was a company called “Bi Agems.” Plaintiff’s attorneys identified the purchaser as “Diagems.” An individual named “Jim” picked up the server from the warehouse. The wire transfer came from Standard Charter Bank in Dubai.

Several facts suggested to the court that the defendants orchestrated the abrupt sale of the warehouse server. Mr. Shah had business connections in Dubai. Mr. Shah and his businesses had prior accounts with Standard Charter Bank. The court learned that there is an Illinois company called Diagems, and Mr. Shah testified that he knows the principals of that company fairly well and that they attend

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the same temple. Also, during the three-day period in which the server was sold and removed from the warehouse, there were 21 calls from Mr. Shah to Mr. Clark at First Midwest Bank. Yet, despite their close working relationship, Mr. Shah claims that Mr. Clark never informed him of the other buyer for the server and that he was not given an opportunity to meet the offered price.

Mr. Clark’s involvement in the sale also raised eyebrows. Mr. Clark explained that he received a telephone call from an unidentified individual who was interested in buying the server. The caller did not ask any questions about the server or request an opportunity to inspect it. The caller did not tell Mr. Clark how he came to know about the warehouse server. Mr. Clark did not ask any questions. He told the buyer to wire $60,000, but he does not recall giving transfer instructions. Mr. Clark thought the caller indicated that he represented a company called “Bi Agems” in Dubai. An individual named “Jim” met Mr. Clark at the warehouse and took possession of the server. Mr. Clark did not request identification and did not ask “Jim” any questions. The server had not been seen since “Jim” took it from the warehouse.

Plaintiff moved for sanctions against defendants and their attorneys. Magistrate Judge Michael Mason found that “there is no question that Defendants knowingly abandoned the server at the warehouse.” They also “repeatedly ignored [their attorneys’] instructions to regain custody and control of the warehouse server.” Defendants argued that they relied on their attorneys to take custody of the server, but the court credited the lawyers’ testimony and arguments on this issue. Moreover, the court concluded, “there is strong circumstantial evidence to suggest that Defendants actually orchestrated the disappearance of the warehouse server and then went to great efforts to cover their tracks.” This included withholding information from their attorneys.

The court sanctioned defendants in several ways. First, the court awarded fees and costs associated with the defendants’ motion for sanctions. Second, Magistrate Judge Mason decided to preclude defendants from introducing evidence related to data on the server. Finally, the court sanctioned defendants by ordering an adverse inference instruction be given to the jury. Specifically, the court ordered that the jury be informed that the defendants abandoned the server and that their failure to preserve the server may be considered evidence that the server contained information that was unfavorable to the defendants’ position.

Regarding defendants’ attorneys, the court agreed that counsel could have and should have done more to ensure

preservation of the server. Specifically, Magistrate Judge Mason found that defendants’ attorneys should not have accepted their clients’ assurances under the circumstances. Citing Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004), and Qualcomm, Inc. v. Broadcom Corp., 2010 WL 1336937 (S.D.Cal. Apr. 2, 2010), the court held that “although [defendants’ attorneys] certainly could have done more, the ultimate responsibility for the spoliation of the warehouse server rests with Defendants.” Nevertheless, Magistrate Judge Mason did not sanction the defendants’ attorneys.

Defendants filed a Rule 72 objection to Magistrate Judge Mason’s decision. The district court adopted the magistrate’s report and recommendation with one exception. Specifically, the district court asked Magistrate Judge Mason to consider whether sanctions should be imposed on all six defendants, including the Shahs and their various companies, or only a select few. See United Central Bank v. Kanan Fashions, Inc., 2011 WL 4396856 (N.D.Ill. Sep. 21, 2011). A motion to reconsider this ruling was denied. After receiving supplemental briefs on the issue, Magistrate Judge Mason found that all six defendants were liable for sanctions. A Rule 72 objection from the decision to sanction all six defendants has been briefed and remains pending.

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United Central Bank is significant because it highlights the difficulty attorneys may encounter in coordinating preservation and production efforts with their clients. Although the attorneys were not sanctioned, the court determined that they should have done more to preserve the warehouse server. The attorneys made several efforts to remind their clients of the duty to preserve the server and

tried to coordinate its production. But the attorneys’ reliance on their clients’ assurances turned out to be unjustified. And, if the court’s finding that the defendants “orchestrated” the server’s disappearance, this case demonstrates the lengths to which a party may go, contrary to their attorneys’ advice, to avoid production of electronic data.

Social MediaSocial media, such as Facebook and LinkedIn, is a valuable resource for the diligent investigator. The informality of social media, the supportive network of “friends” and the apparent immediacy of a user’s “status” all seem to lull the subscriber into doing or saying things that he or she may later regret in litigation. But the transient nature of information shared via social media is an illusion. And the deletion of information shared on social media may constitute spoliation worthy of strict sanctions.

Lester v. Allied Concrete, Nos. CL08-150, CL09-223 (Va. Cir. Ct. Sep. 1, 2011)Cleaning up a social media site to avoid disclosure of potentially harmful information may have serious consequences. Plaintiff Isaiah Lester commenced an action in Virginia state court after his wife died in an accident. During discovery, defense counsel requested production of the contents of Mr. Lester’s Facebook account. In particular, they sought information relating to potentially embarrassing photographs posted on the site as of “the day this request is signed.”

According to the court’s order on post-trial motions, after receiving the request for production, Mr. Lester’s attorney told his paralegal “to tell Lester to ‘clean up’ his Facebook because ‘we don’t want blowups of this stuff at trial.’” Mr. Lester subsequently deactivated his Facebook account. The court found that on the next day, Mr. Lester’s attorney executed a discovery response stating that Mr. Lester did not have a Facebook page as of the date the response was signed.

Defendants were unsatisfied with this response because they requested the Facebook page as of the date of their request. In response to their threatened motion, plaintiff’s counsel decided to produce a screenshot of Mr. Lester’s Facebook account. According to the order, Mr. Lester reactivated his Facebook page and deleted 16 photographs, an act Judge Edward Hogshire found to be “consistent

with the earlier directive from [his attorney] to ‘clean up’ his Facebook account.” Mr. Lester’s attorney and his paralegal claimed that they were unaware of the fact that Mr. Lester deleted the photographs before they served Mr. Lester’s Facebook page on defense counsel. In the subsequent dispute over this exchange, the court also found that Mr. Lester’s attorney omitted a key email from both the privilege log and the materials submitted to the court for in camera inspection.

Judge Hogshire found that Mr. Lester’s attorney “chose to obstruct production of the requested screen-prints [sic] by drafting a deceptive response … and then instructing his client to take down his Facebook page.” He also determined that Mr. Lester committed various acts of “misconduct,” which included deactivating the Facebook account, claiming that he did not have a Facebook account in a “misleading response,” deleting photographs from Facebook prior to the site’s production and claiming on the stand that he never deleted photographs from Facebook.

Mr. Lester and his attorney were ordered to pay defense counsel $180,000 and $542,000, respectively. Plaintiff’s attorney was referred to the Virginia State Bar, and allegations of his client’s perjury were submitted to the

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Commonwealth’s Attorney. Plaintiff’s counsel also resigned from his law firm. (See Peter Vieth, “A Very High-Profile Case in Charlottesville,” Virginia Lawyers Weekly, December 8, 2011.)

Despite the allegations of spoliation arising during discovery, the case proceeded to trial. The jury awarded approximately $10.6 million to the plaintiffs. The court reduced the award

by $4.1 million upon finding that the verdict was unduly influenced by juror sympathy. Interestingly, in reaching this decision, the court indicated that the “defense’s misguided strategy of denying liability and spotlighting Isaiah Lester’s Facebook frolics did not help.” (See id.) Both sides have stated their intention to ask the Virginia Supreme Court to review the case.

Inadvertent DisclosureAvoiding inadvertent disclosure of privileged documents is a vital concern in every ESI production. Rule 502 of the Federal Rules of Evidence provides some protection against inadvertent disclosure. Nevertheless, counsel should be diligent to ensure that their review and production procedures are reasonably designed to prevent unintended disclosures. Otherwise, attorneys not only risk waiving the privilege but also could face potential malpractice claims.

Thorncreek Apartments III, LLC v. Village of Park Forest, 2011 WL 3489828 (N.D. Ill. Aug. 9, 2011)During discovery, attorneys for the Village of Park Forest reviewed and produced about 250,000 pages of documents. The Village’s attorney determined that 159 of those documents were privileged. All of the privileged documents were inadvertently disclosed. The parties agreed to the status of all but six of the privileged documents.

Applying Rule 502 of the Federal Rules of Evidence, the court determined that the Village waived its privilege regarding the six challenged documents. According to Rule 502(b), there is no waiver of the privilege when: “(1) the disclosure is inadvertent; (2) the holder of the privilege or protection took reasonable steps to prevent disclosure; and (3) the holder promptly took reasonable steps to rectify the error. …”

The court agreed that the documents were privileged and that the disclosure was inadvertent. But the court’s evaluation of the factors to consider when determining whether an inadvertent disclosure constitutes a waiver of privilege – the reasonableness of precautions taken, the time taken to rectify the error, the scope of discovery, the extent of disclosure and the overriding issue of fairness – weighed against the Village.

Because the Village did not succeed in withholding even one privileged document, the court concluded that reasonable precautions had not been taken to prevent the disclosure. Nine months was also too long to rectify the error. The court observed that if the Village had created a privilege log near the time of its disclosure, this issue would have been avoided. Considering the six months permitted for the Village to complete its discovery responses, the court did not find the scope of its production, 250,000 pages, to be so significant as to excuse the inadvertent disclosure. Finally, the court believed it was fair to permit Thorncreek to have continued access to the challenged documents because it would hold the Village “responsible for its failure to take reasonable care to safeguard the privilege or to rectify the inadvertent error once it occurred.”

J-M Manufacturing Co. v. McDermott Will & Emery, No. BC462832 (Cal. Super. Ct. filed Jun. 2, 2011)As alleged in this pending lawsuit, inadvertent disclosure in ESI may also lead to exposure for legal malpractice. J-M Manufacturing filed a lawsuit against its former attorneys, McDermott Will & Emery, for producing 3,900 privileged emails. According to the complaint, J-M Manufacturing retained McDermott Will & Emery in connection with federal and state government subpoenas that required J-M Manufacturing to produce paper and electronic documents.

J-M Manufacturing and its attorneys allegedly worked together to identify 160 custodians who potentially possessed relevant information. The complaint states that McDermott Will & Emery hired e-discovery vendors that used a list of key words to cull the data for responsive documents. The attorneys produced the material containing the key words to the government allegedly without reviewing for privilege. Subsequently, according to J-M Manufacturing, the government discovered that several of

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the documents were privileged and directed the company to conduct a privilege review.

McDermott Will & Emery then filtered the responsive documents through a second key-word list to identify privileged material. The attorneys hired contract attorneys to review, identify and categorize potentially privileged documents. However, the complaint states that McDermott Will & Emery only spot-checked the contract attorneys’ work on a limited basis. The complaint alleges that the efforts of the firm and the contract attorneys fell below the applicable standard of care. As a result, J-M Manufacturing claims that the second production included 3,900 privileged documents, which were subsequently turned over to

the relators in a separate qui tam case involving J-M Manufacturing. After attempts by a new law firm to recall the privileged documents from the relators failed, J-M Manufacturing sued McDermott Will & Emery. The case is still pending.

The suit emphasizes the significance of training and supervising contract attorneys to control the quality of the ESI production. It offers a warning to all law firms conducting electronic discovery reviews to carefully screen and educate contract attorneys, develop clear review procedures, and conduct careful quality assurance and privilege reviews.

Impressions & RecommendationsESI decisions over the past year demonstrate an unmistakable trend in civil litigation – ESI disputes are not going away. In fact, they are becoming increasingly common. This trend reflects the fact that the role of ESI in every aspect of modern life continues to expand exponentially. As a result, ESI decisions from 2011 demonstrate that litigants and their attorneys must accept the increasing significance of ESI in civil litigation and adapt to the ever-changing world of electronic information. They must also take affirmative steps to balance their obligation to preserve and produce ESI and simultaneously prevent an unjustifiably burdensome interruption of their business operations.

There is no easy solution for these problems. ESI decisions from the past year, however, provide significant insight into the courts’ expectations of parties and their attorneys. Consistently, the judges deciding ESI disputes throughout the United States over the past year expected attorneys and litigants to cooperate meaningfully with each other about ESI issues. In Pippins, for example, the court ordered expensive data preservation measures, at least in part, because KPMG “failed to work effectively” with plaintiffs’ counsel to develop a less-burdensome alternative. Da Silva Moore showed the court’s expectation that parties will work together regarding the use of emerging technologies for searching ESI. And in National Day Laborer, Judge Scheindlin, expressed frustration at the attorneys’ failure to conduct a Rule 26 conference regarding the format of the requested production.

The oft-stated expectation that parties and their attorneys will cooperate meaningfully regarding ESI issues promotes

the courts’ interest in managing their own dockets. But it also serves the litigants’ interests. Early discussions about preservation methods, review technology, production format and proportionality, among other topics, help define the parties’ obligations during the ESI process. This serves the litigants’ interest in limiting the ever-escalating cost of ESI. It also helps avoid unnecessary and expensive motion practice. Because parties frequently raise ESI issues in an effort to gain a broad tactical advantage, evidence of early and meaningful efforts to cooperate on these issues helps the attorneys raise a credible defense to an attack on their ESI preservation, review and production.

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