Much has been made in recent months about “e-discovery” in light of changes to the Federal Rules of Civil Procedure that went into effect December 2006. The new Rules dictate that parties to Federal litigation must meet and confer regarding the discovery and form of production of all electronically stored information (“ESI”) that is in the possession, custody or control of each party. This meeting must take place at the outset of any Federal Court litigation.
Almost every business communicates or does business electronically thereby creating ESI that may be relevant in a lawsuit. This translates into the following simple fact: Now more than ever, business owners will have to pay greater attention to the issue of ESI utilized in their businesses.
Some have responded with alarm to the Rule changes, citing the expense associated with compliance as well as potential invasiveness to business practices. This article will discuss some of the practical effects of the Rules. As with any new rules, experience may dictate changes and modifications as we move forward.
1. What is “e-discovery”? “E-discovery”, or electronic discovery, refers to any process in which ESI is requested, located, secured and searched by a party during the discovery period of a lawsuit. “ESI” consists of any information created, stored or best utilized with computer technology of any type. Such information can be found in various formats including active online data, offline storage and archival data, backup data, and erased, fragmented or damaged data. The above types of information can be found on PDAs (Personal Data Assistants), zip and jazz drives, CD-ROMs, floppy disks, laptop and desktop computers, external hard drives, tape backups, firewall logs, and voicemail messages. Outside storage, including iPods, web-based email accounts, GPS information, spare computer equipment, and vehicle computers, must also be considered.
2. Do I need to do anything right now? We believe in “plan for the worst and hope for the best.” Following that maxim, we believe that it is better to proactively examine potential issues before the lawsuit arrives at your door. To that end, we think that all business owners should be conversant with the technology used in their business. They should be able to discuss the programs used, the history of upgrades to those programs, any specific modifications made to those programs for their business, and the like. Business owners should also be able to reproduce retention policies, be they written policies or the de facto policies that undoubtedly exist in every business. For instance, whether you know it or not, your IT department is in all likelihood destroying emails after particular dates simply due to storage concerns. You should know what those time periods are in advance.
Business owners should also have discussions with their IT people regarding how to reproduce the information contained in their computer systems. Is it simply a matter of pulling one hard drive and putting is on the shelf? Is it a nationwide system run on multiple servers? Can information on the system be separated by subject matter, employee, project or other similar parameters? All of these are questions that may and will be asked at some point in litigation if relevant.
In doing all this, a business owner should also be cognizant of costs needed to perform a certain procedure. For instance, it may be easy to pull a server from a site but to replace that server will cost tens of thousands of dollars and result in a significant loss of time to the business. The reason the business owner wants to know this in advance is so that their lawyer can be prepared for an emergency protective order should some type of overbroad discovery request be made in the course of litigation. If a business owner waits until the request is made, there will be delay and less preparedness than there should be for a motion of this type.
Finally, a business should have a person or persons designated in advance to be able to discuss these issues. Nothing is more frustrating to an employee and to the employer than thinking they know who the “go to “ person is and finding out they are wrong.
3. What about the files on my desk? Good question. Inevitably, people are pack rats. They will keep copies of things in drawers, file cabinets, briefcases, and, now, on their desktop computers. When a matter potentially involving electronic discovery arises, a business owner should discuss the existence of these “shadow files” with all relevant employees. While there may be nothing wrong with keeping a “personal shadow file” it is always embarrassing to discover at deposition that the document or email that was lost or destroyed is actually sitting safe and sound in someone’s drawer or in a file folder on someone’s desktop. The same applies to personal computers not tied to the company’s system. Again, a few minutes of proactive inquiry can avoid a great deal of expense and embarrassment down the road.
4. What do I do if I receive a “litigation hold letter” before a lawsuit is filed? A litigation hold letter is an attempt by some attorneys to freeze the documents and computer systems of a potential defendant in advance of an actual lawsuit. This is something that will undoubtedly be utilized more frequently in the future, and the failure to comply by preserving the appropriate information can be met with court sanctions.
The answer? Easy – call your lawyer.
For more information regarding this article, please contact Bonnie Polk at 941-552-5548 or email her at firstname.lastname@example.org or Morgan Bentley at 941-329-6624 or email him at email@example.com.