Delaware eDiscovery Report

A Critique of the Delaware District Court's Revised Default eDiscovery Standard

Christopher Spizzirri — Mon, 07 May 2012 14:53:00 -0500

As many of you are likely aware, the Delaware District Court revised its Default Standard for Discovery back in December. Several sources walked readers through the new provisions and speculated about the practical impacts of the new Default Standard. I opted to wait until working under the new Default Standard before offering commentary. Now that I have had the opportunity to use the new Standard in real cases, I'm ready to offer a practical critique.

The new Default Standard is a real leap forward from its predecessor and an excellent guide for litigants. Whereas the old Default Standard was basic, a bit scattershot, and meant to be a punishment to parties who failed to cooperate, the new Default Standard is a gift wrapped eDiscovery plan. (It's my understanding that DuPont's Global eDiscovery Director, Vince Catanzaro, was a driving force behind development of these new guidelines. Well done Vince!) To date, I have used the new Standard in several cases as the basis for agreements for conducting eDiscovery. Among it's best features are:

A focus on early party Meet & Confers regarding eDiscovery, including early consideration of Proportionality;
Schedule A of the new Standard lists data types and sources that are excluded from preservation absent a good cause showing;
A list of metadata fields that parties must exchange, no other fields are required;
During search term discussions, receiving parties may request no more than 10 additional search terms;
Seeks enforcement of the FRCP 26(f) Meet & Confer requirement to discuss eDiscovery and the timing of the same;
Protection of litigation holds and other preservation efforts from discovery; and
On-site inspection of the producing party's information systems is barred absent a good cause showing.

However, the new Standard is not without it's flaws. Although none of it's flaws are major, there are a few items that I think are unclear in the new Standard. I will address them in the order in which they appear in the new Standard, citing the section, so you can play along at home.

The first oddity, while not an actual flaw per se, merits mentioning because of its irony: the document appears to be scanned paper. Odd.

To Preserve or Not To Preserve

The first possible flaw is that the language of section 1.c.(i) seems to contradict or at least conflict with Schedule A #5. I'll explain.

Schedule A of the new Standard lists data types and sources that are excluded from preservation absent a good cause showing. Schedule A #5 identifies "Back-up data that are substantially duplicative of data that are more accessible elsewhere." The inclusion of the word "substantially" here means to me that the Court recognizes and accepts that *some* relatively small amount of non-duplicative data may be lost. So good cause to preserve a backup source would require showing that a backup has a unacceptably large amount of non-duplicative data. Just showing one document, or even a few, would likely not be good cause to force preservation. This is pragmatic and enlightened, and I like it (and I'm sure the Court is relieved to know that I approve).

However Section 1.c.(i) concerns the scope of discoverable information and says:

Absent a showing of good cause by the requesting party, the parties shall not be required to modify, on a going-forward basis, the procedures used by them in the ordinary course of business to back up and archive data; provided, however, that the parties shall preserve the non-duplicative discoverable information currently in their possession, custody or control.

To me, the first phrase in this section says that parties don't need to change their regular backup routines, including the regular destruction of backups. In other words, just like Schedule A #5, there's no need to preserve backups. Good.

Not so fast. The second phrase in section 1.c.(i) says that parties may only continue executing their regular backup routines, including the regular destruction of backups, if there is no unique data in a backup. There's unique data in most backups, so reading the second phrase literally seems to negate the first part of section 1.c.(i).

That is, section 1.c.(i) really says that parties may continue executing their regular backup routines, including the regular destruction of backups, if, and only if, the backups they intend to destroy have no unique data. None. Zero. This could cause parties to keep all backups for fear that any of them contain even one unique item. Not only is that a bad rule, it directly contradicts Schedule A #5's exclusion of backups from preservation.

I have no doubt that causing parties to keep all backups was not the Court's intention, and this is merely a drafting error. Nevertheless, it's potentially problematic, and I hope it will be corrected. I offer the following language as a possible alternative:

Neither party shall be required to modify, on a going-forward basis, the procedures used by them in the ordinary course of business to back up and archive data, unless those procedures may be reasonably expected to destroy potentially relevant data that does not also exist on a more readily accessible source.

Translucence Anyone?

This isn't a flaw so much an issue with style. Section 1.d.(iii) says:

Activities undertaken in compliance with the duty to preserve information are protected from disclosure and discovery.

While this is certainly a clear and welcome statement that preservation activities are protected, there are times when disclosing some of those activities is helpful. If a party discloses their preservation efforts and the opposing party will agree (in writing) that those efforts are reasonable, the disclosed preservation effort then become highly defensible.

Section 1.d.(iii) doesn't preclude such disclosure and discussion, but it doesn't encourage it either. I would have preferred the section said something like:

Although activities undertaken in compliance with the duty to preserve information are protected from disclosure and discovery, parties are encouraged to share this information in reasonable detail when appropriate in the interest of cooperation.

I'm not married to that language, but you get the idea. Like I said, this isn't a flaw, just a style preference.

String Theory

Section 5.b. does a lot of good things, but I believe it could use some clarification. Specifically, it says:

Absent a showing of good cause, a requesting party may request no more than 10 additional terms to be used in connection with the electronic search.

What counts as a search term? Quite often, we use search strings (e.g. "too much" w/3 noise) of varying complexity, because they yield more tailored results and smaller data sets than individual terms (e.g. "noise"). So, I may have several search strings like:

Smith AND [misappropriat* OR stole OR steal* OR (customer w/3 list) OR (client w/3 list) OR fire OR terminat* OR discipline* OR suspend* OR resign* OR unemploy*] between 1/1/08-1/1/10
(Kennedy OR Jones OR Adams) AND (fire OR terminat* OR discipline* OR suspend*) between 9/15/09-10/15/09
Smith AND [perform! OR theft! OR (client w/7 contact)] between 10/1/08-11/1/10

What exactly can the receiving party request? It seems clear to me they can request that individual words be added to a string with each word counting against the 10. That is, using the above strings, the receiving party can request the addition of "account" to the final string so it reads:

Smith AND [account OR perform! OR theft! OR (client w/7 contact)] between 10/1/08-11/1/10.

The requesting party can do that 9 more times.

But what if the receiving party requests the addition of "account manager" instead? Is that one term or two? What if, in addition to the strings above, they requested we also run: "(Williams OR Martin OR Wilson) AND (captur* OR escap* OR dwindl*) between 6/15/09-8/15/09?" Is that 6 terms? I think so, but, to avoid party confusion and unnecessary court intervention, this could be clarified.

Going Native

Section 5.d. says:

The only files that should be produced in native format are files not easily converted to image format, such as Excel and Access files.

I see two problems here. The first is a minor drafting error. For accuracy, "Excel" should be changed to "spreadsheets" (I would even add "and similar files like those with a .csv extension"). Certainly, Excel spreadsheets are the most common spreadsheets--and perhaps Excel has become synonymous with spreadsheets the way Qtips now means all cotton swabs--but there are many of us who use non-Excel spreadsheets. This is an easy fix.

The other problem is two-fold. First, like the Excel issue, "Access" should be changed to "databases." Again, there are many other types of databases besides Access. In fact, I would wager SQL (pronounced sequel) databases are the most common right now. This is also and easy fix, but there's a much bigger problem here.

The second problem is that production of entire databases is not a very good way to handle databases in eDiscovery. In fact, it's a bad way to handle them.

The Sedona Conference® Database Principles Addressing the Preservation and Production of Databases and Database Information in Civil Litigation (April 2011) explains that the best way to handle databases in eDiscovery is to generate relevant reports for production. This requires the producing party to determine the fields available in a given database, disclose the fields to the receiving party, and negotiate relevant reports.

There's more to it than that, but that's the basic idea: database production is based on reports not exchanging entire databases. This process is very similar to search term negotiation and development, except the discussion is about database fields. I would hope this portion of the new Standard can be revised quickly, because I think it could prove problematic.

Metadata, I Knew You Well

Section 5.e. lists the metadata fields parties must provide. Among the fields listed are Conversation Index, Control Number Begin, and Control Number End.

Conversation Index. As I understand it, this is a field created by eDiscovery software that identifies and groups email threads, which is useful during review. Not all software does this, so not everyone will have a Conversation Index field to produce. Even when a party does have this field, it exists for their own use during review and is not something typically produced, if ever. Moreover, even if a party were to produce this field of information, most, if not all, review software would be unable to utilize the information. This field should be removed from the list.

Control Numbers. These are typically numbers assigned to documents for internal use and are never disclosed. I think what was intended here was Bates Begin and Bates End. These are arguably the two most important fields parties must exchange, but they do not currently appear on the list.

Title. This is a commonly exchanged field indicating the title given to an office document. I would have included it on the list.

Missing in Action

As terrific as the exclusions in Schedule A are, they do not address custodians' personal data, SMS text messages, or social media. Maybe the Court doesn't want these categories of data excluded by default, but they seem to fit in nicely with the other categories on that list. Either way, some guidance on handling these types of data would have been appreciated, especially considering how frightened some people seem to be about social media.

Drum Roll…

If you like the new Default Standard as much as I do, you will want to use it as the basis for a form eDiscovery agreement for use in Delaware District Court and any other court. After all, why reinvent the wheel? But, as pointed out above, the new Standard is not perfect. The workaround for that is to pull the text of the new Standard into a form agreement and correcting the errors discussed above. After that, all you will need to do is make changes warranted by the specific circumstances of a case and you're done. Pre-cooked eDiscovery Plan.

DE District Court Test Drives Race Tires America, Curbs Taxation of eDiscovery Costs

Christopher Spizzirri — Wed, 18 Apr 2012 15:51:51 -0500

As readers of this blog likely know, there's a mini-trend in eDiscovery to recover vendor costs in Federal courts as "taxable" under 28 U.S.C. §1920(4). That section allows courts to require losing parties to reimburse prevailing parties for "fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case." There recently have been several cases around the country where prevailing parties have successfully recovered costs this way. (See footnote 2 here for a short list of cases.)

In Race Tires America Inc. v. Hoosier Racing Tire Corp, the Western District of Pennsylvania awarded over $367,000 of "taxable costs" to the prevailing defendants for eDiscovery services like hard drive imaging, data processing, keyword searching, and file format conversion. However, the 3rd U.S. Circuit Court of Appeals vacated the award, defining copies as only scanning and file-format conversion, drawing a sharp distinction between "exemplification" and "making copies" in §1920(4).

In Delaware District Court recently, in Cordance Corp. v. Amazon.com, Inc., C.A. No. 06-491-MPT (D. Del. Apr. 11, 2012), Amazon prevailed and requested $447,694.69 reimbursement for electronic discovery costs under D. DEL. LR54.1(b)(11). According to Magistrate Judge Thynge

D. DEL. LR54.1(b)(11) provides “Other costs: Claims for costs other than those specifically mentioned in the preceding paragraphs of subpart (b) of this rule ordinarily will not be allowed, unless the party claiming such costs substantiates the claim by reference to a statute or binding decision.” Discovery or ediscovery expenses are not specifically itemized under LR 54.1(b)

Applying Race Tires, Judge Thynge approved just $1,729.28 as taxable, and requires Amazon to "produce documents that distinguish the costs for converting documents, which were recoverable, from costs for processing, which were not" in order to recover any other eDiscovery costs.

Clearly §1920(4) still has some value to prevailing parties in Delaware District Court (and elsewhere in the 3rd Circuit), just not as much as it once appeared.

2012 Federal Trial Practice Seminar: An Introduction to Federal Practice in the District of Delaware

Christopher Spizzirri — Tue, 17 Apr 2012 12:28:38 -0500

From the Delaware Federal Bar Executive Committee:

The Delaware Chapter of the Federal Bar Association, in conjunction with the United States District Court for the District of Delaware, is pleased to announce another exciting new initiative. On the evenings of Thursday, May 17 and Thursday, May 31, 2012, from 5:00 to 7:30 p.m., the District Court and FBA will sponsor a two-night seminar program entitled “The Federal Trial Practice Seminar Presents: An Introduction to Federal Practice in the District of Delaware.” The sessions will take place in Courtroom 2B at the J. Caleb Boggs Federal Building.

Attorneys who have been practicing in the District for three years or less are eligible to participate in this seminar. One of the two seminar sessions will relate to an attorney’s interaction with opposing counsel and participation in the litigation process, while the other session will focus on an attorney’s interaction with the Court. Each session will include a presentation from a speaker and a panel discussion. The speakers and panel members will be current and/or former judges of the District Court.

Participation is limited to FBA members. Current FBA members may register for the seminar by contacting Steve Brauerman via e-mail at sbrauerman@bayardlaw.com, by no later than May 14, 2012. Those interested in participating in the seminar who are not currently FBA members may fill out and submit the attached application form in order to become a member. Alternatively, they may contact Mr. Brauerman at the e-mail address listed above to obtain additional information about FBA membership.

Space for the seminar is limited and applicants will be accepted on a first-come, first-served basis. Applicants should be available to attend both sessions. Admission to the seminar is free and the FBA expects to apply for Continuing Legal Education credit in Delaware for both sessions.

The "Introduction to Federal Practice" seminar will be organized by the same administrative team that has organized our successful "Federal Trial Practice Seminar" (or "FTPS") in 2010 and 2011. The FTPS, an eight-week trial skills seminar program offered to attorneys in their first ten years of practice, will be next offered again in Spring 2013.

Friday Notes

Christopher Spizzirri — Fri, 24 Feb 2012 15:57:29 -0500

Note number one is that I promise to resume posting regularly. I haven't been very good at keeping up here as my case load has grown. It was important for me to spend my time focusing on managing my growing eDiscovery client work. (Don't feel bad though, because you aren't the only ones I've been neglecting. I didn't go to the Georgetown Advanced eDiscovery Institute, LTNY, or either of the last two Sedona Conference® WG1 meetings.) Now that I'm sure everything is under control, I can return to the blogosphere. Yay!

Speaking of my return to the sunlight, I am honored to be a panelist at the upcoming annual ARMA Diamond State Chapter seminar, INFO XXX – RIM on the Edge. (Cool name! Jealous much?) I will be on a panel discussing Knowledge Management. I'm excited that two of my favorite people, Vince Catanzaro and Molly DiBianca, are also participating.

Delaware's eDiscovery rockstar, Kevin F. Brady, has finally, officially joined forces with nationally known corporate litigator and blogger Francis G.X. Pileggi in the Wilmington, Delaware office of Eckert Seamans Cherin & Mellott. Kevin has often guest posted on Francis' blog, and the two have collaborated on other projects. I wouldn't say they exchange long-protein strains a la Kang and Kodos, but they've been professionally linked together in the past. Read more at Delaware Law Weekly.

Last, but definitely not least. LeClair Ryan's Dennis Kiker, co-author of the excellent The e-Discovery Myth blog, has two posts discussing the emergence of the true eDiscovery lawyer—those of us who have dedicated our legal practice to eDiscovery. Take a look at "I Want an E-Discovery Lawyer for My E-Discovery Project" and the follow up "E-Discovery Lawyers – Part II."

17 Morris James Attorneys Named In The Best Lawyers in America® 2012 in 20 Practice Areas

Morris James Delaware — Wed, 31 Aug 2011 14:18:07 -0500

Seventeen Morris James attorneys are listed as being among the most elite lawyers in their practices in The Best Lawyers in America® 2012.

The Best Lawyers in America® has become universally regarded as the definitive guide to legal excellence. Their rigorous research is based on an exhaustive peer-review where leading attorneys cast votes on the legal abilities of other lawyers in their practice areas.

The Morris James attorneys listed in the 18th edition of the guide and the areas of law in which they are recognized include:

Richard P. Beck
Litigation – Real Estate (1983)
Real Estate Law (1983)

John M. Bloxom IV
Real Estate Law (2010)

P. Clarkson Collins, Jr.
Corporate Law (2005)
Litigation – Mergers and Acquisitions (2005)

Mary M. Culley
Elder Law (2008)

Keith E. Donovan
Personal Injury Litigation (2009)

Dennis D. Ferri
Medical Malpractice Law (2007)
Personal Injury Litigation – Defendants (2007)

Richard Galperin
Personal Injury Litigation – Defendants (2005)

Richard K. Herrmann
Information Technology Law (2003)
Technology Law (2003)

Francis J. Jones, Jr.
Personal Injury Litigation – Defendants (2008)
Personal Injury Litigation – Plaintiffs (2008)

Gretchen S. Knight
Family Law (2007)

Lewis H. Lazarus
Commercial Litigation (2006)
Corporate Law (2006)
Litigation – Mergers and Acquisitions (2006)

Mary B. Matterer
Litigation – Intellectual Property (2009)

Edward M. McNally
Corporate Law (2005)
Litigation – Mergers and Acquisitions (2005)

Mark D. Olson
Tax Law (2011)

James W. Semple
Commercial Litigation (2009)

Bruce W. Tigani
Tax Law (2011)

David H. Williams
Education Law (2007)
Employment Law – Management (2007)
Labor Law – Management (2007)
Litigation – Labor and Employment (2007)

(Year indicates first year listed in practice area)

[UPDATE] In Defense of Genger, Part II

Christopher Spizzirri — Tue, 19 Jul 2011 14:20:45 -0500

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UPDATE:

I hate to say I told you so, but...wait, no I don't.

Yesterday, the Delaware Supreme Court issued its opinion in this matter affirming the Court of Chancery's spoliation finding. The Court held the spoliation finding proper, because Genger took affirmative steps to overwrite unallocated space, saying:

We do not read the Court of Chancery’s Spoliation Opinion to hold that as a matter of routine document-retention procedures, a computer hard drive’s unallocated free space must always be preserved. The trial court rested its spoliation and contempt findings on more specific and narrow factual grounds—that Genger, despite knowing he had a duty to preserve documents, intentionally took affirmative actions to destroy several relevant documents on his work computer. These actions prevented the Trump Group from recovering those deleted documents for use in the Section 225…

Compare with my statements below that

The [Court of Chancery] opinion in this case does not require preservation of all unallocated space in every case. Genger was sanctioned because he took affirmative steps to overwrite unallocated space, in violation of the Court's order... [T]here is nothing in this opinion that creates any requirement to preserve unallocated space. Rather, the opinion only says you shouldn't go out of your way to destroy it.

I feel quite vindicated in my defense, considering there were some persons and organizations of import in the eDiscovery community lined up on the other side. Obviously, reasonable minds can disagree, especially in interpreting court decisions. Ultimately, I am thankful that the Supreme Court's decision should allay any fears created by certain interpretations of the Court of Chancery's spoliation decision.

ORIGINAL POST (2011-03-11 13:20:45):

I had almost given up on writing this post considering how long it has been since I posted In Defense of Genger, Part I and (more importantly) how long it has been since the publication of the posts I am taking issue with. However, the ongoing confusion about this case has prompted me to action.

If you have read Part I, you are familiar with the Court of Chancery's decision in TR Investors LLC v. Genger, C.A. 3994-VCS (December 9, 2009) and with the allegations made by Leonard Deutchman, General Counsel at LDiscovery LLC, in a two-part post hosted by Law.com.  For those who are not familiar, Mr. Deutchman asserts that the Court got the decision wrong because it (1) does not understand the technology involved (Part 1) and (2) does not understand the law of eDiscovery (Part 2).

It's sufficient to say that I respectfully disagree with Mr. Deutchman on both charges. Rebutting his posts was a fun, interesting exercise for me, but it didn't seem terribly important. I saw it as an esoteric debate between eDiscovery geeks. That has changed, because, today, a prominent media outlet has published a post that elevates the confusion about this opinion and will cause unnecessary fear among corporate counsel.

The latest case of hand-wringing and confusion over this decision comes to us from none other than Forbes by way of Daniel Fisher's post "Delaware Ruling Would Require Massive Data Backups." Mr. Fisher opens his post stating that:

A little-noticed decision by a Delaware court has the potential to impose huge costs on companies unless it is reversed, computer-security experts say...[e]xperts say retaining such data would be prohibitively expensive since the unallocated space is essentially a trash bin that is altered each time a key is tapped.

Despite the fact that Mr. Fisher twice refers to "experts" (plural) as the source for these hyper-ventilations, his lone identified source for the post is Daniel Garrie, a lawyer and managing director at Focused Solution Recourse Delivery Group LLC , a computer consulting firm in Seattle.  Mr. Fisher's post continues:

“It’s almost impossible for large companies with massive amounts of equipment to comply,” said Garrie... “I don’t even know if it’s possible,” said Garrie. “I mean, anything’s possible with enough money,” but companies would have to take bit-level images of their hard drives on a regular basis and store them somewhere, to be retrieved each time they are sued. That means all the time for most large companies. The costs would be “exponentially larger,” than current electronic discovery measures. “Several large global companies,” clients he declined to name, “have expressed concern.”

Let me clear up the confusion: The opinion in this case does not require preservation of all unallocated space in every case. Genger was sanctioned because he took affirmative steps to overwrite unallocated space, in violation of the Court's order and without first telling anyone. The routine, passive overwriting of unallocated space was NOT the cause for any sanctions here, so there is nothing in this opinion that creates any requirement to preserve unallocated space. Rather, the opinion only says you shouldn't go out of your way to destroy it. Big, BIG difference.

To Mr. Garrie's credit, he is consistent—he is co-author of an article in the Northwestern Journal of Technology and Intellectual Property that makes the same mistaken arguments, and he filed a brief with the Delaware Supreme Court arguing for reversal of the Genger opinion. I obviously disagree with Mr. Garrie's opinions on this matter, but I am here to help, so I say:

Mr. Garrie, for the “[s]everal large global companies [that] have expressed concern,” please send them a link to this post and tell them not to worry.

I don't actually expect Mr. Garrie will do that, but perhaps some of his clients will stumble upon this post, in which case here is my advice to them:

If you act cooperatively and transparently, you will be fine. If you find yourself in a similar position to Mr. Genger's, share your concerns with opposing counsel and the court before you do anything. Don't take matters into your own hands and violate a court order by wiping a hard drive in the middle of the night—it's bad form and will only get you in trouble.

Stayed tuned for the decision of the Delaware Supreme Court—~~I may have a lot of words to eat~~...

The Tenth Circuit Speaks!

Christopher Spizzirri — Thu, 05 May 2011 19:22:08 -0500

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No doubt jealous of all the attention our beloved Judge Shira Scheindlin receives, two days ago U.S. Court of Appeals for the Tenth Circuit Judge Neil M. Gorsuch issued an order in Lee v. Max International, LLC affirming a terminating sanction in discovery. Woo hoo!

In one fell swoop, Judge Gorsuch does the following:

1) Establishes a "3 Strikes and You're Out!" rule:

How many times can a litigant ignore his discovery obligations before his misconduct catches up with him? The plaintiffs in this case failed to produce documents in response to a discovery request. Then they proceeded to violate not one but two judicial orders compelling production of the requested materials.

After patiently affording the plaintiffs chance after chance, the district court eventually found the intransigence intolerable and dismissed the case as sanction. We affirm. Our justice system has a strong preference for resolving cases on their merits whenever possible, but no one... should count on more than three chances to make good a discovery obligation. (emphasis added)

2) Enlightens us on the karma of discovery:

[T]here is such thing as discovery karma. Discovery misconduct often may be seen as tactically advantageous at first. But just as our good and bad deeds eventually tend to catch up with us, so do discovery machinations.

3) Establishes the "gimlet eye" standard of review:

We view challenges to a district court’s discovery sanctions order with a gimlet eye.

The lesson: Don't mess with District Judges and Magistrates in discovery.

Read the coverage at Above the Law where ALL YOUR DOCS ARE BELONG TO US.

[Update] Pulte Gets Pinched for Spoliation

Christopher Spizzirri — Mon, 04 Apr 2011 16:01:39 -0500

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UPDATE:

I have amended my post based on some very thoughtful clarification from Dennis Kiker in the comments. Added text is underlined, and deleted text is ~~struckthrough~~.

ORIGINAL POST (February 28, 2011):

LTN reports that national home builder Pulte Homes was caught deleting emails and wiping hard drives in direct violation of a court order:

Forsyth County Superior Court Chief Judge Jeffrey S. Bagley has ordered sanctions against Pulte Home Corp. for destroying e-mails and other electronic evidence in an environmental lawsuit.

The sanctions... include paying attorney fees for plaintiffs...

"We expect that attorney fees and costs will be in the range of $400,000 -- making it the largest award of sanctions for willful spoliation of electronically stored information in Georgia history," said Michael P. Carvalho, attorney for Adele and Tim Simerly, who are suing Pulte over stormwater runoff...

In September 2009, Bagley ordered an investigation by a special master into allegations that Pulte's vice president of land development, George "Ted" Turner, had deleted e-mails related to the case. The order followed a deposition in which Turner said he had deleted e-mails and intended to continue doing so, according to Carvalho...

The Special Master's report concluded that Pulte employees violated Bagley's order on spoliation of evidence, specifically deleting e-mails as well as replacing and reformatting hard drives in some computers...

"Pulte argued that despite the fact that significant efforts had been undertaken by the court-appointed forensic expert, 'only 160 documents' had been produced as potentially deleted emails," wrote Bagley. "And of these 160 documents, none of the emails was ultimately determined to be a 'smoking gun,' which would have otherwise caused this court to conclude that Turner's deletion was intended to hide, cover up or obfuscate the truth.

"Despite this court's prior order prohibiting the continued deletion of emails, Pulte continued to engage in a pattern of … spoliation," the judge added.

Read the full post...

Generally, the destruction of information only rises to the level of sanctionable spoliation when (1) the duty to preserve information has attached to a party, (2) the party commits a culpable breach of that duty, and (3) the resulting destruction causes prejudice to the other party. The post above does not mention any direct evidence of prejudice caused by the information destruction, yet the Court—rightfully—still found spoliation. Good.

Why do I say the Court was right in finding spoliation even though one of the elements of spoliation seems missing? Because the requirement that culpably destroyed evidence be shown to have caused prejudice—i.e. to show that what was destroyed was in fact relevant—unfairly shifts the burden to the non-culpable party to prove it was harmed by another's bad act. To address that inequity, "prejudice may be presumed when the spoliating party acted in bad faith or in a grossly negligent manner..." Pension Comm. of the Univ. of Montreal Pension Plan v. Banc of Am. Sec., 2010 WL 184312 (S.D.N.Y. Jan. 15, 2010) (Amended Order).

The Delaware Court of Chancery employed this logic in TR Investors LLC v. Genger, C.A. 3994-VCS in which the defendant, Genger, ~~culpably~~ knowingly, willfully, and in bad faith destroyed evidence then argued he should not be ~~found to have spoliated evidence~~ sanctioned absent proof from plaintiffs that the documents he destroyed were relevant. The Court had this to say about Genger's specious argument:

For a party to intentionally violate an order not to destroy or tamper with information and then to claim that he did little harm because no one can prove how much information he eradicated takes immense chutzpah. For a court to accept such a defense would render the court unable to govern situations like this in the future, as parties would know that they could argue extenuation using the very uncertainty their own misconduct had created.

Judge Bagley should say the same thing to Pulte.

[UPDATE] Using search as a shield?

Christopher Spizzirri — Mon, 21 Feb 2011 12:37:00 -0500

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UPDATE:

Sorry for the quasi-necropost, but I just stumbled upon relevant case law. In reading Cecil Lynn's excellent recent article on Law.com, Drama & Destruction, that provides a great rundown of 2010 case law, I came across this case summary:

In Ross v. Abercrombie & Fitch, defense counsel argued unpersuasively that the defense had no obligation to search for or locate known documents that did not turn up using the parties' agreed-upon search terms. 2010 U.S. Dist. Lexis 47620, at *11-14 (S.D. Ohio May 14, 2010).

I haven't read the case, but this seems to support the proposition that a producing party's obligation to produce relevant materials is not limited by the application of search terms. In other words, search terms are not a shield to producing known, relevant documents. Thank you very much.

ORIGINAL POST (2009-09-18 12:22:33):

This isn't exactly timely, but it's been on my mind for months, and I wanted to share and get your feedback.

I had the pleasure of attending The Sedona Conference® Institute this past March in Philadelphia. During the last day lunch, a particularly interesting conversation started up at my table. I was sitting with people I had never met before and probably wouldn't be able to pick out of a crowd now, but we managed to have a brief and interesting discussion about keyword searching and the obligation to produce. I don't remember how it started, but the terms of the debate were this: Is there an obligation to produce responsive data that was not hit by negotiated keyword terms? That is, you have positive knowledge that responsive documents have been excluded by keyword searching. Are you obligated to produce them?

I thought, and still do, that there is absolutely an obligation to turn the documents over. Keyword searching is a method for finding responsive documents that are mixed in with a morass of non-responsive documents. But, if you have a collected group of documents that are responsive, there's no need to dump them in the unsorted pile in the first place. They should be set aside for production without having to be keyword searched at all.

I casually shared my opinion with the table and saw several nodding heads, but I was surprised to find that two gentlemen did not agreed at all. Their view was that, if the keywords were negotiated, then the results are the results and there's no obligation to turn over anything not hit by them. One gentleman (a litigator, if I recall correctly) flatly said he would not turn over the responsive documents. The other gentleman (a vendor, I think) rather snidely remarked something to the effect that 'You wouldn't tell the other side what to ask during depositions, would you?' I agreed with that but thought it was a specious analogy. Not wanting to ruin a pleasant lunch with a heated debate, I let the discussion go, but it's been eating at me ever since.

Compare the view of these two gentlemen to the view of those of us who use sampling techniques to test the accuracy of keyword searches. When testing for false negatives (exclusion of responsive documents), many people are of the opinion that even one false negative requires that the whole pile of excluded documents be manually reviewed. On the other hand, for the gentlemen at my table, it would make no sense to ever test keyword search results, because they wouldn't produce any false negatives they found. To me, not producing documents you know are responsive just because they weren't hit by negotiated keyword searches is like using keyword searching as a shield. That not only violates the principles of cooperation but amounts to bad faith.

So which is right? Am I being naive and Pollyanna-ish, or do these two guys not get it? Or maybe it's a little of both?

[UPDATE] eDiscovery is Optional in Delaware Court of Chancery

Christopher Spizzirri — Fri, 18 Feb 2011 12:33:07 -0500

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UPDATE:

Apparently I am the only one who seems to be concerned with the Court of Chancery's unqualified allowance for parties to agree to forgo discovery of ESI. Here are the other blog posts I found that have reported on the new guidelines, not a single one raises any concern:

Delaware Court of Chancery Provides Good Advice on Preservation (Losey)

Court of Chancery Issues Guidelines for Preservation of Electronically Stored Information (Brady)

Delaware’s influential Chancery Court issues preservation guidelines likely to have wide impact

Delaware Court of Chancery Issues Guidelines for Preservation of Electronically Stored Information

Delaware Court of Chancery Recently Established Guidelines for Preservation of ESI

ORIGINAL POST:

Last week, the Delaware Court of Chancery—one of the nation's premier business Courts—unexpectedly issued a one and a half page "Guidelines for Preservation of Electronically Stored Information." Surprisingly, the Guidelines seem to allow parties to opt-out of document discovery entirely (see the last item below). In summary, the Guidelines are as follows:

There is a common law duty to preserve potentially relevant electronically stored information (ESI) within a party's possession, custody, or control once litigation is commenced or when litigation is "reasonably anticipated."
Parties must take reasonable steps in good faith to meet their duty to preserve ESI.
Parties and their counsel should confer early in the litigation regarding the preservation of ESI.
Parties and their counsel must develop, oversee, and document a preservation process in collaboration with the appropriate client information technology personnel.
Parties and their counsel should discuss the need to identify how custodians store their information, including document retention policies and procedures as well as the processes used to create, edit, send, receive, store, and destroy information for the custodians.
Counsel should take reasonable steps to verify information they receive about how ESI is created, modified, stored, or destroyed.
The preservation process should include a written litigation hold notice to individual custodians instructing them to take reasonable steps, act in good faith, and with a sense of urgency in preserving potentially relevant information.
Parties and their counsel may face "serious consequences" for failing to take reasonable steps to preserve ESI.
The reasonableness of a party's preservation process is judged on a case-by-case basis.
Counsel for all parties should confer about the scope and timing of discovery of ESI and may agree to limit or forgo the discovery of ESI.

I am very interested to hear comments on this development.

[UPDATE] Self-Collection Prohibited in Delaware

Christopher Spizzirri — Tue, 07 Dec 2010 13:18:51 -0500

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UPDATE:

A colleague recently spoke to Vice Chancellor Laster about this opinion, and the Vice Chancellor reportedly said, "No self-collection in my Court." I'm not sure that statement addresses my distinction between collection and review, but it does reinforce the Vice Chancellor's opposition to unsupervised custodian document collection.

Also, below is the presentation I made for use in briefing this case for the Herrmann Technology Inn of Court:

ORIGINAL POST:

Recently, Vice Chancellor Laster gave some of us a jolt with a bench ruling on a discovery dispute in Roffe v. Eagle Rock Energy GP, et al., C.A. No. 5258-VCL (Del. Ch. Apr. 8, 2010). The ruling addresses the issue of client self-collection and a lawyer's oversight duties.

The Association of Corporate Counsel's (AAC) website carried a summary of the ruling authored by Morgan Lewis & Bockius LLP that stated:

Vice Chancellor Laster ruled from the bench that confirmatory discovery—like formal discovery—requires the defendant’s attorney to be physically present during the collection of electronically stored information from his/her client; self collection by the client is not permitted.

Well-known eDiscovery expert, Kevin Brady of Connolly Bove in Delaware, explained that the ruling:

[P]ointed out that lawyers have an affirmative duty to be actively engaged in the collection process to the point that a lawyer should meet in person with the client to physically review his or her electronic information repositories wherever they may be located (including, if necessary, personal computers if that is where relevant information is stored).

I think Kevin's summary is much closer to the mark, and I'll explain why in a minute. First, the language causing concern is on lines 12-19 on page 10 of the attached transcript and reads as follows:

[Y]ou do not rely on a defendant to search their own e-mail system... There needs to be a lawyer who goes and makes sure the collection is done properly... we don't rely on people who are defendants to decide what documents are responsive, at least not in this Court.

The AAC article suggests there are two things implicated by this, and other supportive, language in the ruling: (1) client self-collection is not allowed, and (2) an attorney must be present during data collection. I think that interpretation assumes the worst and goes too far.

On the issue of self-collection, when the Court says not to "rely on a defendant to search their own e-mail system" and "we don't rely on people who are defendants to decide what documents are responsive," I believe the Court refers specifically to the practice of a client acting as document reviewer and sole arbiter of responsiveness. That is well understood to be a bad practice, so there is nothing shocking about this pronouncement.

I do not think the Court, in this ruling, has said that client bulk self-collection is impermissible. I see nothing in this ruling that would prohibit a client from gathering a mass of potentially responsive documents, e.g. full email accounts for all custodians, with guidance from counsel and turning them over to counsel for review. Counsel must review all potentially responsive documents and make final responsiveness determinations.

On the issue of requiring counsel's physical presence during collection, I again think the AAC article's interpretation of the Court's ruling goes too far. The AAC article seems to rely on the word "goes" in the Court's statement that "[t]here needs to be a lawyer who goes and makes sure the collection is done properly" for the proposition that counsel must 'go' and be physically present for collection. I think we get the spirit of the Court's statement by removing the 'go' part: "[t]here needs to be a lawyer who... makes sure the collection is done properly." That is well understood to be a best, if not required, practice, so there is nothing shocking about this pronouncement either.

To be fair, there are other references in the ruling to lawyers 'getting on a plane' to get data, but these suggestions seem to be case specific. In this case, Plaintiff was supposed to be conducting confirmatory discovery on three board directors but only collected from two. The third was a Mr. Smith. So the Vice Chancellor suggests that someone get on a plane to go get Mr. Smith's documents ("And you certainly need to put somebody on a plane to go out and see Mr. Smith." page 10, line 20; "So the question for me would be, one, how fast can you do this right? And that means not only the e-mails from Mr. Smith. As I say, somebody should have been on a plane a long time ago to go through his e-mails. And if he chose to use his personal computer, well, that was his bad choice. All right? And if he has it mixed in other stuff that he gets, 150 e-mails a day, or whatever, that was his bad choice. That makes it all the more essential that a lawyer get on a plane, and go and sit down with Mr. Smith, and go through his e-mail and make sure that what is produced is -- what is responsive is appropriately produced." page 12, lines 1-13). This seems to be a specific issue with Mr. Smith in this particular case requiring the physical presence of counsel to ensure collection of, perhaps, an unwilling participant.

I think my reading of this transcript aligns with Kevin Brady's in that lawyers need to be engaged in the discovery process and may need to be physically present during data collection. If, however, my interpretation is wrong and a lawyer is required to be present during collection that may only be conducted by a vendor, the cost of discovery in Delaware may be on the rise.

Morris James LLP is Named a "Go-To Law Firm" for the Nation's Fortune 500 Companies

Morris James Delaware — Tue, 23 Nov 2010 16:19:01 -0500

Recognizing the firm's strength in intellectual property litigation, Corporate Counsel magazine has named Morris James a “Go-To Law Firm for the Top 500 Companies.” Go-To Law Firms are chosen from an American Lawyer Media national survey of general counsel from the top Fortune 500 companies and through research in various key databases. The firm’s recognition will be published in the 8th Annual Edition of In-House Law Departments at the Top 500 Companies.

The Morris James Intellectual Property Litigation Group provides out-of-state firms and their clients help in navigating the Delaware court system. The Group combines its on-the-ground, technical and trial experience to address the complex intellectual property protection issues moving global markets today. They represent clients in complex disputes involving patents, trade secrets, trademarks, copyrights, unfair competition, and antitrust issues and have successfully litigated cases in all areas of technology in the Delaware District Court, the Delaware Court of Chancery and Superior Court, and federal courts throughout the country, including the Court of Appeals for the Federal Circuit.

Four Morris James Attorneys Selected By Their Peers As "Top Lawyers" In Delaware Today Magazine

Morris James Delaware — Thu, 04 Nov 2010 15:44:54 -0500

Morris James is pleased to congratulate the lawyers listed below who were the most recommended by their professional peers, as determined by a Delaware Today survey of Delaware attorneys.

Gretchen S. Knight
Divorce
Family Law

Mary M. Culley
Elder Law

Keith E. Donovan
Personal Injury
(Dover Office)

Jill S. Di Sciullo
Family Law

To view the entire list of "Top Lawyers", please click here.

Morris James LLP Receives "Award of Excellence" From The Marvin S. Gilman Superstars in Business Awards Sponsored by the DSCC

Morris James Delaware — Thu, 04 Nov 2010 15:43:27 -0500

We are very pleased to receive this honor from the Delaware State Chamber of Commerce," said David H. Williams, Managing Partner of Morris James LLP, "Our firm is deeply rooted in Delaware and we are committed to providing our community with top-tier legal services.”

The Marvin S. Gilman Superstars in Business Award, named for one of Delaware’s leading small business entrepreneurs, honors businesses and non-profit corporations for their outstanding achievements and model approaches to business and management. The awards are presented to companies that have been in business for at least three years, are small businesses based on number of employees, and are members of the Delaware State Chamber of Commerce. Awards of Excellence are also granted to deserving companies.

The “Superstars in Business” winners include Laura Novak Photography & Little Nest Portraits (Category of up to 25 employees), SSD Technology Partners (Category of 26 to 64 employees), IG Burton and Company, Inc. (Category of over 65 employees), and Habitat for Humanity of New Castle County (Non-profit organization category).

In addition to Morris James LLP (Category of over 65 employees), the “Award of Excellence” winners include Bramhall & Hitchen, Inc. (Category of up to 25 employees), Gunnip & Company LLP (Category of 26 to 64 employees), and Children & Families First (Non-profit organization category).

Click here to learn more about the awards and the Delaware State Chamber of Commerce.

Naked Search Terms Revisited

Christopher Spizzirri — Thu, 04 Nov 2010 09:51:02 -0500

Chalk this up as a victory for the somewhat maligned use of search terms in eDiscovery. I was clued into this recent article via Lifehacker, discussing the eDiscovery findings of the Lehman collapse. The article, 'Stupid' Lehman E-Mails Didn't Stay 'Just Between Us,' shows how candid people still are in email and how the use of some thoughtful keywords and a little testing can still be very effective as a result:

"Just between us," it may be "stupid" to use certain words in e-mail to "discuss" the "big trouble" you might face if you’re ever investigated for financial wrongdoing or a subsequent cover-up.

Those are some of the terms that examiner Anton R. Valukas searched for in 34 million pages of Lehman Brothers Holdings Inc. e-mails and reports, to find out who knew what about the risks that drove the fourth-largest securities firm into bankruptcy, according to his 2,200-page study on the collapse.

Read the full article.

Best Practices in Managing Discovery: Strategies & Tactics to Control Spending, Reduce Volume and Streamline Processes

Christopher Spizzirri — Wed, 22 Sep 2010 17:35:26 -0500

I am honored to be a co-panelist with Richard Baer of Qwest Communications, in a LexisNexis® webinar tomorrow, Thursday, September 23, from 2-3 pm EST. Rich is Chief Administrative Officer and General Counsel for Qwest, and we will be discussing best practices for managing discovery in-house.

Here is a short summary from the webinar's website:

If your law department is under pressure to control rising costs associated with discovery, you’re not alone. In an average case, discovery expenses now represent 50% of total litigation costs—and in some cases up to 90%.

In this free Webinar, we’ve paired in-house counsel Richard Baer of Qwest Communications and outside counsel Chris Spizzirri of Morris James LLP—two professionals who are expert at minimizing the burden and costs associated with discovery. Register today to discover best practices for:

Creating and implementing policies and procedures to streamline every phase of discovery, from preservation efforts to document production

Utilizing technology to organize and deal with large volumes of data

Assembling and managing response and discovery teams including internal staff, outside counsel, contract attorneys and non-attorneys

And more strategies and tactics

Please Register now and join us for an informative session.

18 Morris James Attorneys Selected by their Peers for Inclusion in The Best Lawyers in America® 2011

Morris James Delaware — Wed, 04 Aug 2010 15:42:23 -0500

18 Morris James attorneys in 13 practice areas were recently selected by their peers for inclusion in The Best Lawyers in America® 2011. New to the list are Mark D. Olson and Bruce W. Tigani from the firm’s Tax, Estates and Business practice. The firm’s Real Estate Practice Group Chair, Richard Beck, has been named in this highly regarded publication since its inception in 1983.

The Best Lawyers in America® 2011 has become universally regarded as the definitive guide to legal excellence. Their rigorous research is based on an exhaustive peer-review survey in which more than 39,000 leading attorneys cast almost 3.1 million votes on the legal abilities of other lawyers in their practice areas. The Morris James attorneys listed in the 2011 edition and the areas of law in which they are recognized include:

COMMERCIAL LITIGATION
• P. Clarkson Collins, Jr. (2005)
• Lewis H. Lazarus (2006)
• Edward M. McNally (2005)
• James W. Semple (2009)

CORPORATE LAW
• P. Clarkson Collins, Jr. (2005)
• Lewis H. Lazarus (2006)
• Edward M. McNally (2005)

ELDER LAW
• Mary M. Culley (2008)

EDUCATION LAW
• David H. Williams (2007)

FAMILY LAW
• Gretchen S. Knight (2007)

INFORMATION TECHNOLOGY LAW
• Richard K. Herrmann (2003)

INSURANCE LAW
• Mary B. Matterer (2009)

LABOR AND EMPLOYMENT LAW
• David H. Williams (2007)

PERSONAL INJURY LITIGATION
• Keith E. Donovan (2009)
• Dennis D. Ferri (2007)
• Richard Galperin (2005)
• Francis J. Jones, Jr. (2008)

REAL ESTATE LAW
• Richard P. Beck (1983)
• John Bloxom IV (2010)

TAX LAW
• Daniel P. McCollom (2007)
• Mark D. Olson (2011) *
• Bruce W. Tigani (2011) *

TECHNOLOGY LAW
• Richard K. Herrmann (2003)

TRUSTS AND ESTATES
• Mary M. Culley (2008)

* Indicates First Year on List

Benchmark Litigation 2011 Names 5 Morris James Partners Among Top "Local Litigation Stars"

Morris James Delaware — Wed, 04 Aug 2010 09:46:11 -0500

Morris James LLP is pleased to announce that five of its partners have been recognized among the top Delaware litigation attorneys in Benchmark Litigation 2011 - The Guide to America's Leading Litigation Firms and Attorneys.

Morris James’ Litigation Stars

Rich Galperin
Clark Collins
Richard Herrmann
Lewis Lazarus
Edward McNally

Benchmark Litigation focuses exclusively on litigation lawyers and firms in the United States. Recommendations are based on extensive face-to-face and telephone interviews with the nation’s leading private practice lawyers and in-house counsel.

In Defense of Genger, Part I

Christopher Spizzirri — Tue, 29 Jun 2010 10:37:53 -0500

I rise now to defend the Court of Chancery's decision in TR Investors LLC v. Genger, C.A. 3994-VCS (December 9, 2009) against the allegations made by Leonard Deutchman, General Counsel at LDiscovery LLC, in a two-part post hosted by Law.com. I promised at the end of April that a defense would be forth coming but wanted to give everyone time to read the two posts to which I respond.

Mr. Deutchman asserts that the Court got the decision wrong because it (1) doesn't understand the technology involved (Part 1) and (2) doesn't understand the law of eDiscovery (Part 2). I have decided to respond in two parts to keep each of my posts digestible.

In Part 1, Mr. Deutchman aims to discredit the Court's technical competence, and his first criticism makes unsupported assertions about the Court's findings.

The court ruled that by wiping the unallocated space of the two drives, the defendant violated the standstill agreement and was thus in contempt of court. To reach its holding, the court had to make factual leaps and draw legal conclusions that are in my view questionable.

The court's first factual leap was that because temporary files could have resided intact in unallocated space, they were, in fact, intact prior to the wiping. More specifically, the longer leap is that because temporary files could have resided intact in unallocated space, temporary files important to plaintiffs were destroyed by the wiping.

In my reading, the Court did not assume or conclude that any particular files resided in unallocated space. Read as a whole, the opinion finds that files existed in unallocated space, some of which may have been relevant, but no one will ever know because Genger destroyed them. The Court fines Genger for willful destruction of data in direct and clear violation of a Court order.

Mr. Deutchman's second criticism was that "that the files [the Court] believed continued to reside in unallocated space if the defendant had not wiped them would have been important to the matter." Here Mr. Deutchman's merely reiterates Genger's "No harm, no foul" defense—or, as Ralph Losey refers to it, the "pig-in-a-poke" defense—to which the Court replied:

For a party to intentionally violate an order not to destroy or tamper with information and then to claim that he did little harm because no one can prove how much information he eradicated takes immense chutzpah. For a court to accept such a defense would render the court unable to govern situations like this in the future, as parties would know that they could argue extenuation using the very uncertainty their own misconduct had created.

Finally, Mr. Deutchman's concludes his first post by suggesting the Court is technically incompetent by claiming the Court thinks of unallocated space as a back up system.

It is important to note that nowhere in typical computer usage or professional information technology practice is the unallocated space on a hard drive regarded as "back up" in the way that the court does here.

No IT professional or typical user would consider unallocated space to be a "backup" space, akin to an external drive or backup tape used to affirmatively back up files, simply because forensic searching could possibly locate therein lost files in their deleted or temporary states.

While the Court of Chancery is likely not full of techno geeks, they seem to more than adequately understand the technology involved. In any case, the Court does not liken unallocated space to a backup system. On this point, the Court said "the information on the unallocated space of the TRI system therefore acted somewhat as a back-stop reservoir of documents that had been deleted from the active files of TRI users," and that the unallocated space was "a data source that would have acted as a back-stop in case relevant evidence had been deleted in the months when the motivation to delete would have been at a zenith." (Emphasis added.) Frankly, Mr. Deutchman's attempt to impugn the Court with this allegation is bizarre considering the plain and clear language quoted above.

I will address Mr. Deutchman's second assault on the Genger decision shortly.

UPDATE: Thanks to LexBlog CEO Kevin O'Keefe for recognizing this as a Best in Law Blogs post, the second time this blog has received that honor.

Chambers USA Names 10 Morris James Partners In Their 2010 Guide to Leading Business Lawyers

Morris James Delaware — Wed, 16 Jun 2010 15:12:29 -0500

Morris James LLP is pleased to announce that ten of its partners have been ranked among the leading Delaware lawyers in the 2010 edition of Chambers USA: America’s Leading Lawyers for Business - an increase of two rankings from last year. In addition, four practice areas including Bankruptcy/Restructuring, Chancery, Intellectual Property and Employment Law were identified among the leading practices in Delaware. The Morris James partners selected for inclusion in the 2010 edition are:

Bankruptcy/Restructuring

Brett Fallon
Carl N. Kunz
Stephen M. Miller

Chancery

Edward M. McNally
Lewis H. Lazarus
P. Clarkson Collins, Jr.

Intellectual Property

Mary M. Matterer
Richard K. Herrmann

Labor and Employment

David H. Williams

Real Estate: Zoning/Land Use

A. Kimberly Hoffman

Chambers & Partners is a highly respected and influential London-based research and publishing company that provides rankings of leading business lawyers and law firms throughout the world. Rankings are based on technical legal ability, professional conduct, client service, commercial astuteness, diligence, commitment, and other qualities most valued by clients.