Let’s start with the punch line: the calendar events were deleted. This, in and of itself, is something from which a party can recover. Unfortunately, the defense thrice acted in a manner that tested the patience of the court and resulted in severe sanctions. We should say that upon the filing of the complaint, the company did issue a litigation hold ordering employees to preserve relevant information. The problem is that the managing directors took it upon themselves to selectively ignore this order.

The first misstep on the defense’s part was that the executives continued their routine and daily practice of deleting calendar entries that have passed, as was company policy at the time. The second infraction was when the defendant repeatedly offered false testimony declaring that the company had no such calendaring system. Finally, one of the defense witnesses continued to ignore the order to stop deleting even as the case was heading to trial.

As one can imagine, U.S. Magistrate John Gorman didn’t look upon this behavior kindly and described the actions of the company’s officers as “misleading and intentional” at best. (*5) The court determined that the destruction of the calendars did prejudice the plaintiff’s case that had been “deprived of a valuable source of potentially-impeaching information.”

While denying a case dispositive sanction, the court concluded that the behavior “cannot be condoned” (*7) and ordered an adverse inference instruction, denied use of any evidence derived from the spoliated calendars, and ordered the defendant to pay double the plaintiff’s attorney’s fees. On the last point, the court reasoned that the doubling was “a rough effort to compensate Plaintiff for the efforts that were made.”

Clearly the executives at FCA LLC were at best not cognizant of the implications of their behavior, and at worst willfully deceiving the court.  As such, it is hard to argue that severe sanctions were not warranted. The results in this case point to the value of investing in building a ‘culture of compliance’ by educating the organization about the importance of a litigation hold and the implications of not complying with its expected behavior.

Further Reading

• Gilliland, Joshua, How to Get A Judge to Say ‘Stern Measures Are Called For,’ Bow Tie Law’s Blog, April 24, 2013.
• Weiner, Richard, Sanctions for No Pre-litigation Hold on Electronic Documents, Akron Legal News, May 17, 2013.
• Case Law Summary: Kirgan v. FCA LLC, Applied Discovery.
• Full opinion of Kirgan v. FCA LLC

Judge Grewal’s opinion is narrowly focused on whether Google has produced versions of a key diagram that illustrates the automated processing system used for targeting the advertisements. Google argued that it was a document that was “continuously updated” (*3) and that they were “altered in the normal course of business” (*3). Therefore, Google’s “routine, good-faith operation of an electronic information system” (*4) entitled them to safe harbor under Rule 37(e).

The court deemed this to not be the case, citing In re Napster, that “a litigant is under a duty to preserve evidence which it knows or reasonably should know is relevant to the action.” (*4) Judge Grewal determined that since the plaintiff had filed the case in 2010 and specifically requested these documents, that Google “had plenty of notice” that the information was relevant. (*4)

The court did conclude that there was nothing to show that Google possessed a “culpable state of mind” and that no punitive sanctions were warranted. However, the court did order that Google should identify any potential custodians that may have previous versions of the document and allow for additional discovery .

The key takeaway from the four-page opinion is that ESI that is potentially responsive to a matter must be preserved, including any iterations of the ESI. In this case, the court deemed it relevant that various versions could inform the case and should therefore have been preserved. Litigants should take this into consideration when assessing their preservation strategies and pay particular attention to any “living documents” such as those retained in retention systems like GoogleDocs and SharePoint, making sure to keep track of them as they are revised once a duty to preserve has attached.

Further Reading:

• Full Opinion of Dunbar v. Google (N.D.Cal., April 2, 2013)

The mini-conference kicked off with a legal hold case law update session.  The session highlighted cases like EEOC v. Honey Baked Ham and Gatto v. United Air Lines, cases that emphasized how preservation and e-discovery area two-way street.  The panel discussed written litigation holds as a per se rule, highlighting Chin v. Port Authority and Gerlich v U. S. DOJ.  Cost shifting was discussed with Boeynnems v. LA Fitness and Pippins v. KPMG, and the panel concluded with scope of preservation illustrated by the recent Dunbar v. Google case.

The second panel focused in on how to better align an organization with its legal responsibilities when it comes to data preservation.  The session “Fostering a Culture of Compliance” explored the importance of employee education and training, corporate policies and retention practices, and approaches to auditing compliance.

From left to right: Robert Owen (Sutherland Asbill), Lynn Dummett (Allianz Global Investors), Adam Cohen (Ernst & Young) and Ken Cappel (Amneal Pharmaceuticals) at PREX NY, April 29, 2013.

The issues presented by emerging data sources became the subject of the third panel “Preserving Wild Data,” with an enlightening discussion of BYOD and COPE, the impact of social media in litigation, the role of third parties in possession of ESI, and preservation challenges of the cloud.

The final session of the afternoon was all about “Defending Preservation,” with panelists sharing their thoughts about preparing for and responding when things go wrong, ways to approach claims of spoliation, and the crucial importance of getting your own house in order with sound policies and preservation practices.

The mini-conference was extremely well received; with attendees coming away with a deepened awareness of preservation challenges, coupled with practical tips and shared best practices for improving legal hold policies and procedures.  All were appreciative of the insights shared by the panelists and conference moderators.

First, a little background: The plaintiff Kenneth Day left IBM to take a senior level engineering position at the defendant, LSI Corporation, with the expectation that he would receive stock options, promotions and bonuses in short order. He accepted the job in May 2008, received the promotion, bonuses and stock options in March 2009, which were revoked in March 2010. Day then claims he was harassed, including racial slurs, and was terminated in October 2010.  The defendant claimed the plaintiff was demoted due to a “reduction in force.”

Despite issuing a litigation hold, preserving and producing countless documents to the plaintiff, the case still pivoted from “discrimination case” to “spoliation case” due to an alleged loss of documents from a key hiring manager who had subsequently left the company and was not included in the original litigation hold, along with other potentially relevant information including internal Instant Messages, HR documentation of the plaintiff’s promotion and stock grant and the “reduction in force” details. (p.7-9) All in all, a relatively small pool of ESI, but the court believed them to be critical.

While numerous factors are mentioned in Judge Jorgensen’s opinion (many dissected in great detail), the failure to preserve the hiring manager’s documentation and the explanation of the defendant’s in-house legal counsel appears to have turned the case. The opinion states, “As legal counsel for LSI, it appears [he] had a culpable mind” and “it appears that [he] at least acted willfully here.” The court found that LSI’s legal counsel should have known of the documentation and then “misstated the facts regarding what kind of directive he gave regarding searches for relevant documentation.” (p.18)

The opinion is impressive in its detail and citation, so you are encouraged to read it for further insights. In summary, the court found key documents were lost that prejudiced the case and delayed justice. Judge Jorgenson leveled heavy sanctions against LSI Corporation for an improper legal hold that resulted in prejudice:

“Because LSI did not take action to ensure that all [hiring manager’s] documentation was retained, any e-mails of [his] that may have corroborated [his] assertion that his actions were separate from [department VP’s] cannot be used to support Day’s claim…. Day is substantially prejudiced on this claim. Failure to grant default would cause Day to suffer substantial prejudice because LSI’s destruction of evidence has “impair[ed Day’s] ability to go to trial” and “threaten[ed] to interfere with the rightful decision of the case.” (citations omitted) An award of partial default judgment on this claim is appropriate.”

In the final analysis, LSI did many things right – at least with regard to its preservation efforts by issuing holds to key custodians and efforts to remediate any loss. Their shortcoming was in either negligently or deliberately failing to save selected key documents. Had it stopped there, perhaps the sanctions may have not been as severe, save for legal counsel misrepresenting its actions. In Day v. LSI, the court unmistakably showed its intolerance for inadequate preservation and attempts to justify those shortcomings that results in substantial prejudice and interferes with an expeditious trial.

Further Reading

• Nardone, Susan L., A Bad “Day” for a Company Whose In-House Attorney Failed to Properly Preserve Relevant Documents, E-Discovery Law Alert, Gibbons P.C., February 28, 2013.
• Case Summary, Day v. LSI Corp., Applied Discovery
• Full opinion: Day v. LSI Corp., No. CIV 11-186-TUC-CKJ, 2012 U.S. Dist. LEXIS 180319 (D. Ariz. Dec. 20, 2012)

The case stemmed from an on-the-job injury for the plaintiff, a baggage handler, who was injured while unloading baggage at JFK Airport in January 2008 and suffered serious injuries resulting in permanent disability. The defendants, as part of their discovery, wanted to look at the plaintiff’s social media to evaluate the impact on his lifestyle. In November 2011, the plaintiff granted signed authorizations to all of his social media and online accounts – all except for Facebook. (*1) The defense was persistent and it was agreed in a pre-trial settlement conference in early December 2011 that the plaintiff would allow access to his account and changed it to shared password of “alliedunited.” (*1)

The defense team accessed the plaintiff’s Facebook account and gathered some information. However, after the plaintiff received a few alerts of unfamiliar computers accessing the account, he deactivated it, claiming that his account had been hacked in the past. The defense had gathered some information, but had not completed its work and went directly to Facebook. The social media giant “instead recommended that the account holder download the entire contents of the account as an alternative method for obtaining the information. (*2)

In early January 2012, plaintiffs counsel agreed to allow access to the account but were subsequently informed on January 20, 2012, that the account had been lost. The plaintiff’s “account could not be reactivated because Facebook had “automatically deleted” the account fourteen days after its deactivation,” (*2) which occurred on December 16, 2011. The defense team claimed some “shenanigans” on the part of the plaintiff, specifically that he took more proactive steps to delete the information than simply being ignorant of the 14-day deletion policy. (*2)

The defense team requested an adverse inference and monetary sanctions. Judge Mannion determined that the threshold for issuing an adverse inference instruction had been met, including the following four factors (*4):

1. The evidence was within the party’s control;
2. There was an actual suppression or withholding of evidence;
3. The evidence was destroyed or withheld was relevant to the claims or defenses; and
4. It was reasonably foreseeable that the evidence would be discoverable.

The court didn’t find malice in the plaintiffs action but granted the adverse inference instruction because the “Defendants are prejudiced because they have lost access to evidence that is potentially relevant to Plaintiff’s damages and credibility. In light of all of the above, a spoliation inference is appropriate.” (*4)

Whether the data was lost by accident or “by accident,” is relevant to the consequences in this case. But the takeaway for attorneys is to understand how social media is handled and how it can be disposed of in order that they can avoid similar outcomes in the future.

Further Reading

• Gallagher, Mary Pat, Deletion of Facebook Page Found to Be Spoliation of Evidence, New Jersey Law Journal, April 1, 2013.
• Case Summary, Gatto v. United Air Lines, Applied Discovery
• Full opinion: Gatto v. United Air Lines, Inc., No.: 10-cv-1090-ES-SCM, 2013 U.S. Dist. LEXIS 41909 (D.N.J. Mar. 25, 2013)

The patent infringement and trademark case of Phillip M. Adams & Assoc. v. Dell Computer Corp. has been an ongoing saga with actions dating back to the 1990s. In recent years the case had been on hiatus, but that ended on March 18, 2013 when the Federal Circuit announced its ruling on four claims that had been challenged from the earlier District Court opinion.

Of particular interest here is that the three-judge panel overturned an adverse inference sanction for spoliation that the District Court had imposed on ASUSTeK Computer Corp. (ASUS), a co-defendant in the case who had brought the appeal. Does this set a precedent  that signals a shift in the threshold for issuing an adverse inference?

The Back Story

This is a long, complex and messy case with many fact-specific issues, so the focus here will be on the spoliation sanction. It all began with a small innovation that detected and resolved defects in floppy drive controllers that could cause data errors in the most ubiquitous data storage technology of that era. It was discovered that computer manufacturers were selling defective products and a class action suit was filed. The first target was Toshiba which ultimately settled for $2.1 billion in 1999.

With the threat of a flood of class actions, computer manufacturers needed the plaintiff’s technology. ASUS developed software to detect and correct the defects in response to the Toshiba class action. Unfortunately, the plaintiff claimed this was in violation of a patent held by the plaintiff and inventor Phillip Adams who filed suit in May 2005 alleging infringement.

When asked to produce key documents, ASUS’s response was meager. While producing a copy of the software program, it failed to deliver the source code which was considered critical to determining if ASUS copied Adams’ work or not. ASUS claimed the source code was lost due to “information management practices.”

Conflicting Opinions

The pre-trial first opinion (Adams v. Dell, 621 F.Supp.2d 1173, 1194 (D.Utah Mar 30 2009)) by U.S. Magistrate Judge David Nuffer determined that there was no determination of bad faith but that “ASUS’ lack of a retention policy and irresponsible data retention practices are responsible for the loss of significant data”(*15). He reserved any determination of sanctions on additional evidence to determine prejudice. In a July 10, 2009 opinion, the magistrate found no evidence of willful spoliation and “[i]n fact, the evidence… shows just the opposite.” Absent of bad faith, the order for sanctions was denied.

Subsequently, the district judge in (Phillip M. Adams & Assocs. V. Sony Elecs. Inc., No. 05-64, D. Utah Sept 26, 2011) reversed the magistrate’s opinion and “ordered an adverse inference sanction against ASUS for spoliation of evidence.” (p.6) The sanction was an adverse inference as it was deemed “an adequate penalty under the circumstances.” (p.6)

Appeals Court Overrides the Override

In the appeal, the Federal Circuit weighed in on ASUS’s assertion that the district court erred in imposing the adverse inference sanction on grounds of “abuse of discretion.” Following the July 2009 ruling, the plaintiff objected to the order which denied a sanction.

According the FRCP, the only rationale for reconsidering a magistrate’s pretrial order is if it was “clearly erroneous or contrary to law.” Despite this, the district court found no clear error in Magistrate Judge Nuffer’s ruling but still “determining a sanction was warranted and imposed a broad adverse inference sanction against ASUS.”

In footnote 7, the Appeals Court notes that the “district court’s decision could be interpreted as making an independent finding of bad faith,” in which it cites the September 2010 district court as ruling that “ASUS failed to preserve certain evidence with ‘pinpoint accuracy.’ If this was the case, the district court abused its discretion by failing to properly defer to the magistrate’s actual findings.”

The Federal Circuit reversed the ruling. It deemed the district court’s ruling to be in error because in that Circuit an adverse inference sanction “must be predicated on the bad faith of the party destroying the records.” (p.9 citing Aramburu v. Boeing) By reversing the adverse inference sanction, the panel would “consider whether there is adequate evidence to support the jury verdicts against ASUS absent such adverse inferences.” (p.9)

The Ruling’s Impact on Preservation

It may be too early to tell, but on first blush the decision is not likely to have an overarching impact. In the end, the standards for preservation remain the same: bad faith is a prerequisite for adverse inference sanctions. (As shown in the Spoliation Sanctions by Circuit chart) That is what the magistrate judge correctly ruled in his July 2009 opinion.

The crux of the Federal Circuit’s ruling pertains to the reasoning that the district court chose to overrule the magistrate’s opinion and give an adverse inference sanction. The court agreed there was not bad faith and the district court made an independent finding and therefore “committed legal error” (p.9), and a “district court by definition abuses its discretion when it makes an error of law.” (p.9)

In the end, the opinion focuses less on “what,” “when” and “how” spoliation occurred, but how the courts handled it. The Federal Circuit’s ruling offers little assistance in clarifying issues around timing of trigger events nor bright lines on preservation and legal holds. Organizations still need to have sound preservation practices in place otherwise based on the current legal standards they could find themselves in sanctionable territory.

Further Reading:

• Full opinion: Phillip M. Adams & Assoc. v. Dell Computer Corp. (Fed. Cir. Mar 18, 2013)
• Pre-trial opinion: Adams v. Dell, 621 F.Supp.2d 1173, 1194 (D. Utah Mar 30, 2009)
• InfoLawGroup LLP, The Other Shoe in Adams v. Dell Drops Gently, August 4, 2010. (Recap of July 2010 opinion by magistrate judge that ruled no sanctions are warranted.)
• Barkett, John M., Footnote 18, p.12, Zubulake Revisited: Pension Committee and the Duty to Preserve, Shook, Hardy & Bacon L.L.P., 2010. (Case brief on March 30, 2009 pre-trial opinion.)

EEOC v. JP Morgan Chase Bank

In the first case E.E.O.C. v. JP Morgan Chase Bank N.A., No. 2:09-cv-00864 (S.D. Ohio Feb. 28, 2013), U.S. District Judge Gregory L. Frost handed down an opinion in an alleged discrimination by employees at the bank. The action was filed by the EEOC on behalf of female employees that were not given the opportunity to work with the most lucrative clients at the mortgage consulting group. Porter Wright’s Employer Law Alert brought the opinion to our attention.

When the bank was investigated, the Commission staff requested records showing the qualifications of the employees so that it would be possible to assess the alleged discrimination. As the case evolved, the bank was asked to produce data covering a three-year period. During the time when the scope of production was being debated, 10 months of data was destroyed per routine document deletion policies. Despite the fact that a formal document request had not been made before the data was deleted, it was established that a number notices sent about the anticipated action constituted a clear “trigger event” and commenced the obligation to preserve – including suspending automatic culling of data.

As Judge Frost made clear in the opinion, “Defendant’s failure to establish a litigation hold is inexcusable. The multiple notices that should have triggered a hold and Defendant’s dubious failure if not outright refusal to recognize or accept the scope of this litigation and that the relevant data reaches beyond the statutory period present exceptional circumstances that remove the conduct here from the protections provided by Rule 37(e).” (p.13)

The court based its sanctions because the failure to preserve inhibited “the integrity of the judicial process in order to retain confidence that the process works to uncover the truth.” The opinion goes into great detail on the legal foundation for sanctions and their severity based on standards set forth in the Sixth Circuit, including a three-part test for control, culpability and relevance. (p.17)

While denying the Defendant’s request for summary judgment, the court ordered a permissive adverse inference instruction to the jury as the “most reasonable and pragmatic course.” (p.17)

EEOC v. Ventura Corp.

Turning to the second opinion of Equal Employment Opportunity Commission v. Ventura Corp., Civ. No. 11-1700 (PG), 2013 U.S. Dist. LEXIS 19662 (D.P.R. Feb. 12, 2013) that was issued only two weeks prior. The Commission was investigating a Title VII complaint on behalf of male employees who claimed they were not offered managerial positions at the company.

Despite numerous warnings by the EEOC to preserve information relevant to the case, key evidence was lost including resumes from job applicants and critical emails among managers. The Commission sought sanctions for destruction of relevant records that hindered the ability to prosecute the claim. Ventura explained that the resumes were shredded at a warehouse and emails and other files fell victim to a company-wide “software migration.”

The Court was not able to determine bad faith on the part of the Defendant, but it found that sanctions were indeed warranted under First Circuit precedent that bad faith was not necessary and noted that sanctions can be imposed “if such evidence is mishandled through carelessness.” Key documents were spoliated by Ventura once a duty to preserve had attached following a “trigger event” – and the Court noted that it was likely prejudicial since the complainant had a copy of a similar email. The sanction consisted of exclusion of testimony showing hiring practices and an adverse jury instruction suggesting that the jury can infer that the lost emails were damaging to the defense’s case.

Corroborating Evidence – Four Conclusions from the EEOC Cases

Is it possible to connect these two cases even though it was happenstance that the opinions were issued only two weeks apart? While not directly related, the similarities are many, as follows:

1. Sanctions Despite Absence of Bad Faith – Neither sanction was the result of bad faith spoliation, rather the defendants lost key information due inadequate preservation processes and, perhaps, a lack of careful oversight by the responsible attorneys .
2. Pay Attention When the Other Party (especially the EEOC) Reminds of Obligation to Preserve – The EEOC was clear in its intentions in both complaints and notified both defendants about what was coming and what needed to be preserved, yet neither company adequately heeded the warnings.
3. Failure to Suspend Routine Destruction of Records – Interestingly (and perhaps coincidentally) both matters involved the parties losing evidence because they didn’t keep it from being destroyed.
4. Failure to Act in a Timely Manner to the Trigger – Particularly in the JP Morgan Chase Bank case, the legal team’s haggling over what to produce caused them to lose the plot entirely. The trigger to preserve had passed and they didn’t put controls in place to ensure that key data was not destroyed through a routine data management process.

Two cases don’t make a trend, but the similarities are eerie. The defendants clearly did not take the cases as seriously as they should, possibly due to them underestimating the implications of an EEOC complaint or the lack of training of Human Resources staff and the attorneys handling these employment matters. Whatever the reason, the sanctions serve as a cautionary tale for other organizations to step up their efforts to improve records management efforts and to better train and instill a “culture of compliance” among staff and attorneys overseeing employment matters.

Further Reading

• Koesel, Margaret M. and Tracey L. Turnbull, Caution: Recent Case Highlights Importance of Broad, Early Preservation Efforts, Employer Law Alert, Porter Wright LLP, March 6, 2013
• Full opinion in E.E.O.C. v. JP Morgan Chase Bank N.A., No. 2:09-cv-00864, S.D. Ohio, February 28, 2013
• Applied Discovery Online Law Library, Equal Employment Opportunity Commission v. Ventura Corp., Civ. No. 11-1700 (PG), 2013 U.S. Dist. LEXIS 19662 (D.P.R. Feb. 12, 2013).

According the opinion, when the case was initiated in December 2010 the plaintiffs “served a ‘litigation hold letter’ on the defendants, directing them to preserve several categories of documents, including text messages.” As the case progressed, no text messages were produced in discovery requests and then it was revealed the defendant had lost his iPhone along with any texts saved on it.

While admitting the loss of the phone, the defense took the position that the texts were “irrelevant.” In addition, they contended that they had “responded fully” to a discovery request in May 2011, prior to the loss of the phone the following August.

The court didn’t buy what they were selling. Judge Jackson put no weight behind the defendants’ claims, citing the fact that the defense counsel made no indication that the texts were reviewed as part of the production request. The fact was that “neither the plaintiffs nor the Court will ever know” if the texts were relevant.

In looking at sanctions, the Court noted that they are warranted when the litigant “knew, or should have known, that litigation was imminent” and that the “adverse party was prejudiced,” citing Turner v. Public Serv. Co. of Colorado. The duty to preserve had attached, and the defendants “did not do it.” In concluding that the loss was now willful (merely negligent), the Court found an outright adverse inference instruction to be “too harsh and is unwarranted as a sanction for the negligent ‘spoliation’ of evidence.”

The middle ground that Judge Jackson fashioned permitted the plaintiffs “to introduce evidence at trial, if they wish, of the litigation hold letter and defendants’ failure to preserve… text messages. Plaintiffs may argue whatever inference they hope the jury will draw. Defendants may present evidence in explanation, assuming of course that the evidence is otherwise admissible, and argue that no adverse inference should be drawn.”

The implication of this sanction is relatively benign, but given the contentiousness outlined in the full opinion, it’s entirely possible that such an argument could tip the scale toward the plaintiffs if a number of other factors remained equal as presented to the jury.

Further Reading:

• Applied Discovery Online Law Library, Christou v. Beatport, LLC, Civil Action No. 10-cv-02912-RBJ-KMT, 2013 U.S. Dist. LEXIS 9034 (D. Colo. Jan. 23, 2013).
• Full Opinion of Christou v. Beatport

]]> http://blog.legalholdpro.com/2013/03/19/colorado-court-finds-negligence-in-the-case-of-the-missing-text-messages/feed/ 0 chris http://blog.legalholdpro.com/2013/02/18/corporate-counsel-agenda-survey-shows-creating-culture-of-compliance-is-among-top-concerns/ http://blog.legalholdpro.com/2013/02/18/corporate-counsel-agenda-survey-shows-creating-culture-of-compliance-is-among-top-concerns/#comments Mon, 18 Feb 2013 20:00:18 +0000 Chris Bright http://blog.legalholdpro.com/?p=969 ]]> A new national survey of corporate counsel released February 15 revealed that creating a culture of compliance is a top priority in 2013. The “Corporate Counsel Agenda 2013” survey published by ALM Legal Intelligence queried 126 GCs, Chief Legal Officers and deputy general counsels at companies with revenue ranging from more than $1 billion (43%), $500 million to $1 billion (9%), to smaller enterprises with less than $500 million (48%).

Several responses indicated an opportunity for in-house legal teams to solve concerns by automating litigation hold and data preservation processes:

• 39% – Need to do more with fewer resources
• 37% – Need to keep business leaders with legal department performance
• 34% – Need to create a culture of compliance
• 20% – Need to do a better job on risk management

As Corporate Counsel reported, “Still dealing with pressures to do more with less, in-house counsel are also examining workflow in their departments.” If one were to draw a Venn diagram, one solution that would address all of those concerns would be taking control of the preservation process. This survey makes a strong case for upgrading existing processes.

One area where corporate counsel indicated a big step forward is that business leaders’ impression of in-house legal departments is on the rise. “The good news in the survey’s results is that more business leaders appear to be putting the general counsel on speed dial. ‘Only 29 percent of respondents felt they were brought in too late to deal with matters effectively, which is down considerably compared to the 54 percent who responded in 2011,’ the survey finds,” according to Corporate Counsel.

The full survey results of Corporate Counsel Agenda 2013 are available for $499 at the ALM Legal Intelligence site.

The Delaware Court of Chancery adopted on January 1 a set of rule amendments designed to address how litigants must handle ESI with an eye toward giving guidance to the Bar and to develop “reliable and transparent procedures for electronic discovery.” Specific to managing data preservation, following are two excerpts from Delaware’s rules updates:

• Experienced outside counsel, rather than the interested parties, should be actively involved in establishing and monitoring the procedures used to preserve, collect and review documents to determine that reasonable, good faith efforts are undertaken to ensure that responsive, non-privileged documents are timely produced.
• With respect to electronic discovery, the guidelines recommend that Delaware counsel and co-counsel collectively maintain a written description of the discovery process, including detailed information regarding efforts to preserve documents, custodians identified, search terms used, and what files were searched.

The New York State Courts’ efforts are still in a formative stage when compared to Delaware. The E-Discovery Working Group on January 7 published proposed amendments regarding electronic discovery that would amend Section 202.12(c)(3) of the Uniform Rules of Trial Courts and Section 202.70(g)(Rule 8) of the Rules of the Commercial Division.

The rules amendments would generally normalize New York State Courts to standards established at the Federal Court level and puts a strong emphasis on preservation. For example, Section 202.70(g)(Rule 8) would have the parties report on “implementation of a preservation plan for potentially relevant electronically stored information” and “identification of the individual(s) responsible for preservation.” It is important that these steps would now become codified as part of the courts’ procedures. The Rule 8 amendment would require parties to address these issues in a preliminary conference. The proposed amendments are posted and public comments are due by March 8, 2013.

The precedents being set in Delaware and New York will likely lead to similar amendments nationwide over the coming years in order to aid the courts in avoiding the pitfalls of preservation and ESI that can inhibit the courts from addressing the critical issues at hand.

Further Reading:

• McConnell, John, Memorandum on Proposed Amendments by E-Discovery Working Group, Statue of New York Unified Court System, January 7, 2013.
• Saso, Paul, New York State Courts Look to Adopt Rules Requiring Parties to Discuss E-Discovery at the Outset of Litigation, E-Discovery Law Alert, Gibbons P.C., January 31, 2013.
• Viceconte, Christopher, Delaware Court of Chancery Announces Rule Amendments and New “Must Read” E-Discovery Guidelines, E-Discovery Law Alert, Gibbons P.C., February 4, 2013.