# Presentation: 317909

## Federal Judicial Center

**Electronic Discovery**
- National Workshop for
- United States Magistrate Judges
- June 12, 2002
- Kenneth J. Withers
- FJC Research Division

## 93% of all information generated in 1999 was in DIGITAL form

- Paper

## 93% of all information generated in 1999 was in DIGITAL form

## Federal Judicial Center

- Social and legal forces driving “digitization”
- Nearly ALL conventional documents and  business activities are now computerized
- Federal government activities must be computerized, per GPEA
- Email traffic has surpassed telephone and postal communication
- Millions of transactions with legal significance are taking place using computer-based communications

## Federal Judicial Center

- 2000 ABA Litigation Section survey
- 40% believed that their clients had significant electronic records collections
- 22% *didn’t know*
- 83% said their clients did *not* have established protocols to answer discovery requests
- 75% said their clients were *not* aware that electronic records were discoverable

## Federal Judicial Center

- Issues we will explore today
- Differences between electronic and conventional discovery
- Management issues for judges
- Current framework under the rules
- Significant case law
- Federal rules activity

## Federal Judicial Center

- What are “electronic documents”?
- Information created, stored, and/or utilized using computer technology
- Business applications, such as word processing and databases
- Internet applications, such as e-mail and web traffic
- Information on peripheral and mobile devices
- Computer-based record storage, such as disks, tapes, and drives

## Federal Judicial Center

- What are “electronic documents”?
- Differences in degree
- Differences in kind
- Differences in costs

## Federal Judicial Center

- What are the differences *in degree* between paper and electronic documents?
- Volume
- Location
- Volatility

## Federal Judicial Center

- Volume
- One printed word-processing document
- How many electronic documents?

## Federal Judicial Center

- Volume
- Hypothetical email system
- 100 employees
- 25 messages/employee/day
- 250 full working days/year
**625,000 messages**
- 12 monthly backups
**7,500,000 total messages**

## Federal Judicial Center

- Location
- Hard drives
- Servers
- Backup media
- Email servers
- Other hard drives and email servers in organization
- Outside recipients (hard drives, servers, backups)
- Laptop computers
- Home computers
- Palm Pilots
- Future: digital phone records, car systems, smart cards, toaster ovens...

## Federal Judicial Center

- Volatility
- Ease of undetectable alteration
- Alteration through routine handling
- Automatic overwriting and recycling
- Mishandling data in the discovery process
- “Unintentional spoliation”
- Gates Rubber v. Bando Chemical Industries, 167 F.R.D. 90 (D. Colo. 1996)

## Federal Judicial Center

- What are the differences *in kind* between paper and electronic documents?
- Metadata/hidden data
- Databases and spreadsheets
- System data
- “Deleted” data
- “Ghost” or residual data

## Federal Judicial Center

- Metadata
- _[Email headers and routing information](slide1.xml)_
- _[Word processing profiles and editing history](slide1.xml)_
- Spreadsheet data sources and formulae
- Database structure and relationships

## Federal Judicial Center

- TO:		Hon. David Levi <david_levi@caed.uscourts.gov>
- FROM:		Ken Withers <kwithers@fjc.gov>
- DATE:		6 Mar 2002
- SUBJECT:	Pike & Fischer/BNA Slides
- Judge Levi:
- I am preparing some slides for you to use at the upcoming Pike &
- Fischer/BNA conference on electronic discovery.  Did you want to include
- any discussion of the Magistrate Judges Survey or other Rules Committee
- activities?
- //////////////////////////////
- Kenneth J. Withers
- Research Associate
- One Columbus Circle NE
- Washington DC 20002-8003
- TEL: 202 502-4065
- FAX: 202 502-4199

## Federal Judicial Center

## Slide 18

## Slide 19

## Slide 20

## Federal Judicial Center

- “Transient compound documents”
- Web-based interface
- Information from various databases and other sources
- Template for presentation on screen
- Record of computer use
- No permanent document (unless screen is printed)
- How would this be treated under Rule 34?

## Federal Judicial Center

- Examples of “transient compound documents”
- Computer-based retail transactions
- Online securities and commodities trading
- “Enterprise solutions”
- Loan officer’s decision in housing discrimination case
- Nuclear technician’s decision in power plant shutdown

## Federal Judicial Center

- System data
- No real counterpart in paper world
- Access to computers (log-in files)
- Access to network resources
- Use of printer, fax, and other peripherals
- Use of email
- Use of World Wide Web

## Federal Judicial Center

- “Deleted” data
- “Delete” does not mean destroy, it means ignore
- “Federal witness protection program for bad documents”
-  Joan Feldman, Computer Forensics, Inc.
- Computer forensics view
- Deleted files
- Residual data (slack space, ghost files, .swp files, etc.)
- Practical view
- Other computers
- Backup media
- Packrat-ism

## Federal Judicial Center

- “Ghost” or residual data
- Computers, like nature, abhor a vacuum
- “Digital packing material” used to fill ends of sectors
- Data left behind from previous files or randomly  taken from other working files
- Data not necessarily “saved”
- Can remain for years
- Can get transferred to other computers

## Federal Judicial Center

- What are the differences *in cost* between paper and electronic documents?
- Natural shift in cost allocation
- Need for experts
- Extraordinary up-front costs (before actual production)
- BUT, the potential for long-term savings

## Federal Judicial Center

- Natural shift in cost allocation
**Typical cost allocation in the “big document case”**
- Respondent’s cost of production (searching, reviewing, making records available) is usually less than
- Requester’s cost of discovery (reviewing, selecting, copying, transport)
**Typical cost allocation in the “big electronic case”**
- Cost of production (searching, reviewing, making records available) is usually greater than
- Cost of discovery (reviewing, selecting, copying, transport)

## Federal Judicial Center

- The need for experts
- System experts who know the system in question
- Electronic discovery experts who can organize vast collections
- Forensic experts to find deleted and residual data
- Trial preparation consultants v. testifying experts
- Partisan experts v. neutral experts
- FRCP 53? FRE 706? “Officer of the Court?”

## Federal Judicial Center

- Costs from recent case law
- Murphy Oil USA v. Fluor Daniel, Inc., 2002 WL 246439 (E.D. La.)
- $6.2 million to restore and print email from 93 backup tapes

## Federal Judicial Center

- Costs from recent case law
- Rowe Entertainment v. The William Morris Agency, 205 F.R.D. 421 (S.D. N.Y., 2002)
- $395,944 to restore 8 selected backup tapes, or $9,750,000 to restore total of 200
- $43,110 - $84,060 for retrieval, plus $247,000 for review of 200,000 email messages
- $395,000 to restore and $120,000 to review 523 backup tapes
- $403,000 to restore 47 backup tapes retrieve email from 126 desktop PCs before attorney review

## Federal Judicial Center

- Costs from recent case law
- In re Bristol Myers Squibb, 205 F.R.D. 437 (D. N.J., 2002)
- $432,219.16 for scanning 3,085,994 pages (14¢/page)
- Virtually no copying costs (cost of burning CDs)
- Virtually no transport costs

## Federal Judicial Center

- Cost savings with electronic documents
- Reduced photocopying costs
- Reduced transportation and storage costs
- Ability to search using computers
- Ability to segregate, identify, index, authenticate
- Integration into electronic case filing and management system
- Paper production may be considered discovery abuse

## Federal Judicial Center

- Survey of magistrate judges (Summer 2000)
- Did you have any cases involving electronic discovery disputes?
- What types of cases?
- What types of disputes?
- Any local rules or standing orders?
- Any cases suitable for “case study?”

## Types of cases in which judges report electronic discovery disputes

**Types of cases in which judges report electronic discovery disputes**

## Types of electronic discovery issues judges experience

**Types of electronic discovery issues judges experience**

## Federal Judicial Center

- Survey of magistrate judges (Summer 2000)
- Results should not be taken as “scientific,” only informative
- Novel data collection technique may have affected results
- Judges can’t report on cases in which there is no dispute that comes before them

## Federal Judicial Center

- Judicial management of electronic discovery: the rules framework
- Scope as a legal concept, Rule 26 (b)(1)
- Scope as a practical or logistical concept, Rule 26 (b)(2) and Rule 26(c)
- Rule 34 definition of “document”

## Federal Judicial Center

- Legal definitions of “scope”
- Party-managed discovery of information relevant to the “claims and defenses of the parties”
- Word processing, email, primary data
- Judicially supervised discovery of information relevant to the “subject matter of the dispute”
- Records keepers, metadata, system data
- Reminder: Rule 26(b)(2)(i), (ii), (iii) “proportionality”considerations govern all discovery

## Federal Judicial Center

- Logistical or practical definitions of “scope,” in ascending order of difficulty
- Active data
- Metadata
- System data
- Backup tapes
- Deleted files
- Legacy data

## Federal Judicial Center

- Approaches to defining “scope”
- Rule-based definitions of scope
- Practice-based definitions of scope
- Case-based definitions of scope early in discovery
- Rule 16(b) pretrial conference
- Rule 26(f) initial disclosure conference

## Federal Judicial Center

- Texas Rules of Civil Procedure 196.4
- Requesting party must specify form
- Responding party must produce data “readily available... in its ordinary course of business”
- Responding party may object
- If further discovery ordered, court must order requesting party to pay expenses for any “extraordinary steps required to retrieve and produce information”

## Federal Judicial Center

- The ABA Civil Discovery Standards
- Duty to preserve documents, including computer data
- No duty to restore data deleted in the regular course of business
- Court should weigh benefits and burdens of proposed discovery
- Requesting party should bear “special expenses”
- Parties should stipulate to authenticity

## Federal Judicial Center

- Eastern District of Arkansas Local Rule 26.1
- Under Rule 26(f), the parties are to meet and confer, and file a report discussing:
- Whether there will be electronic discovery
- Anticipated cost and time
- Format and media
- Data preservation
- Any other anticipated problems

## Federal Judicial Center

- District of Wyoming Local Rule 26.1
- Under Rule 26(f), the parties are to meet and confer regarding:
- Data preservation
- Scope of email discovery
- Inadvertent production of privileged email
- Need and cost of discovery of deleted data
- Need and cost of discovery of backup data

## Federal Judicial Center

- Judicial management of electronic discovery
- Question of management style
- Early intervention under Rule 16 and Rule 26
- Press for expert communication
- Be fully informed about costs and logistics
- Set reasonable deadlines and stick to them
- Be available to settle questions as they arise

- Propulsid Pretrial Order #10
- http:/propulsid.laed.uscourts.gov/orders/order10.pdf

## Federal Judicial Center

- Protecting privacy and privilege
- Strasser v. Yalamanchi, 669 So. 2d 1142 (Fla Ct. App. 1996) (“Strasser I”)
- Northwest Airlines v. Local 2000 Teamsters, 00-CV-8 (D. Minn. 2000)
- Playboy v. Terri Welles, 60 F. Supp. 2d 1050 (S.D. Cal. 1999)
- Rowe Entertainment v. The William Morris Agency, et al., 205 F.R.D. 421 (S.D. N.Y. 2002)

## Federal Judicial Center

- Data preservation and spoliation
- Linnen v. A.H. Robins, 10 Mass. L. Rep. 189 (Mass. Super. Ct. 1999)
- GTFM v. Wal-Mart Stores, 2000 WL 335558 (S.D.N.Y.)
- Danis v. USN Communications, 2000 WL 1694325 (N.D. Ill.)
- Strasser v. Yalamanchi, 783 So.2d 1087 (Fla Ct. App. 2001) (“Strasser II”)

## Federal Judicial Center

- Data retrieval by experts
- Fennell v. First Step Designs, 83 F. 3d 526 (1st Cir. 1996)
- McPeek v. Ashcroft, 202 F.R.D. 31 (D. D.C. 2001)
- Stallings-Daniel v. Northern Trust Company, 2002 WL 385566 (N.D. Ill.)
- Playboy v. Terri Welles, 60 F. Supp. 2d 1050 (S.D. Cal. 1999)
- Rowe Entertainment v. The William Morris Agency, et al., 205 F.R.D. 421 (S.D. N.Y. 2002)

## Federal Judicial Center

- Form of production
- McNally Tunneling v. City of Evanston, 2001 WL 1568879 (N.D. Ill.)
- In re Bristol-Myers Squibb Securities Litigation, 205 F.R.D. 437 (D. N.J., 2002)

## Federal Judicial Center

- Authentication and chain of custody
- Gates Rubber v. Bando Chemical Industries, 167 F.R.D. 90 (D. Colo. 1996)

## Federal Judicial Center

- Costs and cost allocation
- In re Brand Name Prescription Drugs Antitrust Litigation, 1995 WL 360526 (N.D. Ill.)
- In re Air Crash Disaster at Detroit Metropolitan Airport, 130 F.R.D. 634 (E.D. Mich. 1989)
- Rowe Entertainment, Inc., et al. v. The William Morris Agency, et al., 205 F.R.D. 421 (S.D. N.Y. 2002)

## Federal Judicial Center

- Law review articles and commentary
- Richard L. Marcus, *Confronting the Future: Coping with Discovery of Electronic Material*, 64 Law & Contemporary Problems 253 (Spring/Summer 2001, Nos. 2 & 3).
- Martin H. Redish, *Electronic Discovery and the Litigation Matrix*, , 51 Duke L. J. 561 (2001).
- Hon. James M. Rosenbaum, *In Defense of the Delete Key*, 3 Green Bag 2d 393 (2000); *In Defense of the Hard Drive*, 4 Green Bag 2d 169 (2001).
- Hon. Shira A. Scheindlin, *Electronic Discovery in Federal Civil Litigation: Is Rule 34 Up to the Task?,* 41 B.C.L. Rev. (2000).

## Federal Judicial Center

- http://www.kenwithers.com/articles
- Recent articles, seminar presentations, bibliography, case citations
- Caulfield and Svihra, *Requiring the Losing Party to Pay*
- Redgrave and Hiser, *Fishing in the Ocean*
- Debate: *Should the rules be amended?*
- Tom Allman v. New York State Bar Association
- Proposal: *Model State Discovery Rule*

## Federal Judicial Center

- Discovery Subcommittee of the Civil Rules Advisory Committee
- “Mini conferences” in San Francisco and New York
- No formal proposals considered
- Consensus for no immediate action
- Summer 2000 survey of magistrate judges
- Not scientific, but instructive
- More disputes in smaller cases
- 2001/2002 in-depth case studies
- May 2002 preliminary findings
- October 2002 final report

## Federal Judicial Center

- “Mini conferences”
- San Francisco: March 2000
- New York: October 2000
- Invitations extended to:
- Judges
- Plaintiff, defendant, and in-house counsel
- Academics
- Technologists
- No formal proposals considered
- “Information gathering”

## Federal Judicial Center

- “Mini-conferences”: No consensus for immediate action
- December 1, 2000 amendments had just been adopted
- Strong support for position that no changes were needed
- Rules amendment process (3-4 years) could be overtaken by technological advances

## Federal Judicial Center

- Research questions from the Discovery Subcommittee
- What, if any, aspects of electronic media discovery are unique and distinct from conventional discovery?
- If there are distinctions, should these be addressed in the rules of discovery?

## Federal Judicial Center

- Electronic discovery case study research
- Approximately 20 cases selected
- All discovery-related filings being analyzed
- Interviews being conducted with judges, attorneys
- Preliminary report issued in May 2002
- Final report due in October 2002