file:///C|/FEB/0211rule.txt

 1 

 COMMITTEE ON RULES OF PRACTICE AND PROCEDURE 

 OF THE JUDICIAL CONFERENCE OF THE UNITED STATES

 PUBLIC HEARING ON PROPOSED AMENDMENTS TO THE 

 FEDERAL RULES OF CIVIL PROCEDURE

 Friday, February 11, 2005 

 8:30 a.m.

 Judicial Conference Center 

 One Columbus Circle, N.E. 

 Washington, D.C. 20544 

file:///C|/FEB/0211rule.txt (1 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 2 

 COMMITTEE MEMBERS: 

 THE HONORABLE LEE H. ROSENTHAL, CHAIR 

 DAVID M. BERNICK, ESQ. 

 FRANK CICERO, JR., ESQ. 

 PROFESSOR EDWARD H. COOPER 

 DANIEL C. GIRARD, ESQ. 

 THE HONORABLE C. CHRISTOPHER HAGY 

 THE HONORABLE NATHAN L. HECHT 

 TED HIRT, ESQ. 

 JAMES N. ISHIDA 

 THE HONORABLE PETER D. KEISLER 

 JOHN G. KESTER 

 THE HONORABLE MARK R. KRAVITZ 

 THE HONORABLE DAVID F. LEVI 

 PROFESSOR RICHARD L. MARCUS 

 PETER G. McCABE, SECRETARY, COMMITTEE ON RULES 

 OF PRACTICE AND PROCEDURE 

 JOHN K. RABIEJ, CHIEF, RULES COMMITTEE 

 SUPPORT OFFICE 

 THE HONORABLE SHIRA ANN SCHEINDLIN 

 THE HONORABLE JERRY E. SMITH 

 CHILTON DAVIS VARNER, ESQ. 

 THE HONORABLE JAMES D. WALKER, JR. 

 THOMAS E. WILLGING 

 KENNETH J. WITHERS, FEDERAL JUDICIAL CENTER 

file:///C|/FEB/0211rule.txt (2 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 3 

 SPEAKERS: 

 TODD SMITH 

 JIM ROOKS 

 KELLY KUCHTA 

 GREG ARENSON 

 ADAM COHEN 

 JOSE LUIS MURILLO 

 SANFORD SVETCOV 

 HENRY ROSEN 

 DARNLEY STEWART 

 JONATHAN REDGRAVE 

 ANTHONY TARRICONE 

 DENNIS KIKER 

 JEFFREY GREENBAUM 

 GEORGE L. PAUL 

 MIKE PROUNIS 

 CATHERINE DeGENOVA-CARTER 

 PAMELA COUKOS 

 MICHAEL NELSON 

 GEORGE J. SOCHA 

 DAMON HACKER 

 DONALD WOCHNA 

 STEPHANIE MIDDLETON 

 BRIAN LEDDIN 

 DAVID McDERMOTT 

 CHERYL PEDERSON 

 DABNEY CARR 

 LAWRENCE LA SALA 

 RON PEPE 

 WILLIAM BUTTERFIELD 

 DAVID ROMINE 

 JAMES DALEY 

 CAROLE LONGENDYKE 

 PAUL LEWIS 

file:///C|/FEB/0211rule.txt (3 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 4 

 P R O C E E D I N G S 

 JUDGE ROSENTHAL: Good morning. My name is Lee 

 Rosenthal. I'm Chair of the committee. And on 

 behalf of the committee, I want to thank all of you

 for coming today and for testifying to assist us in 

 understanding the intricacies and the complexities 

 of electronic discovery. 

 Because there are a large number of you who are 

 scheduled to testify today--we have 15 this morning

 and another 11 this afternoon--it will be necessary 

 to impose time limits. Each of you will be given 

 15 minutes, and that will have to include 

 questions. 

 So I would urge you not to repeat your written

 statements--if you have filed them, we have read 

 them--and to please be as specific as possible in 

 focusing your criticisms, concerns, or points on 

 the proposed rules. That would be the most helpful 

 to us.

 And with that, I think we are scheduled to 

 begin with Mr. Smith. And if you could all, 

 please, as well speak into the microphones. If you 

file:///C|/FEB/0211rule.txt (4 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 5 

 don't, the people who are behind you will not be 

 able to hear you. 

 Good morning. 

 MR. SMITH: Good morning. My name is Todd

 Smith. I practice in Chicago. I'm the president 

 of the Association of Trial Lawyers of America this 

 year. ATLA is a 60,000-member association. And by 

 the way, I brought my attorney with me, Jim Rooks. 

 Jim is the senior policy research counsel for ATLA.

 ATLA represents personal injury plaintiffs, 

 civil rights plaintiffs, employment and 

 environmental litigation plaintiffs, defendants in 

 criminal cases, and either side of commercial and 

 family litigation. We have filed a written

 statement with the committee, and I don't propose 

 to read that to you. Instead, I want to speak this 

 morning directly to just three matters that we 

 mention in the written statement. 

 First of all, ATLA made an effort, a strong

 effort, over the last eight months to reach out to 

 our membership to try and learn as much as we could 

 from their own experiences with electronic 

file:///C|/FEB/0211rule.txt (5 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 6 

 discovery. I described that effort in my written 

 statement to you. 

 Most of the writing that has been done on this 

 subject appears to have focused on major complex

 litigation, much of it businesses suing businesses. 

 Our members tend to be involved in what I would 

 call a smaller scale litigation, and we wanted to 

 know the extent to which our membership found 

 themselves involved in these issues, electronic

 discovery, in their practices. 

 I was a bit surprised, and I think Jim Rooks 

 and ATLA was a bit surprised, at the context our 

 members have had, the extent of that in their areas 

 of practice. We urged them to provide comments to

 the committee with real-life examples, their 

 experiences with e-discovery, to broaden the base 

 of information available to this committee. Based 

 on what we've seen on the judicial conference Web 

 site, it appears that there have been a number

 of--more than just a few who have done just that at 

 our request. 

 Members told us, and they appear to be telling 

file:///C|/FEB/0211rule.txt (6 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 7 

 the committee as well, that they believe the 

 present federal rules generally work quite well for 

 all kinds of discovery, even in complex cases, and 

 need little, if any, change. They don't believe

 that the proposed amendments would improve federal 

 practice. They believe that, if adopted, these 

 proposals would invite additional discovery abuse, 

 give corporate litigants procedural and substantive 

 advantages beyond those they already enjoy, and

 continue what we feel is a steady erosion of the 

 right to discovery. 

 Secondly, I offer a hypothetical case in the 

 written report to show what we think this proposed 

 rules changes on how it could have a negative

 impact on litigation. The case is in the materials 

 as family of Patient A v. Company X. It's a 

 hypothetical, but the danger posed by any rule that 

 would give cover to litigants who want to "claw 

 back" discovered evidence that will actually prove

 negligence or other wrongdoing is anything but 

 hypothetical. 

 And talking about cases that don't really exist 

file:///C|/FEB/0211rule.txt (7 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 8 

 can trivialize the issue. So let me give an 

 example of real life. It doesn't exactly involve 

 electronic discovery, but the proposed rule of 

 26(b)(5)(B) on recovery of documents under a claim

 of privilege, if we can address that, is not 

 limited to electronic evidence. It would apply to 

 paper documents as well. 

 Not so long ago, I represented a medical 

 malpractice victim. We were well into the case,

 and we were at a stage where the main question was 

 whether the health care provider would be settling 

 the case or whether we would be going to trial, and 

 we were going through expert discovery. 

 One day, I received an item from defense

 counsel's office, which my assistant took to be a 

 letter to me. It was, as a result, opened, placed 

 in my stack of mail for me to read. It was a 

 two-page letter, and part way through the second 

 page, and I realized that the letter was not really

 intended for me at all. It was a letter from 

 defense counsel to a representative of the 

 malpractice insurer who insured one of the 

file:///C|/FEB/0211rule.txt (8 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 9 

 defendants in the case. 

 I was amazed at what I saw. It wasn't about 

 some facts that we hadn't learned or that we hadn't 

 discovered. It was worse than that. The lawyer

 was telling the insurer that he had consulted with 

 an expert witness whom he had used a number of 

 times before, and he wrote that the doctor-expert 

 had told him that the provider of care clearly had 

 not satisfied the standard of care for the medical

 specialty involved and that there was considerable 

 exposure in this case. 

 The lawyer in the letter went on to say that 

 the doctor told him, however, if the case went to 

 trial, he would still be willing to take the stand

 and testify that the standard of care had been met. 

 In short, I was looking at a letter that said, 

 "Don't worry. Our expert will lie for us." 

 Now I won't ask you what I should have done 

 with that letter. I don't want to really deal with

 that issue directly. We can, if you like, but--and 

 I won't ask you to put yourself in my shoes, or the 

 defense lawyer's shoes, or the judge's shoes, or 

file:///C|/FEB/0211rule.txt (9 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 10 

 even the malpractice victim's shoes. 

 Justice matters in situations like this. And 

 if I get a letter like that, and if the defense 

 lawyer is allowed to retrieve it, and if I can't

 use it to refer to it at trial, is justice really 

 served in a situation like that? 

 JUDGE ROSENTHAL: Mr. Smith? 

 MR. SMITH: Yes? 

 JUDGE ROSENTHAL: Would your concerns about the

 provision be addressed somewhat if it was revised 

 to provide that rather than having the defense 

 lawyer retrieve the letter, the letter could be 

 submitted to the court, for the court then to 

 determine whether it was privileged in the first

 place? And if it was deemed privileged, if that 

 privilege had been forfeited? 

 MR. SMITH: I don't believe that would remedy 

 my complete concerns here. I tend to feel that 

 once information is there and that there should not

 be an ability to retrieve this. And because of the 

 overwhelming liability aspects of this particular 

 example, I'd be very troubled if this were even in 

file:///C|/FEB/0211rule.txt (10 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 11 

 question as to whether this were usable. 

 And I guess what Your Honor is suggesting is 

 that it would go, and a decision would then be made 

 on that point. I feel a rule of this nature that

 compromises this sort of a situation is not 

 advisable. 

 JUDGE HECHT: Mr. Smith-- 

 MR. SMITH: Yes? 

 JUDGE HECHT: --we've heard testimony that it's

 quite common to have--for counsel to have an 

 agreement like this in litigation. Do you know 

 from your membership whether they commonly agree to 

 these sorts of things or not? 

 MR. SMITH: Agree to concerns about waiver?

 JUDGE HECHT: This sort of claw back idea? If 

 it's common to put that in a pretrial order? 

 MR. SMITH: I don't know that--I can say I 

 don't know that from my membership. I can't tell 

 you that my members have indicated that. Maybe Mr.

 Rooks can help me with that? 

 MR. ROOKS: I've seen several references in it 

 to letters that I've gotten courtesy copies of, but 

file:///C|/FEB/0211rule.txt (11 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 12 

 there are only about a half dozen of them. I think 

 the gist of it was that, yes, this is done, if it's 

 done by agreement. It's done by agreement. 

 It's not done because of a rule, and it isn't

 necessary to have a rule to encourage it. It's 

 already out there. The range of situations in 

 which it could happen, obviously, range from the 

 trivial to the extremely serious. 

 JUDGE ROSENTHAL: Mr. Smith, if that kind of

 agreement was in place, would you have resisted, 

 nonetheless, returning the letter because of the 

 agreement? 

 MR. SMITH: Well, I was troubled by this letter 

 a great deal. I suppose I--it's not common to

 receive something like this, but it's not the only 

 experience I've had. 

 I was concerned for my colleague on the other 

 side of the bar for the error that had clearly been 

 made. So I did have concerns there. On the other

 hand, I was deeply concerned about the fact of what 

 I was reading. And my concern, ultimately, is that 

 justice be served. 

file:///C|/FEB/0211rule.txt (12 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 13 

 And if I'm actually seeing in a letter of that 

 nature that they're going forward with someone who 

 is going to present, frankly, a fraud on the court, 

 with having true feelings that say there was a

 violation of the standard of care but willing to 

 testify otherwise, I think, on balance, that should 

 weigh--that should carry the day. And that's what 

 I believe we're ultimately talking about is 

 achieving justice.

 PROFESSOR MARCUS: Mr. Smith? 

 MR. SMITH: Yes? 

 PROFESSOR MARCUS: When you say "carry the 

 day," would that not include the possibility, under 

 what Judge Rosenthal suggested, of a ruling that

 under the crime fraud exception to the privilege, 

 there is no privilege for this document that you 

 have? 

 MR. SMITH: I don't think the crime fraud 

 exception, in and of itself, would cover what I'm

 talking about. My example, perhaps, is as 

 extraordinary as it gets. In other words, I 

 believe this was a suggestion that a fraud, a lie, 

file:///C|/FEB/0211rule.txt (13 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 14 

 would be provided under sworn testimony to the 

 court and jury. 

 But I think--I'm concerned that we provide 

 protection at all for relevant information and

 evidence that should be getting to the finder of 

 facts so they can reach the proper decision based 

 upon what the truth is. That's my concern. 

 PROFESSOR MARCUS: But isn't that what the 

 privilege does when it's properly invoked?

 MR. SMITH: Well, I think to some extent. But 

 once it's waived and it's out there, what do you do 

 to the lawyer on the other side who now has the 

 information and needs to be using that? 

 JUDGE ROSENTHAL: Mr. Smith, we have heard a

 number of people, representing both plaintiffs and 

 defendants, express in different ways that most 

 cases involving electronic information have 

 discovery of that information focused on 

 information that is reasonably accessible. That

 is, in most cases, there is no attempt made and no 

 significant litigation over the information that 

 might be deleted or fragmented or legacy or on 

file:///C|/FEB/0211rule.txt (14 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 15 

 back-up tapes, whatever the case may be. 

 Has that been your experience or the experience 

 of the members who responded to your communication? 

 MR. SMITH: With regard to is it 26(b)(2), not

 reasonably accessible? 

 JUDGE ROSENTHAL: Yes, sir. 

 MR. SMITH: Well, we have concerns about that, 

 and I think the experience has been that the rules 

 currently operate very well there. The information

 is freely exchanged. And I may be missing your 

 question a bit. 

 JUDGE ROSENTHAL: I'm sorry. Perhaps it wasn't 

 clear. My question is whether you received 

 information from your members about the frequency

 with which they go to inaccessible information and 

 spend the time and the money to get the back-up 

 tapes restored or the deleted information restored 

 as opposed to focusing discovery on information 

 that is active data or reasonably accessible?

 MR. SMITH: I believe there is a frequent 

 effort. I can't tell you the nature of that. 

 Again, I'll ask Mr. Rooks to chime in if he can. 

file:///C|/FEB/0211rule.txt (15 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 16 

 But I believe there is frequently, routinely an 

 effort to pursue information that I don't know 

 whether it would be called inaccessible. It just 

 may be more difficult to obtain. So, Jim?

 JUDGE ROSENTHAL: I'm not talking about just 

 putting a request in your initial discovery motion 

 or request for production as a kind of a 

 boilerplate. I'm talking about actually pursuing 

 back-up information, inaccessible information, even

 after you have received the reasonably accessible 

 information. Did you get any sense from your 

 members' communications as to how frequent that is? 

 MR. ROOKS: Again, I've only seen maybe a half 

 dozen letters. I haven't actually gone through the

 log on the Web site to see who's an ATLA member and 

 who isn't. But the overall sense is that whether 

 it's accessible or inaccessible, they don't have 

 all that many fights about it. And because the 

 rules presently, as they presently are, are working

 well enough. But I think there are certainly some 

 examples of cases in which they have pursued it, 

 clearly. 

file:///C|/FEB/0211rule.txt (16 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 17 

 But overall, the picture we get is that this is 

 a problem--in other words, discovery disputes are a 

 problem in a very comparatively small number of 

 cases. So I don't think they fight over accessible

 or inaccessible a lot. 

 JUDGE ROSENTHAL: Thank you. 

 MR. SMITH: We are limited in time, and I 

 wanted to get to something that I thought the 

 committee would find quite interesting in materials

 that we distributed this morning. And I know you 

 haven't really had an opportunity to look at those 

 closely. But we've provided three exhibits with my 

 written statement, and those exhibits were 

 circulated today.

 Just a few days ago, we discovered some 

 fascinating statements on the point regarding 

 routinely--on 26(b)(5)(B) as well as 

 26(b)(2)--pardon me, 37(f) and 26(b)(2). I think 

 they would address both of those. And they came

 from people who ought to know about information 

 technology, 19 senior information technology 

 professionals. They're well-credentialed, vastly 

file:///C|/FEB/0211rule.txt (17 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 18 

 experienced professionals who run their 

 departments. 

 And you'll see that in the materials, it's from 

 their statements that we find some very interesting

 information. It's clear in the statements in those 

 exhibits that they are concerned with running the 

 best information systems they can. 

 It's a group of information technology 

 professionals discussing the retention of e-mail.

 They aren't focused on destroying crucial evidence 

 or dodging discovery requests. These people 

 weren't talking to their companies' management or 

 legal departments or to the news media or the 

 public. They were talking to each other. So you

 can see the communications and how important, well, 

 these rules may be to them. 

 We downloaded the messages they sent amongst 

 themselves and put them in Exhibit A to my written 

 statement. We brought 100 copies of that today.

 Every one of the messages is there in the same 

 order in which they were written. We also 

 downloaded the rules for permissible use of that 

file:///C|/FEB/0211rule.txt (18 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 19 

 e-mail list and put that in Exhibit B, which 

 follows immediately behind Exhibit A. We formatted 

 the messages to make these easier to read, but we 

 changed none of the content.

 We segregated the information that would 

 indicate who the 19 authors are, who they worked 

 for, and who owns the e-mail list. Under the 

 e-mail list rules, that information is not 

 confidential, but we removed it to a separate

 document, Exhibit C. And that's just for this 

 committee, so the identities of these folks are not 

 disclosed beyond the committee here, and that would 

 be the committee's decision. It's not confidential 

 by virtue of the rules, however, on that e-mail

 list. 

 In Exhibit C, we also produced the entire body 

 of original raw traffic on the e-mail list exactly 

 as it was downloaded. We had no interest in 

 publicizing the identities of these folks.

 As we look through Exhibit A, we can see 

 comments that address several issues that had been 

 raised during the deliberations over these rules. 

file:///C|/FEB/0211rule.txt (19 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 20 

 The need for specific e-mail retention policies is 

 discussed here by these IT folks from different 

 companies, the most appropriate length of time for 

 the retention of e-mail messages or the most

 appropriate size of the storage space allotted to 

 users, and whether the push for e-mail limits 

 really comes from technical people or from lawyers. 

 And you'll see that discussed in there. 

 We put the comments that we thought are most

 relevant and informative into bold type for you. 

 We weren't surprised by anything we saw there. 

 With regard to the need for e-mail retention 

 policies, the authors wrote as follows, "Many of us 

 don't have a retention policy." Again, this

 supports the proposition a lack of storage is 

 hardly a priority issue. 

 "I know that the type of organizations that," 

 the person continues, "I've worked at have not 

 wanted to establish any for e-mail due to the 'once

 we lose it, we'll need it' mentality." 

 Another comment--"I really don't understand the 

 perceived need to clean house every X ticks of the 

file:///C|/FEB/0211rule.txt (20 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 21 

 clock." Another comment--"We'd rather our users 

 focus on their work than constantly worrying about 

 their mailbox size." 

 Another comment--"The nonlegal benefits to

 forced e-mail retention basically boil down to 

 speed of the system, available storage space, and 

 number of tapes it takes to back-up the e-mail 

 system. I would say that unless you have a legal 

 requirement to enforce limited retention, you

 probably do yourself more harm than good by trying 

 to implement this." That's in the one area with 

 regard to retention. 

 On the subject of appropriate amounts of 

 storage space or time limits on retention, they

 say, "We are at three months for sent and trash." 

 Another one says, "We have a 365-day retention on 

 e-mail and a 7-day retention on trashed mail." 

 Another says, "We have no limit at all on any 

 folders whatsoever."

 Another says, "I personally have 250,000 stored 

 e-mail messages, and they come in handy more often 

 than you'd think. Storage space is cheap. And 

file:///C|/FEB/0211rule.txt (21 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 22 

 ease of work for IT staff should not get in the way 

 of the organization's mission." 

 Finally, as to the legal, not technological, 

 impetus for retention policies, they wrote, "We are

 taking a serious look at our retention policy for 

 e-mail. We have a whole staff working group 

 looking at this issue, and legal is involved." 

 Next, "Our mailbox policies were initially a 

 suggestion from our legal department. They wanted

 very strict rules on the keeping of e-mail (one 

 suggestion was no more than three weeks of e-mail 

 to be kept). We formed a staff working group and 

 went to upper management with a proposal. We set 

 these limits based on legal reasons, not on

 technical reasons." 

 JUDGE ROSENTHAL: Mr. Smith? Mr. Smith, I 

 think that we'll be able to read this. 

 MR. SMITH: Yes, I-- 

 JUDGE ROSENTHAL: Perhaps you could use your

 time to make the point. 

 MR. SMITH: That's the point. The point simply 

 is there. 

file:///C|/FEB/0211rule.txt (22 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 23 

 JUDGE ROSENTHAL: Excuse me. I think we have a 

 question first. 

 MR. SMITH: Pardon me. Go right ahead. 

 MR. CICERO: One question. I'm Frank Cicero

 from Chicago. 

 MR. SMITH: Yes, Frank. How are you? 

 JUDGE ROSENTHAL: Can you use the mike, Frank? 

 MR. CICERO: Yes, if I can find it. I'd like 

 to go back for just a second to your discussion

 about what's been referred to here as the claw back 

 provision. Because the example you cited, I think, 

 is an unusual one. I've had similar experiences, 

 but I think there's another important consideration 

 that I'd like your observation on. And that is

 that the--I think much of the impetus for voluntary 

 agreements to return documents or provide something 

 for inadvertent disclosure or for a rule like this 

 is to expedite discovery. 

 Plaintiffs--not plaintiffs, parties who want

 discovery regularly want it as quickly as possible. 

 And in order to avoid having thorough reviews made 

 that avoid inadvertent discovery, parties make 

file:///C|/FEB/0211rule.txt (23 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 24 

 agreements that say if, inadvertently, things are 

 produced that are privileged, we'll provide a way 

 to get it back. 

 And I think there's an interplay between

 timeliness or efficiency and expedition and the 

 problem that we're talking about here. Do you have 

 any observations about that as a--providing a need 

 or at least a reason why your organization might 

 think it's a good idea?

 MR. SMITH: I much prefer what you described, 

 Frank. In other words, I would prefer that the 

 parties get together on that kind of issue. And 

 so, a party, you know, at arm's length, they're 

 deciding this amongst themselves. I think that's

 the better approach, myself. 

 I'm not offended by people getting together and 

 making an agreement of that sort. I don't know if 

 that helps you or not, but that's-- 

 MR. CICERO: Well, I think, in part--certainly

 that's one of the options. But I think, in part, 

 one of the motivations behind a rule like this is 

 to help with the expedition of discovery, in case 

file:///C|/FEB/0211rule.txt (24 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 25 

 parties--well, I'll let it end there. 

 MR. SMITH: I guess if parties don't reach an 

 agreement, then the rule would control it under the 

 circumstance of this proposed rule, and I'm not

 comfortable with that. If information has come to 

 light that bears significantly on the truth that's 

 going to be presented in the courtroom, on justice, 

 that's what troubles me. 

 And if there's been a waiver without the kind

 of agreement you're talking about, I'm troubled by 

 that claw back. 

 JUDGE ROSENTHAL: Any other questions for Mr. 

 Smith? 

 MR. SMITH: In conclusion then--well, the last

 element of the material I was just citing briefly, 

 it does comment clearly that they are trying to 

 limit the amount of material that would be 

 available in legal discovery. 

 JUDGE ROSENTHAL: Now this is material, if I

 understand it correctly, that they're talking about 

 that there is no regulatory or statutory 

 requirement to keep and that, according to the 

file:///C|/FEB/0211rule.txt (25 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 26 

 discussion you've characterized, that there is no 

 business need or use to retain. Is that correct? 

 MR. SMITH: Well, I don't know that there would 

 be no business need or use. It sounds to me like

 there's comments there that indicate that once 

 you've lost it, that's when you need it again. So 

 that they find that they do need it, in fact. 

 But it's clear from these comments that the 

 discussion, ultimately, is occurring on retention

 based upon legal discovery. And I think the rule, 

 37(f), that's being proposed does encourage the 

 destruction rather than the retention. And this is 

 a clear indication of just that, that what's going 

 on there is they're discussing this only because of

 legal discovery as opposed to other issues. 

 JUDGE ROSENTHAL: Thank you, Mr. Smith. 

 MR. SMITH: ATLA is glad to be with you. We 

 very much appreciate your efforts. We wish we 

 could support the hard work that's going on on

 these rules, but we felt we should address the 

 problems that we see. But we certainly appreciate 

 everything the committee has done. 

file:///C|/FEB/0211rule.txt (26 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 27 

 Thank you very much. 

 JUDGE ROSENTHAL: We appreciate your comments. 

 Thank you very much. 

 Mr. Pickle? Is Mr. Pickle here?

 [No response.] 

 JUDGE ROSENTHAL: Is Ms. Kuchta? I apologize 

 if I've mispronounced. Mr. Kuchta, I really struck 

 out there. I apologize. 

 MR. KUCHTA: Not a problem. Thank you very

 much for inviting me here, or accepting my request 

 to testify. 

 I'm not going to read the comments that I have. 

 First, I guess I want to start with and preface 

 that I'm not an attorney. I'm representing more

 from a business and technology perspective. In my 

 position, I help parties deal with their electronic 

 discovery issues. I think it gives me some unique 

 insight into the business and technology issues. 

 In my comments, I specifically state this is

 not purely a legal decision or problem. This is 

 actually--there's a three-legged stool, and 

 business and technology are really the other 

file:///C|/FEB/0211rule.txt (27 of 455) [3/2/05 2:36:43 PM]
file:///C|/FEB/0211rule.txt

 28 

 portions of that leg. 

 I wanted to make sure that I expounded upon the 

 issue that I talked or the example I gave you, just 

 to make sure I'm clear. I'm not going to spend

 much time. But in 2003, my staff--and there's a 

 slide in my comment that depicts this. But my 

 staff had looked at things because we saw the 

 correlation between storage space and the cost. 

 And in 1956, IBM came out with their computer.

 If you take $100 in 1956 and spent $100 from 1956 

 through present, today, or through 2003--excuse 

 me--and bought storage space, took that space, 

 printed it to paper--because that's what we all 

 know and can appreciate, piles of paper--laid those

 end to end. In 1956, if you got off the train at 

 Penn Station in New York, you'd get to the ticket 

 counter. 

 In 1980, if you bought the same $100 of storage 

 space, printed it to paper, laid it end to end,

 left the train, you'd get to the post office across 

 the street. In 1990, you'd get to the Hudson River 

 on the East Side. In 2000, you'd get to Detroit. 

file:///C|/FEB/0211rule.txt (28 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 29 

 You could lay that paper end to end to Detroit. 

 And in 2003, you'd get it to New Delhi, India. 

 That is a very big testament here to understand 

 the business and technology issues because, if

 you'll look, everybody talks about Moore's Law of 

 computing. Well, actually, if you look at storage 

 space, in my estimation, technology has outpaced 

 Moore's Law in semiconductors in the ability to 

 save storage space cheaply.

 That is a very big, important point because 

 what it does for businesses is it does not require 

 them to actively manage their data. And since it 

 does not, there is not any financial penalties for 

 them. It's very cheap. They can be very relaxed

 on their business records. 

 I'm not here to say that this is all their 

 problem. But I think that a lot of these issues 

 here lie within the different parties. And I guess 

 this is probably a perfect time to say that we all

 know that electronic discovery is expensive. 

 I could tell you what is going to be coming 

 very soon is almost everybody, all of us consumers, 

file:///C|/FEB/0211rule.txt (29 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 30 

 have computers on our desks. The gentleman spoke 

 from ATLA about big companies. This is not going 

 to be just a big company problem. This is going to 

 be an issue with every one of us that uses

 technology. And we see that in things that happen, 

 in legal events. People are speaking on Internet 

 chat rooms, on instant messaging, through their 

 Palm Pilots. 

 So, please, the main purpose that I would like

 to make a comment on is understand there are some 

 things that needs to be addressed from a legal 

 perspective with legal changes, but let's not 

 overstep the boundaries--because I have some very 

 real concerns.

 And I'm only going to go out to the next three 

 to five years--we don't know what technology is 

 going to be. And there are some specific rules 

 that you discuss about changing, you know, what 

 formats are discoverable. And I have to tell you,

 in three to five years, I can't tell you what's 

 going to be discoverable as far as formats are 

 concerned because of the change of technology. 

file:///C|/FEB/0211rule.txt (30 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 31 

 It's all driven by the consumer. 

 JUDGE HECHT: Mr. Kuchta, let me ask you a 

 question. 

 MR. KUCHTA: You may.

 JUDGE HECHT: Do you foresee the continued use 

 of back-up tapes as disaster recovery? 

 MR. KUCHTA: Specifically, it's been predicted 

 for a very long time that back-up tapes would be 

 the demise and they would be soon discarded. I

 don't know that I can ever predict that they ever 

 will. Judge Scheindlin had made the association 

 between inaccessible and accessible data, the 

 things that are--that was a very well-thought out 

 decision at that particular time.

 In my comments, I specifically stated, though, 

 that has changed. In the 2002-2003 timeframe, I 

 was involved in the Medtronic v. Dr. Michelson 

 matter. And in that, the initial estimate that I 

 was privy to was that the discovery was going to

 cost $300 million by Medtronic to produce their 100 

 terabytes of data and review it. 

 At that particular time, the judge ordered a 

file:///C|/FEB/0211rule.txt (31 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 32 

 reasonable cost of about $4,800 to restore a tape, 

 search it for information. Today, I can tell you 

 that is probably under $1,000. And what was 

 inaccessible yesterday may become accessible today.

 So it's very difficult to put rules like that in, 

 and business and technology changes. So I don't 

 know that tapes will ever go away. 

 PROFESSOR MARCUS: Follow-up question. Then if 

 you were going to have a rule, wouldn't the term

 "reasonably accessible" be a fairly good way of 

 describing what you should be asking under the 

 conditions that prevail? 

 MR. KUCHTA: I think that it is. I think that 

 your rules need to be flexible and need to be open

 for interpretation. Otherwise, you'll find 

 yourself here in two years, three years, something 

 along that nature, and that is the point or one of 

 the points that I wanted to leave with you today. 

 I think that it is.

 JUDGE KEISLER: Excuse me. Do you think that 

 the current formulation proposed rule is not 

 sufficiently flexible? 

file:///C|/FEB/0211rule.txt (32 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 33 

 MR. KUCHTA: No, I think that it is, with maybe 

 some minor tweaking. I think that it is. I 

 think--and that brings up, too, probably the most 

 important point. I think the 9th Circuit tried to

 develop a model. And in my opinion, only my 

 opinion, when I find that we have very 

 scorched-earth litigation over electronic discovery 

 issues or a lot of tension between the parties, 

 it's because there's not been a lot of disclosure.

 Oftentimes, as humans, if we lack information 

 about what is really there, we have to conjecture 

 and draw up some idea of what goes on. And 

 oftentimes, the party that's left with no 

 information or little information is left to draw a

 very negative conclusion when, in fact, it might 

 not be a negative conclusion. Sometimes it is, as 

 the gentleman from ATLA had spoken about. But I 

 think that early and full disclosure is very much 

 the name of the game.

 But what I want to identify, though--and this 

 is coming from a business perspective. I see this 

 each and every day, and for the practicing 

file:///C|/FEB/0211rule.txt (33 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 34 

 attorneys, I know you see that. The general 

 counsel is governed by, obviously, the CFO, CEO, 

 and the paradigm in business, and it's the same 

 thing with data storage, don't spend a dollar today

 that you can spend next month or next year. You 

 defer your expenses. 

 What we see in discovery is that discovery is 

 pushed off until the very end. It is expensive. 

 It's very expensive. And so, the parties have a

 business and a financial interest to try and defer 

 that cost, look for some way out, do some 

 negotiations. Unfortunately, some people don't 

 approach it that way. 

 So what happens is, is you have all this

 massive amount of data that is collected during 

 that period of time. In the Michelson matter, I 

 was brought in 18 months after discovery had 

 happened, and it was at least a year before we had 

 gotten some electronic documents. And over that

 time, there was tens of terabytes of data that were 

 saved, that we're now privy to this. So that is a 

 unique aspect of the justice system and the 

file:///C|/FEB/0211rule.txt (34 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 35 

 process, the way it works. 

 I think the gentleman had asked about, you 

 know, expediting discovery. And I think expediting 

 discovery and disclosure is absolutely the way to

 go. Now let it be said that I'm in favor of 

 document retention policies, and I want to make 

 sure I stress that point. That is a very real 

 decision that a business needs to make, and it is a 

 business decision because in America we are not

 becoming a manufacturing community, but one based 

 on ideas. We need access to the information. 

 And the volume of information that we are now 

 saving is incredible, not from an electronic 

 discovery perspective, but to manage it.

 Corporations have a pretty good feel that the 

 individuals who use their data know what's on their 

 computer. But collectively-- 

 JUDGE SCHEINDLIN: Could I interrupt you for a 

 sec?

 MR. KUCHTA: Yes, you may. 

 JUDGE SCHEINDLIN: Okay. You were talking 

 before about the accessible/inaccessible divide. 

file:///C|/FEB/0211rule.txt (35 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 36 

 MR. KUCHTA: Sure. 

 JUDGE SCHEINDLIN: And I think you said that 

 you supported that. But when I look at your 

 written materials at page 4, you said, "I strongly

 recommend that you reconsider the attempt to 

 distinguish whether data is accessible or 

 inaccessible." 

 So I'm confused between your written comments 

 and your oral comments. Which is it? Do you think

 that we're doing the right thing in having a 

 divide, or do you think we're doing the wrong thing 

 in having that divide? 

 MR. KUCHTA: Very good question. Thanks for 

 asking me to clarify it. I think at the time that

 you had made that ruling, it was a very good 

 decision. I think that looking and now having the 

 hindsight of it being 20/20, that I think that that 

 is going to be something that is going to be 

 difficult to attain and keep.

 JUDGE SCHEINDLIN: So you don't think we should 

 do this two-tier approach, trying to divide between 

 accessible and inaccessible? 

file:///C|/FEB/0211rule.txt (36 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 37 

 MR. KUCHTA: I think it's going to be very, 

 very difficult. And I think it may lend itself to 

 some abuse in what is accessible and what is not 

 accessible.

 So there are two elements in my area. One is 

 that I think that the lines are becoming blurred 

 about what is inaccessible and accessible. And I 

 haven't really applied it to a financial term, that 

 was going to cost or take a great deal of effort to

 recover data. I think that is coming down, the 

 cost and the time necessary. 

 JUDGE SCHEINDLIN: So if there is a 

 distinction, it's about cost. Is that what you're 

 saying?

 MR. KUCHTA: I really think it's about cost. 

 JUDGE SCHEINDLIN: Okay. That's helpful. 

 MR. KUCHTA: I really think it's about cost. 

 JUDGE SCHEINDLIN: Thank you. 

 MR. KUCHTA: You bet. I'll open it for other

 questions because I know that you're very short on 

 time. 

 JUDGE ROSENTHAL: Just one question. In terms 

file:///C|/FEB/0211rule.txt (37 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 38 

 of the potential for abuse that you were talking 

 about, you mentioned a minute ago that you thought 

 that businesses should be encouraged to have 

 document retention and destruction policies that

 would allow them to manage their electronic 

 information. 

 Does that mean that you think that with such 

 policies, businesses will decide what to keep 

 readily available and what to allow to become

 inaccessible based on business needs? Is that the 

 model you're looking for? 

 MR. KUCHTA: Actually, I don't know. I agreed 

 with everything except for the inaccessible portion 

 of that. I think that we're going to have to start

 discarding information that is clearly not required 

 by regulatory or legal requirements and it has no 

 business nature. We need to destroy that. 

 I can't tell you how many times when we have 

 discovery, and we get the dancing baby spam. We

 have a lot of junk that we're saving. 

 JUDGE ROSENTHAL: So you mean really 

 inaccessible. You mean gone? 

file:///C|/FEB/0211rule.txt (38 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 39 

 MR. KUCHTA: Really inaccessible. I mean it's 

 gone. 

 JUDGE ROSENTHAL: Okay. 

 MR. KUCHTA: And I think businesses have that

 right, and individuals should have that right as 

 well. 

 JUDGE SCHEINDLIN: And can I get your views 

 clarified a little bit on the safe harbor? 

 MR. KUCHTA: Sure.

 JUDGE SCHEINDLIN: At the end of your written 

 materials, I think you say you don't think we 

 should do that. I think you were opposed to it. 

 Your "recommendation is that the proposed changes 

 be removed from consideration" is what you wrote.

 MR. KUCHTA: My concern is that, in general, I 

 think I would be in favor of it. But I think that 

 it would be very difficult to define how it could 

 be applied in a manner that could not be open to 

 abuse. And when I'm saying it from that

 perspective-- 

 JUDGE SCHEINDLIN: Abuse by whom? 

 MR. KUCHTA: The individuals that are saving 

file:///C|/FEB/0211rule.txt (39 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 40 

 the data. It's a very subjective decision about 

 what data to save and what data to collect. I see 

 varied parties that get the same type of subpoena 

 from a government or from a legal matter, they take

 different interpretations, and their outcomes are 

 very readily different. 

 The same thing with the safe harbor rule. I 

 think that is going to be open to--the way it's 

 written, open to a lot of subjectivity about what

 can be saved and how--when our duty is really 

 required to do that. 

 I think what I'm proposing, though, is that 

 companies who actively manage their data are not 

 going to have this issue. Their costs for

 electronic discovery are going to go down. It will 

 be very expensive when they make that first leap to 

 doing that, but that is really my comments. 

 And I will answer any other questions and, for 

 the sake of time, give the rest of my parties

 behind me the opportunity. Does anybody have any 

 other questions? 

 MR. GIRARD: I just have one quick one. 

file:///C|/FEB/0211rule.txt (40 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 41 

 JUDGE ROSENTHAL: All right. 

 MR. GIRARD: Do you think if you put multiple 

 data retrieval consultants in a room that they 

 would be able to agree on what constitutes

 inaccessible information as opposed to accessible? 

 MR. KUCHTA: I think that under-- 

 MR. GIRARD: --answer to that question? 

 MR. KUCHTA: The answer is--I think that the 

 answer is yes. I think that it may take a little

 bit and that often in a discovery process, it takes 

 a little bit. But I've been privy to most of the 

 large electronic discovery service providers, and 

 I've worked on many of those, and we can come up 

 with some very reasonable objectives.

 Because, ultimately, at the end of the day, if 

 they're getting paid by businesses, they're being 

 paid to be reasonable. And I think that is very 

 definitely something that can happen. Very rarely 

 do you ever get somebody that is very unreasonable.

 And oftentimes, it's a lack of ignorance or 

 information that they have. 

 JUDGE ROSENTHAL: Thank you very much. 

file:///C|/FEB/0211rule.txt (41 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 42 

 MR. KUCHTA: You're welcome. Do you have a 

 question? 

 JUDGE ROSENTHAL: Mr.-- 

 MR. KUCHTA: Thank you.

 JUDGE ROSENTHAL: I think that's it. Thank 

 you, sir. 

 Mr. Arenson and Mr. Cohen, please? Good 

 morning. 

 MR. ARENSON: Good morning. I'm Greg Arenson

 of Kaplan Fox in New York, and this is Adam Cohen 

 of Weil Gotshal in New York. Adam is also the 

 co-author of the leading treatise in this area, as 

 you probably know. 

 We're both here representing the New York State

 Bar Association Commercial and Federal Litigation 

 Section. We've submitted a report, which I believe 

 you all have. 

 JUDGE ROSENTHAL: We do. 

 MR. ARENSON: We're going to just highlight a

 few areas that, hopefully, will provide some 

 additional insight on the proposed rules, which, in 

 general, we do endorse. 

file:///C|/FEB/0211rule.txt (42 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 43 

 I will discuss one aspect of the proposed safe 

 harbor under Rule 37(f) and also some aspects of 

 the procedure for handling privileged information 

 that is inadvertently disclosed. Adam will discuss

 the notion of reasonable accessibility and also the 

 electronically searchable form under Rule 34(b). 

 Turning first to the Rule 37(f), safe harbor. 

 That, in part, depends on the routine operation of 

 an electronic information system under both of the

 definitions that are being proposed. We think that 

 the advisory committee note to the proposed rule 

 should provide more guidance as to what factors may 

 be considered in determining the routine operation 

 of an electronic information system.

 We suggest that there are really sort of two 

 factors that go into the determination that a court 

 might make. First would be the capabilities of the 

 system, and the second would be the policies that 

 are place regarding the storage on the system. And

 in our report, we break that down under the 

 capabilities sort of to three aspects. 

 The first is the manner in which the electronic 

file:///C|/FEB/0211rule.txt (43 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 44 

 information system, which means both the hardware 

 and the software, and those electronically stored 

 information. The second is any difficulties in 

 modifying that system that might alter or destroy

 electronically stored information. And then 

 whether some portion of the system is designed to 

 destroy litigation-related material. And of 

 course, Evidence Eliminator is one that comes to 

 mind, and that's sort of a negative when you look

 at it. 

 Looking at the other set of factors, under the 

 policies, that's what you would expect is that you 

 would look at the policies regarding preservation, 

 alteration, and destruction of electronically

 stored information that's outside the context of 

 litigation and see what that says if, of course, 

 they have the policies. And then also what the 

 policies are once the potential litigation is known 

 to the company or to the individual, if they've got

 it. 

 Turning then to the Rule 26(b)(5)(B)-- 

 JUDGE SCHEINDLIN: One question. On the 37(f), 

file:///C|/FEB/0211rule.txt (44 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 45 

 do you support the as-drafted version, or do you 

 have views on the footnote version? 

 MR. ARENSON: We have views in the report, and 

 it's definitely the as-drafted version, Judge

 Scheindlin. 

 JUDGE SCHEINDLIN: Why is that? Why do you 

 not-- 

 MR. ARENSON: Really two reasons. One is that 

 we feel that the as-drafted version is a more

 objective rule, not a subjective rule. That if you 

 start looking for recklessness and willfulness, you 

 have to get into the operation of what the person 

 who lost the information or can't produce it did. 

 With just the negligence standard, really, you

 can use a reasonable person, what they should have 

 done. And some of the routine operation 

 description that I've just gone through would bear 

 on that as well. 

 JUDGE ROSENTHAL: Mr. Arenson, some have

 suggested that we should consider in the note, or 

 even perhaps in the rule, adding some language to 

 the effect that the culpability ought to be a 

file:///C|/FEB/0211rule.txt (45 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 46 

 factor in deciding whether the more severe 

 sanctions might be appropriate if the safe harbor 

 didn't apply. Do you have a view on whether such 

 language would be appropriate or useful?

 MR. ARENSON: Well, first of all, as you 

 probably know, Judge Rosenthal, there are a variety 

 of views out there among the courts. And so, 

 essentially, I hate to say it, this way you'd be 

 legislating what the view ought to be. I think

 that in the 4th Circuit, there is sort of you take 

 a look at the culpability, you also take a look at 

 the importance to the litigation of the material 

 that cannot be produced. That, to me, seems to be 

 a more rational standard.

 And you have different standards perhaps in the 

 different circuits and even among the different 

 district courts as they apply it to the facts. So 

 I would not be in favor of this committee taking a 

 position with regard to that. But that's my

 position. I can't say that's necessarily the bar 

 association's position. 

 JUDGE SCHEINDLIN: One more question. I know 

file:///C|/FEB/0211rule.txt (46 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 47 

 you want to move on to other topics. 

 MR. ARENSON: No problem. 

 JUDGE SCHEINDLIN: But on 37(f), this concept 

 of a litigation hold, do you think this is

 something that really can be implemented, can be 

 done right? Have you had experience with it 

 yourself? Are people confused by it? Can they 

 really teach it and do it with their clients? 

 MR. ARENSON: I haven't had sufficient

 experience. Judge Scheindlin, as you know, I tend 

 to be on the plaintiff's side rather than the 

 defendant's side in major cases. And my experience 

 has been that the instructions are generally given 

 out by defense counsel in the cases that I am

 involved in. And the question is always the 

 implementation. 

 That depends on the system. That depends upon 

 their corporate culture sometimes. So it's hard to 

 know. I think it's the right idea. I think it's

 the right approach. But I haven't had any 

 experience where it's really been a problem. 

 JUDGE SCHEINDLIN: Thank you. 

file:///C|/FEB/0211rule.txt (47 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 48 

 JUDGE ROSENTHAL: Thank you. Go ahead, please. 

 MR. ARENSON: Okay. Turning briefly to 

 26(b)(5), we have a suggestion that the obligation 

 of the party that has received the information

 after notice not to use, disclose, or disseminate 

 the information. Pending resolution of the 

 privilege, claim should be in the rule and not in 

 the notes. 

 Currently, you've got that in the notes. We

 think it's really important to have that obligation 

 out there where people can see that that's what 

 they have to do without reading the notes and where 

 it's very clear that that's what the person who 

 receives the inadvertently disclosed information

 has to do. 

 We also support the concept that once the 

 notice has been given, that there is an obligation 

 to return, sequester, or destroy the material. But 

 we do note that maybe it doesn't quite apply to all

 electronically stored information because, as we 

 all know, deletion doesn't destroy the material. 

 And sequestration, when you think about what 

file:///C|/FEB/0211rule.txt (48 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 49 

 might be on a CD, doesn't make sense because it's 

 just one of a whole bunch of documents. And I have 

 had experience where production of information is 

 on CDs, and how I would give back one piece of it

 and get another CD in place of it. I mean, it's a 

 lot of extra work. 

 And so, therefore, the knowledge that you can't 

 use the information, which we're proposing to put 

 back into the rule, seems to us to be the better

 way to go about this in terms of it. And we don't 

 have a good solution as to the language. But the 

 concept is the right one. You just can't use it. 

 With that, unless somebody's got a question on 

 this point--there we go. Professor?

 PROFESSOR MARCUS: Following up on what you 

 just said, do you think it would be wise to 

 consider providing that the party who receives the 

 notice has the option of seeking a ruling from the 

 court on whether the privilege is properly asserted

 with regard to these materials? 

 MR. ARENSON: I think currently couldn't either 

 side really make that motion either way? One to 

file:///C|/FEB/0211rule.txt (49 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 50 

 demand that the material either not be considered 

 privileged or that it be produced if it's sort of 

 in this--it's inadvertently produced. And of 

 course, the party that produced it may want to

 protect the privilege. 

 PROFESSOR MARCUS: So you say that's implicit? 

 MR. ARENSON: I think it's implicit. But you 

 are closer to the draftsperson of this rule, and so 

 you may know that it wasn't meant to be implicit.

 JUDGE SCHEINDLIN: Mr. Arenson, are you 

 comfortable with the reasonable time idea, or do 

 you think there should be a time limit that the 

 producing party has to act by? 

 MR. ARENSON: I'm comfortable with the

 reasonable time because in these things, as usual, 

 it's fact driven. If you say you have to do it 

 within 30 days, well, somebody will do it on the 

 31st day, and that may or may not have been 

 reasonable, given where we are.

 MR. GIRARD: I have a quick question, Greg. 

 MR. ARENSON: Sure, Dan. 

 MR. GIRARD: Have you had the experience where 

file:///C|/FEB/0211rule.txt (50 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 51 

 once the implications of a document become clear in 

 the litigation that the privilege claim is 

 asserted? 

 MR. ARENSON: Well, I can't say I personally

 have had that experience, but certainly I'm aware 

 that that sort of thing does go on. But that still 

 doesn't mean that whatever the privilege is that is 

 applicable, if it was applicable, shouldn't be 

 litigated and decided by a court. You may disagree

 about that, but I think that's where the proper 

 resolution should be. 

 MR. GIRARD: Thank you. 

 MR. ARENSON: Adam, it's your turn. 

 MR. COHEN: Well, first of all, I just want to

 thank you all for having me here. It's a real 

 honor. 

 And I would like, before I get into the two 

 topics that I was going to address, to speak to 

 this litigation hold issue because it is something

 that I deal with every day. And yes, the concept 

 is a valid concept, and it's what people do all the 

 time. The trick is in the implementation. That's 

file:///C|/FEB/0211rule.txt (51 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 52 

 why we see very sophisticated parties and 

 sophisticated law firms being sanctioned. 

 It seems like every month there is a big 

 sanctions case with a big company or a big law

 firm. It's not because they're bad people. It's 

 because it's incredibly difficult to implement a 

 litigation hold over electronic information 

 perfectly, and that's why we believe that the safe 

 harbor makes sense.

 I was going to speak about the accessibility 

 issue and also about the default format issue. And 

 I have my notes on a computer, which I thought 

 would be appropriate, given the subject matter 

 today.

 We generally support this distinction of 

 accessible versus not reasonably accessible. But 

 we feel that the standard of reasonably accessible, 

 it needs to be explicit in the rule or the notes 

 that this standard is flexible enough to take into

 account all of the factors that a court should be 

 considering in determining whether something is 

 reasonably accessible. And I think also that there 

file:///C|/FEB/0211rule.txt (52 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 53 

 needs to be some additional clarity on what kind of 

 description of inaccessible information needs to be 

 made by the party that's claiming that that exists. 

 We feel that, you know, it should be clarified

 that a court is not merely considering the medium 

 in which the information is kept. There's, you 

 know, a lot of talk about back-up tapes and hard 

 disks. And I think that regardless of the speed at 

 which people move away from mediums like that, it's

 inevitable it's going to happen, and that a court 

 should be considering the frequency with which the 

 electronically stored information question has been 

 accessed in the past. 

 I think one can get the impression from reading

 what's in the rule and the comment that having 

 access to the information, period, would turn that 

 into accessible information, and you know, as an 

 example, you may want to access information for the 

 purposes of demonstrating the expenses, the

 difficulties involved in accessing that 

 information. 

 You may have accessed a back-up tape in the 

file:///C|/FEB/0211rule.txt (53 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 54 

 past to recover some important e-mail, but it 

 doesn't seem that that shouldn't necessarily-- 

 JUDGE SCHEINDLIN: Can I interrupt you? I know 

 it's a bit rude. But my question is what makes

 things inaccessible anyway? Is it just cost and 

 burden, or is it anything else? 

 MR. COHEN: Well, I think, first of all, we 

 should move away from saying accessible or 

 inaccessible and talk about the reasonably

 accessible and not reasonably accessible, and I 

 think it is cost and burden. 

 JUDGE SCHEINDLIN: Is it cost and burden? 

 MR. COHEN: Absolutely. It's cost and burden. 

 JUDGE SCHEINDLIN: Well, if it's cost and

 burden--if it's cost and burden, don't we have a 

 rule covering cost and burden? 

 MR. COHEN: Well, we do have a rule covering 

 cost and burden. But we're talking here about what 

 needs to be produced in the first instance, I

 guess. 

 JUDGE SCHEINDLIN: But I mean courts have a 

 rule now to assess whether something is unduly 

file:///C|/FEB/0211rule.txt (54 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 55 

 burdensome or unduly costly. What does this add? 

 MR. COHEN: Well, I think what this adds is it 

 eliminates the uncertainty, you know, that you have 

 violated some kind of discovery obligation when in

 response to an initial document request, you don't 

 produce, for example, deleted e-mails on a hard 

 drive. 

 Now in practice, people are not doing that 

 anyway. But in this area, this has always been one

 of these sort of open questions that no one has had 

 a firm answer on. And that's what I think this 

 rules does. 

 JUDGE SCHEINDLIN: At earlier hearings, people 

 have called it the elephant in the room, meaning

 you may not produce it, but do you preserve it so 

 that the court can then rule on it? 

 MR. COHEN: Absolutely. People do preserve it. 

 Generally, the uncertainty with the inaccessible 

 information has been, for example, deleted e-mails

 on hard drives. I don't think people are going out 

 and saying, okay, you're not allowed to use your 

 computer anymore because you might destroy deleted 

file:///C|/FEB/0211rule.txt (55 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 56 

 e-mails. 

 And then with the other example that's in the 

 notes, you know, not reasonably accessible is 

 back-up tapes. You know, people have struggled and

 are continuing to struggle with what to do about 

 back-up tapes. It's an easier case, like the 

 Zubulake case, where you have a limited number of 

 key persons and you're able to segregate and 

 identify certain back-up tapes. It's the harder

 case where you're dealing with entire departments 

 of large corporations and you're not sure of what 

 your duties to preserve are. 

 JUDGE SCHEINDLIN: So you tell your client to 

 preserve it, even though they don't have to produce

 it? This so-called inaccessible-- 

 MR. COHEN: Well, first of all, what precisely 

 you preserve will depend on the particular case. 

 But I totally endorse the notion, and I think in 

 practice what everyone does, that the preservation

 obligation has to be viewed as much broader than 

 the production obligation and that you're not going 

 to not preserve information because you have some 

file:///C|/FEB/0211rule.txt (56 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 57 

 argument that you're going to make later, that you 

 shouldn't have to produce it because it's not 

 relevant or something like that. 

 JUDGE SCHEINDLIN: I'm sorry to have a

 dialogue. But then does that mean that you stop 

 recycling? 

 MR. COHEN: Well, in some cases, you do. 

 People absolutely do that. And then they can argue 

 about, you know, whether and who should bear the

 expense of deriving information from back-up tapes. 

 Okay. So my second point on accessibility was 

 about how you identify the information that's not 

 reasonably accessible. You know, I think there's a 

 certain lack of clarity there in the rule.

 Clearly, it's going to be a case-by-case 

 determination to some extent. But I think it's 

 incumbent on us to point out those areas of lack of 

 clarity, and you know, questions arise as to 

 whether it's sufficient to say something like

 "back-up tapes" or "deleted information on hard 

 drives" or whether there is some more specific 

 identification that's contemplated here. 

file:///C|/FEB/0211rule.txt (57 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 58 

 I'm just going to move-- 

 PROFESSOR MARCUS: Mr. Cohen? 

 MR. COHEN: Yes? 

 PROFESSOR MARCUS: What do you do now about

 conveying to the other side? You usually represent 

 defendants? 

 MR. COHEN: Well, I'm basically in IT 

 litigation. So I tend to work on both sides. 

 PROFESSOR MARCUS: Okay. Well, what is it your

 understanding about how people presently 

 communicate to the other side what they haven't 

 examined, if they haven't examined everything? 

 MR. COHEN: In most cases where there is sort 

 of a symmetrical relationship, both parties have

 large amounts of electronic information, the issue 

 doesn't come up. Because, you know, both sides, 

 there is this mutually assured destruction notion 

 that if you start raising issues like back-up tapes 

 and deleted e-mails, you know, what's good for the

 goose is good for the gander. 

 I think in the asymmetrical cases, those issues 

 get raised when the plaintiff doesn't--takes a 

file:///C|/FEB/0211rule.txt (58 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 59 

 deposition of let's say a 30(b)(6) deposition of an 

 IT person and discovers that they haven't received 

 information on back-up tapes, or they simply, you 

 know, ask about what collection efforts were made

 in a letter, and they get the answer. 

 There are generally, at least in the cases I 

 have experience with, it's not something that is 

 discussed up front in the first instance. One of 

 the reasons we support the notion of discussing all

 of these issues at the initial conference and 

 before. 

 JUDGE ROSENTHAL: You'll have to wrap up. 

 MR. COHEN: Okay. I think you can see from our 

 report that on the default format issue, I think

 there are lots of problems there that that's going 

 to create technically. And so, you know, we don't 

 support the way that that default format is 

 currently implemented of those rules. 

 JUDGE ROSENTHAL: Is your criticism that there

 is a default outlined, if there's no request--if 

 there is no agreement and no court order, or with 

 the way in which the default is described? 

file:///C|/FEB/0211rule.txt (59 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 60 

 MR. COHEN: I think that our position is that, 

 theoretically, you know, perhaps there is a way to 

 describe a default format. I don't know what that 

 is. And the current way it's done is not

 sufficient. It seems to me that if you're going to 

 have discussion at an early conference about format 

 of production, then why should someone be forced to 

 produce in a specific format later on if the person 

 didn't request production in a specific format?

 JUDGE ROSENTHAL: If we did not specify a 

 default but did give some guidance as to whether 

 there should be a limit on the number of different 

 formats in which the same information should be 

 provided, would you be comfortable with that?

 MR. COHEN: You know, it's not something I can 

 express a position on on behalf of the section. 

 But you know-- 

 JUDGE ROSENTHAL: I'm asking you then. 

 MR. COHEN: I think, personally, I think, yes,

 that makes sense. 

 JUDGE ROSENTHAL: Any other questions? 

 [No response.] 

file:///C|/FEB/0211rule.txt (60 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 61 

 JUDGE ROSENTHAL: We very much appreciate your 

 coming and for the detail and thought that the 

 association obviously put into the report. 

 And for those of you who submitted detailed

 reports, I extend the same compliment and will not 

 take the time to say that over and over again. 

 Thank you. 

 MR. COHEN: Thank you very much. 

 JUDGE ROSENTHAL: Mr. Murillo? Good morning.

 MR. MURILLO: Good morning. My name is Joe 

 Murillo. I am vice president and associate general 

 counsel of Philip Morris USA. 

 And I am here to share our perspective. You 

 will not be shocked to hear that it is somewhat of

 a defense perspective. We are, indeed, a defendant 

 of some note and some notoriety. But it's 

 precisely because of that that we are here. We 

 welcome this committee's work. We welcome the 

 rules. And what we would like to emphasize--and

 I'm going to very much take you up on your offer 

 that I not follow my comments. I think they speak 

 for themselves. 

file:///C|/FEB/0211rule.txt (61 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 62 

 What we want to emphasize is what we have seen 

 is the need for corporate defendants, particularly 

 defendants such as us, that have litigation every 

 day, every year--that produce information,

 documents every day, every year, case after case, 

 thousands upon thousands of cases, millions upon 

 millions of documents, gigabytes upon gigabytes of 

 data, et cetera, et cetera, ad infinitum--we need 

 clarity because we need to be proactive. We cannot

 wait for the demand to collect documents. 

 We collect documents every day. We have a 

 staff of 58 lawyers and paralegals in my group that 

 do nothing but go with the business, collect their 

 documents, understand the data, understand what is

 accessible, understand what the business uses every 

 day to conduct the business of the corporation, and 

 find ways to be able to crank this information out 

 as quickly and efficiently as possible. That is 

 what we try to do.

 What we need, please, are clear rules so that 

 we can go off and do our job and anticipate and be 

 proactive. That is what we have tried to do for 

file:///C|/FEB/0211rule.txt (62 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 63 

 the past 7, 8, 10 years. We need sustainability. 

 That's why we need--we think there needs to be 

 clarity. 

 As to formats, we think the clearer you can be

 on what the guidelines are, what are our duties? 

 Do we have the duty to be perfect? Is that what 

 we're talking about? I hope not. Right? But the 

 more clarity we can get on these crucial points, 

 the better off we can go off and plan to do our

 work, both as a plaintiff and a defendant. 

 Yes, ma'am? 

 JUDGE ROSENTHAL: One of the prior speakers, 

 Mr. Cohen, raised a skepticism about whether we 

 could specify a default form of production that was

 good enough to be included in the rules. And by 

 that, I, of course, mean what form of production 

 would be among those from which a defendant or 

 producer could pick if there was no agreement and 

 no court order? Do you share his skepticism?

 MR. MURILLO: I do not. I think that while 

 rules need to be written with the future in mind, 

 and I understand comments and agree with comments 

file:///C|/FEB/0211rule.txt (63 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 64 

 that I don't think we should be tied to particular 

 formats that lead to inflexible situations. Take 

 our example, for example. 

 We post documents on a public Web site, which

 we are required to do under the master settlement 

 agreement. Every time we produce documents in a 

 smoking and health liability case, we are required, 

 within a specified period of time, to post those 

 documents in a specified format with specified

 objective coding, with specified rules and 

 procedures. 

 We also have proactively taken the step, which 

 I freely admit works to our advantage as well, to 

 then provide a plaintiffs-only Web site, whereupon,

 at no cost, the same type of information for 

 confidential and trade secret documents can be made 

 available to litigants. 

 If I were in the situation where in each case, 

 each of the 2,000 cases that we have at any given

 point, more or less, we had to run around and 

 satisfy a request--this one would like TIFF, this 

 one would like the metadata, this one would like 

file:///C|/FEB/0211rule.txt (64 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 65 

 whatever--we could not function. 

 So we think that whether you tell us what the 

 format should be, which has the danger of cementing 

 you in to the lack of flexibility for the future,

 or it is further clarified, right, that the format 

 is something that is either as we produce it or 

 have it in the regular course of business for 

 production, or something that is agreed upon in 

 advance in some logical fashion, right? We don't

 share that skepticism, in sum. 

 JUDGE ROSENTHAL: Thank you. 

 MS. VARNER: Mr. Murillo? 

 MR. MURILLO: Yes, ma'am? 

 MS. VARNER: You state in your written comments

 that you don't believe that the burden analysis 

 under Rule 26(b)(2) is sufficient to protect 

 litigants in electronic discovery. Would you 

 elaborate on why that is so? 

 MR. MURILLO: Could you give me a page?

 MS. VARNER: Yes. It's on page 2. It's your 

 first bullet on page 2. "It is insufficient to 

 rely on a burden analysis under Rule 26(b)(2)." 

file:///C|/FEB/0211rule.txt (65 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 66 

 MR. MURILLO: Right. Really, that goes to the 

 need for clear rules. We think that there needs to 

 be a recognition that the way that electronic data 

 exists is not necessarily the way that the rules

 contemplated the burden analysis. And I think 

 given the massive nature of the data and the 

 options available to litigants in asking or 

 producing the data calls for the need to have 

 guidance.

 I need guidance in advance as to what about 

 inaccessibility? What about back-up tapes? What 

 about data sources that are recycled not even in a 

 back-up tape scenario, but every day? We have 

 accounts payable systems that every day turn

 themselves over. So we think that the concept of 

 having specific coverage for the types of 

 electronic records that exist in America today is a 

 good concept. 

 And I do not think that it is a situation where

 technology will make these rules irrelevant in some 

 future period. I think we have to face the fact 

 that there are a myriad of different types of 

file:///C|/FEB/0211rule.txt (66 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 67 

 information that could be available, only an 

 infinitesimal portion of which are really what you 

 would like us to discover. 

 JUDGE ROSENTHAL: Are there other questions?

 MR. MURILLO: Professor Marcus? 

 JUDGE ROSENTHAL: Rick, I'm sorry. 

 PROFESSOR MARCUS: I think you said earlier 

 that your 58 lawyers and paralegals have a 

 conception of what is and is not accessible, and

 you've just mentioned clear rules. Do you think 

 the current proposal on 26(b)(2), to amend it, will 

 provide a clear rule? And related to that, what is 

 the understanding of your 58 people on what is and 

 is not accessible?

 MR. MURILLO: Well, that's a good question. 

 What we try to anchor our understanding is superior 

 knowledge of the business. That is one of the 

 reasons that we chose to take most of this work 

 in-house from outside counsel. And I hasten to add

 that behind the 58 people that work for me, there 

 are hundreds of outside counsel, many of whom are 

 represented in rooms like this across the country, 

file:///C|/FEB/0211rule.txt (67 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 68 

 that also work for us and that provide support on 

 these issues. 

 But the point is that we believe--the theory of 

 our case, if you will, is that the better you

 understand the business that you are supporting, 

 the records that they are creating, the documents 

 that they are generating and how they treat these 

 things, the better you can support both collection 

 efforts and really substantive litigation. And

 therefore, we try to understand what the business 

 uses to run the business every day, and that is 

 what I consider the available information to us. 

 I use the language of inaccessible/accessible 

 because it's the language of the rule. And if I

 had my druthers, the more you can do, whether it's 

 in the notes or otherwise, to clarify that 

 inaccessible/accessible should be judged against 

 the concept of what does the business use in the 

 regular course of its business each day, right, the

 happier I would be. 

 Again, because whichever way you go, I need the 

 clarity so that I can do this with some concept of 

file:///C|/FEB/0211rule.txt (68 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 69 

 sustainability. 

 PROFESSOR MARCUS: Okay. Can I ask one related 

 question? 

 JUDGE ROSENTHAL: Yes, please.

 PROFESSOR MARCUS: When you have decided how 

 much to search to respond to discovery, how do you 

 go about acquainting the other side with this 

 familiarity of the details of your business so that 

 it understands why you haven't looked in other

 places? 

 MR. MURILLO: Assuming they have not been on 

 Google, found our site, and done it on their own, 

 based on the massive amount of information that 

 exists about every conceivable detail of our

 business in the public domain at this point, I 

 would say that we try to be as clear as we can in 

 our answers and objections to written discovery in 

 advance or at pretrial conference or at Rule 26 

 conferences so that people understand what is going

 on. 

 And clearly, if they have follow-up questions 

 after they've digested the typically massive amount 

file:///C|/FEB/0211rule.txt (69 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 70 

 of information made available to them, if they have 

 a particular question about a document, that "why 

 don't I see the response to this letter" or "is 

 there anything that tells me when this particular

 presentation was created," we'll take those 

 requests under advisement. And if it's available 

 and not burdensome, we will comply with that 

 request. 

 But the key point I'm making is that there is

 not lot left to wonder about how our company 

 operates. And therefore, there is so much 

 information out there that we rarely face the 

 situation that is contemplated with these sort of, 

 you know, I'll call them "crime scene

 investigation, forensic-type" questions about 

 metadata and the like. 

 JUDGE SCHEINDLIN: You just used the phrase "if 

 it's available and not burdensome," we'll give it 

 to them. But that wouldn't have anything to do

 with whether you access it for business regularly. 

 In other words, what does that have to do with 

 producing relevant information that the other side 

file:///C|/FEB/0211rule.txt (70 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 71 

 is entitled to in litigation? So, as long as it's 

 available and not burdensome, you just said, "I'll 

 give it," which you didn't tie to business use. 

 MR. MURILLO: Yes, Your Honor, that's a good

 question. And I think that one of the things that 

 I am concerned with, but I think has been 

 adequately covered in other comments, is I am not 

 an IT expert by any stretch of the imagination. 

 But what little I know is that a little information

 is dangerous. 

 And there is a big cry between the famous 

 back-up tapes in the famous vault in the famous 

 bowels of some warehouse, right, and lots of other 

 partial, perhaps inconclusive, perhaps sometimes

 used, perhaps sometimes not used information that 

 is available in our data systems. 

 So, in other words, if I were, in fact, in an 

 employment case, and there are a series of very 

 specific questions with respect to one employee,

 right? There are things that we might be able to 

 do to dig into the bowels of the hard drives of 

 employment records and the like, right, that I'm 

file:///C|/FEB/0211rule.txt (71 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 72 

 happy to consider. 

 My problem is I cannot do that, right, and not 

 bankrupt the company for 2,000 smoking and health 

 cases just because plaintiffs are trying to get

 some advantage over me in the discovery process. 

 JUDGE ROSENTHAL: Thank you very much. 

 MR. MURILLO: Thank you. Yes? 

 MR. GIRARD: As I read your comments, you're 

 focused on the results of a national standard. In

 terms of doing your job, is there anything in the 

 accessibility/inaccessibility proposal that 

 enhances things from your perspective? 

 MR. MURILLO: I think it is certainly a huge 

 step in the right direction. As I mentioned to

 Professor Marcus, the closer we can get to clarity 

 on the issue of what is accessible, right, and I've 

 seen proposals for different comments that could go 

 in the notes. Again, from my perspective, and I 

 think the Sedona Principles lay it out very nicely,

 it is things that are used in the regular course of 

 business, accessed in the regular course of 

 business. That, to me, needs to be at least the 

file:///C|/FEB/0211rule.txt (72 of 455) [3/2/05 2:36:44 PM]
file:///C|/FEB/0211rule.txt

 73 

 starting point. 

 JUDGE ROSENTHAL: Thank you, sir. 

 Mr. Svetcov and Mr. Rosen? 

 MR. SVETCOV: Good morning, Judge Rosenthal and

 members of the committee. Thank you for having us. 

 My name is Sandy Svetcov. I'm a partner at the 

 Lerach Coughlin firm in San Francisco. With me is 

 Henry Rosen, one of my partners who is in the San 

 Diego office of the firm.

 I'm an appellate lawyer. He's a trial lawyer. 

 And I've tried carefully to stay away from these 

 issues. I have my hands full on the FARA Committee 

 with unpublished opinions. But my firm asked me to 

 help assemble the letters that we've submitted.

 And so, if you kind of look at us as a restaurant, 

 I'm the maitre 'd, and he's the chef de cuisine. 

 I have just a couple of themes that I'd like to 

 talk about, and then I'm going to turn it over to 

 Henry because he really knows this stuff and deals

 with it daily. 

 You know, while you're having these hearings 

 and thinking about these rules, there are federal 

file:///C|/FEB/0211rule.txt (73 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 74 

 district judges in 95 districts who are solving 

 these problems under the existing rules. I've 

 heard testimony today about a rule called not 

 reasonably accessible. The word "reasonably" in

 there--I'm an appellate lawyer--is just another 

 word for "burden." And burden is already in the 

 rules. 

 What I'm hearing about the technology and, God 

 knows, I know I'm an anachronism. I've been doing

 this for 40 years, and I'll try to struggle along 

 for a few more. I write my briefs out in pencil to 

 start with. Then my secretary takes over with the 

 word processor. 

 But the rules cover this today. And when you

 put the word "not reasonably accessible" in this, 

 "reasonably" is not going to add clarity, it's 

 going to add flexibility. And you already have 

 flexibility in burden. So why are you doing this? 

 If this committee folded its tent and went away,

 district courts are going to be able to do their 

 work. 

 JUDGE ROSENTHAL: Is the question whether we 

file:///C|/FEB/0211rule.txt (74 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 75 

 are able to do our work or whether it can be done 

 better? 

 MR. SVETCOV: Well, that's a real question. 

 And the technology, I think, will tell you that

 maybe--maybe the technology will outstrip the 

 proposals that you already have in place. And 

 that's a real question because, apparently, the 

 issue was accessibility at one point. 

 Two years ago, the question was--it's no longer

 a question of accessibility. The stuff is 

 accessible. It's just how expensive and difficult 

 it is to get at. That's one theme. 

 Second theme is the magistrates filed papers 

 three or four days ago. I read their papers.

 They're the people who are doing this, and they're 

 not supporting this. So that raises a really big 

 red flag for you. Why are you doing this if the 

 people in the trenches are not doing this? 

 Third, on the Appellate Rules Committee, the

 rules are--we set up procedures which are party 

 neutral. I'm listening to testimony where 

 plaintiff's lawyers come in and say "no" and 

file:///C|/FEB/0211rule.txt (75 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 76 

 defense lawyers say "great" and the companies say 

 it's great. There is something wrong there. You 

 need to step back and make sure these are really 

 party neutral because what I'm hearing is they're

 not party neutral. Somebody wants these very 

 badly. 

 And I think, having been a corporate defense 

 lawyer for 10 years in a prior life, I know why 

 they want it. They want words like "not reasonably

 accessible" as tools for litigation. And is that 

 what you want--more battles than you already have 

 in this area? That's crazy. 

 I read an article in the Federal Bar 

 Association last month. It's called "Why I Hate

 Discovery" by an academic who used to be a 

 corporate defense lawyer. And he's proposing the 

 worst possible idea. He wants a Rule 23(f) 

 discretionary appeal for discovery issues. Now 

 that is the craziest proposal I've ever heard of.

 JUDGE ROSENTHAL: That would be fun for the 

 Appellate Rules Committee to consider. 

 MR. SVETCOV: Well, it's actually going to be 

file:///C|/FEB/0211rule.txt (76 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 77 

 in this--because 23(f) is a civil rule, God bless 

 you, you're going to have that one, too. 

 JUDGE ROSENTHAL: You mean 26(f). 23(f), you 

 may remember, that was a couple of years ago.

 MR. SVETCOV: It's the class--I know. But the 

 23(f) discretionary appeals in class actions is a 

 small slice of federal cases compared to discovery 

 in every federal civil case. 

 So, and here's the one that really floors me.

 In Rule 26(b)(2), if the responding party says not 

 reasonably accessible--he just has to say it, not 

 reasonably accessible--now the requesting party has 

 to file a motion. The problem with that motion is 

 what do I say in that motion? Is it--I guess it's

 a motion to please help me, Your Honor. Because 

 there is no other standard in the rule for what 

 that motion is supposed to say. 

 JUDGE ROSENTHAL: Is it your understanding that 

 under current practice, the responding party would

 simply file an objection, saying that this is too 

 costly, too burdensome to produce? We're not going 

 to do it now, or we're not going to do it. And 

file:///C|/FEB/0211rule.txt (77 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 78 

 then the requesting party files a response, any 

 motion to compel, saying you need to do it and then 

 the-- 

 MR. SVETCOV: Or the respondent would file a

 motion for protective order, carrying an initial 

 burden. The thing is flipped--it's flipped in 

 reverse, and it doesn't make sense to do it that 

 way. 

 JUDGE ROSENTHAL: Mr. Svetcov, is it your

 concern that the burden is shift and the party who 

 files the first motion is changed, or is your 

 concern that it is addressed in the rules in the 

 first place? 

 MR. SVETCOV: Well, I think it's already

 addressed in the rules. Under the current rules, 

 if the proposed, the requested discovery is 

 burdensome, the responding party has the ability to 

 make a motion for protective order, and the court 

 has the ability to resolve the question.

 JUDGE ROSENTHAL: So is your concern that it's 

 already in the rules, and you don't like shifting 

 the burden? 

file:///C|/FEB/0211rule.txt (78 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 79 

 MR. SVETCOV: I'm not sure there's a burden 

 shift. I'm concerned with a motion that has no 

 content. And you know, as an appellate lawyer, I'm 

 not without experience in the trial courts. I've

 tried jury trials. I've tried court trials. And 

 more importantly, as an appellate lawyer, I've 

 watched over this system for 40 years. 

 I was a state and federal prosecutor for 25 

 years. I was a corporate defense lawyer. I worked

 in the state legislature in Sacramento. I was a 

 lawyer in the Navy. I love our legal system. And 

 I don't like it tinkered with unnecessarily, and 

 that's what I'm seeing here. 

 And I think I've said enough. I've used my

 time. Unless you have questions, I think Mr. 

 Rosen-- 

 JUDGE HAGY: What is it about "identifies" that 

 you don't understand? You can't just say it's not 

 reasonably accessible. It says you have to

 identify that which is not reasonably accessible. 

 And rather than what you've got now is the 

 defendant responds, "The request is unduly 

file:///C|/FEB/0211rule.txt (79 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 80 

 burdensome. However, I'll provide the following." 

 But you don't know what he's not providing. 

 This requires him to tell you what it is that 

 he's not providing, to get him to get it, and put

 context to a motion. 

 MR. SVETCOV: Well, I take it that the same 

 obligation exists today to say why it is unduly 

 burdensome. And district judges would, it seems to 

 me, want to know the answer to that question in a

 motion for a protective order. 

 JUDGE HAGY: It's really brought about by a 

 motion to compel. Generally, the burden is on not 

 the party who is defending, but the party who wants 

 the additional information. But I think you've

 got--we'll go to your litigating partner. 

 MR. SVETCOV: That's a great idea. 

 MR. ROSEN: Thanks for letting us testify 

 today. I wanted to really emphasize the fact that 

 we are in favor of party neutral rules, and we

 believe that the proposed amendments to 26(f), 

 which require the meet and confer on the subject of 

 the computer e-discovery, is really the way to go. 

file:///C|/FEB/0211rule.txt (80 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 81 

 And our proposal would be that that would be beefed 

 up. 

 When I heard that the Federal Rules Committee 

 was addressing these rules, these proposed changes,

 I was very excited when I heard the term 

 "e-discovery," because it's something that I've 

 dealt with for the whole 14 years that I've been in 

 this practice. 

 I've been in this practice in a very exciting

 time to see the transition of document productions 

 from paper productions to this electronic. And I 

 was hoping that the proposed rules would address 

 what I see is the biggest problem with e-discovery. 

 And it's exactly that, that there is not adequate

 meet and confer on the front end of the cases. 

 For that reason, we have suggested that this 

 meeting about e-discovery should occur within 21 

 days of filing and not within 21 days of the 

 scheduling conference. The reason for that

 suggestion is simple. In securities cases, in my 

 practice area, and in a ton of other federal cases, 

 the scheduling conference doesn't happen early 

file:///C|/FEB/0211rule.txt (81 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 82 

 enough. 

 I have had a lot of case in the District of 

 Colorado, for example, and in that case, you don't 

 have discovery until the case is deemed at issue.

 And that doesn't occur until an answer has been 

 filed. 

 JUDGE ROSENTHAL: Are you suggesting that as a 

 requirement for every case? I mean, securities 

 cases in which you sue large entities who have

 in-house counsel and staffs of outside lawyers at 

 the ready may lend themselves to being able to have 

 a meaningful meet and confer within 21 days after 

 getting the complaint. But there are many cases in 

 which that is simply not the case.

 MR. ROSEN: Well, I think that the problems 

 that I've seen every day and the problems that were 

 identified by Judge Scheindlin would have been 

 remedied had there been an initial meeting to 

 determine simply is there an e-discovery issue in

 this case? 

 If there is no e-discovery issue in the case, 

 then I think that that requirement could be--it 

file:///C|/FEB/0211rule.txt (82 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 83 

 could be written in such a way that you don't have 

 to do it that early. 

 JUDGE ROSENTHAL: But you're suggesting that in 

 every single case, within 21 days after the

 complaint is filed, there has to be this exchange 

 of information? 

 MR. ROSEN: When I think that--in order for 

 there to be a litigation hold, which really is 

 effective, I think--and that both sides understand

 what's going on. Because if you have a simple, 

 small case where there is only a couple of back-up 

 tapes at issue, then that's one thing. But if you 

 do have a very, very large company, then you really 

 do have to give a lot of thought to how the

 litigation hold is going to occur. Otherwise, by 

 the time the case is deemed at issue, you are going 

 to lose a lot of data. 

 And I think that the rules can be written with 

 enough flexibility so that that meet and confer can

 occur, and the depth of it can depend on what kind 

 of case it is. 

 MR. GIRARD: Do you currently have information 

file:///C|/FEB/0211rule.txt (83 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 84 

 about the other side's electronic storage 

 capabilities before you propound your initial 

 discovery request at this point? 

 MR. ROSEN: We have no information. In every

 one of my cases, I send in a very early letter, 

 asking the other side to identify what steps they 

 are taking to preserve the electronic record. I 

 have refined that letter with the help of the 

 forensic computer experts that we've hired. And I

 am flatly given the same response every time, and 

 that is, "We are complying with our obligations to 

 preserve the record." 

 So we will not find out for a year and a half 

 that certain portions--and I can give you five

 different examples, if you like, of what happens 

 when you don't have that early meet and confer, 

 when you don't have a meeting of the minds as to 

 what is being preserved. 

 One case, there will be a decision by the

 defense lawyers to--the responding party lawyers to 

 preserve electronic documents from headquarters, 

 but they won't preserve them from the regional 

file:///C|/FEB/0211rule.txt (84 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 85 

 sites. They will then argue, well, this was a 

 reasonable step because the speakers, the 

 decision-makers in the case were all at 

 headquarters. But with complex accounting frauds,

 what is happening on the ground at regional levels 

 can be very important. 

 Another case, a company goes into bankruptcy 

 before the case is deemed at issue. And in that 

 case, there is no e-mail server. The e-mails are

 pushed to every individual's hard drive, and by the 

 time the case was at issue, the hard drives have 

 all been thrown out. And so, there will be a 

 four-year period in the case where there is no 

 e-mail at all.

 And I don't think this suggestion applies only 

 to my practice. I think that in tons and tons of 

 complex cases, there would be--justice would be 

 served, the record would be greatly enhanced by 

 this early meet and confer. For that reason, we

 are very excited to see the proposed changes to 

 Rule--to the early meet and confer, although we do 

 think those need to be beefed up. 

file:///C|/FEB/0211rule.txt (85 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 86 

 By the same time, we are very, very concerned 

 about the proposed discussion regarding reasonably 

 accessible, and it's really very simple. I'm 

 surprised I haven't heard more discussion of it

 today. The reason is, is that the notes make the 

 suggestion that what is reasonably accessible isn't 

 what you all have been talking about, and that is 

 what is the cost of that information? But it has 

 to do with whether or not it's active data. It has

 to do with whether it's on a back-up tape that's on 

 a legacy system or not. 

 But I can tell you, in case after case, the 

 best information that's relevant in that case is 

 going to be--could be inactive data. I think

 there's a reason why-- 

 JUDGE ROSENTHAL: Could be in, space, active 

 data or-- 

 MR. ROSEN: Could be inactive data, and I'll 

 give you an example.

 MR. SVETCOV: Inactive. One word, no space. 

 JUDGE ROSENTHAL: Thank you. 

 MR. ROSEN: Inactive data. And I think the 

file:///C|/FEB/0211rule.txt (86 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 87 

 reason is there's a lot of--for example, again, to 

 go back to accounting fraud, it's a huge part of 

 our practice. Those are backward-looking by 

 nature. A company comes forward and restates three

 years of financials. Well, the stuff that was 

 dealt with three years ago is not active anymore, 

 and it's not on the active people's files. And so, 

 to get that data, you have to go to back-up tapes. 

 And I think that it really has to be emphasized

 that if the committee is being told still today, in 

 2005, that it's expensive and difficult to restore 

 back-up tapes, they are being given that 

 information by forensic people who either are not 

 experienced in this area or just like when you go

 out to get bids on a house, paint job, or a 

 remodel, you're going to get a wide variety of 

 prices. 

 The question came up earlier about whether you 

 could get a group of forensic experts to agree on

 the definition of "reasonably accessible." And if 

 that definition is dictated by cost, the answer is 

 absolutely not. Because still, to this day, you're 

file:///C|/FEB/0211rule.txt (87 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 88 

 going to get a disparity in bids in restoring data 

 from a back-up tape, which is quite shocking. And 

 the reality is I consulted with a couple of firms 

 that I use a lot now, and partially because over

 the years their prices have dropped drastically. 

 And they say it's shocking. If you had asked this 

 question five, six years ago, restoring back-up 

 tape is cost 10, 100 times greater than it is 

 today.

 JUDGE SCHEINDLIN: Mr. Rosen, a question was 

 asked earlier of one of the lawyers who testified, 

 how often in a case do you really have to go to 

 this back-up material or to what the notes seem to 

 imply is inaccessible? What percentage of your

 cases do you really find data there that you need 

 and use in the case? 

 MR. ROSEN: Well, frequently. All the time. 

 Now there-- 

 JUDGE SCHEINDLIN: All the time you go to

 restored information? Legacy or back-up tape type 

 information, inactive data? 

 MR. ROSEN: Well, I think the issue of whether 

file:///C|/FEB/0211rule.txt (88 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 89 

 something is on the legacy system or not is a 

 separate question. 

 JUDGE ROSENTHAL: Well, let's start with that. 

 JUDGE SCHEINDLIN: Well, but legacy has to be

 restored in some way because it's outdated. You've 

 got to build again. 

 MR. ROSEN: That's right. And our forensic 

 experts, in order to get our work and to get the 

 work of the producing parties, who, frankly, are

 bigger clients than we are, they have had to 

 develop the systems to address the old legacy 

 systems. 

 JUDGE ROSENTHAL: I think the question is 

 how--in what percentage of your cases, how often--

 JUDGE SCHEINDLIN: Restate it. 

 JUDGE ROSENTHAL: --do you go to information 

 that has to be restored before it can be retrieved, 

 examined, and produced? 

 MR. ROSEN: In cases where if there's a class

 period that's four years old, in every single one. 

 In every single one. 

 JUDGE SCHEINDLIN: Overall in your practice, 

file:///C|/FEB/0211rule.txt (89 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 90 

 what? More than 50 percent of the time, you're 

 going-- 

 MR. ROSEN: If 60 percent of our cases are 

 accounting frauds, I would say that it's at least

 in 60 percent of the cases. 

 JUDGE ROSENTHAL: So it varies by subject area. 

 Is that fair? 

 MR. ROSEN: It varies by subject area. 

 JUDGE SCHEINDLIN: And how about cost shifting?

 When you've had to put the adversary to the expense 

 of that kind of retrieval, have there been requests 

 for cost shifting? And if so, how have courts 

 handled that? 

 MR. ROSEN: Well, one of the reasons why we

 think the court rules are dealing just fine with 

 this system is that, of course, we have to engage 

 in very lengthy meet and confers on the subject of 

 who bears the cost and on the subject of whose 

 burden it is.

 And I can tell you the forensic firms are 

 really coming along in this area, and a lot of 

 times now we are hiring the same firms. We are 

file:///C|/FEB/0211rule.txt (90 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 91 

 agreeing to the same firms in order to make it much 

 cheaper. And it really, really does depend on the 

 facts and circumstances of the case. If you've got 

 a case where it's merely--

 JUDGE SCHEINDLIN: Does that mean you're 

 agreeing to cost shifting? Is that what you're 

 saying? 

 MR. ROSEN: No. 

 JUDGE SCHEINDLIN: No?

 MR. ROSEN: What I'm saying is that whether 

 costs are shifted depends on the circumstances of 

 the case. If you've got a-- 

 JUDGE SCHEINDLIN: How often does that occur, 

 and does it occur because courts order it or

 because you agree to pay some of the cost? How 

 does this work? 

 MR. ROSEN: I would say that in--we are winning 

 the fight primarily on the issue of if it goes to 

 the court on who has to pay for shifting. But we

 are willing to share the costs on a very, very 

 frequent basis. The issue of whether the costs get 

 shifted will depend on whether it's simply 

file:///C|/FEB/0211rule.txt (91 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 92 

 restoring something from a back-up tape or, in the 

 more extreme situation, where you have to go to 

 hard drives and be more of like a criminal 

 investigator to find deleted e-mails. That, I

 would note, is more of the exception than the rule. 

 That is not occurring on a frequent basis, in my 

 experience, actually searching people's-- 

 JUDGE ROSENTHAL: Shira, we have one other 

 person who wants to ask a question. I'm sorry.

 MR. ROSEN: Sorry. Someone else has a 

 question? 

 JUDGE ROSENTHAL: Judge Walker? 

 JUDGE WALKER: I do. I hear you saying that 

 the outer limits are probably not cost or burden

 because that's changing. I hear you saying even 

 that business necessity is not the outer limit 

 because what's useful for litigation may long ago 

 have not been useful for the business. 

 So, and when we've heard--you probably were

 here when we were told that there needs to be some 

 sort of definition of an outer limit. What is it? 

 MR. ROSEN: Well, I think that the rules 

file:///C|/FEB/0211rule.txt (92 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 93 

 provide for--the unduly burdensome, I think, is the 

 proper limit. And I think that it is-- 

 JUDGE WALKER: That doesn't go to retention, 

 though. If it's not available, then it's never

 going to be produced. It can't be produced. 

 MR. ROSEN: Well, I think the issue of 

 retention is a very interesting subject. 

 Obviously, the courts can only pass rules that 

 apply to cases once they've been filed. You guys

 are not pretending to propose rules which are going 

 to dictate retention policies. 

 But I think that the issue of a reasonable 

 litigation hold that occurs once a case has been 

 filed is something that has to be evaluated on a

 case-by-case basis. And so, the rules must be 

 flexible enough to evaluate that. 

 JUDGE WALKER: So I should hear your comments 

 speaking to the litigation hold concept, not to the 

 folks who are wondering how to run their business

 on a day-to-day basis? 

 MR. ROSEN: Right. I don't think that--I mean, 

 it would be great for me to be able to say I think 

file:///C|/FEB/0211rule.txt (93 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 94 

 they should retain their records for 10 years. 

 We're not going to dictate policy or pretend to be 

 able to influence policy on how long people should 

 hold documents.

 MR. HIRT: Mr. Rosen? 

 MR. ROSEN: Yes? 

 MR. HIRT: Can I ask you a question? Just 

 going back to something you said earlier, do you 

 read the language in the note about legacy systems

 and back-up tapes as suggesting that they would be 

 automatically deemed reasonably inaccessible, even 

 if it weren't costly to retrieve the data? 

 MR. ROSEN: That's the way I read it because of 

 the comments in conjunction with the idea of active

 versus inactive data. 

 MR. HIRT: Because I do think--at least the way 

 I read it, and I've actually heard other people say 

 the same thing you said, so maybe it's ambiguous. 

 But I read the first paragraph of the committee

 note on (b)(2) as being very careful to say that 

 some information stored in back-up tapes or 

 disaster recovery systems or legacy data may be 

file:///C|/FEB/0211rule.txt (94 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 95 

 expensive and costly to retrieve. But not to 

 suggest as a categorical matter that all such 

 information was automatically inaccessible. 

 MR. ROSEN: And I saw that language in the note

 as well. But my more primary concern was this 

 notion of active versus inactive. I think that the 

 gentleman from Philip Morris, who suggested that we 

 really need clarity and it has to be limited to 

 stuff we're using frequently--I think there's a

 reason why that request was made. 

 And I think that's--to me, that's one of the 

 scarier features of this rule and why I believe 

 people perceive it as really narrowing the scope of 

 discovery. And I think that if you read that--the

 other thing I think that is somewhat frightening is 

 reading that in conjunction with the safe harbor 

 provision. And that is if reasonably accessible 

 means only active data and you only search for 

 active data in response, but during the course of

 normal business destruction, inactive data is 

 destroyed, then you're protected by the safe 

 harbor. 

file:///C|/FEB/0211rule.txt (95 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 96 

 And I think the rules need to be modified or 

 rewritten to address that concern. I think I might 

 be out of time, but I'll take more questions. 

 JUDGE ROSENTHAL: I think you are. Mr.

 Keisler, last question. 

 JUDGE KEISLER: It's not sufficient, to your 

 mind, that the material on active data says 

 specifically the fact that the party does not 

 routinely access the information does not

 necessarily mean that access requires substantial 

 effort or cost? That doesn't deliver all that you 

 think is necessary to say on that point? 

 MR. ROSEN: No, I don't. I really don't. 

 Because I think over and over again that the

 magistrates and 10 other people's responses have 

 all picked up on that point. And that is the fear 

 that people are going to use the active versus 

 inactive as a dividing line. 

 JUDGE ROSENTHAL: Thank you very much, both of

 you. 

 MR. ROSEN: Thank you. 

 JUDGE ROSENTHAL: We appreciate your time. 

file:///C|/FEB/0211rule.txt (96 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 97 

 Darnley Stewart, please? Ms. Stewart. And no 

 pressure, Ms. Stewart, but we're going to take a 

 break after your remarks. 

 [Laughter.]

 MS. STEWART: I want to let Judge Rosenthal and 

 all of you know that I'm afraid I've been on the 

 road. I didn't have a chance to get my remarks to 

 you beforehand. But I spoke to someone, and I will 

 be getting them to you in the next couple of days.

 Okay? 

 JUDGE ROSENTHAL: Thank you. 

 MS. STEWART: My name is Darnley Stewart. I'm 

 a partner at a firm in New York called Bernstein, 

 Litowitz, Berger & Grossman. We're a Lerach

 Coughlin "lite," if you will. We do all class 

 action work, primarily in securities litigation. 

 I come to this issue, though, with two 

 different perspectives. As a partner in a firm 

 with pretty substantial resources, even though

 we're not that large, and a firm that mostly does 

 securities litigation, but I primarily do 

 discrimination work on behalf of plaintiffs. And I 

file:///C|/FEB/0211rule.txt (97 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 98 

 am the vice president of the New York affiliate of 

 the National Employment Lawyers Association, which 

 is the--pretty much the only organization in the 

 country that is only comprised of people who

 primarily do individual employment and some class 

 action work on behalf of individual employees. 

 I want to answer something that both Judge 

 Rosenthal and Judge Scheindlin asked today as a way 

 to get into my remarks. Both of you asked

 whether--and I think when you were talking to Mr. 

 Smith from ATLA, whether it was his impression that 

 the majority of his constituency have to access 

 inaccessible data at some point, and you asked this 

 also of the people from the Lerach law firm.

 And certainly, in our securities practice, that 

 is true. We--in almost every single one of our 

 securities cases, we are seeking and we are getting 

 what would be called inaccessible data. Because 

 you also have to remember a lot of these companies

 have gone out of business. Try getting active data 

 from Arthur Andersen. So we are doing that. 

 On behalf of the people in NELA who are--the 

file:///C|/FEB/0211rule.txt (98 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 99 

 vast majority of whom are solo practitioners or 

 small firm practitioners around the country, I 

 don't think they are. And as we move forward in 

 this new digital world, it causes me concern, and I

 think, thanks to all of your hard work, we have an 

 opportunity here to maybe do what we've always 

 thought electronic discovery would do, which is to 

 level the playing field. And in that regard, I 

 have a couple of ideas and some thoughts on the

 proposed rules. 

 Before I get, though, because it came up this 

 morning, I do want to make a couple of comments 

 about the claw back provision because I didn't 

 intend to address it today, but there were a couple

 of things I wanted to raise that came up in my mind 

 during Mr. Smith's comments. 

 The remark was made that often there is an 

 agreement between the parties, usually when you're 

 negotiating a confidentiality order, to--that there

 will, if there is an inadvertent production of a 

 privileged document, that there will be a claw back 

 provision. It will be given back. 

file:///C|/FEB/0211rule.txt (99 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 100 

 Since I've been a plaintiff's lawyer, which is 

 longer now than I was a defendant's lawyer, I've 

 never agreed to that provision. But I had a senior 

 partner at Covington & Burling recently tell me

 that it is the first time that any plaintiff's 

 lawyer has ever said that to him. And I want to 

 explain to you why that is the case and why I'm not 

 in favor of the provision. 

 There is a well-developed body of law on this

 issue. And it has provisions in it, and it's 

 consistent among various jurisdictions, I believe. 

 I'm only familiar with two or three because it's 

 come up in those different jurisdictions, and 

 certainly 2nd and 3rd Circuit are consistent with

 one another. 

 But one of the parts of that test is that the 

 court will look at whether there is a public 

 interest to be served by the waiver of the 

 privilege with respect to that document, and that

 is why I always will argue that I will not agree to 

 that provision in an agreement of confidentiality 

 order because I like the common law rule, and I 

file:///C|/FEB/0211rule.txt (100 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 101 

 think it serves--it's much more useful. So I just 

 wanted to say that's why I never agree to that 

 provision. That's why I would oppose this. 

 And also because at times when I have gotten

 inadvertently produced documents, they have been 

 similarly shocking to the one that Mr. Smith 

 described this morning. They have revealed that 

 the defendants are not being truthful with the 

 court, and they often reveal that there has been

 over redaction. 

 So I've found them to have been very useful 

 documents, and they have helped to resolve cases. 

 And I have gotten the crime fraud exception on one 

 document like that. So I just wanted to say that.

 We were talking about I think someone used the 

 word today "asymmetrical." And my concern with the 

 small solo practitioners, the small firm 

 practitioners around the country now, I think 

 they're already behind the eight ball. And I fear,

 as we go forward, that they're going to be even 

 more so. I can exhort them to read the Zubulake 

 scriptures. I can exhort them at conferences that 

file:///C|/FEB/0211rule.txt (101 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 102 

 they can barely afford to pay $350 to attend that 

 they need to get savvy on these rules. 

 But I fear that it is an asymmetrical 

 situation, and there are ways that we can help out.

 I think the first way is in the proposed changes to 

 Rule 16 and 26(f). I think I agree with my 

 colleagues from the Lerach law firm. These are 

 very important and can be very helpful to the 

 smaller practitioners who are in an asymmetrical

 situation. 

 However, I would advocate that they go even 

 further and incorporate some of the provisions that 

 I think have worked out very well in, say, the 

 District of New Jersey. So I would include in the

 proposed language of the rules that there also be 

 in the 26(f) planning beyond what form the 

 document, the data shall be produced in, what 

 measures have been taken and will be taken to 

 preserve discoverable data from alteration, and the

 anticipated scope, cost, and time required for 

 disclosure or production of data that the parties 

 claim cannot be produced without undue burden and 

file:///C|/FEB/0211rule.txt (102 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 103 

 expense. 

 We have to get into these conversations early. 

 If we wait for the request and then the 

 identification, and then we have to bring our

 motion, it's going to be too late. And it's very 

 important, and it's important for, again, the solo 

 practitioners to see this in the rule and know that 

 this is the kind of information they have to get 

 into. So it actually will serve a very useful

 purpose. 

 I'm also in favor of the duty to investigate 

 prior to meeting. I think judges probably get very 

 frustrated with the parties when it's clear that 

 they've just sort of had a conversation on the

 phone. And I think, again, we have an opportunity 

 here to really change that. 

 And if there's a duty to investigate and 

 actually look at what your company's IT systems are 

 and come to the yearly conference with specific

 information about your systems, and even just an 

 overview of your systems and what databases are 

 involved, it will certainly help the person in the 

file:///C|/FEB/0211rule.txt (103 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 104 

 asymmetrical situation to know what is there and 

 what they can ask for. 

 And for situations where it's not asymmetrical, 

 and I really don't think I'm in a generally--our

 firm is in an asymmetrical situation because we're 

 good, and we have resources. But even for us, it 

 will save a lot of time. It will help us focus our 

 discovery requests. It will cut down on the number 

 of 30(b)(6) depositions.

 Now we are taking 30(b)(6) depositions at the 

 beginning of the case just to find out about 

 questions of burden and scope and what is there. 

 If that is already provided to me, I don't have to 

 have those depositions. So it will save everybody

 a lot of time and money. 

 So, at least, the parties should come to the 

 initial planning conference with an overview of the 

 various databases, file directories, and maybe file 

 labels. New Jersey has enacted these types of

 provisions, and my understanding is they have been 

 very successful. I know at least Judge Hughes has 

 said that it's really caused the parties to talk 

file:///C|/FEB/0211rule.txt (104 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 105 

 early and often. So we would be in favor of going 

 even further. 

 I want to say just a quick word in this regard 

 about special masters. With the enactment of the

 changes to Rule 53 in 2003--and I believe Judge 

 Scheindlin is a former head of that 

 subcommittee--they really can take on many more 

 different tasks now and at different stages of the 

 litigation. And again, I'm going to this leveling

 of the playing field. 

 And I think if there is something in the 

 advisory committee notes that the judges can--that 

 encourages the judges and maybe the parties to seek 

 the assignment of a special master, even to talk at

 that early phase about what--if we're talking about 

 burden and we're talking about what's accessible, 

 what's not accessible, it would be tremendously 

 helpful to have a special master with particular 

 knowledge about technology there before it has to

 go to the judge, who may or may not--will certainly 

 not have the knowledge base of the judges on this 

 committee, and it would be very, very helpful. 

file:///C|/FEB/0211rule.txt (105 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 106 

 And I think I would encourage the advisory 

 committee to make that available or at least 

 encourage judges and parties in the advisory notes 

 to maybe assign a special master to help with these

 particular issues. 

 I want to make a quick comment about the 

 changes to Rule 26(b). It's clear what we're 

 talking about is undue burden and expense. And 

 certainly, as plaintiff's litigators, we get the

 claim all the time. And I understand there's been 

 comments, well, you're dealing with undue burden 

 and expense now, what difference does that make if 

 they're saying it's unduly burdensome or it's not 

 reasonably accessible?

 And maybe you have a point, but then why do we 

 need to go there? It gives them yet another kind 

 of technical term that they will apply in response 

 to every single request for electronically 

 available information, and we know that they will

 because they always make the claim of undue burden 

 the first instance now. 

 I have a series of credit discrimination cases 

file:///C|/FEB/0211rule.txt (106 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 107 

 under the Equal Credit Opportunity Act. We've sued 

 10 different financing companies and banks, and in 

 each of those cases, we--it's a disparate impact 

 case, and we have sought transaction data. Ten

 times there has been a claim of undue burden. They 

 cannot--they've even said, "If we are asked to 

 produce nationwide data like this, we cannot do 

 it." 

 Well, in every single case, they have been able

 to produce the data. It's been easily analyzed 

 and, of course, has demonstrated disparate impact. 

 And that's another concern I have. We have a 

 phrase "reasonably accessible," which is 

 susceptible to a number of different

 interpretations. And yet, in the notes, there's no 

 real definition, and the only inference that is 

 given is whether it can be used in the ordinary 

 course of business. 

 And let me give you an example from one of our

 credit discrimination cases. We requested all 

 transaction data--and it was about discrimination 

 in car financing terms. We had asked for all 

file:///C|/FEB/0211rule.txt (107 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 108 

 transaction data going back a long period of time. 

 Well, after 90 days in the car business, 

 application data, when you go to the dealership, it 

 falls off the system. More than that, we learned

 that after a certain point of time, this one 

 company, they just took--they put them onto 

 cartridges, and they put them off in storage 

 somewhere. 

 Well, those ones that went back to the early

 '90s were certainly not used anymore in the 

 ordinary course of business. They were never used. 

 And they told us, "It's inaccessible. They're on 

 these old cartridges. We're not going to be able 

 to give it to you." In fact, we got it from them.

 They were fairly easily converted. It was not 

 expensive. So there wasn't undue burden or 

 expense, but they were inaccessible. And they were 

 not used in the ordinary course of business. 

 So I think if we're going to go down this road,

 it's just--it's very dangerous to have the only 

 inferent be ordinary course of business. And where 

 we already have undue burden and expense, which, 

file:///C|/FEB/0211rule.txt (108 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 109 

 again, has a well-developed body of law, I don't 

 think-- 

 JUDGE SCHEINDLIN: When you've experienced this 

 restoration of older data, has anybody asked for

 cost shifting, in your experience? 

 MS. STEWART: You know what? We haven't. 

 There hasn't been that issue because, honestly, 

 Judge Scheindlin, it hasn't been that expensive. 

 In one case, for our expert, we had to buy a

 special computer so he could convert the data from 

 these old cartridges. 

 And so, I guess, would a little solo 

 practitioner be able to buy a computer for their 

 expert? No, they couldn't even afford an expert in

 the first instance. So, but it really was not that 

 expensive. 

 JUDGE LEVI: But you paid for it. 

 JUDGE HAGY: But you paid for it. 

 MS. STEWART: We paid for it.

 JUDGE HAGY: So it is cost shifting. You just 

 accepted it. 

 MS. STEWART: Well, I guess--yes. 

file:///C|/FEB/0211rule.txt (109 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 110 

 JUDGE ROSENTHAL: But it wasn't very much cost. 

 MS. STEWART: That's right. That makes it 

 easy, right? You know, we would adhere to the cost 

 shifting test that's in Zubulake I. I mean, I

 think that that's a very fair test, and that's the 

 one that if cost shifting was going to be 

 considered, that's what we would--that's what we 

 would follow. 

 JUDGE LEVI: Could I ask one?

 JUDGE ROSENTHAL: Sure. 

 JUDGE LEVI: Then do you seek that cost at the 

 end of the case if you prevail? 

 MS. STEWART: Well, it's part of our--you know, 

 you file a petition with the court and an

 application for fees and expenses. So, yes, the 

 expenses, that would be expert expenses. 

 JUDGE LEVI: That would be part of your 

 expenses. What if you lost the case, and you 

 hadn't paid? The other side had paid. Would you--

 MS. STEWART: God forbid. If we lost the 

 case-- 

 JUDGE LEVI: Let's say, you know, instead of 

file:///C|/FEB/0211rule.txt (110 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 111 

 finding disparate impact, let's say the company was 

 put to some expense and demonstrated to a jury that 

 it was not disparate impact. So it was not upheld, 

 and they sought costs?

 MS. STEWART: So what's your question? I'm 

 sorry. 

 JUDGE LEVI: Would that be fair, and is that 

 what happens? 

 MS. STEWART: If they sought cost from me?

 It's never happened, so-- 

 JUDGE LEVI: You always win? 

 MS. STEWART: Honestly? 

 [Laughter.] 

 MS. STEWART: Or it's worked out, more often

 than not. 

 JUDGE KRAVITZ: The court would be party 

 neutral. 

 JUDGE ROSENTHAL: And if it's worked out, that 

 is, if the case settles, do these costs just simply

 rest on the party who bore them during the case? 

 MS. STEWART: Yes. Yes. And if--when we make 

 our application to the court for our fees and 

file:///C|/FEB/0211rule.txt (111 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 112 

 expenses, those would be the reasonable--the court 

 would have those in front of the court. 

 I want to just say one more thing because I 

 know everyone--I agree with Mr. Svetcov that for us

 to make an empty motion, it's nonsensical. And 

 there is very--there's no reason not to follow the 

 language, the language from--you can kind of borrow 

 from the language--if we're going to go down this 

 road, we can borrow from the language on privilege

 that the rule uses. 

 "When a party withholds electronically stored 

 information otherwise discoverable under these 

 rules by claiming that such production would cause 

 undue burden/expense, the party shall make the

 claim expressly must show that production of the 

 information will cause undue burden/expense." I 

 think that makes a lot more sense. It puts the 

 burden on them. 

 I would also add in the advisory notes, the

 advisory notes really need to make clear that the 

 nonproducing party will provide very specific 

 information as to what is being withheld and that 

file:///C|/FEB/0211rule.txt (112 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 113 

 the requesting party has the ability to test or 

 sample the electronically stored information 

 pursuant to Rule 34. 

 JUDGE ROSENTHAL: Could I ask you a question

 about the first thing you said? 

 MS. STEWART: Yes. 

 JUDGE ROSENTHAL: If a party, indeed, had 

 the--if a responding party had the burden of 

 showing that it could not provide the information

 without undue burden and expense-- 

 MS. STEWART: Incurring undue burden and 

 expense, yes. 

 JUDGE ROSENTHAL: --then would you have a 

 problem if the burden would then shift to the

 requesting party to show that even though there 

 would be significant burden and cost, good cause 

 nonetheless can be shown for the production? 

 MS. STEWART: I think once they had made--yes, 

 once they had made their showing and we had an

 ability to test the data and to probe their 

 showing, and if they were--still won that at the 

 end of the day, yes. 

file:///C|/FEB/0211rule.txt (113 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 114 

 Again, it comes to the balancing test, the 

 proportionality test of the rules and sort of the 

 balancing test that Judge Scheindlin talks about in 

 Zubulake I. Right, then we would have to come

 forward and say come up with--it would probably be 

 worked out at that point whether we would do some 

 kind of cost shifting. But we would need to show 

 for good cause. 

 JUDGE ROSENTHAL: All right. Frank?

 MR. CICERO: Just one quick question. I passed 

 on asking this of Mr. Svetcov, but since you 

 endorsed his comments, I'll ask it of you. I'm not 

 clear on why a motion would be an empty motion. Do 

 you believe that simply said a motion to compel the

 party to show why the information is not reasonably 

 accessible, would that get the attention of the 

 court sufficiently? 

 MS. STEWART: Yes. But what's the point of 

 that? That's what I don't understand. Usually,

 when we make a motion to compel, we have 

 affidavits. I mean, it's a meaningful motion. We 

 know exactly what we're talking about. 

file:///C|/FEB/0211rule.txt (114 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 115 

 Here, they've just said one line, which is that 

 this is not reasonably accessible. I don't know 

 anything about the data. I have no way to make any 

 kind of showing at all that I would normally make

 on my opening motion. So-- 

 MR. CICERO: What I'm saying is wouldn't it be 

 enough to get the attention of the court without 

 you making a showing. So that the party would have 

 to come in then and make the showing. If they

 didn't make--if they just said, well, it's not 

 reasonably accessible, that's not a showing. 

 MS. STEWART: I agree. But that might not well 

 happen. But I agree with Mr. Svetcov that it seems 

 a wasted effort because I make a motion based on

 nothing except someone else's representation, and 

 it doesn't seem like it's a meaningful use of 

 anybody's time. Yes? 

 MR. GIRARD: Ms. Stewart, is there a point 

 that, ultimately, in order to get it, you still

 have to show good cause so that the burden then 

 flips back to the plaintiff after they respond to 

 the motion? 

file:///C|/FEB/0211rule.txt (115 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 116 

 MS. STEWART: No. I only need to show good 

 cause if it's been deemed to be--it's going to 

 cause undue burden or expense. 

 MR. GIRARD: Right. So the sequence is you

 file a motion because they've invoked 

 inaccessibility. 

 MS. STEWART: Yes. 

 MR. GIRARD: Then they respond and make their 

 showing. But before you get it, the way the

 proposal is written, you have to then show good 

 cause, as I read it, so that you end up--it seems 

 like there's another round of briefing. Her 

 opening brief doesn't have to make that cause 

 showing.

 MS. STEWART: Right. Because I can't. I 

 literally cannot. So I just think in the first-- 

 JUDGE SCHEINDLIN: I think what the issue might 

 be, that people are concerned about, is wouldn't 

 you need some discovery possibly to contest the

 accessibility argument? In other words, if the 

 other side says it's not reasonably accessible, we 

 would say, "Well, before I could challenge that, 

file:///C|/FEB/0211rule.txt (116 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 117 

 I'm going to need to know about your system." 

 MS. STEWART: Absolutely. And that's why I 

 said the notes-- 

 JUDGE SCHEINDLIN: So you move into a whole

 round of discovery on the accessibility question 

 before we even pass step one. 

 MS. STEWART: Right. 

 JUDGE SCHEINDLIN: Right. That's an issue. 

 JUDGE ROSENTHAL: I think Mr. Bernick had the

 last question. 

 MR. BERNICK: Oh. Well, maybe it's just a 

 review of what people have said so far. But I 

 mean, technically, at least my experience in this 

 has been that there is discovery because this is a

 complex area, and people tend to shoot in the dark 

 on either side. 

 Ms. STEWART: Right. 

 MR. BERNICK: So as a practical matter with the 

 rule commonplace is that the producing party takes

 the first step by providing the identification, 

 which if it's taken seriously is a serious and 

 informative process. 

file:///C|/FEB/0211rule.txt (117 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 118 

 And to answer Professor Marcus's question, I 

 presume that in that process, the defendant or 

 producing party who knows their information the 

 best would have to provide an identification and

 explore what is it they knew or what it is they 

 didn't know about their own information. 

 MS. STEWART: Well you would hope that it would 

 be-- 

 MR. BERNICK: Inevitably, because they're going

 to be scrutinized by the court and tested in a 

 motion practice process, most responding parties 

 wouldn't want their credibility to be sacrificed 

 immediately. 

 MS. STEWART: I've never found defendants have

 that much of a problem. 

 [Laughter.] 

 MR. BERNICK: My experience has been very 

 different. When you're first before the court on 

 the very initial matter before the case, you don't

 want to compromise your credibility. And this is a 

 situation where because of the focus that's taking 

 place in this area, it's a good opportunity to have 

file:///C|/FEB/0211rule.txt (118 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 119 

 your credibility become compromised if you're not 

 forthright with the court. 

 You have an identification process. There will 

 then undoubtedly be requests for discovery. If

 there are ambiguities, 30(b)(6) depositions. A 

 motion then can be filed with the benefit of both 

 the identification and discovery, or the discovery 

 can take place in connection with the motion. And 

 what the rules really contemplate is to, in a

 sense, force the parties to hash out at the very 

 beginning what is reasonably accessible, what's not 

 reasonably accessible, so they can then get on with 

 life. 

 Why--isn't that the way that discovery problems

 generally are resolved? And all that's really 

 special here is that there's a recognition that 

 electronic data has become a big problem. It's not 

 a problem that anybody's created. It's the fact 

 that technology has evolved. We're dealing with a

 massive amount of information that perhaps nobody 

 really wants to have become incorporated in the 

 litigation. I don't understand why it's such a 

file:///C|/FEB/0211rule.txt (119 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 120 

 blind and useless process. 

 MS. STEWART: I guess, if that's what the rules 

 contemplate, then my fear is that's not what they 

 say. If they say that it has to be--that the

 nonproducing party just has to identify it's not 

 reasonably accessible, and then we have to file our 

 motion. And I guess if the rules really 

 contemplate that they have to make a very specific 

 showing with their reasonable--with their

 identification of the reasonable accessibility 

 issue, then maybe we would have less of a problem 

 with that aspect. But it definitely should not be 

 the burden is on us to make our motion to compel. 

 JUDGE ROSENTHAL: One last question.

 MS. STEWART: Okay. 

 MR. CICERO: Just one comment on that because I 

 think that the--I think that the intent of that is 

 you have to make a choice of who makes the first 

 move. And the intent was, okay, the party that

 says I can't produce it has the obligation, you 

 make the first move to make them prove it. And 

 then you get into the process that Mr. Bernick 

file:///C|/FEB/0211rule.txt (120 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 121 

 and-- 

 MS. STEWART: Well, when I read the transcript 

 from the first day of testimony in California, I 

 saw that somebody said, well, isn't it always the

 case that the defendant just cries "undue burden," 

 and then you have to come to court? And the truth 

 of the matter, again, is 100 percent of the time 

 when that objection is made, I say, "Okay, go ahead 

 and make your motion for protective order, or I

 want to see the data by next Friday." And it's 

 50-50 whether I'm going to have to eventually go to 

 court. 

 So maybe as a practical matter you're right. 

 But we do have a rule, 26(c), that provides that if

 they're not going to produce, that they have to 

 come forward and make a showing and file their 

 motion. And I think that should be the same here. 

 JUDGE ROSENTHAL: Thank you, Ms. Stewart. 

 MS. STEWART: Okay. Thank you.

 JUDGE ROSENTHAL: We'll take a 15-minute break, 

 ladies and gentlemen. 

 [Recess.] 

file:///C|/FEB/0211rule.txt (121 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 122 

 MR. REDGRAVE: --tried to submit to the 

 committee is my view of what would be, I think, 

 really minor additions or amendments to what the 

 rules committee has promulgated here.

 Overall, I think that this has been a very 

 complex task that's been undertaken with a heroic 

 amount of effort on behalf of the advisory 

 committee, and I think that what you came out with 

 was really something that parties have talked about

 in this room. You know, they wanted something that 

 is a neutral, and I think that what the committee 

 has done has been true to that standard. 

 Now are there rough edges that people seem to 

 take issue with? Of course. There are rough

 edges, both for people that are traditionally 

 thought of as defense bar or people traditionally 

 thought of as plaintiff's bar. 

 But what I've tried to emphasize in my comments 

 is the fact that whatever changes are made, there

 has to be a comprehensive look at these rules, not 

 in the perspective of a traditional tort or 

 traditional employment law, but how these rules 

file:///C|/FEB/0211rule.txt (122 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 123 

 apply to everyone, everywhere. How they apply to 

 individuals in the technology age, where so many 

 people are going to have so many computing devices. 

 How they apply to large corporations and complex

 litigation and everything in between. 

 So I want to make sure that when you see the 

 totality of my comments, including a red line of 

 the proposed rule and the committee note, please 

 understand that I'm trying to be as helpful as I

 can. And in that regard, I don't think there's 

 necessarily any magic language for some of these. 

 So what I want to focus my comments on this morning 

 are three particular aspects of the proposed rule 

 changes--the privilege provision, just quickly,

 26(b)(5), and then going on to the two-tier ,and 

 then to the safe harbor. 

 COURT REPORTER: Could you re-introduce 

 yourself for the record, please? 

 MR. REDGRAVE: Sure. Jonathan Redgrave.

 And one final preface before I get there, I 

 will note, although I haven't done as much work as 

 this committee, I think I have read about 170 of 

file:///C|/FEB/0211rule.txt (123 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 124 

 the comments in my spare time in the last several 

 weeks. I've read the transcript from the San 

 Francisco hearing. I've not had a chance to see 

 the Dallas one.

 With respect to the privilege provision, the 

 claw back, I think only minor changes are necessary 

 in that provision to accommodate a number of 

 comments that have been raised. I think 

 particularly I want to speak to the fact that I do

 not believe that this rule proposal transgresses 

 the enabling act. I think it is a procedural 

 proposal. To the extent there's any ambiguity in 

 that, I believe that can be clarified in the 

 committee note.

 I think the substantive provision has been 

 raised here this morning, and I addressed it in my 

 comments, that perhaps the note should have a 

 provision whereby the party that's being asked to 

 sequester it can, instead of sequestering and

 returning to the producing party, be able to 

 provide that to the court for a challenge. So if 

 we had any of the instances that certain people 

file:///C|/FEB/0211rule.txt (124 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 125 

 have referenced today, they think a gross abuse of 

 justice or something like that, it's going to be 

 going straight before the court. 

 And I think that's a good change, and I think

 it's something that will really stop anyone trying 

 to abuse a provision like this. Again, it's 

 procedural only. It's meant as a way to really 

 give a best practice to all litigants. But it 

 doesn't change the substantive effect. If there's

 a waiver, there's a waiver. In different 

 jurisdictions, that's just going to be dealt with 

 by the judges as it has been. 

 But this is a better practice. I think, Judge 

 Rosenthal, you made a remark in response to a

 comment this morning, it's not just about if it's 

 isn't broken, don't fix it. Can we make the rules 

 better? And I think all of the testimony over the 

 past couple of years really go to the fact that the 

 rules can be made better to address situations

 dealing with electronic discovery. 

 JUDGE SCHEINDLIN: Can I ask one quick question 

 on that one? When you get that request you're 

file:///C|/FEB/0211rule.txt (125 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 126 

 supposed to destroy it, return it, or sequester it, 

 is that something you can do after you've 

 disseminated the thing electronically possibly to 

 hundreds of people? What lengths do you have to go

 to to try to retrieve in order to return when you 

 may have disseminated widely? 

 MR. REDGRAVE: Well, I think the truth is it's 

 going to be a reasonableness standard for that like 

 it is for so many things. That the party that was

 asked to give it back, when they're called to 

 account with the court, they'll say, "Well, I 

 notified the people that I sent it to of the fact 

 that the request was made." 

 Obviously, to the extent they don't control

 those parties, they can't do anything else. And 

 the reality is, that may play into a court's 

 determination of a waiver of the privilege. 

 JUDGE SCHEINDLIN: But they have to notify 

 everybody they can think of that they might have

 sent-- 

 MR. REDGRAVE: That's correct. And they may be 

 able to take other steps. Depending if it's their 

file:///C|/FEB/0211rule.txt (126 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 127 

 consultant or their expert, there's greater levels 

 of control. So it's not a perfect situation, but 

 it does make the practice better. 

 With respect to the two-tier, I've made a

 number of comments with respect to the placement of 

 the provisions within the rule. I think it's 

 important that the clarification be made that even 

 if data is accessible, of course, the 

 proportionality standards of 26(b)(2)(i) through

 (iii) are applicable to that data. What we're 

 talking about here is just special considerations 

 of accessibility. 

 Now whether you place it where I've suggested 

 towards the beginning of the rule or even if you

 took, I believe, the magistrates judges association 

 comment that talked about perhaps making it as a 

 subset consideration, I think the concept is what 

 should be discussed. I think the committee is 

 right in its recommendation that a two-tier system

 would improve the practice. 

 Now I say that, recognizing that there are 

 going to be rough edges, and I think the parties 

file:///C|/FEB/0211rule.txt (127 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 128 

 that have testified at prior hearings and this 

 morning note that there are situations where it 

 could be hard to apply. That's true with any rule. 

 But does it overall make the practice better by

 providing a presumptive guidance for the parties as 

 to where you should be starting? And I say it 

 does. 

 JUDGE SCHEINDLIN: Is it presumptively clear 

 that you preserve the inaccessible? I realize we

 presumptively don't produce it, but do you preserve 

 it? 

 MR. REDGRAVE: That will depend on the 

 situation of the case, Your Honor. Because when 

 we're talking about inaccessible data, it may very

 well be that you know you have a large mass of 

 data. Whether it's on a tape, whether it's on the 

 old legacy system, you don't know for sure whether 

 there's data in there that may be responsive or 

 not.

 But you don't go to the ends of the earth--the 

 duty to preserve is one of reasonableness and good 

 faith, okay? So in reasonableness and good faith, 

file:///C|/FEB/0211rule.txt (128 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 129 

 do you have some special belief that in this legacy 

 system or on that back-up tape, is there unique 

 data? It's quite true, you're not going to be able 

 preserve everything. I think every--

 JUDGE SCHEINDLIN: I guess what I'm asking, 

 have we given enough guidance in this rule-making 

 effort to talk about the second tier in terms of 

 preservation as opposed to production, or are we 

 leaving everybody on their own to figure it out?

 MR. REDGRAVE: There's two responses to that, 

 Your Honor. To a certain degree, I'm not sure you 

 can address that because a lot of that is really 

 prelitigation. Secondly, with respect to what you 

 can address in terms of the litigation, the more

 specificity you try to put into the committee note, 

 the more problems you may raise for yourself in 

 terms of "You left this out. You included 

 something. Why did you do that?" 

 And there is a degree of truth to the fact that

 the magistrate judges, district court judges really 

 do understand how to apply reasonableness and good 

 faith to the determinations. But the important 

file:///C|/FEB/0211rule.txt (129 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 130 

 point about having the two-tier is to give 

 presumptive guidance to the parties and to the 

 courts that just like in a case where you're 

 looking at 10 employees were involved, for

 instance. And you go to the employees to collect 

 their documents. What do you have? 

 You ask them what's on their hard drive. You 

 say, did you use any file space on the servers, the 

 joint servers within the company? Did you share

 any documents on some distributive device? That's 

 the only place. You go through that entire 

 process. 

 But you don't bring in your forensic analysis, 

 whether it's with your own in-house IT staff or

 with a computer specialist to say, well, we're just 

 going to skip over the employee interview and find 

 out what they really have been using in this case, 

 to just dig through their computer drive and get 

 everything.

 The question is where do you draw lines? I 

 mean, this is where it's all coming down to. 

 Corporations, litigants, they're really confused 

file:///C|/FEB/0211rule.txt (130 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 131 

 about where to draw the lines because they're 

 trying to do the right thing. And by providing 

 this presumptive guidance, I think it can provide a 

 line. But as with any presumption, it is going to

 shift, depending on the circumstances. 

 I think if you look at, for instance, the 

 things that the Sedona Principles have tried to put 

 out there, I go around the country talking about 

 them as presumptive guidance because there are

 certain circumstances--for instance, we heard this 

 morning maybe in the labor context--where the 

 parties will know, really will know that they're 

 going to have to take some steps to go back and 

 find some data. You know, that's different.

 You're talking about having a presumptive part 

 of the rule, though, that can deal with a lot of 

 the cases and then give flexible guidance whereby 

 you can shift that presumption. So that's where I 

 think it really comes up.

 I did make in the comments a suggestion with 

 respect to the motion practice. I saw a number of 

 comments where they're just confused that the, you 

file:///C|/FEB/0211rule.txt (131 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 132 

 know, party makes their objection, and they have to 

 specify. I saw one comment or a number of comments 

 concerned about the level of specification 

 necessary. "We don't need a privilege log."

 Well, certainly if you required a privilege 

 log-type level of specificity, it might defeat the 

 purpose. I suggested that really where we should 

 focus this on is in the cases where it matters. In 

 those early meet and confers, in the early 26

 conference, that's where the parties should be 

 engaging in that back and forth about what they're 

 not producing. 

 I think there's a lot of cases out there where 

 you don't need to have this detailed information or

 even--maybe even a general information exchange 

 because they just get along fine. They'll be able 

 to understand what they're supposed to do with the 

 presumption and apply it. It won't become an 

 issue.

 But in the cases where it does, having that 

 focus in the committee know as far as what you do 

 in the meet and confer sessions to exchange that 

file:///C|/FEB/0211rule.txt (132 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 133 

 information, I think the practice will quickly 

 embrace what this committee is saying to practice, 

 to get in there, get in there early. And that goes 

 back to a comment I make at the outset of my

 written comments about the totality. 

 When you're looking at is this rule proposal 

 fair, you've got to look at the totality of the 

 fact that we're going to be forcing litigants to 

 try and come up front earlier, to get in there with

 specificity, get people that know things in the 

 door. Okay? 

 And so, I think when you look at the overall 

 scope of it, the two-tier actually does serve a 

 very good purpose. Whether you define it a little

 bit differently to accommodate some of the 

 comments, again, I think you can. I'd be concerned 

 about trying to draw too many distinctions because 

 you get into trouble when you get into that level 

 of detail on the committee note, much less a rule.

 But I think it's a good thing, and I urge the 

 committee to go forward with a two-tier approach. 

 With-- 

file:///C|/FEB/0211rule.txt (133 of 455) [3/2/05 2:36:45 PM]
file:///C|/FEB/0211rule.txt

 134 

 JUDGE HAGY: If I may just follow up on Judge 

 Scheindlin's question? I'm sort of surprised. I 

 assumed that if you identified something as not 

 reasonably accessible, and therefore I'm not going

 to produce it, that that would carry with it a kind 

 of a duty to preserve it until the issue was 

 resolved, while you indicated it may not 

 necessarily be preserved. 

 Do you think we need to consider specifying

 that if you say it's not reasonably accessible, you 

 will preserve it, although not produce it, until 

 the matter is resolved? 

 MR. REDGRAVE: I would not favor that in the 

 rule or in the committee note either. The reality

 is there's a lot of things that are not accessible 

 that you could say is it possible? Is it 

 theoretically possible there's information there? 

 Of course, it's true. 

 However, we don't run out and take depositions

 of everyone to preserve their knowledge when a 

 lawsuit is filed or when you know the lawsuit is 

 coming. There have to be reasonable measures or 

file:///C|/FEB/0211rule.txt (134 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 135 

 reasonable bounds with respect to the measures that 

 have to be taken to preserve information under the 

 common law duties. It is not an absolute duty. It 

 is not a strict liability standard as far as

 preservation. 

 So a lot of this discussion really comes down 

 to that, what is the duty? What is the duty to 

 preserve in the common law context? What is the 

 scope and contour of that? And that is the

 interplay that you're seeing here with respect to 

 these rules changes. And what you're brushing up 

 against is are you interfering or are somehow 

 modifying or changing that? 

 And I think what's important is that the

 committee recognize that the parties should be 

 talking about it. You recognize the fact that it 

 does have an interplay with respect to what's 

 actually eventually discoverable and what's 

 produced. But I don't think you should step out

 and change or try to change that law, which is out 

 there in existence, with respect to what is the 

 scope of that preservation duty. 

file:///C|/FEB/0211rule.txt (135 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 136 

 JUDGE HAGY: What do you think would happen if 

 you said something is not reasonably accessible, 

 and they move to make you show it. And then you 

 come in, and they show a need for it, and the judge

 balances the cost and the benefits and says, "All 

 right, I want the plaintiff to pay for half of it." 

 And you say, "Jeez, you know, we destroyed half of 

 that." You would be sanctioned, wouldn't you? 

 MR. REDGRAVE: With respect to what the

 ultimate peril is, there is peril. And where I go 

 back to my comment is the fact that if--I mean, 

 it's a sliding scale. Parties have their duties to 

 understand what they need to preserve in that 

 situation.

 And with respect to what they're saying is 

 inaccessible, they may understand that for half of 

 that stuff that's inaccessible, they know it's 

 still in dispute as far as whether or not the other 

 side is going to seek to have it produced in the

 case. They may understand that they may 

 nevertheless need to keep copies of that pending 

 the determination. But there may be other things 

file:///C|/FEB/0211rule.txt (136 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 137 

 that are inaccessible that they really don't 

 believe they have an obligation to keep, to 

 preserve, okay? They make that decision at their 

 peril.

 I mean, that's part of the dilemma facing 

 counsel that are advising corporations, or 

 entities, and those entities, whether they be 

 government or private. They're facing those 

 challenges, and they do have to make decisions, and

 they do. And then they have to come into court and 

 be able to defend them in good faith. And if they 

 can't, yes, they're in trouble. 

 Whether it's sanctions, and the whole range of 

 sanctions, depending on what the level of the

 violation, what it is that's lost. There's an 

 entire matrix of what the potential consequences 

 are. But that dilemma is real, and that's what 

 they have to balance. But that is their duty, and 

 they've got to fulfill it as they see it.

 JUDGE ROSENTHAL: Mr. Marcus? Professor 

 Marcus? 

 PROFESSOR MARCUS: I'd like to pursue what you 

file:///C|/FEB/0211rule.txt (137 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 138 

 said about the 26(f) conference and to relate it to 

 the other things you've just said. Am I right in 

 understanding that your view is that once somebody 

 has invoked 26(b)(2), if it's changed the way the

 proposal is written, then the later unavailability 

 of that information would not be covered by the 

 safe harbor proposed 37(f), even though one side 

 said at that point that the information was 

 inaccessible?

 And I wonder if you think that the approach to 

 the litigation hold spelled out in 37(f)(1) should 

 take account of the level of disclosure in the 

 26(f) conference concerning computer systems made 

 by the party who's invoking 37(f)? That may be too

 many questions, but I think they're related to each 

 other. 

 MR. REDGRAVE: Objection. Compound. 

 [Laughter.] 

 PROFESSOR MARCUS: I think that applies in this

 setting. 

 JUDGE ROSENTHAL: Overruled. Mr. Redgrave, 

 it's overruled. 

file:///C|/FEB/0211rule.txt (138 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 139 

 [Laughter.] 

 MR. REDGRAVE: As to the first question, I'm 

 not sure that was correct as far as how my 

 interplay was with 26(b)(2) and 37(f), that if you

 have information that's not reasonably accessible 

 that you can still, even if there is maybe in your 

 disclosures in talking about not reasonably 

 accessible data, if that is then, if you follow the 

 other provisions of 37(f), if it's destroyed in the

 routine system operations, can you still benefit 

 from the safe harbor? I think the answer is you 

 still can benefit from the safe harbor. 

 JUDGE ROSENTHAL: Does that depend on--excuse 

 me for interrupting--the answer to the first of the

 questions? Does that depend on the extent to which 

 there was a basis for believing that unique 

 discoverable information was on the material 

 identified as inaccessible? 

 MR. REDGRAVE: Yes.

 JUDGE ROSENTHAL: And I tried to underline the 

 word "unique" there. 

 MR. REDGRAVE: Yes, it does. Now if I'm 

file:///C|/FEB/0211rule.txt (139 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 140 

 following the second part of the question, we're 

 talking about Rule 37(f) and whether or not--you're 

 going to have to refresh me on the second part of 

 the question.

 PROFESSOR MARCUS: Well, I think that there's 

 relation--I thought you emphasized your support for 

 26(f). 

 MR. REDGRAVE: Yes. 

 PROFESSOR MARCUS: 26(f) exchange of

 information about these questions. My suggestion 

 was that it might be that that should relate to the 

 court's attitude toward sanctions later and ask the 

 question whether this party invoking 37(f) made a 

 sufficient disclosure of the operation of its

 systems and what would be preserved back in the 

 26(f) conference? 

 MR. REDGRAVE: I believe that there will be an 

 interrelationship when you get to 37 and 

 implications there with respect to what the party

 did early in the litigation as far as how they 

 disclosed, how they interacted with respect to the 

 discovery and disclosure obligations, how they went 

file:///C|/FEB/0211rule.txt (140 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 141 

 about their entire course of discovery. 

 I mean, right now, we know. Behind any 

 sanctions order that I see, there's a lot of 

 history in those cases. And whether you make that

 more explicit in the committee note or not, I fully 

 expect the district court judges will look and 

 magistrate judges will look very carefully at what 

 the parties did in their early conferences. 

 And I think it goes both ways, too, that if a

 party really thought they needed certain 

 information preserved, and they just kind of, for 

 lack of a better term, lay in the weeds and they 

 kind of were trying to play some game, towards the 

 end of the case say, "Aha, you didn't save it."

 But there was an opportunity, the other side was 

 engaged in a discourse at the beginning of the 

 case, it's going to go the other way. And I think 

 that will weigh against that party if there was a 

 lot of discussion about what needed to be

 preserved, and they didn't say they wanted it 

 preserved. 

 So I think that's where I go back to my comment 

file:///C|/FEB/0211rule.txt (141 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 142 

 about seeing everything as a totality. I think 

 there is interplay there, and whether or not you 

 need to make it more specific, I don't know. I 

 think that's going to be the way it plays out.

 JUDGE SCHEINDLIN: I have one question just 

 going back to inaccessibility. Is it anything 

 other than cost and burden to you? When you're 

 advising and trying to decide what's inaccessible, 

 how are you defining it?

 And the reason I ask that is reading a lot of 

 the comments, I'm being told that technology is 

 making more and more things accessible because it's 

 cheaper and easier than it was a year ago or five 

 years before that. So what is the definition to

 you, and is it just cost and burden? 

 MR. REDGRAVE: Two responses. The first one 

 and the last point you made about technology, I 

 think it's important that you stick with a concept 

 like accessibility rather than particular

 technology because technology will change that 

 sliding scale of accessibility. 

 Now how do you define it, which is the thornier 

file:///C|/FEB/0211rule.txt (142 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 143 

 question? That is a question that I think if you 

 adopt it, people will really, in practice, reach a 

 definitional stage of a year out or so where they 

 have a better understanding.

 But right now, it is not solely--it's like a 

 subpart of cost and burden. But it's a unique 

 subpart because it also ties in with the scope 

 question. Scope of your duty to produce. Scope, 

 how far do you have to go with respect to

 collecting information, collecting data, to produce 

 it in any given case, okay? 

 So it's tied with that entire scope concept. 

 So how far do you have to go? How far does the net 

 have to be cast? Now within that is, wow, I'm

 going to reach a certain point of undue cost. I'm 

 going to have marginal returns. I'm not getting 

 much back for my money for the additional search to 

 talk to the 201st custodian, the 202nd custodian. 

 I'm not going to get much when I go to the data

 systems in Asia, when I know it's a U.S. case. 

 It's a balancing there with respect to the 

 scope of duty that then does have a large component 

file:///C|/FEB/0211rule.txt (143 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 144 

 in terms of burden and cost. So, and that's why I 

 went back to my earlier comment, though. Even if 

 you do say it's accessible--like Weslaw, I've got 

 access to a tremendous of amount of stuff, but if

 you said produce it all, well, just because it's 

 accessible doesn't mean they don't still have that 

 burden issue on the proportionality test. 

 JUDGE ROSENTHAL: I guess to put a point on the 

 question, if it is a subset of cost and burden and

 if there are already factors in the rules requiring 

 that cost and burden be addressed, why do we need a 

 two-tier structure specifically for this cost and 

 burden analysis? 

 MR. REDGRAVE: Yes. I think that's a great

 question. It's been raised in a number of the 

 comments. And I would suggest that the inclusion 

 of this presumptive distinction between accessible 

 and inaccessible is very valuable. 

 But as I said, the way in which you do it could

 be modified. I've suggested one way where it comes 

 up, I think, more logically in the rule. The 

 magistrate judges, I think, said if you're going to 

file:///C|/FEB/0211rule.txt (144 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 145 

 go down this road, maybe it's more sensible to do 

 it as part of 26(b)(2)(iii). 

 In any event, even if you put it there, I think 

 it still is a two-tier distinction that is

 valuable. Maybe that makes more sense to explain 

 it down there. But the fact is you're creating, 

 kind of setting forth in the rule the presumptive 

 guidance to the parties that things that are not in 

 that set of things that are being accessed in the

 ordinary course of business, that are things that 

 people are going into and going out of, that's 

 where you should start in the lawsuit. And you 

 recognize there are a number of cases you are going 

 to go beyond that, okay, and I mean, that's really

 where we are. 

 Is it a perfect solution? Absolutely not. Is 

 it a better solution than where we are? Yes. I 

 mean, that's where I think we are. And I think 

 with some of the other changes in terminology that

 I suggest, we get over some of the hurdles some of 

 the comments have had with respect to dating 

 ourselves in terms of technology. So in terms of 

file:///C|/FEB/0211rule.txt (145 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 146 

 Rule 26(b)(2), I think the two-tier, you may want 

 to shift it around, but I think it still is a 

 valuable distinction. 

 In terms of 37(f), I've made comments that go

 to the culpability standard. And the reason I need 

 to explain this a little bit is the way the safe 

 harbor is drafted right now, it's a very narrow 

 safe harbor talking about this inaccessible data. 

 I assume we've gone through this preservation

 drill at the beginning of the case, and we're 

 getting to the end or somewhere down the road in 

 the case, and we've got the inaccessible data 

 that's been in the routine course of the operation 

 of the data systems. It's gone.

 For that particular subset of data, I think the 

 culpability standards should be higher than just 

 pure what I think has been bandied about as 

 negligence. I don't know if that's a proper 

 attribution. But that's where I'm talking about in

 that particular context because step back for a 

 second, back to our discussion of the common law 

 duty of preservation. You've got good faith, 

file:///C|/FEB/0211rule.txt (146 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 147 

 reasonableness governing that duty. Once you've 

 defined the scope of that duty, you look at whether 

 there's been a breach of that duty. 

 And so, that duty is not an absolute duty to

 keep everything. If that's that standard out there 

 right now, all you're doing is applying the 

 standard as it right now to this inaccessible data. 

 You're not really changing things. And I question 

 whether or not the majority, or whatever you call

 that thing that's in the main text of the proposal, 

 is really doing very much. 

 And I think, if we're going to be taking a safe 

 harbor, we're either going to do one thing and say 

 this inaccessible stuff, we should have a higher

 standard of culpability. Or secondly, if you're 

 going to go forward and look more at the broader 

 preservation duty, you should recognize that this 

 reasonable and good faith duty, that's applying to 

 everything.

 It's not an absolute duty. You cannot. If it 

 was, everyone fails. I'll serve discovery requests 

 on anyone sitting at this table, and you'll fail if 

file:///C|/FEB/0211rule.txt (147 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 148 

 I set you to a standard of absolute perfection to 

 preserve the things in your BlackBerrys, your cell 

 phones, your PDAs, your home TiVo, whatever it is. 

 It's just the way in which the world is today with

 respect to technology. 

 And with respect to people who have made 

 comments as to this is going to somehow make 

 discovery harder, if people are going to find 

 stuff, it just ain't so. There's going to be a lot

 more information produced in discovery, period. 

 That's one of the reasons I think the inadvertent 

 production rule is a very important thing. We are 

 going to have more and more documents produced, 

 data produced, and we're going to be able to do a

 lot of that more efficiently and cheaper. 

 But just because those technology innovations 

 are there that are going to help us, it doesn't at 

 all change the fact that I think these rules 

 proposals are good and are necessary. And I think

 we should look at this as a way in which to 

 harmonize that increased technological reliance, 

 but realize that at the end of the day, we still 

file:///C|/FEB/0211rule.txt (148 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 149 

 need tangible information for judges and juries to 

 look at. 

 Okay, there is a translation process. And in 

 between are the lawyers who actually have to review

 the stuff, understand the stuff, advise clients 

 about what this means in terms of the claims and 

 defenses, okay? It's not just we have this big 

 pile of information. Poof, now we've got a result. 

 There is this interaction where humans still have a

 huge part to play because in the end that data is 

 for us. It shouldn't run our lives. 

 So that's really it for my comments. I really 

 didn't come with anything prepared other than to 

 try and talk about those three things. I really

 appreciate the intense effort that's gone into 

 this. There is no perfect language. Please do not 

 wait for perfect language to arise. It never will. 

 Please keep in mind my comments are trying to 

 be helpful. In terms of specific language I

 suggest in the rules, I don't think any of my 

 suggestions are particularly magic. I've made some 

 particular suggestions as far as committee notes 

file:///C|/FEB/0211rule.txt (149 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 150 

 that I think would improve. But I think my written 

 comments probably explain pretty much everything 

 there. 

 JUDGE ROSENTHAL: Thank you very much, Mr.

 Redgrave. 

 MR. REDGRAVE: Thank you. 

 JUDGE ROSENTHAL: Mr. Tarricone? Good morning. 

 MR. TARRICONE: Good morning, Judge, members of 

 the committee. Thank you for allowing me to be

 here this morning. 

 I'd like to start by just telling you the 

 perspective that I come from and that I try to 

 bring to you this morning. I've spent 26 years 

 representing individuals in I guess what we've been

 calling asymmetrical litigation--David versus 

 Goliath--the individual litigants who have a right 

 to use the federal courts equally with the 

 corporations and the corporate interests that 

 you've mostly heard from and who have mostly been

 driving this entire process. 

 And in my view, this entire process has been 

 too focused on corporate expediency and corporate 

file:///C|/FEB/0211rule.txt (150 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 151 

 costs and the need for certainty with respect to 

 preservation standards, and too little focus has 

 been put on the issue of access to justice for 

 individual litigants and the essential purpose of

 litigation, which is to reveal the truth. 

 And I think we need to refocus ourselves a 

 little bit and remember that this entire civil 

 litigation process is to resolve disputes through 

 an adversarial system of weighing and evaluating

 evidence with the ultimate goal of determining the 

 truth. And I believe that these rules are 

 elevating expediency and issues of cost and 

 retrieval over the quality of evidence. And I 

 would urge that there would be a focus on the

 quality of evidence that is given to the fact 

 finder, regardless of where it is. It may be 

 inaccessible. But it may be the best evidence of 

 what happened. 

 And just as one example that I saw in the paper

 a few days ago, there were tapes that were 

 electronically stored at an Enron facility, which 

 revealed the exact reason why there was a power 

file:///C|/FEB/0211rule.txt (151 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 152 

 shutdown. And this is in a civil case, a civil 

 litigation between two power companies, energy 

 companies, one suing Enron. And it had to do with 

 the shortage, the energy crisis back in 2000 and

 2001. 

 And there is a tape that was electronically 

 stored, where an Enron employee says to another, 

 "We want you guys to get a little creative and come 

 up with a reason to go down," meaning to shut down

 the power plant. And indeed, they did. And the 

 next day, there were huge blackouts, and we all 

 know what happened. 

 That tape was preserved in that case, that 

 electronic data, because the FBI seized it. We

 don't have that benefit in most litigation. 

 JUDGE ROSENTHAL: Mr. Tarricone, could I ask 

 you a question? 

 MR. TARRICONE: Yes. 

 JUDGE ROSENTHAL: How often in your cases has

 it been your experience that you have needed to 

 restore data from tapes or any other kind of media 

 that before you could have it retrieved and 

file:///C|/FEB/0211rule.txt (152 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 153 

 produced? That is, how often do you have to go 

 to-- 

 MR. TARRICONE: I cannot--I cannot view that as 

 a particularly common problem in my litigation.

 However, let me just give you a scenario. 

 JUDGE ROSENTHAL: Hang on. Before you do that, 

 would you mind giving us a little bit of a fuller 

 picture of the type of litigation you have? So we 

 get a better of sense of--

 MR. TARRICONE: I handle complex personal 

 injury litigation--aviation cases, medical 

 malpractice, and product liability mostly. Let me 

 give you an example of a case, a case involving the 

 crash of a twin-engine airplane. At issue was the

 overhaul of an engine and, in particular, a fuel 

 control unit. 

 Under federal aviation regulations, every nut, 

 bolt, washer, spring, screw has to be accounted 

 for, whether it's a new part or a used part that's

 put back into the engine. And in this case, four 

 people were killed when an engine failed on 

 take-off and the propellor of the plane wouldn't 

file:///C|/FEB/0211rule.txt (153 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 154 

 feather. And we were looking at why it failed and 

 why wasn't it feathered. 

 And the claim was against an overhauler, a big 

 facility, and also against a fixed-base operator,

 another large facility. And we needed to get the 

 exact records of what happened when they did the 

 overhaul, which parts were replaced and which ones 

 weren't. And initially, we were told there were no 

 such documents.

 JUDGE ROSENTHAL: Was this electronic record? 

 MR. TARRICONE: Well, first, we were given 

 paper. Let me start by saying it's my experience 

 that it is the rare case that computer-based 

 information is voluntarily identified and turned

 over to plaintiff's counsel in this asymmetrical 

 litigation. It is a very rare case. It usually is 

 discovered after depositions and conferences and 

 motions. 

 And in this case, what happened was we get our

 initial, you know, multiple boxes of documents. 

 There's not a single bit of electronic data that's 

 produced. We're told that it doesn't exist. We go 

file:///C|/FEB/0211rule.txt (154 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 155 

 for nine months trying to figure out where this 

 information is. And eventually, we get to one 

 witness who says, "Oh, that's out in a warehouse. 

 We have our old computer system. It's out there."

 Well, how difficult would it be to access that? 

 He says, "Oh, I can go out there tomorrow and just 

 type in an inquiry and retrieve it." And we went 

 back to court, and it delayed the process for nine 

 months. Ultimately, we got the information.

 Another example of a case, and this is one--we 

 don't usually handle employment cases in our 

 office. Someone came to the office-- 

 JUDGE ROSENTHAL: I'm sorry. On that first 

 example you just gave?

 MR. TARRICONE: Yes? 

 JUDGE ROSENTHAL: That was information that did 

 not need to be restored? He just typed it in, and 

 it came. 

 MR. TARRICONE: Well, it was--we had been told

 by previous witnesses, higher ups in the company, 

 that it was their old system, that it was a system 

 that was no longer in use, that it was inactive 

file:///C|/FEB/0211rule.txt (155 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 156 

 material, all the claims that we've been discussing 

 here today. When, in fact, it was really quite 

 readily accessible. There was no cost shifting 

 issue, and eventually, we received the information.

 In the same case, e-mails had to be obtained 

 from five years earlier when the overhaul was done. 

 And eventually, they revealed why the wrong 

 propellor governor was put on the airplane and why 

 the propellor didn't feather.

 Now I represented one family, a widow and five 

 children. And you know, it's not "Goliath versus 

 Goliath" symmetrical litigation, where you have 

 mutually assured destruction if you don't reveal 

 information. It's more the effort of stonewalling,

 which I think is the real problem in the discovery 

 process for ordinary Americans seeking access to 

 justice, David versus Goliath. 

 JUDGE HAGY: The way we've drafted it, you 

 wouldn't have had to wait nine months. At least

 this was our intent. You wouldn't have had to wait 

 nine months to find out there was this information 

 they thought was inaccessible. 

file:///C|/FEB/0211rule.txt (156 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 157 

 In their first response to you, when you asked 

 for documents, they would have had to say, "I'm 

 responding this, and we have this other 

 inaccessible information, including maybe what's

 out at a warehouse." Wouldn't you have gotten to 

 it quicker that way? 

 MR. TARRICONE: In that case, I don't think so 

 because they didn't disclose that anything existed. 

 JUDGE HAGY: They didn't know about it, or they

 didn't object to it? 

 MR. TARRICONE: Well, I don't--I wouldn't 

 assume they didn't know about it. They didn't 

 reveal any information about it. We had to 

 discover it through the discovery process by taking

 20 or 30 depositions at extreme cost. And one of 

 the things I think this points out is that this 

 two-tier process, just by creating another tier, it 

 creates another hurdle. And for an individual 

 litigant, that means more cost.

 And it ultimately results in one of two things. 

 Either the case not being pursued because a lawyer 

 can't afford to take the case who's not being paid 

file:///C|/FEB/0211rule.txt (157 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 158 

 $350 an hour with a team of lawyers to access the 

 information, or the case goes forward without what 

 might be outcome-determinative evidence because 

 once the case is filed, the litigant, the

 individual litigant, can't afford to go through the 

 process to obtain the information. 

 And I think one of the problems here is that 

 when you create this two-tier, it is another 

 hurdle. And there then becomes another battle in

 the overall war of the case, which I think could be 

 very drawn out and require additional depositions, 

 motions, could require hearings, could require 

 experts. It's just one more hurdle. 

 JUDGE HAGY: How is it different from the

 current proportionality test, where somebody says, 

 "I'm not going to turn it over. It's too 

 burdensome." And then you've got to go through it 

 to show you have a real need for it and it's not 

 that burdensome. But that's the current test, and

 it didn't work in your case. 

 Now we're trying to say, okay, make them 

 identify in advance, make them think "Do I have any 

file:///C|/FEB/0211rule.txt (158 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 159 

 electronic discovery?" Because half the time, 

 probably in that case, it never occurred to them. 

 Maybe it did. But now they have to. Right up 

 front, it's told if you want to protect this stuff,

 you better tell us about it and tell us it's 

 reasonably inaccessible. You go through the same 

 battle as you do-- 

 MR. TARRICONE: With one exception. I don't 

 think they should be able to unilaterally declare

 that it's inaccessible and then put the burden on 

 the requesting party to file a motion and then go 

 through this entire discovery process. It's 

 two-tier. It is one more burden. 

 JUDGE HAGY: Don't they unilaterally do it now?

 Say "I'm not going to--" 

 MR. TARRICONE: I think it's a more 

 difficult--they have to come in and prove that it's 

 unduly burdensome. 

 JUDGE HAGY: Well, maybe it works different.

 But in my court, when somebody claims something is 

 unduly burdensome, and the other party--they're 

 required to meet and confer about it and then move 

file:///C|/FEB/0211rule.txt (159 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 160 

 to compel if they can't work it out. Same burden. 

 MR. TARRICONE: Well, it often gets resolved 

 when they meet and confer. 

 JUDGE HAGY: Wouldn't it happen here, too?

 MR. TARRICONE: I don't think so because here 

 it sort of shifts the burden. And just having the 

 category of inaccessibility gives cover to somebody 

 that wants to try to secret away information. 

 JUDGE ROSENTHAL: Mr. Bernick, I think you had

 a question? 

 MR. BERNICK: Yes. I've read through a lot of 

 comments, and I think that your comment is saying 

 the same thing, which is that litigation is a 

 search for the truth. I think the committee agrees

 with that proposition. 

 If you went back to the period of time before 

 there was significant electronic storage of 

 information and just dealt with an ordinary 

 document case, you represent your individual who's

 concerned about cost, one of the experiences that I 

 think people often reported was that big companies 

 would take discovery requests, and they would say, 

file:///C|/FEB/0211rule.txt (160 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 161 

 "Give me everything that you've got regarding the 

 design of X or Y or Z." 

 And they would take that very seriously, and 

 they would say, "Well, I'll tell you what? Why

 don't you pay a visit to our warehouse where we 

 store all of our documents? We will diligently 

 show you all of the different segments of the 

 warehouse where all these documents are stored, and 

 you can tell us what it is that you want."

 And the response, of course, is that, "Well, 

 that's ridiculous. I don't have the time or 

 energy, and I don't have the knowledge, really, to 

 be able to compel where I should go to get what I 

 really need. You're producing too much that's

 useful for the litigation." 

 And ordinarily, I think the court is generally 

 sympathetic to that. That is, that you can't 

 simply open up the keys to the warehouse. You've 

 got to do more to be more focused on what is really

 useful for the litigants. 

 If here we abandoned the idea of 

 accessibility--you had a company that got a 

file:///C|/FEB/0211rule.txt (161 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 162 

 discovery request which names the maker of a 

 certain product--we're such great people. We're 

 now going to give you all of our back-up tapes. 

 We're going to give you all of our information.

 Show up, and we'll invite you in. Wouldn't you 

 have the same complaint, which is that that's not 

 really a truth-seeking effort because there's not 

 been an effort to weed out what's really going to 

 be useful for the litigation?

 Wouldn't you have the same kind of problem if 

 people took seriously the idea there shouldn't be 

 any limitation that set access, which incorporates 

 not just cost and burden, but also captures, I 

 think, the idea of what's really useful for the

 litigation? Wouldn't you have the same problem if 

 you abandoned the idea of access, that the 

 individual plaintiff is really disadvantaged? 

 MR. TARRICONE: I'd like to start by hoping 

 that parties act in good faith. So let's start

 with that premise and that there is not going to be 

 stone-walling by producing a lot of unnecessary 

 information. 

file:///C|/FEB/0211rule.txt (162 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 163 

 I've spent many days in warehouses looking 

 through boxes of paper before it was electronically 

 stored. And I think your question points out 

 something that's important for this committee to

 consider. That electronic data--you know, what 

 used to fit in an entire warehouse now fits in a 

 shoe box. And while it may require searching, it 

 can be done by sorting and with a computer search 

 sometimes, not always.

 Now this is called a stick drive. It didn't 

 exist when I was at that first conference back in 

 2000. This holds 1 gigabyte of information. 

 JUDGE ROSENTHAL: Several have shown us. Thank 

 you.

 MR. TARRICONE: But it's amazing. And the new 

 iPod has 60 gigabytes of information. 

 JUDGE ROSENTHAL: Oh, my daughter showed me 

 that one. 

 [Laughter.]

 MR. BERNICK: But it's also true that that may 

 be searchable, word searchable, but most of the 

 material that we're probably talking about here 

file:///C|/FEB/0211rule.txt (163 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 164 

 that's controversial was never made to be word 

 searchable. 

 MR. TARRICONE: When this process started back 

 in the late 1990s, and there was a lot of concern

 about archives going back 10 years from then, you 

 know, we're moving forward. Today, it's 2005. 

 Information from the year 2000 will become less 

 relevant every year as we move forward. 

 And the searchability, the search capabilities,

 the storage capabilities will continue to advance. 

 I don't know how anybody can define accessibility 

 or inaccessibility, and a couple of people today 

 have commented that, well, we need to have a 

 definition. It can't be defined because it's a

 moving target. And that's why I think it's 

 ill-advised and just creates another hurdle. 

 And again, when it's Goliath versus Goliath, it 

 doesn't matter because of the mutually assured 

 destruction practice.

 JUDGE ROSENTHAL: It's deceptive. 

 JUDGE HECHT: One other question. You have not 

 commented on the claw back provision, the 

file:///C|/FEB/0211rule.txt (164 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 165 

 inadvertent production provision. Is it 

 commonplace in your kind of litigation for the 

 parties to agree to that sort of thing or not? 

 MR. TARRICONE: I have never agreed to that.

 JUDGE HECHT: Is that on principle, or it just 

 doesn't come up? 

 JUDGE ROSENTHAL: Because you don't have that 

 problem perhaps? 

 MR. TARRICONE: Because it hasn't been raised

 all that often. A couple of times it has. I just 

 haven't agreed to it. And I have had instances 

 where things have been inadvertently revealed. But 

 it really hasn't been an issue in my practice. 

 JUDGE ROSENTHAL: Have you dealt with the

 presence of such agreements in other cases? That 

 is, have you been advised of cases in which there 

 was that kind of agreement in place, and the issue 

 was the effect of a disclosure on third parties? 

 MR. TARRICONE: No. I haven't had that

 experience. You know, I'd like to comment on Rule 

 37 before I run out of time-- 

 JUDGE ROSENTHAL: Briefly, please. Thank you. 

file:///C|/FEB/0211rule.txt (165 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 166 

 MR. TARRICONE: --if I could? I have real 

 concerns about the proposed Rule 37. And in my 

 view, and this may be a radical view, I think it 

 exceeds the authority of this committee because it

 abridges the rights of individuals that have been 

 developed in virtually every jurisdiction in the 

 concept of spoliation. 

 And the concept of spoliation and the remedies 

 that go along with it, which in some jurisdictions,

 it is a separate cause of action. It is a minority 

 view. But it is a separate cause of action in some 

 jurisdictions. 

 In almost all jurisdictions, it gives rise at 

 least to an inference. It sometimes can result in

 dismissal or default or shifting of the burden of 

 proof, striking of a defense, striking of a claim. 

 And in most jurisdictions, it focuses on 

 reasonableness. 

 What Rule 37 does to abridge that right--well,

 it does two things. First, as I read the rule, an 

 action has to be commenced before there is any 

 obligation. And the law in many jurisdictions is 

file:///C|/FEB/0211rule.txt (166 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 167 

 that when one should reasonably anticipate 

 litigation from an event or occurrence or activity, 

 there is an obligation to preserve. And this 

 changes that. And it may not be the intent of the

 committee, but I believe that a plain reading of 

 the rule changes that. 

 The second part of it, though, which I think is 

 the real problem, is that this is a de facto 

 preservation standard. Any routine procedure is

 reasonable under this rule. In every court where 

 I've read a decision, reasonableness depends on the 

 particular circumstances. What might be reasonable 

 in one company might not be reasonable in another 

 company because of the nature of the business.

 Within the same company, what might be reasonable 

 under one set of circumstances won't be reasonable 

 under another set of circumstances. And I'll give 

 you a couple of examples. 

 The Federal Aviation Administration, the radar

 data from all the radar facilities. They recycle 

 the tapes every 15 days. Perfectly reasonable, 

 unless a plane crashes. And I've had cases where 

file:///C|/FEB/0211rule.txt (167 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 168 

 planes have crashed, and the data hasn't been 

 preserved because they were relying on their 

 standard routine procedure of recycling the tapes. 

 Now under this rule, I can't do anything about

 that because it's established that the routine 

 practice is reasonable. Under existing law, I have 

 pretty good spoliation claim in most jurisdictions, 

 especially if the FAA is [audio gap], which is, you 

 know, the case I'm talking about.

 Now another example, there's a 1st Circuit 

 decision, the Blintzer case, where a man is a guest 

 at a Marriott hotel, has a heart attack. His wife 

 calls the front desk and asks for an ambulance to 

 be sent, and it's quite sometime before an

 ambulance is sent. A claim is brought against the 

 hotel a year or so after. There's a three-year 

 statute of limitations in Massachusetts. 

 The hotel had a 30-day purging policy. And the 

 telephone logs were purged after 30 days, wherein

 would lie the answer as to how much time elapsed 

 between the man's wife calling the front desk and 

 the call being made to the ambulance company. And 

file:///C|/FEB/0211rule.txt (168 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 169 

 in that case, the court said that may be your usual 

 routine. It may be perfectly reasonable, usually. 

 But in this case, it isn't. You should have 

 anticipated litigation from this, and I think there

 was an inference was the remedy there. 

 But this rule, as it's written, establishes a 

 preservation standard. I don't think it is the 

 role of this committee to give certainty to 

 corporate America with respect to their

 preservation standards. It's a business decision 

 that each company has to make on its own, and they 

 shouldn't be given cover of this rule. And I dare 

 say that I believe this rule will encourage the 

 adoption of preservation standards that are

 intended to destroy useful information, information 

 that should see the light of day in litigation. 

 JUDGE ROSENTHAL: Any other questions? 

 MR. TARRICONE: I would just--let me just give 

 you one quote. Franklin Delano Roosevelt.

 JUDGE ROSENTHAL: Is it in your written 

 materials? 

 MR. TARRICONE: No. 

file:///C|/FEB/0211rule.txt (169 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 170 

 JUDGE ROSENTHAL: All right. 

 [Laughter.] 

 MR. TARRICONE: "Rules are not necessarily 

 sacred, but principles are." And I would ask that

 you keep the focus on, again, that truth-seeking 

 purpose of litigation. That's a principle that we 

 really shouldn't lose sight of. 

 Thank you. 

 JUDGE ROSENTHAL: Thank you, sir.

 Mr. Kiker? 

 MR. KIKER: I'd like to thank the committee. 

 I'm Dennis Kiker. 

 In the interest of full disclosure, I do come 

 at this from a defense perspective. I represent

 exclusively manufacturers and almost exclusively in 

 product liability cases. So I do have a viewpoint 

 on a lot of the rules. 

 In the interest of time, however, I'm going to 

 limit my discussion to one particular aspect. I'm

 willing to take questions, obviously, on any of the 

 rules. I do endorse the two-tiered provision. I 

 do endorse the safe harbor provision. And I think, 

file:///C|/FEB/0211rule.txt (170 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 171 

 as Mr. Redgrave indicated, I think, personally, 

 that if these rules went into effect today, it 

 would be a great improvement and provide a lot of 

 clarity for all of the parties. The case law would

 develop, life would go on, and everybody would 

 survive. 

 But in the interest of improvement and making 

 some detailed improvements, there is one particular 

 or perhaps two, but one particular area that

 concerns me. My role is as--the title is national 

 discovery coordinator, which is a fancy title for a 

 rather mundane existence. My existence revolves 

 around Rule 26, 33, 34, and 36. I respond to 

 discovery.

 When the need comes, I negotiate meet and 

 confer. I will file motions for protective order, 

 and I will respond to motions to compel. That's a 

 big part of my job. And so, in dealing with that, 

 one of the issues that came to light to me, and

 it's based upon recent experience is the provision 

 in Rule 34 regarding the form of production. 

 I think the issue here is we're trying to 

file:///C|/FEB/0211rule.txt (171 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 172 

 translate a traditionally paper existence into an 

 electronic existence. And under the paper 

 existence, it was very easy. We produced documents 

 in the form they were kept in the ordinary course

 of business, or we organized them by request 

 number. But we were dealing with pieces of paper, 

 so it was very easy. 

 Translating that into the electronic world is a 

 little bit difficult, and I think that the

 presumptive forms that are proposed by the rules, 

 absent agreement of the parties, are problematic in 

 two respects. First, they don't--they aren't 

 necessarily the best form of production to make the 

 document, the information usable to the litigants.

 And second, they don't, at least with current 

 technology--and I think that future technology may 

 resolve this in some respects, and it may 

 exacerbate it in others. But they make it 

 difficult to provide protections for certain types

 of information--proprietary information, trade 

 secret information, which is another big part of my 

 job. 

file:///C|/FEB/0211rule.txt (172 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 173 

 And so, let me start at the beginning. The 

 form of production not being necessarily the best 

 form of production. The best thing I can do is 

 give you an example. Certain of my clients

 maintain product information in a relational 

 database. If I want to know about the 

 manufacturing specifications for a particular 

 product, they will query the database, produce a 

 report, and I've got a complete detailed

 specification of how that product is built. 

 If I'm going to produce it now in the form it's 

 kept in the ordinary course of business, I've got 

 to produce my proprietary database, together with 

 all of the information in it and the interface that

 allows you to query that database. My client will 

 have a problem with that. 

 If I have to produce it in an electronically 

 searchable form, my options are pretty limited. I 

 can extract a flat file, which is--import that into

 an Excel spreadsheet, and you can play with it and 

 use it. But it's certainly not as useful as the 

 specification itself, printed out on a piece of 

file:///C|/FEB/0211rule.txt (173 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 174 

 paper or converted to a TIFF or PDF image. But the 

 rules wouldn't allow me to do that unless the other 

 parties agreed. 

 And I wouldn't want to suggest that parties are

 disagreeable, but I think we do run into the 

 situation where parties sometimes aren't assured 

 they're getting everything they need. So I think 

 that we need to have a compromise in there that 

 would allow us to produce it in alternate form.

 The reason that's important secondarily is that 

 electronic information right now is difficult to 

 protect. A lot of the information that companies 

 produce is necessarily confidential. It may run 

 from customer lists. It may run from confidential

 pricing information. It could be the formula to 

 Coke. I don't represent Coca-Cola, so I can say 

 that. Some of my clients, though, do have their 

 own formulas to Coke that we like to preserve. We 

 have to redact that information. We have to be

 able to mark documents as confidential when they're 

 produced. 

 And this isn't just a hypothetical concern. I 

file:///C|/FEB/0211rule.txt (174 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 175 

 have one client in the western district of Oklahoma 

 recently in a lawsuit, was produced a document by a 

 plaintiff's expert that was produced under 

 protective order from another one of my clients in

 a different litigation. 

 We knew where that document came from because 

 it had a Bates number and a confidential banner on 

 it that identified the source of that document, the 

 case in which it was produced. And we were able to

 go and seek the appropriate remedies to have that 

 document--parties address the wrongful disclosure. 

 Electronic documents are not that easy to protect. 

 JUDGE ROSENTHAL: May I ask you a question? 

 MR. KIKER: Yes.

 JUDGE ROSENTHAL: Is it your advice to us that 

 we not attempt to specify any default that would 

 apply if the parties did not agree and the court 

 did not order? 

 MR. KIKER: Essentially, yes. I think

 providing a default is not a bad thing as long as 

 it's understood that there are potential exceptions 

 in appropriate circumstances. Absolutely. 

file:///C|/FEB/0211rule.txt (175 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 176 

 JUDGE ROSENTHAL: How would you trigger those 

 exceptions without agreement or court order? 

 MR. KIKER: I think you'd put it in the rule. 

 The language that I proposed in the rule would

 simply have that be--it basically state that if 

 it's practicable, you'd produce it in the form it's 

 ordinarily kept in the ordinary course of business 

 or in an electronically searchable form. But in 

 appropriate circumstances, you may produce it in an

 alternate form. 

 JUDGE ROSENTHAL: Without specifying that 

 alternate form? 

 MR. KIKER: Well, obviously--correct. Without 

 the rule specifying the alternate form.

 Absolutely. 

 JUDGE SCHEINDLIN: But isn't the way we drafted 

 it, you don't hit the default unless there is no 

 agreement or a court order. So if you know you 

 don't want the default and you can't reach

 agreement, why not go to the court and say, "Here 

 are my circumstances. Here is how I'd like to 

 produce it in this case. I think we should order 

file:///C|/FEB/0211rule.txt (176 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 177 

 it." Then it will never be in the default with the 

 court order at your suggestion. 

 MR. KIKER: I think I'm trying to save you some 

 work on having to decide that decision, to make

 that decision. I think in the most-- 

 JUDGE SCHEINDLIN: Well, that's there, of 

 course, so that the parties will agree. Nobody 

 wants to go to court. So it's to encourage them to 

 agree that the next step is court, and the last

 step is default. Isn't that the way it's drafted? 

 MR. KIKER: I think that's absolutely correct, 

 and I would be one who would-- 

 JUDGE SCHEINDLIN: You have protection. 

 MR. KIKER: I would absolutely--I endorse the

 up-front discussion between the parties to try to 

 resolve these issues. It's been my experience that 

 the issues are not always resolved. And it seems 

 to me that rather than immediately going to the 

 default of going to the court that the parties

 should be able to produce the documents. 

 We know our documents. We know the best form 

 that they're produced. If I produce them, a 

file:///C|/FEB/0211rule.txt (177 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 178 

 specification, and you know, my opposing party 

 says-- 

 JUDGE SCHEINDLIN: But your goal may not be to 

 help your adversary. That's where the dispute

 arises. The adversary may have needs as to how 

 they want the documents produced, and you may not 

 agree with those needs. 

 MR. KIKER: Right. 

 JUDGE SCHEINDLIN: All I'm saying is you really

 can't agree and you don't want the default, you 

 could ask the court, explaining why in this case 

 you have to do it a certain way. 

 MR. KIKER: Absolutely. And I agree. And 

 that's why I prefaced my comments, saying that if

 these rules went into effect today, I could do my 

 job. I could live with it for the most part. I 

 would like to make the system and the process a 

 little more seamless so that we don't have to 

 petition the court every time there's a

 disagreement because there are too often too many 

 disagreements. 

 MR. HIRT: Mr. Kiker, how often would you get 

file:///C|/FEB/0211rule.txt (178 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 179 

 to the default? I mean, I guess the thing that I 

 just puzzle over is, given the extraordinary 

 implications for the costs and usefulness of the 

 information to the requesting party, why wouldn't

 any but an extremely naive counsel specify the form 

 of production he or she wants in making a request? 

 MR. KIKER: My experience has been that, and I 

 think as time goes on, as more and more parties 

 become savvy, so to speak, about the forms of

 production and the usefulness of it, I think 

 justifiably in many cases there is a lot of 

 reluctance on the part of the Davids of the world 

 to accept the Goliaths of the world's statement as 

 to here is what's best for you in this case. And

 the reaction then is to say "give me everything." 

 I mean, we've all seen the request for 

 production that encompasses a whole page, and they 

 say "give me every document." And in this, and you 

 know, and they want it in every form, and that's

 typically the opening salvo when you have these 

 discussions. 

 And until you have that rapport, until you have 

file:///C|/FEB/0211rule.txt (179 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 180 

 that level of trust built up among the parties, I 

 think it's going to be difficult in the beginning 

 to come to an agreement on all these issues. I 

 think it's a worthwhile endeavor, and I think the

 parties need to focus on those issues. But the 

 form of production is one that I think will be 

 difficult to agree on until that trust is built up. 

 A lot of the times, I deal with lawyers that 

 I've never met. And I deal with them once, and I

 never see them again because it's an extraneous 

 lawsuit down in Wyoming or Montana or somebody. 

 And I'll never see this lawyer again. He has no 

 reason to trust me. I have no reason to trust him. 

 And so, he's going to ask for everything. I'm

 going to try to--I'm going to be reasonable, 

 obviously, and I'm going to try to give him what he 

 needs. But I see this running into a problem. 

 MR. HIRT: But even in that situation, you 

 don't get to the default, do you? I mean, the

 requesting party requests something in 10 different 

 forms. You say no. That goes to the court. Then 

 the court decides. But the default is for the 

file:///C|/FEB/0211rule.txt (180 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 181 

 situation which there is no specification in the 

 document request as to form, and I'm just 

 wondering, you know, why any experienced requesting 

 party counsel would ever just let the thing get to

 that point? 

 MR. KIKER: Well, I think oftentimes there is 

 no specificity in the request as to the form. 

 "Provide me all documents related to this product." 

 Period. Does that specify the form? Absolutely

 not. If I'm going to interpret documents the way 

 the rules tell me, I've got to give you everything 

 in every form that it exists. And so, now I have 

 to go to the default or make a judgment call or 

 petition the court.

 JUDGE HAGY: First, talk to the other side. 

 MR. KIKER: First, talk to the other side. 

 JUDGE HAGY: And then go to the court. 

 MR. KIKER: And then go to the court. Or 

 produce it in a reasonably usable format. And my

 experience is I give them the specification, and 

 they're satisfied. This wouldn't allow me to give 

 them the specification if they didn't express it 

file:///C|/FEB/0211rule.txt (181 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 182 

 and they didn't trust me with that. I've given 

 them the piece of paper. They work with it, and 

 it's okay. Or I gave them the PDF or the TIFF. 

 One other issue I thought, and this is just a

 bit of clarification as to the reasonably 

 accessible requirement-- 

 MS. VARNER: Mr. Kiker, could I interrupt you 

 just for a moment? 

 MR. KIKER: Oh, absolutely.

 MS. VARNER: And I ask you a question, given 

 that you do national discovery. Some have 

 suggested that the issue of burden and expense is 

 already adequately addressed in the current rules, 

 and we don't need to be drafting new amendments.

 In your experience and your practice, how often 

 have you been able to persuade a court to prohibit 

 document discovery under the existing (b)(2) based 

 on burden, expense, and proportionality? 

 MR. KIKER: That would vary, depending on the

 jurisdiction and the circumstances, as it probably 

 should. Most cases, fairly regularly. I mean, we 

 go in, and there's a compromise drawn somewhere 

file:///C|/FEB/0211rule.txt (182 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 183 

 between where the plaintiffs would like to be and 

 where the defendants would like to be. And there 

 is a compromise drawn. 

 I tend to think, philosophically, that those

 who say this is already in the rules, the 

 two-tiered approach is there implicitly in the 

 rules because, as several people have commented, I 

 already have the argument that it's overly 

 burdensome, that the cost is too much relative to

 the value of the data. 

 I think electronic information is different 

 enough from what we are all accustomed to in the 

 world of paper that it is worth making that 

 distinction now. Particularly--and I like the

 reasonably accessible standard because of its lack 

 of definitiveness, because we don't know where the 

 technology is going to be in five years. We don't 

 know what is going to be accessible in five years. 

 But understanding and tipping our hat, so to

 speak, to the fact that this is different than the 

 file cabinet and the shredding box and the 

 dumpster. I think Microsoft drew that analogy very 

file:///C|/FEB/0211rule.txt (183 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 184 

 well in their comments, and I endorse that. 

 JUDGE SCHEINDLIN: But whatever the technology 

 is, what would make something inaccessible? 

 MR. KIKER: I'm glad you ask that question.

 Because to me, the issue really isn't the 

 information. The rules speak to whether 

 information is accessible or inaccessible. To me, 

 it's the source of the information which makes that 

 data inaccessible.

 If I know information exists, somebody drew an 

 analogy a moment ago of an old computer system 

 where the product specifications are on that 

 system. I know the information exists. It's 

 relevant. I think the burden there is probably

 affirmative to go and get it and produce it in this 

 case, even if it's relatively inaccessible. To me, 

 the issue here is the source of the data. 

 The sources being back-up tapes are, you know, 

 for the most part, not accessible because they're

 not used for business purposes. They're not easily 

 searched for the type of information we want. 

 JUDGE SCHEINDLIN: But that could change. 

file:///C|/FEB/0211rule.txt (184 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 185 

 MR. KIKER: That will change. 

 JUDGE SCHEINDLIN: That's technology. So that 

 doesn't really define it. What would make 

 something inaccessible as the technology changes?

 What is the definition is what I'm trying to get 

 at? You think it's the source. What does that 

 mean? Is it too expensive, too difficult to 

 retrieve? What does it mean? 

 MR. KIKER: I think it's a little of all of the

 above, and I don't think that the committee is well 

 advised to try to define accessible. 

 JUDGE SCHEINDLIN: But I'm asking you to try to 

 understand it. Can't it be back-up tape-- 

 MR. KIKER: What I can tell you today, I can

 tell you today for a particular client, and it will 

 differ for different clients, what is accessible to 

 that particular client. For example, I have a 

 client who has legacy data from an old e-mail 

 system that is there. They can load those tapes

 onto a minicomputer. They can translate those 

 tapes. They can install the software, and they can 

 get it. It's very time consuming, very expensive. 

file:///C|/FEB/0211rule.txt (185 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 186 

 Is there relevant information on there? Your 

 guess is as good as mine. That is the consummate 

 fishing expedition. Does it make sense to go get 

 that? It's not really reasonably accessible

 because the time and the burden and the expense of 

 getting make it so. 

 The whether or not it's reasonably accessible 

 depends to me, in large part, on what the 

 information is. If the information is important

 and relevant and I know where it is, is the expense 

 that--because it's expensive to get out of there, 

 does that make it inaccessible? I'm not sure. I 

 think that's a difficult thing to define. I think 

 this is one thing that the courts are going to have

 to deal with on a case-by-case basis. 

 JUDGE ROSENTHAL: Are there any other questions 

 of Mr. Kiker? 

 MR. GIRARD: Very quickly. I have one. Go 

 ahead.

 JUDGE ROSENTHAL: Rick, go ahead. 

 PROFESSOR MARCUS: I have a question about Rule 

 34(a), which I don't think you've mentioned. It's 

file:///C|/FEB/0211rule.txt (186 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 187 

 prompted by what you said about electronically 

 stored information being different and also your 

 reference to the relational database production 

 problem that you mentioned.

 34(a) proposes to make explicit and somewhat 

 separate the notion of electronically stored 

 information sought through discovery. Do you think 

 that's a helpful distinction to make, and do you 

 think that a relational database is properly

 thought of as a "document?" 

 MR. KIKER: That's a good question. I do think 

 that it is an excellent distinction to make, and I 

 do not, for my part, consider a relational database 

 to be a document. It is too transient. It is too

 ephemeral, so to speak. The information changes 

 too actively. 

 I think a document--and that's why I think it's 

 important to draw these distinctions in the rules, 

 to recognize that we're really dealing with

 information in a completely different form than 

 traditionally we are used to it. The document does 

 not change. The document does not move in 

file:///C|/FEB/0211rule.txt (187 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 188 

 location. The document can't be cut up into pieces 

 and used in different ways. 

 Whereas data, information, electronic 

 information, the bits and bytes that make up that

 database can. And so, document doesn't readily 

 describe what we're dealing with. And the problem 

 is we know what we're dealing with today. We know 

 that what we're dealing with today is vastly 

 different than what we were dealing with 10 years

 ago. 

 Nobody has a vision of what we'll be dealing 

 with in 10 years, and I think it's time that the 

 rules recognize that this is a different world. 

 This is a different environment from a business

 perspective and from a litigation perspective. 

 JUDGE ROSENTHAL: Mr. Girard, last question. 

 MR. GIRARD: Are the requests that you're 

 getting evolving, are they becoming more 

 sophisticated? As I would guess that a lot of the

 problem is, from your perspective, people are 

 propounding requests that are based on models from 

 the paper era. And I'd be curious to know if 

file:///C|/FEB/0211rule.txt (188 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 189 

 you're seeing any increase in sophistication on the 

 part of the requesting parties in how they're 

 framing the request? 

 MR. KIKER: Oh, absolutely. I think you're

 beginning to get a broader understanding among the 

 bar generally, both sides of the bar. Both in the 

 terms of the requests and the quality of the 

 discussions revolving around the request as to what 

 we're actually going to produce.

 I'm a big advocate of the meet and confer. 

 That's a big part of my job because we always start 

 here, arm lengths apart, and our goal is to get 

 somewhere into the middle so that we get the 

 information necessary to resolve the lawsuit.

 JUDGE ROSENTHAL: Mr. Kiker, thank you very 

 much for your time. 

 Mr. Greenbaum? 

 MR. GREENBAUM: Good morning, everyone. I want 

 to start with explaining the capacity in which I

 address you, and I hope I don't use up my 15 

 minutes. 

 [Laughter.] 

file:///C|/FEB/0211rule.txt (189 of 455) [3/2/05 2:36:46 PM]
file:///C|/FEB/0211rule.txt

 190 

 JUDGE ROSENTHAL: Do we have to hear about the 

 House of Delegates? 

 MR. GREENBAUM: I'm here to express the views 

 that are set forth in my letter. That letter also

 expresses the views of 50 other individuals who 

 happen to be all the members of the council and the 

 Federal Practice Task Force of the ABA Section of 

 Litigation. They include people who are lawyers on 

 the plaintiff side, lawyers on the defense side,

 business lawyers who could be on a plaintiff's side 

 or defense side, depending on the case. A number 

 of federal judges. However, they've not been 

 approved by the ABA, and they do not reflect ABA 

 policy.

 With that disclaimer, let me start by saying I 

 believe there is a need to act now, and it is 

 important to develop uniform national standards. I 

 think the proposals on the table are excellent, and 

 I'm very grateful for the opportunity of hoping to

 make some suggestions to try to make them better. 

 Let me start with early discovery planning. 

 I'm in agreement with the views generally 

file:///C|/FEB/0211rule.txt (190 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 191 

 expressed. It's a good idea to discuss these 

 issues early. I do have some concerns, and I guess 

 the common thread of some of my comments is that 

 more guidance is needed as to some of these areas,

 and one of them is what happens when parties don't 

 agree on the proper form of discovery? 

 I'm concerned that when you start seeing 

 routine preservation orders being entered in every 

 case and that there is a danger that we may have

 overbroad preservation orders that become very 

 difficult to comply with and that become traps for 

 the unwary. 

 And I give as an example, without commenting on 

 the facts of that case because that's a separate

 issue altogether, the preservation order cited in 

 the Philip Morris case, where in Case Management I, 

 which I presume was entered in somewhat of a 

 routine fashion--maybe even ex parte, but I assume 

 not ex parte--but the preservation order was

 preserve all documents containing information which 

 could be potentially relevant to the subject matter 

 of the litigation. 

file:///C|/FEB/0211rule.txt (191 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 192 

 Now that, to me, is not helpful. And it's 

 basically taking a discovery process that's 

 supposed to be lawyer-driven and now superimposing 

 a court requirement before there is any discussion

 of the issues in the case, before the parties have 

 presumably focused on what they want in the case, 

 and I think the note should explain that that's not 

 what we're talking about. 

 We should not have broad preservation orders.

 Any preservation order should be carefully tailored 

 to the specific issues in the case. And it may not 

 be able to be issued right off the bat after the 

 first conference because, at that time, both the 

 parties and the court may not have a sufficient

 understanding of not only the technology and the 

 systems that are available to the parties, but also 

 of the issues in the case. 

 If you have--and I think the goal of this is to 

 refine the issues so that we're dealing with very

 ascertainable areas. So, for example, in the 

 Zubulake case, those whole series of opinions were 

 basically about one discovery request, which said, 

file:///C|/FEB/0211rule.txt (192 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 193 

 "Give me the e-mails discussing me among my 

 supervisors." Now that's very--you can deal with 

 that. But if you have broad request cases that 

 talk about practices of companies generally, that's

 when you start getting into the preservation 

 difficulties of how do you deal with all of these 

 issues. 

 I don't think any preservation order should be 

 done as a matter of ex parte practice. They should

 not be generalized. And I do think, unfortunately, 

 we are going to be seeing an era where people will 

 be posturing to try the spoliation case. And I 

 think it's inevitable. I think we will see that 

 because, in hindsight, the most good faith type of

 conduct is hard to stand up if you keep taking 

 deposition upon deposition and follow every trail. 

 If you look hard enough, you're probably going to 

 find some problem somewhere. 

 And I've already been seeing this happening. I

 got a letter recently in a very--class action 

 against a major institution, where we're on a 

 motion to dismiss phase, no discoveries really had 

file:///C|/FEB/0211rule.txt (193 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 194 

 gone forward on either side, and the letter said, 

 "I am going to be seeking electronic information in 

 this case, and therefore be on notice that you have 

 an obligation to discontinue all data destruction

 and back-up tape recycling policies." 

 Now I sat with that letter. Maybe other 

 counsel may have just said, "I'm not going to even 

 respond to that." I responded. But I only took 

 that as an effort to try to set something up for

 later that if in two years from now, if we get 

 there, there has been documents that are not there 

 and they were on back-up tapes, maybe inaccessible 

 tapes, they said, "We'll put you on notice at the 

 beginning of the case."

 I responded thinking, well, if there's a 

 legitimate issue here, maybe they'd go to the 

 court. They didn't go to the court. And that just 

 furthered my sense that this was really done just 

 for posturing.

 PROFESSOR MARCUS: I'm sorry to interrupt. But 

 it seems to me the most pertinent proposal that's 

 made is the proposal to add to 26(f) a provision 

file:///C|/FEB/0211rule.txt (194 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 195 

 saying discuss any issues relating to preserving 

 discoverable information. It strikes me that maybe 

 that would be desirable in a case like the one you 

 described. I don't see how it would be

 undesirable, and I'm not sure what rule provisions 

 you have in mind to solve the problem you're 

 describing. 

 MR. GREENBAUM: I am seeking a little more 

 guidance on what is the default without a

 preservation order in place. Let's assume you 

 have--and what I'm suggestion that unless you know 

 that particular information is going to be relevant 

 to a case and is not available in any other-- 

 PROFESSOR MARCUS: Is this a comment on

 37(f)(1)? 

 MR. GREENBAUM: No. This really deals with the 

 preservation discussion and how you define-- 

 JUDGE SCHEINDLIN: Is really part of your 

 question is that if it's two-tier and the material

 is inaccessible, do you still have to hold onto it? 

 MR. GREENBAUM: That's correct, and I don't 

 think you should-- 

file:///C|/FEB/0211rule.txt (195 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 196 

 JUDGE ROSENTHAL: Can I ask you a question 

 about that? 

 MR. GREENBAUM: --as a general rule. 

 JUDGE ROSENTHAL: Can I ask you a question

 about that? Because that was exactly the one 

 question I wanted to ask you, if I may? I 

 understand the position and the attraction of 

 having that as a bright line, but what do you do 

 about a situation--and people apparently disagree

 about how frequently this is likely to arise. But 

 assume with me, for the purpose of this discussion 

 that there is a situation present in which you have 

 a basis for believing, a good basis for 

 believing--you as the party holding material likely

 to be sought in discovery--that the only source of 

 discoverable information, important discoverable 

 information is on inaccessible locations? 

 MR. GREENBAUM: I've built in an exception to 

 that.

 JUDGE ROSENTHAL: How do you do that, given the 

 language you propose? 

 MR. GREENBAUM: I think you--I haven't worked 

file:///C|/FEB/0211rule.txt (196 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 197 

 through the wording, but I think unless you have, 

 you know, good reason to believe that information 

 is not available in any other source. And again, 

 we're all talking about good faith. So I think, in

 the general case, you would not have an obligation 

 to preserve that unless you know, and it could be 

 shown that you know by the nature of the claims, 

 maybe by the nature of letters that were written 

 putting you on notice, by the nature of discussions

 that were had. 

 Obviously, if someone says, "Well, I want this 

 specific tape that has the e-mails about this 

 particular employee," and you say, "I don't think 

 that's accessible." And then they go to court, and

 in the meantime, you allow it to be destroyed, I 

 wouldn't want to be sitting in that chair. So, 

 obviously, there's some common sense here, and it's 

 all going to be tested by good faith. 

 But I think there should be a bright line that

 says unless you have that situation, that unless 

 somebody makes an issue about broadening 

 preservation to inaccessible data, that you should 

file:///C|/FEB/0211rule.txt (197 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 198 

 not, in the first instance, have to preserve it 

 without a court order. And once a court order is 

 in place, obviously, your conduct is going to be 

 judged based on how you comply with that court

 order. 

 And in that instance, the court is going to 

 want to address the issues earlier rather than 

 later. There are other issues, however, that a 

 court may need to defer addressing these issues

 until more information can be had, maybe even 

 discovery on the issue. 

 JUDGE ROSENTHAL: I think Mr. Bernick had one 

 more question before you go on. 

 MR. BERNICK: I'm struggling a little bit with

 this notion of there being a bright-line test. 

 Even before electronic discovery, again, in an 

 ordinary case that involved a significant product 

 or a significant area of business for a company, 

 the litigation is filed.

 I know of very few companies that had seen 

 litigation that wouldn't take steps to preserve 

 documents that might be relevant to the litigation 

file:///C|/FEB/0211rule.txt (198 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 199 

 because of the risk of a spoliation claim and 

 because of, frankly, the obligation to litigate--be 

 prepared to litigate in good faith with the 

 evidence that's relevant. So companies every day

 of the week have to make these kinds of decisions, 

 and they've made those kinds of decisions without 

 there being a bright-line test. 

 Now this rule, through the sanction language 

 that's been quoted, attempts to provide some

 further guidance for that decision-making. But to 

 say that there has to be then a bright-line test 

 that can be followed really says that we can spell 

 out by rule what should happen in the whole, almost 

 an infinite range of different kinds of

 circumstances that a company sees. 

 I would think that, A, if you can't have a 

 dialogue with the other side so that you could 

 reach agreement or precipitate the issue, the 

 company then exercises its judgment in order to act

 affirmatively to preserve documents that are 

 expected to be relevant. If they do a good job, 

 the current language that's being proposed for Rule 

file:///C|/FEB/0211rule.txt (199 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 200 

 37, that does provide them with protection. 

 By doing that, by keeping Rule 37 nonspecific, 

 you give the latitude to the companies in a 

 tailor-made program that fits their circumstances.

 But these problems are not novel problems. They've 

 always existed. 

 MR. GREENBAUM: I am addressing the 

 differentiation between not accessible data and 

 accessible data. Obviously, you have a duty to put

 in a litigation hold. Obviously, if there's 

 information on your active systems that is relevant 

 to the litigation, you must preserve it and not 

 allow it to be recycled and destroyed. I'm not 

 saying anything that's inconsistent with that.

 MR. BERNICK: But the accessibility language 

 that is built into Rule 37 to the extent it talks 

 about preservation of discoverable information, 

 discoverable under these rules would include 

 considerations of accessibility. So Rule 37, as I

 read it, interfaces with the two-tiered structure. 

 All that I think you would then do in order to 

 address the issue of accessibility is to build 

file:///C|/FEB/0211rule.txt (200 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 201 

 accessibility, your judgment about accessibility, 

 into the program or into the freeze that you've put 

 in place. If you've done a reasonable job of that, 

 then again Rule 37 gives you protection.

 MR. GREENBAUM: Well, all I'm saying is that in 

 Rule 37, you should add the word "accessibility." 

 MR. BERNICK: But it's already there because it 

 talks about "discoverable." And under the new 

 language that would talk about accessibility as

 being a parameter for discovery, Rule 37 already 

 incorporates the notion of accessibility, at least 

 as I read it. I may not read it the right way. 

 MR. GREENBAUM: Well, I just don't think it's 

 clear enough because you're always going to be

 judged in 20/20 hindsight. And what looks 

 reasonable at the beginning of the case, two years 

 later, after many depositions may not look as 

 reasonable. And that's why I think there's a need 

 for a little greater certainty, and I suggested a

 modest change to that by just tying it into the 

 two-tier system. 

 JUDGE SCHEINDLIN: Jeff, one quick question 

file:///C|/FEB/0211rule.txt (201 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 202 

 that we've asked--at least I have--of many of the 

 people today. But I know you spend a lot of time 

 on this. Where do you draw that line of 

 inaccessible? Is it about cost and burden, or is

 it something different? 

 MR. GREENBAUM: Well, I think it is about cost 

 and burden, but I do think you need to go through 

 the effort. And I think the definition is pretty 

 good. I think the Sedona Principles are helpful.

 I think the definitions that are in the rule now 

 about talking about legacy data and-- 

 JUDGE SCHEINDLIN: But why is that 

 inaccessible? Can't you be more concrete? Is it 

 anything other than the cost and burden of

 retrieving it that helps you define something as 

 inaccessible? 

 MR. GREENBAUM: I think it is cost and burden. 

 But that being said, I still think the rules are 

 not sufficient as it is, and we do need that, very

 badly need that two-tier approach. 

 JUDGE SCHEINDLIN: Well, what does it add? 

 We've always dealt with cost and burden. What is 

file:///C|/FEB/0211rule.txt (202 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 203 

 it that we're adding if it's all about cost and 

 burden? 

 MR. GREENBAUM: Well, because I think we have 

 enough experience now to generalize. Because right

 now what you have is the judges in 93 districts and 

 however many judges there are and then there are 

 magistrate judges, all making their own judgment 

 sometimes early in a case before, you know, the 

 issues have been developed, before a demonstration

 of burden and cost can even be done, as to, "Well, 

 I think you can do that. Press a button." 

 And I think there's enough learning that's 

 taken place now that says basically back-up 

 systems, disaster recovery systems that are not

 searchable, that are not indexed-- 

 JUDGE SCHEINDLIN: But that's going to be 

 something subject to technology. That can't be 

 fixed. 

 MR. GREENBAUM: It may change over time. I

 agree with that. 

 JUDGE SCHEINDLIN: Correct. So we can't fix 

 that in the rules as inaccessible. 

file:///C|/FEB/0211rule.txt (203 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 204 

 MR. GREENBAUM: Certainly today, and I think 

 you can point that out in the rule that this may 

 evolve over time. I think cost and burden is a 

 good part of the test.

 JUDGE ROSENTHAL: Last question, I think. 

 MR. CICERO: Just to amplify that, it seems 

 inevitable to me that it will evolve over time not 

 only by technology, but also by judicial decisions. 

 MR. GREENBAUM: Yes.

 MR. CICERO: Which, as they do that, if you get 

 something from somebody in one case, you'll be 

 citing it in the next case and citing--and that 

 will take into consideration changes in technology. 

 If we try to define it too much, then we'll be

 restricting what the courts can do or will do with 

 respect to future-- 

 MR. GREENBAUM: I think you've done a pretty 

 good job up until now. I mean, I think the rule as 

 drafted does a pretty good job with it.

 Let me move on to one or two other areas. We 

 talked about--there was discussion of the form of 

 production and the default. I think the word 

file:///C|/FEB/0211rule.txt (204 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 205 

 "default" is really a misnomer, and I think it 

 should be expanded. Right now, the default is only 

 there if someone doesn't request a form, and it 

 gives the producer a choice.

 Under our existing structure of discovery, a 

 responder has two choices. Right now, you can 

 produce something in the form it's maintained or in 

 response to a particular request. I think that's a 

 useful concept, and the responder should always

 have a choice, knowing their systems, of saying 

 that this is the form we want to produce it in. 

 And the other side can show good cause why that's 

 not what that person needs. 

 But whether it's electronically searchable, the

 form it's maintained, there has to be some 

 flexibility built in there so that the producing 

 party can do something consistent with that party's 

 systems. And therefore, I would be in favor of 

 taking out the word "default" by taking that choice

 and expanding it in all instances and then letting 

 the requester say, "Well, no, that doesn't work for 

 me," and then explain why. 

file:///C|/FEB/0211rule.txt (205 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 206 

 Safe harbor, there's been a big discussion 

 about the level of culpability, and there is 

 concern by many that, well, if you have negligent 

 spoliation, you could have, you know, bet the

 company case where you get this atomic bomb type of 

 adverse inference and that it's not helpful. 

 And my compromise on that would be to list the 

 level of sanctions that are available and specify 

 the level of culpability required for each one.

 So, for example, you want to have a redeposition, 

 the judge may say that's a reasonable remedy. You 

 know, I want to call it a sanction to do if, you 

 know, certain documents are negligently destroyed. 

 On the other hand, if it's an adverse inference

 or the striking of defenses or claims, you're not 

 going to want to do that unless there is some kind 

 of willfulness. And I think that's what most 

 judges are going to do anyway. But if you put that 

 in a rule, you're going to give people a lot more

 comfort that these systems are not going to be 

 running away from them, and that if they act in 

 good faith, there's going to be some protection. 

file:///C|/FEB/0211rule.txt (206 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 207 

 Thank you. 

 JUDGE HAGY: Call it sanction guidelines? 

 MR. GREENBAUM: No, I think you can put it 

 right now, Rule 37 has a listing of the range of

 sanctions. And all you would need to say is, you 

 know, we would not expect these sanctions to be 

 imposed unless there is some type of willfulness. 

 JUDGE ROSENTHAL: I think it was a booker joke. 

 It's only funny to a small group.

 [Laughter.] 

 JUDGE ROSENTHAL: Thank you, Mr. Greenbaum. 

 Mr. Paul? 

 MR. PAUL: Thank you, Your Honor. I'm George 

 Paul. I'm a practitioner in Phoenix, Arizona.

 It's a great privilege to be here this morning. I 

 have with me Mr. Mike Prounis from New York City, 

 and also Mike Faraci from Navigant Consulting, and 

 Professor Gary T. Ford, who is our Ph.D. survey 

 expert.

 Our testimony is like Mr. Greenbaum's. I need 

 to make the statement that it is not endorsed or 

 approved by the American Bar Association. But we 

file:///C|/FEB/0211rule.txt (207 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 208 

 are here as a group of people who work together in 

 the ABA and its Digital Evidence Project, which is 

 an interdisciplinary working group that's been 

 working on digital evidence issues for some time.

 And what we decided to do was to conduct, to 

 the best of our ability, a scientific survey. And 

 I'm going to ask Mike to explain a little bit about 

 the survey first and the survey population. 

 MR. PROUNIS: Thank you very much, George.

 We were looking--we were searching for the 

 voice of the unorganized rank and file in terms of 

 in-house counsel. And as George says, we wanted to 

 do that in a scientific manner. I just would note 

 that we could have increased our response rate

 considerably by targeting some specific segments of 

 the bar, but we opted not to. 

 In fact, most of our respondents were not 

 familiar with the existence or the details of the 

 proposed amendments. So we were hoping to give you

 a different perspective perhaps. 

 These respondents, by and large, have post 2000 

 litigation experience, both as defendants and 

file:///C|/FEB/0211rule.txt (208 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 209 

 plaintiffs. The 65.5 percent of them either run 

 law departments or supervise lawyers within law 

 departments, and the majority have over 21 years 

 experience in terms of practice experience. The

 majority work for billion-dollar plus organizations 

 spread across the industrial horizon, mostly 

 manufacturing, financial services, transport, 

 communications, and utilities. 

 And 25 percent of those respondents actually

 are members of the Fortune 180. So they're $10 

 billion-plus organizations. But we felt that as 

 owners of the ESI and as primary buyers of legal 

 services and the ones who will be implementing 

 these rules, it would be interesting to hear their

 voice. 

 MR. PAUL: This is spelled out and detailed in 

 our 60-something page preliminary survey report. 

 So what we did was survey this population not only 

 about our perceived policies behind these rules,

 but also about current practices, what is going on? 

 Are some of the things that perhaps you've been 

 hearing in hearings anecdotally, are they really 

file:///C|/FEB/0211rule.txt (209 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 210 

 real, or are they urban myths, so to speak? 

 So one of the principal findings that we 

 focused on was the concept of the meet and confer 

 session, the prediscovery meeting, because it seems

 to me like this is one of the keystones of these 

 new rule amendments. Prediscovery meetings, meet 

 and confer meetings were happening about 25 percent 

 of the time in cases where people had 

 electronically stored information. So they're

 happening. They're not happening in every case, 

 but they are happening. 

 The interesting data, at least as we perceive 

 it, and we've laid it out for the entire world to 

 review, is that in the cases where people are

 meeting and conferring and where they are able to 

 state, "Yes, I know what happened in those 

 meetings," "I remember," or "I have that data," 

 there is an ability to agree, a very strong ability 

 to agree, when perhaps some of the gamesmanship is

 dropped and some of the collaboration among 

 advocates occurs. 

 For example, over 80 percent of the respondents 

file:///C|/FEB/0211rule.txt (210 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 211 

 who had meet and confer sessions about 

 electronically stored information were able to 

 either agree without any assistance of the court or 

 with some assistance of the court, but not

 including a court order. Only maybe 17 percent of 

 the respondents had to have a court intervene. 

 JUDGE ROSENTHAL: Mr. Paul, may I ask you a 

 question, since you very helpfully have included 

 the details of the survey and the survey results.

 Could you summarize the lessons that you draw from 

 your survey results for us as we look at these 

 proposed rules? 

 MR. PAUL: Yes. I think that as far I think 

 meet and conference sessions are critical to how

 these rules are going to work in the future. If 

 they're not taken seriously, there is going to be 

 some problems because we have such complex 

 information systems. And unless people are 

 actually trying to discuss them with one another,

 there is really not going to be this search for 

 truth that we've been talking about. 

 Mike, what would you also say as an executive 

file:///C|/FEB/0211rule.txt (211 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 212 

 summary that we would like to give to them? 

 MR. PROUNIS: Well, in terms of the form of 

 production, we found it very interesting that paper 

 is still winning out. 46.3 percent of the most

 recent experience, they agreed to produce ESI as 

 paper. I would note that 30 percent indicated they 

 agreed to produce ESI as native, and a combined 25 

 percent agreed to produce ESI in a searchable 

 format. We specified what might be called a fat

 PDF file, which contains both the image and the 

 text. 

 So the default formats are being used out 

 there. Again, the last part of this is TIFF, is 

 38.8 percent of the respondents are producing in

 TIFF. And it suggests that people are producing in 

 multiple formats. 

 JUDGE ROSENTHAL: The same information in 

 multiple formats? 

 MR. PROUNIS: Yes. That's right.

 MR. PAUL: On privilege waiver, which seems to 

 be one of the main areas of concern of the 

 committee, what our finding was is that when people 

file:///C|/FEB/0211rule.txt (212 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 213 

 talked about privilege waiver in advance, they were 

 likely to be able to have an amicable solution to 

 it. But when it came up in the middle of a case 

 before prediscussion, there was a less likelihood

 of people being able to agree. They started 

 disagreeing. They started to claim waiver. Not 

 very many courts ruled on waiver. Only one court 

 upheld the waiver of the attorney-client privilege. 

 Now one of our most interesting findings was

 about sanctions, because we're talking about 

 spoliation sanctions so much. We found that 

 spoliation sanctions just aren't coming up that 

 much, at least as reported by these respondents. 

 Very, very few said that they had had it requested

 against them. Very few had requested against 

 others, and over 90 percent of the people just said 

 it had never come up in their case. We only had 

 one--well, less than 1 percent of the people had 

 actually been sanctioned.

 Somewhat contradictorily, though, when we asked 

 people did they think that taking action about 

 sanctions for spoliation of ESI was important, 

file:///C|/FEB/0211rule.txt (213 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 214 

 everyone seemed to very much believe it was a very 

 important topic. But their experience did not show 

 that this was dominating the recent cases involving 

 ESI.

 Let's talk a little bit about how electronic 

 discovery has changed data management costs. 

 MR. PROUNIS: Right. Unlike five years ago, 

 when I believe an ABA survey suggested that 84 

 percent of people really did not have an electronic

 discovery protocol, 69 percent of the respondents 

 here suggested that it's very much front and 

 center. That ESI was influencing their records 

 management policies. 

 The survey also suggests that the archives

 appear to be growing, corporate archives. Even 

 though people are aware that they can legally 

 reduce the size of their archives, it seems that 

 most people are not doing so. 

 And my final point in terms of a high-level

 summary is that 69.7 percent of the respondents did 

 not agree when asked if they settled their most 

 recent case to avoid the financial cost of 

file:///C|/FEB/0211rule.txt (214 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 215 

 electronic discovery, which I found a bit 

 surprising. 

 MR. PAUL: I'd like to go back just very, very 

 briefly on the data management. One of our focused

 interviews with one of the acknowledged experts in 

 this area requested us to inquire of this group 

 into whether there were either electronic or 

 cost-effective ways to search for privileged 

 materials. So I don't have to have just a bunch of

 associates looking through a lot of paper. 

 And the response was not really. There really 

 aren't tools available, all right? And again, the 

 statistics are laid out in tables in Appendix A. 

 And I think two quick final points. Our report

 shows some real confusion, and we've heard a lot of 

 discussion in testimony this morning about 

 reasonable accessibility. Our report showed a lot 

 of confusion, maybe not surprisingly so, about 

 reasonable accessibility. For example--

 MR. PROUNIS: Back-up. 

 MR. PAUL: --information stored on back-up 

 tapes. Well, almost 60 percent of the respondents, 

file:///C|/FEB/0211rule.txt (215 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 216 

 and these are people from large, sophisticated 

 companies, felt that's reasonably accessible, okay? 

 And so, it sort of--again, this is sort of one of 

 these things that may be contradicting some of the

 urban myths. 

 Now if you ask them information stored on 

 legacy systems, well, only 7 percent say that's 

 reasonably accessible. So that's something that's 

 very much in accordance with what you would

 intuitively think. But then you get, well, how 

 about a hand-held device? Well, gee, people don't 

 really know about a hand-held device. How about a 

 laptop? There is not a consensus. 

 And so, this whole idea of reasonable

 accessibility is problematic, not only in regards 

 to the legal standard that a court might apply in 

 determining the burdens of proof and the cost of 

 production, but also just the understanding of the 

 general legal community about the concept of

 reasonable accessibility. It's a problematic issue 

 for the general populace. 

 JUDGE ROSENTHAL: May I just ask one quick 

file:///C|/FEB/0211rule.txt (216 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 217 

 question? 

 MR. PAUL: Yes, Your Honor. 

 JUDGE ROSENTHAL: And it may be in the 

 explanation of the procedure you followed. When

 you asked these questions, did you provide the 

 survey respondents with a copy of the language 

 describing--of the proposed rule and the 

 accompanying note? 

 MR. PAUL: No, we--

 JUDGE ROSENTHAL: So it was just a question 

 of-- 

 MR. PAUL: We tried to just use the words 

 "reasonably accessible." 

 JUDGE ROSENTHAL: Okay.

 MR. PAUL: We did not want to give them a 

 definition because--and we actually, it was a very 

 conscious decision, did not want this to be a test 

 on the rules. We did not want people trying to 

 give uninformed quick responses to rules. We

 wanted them engaging in broad policies. 

 JUDGE ROSENTHAL: Okay. Thank you. 

 MR. PAUL: The final point is that we did ask 

file:///C|/FEB/0211rule.txt (217 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 218 

 people--we figured most people will not have been 

 expert on the rules. Most people maybe won't even 

 have heard about the rules. Truthfully, over 30 

 percent of the general population and another 50

 percent said, "Well, I've heard about rules. I 

 don't know anything about them." 

 But we wanted to ask them about what the 

 committee has identified in its materials as the 

 issues, the areas of concern, the places that

 you're folding in new procedures into the rules. 

 And so, we did ask them about that. And although 

 people hadn't really been familiar with the rules, 

 they were really quite supportive of action in the 

 areas that are being addressed. And that's found

 on page 10 of our report, and we've given you some 

 examples. 

 That, for example, inadvertent production of 

 privileged materials, a huge majority believe that 

 this needs to be addressed involving ESI. The idea

 of reasonable accessibility. Although people can't 

 really define it, a very strong majority think, you 

 know, that is something that we really need to 

file:///C|/FEB/0211rule.txt (218 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 219 

 address. Rule makers need to address that. 

 So I think that the lesson there is that, yes, 

 there has been a focus on proper areas. Yes, even 

 people that haven't even studied up on this believe

 that these are areas. They do this all day long. 

 A lot of these people have had over 10 cases. 

 A lot of them had hundreds of cases involving ESI, 

 and sort of the personal testimony about this is 

 that the overwhelming complexity of the information

 systems at litigants now is going to demand a 

 new--sort of a new age of collaboration, I think, 

 among advocates because that's going to be the only 

 way that they're going to work through all the 

 various problems that we have been discussing here

 today--as to the meet and confer, a robust meet and 

 confer process. 

 JUDGE ROSENTHAL: Thank you very much. We 

 appreciate all of your effort and your coming here 

 today.

 MR. PAUL: Thank you. 

 JUDGE ROSENTHAL: Ms. Carter? DeGenova-Carter. 

 I'm sorry if I only got half of your name. 

file:///C|/FEB/0211rule.txt (219 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 220 

 MS. DeGENOVA-CARTER: You got it all out, 

 frankly, and that happens. Good morning. 

 JUDGE ROSENTHAL: Good morning. 

 MS. DeGENOVA-CARTER: I am here today on behalf

 of State Farm, and we'd like to thank the committee 

 for allowing us to come and give our support and 

 our explanation and commentary on the proposed 

 amendments. 

 Let me give you a brief idea of what I do every

 day. I am counsel for State Farm. I work in the 

 litigation department, and primarily my job is to 

 handle institutional discovery. We handle the 

 discovery that comes in from all of the different 

 jurisdictions that would be involving corporate

 documents, requests for corporate information, et 

 cetera. 

 What I'd like to do today is give you our 

 support and our rationale for our position, but 

 also give you some practical illustrations of why

 we feel the way that we do about the rules. And 

 we'd like to address three different areas. The 

 first being the two tiers of discovery, second 

file:///C|/FEB/0211rule.txt (220 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 221 

 being cost allocation, and third being the safe 

 harbor rule. 

 But before I do that, I wanted to give you a 

 little bit of brief background about State Farm.

 Obviously, we're one of the larger insurers in the 

 United States. We do business in all 50 states, 

 the District of Columbia, and also in three 

 provinces in Canada. We have over 69,000 

 employees, over 16,000 agents, and approximately

 156,000 active e-mail boxes. 

 We send and receive over 5 million e-mails a 

 day, and each of the size of those e-mails is 

 approximately 25 kilobytes. We also have all 

 different kinds of databases and servers.

 As an insurance company, we handle claims. The 

 majority of those are auto and fire claims. And 

 for the year 2004, we had 12.7 million claims that 

 we handled for our policyholders. Unfortunately, 

 since we handle so many of those claims, we're also

 a major user of the court system. 

 Last year, we had for just auto suits over 

 125,000 auto suits in which we were defending our 

file:///C|/FEB/0211rule.txt (221 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 222 

 policyholders in some court of jurisdiction. For 

 the fire side of the company, we had over 18,000 

 lawsuits that we were defending. And then we also 

 have at the end of the year 2004 approximately

 3,000 suits just against the State Farm enterprise. 

 So we're looking at currently, right now, State 

 Farm is involved in over 150,000 lawsuits in some 

 jurisdiction or another. Obviously, from that 

 standpoint, we're here to support the rules because

 we think that they give us guidance on how to 

 handle this new trend of electronic discovery. 

 Given the size and the volume of the information 

 that we handle, we get requests for electronic 

 information every day. I see them come across my

 desk as if it's just the normal course of business. 

 One thing that we are concerned about is that 

 the rules retain the overall goals of the '93 and 

 the 2000 amendments, which really did a good job 

 focusing on making sure that parties were serving

 meritorious relevant discovery. And we want to be 

 sure that with these amendments that the parties 

 are still doing that, and simply because we have a 

file:///C|/FEB/0211rule.txt (222 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 223 

 new topic, electronic discovery, we're not opening 

 the door for parties to have less meritorious, very 

 overbroad discovery. 

 And on the first topic of the two tiers, State

 Farm supports the two tiers. We think that we need 

 some type of classification to help us handle the 

 different types of requests for electronic 

 discovery that we get. We might suggest that, as 

 many here have today, that reasonably accessible be

 more further defined or clarified better. And I 

 know that it's a very difficult concept, trying to 

 create a definition for this, this beast of 

 information. 

 We do have a couple of suggestions, and one

 might be defining it from a user and searcher 

 perspective. So maybe a suggestion would be active 

 or online data that is searchable, using the native 

 application in which it was created. In layperson 

 speak, it would be active online information that

 is searchable in the manner in which it was 

 created. 

 If we don't want to or the committee doesn't 

file:///C|/FEB/0211rule.txt (223 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 224 

 want a specific definition, another idea that we 

 thought of was maybe a noninclusive list of factors 

 that you consider, very similar to Judge 

 Scheindlin's Zubulake opinion, where there is a

 list of factors, such as is this information 

 information that's active? Is it online? Is it 

 easily retrievable? Is it information that can be 

 retrieved obviously without a lot of burden and 

 with minimal effort and minimal cost?

 Now we understand that that's very difficult to 

 do, but we think that if we have a definition of 

 accessible versus inaccessible, it will make the 

 discovery process clearer for both sides. Right 

 now, I think that there is an uncertainty with what

 responding parties have to produce and what 

 requesting parties are entitled to. 

 Just as an example, in the costs that we do 

 face searching our active system, if we had a 

 request to search one of our servers for e-mail,

 and we have 49 different servers that house all of 

 those 156,000 mailboxes, and they're located in 

 four different spots all across the country. One 

file:///C|/FEB/0211rule.txt (224 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 225 

 request to search one server for 10 terms that a 

 plaintiff gives us, for search and review, costs 

 $125,000. We've had to do it, and we've done it 

 because we didn't know--we didn't have guidance on

 whether this was accessible information, whether it 

 was inaccessible. 

 So we thought, okay, it's been asked for. We 

 had a judge that said, "Okay, plaintiff, give them 

 the 10 terms that you want searched on the server,"

 and we paid for it. And it-- 

 JUDGE SCHEINDLIN: Can I interrupt? I just had 

 a question about that, given an earlier speaker. 

 MS. DeGENOVA-CARTER: Sure. 

 JUDGE SCHEINDLIN: Earlier this morning, we

 heard that that may be a matter of shopping. Did 

 you pay an outside vendor that $125,000, or was 

 that in-house? 

 MS. DeGENOVA-CARTER: This was outside at the 

 time, and it was done probably about a year ago.

 JUDGE SCHEINDLIN: So, according to the earlier 

 speaker, you might have been able to buy that 

 cheaper? 

file:///C|/FEB/0211rule.txt (225 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 226 

 MS. DeGENOVA-CARTER: Well, yes, maybe we could 

 have. But we didn't know. And at the time, you 

 know, we had about 45 days to complete it. 

 JUDGE SCHEINDLIN: I understand. So maybe it

 can be bought cheaper. Maybe the costs will go 

 down next year? 

 MS. DeGENOVA-CARTER: Yes, exactly. And that's 

 a very good point. The costs very well could go 

 down next year, and I know a number of speakers

 have said and State Farm would agree with the fact 

 that we have to be flexible. But I think we can 

 still give a definition and be flexible. The 

 definition that we proposed would change with 

 technology.

 As a new technology became available, if your 

 system could be searched in that technology, then 

 your information would be considered to be readily 

 accessible, and you would have burden to produce 

 that. And you would have the burden to pay for

 that, and I think most companies would probably 

 find that to be reasonable. 

 JUDGE ROSENTHAL: Professor Marcus? 

file:///C|/FEB/0211rule.txt (226 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 227 

 PROFESSOR MARCUS: In the example you gave 

 about the judge's order that you search the server 

 using 10 terms, how would that be handled 

 differently under Rule 26(b)(2) as it has been

 proposed? 

 MS. DeGENOVA-CARTER: Current--for us, under 

 Rule 26(b)(2), right now, that information would 

 fall into an accessible category. So it's-- 

 PROFESSOR MARCUS: When you received a Rule 34

 request that included that information, what did 

 you do in response? And then what happened after 

 that? 

 MS. DeGENOVA-CARTER: Right. Sure. Obviously, 

 what we did is we, first off, objected and said

 this is very broad. I think the request was for 

 any and all documents that you have relating to 

 this case. So we served our objections on the 

 other party. 

 And then they came back and said, okay, now

 that you've described to us this e-mail system that 

 I described--which we said, "Wait a second. We 

 can't go search 156,000 mailboxes. Let us know 

file:///C|/FEB/0211rule.txt (227 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 228 

 either the parties you think that are involved or 

 give us more of a definite definition." 

 And so, that's when they came up with the idea, 

 well, we can limit it to terms that we think would

 be operative in this case. And we said, well, we 

 would rather, obviously, have it restricted to the 

 parties that were involved. But the judge agreed 

 that 10 terms, they were relevant terms, that we 

 should search our system for that.

 So what we did was we found the servers and the 

 mailboxes that would be affected, and we contacted 

 our vendors who we would use, and we had to do a 

 search for the 10 terms. Then we had to review all 

 of the information that we found, which actually

 cost a lot more money than did the search itself. 

 And that would be one of the reasons that we would 

 suggest, for cost allocation, a presumption in tier 

 two for inaccessible information that--a 

 presumption of cost shifting for information that's

 not reasonably accessible. 

 Obviously, that presumption would be able to be 

 rebutted by clear and convincing evidence of the 

file:///C|/FEB/0211rule.txt (228 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 229 

 need or that this information is relevant and is 

 available. 

 PROFESSOR MARCUS: I'm sorry to press you on 

 this.

 MS. DeGENOVA-CARTER: No, that's fine. 

 PROFESSOR MARCUS: But that sounds a lot like 

 what I would expect would happen under Rule 

 26(b)(2) as proposed to be changed. 

 MS. DeGENOVA-CARTER: It is.

 PROFESSOR MARCUS: I'm not clear on why it's 

 different. 

 MS. DeGENOVA-CARTER: Well, it would be 

 different because I think we have more guidance, 

 and potentially, we may not have had to do that

 search. If we could classify that this information 

 was either--in this case, it would have been 

 accessible. 

 But I think if it was a different example, and 

 it was possibly inaccessible information, then we

 have a whole other area in which we have another 

 opportunity to pursue, well, maybe we should 

 be--maybe we should be defining the scope. Maybe 

file:///C|/FEB/0211rule.txt (229 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 230 

 defendants need to define the scope further. 

 But right now, as it stands, we don't have the 

 division between inaccessible and accessible. 

 Whereas, for your example, it would be the same.

 But in other examples, it could be very different. 

 PROFESSOR COOPER: Can I ask one further 

 question? You got a lot of responses searching for 

 10 terms. You reviewed it. What proportion of the 

 material that came up was, in fact, responsive to

 the request? 

 MS. DeGENOVA-CARTER: Very little. I think 

 that maybe we probably--five or six documents. 

 MR. CICERO: E-mails? 

 MS. DeGENOVA-CARTER: Mm-hmm. And in

 actuality, it's because those terms were used 

 so--these were very common terms, I should say, 

 also. So they were used in the e-mails. It was 

 not a case of here is the requesting parties, all 

 the information that they want in one e-mail. It

 was a very limited amount of information that was 

 actually available. 

 JUDGE HAGY: Did you argue the cost in that 

file:///C|/FEB/0211rule.txt (230 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 231 

 case to the court, that it was unfairly burdensome 

 because it was going to cost a million dollars and 

 the sample shows you're not going to get anything 

 or--

 MS. DeGENOVA-CARTER: We did argue cost, but we 

 were still ordered to do it. So we complied. 

 JUDGE HAGY: So now the reasonably accessible 

 test, why wouldn't the same thing happen? Or do 

 you define reasonably accessible as being something

 other than cost benefit? 

 MS. DeGENOVA-CARTER: No. For this example, I 

 would say that it would be the same results because 

 it's e-mail and it's active. It would be different 

 if it were back-up tapes or maybe, for example,

 some of the other systems we have that we do 

 maintain electronic information and have record 

 retention guidelines where some of that information 

 is held for a certain number of years. 

 So I've heard a number of people here today

 say, well--I think one of Judge Scheindlin's 

 questions, well, if you're dealing with back-up 

 tapes, then maybe we never get to that point 

file:///C|/FEB/0211rule.txt (231 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 232 

 because those wouldn't have the relevant 

 information on it to begin with. But if you're 

 handling--if you're not just focusing on the 

 back-up tapes, large companies have other types of

 systems that could be considered to be 

 inaccessible. 

 JUDGE ROSENTHAL: Can I ask just one other 

 question? How often, in your experience, has it 

 been necessary for you to restore information from

 inaccessible sources in order to satisfy discovery 

 needs? 

 MS. DeGENOVA-CARTER: Very rarely. Normally, 

 we can get the information that we need, that even 

 the other side feels is responsive, from what we

 have and consider accessible from the active 

 information. 

 JUDGE ROSENTHAL: Are there other questions of 

 Ms. DeGenova-Carter? Yes, sir? 

 MR. KESTER: Just quickly. How typical is this

 example that you gave us in terms of its cost and 

 in terms of how often such things happen? 

 MS. DeGENOVA-CARTER: That's probably an 

file:///C|/FEB/0211rule.txt (232 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 233 

 atypical example. Normally, what we get are 

 requests for searching certain individual's 

 mailboxes, which we do all of the time. That would 

 be the more typical. Search a few mailboxes,

 search a few people's computers. 

 We don't have very many requests to restore 

 back-up tapes or to do searches on all of our 

 servers. I think once we explain and educate the 

 courts on what our system is like, then the court

 and the opposing counsel normally will narrow down 

 their search. 

 But for example, we do have requests--I 

 received this request last month, and this is from 

 an ongoing case in federal court in a Midwestern

 state. And the request was the parties wanted 

 exact copies of all of our hard drives on desktop 

 computers, laptop computers, notebook computers, 

 PDAs, servers, and other electronic media related 

 to this action from November 1, 2002, to August of

 2003. 

 So they pretty much wanted everything that we 

 had, and we actually had to spend the time to go in 

file:///C|/FEB/0211rule.txt (233 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 234 

 and explain to them in court through laborious 

 motions this is a very broad request. We can't 

 comply with this. This would take hours and hours 

 and thousands of dollars.

 And we do have the requests. We had another 

 request where we had to search servers, again, for 

 certain terms. I think the requesting parties 

 feels if they give the terms that we want, and we 

 can go and search them, that that won't cost a lot

 of money. Again, it still does. And we did this 

 search in-house. I think we learned from doing it 

 out-house. 

 But the search was, again, for--10 seems to be 

 the magic number--10 terms, for example, fraud,

 defraud, fraudulent, in a bad faith claim. We 

 searched three legal domain servers. It took 537 

 hours and cost us internally $48,811, and that was 

 for one request in one bad faith case. 

 JUDGE ROSENTHAL: Any other questions?

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 Ms. Coukos? Good morning. 

file:///C|/FEB/0211rule.txt (234 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 235 

 MS. COUKOS: Good morning. Good afternoon, I'm 

 not quite sure where we are now. 

 JUDGE ROSENTHAL: Sorry. It's functionally 

 morning, before lunch.

 MS. COUKOS: I'll accept that. My name is 

 Pamela Coukos. I'm a counsel to the firm of Mehri 

 & Skalet here in Washington, D.C. We are a small 

 plaintiff's firm that does complex and class action 

 litigation in a number of areas. My practice area

 is primarily employment discrimination cases. 

 And I want to focus today my comments 

 specifically on the reasonably accessible language, 

 to just respond to some of the issues that have 

 come up this morning. With respect to the other

 issues, you already have some written comments. 

 And I will be quite frank with the question 

 that's been asked of a number of witnesses. I 

 don't usually need to go into legacy data to 

 litigate my cases. However, I believe this rule

 change is going to have a big impact on my practice 

 because I don't see the issues as confined to just 

 restoring information that is in some kind of 

file:///C|/FEB/0211rule.txt (235 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 236 

 legacy system. And let me explain a little bit why 

 I see that to be the case. 

 In a surprising number of my cases, there is 

 some document or set of documents which we refer to

 the shorthand of "management knowledge." It's the 

 PowerPoint to the senior executives or the memo to 

 the CEO or some internal reporting about how the 

 company believes they're doing on diversity. 

 Obviously, this is pretty relevant information to

 our claims. 

 In the old days, it would be in somebody's file 

 cabinet probably, and it would be searched for in 

 response to a discovery request. These days, it 

 could be anywhere. It could be on a server. It's

 probably in somebody's e-mail box attached to some 

 e-mails about this. 

 And it might not be active. You know, it might 

 be sort of the equivalent of the file cabinet. 

 Might not have been accessed for two, three, or

 four years. But it's not that difficult to get to. 

 And if we look at what's currently in the rule now, 

 it's relevant. Let's assume it's not unduly 

file:///C|/FEB/0211rule.txt (236 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 237 

 burdensome to get to and that there isn't a valid 

 cost issue because if that were the case, then 

 those would be the objections that would be 

 presented.

 So, as we've been talking this morning, there 

 is some other thing about it that means not just 

 that there should be cost shifting or something 

 else, but that it's not discoverable. That I can't 

 get it without satisfying a good cause standard,

 which, as we all know, is more than just relevance. 

 There's some kind of really good reason. 

 JUDGE ROSENTHAL: Can I interrupt you for a 

 second? 

 MS. COUKOS: Sure.

 JUDGE ROSENTHAL: Your paper proposes as a 

 substitute for the standard of inaccessible without 

 undue burden or expense. And my question is this. 

 You seem to assume that it all comes down to a 

 question of cost shifting. But if there is, let's

 just assume that we have your standard in place, 

 and a party comes in and says the stuff that you 

 want, requesting party, I cannot give you without 

file:///C|/FEB/0211rule.txt (237 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 238 

 spending a ton of money and spending a ton of time. 

 So my first question is not merely how much of 

 the cost of restoration is appropriate to share or 

 allocate, but should there be any requirement to

 produce in the first place? Does your standard 

 adequately convey that there are separate and 

 distinct questions, the first being is production 

 required? The second being, if so, if good cause 

 is shown, if there is need, then the question is on

 what terms should that production occur? 

 MS. COUKOS: Sure, and I think that those are 

 separate questions under the existing rule. Those 

 would be separate questions under the rule as 

 proposed.

 And let me just clarify, the reason I put 

 forward some alternate language is not because I 

 really endorse this concept but because, to be 

 honest, there is a perception that the decision has 

 basically already been made that there is going to

 be some change along these lines. And if so, you 

 know, I propose some alterations that I think make 

 it a little bit harder for the other side to have 

file:///C|/FEB/0211rule.txt (238 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 239 

 recourse to this exception. 

 And I'm concerned about both active data, where 

 there is something that's required to get to it, 

 and also data that's sort of--that's really

 inactive because it's not used on a daily basis. 

 And what we've been hearing, I think, from a lot of 

 people is that's how they want to define accessible 

 is how is it used in the business? Is it really 

 being gotten to on a regular basis?

 And if it's inactive, but not that hard to get 

 to, then I'm just not sure what this rule is adding 

 that would really be beneficial. And I'm concerned 

 that it actually will be a way to constrain a good 

 fact-finding process.

 You know, what we're talking about is the 

 potential evidence in a case, the factual narrative 

 that will determine whether the claims success or 

 fail, whether the defense succeed or fail. And you 

 know, there was some discussion of what are the

 limits? And the limits, I think, are cost and 

 burden and, frankly, relevance--all of which are 

 already in the rule that we have. 

file:///C|/FEB/0211rule.txt (239 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 240 

 And to start talking about how often is it used 

 on a daily basis, if there is no cost issue and no 

 burden issue and relevance is satisfied, then that, 

 to me, is cutting back on the fact-finding process

 in an inappropriate way. You know, I've done 

 legislative drafting in the early part of my 

 career. I never wrote some language without 

 meaning to change something that was already in 

 place. And so, that's why you're hearing a lot of

 concerns from the plaintiff's bar. 

 You know, my law professor, like many law 

 professors on civil procedure, would say something 

 like, well, I'll give you all the substantive law. 

 You give me all the rules of procedure, and I'll

 beat you every time. And the interplay of 

 substance and procedure here, I think, particularly 

 on these class action cases, is that I have to show 

 that my class action is manageable, that there are 

 common issues.

 If there is a centralized database of 

 information that isn't that hard to get to that can 

 be produced to me that we can use to litigate the 

file:///C|/FEB/0211rule.txt (240 of 455) [3/2/05 2:36:47 PM]
file:///C|/FEB/0211rule.txt

 241 

 case, in some ways, that concedes some aspects of 

 manageability of the case. And I think that's the 

 reason why we're running into a lot of resistance 

 to producing that information or claiming that it's

 really hard to work with, really expensive, and I'm 

 just worried about writing into the rule yet 

 another basis to withhold it. 

 I think that was the main issue I wanted to 

 bring forward. I don't if there are any questions.

 JUDGE SCHEINDLIN: Can I ask a quick question? 

 MS. COUKOS: Sure. 

 JUDGE SCHEINDLIN: If this framework were to 

 stay, what would you expect a party to do in terms 

 of designating or identifying that which they say

 is inaccessible? What would you hope they would do 

 so that you would understand their claim? 

 MS. COUKOS: Well, I hope that the rule would 

 be understood and applied to require some kind of 

 good faith determination about accessibility before

 it's simply identified--and I explained in my 

 written comments why I'm concerned about that 

 identifies language--and to tell me about why it's 

file:///C|/FEB/0211rule.txt (241 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 242 

 inaccessible. And this happens already. 

 You know, I have conversations with people 

 about, "Yes, you know, we converted our database 

 six years ago, and we still have the old tapes, and

 here is what we think is on them." And usually 

 I'll say, "You know what, I don't think I need it. 

 I don't think I need it right now. Let's start 

 with what we have already, and you know, maybe it 

 makes sense to preserve it, and if we have to get

 there, we will." 

 But the more information that I can get up 

 front about why it's inaccessible, what the issues 

 are involved in getting at it and, as I think Ms. 

 Stewart explained, to test those assertions in a

 meaningful way, the more likely it is we'll be able 

 to actually to just resolve it without having to 

 come in. 

 But just to echo another point people have 

 made, this whole idea that I've got to move to

 compel every single time, that's really troubling. 

 That's not anywhere in the current rules or 

 practice, you know? It's sometimes we move to 

file:///C|/FEB/0211rule.txt (242 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 243 

 compel. Sometimes it's frequently a protective 

 order motion. But again, usually, we have some 

 basis of information to proceed. 

 And you know, as written, that's not really

 necessarily part of the process. And maybe it will 

 evolve through a lot of litigation of this issue, 

 but it would be much better to clarify those 

 responsibilities up front. 

 JUDGE ROSENTHAL: Are there other questions?

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 And our last witness for the morning session, 

 Mr. Nelson? And I'll caution you in a way that I 

 did one of the earlier witnesses. No pressure, but

 you're all that stands between us and lunch. 

 [Laughter.] 

 MR. NELSON: I'm mindful of that, Your Honor. 

 I'm also mindful that the afternoon session is 

 supposed to start promptly at 1:00 or earlier. So

 I will be brief, and I certainly understand if you 

 all defer questions in light of the lunch period. 

 Thank you for the opportunity to provide my 

file:///C|/FEB/0211rule.txt (243 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 244 

 comments. I'm with the Philadelphia-based law firm 

 of Nelson Levine. I practice in complex 

 litigation, defending consumer class actions. 

 I attended a number of conference on this

 matter, including the Fordham conference. You may 

 remember me. I was the one with the crutches, if 

 you remember the one attorney hobbling around? 

 JUDGE ROSENTHAL: It looks like you're doing 

 better.

 MR. NELSON: I have done better, yes. 

 There's been a lot of commentary that there is 

 no need for rules and the rules we currently have 

 work well. I don't think there's any need to 

 rehash it, since it's been covered so well by the

 committee note and your report as to the need for 

 some kind of guidance. 

 But I can share with you that a lot of this 

 guidance is necessary not just as we embrace 

 litigation, but corporate America needs that

 guidance on how to act on a prospective basis. And 

 absent that, there is not a uniform or national 

 standard that we all can live by. And that causes 

file:///C|/FEB/0211rule.txt (244 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 245 

 undue expense, in and of itself, to err on the side 

 of caution. 

 I am in favor of a two-tier approach with 

 respect to Rule 26(b). In reality, I see how this

 works is not an empty motion practice, as has been 

 suggested, but a respondent will respond that they 

 have some discoverable documents and then will most 

 likely assert that there is the possibility of some 

 reasonably inaccessible data just because the

 process to go and find that data, in and of itself, 

 would require the exhaustive search we're trying to 

 avoid. 

 If the plaintiff feels after--or the requesting 

 party feels after having seen what has been

 produced and having seen that objection based upon 

 the reasonably inaccessible aspect to this, then 

 the plaintiff simply has to file a motion which 

 doesn't sound, according to these rules, like 

 there's an awful lot of grounds to contest, and

 then that would go before the court. 

 I don't see that being a very difficult motion 

 practice to adhere to, either by the attorneys-- 

file:///C|/FEB/0211rule.txt (245 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 246 

 JUDGE SCHEINDLIN: Let me just ask you, though, 

 to contest your claim of inaccessibility, say 

 you're the party raising the accessibility. 

 MR. NELSON: That's right.

 JUDGE SCHEINDLIN: Now to contest that, aren't 

 you going to engage in expensive discovery so that 

 the requesting party can prove in the end that it's 

 actually accessible? How could they prove it 

 without discovering your entire system and the

 difficulties of retrieval and the cost, et cetera? 

 MR. NELSON: Well, that challenge only comes 

 out like the red flag in an NFL football game. 

 JUDGE SCHEINDLIN: I don't know what that 

 means.

 MR. NELSON: The requesting party--okay. Well, 

 it means that you get to contest the referee's 

 ruling on it, on a call. I don't want to make this 

 too long. We're just--I'm a Philadelphia Eagles 

 fan suffering from the effects of the Super Bowl.

 Be that as it may, the way I see this working 

 out is that the reasonably inaccessible data is 

 defined in very broad scopes, but hopefully with 

file:///C|/FEB/0211rule.txt (246 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 247 

 enough detail so that somebody can really 

 comprehend the inaccessibility of it. At that 

 point, plaintiff, having read that--or requesting 

 party, having read that, will buy it or not buy it.

 And then, only then, if they don't buy it, then it 

 moves forward before a hearing before the judge. 

 JUDGE SCHEINDLIN: Involving the discovery? 

 MR. NELSON: Involving the discovery. 

 JUDGE SCHEINDLIN: So how much would you have

 to disclose to substantiate the inaccessibility 

 claim? 

 MR. NELSON: Well, hopefully, in order to have 

 made that objection that it was reasonably 

 inaccessible, you would have done a good faith

 effort to describe, well, there is some legacy 

 data, or there's back-up tapes. That there's a 

 likelihood that there is some data there that may 

 comport. 

 JUDGE SCHEINDLIN: Well, that's not enough.

 Wouldn't you have to show why it's inaccessible? 

 Not just that it's legacy data, but there is some 

 difficult in getting it to you? 

file:///C|/FEB/0211rule.txt (247 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 248 

 MR. NELSON: Certainly, and it's going to 

 depend upon the circumstances. There's about nine 

 different circumstances that are put in the 

 proposed committee notes right now that talk about

 the different aspects of inaccessibility. And I 

 would submit to you that most of those are going to 

 be the grounds for why this data is inaccessible, 

 but it's going to be determined by the 

 circumstances.

 So, for instance, one of my clients is a large 

 insurance company. They buy other insurance 

 companies routinely. Those insurance companies 

 have computer systems. They are no longer 

 functional. And even the IT people that ran those

 systems are no longer available. And in order to 

 read into that system, they're going to have to buy 

 technology to reconstruct the ability to read and 

 then learn what's there. I think that would 

 certainly qualify as inaccessible data.

 The fact that data is routinely destroyed as a 

 matter of back-up systems to deal with 

 catastrophes, I think that would certainly get into 

file:///C|/FEB/0211rule.txt (248 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 249 

 the realm of inaccessible data or reasonably 

 inaccessible data. And I think those kind of 

 descriptions would adequately be laid out in this 

 position before there's even a contest by the party

 that's responding to the discovery request. 

 But keep in mind there's also going to be some 

 documents produced at the very same time. And so, 

 the requesting party is going to be able to see 

 what they already have, and they're going to be

 able to see what the potential is for maybe getting 

 some additional documents or data they don't need. 

 With respect to the identification process, 

 which you're getting to, I think there is some 

 vagueness with that. I respectfully suggest that

 that be modified in some way so that parties aren't 

 required to produce what is tantamount to the 

 equivalent of a privilege log. That, in and of 

 itself, would require an exhaustive review of data 

 that they normally wouldn't have to review.

 With respect to the second phase, if despite 

 the fact the showing of inaccessibility, the court 

 orders the data to be evaluated by the requesting 

file:///C|/FEB/0211rule.txt (249 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 250 

 party, I respectfully suggest that the cost of that 

 should be presumed to be the requesting party's. 

 JUDGE SCHEINDLIN: Can we just go back one 

 step?

 MR. NELSON: Sure. 

 JUDGE SCHEINDLIN: What is your view on the 

 preservation of the inaccessible? 

 MR. NELSON: Well, that's an interesting 

 question. But if I can get to that when we deal

 with Rule 37, if that's okay, for the sake of 

 efficiency? 

 With respect to the concept that there is going 

 to be unscrupulous companies putting data into the 

 inaccessible category, the courts always have the

 ability to sanction bad faith conduct. And in the 

 real world, what's going to happen is if a 

 responding party overplays that card, the sanction 

 is available, and there's no reason to be worried 

 about corporate America hiding the ball. I just

 don't think that's going to happen. It does happen 

 from time to time, and you folks are wonderfully 

 adept at dealing with it. 

file:///C|/FEB/0211rule.txt (250 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 251 

 With respect to 37, this rule as it's written, 

 in my opinion, is somewhat not workable. There are 

 two sections of this that grant safe harbor 

 protection, the first of which says the party took

 reasonable steps to preserve the information. The 

 second steps is it results from the failure of the 

 routine operation of the party's systems. 

 Well, if the system is designed to have a 

 routine deletion--not destruction, deletion--then

 how can a party take reasonable steps to stop the 

 routine? Isn't what we're really talking about 

 here avoiding the cost of stopping the routine 

 deletion of data that is generally unnecessary? 

 And so, from my perspective, this rule should

 be written, "A court may not impose sanction under 

 these rules on a party for failing to provide 

 electronically stored information deleted or lost 

 as a result of the routine operation of the party's 

 electronic information system unless the party

 intentionally or recklessly violated an order 

 issued in the action requiring the preservation of 

 the information." 

file:///C|/FEB/0211rule.txt (251 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 252 

 There's been some talk about whether or not it 

 should be a negligence standard or it would be a 

 reckless standard. I echo the sentiments that have 

 been expressed that, right now, spoliation of

 evidence is really about intentional or reckless 

 conduct. It's not about negligence. There is no 

 reason to take what is an already complicated 

 subject and somehow put negligence as the issue as 

 opposed to what is already spoliation of evidence

 intentional and reckless. 

 With that, I'll take any questions if you have 

 any. 

 JUDGE ROSENTHAL: Are there any questions? Go 

 ahead, Mr. Bernick.

 MR. BERNICK: I've asked a number of people, 

 and I guess I'm under the same pressures and 

 operate under the same risks. 

 JUDGE ROSENTHAL: I didn't even have to say 

 anything.

 MR. BERNICK: But a number of people have 

 commented on the interface between the proposed 

 change to Rule 37, the doctrine of spoliation. All 

file:///C|/FEB/0211rule.txt (252 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 253 

 that Rule 37 really talks about is limitation on 

 the ability to impose sanctions under the rules. 

 So I mean, as you read Rule 37, do you believe that 

 it really displaces spoliation? And part of that

 also is, is spoliation law prelitigation or during 

 litigation? 

 You can make an argument that once you're in 

 litigation, the standard should be not simply good 

 or bad faith, that you have an affirmative

 obligation to take steps to preserve evidence. And 

 then it's more appropriate that the standard not be 

 based upon a subjective, but rather on a more 

 objective test. 

 MR. NELSON: Don't you have affirmative

 obligations to take reasonable steps, not every 

 possible step you could possibly imagine? 

 MR. BERNICK: But that's what the rule spells 

 out, a reasonable standard. 

 MR. NELSON: Exactly. So if you violate the

 reasonableness, which is now a question of 

 negligence, aren't you talking about a higher 

 issue, which is reckless or dishonest conduct? I 

file:///C|/FEB/0211rule.txt (253 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 254 

 mean, you can satisfy reasonableness and still be 

 negligent--I mean not negligent. You can be not 

 negligent and satisfy reasonable. 

 MR. BERNICK: You can be non-negligent--

 MR. NELSON: Let me try to phrase it a 

 different way. With respect to the reasonableness 

 practice, you can be reasonable and still be wrong. 

 You have a right to be wrong and still be 

 reasonable.

 JUDGE ROSENTHAL: Even us. That's true. 

 That's true. 

 MR. BERNICK: Isn't that appropriate? 

 MR. NELSON: Well, sure. But from the 

 standpoint of spoliation, I think in this

 situation, since there's so much data and there's 

 so many potential mistakes, I think it has to be a 

 recklessness or a dishonest conduct. We are 

 talking about systems that routinely do this as a 

 matter of good housekeeping.

 JUDGE ROSENTHAL: Thank you, sir. 

 MR. NELSON: Thank you. 

 JUDGE ROSENTHAL: We very much appreciate your 

file:///C|/FEB/0211rule.txt (254 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 255 

 time. Forty-five minutes? That's pushing it, but 

 we do have a lot to get through before the 

 afternoon. So we will resume in 45 minutes. Thank 

 you.

 [Recess.] 

file:///C|/FEB/0211rule.txt (255 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 256 

 AFTERNOON SESSION 

 [1:47 p.m.] 

 JUDGE ROSENTHAL: We're going to begin with Mr. 

 Socha. Good afternoon.

 MR. SOCHA: Thank you, Your Honor. Members of 

 the committee, thank you for this opportunity. 

 I would like to start--there are three points 

 I'd like to cover, if possible, during the time 

 available to me. First is the question of

 reasonably accessible. Second is an issue of form 

 or forms of production. And then, finally, if 

 there's time, possibly some discussion about the 

 back-up tapes because we always seem to be coming 

 back to back-up tapes.

 Under reasonably accessible, there have been 

 questions throughout the day of how one goes about 

 defining reasonably accessible. I have a modest 

 proposal for you here. I've got a set of five 

 factors to consider when thinking about whether

 electronically stored information truly is 

 reasonably accessible. I've categorized them as 

 type, form, location, ability, and effort. 

file:///C|/FEB/0211rule.txt (256 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 257 

 For type, the question I think is, is the 

 information of a type that the producing party 

 routinely and knowingly uses or that a reasonable 

 organization or entity in the shoes of that person

 or organization would routinely and knowingly use? 

 So an example of that would be the text of a word 

 processing document. People who are creating word 

 processing documents work with and expect to see 

 the text.

 The metadata generally is not something that 

 most users expect to have there. Many of them 

 don't even know much of the information that 

 follows along hidden with a word processing 

 document. However, if it's someone who does

 routinely use and make use of that information or 

 an organization that does, that changes things. So 

 first is the type of information. 

 Second is the form. Is the information being 

 sought in a form that's consistent with the form or

 forms that are routinely and knowingly used by the 

 responding party or the producing party or, again, 

 would reasonably be used? There, an example would 

file:///C|/FEB/0211rule.txt (257 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 258 

 be information from, as used earlier, the example 

 of a relational database system, an enterprise 

 database system, where most of the people in the 

 organization and the key people perhaps in the

 organization make limited use of that data. 

 They know how to put it in perhaps, using a 

 limited set of forms or approaches. They know how 

 to get it out in a limited set of reports. What 

 they don't know is anything about the other 4,523

 tables of information in that system or how to get 

 at that or get out of it. And it may well be that 

 there is not anybody in the organization who, with 

 the expertise available and the tools available to 

 that person, can readily get at that information.

 Yes? 

 JUDGE ROSENTHAL: Is it your advice to us, Mr. 

 Socha, that we put these factors in a rule or that 

 we draw attention in the notes to these kinds of 

 considerations or that we use the term "reasonably

 accessible" and have the Manual for Complex 

 Litigation and case law fill in these details? 

 MR. SOCHA: I would leave the rule the way you 

file:///C|/FEB/0211rule.txt (258 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 259 

 have it formulated now. I would use the term 

 "reasonably accessible." I would suggest 

 considering putting language of this type into the 

 notes to help better explain what is meant by

 reasonably accessible. And with these five areas, 

 I have tried very hard to stay away from tying them 

 to today's technology and today's technological 

 problems because, as you've heard over and over, 

 those are changing, and those will continue to

 change. 

 JUDGE ROSENTHAL: Go ahead. 

 MR. SOCHA: Putting this in the Manual for 

 Complex Litigation probably isn't the right place 

 for it because these factors can apply and these

 issues apply not just in complex litigation, but in 

 less complex litigation as well. 

 The third factor is location. Where is that 

 information actually stored? Is it, once again, in 

 a location that is knowingly and routinely used by

 the party or that you would reasonably expect the 

 party to knowingly and routinely use? Or is it 

 somewhere- yes? 

file:///C|/FEB/0211rule.txt (259 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 260 

 MR. CICERO: Let me interrupt you there, if I 

 may, because I was waiting to see how often the 

 word "routinely" would come up. 

 MR. SOCHA: Quite a bit. But we can take it

 out. 

 MR. CICERO: This had come up earlier in the 

 day in one form or another, and I've been puzzling 

 over that because-- 

 JUDGE ROSENTHAL: Frank, would you talk into

 the microphone? 

 MR. CICERO: I'm sorry. I've been puzzling 

 over your use of the word "routinely" and others 

 who have used similar terms. Because it seems to 

 me that--well, I start to think about, you know,

 the old days, when you had things stored in salt 

 mines and that, or wherever they were. And 

 probably a lot of the things--the material that was 

 stored there was not routinely available. It 

 depends on how you define "routinely." But it was

 not routinely available. It wasn't kept for use in 

 the daily course of business or anything else, or 

 it wouldn't have been out there. It would have 

file:///C|/FEB/0211rule.txt (260 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 261 

 been in someone's office. 

 But nevertheless, you routinely had to go 

 search in those places if you had document 

 requests. What do you mean, is that a necessary

 term, or is it too restrictive? 

 MR. SOCHA: It's not a necessary term. It may 

 not even be the best term. Here is what I meant by 

 it, and I'm not sure what others mean by 

 "routinely," but here is what I was thinking of. I

 was thinking of the type of activity that you 

 engage in as a matter of course rather than one 

 where you have to sit back and say, "Okay, now how 

 do I do this? How do I take care of this?" 

 So it's not so much a question of frequency,

 not that use of routinely. But routinely instead 

 as an indication of matter of course rather than 

 exception. 

 MR. CICERO: So salt mines would be routinely 

 under that definition--

 MR. SOCHA: Salt mines could be routinely under 

 that. 

 MR. CICERO: --if you send people out there 

file:///C|/FEB/0211rule.txt (261 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 262 

 from time to time to get stuff? 

 MR. SOCHA: That's right. 

 JUDGE HECHT: And just to follow up on that, 

 and it might be different for different people?

 MR. SOCHA: It most certainly will be different 

 for different people. So, again, it may not be the 

 best word for this, by any means. But I figured 

 I'd suggest something. 

 Online servers most likely would be an example

 of locations where people routinely go for 

 information, but I wouldn't look at this factor in 

 isolation. I'd look at it in combination with the 

 other factors. 

 Back-up tapes or, rather, disaster recovery

 back-up systems--because not all disaster recovery 

 systems use back-up tapes--may be a location that's 

 not used on a routine basis to get the information 

 back. It may be something that's used on a routine 

 basis just to get information in.

 I can go into back-up tapes a little more now 

 or come back to that after I get through these, 

 whichever you would prefer. 

file:///C|/FEB/0211rule.txt (262 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 263 

 JUDGE ROSENTHAL: I think it might be helpful 

 if we got these five factors out and then moved on 

 from there. 

 MR. SOCHA: Okay. Fourth is ability. And the

 question there is whether the producing party has 

 the hardware, the software, and the expertise to 

 gain access to this information or whether they've 

 got to find someone or some organization that can 

 get at this information that they don't, once

 again, knowingly and routinely go after. 

 One example there is that most of the companies 

 that I have seen that need to produce electronic 

 files have a pretty good handle on how to produce 

 an individual's PST file or the file that's used to

 store outlook e-mail messages and related things. 

 That's generally a fairly straightforward 

 proposition, and there is often someone within the 

 IT department of the organization or someone 

 similar to that who can get that file, get it to

 the attorneys. The attorneys can go through the 

 review and then get it onto the other side. 

 If, however, it's a situation--and I think 

file:///C|/FEB/0211rule.txt (263 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 264 

 these are unusual situations, by the way--where 

 it's necessary to get a forensically correct copy 

 of the hard drive of a computer, it's generally 

 going to be unlikely that a company is going to

 have on staff someone who has the training, the 

 experience, and the equipment to do that correctly. 

 They'll have to turn to outside resources. 

 Finally is effort. And I haven't heard a lot 

 of direct discussion today about effort. But it

 seems to me that the effort required for the 

 producing party to gain access to and produce the 

 requested information ought to somehow be 

 proportionate to the magnitude of the dispute. So 

 that there shouldn't need to be $125,000 or $125

 million worth of electronic discovery effort 

 required to deal with a lawsuit where there is 

 $50,000 at issue. 

 JUDGE ROSENTHAL: Is effort cost and burden? 

 MR. SOCHA: Effort is the closest to cost and

 burden. I tried to isolate it, calling it effort 

 here, instead of cost and burden, because I think 

 all of these--type, form, location, ability, and 

file:///C|/FEB/0211rule.txt (264 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 265 

 effort--can be considered as cost and burden 

 factors. 

 Those were the five factors that I thought 

 might be useful in helping explain or describe

 what's meant by reasonably accessible. 

 The second point I wanted to cover--unless 

 there are questions about that--is form of 

 production. And I think what I want to bring up 

 here ought to be relatively uncontroversial. I

 think it's just one of those things that has 

 managed to slip through the cracks along the way. 

 The rules, as they are drafted, and the notes, 

 as they are drafted, right now talk about a form of 

 production. And in some instances, a form of

 production makes sense. But that's not universally 

 true. 

 If I am a producing party and I have 

 electronically stored information to provide to the 

 other side. It's relevant. It's not privileged.

 I might have, as an example, e-mail messages, word 

 processing documents, spreadsheet files, and 

 information out of a large relational database 

file:///C|/FEB/0211rule.txt (265 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 266 

 system. If I had to choose a single form of 

 production, all that information had to be produced 

 in the same form--PDF or TIFF or native--I'd be in 

 trouble, to a certain extent, and the requesting

 party probably would be in trouble as well. 

 If I decided to hand it all over in native 

 form, that would be fine in a way for the e-mail 

 messages, the word processing documents, and the 

 spreadsheet files, at least as far as the

 requesting party goes, because they ought to be 

 able to open and work with those. But if I hand 

 them over a large Oracle database, chances are 

 there is not a single thing they can do with that. 

 Similarly, however, if I convert everything to

 paper or quasi-paper, PDF or TIFF, that can be 

 useful for some of the materials, but it poses its 

 own problem. Any single form might be problematic. 

 So I suggest revising both the rules and the 

 notes to say instead and talk instead about forms,

 plural, of production rather than a form, singular. 

 And in my written materials, I've got a suggestion 

 for language to consider using in the notes to talk 

file:///C|/FEB/0211rule.txt (266 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 267 

 about that further. Questions on forms of 

 production? 

 The third area then that I wanted to address 

 was back-up tapes because there is so much

 discussion about back-up tapes. We seem to be 

 obsessed with back-up tapes these days. They are 

 not going away from a long time to come. Yes? 

 PROFESSOR MARCUS: I'm sorry I was slow on the 

 uptake there. But regarding form of production,

 34(a) as presently proposed to be changed says the 

 request may specify the form in which 

 electronically stored information is to be 

 produced. And then in the absence of that, 34(a) 

 says a responding party must produce the

 information in a form in which it is ordinarily 

 maintained or in an electronically searchable form. 

 If those two were pluralized, that would 

 address what you're talking about? 

 MR. SOCHA: That would address what I'm talking

 about. I think it would help as well, though, to 

 have some commentary in the notes to explain what's 

 meant by that difference because it would be so 

file:///C|/FEB/0211rule.txt (267 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 268 

 easy for people to slide right over a plural versus 

 a singular there. Yes? 

 JUDGE ROSENTHAL: In our note, in the language 

 that says that parties only have to produce in one

 form, would you suggest that we clarify that to 

 make it clear that the same information only need 

 be produced in one form? 

 MR. SOCHA: That makes sense. What I'd be 

 concerned about is disparate types of information

 having to be produced all in one form, trying to 

 force everything into a single container. 

 JUDGE ROSENTHAL: Thank you. 

 MR. SOCHA: We seem to be obsessed these days 

 with back-up tapes, and back-up tapes are not going

 to go away for quite some time for two reasons. 

 One, they're not going away in the business world, 

 the world of people who use back-up tapes. First, 

 organizations, especially large ones, have enormous 

 investments in their back-up tape systems. They

 have got huge machines that have robotic arms that 

 move tapes around, pull them out of one slot, move 

 them over, stick them into another slot. Very 

file:///C|/FEB/0211rule.txt (268 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 269 

 complex, very expensive systems. 

 And they're going to be reluctant to throw 

 those out, even if there is something better 

 available. They're going to wait until the pain of

 continuing on with what they have is far greater 

 than the pain of replacing it all. And for many, 

 that's not going to happen for some time. 

 Second, the people who make tapes and tape 

 back-up systems don't want to see these systems go

 away. So they are working very hard to make them 

 run faster, to allow more information to be stored 

 on the tapes, and, to the extent they can, to make 

 it easier to get the information off the tapes. 

 Third, we're talking about litigation, and

 litigation is looking at what happened in the past. 

 So even if a company gets rid of a back-up tape 

 system today, it's likely for some period of time 

 to still have some tapes sitting around. 

 Back-up tapes and systems, I've heard people

 talking about these as if they're all the same, but 

 they're not. They can differ enormously. I'll 

 give two examples, which I think highlight the 

file:///C|/FEB/0211rule.txt (269 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 270 

 challenges of dealing with them, and I think I'm 

 done with my time after that, if I'm guessing 

 correctly. 

 A simple system is a single server that has a

 dedicated tape drive attached to it. And each 

 night, someone puts a tape into that machine, and 

 that tape copies the contents of the entire server. 

 That tape then goes offsite for maybe 90 days, 

 comes back, and is rewritten again. That's the

 simplest extreme. 

 There, if you have a tape and you have a 

 machine similar to the one you were starting with, 

 you can restore the information at some cost off of 

 that tape onto the computer.

 At the other extreme, you have the robotic arms 

 and the silos. The most important thing, though, 

 is you've got what's called a many-to-many 

 relationship. On the one hand, you've got many, 

 many back-up tapes being created each night. On

 the other hand, you have many, many servers where 

 that information is coming from. And there's a 

 computer system or a series of computer systems in 

file:///C|/FEB/0211rule.txt (270 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 271 

 between that make these two things work. 

 Any one tape could have information on it from 

 multiple--3, 5, 10, 15, more--different servers. 

 Any one server can have information on multiple

 different tapes. It's designed that way to allow 

 the organizations to get as much information copied 

 off those computers in as short a time as possible 

 and get them on the tapes. 

 Everyone who uses those systems and has had to

 restore information from them recognizes that the 

 systems are not designed to allow information to 

 flow easily the other direction. It can be a very 

 arduous process. And even the best of absolute 

 disaster recovery scenarios call for 48 hours for a

 massive restore of a system which, by the way, 

 doesn't tell you, for litigation purposes, anything 

 about what's on those tapes. 

 So there's a huge range of complexity with 

 back-up tape systems.

 JUDGE ROSENTHAL: Are there questions? 

 MS. VARNER: Could you address Mr. Rosen's 

 comment this morning that it's not very expensive 

file:///C|/FEB/0211rule.txt (271 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 272 

 to deal with back-up tapes? I don't know if you 

 were here this morning. 

 MR. SOCHA: I was. 

 MS. VARNER: But we had a comment that that

 cost had been driven way down, and it was that you 

 could find vendors who could do it quite cheaply. 

 MR. SOCHA: If you are talking about my first 

 example, that is, for the most part, true. If you 

 have a single back-up tape that is a whole copy of

 a server, you can get the information restored off 

 that back-up tape generally at a cost of anywhere 

 from a few hundred to a few thousand dollars. At 

 that point, you have not yet looked through that 

 information in any way. You have just recovered it

 off of that tape and put it onto a computer. 

 However, at the other end of the spectrum, this 

 can be an enormous problem. There's an 

 organization I'm working with right now, a company, 

 a defendant in a series of lawsuits that has been

 under a preservation order to hold all back-up 

 tapes not from all of their systems worldwide, but 

 from a significant number of them. 

file:///C|/FEB/0211rule.txt (272 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 273 

 In the past roughly eight months, they have 

 spent just in order to buy new tapes, new tubs in 

 which to put the tapes so they can be transported 

 from the data centers out to the storage

 facilities, labels for the tapes and related 

 items--in the past eight months, they've spent just 

 shy of $6 million. That's just for the tapes. 

 That doesn't talk about the money spent in 

 additional time on the part of their people to

 order new tapes, open up the packages, remove all 

 the packaging material, label the tapes, initialize 

 the tapes so the system can read them, put them in. 

 All of this is just to get the information on 

 the tapes. There are--I don't even know off the

 top of my head the count for the number of tapes, 

 but it is an enormous number. If you needed to go 

 there and start pulling information off those 

 tapes, and that's one of those many-to-many 

 systems, you can't identify a single tape as one

 likely to have the information you're looking for, 

 not the way discovery requests are posed. 

 JUDGE ROSENTHAL: Mr. Bernick? 

file:///C|/FEB/0211rule.txt (273 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 274 

 MR. SOCHA: The cost they've paid to save those 

 tapes is nothing compared to the cost they would 

 have to pay to try to actually find information on 

 those tapes. So there's no one answer to this.

 MR. BERNICK: Part of the problem is that when 

 you get into preservation orders, they ask that you 

 preserve all copies of back-up tapes. By their 

 nature, from day to day, if you back up daily will 

 be identical copies, in large part, of the day

 before. So an awful lot really depends upon 

 getting a dialogue going, would you agree? 

 MR. SOCHA: Yes. 

 MR. BERNICK: So that people understand that a 

 little word like "copies" has enormous impact when

 it comes to preserving back-up. 

 MR. SOCHA: I agree, and I think the most 

 important thing you're doing with the rules here is 

 encouraging the attorneys to talk early and talk 

 often and talk a lot about these issues. That's

 going to go a lot farther than anything else is to 

 helping with this. There is also the perception 

 often that lawyers are doing a lot of electronic 

file:///C|/FEB/0211rule.txt (274 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 275 

 discovery now. I don't think that's true. 

 I hear two very different stories. When I hear 

 what folks from law firms say publicly, I get a 

 very different story from the one I hear when I go

 into their offices, we close the doors, and they 

 talk about what's really going on. Even in the law 

 firms that are the most advanced, including some of 

 the ones that hold themselves out as having 

 electronic discovery practice groups, it is only a

 minuscule, for the most part, percentage of the 

 lawyers who actually are involved in any fashion in 

 electronic discovery. 

 That is, I think, why what you're doing here is 

 so important and why the portions of the rules that

 talk about talking early and often are so important 

 because they help heighten the awareness that, 

 sooner or later, this is what all these lawyers are 

 going to have to be dealing with. 

 JUDGE SCHEINDLIN: Just one quick question on

 the form of production. What do you think about 

 our proposed default? If there really isn't an 

 agreement or an order, do you like those two 

file:///C|/FEB/0211rule.txt (275 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 276 

 categories or don't like them? Would you prefer 

 usable form instead of searchable? Have you 

 thought about that default? 

 MR. SOCHA: I've thought about it, and I have

 conflicting thoughts about it, of course. 

 JUDGE SCHEINDLIN: We all do. 

 MR. SOCHA: Of course. On the one hand, I 

 think it is potentially a very useful approach to 

 try to force the parties to deal early on with what

 the form of production will be. I think that's a 

 good idea. The problem I see is if you are talking 

 about a default form of production, then what do 

 you make that default form of production, 

 especially if you get into an arena where you have

 forms of production rather than a form of 

 production? I think you're stuck. 

 I think you try your best to encourage folks to 

 talk early and often. But dictating a form of 

 production probably is going to create more

 problems to solve. 

 JUDGE SCHEINDLIN: Would you take it out? 

 Would you just-- 

file:///C|/FEB/0211rule.txt (276 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 277 

 MR. SOCHA: I would take the default form out, 

 but I'd still try to have the language strongly 

 encourage discussion very early and very often. 

 JUDGE SCHEINDLIN: Thank you.

 JUDGE ROSENTHAL: If there are no other 

 questions, thank you, Mr. Socha. 

 MR. SOCHA: Thank you. 

 JUDGE ROSENTHAL: Mr. Hacker and Mr. Wochna? 

 MR. HACKER: Good afternoon.

 JUDGE ROSENTHAL: Good afternoon. 

 MR. HACKER: Thank you for allowing us to come 

 together before you and offer our opinions. My 

 name is Damon Hacker, and I'm the president of one 

 of the leading forensic companies in the country.

 I'm here today with my business partner and chief 

 legal officer of our organization, Don Wochna. 

 And hopefully, we're going to try to paint a 

 somewhat different viewpoint on the changes to the 

 rules than what some of the large organizations may

 be posturing. 

 As an organization that helps parties involved 

 in disputes get to facts of the matter by examining 

file:///C|/FEB/0211rule.txt (277 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 278 

 the information that's on computer systems, 

 including both the visible and invisible 

 information, I believe we have a unique perspective 

 on the proposed changes.

 We use forensically trained attorneys combined 

 with highly competent and trained computer 

 investigators together in computer analysis teams, 

 which kind of allows us to bring both the technical 

 aspects of an investigation together as well as

 some of the legal perspectives. 

 Following much of the existing case law, such 

 as Simon Property v. mySimon, and Antioch v. 

 Scrapbook Borders, we've been able to set out 

 protocols and procedures that allow us to have a

 lot of success in lowering the cost of discovery 

 for our clients as well as shortening the 

 timeframes. 

 Because we've taken an approach like this and 

 our approach and tools are very neutral, we're

 often appointed as an independent, and we're 

 working both sides of the cases and really helping 

 to become truly a nonadversarial discovery 

file:///C|/FEB/0211rule.txt (278 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 279 

 approach. 

 We're happy that as much thinking and work has 

 gone into the proposed changes. And for the most 

 part, we believe the committee has those right. We

 do have a few items that we do have concerns with. 

 And upon review of those comments provided by 

 others during this public comment period believe 

 some of the facts have been at best exaggerated and 

 at worst may be misrepresentative. Specifically,

 we're extremely concerned about the language 

 surrounding reasonably accessible. 

 Today, many companies try to hide behind a 

 pretense that data has been deleted--data that has 

 been deleted and/or removed from systems or is only

 available in the legacy systems and back-up tapes 

 is not reasonably accessible. They offer a variety 

 of reasons, which we've heard today and through the 

 comments, why they should not be discoverable, 

 including burden, associated costs, and the fact

 that data is not generally accessed by the 

 corporation. During our time today here, I'd like 

 to show that that just isn't the case. 

file:///C|/FEB/0211rule.txt (279 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 280 

 We'd like to show that the problems and issues 

 that are being raised may have been problems three 

 to five years ago, but are routinely disappearing 

 and becoming very accessible today. Technology,

 even in the past two years, I have seen make some 

 dramatic changes in this area, and they've help to 

 improve efficiencies and help lowering those costs. 

 Technology is going to continue to improve. 

 I've heard that several times today. Therefore, I

 feel that we shouldn't be going about making the 

 rules to address today's problems or that are going 

 to solve technology that's going to be here even in 

 the very short future. 

 Next, I'd like to dispel this image that the

 seemingly inaccessible data--yes? 

 PROFESSOR MARCUS: Am I understanding you 

 correctly to say that in the very near future, 

 there is going to be nothing that is inaccessible? 

 MR. HACKER: No, I think it's got to be looked

 at on a case-by-case basis. 

 PROFESSOR MARCUS: Would the standard 

 reasonably accessible be a way to look at it on a 

file:///C|/FEB/0211rule.txt (280 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 281 

 case-by-case basis? 

 MR. HACKER: Well, that depends. I think that 

 the definition of reasonably accessible has to be 

 carefully looked at. You know, from the standpoint

 of what is on a computer and what is on computer 

 systems, the tools that most people may have today, 

 one would say, you know, is not reasonably 

 accessible--but that some people even know about. 

 But the tools that are out there, do exist today,

 and there is more coming. 

 I mean, I've seen a tremendous number of 

 companies that have jumped into this arena, both 

 from a service standpoint as well as from the 

 standpoint of offering new tools and software, that

 are going to be out there to help bring more 

 accessible. 

 That's going to kind of lay into my next point, 

 which is, you know, to talk about the cost and kind 

 of dispel this truth that much of what has gone

 on-- 

 PROFESSOR MARCUS: Is that a profitable 

 activity, providing those tools? 

file:///C|/FEB/0211rule.txt (281 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 282 

 [Laughter.] 

 MR. HACKER: I would assume that it is, or they 

 wouldn't-- 

 PROFESSOR MARCUS: There is an element of cost

 in accessing this data using those tools? 

 MR. HACKER: Yes, but I would say that that's 

 relatively low. I mean--yes, go ahead. 

 MR. WOCHNA: If I could interject just quickly, 

 I believe your observation is correct. In the

 future--actually today, nothing is inaccessible. 

 It's a matter of money. 

 But in the future, if the rule is drafted 

 properly--and just as a former alumni of the 

 University of Chicago, I've been practicing 22

 years. I'm very sensitive to the economic analysis 

 of law, make sure we get the burden on the right 

 side of the party to induce people to incorporate 

 the technology properly. 

 If you write the rule correctly, then as the

 technology shows up, so that even the most 

 difficult stuff today to access will become 

 cheaper, will become easier to access, that will 

file:///C|/FEB/0211rule.txt (282 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 283 

 only occur if somebody has got the inducement to 

 buy that technology. 

 JUDGE ROSENTHAL: So we should write the rule 

 to tell a company that if it's a choice between

 improving health benefits for their employees or 

 getting cheaper technology to recover information 

 that might be useful in litigation some day, they 

 ought to choose the latter? 

 MR. WOCHNA: It's never that Hobson's choice,

 though. 

 JUDGE ROSENTHAL: I appreciate that. I was 

 trying to make a point. 

 MR. WOCHNA: No. In fact, you should-- 

 JUDGE ROSENTHAL: Or raise a question.

 MR. WOCHNA: I don't think the committee need 

 dictate the purchase of technology at all. The 

 committee simply needs to do what we try to do in 

 the common law, what we try to do all the time, and 

 that is to place the burden of incurring the cost

 of discovery upon the party that is best able to 

 incorporate the technology to drive the cost down. 

 Which, in this case, would be to tell a 

file:///C|/FEB/0211rule.txt (283 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 284 

 producing party that you have to produce documents. 

 You have to produce them in the forms, et cetera, 

 that are being requested unless you can come to 

 court and show that the documents are not

 accessible. I wouldn't say for reasonably 

 accessible. I would say you have to show they're 

 not technologically accessible. 

 JUDGE ROSENTHAL: At all or-- 

 MR. WOCHNA: I think, ultimately, you would

 start at all because if I were the plaintiff, I 

 would say, well, what if I could do that? In fact, 

 Damon and I have discussed on a couple of 

 occasions, and we don't have an answer to this yet. 

 But it would be great to have a kind of gaming

 solution that if the plaintiff says, "I can recover 

 your documents for you off of your systems for X 

 number of dollars using computer forensics." 

 And the defendant says, "Well, that's crazy. 

 We can't do it in-house for anything less than

 millions." There's got to be a way for the 

 documents to be produced, and somebody to incur the 

 risk that the documents can be produced and 

file:///C|/FEB/0211rule.txt (284 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 285 

 recovered in that economic fashion, as the 

 plaintiff is indicating. 

 And we get put into that situation frequently 

 when we're called into court, and we testify what

 we're going to do, how we're going to do it. And 

 if the court says they only want to spend X number 

 of dollars doing it, we'll do it for those number 

 of dollars. 

 But that's the technology that's available

 today in cases. There is going to be more 

 technology tomorrow and more two years from 

 tomorrow. And in 5 or 10 years, we'll all look 

 back at this and go, wow, why were we ever so 

 worried about back-up tapes or legacy systems?

 Because there are companies out there right now 

 trying to solve those problems, but they're only 

 going to solve them if somebody is out there 

 willing to buy the solution. 

 MR. KESTER: Both of you are just saying that

 what's reasonable is going to change. Isn't that 

 what you're saying? 

 MR. WOCHNA: What's technologically accessible 

file:///C|/FEB/0211rule.txt (285 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 286 

 is always going to change. What's reasonable is 

 going to be a function of one plaintiff's attorney 

 saying this is reasonable, defendant's counsel 

 saying absolutely not.

 And our concern is that the standard--you've 

 got two big areas that we're most concerned 

 about--the standard not be a way for people to hide 

 behind the standard and not disgorge relevant data 

 that's really important.

 While it may be true you're never going to find 

 on back-up tapes deleted stuff, because it never 

 gets saved to a back-up tape, it's absolutely not 

 the case that at the bottom end of the pyramid, 

 where your most distributed computers are at--you

 start imaging your laptops and your PCs and your 

 desktops, et cetera--as you go through the process 

 of recovering data, that is where you're going to 

 find deleted data and instant messages and things 

 that were communicated to one another that never

 made it to the back-up tape, never made it to the 

 server. 

 And if the defendant's got the ability at that 

file:///C|/FEB/0211rule.txt (286 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 287 

 point in time to say to plaintiff this stuff's not 

 accessible--Microsoft's comments have gone so far 

 to say that the deleted stuff on a hard drive ought 

 to be rendered--ought to be considered not

 accessible because it was deleted. Well, that 

 would be--that would be a horrible thing to happen. 

 In cases of theft of intellectual property, 

 where your CFO or your major sales person has left 

 and taken with them your customer list, and you're

 now trying to prove the customer list is being used 

 improperly by a competitor. He didn't leave behind 

 a memo that says, "Here is where I left all the 

 stuff." He tried to do as much as he could to 

 disguise what he had done. And that's exactly what

 we do is we find all of that information. We never 

 find it--excuse me. We very rarely find it in 

 active files. 

 And if the defense capability or, rather, if a 

 defendant is enhanced in their ability to prevent

 access to that information by making it more 

 expensive or engaging people in a lot of motion 

 practice to get to that data, I think your rule is 

file:///C|/FEB/0211rule.txt (287 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 288 

 going to do a disservice. 

 JUDGE ROSENTHAL: Are you describing a 

 situation in which good cause could be shown for 

 obtaining that information and required its

 production? 

 MR. WOCHNA: Yes. But, again--yes, that's 

 true. But even under your proposed rule, it seems 

 that we've got at least one additional motion 

 practice than what we've got at the present time.

 A lot of times we can run in and support a TRO or a 

 request for a preliminary injunction based upon an 

 analysis of 20, 30, 40, a couple hundred computers 

 in the client's system, showing here are the 

 computers we've already looked at.

 We're one week into this litigation. We've got 

 to stop X, Y, and Z from doing something nefarious, 

 et cetera. Here is the data we've found on our 

 computers that evidence the fact something went to 

 our competitor, and we expect we're going to find a

 whole lot more when we get to the defendant. 

 Now it seems to me that we run in early on. 

 We've got some motion practice to start with. It 

file:///C|/FEB/0211rule.txt (288 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 289 

 strikes me that as part of those types of cases, 

 these rules are going to invite a lot more motion 

 practice as defendants in a knee-jerk reaction are 

 going to say, "Active data, here it is. I won't

 even give you the metadata. I won't even tell you 

 when the file was created because that's metadata, 

 and our people don't use it all the time." 

 So you have to rely initially on the written 

 document. And if you think this July 25th document

 was actually created in May, well, then you're just 

 going to have to file a motion to try to get that 

 information out of us. And we're just going to go 

 down this path. I think, ultimately, we're going 

 to get there, but I'm just concerned that you're

 going to have a tremendous more motion practice 

 involved. We're going to show up as experts in all 

 of that, I assume. 

 I did not mean to jump all over that. 

 MR. HACKER: A lot of that actually goes to my

 second point, which is that I believe that the 

 computer forensics has been, in some senses, 

 misclassified as being this heroic effort that 

file:///C|/FEB/0211rule.txt (289 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 290 

 people have to go through to get this. And 

 although we love to have that as kind of label that 

 we're some kind of special "walk on water" kind of 

 people, rarely there is no heroics going on in this

 industry. 

 The tools, I have to tell you, coming from an 

 IT background and being in an IT department, that 

 every IT department is called upon on a daily basis 

 to recover files that have been inadvertently

 modified, that were previously deleted. Go back 

 and--you know, the back-up tapes and that. They're 

 using some of the same tools that we're using. 

 It's available out there, and they're doing it 

 today. And this is not heroics that, you know,

 that's happening. 

 JUDGE HAGY: That being so that everything is 

 reasonably accessible, so what's wrong with calling 

 it reasonably accessible? 

 JUDGE ROSENTHAL: Shouldn't you change your

 company's name? 

 MR. WOCHNA: To? 

 MR. HACKER: To? 

file:///C|/FEB/0211rule.txt (290 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 291 

 JUDGE HAGY: Reasonably Accessible? May I make 

 a comment, Professor Marcus? What would you 

 substitute for reasonably accessible or just take 

 away the concept and assume everything's

 accessible? 

 MR. WOCHNA: I think you ought to assume 

 everything is accessible unless somebody shows you 

 it's not. 

 JUDGE ROSENTHAL: So is your proposed standard

 one that's similar to what was suggested earlier 

 that instead of reasonably accessible, it would be 

 something like inaccessible without undue cost and 

 burden? 

 MR. WOCHNA: That would be fine. That would

 fine. And that would be--you know, a lot of times, 

 I do a lot of seminars, et cetera, and I'll get a 

 whole bunch of attorneys initially thinking to 

 themselves that in litigation, the first thing you 

 do is you grab back-up tapes or you grab servers.

 Because in their minds, they've got the 

 distribution of data in the defendant in the shape 

 of a pyramid. And they're thinking to themselves 

file:///C|/FEB/0211rule.txt (291 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 292 

 as the data gets consolidated as we go up the 

 pyramid, to the server layer or to the back-up tape 

 layer, that's where I'm going to find good stuff. 

 We do a fair amount of time trying to educate

 attorneys that they really ought to consider 

 grabbing the data at the most distributed level, 

 which is the area where people have got their PCs, 

 their laptops, et cetera, by identifying--as we 

 were talking about earlier this

 morning--identifying who's involved in this 

 litigation, who are you going to call as witnesses. 

 If you've got 200 or 300 people, then you've 

 got 200 or 300 computers. Imaging those computers 

 first and then doing a simultaneous analysis on all

 that stuff first, you may find you never need to 

 get to the back-up tape side. You never need to 

 get to the server side, and you never need to get 

 into these fights about whether or not the data, as 

 you chase it up this distribution pyramid, it's

 going to get more costly, and it's going to get 

 more difficult to receive it. 

 And yet, curiously enough, the stuff you may 

file:///C|/FEB/0211rule.txt (292 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 293 

 ultimately want isn't there anyway because it never 

 got saved going up the chain. It's someplace in 

 unallocated places on lower level computers. 

 JUDGE ROSENTHAL: Mr. Bernick, last point.

 MR. BERNICK: How do you reach agreement on who 

 those 200 people are? And won't the plaintiffs in 

 the case insist that that decision should not be 

 made up front, that it should await their receipt 

 of organization charts and their conduct of

 deposition discovery to determine who is really 

 involved in the case? 

 MR. WOCHNA: Yes, I would agree with that. I 

 think plaintiffs, and if they're trying to figure 

 who's involved, initially we recommend a 30(b)

 deposition to try to figure out who in the 

 organization does what, where does this data get 

 distributed, and how does it work? Who's involved 

 in this matter? 

 And then as that comes out, the nice thing is

 as that comes out, you can then grab those 

 computers as they come out. You create clones of 

 them, in effect. And you keep adding clones to the 

file:///C|/FEB/0211rule.txt (293 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 294 

 case. And you keep on searching, and that can be 

 done-- 

 MR. BERNICK: But when do you do the search? 

 MR. WOCHNA: You can do the search--you can do

 the search even as clones are being added and then 

 keep on kicking back relevant data as the case 

 grows. And that searching process is done 

 electronically. Now let's make it clear. It's 

 done electronically, using software to drill down

 through this stuff and find in this myriad mass of 

 information the things that are relevant to that 

 particular case. 

 JUDGE LEVI: Including any attorney-client 

 document?

 MR. WOCHNA: In fact, on the flip side, we 

 absolutely do. We absolutely help the attorneys 

 find the stuff that ought to be preserved. And 

 then the protocols, by the way, for all this, and 

 these aren't ours--Simon v. mySimon, Playboy

 Enterprises-- these are all protocols set up by the 

 federal courts that we think are excellent cases. 

 Antioch v. Scrapbook Borders. Absolutely excellent 

file:///C|/FEB/0211rule.txt (294 of 455) [3/2/05 2:36:48 PM]
file:///C|/FEB/0211rule.txt

 295 

 cases. 

 JUDGE ROSENTHAL: Well, since you didn't talk 

 fast enough. 

 [Laughter.]

 MR. WOCHNA: I just love this area. I do 

 apologize. I am more than animated. 

 JUDGE ROSENTHAL: Well, in that case, you are 

 in a group of people who share your enthusiasm. 

 Thank you very much.

 Ms. Middleton? Is Ms. Middleton here? There 

 she is. I'm sorry. I didn't see you. Good 

 afternoon. 

 MS. MIDDLETON: Good afternoon. I want to 

 thank you for this opportunity to talk to you and

 thank you also for all of your work. 

 I'm strongly in favor of having these rules, 

 and I tried to look at them recently as if I hadn't 

 been involved, watched everything as it developed, 

 and tried to imagine reading these rules from the

 perspective of someone, a judge or litigant, who 

 may not know everything that you all know. And a 

 couple of things jumped out at me that I'd like to 

file:///C|/FEB/0211rule.txt (295 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 296 

 talk about. 

 The first one was that--and getting back to my 

 desire for these rules, I thought maybe be careful 

 what you wish for because one of the things that

 concerned me was there seems to be perhaps a 

 suggestion that there should be more court 

 preservation orders. And I do have one story in my 

 comments, and I also want to correct a comment. It 

 says--this was wishful thinking--that CIGNA

 companies may have several lawsuits pending at any 

 one time. That's several hundred lawsuits pending 

 at any one time. 

 But in a case not long ago, the plaintiffs went 

 to court and gave the judge what appeared to be

 probably a very reasonable order, supported by a 

 motion that cited the Manual for Complex 

 Litigation. And the judge signed the order, ex 

 parte. And basically, the order would have 

 required us to inform all of our 37,000 employees

 that they must not alter, delete, move, change, do 

 anything with any data related to--this is related 

 to our health care business--anything related to 

file:///C|/FEB/0211rule.txt (296 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 297 

 health care claims. It essentially would have shut 

 down our business. 

 And we were faced with the situation of, in 

 essence, ignoring a court order and being in

 contempt for a period of time, and it was a 

 significant period of time before we could get 

 before the judge. 

 So after that experience, and I do think that 

 there are more judges who are signing preservation

 orders without the knowledge you have and inclined 

 to err on the side of overinclusiveness, who may be 

 signing a preservation order with no concept of the 

 real-life implications of these. So to the extent 

 the notes could reflect that preservation orders

 are not necessarily the norm, and if they are 

 entered, they should be very narrowly and carefully 

 tailored to require the preservation of very 

 specific data, perhaps located in specific places 

 because, again, it can be very burdensome on a

 large company. 

 But also I have a concern that the litigants 

 are going to be rushing to court and involving 

file:///C|/FEB/0211rule.txt (297 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 298 

 judges in discovery disputes more and more because, 

 as they read these, if the safe harbor goes 

 through, they're going to say, "Well, I'm going to 

 get an order right at the beginning so that I'm

 going to get the court to sign this order." So 

 these fact procreations or whatever the other side 

 is, I can get sanctions against them. So I would 

 encourage a note to reflect that. 

 I am concerned with the phrase that party need

 not produce--the party need not provide discovery 

 of electronically stored information that the party 

 identifies as not reasonably accessible. I would 

 ask that you consider just taking out that last 

 phrase there and just say "a party need not provide

 discovery of electronically stored information that 

 is not reasonably accessible." That, to me, is the 

 corollary to that you normally provide the 

 documents and the information that's reasonably 

 accessible and that's been asked for.

 And then on motion by the requesting party 

 demonstrating the need and the relevance, the 

 responding party must show that the information is 

file:///C|/FEB/0211rule.txt (298 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 299 

 not reasonably accessible. Otherwise, the way it's 

 worded, I'm concerned that in initially responding 

 to the typical first request for production, 

 I--maybe some judges would say I have to create a

 privilege log or something akin to that. 

 Or some judges might expect me to list all the 

 places, or plaintiffs or requesting party, all the 

 places I didn't think to look, which sort of is an 

 impossibility because I didn't think of it. Or

 just basically create a road map for the other 

 side, if they choose to, to harass me in terms of 

 discovery. 

 If I list and I didn't check the BlackBerrys 

 and the home computers and the three laptops of

 these 85 people who might possibly have 

 discoverable, you know, relevant information, 

 that's exactly what the other side is waiting for, 

 and then we're mired in discovery disputes and back 

 before the judge. So I am concerned about this

 term "specifying." 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: How do you deal with that 

file:///C|/FEB/0211rule.txt (299 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 300 

 kind of problem now? 

 MS. MIDDLETON: What I do now is I turn over 

 the documents that would appear to be responsive 

 and that I could find and that I could know about.

 The other side comes back and says, you know, "We 

 think that you didn't give us the following thing, 

 or did you check with the laptop or the BlackBerry 

 of your CEO?" And then I say, "No, I didn't. Here 

 it is." Or "That's ridiculous. I'm not going to

 get--I didn't check all my back-up tapes. No, I 

 didn't." And then we're off to the races. 

 PROFESSOR MARCUS: Okay. So one thing I'm 

 getting at is it sort of sounds like you are saying 

 you are opposed to the change to Rule 26(b)(2)

 because it's going to make your life harder? 

 MS. MIDDLETON: No. I'm not saying that. I'm 

 saying that I think that we will end up in 

 burdensome motion practice and involving the courts 

 more often than we have now.

 I think, ultimately, what we want to do here is 

 have, number one, clear rules. And they may not be 

 rules I like. But if they're clear and I can tell 

file:///C|/FEB/0211rule.txt (300 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 301 

 my client what to do, fine. And number two, give 

 us rules that will allow the parties to police 

 ourselves to some extent, so that we're not 

 dragging each other into court.

 And again, as in-house counsel, primarily what 

 I want to do, knowing that 95 percent of my cases 

 or more are going to be settled, is I want to get 

 to the merits, and I want to get the cases settled 

 quickly, efficiently, cost effectively, and not

 spend millions of dollars on discovery disputes and 

 turning over documents that are not relevant, 

 restoring back-up tapes that don't have any 

 materials that really make any difference in the 

 case.

 JUDGE ROSENTHAL: May I ask you one question? 

 MS. MIDDLETON: Yes. 

 JUDGE ROSENTHAL: How frequently have you found 

 it necessary to restore data from legacy or 

 back-up, or whatever the case may be, in order to

 be fully responsive to discovery? 

 MS. MIDDLETON: I've not gotten that far. I 

 could see it coming in a couple of cases, quite 

file:///C|/FEB/0211rule.txt (301 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 302 

 frankly. You sometimes enter into the economic 

 decision that this case, it's not an $80 million 

 case. It's $1 million case. I'm going to settle 

 it, even though I don't want to, because it's going

 to cost me a million dollars to restore, review, do 

 the privilege review, get a human being who 

 understands what we're turning over. 

 So we have engaged in some restoration of 

 back-up tapes for other reasons, and I know how

 expensive and burdensome it is. But I've never had 

 to turn it over in litigation. But it's not to say 

 that they haven't been asked for. 

 The other concern I had was the language as 

 saying that the requesting party could specify the

 form. I would ask that you consider changing that 

 to request the form of production. I think that's 

 what you're saying is that they can request what 

 form, but using the term "specify" to me makes 

 it--suggests that they should be the ones who get

 to determine what the form is, as opposed to the 

 parties together. 

 They can request the form. The parties get 

file:///C|/FEB/0211rule.txt (302 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 303 

 together and discuss is this really the form that 

 you want? Is it native format? Is it PDF? What 

 is it? So I think that the term "specify" gives a 

 little too much leverage to the requesting party,

 when a very perfectly reasonable production, useful 

 production could be something other than what the 

 requesting party has "specified." 

 You've asked a couple of times today, I've 

 noticed, about this whether when we talk about

 reasonably accessible, all we're talking about is 

 cost and burden. And I guess at the very end, 

 perhaps that's all we're talking about. 

 But when you do have hundreds of lawsuits 

 coming in, and I think what I've seen in almost

 every lawsuit is the initial complaint is overly 

 broad. And there is no downside for the plaintiff 

 or a requesting party to be overly broad at all 

 times because the only--the only downside for them 

 is that some of their claims get dismissed. Some

 of their requests get denied. But they have no 

 incentive to be narrow. 

 Whereas on the producing party side or the 

file:///C|/FEB/0211rule.txt (303 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 304 

 defendant, I mean, there are plenty of incentives 

 for us to be reasonable. We will be sanctioned or 

 whatever else if we're not reasonable in how we 

 respond. And again, we can get some of these

 claims in an overbroad complaint, and I dismiss 

 perhaps after several motions. But as these rules 

 stand, when the complaint comes in, if it's an 

 overly broad complaint, you're, in essence, under 

 an obligation to preserve, although what we talked

 about is produce--preserve everything that might be 

 discoverable. 

 And discoverable is to be interpreted broadly 

 under the rules. So we're not necessarily limiting 

 ourselves to what might be material or relevant.

 It's pretty much everything. And so, what I'm 

 finding is I get these overly broad complaints, and 

 these would be RICO claims, various class action 

 claims. They're extremely broad. The first 

 amended complaint cuts the case in half, but in the

 mean time, I've already had to shut down things, 

 tell people they have to preserve things, the 

 back-up tapes, suspend them. 

file:///C|/FEB/0211rule.txt (304 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 305 

 So, again, if we can come up with an incentive 

 to have the requesting parties be somewhat 

 reasonable, and one of those incentives, obviously, 

 would be a presumption of cost shifting built into

 the rules that could be overcome by a showing of 

 need, relevance, and if it's unjust to shift the 

 cost. But without that presumption, I'm not--I 

 don't think that many judges will necessarily give 

 adequate consideration to what the cost might be.

 And again, large corporation, yes, we have 

 plenty of money. But hundreds and hundreds and 

 hundreds of lawsuits come in, and you end up 

 settling cases that really shouldn't be settled and 

 for increasingly large amounts.

 It used to be what a nuisance value was 20,000. 

 Now a nuisance value might be 500,000 because of 

 electronic discovery. So anything you can do in 

 there to take into account that there are very few 

 incentives to the requesting party to be narrow

 with their requests at the outset would be much 

 appreciated. 

 I also had a few tweaks, talking about native 

file:///C|/FEB/0211rule.txt (305 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 306 

 format. I have a concern about what appears to be 

 a suggestion that production in native format would 

 be the preference, and I think other witnesses have 

 talked about it. But it's, to me, I wouldn't want

 to suggest--the rules to suggest that that's the 

 favored format. You can't Bates stamp it. You 

 have authentication problems. You have difficulty 

 at depositions and trials with native format. 

 And I would also recommend changing searchable

 to usable or saying searchable or usable because 

 you had a lot of--and technology improvements 

 notwithstanding, you're going to, I think, always 

 have certain kinds of information you've produced 

 that's not going to be searchable. Perhaps it's

 audiotapes or graphic displays or whatever. So 

 usable, to me, would also encompass that kind of 

 thing. 

 On the Rule 37, safe harbor. I think a safe 

 harbor is necessary, but I'm concerned that the

 safe harbor as written is less of a safe harbor 

 than perhaps already exists today. You talked 

 earlier about spoliation law, and there is always a 

file:///C|/FEB/0211rule.txt (306 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 307 

 degree of culpability considered when you get to 

 spoliation. But I'm not sure that there's any--the 

 way this is worded, that there is any showing of 

 culpability required here.

 And I would encourage--I like the--Mr. Nelson's 

 formulation or something akin to it, which is a 

 court should not sanction a party unless the party 

 has recklessly or intentionally allowed relevant 

 and material information to be lost or destroyed.

 JUDGE SCHEINDLIN: Are you talking about any 

 type of sanction or just the ultimate sanctions of 

 dismissal or default? 

 MS. MIDDLETON: Well, I would say an adverse 

 jury instruction is an ultimate sanction as well.

 If by sanction you mean the party has to go back 

 and redepose--allow redeposition and even pay-- 

 JUDGE SCHEINDLIN: Right. Right. 

 MS. MIDDLETON: --even pay for things. To me, 

 those aren't the sanctions I'm talking about. I'm

 talking about the-- 

 JUDGE SCHEINDLIN: The punitive sort of case 

 dispositive sanctions? Yes, okay. 

file:///C|/FEB/0211rule.txt (307 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 308 

 MS. MIDDLETON: Yes. Or even something that 

 would be personally aimed at the behavior of the 

 in-house counsel who forgot--who was unable to stop 

 the back-up tapes, did not know that some piece of

 information might have been on some back-up tape. 

 Again, the preservation is sort of the elephant 

 in the room. We're not supposed to be putting the 

 preservation law into these rules. But when we 

 talk about what should be produced and what should

 be sanctioned, preservation is all over that. And 

 as I read these rules, when I get this complaint 

 that's overbroad, but that's what the complaint is, 

 and I know that there's something on the back-up 

 tapes because everything is on the back-up tapes,

 currently, I have to consider having all my back-up 

 tapes saved for fear of being sanctioned. 

 Because there are some judges, maybe no one in 

 this room, who would say there was evidence on 

 those back-up tapes, and you didn't turn it over.

 And those back-up tapes have been taped over, 

 whatever. The plaintiff happened to save a copy of 

 that e-mail. You didn't turn that e-mail over, and 

file:///C|/FEB/0211rule.txt (308 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 309 

 those back-up tapes were taped over. Adverse 

 sanctions. 

 That's what concerns me. So, quite frankly, I 

 certainly do, and I think other corporate counsel

 are, again, erring on the side of save everything. 

 Save your back-up tapes until this kind of--until 

 these rules come out. And until the judges and 

 other litigants, until we can get some more 

 certainty in this area.

 JUDGE ROSENTHAL: Are there other questions of 

 Ms. Middleton? 

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 MS. MIDDLETON: Thank you.

 JUDGE ROSENTHAL: Mr. Leddin? 

 MR. LEDDIN: Good afternoon. My name is Brian 

 Leddin, and I want to thank you for the opportunity 

 to speak before you today. There has been a lot of 

 discussion this afternoon and this morning about

 preservation and harvesting of documents, and I 

 want to talk about when things go bad and with 

 respect to the claw back provision of 26(b)(5)(B). 

file:///C|/FEB/0211rule.txt (309 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 310 

 I represent products liability defendants, and 

 I have been involved in large-scale production and 

 review of documents electronically, both that were 

 scanned in paper and those that were collected from

 company servers and desktops and like. And I can 

 tell you that in the process of doing that, it 

 introduces new areas of errors, opportunities for 

 errors, especially with respect to identifying and 

 logging privileged documents and making sure that

 they're not released when they shouldn't be. 

 Certainly, in the paper world, when you have a 

 contract reviewer looking at documents and they 

 come across something with the firm letterhead on 

 it, they're pretty much assured that that's

 something they should funnel off and have reviewed 

 more extensively by more seasoned attorneys to make 

 the decision about whether it's privileged. 

 But what you run into in the electronic world, 

 especially with respect to e-mails and PowerPoint

 presentations and the like, is that not only is 

 there a huge increase in the volume of materials 

 that are reviewed, but there's a great deal of 

file:///C|/FEB/0211rule.txt (310 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 311 

 informality involved in the method in which the 

 correspondence is made and the way that people are 

 identified as authors of documents. 

 With respect to e-mail addresses alone, if you

 think about in your own life, I'm sure that 

 everyone has at least two or three, maybe more, 

 e-mail addresses that they're currently using and 

 have had more than that in the past, based on what 

 servers you're identified with and what companies

 you're working for. 

 When you take the past and the paper world, a 

 contract reviewer would be looking at documents, 

 would have a list of--a counsel list that they 

 would basically bang that list against as they went

 along to the side if they had a document that might 

 be privileged. If it turns out that it might be on 

 that list, it goes into another area where more 

 senior people look at it and make the decision 

 about whether it's privileged, put it on the log.

 In this case, you've got not just the person's 

 name, you've got all the variations of their e-mail 

 addresses that may possibly be ticked off. And 

file:///C|/FEB/0211rule.txt (311 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 312 

 then you have other kinds of informal 

 correspondence that goes back and forth that really 

 can't tie to a person's name. And so, other 

 methods, other tools have to be created to identify

 those types of documents that might be privileged. 

 One method is used is keyword searches that 

 look for either the e-mail address, the name of 

 attorneys that are known, or for words that suggest 

 legal or communications. And finally, there are

 ontologies that are developed by linguists, and it 

 seems every meeting I go to of a similar nature to 

 this, there is always some vendor in the room that 

 knows how to do those things and suggests they have 

 a solution.

 I suggest they do have solutions, but they're 

 not perfect. And the problem with the imperfect 

 solutions is that eventually and inevitably a 

 privileged document is going to go out the door 

 that shouldn't have. And it's not because the

 defense bar is trying to hide the ball. It's that 

 the ball is enormous, and we're trying to figure 

 out which things are being tracked out as the ball 

file:///C|/FEB/0211rule.txt (312 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 313 

 is rolling out of the door. 

 The final point I wanted to make with respect 

 to avenues for error with respect to privilege is 

 not just, you know, the inability of the contract

 attorneys and the attorneys doing the review to 

 identify privileged documents and set them aside in 

 a privilege log. It's also the fact that when you 

 start to introduce electronic review and online 

 review of documents, you're now introducing a new

 level of control that is beyond the law firm that's 

 directing the litigation with the in-house counsel. 

 Because now a vendor has come into place that 

 runs that Internet-based review platform. A 

 technician somewhere in California throws a switch

 on Saturday night, and all the things you marked 

 privileged on Sunday go out that shouldn't have. 

 There has to be a way, a reasonable way for that 

 material to be retrieved if it's produced when it 

 shouldn't have been.

 JUDGE ROSENTHAL: How frequently do you see 

 consensual arrangements or quick peeks, claw backs, 

 those kinds of protocols? 

file:///C|/FEB/0211rule.txt (313 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 314 

 MR. LEDDIN: In my experience, the claw back 

 agreement has been put in place and has worked 

 well. My opinion with respect to quick peeks is 

 they are really an area for a great deal of

 mischief. And the idea of letting someone into 

 your system to review documents before you've even 

 had your own people do it is really, I think, a big 

 mistake. 

 I think a better way to look at what a quick

 peek can do is not allow someone to look at the 

 substance of your materials, but better to describe 

 to them the architecture of your system so they can 

 better formulate their questions and their request 

 for production so that it matches up with your

 ability to produce things. 

 JUDGE ROSENTHAL: Mr. Keisler? 

 JUDGE KEISLER: Mr. Leddin, I wondered if I 

 could ask you about how the reasonable time portion 

 of this claw back rule would work because there's

 one thing that's puzzling me a little bit. Which 

 is, I suppose, in the first instance, it's up to 

 the party that has the document to decide whether 

file:///C|/FEB/0211rule.txt (314 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 315 

 the notification was made in a reasonable time 

 because he or she then decides whether to give it 

 back. 

 We've heard today that many lawyers don't like

 entering into these agreements, and any 

 multi-factor inquiry into what's a reasonable time 

 could certainly leave room for someone in good 

 faith to say "I don't think that was reasonable." 

 And if that's so, then I suppose, you know, we have

 litigation before the court over whether there is 

 an obligation to return the document, which seems 

 inconsistent with the notion that the purpose of 

 this rule is to at least prevent further 

 dissemination of the document while the judge

 decides whether he's going to waiver. 

 Now you have a sort of second phase in which 

 the judge has to decide whether the notification 

 was made in a reasonable time. Do you think this 

 could be a problem? Do you think not?

 MR. LEDDIN: Well, to answer your question 

 about reasonable time first, I think I would be a 

 bad lawyer if I gave you a number or a date or a 

file:///C|/FEB/0211rule.txt (315 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 316 

 time for reasonable time. It's going to depend on 

 the circumstances of what it was that was 

 discovered that was produced that shouldn't have 

 been and how quickly it was and how that

 information was communicated to the party that 

 received it that shouldn't have. So that there's 

 not an unreasonable delay in turning things around 

 and retrieving them. 

 With respect to--I'm sorry. I lost track of

 the second part of your question. 

 JUDGE KEISLER: Well, I guess I'm just 

 wondering, one possibility would be to eliminate 

 the reasonable time requirement. That might bear 

 on whether there was a waiver because how diligent

 the producing party was might turn out how quickly 

 he or she asserted it. But it wouldn't leave in 

 the requesting party's control the initial decision 

 about whether to sit on the document longer while 

 the parties litigated over whether a request was

 made in a reasonable time. 

 MR. LEDDIN: The obligation to make the request 

 in a reasonable time is on the party that produced 

file:///C|/FEB/0211rule.txt (316 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 317 

 it improperly. 

 JUDGE KEISLER: Right. 

 MR. LEDDIN: If the party that received it and, 

 received it, realized they shouldn't have, I think

 they have an ethical obligation to notify the 

 producing party that they've gotten something that 

 they shouldn't have. I disagree with the analysis 

 that was given this morning with respect to what 

 the obligation is of the receiver of produced

 privileged material is. 

 But I think the key that I'm trying to get to 

 with respect to the return of documents is that 

 it's not that the document comes back and 

 disappears for good. It goes in a privilege log,

 and a judge has to make a call on whether that 

 document should have been produced in the first 

 place. And it only returns the parties to the 

 position they should have been in had that document 

 not been erroneously produced.

 JUDGE SCHEINDLIN: Is that necessary? Would 

 you be opposed to the receiving party not returning 

 it to you, but saying, "Okay, you've just notified 

file:///C|/FEB/0211rule.txt (317 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 318 

 me that it's privileged. I'm going straight to the 

 court." I'm going to bring that document right 

 down the street to the courtroom and say, "Judge, 

 they gave this to me six months ago. Now they tell

 me it's privileged. I'd like a ruling now. I 

 don't see any reason I've got to go giving it to 

 them and waiting around for them to give it to you. 

 Here it is." 

 MR. LEDDIN: I think that's effectively-- I'm

 arguing the same position because what I'm saying 

 is-- 

 JUDGE SCHEINDLIN: That's okay with you, to add 

 that, "or take it right to court." The receiving 

 party--

 MR. LEDDIN: As soon as it's identified--as 

 soon as it's identified, it really goes on the 

 privilege log, and it's for the judge to make the 

 call. 

 JUDGE SCHEINDLIN: Right.

 MR. LEDDIN: You can make that-- 

 JUDGE SCHEINDLIN: But I'm saying they don't 

 have to give it back to you and wait for you to 

file:///C|/FEB/0211rule.txt (318 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 319 

 come to court. They can skip that and go right to 

 court. 

 MR. LEDDIN: As long as it's returned, 

 sequestered, destroyed, however it's meant so that

 it doesn't continue to propagate. 

 JUDGE SCHEINDLIN: Right. And that's my next 

 question is how far does the receiving party have 

 to go to retrieve it if it's already been 

 disseminated electronically?

 MR. LEDDIN: Right. I think the answer you got 

 this morning was appropriate. I think the 

 receiving party has to contact anyone that received 

 it from them and try to obtain it back. Beyond 

 that--

 JUDGE SCHEINDLIN: Any? What if it was already 

 in the thousands because it was electronically 

 distributed? 

 MR. LEDDIN: If it was electronically 

 distributed to an e-mail list, that e-mail list

 would receive a notification that document should 

 have been returned. 

 JUDGE SCHEINDLIN: And if it was posted to a 

file:///C|/FEB/0211rule.txt (319 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 320 

 document depository online? 

 MR. LEDDIN: Eventually, it's on a billboard, 

 and it's gone. I mean, you've got to do the best 

 you can to get things back when they were produced

 when they shouldn't have been. 

 JUDGE SCHEINDLIN: But this inadvertent 

 disclosure thing, isn't it a well-developed common 

 law bunch of factors already in your circuit and in 

 mine? In the 2nd and 3rd Circuit, there's a lot of

 case law about the factors and how to do this. 

 What-- 

 MR. LEDDIN: Yes, I read Judge Hagy's comments, 

 and I think they're on the mark. My concern here 

 is I think it--and this really gets back to the

 point I wanted to make initially, which is because 

 of the volume of data and because of the 

 informality with which it's moved through the 

 system and the certainty that privileged documents 

 are going to slip through, it's important that the

 courts and the parties deal with this issue before 

 anything is produced. So that everyone knows what 

 the rules are going to be before the first document 

file:///C|/FEB/0211rule.txt (320 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 321 

 rolls out the door. 

 And if that's the case, if there's an agreement 

 on how the materials will be returned and what's a 

 reasonable time to make that call on the fact that

 something was produced that shouldn't have been, 

 all those issues should be dealt with before the 

 first item is produced. And if that's the case, 

 then 26(f) will have done its job. 

 JUDGE ROSENTHAL: Any other questions or

 comments? 

 [No response.] 

 MR. LEDDIN: Thank you. 

 JUDGE ROSENTHAL: Thank you very much. 

 Mr. McDermott, please?

 MR. McDERMOTT: Thank you. My name is David 

 McDermott. I'm a certified records manager and the 

 president of ARMA International. I'd like to 

 introduce Cheryl Pederson, who is also a certified 

 records manager and president-elect of ARMA

 International. 

 We'd like to, first off, thank the Committee on 

 Rules of Practice and Procedure of the Judicial 

file:///C|/FEB/0211rule.txt (321 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 322 

 Conference of the United States for allowing us to 

 make comments to the proposed amendments involving 

 electronic discovery. ARMA is here to testify as 

 experts in records and information management and

 not as legal experts. 

 ARMA is the Association for Records Management 

 Professionals with over 10,000 members in 53 

 countries. ARMA International members range from 

 records and information managers, archivists,

 librarians, to educators in both public and private 

 sectors. ARMA is a recognized standards developer 

 for the American National Standards Institute, 

 ANSI, on records retention and disposition. 

 ARMA is also a member of the Sedona Conference

 working group on electronic document retention and 

 protection. Good record retention policies are 

 good for business, independent of the need to keep 

 records for litigation purposes. A records 

 management program utilized by an organization and

 followed in a consistent manner and in the normal 

 course of business will help to ensure that records 

 are available and accessible for discovery and 

file:///C|/FEB/0211rule.txt (322 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 323 

 litigation purposes. 

 ARMA International applauds the committee's 

 efforts to address electronic discovery. However, 

 we caution the committee against adopting any rules

 that may inadvertently cause large financial 

 burdens to the parties due to increasing volumes of 

 materials stored electronically. We also caution 

 the committee against adopting any rules that may 

 discourage entities from implementing and following

 best principles and best practices of records 

 management. 

 ARMA International agrees with the committee's 

 assertion that there should be an attempt to adopt 

 a consistent set of rules, rather than allowing the

 adoption of local rules by various district courts 

 across the nation. ARMA recommends the adoption of 

 the records management standards developed by the 

 International Organization for Standardization, ISO 

 15489, by any entity that is responsible for

 records and information management. 

 We also recommend that the language within the 

 proposed rules for determining whether information 

file:///C|/FEB/0211rule.txt (323 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 324 

 is reasonably accessible should be clarified. ARMA 

 is concerned that the language in the proposed rule 

 allows the party with the burden of production to 

 determine what is reasonably accessible. We urge

 the courts to determine accessibility based on best 

 principles and best practices of records 

 management. 

 Poor record-keeping practices by an 

 organization should not be allowed as a means of

 frustrating electronic discovery. It is important 

 to note that records destruction within an 

 organization is acceptable, provided that it is 

 conducted in strict adherence to that 

 organization's records retention policy. The

 records retention policy should include all 

 applicable state and federal laws or regulations. 

 Courts would need to resolve issues of 

 deliberate data destruction or whether data was 

 deleted accidentally. We would urge courts to be

 informed about an entity's records management 

 program and the retention schedule applicable to 

 the records subject to discovery. 

file:///C|/FEB/0211rule.txt (324 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 325 

 Generalizing legacy information into the 

 category of inaccessible should be reconsidered. 

 Many federal regulations require the retention of 

 data beyond the active use within a corporation,

 thereby requiring inactive data to be accessible if 

 required by a regulatory authority during its 

 life-cycle. Yes, sir? 

 PROFESSOR MARCUS: Sorry to interrupt. The 

 term in the rule presently is "reasonably

 accessible." And perhaps that term would be as 

 flexible and useful as any. It sounds like your 

 concern is with what's in the note that discusses 

 the meaning of that term? 

 MR. McDERMOTT: Correct.

 PROFESSOR MARCUS: A little earlier this 

 afternoon, we heard a comment that everything is 

 accessible. I gather you're not saying that. So 

 it sounds like what you're saying is that the 

 question of accessibility is identical with the

 question of preservation, which I'm not sure I 

 follow. But it seems like they're somewhat 

 different. 

file:///C|/FEB/0211rule.txt (325 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 326 

 MR. McDERMOTT: Okay. Let me try to--in a best 

 practice for records management, where companies 

 are following retention requirements that are 

 researched--the legal requirements, state

 requirements, any requirements, and that company is 

 following that retention policy and adhering to it 

 in the normal course of business. 

 If that company has destroyed those records 

 according to that policy and can show through

 documentation that they followed the policy--they 

 have information showing that they destroyed those 

 records--it is not reasonably accessible to assume 

 that they can go back to a back-up tape and pull 

 that information back, if you followed those

 retention-- 

 PROFESSOR MARCUS: To use back-up tapes, in 

 your illustration then, you'd say what's on a 

 back-up tape is not reasonably accessible. And 

 that's somewhat different from the question whether

 you'll make somebody go get it anyhow because it 

 shouldn't have been lost in all of its other forms. 

 MR. McDERMOTT: Correct. If you're following 

file:///C|/FEB/0211rule.txt (326 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 327 

 your retention schedule, those records should be 

 available outside of the back-up tapes, if you 

 followed your policies set in place. 

 PROFESSOR MARCUS: Then what I'm getting at is

 it sounds like what you're talking about has to do 

 with good cause for going to inaccessible 

 materials, not for whether they are accessible? 

 MR. McDERMOTT: Good cause. You'd have to show 

 good cause, and the courts would have to determine

 what that is. 

 Courts would need to resolve issues of 

 deliberate data destruction or whether data was 

 deleted accidentally. We would urge courts to be 

 informed about an entity's records management

 program and the retention schedule applicable to 

 the records subject to discovery. 

 Generalizing legacy information in the category 

 of inaccessible should be reconsidered. Many 

 federal regulations--I've read this, but I want to

 make sure I don't miss my spot. Many federal 

 regulations require the retention of data beyond 

 the active, back to that, use within a corporation, 

file:///C|/FEB/0211rule.txt (327 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 328 

 thereby requiring inactive data to be accessible. 

 Good records management practices distinguish 

 between back-up tapes, which are used solely for 

 disaster recovery or restoration of data, and

 records being retained in an electronic form in 

 order to meet retention schedule requirements. 

 Therefore, the fact that records are stored on 

 back-up tapes may not be the best criteria for 

 determining whether records should be reasonably

 accessible. We suggest that the committee make a 

 distinction not so much on the format or storage, 

 but rather between records stored temporarily for 

 disaster recovery or restoration and records that 

 should remain accessible based on retention

 schedule. 

 We'd like to make the following 

 recommendations. The proposed rule should include 

 language that encourages good records management 

 programs so that the organizations may respond to

 discovery requests in a timely manner and without a 

 need for extraordinary or heroic measures. ARMA 

 recommends the following text for incorporation in 

file:///C|/FEB/0211rule.txt (328 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 329 

 Rule 26 or the committee's commentary to Rule 26. 

 "For corporate entities or any parties subject 

 to statutory or regulatory retention requirements, 

 a party will be expected to provide a copy of its

 formal records retention policies and procedures or 

 otherwise articulate its record retention practices 

 in the absence of a written policy. Records 

 subject to a party's records retention policies and 

 procedures, whether formal or informal, will be

 assumed to be reasonably accessible, and a party's 

 failure to follow its practices and procedures will 

 not relieve the party from the requirements of 

 discovery." 

 Further, language in the rules should

 acknowledge that legacy data be considered 

 reasonably accessible during its entire retention 

 period, regardless of whether it is in active use 

 or being retained to meet legal and regulatory 

 requirements. ARMA recommends the following text

 for incorporation in Rule 26 or the committee's 

 commentary to Rule 26. 

 "Legacy data can be considered reasonably 

file:///C|/FEB/0211rule.txt (329 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 330 

 accessible during its entire retention period, 

 whether it is in active use or being retained to 

 meet legal and regulatory requirements, regardless 

 of the format or technology used for storage."

 JUDGE ROSENTHAL: May I ask a flip side of the 

 question? Are you saying that if a record is not 

 required under the party's retention policy and 

 procedure to be retained, number one, and not--and 

 therefore not required by statute or regulatory

 obligations to be retained--take e-mail as an 

 example, most e-mail. Does that mean that it would 

 be assumed after a period of time, depending on the 

 party's computer system, to be not reasonably 

 accessible?

 MR. McDERMOTT: You know, and that's a great 

 question. Best practices for records management 

 would call for a policy surrounding e-mail and the 

 retention and disposal. Records management views 

 e-mail as a delivery mechanism. What we are

 concerned with is the content of the information 

 being delivered by that e-mail, whether it's in the 

 body of the e-mail or as an attachment. 

file:///C|/FEB/0211rule.txt (330 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 331 

 Records that say something like, "Hey, Dave, 

 let's go to lunch," is not a record. But records 

 dealing with--in an e-mail that might deal with a 

 contract or an HR situation, those need to be

 classified and moved out of an e-mail system into 

 the proper class of records, and that's what best 

 practice of a records management program would 

 dictate. 

 JUDGE ROSENTHAL: So what you're saying is

 that--I think you answered my question. If the 

 policy is designed along the criteria that you've 

 described, then information that was not required 

 to be retained under that policy could safely be 

 discarded?

 MR. McDERMOTT: Could safely be discarded. 

 JUDGE ROSENTHAL: And would not be viewed as 

 accessible? 

 MR. McDERMOTT: That's correct. 

 MR. CICERO: Do you find that your example

 solves the problem, though? Because if e-mail-- 

 JUDGE ROSENTHAL: Hold on. 

 MR. CICERO: If the e-mail you talk about says, 

file:///C|/FEB/0211rule.txt (331 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 332 

 "Dave, let's go to lunch and talk about that Vioxx 

 problem that came up in Georgia," it's the same 

 substantive--I mean, from form and everything else, 

 it's the same type of document, but it may have a

 very different significance. 

 MR. McDERMOTT: And you are correct. The 

 difference on what you just mentioned was, "Hey, 

 Dave, let's go to lunch and talk about the Vioxx 

 problem." Then that becomes part of a class of

 correspondence for particularly that type of record 

 or for that class. 

 MR. CICERO: Yes, but somebody that's simply 

 making a--setting up criteria for whether to keep 

 e-mails or not is not going to suggest within an IT

 department that they analyze what the records say. 

 MR. McDERMOTT: There is a disconnect between 

 IT and records management. 

 MR. CICERO: Okay. Within records management. 

 Whoever is doing--establishing the criteria for

 whether or not to keep the type of casual document 

 you were talking about is not going to make an 

 analysis, I assume, of the content of each one of 

file:///C|/FEB/0211rule.txt (332 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 333 

 those million documents a day--million pieces of 

 mail a day that are within a company. 

 MR. McDERMOTT: Best practices would indicate 

 that the individual receiving the mail would have

 to determine whether that is a record or not. It 

 comes back to ethics and requiring people to make 

 the decision on what is a record and what is not, 

 and will it have value? 

 I don't believe it reasonable to retain every

 e-mail ever received. They are just--they're not 

 records. And that's a good records management best 

 practice. 

 MR. CICERO: But they may be information 

 relevant to a litigation.

 MR. McDERMOTT: They certainly may. Good 

 records management policy in the case of litigation 

 calls for the ability to put record holds across 

 groups or functionalities of departments. And once 

 you know you're in an imminent litigation or you

 have been subpoenaed, holds are put in place across 

 groups, across classes of people, and across 

 classes of records. And that's best practices of 

file:///C|/FEB/0211rule.txt (333 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 334 

 records management. 

 Once we know there is a litigation, all 

 disposal is stopped, or it should be stopped. So 

 courts, plaintiffs, defendants can find that

 information through discovery and produce it. 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: What you just said prompts 

 another question. I think you said once we know 

 there's litigation, all destruction must stop.

 Could you elaborate on exactly what that means and 

 how it's supposed to work under best practices? 

 MR. McDERMOTT: I can. When an attorney or a 

 director or a manager or whoever receives a 

 subpoena, and that is handed up through to the

 legal department or an attorney, the records 

 management group typically will work with the legal 

 department on determining what records are 

 required. An e-mail is sent or a communication is 

 sent to anybody and everybody who may have

 involvement with that particular action. 

 PROFESSOR MARCUS: Okay. My concern was what 

 you're talking about is developing a strategy for 

file:///C|/FEB/0211rule.txt (334 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 335 

 identifying the people or sources that should be 

 preserved, not just all of everything? 

 MR. McDERMOTT: Absolutely. And quite 

 honestly, I've seen subpoenas where it's everybody,

 and then the attorneys work that down. And again, 

 I'm not an attorney. I'm the support to our legal 

 department. So they work that down, and we know 

 the class of record, the class of people. And 

 communication is sent to those people to halt any

 and all disposal. 

 And we have found that you have to be very 

 specific. You have to include electronic records. 

 You cross your Ts and dot your Is. And then it's 

 not only important to get that communication out to

 those people. But best practice would indicate 

 that you would follow that up on maybe a monthly or 

 even a quarterly basis that we have an ongoing 

 litigation, continue to hold these records. 

 It's just not about doing it one time. It's

 about making sure you're constantly in the face of 

 the individuals that may have access to those 

 records or the ability to have access to those 

file:///C|/FEB/0211rule.txt (335 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 336 

 records. 

 JUDGE ROSENTHAL: Are there any other 

 questions? 

 [No response.]

 MR. McDERMOTT: I'd like to thank you for 

 allowing us to present today. 

 JUDGE ROSENTHAL: Thank you. 

 Dabney Carr? Good afternoon, Mr. Carr. 

 MR. CARR: Good afternoon. Thank you for

 allowing me the chance to appear before you today 

 and also thank you for accommodating my schedule 

 and moving me from tomorrow to today. 

 I would like to--just as a brief introduction 

 to myself, I'm an attorney in private practice in

 Richmond, Virginia. Primarily practice in the area 

 of products liability, but also do a general 

 litigation practice, primarily for defendants. 

 The perspective that I think I offer--and I was 

 not here this morning to hear the commentary this

 morning--but it may be different from a lot of 

 people with a greater feel of expertise and the 

 technology or from the companies that are engaged 

file:///C|/FEB/0211rule.txt (336 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 337 

 in e-discovery all the time. It's from the 

 perspective of a practicing attorney, many of whose 

 clients are not involved in litigation all the 

 time.

 I find that, primarily, litigants are people 

 who are in litigation rarely. Maybe the first time 

 a company might be involved in litigation and, 

 hopefully, for them, their last. And also they are 

 involved in litigation that is not necessarily

 multi-million dollar litigation. 

 In the work that I do, primarily, though it 

 runs a scope of cases, a million case is still a 

 big case. And for the companies that I represent 

 and that I deal with, that it is usually a great

 deal more expensive to retrieve and produce 

 electronic information than it is in the more 

 common example of paper discovery that more of the 

 lawyers are used to. 

 And as I sat here this afternoon and listened

 to the people and the comments before me, it 

 occurred to me that what brings us here and to this 

 point is that great difference between the cost 

file:///C|/FEB/0211rule.txt (337 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 338 

 involved in electronic production and the 

 difference in paper production. 

 In preparation for coming here today, I 

 canvassed my colleagues by e-mail, as a matter of

 fact, to find examples of people who have had 

 problems with the discovery of electronic 

 information. And in general, the responses I got 

 were that not so much with issues of sanctions or 

 preservation problems or things like that, it was

 more along the lines that in dealing with your 

 garden-variety commercial litigation case, it was 

 far more expensive to go through the discovery 

 process to produce electronically stored 

 information than it would typically be in the case

 of information that's stored in hard copy. 

 And I think the reason for that is that 

 computers give us a much greater ability both to 

 store a great deal of information and to retrieve 

 it. But that at some point in the process of

 producing the information, you have to bring the 

 information back to a human form. In the sense 

 that you may be able to retrieve easily millions of 

file:///C|/FEB/0211rule.txt (338 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 339 

 pages of information, but at some point, a lawyer 

 usually has to go through it. And that is the 

 human level that becomes so expensive. 

 Or a lawyer has to define or a litigant has to

 define what in this great mass of litigation that 

 I've been able to keep and store is relevant to the 

 information--relevant to the case that I am 

 involved in. 

 And the second point that I was thinking about

 as I was sitting here and that I expressed in my 

 comments was that the committee should keep in mind 

 the general unfamiliarity that litigants and judges 

 as well have with the issues which this committee 

 has now become experts on. And that would be, from

 my practice, that the default rules that apply when 

 you are talking about paper discovery don't work as 

 well for the kind of--for electronically stored 

 information primarily because of the expense of 

 production.

 And let me give you an example of what I'm 

 talking about. In the world that I practice in, as 

 a general rule, discovery issues are worked out by 

file:///C|/FEB/0211rule.txt (339 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 340 

 the litigants. The court is almost never involved. 

 The advice I always give to clients when they're 

 from outside where I practice in the courts of 

 Virginia is that you never want to bring a

 discovery dispute to the court. The courts 

 actively don't want to hear them because of the 

 time involved and because they have a lot of other 

 things that they need to deal with. 

 And I always tell people that if we have a

 discovery dispute and we have to file a motion to 

 compel or respond to one and have to go to court, 

 the rule is that somebody is going to be 

 sanctioned. And so, that is the last thing that 

 you want to do. Someone will have to pay is the

 standard rule. 

 And sometimes you hear the old saying that what 

 motivates people mostly is fear. Well, the fear of 

 appearing before a federal judge on a discovery 

 dispute is one thing that motivates me a great

 deal. 

 JUDGE ROSENTHAL: Boy, those Texas lawyers are 

 sure brave. 

file:///C|/FEB/0211rule.txt (340 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 341 

 [Laughter.] 

 MR. CARR: Perhaps. Perhaps. Well--and so, 

 the rules--my point being that the rules, as other 

 people have expressed, that you come up with in

 this process have to be rules that the litigants 

 can understand and apply without having to ask the 

 courts for help. And the reason for that is 

 because in the main, they will be rules that the 

 litigants will be having to work out for

 themselves. 

 And where I practice, the lawyers get along 

 pretty well. We're probably more reasonable in 

 dealing with one another than others. But the 

 issue is, is how do you allow for the efficient

 production of relevant information without setting 

 up circumstances where you're going to break the 

 bank for one party or the other? So that you want 

 rules where neither party will be able to hold the 

 gun of the cost of production to the other's head

 in order to get a case settled. 

 Which I heard Ms. Middleton mention that 

 earlier on, that sometimes they settle cases that 

file:///C|/FEB/0211rule.txt (341 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 342 

 they wouldn't otherwise settle because of the cost 

 of production. And in the kind of cases--I would 

 say the majority of the cases where I deal with, 

 where the value of the case is simply not going to

 be into the millions of dollars, that that becomes 

 a real issue, where you start getting into 

 electronically stored information. 

 The only two areas that I want to mention 

 today, which were included in my comments, were in

 the areas of reasonable accessibility, the two-tier 

 discovery, and in the safe harbor. I support the 

 proposed rule on the reasonable accessibility. The 

 only area in which I had suggested in my comments 

 any minor change was on the portion of the rule

 that talks about identifying reasonably 

 inaccessible information. And there are a couple 

 of points I'd like to make about that. 

 The first is, is that if you have a requirement 

 to identify reasonably inaccessible information, I

 can tell you what I think most litigants will do 

 and what I certainly would do. Is that you will 

 quickly come up with your standard list of 

file:///C|/FEB/0211rule.txt (342 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 343 

 reasonably inaccessible information, which you will 

 include in every discovery response that you ever 

 do. A little like if you see discovery responses 

 today, there's always general objections at the

 front of them. 

 All that litigants will do, will come up with 

 laundry lists of different things that they have 

 not looked at, again, motivated by the fear that 

 they haven't identified something. And that

 if--under the current language, if they fail to 

 identify information that they have not looked at 

 and that information later comes to light that 

 there is information of that type, that that 

 information will be considered reasonably

 accessible because it was not identified as 

 reasonably inaccessible. 

 The second point that I would say about that is 

 that if the current language remains, that at least 

 that the rules be clarified to make clear that the

 requirement can be satisfied by such generalized 

 descriptions. For instance, disaster recovery 

 back-up tapes. But still-- 

file:///C|/FEB/0211rule.txt (343 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 344 

 JUDGE SCHEINDLIN: I have a question for you. 

 MR. CARR: Yes, ma'am? 

 JUDGE SCHEINDLIN: Now you're going to have to 

 support this showing, this claim that it's

 inaccessible. So at some point, you're going to 

 have to make a case for that. What is your duty to 

 investigate that it's really inaccessible? What 

 are you going to say eventually to the court or to 

 the adversary? How are you going to explain this

 position you're taking? 

 MR. CARR: Typically, what happens is that 

 those issues get narrowed down in the course of the 

 attorneys going back and forth, and that the way 

 the process works is you say, "Here is what I've

 given. I haven't looked at all these things." And 

 then what happens is the other side will say, 

 "Well, what about this? What about that?" 

 And as you come up with things that might 

 actually exist, once you get past the boilerplate,

 then you have to support that. And in that back 

 and forth, you either say, "Well, yes, we do have 

 this, and we can get it." And you produce it, and 

file:///C|/FEB/0211rule.txt (344 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 345 

 it never gets to court. Or you do have to-- 

 JUDGE SCHEINDLIN: Right. But that's what 

 you're doing now without this rule. 

 MR. CARR: I'm sorry?

 JUDGE SCHEINDLIN: That's what you're doing 

 now. That's your experience now without this rule. 

 People make requests and you say, "That's 

 burdensome. We don't want to go there. We 

 shouldn't have to go there. Let's sit down and

 negotiate. Let's keep this back-up stuff off 

 limits. Let's go to the legacy because it can be 

 restored. and we think that there's really stuff 

 there." 

 You know, you work it out. You negotiate. You

 work it out. How is all this going to change your 

 practice, since you apparently are doing pretty 

 well at negotiating and identifying what to give 

 and what not to give? 

 MR. CARR: I'm not sure I--well, let get to

 your point, which is that I think the rules need 

 the reasonably accessible/reasonably inaccessible 

 standard in there. And the reason is, is because, 

file:///C|/FEB/0211rule.txt (345 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 346 

 otherwise, the parties don't know where the balance 

 lays. 

 So if there is the rule here that you only have 

 to look at the reasonably accessible and produce

 the reasonably accessible, that gives the parties 

 the guideline, the rule of the road that they can 

 then apply. 

 JUDGE SCHEINDLIN: Well, except you have the 

 power to define that for yourself. Apparently you

 say all I've got to do is to label it as 

 inaccessible, and I've passed step one. I've told 

 the other side that's inaccessible. So I don't 

 have to do it. I'm not going to do it. I've 

 placed it in the second tier.

 Now I say to you you're going to have to defend 

 that placement. 

 MR. CARR: Yes. 

 JUDGE SCHEINDLIN: But we're not telling you 

 which it is, really. It's still going to be your

 call. 

 MR. CARR: As the way I understand your 

 question, my point is that if there is no standard, 

file:///C|/FEB/0211rule.txt (346 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 347 

 reasonably accessible versus inaccessible, then the 

 parties are left with nothing to go by, and you get 

 into a lot more of the dispute-- 

 JUDGE SCHEINDLIN: Why nothing? But you always

 do. You say that's unduly burdensome. I shouldn't 

 have to do that, or that's very costly, I shouldn't 

 have to do that. You do that all the time. 

 MR. CARR: Yes. 

 JUDGE SCHEINDLIN: You draw that line. You say

 unduly burdensome or unduly expensive or both. I 

 shouldn't have to go there. Now you're going to 

 have to litigate this if we can't work it out. One 

 of us is going to have to make a motion to compel 

 or for protective order if we can't negotiate it.

 But, in fact, you said you negotiate. 

 MR. CARR: No. Yes, you do. But sometimes you 

 can't work them out. 

 JUDGE SCHEINDLIN: Right. 

 MR. CARR: And sometimes what parties will end

 up doing, from my side, is that they feel they have 

 to produce more and spend more than they would 

 without this standard and go into the inaccessible 

file:///C|/FEB/0211rule.txt (347 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 348 

 information. 

 JUDGE HAGY: So you support the standard? You 

 like the inaccessible? 

 MR. CARR: Yes.

 JUDGE HAGY: The only difference is you don't 

 want the producing party to have to identify-- 

 MR. CARR: That was my first point, yes. 

 JUDGE HAGY: And the reason you say that is 

 because it would be boilerplate?

 MR. CARR: Yes. 

 JUDGE HAGY: And my question is, what's wrong 

 with boilerplate? Any other person, what you want 

 to do is hand over some stuff and then lay in the 

 weeds and hope you have a party who doesn't know

 about legacy information or back-up information or 

 all of those things that would otherwise be in the 

 boilerplate? 

 MR. CARR: No, I would say that I certainly 

 don't want it to lay in the weeds.

 [Laughter.] 

 JUDGE HAGY: You don't want to identify it. 

 No, it wasn't an invitation. I was just--hide in 

file:///C|/FEB/0211rule.txt (348 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 349 

 the weeds, I meant. 

 MR. CARR: Or hide in the weeds. 

 JUDGE HAGY: Okay. But you see, that's our 

 purpose is to make you identify so that the issues

 raise to the top so the parties can discuss it. 

 Whereas under your method, I don't see how it would 

 ever get discussed. 

 MR. CARR: Well, I think under-- 

 JUDGE HAGY: Except among sophisticated

 counsel. 

 MR. CARR: A lot of times, the parties don't 

 know what all that they have. That's one of the 

 things that came to mind the way I was approaching 

 it. Is that you're asking a little bit to I

 wouldn't call it exactly define a negative. But 

 you are asking them to express the negative. What 

 haven't you given us? 

 And as I see what the obligation ought to be, 

 and that I read in the rules and the way I would

 propose it, is that you go and get everything that 

 reasonably you can get. But then to have to go 

 beyond that and to identify everything that you 

file:///C|/FEB/0211rule.txt (349 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 350 

 cannot get is difficult to begin with and could be, 

 at times, somewhat impossible. 

 JUDGE SCHEINDLIN: Yes, but the problem is 

 you're doing the defining, right, of what is

 difficult to get. And nobody knows what criteria 

 you've selected. For example, you may say, as some 

 witnesses have, I'm defining it as that which I 

 don't ordinarily access. 

 MR. CARR: Correct.

 JUDGE SCHEINDLIN: Somebody else might come 

 back and say, "Well, so what? You don't access it, 

 but it's easy to get. It's cheap. It's easy. It 

 can be done in an hour. I don't care if you use 

 it. Go get it."

 MR. CARR: But won't you always have that 

 problem with any standard as to what should be 

 initially produced is that the party has to 

 interpret what that means and tell you what they 

 have produced. And then what I'm saying is if

 they've told you what they have produced, why do 

 they have to go on and tell you what they have not 

 produced? It may be more just semantic-- 

file:///C|/FEB/0211rule.txt (350 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 351 

 JUDGE ROSENTHAL: Well, I think we're kind of 

 arguing about the same thing, which is the best way 

 to frame in a rule an ability to draw that line and 

 the ability for the other party to, if they believe

 it appropriate, test where you've drawn the line. 

 And I don't think anybody's disputing that that 

 ability should be there. We just need to make sure 

 we have framed it appropriately. 

 I think Mr. Girard had a question.

 MR. GIRARD: When you do your meet and confer 

 now, though-- 

 MR. CARR: Yes? I'm sorry. 

 MR. GIRARD: When you do your meet and confer 

 with the opposing side, you haven't already gone

 out and searched, right? You're talking about on 

 both sides spending money and taking time and 

 employees and distracting people. And so, aren't 

 you horse trading with the other side at that 

 point?

 MR. CARR: Yes. The meet and--yes. And again, 

 where I'd say that typically of my experiences in 

 the practice and the courts I work in is that the 

file:///C|/FEB/0211rule.txt (351 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 352 

 attorneys are able to work out a lot of this. 

 Because the meet and confer does occur typically 

 before you would go to any great expense, at least, 

 and requesting parties are usually willing to

 define what it is they really want, what is it you 

 really need? That's the question that goes back 

 and forth. 

 So, yes, that would be true. And that does 

 reduce the expense.

 MR. GIRARD: So when you say, though, that you 

 want to have it be that you go out first and get 

 what you can and then talk about what you can't 

 get, that would be a change then in the way you're 

 currently doing it, wouldn't it?

 MR. CARR: I picture that the way that we would 

 do this would incorporate the early conversation 

 that you talk about. And so, whether it would be a 

 change in the way we do it--if they were to request 

 something, and then we would go to look and realize

 that we couldn't find it, then we would include 

 that as inaccessible, and we would tell them that. 

 MR. GIRARD: I have trouble seeing how it would 

file:///C|/FEB/0211rule.txt (352 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 353 

 be different from what you're currently doing 

 because I think you're just making a series of 

 tradeoffs with the other side. And on their side, 

 they're evaluating your arguments and making

 decisions about how much money they want to spend, 

 and you're doing it from your perspective. And I'm 

 just not sure how different the practice would 

 actually be under this rule from your perspective. 

 MR. CARR: And you're talking specifically

 about the obligation to identify reasonably 

 inaccessible information? 

 MR. GIRARD: And also the sequencing of how you 

 spend that money that you commit to the discovery 

 process. Because I think that you're on both sides

 intelligently not spending that money until you 

 think you've reached some kind of agreement about 

 what makes sense. 

 MR. CARR: Well, let me disagree with you a 

 little bit there. Because I think at the point in

 time when the money gets spent is when you have to 

 go back to your client and say this is what you 

 have to look for. And as I say, what I learned 

file:///C|/FEB/0211rule.txt (353 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 354 

 from my colleagues and from the examples of people 

 was that in general with the production of 

 e-discovery, it's always a lot more expensive 

 because of the volume of information that can be

 retrieved that then has to be gone through by 

 someone in some fashion. So that's where the money 

 gets spent. 

 And where the parties always disagree at that 

 point is the breadth of what has to be gone and

 gotten as being relevant to the case. And that my 

 experience is that the breadth of what is gone and 

 gotten and retrieved is much broader than what 

 anybody will think is ultimately relevant. 

 JUDGE SCHEINDLIN: May I ask one--go ahead?

 MR. CARR: Yes, ma'am? 

 JUDGE ROSENTHAL: In your experience, have 

 you--how frequently have you had to resort to 

 restoring information that was "inaccessible" as 

 opposed to being able to satisfy the discovery

 needs of the case from information that was not 

 required to be restored? 

 MR. CARR: Not a lot of experience with having 

file:///C|/FEB/0211rule.txt (354 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 355 

 to restore information. Most of the expense comes 

 involved in--I've heard a couple of the consultants 

 testify earlier about seeking the information at 

 the distributive level. I think that's what he

 called it, at the bottom level. That's where the 

 big expense is. 

 Having, you know, I'd say a big number for a 

 case, say, 30 people--and this was an example that 

 was given to me--who could have on their laptops

 discoverable information. That would take a great 

 deal of time to get all that information from 

 people who could be out on the road or not around, 

 was extremely expensive. And it was the recovery 

 of information at the distributive level that is,

 in my experience and the experience of my 

 colleagues-- 

 JUDGE ROSENTHAL: Is that required? 

 MR. CARR: --is where the money is spent and 

 where the time is spent. And then the next area

 where that tends to be a lot of money is spent is 

 the review of the material. And that would be 

 mostly in the form of attorney hours. 

file:///C|/FEB/0211rule.txt (355 of 455) [3/2/05 2:36:49 PM]
file:///C|/FEB/0211rule.txt

 356 

 JUDGE ROSENTHAL: And are you talking about 

 information that required no restoration at all-- 

 MR. CARR: Yes. 

 JUDGE ROSENTHAL: --that under our proposal

 would be within the first tier? 

 MR. CARR: Yes, I think that's right. And 

 that's where I say what brings us here is that we 

 have this very expensive condition. 

 JUDGE SCHEINDLIN: And that was my follow-up

 question is I wonder if your information on cost is 

 anecdotal or empirical? And what I mean by that is 

 a lot of the comments, they were ignoring the 

 benefits of the electronic age. 

 In other words, it should be making a lot of

 this less expensive because searchability, 

 collectibility, producibility are now at the shoe 

 box level and not the truck so that their cost, in 

 effect, should be going down. And some of the 

 comments have actually said that. So I'm wondering

 how empirical that reporting is, or is it 

 anecdotal? 

 MR. CARR: Oh, it's clearly anecdotal. 

file:///C|/FEB/0211rule.txt (356 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 357 

 JUDGE SCHEINDLIN: Right. 

 MR. CARR: I haven't made any attempt to be 

 empirical. 

 JUDGE SCHEINDLIN: No. And the reason I raise

 it, there has to be some benefit to this world we 

 live in in the sense of things I 

 said--searchability, collectibility, and 

 producibility. They have to be cheaper, logically. 

 Logically.

 MR. CARR: I can only speak for my experience. 

 And that is, is that the effect of the ability to 

 obtain information because of the benefits of 

 computers only gets people to ask for more 

 information. That's been my experience.

 I can tell you, and going through it day to 

 day, it's a lot easier in the hard copy age, where 

 you can say there's the files over there. Send 

 them to the outside copier, get them copied. 

 That's a few thousand dollar problem. But that if

 people think, and today you can, you can retrieve 

 almost anything. So they'll ask you to retrieve 

 almost anything. 

file:///C|/FEB/0211rule.txt (357 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 358 

 JUDGE SCHEINDLIN: But I just wonder if you're 

 really forgetting the era of the megacases. I 

 mean, there were always huge document cases with 

 paper review of millions of documents.

 MR. BERNICK: It's so much worse now. 

 JUDGE SCHEINDLIN: Is it? 

 MR. BERNICK: It's an order of magnitude worse. 

 I can't resist. 

 JUDGE ROSENTHAL: Microphone, David. It may be

 worse, but we can't hear about it. 

 MR. BERNICK: But just very briefly, there are 

 clearly massive efficiencies. That's why the 

 technology is being used. But they're efficiencies 

 for business activities. The very fact of broad

 distribution enables people to function much more 

 cohesively, even when they're not in the office, et 

 cetera, et cetera, et cetera. There are enormous 

 efficiencies from the business point of view. 

 But you're now taking that collection, that

 snapshot, out of the business and putting it into 

 the litigation world, and those same rules of 

 efficiency that led to the creation of the data 

file:///C|/FEB/0211rule.txt (358 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 359 

 don't necessarily make it more efficient for the 

 manipulation of that data by lawyers in the 

 courtroom in the discovery process. And you know, 

 I can't tell you it is all, of course, anecdotal.

 But I'll tell you the anecdote. 

 I sat next to a guy who does litigation for GE. 

 This must have been three or four years ago. It 

 was a Kenny Feinberg soiree on the other side of 

 town. And I was supposed to be the leader of the

 panel, the panel was supposed to talk about recent 

 developments in the discovery process. And the 

 question that got put--actually, I was on the panel 

 with him. The question that got put to all of us 

 was, well, what do you think about electronic

 discovery? Has it been a net benefit, or has it 

 been a net burden? You know, what about the 

 computer in litigation? 

 And I was first, and I knew this guy was next 

 to me, and I thought, oh, for sure, he's going to

 say it's the best thing since sliced bread because 

 it's a sophisticated big company. So I came out 

 and I said I think it's a big pain in the neck. 

file:///C|/FEB/0211rule.txt (359 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 360 

 Once you actually know what you want to do, you can 

 develop technology for litigation that makes your 

 task more efficient. But when it comes to 

 discovery, it's horrific.

 And as I said that, I was worried that I was 

 going to find this knife in my back, and he was 

 going to skewer me. He says electronic discovery 

 is the bane of our existence. It's made our 

 process horrifically--

 JUDGE SCHEINDLIN: I'm sorry. Who is this 

 other person? 

 MR. BERNICK: From General Electric. 

 JUDGE SCHEINDLIN: General--well. 

 MR. BERNICK: But that is what you're dealing

 with. You're dealing with an organization that 

 creates enormous volumes of data. So you can have 

 technology that helps litigation, once you've 

 defined the population of data and you're working 

 with it. But the retrieval, what comes in the

 funnel is much, much more. 

 JUDGE ROSENTHAL: Any more questions for Mr. 

 Carr, not for Mr. Bernick? 

file:///C|/FEB/0211rule.txt (360 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 361 

 [Laughter.] 

 MR. CARR: Thank you for your time. 

 JUDGE ROSENTHAL: Thank you very much. Come 

 down to Texas any time.

 Mr. La Sala? Good afternoon. 

 MR. LA SALA: Good afternoon, Judge Rosenthal 

 and distinguished members of the committee. 

 It's a great pleasure for me to be here today, 

 and I thank you for the opportunity to present

 these comments to you. My name is Lawrence La 

 Sala, and I am the assistant general counsel for 

 litigation for Textron, Inc., which is a company 

 headquartered in Providence, Rhode Island. 

 I appear here today, however, as a

 representative of the Association of Corporate 

 Counsel, formerly known as the American Corporate 

 Counsel Association, or ACCA, but now referred to 

 as ACC. ACC is the in-house bar association for 

 lawyers who practice in legal departments of

 corporations and other private sector organizations 

 worldwide. It has over 17,600 individual members 

 who represent more than 8,000 organizations. 

file:///C|/FEB/0211rule.txt (361 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 362 

 To my right is Ron Peppe, who is ACC's vice 

 president for law and communications, to the extent 

 anyone has any questions about the organization or 

 its membership.

 ACC members cover a broad spectrum of 

 interests. They include solo practitioners 

 providing all-around legal services to small 

 private companies, general counsel to nonprofits 

 who are struggling to make ends meet, and chief

 legal officers to the world's largest publicly 

 traded companies. Yet ACC members, large and 

 small, are very concerned about the issues under 

 consideration by this committee. 

 E-discovery and records retention challenges

 often top the list of concerns faced by our members 

 and their clients, and we speak with confidence 

 when we suggest that the issue affects and 

 frustrates organizations of every size, shape, and 

 color. A predominant thread among ACC members

 suggest that a widespread relief exists that the 

 current state of the rules frequently permit 

 discovery issues, and particular e-discovery 

file:///C|/FEB/0211rule.txt (362 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 363 

 issues, to overshadow the rest of litigation and 

 inhibit the creation and maintenance of effective 

 corporate records management programs. 

 For ACC members, the lesson seems to be this.

 The ability to leverage and manipulate e-discovery 

 requests and procedures, be it through overbroad 

 discovery requests or threats of sanctions for 

 unavailable or inaccessible data, will frequently 

 be case determinative, regardless of the merits of

 the case or the amount in controversy relative to 

 the cost of document or records production. 

 So we are here to plead, essentially, that the 

 need for consistency, predictability, and fair 

 rules that take into account the business realities

 that our members go through have never been 

 greater. Given the widespread perception among ACC 

 members upon reviewing this committee's proposals 

 for amendments to the civil rules, the ACC's board 

 of directors took an unusual act, which was to

 unanimously adopt a formal policy regarding 

 e-discovery at their February 1st board meeting. 

 And a copy of this policy has been submitted to you 

file:///C|/FEB/0211rule.txt (363 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 364 

 and I believe is part of the preparation materials 

 that you have. 

 Unlike many of the speakers here today, it is 

 not my intention to join the debate on how specific

 language of the rules should read or to address 

 many of the specific points of construction that 

 other speakers have discussed and will discuss. 

 Frankly, the diversity of our membership makes 

 reaching a consensus on those things quite

 difficult. 

 What I am here to do is to express the ACC's 

 strong support for two key proposals that our 

 members believe are crucial to create a fair and 

 predictable playing field for litigants engaged in

 discovery. First, ACC supports the enactment of a 

 presumptive limitation in Rule 26(b) on the need to 

 preserve and produce inaccessible information. 

 Second, ACC supports the enactment of the safe 

 harbor provision in Rule 37, providing that

 sanctions will not be applied against companies for 

 the routine loss of information, which can occur 

 despite the good faith operation of conventional 

file:///C|/FEB/0211rule.txt (364 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 365 

 record systems. 

 These two proposed revisions represent the 

 least that any corporate litigant--large, 

 middle-size, or small--has a right to expect from

 the rules that govern the litigation in which it is 

 involved. And the reason I say this is because I 

 think it is far too easy when debating these rules 

 and the revisions to lose sight of the fact that 

 most corporations and organizations affected by

 these rules do not exist solely for the purpose of 

 litigating lawsuits. 

 They exist to manufacture products, to provide 

 services, or to engage in a million other 

 business-related activities. In running their

 businesses, these companies are mindful of a 

 multitude of factors and costs and risks that can 

 affect their success. One and only one of those 

 factors is the existence of litigation. 

 Thus, while ACC members cannot ignore the

 existence of litigation or the responsibilities 

 that litigation imposes, litigation cannot and 

 should not be the driver that determines corporate 

file:///C|/FEB/0211rule.txt (365 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 366 

 policy and how business is run. 

 The proposed revisions to Rule 26(b), for 

 instance, with regard to electronically stored 

 information that is deemed by the producing party

 to be inaccessible is a good example of a provision 

 that balances business realities with litigation 

 needs. On the one hand, it permits business 

 entities to avoid in most instances the 

 time-consuming and costly restoration of data that,

 A, is not used in the normal course of business 

 and, B, is of insignificant evidentiary value. 

 On the other hand, as the advisory committee 

 notes rather aptly, the volume of potentially 

 responsive information that is reasonably

 accessible will frequently be very large. And I 

 would add that this accessible information is the 

 information actually used by the businesses and is, 

 therefore, likely to contain the most relevant 

 information in most of the cases.

 I've read some of the submissions and the 

 transcript of the California hearings, and some of 

 these arguments have been repeated here in various 

file:///C|/FEB/0211rule.txt (366 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 367 

 forms today. But for many corporate litigants, to 

 save information and to designate information as 

 inaccessible will actually change the process by 

 which they save data and they save records, and

 they will do it in a way to permit them to avoid 

 litigation responsibilities. 

 An argument we heard earlier here today is 

 that, in fact, companies will go out and design 

 records retention programs to eliminate potentially

 damaging evidence. To be frank, this argument is 

 not based in the reality of how corporations work. 

 First, it presupposes a level of focus on 

 preventive legal considerations by nonlegal 

 employees that does not exist, as well as a certain

 spirit of cooperation between nonlawyers--business 

 people and the lawyers. I can tell you from 

 experience that most of the time, my business 

 partners don't want to hear from me and 

 particularly when I am suggesting a policy that's

 going to make their lives more difficult and cause 

 them more work. 

 They basically want to do their jobs, and that 

file:///C|/FEB/0211rule.txt (367 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 368 

 is what they're focusing on. They are not focusing 

 on making my life easier, particularly when it 

 comes to discovery obligations. 

 Second, the argument in some part makes no

 sense because if you look at the examples that are 

 provided in the committee note for inaccessible 

 data--disaster recovery systems, i.e., back-up 

 tapes, legacy systems, deleted items that would 

 require reconstruction--it is simply inconceivable

 that a corporation would take the information that 

 it needs to run its business and convert it, as a 

 matter of policy, to a format that renders it 

 completely unusable for the corporation itself. 

 And finally, to the extent that there is some

 evidence or an argument to be made that a corporate 

 litigant has taken steps to improperly categorize 

 certain information as inaccessible, the rule and 

 its revisions permit the requesting party to 

 challenge that designation and, in fact, the

 initial burden of proof is on the withholding 

 party. If the misconduct has occurred, proper 

 redress can be made to the court. 

file:///C|/FEB/0211rule.txt (368 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 369 

 So, in sum, ACC believes that the proposed 

 revisions to Rule 26(b) levels the playing field 

 and properly balances legitimate business interests 

 with litigation interests.

 The same can be said for the revisions to Rule 

 37 regarding the establishment of a safe harbor for 

 information lost as a result of routine operation 

 of a party's electronic information system. Again, 

 taking a step back, businesses create records

 retention policies for many business-related 

 reasons having nothing to do with litigation. 

 Spam is blocked, and questionable e-mails are 

 purged to prevent computer viruses and an overload 

 to the e-mail system. Automatic e-mail deletion

 protocols are activated to increase system 

 efficiency, open up server space, and save costs. 

 Likewise, the same cost considerations go into 

 back-up tape rotation and the overwriting of 

 back-up tapes and data on servers and the like.

 The ACC understands the need to incorporate 

 features into such programs which allow a response 

 to litigation holds when appropriate. But without 

file:///C|/FEB/0211rule.txt (369 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 370 

 a safe harbor provision, the current environment 

 actually threatens to turn the business equation on 

 its head. Instead of encouraging the incorporation 

 of reasonable features, corporations and corporate

 records managers, through their legal counsel, are 

 being asked to redesign records retention systems 

 so that crucial business needs take a back seat to 

 potential litigation concerns. 

 PROFESSOR MARCUS: Can I ask a question there,

 just because it sounds like something some of our 

 witnesses might be thinking. I gather what you 

 just said is that litigation concerns have affected 

 the design of information management systems? 

 MR. LA SALA: That is correct.

 PROFESSOR MARCUS: But it sounds like some 

 other witnesses are saying that litigation might 

 have that kind of effect if deeming something 

 inaccessible would be a way to keep it beyond the 

 reach of discovery. And I thought you said that

 that wouldn't happen. 

 It seems to me there may be a tension there 

 between the litigation pressure you're talking 

file:///C|/FEB/0211rule.txt (370 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 371 

 about now and the impossibility I think you 

 mentioned regarding that same kind of litigation 

 pressure affecting information management in terms 

 of what is accessible and not accessible. Could

 you comment on that? 

 MR. LA SALA: I think what I'm trying to say is 

 that the pressure that companies are feeling from 

 litigation, and from the current state of 

 uncertainty that they're litigating in, is it is

 easy and safe at this point, though not the best 

 corporate practice, to suspend records retention 

 policies to not back up tapes or recycle back-up 

 tapes. 

 And what I have actually found in trying to

 develop a comprehensive policy for my own company 

 is, in talking to other in-house counsel and 

 records managers, there are significant amounts of 

 companies out there who know they need to do 

 something. They need to control this data somehow.

 But they're not even getting to that stage yet. 

 They're not implementing policies. They're not 

 implementing automatic e-mail deletion systems. 

file:///C|/FEB/0211rule.txt (371 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 372 

 They're basically doing nothing, putting the 

 corporate imperatives, if you will, on the back 

 burner because of current litigation and the fear 

 that they're going to do something by implementing

 these policies to put them in a bad way in that 

 litigation. Does that answer your question? 

 PROFESSOR MARCUS: Well, I guess. My reason 

 for asking was that it sounds like the lawyers are 

 calling the shots in those instances now. And you

 said the lawyers wouldn't call the shots in those 

 other instances, and that didn't seem to fit 

 together to me. 

 MR. LA SALA: Well, I think if the lawyers 

 yelled loud enough in any organization, they're

 going to get hurt. On a day-to-day basis, it is 

 the business units and the business people that are 

 making their own decisions about records retention 

 type issues. 

 If there is a significant litigation, which

 companies certainly the size of Textron and others 

 that ACC represents, there is always at least one 

 significant litigation. It is the lawyer's 

file:///C|/FEB/0211rule.txt (372 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 373 

 job--the in-house lawyer's job to inform management 

 that they need to take a step back. 

 PROFESSOR MARCUS: That shot-calling tends to 

 be litigation specific?

 MR. LA SALA: In the first instance. It's 

 really a notification. It's a notification to 

 senior management. 

 PROFESSOR MARCUS: Right. So the other 

 situation then perhaps is when just in overall

 company-wide forever kinds of information 

 management practices, which would be much less 

 likely to be affected by lawyer input? 

 MR. PEPPE: They may not even exist. That's 

 one of the issues. Sixty-two percent of our

 members come from small law departments. Our 

 members include 98 or 99 of the Fortune 100 

 companies. But at the other end, the large bulk of 

 business in this country is done through these 

 smaller companies and smaller departments.

 And frankly, the standard, we get more requests 

 from companies' lawyers looking for document 

 retention policies as if it's something you can 

file:///C|/FEB/0211rule.txt (373 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 374 

 just copy and put in place, and assuming then they 

 have to go sell it to management. 

 Before I joined ACC--I've been on the staff for 

 about a year--I was general counsel for U.S.

 operations of the International Manufacturing and 

 Construction Company. It was always very 

 interesting trying to sell to management in another 

 country these types of policies and procedures 

 because, frankly, they don't deal with them

 anywhere else. 

 It was very interesting hearing earlier today 

 someone pointing to the Chicago school and an 

 economic analysis. Because if we're going to go 

 down that path, we really need to look at what's

 really driving the economic analysis areas, the 

 relative cost benefits for the plaintiffs versus 

 the defendants in some of these cases. 

 In fact, in most of the world where my company 

 did business, the loser paid. So there was a very

 different perspective about what you went and asked 

 for. There's no loss here to go ahead and ask for 

 these things. So it does tend to come up, to 

file:///C|/FEB/0211rule.txt (374 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 375 

 answer your question, in a litigation contest 

 because most companies on the smaller side tend to 

 become aware of these things when they have a 

 problem. It's after the lawsuit comes in.

 Sitting in the lawyer's chair, we have a little 

 different role because we have duties to the court 

 and otherwise, where we're trying to enforce these 

 things. And we try and explain to the company what 

 they have to do. But quite often there is some

 push-back until it becomes a matter of a particular 

 litigation as opposed to a general policy. 

 There is a little bit of it more in the air 

 now, where people are a little more concerned 

 generally. But those things ebb and flow. And so,

 that's partly why our association saw this 

 consensus on a couple of key points that to the 

 extent there are standards and something 

 recognizable that as the in-house counsel, we can 

 take back to management and say here is something

 you can build your system around and something we 

 can work on from a common basis, you tend to make 

 more progress in developing those systems. 

file:///C|/FEB/0211rule.txt (375 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 376 

 MR. GIRARD: May I ask a question? Recognizing 

 that members don't run businesses with a view to 

 being sued and defending litigation, does it not 

 benefit them to cut to the chase when it comes to

 discovery as much as possible in the sense that 

 policies that favor an effective exchange of 

 information I would think would be to your members' 

 benefit as opposed to creating a risk of collateral 

 litigation over issues surrounding accessibility?

 And I guess the question I would tender out 

 there is do you not see in a rule that in some 

 respects I think may be best the producing party 

 with an extra trump in their hand, an extra trump 

 card, in the sense of being able to invoke

 inaccessibility or lack of reasonable accessibility 

 that might create an increased possibility of 

 basically satellite litigation that ends up making 

 a case harder or more expensive to get it done? 

 MR. LA SALA: I think, to go back to Jonathan

 Redgrave earlier today, who said we need to look at 

 your proposals as a whole, we're not here talking 

 about the initial meet and confer, but it is 

file:///C|/FEB/0211rule.txt (376 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 377 

 something that we support. And I think that a lot 

 of these issues will and should be addressed, so 

 that the collateral litigation you're talking about 

 I think, in most cases, would not end up happening.

 The other point I would make on that is because 

 the revision does place such an emphasis on active 

 data and producing the active data and 

 essentially--or implicitly in the rule and 

 expressly in the note encourages the parties to

 first take a look at the active data and see if 

 what they really need is in there. And in my 

 experience, I think, by and large, most cases will 

 be resolved at the active data point. 

 I don't think a lot of cases will move into

 inaccessible data. For me, inaccessible data 

 is--it may be slightly different than what other 

 people view it as. For me, it's really about 

 disruption to the business, which is consistent 

 with the comments we're making.

 It's about having to suspend disaster recovery 

 policies. It's having to suspend automatic e-mail 

 deletion policies on a small or a large scale. 

file:///C|/FEB/0211rule.txt (377 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 378 

 It's about taking IT people, who are busy enough 

 just running our systems, and having to divert 

 their attention for a day or a week, or whatever, 

 to take care of this data when there is a perfectly

 acceptable pool of active data, easily accessible 

 data that can be looked at first to determine if 

 there are issues. 

 So the answer to your question is, sure, it is 

 entirely possible that we may be putting in an

 extra step and require some collateral litigation 

 on discovery issues. Frankly, I think a lot of 

 that happens anyway, particularly with some of the 

 uncertainty that we have right now. 

 And I think to the extent that, as

 corporations, we have certainty about what our 

 obligations are and are not, we will actually be in 

 a better position on the front end of the case to 

 decide what to do and not to do. 

 JUDGE ROSENTHAL: We're running short on time.

 Ms. Varner? 

 MS. VARNER: This will be quick. You've 

 studied the proposed amendments? 

file:///C|/FEB/0211rule.txt (378 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 379 

 MR. LA SALA: Yes. 

 MS. VARNER: Assume that you file a response 

 that says the following is reasonably inaccessible, 

 and we haven't searched it and we're not producing

 it. Do you believe that you are under a 

 preservation obligation until that issue is 

 resolved under the proposals as currently drafted? 

 MR. LA SALA: The proposal, as currently 

 drafted, sets a standard that the parties need to

 preserve the information that they knew or 

 reasonably should have known was going to be 

 responsive. And I think that's about as best as 

 you're going to get. 

 In some instances--it's always a judgment call.

 And in some instances, I'm going to make the 

 determination that, yes, I need to preserve that 

 information, and in other instances, I'm going to 

 make the determination that I don't and run the 

 risk--and I understand there's a risk that I might

 get sanctioned somehow at the end of the day for 

 not preserving it. 

 But there certainly will be instances when from 

file:///C|/FEB/0211rule.txt (379 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 380 

 a litigation perspective it doesn't make sense to 

 preserve the information, and there will also be 

 instances when from a business perspective I just 

 can't do it.

 MR. GIRARD: Quick question. Does ACC have a 

 position on whether the proposal with respect to 

 identification that you're claiming is not 

 reasonably accessible, do you have a position as to 

 whether that's going to give you more certainty?

 MR. LA SALA: I don't think we've drilled down 

 to that level of detail with the membership. 

 Actually, I don't think it possible, and I suspect 

 if we polled them we would get a multitude of 

 answers.

 MR. PEPPE: You would get a mix of answers. 

 And frankly, the answer you'd probably get from 

 most of the members is inaccessible means "I asked 

 for it, and nobody can find it." And so, then we 

 get back to the question earlier of everything is

 accessible for a cost. But when you're dealing 

 with that many cases and that kind of caseload, 

 it's not accessible as far as the counsel knows. 

file:///C|/FEB/0211rule.txt (380 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 381 

 JUDGE ROSENTHAL: Last question, Judge Walker? 

 JUDGE WALKER: I'll be brief. We're hearing 

 today from several witnesses that document 

 retrieval and preservation and analysis tools are

 becoming more and more available at lower and lower 

 cost. And we're hearing a lot about litigation 

 requirements versus business retention requirements 

 and best practices, so to speak. This is my 

 question.

 Is this maybe just hopeful thinking? Are we 

 perhaps coming to a point where litigation 

 requirements and business practices and best 

 practices can become one and the same? And that 

 leads to the question, what do you think that

 litigation requires that best practices don't 

 require? 

 MR. LA SALA: I think that we are moving in 

 that direction, and I think that would be an ideal 

 place to end up. I think that the way the

 corporate world is set up, we are not close to 

 being there yet. You are-- 

 JUDGE WALKER: Is that where you're going, 

file:///C|/FEB/0211rule.txt (381 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 382 

 though? 

 MR. LA SALA: I think that is a fine place to 

 end up. I think that good, responsible records 

 retention practices do need to take into account

 best practices in terms of responding and dealing 

 with litigation, sure. But the systems, currently 

 as they exist in most companies, are not able to do 

 that. 

 JUDGE WALKER: But understanding we're headed

 to a different world, technologically, really what 

 I'm saying is does litigation require things that 

 business practices would never require? 

 MR. LA SALA: I think the answer is, in some 

 instances, yes. Particularly under the current

 scheme where it is very easy for plaintiffs to 

 serve a prelitigation preservation notice or an 

 overly broad discovery request calling for you to 

 retain, under threat of sanction, all of your 

 back-up tapes and suspend your e-mail deletion

 policies. And I don't think that all of litigation 

 requires that type of response. 

 MR. PEPPE: Well, that's a general discovery 

file:///C|/FEB/0211rule.txt (382 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 383 

 issue, too, not just an e-discovery issue. I mean, 

 we heard the predictions 30 years ago about the 

 paperless society. And I don't know about you, but 

 the more computers we have, the more paper we have

 floating around. And e-discovery generally means 

 something gets printed out, and then they sort 

 through it the old-fashioned way eventually. 

 JUDGE ROSENTHAL: Well, this table would 

 certainly bear your observation out. Thank you.

 MR. LA SALA: Thank you. 

 JUDGE ROSENTHAL: Mr. Butterfield? Good 

 afternoon. 

 MR. BUTTERFIELD: Good afternoon. I'd like to 

 thank the committee for giving me the opportunity

 to appear and present my comments and testimony. 

 My name is William Butterfield. I am a partner 

 with the law firm Finkelstein Thompson & Loughran. 

 We have offices in Washington, D.C., and in San 

 Francisco, California.

 I come here as a plaintiff's practitioner. I 

 am typically involved in complex litigation 

 involving antitrust claims, securities, 

file:///C|/FEB/0211rule.txt (383 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 384 

 commodities, and consumer claims. And I'm often 

 the guy who is responsible for electronic discovery 

 in those cases. I've been handling that electronic 

 discovery since the early '90s, when we imaged

 paper documents and threw them up on a server, a 

 client server, and made them accessible to lawyers 

 around the country. 

 Today, typically, the cases I work on, we have 

 documents under management running anywhere from

 about 3 million pages to over 10 million pages. So 

 I deal with these issues every day. 

 JUDGE ROSENTHAL: May I ask a question about 

 your written submission? 

 MR. BUTTERFIELD: Yes.

 JUDGE ROSENTHAL: You were critical, if I 

 understood it correctly, of the two-tier proposal, 

 as it's come to be known, because it, to use your 

 words, "delegates to the responding party the 

 decision as to whether information is on the not

 reasonably accessible side of that divide." 

 But if the proposal provides a mechanism and 

 prescribes a procedure for challenging that drawing 

file:///C|/FEB/0211rule.txt (384 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 385 

 of the line and for requiring the party that drew 

 that line to back it up and puts the burden on that 

 party to do that, why isn't that the answer to your 

 concern about allowing the producing party to make

 that initial determination? It's only an initial 

 determination. 

 MR. BUTTERFIELD: It's an initial 

 determination, but I think it can be argued 

 that--well, first of all, I would say I haven't

 heard anything yet today and I haven't seen 

 anything that demonstrates to me that there is a 

 reason to adopt this rule and that there's a reason 

 not to stay with the current way of dealing with 

 these situations, which, in the Zubulake case,

 there has been a very fair way of addressing these 

 issues and dealing with them. 

 And I don't understand why it's necessary to 

 adopt new rules with this arbitrary, arguably, 

 concept of reasonable accessibility, which is going

 to have to be litigated in every case. But-- 

 MS. VARNER: Excuse me. If I might follow up 

 with that, Your Honor? 

file:///C|/FEB/0211rule.txt (385 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 386 

 JUDGE ROSENTHAL: Please. 

 MR. BUTTERFIELD: Yes? 

 JUDGE ROSENTHAL: And we'll give you a chance 

 to answer.

 MS. VARNER: You state in your comments that 

 you believe that this sort of turns the litigation 

 system on its head. But doesn't the proposed rule 

 mirror the way that discovery has traditionally 

 been done? That is, one side asks the other side,

 and the other side, who has the information, makes 

 its objections and talks about burden and whether 

 things are responsive and relevant? 

 And then the requesting party has the ability 

 to try to test that through a motion to compel.

 Why is this conceptually any different? 

 MR. BUTTERFIELD: Currently, there is a 

 presumption that all relevant information is 

 discoverable. Under--and obtainable unless the 

 responding party shows that there is an undue

 burden producing that. The rule change will 

 incorporate a system in which information must be 

 relevant and accessible to be discoverable unless 

file:///C|/FEB/0211rule.txt (386 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 387 

 the requesting party demonstrates good cause. 

 So it shifts the burden. So it's not exactly 

 the same as the current scenario. And my comment 

 is that under the current state of the--the current

 rules and the current case law, there is a more 

 than adequate protocol for dealing with these 

 issues. 

 Second, under the reasonably accessible 

 language and the new proposed Rule 26(b)(2), I made

 the point in my comments that this rule change 

 almost creates a disincentive for typical 

 responding parties to adopt new technology. 

 And let's say you have two responding parties, 

 and one decides, okay, we're going to adopt--and I

 mention some new technology in the footnotes to my 

 comments that make it easier to archive backed-up 

 data and easier to retrieve that data. Well, let's 

 say one company decides, okay, as a business 

 decision, we think it's a good idea to spend the

 money, buy the technology, incorporate it. 

 That company may be subject to a different 

 standard with respect to production of their 

file:///C|/FEB/0211rule.txt (387 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 388 

 documents than another company that says, no, we 

 would rather pay our executives bonuses, and we're 

 not going to buy this technology. And by the way, 

 we have more shelter from requests from plaintiffs.

 JUDGE HAGY: Excuse me. But don't you 

 also--aren't they also giving up the fact that they 

 may be deleting the very evidence that will 

 disprove the plaintiff's case? You're always 

 assuming that what's deleted is bad for the

 company. It may be good. 

 MR. BUTTERFIELD: I'm not assuming anything. 

 JUDGE HAGY: So they don't have an 

 incentive--you say they have an incentive to not 

 preserve documents. It seems to me you may just as

 likely be destroying the evidence that will help 

 you as you will that would hurt you. 

 MR. BUTTERFIELD: I've seen both sides of the 

 picture. I've practiced for a long time, and I've 

 seen companies that are at least were alleged to

 intentionally have destroyed data and seen lots of 

 cases where discovery and documents are produced 

 that proves the defendant's case. 

file:///C|/FEB/0211rule.txt (388 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 389 

 Discovery is about the search for the truth. 

 And when you say that just because that smoking gun 

 might be contained in a "inaccessible" back-up 

 tape, it's not discoverable unless there is some

 good cause shown, then I question whether or not we 

 are bending the rules too far. 

 PROFESSOR MARCUS: Can I ask you a question 

 there? 

 MR. BUTTERFIELD: Yes.

 PROFESSOR MARCUS: How often do you--you used 

 back-up tapes as our conventional illustration of 

 this. How often do you, in fact, seek and get 

 information from back-up tapes, and how often do 

 you get it without making some kind of showing like

 good cause, why it's worth getting? 

 MR. BUTTERFIELD: That's a great question. And 

 in my current practice, I know that if I seek 

 back-up tapes, I'm going to get a big fight. So I 

 don't seek back-up tapes unless I have a darned

 good reason to seek them. 

 And I heard, I think, three times since I've 

 been here today that members from the other side of 

file:///C|/FEB/0211rule.txt (389 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 390 

 the aisle have said that, you know, with the 

 plaintiff's bar there is no downside to having 

 overbroad requests. It doesn't hurt them. It 

 harms the defendants. Well, it costs a lot of

 money for the plaintiff's side to obtain those 

 documents, to keep them under management on an 

 extranet or some other vehicle, and to review them. 

 So there is a downside, and it's not in my best 

 interest to request back-up tapes unless there is a

 good reason to do so. 

 JUDGE ROSENTHAL: May I ask you two questions 

 to follow up on that? I'm sorry, Professor Marcus. 

 Go ahead. You do it first. 

 PROFESSOR MARCUS: It sounds to me like what

 you were saying, though, is that in order to get 

 these things, you have to do something a whole lot 

 like what you say is a new obstacle, something like 

 a good cause showing. It sounds like that's what 

 you're doing now.

 MR. BUTTERFIELD: What I'm saying is that under 

 the current rules and under the current case law, I 

 have sufficient barriers and concerns about going 

file:///C|/FEB/0211rule.txt (390 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 391 

 after back-up tapes, and I don't think it's 

 necessary to change the rules. I think there's an 

 adequate procedure that exists currently to deal 

 with these situations.

 JUDGE ROSENTHAL: I'd like to press you a 

 little bit on the question that Professor Marcus 

 asked you. You said that you don't seek back-up 

 tapes, and I assume that the same answer or same 

 description would apply to other forms of data that

 would require restoration, such as legacy data? 

 MR. BUTTERFIELD: Yes. 

 JUDGE ROSENTHAL: Unless you have a good reason 

 for doing so? 

 MR. BUTTERFIELD: Yes.

 JUDGE ROSENTHAL: Because you expect it to be 

 resisted because it's expensive and difficult and 

 all the reasons that animate these proposals? 

 MR. BUTTERFIELD: That's right. 

 JUDGE ROSENTHAL: But my specific question is

 how often does that occur? That is, how often have 

 you found it necessary, in your judgment, to seek 

 restoration of information because the amount of 

file:///C|/FEB/0211rule.txt (391 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 392 

 the information you got without needing restoration 

 was inadequate to respond to your discovery needs? 

 MR. BUTTERFIELD: I don't think I've had to do 

 it.

 JUDGE ROSENTHAL: You've never had to do it? 

 MR. BUTTERFIELD: No. You know, I know that if 

 I do it, and if I go--let's say I litigate the 

 matter, and the court applies the standards from 

 the Zubulake case, I could be facing a huge bill.

 Now, but I want the opportunity--let's say that 

 my client comes to me, and my client says, "You 

 know, there's an e-mail. It's about three years 

 old. It's probably not in the active files of the 

 company anymore, but I can tell you that this is

 going to make the case." 

 I want the opportunity to go after that e-mail. 

 Even if I lose under the Zubulake task, and I have 

 to pay for it, I at least want the opportunity to 

 do that. And I understand that there is the good

 cause language in the new rule, but the new rule 

 shifts burdens. And I haven't understood to this 

 point why it's necessary to do that. 

file:///C|/FEB/0211rule.txt (392 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 393 

 Getting to--and I want to discuss in my limited 

 time the interplay-- 

 JUDGE HAGY: Doesn't the new rule require--if 

 you challenge it, the new rules requires the

 producing party to establish that or to show that 

 it's inaccessible. And then that shifts so they 

 have the burden. They have to show it's 

 inaccessible. That shifts back to you to say, "But 

 judge, here is my witness, and she says there is

 this e-mail that just knock dead, right on. And I 

 want that. That's all I'm looking for." 

 MR. BUTTERFIELD: Wouldn't you agree that it 

 shifts the burdens from how they exist presently? 

 JUDGE HAGY: I don't think so. Ultimately, if

 it's established that it's relevant. But if it's 

 established, and I think you made a good point. 

 Currently, if it's relevant, it's presumed that you 

 get it. Now you say if it's relevant and 

 accessible, it's presumed you get it.

 Well, it seems to me if the producing party 

 comes forward and establishes that it's not 

 accessible, it doesn't shock me if it's not 

file:///C|/FEB/0211rule.txt (393 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 394 

 accessible after considering the value to you, the 

 value of what you've already got the cost to 

 produce it, the value of now the litigation. Then 

 it should be presumed you don't get it. That

 doesn't shock me. 

 They have the burden of first establishing, 

 though--at least that's our intent, I think, to 

 say, hey, it's not accessible. If you challenge 

 it, they've got to come forward and say this is why

 we don't think it qualifies as accessible. 

 MR. BUTTERFIELD: What they do is they come 

 back and say and--we heard one gentleman from the 

 defense side say they're going to boilerplate. 

 JUDGE HAGY: That's the initial response. Then

 you challenge it, and then they've got to lay their 

 cards down. 

 MR. BUTTERFIELD: But my point is, again, that 

 I think the burden shifts. But I do want to talk 

 about the safe harbor provisions. And first of

 all, because of the way the safe harbor proposed 

 rule is structured, presently, when I enter into a 

 case--and by the way, I applaud the committee. I 

file:///C|/FEB/0211rule.txt (394 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 395 

 think it's great that they are forcing litigants 

 and judges to deal with electronic discovery issues 

 early. 

 I think in the kind of cases I litigate, the

 practitioners on both sides are typically steeped 

 in the area. They do that anyway. But I've seen 

 too many cases where that hasn't happened, and I 

 applaud the committee's efforts. 

 But presently, when I file a lawsuit, I conduct

 a discussion with the defense side and, in fact, in 

 another case I just got done with two months with a 

 joint technology committee where we structured a 

 document production format agreement, and we also 

 discussed document preservation issues. And the

 way I look at it, unless I believe that the 

 defendants are not adhering to their requirements 

 to preserve documents, I don't seek a preservation 

 order. 

 With respect to the new Rule 37, that's the

 first thing I'm going to do right out of the box. 

 Because unless there's a preservation order, in 

 many ways, we are giving the responding 

file:///C|/FEB/0211rule.txt (395 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 396 

 parties--and I talk about this interplay, and I'm 

 really worried about this. Because I ask whether 

 the responding party can classify relevant data, 

 maybe the smoking gun I'm talking about, as not

 reasonably accessible and, using that 

 classification, destroy data and then use the safe 

 harbor provision to insulate itself. 

 JUDGE ROSENTHAL: There's language in the safe 

 harbor provision that says that there is no safe

 harbor available to someone who fails to take 

 reasonable steps to preserve, and then the language 

 is in there. 

 MR. BUTTERFIELD: To preserve discoverable 

 evidence.

 JUDGE ROSENTHAL: But why wouldn't that 

 specifically just apply to what you have just 

 described? That is, the party knows the only place 

 that the smoking gun is located is on what they 

 have designated as inaccessible. Why wouldn't that

 be a pretty easy case to defeat any safe harbor 

 argument? 

 MR. BUTTERFIELD: The argument I worry about is 

file:///C|/FEB/0211rule.txt (396 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 397 

 them coming back and saying we--it was not 

 discoverable, in our view, because it was not 

 reasonably accessible. Because it was not 

 reasonably accessible, we could destroy it, and the

 safe harbor provision, particularly if you apply a 

 standard higher than negligence, the safe harbor 

 provision will provide cover. 

 And I agree that there could be arguments going 

 both ways. What I said in my papers is that if

 that's the position of the committee, why doesn't 

 the committee write an exception into Rule 37(f) to 

 exclude the destruction of data from safe harbor, 

 where the decision to destroy that data is made 

 solely by the responding party?

 JUDGE HAGY: As a tradeoff, suppose we say that 

 when you say data is inaccessible and you notify 

 that in a lawsuit. You say, "We're holding some 

 back. It's inaccessible." And it would be my 

 thought that if they then destroyed that, I

 wouldn't want to stand before a judge if I did it 

 and say, "Well, we destroyed it. We thought it was 

 inaccessible." 

file:///C|/FEB/0211rule.txt (397 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 398 

 But as a tradeoff to say you must preserve when 

 you claim that it's inaccessible, what would you 

 think about the plaintiff having to make the motion 

 to see inaccessible data within a regular period of

 time? Because as it is now, there is no time limit 

 on when the plaintiff has to move to make you 

 establish its accessibility. 

 MR. BUTTERFIELD: I think the rule is 

 problematic for both defendants and plaintiffs.

 Because the defense--if I represent a company, both 

 sides, when a lawsuit starts, you know, they go 

 down roads, and where you end up is oftentimes a 

 lot different than where you start. So documents 

 that you think may not even be relevant or may be

 marginally useful may become vitally important. 

 So you may, in good faith, advise your client, 

 as corporate counsel, "You know what? This is on 

 back-up tapes. I don't think it applies to the 

 lawsuit. I don't have a problem if you destroy

 it." What happens then? It's too late. It can't 

 be challenged. 

 JUDGE ROSENTHAL: Professor Marcus, we'll give 

file:///C|/FEB/0211rule.txt (398 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 399 

 you the honor of the last question. 

 PROFESSOR MARCUS: I think he's actually 

 answered whatever I was going to ask, to the extent 

 I was going to ask it. So I'll defer the honor

 back to Chris Hagy. 

 JUDGE HAGY: And I'll give it back to Mr. 

 Butterfield. 

 MR. BUTTERFIELD: If there are no other 

 questions, thank you very much.

 JUDGE ROSENTHAL: Thank you. 

 Mr. Romine? Good afternoon. 

 MR. ROMINE: Good afternoon. Thank you, 

 Chairman Levi, Judge Rosenthal, Professor Cooper, 

 the rest of the committee.

 This is the third time that I've testified in 

 front of the committee, and each time I'm impressed 

 with the professionalism of the Administrative 

 Office of the Courts, and they really do a good job 

 of organizing these things. So thank you very

 much. 

 You have my written statement, and I'm not 

 going to rehash that. I'd like to instead talk 

file:///C|/FEB/0211rule.txt (399 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 400 

 about three examples from my own practice. Going 

 way back to ancient history in the late '90s, 

 before e-discovery was as prevalent as it is today, 

 I was involved in a couple of cases. One was a

 major antitrust class action. The other was one of 

 the states' litigation against the tobacco 

 industry. And I was on the plaintiff's side in 

 both cases. 

 And in both cases, the defendants produced

 literally warehouses full of paper documents, 

 warehouses full. And I was one of a team of dozens 

 of lawyers in both cases looking at these 

 documents. And I could tell just by looking at 

 some of the documents, some of the files that I

 looked at, because lawyers can tell these things, 

 these files had been reviewed by defense counsel. 

 Maybe a paralegal or maybe a lawyer, I don't know. 

 But they had been reviewed. 

 And I know in the tobacco litigation that it

 cost the defendants millions of dollars to produce 

 this material. And in the antitrust case, I expect 

 that it did. I'm not sure that it did. 

file:///C|/FEB/0211rule.txt (400 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 401 

 So this is an example that may be an argument 

 in favor of the Rule 26 changes that were made in 

 the year 2000, shrinking it from subject matter of 

 the litigation to relevant to the claim or defense

 of any party. But it's not an argument in favor of 

 what I think is the thinking behind the current 

 rule, which is that electronic discovery is more 

 expensive than paper discovery. Electronic 

 discovery, my experience, is not more expensive

 than paper discovery. It's less expensive. 

 The second example is I was involved in a 

 commercial arbitration a couple of years ago. It 

 was AAA arbitration, but the parties agreed to use 

 rules similar to the rules of civil procedure. And

 my client was a mid-sized business that had a lot 

 of electronic information and a lot of paper 

 information. 

 And the client was overjoyed that it could 

 respond to the discovery requests primarily by

 downloading what existed on its employees' PCs and 

 sending them to me on a CD, which I could then, you 

 know, review on my PC. There was some paper files, 

file:///C|/FEB/0211rule.txt (401 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 402 

 20 or 30 boxes, that existed from before things 

 were done on computer that they had to ship to me, 

 and people in my office had to look through them 

 page by page and use stickies to identify things

 that were responsive, things that were not 

 responsive, things that were privileged, things 

 that were not privileged. 

 And in that case, the paper discovery was much 

 more unwieldy. The electronic information was much

 more wieldy. 

 The third example is I represented a couple of 

 class representatives, individuals, plaintiffs in a 

 securities class action. One of these individuals 

 was computer literate, the other was not. A

 similar situation, the class representative that 

 was computer literate sent me an 8.5 by 11 envelope 

 full of the paper discovery that he had, and he 

 e-mailed me the rest of the discovery that he had. 

 With the class representative that was not

 computer literate, she and I spent six hours in her 

 self-storage unit in Fort Lauderdale, Florida, 

 looking for responsive documents. We were there 

file:///C|/FEB/0211rule.txt (402 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 403 

 until 10:00 at night. They closed at 9:00. We got 

 locked in and had to climb over the fence in order 

 to get out. 

 So paper discovery is not better--or paper

 discovery is not cheaper than electronic discovery. 

 It's just not. 

 JUDGE ROSENTHAL: Can I ask you a question? 

 MR. ROMINE: I've represented-- 

 JUDGE ROSENTHAL: Excuse me, Mr. Romine?

 MR. ROMINE: Yes? 

 JUDGE ROSENTHAL: May I ask you a question? 

 MR. ROMINE: Sure. 

 JUDGE ROSENTHAL: Sorry to interrupt you. 

 MR. ROMINE: No problem.

 JUDGE ROSENTHAL: It's the same question that 

 we've asked a number of other people. 

 MR. ROMINE: Right. 

 JUDGE ROSENTHAL: In your practice, how 

 frequently have you been required to have recourse

 to information that you had to have restored, 

 whether it was from back-ups or legacy data or 

 similarly relatively inaccessible storage media, 

file:///C|/FEB/0211rule.txt (403 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 404 

 before it could be retrieved and looked at and 

 produced? How often have you had to have recourse 

 to that kind of information after you have 

 exhausted sources of what was reasonably available?

 MR. ROMINE: Right. I think once. 

 JUDGE ROSENTHAL: In how many years? 

 MR. ROMINE: About 11 years. And just for the 

 committee's knowledge, we had some computers that 

 had crashed, and we were told that responsive

 documents likely were on those computers. 

 JUDGE ROSENTHAL: And that was pretty easy to 

 figure out that that computer, in fact, had 

 responsive documents because it had crashed? 

 MR. ROMINE: Well, we thought that it did

 because it belonged to someone who was involved in 

 the issues in the case. So we thought that some 

 responsive documents were on that computer. It was 

 sitting somewhere in the company's premises, but it 

 had not been successfully restored. And we tried

 to restore it, and we could not. 

 JUDGE ROSENTHAL: And were you also able to--or 

 how easy was it for you to make the assumption or 

file:///C|/FEB/0211rule.txt (404 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 405 

 reach the conclusion that the information that was 

 likely to be on that computer was not also 

 available in accessible sources? 

 MR. ROMINE: We weren't. We never knew. It's

 possible that the information on that computer was 

 also produced from other sources. 

 JUDGE SCHEINDLIN: There was a presumption in 

 the last question. I think Judge Rosenthal used 

 the word "accessible," naturally. How do you--do

 you like that split? And if so, how do you define 

 these terms? 

 MR. ROMINE: I'm ambivalent as to the split. 

 What I'm most concerned about is the idea that a 

 party need not produce information that it

 identifies is not reasonably accessible. It's 

 not-- it's not the burden of the responding party 

 to prove that the information is not reasonably 

 accessible. It's not on the burden of the 

 responding party. It's on the burden of the

 requesting party to file a motion to compel. 

 Under the current rules, it's the burden of the 

 responding party to show facts why there is an 

file:///C|/FEB/0211rule.txt (405 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 406 

 undue burden. If the party doesn't show facts why 

 it's an undue burden, the party risks waiving the 

 objection. Under the proposed rule, the burden is 

 on the requesting party--to put it in your lap,

 Judge Rosenthal, and say, "Judge Rosenthal, the 

 defendant over here," or the litigant--it doesn't 

 have to be plaintiff or defendant. "Judge 

 Rosenthal, this litigant over here says that this 

 information is not reasonably accessible. And I

 want you to determine whether it's reasonably 

 accessible or not." 

 JUDGE ROSENTHAL: I'm sorry. 

 MR. ROMINE: That's okay. 

 JUDGE ROSENTHAL: Are you suggesting that if we

 clarified that it was the burden of the responding 

 party to show that the information was not 

 reasonably accessible or was reasonably 

 inaccessible, that that would satisfy your concern? 

 MR. ROMINE: It would go half way, but it would

 not satisfy them. The reason it goes half way is 

 because the way the proposal is currently drafted, 

 the responding party is under no obligation to do 

file:///C|/FEB/0211rule.txt (406 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 407 

 anything until and unless the requesting party 

 files a motion to compel. The responding party is 

 required to do nothing until I ask you, Judge 

 Rosenthal, to determine whether the information

 really is reasonably accessible or not. 

 Under the current practice, the responding 

 party has to say here is why there's an undue 

 burden. Neither under the proposed rule nor under 

 the proposed comment to the rule does the

 responding party have any burden to do anything, 

 including meet and confer. 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: I want to go back to the 

 computer that you couldn't restore. And it strikes

 me that you'll agree with me that that's one 

 instance in which there's truly inaccessible 

 information. 

 MR. ROMINE: It was functionally inaccessible. 

 PROFESSOR MARCUS: Okay. Did the responding

 party in that instance make a motion for a 

 protective order to be excused from producing that 

 information? 

file:///C|/FEB/0211rule.txt (407 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 408 

 MR. ROMINE: We were the responding party, and, 

 no, we didn't make any motion. 

 PROFESSOR MARCUS: Oh, you were the responding 

 party?

 MR. ROMINE: Yes. This was our computer. 

 PROFESSOR MARCUS: I thought you just said that 

 the reason you're opposed to the change is that 

 right now the responding party has the obligation 

 to make a motion with the judge to be excused from

 producing, whereas under this arrangement things 

 would be different. It strikes me that very often 

 they would work very much the same. 

 MR. ROMINE: I don't think that's true. The 

 responding party under the current rules does not

 have a burden to make a motion. The responding 

 party under the current rules has an obligation to 

 set forth in its responses to discovery why the 

 information is objectionable or why there is an 

 undue burden to produce.

 I want to refer back to what Dabney Carr said 

 in support of the rules or support of the rule 

 change. He said litigants have to understand and 

file:///C|/FEB/0211rule.txt (408 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 409 

 apply, without having to ask the courts for help, 

 the discovery rules. Well, that's what's happening 

 now. He himself said that 99 percent of the time 

 when he has a discovery dispute, he works it out

 with opposing counsel in a meet and confer. 

 Under the current rules, that doesn't happen 

 because there is no meet and confer obligation--I'm 

 sorry. Under the proposed rules, that doesn't 

 happen because there is no meet and confer

 obligation. Under the proposed rules, the 

 requesting party has to file a motion to compel. 

 JUDGE HAGY: I think under every court I know, 

 maybe it's by local orders, you can't file a motion 

 to compel without having certified that you've meet

 and conferred. Nor can you file for a motion for 

 protective order until you certify that. 

 So we don't envision that going away. Maybe 

 you're saying that we ought to specifically put a 

 meet and confer requirement here?

 MR. ROMINE: Again, that would be a step in the 

 right direction. But my point is the way that the 

 proposed rule is written, there is no obligation 

file:///C|/FEB/0211rule.txt (409 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 410 

 for the responding party to specify or to justify 

 why the information is not reasonably accessible 

 until the requesting party files a motion to 

 compel. And that is not going to happen in every

 circumstance. 

 JUDGE HAGY: You're also saying under the 

 current rules, there's an obligation on the 

 responding party to state why a request is unduly 

 burdensome or oppressive. I never see it. They

 just say it's unduly burden or oppressive. And 

 then even though there's no meet and confer 

 provision here, the parties say, "I'm going to move 

 to compel that," and they get together and they 

 meet and confer.

 So we don't have a meet and confer now. Then 

 if they have to, they can argue what is 

 unduly--what is oppressive and burdensome. 

 MR. ROMINE: I think that there are cases, and 

 one of them is cited in my written materials--there

 are cases in which a party has objected on grounds 

 of unduly burdensome. They don't make any effort 

 to show why, and their objection is waived. 

file:///C|/FEB/0211rule.txt (410 of 455) [3/2/05 2:36:50 PM]
file:///C|/FEB/0211rule.txt

 411 

 JUDGE HAGY: A lot of cases the other way, too. 

 It all depends on what the ultimate fact showing 

 is. If it's just nonsense, it's not unduly 

 burdensome, then the other way.

 JUDGE ROSENTHAL: I think we have Mr. Girard 

 and then Professor Marcus, and then we will 

 probably be almost out of time. 

 MR. GIRARD: But quickly, aren't you saying 

 that under the existing system, that because the

 presumption is that if a party resisting discovery 

 fails to show good cause, then they waive their 

 objections and that that process flushes out 

 whatever their objections are in the context of the 

 meet and confer?

 MR. ROMINE: No. There is no good cause 

 requirement now. 

 MR. GIRARD: I'm talking about currently. 

 MR. ROMINE: Right. There is no good cause 

 requirement.

 MR. GIRARD: My understanding of the way Rule 

 26 works currently is that there is a good cause 

 requirement if you're resisting discovery. In 

file:///C|/FEB/0211rule.txt (411 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 412 

 other words, if the dispute is litigated, the party 

 resisting discovery has to show good cause. 

 MR. ROMINE: No. That's not the way it works. 

 MR. GIRARD: Okay. Tell me how it works.

 MR. ROMINE: Under the rules--I'm sorry, Your 

 Honor. The way I understand it, there is no good 

 cause in the rule. The way the rule is applied by 

 judges in the cases that I've read is the party 

 resisting discovery has to show undue burden.

 That's different than good cause. It's different 

 than good cause. The responding party has to show 

 undue burden. 

 And let me just explicate that because I think 

 it's important. Under the current rule, requesting

 party requests, responding party says undue burden. 

 You have a meet and confer. Either you work it out 

 99 percent of the time, like Mr. Carr said, or you 

 don't work it out the 1 percent of the time, and 

 the requesting party files a motion to compel.

 Here's how it works under the proposal. 

 Requesting party makes a request. Responding party 

 says it's not reasonably accessible. Then you may 

file:///C|/FEB/0211rule.txt (412 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 413 

 or may not have a meet and confer. Then you have a 

 motion to compel in most cases in which the 

 requesting party cares. Then you have a motion to 

 compel.

 Then the judge says, "Well, I agree. It's not 

 reasonably accessible." The judge must make that 

 finding. Then the requesting party says, "Well, 

 even if it's not reasonably accessible--" 

 JUDGE SCHEINDLIN: But you have skipped a step.

 The judge isn't going to do that. The burden is on 

 the producing party to make the showing-- 

 MR. ROMINE: Yes. Yes. 

 JUDGE SCHEINDLIN: --that it's not reasonably 

 accessible.

 MR. ROMINE: That's right. Thank you, Your 

 Honor. 

 JUDGE SCHEINDLIN: And then the judge can 

 decide. 

 MR. ROMINE: Yes.

 JUDGE SCHEINDLIN: But it is, the burden is on 

 the party who asserted that to prove it. 

 MR. ROMINE: After the motion to compel was 

file:///C|/FEB/0211rule.txt (413 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 414 

 filed. 

 JUDGE SCHEINDLIN: I agree with you. 

 MR. ROMINE: After the motion to compel was 

 filed.

 JUDGE SCHEINDLIN: Clearly after--right, after 

 the motion. 

 MR. ROMINE: So then the judge says, "All 

 right. I agree with you. It's not reasonably 

 accessible." And then the plaintiff says--or

 excuse me, the requesting party says, "Well, all 

 right. So it's not reasonably accessible, but I've 

 got good cause." 

 So you've already found that it's not 

 reasonably accessible. But now I'm going to say

 you should give it to me anyway because there's 

 good cause. And I would say it's adding three or 

 four unnecessary steps to a process that works well 

 now. 

 And let me just--I realize I may be running out

 of time, but I think this is an important point. 

 JUDGE ROSENTHAL: I think Professor Marcus had 

 a question first. 

file:///C|/FEB/0211rule.txt (414 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 415 

 MR. ROMINE: Okay. I'm sorry. 

 JUDGE ROSENTHAL: No. Go ahead. 

 MR. ROMINE: The reasonably accessible language 

 is okay, but there's no reason that I can see why

 the reasonably accessible language must logically 

 be tied to a system where the responding party has 

 the ability on its own initiative just not to 

 produce documents. 

 There's language in my written materials that

 says you can incorporate the words "reasonably 

 accessible" into the undue burden standard in Rule 

 26(c) or the burden of production outweighs the 

 likely benefit under Rule 26(b)-- 

 JUDGE SCHEINDLIN: So it would become a factor

 that a court would consider? 

 MR. ROMINE: A factor the court would consider, 

 yes. 

 JUDGE SCHEINDLIN: Right. 

 JUDGE WALKER: Can I ask a yes/no question?

 JUDGE ROSENTHAL: Yes. 

 JUDGE WALKER: Did you tell them about the 

 computer that had crashed and you couldn't restore? 

file:///C|/FEB/0211rule.txt (415 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 416 

 MR. ROMINE: Did I tell the other side? No. 

 JUDGE ROSENTHAL: Did you say that into the 

 microphone? 

 MR. ROMINE: No.

 JUDGE ROSENTHAL: Go ahead. 

 JUDGE SCHEINDLIN: Is one of your concerns with 

 the self-designating reasonably accessible problem 

 that the party may also then feel free not to 

 preserve it? Is that one of your concerns?

 MR. ROMINE: Yes. Yes, that is one of my 

 concerns. And the--I read a newspaper article 

 about the hearing in San Francisco. I wasn't 

 there, so my apologies to the court. But the vice 

 president from Intel said that people like me are

 not litigating in today's world. But I've been 

 litigating in today's world or the contemporary 

 world for the last 11 years, and I think the 

 committee is somewhat at a disadvantage because you 

 hear from people who have vastly different

 perspectives on litigation and how it works in 

 today's world. 

 And I would submit that the way the committee 

file:///C|/FEB/0211rule.txt (416 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 417 

 gets to learn what's happening in the real world 

 from an objective point of view is to read the 

 cases like Zubulake and like the Row Entertainment 

 cases. And the proposed rules, if they go into

 effect, will basically encourage and bless 

 litigants who delete and destroy evidence for the 

 specific purpose of making them not reasonably 

 accessible. 

 And it will encourage litigants to employ

 document retention or, rather, document destruction 

 data for the specific purpose of avoiding Rule 37 

 sanctions. And I agree with the immediate past 

 speaker, Mr. Butterfield. I don't see any reason 

 why plaintiffs now or, for that matter, defendants

 now in an answer should not move for a preservation 

 order at the time they file their complaint or the 

 time that they file their answer. 

 Because if a litigant is going to be under the 

 threat of sanctions only if there is a preservation

 order, then I think you're going to get these 

 boilerplate motions at the get-go, saying, "I want 

 the judge to get a preservation order. Otherwise, 

file:///C|/FEB/0211rule.txt (417 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 418 

 all of my evidence is going to disappear." 

 JUDGE ROSENTHAL: Any other questions of Mr. 

 Romine? 

 [No response.]

 JUDGE ROSENTHAL: Thank you. 

 MR. ROMINE: Thank you. 

 JUDGE ROSENTHAL: Mr. Daley? 

 MR. DALEY: Thank you. Good to see you again. 

 My name is James Daley. I am a partner in the law

 firm of Shook, Hardy & Bacon. My office is in 

 Kansas City, Missouri. 

 I have really three things to tell you about my 

 background that I think might bear on my remarks, 

 and I have three themes I think that are advanced

 by the proposed federal rules and then three 

 examples or suggestions of potential modifications 

 to the proposed rules that I think would be 

 helpful. 

 First of all, I came to this area first from

 the standpoint of technology and as a technologist 

 in undergraduate computer programming, leading to 

 my master's degree in information services. Then 

file:///C|/FEB/0211rule.txt (418 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 419 

 practiced law as a first chair trial attorney for 

 first 15 years until I realized I didn't know my 

 four children very well. 

 So then I applied, for the last 10 years

 really, my technology background and my knowledge 

 of the anatomy of a case and, indeed, these rules 

 to try to work with folks both in the records 

 retention industry, the technology industry, and my 

 colleagues at the bench and bar to try to explore

 proactive ways, creative ways to deal with 

 e-discovery issues. 

 And I'm going to submit to you that it's my 

 experience that in this arena, the big issues are 

 not back-up tapes, and the big issues are not

 deleted or erased data or fragmented files. The 

 big issue that catches the attention of general 

 counsel and IT directors around the country and 

 around the world that I deal with on a daily basis 

 is the issue of unstructured or individual

 electronic data. That is the big issue. 

 And I don't know if you've heard this 

 perspective, but I'll just take a moment to impact 

file:///C|/FEB/0211rule.txt (419 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 420 

 this because I think it's helpful to reflect for a 

 moment on how we got into this mess. We got into 

 this mess because we failed to see a strategic 

 inflection point that happened sometime between

 1970 and 1985. 

 Coincidentally, 1970 was the first federal 

 rules comment dealing with data compilations. But 

 not until about 15 years later in the mid '80s did 

 we all get a PC on our desktop. And not until then

 did we, by the good works of Bill Gates and others, 

 get personal productivity software on those 

 desktops. First, a word processing spreadsheet, 

 then e-mail. Then we had local area networks so we 

 could propagate the e-mail and documents all

 throughout a local network and then a wide area 

 network. 

 So fast forward to today. We have instant 

 messaging. We have text messaging. We have the 

 USB memory keys that I brought my remarks today to

 share with you on. And we're in the situation 

 where records retention staffing has been cut in 

 the last 20 years. We no longer have the trusty 

file:///C|/FEB/0211rule.txt (420 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 421 

 paper file clerks, let alone electronic file 

 clerks. 

 We've got people we're asking to do more for 

 less. They have little incentive or no incentive

 to do anything except save everything when they get 

 a hold notice. Companies on the priority scale, 

 when they're looking at how to budget their money 

 in a difficult economy in particular, have no 

 incentive to move electronic records retention to

 the fore. 

 The companies that I speak with, the Fortune 

 100 to 500 companies I speak with, have had these 

 projects on the books for years--two, three, four, 

 five years. But they always get cut. Why?

 Because there is no incentive for them to do 

 otherwise. And I would submit to you that the 

 proposed rules give them that incentive. 

 It gives the management of corporations the 

 incentive to allocate the resources to deal with

 this issue, which is only getting worse, to the 

 detriment of plaintiffs and defendants and the 

 administration of justice alike. 

file:///C|/FEB/0211rule.txt (421 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 422 

 If for no other reason, these proposed rules 

 give the cache, give the juice, so to speak, for 

 top management to allocate this as a priority to 

 deal with it in a responsible way. I submit to you

 that corporations are not trying to hide the ball. 

 That's not been my experience in my 25 years. And 

 I have worked on both sides of the bench. 

 My former firm, I did a fair amount of 

 plaintiff's work, and I know it's easy to get

 jaundiced to one side or the other, and I know the 

 courts are asked to be the arbiter, the neutral 

 detached arbiter, and to balance the need or the 

 desire for perfect information on the one hand with 

 the burdens and the expense of doing what is

 reasonable. 

 And I realize there is somewhat of a sliding 

 scale, even if we don't articulate it. You know, 

 IBM's bar in terms of reasonableness is going to be 

 more than the "ma and pa" shop.

 But the bottom line is this--without the 

 incentive provided by these proposed federal rules, 

 I think we're going to stay in that holding 

file:///C|/FEB/0211rule.txt (422 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 423 

 pattern. And I don't think we're going to have the 

 type of predictability and guidance that corporate 

 America needs to deal with this issue and that the 

 IT folks and records managers of corporate America

 are yearning for. 

 JUDGE HECHT: Let me ask you this. Why do you 

 think it provides or how do you think it provides 

 more incentive? 

 MR. DALEY: Well, probably in two main ways.

 The first is that it increases the profile of 

 e-discovery. It increases it in a way that is far 

 more dramatic than the 11 federal district courts 

 and 9th Circuit and state courts or state 

 legislatures, who are currently trying to tinker

 with e-discovery from a statutory rules-based or 

 guidelines-based standpoint. 

 So it increases the profile. It gives them 

 some assurance that if they do certain things, if 

 they abide by these standards, then whether they're

 in Minnesota or California or Florida, they'll have 

 a baseline for which they can budget human 

 resources, technical resources and, you know what, 

file:///C|/FEB/0211rule.txt (423 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 424 

 money. Okay? So predictability for them goes far 

 beyond just the standards. It's predictability of 

 expense. 

 JUDGE ROSENTHAL: May I ask you a question

 about that to follow up on Judge Hecht's question? 

 The one proposal that was made would be to include, 

 either in rule language or in the note language, 

 language to the effect that if a company has a 

 policy in place for routine destruction and

 retention that applied to electronic information 

 that did not base--that was not based on any 

 particular case and the relationship of information 

 to that case, that would be a factor for 

 examination in determining whether the company had

 acted reasonably if information was lost. 

 Do you think that that would provide the kind 

 of incentive you're talking about? Would you be in 

 favor of that kind of language, or do you think 

 it's a level of detail that we should not include

 in rule or note language? 

 MR. DALEY: I'm really whole-heartedly in favor 

 of that, and I think that is a--that would be a 

file:///C|/FEB/0211rule.txt (424 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 425 

 major boost to moving forward in initiatives that 

 have really remained dormant for years. 

 The end-game here, we all know--those of us who 

 deal with technology and e-discovery--the end-game

 here is having electronic records management 

 systems that assist individuals, you and me, in 

 managing the electronic information that we 

 generate, transmit, and receive day in and day out. 

 And until that happens, you know, until that

 happens, back-up tapes and inaccessible data pale 

 in comparison. 

 JUDGE ROSENTHAL: Let me just ask one other 

 follow-up question. If the rules have this 

 powerful ability to influence corporate behavior,

 perhaps you could comment on the concerns that 

 we've heard from a number of speakers that if we 

 draw a line between inaccessible and accessible and 

 if we also have a safe harbor, that it will 

 embolden companies to make information that might

 be helpful to the other side in litigation 

 inaccessible faster in order to make it unavailable 

 in litigation. 

file:///C|/FEB/0211rule.txt (425 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 426 

 MR. DALEY: You know, I frankly don't think 

 that is a specious argument. I don't think the 

 argument holds true that just because you provide a 

 safe harbor and you provide a mechanism by which

 they're encouraged to do the responsible 

 thing--that is to say, have policies that are well 

 reasoned, tailored to the business, have procedures 

 that implement those policies, and have processes 

 that could be demonstrated and should be

 demonstrated when challenged in terms of how those 

 procedures are communicated, coordinated, and 

 complied with. 

 Then in that event, you've got, I think, the 

 better situation. We can't live in an atmosphere

 of fear, uncertainty, and distrust. At some level, 

 we have to trust each other to do the right thing, 

 absent evidence of the contrary. I don't think it 

 is particularly helpful to have the lack of 

 guidance and uniformity and consistency that we

 have now. So the argument that the status quo is 

 better than the proposed rules, I think, is just 

 respectfully incorrect. 

file:///C|/FEB/0211rule.txt (426 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 427 

 JUDGE SCHEINDLIN: Jim, you said earlier that 

 the problem is probably not with the so-called 

 inaccessible data anyway. It's with the massive 

 amount of data that is agreed upon to be

 accessible, but how do we deal with it? So if 

 we're going to have this divide for the part that 

 really isn't all that important, how do you define 

 the inaccessible? What is your personal sense of 

 it?

 MR. DALEY: Well, I tell you, I've been doing 

 this as a litigator for last 11 years. I have not 

 ever, absent corruption of data, found data that 

 could not be accessible with enough time and money. 

 JUDGE SCHEINDLIN: Right.

 MR. DALEY: So, to me, accessibility is not the 

 issue, as I mention in my remarks. 

 JUDGE SCHEINDLIN: Right. So it's not the 

 issue. But we're writing this whole rule and 

 having two days of debate about it. So, A, should

 we bother? And if so, what's inaccessible to you? 

 MR. DALEY: I think active/inactive is a much 

 better distinction. I really do. 

file:///C|/FEB/0211rule.txt (427 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 428 

 JUDGE SCHEINDLIN: Oh, but people have said 

 that inactive--some of the inactive material is 

 easily accessed. It's relevant. And under all our 

 principles of discovery, why should it be

 presumptively off limits at all? It's not hard to 

 get. It's relevant, you know? 

 MR. DALEY: Let me give you a few examples of 

 what I mean by it and why I draw the distinction. 

 I've had occasion to recover data from portable air

 quality devices used in airplanes at the time that 

 we had smoking on airplanes. These were 

 20-year-old. I've dealt with Bernoulli boxes, with 

 old TK cartridges, with old IBM 3480 cartridges 

 with paper tape, with punch cards, you name it.

 You can find--you can find the hardware and 

 software museums around the country and hot sites 

 to make that which is inaccessible accessible. I'm 

 not sure how you draw that distinction. 

 JUDGE SCHEINDLIN: Oh, but only with some big

 expense, right? Okay. 

 MR. DALEY: Right. I think, though, if you 

 look at active/inactive as an operational 

file:///C|/FEB/0211rule.txt (428 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 429 

 definition, again, it's a matter of proof. It's a 

 matter of evidence. But if I am actively accessing 

 certain types of data, whether it's on a back-up 

 tape, whether it's an online or near-line system, I

 think the fair thing to do is to require a due 

 diligence exploration of that. 

 If it's inactive, however, for instance, a 

 historical archive tape--and I've got some clients 

 that have 30,000 of these things. They're paying

 $250,000 a year storing in three separate 

 continents just because they're afraid to deal with 

 them. And that's just the real-life situation of 

 one client, let alone many. Those are tapes that 

 they have no active reason to access.

 JUDGE SCHEINDLIN: In other words, but for 

 litigation, they would now destroy them? 

 MR. DALEY: Exactly. But for these broad 

 protective orders they've received since the early 

 '90s, which have been shopped around and

 incorporated by reference by other courts, they 

 wouldn't have them. They haven't touched them. 

 They have no current business use. They're from 

file:///C|/FEB/0211rule.txt (429 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 430 

 platforms that have long ago retired. 

 JUDGE SCHEINDLIN: Maybe it's semantics, but is 

 all inactive data going to fall into your 5:00--I'm 

 sorry to do that to you--but 10 of 5:00 definition

 here? In other words, we've been using the word 

 "inactive," I think, differently than you're now 

 using it. 

 You're saying it's inactive because it has no 

 purpose in the whole world, except that it's being

 stored pursuant to some judge's protective order. 

 Otherwise, nobody would want it. That isn't how I 

 understood inactive until now. 

 So I don't know if your definition is 

 universally accepted of what is inactive. And if

 we went down that road, we'd have to start all over 

 again, getting everybody's input as to what 

 inactive means. 

 MR. DALEY: I know. I've struggled with the 

 accessibility/inaccessibility versus

 active/inactive. I will tell you that it 

 highlights a problem of translation between the 

 technology community and the legal community and 

file:///C|/FEB/0211rule.txt (430 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 431 

 the records management community. 

 JUDGE ROSENTHAL: May I just have one question, 

 and then Frank, and then I think it will be time. 

 In general, putting aside for the moment the

 particular label that you're using, are you in 

 favor of a two-tier structure that draws a line 

 somewhere between the stuff that you do not need to 

 spend a lot of money and undergo a lot of effort to 

 restore before you even retrieve it and examine it

 on the one hand. And on the other hand, the stuff 

 that does require that kind of cost, expense, and 

 burden just to restore before you even get to this 

 traditional steps that have accompanied 

 preproduction activity of information?

 MR. DALEY: I'm very much in favor of the 

 two-tier structure. I think it very much advances 

 the predictability, the guidance of the 

 administration of justice. 

 JUDGE ROSENTHAL: Does that functional

 description of the line make sense to you, given 

 the ambiguity that we've been talking about? 

 MR. DALEY: I think it still obtains, I really 

file:///C|/FEB/0211rule.txt (431 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 432 

 do. 

 JUDGE ROSENTHAL: Frank, just one second? No? 

 Frank, just a footnote and to hers. 

 MR. CICERO: Okay, I had a footnote to yours.

 JUDGE ROSENTHAL: Oh, okay. 

 [Laughter.] 

 JUDGE SCHEINDLIN: And I took that away from 

 him. So, if you don't mind, I just want to follow 

 up.

 MR. CICERO: --this criteria that you have set 

 forth because I've had a number of discussions, as 

 I think a lot of us have, in the halls and 

 elsewhere today, about that terminology. Not 

 necessarily what you need. And you said a moment

 ago that there are semantic differences in 

 understanding between or among lawyers. 

 As you use the term or the criteria, 

 active/inactive, does the data that you describe 

 which are on old airplane smoke detectors and

 various others, is that active or inactive? 

 MR. DALEY: Inactive. 

 MR. CICERO: Okay. You see, what troubles me 

file:///C|/FEB/0211rule.txt (432 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 433 

 about that is--let me give you another example. 

 There are classes of cases, which I'm sure you 

 recognize, where all of the relevant data is 

 inactive data. Toxic waste cases, where the

 records may go back 10, 15, 20 years, and those are 

 the relevant records for a personal injury or a 

 property damage claim. 

 Or we had examples cited this morning of 

 securities cases, where it may not be 15 or 20

 years, but it may be 3, 4, or 5 years. But one 

 thing we know about all of it is that it's not 

 actively used in the business at the present time. 

 And that's where I have a problem with that 

 distinction.

 Because it depends on what cases you're talking 

 about, but there are large categories of cases 

 where all of the relevant data is data which are 

 not used in business at the present time and which 

 the business doesn't want to come to light or even

 see. Except for the fact that somebody comes 

 along, and they still have it and they want to see 

 it. And it is relevant and material to the 

file:///C|/FEB/0211rule.txt (433 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 434 

 litigation. Indeed, it is all the evidence 

 relating to respective litigation. 

 JUDGE ROSENTHAL: Shira, did you want to follow 

 up?

 MR. CICERO: Well, I just wonder, I mean, under 

 your definition, I gather all of that type of 

 information is not active information? 

 MR. DALEY: Well, I think it's fair to draw a 

 distinction in the electronic realm between what is

 reasonably--that which is active and used in the 

 ordinary course of business and can be reasonably 

 accessed versus that which is inactive and can't 

 reasonably be accessed. 

 JUDGE SCHEINDLIN: My only follow-up was that

 Judge Rosenthal asked a question. It's now three 

 minutes ago. But she used the word "restore." Is 

 it always a matter of restoration for this sort of 

 inactive material? I mean, it might be inactive, 

 but it may not need to be restored.

 JUDGE ROSENTHAL: No, I did. 

 JUDGE SCHEINDLIN: No, no. You used the word 

 "restore." Right. But I'm asking you, as somebody 

file:///C|/FEB/0211rule.txt (434 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 435 

 who has far more technology background than I, it 

 may be old, it may be inactive, but does it need to 

 be restored or just retrieved? And there is a 

 difference.

 JUDGE ROSENTHAL: And I guess my question, to 

 follow up on her follow-up, if I can-- 

 JUDGE SCHEINDLIN: Well, I don't know. I'd 

 like to get an answer. 

 JUDGE ROSENTHAL: - with whether that

 restoration factor makes any sense, based on your 

 technology knowledge? 

 JUDGE SCHEINDLIN: Okay. But could you do mine 

 first? Then we can follow up with that because I 

 need to know whether you think that all the

 inactive needs restoration as opposed to just 

 retrieving sometimes? 

 MR. DALEY: Well, I guess from a technology 

 perspective? 

 JUDGE SCHEINDLIN: Right, right.

 MR. DALEY: It's hard to do one without the 

 other. In other words, we know we have to restore 

 and oftentimes convert some of these old data types 

file:///C|/FEB/0211rule.txt (435 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 436 

 so that they're even readable or reasonably-- 

 JUDGE SCHEINDLIN: Okay. So you would always 

 use the word "restore?" 

 MR. DALEY: I would.

 JUDGE SCHEINDLIN: Okay. That answered my 

 question. 

 JUDGE ROSENTHAL: Now I think we were asking 

 the same question. 

 JUDGE SCHEINDLIN: I don't know. But anyway--

 JUDGE ROSENTHAL: But I think you've answered 

 it to my satisfaction for right now, given the 

 hour. 

 MR. DALEY: Again, thank you for the 

 opportunity.

 JUDGE ROSENTHAL: Thank you for your patience 

 and our somewhat fragmented questions. 

 And Mr. Lewis and Ms. Longendyke? Good 

 evening. 

 MS. LONGENDYKE: You did very well with my

 name. That doesn't happen very often. 

 JUDGE ROSENTHAL: I've butchered everybody 

 else's, so at least I got one right. 

file:///C|/FEB/0211rule.txt (436 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 437 

 MS. LONGENDYKE: Good afternoon, everyone. My 

 name is Carole Longendyke, and with me is Paul 

 Lewis. And we represent P.G. Lewis & Associates, a 

 data forensics firm in Whitehouse Station, New

 Jersey, with more than two years' experience in the 

 preservation, recovery, and analysis of electronic 

 evidence. 

 Our firm's perspective is based on our 

 knowledge and understanding of relevant technology,

 as well as our experience with that technology in a 

 variety of civil litigations and criminal matters. 

 Since significant focus is being placed upon 

 inaccessible information and the relative costs 

 associated with producing it in discovery, I would

 like to address a few points relating to these 

 topics specifically. 

 The hazards of labeling data inaccessible. It 

 has been our experience that data cannot be 

 inaccessible in that it either exists or does not

 exist. And if it exists, it can be preserved and 

 recovered. We therefore feel that the term 

 "inaccessible" should be excluded from the rules, 

file:///C|/FEB/0211rule.txt (437 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 438 

 and emphasis placed instead upon the varying levels 

 of accessibility relative to cost and complexity. 

 Furthermore, the ease with which an individual 

 can render a document inaccessible is such that a

 blanket definition can have serious consequences. 

 Consider as an example documents sent to a 

 computer's recycle bin. For all intents and 

 purposes, this document has been discarded and is 

 no longer an active discoverable document. The

 document can very easily be recovered, however, at 

 any time and for whatever purpose determined by the 

 user. 

 We are concerned that an overgeneralized term, 

 such as inaccessible, might provide an incentive

 for the manipulation of data across the varying 

 levels of inaccessibility. 

 JUDGE ROSENTHAL: Can you give us some ideas as 

 to a functional description of the levels of 

 accessibility that you have referred to?

 MS. LONGENDYKE: Certainly. For a user to send 

 a document to a recycle bin, that user still has 

 the opportunity to bring that file back into an 

file:///C|/FEB/0211rule.txt (438 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 439 

 active state. 

 JUDGE ROSENTHAL: I understand. Go ahead. 

 Perhaps I could ask it this way. 

 MS. LONGENDYKE: Okay.

 JUDGE ROSENTHAL: One of the formulations that 

 was suggested to us was something along the lines 

 of inaccessible without undue burden and expense, 

 or something along those lines. Would you be more 

 comfortable with that kind of a formulation?

 MS. LONGENDYKE: I actually address that in 

 another part of my statement. Is that okay if I 

 just continue? Okay. Because that is a big point 

 that I would like to make. 

 JUDGE ROSENTHAL: I think I'm suggesting that

 we would--I at least--I don't want to speak for the 

 other members of the group--would like to hear more 

 about that area. 

 MS. LONGENDYKE: Oh, absolutely. 

 MR. LEWIS: We have eight minutes, but eight

 very powerful minutes. 

 MS. LONGENDYKE: Okay. In fact, the next 

 section addresses that very clearly. Well, I'll 

file:///C|/FEB/0211rule.txt (439 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 440 

 just move on here. 

 Discovery that is limited to that which is 

 perceived as accessible has, in the past, 

 encouraged willful destruction of responsive

 information, and rules written with such 

 limitations will likely provide similar incentive 

 in the future. 

 The relative value of Tier 1 and Tier 2 

 discovery. The value of less--

 PROFESSOR MARCUS: Excuse me. What limited 

 that discovery to that which was deemed accessible? 

 MS. LONGENDYKE: Excuse me? 

 PROFESSOR MARCUS: I thought you said discovery 

 that was limited in the past to that which was

 accessible had led to the loss of data. 

 MS. LONGENDYKE: Well, what I'm saying is if 

 discovery is limited to that which is accessible, 

 then-- 

 PROFESSOR MARCUS: This isn't about things that

 happened in the past. 

 MS. LONGENDYKE: Well, in cases and situations 

 that we have seen in our business in data 

file:///C|/FEB/0211rule.txt (440 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 441 

 forensics, when discovery is just limited to "give 

 us what you can give us right now, give us what is 

 active and what is most accessible," is excluding a 

 great deal of information.

 PROFESSOR MARCUS: That had been the practice 

 in a number of cases in which you had been 

 involved? 

 MS. LONGENDYKE: Well, I think that 

 as--considering that there has been a limited

 understanding of the availability of alternate 

 methods for recovering information, which is really 

 the thrust of our point here is that there is this 

 second-tier discovery, this recovery of information 

 is not that difficult, although it's been ignored

 in the past, I think. 

 PROFESSOR MARCUS: Did you hear Mr. Romine 

 testify a little while ago about the computer that 

 he couldn't get anything off of? 

 MS. LONGENDYKE: Yes, I did.

 PROFESSOR MARCUS: Would you regard that data 

 as inaccessible? 

 MS. LONGENDYKE: No, I would not. 

file:///C|/FEB/0211rule.txt (441 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 442 

 MR. LEWIS: No. 

 PROFESSOR MARCUS: Okay. 

 MS. LONGENDYKE: The value of less accessible 

 information in litigation cannot be discounted

 merely because it is available in lesser quantities 

 and in less accessible locations. The notion that 

 the sheer volume of data from the most accessible 

 sources somehow negates the value of the smaller 

 proportions in the less-accessible locations is

 invalid. 

 As an example, I provided data forensic 

 services to both the defense and the prosecution in 

 the recent Enron/Merrill Lynch Nigerian Barge trial 

 in Houston, Texas.

 JUDGE ROSENTHAL: May I ask one more question? 

 I'm sorry. 

 MS. LONGENDYKE: Sure. 

 JUDGE ROSENTHAL: We do have your written 

 statement. So rather than just reading, it might

 be more helpful if you responded to questions that 

 a number of us might have. And I do have a 

 question. 

file:///C|/FEB/0211rule.txt (442 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 443 

 MS. LONGENDYKE: Okay. 

 JUDGE ROSENTHAL: What do you think is the 

 appropriate role of balancing the difficulty, the 

 cost, the expense, and the delay of having to

 obtain information that is at a more difficult 

 level of access? And you've said there are levels. 

 And on the one hand, in relationship to the 

 importance of it to the case and the availability 

 of other information that might be easier to get,

 that might be responsive to the same discovery 

 needs, what's the role of all of those factors in 

 deciding whether you should have to get access to 

 require access to the less available information in 

 the first place and in deciding on what terms that

 should be done? 

 MS. LONGENDYKE: Well, I think that it's not 

 necessarily more difficult. It's just a different 

 process. Acquiring information on a computer that 

 has been deleted, that is maybe not an active file,

 retrieving it--it can't be produced in typical 

 methods of discovery, in just printing something 

 out, for example, a document that is active. So 

file:///C|/FEB/0211rule.txt (443 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 444 

 it's just a different process. 

 Computer forensics is the process of finding 

 the latent information, finding and retrieving and 

 recovering the deleted data. And in our

 experience, it's--frankly, I think there's a lot of 

 hoopla about nothing. It's not such a difficult, 

 nor is it costly-- 

 JUDGE ROSENTHAL: Then why does it--go ahead. 

 JUDGE SCHEINDLIN: Can I follow up with another

 sentence you were about to read? You said, in this 

 Texas litigation, it wasn't the accessible sources 

 that proved valuable, but the recovery and analysis 

 of documents previously deemed inaccessible that 

 proved--that were the gold mine. That was the gold

 mine. 

 Well, what were they? What were those 

 inaccessible materials that produced the gold mine 

 in that litigation? 

 MS. LONGENDYKE: It was back-up tapes that they

 had required restoration. And frankly, it was not 

 a very difficult process whatsoever to take those 

 back-up tapes that had been previously determined-- 

file:///C|/FEB/0211rule.txt (444 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 445 

 JUDGE SCHEINDLIN: How old were these? Why did 

 you have to go to back-up tapes, and how long--what 

 date range were they? 

 MS. LONGENDYKE: It was back in 1999, and I

 believe most of their data, their active data was 

 lost in September 11. 

 JUDGE ROSENTHAL: It was a criminal case. 

 JUDGE SCHEINDLIN: No, I know that. But it was 

 a September 11th loss. That's why you had to go to

 the back-up tapes? 

 MS. LONGENDYKE: I believe so, yes. 

 JUDGE SCHEINDLIN: And those tapes were still 

 around two years later? 

 MS. LONGENDYKE: Yes, they were.

 JUDGE SCHEINDLIN: They were around. 

 MS. LONGENDYKE: They were tapes from 1999. 

 JUDGE SCHEINDLIN: So they were around at least 

 two years--for two years as of September 11th? 

 MS. LONGENDYKE: Yes.

 JUDGE SCHEINDLIN: So somebody kept them for 

 two years anyway. Do you know why they were kept? 

 MS. LONGENDYKE: No, I don't. 

file:///C|/FEB/0211rule.txt (445 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 446 

 JUDGE SCHEINDLIN: No. But that produced the 

 material? 

 MS. LONGENDYKE: Yes. Yes, and-- 

 MR. LEWIS: Can I give another example of that?

 Is in a recent case example or--I'm sorry, 

 correction--in a hypothetical case example, there 

 was a situation where--and it was a sexual 

 harassment case, and the corporation was attempting 

 to defend itself from e-mail messages that were

 committed to hard copy and presented by the 

 plaintiff. 

 We determined that the e-mail messages that 

 were presented were not even e-mail messages. They 

 were Word documents that were fabricated to look

 like e-mail messages, and then the Word documents 

 were deleted. So they never would have been backed 

 up or archived onto a back-up tape. They would 

 only be found on the computer, the source computer 

 that created those Word documents and then

 immediately deleted those documents after they were 

 printed. 

 But we were able to determine that it was a 

file:///C|/FEB/0211rule.txt (446 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 447 

 Word document, not an e-mail, when it was created, 

 when it was deleted, when it was printed, what 

 printer it was printed to, who was logged in at the 

 time.

 JUDGE SCHEINDLIN: You were able to do that 

 from retrieving deleted areas or fragmented areas 

 of the hard drive? 

 MR. LEWIS: Right. 

 JUDGE SCHEINDLIN: Right. Which we would have

 thought maybe was inaccessible under this divide. 

 I get your point. Okay. 

 MR. LEWIS: Exactly. And it was an inexpensive 

 process to do that. 

 JUDGE SCHEINDLIN: I got it.

 JUDGE ROSENTHAL: I think I'd just like to 

 press a little bit more on what you believe the 

 role is of the kinds of proportionality factors 

 that we've been talking about? 

 MS. LONGENDYKE: Well, certainly, because we

 are called into cases to provide data forensic 

 services, to search for the deleted data, from our 

 perspective, it's every case we work on, we find 

file:///C|/FEB/0211rule.txt (447 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 448 

 something that can be perceived as the smoking gun. 

 Something that was not found in the typical 

 discovery processes. 

 And furthermore, the forensic approach or the

 data forensic approach to recovering information is 

 such that we can target our search very narrowly. 

 So if we're looking at a situation of something 

 that happened, let's say we want to look at 

 someone's activities on a computer or looking for

 documents during a specific timeframe and maybe 

 e-mails between certain people, we don't have to 

 restore 10 years' worth of back-up tapes. It can 

 be very, very targeted. 

 And we have had cases exactly like that, where

 we're given a timeframe, we're given people's 

 names. And we go in. We go to the company. We 

 recover the back-up tapes that are relevant, and 

 we're able to recover the information even on the 

 back-up tapes or from individual computers, the

 latent data as well. 

 JUDGE ROSENTHAL: Could I ask--I'm sorry. Did 

 somebody have a question? 

file:///C|/FEB/0211rule.txt (448 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 449 

 MR. LEWIS: I was just going to add-- 

 JUDGE ROSENTHAL: Go ahead. 

 MR. LEWIS: With today's technology, it is 

 possible to search through a warehouse of

 documents, including the so-called shredded 

 documents, very, very quickly and very cost 

 effectively and with tremendous precision. So the 

 technology exists today to provide that. 

 MS. LONGENDYKE: And it's our perspective that

 we would like to see the rules written in a way 

 that allows for the big picture, that does not 

 distinguish between accessible and inaccessible or 

 active and inactive, because we see every day very 

 relevant information being produced from these

 inactive files and from back-up tapes and such. 

 JUDGE SCHEINDLIN: Of course, while you see it 

 every day, I suspect it's just the tip of the 

 iceberg. People go out and hire you when they need 

 to go way back or behind. In most of the mass of

 litigation, you're not hired. 99.8 percent of the 

 cases, I suppose, never get a forensic expert 

 digging in back-up tapes. You're seeing a tip of 

file:///C|/FEB/0211rule.txt (449 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 450 

 the iceberg world, where every day you are 

 retrieving things from back-ups. 

 But we've asked lawyer after lawyer how often 

 have you had to go to back-ups, and the answer all

 day has been once or nuts. And we aren't hearing a 

 lot of lawyers in the real world going there. 

 MS. LONGENDYKE: And it is a dramatically 

 booming market. We are--I present regularly law 

 firms, and once I explain to them the value of data

 forensics, you hear head smacking. People 

 are--attorneys are starting to really understand 

 how it is not so expensive. It's not so difficult. 

 JUDGE ROSENTHAL: May I ask one other question 

 about that? Just give us a sense of the added

 expense for, if you can, in general terms, tell us 

 how much it would cost someone who wanted to 

 undergo the kind of searching that you're talking 

 about, a day of your time or however long it is. 

 Is there an average that you can give us?

 MS. LONGENDYKE: Certainly. 

 MR. LEWIS: We have about 300 matters that we 

 worked on in 2004 for corporations of all sizes, 

file:///C|/FEB/0211rule.txt (450 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 451 

 including Fortune 500. And our average case 

 billable is $13,800. So it's not a significant 

 amount of money. 

 JUDGE HAGY: Would you consider it a

 significant amount of money in a case involving a 

 $2,500 claim? 

 MR. LEWIS: Yes. 

 JUDGE HAGY: You've been focusing on 

 inaccessible and accessible. The key word is

 "reasonable." We don't have a law against 

 inaccessible. We say reasonably. You've got to 

 prove it's not reasonably accessible. If what 

 you're saying, in fact, is true, you can do it 

 cheaply and easily and it's cost benefit, well,

 then it's reasonably accessible. There is no 

 inaccessible. 

 Doesn't that do it? The word "reasonably" gets 

 you right where you want it. 

 MS. LONGENDYKE: Yes, yes. I would agree with

 you, yes. Reasonably accessible, based on cost, 

 balanced with the relative return. 

 MR. LEWIS: We also find that in the meet and 

file:///C|/FEB/0211rule.txt (451 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 452 

 confer stage, we're able to--or we see the scope of 

 discovery being limited significantly. So it's not 

 10 years of back-up tapes, it's three or four 

 specific personal computers, if there is an

 intelligent discussion on the front end. 

 MR. CICERO: You say you represent both big and 

 small companies. Do you find even in big companies 

 with extensive computerized functions that there is 

 not--there is or is not this kind of awareness that

 you're sharing with us about where information 

 might be, how to get it? Can they do it in-house? 

 Can they restore these? 

 Or do they need people like you who would come 

 in and say, no, no. It could be over here. It

 could be over here, and this is how you get it? 

 MR. LEWIS: One way to answer that is there's 

 been some discussion about this infinite world or 

 this tremendous amount of data called a computer 

 network that could be a global computer network.

 It's ludicrous to look at the network that way. 

 If the problem is identified, the scope of 

 discovery can be limited to sometimes one desktop 

file:///C|/FEB/0211rule.txt (452 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 453 

 computer. So it just requires a conversation on 

 the front end. The data will reside in very 

 deliberate, very specific locations. 

 MR. CICERO: But I assume if they could do that

 inside the organization, they would have less need 

 for people outside to come and help them. So I 

 guess my question is, is it more likely or less 

 likely that even businesses or companies with a 

 fairly sophisticated computer system inside need

 help from people who have the services like you 

 provide to come in and help them say here, here, 

 here, here, or not? 

 MR. LEWIS: Well, we've been involved in 

 situations where major corporations with tremendous

 IT talent was not able to find very specific pieces 

 of information. So it's a cost benefit whether to 

 employ individuals to provide the service 

 internally or, for the one or two times a year that 

 you may need to use it, to reach outside.

 MR. CICERO: And so, then just lastly, would it 

 be fair to say at least with the talent that is in 

 the corporation before they come outside and get 

file:///C|/FEB/0211rule.txt (453 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 454 

 additional help, part of that information is 

 inaccessible in the sense that they do not have 

 either the resources or the talent or the knowledge 

 or the skill or whatever it takes to get it?

 MS. LONGENDYKE: I would agree with that. I 

 think that most IT departments, most IT personnel 

 are not trained in the forensic recovery of data. 

 And they may be able to restore back-up tapes with 

 no problem, but it's that latent data--the data

 that's been deleted and computer hard drives that 

 have been formatted when the CEO leaves the company 

 and wants to cover his tracks. 

 It would require forensic tools and, 

 specifically, software and hardware tools in order

 to recover that data. And that's why I said that 

 the data forensics is not necessarily more 

 expensive. It's just a different process. But IT 

 department can print out files. It can provide it, 

 the active files.

 But, yes, to answer your question, I believe 

 that it does require somebody with special skills 

 such as a data forensics firms. Someone who is 

file:///C|/FEB/0211rule.txt (454 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0211rule.txt

 455 

 trained in that process specifically. 

 JUDGE ROSENTHAL: So it's cheap and easy, but 

 not well known. 

 MS. LONGENDYKE: That is the best way I've

 heard it put. Thank you. 

 MR. LEWIS: Exactly. 

 JUDGE ROSENTHAL: And so, we should end on that 

 before your secret is out of the bag. 

 [Laughter.]

 JUDGE ROSENTHAL: Thank you very much. 

 MS. LONGENDYKE: Thank you, all. 

 MR. LEWIS: Thank you. 

 JUDGE ROSENTHAL: We will resume at 8:30 

 tomorrow morning.

 [Whereupon, at 5:05 p.m., the hearing was 

 recessed, to reconvene at 8:30 a.m., February 12, 

 2005.] 

file:///C|/FEB/0211rule.txt (455 of 455) [3/2/05 2:36:51 PM]
file:///C|/FEB/0212rule.txt

 1 

 COMMITTEE ON RULES OF PRACTICE AND PROCEDURE 

 OF THE JUDICIAL CONFERENCE OF THE UNITED STATES

 PUBLIC HEARING ON PROPOSED AMENDMENTS TO THE 

 FEDERAL RULES OF CIVIL PROCEDURE

 Saturday, February 12, 2005 

 8:30 a.m.

 Judicial Conference Center 

 One Columbus Circle, N.E. 

 Washington, D.C. 20544 

file:///C|/FEB/0212rule.txt (1 of 254) [3/2/05 3:01:28 PM]
file:///C|/FEB/0212rule.txt

 2 

 COMMITTEE MEMBERS: 

 THE HONORABLE LEE H. ROSENTHAL, CHAIR 

 DAVID M. BERNICK, ESQ. 

 FRANK CICERO, JR., ESQ. 

 PROFESSOR EDWARD H. COOPER 

 DANIEL C. GIRARD, ESQ. 

 THE HONORABLE C. CHRISTOPHER HAGY 

 THE HONORABLE NATHAN L. HECHT 

 TED HIRT, ESQ. 

 JAMES N. ISHIDA 

 THE HONORABLE PETER D. KEISLER 

 JOHN G. KESTER 

 THE HONORABLE MARK R. KRAVITZ 

 THE HONORABLE DAVID F. LEVI 

 PROFESSOR RICHARD L. MARCUS 

 PETER G. McCABE, SECRETARY, COMMITTEE ON RULES 

 OF PRACTICE AND PROCEDURE 

 JOHN K. RABIEJ, CHIEF, RULES COMMITTEE 

 SUPPORT OFFICE 

 THE HONORABLE SHIRA ANN SCHEINDLIN 

 THE HONORABLE JERRY E. SMITH 

 CHILTON DAVIS VARNER, ESQ. 

 THE HONORABLE JAMES D. WALKER, JR. 

 THOMAS E. WILLGING 

 KENNETH J. WITHERS, FEDERAL JUDICIAL CENTER 

file:///C|/FEB/0212rule.txt (2 of 254) [3/2/05 3:01:28 PM]
file:///C|/FEB/0212rule.txt

 3 

 SPEAKERS: 

 THEODORE B. VAN ITALLIE, JR. 

 AL CORTESE 

 ARIANA TADLER 

 TED KURT 

 CRAIG D. BALL 

 CHERI A. GROSVENOR 

 MICHAEL RYAN 

 KEITH ALTMAN 

 RUDY KLEYSTEUBER 

 MIKE HEIDLER 

 STEVEN SHEPARD 

 JOSEPH MASTERS 

 DAVID TANNENBAUM 

file:///C|/FEB/0212rule.txt (3 of 254) [3/2/05 3:01:28 PM]
file:///C|/FEB/0212rule.txt

 4 

 P R O C E E D I N G S 

 JUDGE ROSENTHAL: Good morning. Just so our 

 record is clear, to express the dedication of all 

 those who are with us, it is 8:30 on Saturday

 morning. It is a beautiful day here in this 

 conference room, and we are very grateful that you 

 are all here with us to continue to explore 

 electronic discovery and the rules under which it 

 should be conducted.

 We will begin this morning with Mr. Van 

 Itallie. And I apologize if your name does not 

 resemble what I just said. 

 MR. VAN ITALLIE: Very close, Judge. Van 

 Itallie, just like the country.

 JUDGE ROSENTHAL: That would have been too 

 easy. 

 MR. VAN ITALLIE: Thank you very much, Judge. 

 My name is Theodore Van Itallie. I am the head of 

 litigation for Johnson & Johnson. It is

 unquestionably a privilege to have the chance to 

 talk to the committee and submit our comments. 

 From a perspective standpoint, I have the good 

file:///C|/FEB/0212rule.txt (4 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 5 

 fortune to work for a corporation that has an 

 extraordinarily good reputation in this country. 

 And one of my principal responsibilities as head of 

 litigation is to seek to protect and burnish that

 reputation in courts around the United States, and 

 we are long-term participants in the judicial 

 process. We've been at it for over 100 years, and 

 we expect to be at it for a continued long period 

 of time.

 We are in courts on a regular basis, and our 

 reputation precedes us and follows us. And our 

 standing in courts before the judiciary is critical 

 to us. We abhor discovery battles. We are 

 allergic to the prospect of a sanctions motion, and

 we work really extraordinarily hard to try to 

 avoid, you know, any basis on which any adversary 

 could make those kind of accusations against us. 

 But we are also an extraordinarily complex 

 company with almost 200 operating companies

 worldwide. We have a blindingly complex 

 information architecture. And you know, we have 

 the essential business needs to recycle back-up 

file:///C|/FEB/0212rule.txt (5 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 6 

 tapes in appropriate circumstances, to run programs 

 like Mail Manager that do purge outdated e-mail. 

 And taking that kind of set of circumstances, 

 combined with the developing patchwork of local

 federal rules and uncertainty about what the 

 standards are, meeting this fundamental obligation 

 and protecting our reputation is, frankly, 

 crushingly--increasingly crushingly difficult. 

 So the development of these new rules and the

 prospect for uniform development of a body of law 

 for people in our position I think is going to be 

 extraordinarily valuable. And I think that the 

 overall effort is really an extraordinary 

 contribution to development of standards in the

 area. 

 A couple of specific points that I would make 

 with respect to the individual rules. Starting 

 first with the two-tier in Rule 26(b)(2), it does 

 seem to me that there is no question that that will

 not simply serve the needs of data producers. That 

 there's a very strong prospect that that will 

 accelerate the discovery and therefore the progress 

file:///C|/FEB/0212rule.txt (6 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 7 

 towards the merits of the accessible data. 

 I think the presumption that accessible data is 

 not likely to be the basis on which a good 

 objection for burdens or anything else could be

 sustained is going to streamline the early 

 disclosure-- 

 JUDGE SCHEINDLIN: I'm sorry. I didn't 

 understand. How's it going to make it faster? 

 MR. VAN ITALLIE: I beg your pardon?

 JUDGE SCHEINDLIN: We were told yesterday it 

 was going to make it slower because it was going to 

 inevitably result in discovery and a motion to 

 compel the second tier. How is it going to make it 

 faster? We were told it would probably slow it

 down by a year. 

 MR. VAN ITALLIE: Well, I think with respect to 

 the first tier, I think it will clearly expedite 

 the process, and I think it will probably--I think 

 there's a strong likelihood that that will satisfy

 the litigants in the majority of circumstances. 

 JUDGE SCHEINDLIN: I see. You don't think 

 people will still raise the proportionality 

file:///C|/FEB/0212rule.txt (7 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 8 

 factors, even with respect to the first tier, and 

 say just because it's accessible doesn't mean we 

 should give it to you? It's going to be very 

 burdensome.

 MR. VAN ITALLIE: I think the bias is going to 

 be against that. I think the rules express the 

 bias that that's going to be produced more readily, 

 and I suspect that that's the way it will develop. 

 I also think there is an advantage to

 separating from prior case law on burden and 

 expense by focusing the development of standards on 

 this accessibility/inaccessibility issue. And I 

 think that, you know, I think the game has changed, 

 that certainly the factual circumstances have

 changed. Just the sheer amount-- 

 JUDGE SCHEINDLIN: Sorry to interrupt again, 

 but you may not have been with us all day 

 yesterday. Everybody yesterday seemed to agree 

 that what makes it inaccessible was burden and

 expense, the very thing you say we're not going to 

 be focusing on. When we ask witnesses, well, what 

 makes it inaccessible, most admitted that it was 

file:///C|/FEB/0212rule.txt (8 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 9 

 either burden or expense or both. 

 MR. VAN ITALLIE: Yes, but I think that there 

 is an element of that. My point is that I think 

 the standards that should be applied in the area

 are likely to--I think it's important that they 

 develop with respect to the new circumstances of 

 electronic discovery. I don't think you just 

 transfer the old case law over. 

 And I also think the prospects of uniform case

 law developing around this issue is improved by 

 having this new construct, have people focusing on 

 this new construct. 

 JUDGE SCHEINDLIN: Well, but then what makes it 

 inaccessible if it's not burden and expense? What

 else? 

 MR. VAN ITALLIE: It's at least burden--it is 

 at least burden and expense. 

 JUDGE SCHEINDLIN: Is it something else? 

 MR. VAN ITALLIE: Well, I think that remains to

 be seen. But I think the analysis, given the 

 proliferation of, you know, multiple copies of 

 materials, given the--from my standpoint, the yield 

file:///C|/FEB/0212rule.txt (9 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 10 

 from the review of inaccessible material, depending 

 on the circumstances, being low, I think the 

 analysis overall just could well be different. 

 JUDGE SCHEINDLIN: What's the definition then?

 What's inaccessible? 

 MR. VAN ITALLIE: Well, again, that's clearly 

 going to be developed in the case law. 

 JUDGE SCHEINDLIN: But to you? 

 MR. VAN ITALLIE: I think it is at least

 circumstances where, as has been pointed out-- 

 MR. CICERO: Can I ask a specific question on 

 that because I wanted to follow up on something you 

 said a minute ago? 

 JUDGE ROSENTHAL: I think he was in the middle

 of his answer. Let him give this answer, and then 

 we can follow up. Sorry, Frank. Go ahead. 

 MR. VAN ITALLIE: I agree with the comments 

 that have been made about inaccessibility. I mean, 

 clearly, if you've got computer systems that no

 longer have operating systems that allow you to 

 retrieve them, that's going to be inaccessible. 

 When the analysis will include the expense to 

file:///C|/FEB/0212rule.txt (10 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 11 

 retrieve the data, the potential yield from the 

 review, it will include the cost of review and 

 privilege. You know, this is all of the things 

 we've spoken about. And they will be balanced

 against, you know, the likelihood you're actually 

 going to find something that's unique within those 

 materials. 

 JUDGE ROSENTHAL: Go ahead. 

 MR. CICERO: I apologize for interrupting--

 JUDGE ROSENTHAL: No, go ahead. 

 MR. CICERO: --you, Mr. Van Itallie, and also 

 my colleagues. But on the point that you were 

 discussing with Judge Scheindlin, you said 

 something that I wanted to clarify in my own mind a

 few moments ago about I thought you said you 

 routinely accessed back-up tapes for certain 

 purposes. Did I misunderstand what you said? You 

 used the term "back-up tapes," I thought. 

 MR. VAN ITALLIE: Well, no. I mean, I was

 talking about recycling back-up tapes. I was not 

 talking about accessing back-up tapes for-- 

 JUDGE ROSENTHAL: May I ask you a question 

file:///C|/FEB/0212rule.txt (11 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 12 

 about back-up tapes in general? How often in your 

 experience in handling e-discovery in the cases 

 that your company is involved with has it been 

 necessary for you to recover data or restore data

 on back-up tapes or legacy sources because you were 

 unable to satisfy the discovery needs of the case 

 through information that was readily accessible? 

 MR. VAN ITALLIE: I, frankly, can't think of an 

 instance where that has occurred.

 JUDGE ROSENTHAL: Have there been litigation 

 battles over efforts to make you do that? 

 MR. VAN ITALLIE: Not that I can think of 

 sitting here, frankly. 

 JUDGE ROSENTHAL: Is that because you've been

 able to negotiate with opposing counsel to avoid 

 having to do that, at least before there was an 

 ability to analyze the readily accessible 

 information and see if that was enough? 

 MR. VAN ITALLIE: Yes. And just because of the

 wealth of information that's, in effect, readily 

 available. 

 JUDGE ROSENTHAL: May I ask one other question? 

file:///C|/FEB/0212rule.txt (12 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 13 

 When you think of information that you don't have 

 to apply forensic tools to to restore, computer 

 forensic tools--or to recover, whatever the right 

 term is--but that is dispersed across a large

 number of information gatherers and producers, all 

 of the various employees across the world who have 

 their own PCs, their own data forces? 

 MR. VAN ITALLIE: Right. 

 JUDGE ROSENTHAL: Is that kind of dispersal and

 distribution problem part of accessibility, or is 

 that simply part of the general volume and cost of 

 electronic discovery? 

 MR. VAN ITALLIE: Well, I mean, I think-- 

 JUDGE ROSENTHAL: Or both?

 MR. VAN ITALLIE: Yes, I think in circumstances 

 where those individuals are on our network or have 

 a network connection available to them, there are 

 means available which would allow each of them 

 individually to, in effect, collect and transmit

 their data just to a central repository. And I 

 think in that circumstance, I would consider that 

 to be accessible. 

file:///C|/FEB/0212rule.txt (13 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 14 

 JUDGE ROSENTHAL: What about-- 

 MR. VAN ITALLIE: There may be other 

 circumstances where you actually would have to go 

 sort of door to door--

 JUDGE ROSENTHAL: Exactly. 

 MR. VAN ITALLIE: --that may raise another set 

 of issues. 

 JUDGE ROSENTHAL: How do you handle those kinds 

 of situations now?

 MR. VAN ITALLIE: Well, I mean, we do have the 

 capability to collect from individual user's PCs, 

 whether they are, you know, at individual corporate 

 locations or in the field. And that is something 

 which, you know, frankly, that the issue of the

 form of production that Rule 34 implicates because 

 it's quite difficult to undertake a collection of 

 that character and still consider that to be a 

 production in the manner in which the documents are 

 ordinarily maintained.

 So, I mean, that does get to another point that 

 I think has been made and remade, but I do think 

 there's an issue with the Rule 34 default for 

file:///C|/FEB/0212rule.txt (14 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 15 

 production and the form in which documents are 

 ordinarily maintained. 

 PROFESSOR MARCUS: Sir, and before you go on, 

 you said you have the ability to collect

 information from these dispersed PCs and the like? 

 MR. VAN ITALLIE: Right. 

 PROFESSOR MARCUS: When you have a litigation 

 hold, do you expect that the users of those 

 dispersed units will honor and implement that hold?

 Do you know what I mean by a litigation hold? 

 MR. VAN ITALLIE: Sure. 

 PROFESSOR MARCUS: Do you? 

 MR. VAN ITALLIE: Well, we rely on that to be 

 the case.

 PROFESSOR MARCUS: Okay. 

 MR. VAN ITALLIE: Yes. 

 JUDGE ROSENTHAL: I think Justice Hecht had a 

 question. 

 JUDGE HECHT: Do you ever have occasion to

 employ outside forensic experts to assist you in 

 responding to discovery or get discovery from 

 someone else? 

file:///C|/FEB/0212rule.txt (15 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 16 

 MR. VAN ITALLIE: Well, yes. I mean, you know, 

 in terms of forensic experts, in terms of actually 

 restoring or mirroring or trying to reconstruct or 

 secure deleted data, that's not something which we

 have been called upon to do. But we are heavily 

 reliant on experts in order to basically assist in 

 the process of collection and review of what is 

 frequently massive amounts of electronic data. 

 But with respect to particular forensic

 reconstruction, data location issues, I mean, that 

 is not something which we have historically been 

 called upon to undertake. 

 JUDGE ROSENTHAL: Frank, please? 

 MR. CICERO: Mr. Van Itallie, I just reread

 your comments about identifying inaccessible 

 information here, and hearing you here today raises 

 a question that some of us have been discussing 

 that has been troubling me. And it is whether even 

 saying in the rules as we propose them that there

 is this two-classification arrangement for data 

 will stimulate activity to get the inaccessible 

 data. 

file:///C|/FEB/0212rule.txt (16 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 17 

 You suggest that you've managed quite well to 

 provide so much information to people that they're 

 comfortable with that, and they don't see the need 

 to try to get at the kinds of things that you say

 are very difficult to get at. And I'm wondering, 

 and I'd like your reaction, to whether the very 

 fact that you lay out two categories of information 

 will stimulate litigation or requests of the 

 so-called inaccessible information, either because

 of the suspicion that the custodian of the 

 information is moving the line so that stuff that 

 should be accessible is not accessible or for some 

 other reason? 

 You seem to manage very well in keeping-- from

 what you've said, in keeping the inaccessible 

 information inaccessible. 

 MR. VAN ITALLIE: Well, yes, I mean, I think 

 that there is protection from us, but for us, 

 though, clearly in the designation component, and I

 have a slightly different view, I guess, of that 

 designation component. And one of my areas of 

 concern is, you know, the sort of boundaries of 

file:///C|/FEB/0212rule.txt (17 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 18 

 what that entails. 

 But as I look at the rule, the first predicate 

 is discoverable information, and it's, as I read 

 the rule, I would be identifying inaccessible

 information that is already within the discoverable 

 data penumbra. Now I guess there are circumstances 

 where you genuinely can't--there's just no prospect 

 of figuring out and no one has any memory as to 

 what might be within the particular repository, and

 there's an advantage in that circumstance 

 potentially in identifying that as--even though you 

 may not have a reason to think that it is 

 necessarily discoverable, but it may be prudent to 

 identify it in that category.

 But I do have concern about some of the 

 discussion that suggests that there may be 

 obligations beyond the kind of borders of 

 discoverability for identification. But I mean, in 

 terms of your specific question, is this construct

 going to encourage efforts to obtain inaccessible 

 data and motion practice and fight about that? 

 Again, I think that our experience suggests that 

file:///C|/FEB/0212rule.txt (18 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 19 

 the accessible data will be--will fulfill most 

 discovery needs, and on that basis, I don't think 

 there should be excessive concern that people will 

 be drawn to fight about the inaccessible category.

 JUDGE ROSENTHAL: Mr. Girard? 

 MR. GIRARD: Are you concerned at all with the 

 way it's set up in terms of the proposal where if 

 someone is, let's say, baited by the fact that 

 you've identified some category of material as

 being inaccessible, and then they file a motion, 

 and now you have to make your showing of 

 inaccessibility. Could you see the potential that 

 that may put you at expense that it sounds like 

 you're currently avoiding?

 MR. VAN ITALLIE: Well, I mean, I guess it's 

 going to be hard to see exactly how that's going to 

 unfold. But I think, again, the advantages for us, 

 when we do identify a repository that contains 

 discoverable information but has been nonetheless

 clearly inaccessible, to have this--to have that in 

 the second layer and not to have--well, simply to 

 put that, in effect, in the background and focus, 

file:///C|/FEB/0212rule.txt (19 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 20 

 in the first instance, on the accessible material, 

 I think overall that's going to be beneficial to us 

 in terms of streamlining the process. 

 I do continue to think that the likelihood

 people are going to be satisfied by the rather 

 substantial amount of information that's generally 

 accessible is going to, you know, maintain the 

 focus of that area, and I don't think--I don't 

 foresee that this is going to beat people into

 fighting about genuinely inaccessible material. 

 JUDGE SCHEINDLIN: Will you preserve the 

 inaccessible? Will you preserve it until-- 

 MR. VAN ITALLIE: Well, I've heard that 

 question come up. And if it's material that you

 consider in the first instance to be discoverable, 

 I think you're taking your life in your hands not 

 preserving it. 

 JUDGE SCHEINDLIN: Even if it's inaccessible, 

 you'll hold onto it?

 MR. VAN ITALLIE: If it's discoverable 

 information. That would certainly be my 

 understanding. 

file:///C|/FEB/0212rule.txt (20 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 21 

 JUDGE SCHEINDLIN: Right. Of course, one of 

 the concerns there is people say they don't know if 

 it's discoverable because they're not sure what's 

 on it. They've got old tapes lying around and--

 MR. VAN ITALLIE: Yes, and then you're going to 

 get into some--there will be risk balancing in that 

 area, and I think it depends upon the basis for 

 their comfort that it really is not discoverable. 

 It's just not likely to be discoverable at the end

 of the day. 

 If I can just make a couple of other quick 

 points. 

 JUDGE ROSENTHAL: May I ask one other--Rick, 

 you had a question first, please?

 PROFESSOR MARCUS: Can I just follow up? 

 JUDGE ROSENTHAL: Go ahead. 

 PROFESSOR MARCUS: I think you said you had 

 identified a repository. Is that what you--could 

 you tell me a little bit more about how you regard

 the identification requirement of 26(b)(2) to work, 

 what you would be likely to be saying, when you 

 examined what you had, to convey what you were not 

file:///C|/FEB/0212rule.txt (21 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 22 

 examining? 

 MR. VAN ITALLIE: Well, I would just--I think 

 that was simply a single example. But if you did 

 have an antiquated repository of back-up tapes

 that, you know, were on index, and nobody 

 could--and there was no one around who could 

 remember what they were, I think that is something 

 that would be appropriately identified under the 

 rule.

 PROFESSOR MARCUS: It wold not cover the gambit 

 of things that you might consider in that 

 inaccessible category? 

 MR. VAN ITALLIE: I think it does. 

 PROFESSOR MARCUS: Okay.

 MR. VAN ITALLIE: Yes, that's inaccessible 

 data, which is therefore identified. 

 JUDGE ROSENTHAL: May I ask you to comment on 

 some of the concerns we've heard expressed that the 

 two-tier structure in combination with Rule 37(f)

 might lead companies in particular to feel that 

 they can move information to inaccessible 

 repositories and then destroy it with greater 

file:///C|/FEB/0212rule.txt (22 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 23 

 latitude than they would now enjoy and that that 

 would have the effect of enabling companies to 

 remove information in order to shield it from 

 discovery. That's the first question.

 And a related question is the concern we've 

 heard expressed that companies will be--will have a 

 disincentive to update technology that would make 

 more information accessible and will instead keep 

 older technology because it would have the benefit

 of reducing accessibility or delaying 

 accessibility. 

 MR. VAN ITALLIE: Right. Yes, I mean, I've 

 heard those comments. I don't think there's any 

 evidence of it. I think it is extremely unlikely

 that there will be those kinds of motivations in 

 dealing with what is a fundamental business tool, 

 the information architecture of the corporation. I 

 mean, they are--that is the kind of the lifeblood 

 of the way business is transacted.

 And you know, I do not see it being perverted 

 to a purpose in that fashion. I mean, I think 

 that's--maybe there's a leap of faith there, but I 

file:///C|/FEB/0212rule.txt (23 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 24 

 don't think there's any evidence of it. And I 

 think the central business importance of the data 

 system, that's the ultimate goal that's going to be 

 served, not some nefarious motive of that sort.

 Although I think that does help me transition 

 to a related point that I am concerned about, and 

 that's with respect to the Rule 37 safe harbor 

 because I think it is those concerns, Judge 

 Rosenthal, some of which were expressed around the

 table yesterday by witnesses that, you know, there 

 is this perception somehow that such manipulations 

 might occur. 

 And I do foresee the prospect of efforts to 

 obtain, you know, to put blanket protective orders

 as being an issue going forward just because there 

 is this sinister concern about somehow what 

 corporations might do. And I think that, clearly, 

 a broad protective order can be a crippling 

 consequence for any enterprise, but an enterprise

 like us, which is complex and where our hold orders 

 and discovery obligations are not limited to, you 

 know, a small group of individuals. 

file:///C|/FEB/0212rule.txt (24 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 25 

 I mean, generally, we are fighting about 

 products. The applicable evidence is spread 

 through thousands of individuals within an 

 organization. So we would just genuinely be

 crippled by a broad protective order. And I do 

 think that it would be tremendously valuable, and I 

 think there are places that the committee has made 

 reference to it. But to stick something into the 

 notes on Rule 37 just, you know, conveying the

 concern about broad protective, broad, in effect, 

 knee jerk or thoughtless protective orders, I 

 think, that would be very important. 

 I think the opportunity for early discussion of 

 these issues in the Rule 16 conference, that's the

 place where these matters ought to be worked out in 

 the first instance. And it's really protective 

 orders that come out of what's agreed or come out 

 of that process which I think are the appropriate 

 ones to govern the safe harbor, Rule 37.

 Because there's a--one of my concerns is under 

 a traditional protective order, it may still be 

 appropriate to, if you have a completely reliable 

file:///C|/FEB/0212rule.txt (25 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 26 

 hold on a system, and you could be--you've audited 

 your employees, and you're assuring yourself that 

 they are not taking things off active systems, it 

 may be appropriate to continue to recycle your

 back-up tapes in the background. 

 But I think the way Rule 37 has set the 

 construct up, once there is a protective order, 

 there's a presumption even that has to stop. So I 

 think there is--you know, to my mind, this is a

 real two-edged sword. I do foresee, frankly, you 

 know, a lot of early efforts to get these broad 

 protective orders in. 

 JUDGE SCHEINDLIN: A lot of witnesses said that 

 they would do that because--what you call their

 sinister concern that you would be destroying 

 things, I don't know that it was a sinister 

 concern. But what they thought the rule does is 

 give the permission to now destroy without 

 consequence.

 So to protect themselves and be sure that the 

 information is there, should it be discoverable, 

 they said I now have no choice but to get a 

file:///C|/FEB/0212rule.txt (26 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 27 

 protective order because the other side has 

 permission through the rules, essentially, to 

 delete--to delete or destroy. That's the argument. 

 Do you see that from their point of view, the

 other side's point of view, that the rule gives a 

 blessing to going ahead and destroying? And so, to 

 stop that, they have no choice but to get a 

 protective order. 

 MR. VAN ITALLIE: You mean once you have a

 narrowly tailored protective order that makes it 

 clear what the boundaries are? Is that what you're 

 saying that that-- 

 JUDGE SCHEINDLIN: I'm saying because the rule 

 would appear to permit a company to continue its

 ordinary business practice of destroying 

 information, and the other side says, well, I don't 

 want them to continue right now until I have a 

 chance to see what's there on the active data to 

 know if I'm going to have to go behind it.

 MR. VAN ITALLIE: Right. 

 JUDGE SCHEINDLIN: So the only way to assure 

 that it will be there when I need it is to get a 

file:///C|/FEB/0212rule.txt (27 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 28 

 protective order because of the rule. So that's 

 the logic. It's not a matter of sinister concern. 

 It's a matter of the permission is granted to 

 continue to destroy.

 MR. VAN ITALLIE: Well, yes, but I think that 

 makes the point. I think there will be efforts to 

 get those protective orders, and I think they are 

 going to be highly problematic. 

 JUDGE KEISLER: Mr. Van Itallie, whenever

 you've gotten these broad preservation orders in 

 the past, and I assume the feeling is that they're 

 kind of flexibly given by some judges and they have 

 very broad implications for the operations of these 

 businesses, have you ever gone back to the judge

 with--early on with a motion to reconsider or 

 modify in which you've laid out, with some sort of 

 declaration from an IT person, you know, "Here is 

 what the consequences are for our business. Here 

 is why I see it necessary," and try to get it

 changed that way? 

 MR. VAN ITALLIE: No question. Yes, no 

 question. And we've had good success with that 

file:///C|/FEB/0212rule.txt (28 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 29 

 because I think there is a growing recognition of 

 the consequences for these orders for large 

 enterprises, and I think that's as long as you can 

 satisfy the court that you've got a reasonable

 system, I think there is a generally good prospect. 

 But I mean, whether that's going to be uniform 

 and whether you'll be able to be persuasive to all 

 courts, I think this is--it is still relatively 

 unusual, I think, to--at least in our practice--to

 have these blanket orders. But I do foresee that, 

 frankly, there's going to be more requests for it 

 in the face of this rule. So I think we're 

 anticipating--I'm anticipating a lot more, you 

 know, that this will be more of an issue once these

 rules take hold. 

 Now we are still--we think we're in a better 

 place than we would be otherwise. But I think 

 there is, again, our interest is in dealing with 

 tailored appropriate, you know, narrowly drawn

 orders. And to the degree that the rules convey 

 and the notes emphasize the significance of that, 

 that's going to be tremendously valuable from our 

file:///C|/FEB/0212rule.txt (29 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 30 

 standpoint. 

 JUDGE ROSENTHAL: Yes, sir? Last question, I 

 think. 

 PROFESSOR MARCUS: Picking up on that, some

 witnesses have said that the textual requirement in 

 Rule 26(f) that there be discussion of preservation 

 at the 26(f) meeting would make that too prominent. 

 Am I right in interpreting what you're saying to 

 mean that you think it's a good idea to insist on

 that sort of discussion up front? 

 MR. VAN ITALLIE: Well, yes. I mean, I think, 

 first of all, our headquarters are in the District 

 of New Jersey. So we are currently subject to a 

 local rule, which mandates those sorts of

 discussions. Yes, I mean, I think our major 

 problem is a fundamental misunderstanding at the 

 outset of a case, which sets up the prospect for a 

 kind of "gotcha" sort of motion. 

 I think from our standpoint, we're better off

 having things clarified. And I fundamentally feel 

 that if there is going to be an effort made to stop 

 the ordinary management of data systems, the 

file:///C|/FEB/0212rule.txt (30 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 31 

 recycling of back-up tapes, that that--that really 

 the party that is proposing that has an affirmative 

 obligation to bring that to the fore at the 

 earliest opportunity because I think that is--there

 should--encouraging the presentation of that issue 

 and a more rapid resolution of it is significant. 

 Because, you know, I think we are--what we want 

 to be able to do is to convey, first of all, how 

 crippling it can be, how vastly disproportionate

 the expense from that kind of a proposal. And 

 particularly, where we have--where there really is 

 not a demonstrated need for it and where there are 

 good methodologies in place to, you know, basically 

 indicate that it's really not warranted. So, yes,

 I mean, we are in favor of that kind of an issue 

 coming up at the earliest opportunity. 

 JUDGE ROSENTHAL: Any other questions? 

 MR. VAN ITALLIE: Can I make one other point on 

 an issue that I have not heard come up, and that is

 instant messenger. You know, there is an entire 

 population of workers coming into the workforce 

 right now for whom instant messaging is, you know, 

file:///C|/FEB/0212rule.txt (31 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 32 

 the most fundamental way for them to communicate. 

 It is, at this point, very easy for anyone to 

 download an instant message to their laptop, even 

 when corporate systems like ours do everything we

 can to prevent it happening. I mean, you can just 

 do it, even if you deny administrator rights and 

 the rights to load other software onto your 

 computer. 

 So I think many companies are looking at

 basically establishing a corporate standard in the 

 area because they don't have any choice. Their 

 employees are already communicating in that 

 fashion. And the default instant messenger setup 

 and the way I think it will be set up by most

 businesses is that, you know, once you have had 

 this sort of discussion with a group of people and 

 you close out that session, it is not preserved. 

 It's gone. 

 It resides temporarily on your random access

 memory--if that's still the pertinent term--and 

 then when you close it out, it's gone. And there 

 is no business need to, when the computer is turned 

file:///C|/FEB/0212rule.txt (32 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 33 

 off or when you close out the system to preserve 

 that. And I take from the language in Rule 34 of 

 electronically preserved information that that 

 would exclude stuff that transitorily resides in

 RAM. 

 But I do see the prospect of arguments being 

 made that if we're going to use this means of 

 communication, we are somehow obligated to 

 establish it or configure it in a way that

 preserves it, even when there is no business need. 

 So I don't think this is a hypothetical issue. I 

 think it's going to increasingly be on us. 

 But just as we don't record--we're not 

 obligated to record our--set up our phone systems

 to record conversations, I would--I think it would 

 be where there's not a business need, I don't think 

 there should be a litigation or discovery need to-- 

 JUDGE SCHEINDLIN: Well, what's your 

 suggestion? I mean, we actually mention instant

 messaging in the notes or in the rule? What is 

 your suggestion to it? 

 MR. VAN ITALLIE: Well, I think--I think, I 

file:///C|/FEB/0212rule.txt (33 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 34 

 mean, yes. To the degree that a comment could be 

 made about electronically stored does not encompass 

 transitory RAM-related information. I mean, 

 obviously, that would spike the issue, and I think

 it ought to be spiked. 

 MR. KESTER: But you're saying it isn't 

 electronically stored? 

 MR. VAN ITALLIE: I'm saying it isn't. That 

 would be my point of view. Yes, that would be my

 point. 

 JUDGE ROSENTHAL: It's just not stored. Is 

 that your point? 

 MR. VAN ITALLIE: It's not stored. I regard it 

 as not being stored.

 JUDGE HAGY: Is it stored until the computer is 

 turned off? Is that why you're concerned? 

 MR. VAN ITALLIE: Well, yes, that's right. 

 That it resides in the memory of your computer when 

 it is turned off, and if it doesn't do that, it's

 not-- 

 JUDGE ROSENTHAL: Is it stored after you close 

 out that IM session? 

file:///C|/FEB/0212rule.txt (34 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 35 

 MR. VAN ITALLIE: No. 

 JUDGE ROSENTHAL: It's just like when you hang 

 up the phone, there is no vestige of what you said 

 in that conversation that was just concluded?

 MR. VAN ITALLIE: That's correct. 

 JUDGE SCHEINDLIN: But that's a choice. You 

 could configure the system either way. It could be 

 recorded. 

 MR. VAN ITALLIE: At substantial expense.

 JUDGE SCHEINDLIN: Right. I understand. I 

 didn't say you should, but you could. It's 

 possible to do it one way or the other. 

 JUDGE ROSENTHAL: You could do it on the 

 telephone, too. Just like when I call the credit

 card company and they say, "By the way, your phone 

 call is recorded." You, too, could have quality 

 control. 

 [Laughter.] 

 MR. KESTER: But the analogy here is a bunch of

 people sitting around the table, having a 

 conversation. No one is making a transcript of 

 that. If they made a transcript, then you would 

file:///C|/FEB/0212rule.txt (35 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 36 

 have a-- 

 MR. VAN ITALLIE: I agree with that. I think 

 that is the analogy. It's a hallway conversation 

 on the computer, basically.

 MR. KESTER: Yes, yes. 

 JUDGE ROSENTHAL: Anything further? 

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 I believe Mr. Claiborne is not going to be with

 us this morning. So Mr. Cortese? Al? 

 MR. CORTESE: Good morning, Your Honor. 

 JUDGE ROSENTHAL: Good morning. 

 MR. CORTESE: Members of the committee. It is 

 a real pleasure to appear before you, and I do want

 to say that I'm here today on behalf of the United 

 States Chamber of Commerce Institute of Legal 

 Reform and the Lawyers for Civil Justice. 

 The Institute for Legal Reform is an affiliate 

 of the Chamber of Commerce of the United States,

 and somebody told me they have three million 

 members. I can't believe that. But-- 

 JUDGE ROSENTHAL: Is that too low or too high? 

file:///C|/FEB/0212rule.txt (36 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 37 

 MR. CORTESE: That's what they told me. I 

 think it's awful high. But that's what I'm told. 

 And the Lawyers for Civil Justice is a 

 coalition of defense and corporate counsel. So we

 come at this with a particular perspective, but 

 with an effort to really assist the committee in 

 doing what I think they have already done very 

 effectively, which is to move the rules in the 

 direction that they have been moving, I think, for

 at least 20 years. Which is toward trying to fit 

 the discovery into the needs of the case so that 

 discovery is more effective, less costly, and less 

 burdensome. 

 And that incorporates, in effect, the

 proportionality requirement from the 1983 

 amendments, which was, in effect, moved further by 

 the '93 amendments, which require disclosure, and 

 the 2000 amendments, which essentially set up the 

 two-tier, the purpose of which is to move the good

 stuff further forward and to worry about the really 

 difficult information, at least, later. 

 And I would submit to you that we are now at 

file:///C|/FEB/0212rule.txt (37 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 38 

 the point, and you'll all recall that in connection 

 with the 2000 amendments--I think Judge Niemeyer 

 was chair at the time, and he indicated that there 

 was going to be a need then--I think that was '99

 or '98--to deal with the problem of electronic 

 discovery, and here we are. 

 So I think that this is not--your proposals are 

 certainly not earth-shattering, ground-breaking, or 

 very new. In fact, they're fairly similar to

 proposals that were made in 1978 that were not 

 promulgated by the committee-- 

 JUDGE SCHEINDLIN: Al, one early interruption. 

 Do you think the two-tier of the 2000 amendments 

 has cut back on discovery at all?

 MR. CORTESE: I don't know the answer to that. 

 JUDGE SCHEINDLIN: Okay. Fair enough. 

 MR. CORTESE: And that is really the problem, 

 Judge. That is really the problem because what the 

 rules can do is to give the signal. And I know,

 and I read in I think Magistrate Judge Hedge's 

 statement, and it was implicated in the 

 magistrate's position that, well, those rules don't 

file:///C|/FEB/0212rule.txt (38 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 39 

 work. So why do we need more rules? Well-- 

 JUDGE SCHEINDLIN: I don't know if it's don't 

 work or didn't make a whole lot of difference, 

 despite the prediction--

 MR. CORTESE: Yes, well, I mean, they didn't 

 entirely serve their purpose. But the point is, I 

 mean, you have to have rules and you have to be 

 sending signals to the parties. And the purpose of 

 that signal was to do the 180-degree turn from very

 liberal discovery covering everything that is 

 represented to proportionality and balance and 

 focus that's represented in the 1983 amendments, 

 and it's been carried forward, as I indicated. 

 So I think that the two-tier approach is

 extremely important and could be beneficial if it's 

 properly enforced. Obviously, one of the ways to 

 enforce that, in effect, is essentially what you've 

 heard before, the presumption of cost sharing. And 

 I know that had been considered and rejected,

 frankly, in connection with the 2000 amendments. 

 But that was then. This is now. The problem has 

 grown by magnitudes. 

file:///C|/FEB/0212rule.txt (39 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 40 

 And because we've now got the experience in 

 Texas and California and New York, where cost 

 sharing, either on a presumptive or a mandatory 

 basis or a factor basis, has tended to decrease the

 disputes, and that was the testimony in Dallas, 

 certainly, with respect to the Texas rule. And it 

 even came from the president of the Texas Trial 

 Lawyers Association, who said he was concerned 

 about this rule but wasn't concerned--didn't have

 any problems with the Texas rule. 

 And I think Judge Rosenthal pointed out to him 

 that you thought that the Texas rule was much 

 stouter, I think you put it, Your Honor, than the 

 current proposal. But the point is that there have

 to be some incentives to direct the parties to 

 concentrate on the needs of the case. And when 

 you're in a situation like this--and you've heard 

 all of these stories about the multiplicity and the 

 magnitude and the complexity of this data. But the

 point is to get to the information that probably, 

 in 99 cases out of 100, could solve the problem in 

 the case and would be all that you need. 

file:///C|/FEB/0212rule.txt (40 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 41 

 I mean, it's exactly what Your Honor said in 

 the MTBE cases that, basically, you know, if you've 

 got tapes from 40 years ago sitting on the shelf 

 and they're not being used, well, you don't have to

 produce them, but save them because they're there 

 and they're not in the recycling process. But I'm 

 not going to let you get into the current recycling 

 information of 200 companies who operate worldwide 

 just because you think you want only the covers of

 the back-up tapes. 

 And did you ever find out what that was? 

 JUDGE SCHEINDLIN: No. But I did say what you 

 said. 

 MR. CORTESE: Thank you, Your Honor.

 [Laughter.] 

 MR. CORTESE: And I think there needs to be a 

 little brushing up perhaps of the description of 

 reasonably accessible, and I think we can deal with 

 that. I deal with that in my paper, and we

 will--and I do want to indicate that we will be 

 filing a comment by the 15th on behalf of the 

 institute and the Lawyers for Civil Justice that 

file:///C|/FEB/0212rule.txt (41 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 42 

 will deal with some of these issues. 

 Does Your Honor have a question? 

 JUDGE ROSENTHAL: No. You anticipated it. 

 MR. CORTESE: All right. Thank you.

 And I think that the one most important 

 clarification really goes right to this issue of 

 preservation. That is really a lot of what's 

 driving this whole problem because, frankly, 

 companies are over preserving in the anticipation

 that they're going to get a lawsuit because many of 

 them get hundreds of lawsuits a month. So the only 

 alternative is to save everything because something 

 in the company has got to be relevant to something 

 that they're going to get sued for.

 And I think that some of the witnesses are 

 correct when they say that the combination of the 

 two-tier and the safe harbor, in essence, at least 

 gives some protection to the problem of--to the 

 parties that have the problem of over preservation

 by basically indicating that unless you know 

 something is relevant to the case, and it's on a 

 back-up system and nowhere else--it's not 

file:///C|/FEB/0212rule.txt (42 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 43 

 duplicated. It's unique, I think, as Judge 

 Rosenthal put it--you don't have an obligation to 

 save that back-up material or the legacy data, or 

 whatever, and that you can recycle that in the

 regular course of business. There obviously has to 

 be a regular recycling routine in order to lose 

 that. 

 And stuff is going to happen. I mean, we've 

 had a lot of experts here give us a lot of

 different opinions on how hard and how easy this 

 all is. Well, it's a massive problem, and no 

 matter how hard you try, no matter what extent of 

 good faith you demonstrate, something's going to 

 get lost. And it happens all the time.

 And therefore, I think that people who are 

 making good faith efforts to do that and who are 

 attempting to assist in moving the checker forward 

 in discovery ought to have at least some protection 

 when they have made the decision, which, of course,

 is always checked in 20/20 hindsight, that at the 

 time that they're confronted with it, "Well, we 

 don't really need to look there." 

file:///C|/FEB/0212rule.txt (43 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 44 

 Now if they looked there, maybe they would find 

 something. As Judge Hagy said the other day, maybe 

 it's good for them. Maybe it's good for the other 

 guy. But we don't know. So we ought to be able to

 let our systems run, our processes run, because to 

 stop them would essentially almost stop the 

 business. Yes? 

 JUDGE SCHEINDLIN: Do you share the prior 

 speaker's concern about an uptick in the number of

 preservation orders-- 

 MR. CORTESE: Yes. I do. I do. But I think 

 that will be handled as it works out, and I think 

 the answer to it is, I think, the one that Mr. Van 

 Itallie gave, which is that really the orders ought

 to be tailored to the needs of the case. And 

 that's one comment that I have on the safe harbor 

 proposal. We prefer--we have our own formulation 

 of that, which we think is a little clearer and a 

 little more direct, and that will be in the

 comment. And actually, it's close in my comment 

 that I filed recently. 

 But the more I look at it, the more I prefer 

file:///C|/FEB/0212rule.txt (44 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 45 

 the footnote alternative. And I think with the 

 addition of maybe a word like "specified 

 information," "preserve specified information," and 

 a note that explains what that means in terms of

 preservation orders that that would be sufficient. 

 JUDGE ROSENTHAL: I'm sorry. So that you would 

 prefer that in the rule, the description of the 

 preservation order that it violated would make 

 someone ineligible for the safe harbor we should

 add the words "specified--information specified" in 

 a preservation order? Something like that? 

 MR. CORTESE: Yes, right. Yes, Your Honor. I 

 think it just takes one word, and it's in my 

 statement, but I can't find it now.

 JUDGE HAGY: All information? How do you 

 specify? That's like the identification of the 

 inaccessible information. It could be very broad 

 or very narrow, specific information. Specified 

 information in a preservation order could be all

 information, and then they could say that was 

 specified, and that doesn't do you any good at all, 

 right? 

file:///C|/FEB/0212rule.txt (45 of 254) [3/2/05 3:01:29 PM]
file:///C|/FEB/0212rule.txt

 46 

 MR. CORTESE: Perhaps. Perhaps. But what I'm 

 trying to-- 

 JUDGE HAGY: It's what's it mean, I know-- 

 MR. CORTESE: What I'm trying to get across is

 the fact that the word tips you off to the fact 

 that there ought to be an explanation of what you 

 need in terms of tailoring preservation orders to 

 the needs of the case and the claims in the case, 

 rather than the preservation order we've seen,

 which is hold everything that's relevant to the 

 subject matter. 

 JUDGE ROSENTHAL: Would that likely lead to 

 parties seeking preservation orders that would be 

 broad, but specific? That is, preserve everything,

 and by everything, we back-up tapes, legacy data. 

 We mean the et cetera, et cetera, et cetera. 

 MR. CORTESE: No, no. I don't think so. I 

 think that we're not talking about categories of 

 information. We're talking about the claims in the

 case and what information is likely to be related 

 to those claims. In other words, a number of 

 people have said and the computer consultants who 

file:///C|/FEB/0212rule.txt (46 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 47 

 say they can find anything any time for not a lot 

 of money always start out with a name or a document 

 or something like that. 

 I don't know if you've had this experience, but

 every time I go into my computer and try to find 

 something, it takes me quite a number of tries. I 

 know it's there. 

 JUDGE ROSENTHAL: We can recommend some people 

 who can help you.

 [Laughter.] 

 MR. CORTESE: I bet. 

 JUDGE WALKER: At low cost. 

 MR. CORTESE: And they're only going to charge 

 me an average of $13,000.

 JUDGE ROSENTHAL: Mr. Keisler? 

 JUDGE KEISLER: There's a perception among some 

 of the people at the Justice Department involved 

 with enforcement issues-- 

 JUDGE ROSENTHAL: You need to use the

 microphone. 

 JUDGE KEISLER: I'm sorry. There is a 

 perception among some of the people at the Justice 

file:///C|/FEB/0212rule.txt (47 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 48 

 Department involved with enforcement that document 

 retention periods under standard document retention 

 policies are getting shorter. And some of that is 

 attributed to litigation concerns.

 Not anything sinister or unlawful, but just as 

 one is thinking, as a company, how long one wants 

 to let things sit in the system--even though there 

 is capacity for it--one of the considerations is 

 sometimes it's better with less around than more

 when there's no preservation order or other legal 

 obligation. 

 Do you share the perception? Is it the case 

 that the members of your organization are 

 increasingly going to shorter standard retention

 periods? 

 MR. CORTESE: Frankly, I don't know, Mr. 

 Keisler. But I have had and, in fact, in some of 

 the testimony here that the real consideration 

 regarding retention policies are the multiplicity

 of legal requirements, business requirements, and 

 the litigation tail is wagging the preservation 

 dog, but not in terms of shortening preservation 

file:///C|/FEB/0212rule.txt (48 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 49 

 policies that are in place. 

 But I can--I might be able to get you an answer 

 to that. I don't know offhand. But my view on 

 that is that there are so many requirements. I

 mean, you take the Tread Act, you take 

 Sarbanes-Oxley, you take all the legal 

 requirements, all the regulatory requirements, all 

 the business requirements, that that is not a 

 problem. And that companies cannot, in effect,

 legally or practically, shorten their retention 

 policies for purposes of trying to avoid bad 

 documents showing up. 

 And then every time you shorten a retention 

 policy, you're going to throw out the good with the

 bad. 

 JUDGE KEISLER: Well, you have to have some--I 

 mean, all of these automatic systems-- 

 MR. CORTESE: Yes. 

 JUDGE KEISLER: --some period of time after

 which things start getting either moved to some 

 archive system or maybe deleted entirely. So 

 wherever that point is, there has to be some 

file:///C|/FEB/0212rule.txt (49 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 50 

 reconciliation between this general principle that 

 the system operates under and whatever specific 

 legal preservation requirements there are. 

 So I'm not sure how that's accomplished. I

 don't know if you know. But that's going to be 

 true, I suppose, whatever the length of the 

 retention period unless you were to decide you're 

 going to save things forever, which, of course, 

 nobody does.

 MR. CORTESE: Right. I don't really know. 

 Well, actually, that's not--I mean, those tapes in 

 the MTBE cases were 40 or 50 years old. And some 

 companies do save everything forever for some 

 reason. I mean, I have all my--I have 5,000

 e-mails in my outbox. I've never cleaned it out. 

 My inbox, I mean. 

 But in any event, I think those considerations 

 really are going to be driven by the business and 

 legal needs rather than the litigation needs. And

 therefore, I think that what business really wants 

 is guidance from the courts, at least in this 

 litigation tail, that enables them to follow the 

file:///C|/FEB/0212rule.txt (50 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 51 

 legal and business requirements rather than be 

 controlled by the litigation risk. 

 Because the risks are significant. Even though 

 a lot of them haven't been sanctioned, they're very

 concerned about that. They want to do the right 

 thing. 

 Yes, Your Honor? 

 JUDGE ROSENTHAL: We've heard some concern by 

 some speakers that by putting the preservation

 topic up front and specifying it as a topic to be 

 discussed in the early meet and confer that we are 

 giving it too large and too early a role. 

 Others seem to believe that that would be good 

 because it's not going to go away if it's not

 talked about, and if it's talked about earlier, the 

 likelihood of problems emerging later might be 

 reduced. Do you have a view on that? 

 MR. CORTESE: I was earlier concerned about 

 that, more from a rule-making standpoint, because

 it was something that had never been mentioned in 

 the rules, and it deals with an area of substantive 

 law. 

file:///C|/FEB/0212rule.txt (51 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 52 

 JUDGE ROSENTHAL: We refer to it as the "P" 

 word. 

 [Laughter.] 

 MR. CORTESE: But now it's out on the table,

 and I think it has to be out on the table because 

 it's the elephant in the room. It's driving this 

 whole thing. 

 JUDGE ROSENTHAL: So you're comfortable now 

 with keeping it in the Rule 26 topics and Rule 16?

 MR. CORTESE: We'd prefer that you put it into 

 the note in terms of discussion and cast the 26(f) 

 in terms of the existing language, which is 

 discussions relating to disclosure and discovery of 

 information because that's what the rules require

 you to do. The rules don't require you to preserve 

 information. Then that effect is that that's what 

 happens. 

 But from the standpoint of rule-making, it 

 might be better to say related to the disclosure

 and discovery and then in the note explain the need 

 for early preservation orders tailored to the needs 

 of the case, and so forth. 

file:///C|/FEB/0212rule.txt (52 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 53 

 Judge Levi? 

 JUDGE LEVI: I think you were in San Francisco 

 many years ago, when we first started down this 

 road, and you remember that I think there was a

 lawyer there from Milberg Weiss, and there was the 

 general counsel from Intel and--among many others. 

 And the general counsel from Intel described what 

 his litigation hold typically was, and I think he 

 even had a copy there. And the lawyer from Milberg

 said that was a very reasonable litigation hold. 

 And when we started on this path, it seemed to 

 us that there was actually quite a bit of agreement 

 between parties that try to do these things right 

 as to what needs to be done. In other words, the

 kind of preservation order that some have described 

 here sounds quite unreasonable to virtually to 

 everybody. And yet there's probably quite a bit of 

 agreement as to what would be reasonable in any 

 particular--any particular case.

 But I continue to hear this fear about an early 

 preservation order. And that was different than 

 what I thought was the concern in San Francisco, 

file:///C|/FEB/0212rule.txt (53 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 54 

 which was uncertainty. And it would seem to me 

 that the people that you represent would benefit 

 tremendously from getting into court early with 

 either an agreed-upon or, if not agreed upon, a

 proposal for a reasonable preservation order that I 

 would think most courts would be inclined to grant. 

 MR. CORTESE: I think you're absolutely 

 correct, Your Honor. I don't remember the 

 particular conversation you referred to, but that

 is true. And I think you've had in many instances 

 here--there are a number of lawyers on both sides 

 of the V who support these proposals. 

 With respect to the concern about early 

 preservation orders, it's really what we might call

 the drive-by preservation order. 

 JUDGE LEVI: In federal court--if you can focus 

 on federal court? 

 MR. CORTESE: I don't have the answer to that. 

 But that's another thing that perhaps we could

 check into. But it's still the fear. And well, 

 how common is it? I mean, we had the Philip Morris 

 example. That's an order of grave concern, and 

file:///C|/FEB/0212rule.txt (54 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 55 

 even the litigation section pointed that out. 

 JUDGE SCHEINDLIN: You mean the preservation 

 order? 

 MR. CORTESE: The preservation order, yes.

 Yes, Your Honor. 

 JUDGE SCHEINDLIN: I think this is just 

 speaking across the table-- 

 MR. CORTESE: But I want to--let me-- 

 JUDGE SCHEINDLIN: --for one minute. The

 Manual for Complex Litigation has a form 

 preservation order, which I've looked at, and it's 

 very overbroad. So that may be a part of the 

 problem is the form. 

 MR. CORTESE: That's an excellent suggestion.

 JUDGE SCHEINDLIN: Yes, it has to be looked at 

 because-- 

 JUDGE LEVI: Well, that's a problem. I mean, 

 the committee doesn't draft that. 

 JUDGE SCHEINDLIN: No, no. I'm just saying to

 you that may be a source of some of the problem 

 with broad orders. 

 JUDGE LEVI: That could be. But I was 

file:///C|/FEB/0212rule.txt (55 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 56 

 impressed by what the gentleman from Johnson & 

 Johnson said, which is when they go in, and they 

 have an affidavit or a declaration from their IT 

 person, and they explain what the damage to this

 company would be and what it is they're prepared to 

 do by way of discovery, which is so broad to begin 

 with, I would think that would be very powerful to 

 most judges. 

 MR. CORTESE: I would hope so. But the point

 is, sometimes it is not, and it is important for 

 the rules to address that so that they lay out the 

 rules of the game for everybody. So that even the 

 least sophisticated lawyers can understand what 

 their obligations are. And now there is a good bit

 of uncertainty, certainly, with respect to that. 

 I think I've already said that we would support 

 the--we support very strongly the two-tier and the 

 safe harbor, and we have some suggestions with 

 respect to not only them, but other elements that

 I'd like to leave to our written comments. 

 But I do want to right now take the opportunity 

 to thank you very much for getting into this 

file:///C|/FEB/0212rule.txt (56 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 57 

 subject. It's an extraordinarily important, 

 extraordinarily difficult subject, but it's 

 something that will help, really, I think an awful 

 lot because I believe that if properly applied--and

 let's hope this time we can get it properly applied 

 by the right guidance--that it will, in fact, 

 reduce the costs and burdens and make discovery 

 more effective. 

 JUDGE ROSENTHAL: If there are no further

 questions? 

 MR. CORTESE: Ms. Varner has a question. 

 JUDGE ROSENTHAL: We have one question. 

 MS. VARNER: Mr. Cortese, you are very familiar 

 with the proposed amendments, and I'd like your

 feeling as to what, for example, some of your 

 clients or the members of the U.S. Chamber would 

 do. They declare certain categories of information 

 to be inaccessible or not reasonably accessible. 

 Would they then implement a litigation hold on

 those materials until that determination has been 

 made? 

 MR. CORTESE: Absolutely. They have to. They 

file:///C|/FEB/0212rule.txt (57 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 58 

 have to. They cannot take the risk of not doing 

 that. 

 And I think, you know, that's one of the real 

 problems today because it's the companies that

 don't have that kind of process in place. I mean, 

 we heard somebody has 58 people that are 

 taking--that are managing documents for litigation 

 purposes. But the smaller companies, they don't 

 have any idea what to do.

 And I think if there is a direction in the 

 rules and the notes that that's what they need to 

 do, they are much more likely to do it. And the 

 general counsel would not be able to take the risk 

 of not putting in place a litigation hold.

 And that's really one of the reasons why we 

 think that in this balance--and I think these rules 

 are all about balance and proportionality in 

 approaching discovery--that the balance is struck 

 when you are able to permit a company to run its

 processes in a business-like way and manage its 

 data in a business-like way, but still preserve the 

 information that's necessary for the litigation on 

file:///C|/FEB/0212rule.txt (58 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 59 

 both sides. And that's how the litigation hold, I 

 think, works together with the safe harbor and the 

 two-tier. 

 JUDGE HAGY: Mr. Cortese, at the bottom of page

 2, when you're talking about the two-tiered 

 approach, you say it has the practical benefit of 

 confirming that such information--that is 

 information not reasonably accessible but still 

 could be ordered for good cause--need not

 ordinarily be preserved. 

 And you don't mean, do you, that if such 

 information has been--is inaccessible, but for good 

 cause should be discovered, you don't have to 

 preserve it? You don't mean that?

 MR. CORTESE: No. I mean that that takes into 

 account the fact that if a company or if an 

 individual has knowledge of the unique information 

 that's in inaccessible data, then that should be 

 preserved.

 JUDGE HAGY: It should be. 

 MR. CORTESE: But you can't--you don't just get 

 the protection by declaring something inaccessible, 

file:///C|/FEB/0212rule.txt (59 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 60 

 but that that's the natural implication. That's 

 why I think it needs a little more clarification 

 and a little more explanation that ties these two 

 components together.

 JUDGE ROSENTHAL: And if that organization or 

 individual did not know because there was no 

 knowledge of what, in fact, resided on those 

 inaccessible materials, then it would be up to the 

 judgment of that organization. And I guess your

 comment would be that the risk of destroying would 

 probably not be one that most would be willing to 

 run? 

 MR. CORTESE: Right. That's probably correct. 

 I mean, I had a general counsel just yesterday tell

 me that he runs the same risk every day, maybe many 

 times. You have to make these judgments. 

 And the problem that's presented, obviously, is 

 that the judgments you make today on incomplete and 

 uncertain information are always second-guessed

 later, when you've got the more information and 

 better information. Well, that's a difficult 

 position to be in. 

file:///C|/FEB/0212rule.txt (60 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 61 

 JUDGE HAGY: Let me make it clear. You read 

 26(b) as having to do with preservation? 

 MR. CORTESE: The combination of 26(b) and 

 two-tier, in effect, tells me--and I think this is

 what should be clarified--that unless you have 

 knowledge of unique information on back-up systems 

 or inaccessible data, inaccessible information, 

 that you can permit the regular operation of your 

 inaccessible information.

 That's because of the multiplicity, the 

 magnitude, the complexity of all that information, 

 and you can't know--you can't know all what's in 

 there. But you do have in place procedures that 

 will retain the information that is accessible that

 will serve the purposes of the litigation. 

 This is all about permitting companies to 

 manage their data in their regular course of 

 business if they have taken steps to preserve the 

 information that's necessary in a particular

 litigation. 

 Yes, sir? Professor Marcus? 

 PROFESSOR MARCUS: I think more than once 

file:///C|/FEB/0212rule.txt (61 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 62 

 you've said you must preserve if there is 

 information that is unique to the back-up systems 

 and not otherwise available, which is certainly an 

 important concern. But I'm wondering how you would

 envision that that insight would ever come into the 

 mind of a company? 

 And I am asking because it sounds like 

 something that might never happen. So that, you 

 know, ostensibly things would be preserved, but

 actually nothing would ever be preserved? 

 MR. CORTESE: Well, that may be true. It might 

 never happen because, in most instances, the 

 information that's necessary for the litigation is 

 going to be in what's accessible because of the

 duplication and the masses of information that are 

 produced on these back-up systems. 

 And it's in instances where, for example, the 

 computer goes down--in 9/11--and they know that 

 there's information on that, and that it's going to

 be backed up somewhere. But it happens 

 instantaneously. That's what a disaster recovery 

 system is all about. And they can go back and 

file:///C|/FEB/0212rule.txt (62 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 63 

 retrieve that information reasonably efficiently 

 from the back-up system. And that does happen very 

 rarely. 

 JUDGE ROSENTHAL: Any other questions?

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 MR. CORTESE: Thank you very much. 

 JUDGE ROSENTHAL: Ms. Tadler? Good morning. 

 Good morning, Ms. Tadler.

 MS. TADLER: Good morning. Thank you for 

 permitting me the opportunity to be here today to 

 speak to you all. And also, like so many others 

 who have been here in the last two days, thank you 

 also for spending as much time as you all have and

 encouraging others to think about these issues, 

 which are obviously critical to litigation and its 

 ultimate evolution in terms of how we access 

 information. 

 Just by way of background about who I am, I'm a

 partner at Milberg Weiss. I principally do 

 plaintiff's work. And generally, my practice in 

 particular is in the context of securities class 

file:///C|/FEB/0212rule.txt (63 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 64 

 action work, as well as consumer fraud class action 

 work. Obviously, that's no surprise to you that 

 these cases tend to be among the largest in the 

 system, and they also tend to be the most document

 intensive. 

 I would say that certainly in the late '90s and 

 even beginning in 2000, we saw cases which had 

 multi-million pages of productions, and we thought 

 that that was becoming the more commonplace of the

 situations with documents. That is just simply not 

 true. I mean, I have cases now, where one case in 

 particular, the IPO securities litigation, we are 

 dealing with in excess of 20 million pages/images, 

 and discovery is ongoing.

 JUDGE ROSENTHAL: May I ask you a question that 

 ties into just this volume point? 

 MS. TADLER: Sure. 

 JUDGE ROSENTHAL: How frequently in your 

 litigation experience have you had to resort to

 information that is not reasonably accessible as 

 opposed to satisfying your discovery needs with the 

 information that can readily be obtained? And I'm 

file:///C|/FEB/0212rule.txt (64 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 65 

 talking about electronically stored information, of 

 course. 

 MS. TADLER: Right. Not to be cute, but I 

 guess my first question back would be, well, what

 is your definition of reasonably inaccessible? And 

 that's sort of the tension I think that we're all 

 facing-- 

 JUDGE ROSENTHAL: I'll answer that because I 

 really want to know. How often, to use the

 examples that have been cited most frequently in 

 the last couple of days, how often have you had to 

 have back-up tapes restored or have legacy data 

 restored or fragmented data restored or deleted 

 information restored before you could even examine

 it as opposed to simply--as opposed to relying on 

 information that did not require that kind of 

 technological restoration before you could even 

 read it? 

 MS. TADLER: It is sporadic. It is not in

 every case. It is not in the majority of cases. 

 JUDGE ROSENTHAL: Can you give me an example? 

 MS. TADLER: Can I give you-- 

file:///C|/FEB/0212rule.txt (65 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 66 

 JUDGE ROSENTHAL: Well, not an example. Can 

 you give me some better feel, more precise feel for 

 the frequency in which this has been necessary? 

 MS. TADLER: I can tell you that, for instance,

 in the IPO cases issues have come up because, in 

 particular, in those series of cases, which are 310 

 separate class actions coordinated in the system 

 for pretrial purposes, we faced 9/11 issues. We 

 actually appeared before the judge in that matter

 literally just days from the 9/11 incident. 

 So in that situation what we had to do was deal 

 with specific defendants--they happen to be 

 defendants--although, obviously, we're focusing on 

 responding parties in this discussion--who I had to

 negotiate with on an independent basis as to 

 whether information was available from some other 

 system. And the negotiations in those situations 

 are very, very intense. And it requires a lot of 

 education.

 And I'm going to be the first to tell you that 

 although I consider myself fairly informed on these 

 issues among the plaintiff's bar, I am an 

file:///C|/FEB/0212rule.txt (66 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 67 

 ignoramus, okay? I am learning every single day, 

 in part, because I have to, but, in part, because I 

 also happen to really enjoy the subject, if you 

 will.

 JUDGE ROSENTHAL: Well, we share your passion. 

 MS. TADLER: I know. 

 JUDGE ROSENTHAL: But other than that, is 

 there--other than the 9/11 circumstance, can 

 you--have there been other cases in which you have

 had to resort to back-ups, legacy, et cetera-- 

 MS. TADLER: Yes. 

 JUDGE ROSENTHAL: As opposed to-- 

 MS. TADLER: Yes. My firm, throughout its 

 history, has had situations, whether they be

 consumer-oriented cases or securities-oriented 

 cases, where back-up tapes in certain situations 

 have had to be searched. But we approach that 

 situation from a very reasonable standpoint. And 

 what we do is we really do try to isolate down who

 the relevant people are or the relevant department, 

 and then we go to the opposing party and we say how 

 is it that you then can look to narrow down what 

file:///C|/FEB/0212rule.txt (67 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 68 

 you would otherwise consider to be an extraordinary 

 burden? 

 One of the problems that creates even greater 

 tension here is the fact that to the extent we want

 to talk about a disaster recovery program and the 

 saving of information on medium like back-up tapes, 

 many companies, unfortunately, don't seem to have 

 some kind of organizational data which helps them 

 to go to those back-up tapes and figure out where

 is John Doe's information. Was he on server one, 

 server three, server five? Which of these tapes 

 are the most likely or are, in fact, the tapes? 

 JUDGE ROSENTHAL: Is that the many-to-many 

 problem we heard about yesterday?

 MS. TADLER: I think so. I think so. You 

 know, it strikes me that if I had a disaster 

 recovery program, I would want to know that these 

 people's information is in this particular sector. 

 These people's information are in this particular

 sector. Companies don't work that way. Should 

 they be faulted about that? I have feelings both 

 ways about it, depending on the circumstances. 

file:///C|/FEB/0212rule.txt (68 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 69 

 But part of it, the answer is no because of the 

 evolution of technology. Technology has moved so 

 quickly people didn't envision that it was going to 

 evolve this way.

 JUDGE WALKER: May I ask you to clarify that? 

 You discussed back-up tapes in a disaster or data 

 loss scenario, which I very well understand. Have 

 you had any occasion to utilize back-up tapes not 

 regarding--not relating to 9/11 and not relating to

 disaster or loss of data, but simply to further 

 explore beyond the scope of otherwise available 

 data? Do you understand my question? 

 MS. TADLER: I do. I do. And I have to answer 

 now both on a personal level and on a firm level,

 as well as I've been at multiple firms in my 

 practice. So on a personal level, separate and 

 apart from a 9/11-oriented issue or a situation 

 where I have had parties who have come and told me 

 that their system has crashed--okay?

 And in that situation, I have said to them, 

 "I'm sorry. You need to now go to your back-up 

 tapes. But before you get all concerned about 

file:///C|/FEB/0212rule.txt (69 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 70 

 that, let's sit down and talk about how we're going 

 to go about that." 

 There are people in this committee who know I 

 am huge advocate of the meet and confer process.

 JUDGE WALKER: But we know about where there is 

 a loss of data, we are automatically alerted to the 

 necessity for some kind of back-up, whether it's 

 tape or whatever. We know about that and the 

 obvious need to refer there.

 But in a situation where a company, the data 

 seems to be intact, but you sense a problem of some 

 sort. Have you ever had to look behind an 

 otherwise intact data set to back-up tapes for 

 further discovery?

 MS. TADLER: Yes. Because there are--and when 

 I say "yes," I'm speaking not only--I'm not 

 speaking specifically about my own experience, but 

 of my colleagues at my firm and also at my prior 

 firm because I've been particularly focused on one

 particular case for a while. 

 But the fact of the matter is that in those 

 instances, they generally involve class actions 

file:///C|/FEB/0212rule.txt (70 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 71 

 where by the time the case is filed, the 

 distinction between the time of filing and the 

 actual time of the alleged wrongdoing has already 

 allowed for systems to change, for the changes in

 the types of hardware and software that are being 

 utilized. 

 And as a result, there are times when we 

 necessarily have to say "you need to go back." 

 Those instances in which either my firm or myself

 tangentially being involved required us bringing in 

 resources because we didn't have the ability 

 either. 

 So one of the things--and I want to answer your 

 question because I know you have one. But I want

 everybody to remember that as much as there is a 

 cost and burden component to the responding party, 

 there is a cost and burden component to the 

 requesting party in terms of education, dedication 

 of resources, hiring of vendors. We don't just

 have sort of inherent knowledge that when you give 

 me your back-up tape I know what to do with it. 

 There's a cost issue on my side, too. 

file:///C|/FEB/0212rule.txt (71 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 72 

 JUDGE ROSENTHAL: In the occasions in which you 

 do think that you will need back-up 

 information--again, I'm focusing on that just 

 because it's a handy example--is it your--is it

 customary to first examine the information that 

 doesn't require this kind of additional cost, 

 burden, effort to obtain? 

 That is, to first go through the first tier of 

 information and see if it will satisfy your needs,

 or if it will be deficient in some respect, before 

 you incur the additional cost and effort of the 

 information that is such as back-up tapes that 

 might not be reasonably accessible? 

 MS. TADLER: The answer is an absolute yes.

 JUDGE ROSENTHAL: So sequencing of the sort 

 I've described is frequent? 

 MS. TADLER: Yes. But with the following 

 clarification, which is that in every case that I 

 am in and the first thing that I speak to my

 opponent about is preservation. And what I do is I 

 seek--I don't always get--a responsive party, 

 meaning somebody who is willing to sit down with me 

file:///C|/FEB/0212rule.txt (72 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 73 

 and talk about these issues. 

 And I am somewhat further hampered, if you 

 will, insofar as the PSLRA, Private Securities 

 Litigation Reform Act, has an automatic stay of

 discovery at the time of a motion to dismiss being 

 filed. There are responding parties who presume 

 that because of that provision, they need not speak 

 to me any further about that issue until we get 

 into discovery.

 JUDGE SCHEINDLIN: Yes, but you also have a 

 statutory preservation order, right? In the PSLRA, 

 there's a statutory requirement of preservation? 

 MS. TADLER: That is correct, Your Honor. 

 However, when you're dealing with a massive case

 where you have a responding party who claims that, 

 notwithstanding that order, they're going to have 

 to otherwise, without input from me, make 

 reasonable judgments because otherwise their 

 business is going to be crippled by saving

 everything in a case that happens to be huge and 

 impacts regions, departments, foreign offices, 

 domestic offices, necessarily in order for 

file:///C|/FEB/0212rule.txt (73 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 74 

 discovery from my perspective to be productive, I 

 want to still get in there and talk to my opponent 

 and say, "Tell me what your situation is. What are 

 the kinds of things that you are looking at or

 you're concerned about?" 

 So that they don't make what they consider to 

 be a reasonable judgment that I don't. 

 JUDGE SCHEINDLIN: Can I ask you to do two 

 things? I'm worried about your time, and I

 wondered, for the benefit of the 

 committee--obviously, I'm familiar with the 

 attachments. But would you tell the committee why 

 you gave these attachments to us, and secondly, 

 what are your views, quickly, on the rules?

 Because I'm afraid you're going to run out of time. 

 We'll never get that on the record. So-- 

 MS. TADLER: Thank you. The attachments that I 

 provided, obviously, are tools that were used in 

 the IPO securities litigation to address issues in

 terms of preservation. But also the questionnaire 

 that is attached, the document preservation 

 protocol order, was something that not only 

file:///C|/FEB/0212rule.txt (74 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 75 

 facilitated our discussions in terms preservation, 

 but it actually facilitated our discussions in 

 terms of everyday discovery because it precluded 

 the necessity, if you will, for sort of a very rote

 30(b)(6). 

 I'm a big fan of the 30(b)(6) deposition. But 

 in a case like this, with 55 banks and, you know, 

 another 309 issuing corporations and another 

 thousand individual officers and directors, we

 would have been taking a lot of 30(b)(6) 

 depositions to only then turn around and ask for 

 the next one for more complex information. 

 So together with a number of people on the 

 plaintiff's side as well as on the defense side, we

 sat down and worked on the kinds of concerns and 

 questions that we had, which ultimately led to this 

 preservation protocol. And you know, I don't think 

 it happens to be a perfect tool. I'm sitting here 

 now two years later, there are things I would do

 differently. 

 Do I think it's a horrible tool? No. Am I, 

 you know, dissatisfied with what it has 

file:///C|/FEB/0212rule.txt (75 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 76 

 accomplished to date? No. But because of the way 

 things have changed, I could see making further 

 adjustments and modifications. 

 JUDGE SCHEINDLIN: But the point was it was an

 early negotiated preservation order that-- 

 MS. TADLER: Absolutely. To give it timing. 

 JUDGE SCHEINDLIN: --didn't go to court. It 

 didn't go to court. You negotiated your own 

 preservation order early.

 MS. TADLER: That's correct. And to give a 

 timing sequence so that you understand, these cases 

 were initiated in early 2001. This order, I 

 believe, was entered in 2002. And the motions to 

 dismiss in this case were resolved in February

 2003. 

 So this was, in fact, resolved before the stay 

 would have otherwise been lifted as a result of the 

 ruling on the motion to dismiss. 

 JUDGE SCHEINDLIN: Okay. And your views on the

 rules? 

 MS. TADLER: Yes. My views on the rules. You 

 know, I obviously only briefly touched upon them in 

file:///C|/FEB/0212rule.txt (76 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 77 

 my submission, and I would have liked to have been 

 more substantive on that, although I had family 

 circumstances which precluded me from doing so. 

 My feeling about the reasonable accessible

 standard is that it is premature. It definitely is 

 putting a potential shift in burden on the parties, 

 whether we're talking about actual litigation 

 parties or just discovery parties and who's sitting 

 on whatever side of the fence because, truly, in

 complex litigation, oftentimes both sides are 

 requesting parties and are responding parties. 

 I am very concerned that to the extent it is 

 more often the case that the requesting party is 

 the party is the party seeking to discover the

 truth and to prove his or her claim, that we are 

 creating further burdens for that party. And I 

 think that what we have to remember, and I think I 

 ended my submission with this is what we're here to 

 talk about in terms of the rules are to provide

 means by which to discover the truth, whatever that 

 truth may be. 

 I don't think that reasonably accessible is a 

file:///C|/FEB/0212rule.txt (77 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 78 

 sufficiently defined term. I also am very 

 concerned about the two-tier approach. And you 

 know, I think that that particular area, although 

 we've heard a fair amount of testimony about it, I

 think a lot of people have spoken specifically 

 about the reasonably accessible component and 

 haven't often gotten to the two-tier aspect. 

 But I certainly--I looked, for instance, at the 

 recent magistrates report. To some extent, I

 endorse some of the things that they are saying. I 

 am very concerned about the way in which that 

 process would work. 

 And just to break it down for you, my opponent 

 says reasonably inaccessible. Now I have to go

 back, and I have to draft a motion. I draft a 

 motion. "Your Honor, wah, wah, wah. Defendants 

 say reasonably inaccessible." Well, I'm not going 

 to put in a motion like that. I feel obligated to 

 put more substance in.

 So now I'm being put to some kind of burden, in 

 my mind, of, okay, what do I know about their 

 systems? Uh, nothing. Okay. Why do I need the 

file:///C|/FEB/0212rule.txt (78 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 79 

 information? In essence, I'm being put already to 

 a good cause standard to show why I need it to 

 further persuade the judge, the magistrate, as to 

 why I should have access to that information.

 MS. VARNER: Excuse me. Why would you feel 

 that you had to file something more than they have 

 said it is inaccessible, and we don't believe--we 

 believe there is, A, it may not be and, B, if it 

 is, there is good cause. And then just file that

 pro forma motion, which leaves the burden, under 

 the language of the rule, that the responding party 

 "must show" that it is inaccessible? What is the 

 burden shift there? 

 MS. TADLER: Well, let me answer the first

 question, which is why would I feel obligated to do 

 more than that? I suppose it's inherently because 

 of just how the process has worked for so many 

 decades, which is when I do a motion to compel, I 

 usually append an affidavit or some kind of

 substance as to why I am seeking and why I think 

 I'm entitled to the relief that I am seeking. 

 In addition, it strikes me that if all this is, 

file:///C|/FEB/0212rule.txt (79 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 80 

 is, you know, a piece of paper to say they said 

 inaccessible, motion to compel, I guess I'd be 

 inclined to turn the tables. Why shouldn't they 

 then make a motion for a protective order?

 MS. VARNER: Because-- 

 MS. TADLER: And--I'm sorry. 

 MS. VARNER: Because--and no one is operating 

 under these rules. But I would assume that in a 

 large majority of cases, people might say, "Okay,

 if you believe it's inaccessible, I'm not going to 

 go into motions practice right now. We'll look at 

 the stuff that is accessible. We'll see if we have 

 a problem." I would think there are going to be a 

 lot of cases where somebody might just accept that

 representation. 

 MS. TADLER: Well, isn't that a dangerous 

 representation? And I guess one of the points that 

 I wanted to make to you all today is the number of 

 people in the litigating population who really have

 absolutely no comprehension of any of the issues 

 that we are talking about. 

 And if somebody is sitting in a situation and 

file:///C|/FEB/0212rule.txt (80 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 81 

 says, "Okay, you said reasonably inaccessible. So, 

 you know, I'm not inclined to do anything now." 

 Are we basically fostering ignorance? We're 

 allowing then the lack of the discovery. We're

 deterring the discovery of truth because of a 

 burden that we've now created. I don't see how 

 that is, in any way, equitable. 

 Go ahead. I'm sorry. Go ahead. 

 MS. VARNER: I do think that Milberg Weiss may

 be in a different category than lots of people who 

 have cases in federal court. And I'm assuming--I'm 

 not a judge, but I'm assuming the discovery 

 proceeds in many cases where someone asks for X, 

 and the responder says, "I'm going to give you X

 minus whatever," making appropriate objections, and 

 no motion practice results from that. People work 

 it out. They go along. They believe they've got 

 enough for their case. 

 I do think that having the responder file a

 motion for protective order may, in fact, result in 

 more motion practice than the way the rule is 

 currently framed, and I do think that in your cases 

file:///C|/FEB/0212rule.txt (81 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 82 

 that you all are, quite frankly, dealing with a 

 different level of document production than is true 

 for the majority of cases in federal court. 

 But I'd be interested if other people disagree.

 That would just be my-- 

 MS. TADLER: No-- 

 JUDGE SCHEINDLIN: I'll just take one second, 

 since she said other people. On our employment 

 docket, which is a huge part of our docket, I am

 finding plaintiff's lawyers are routinely asking 

 for more and more levels of discovery of electronic 

 information, including material that's not on the 

 active systems. 

 And one example I can give you is if you are

 suing, let's say, a bankrupt company or a company 

 no longer in business. Basically, they don't have 

 any active data. It's all legacy. They're asking 

 for it. It has to be rebuilt or restored, and then 

 there's question of cost.

 But taking it right out of the complex 

 commercial area into the everyday employment 

 material, which is a huge part of the federal 

file:///C|/FEB/0212rule.txt (82 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 83 

 docket across the country, I at least, am seeing 

 more. Just to answer. I'm sorry to interrupt. 

 MS. TADLER: Just to give you a feel, though, 

 on the population that really is not, in any way,

 educated on these issues. On Wednesday evening, I 

 went to a New York County Lawyers Association 

 program, CLE program about electronic discovery. 

 Granted, the majority of the people there are state 

 practitioners. However, the majority of the people

 that raised their hands said they do some federal 

 work. 

 A poll was taken. How many of you are familiar 

 with the concept of electronic discovery? I'm 

 going to estimate there were 50 people in the room.

 Four of us. So three others raised their hand. 

 How many of you have ever even thought to ask for 

 electronic discovery? Two of us raised our hand. 

 The discussion then ensued, ended up being very 

 different from the format that the moderator had

 anticipated because of the lack of information and 

 knowledge on these issues. 

 And my fear, going back to your question, is 

file:///C|/FEB/0212rule.txt (83 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 84 

 that we need to be very careful about the kinds of 

 burdens or presumptions or standards that we're 

 creating when we have a fair population that really 

 don't understand these issues, and the burden is

 actually, therefore, increasing for them because of 

 the lack of knowledge. 

 JUDGE ROSENTHAL: Mr. Keisler, last question. 

 JUDGE KEISLER: Ms. Tadler, there's a line in 

 your written testimony in which you've described

 the era of today as one in which technology like 

 e-mail, instant messaging, write fax or e-fax, and 

 electronic databases serve as a principal means of 

 communication. I was just wondering, since you 

 mentioned instant messaging--and I know that we

 heard this morning from Mr. Van Itallie about 

 that--do you go after, obtain, and use instant 

 messaging in your work? 

 MS. TADLER: We do in specific types of cases. 

 I tend to think that it is going to become a more

 routine--because it is in our requests. 

 JUDGE KEISLER: And how do you get it? Because 

 we were told today it doesn't stay on the system, 

file:///C|/FEB/0212rule.txt (84 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 85 

 and people don't print it out. So where is it 

 reposed that you can-- 

 MS. TADLER: I have to tell you on that I don't 

 have an answer for you. I don't know.

 JUDGE ROSENTHAL: But you put it in the request 

 anyway? 

 MS. TADLER: But we put it in the request, and 

 we have vendors who are working with us who tell us 

 that it is accessible through a variety of means.

 JUDGE ROSENTHAL: Do you put it in every 

 request? 

 MS. TADLER: No. No. It really depends on the 

 type of case, the types of defendants. I mean, 

 again, not to be boring, but on the IPO cases,

 you're dealing with investment bankers. That's how 

 they communicate. But it happens to be that at the 

 time period that we were looking at in these cases, 

 it wasn't as routine. 

 I'll leave you with this--do you have any other

 questions? Because I want to leave you with an 

 important comment. 

 JUDGE ROSENTHAL: No, I think we are out of 

file:///C|/FEB/0212rule.txt (85 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 86 

 time. 

 MS. TADLER: Okay. Right before I came down to 

 Washington, I spoke to my IT guy as well as my 

 litigation tech support guy, and they told me that

 in the last three weeks, Microsoft actually 

 released their XP multimedia operating system for 

 home entertainment. This is just the beginning. 

 This is going to enable every one of us to sit 

 in our home or in your office with, in essence, a

 television screen where you access your telephone, 

 your e-mail, any other electronic information, 

 video teleconferencing. And all of that is going 

 to be able to transmit across different media. 

 JUDGE ROSENTHAL: I think you said it all when

 you just said what you said a second ago, "my IT 

 guy." 

 [Laughter.] 

 MS. TADLER: Thank you, again. 

 JUDGE ROSENTHAL: Thank you.

 Mr. Kurt? Mr. Kurt, are you appearing as 

 Skipper Ted Kurt? And I'm referring to the written 

 testimony that we received in which you note that 

file:///C|/FEB/0212rule.txt (86 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 87 

 your column appears on a monthly basis in the 

 Toledo Bar Association News, "Cruising The Internet 

 With Skipper Ted Kurt." 

 MR. KURT: I didn't wear my skipper cap this

 morning, Your Honor. Perhaps I should have. 

 Actually, no, I'm appearing and testifying on 

 my own behalf. And although I'm very active with 

 the Toledo Bar Association, my comments should not 

 be construed as representing the Toledo Bar

 Association. 

 But thank you for the reminder that I am the 

 skipper. Our editor of the Toledo Bar News said to 

 be sure to get a picture of me standing outside the 

 Thurgood Marshall Building with my cap. So I may

 do that. 

 I would like to bring attention to--excuse me. 

 I have a cold here. I would like to bring 

 attention to the fact that electronically stored 

 information or this stuff we're talking about--I

 actually have a problem with the term 

 "electronically stored information." But this 

 stuff we're talking about is much more than e-mail. 

file:///C|/FEB/0212rule.txt (87 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 88 

 The testimony that I have--excuse me--heard 

 this morning and some yesterday concerns e-mail, 

 instant messaging, and so forth. There is quite a 

 bit more of information that one would consider

 electronically stored. 

 I mentioned in my statement that I drove here, 

 excuse me, with my son. And in the car, we had 11 

 items that contained potentially discoverable 

 electronically stored information--a digital

 camera, GPS unit, which without which I wouldn't 

 have been here, a couple of cell phones, a PDA 

 device, and my blood sugar monitor. And this is 

 just my stuff. My son had most of the same stuff. 

 All of this contains information that one would

 consider, I guess, electronically stored. 

 JUDGE ROSENTHAL: Mr. Kurt, may I interrupt you 

 and ask you a question? You mentioned in your 

 written comments that you found the term 

 "electronically stored information" unduly

 limiting. Do you have an alternative to propose? 

 MR. KURT: Perhaps the term "digitally stored 

 information" or "digitized information," "optically 

file:///C|/FEB/0212rule.txt (88 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 89 

 stored information." I'm not certain whether 

 information on a CD-ROM really is electronically 

 stored. Certainly, very likely, it's digitally 

 stored. Perhaps it's optically stored. I don't

 know. 

 I am a skipper. However, I'm not that well 

 versed in that type of technology. But 

 electronically stored information might be too 

 limiting. If there is information that is

 optically stored, perhaps the term "electronically 

 stored information" might not apply. 

 In the introduction to the committee's 

 comments, there is reference to--information to 

 adequately accommodate discovery of information

 generated by, stored, and retrieved from, so forth, 

 through computers. Certainly I think that is very 

 limiting. 

 My blood sugar monitor here is not a--I don't 

 know if it's a computer. I think perhaps not. If

 I were to sue my endocrinologist--for the record, 

 Dr. Elliott, I have no plans to do that--but 

 perhaps he could attempt to discover my blood sugar 

file:///C|/FEB/0212rule.txt (89 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 90 

 monitoring record to indicate that perhaps I was 

 not compliant. 

 So I don't know whether or not under the 

 proposed amendments whether or not the information

 in, for example, the blood sugar monitor would be 

 construed as electronically stored information. 

 I've heard a lot of discussion this morning 

 about instant messaging. There is information on 

 everyone's laptops, at least everyone who--that

 goes online to the Internet. There are temporary 

 Internet files, cache files, records of downloaded 

 files, cookies. I call these electronic 

 fingerprints. Every time we go on the Internet, we 

 leave these fingerprints for others to dust,

 really, and find out where we were and when we were 

 there. 

 I mentioned in my notes that I had a friend who 

 asked me to help him clean up his computer. The 

 first thing I did was to look at his temporary

 files, and I mentioned to him, I said, "You've been 

 at the Sports Illustrated swimsuit site." "Oh, no. 

 No." I said, "Why don't you just buy the 

file:///C|/FEB/0212rule.txt (90 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 91 

 magazine?" He said, "I never went to the site." 

 "Let's see. You were there this morning. You 

 were there twice yesterday. You were there a week 

 ago." "How do you know?" I said, "Well, it's

 right here." And there were other sites that I 

 won't mention this morning. 

 But I just want to bring attention to the fact 

 that there was a lot of information out there that 

 most litigators, as Ms. Tadler just mentioned, most

 fine, excellent litigators with years and years of 

 experience perhaps are not aware of the existence 

 of this type of information. 

 And I'm doing my best, at least in Toledo, 

 northwest Ohio, to educate attorneys about the

 existence and the potential existence of this 

 material. 

 JUDGE ROSENTHAL: Did you have any other 

 particular comments on the rules that you wanted to 

 share with us, the proposed rules?

 MR. KURT: No, I don't. 

 JUDGE ROSENTHAL: Are there any questions of 

 Mr. Kurt? 

file:///C|/FEB/0212rule.txt (91 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 92 

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much. 

 MR. KURT: Thank you, Your Honor. 

 JUDGE ROSENTHAL: Don't forget your stuff.

 Mr. Ball? Good morning. 

 MR. BALL: Good morning, Your Honor. Good 

 morning, ladies and gentleman. 

 Ladies and gentleman, my name is Craig Ball. I 

 am from Houston, Texas. You have in your packages

 the information which I submitted with respect to 

 my specific comments on the rules, and I hope that 

 it is, in some small way, helpful. 

 I am a long-time trial lawyer. I've had the 

 pleasure of dealing with a number of you in a

 professional capacity in the past, and I have, in 

 recent years, also moved away from the practice of 

 law and become a formally trained computer forensic 

 examiner. And I have since then devoted 100 

 percent of my time to the focus on the teaching and

 study and practice of electronic discovery. 

 I don't have a constituency here today. I'm 

 not here for the trial lawyers or any of the 

file:///C|/FEB/0212rule.txt (92 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 93 

 clients or the courts for whom I serve as special 

 master. My constituency is just my concern for 

 where electronic discovery is going. 

 I want to thank the committee, as others have

 done, but I want to thank the committee for 

 something a little different. Not only what you 

 have contributed, but also for providing me, in 

 truth, the best day and a half of continuing legal 

 education that I have had perhaps in my career.

 It is stunning, astounding, when you consider 

 that this was anybody could come and talk, the 

 caliber and quality of information and the papers, 

 if you will, that have been submitted. Everyone-- 

 JUDGE SCHEINDLIN: Can we say, for the record,

 that we agree with that, and most of us have talked 

 about how much we've gained and learned from all 

 those who've come to speak with us. Thank you for 

 coming. 

 MR. BALL: Thank you. When I started as a

 lawyer--sadly, a very long time ago--discovery was 

 challenging always, but not as challenging in this 

 way. Because when I made a request for production 

file:///C|/FEB/0212rule.txt (93 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 94 

 or when it was served upon me, someone would go to 

 a room designated to hold files, and they would go 

 to a metal box designated to hold files. And they 

 would look through a folder and a file. And if it

 had the Doe v. Roe case, that's would be where they 

 would go. 

 They didn't go into every file and every file 

 cabinet and every room searching, absent an 

 allegation of tampering or loss, because there was

 a records management system in place that allowed 

 us to say with reasonable particularity, "This is 

 where we keep that stuff. We don't need to look in 

 the other places." 

 But as there has been a rush to automate,

 really willy-nilly over the course of the last 

 roughly 20 years since the introduction of the 

 personal computer, we've seen that the cost savings 

 and the increases in productivity have often come 

 on the backs of giving up all of the sensible

 records management techniques that were part and 

 parcel of business operations for most of my career 

 and, in fact, most of all of our careers. 

file:///C|/FEB/0212rule.txt (94 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 95 

 And those savings, in a sense, have been 

 deferred costs. And they're coming back like 

 chickens coming home to roost now as we realize 

 that we have allowed information to fall into

 hundreds, in some instances, thousands, in some 

 instances, local hard drives, back-up tapes, 

 personal devices, blood pressure meters, the airbag 

 modules on your automobile that monitors your speed 

 and your braking activity before each collision.

 And in all manner of good, solid determinative 

 evidence that we have allowed to slip into many 

 different places. 

 We need to focus, I think--and let me add that 

 in driving over here this morning, I passed

 Georgetown Law School. And there, engraved on the 

 pediment in stone, was the sentiment that, "Law is 

 just the means. The end is justice." And I found 

 that instructive today because will the end of the 

 reasonably accessible test be, in any way, to

 engender broader access to relevant information? 

 Is there any way that that test or that hurdle 

 is going to result in better quality, higher 

file:///C|/FEB/0212rule.txt (95 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 96 

 quality, more probative information coming before 

 the tryers of fact. And I think the answer has to 

 be, no, it's not set up for that purpose. It's 

 intended as a way to make it harder to get to

 relevant evidence. 

 JUDGE ROSENTHAL: Mr. Ball, does your practice 

 focus on cases in which you are specifically 

 charged with obtaining information that would be 

 considered not reasonably accessible? That is,

 that would require forensic tools or means other 

 than those customarily used by the organization in 

 its own data management to obtain access to? 

 MR. BALL: A substantial portion of it does, 

 certainly, Your Honor. And--

 JUDGE ROSENTHAL: And can I ask you a question? 

 MR. BALL: Please. 

 JUDGE ROSENTHAL: Is it your experience 

 that--we just heard Ms. Tadler say that her 

 practice is to first look at the information that

 can be obtained without this additional level of 

 effort and expense and see if that will satisfy 

 discovery needs before resorting to this 

file:///C|/FEB/0212rule.txt (96 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 97 

 information that does require additional effort and 

 expense to even obtain before you even begin to 

 read it, review it, examine it for privilege, et 

 cetera. Is that consistent with the way your cases

 are handled? 

 MR. BALL: That is the ideal, but it is an 

 ideal that cannot be realized as long as we 

 understand that while we are making that effort, 

 another effort is ongoing to destroy the things

 that will not exist in accessible data. 

 I think it's important that we focus on the 

 fact that back-up tapes would be 100 percent 

 cumulative evidence. You would never need to look 

 at them if it were not for the fact that people are

 deleting information. And the back-up tapes-- 

 JUDGE ROSENTHAL: Wait, when you say people are 

 deleting-- 

 MR. BALL: Yes. 

 JUDGE ROSENTHAL: Let's divide that concept a

 little. On the one hand, there is the kind of 

 intentional deletion that what you are talking 

 about sounds like. When you say "people are 

file:///C|/FEB/0212rule.txt (97 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 98 

 deleting," I hear that as saying there is some guy 

 out there who, either in deliberate disregard and 

 disobedience of common law or other preservation 

 duties, is targeting information for deletion or

 allowing it to occur, knowing that it needs to be 

 produced because of its relationship to a 

 particular litigation. 

 That's one kind of destruction. And I don't 

 think anybody in this room would say that should

 somehow be protected. 

 MR. BALL: But it is, and it will be by this 

 rule. 

 JUDGE ROSENTHAL: Well, hang on. Hang on. The 

 second kind of destruction of information would be

 the kind of information that is routinely recycled, 

 et cetera, that is not--that is being handled under 

 a routine pre-existing policy. 

 And the question then is what do you do about 

 the possibility or probability or certainty,

 because any one of them could exist in different 

 circumstances, that that information that is 

 subject to the kind of routine recycling might 

file:///C|/FEB/0212rule.txt (98 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 99 

 contain responsive discoverable information? And 

 then the question is whether that information 

 exists elsewhere that is readily available? 

 MR. BALL: Let's look at that practically.

 JUDGE ROSENTHAL: If you can tell me exactly 

 which end of that are you looking at? 

 MR. BALL: I'll try. If we look at that 

 practically for a moment, back-up systems are 

 designed to really, truly only bring a system back

 up on its feet in the event of some disaster. 

 JUDGE ROSENTHAL: System wide? 

 MR. BALL: Well, or local to that system. It 

 could be just one hard drive. The issue, the 

 problem is that there is no business purpose for

 wanting to bring your systems back up to the way 

 they appeared six months or two years ago. 

 What has happened, of course, is that if it 

 were just truly a back-up system, and it had a, 

 let's say, a 30-day lifespan--because much beyond

 that, you really begin to lose significant 

 information. The facts of how events happen, the 

 facts of how litigation proceeds at a relatively 

file:///C|/FEB/0212rule.txt (99 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 100 

 slow pace means that if that were truly adhered to, 

 that information would already be gone, essentially 

 without culpability. 

 But that's not where we find ourselves arguing,

 is it? We find ourselves arguing about companies 

 that have kept sometimes thousands of tapes, 

 sometimes claiming, "We keep them. We have no 

 means even to look at them." 

 And so, I'm concerned that we are fashioning a

 rule that is essentially going to be designed to 

 protect people that say we are so inept in our 

 business practices, we are so confused in how we do 

 business that you need special rules to protect us 

 from our own ineptitude. And that's really--that's

 harsh, I admit. 

 But I want to come back to what you raised a 

 moment ago. And it seems to me that there has been 

 little or no focus of one other aspect, and that is 

 the individuals are generally the people who delete

 the data. We've only looked at Nancy Temple and 

 David Duncan in the Enron case, not to single them 

 out alone, or the Frank Petrone matter, or even the 

file:///C|/FEB/0212rule.txt (100 of 254) [3/2/05 3:01:30 PM]
file:///C|/FEB/0212rule.txt

 101 

 Martha Stewart case, where you had issues of 

 tampering with electronic information. 

 Ultimately, it comes down to there may be 

 somebody in the organization because we have

 foolishly vested the ability to shred evidence on 

 every desktop and every individual, largely without 

 any supervision or controls. And we won't find 

 that out, will we, until we have a chance to look 

 at the active data.

 And then once we find that out, we need to be 

 sure that it hasn't disappeared in the back-up 

 data. Because once that active data is gone, there 

 are really only two ways to get it back, 

 practically speaking. The back-up tapes, which you

 can view as a type of forensics, if you choose, or 

 the way I tend to focus on it, which is computer 

 forensics and the unallocated space and so forth. 

 So we have to find a way to preserve the status 

 quo, which is we're willing to look at the active

 data first. I don't know a requesting party who 

 sensibly wouldn't say, "Of course, I'll look at 

 this first. The burdens for me are huge, too." 

file:///C|/FEB/0212rule.txt (101 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 102 

 But I just need to be sure that if I find that 

 there's a gap here, that someone has gone and had a 

 delete-a-thon on the day when he heard the 

 subpoenas are coming, that information is not lost

 to me because you've gone on and deleted your 

 back-up tapes. 

 JUDGE SCHEINDLIN: How likely are you to find 

 it on the computer hard drive in that space that 

 you were talking about?

 MR. BALL: If the individual has not taken 

 certain extraordinary steps to defeat computer 

 forensics, there is a tremendous likelihood. 

 JUDGE SCHEINDLIN: I thought that was the 

 answer. And given that, the companies we hear from

 are not so worried about the individual computers 

 as they are about the back-up system for the entire 

 company. So nobody is going to interfere, I think, 

 with your ability to do the computer forensics on 

 the individual's computer and dig out the deleted

 information, which you said is overwhelmingly 

 likely to find it. 

 Now the back-ups is a different problem because 

file:///C|/FEB/0212rule.txt (102 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 103 

 they're talking about a big company, big system, 

 hundreds of back-ups, night after night. Why can't 

 they continue the practice of recycling safely? 

 JUDGE ROSENTHAL: And that goes to the point

 about is it available elsewhere in a way? 

 JUDGE SCHEINDLIN: Yes. 

 MR. BALL: I think that, within reason, they 

 can recycle. But they have to have--they have to 

 segregate, in a sense, their use of back-up systems

 as a true means of disaster recovery, which is a 

 very short window and a window essentially so short 

 as not to impact much of any litigation because it 

 just takes time to get to court, versus these 

 informal and very awkward archival systems. "Let's

 go ahead and keep six months ago. Let's keep a 

 year ago." 

 It was pointed out a moment ago, well, if you 

 had a transcript of--if you have a conversation at 

 the water cooler, you don't have evidence of that.

 It's transitory. But if you were to tape it or had 

 a transcript of it, it's fair game for discovery. 

 Or, well, we don't tape our phone calls. Phone 

file:///C|/FEB/0212rule.txt (103 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 104 

 calls are then ephemeral. But if you tape your 

 phone calls, they're fair game for discovery. 

 If you are making informal archives, albeit 

 poorly managed, poorly indexed, hard to get to,

 they are fair game for discovery. Get rid of it 

 quickly once it has lost the utility as a disaster 

 recovery tool. 

 JUDGE ROSENTHAL: You think that's good? 

 MR. BALL: I think that it's good practice from

 an IT standpoint, and I think it is good practice 

 from an information standpoint because once you 

 allow it to lose that unique character as a 

 disaster recovery tool, it takes on the character 

 of an archive. And I think that makes it

 unquestionably fair game for discovery. 

 JUDGE SCHEINDLIN: Mr. Ball, the only response 

 to your argument, because I've obviously heard it 

 before, is the big company that says we are sued 

 every day or we are in suit every day. So we could

 never safely keep it for the one week that's really 

 needed to restore the system because somebody 

 always wants us to keep it as part of some 

file:///C|/FEB/0212rule.txt (104 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 105 

 litigation somewhere. 

 So for the really big company, can they recycle 

 if they're always in suit with somebody? 

 MR. BALL: I think this is not going to be a

 satisfactory answer, I'll preface it that way. I 

 think they can recycle if they have put proper 

 steps in place to prevent the active data from 

 being deleted in such a way that the evidence is 

 not available in that realm.

 JUDGE SCHEINDLIN: But can they ever ensure 

 that the one individual employee somewhere is 

 paying no attention or intentionally deleting? 

 MR. BALL: Can they ensure it? Absolutely no. 

 But right now, they take essentially--they take

 minimal, if any, steps. Again, we've vested the 

 ability to destroy evidence in every individual 

 with a computer, a PDA, a personal computer, et 

 cetera. That may seem unsatisfactory again, but 

 it's as if you put a shredder in every individual's

 office and gave them access to the file room. 

 JUDGE ROSENTHAL: Mr. Ball, are you essentially 

 arguing over or worrying about what a reasonable 

file:///C|/FEB/0212rule.txt (105 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 106 

 litigation hold looks like? And you're making a 

 general statement that, in general, to vest that 

 kind of discretion with individuals is not, in your 

 judgment, a reasonable litigation hold by itself.

 Isn't that what-- 

 MR. BALL: I think that we have seen the abuses 

 sufficiently. They are notable. What I want to 

 digress for a moment and say is, where are the 

 parade of horribles? By that, I mean where are the

 abusive district judges who have sanctioned people 

 for innocent destruction? I've read the cases. 

 You all have made the cases in many instances. 

 That's not what happens. 

 When you look at a Laura Zubulake case or you

 look at a Philip Morris, or we could name them all, 

 generally, you're looking at a situation of fairly 

 overt, fairly egregious, fairly contemptuous 

 action. No one has cited me to the case where we 

 tripped over it, it was purely innocent, and you've

 sanctioned us $2.75 million and stopped 15 of our 

 experts from testifying. That case hasn't come 

 down the pike that I know about. 

file:///C|/FEB/0212rule.txt (106 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 107 

 JUDGE ROSENTHAL: May I ask you one other 

 question? Nathan, you had a question, clearly. Go 

 ahead, please. 

 JUDGE HECHT: Did I understand you correctly to

 say that there is no business reason to keep serial 

 back-up tapes? No? 

 MR. BALL: There is no functional business 

 reason for you to have the need to bring your 

 systems back up the way they existed three years

 ago. I mean that kind of time travel is rarely 

 necessary. 

 JUDGE HECHT: Right. But if you could bring it 

 up the way it existed yesterday, Friday, is there 

 any reason to keep Thursday's back-up tape?

 MR. BALL: There are some belt and suspenders 

 reasons to do it. I mean, obviously, you want a 

 rotation. And you have to understand that there 

 are different kinds of back-ups. We speak in 

 rather specific terms, but there are such things as

 incremental back-ups. You have full back-ups. You 

 have something called brick-level back-ups that may 

 not have come to your attention. 

file:///C|/FEB/0212rule.txt (107 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 108 

 But those are specialized back-ups that just 

 focus on backing up individual users' e-mail 

 accounts, for example. Those are very easily 

 searchable. Those you can go to and you can get to

 an individual user because they're built for that 

 kind of accessibility. They're the kind of thing 

 where the CEO says, "I've pushed the wrong button. 

 I need an e-mail from six months ago." 

 JUDGE HECHT: But isn't that an archival reason

 to keep the tape? 

 MR. BALL: It is. Or, if you will, yes, it's 

 an archival purpose. It's designed to be able to 

 get back to it beyond just how did we look at close 

 of business yesterday?

 JUDGE HECHT: And your point is if you keep it 

 for that reason, it's fair game for discovery? 

 MR. BALL: If it's not available in active 

 data. Absolutely. It's cumulative if it's 

 available in active data.

 JUDGE SCHEINDLIN: But do you oppose the 

 two-tier or not because that almost sounded like 

 you liked the--or you accept or like the two-tier? 

file:///C|/FEB/0212rule.txt (108 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 109 

 MR. BALL: I honestly do not like the two-tier. 

 I think that it gets us no further down the road. 

 I believe the system is not broken. 

 JUDGE SCHEINDLIN: What is your objection,

 though, to the two-tier? What is the problem with 

 it? 

 MR. BALL: Well, to begin with, you've heard--I 

 don't want to repeat everyone else. The reasonably 

 accessible test really has no meaning, and the

 closer you get to the data, the less meaning it 

 acquires. 

 For me, for example, it's just 1s and 0s. I 

 mean, what you see depends upon the template that 

 you superimpose against those 1s and 0s. For

 example, five years ago, you didn't have something 

 called the "recycle bin" on your personal computer. 

 Now you do. Now things that are in the recycle bin 

 are deemed easily accessible. 

 That data really hasn't functionally changed.

 A certain functionality has been added to the 

 computer sort of a la Norton Utilities that, a 

 Microsoft way of bringing good ideas into its 

file:///C|/FEB/0212rule.txt (109 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 110 

 operating system--and that sounded much more 

 complimentary of Microsoft than I meant to be. The 

 idea is that they added functionality. 

 Well, all data is accessible until it's

 obliterated. All data is accessible until it's 

 obliterated. All data is inaccessible until you 

 have the tools and software to look at it. Some of 

 that functionality is built into the tools you use. 

 Some more of it will come in.

 Those of you who are using, for example, Google 

 desktop, and I know you all are gearheads enough 

 that a number of you will know what I'm talking 

 about, a search utility that applies the Google 

 power to your own personal computer. You know

 you've gained a tremendous ability to find things 

 you didn't have before you started it. 

 We're seeing that movement. Right now, saying 

 inaccessible, accessible, reasonably inaccessible, 

 I don't think it draws a line. And I think that if

 you draw a line that everyone sees in a different 

 place, it's not very instructive. 

 JUDGE ROSENTHAL: Can I ask a follow-up 

file:///C|/FEB/0212rule.txt (110 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 111 

 question on that, Shira? Do you mind? 

 One of the alternative formulations we heard 

 was inaccessible without undue expense or burden. 

 Do you have a reaction to that?

 MR. BALL: I do. And that is that I believe, 

 as others have said, as here others on the panel 

 have said, how do you separate the concept of 

 accessibility or inaccessibility from undue burden 

 and cost? Isn't that really what you're saying?

 Since undue burden and costs are already 

 effectively built into the rule, since the common 

 law already shows us a number of decisions that 

 apply those in a way that lawyers can look to 

 instructively, why do we add another term that

 really doesn't define anything, that creates, I 

 believe, a greater sense of confusion or another 

 excuse, if it's abused, of why you're not going to 

 get to relevant evidence? 

 JUDGE ROSENTHAL: It sounds like we're all, in

 essence, talking about how to make those factors, 

 those proportionality factors and their application 

 to this particular and new body of information 

file:///C|/FEB/0212rule.txt (111 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 112 

 clearer? 

 MR. BALL: Yes. And I believe--I believe that 

 the courts have been doing a quite good job of it 

 so far. They're going to have more and more

 challenging because right now we're dealing with a 

 gargantuan knowledge gap. Why do lawyers ask for 

 all of this stuff and these broad retention things? 

 Partly it's because we know nothing about the 

 systems against which we're making our requests.

 If we knew, if we immediately had a meet and 

 confer where somebody said, "Here's what we're 

 willing to keep. You've asked us to keep the moon. 

 But this is what we're going to keep. This is what 

 we have, and we're not going to change anything

 on." At least the issue would be joined. 

 And I could then run to court and say, "Your 

 Honor, it's not reasonable what they're going to 

 do. I move for a protective order. I move for a 

 preservation order." I then have that. But that

 needs to be there. We have to bridge that 

 knowledge gap. 

 JUDGE ROSENTHAL: Do you get hired to be part 

file:///C|/FEB/0212rule.txt (112 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 113 

 of the meet and confers? 

 MR. BALL: Yes. If not physically present, I'm 

 often brought in to advise-- 

 JUDGE ROSENTHAL: Virtually present?

 MR. BALL: --as to what it should be. I will 

 sometimes get the phone calls. I'm the person 

 sometimes that people will call and say, "They've 

 offered us this. Is this going to be sufficient to 

 find the smoking gun?" And I'll opine as to

 whether I think that the sample is sufficient. 

 JUDGE HAGY: Let me add to that. I've always 

 thought that the reason and purpose for our 

 two-tier approach was to do exactly what you said. 

 Here's what I'm going to give you. Here's what I'm

 not going to give you. That generates a meet and 

 confer. Now you know that it's out there. And you 

 know you need to discuss it. 

 As earlier speakers have said, probably 90 

 percent of the plaintiff's attorneys and 90 percent

 of the defense attorneys currently don't even 

 consider e-discovery. When they respond, they're 

 not thinking about what they're not turning over. 

file:///C|/FEB/0212rule.txt (113 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 114 

 It's just to make people think about it, focus, to 

 begin a conversation. And maybe it's not a good 

 way to do it because it may repeat the cost benefit 

 analysis. Or as another individual said yesterday,

 he thought it was beneficial because at least we 

 got people communicating on the issue. And maybe 

 that's not our job. 

 But you know, you just said what needs to be 

 done is at a meet and confer identify what I'm

 giving and what I'm not giving. And that's exactly 

 what the response which identifies the inaccessible 

 materials does. 

 MR. BALL: But there are two elements missing 

 from that, Your Honor, and that is this. One is

 it's not set up that they're going to tell us, 

 "Here is what we have, and these are things we're 

 not going to keep." And there is nothing to 

 preserve the status quo to then allow me to get to 

 court and say, "Judge, stop them because they're

 going to destroy these things." Do you follow me? 

 JUDGE HAGY: Well, what do we currently have to 

 preserve the status quo? We don't have anything. 

file:///C|/FEB/0212rule.txt (114 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 115 

 So we're not adding or deleting anything with 

 respect to preservation orders. It has nothing to 

 do with preservation orders. 

 MR. BALL: Well, if your point is that it

 really doesn't add or delete anything, we can learn 

 to live with the reasonably accessible/inaccessible 

 test. But I do agree with you. I don't think it 

 really does add anything except an extra procedural 

 step that must be overcome by, again, additional

 cost. 

 Because in order to overcome that, that means, 

 as a lawyer seeking discovery, I have to bring an 

 expert in immediately. That's good for me 

 personally. It's bad for the system.

 JUDGE HAGY: It gives you--it highlights that 

 you need to do exactly what you've said is 

 beneficial to do at a meet and confer. 

 MR. BALL: But how is--and the thing is in the 

 meet and confer, once you say, "We deem it

 inaccessible," it appears with the way the rules 

 are structured that you have no obligation to 

 preserve that information you deem inaccessible. 

file:///C|/FEB/0212rule.txt (115 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 116 

 JUDGE ROSENTHAL: Mr. Ball, I don't mean to cut 

 you off, but I am. Two points. One, we do have 

 language in the note that attempts to bring some 

 light to this relationship of the second tier and

 the preservation issue. 

 Perhaps one way of hearing what you're saying 

 would be that we need, at a minimum, to look to see 

 if that needs to be clarified further. It sounds 

 as if you think that that is not enough guidance.

 Would that be fair? 

 MR. BALL: Yes. Certainly it is not enough 

 guidance if you will go with what I must iterate I 

 do not think is a necessary change. 

 JUDGE ROSENTHAL: I accept that that's your

 position. Certainly you've made that quite clear, 

 and I appreciate that. 

 MR. BALL: Thank you. 

 JUDGE ROSENTHAL: You had a question, Mr. 

 Cicero?

 MR. CICERO: We can discuss it later, when 

 we're at our meeting. 

 JUDGE ROSENTHAL: All right. Are there other 

file:///C|/FEB/0212rule.txt (116 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 117 

 questions of Mr. Ball? 

 [No response.] 

 JUDGE ROSENTHAL: Well, thank you. You do 

 have, obviously, great expertise, and we appreciate

 you sharing it with us. 

 MR. BALL: May I-- 

 JUDGE ROSENTHAL: Certainly. 

 MR. BALL: I would just close with one thing 

 because I really want to reiterate it. It was well

 stated by George Socha yesterday, and I want to 

 reiterate it because you've heard many things over 

 and over again. I'm concerned if you don't hear 

 multiple things over and over again, you may not 

 give it sufficient weight.

 JUDGE ROSENTHAL: People make that mistake with 

 juries all the time. 

 [Laughter.] 

 MR. BALL: As I said in my written materials, 

 Your Honor, I am, as Niels Bohr said, an expert by

 virtue of the fact of having made most of the 

 mistakes in a narrow field. 

 Rule 34(b), the one specifying form of 

file:///C|/FEB/0212rule.txt (117 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 118 

 production, I think it's imperative that if--the 

 change as to forms, it's important because there 

 are just a number of growing important aspects of 

 evidence--databases, spreadsheets, sound

 recordings, video, as the media center was 

 mentioned--we're going to see more of that. It 

 simply doesn't lend itself to one universal aspect 

 or form. I do hope you will change it there and 

 also take it out of the subpoena rule in 45, where

 it also exists. 

 Thank you all very much for listening. 

 JUDGE ROSENTHAL: Thank you. 

 We'll take a 15-minute break, ladies and 

 gentlemen.

 [Recess.] 

 JUDGE ROSENTHAL: Okay. Ms. Grosvenor? Good 

 morning. 

 MS. GROSVENOR: Good morning, Your Honor, 

 members of the committee. Thank you very much for

 the opportunity to appear today. I appreciate 

 everybody taking their time on this Saturday 

 morning to accommodate all of the interest in this 

file:///C|/FEB/0212rule.txt (118 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 119 

 subject. 

 I have to say I wish I could have been here 

 yesterday. It's been so interesting to hear 

 everybody's points of view this morning.

 My name is Cheri Grosvenor. I'm a business 

 litigator at King & Spalding's Atlanta office. And 

 before I begin, let me clarify that my remarks here 

 today are my viewpoints. I'm not appearing to 

 present the firm's viewpoints or the views of our

 clients. To the extent that my comments coincide 

 with our written submission, they are also the 

 views of the signatories to that letter. 

 The point that caused us to submit the written 

 commentary and for me to appear today is slightly

 different than some of the focus that you've heard 

 of the discussion most of this morning. Our 

 concern relates to the amendment to Rule 26(b)(2), 

 and we fully support the inclusion of the two-tier 

 approach.

 However, we have some concern that with all of 

 the focus on what constitutes reasonably accessible 

 information and how are you going to handle 

file:///C|/FEB/0212rule.txt (119 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 120 

 inaccessible information and that process, that the 

 balancing test that appears in Rule--in Subsection 

 iii of Rule 26(b)(2) may become pushed to the 

 background with the treatment of reasonably

 accessible information. 

 We frequently in our practice hear the argument 

 that if it's reasonably accessible, that must mean 

 it's quick, easy, and cheap to produce it, and 

 that's just simply not been our experience. And we

 fear that that argument does have some appeal to an 

 uninitiated audience. And so, we feel very much 

 that accessibility does not fully answer the 

 question of burden. And so, we think it's 

 important to provide a little bit of anecdotal

 information along those regards. 

 JUDGE SCHEINDLIN: Can I interrupt solely in 

 the interest of time? 

 MS. GROSVENOR: Sure. 

 JUDGE SCHEINDLIN: If we were simply to remind

 the reader of rules that the proportionality test 

 applies to the accessible also, would that do it? 

 MS. GROSVENOR: I believe so. I think that you 

file:///C|/FEB/0212rule.txt (120 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 121 

 could really address it in the notes. 

 JUDGE SCHEINDLIN: Okay. I think there's a 

 great inclination around the table to accept that 

 suggestion. So if that helps you?

 MS. GROSVENOR: Great. I do feel that that 

 could be easily addressed in the notes and just a 

 reminder that--because what we don't want to see 

 happen out of this process is that the new language 

 leads to then fights over valid objections to

 reasonably accessible data because you have cases 

 where you get estimates that it's a multi-million 

 dollar effort just to get and process the e-mail 

 that everyone admits is reasonably accessible. And 

 we hear that from clients--

 JUDGE SCHEINDLIN: I guess what I'm saying is 

 point well taken, counselor. 

 MS. GROSVENOR: Okay. I will comment on one 

 other question that I've heard debated this 

 morning, which is I've heard a couple of

 representations made that people's practice is to 

 approach the discovery by reviewing the information 

 is accessible before moving on to the information, 

file:///C|/FEB/0212rule.txt (121 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 122 

 a determination on the inaccessible information. 

 I will say that that has not been my experience 

 in many cases. I've found that, unfortunately-- 

 JUDGE ROSENTHAL: I'm sorry. Your experience

 as a responding party? 

 MS. GROSVENOR: As a responding party. That's 

 correct. My practice is primarily defense of 

 complex commercial cases, and so my perspective is 

 largely as a responding party.

 And I have found that you, unfortunately, do 

 encounter practitioners who recognize the hammer 

 that can be the discovery burden. And you do 

 encounter that it is used as a method of imposing 

 additional burden and cost. And so, I would not

 say it is universal that requesting parties do take 

 the time to go through what is the accessible 

 information. 

 And so, I think that the distinction that is 

 being proposed is meaningful in that regard,

 provided that the right signals are provided by the 

 committee and the notes that allows for that 

 distinction to remain meaningful. So that you do 

file:///C|/FEB/0212rule.txt (122 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 123 

 have an informed dialogue through the disclosures, 

 so that people are aware of what they're getting. 

 They look to that, and then they still have the 

 avenue provided in the rule to then, should it be

 insufficient through what's available, to pursue 

 what's inaccessible. 

 And given that the committee has already seemed 

 receptive of that comment, I'm happy to provide 

 further examples or answer any specific questions.

 But I gather that the point is well taken from the 

 written submission. So I won't occupy any other 

 time unless people have specific questions. 

 JUDGE SCHEINDLIN: The only one I would ask is 

 what I've asked so many people, but I don't want to

 leave you out, which is how do you draw that line? 

 How do you define inaccessible? 

 MS. GROSVENOR: Well, I actually think that it 

 is really just formalizing what responding parties 

 have already been doing. I think in my experience

 with clients responding to large discovery requests 

 that this is what they've already asked themselves 

 is, "What can we get to? What are we using?" 

file:///C|/FEB/0212rule.txt (123 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 124 

 I think that one of the principles of the 

 Sedona Principles explains that, No. 8, and has a 

 pretty good delineation of that. That language, 

 active data, information purposely stored in a

 manner anticipating future business use and permits 

 efficient searching and retrieval. I think that 

 that actually has a pretty good scope, and I think 

 it's an inquiry that clients have already been 

 asking themselves.

 And so, I think in practice, as this plays out, 

 that it may not be the difficulty-- 

 JUDGE SCHEINDLIN: Can you read that one more 

 time? Could you read that one more time? Could 

 you read those words?

 MS. GROSVENOR: Sure. This is from the Sedona 

 Principles. "The primary source of electronic data 

 and documents for production should be active data 

 and information purposely stored in a manner that 

 anticipates future business use and permits

 efficient searching and retrieval." 

 JUDGE ROSENTHAL: Can I ask one question about 

 that? 

file:///C|/FEB/0212rule.txt (124 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 125 

 MS. GROSVENOR: Sure. 

 JUDGE ROSENTHAL: We've heard about two 

 different aspects of--we've heard a lot of 

 different aspects of problems with electronic

 information, but two that seem to apply 

 particularly in this discussion are somewhat 

 different. One is the problem of having to 

 forensically restore or recover information 

 because, for some reason based on the way in which

 it was stored, it is not available without that--it 

 can't even be looked at without that kind of step 

 being taken. That's one category. 

 The second category is the fact that a lot of 

 electronic information is dispersed over a huge

 number of potentially different places where it 

 could be located. In any one of those places, it 

 may not be hard to retrieve. But the large amount 

 of distribution and dispersion that characterizes 

 some of these networks or lack of networks, as

 everybody with their own PC, makes that difficult. 

 Is your notion of accessibility one that covers 

 both of those situations, both of those features? 

file:///C|/FEB/0212rule.txt (125 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 126 

 Or is it something different? 

 MS. GROSVENOR: Well, I think that they're 

 really two very different issues. I think, in my 

 experience, clients are aware that they are going

 to have to tackle the problem of information being 

 dispersed. If you have multinational corporations, 

 it raises issues of how are you going to translate? 

 You know, who are you going to be able to use 

 to--if you've got e-mails in Japanese, you're going

 to have to use your Japanese personnel to help sort 

 out responsive material. 

 And I think clients recognize that, and I think 

 that is where we feel that the reference to the 

 balancing test that's already in 26(b)(2) can be so

 useful is, you know, you look at what has to be 

 done. The clients recognize that that has to be 

 done. But they want to see it focused and have 

 some kind of enforceability of reasonable limits so 

 that it doesn't become an easy avenue to force

 someone to the settlement table just by virtue of 

 the cost. But so that parties can really get at 

 what do we really need to litigate this case? 

file:///C|/FEB/0212rule.txt (126 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 127 

 And you know, one presumption that I hear in 

 these arguments so often that I think is 

 unfortunate is companies are looking at this also 

 as this is equally likely to be what's going to

 disprove a claim as it is to be what's going to 

 prove a claim. You know, sometimes you hear the 

 assumption that, you know, it's the smoking gun. 

 Well, the defense needs those documents a lot of 

 times, too. And so, it's a problem that has two

 sides that coin. 

 Now with the other aspect of the recovery 

 materials, I think that is why the importance of 

 inaccessible material because that is not formatted 

 in a way that's designed for actual business use,

 other than in the event of an emergency and to 

 restore that snapshot, and you've already heard 

 good discussion of that. But I think that goes to 

 the inaccessibility aspect. 

 JUDGE ROSENTHAL: Mr. Cicero?

 MR. CICERO: I'd like to direct your attention 

 to the question of preservation for a moment 

 because we've had two contrasting views expressed 

file:///C|/FEB/0212rule.txt (127 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 128 

 here in the last two days. If you were here 

 yesterday, you heard some of them again this 

 morning about the question concerning--about the 

 question of obligation with respect to the

 information that is designated not reasonably 

 accessible. 

 Is there a preservation obligation? What is 

 the extent of the preservation obligation? Or is 

 preservation a completely separate issue? Because

 some, I think, infer from the two categories that, 

 well, if it's not reasonably accessible, we don't 

 have a preservation obligation. What would you 

 advise? 

 MS. GROSVENOR: Well, I don't think you can say

 that the preservation obligation is entirely 

 unrelated to the reasonably accessible or 

 inaccessible determination. And I think that that 

 has to be evaluated on a case-by-case situation. I 

 think what's reasonably inaccessible at one company

 may be somewhat accessible at another company. And 

 so, I think that has to be evaluated based on the 

 scope of the case and the situation with the data 

file:///C|/FEB/0212rule.txt (128 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 129 

 storage. 

 I think that Mr. Van Itallie's comment this 

 morning was well taken that companies recognize 

 that there is risk inherent in that, and there is

 going to have to be some risk balancing. 

 MR. CICERO: Well, what would be your response 

 if a requesting party said, "Well, okay, you've 

 designated this material as not reasonably 

 accessible. We won't fight about all of that or a

 certain designated category of certain parts of it 

 we think are reasonable. We won't fight about it 

 now, but we want you to preserve it all." 

 MS. GROSVENOR: Well, I think that's where it's 

 helpful to have that in the initial conference, the

 planning conference. Because if there is going to 

 be a clear fight over that, I think these proposed 

 amendments give you a good avenue to get a matter 

 before the court and resolve it quickly. 

 And that's where bringing it to the front end

 of the process is extremely helpful. And I think 

 that's one of the key areas of electronic discovery 

 developments is that people are now recognizing 

file:///C|/FEB/0212rule.txt (129 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 130 

 that this has to be resolved on the front end of a 

 case. 

 JUDGE ROSENTHAL: Mr. Girard, do you have a 

 question? And then Professor Marcus.

 MR. GIRARD: I'd be interested to know what you 

 do now in regard to the 26(f) conference as far as 

 sharing information relating to electronic issues 

 with your adversary? And whether you think that 

 the proposed change requiring discussion of issues

 relating to discovery of electronically stored 

 information would change your practice, and whether 

 it would prompt people on the producing party side 

 to give the requesting party more information that 

 would allow them to frame requests that are more

 targeted than they probably currently are? 

 MS. GROSVENOR: I do believe, actually, that it 

 is going to enhance the discussions. I think 

 that--and really had two different experiences. It 

 depends entirely right now on sort of what is the

 beginning level of knowledge of the other side and 

 what kind of entity are you dealing with? 

 In the complex cases where you have two 

file:///C|/FEB/0212rule.txt (130 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 131 

 corporate entities on--you have plaintiffs and 

 defendants that are corporate entities, those 

 discussions are already taking place because both 

 sides are going to be requesting parties. Where

 you have perhaps a less sophisticated plaintiff, 

 those discussions probably aren't going on as much. 

 Corporations certainly aren't requiring a 

 specific request asking for electronic information. 

 They already presume that that's part of the

 discovery obligation, in my experience. But those 

 discussions are not as fulsome at the initial 

 conference in some instances. 

 MR. GIRARD: Would you like to see the rule, 

 the proposal go farther than it does? Or do you

 think it's adequate? 

 MS. GROSVENOR: I think it's adequate. 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: A related question. The 

 proposal on 26(f) now says in the text one thing

 that should be discussed is preservation. Am I 

 right in understanding that you think that's a good 

 thing to have there in the rule? 

file:///C|/FEB/0212rule.txt (131 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 132 

 MS. GROSVENOR: I do. I do. I think it 

 focuses both parties because it makes both the 

 requesting party and the producing party aware of 

 the circumstances. And I think it can help the

 counsel for the responding party get a handle on 

 what their client's situation is and get their 

 client focused on it so that appropriate steps are 

 taken early in the litigation. 

 JUDGE ROSENTHAL: Are there other questions?

 [No response.] 

 JUDGE ROSENTHAL: Ms. Grosvenor, thank you very 

 much. 

 MS. GROSVENOR: Thank you. 

 JUDGE ROSENTHAL: Mr. Ryan? Good morning.

 MR. RYAN: Good morning. My name is Michael 

 Ryan. I'm an attorney and a shareholder in the law 

 firm of Krupnick Campbell Malone in Fort 

 Lauderdale, Florida. I, along with my partners, 

 represent people and companies who have been

 damaged through the wrongful acts of others. 

 Before I begin, let me say and echo what Mr. 

 Ball commented on earlier. I think that I've 

file:///C|/FEB/0212rule.txt (132 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 133 

 learned more just this morning than I have in 

 debating these things amongst myself and my 

 colleagues over the coming weeks leading to this. 

 Rather than perhaps some of the notes and

 commentary, what we probably needed were for judges 

 and practitioners to have an ability to watch this 

 process and see this debate and energize how judges 

 are going to deal with this issue because all 

 that's been discussed is being addressed in the

 well of the courtroom. 

 Before I also begin, I want to tell you that I 

 am chair of ATLA's Electronic Discovery Litigation 

 Group. As the name suggests, that group is 

 dedicated toward addressing legal and technical

 issues in this evolving area. I am not chair 

 because of some unique knowledge or talent or great 

 experience. I think I was at the first meeting and 

 the only one with a passion to discuss these 

 issues.

 So I can't answer a lot of your technical 

 questions. But what I can do is tell you that I've 

 spoke to lots of lawyers on both sides, and I've 

file:///C|/FEB/0212rule.txt (133 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 134 

 lectured on these issues as well. I am not here on 

 behalf of ATLA--yes? 

 PROFESSOR MARCUS: Mr. Ryan? Just related to 

 that. Do you have a sense in the present of how

 frequently ATLA members look for electronic 

 information through discovery? We heard comments a 

 little while ago about a meeting of lawyers in 

 which very, very few had ever thought about doing 

 that, much less done it.

 MR. RYAN: I think that's an accurate, although 

 anecdotal--it's hard for me to scientifically 

 answer that. But I think that's true. Right now, 

 we don't have people who are regularly asking for 

 it in routine vanilla cases. What I end up talking

 to a lot of people about are these big document 

 production cases we've seen that tend to justify 

 the involvement. 

 I will say, though, at a recent meeting, I was 

 surprised at the number of--and I say vanilla--

 routine cases that this was coming up in. Contract 

 disputes, two companies arguing over whether there 

 was appropriate due diligence. Someone raised it 

file:///C|/FEB/0212rule.txt (134 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 135 

 in a medical malpractice context that apparently 

 the doctor had gone paperless. 

 So I think we are at the cusp, and I think the 

 timing is well suited for this discussion because

 we are going to be faced with regular practitioners 

 who don't have great resources asking for this. 

 And certainly, as we've heard from Mr. Ball and 

 others this morning, the technology is becoming 

 more cost effective to be able to manage this even

 in a simple fashion. 

 But I don't speak on behalf of ATLA. I speak 

 for myself as an individual lawyer who has argued 

 motions for production, dealt with the issues of 

 collection, and lectured to lawyers about how to

 deal with this. Let me first say that what I 

 advocate to all lawyers that I speak to on both 

 sides, and what I sincerely tell this committee, is 

 I don't want too much information. 

 My goal is not to get 10 million pages of

 images. I can't manage that. I have great 

 resources, and I work in MDL settings. I don't 

 want that. What I do think and what the committee 

file:///C|/FEB/0212rule.txt (135 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 136 

 needs to be commended for more than anything else 

 is the recognition that up-front discussions and 

 court involvement early on this very serious issue 

 will solve much of what we're debating on

 reasonably accessible, on preservation, on claw 

 back, on the other issues. 

 JUDGE ROSENTHAL: May I ask you one question 

 about that? And I've asked a number of others. In 

 your experience and in the experience that you have

 learned about of your members and others you've 

 spoken with, how frequently have you found it 

 necessary to go to information that is inaccessible 

 in the sense that forensic measures have to be 

 taken to recover it or restore it before it can

 even be looked at? That's the first question. 

 And the second question is, is it your practice 

 to look first to how much the readily available 

 information will adequately satisfy your discovery 

 needs before you incur the additional expense of

 the inaccessible information? 

 MR. RYAN: In short, it is not frequent that 

 back-up tapes are restored. Second, I do want to 

file:///C|/FEB/0212rule.txt (136 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 137 

 go first and see what's there. Now let me expand 

 on those answers. 

 The issue of back-up tapes, in my experience in 

 talking to lawyers, seems to come up in more

 discrete cases that are targeted and focused either 

 by timeframe or individual. The big case that I 

 might be involved with that involves 10 years of 

 information flow, back-up tapes become less 

 important.

 With respect to how to deal with the issue, my 

 concern is always preservation. I am faced with 

 the problem that I have perhaps an intransigent 

 producing party who I don't know when I'm going to 

 get that first tier. It may be months. It may be

 a year, due to battles over production and wanting 

 to be efficient. So I don't know when I'm going to 

 be in a position to really say have I received, or 

 are there tell-tale signs of something missing? 

 JUDGE ROSENTHAL: Do you negotiate what steps

 will be taken to preserve information while you are 

 looking through the first tier to make those 

 determinations? 

file:///C|/FEB/0212rule.txt (137 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 138 

 MR. RYAN: It is. That's what I advocate. 

 That's what the people I work with advocate, and I 

 think you'll hear from someone later this morning 

 about a very effective way of dealing with--and it

 was dealt with in the Propulsid litigation and 

 Johnson & Johnson, and I'll let him expand on that. 

 But there are very efficient ways to deal with 

 it if you have rational parties on both sides and a 

 court that is involved early. Because if the

 parties are left to themselves, particularly given 

 some of the language, I think, of the rule and the 

 notes, I think there are tactical advantages that 

 can be found to a producing party that is willing 

 to go through motion practice.

 And I have personally dealt with the issue of 

 whether portions of a database are accessible 

 because we don't routinely access it in that 

 manner, we don't believe it's accessible because we 

 have to go through some work. Now I may prevail on

 that, and I have prevailed each time. But that has 

 resulted in months and months of litigation. 

 And I think there is something to be found in 

file:///C|/FEB/0212rule.txt (138 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 139 

 the notes and in the language of reasonably 

 accessible that will at least give lawyers who want 

 to litigate this the opportunity to go before a 

 court which may or may not be sophisticated on the

 issues of electronic discovery and take their 

 changes because there certainly is no downside. 

 There are no penalties or consequences for that. 

 JUDGE SCHEINDLIN: But it would be true now 

 that the same party could say, "I object to the

 request for my databases. It's unduly burdensome 

 and expensive. I shouldn't have to do it." And 

 then you're met with the objection, and it's going 

 to take the time and effort to pursue the motion 

 practice.

 MR. RYAN: You know, I thought of that as I was 

 developing this theme that I think it's going to 

 increase motion practice. And I looked at the 

 magistrate judges' commentary on this. Obviously, 

 we haven't spoken, nor do they find me persuasive.

 But I noticed that they, too, were concerned about 

 the motion practice. 

 And I think it's because what's percolating in 

file:///C|/FEB/0212rule.txt (139 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 140 

 the judiciary right now is adequate. If you look 

 at some of the sensational cases that have come out 

 and said--and usually, they're reported to me, 

 they're sent to me, and they say, "Look, here's

 another example where the court said lawyers are 

 going to have to pay for data." And then you read 

 below the reporting line and you see, well, that 

 was back-up tapes, and they were searching. 

 JUDGE ROSENTHAL: Let me ask you a question

 about that. When you say "pay for data," you mean, 

 I think--and tell me if I'm wrong--the costs of 

 applying the forensic steps necessary to restore 

 the data. You don't mean shifting to the 

 requesting party the cost that the responding or

 producing party will incur to review that data, 

 examine it for privilege, and to understand it 

 before it's produced, do you? 

 MR. RYAN: Well, that's what's reported. 

 That's correct. That it's the cost of restoring

 it. I am facing cost motions right now dealing 

 with electronic discovery. And fortunately, there 

 are very good opinions that I think energize this 

file:///C|/FEB/0212rule.txt (140 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 141 

 discussion, and it doesn't turn on reasonably 

 accessible. It's turns on was it active? Is this 

 part of what the company has active? 

 I think there are some other subtle and unique

 issues that may pop up that deal with whether data 

 is accessible or not. And it deals with whether 

 servers were taken offline. Technically, the 

 company doesn't address anything on those servers 

 right now. But it may take very little effort to

 make that accessible. 

 I think there are also issues of, you know, the 

 technology flow and whether we're going to catch up 

 and get ahead of where Rule 26 will be if it goes 

 through as phrased. That is, back-up tapes may

 become antiquated. You know, certainly you've 

 probably heard that from those who are more 

 technologically savvy. But I think those two are 

 very important. 

 JUDGE SCHEINDLIN: Let me interrupt with this

 question. If "accessible" is the wrong word, 

 because it doesn't create much of a divide and 

 because technology will quickly overcome the 

file:///C|/FEB/0212rule.txt (141 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 142 

 concept of accessibility, is there any other divide 

 that does make some sense in terms of the practice 

 itself? 

 Because do you tend to ask for certain data

 first, and you're willing to review that first, and 

 you're not anxious to go to the second tier because 

 you told us you don't want to get inundated because 

 you have to be reasonable for your own 

 self-preservation. So what is that second tier if

 we've got the wrong words? 

 MR. RYAN: I think that--I think it turns a 

 little bit too much on technology for me to give 

 you a precise, and I think there are some people 

 who have made some suggestions who are

 technologically more inclined. I tend to think of 

 it as is it a universe of data that is 

 actively--does it live and breathe? Is it an 

 active database? Is information added to it on a 

 regular basis, and is information taken from it?

 And I distinguish that from the restoration 

 that's necessary for disaster where you don't 

 really have that. It's not part of the business 

file:///C|/FEB/0212rule.txt (142 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 143 

 practice to restore. It's there. But if you look 

 at virtually every database that I've had to 

 encounter, I have heard arguments that we don't 

 access it. I've been through lengthy depositions

 on whether they access it. And in the end, that 

 was an active, living, breathing universe of 

 information. 

 JUDGE SCHEINDLIN: Well, I've got you about why 

 accessibility is not it. I'm trying to find out

 how you would define a second tier if you were 

 forced have such a--yes? 

 MR. RYAN: I understand. I misunderstood the 

 question. I apologize. I think the second-tier 

 issue is dealing with the--there is a burden aspect

 to it, and I think that's what's troubling 

 everybody, and there's a preservation aspect that's 

 troubling everybody. 

 I think that if in the business function of the 

 company they do not utilize the information on a

 daily basis or a monthly basis, they do not serve 

 the business mission, but it's kept for some 

 alternative reason--and that's what we have really 

file:///C|/FEB/0212rule.txt (143 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 144 

 in the back-up tape situation. It's kept for a per 

 chance issue. I think that's what we're looking at 

 in terms of costly, cost shifting fishing 

 expeditions that everyone seems worried about.

 So if we were to define it, I think that it 

 comes down to, as Your Honor has identified, 

 multiple factors. But I think, fundamentally, if 

 the data is living and breathing, all else would be 

 something that would fall into that inaccessible

 area. 

 JUDGE HECHT: Do you like Sedona Principle No. 

 8? 

 MR. RYAN: I don't know about the specific 

 number. I've heard that definition this morning.

 I think that's a very good definition. And I know 

 Mr. Altman, who will be testifying later, also has 

 some thoughts on that. 

 I think that--it makes it, I think, easier for 

 the judges who have to be faced with it,

 personally. 

 JUDGE SCHEINDLIN: So if it was better defined, 

 what is your view on second tier or two-tier? 

file:///C|/FEB/0212rule.txt (144 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 145 

 MR. RYAN: Let me address the issue of the 

 tiers in terms of motion practice. 

 JUDGE SCHEINDLIN: Okay. Okay. 

 MR. RYAN: I think there are two tiers of data

 information. That's clearly the case. That's what 

 we're talking about. That's not the 800-pound 

 gorilla in the room. What the concern is, are we 

 causing more motion practice because up front there 

 is an incentive for people to say this is

 inaccessible because we don't utilize it often. We 

 don't access it like you're asking us to. 

 And so, my suggestion on that, I think, is to 

 integrate and put perhaps some stronger language up 

 front on what needs to be done. I am a strong

 advocate for this meet and confer process. I think 

 it works, and I have experienced it. 

 When you get the technological people sitting 

 around the table, you eliminate the lawyers' 

 plausible deniability, and 99 percent of the

 problems that people are talking about get solved. 

 That's in my experience. There will always be the 

 producing party who doesn't want to produce some 

file:///C|/FEB/0212rule.txt (145 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 146 

 back-up information because they've destroyed all 

 their e-mails. 

 JUDGE SCHEINDLIN: So you would solve the 

 two-tier by having the parties negotiate those

 tiers up front in their meet and confer? It's that 

 simple. 

 MR. RYAN: Negotiate up front. And I would 

 encourage the court, and it seems almost 

 counterintuitive, but I think the court being

 involved in that process early on is important. 

 I'm not suggesting the conference be held there, 

 but if we're going to cut down on the motion 

 practice, being involved early on preservation and 

 that discussion would be helpful.

 JUDGE ROSENTHAL: And if agreement is not 

 possible and judicial involvement is necessary, is 

 there any way to do that without motions? 

 MR. RYAN: There isn't. But I think it has to 

 be dealt with up front. I don't think we should go

 through the process of allowing them to produce and 

 then saying we don't believe these following 

 databases are reasonably accessible. And then lead 

file:///C|/FEB/0212rule.txt (146 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 147 

 to motion practice. I think we should deal with 

 that up front because there are going to be 

 tremendous issues of cost later on if we do that, 

 perhaps going to back-up tapes because now things

 have been destroyed, and the preservation problem. 

 I mean, that's what's underlying this. 

 I think most rational people and reasonable 

 people on my side of the V would say as long as I 

 know it's there. Okay, I understand you say

 database X is not accessible, but if you're telling 

 me you're going to preserve it so we can get this 

 in front of the court, then I have less concern. 

 JUDGE SCHEINDLIN: Exactly. I have to make an 

 admission that what I'm about to say is not a

 question. So I'm going to admit it right up front. 

 But the problem is, is I've heard some lawyers say 

 here that by making a motion, if the judge then 

 sits on the motion for four months, there's a real 

 question of preservation over the course of that

 six months that it took to make and decide the 

 motion. 

 So that is a comment that favors what you say 

file:///C|/FEB/0212rule.txt (147 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 148 

 about getting it done somehow earlier than motion 

 practice, which has to await the decision. 

 MR. RYAN: And I think related to that, and 

 there was a very good set of questions about, well,

 what's the problem with the motion practice and 

 protective order versus motion? And I was sitting 

 here thinking, what do I do pragmatically? I'm 

 filing a motion to compel inaccessible. They're 

 going to file in opposition. In many courts, I

 can't file a reply. That's number one. 

 I think, number two, the problem is that delay 

 that's going to be occasioned by it. And I think, 

 third, there is some commentary that says if it's 

 inaccessible, you're excused from producing. Well,

 and I think it's in the notes. It says you're 

 excused if it's inaccessible. And I don't think 

 that's really what was being intended. I think 

 what was intended was you may or may not have to 

 produce it, but you don't have to produce it right

 up front there. 

 And so, I'm concerned about some of that 

 language, and I could direct Your Honor to my 

file:///C|/FEB/0212rule.txt (148 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 149 

 concern there. 

 JUDGE ROSENTHAL: May I ask a question, 

 following up on Judge Scheindlin's observation? If 

 you were able to obtain, either by negotiation or

 by court order or some combination of the two, a 

 way to satisfy your preservation concerns while you 

 were examining the first tier of material and 

 testing the inaccessibility claimed as to the 

 second tier, and then deciding whether you were

 going to file motions to bring that to the court if 

 you couldn't resolve it by agreement and getting 

 the court to determine good cause and everything 

 else, would that satisfy your primary concern over 

 the two-tier motion issue?

 MR. RYAN: It would. I think that that would 

 solve the problem greatly. And I think that it 

 would also give the courts more time to be 

 deliberate about it. 

 I mean, there will be a position put forward by

 someone who says, Judge, "And if you don't handle 

 this immediately, we're going to have destruction." 

 And I know the courts hesitate to accept emergency 

file:///C|/FEB/0212rule.txt (149 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 150 

 motions except when, you know, my leg's going to 

 fall off if you don't hear my hearing today. So I 

 think that's critically important if we can 

 preserve it.

 I think there are a couple of other issues I 

 just want to raise, and it's not significant. It 

 hasn't been discussed much this morning. But this 

 issue of claw back provisions. I commend the 

 committee for thinking of, suggesting that. It is

 something that I've tried to negotiate, and I must 

 not be persuasive because I've never been able to 

 convince a producing party that it's in their 

 interest to produce quickly as much information as 

 possible.

 What I see happening is that there is still a 

 document by document, line by line review, and 

 there's very little trusting that goes through in 

 the claw back. In addition, because of I have 

 concerns with the lack of timeframe, as the

 magistrate association raised, as to when this can 

 be raised, I think there is a specter of when a 

 producing party could ask for this material back, 

file:///C|/FEB/0212rule.txt (150 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 151 

 for instance, on the eve of settlement, where a 

 party and the producing party may have interests 

 that are separate and apart from the public safety 

 issues.

 And because it doesn't require specifically 

 that the document actually be privileged or that 

 there be some court review, there could be 

 literally an abuse of this that may result in more 

 motion practice later.

 JUDGE SCHEINDLIN: Would that be solved if the 

 receiving party had the alternative of taking the 

 document directly to court? 

 MR. RYAN: I think in the scenario I just 

 provided, the public safety issue, the receiving

 party may not want to. 

 JUDGE SCHEINDLIN: Oh, oh, I see. Because of 

 settlement. 

 MR. RYAN: Because they have a settlement. 

 JUDGE SCHEINDLIN: Yes, yes. Right.

 MR. RYAN: But in a more general sense, I do 

 think that there is nothing that allows the--at 

 least from the rule, that allows the receiving 

file:///C|/FEB/0212rule.txt (151 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 152 

 party to go to the court. 

 JUDGE SCHEINDLIN: No, right. Right now, it 

 says return, sequester, or destroy. But if one 

 option was or go to court, would that solve some--

 MR. RYAN: I think it would. In the end, I 

 question whether we'll ever see many folks actually 

 utilize it, although I recommend it. 

 JUDGE HECHT: Do you make those agreements 

 often?

 MR. RYAN: I have not made those. I have asked 

 for them, and I have said that it will expedite 

 discovery. But much like my experience with 

 broad-umbrella confidentiality orders that were 

 meant to expedite discovery, they don't. Because

 in the end, it still causes tremendous review. 

 It's not as if they're going to hand me the keys to 

 the warehouse and say go look for the documents. 

 So I think it's admirable, and it was certainly 

 a laudable goal to try to do this. I think, in

 effect, it probably won't be used much, if ever. 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: I want to go back to 

file:///C|/FEB/0212rule.txt (152 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 153 

 something you said earlier about the 26(b)(2) 

 accessibility definition problem. It seems to me, 

 on the one hand, you said I don't like it when the 

 other side says, "We don't use that. We don't

 access that system very often." But on the other 

 hand, you seem to say what I'm interested in is 

 whether it's something that is used regularly, it's 

 living, breathing data in the sense that they 

 interact with it regularly.

 So are you in favor of a definition that says 

 used in the ordinary course of the responding 

 party's business as opposed to reasonably 

 accessible, which seems to look at the difficulty 

 of accessing the information?

 MR. RYAN: I think difficulty is 

 one-size-fits-all. I could envision two different 

 scenarios where either would work for me, but 

 neither would work in another scenario. That is to 

 say, I know a database that's active, that is

 getting information that they are sending to it. 

 But they may not regularly go and look it. Okay? 

 But it's kept for some reason, to serve some big 

file:///C|/FEB/0212rule.txt (153 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 154 

 business mission purpose, whether it's regulatory 

 or the business mission. 

 I have encountered a producing party saying 

 that's not accessible because it's going to take us

 work to get it to you. So I think what I'm really 

 talking about is do they have a universe of 

 information that they're actively adding 

 information to or taking from? And it doesn't 

 matter on the timeframes. Because it presumably is

 serving the business purpose if they've spent the 

 time to do it. 

 So I can't say used in the ordinary course of 

 business because I'm certain I'm going to have 

 motion practice that we don't use it in the

 ordinary course of business as they're requesting 

 it. I think that there needs to be, much like what 

 was said about the Sedona Principles--and there is 

 much that I don't agree about in the Sedona 

 Principles--but I think that definition of active

 data is important. And I think that's really where 

 the divide seems to be. 

 That is, if they're actively adding information 

file:///C|/FEB/0212rule.txt (154 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 155 

 or taking from it, even if they don't do it 

 regularly, it's something that is accessible. It's 

 something that can be produced. 

 JUDGE ROSENTHAL: Can I ask a question about if

 on the example you just gave of the database that 

 was not--was described by the producing party as 

 difficult to provide in production without some 

 additional--without some unusual cost or burden 

 associated with it. What was the nature of that

 cost or burden? 

 MR. RYAN: It was the cost, really, of the IT 

 people having to query it. And my response to that 

 was if you had kept the information on index cards 

 and stored it in a warehouse, you would have had to

 have sent a team of lawyers or staff to go get it. 

 This issue that there is a cost crisis in the 

 production of some of this electronic data is 

 incrementally or differentially, I think, 

 overstated.

 JUDGE ROSENTHAL: Well, hang on one second. Is 

 the cost of that searching that database, is that a 

 cost because there was something about the way in 

file:///C|/FEB/0212rule.txt (155 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 156 

 which that database was stored that did not--that 

 required some technological massaging or conversion 

 or translation before it could be read in the way 

 that the producing party or the requesting party

 wanted or needed? 

 MR. RYAN: I think all databases require some 

 effort to bring them down. 

 JUDGE ROSENTHAL: To bring them down? 

 MR. RYAN: To bring them down to where the

 requesting party can utilize them. That's by 

 definition. Whether it's in a warehouse or not. 

 Absolutely, you're going to have that. 

 The question that I think Your Honor presents 

 is there is also a scenario where they have to

 write software because it's no longer active. It's 

 a legacy database that nobody can do. And in my 

 experience and having heard how people have dealt 

 with this, the parties reach some agreement on it. 

 And they either reach an agreement that somebody is

 going to write the software, or they get the 

 software. And I think the case law is evolving to 

 address that issue. But for the most part, that 

file:///C|/FEB/0212rule.txt (156 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 157 

 usually is a database that's been taken offline. 

 So the costs that we're being asked, we're 

 really querying the database to do--it's almost 

 analogous to what you'd have to do to go to a

 warehouse to get the information. Telling the 

 staff, go and look into these file cabinets and 

 pull that information. 

 JUDGE SCHEINDLIN: So this offline database 

 that you just described, would you consider that

 inaccessible or second tier, whichever one? 

 MR. RYAN: I would. 

 JUDGE SCHEINDLIN: You would? 

 MR. RYAN: I think that that presents--I don't 

 call it inaccessible.

 JUDGE SCHEINDLIN: No, but second tier? 

 MR. RYAN: I would consider that something that 

 the parties need to negotiate because you could 

 take offline a database that is absolutely 

 relevant, and there is limited burden. And if it

 was kept in a warehouse in paper, they'd have to 

 give it to me. 

 JUDGE ROSENTHAL: Well, subject to the 

file:///C|/FEB/0212rule.txt (157 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 158 

 proportionality test. 

 MR. RYAN: Correct. But presumably, you've met 

 that issue by getting access to it. If you don't, 

 then that's another question.

 But if this was a database that went to drug 

 safety or went to the safety and health, and they 

 kept it in some time, and they made a decision to 

 take it offline, just as they made the decision to 

 go to the warehouse, that, I think, embedding the

 cost shifting analysis in that and whether it 

 should be now accessible turns the presumption, I 

 think, on its head of the producing party paying. 

 JUDGE SCHEINDLIN: So you don't accept that one 

 as second tier, really?

 MR. RYAN: Maybe it's our vernacular of "second 

 tier." I would accept--in the process of my 

 requesting, I would accept the active databases, 

 and I would accept the right to go fight with them 

 to get that.

 JUDGE SCHEINDLIN: I see. 

 MR. RYAN: But I do not accept that that's data 

 that is equivalent to back-up tapes. 

file:///C|/FEB/0212rule.txt (158 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 159 

 JUDGE SCHEINDLIN: Gotcha. 

 MR. RYAN: Where you're talking about the 

 inability to find a specific or unique package of 

 information that is very difficult to find.

 JUDGE ROSENTHAL: Is that any different from 

 saying that there are levels of inaccessibility 

 that will change as technology changes? 

 MR. RYAN: That's absolutely correct. 

 JUDGE ROSENTHAL: Anything further of Mr. Ryan?

 [No response.] 

 MR. RYAN: Thank you very much for the time, 

 and I apologize for running over. 

 JUDGE ROSENTHAL: Mr. Altman? 

 MR. ALTMAN: It's still morning. Good morning,

 everyone. My name is Keith Altman. I'm the 

 director of adverse event analysis for Finkelstein 

 & Partners, which is a law firm based in Newburgh, 

 New York. 

 In addition to litigating cases, my firm,

 through me, provides discovery consulting services 

 to numerous law firms around the country. In the 

 last seven years, I've worked on several large 

file:///C|/FEB/0212rule.txt (159 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 160 

 pharmaceutical cases and probably have helped 

 manage about 60 million pages of paper discovery 

 and several hundred gigabytes of database 

 discovery.

 And I'm the one that usually is the person who 

 actually has to work with this information. I'm 

 the one that coordinates with the experts who are 

 going to have to take this information and render 

 opinions based on it. So when I talk about this,

 I'm coming from the perspective of the guy who gets 

 the dump and has to make heads or tails out of it. 

 So it's a little different perspective than just 

 simply asking for it, and it's somebody else's 

 responsibility.

 I've lectured at the Judicial College for the 

 State of New Jersey, for the State of Mississippi. 

 I've also written a book chapter in a book put out 

 by the Federal Bar Association on electronic 

 discovery.

 I actually want to comment on the Judicial 

 College in the State of Mississippi to show where 

 electronic discovery has come to. When we did this 

file:///C|/FEB/0212rule.txt (160 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 161 

 session, it was about a half-day session. One of 

 the judges walked up to me, an older gentleman, and 

 said, "You know, I can't understand why you guys 

 are here. This stuff is completely unimportant to

 us. I deal with divorce cases. I don't deal with 

 any of this stuff." 

 At the end of the session, he came back up to 

 me and says, "Now I understand." He said, "Just 

 last week, I'm dealing with a simple divorce case.

 A husband and wife, one of the allegations that the 

 husband was spending too much time on the Internet, 

 with Internet porn and things like that. And the 

 issue was raised whether I should allow what was on 

 that hard drive to be made accessible through

 discovery in this case, and I just didn't know how 

 to deal with it." 

 And so, I think that just shows that this is 

 not the problem with the big cases. It's not the 

 problem with the small cases. This is an issue of

 this is where everything is going. Everything is 

 about electronic information these days. 

 JUDGE ROSENTHAL: Mr. Altman, I wanted to ask 

file:///C|/FEB/0212rule.txt (161 of 254) [3/2/05 3:01:31 PM]
file:///C|/FEB/0212rule.txt

 162 

 you one question about something in your written 

 submission. You said that--and your pages aren't 

 numbered. I'm sorry. You said in your discussion 

 that in your lectures and in the cases that you

 handle, you recommend a very strong preservation 

 order signed at the same time as the complaint is 

 filed. And as part of that, you recommend an order 

 that would stop all routine records recycling. 

 And you say that you recognize that this kind

 of order can be very difficult for the party 

 subjected to it, and then you go on to say--and 

 here's what particularly caught my eye--"This is 

 one of the desired effects." 

 MR. ALTMAN: Part of the problem with

 negotiating preservation orders, and I've been 

 involved in that process for most of these 

 litigations, they take too long--six months, nine 

 months, a year. We're still negotiating 

 preservation orders after these litigations have

 started. 

 I think there has to be some way, and I don't 

 know exactly what the way is, to bring the parties 

file:///C|/FEB/0212rule.txt (162 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 163 

 to the table very quickly. This data is fragile. 

 It's transient. 

 And you know, for example, take a 

 pharmaceutical litigation. A drug gets pulled off

 the market. The most important e-mails that might 

 exist are the e-mails that were done in the 30, 60 

 days up to the withdrawal of that product. We all 

 know very often these litigations get filed very 

 quickly after such an event. So preserving that

 information and given the fact that I-- 

 JUDGE ROSENTHAL: May I ask you a question? 

 Are those e-mails subject to any statutory or 

 regulatory preservation requirement because of the 

 pharmaceutical industry's highly regulated nature?

 MR. ALTMAN: Some of them may be. But I will 

 tell you, my first--I recommend four depositions 

 take place as early as possible, and they are the 

 records manager, the MIS manager, and in the 

 pharmaceutical context, the director of safety

 surveillance and the director of sales force 

 automation. Which are really the four key pieces 

 of information. 

file:///C|/FEB/0212rule.txt (163 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 164 

 And my experience in being at the depositions 

 of many records managers is that while they appear 

 to have a very strong records retention protocol 

 for their electronic information, they will freely

 admit that the format of the information is 

 irrelevant to how long you need to keep it. It 

 doesn't really matter. 

 When you sit and you start talking to people 

 out in the trenches, they don't even know that

 there is a records retention policy. They don't 

 have any particular protocols at all. They kind of 

 do what they want, when they feel. And I'm not 

 suggesting that people have dishonorable intentions 

 because I truly believe that these problems are

 just human nature type problems. 

 I, myself, and there was another gentleman 

 before, I have every e-mail I've ever sent or 

 received. That's my records retention policy. Is 

 that necessarily the best one? For me, it works.

 For somebody else, it may not work. And 

 unfortunately, there isn't necessarily, for lack of 

 a better term, a standard of care of what's the 

file:///C|/FEB/0212rule.txt (164 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 165 

 best way to do that. 

 JUDGE KEISLER: How much of a records retention 

 policy depends upon the operation of an automatic 

 system, and how much of a records retention policy

 depends on individuals knowing what it is and 

 manually choosing to follow it? 

 MR. ALTMAN: Well, in a typical corporation, 

 there is generally an automatic--often an automatic 

 purge of your inbox and your e-mails. People are

 instructed that they should save things that are 

 relevant for business purposes. If this is a drug 

 safety issue, you need to save it for X period of 

 time. And you're supposed to move it out of your 

 inbox and put it into some other place that is not

 purged on a regular basis. 

 But there is a big disconnect with how that's 

 going on. Companies are trying to put these 

 procedures in place, but people are not necessarily 

 aware. And when you talk to these people, if you

 ask them, and I try to suggest to the attorneys 

 that they ask in every deposition, "Are you aware 

 of the records retention policy with respect to 

file:///C|/FEB/0212rule.txt (165 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 166 

 e-mail? What do you personally do to protect your 

 e-mails in accordance with the records retention 

 policy?" 

 And unfortunately, the reality is that they

 don't know. They don't have good answers to that. 

 And I've seen this, you know, at the level of 

 director of safety surveillance in an organization 

 all the way down to, you know, the low-level staff. 

 So it's really a problem.

 So this kind of ties back to what you've asked 

 me. In the very short term, I think you need to do 

 something so that the other side comes to the table 

 to work with you to negotiate a more reasonable 

 preservation order that is consistent with the

 goals of that particular case. 

 I would love to be able to sit down and say, 

 "Those 97 servers out here that at first glance I 

 said you need to save because I don't know any 

 better? You don't need to save anything off of

 there. We don't think there's any relevant 

 information there." That would be a great and 

 wonderful goal. 

file:///C|/FEB/0212rule.txt (166 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 167 

 PROFESSOR MARCUS: You mentioned that there is 

 a problem getting the people on the front line to 

 do what the policy says. Is that also a problem 

 with preservation orders? Do they suddenly start

 sitting up and listening when there is a 

 preservation order, or is that just something else 

 that goes to the top of the management pyramid but 

 doesn't really filter down to all of the people who 

 are in control of the data?

 MR. ALTMAN: My general experience, because 

 those are also serious questions I suggest people 

 ask is, "Were you aware of the litigation hold? 

 How were you informed about that? And did you do 

 things to comply with it?"

 I have found that there generally is an 

 awareness of the need to preserve, and I truly 

 believe people are trying to do their best to 

 preserve information. And there is not nearly the 

 problem that exists before there is some kind of

 litigation hold. 

 JUDGE SCHEINDLIN: I've been reviewing your 

 written comments. And clearly, you support meet 

file:///C|/FEB/0212rule.txt (167 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 168 

 and confer, and you even have lots of hints on how 

 to do it well. But we've spent a lot of time 

 talking about the two-tier and accessibility, you 

 might as well weigh in while you can. What is your

 bottom line on that proposal? 

 MR. ALTMAN: I think that trying to put this 

 concept of accessibility or inaccessibility is just 

 too subjective to be workable. I could think 

 of--to say it's simply back-up tapes or to say it's

 simply on a hard drive, I could think of lots of 

 examples of each that would break the mold. 

 For example, if I have a server, okay, it's got 

 a database on it. We don't use it anymore. But 

 it's sitting in somebody's office, and all that

 somebody has to do is plug--you know, sit down at 

 it, and they can access the data. Well, I don't 

 access that on an everyday basis. Does that make 

 that inaccessible? 

 Or the question that was raised, and I often

 deal with this, and a great context to that, in 

 pharmaceutical litigations, what do you do with the 

 sales reps? You might have 3,000 sales reps out on 

file:///C|/FEB/0212rule.txt (168 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 169 

 the street, each one of which with a laptop. And 

 they obviously are collecting lots of information 

 as they go out into doctors' offices and things 

 like that.

 It becomes a major problem when the 

 pharmaceutical litigation starts. What do you do 

 with 3,000 sales rep laptops that it's not even 

 like you can just--you know, they're all hooked up 

 in a network. They're all out in the field. How

 do you preserve that kind of information? Does 

 that make that inaccessible? 

 I can tell you my general feeling on-- 

 JUDGE ROSENTHAL: Can I ask you a question? 

 And I don't mean to interrupt you, but I want to

 just make sure you share with us a little bit how 

 you deal with those 3,000 people. 

 MR. ALTMAN: Well, you know, I'd like to talk 

 about the Propulsid model. 

 JUDGE ROSENTHAL: That's fine.

 MR. ALTMAN: I was involved in the Propulsid 

 litigation. It was interesting to hear Mr. Van 

 Itallie speak, and I had not ever met him before. 

file:///C|/FEB/0212rule.txt (169 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 170 

 But I believe Ken Conour, who spoke in San 

 Francisco, was part of that process, and I must 

 tell you that process worked extremely well. Right 

 from the first minute of that litigation, we had

 many, many meet and confers. 

 We came up with a preservation model that I 

 think it really resolves a lot of the issues that 

 takes place, and it was actually very simple. And 

 what we said is, okay, we're going to start

 preserving information today. All the back-up 

 tapes that could possibly have discoverable 

 information on it, you will put those aside. You 

 will never use those again. 

 You will tell everybody in the company about

 the litigation, about the litigation hold, what 

 kind of information is relevant. You will 

 implement a collection process by which each person 

 will be told if you create a document, going 

 forward, relevant to Propulsid, you will send it to

 the centralized collecting point. 

 And then you go out and you buy brand-new 

 back-up tapes, and you start recycling your back-up 

file:///C|/FEB/0212rule.txt (170 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 171 

 tapes. Because at that point, the back-up tapes, 

 going forward, are really just for the normal 

 disaster recovery purposes. And in doing that, 

 that brings the cost down tremendously.

 Or the parallel to that is you say to the sales 

 reps, "Do you have information relevant to 

 Propulsid on your laptop? If you do, send a copy 

 of it here." And you have to take some effort to 

 do that.

 You know, I see people complaining about the 

 effort of having to go to 2,000 workstations to 

 look for relevant material. It's not realistic 

 that that has to happen. Usually, a company can 

 identify here's the people that are likely to

 contain information relevant to this litigation. 

 First of all, I don't think there's any real 

 burden to send a communication out to the entire 

 organization. I mean, you can do that in one 

 broadcast e-mail and say even if you're not a

 primary person that has relevant information, just 

 check your machine quickly. Do a rudimentary check 

 to see if you happen to have anything on there. 

file:///C|/FEB/0212rule.txt (171 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 172 

 MR. CICERO: Mr. Altman, let me interrupt you, 

 if I may, for just a moment. Because the example 

 you're using, I may be naive, but I don't think I 

 am, having gone through this kind of a process

 numerous times with paper documents and so on. I 

 would not consider, nor do I think I'd have the 

 temerity to suggest, that going to 3,000 laptops to 

 get it meant that the material was not reasonably 

 accessible.

 It seems to me you've got the same thing--in 

 some ways something easier than you had when you 

 had going to get paper records, calendars, et 

 cetera, et cetera, et cetera, from salesmen all 

 over the place. So that while I take your point as

 far as using the example of the fact that there are 

 documents or records, hard drives all over the 

 place, and there may well be defense counsel--or 

 not defense counsel--producing counsel who don't 

 want to supply that kind of stuff.

 But I suspect that most people looking at that 

 would not find that, at least as I understand that 

 concept of what we're driving at, that that would 

file:///C|/FEB/0212rule.txt (172 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 173 

 be not reasonably accessible material. It seems to 

 me it's, just as you said, there are very routine 

 ways to get it. Most people would recognize that. 

 MR. ALTMAN: Unfortunately, that's not--

 MR. CICERO: I'm sorry? 

 MR. ALTMAN: I was going to say, unfortunately, 

 that's not my experience. I can tell you in some 

 of the litigation I'm involved in, they've argued 

 that having to do anything associated with sales

 force laptops is unreasonably burdensome and gets 

 into this accessible issue. 

 JUDGE SCHEINDLIN: Burdensome, but not 

 inaccessible. 

 MR. ALTMAN: Well, but they're trying to tie

 the whole thing together. And they're using 

 Zubulake as the basis for a lot of that 

 inaccessibility. It's not your fault, but 

 it's--but I think, frankly, they are distorting it. 

 I'm agreeing with--

 MR. CICERO: That may be. They may be arguing 

 that. They've been arguing that for years about 

 salesmen's records, whether they were in the trunk 

file:///C|/FEB/0212rule.txt (173 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 174 

 of the car or whatever. 

 JUDGE ROSENTHAL: Okay. We've solved the 

 problem. We're going to get rid of salesmen. 

 [Laughter.]

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: It seems to me that if 

 you've been having this problem for a long time, 

 it's not at all clear why having the reasonable 

 accessibility provision in the rule makes a

 difference. It sounds like this is a headache for 

 you, and you think it will continue to be a 

 headache. But if the rule is about something 

 somewhat different, why is it bad for what you do? 

 MR. ALTMAN: Because I think the definition is

 what's going to be the problem. I think there is 

 the appropriate mechanism now to deal with such a 

 thing. 

 PROFESSOR MARCUS: Do you agree with the 

 previous speaker that active versus inactive is a

 good dividing line between what you should be 

 looking for, first off, and what you should be 

 looking at only later? 

file:///C|/FEB/0212rule.txt (174 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 175 

 MR. ALTMAN: I think we--I think we differ a 

 little bit. We're mostly consistent with that. 

 PROFESSOR MARCUS: So it's a problem of 

 defining where that dividing line is?

 MR. ALTMAN: Absolutely. 

 PROFESSOR MARCUS: How would you define it? 

 MR. ALTMAN: Well, let me put it to you this 

 way, in all the litigation I've been involved in, 

 I've never asked to go to back-up tapes. It's

 never happened. Not even once. That doesn't mean 

 they shouldn't be saved. But I've never gone back 

 to the back-up tapes. Okay? 

 So, in my mind, generally, back-up tapes are 

 more of the inaccessible type. But let me give you

 an example of one that would not be. Let's say, 

 for example, there is a discrete server that no 

 longer existed that was backed up onto one 

 particular back-up tape in total. Here is the 

 whole database is on this one back-up tape. It

 wouldn't take very much effort to restore that one 

 back-up tape that you specifically know contains 

 the information for that particular database. That 

file:///C|/FEB/0212rule.txt (175 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 176 

 would not be inaccessible. 

 If I don't know where to find things, you know, 

 I have a sea of 500 back-up tapes-- 

 PROFESSOR MARCUS: Why would one back-up tape

 not be inaccessible, but 1,000 be inaccessible? 

 MR. ALTMAN: If I knew that--if I said that I 

 want everything, if everything that was on all 

 1,000 back-up tapes was relevant and discoverable, 

 and I met the burden of having to get that

 information, then if I'm asking you for the whole 

 thing, technically, you just turn over all the 

 back-up tapes to me. And you can say, "Here they 

 are." You don't have to look through them because 

 you've got to give them all to me.

 JUDGE ROSENTHAL: What about privilege? 

 MR. ALTMAN: Well, you know, given those 

 issues. But that's the whole point of the claw 

 back provision as well, which kind of falls apart. 

 It's exactly the same thing. It's designed to

 minimize having to review a lot of the material. 

 But I don't think that's likely to happen. 

 But I could see that one specific back-up tape, 

file:///C|/FEB/0212rule.txt (176 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 177 

 I don't think it's burdensome to have to do one 

 thing. It's when I have 1,000 that I don't know 

 where on the 1,000 back-up tapes the stuff that I 

 need to review is and the effort of getting it to a

 point where I can review it. 

 Let me go to the other end of the spectrum. 

 What I think is always accessible is something that 

 somebody could sit down at a machine and touch, 

 okay? Whether it's by plugging in a server, I

 could sit down. I could touch it. I could get at 

 it, somebody's machine. 

 The fact that I may have to go, you know, to 

 another office and sit down at their machine and do 

 it, that doesn't make it inaccessible. But I can

 touch it. I can feel it. I don't have to do a 

 whole lot of work just to get it to that point. 

 JUDGE SCHEINDLIN: What if you had to hire 

 somebody to restore it? Would that change its 

 status?

 MR. ALTMAN: That's starting to get to 

 be--that's starting to move more into where I would 

 consider the inaccessibility. But I still think 

file:///C|/FEB/0212rule.txt (177 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 178 

 you have to weigh how much effort is required for 

 that. 

 Like, for example, if I had to hire somebody to 

 restore a single back-up tape just because I don't

 have the person to do it, I don't know that that 

 would make that back-up tape truly inaccessible in 

 what you're meaning. You know, it's obviously a 

 more difficult issue when you start talking about 

 the tapes.

 JUDGE ROSENTHAL: Can I ask one more question, 

 and then I think we will have extended your time, 

 and I apologize for that. 

 I was struck by your statement just a second 

 ago that you had never had to go into a back- up

 tape, although you have obviously throughout these 

 various litigations ensured that they were 

 maintained in case that need arose. 

 Do you have any idea how much--let's just take 

 the Propulsid case as an example--what the

 financial cost was of having to stop the recycle of 

 all of those back-up tapes that were place at that 

 time, and go out and get brand-new back-up tapes to 

file:///C|/FEB/0212rule.txt (178 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 179 

 be able to move forward, and then to just hang on 

 to the back-up tapes throughout the duration of the 

 litigation? 

 MR. ALTMAN: I'm not aware of what that cost

 is. Clearly--clearly, there was a cost. But I 

 think it's a lot less than the uncertainty of 

 saying save all your back-up tapes going forward 

 because we don't know, and I've heard anecdotal 

 information that could be several hundred thousand

 dollars per month. That is not what we're looking 

 for. We're looking for reasonable protection of 

 the information to give courts and attorneys the 

 opportunity to sit down. 

 MS. VARNER: Excuse me. I take it that--

 JUDGE ROSENTHAL: One more question. This will 

 be-- 

 MS. VARNER: I take it that there was no cost 

 sharing for that cost, whatever it was? 

 MR. ALTMAN: To preserve the data?

 MS. VARNER: For purchasing the new tapes, 

 which was necessitated by the fact that there was a 

 freeze or a hold on the old ones? 

file:///C|/FEB/0212rule.txt (179 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 180 

 MR. ALTMAN: I'm not aware of whether there was 

 or wasn't. I just don't--I was not involved at 

 that level. 

 I just want to end with one thing. I truly

 believe that the meet and confer process is really 

 the solution to many of the problems raised by 

 these issues. I've had the opportunity to 

 participate not just in Propulsid, but many of 

 these other processes. I think that discussing

 preservation protocols in those meet and confers 

 are very, very valuable. 

 I think what producing parties will find is 

 there may be quite a bit of information they 

 thought they needed to maintain is really stuff

 that the requesting party is not going to be 

 looking to and they can not have to preserve that 

 information. I think that they can define good, 

 solid production protocols and work together to 

 minimize the cost and the burden of producing that

 information. 

 And that if this becomes a more regular part of 

 these litigations, even down to the lower, you 

file:///C|/FEB/0212rule.txt (180 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 181 

 know, simple divorce or simple contract dispute, 

 that it will ultimately take care of a lot of the 

 problems that have been raised today. And that 

 trying to regularize--I don't know if that's the

 right term--some of these things or put a 

 definition of inaccessible versus not reasonably 

 accessible in the rules that are going to always 

 create debate will just complicate issues that 

 often don't happen.

 JUDGE ROSENTHAL: Thank you very much. 

 MR. ALTMAN: Thank you. 

 JUDGE ROSENTHAL: Mr. Kleysteuber? Good 

 morning. 

 MR. KLEYSTEUBER: Good morning.

 JUDGE ROSENTHAL: Before you begin, let me 

 introduce all of--our next speakers are all 

 students at the Yale Law School, who I was very 

 privileged to be able to meet when I went and 

 taught one of Professor Resnick's procedure

 classes. And as I said to one of them earlier, if 

 it is the mark of a good teacher to inspire 

 students to independent thought that, indeed, 

file:///C|/FEB/0212rule.txt (181 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 182 

 questions the statements made by the teacher, I am 

 a great teacher. 

 [Laughter.] 

 MR. KLEYSTEUBER: Thank you for that

 introduction. And thank you for letting me come 

 this morning. I do just want to say, to start out, 

 that I'm coming to this as a lawyer in training. 

 So be gentle and--the only reason I am really 

 coming is because I'm a lawyer in training who

 happens to have a life of experience with 

 technology. 

 JUDGE ROSENTHAL: Are you a gearhead? 

 MR. KLEYSTEUBER: I'm sorry? 

 JUDGE ROSENTHAL: Are you a gearhead? Wasn't

 that the term we heard earlier? 

 MR. KLEYSTEUBER: I guess you could call me 

 that, yes. And I don't even have as much 

 experience with technology as some of my colleagues 

 who will follow.

 But I'm coming these rules, as are the five of 

 us, with a fresh eye, if you will, and we're 

 not--we're not looking at it from the perspective 

file:///C|/FEB/0212rule.txt (182 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 183 

 of precedent so much as just what the rules say on 

 their face, the language that's being used, and 

 what we as gearheads, if you will, would take them 

 to mean in our regular course of using our

 technology. 

 I have very simple points, really. And they 

 can be made quite quickly. So I won't take much of 

 your time. The first is that I think the rule 

 revisions take into account, more than anything,

 costs as a primary motivating factor. And I think 

 that throwing around the idea of costs is a very 

 easy way of skirting a very complicated issue 

 because the costs are multi-faceted, and they're 

 always changing.

 In fact, they're always falling. If you had a 

 chance to look at my little graph, which I was 

 proud of, the cost of magnetic storage has 

 plummeted--and this even shocked me--by, since 

 1980, I think it was seven orders of magnitude.

 The costs of data storage are just constantly 

 changing. And to make a rule that's grounded in 

 the idea of it's going to cost a lot to buy a lot 

file:///C|/FEB/0212rule.txt (183 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 184 

 of hard drives or it's going to cost a lot to buy a 

 lot of tapes may be jumping the gun. I'm sorry? 

 JUDGE ROSENTHAL: I think we've heard a lot of 

 concern that, in fact, it's the very decrease in

 the cost of data storage and the lack of a reason 

 to get rid of material that has resulted in a huge 

 volume of stuff that leads to the much larger cost 

 of human eyes having to examine it before it can be 

 determined to be responsive, relevant, and

 nonprivileged. 

 MR. KLEYSTEUBER: Someone earlier made a point 

 about people no longer keeping records retention 

 policies, management policies, and I think that 

 while that's a valid point, what we are seeing, in

 fact, in the technology world is a paradigm shift 

 about what you do with records. Do any of you all 

 use Google's g-mail? 

 Okay. One person at least. You'll know 

 that--you probably know that Google made a big fuss

 when they introduced a competing mail server 

 because they let you have a gigabyte of storage 

 which was then, when they announced it, a big deal. 

file:///C|/FEB/0212rule.txt (184 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 185 

 And they eliminated--this is the more important 

 part--the use of any folders. 

 You can't actually make a folder anymore on 

 g-mail because Google's entire idea was you don't

 need to spend your time sorting your data into 

 files that then is going to be this is the one file 

 that contains all of the records pertinent to this 

 matter. Rather, you just do a search for the 

 keywords, and the search is so fast and so

 good--it's so clever, in fact--you don't need to 

 spend your time managing the records. The computer 

 does it for you. 

 So I think that it's true that if you build it, 

 it will come, right? If we build more storage

 capacity, we'll find something to put on it. But 

 as our computers get cleverer and as we make 

 programs that can better understand what we're 

 looking for, the problem of filtering out 

 privileged information, the problem of finding the

 relevant records is actually still going to go 

 away, I think. 

 JUDGE WALKER: Would I be correct in 

file:///C|/FEB/0212rule.txt (185 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 186 

 understanding your comments with regard to the 

 increasing storage capacity that there is likewise 

 a quantum leap in the accessibility of that stored 

 information?

 MR. KLEYSTEUBER: That's correct. Yes. 

 JUDGE WALKER: The two go together. Even if we 

 had cheaper and cheaper and faster and faster 

 back-up tapes, that wouldn't be what you're talking 

 about?

 MR. KLEYSTEUBER: Right. 

 JUDGE WALKER: You're talking about storage and 

 accessibility, aren't you? 

 MR. KLEYSTEUBER: Yes, and the accessibility is 

 also coming from faster and faster processing,

 which is something that I didn't really bring up. 

 But you all, I'm sure, heard about the new 

 announcement that the Pentium 4, we're moving past 

 that. In a few months, we'll have IBM making a 

 chip that runs about at least twice as fast, maybe

 four times as fast as our current processors. 

 When you can process data faster, you can 

 search better and more intuitively through it. I'm 

file:///C|/FEB/0212rule.txt (186 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 187 

 sorry. I do think that the costs to search are 

 really falling as well. 

 JUDGE ROSENTHAL: May I ask you a question that 

 we've also heard some debate about? And that is

 the adequacy of our descriptions and labels, 

 electronically stored information? 

 MR. KLEYSTEUBER: I read one set of comments 

 that was submitted that used the term "electronic 

 records." I quite like that. I'm not as

 uncomfortable with it because I think judges will 

 pretty much get the gist of what you're saying 

 there. I am more uncomfortable with other language 

 that's inserted, particularly in the note to Rule 

 26(b)(2) with reasonably inaccessible.

 I think that putting in--enshrining a 

 particular technological process, such as deletion, 

 or a particular technological task, such as 

 disaster recovery, is it's going to date your rule 

 before it's even created. Google has anticipated

 this. We're no longer talking about archives and 

 records. We're just going to search everything 

 every time because we can do that. 

file:///C|/FEB/0212rule.txt (187 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 188 

 The empirical evidence that we have in terms of 

 whether the costs of the specific tasks of 

 recovering deleted data or recovering disaster 

 recovery data, as far as I can tell, is anecdotal.

 And while we have-- 

 JUDGE SCHEINDLIN: Does that mean that 

 everything essentially stays online? There's no 

 offline anymore? 

 MR. KLEYSTEUBER: That's the paradigm that

 Google wants to move you toward at least. 

 JUDGE SCHEINDLIN: It would all be online. 

 Would that mean, so it's all active? It's 

 searchable. It's online. 

 MR. KLEYSTEUBER: It's all active and all

 searchable because it actually costs more to move 

 it into the inactive zone than to just buy a new 

 hard drive, which will cost you nothing. 

 JUDGE ROSENTHAL: Does that mean you can't 

 delete it, even if you wanted to?

 MR. KLEYSTEUBER: No, it doesn't mean that. 

 And certainly I think that computer programmers 

 will always know people will want to erase things. 

file:///C|/FEB/0212rule.txt (188 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 189 

 But it means that--it explains, for example, the 

 emergence of programs like scrubbing programs that 

 erase your hard drive because you know that your 

 hard drive is so big. There is stuff left on there

 from eons ago that just hasn't been overwritten yet 

 because you don't need that space yet. 

 JUDGE SCHEINDLIN: But the one thing that would 

 remain, even in the new world that you just 

 described, would be a disaster recovery back-up

 system in case there was a complete crash or a-- 

 MR. KLEYSTEUBER: But even the disaster 

 recovery system--I'll tell a personal anecdote 

 here, even though I'm against anecdotes. I have a 

 server at home, and the way I do disaster recovery

 is I just keep an entire copy hard drive. I have a 

 back-up drive, a tape drive which I no longer use. 

 And I use the phrase in my comments that back-up 

 tapes may some day be like mimeographs. You know, 

 it's a very slow system that doesn't work very

 well. 

 JUDGE SCHEINDLIN: But I'm not talking about 

 the way to do it, but there will be a disaster 

file:///C|/FEB/0212rule.txt (189 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 190 

 recovery system. 

 MR. KLEYSTEUBER: I think so. But the way to 

 do it may, in fact, be so analogous to the routine 

 operations that to talk about it as disaster

 recovery and assume that disaster recovery means 

 cost doesn't equate. I'm just going to copy over 

 an image of yesterday's things to get disaster 

 recovery. 

 MR. CICERO: I'd like to follow up on that for

 just a moment, if I may. Because your comments 

 toward the end of your paper tied in with a couple 

 of questions here. We have heard over and 

 over--and your comments about Google searches, et 

 cetera.

 We have heard over and over here that the 

 problem with back-up tapes is that there is no way 

 to go in and find a particular subject. That 

 they're not organized the way other things are and 

 so on. Everything is just copied. You're

 suggesting and I ask that isn't conceivable that in 

 a few years, or maybe less time, there will be a 

 way to search all those things routinely? 

file:///C|/FEB/0212rule.txt (190 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 191 

 MR. KLEYSTEUBER: I think that's not-- 

 MR. CICERO: That Google or somebody will come 

 up with a way where if you want to know about 

 salesman Joe Sax's activities, they'll be able to

 go into all these back-up tapes, or whatever they 

 are, the back-up storage devices, and they'll find 

 it? 

 MR. KLEYSTEUBER: And this ties in also to the 

 question of legacy and 26(b)(2).

 PROFESSOR MARCUS: Can I-- 

 MR. KLEYSTEUBER: Go ahead. I'm sorry. 

 PROFESSOR MARCUS: Is it possible that using 

 terms that you might think could become passe soon 

 would have a benefit because as they become passe,

 they are replaced by a world in which nobody has to 

 worry about that anymore, and you've conveyed 

 exactly the message you want to convey about the 

 old stuff that may still be lying around? Unless 

 Frank Cicero is right that it will become somehow

 searchable. So if your new world is coming, maybe 

 that simply supplants the note in a desirable way? 

 MR. KLEYSTEUBER: I don't want to tread on my 

file:///C|/FEB/0212rule.txt (191 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 192 

 friend Mr. Tannenbaum's feet because this is the 

 whole focus of his comments. But if you choose 

 words that protect a certain interest, right now, 

 you are, in fact, freezing the status quo. And

 companies that want to keep certain kinds of data 

 inaccessible to plaintiffs will preserve the idea 

 of a back-up system and disaster recovery in the 

 old frame of mind precisely because they can then 

 say, "Oh, but we don't really have access to it.

 It's kind of too expensive." 

 JUDGE KEISLER: You read our note, don't you, 

 as, in the word's of your testimony, "permanently 

 labeling these scenarios disaster recovery"? 

 MR. KLEYSTEUBER: At least until the next

 revision. 

 JUDGE KEISLER: Until the next revision. Well, 

 permanently while this is in effect as unreasonably 

 accessible. And I've heard that reading from other 

 people, colleagues of mine, too, and it's not my

 reading. And I'm just wondering whether we simply 

 need to add another sentence to clarify. 

 The way I read a sentence like "some 

file:///C|/FEB/0212rule.txt (192 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 193 

 information may be stored solely for disaster 

 recovery purposes and be expensive and difficult to 

 use for other purposes" is not to say that all 

 information stored for disaster recovery purposes

 is necessarily expensive and difficult to use for 

 other purposes, but rather there is a--at least a 

 subset of that information. And with respect to 

 that information, the label "reasonably accessible" 

 would not apply, but that there could be other

 disaster recovery information. 

 The other way, I'm just wondering would it be 

 sufficient, do you think, to clear up--assuming 

 that that's a consensus view of the committee that 

 that's what we're trying to say--to add a sentence

 or two that just says we're not saying that these 

 categories are forever, or even today, in all 

 instances not accessible? 

 MR. KLEYSTEUBER: In my view, that would be a 

 significant improvement, but I personally still

 take the use of the term "reasonably inaccessible" 

 as too easy of a label to grab onto. I think the 

 work that's being done in Rule 26(b) is in the 

file:///C|/FEB/0212rule.txt (193 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 194 

 balancing test--(b)(2). And that is what really 

 needs to be focused on. 

 And when you add a term following it, like 

 reasonably inaccessible, that people can grab onto

 and say, "Well, that's really what it's trying to 

 say. It's not trying to say balancing test. It's 

 trying to say reasonably inaccessible," that that's 

 where the focus is going to be. 

 And the work that you really want to be done is

 you want the judges to balance the costs with the 

 potential benefits. 

 JUDGE ROSENTHAL: And I think that one way, as 

 we've said, to look at our effort is to make those 

 proportionality factors clearer and more effective

 applied to this stuff, which, I take from your 

 comments, we will not be referring to as discovery 

 in a short period. We will be referring to it as 

 Googling? 

 MR. KLEYSTEUBER: Well, I think Google might

 take umbrage at that. 

 JUDGE ROSENTHAL: They might like it. It will 

 be like Kleenex. 

file:///C|/FEB/0212rule.txt (194 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 195 

 MR. KLEYSTEUBER: It might dilute their trade 

 name. 

 JUDGE HAGY: If I may, I think we ought--not 

 just this time, but a lot of us have been using the

 word "not reasonably inaccessible," which is not a 

 term we use. And just for the record, what we're 

 really--I think when the record says that, what 

 we're really trying to say is not reasonably 

 accessible. That's what the statute, the proposed

 statute-- 

 MR. KLEYSTEUBER: Reasonably inaccessible or 

 not. 

 JUDGE HAGY: Reasonably inaccessible is a 

 difficult concept.

 MR. KLEYSTEUBER: And I'm looking back, and I 

 have "unreasonably accessible," which is completely 

 wrong. 

 I'll just make one more comment because I know 

 I'm running low on time. It's about Rule 37, and I

 think that the motive behind the suggested 

 amendment, as I take it, is very worthwhile, which 

 is to point out to judges that there is some stuff 

file:///C|/FEB/0212rule.txt (195 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 196 

 that goes on behind the scenes that causes 

 sometimes some data to be lost. 

 But I think that crafting the safe harbor 

 provision, as it's written at least, is dangerous

 partly because it really creates a big loophole for 

 people to walk through. 

 And I'll just tell you that if I were sued and 

 the new rules were in effect, I would quickly go to 

 my computer and set my data retention policy on my

 Internet Explorer cache to be one day on the 

 history, 50 kilobytes of retention of cached files, 

 and then I'd quickly run my hard drive scrubbing 

 program--if I had something to hide. 

 JUDGE ROSENTHAL: If you did that the day after

 you were sued, you'd be in a world of trouble. 

 MR. KLEYSTEUBER: Yes. Clearly-- 

 [Laughter.] 

 JUDGE ROSENTHAL: Even under the proposed 

 rules.

 MR. KLEYSTEUBER: The way I'm telling it is to 

 make it clearly manifest that it would be a bad 

 faith activity. But the way the proposed rules are 

file:///C|/FEB/0212rule.txt (196 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 197 

 written, at least I could make a plausible argument 

 that I am anticipating needing lots of hard drive 

 space for my litigation, and you know, these are 

 things that would have been deleted anyway. I'm

 just making sure that I have lots of free space. 

 JUDGE HAGY: How do you argue in a jail cell? 

 [Laughter.] 

 JUDGE ROSENTHAL: Keep up with your law school 

 friends.

 JUDGE HAGY: Study a little more. 

 MR. KLEYSTEUBER: I guess what I just want to 

 say about that rule is that if you are going to 

 make that amendment, I would really highlight the 

 idea of intent. And I try to make a practical

 distinction between deleting and erasing. Erasing 

 being the automatic thing that's overwriting, and 

 deleting being the intentional thing. 

 But changing any kind of data retention policy 

 in any way after the point of lawsuit is, in fact,

 deleting, and perhaps an addition to the note to 

 that effect or some other way of bringing that to 

 judges' attention would be helpful. 

file:///C|/FEB/0212rule.txt (197 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 198 

 JUDGE ROSENTHAL: You actually raise an 

 interesting point, which has been brought home to 

 me in various conversations I've had, which is that 

 many companies, we have been told, do not have

 adequate routine retention and destruction 

 policies, particularly with respect to their 

 electronic information. 

 But if they tend to be companies that have some 

 lawsuits that they have already faced or if they

 are on notice of pending litigation, they are most 

 reluctant to then change any aspect of their 

 retention policy or their destruction policy 

 because they are on notice of litigation. So 

 they're in sort of a paralyzed situation, which is

 not good for anybody. 

 MR. KLEYSTEUBER: I think they could still ask 

 the judge for permission to change, given some 

 reasonable necessity that had arisen in their 

 regular course of business.

 JUDGE ROSENTHAL: I think they hope not to be 

 asking the judge for anything. 

 MR. KLEYSTEUBER: All right. 

file:///C|/FEB/0212rule.txt (198 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 199 

 JUDGE ROSENTHAL: Any other questions? 

 [No response.] 

 JUDGE ROSENTHAL: Thank you very much, sir. 

 MR. KLEYSTEUBER: Thank you.

 JUDGE ROSENTHAL: Mr. Heidler? 

 MR. HEIDLER: Your Honor and members of the 

 committee, thank you for the opportunity to testify 

 this afternoon, I see it already is. 

 I'd like to start out by briefly describing

 what I hope to bring to this process. Because I 

 see this as an incredibly complex process because 

 it deals with two complex fields--the field of law 

 and the field of technology. And I can only 

 imagine the enormous legal expertise that has gone

 into this process. And as someone who has spent 

 several years as a professional technology 

 consultant and project manager, I hope that I can 

 bring a lot of technical expertise to this process 

 that might otherwise be under represented.

 So, with that goal in mind, I'd like to comment 

 specifically on the proposed amendments to Rules 

 26(b)(2) and 34(b). Overall, I like the proposed 

file:///C|/FEB/0212rule.txt (199 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 200 

 amendment to Rule 26(b)(2) because I think it's 

 necessary to balance the interests of requesting 

 and responding parties. In particular, as someone 

 who has consulted on large and small technology

 projects, I know that it can be more difficult to 

 access data that must be restored or to access data 

 that relies on obsolete systems. 

 JUDGE SCHEINDLIN: Let me ask you about your 

 topic heading on page 2. You say the reasonably

 accessible standard is necessary for electronic 

 discovery because unlike paper documents, 

 electronic data must be restored, and the 

 technologies upon which it depends can become 

 obsolete.

 So would your great divide between Tier 1 and 

 Tier 2 be the necessity of restoration or the 

 bringing back an obsolete system so that it's now 

 usable? Would that be the real divide? 

 MR. HEIDLER: The way I see this divide is

 there's a placeholder in the rule itself, and it 

 stands for what's in the notes. The note mentions 

 many factors that can lead to data being not 

file:///C|/FEB/0212rule.txt (200 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 201 

 reasonably accessible. Two of them that I have 

 specific qualifications to address are restoration 

 and obsolescence because I've dealt with that in my 

 professional experience.

 JUDGE SCHEINDLIN: But the others would just be 

 cost and burden, which we've discussed a lot in the 

 day and a half we've been sitting here, wouldn't 

 they be? This is what makes it really unique to 

 e-discovery as opposed to paper?

 MR. HEIDLER: That is correct. 

 JUDGE SCHEINDLIN: You do agree with that? 

 MR. HEIDLER: And in fact, I would boil 

 everything down to cost. Even burden is just a 

 measure of time, as I see it. And time is a

 measure of cost as well. 

 JUDGE SCHEINDLIN: Right. This distinguishes 

 electronic material from paper, this idea of 

 restoration? 

 MR. HEIDLER: Precisely.

 JUDGE SCHEINDLIN: Right. Okay. 

 MR. HEIDLER: So these are factors that are 

 unique to electronic data that do not present 

file:///C|/FEB/0212rule.txt (201 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 202 

 themselves in the paper world. 

 JUDGE SCHEINDLIN: Right. Okay. 

 MR. HEIDLER: So I feel particularly qualified 

 to address these concepts of data restoration, data

 obsolescence. As part of my professional career 

 prior to beginning law school, I was charged with 

 writing proposals for technology projects. And I 

 know that in drafting a proposal and estimating the 

 cost for a project, I would require more time and

 more money for a project that required restoring 

 data or accessing data that was needed to be 

 restored into an obsolete system. 

 JUDGE SCHEINDLIN: Can I interrupt with just a 

 question because I don't understand? How do you

 bring obsolete data back? Does it mean writing a 

 program? Is that what it generally means? 

 MR. HEIDLER: When I say obsolete data, I mean 

 legacy data. Data that's based on an obsolete 

 system.

 JUDGE SCHEINDLIN: I know. So how do you bring 

 it back, in a word? Not a whole-- 

 MR. HEIDLER: Okay. A large system would have 

file:///C|/FEB/0212rule.txt (202 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 203 

 data backed up from its database. And whenever 

 that database becomes obsolete, whenever the 

 hardware and the operating system become obsolete 

 and become replaced by newer versions and newer

 models, it becomes more difficult to access that 

 data in the old environment. 

 JUDGE SCHEINDLIN: And you do it by? 

 MR. HEIDLER: You would do it by reconstructing 

 the old environment.

 JUDGE SCHEINDLIN: Okay. That's what I needed. 

 MR. HEIDLER: There are several ways that one 

 could do this. If--depending on how the data is 

 arranged in the database, if the database has an 

 intuitive arrangement, if the items in the database

 are well named and not too complex, then this could 

 be done by querying the database directly, as 

 someone previously mentioned. 

 If the database is complex, if the software 

 application that uses the database performs

 specific calculations on the data or provides some 

 reporting functionality, then the responding party 

 could need to reconstruct that environment in order 

file:///C|/FEB/0212rule.txt (203 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 204 

 to access the data. 

 JUDGE SCHEINDLIN: That was helpful. Thank 

 you. 

 MR. HEIDLER: You're welcome. And in my

 comments, I describe how this process of restoring 

 data into a system could cause a small to 

 medium-sized organization to spend over $65,000. 

 And I used the methodology that I've used to 

 estimate a project of this scope to do that. And

 that estimation does not include the cost to 

 restore data from tape. So that-- 

 JUDGE ROSENTHAL: I'm sorry. I didn't mean to 

 interrupt you. I wanted to pick up on the answer 

 that you gave just a minute ago. Reconstructing

 data from a database that is designed to meet a 

 certain functionality, reconstructing it so that it 

 can provide other information that might be 

 responsive in litigation, is that reconstruction 

 function that you're discussing--is that a function

 applied to what we have been thinking of as active 

 data? 

 MR. HEIDLER: This is data that would have been 

file:///C|/FEB/0212rule.txt (204 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 205 

 previously taken offline. 

 JUDGE ROSENTHAL: Okay. All right. Thank you. 

 MR. HEIDLER: You're welcome. And so-- 

 JUDGE ROSENTHAL: Wait. I've got to ask one

 more question. I'm sorry. 

 MR. HEIDLER: Please. 

 JUDGE ROSENTHAL: On these complex databases, 

 trying to understand how they operate and the 

 limitations of them in discovery, if that database

 had not previously been taken offline--if it was 

 still online--would there be any forensic type 

 of--computer forensic type of work or any other 

 cost or burden to the producing party to provide it 

 in the--well, in order to--to understand what it

 said, examine it, and to produce it? 

 MR. HEIDLER: There are multiple components 

 that go into these large business systems. One of 

 them is the database. Sometimes the database on 

 its own could supply the data, and it would

 probably need to be formatted, unless the 

 requesting party were willing to take the data as 

 it was with some kind of privilege agreement. 

file:///C|/FEB/0212rule.txt (205 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 206 

 JUDGE ROSENTHAL: That's just a formatting 

 problem. And I want to understand, just doesn't 

 mean it's trivial perhaps, but it is a problem of 

 formatting rather than restoring or reconstructing?

 MR. HEIDLER: One problem would be formatting. 

 In other cases and with other databases I've used, 

 and I could describe all of the technical 

 terminology to explain why this could be, but I 

 don't think it would be particularly useful. But

 in some cases, it's just not practical to obtain 

 data directly from a database. The database is 

 poorly designed. Some commercial databases on 

 which I've worked don't follow the normalization 

 patterns that are required for responsible and

 professional database development. 

 And in those cases, it would be particularly 

 burdensome to access the data directly from the 

 database. A responding party would need to go 

 through another step to either write software or to

 implement the software that was designed originally 

 to access the database in order to get to the data. 

 JUDGE ROSENTHAL: Would it be consistent with 

file:///C|/FEB/0212rule.txt (206 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 207 

 the divide of 26(b)(2) to think of that as not 

 reasonably accessible? 

 MR. HEIDLER: I think it depends on the issue, 

 on the amount in controversy, on the resources of

 the parties. Ultimately, it's something that I 

 think should be left to the discretion of a judge. 

 However, I think putting these factors in the 

 comment and in the note would be helpful in that 

 process.

 JUDGE ROSENTHAL: Thank you. Go ahead, please. 

 I'm sorry. 

 MR. HEIDLER: So in my comments, I describe 

 how, without the need to restore data from tape, 

 just restoring data to an application environment

 could cost a small to medium-sized organization 

 over $65,000. Now were that technology obsolete, 

 then the cost would be much more variable. But it 

 could exceed $100,000 just to get data to the point 

 where it is accessible.

 And I don't say all of this to suggest that it 

 will be the norm or it will be typical in 

 litigation, but rather, I think when all of these 

file:///C|/FEB/0212rule.txt (207 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 208 

 factors line up for a party and a party needs to 

 reconstruct an application that requires expensive 

 software licenses or complex software, it could 

 lead the party to pay upwards of over $100,000 to

 access data or to make it accessible to them. 

 And finally, I'd like to comment on the 

 proposed amendment to Rule 34(b) as well. As I 

 read the proposed amendment to that rule, it might 

 allow a responding party to produce data in a

 cumbersome format because the rule does not require 

 the requesting party to specify a data format. So 

 if the requesting party does not specify a data 

 format, then the responding party may produce the 

 data in a form in which it is already maintained.

 And not knowing--and not having the knowledge 

 about litigation that all of you do, my concern 

 would be that a responding party or someone who is 

 anticipating litigation would store data in 

 multiple formats, one of which they know would be

 burdensome, so they could supply that format in 

 litigation. 

 So the suggestion that I include in my comment 

file:///C|/FEB/0212rule.txt (208 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 209 

 would be to require the requesting party to specify 

 at least one data format, based on a conversation 

 in discovery conference. So the parties would 

 agree on that ahead of time.

 JUDGE ROSENTHAL: Half our civil dockets in 

 many jurisdictions are pro se. It might not be 

 reasonable to expect--to require a pro se litigant 

 to specify the electronic format in which it wants 

 information to be provided. That's part of the

 concern. Because we have to write these rules for 

 all cases. 

 MR. HEIDLER: That makes sense. Otherwise, 

 those were all of the comments that I had. I'd 

 like to thank you for the opportunity to

 participate in the process. You have my comments, 

 and if you have any questions on them, I'd be glad 

 to answer them. 

 JUDGE ROSENTHAL: Thank you very much. 

 Mr. Shepard?

 MR. SHEPARD: Your Honors, members of the 

 committee, thank you. I'm grateful for Judge 

 Rosenthal having come to speak at our school and 

file:///C|/FEB/0212rule.txt (209 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 210 

 also for the opportunity to learn more and think 

 more about these issues. As law students, we're 

 coming very new to a longstanding and fascinating 

 discussion, and it's an honor to be able to add our

 voices to those who have already spoken today. 

 I would like to briefly touch on the proposed 

 reasonable accessibility standard. I was 

 interested to hear that the comments earlier today 

 drew a real distinction between this proposed

 standard and the procedure through which it would 

 be applied. A lot of the testimony would begin by 

 speaking first about the standard and then talking 

 about a distinct question about the increase in 

 motion practice or the two-tiered system of review

 in the proposed changes to 26(b)(2). 

 It seemed to me that the question, which was 

 well phrased by Professor Ball earlier this 

 morning, whether or not a reasonable accessibility 

 standard--

 [Laughter.] 

 JUDGE ROSENTHAL: We're laughing because you 

 promoted him. 

file:///C|/FEB/0212rule.txt (210 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 211 

 MR. SHEPARD: From our point of view, everyone 

 here is a professor. 

 [Laughter.] 

 JUDGE ROSENTHAL: Good comeback. That's good.

 MR. SHEPARD: It seems to me that his question, 

 whether or not the reasonably accessible standard 

 makes it easier for a court to reach the relevant 

 information and to make the right decision depends 

 on the procedure in which that standard is applied.

 In the Zubulake case, Judge Scheindlin employed 

 the reasonable accessibility standard in the 

 context of the defendant corporation's 26(c) motion 

 for a protective order. And the standard there 

 seemed to be a useful shorthand. It allowed Judge

 Scheindlin to say, well, we don't need to consider 

 the motion to shift costs relevant to these 

 requests because everybody knows that these 

 requests are for active information, are for 

 optical disks. It's just simply so easy to get

 that talking about the cost doesn't make sense in 

 this context. 

 The advantages of the reasonable accessibility 

file:///C|/FEB/0212rule.txt (211 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 212 

 standard in the Rule 26(c) context would be to keep 

 the conversation not necessarily on the type of 

 technology used, but on the cost that would occur 

 if the defendant or that the responding party,

 rather, would incur in accessing the data. 

 It would also make more sense in this context 

 because the responding party is going to be more 

 familiar with the storage system and will also help 

 to reduce the motion practice. Because in this

 context, the responding party will be making both 

 arguments at once, both that the data is not 

 reasonably accessible and that it poses an undue 

 burden or expense, which is the concern under 26(c) 

 protective motion.

 And finally, it looks different in the 26(c) 

 context rather than 26(b)(2) context because, in 

 the 26(c) context, the true cost of making an error 

 is lower. If coming from the side of making a 

 motion for a protective order, if the court gets it

 wrong, so to speak, and calls something 

 inaccessible when it really should be considered 

 reasonably accessible, there still will be further 

file:///C|/FEB/0212rule.txt (212 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 213 

 opportunity to access this data if the responding 

 corporation or if the responding party isn't able 

 to make the further showing that, all right, even 

 if it is reasonably inaccessible, it also causes us

 too much of an undue burden in order to access it. 

 I'd also like to touch briefly on the Rule 

 26(f) conference. It seems that everybody who has 

 spoken here today agrees that this is a really good 

 idea. I suggest only a minor addition to this

 rule. And that would be to bring in the technical 

 experts as early as possible. 

 I know Judge Rosenthal earlier made mention of 

 the New Jersey District rule, which requires 

 lawyers to confer with their clients on these

 technical issues before attending the 26(f) 

 conference. This seems an excellent idea that 

 could also perhaps be integrated into the notes 

 published by this committee because this is an area 

 in which, I'm sure, we're all familiar.

 There is a great potential for people not to 

 know what they don't know. It's easy to feel that 

 you're familiar with the system because you've 

file:///C|/FEB/0212rule.txt (213 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 214 

 worked with something similar to it or you've dealt 

 with something like that in the past. And yet when 

 it comes down to a specific question that you 

 hadn't anticipated before, you find too late after

 the fact that you really should have talked with 

 the expert beforehand. 

 Finally, I would like to echo Mr. Kurt's 

 concern earlier today with the phrase 

 "electronically stored information." He suggested

 "digitally stored information." But I'm concerned 

 that the word "information" might prove to be a 

 little under inclusive over the long term. 

 This is a concern that might not arise in the 

 next 2, 3 years, perhaps 10 years down the road.

 But I would suggest using the word "data" rather 

 than "information." When folks hear "information," 

 they tend to think of something that was created by 

 a human user, something that is understandable 

 by--has been created by a human being that refers

 to some underlying fact. 

 More and more, computers themselves are 

 generating data that doesn't look like an e-mail or 

file:///C|/FEB/0212rule.txt (214 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 215 

 a note that somebody wrote to somebody else. It 

 looks like--well, to use Mr. Kurt's example, it 

 looks like a blood sugar monitor and the levels of 

 blood sugar that a patient was having.

 The examples that came to my mind and that Rudy 

 talked about earlier were caches of saved Web pages 

 that people have visited, cookies that have been 

 placed on the computer. And we can imagine as the 

 software becomes more and more powerful, for

 computers to interact with their users, computers 

 themselves will be generating more and more 

 information automatically without people 

 understanding what's going on. 

 It's important that the word "data" be included

 so that all of that information remains 

 discoverable. 

 JUDGE ROSENTHAL: Are there any questions? 

 JUDGE WALKER: May I? 

 JUDGE ROSENTHAL: Certainly.

 JUDGE WALKER: Within this scope of kinds of 

 information that computers are generating, and 

 following up on the earlier reference to the Google 

file:///C|/FEB/0212rule.txt (215 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 216 

 paradigm, so to speak, there is also a, is there 

 not, a dictionary or index type of data that these 

 computers are generating, which in itself becomes 

 an independently searchable vehicle of sorts, which

 may even provide a measure of insurance against 

 purposeful deletions? 

 Would that be a fair thing to add to your 

 comment about the use of the word "data" as 

 computer-generated information?

 MR. SHEPARD: Yes, Your Honor, I think it 

 would. And when you speak of the indexing feature 

 that many computers are capable of, it also reminds 

 me of what some people have been calling metadata. 

 JUDGE WALKER: Yes.

 MR. SHEPARD: Which refers to the logs the 

 computer keeps of who sees a file and at what time. 

 And this can occur, as Your Honor points out, 

 without the user of that file even understanding 

 what's going on.

 JUDGE WALKER: And not even knowing how to 

 delete it. 

 MR. SHEPARD: And not even knowing how to 

file:///C|/FEB/0212rule.txt (216 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 217 

 delete it. And so, it can provide someone earlier 

 said electronic footprints or fingerprints that 

 show when people have accessed it. I think the 

 rules should make clear that that, too, will remain

 discoverable. 

 JUDGE ROSENTHAL: Thank you very much. 

 MR. SHEPARD: Thank you for the opportunity. 

 JUDGE ROSENTHAL: Mr. Masters, do you have data 

 for us or information for us?

 [Laughter.] 

 MR. MASTERS: Your Honors, members of the 

 committee, thank you for allowing me to be here. I 

 will be as brief as possible. And my comments 

 included the obligatory notes on 26(b)(2), but I

 think a lot of what I've said have been echoed by 

 my colleagues, and I'd like to focus on Rule 34(b), 

 which Mr. Heidler talked about a little bit. But 

 I'd like to go more in depth. 

 I've been involved professionally with

 computers for over 12 years. And as a learning 

 lawyer and, hopefully, practicing lawyer in the 

 future, I read these amendments as giving me the 

file:///C|/FEB/0212rule.txt (217 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 218 

 ability to bury data in the future with 34(b) as 

 written. And I think it's really a matter of 

 clarification more than anything else. 

 In my comments, I highlighted three different

 scenarios where I felt that the rule did not 

 adequately address. I have an "expensive to read" 

 scenario, where data--so 34(b) providing the 

 opportunity to either have data in its originally 

 stored format or in an electronically searchable

 format, which, to me, does not adequately explain 

 what electronically searchable actually means in 

 the rules. 

 But to start with the expensive to read 

 scenario, I give an example of the Oracle database,

 but I believe in the--there's another example in 

 there. Is it Zubulake or Zubulake? 

 JUDGE SCHEINDLIN: Zubulake. 

 MR. MASTERS: Zubulake. Thank you. 

 JUDGE SCHEINDLIN: So Ms. Zubulake informs me.

 MR. MASTERS: In that case, I believe data was 

 requested in HP Open Mail format, and I have no 

 idea what that is. But I mean, if I were told I 

file:///C|/FEB/0212rule.txt (218 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 219 

 was getting data in an HP Open Mail format, I would 

 be fairly concerned that I would have to buy 

 something expensive to read it. 

 Even today in law school, part time I work for

 a company, and largely what I do is take legacy 

 data and convert it to a standard database format. 

 So I deal with legacy data all the time. And I 

 deal with a lot of expensive to read data. 

 So being able to produce data in its currently

 stored format or its originally stored format does 

 concern me, if that's allowed, especially if you 

 have these pro se attorneys who aren't requesting a 

 format of data. If only one format of data is 

 required, and they're allowed to produce--and the

 producing party is allowed to produce a very 

 expensive to read data, is that something that-- 

 JUDGE SCHEINDLIN: So who should pay the cost 

 of converting it to a usable format? Should it be 

 the producing party that takes the legacy data,

 converts it with what you need-- 

 MR. MASTERS: Assuming that the data is online, 

 assuming there aren't costs in retrieving the data, 

file:///C|/FEB/0212rule.txt (219 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 220 

 I--for example, let's take HP Open Mail. I'm 

 positive that there's a way to export that to text, 

 and that would presumably be electronically 

 searchable. But the rule, as it stands, if I'm the

 attorney for UBS Warburg and I produce in an HP 

 Open Mail, that's it. That's all I've got to do. 

 JUDGE SCHEINDLIN: But I'm still saying the 

 only question is cost, right? Isn't there a cost 

 to you, as the producing party, to convert that to

 a more usable format? 

 MR. MASTERS: One, I think it's an extremely 

 minimal cost in this circumstance. 

 JUDGE SCHEINDLIN: Then it's minimal for the 

 receiving party, too.

 MR. MASTERS: Well, not if HP Open Mail is 

 extremely expensive to buy. In other words-- 

 JUDGE SCHEINDLIN: No. Let me just follow up. 

 So you're assuming the producing party still has 

 the software. For them, it would be a trivial

 cost. But for the receiving party, it would be an 

 expensive item? 

 MR. MASTERS: Right. And I think that's a safe 

file:///C|/FEB/0212rule.txt (220 of 254) [3/2/05 3:01:32 PM]
file:///C|/FEB/0212rule.txt

 221 

 assumption. Because if you own HP Open Mail, it 

 has the opportunity to export it to text. 

 JUDGE SCHEINDLIN: I see. 

 MR. MASTERS: But if you don't have HP Open

 Mail, you can't read HP Open Mail. 

 JUDGE SCHEINDLIN: So it would be equally 

 burdensome. That's a different case. But if it 

 would be inexpensive for the producing party, they 

 ought to produce it in a readable format or usable

 format? 

 MR. MASTERS: Yes. Absolutely. 

 JUDGE SCHEINDLIN: Thank you. 

 MR. MASTERS: So that's the expensive to read 

 scenario. The sort-of-searchable scenario

 addresses what I believe is a confusion with--or at 

 least a lack of thorough explanation about what 

 "searchable" is meant to mean. If I am given a PDF 

 file that has--so a PDF file can have either text 

 data in it, or it can have image data in it. If

 I'm given a PDF file with image data in it, is that 

 searchable? 

 If I'm a producing party, am I allowed to, 

file:///C|/FEB/0212rule.txt (221 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 222 

 let's say--and I have done this as part of my job. 

 We have had text data that we have reproduced as 

 image data so that it would be less easy for our 

 competitors to copy it and use it. I mean, this is

 something that we do just in the normal course of 

 business, and I don't see why it wouldn't happen in 

 the legal world. 

 JUDGE SCHEINDLIN: I have another question, but 

 it's simply based on my ignorance and your

 knowledge. Is that image file searchable or not? 

 I mean, you answer your own question. I don't know 

 the answer. 

 MR. MASTERS: I mean, it's--so what do we mean 

 by searchable? If I want to find a word in it, I

 can't. 

 JUDGE SCHEINDLIN: You can't? 

 MR. MASTERS: I can't. Unless we assume that I 

 can export the image somewhere and run it through 

 an optical character recognition software to then

 give me text. But then that's probably going to be 

 an--I mean, optical character recognition is shady, 

 and especially if when I'm generating these images, 

file:///C|/FEB/0212rule.txt (222 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 223 

 I blur them or I make them harder to read. 

 JUDGE SCHEINDLIN: But then the problem isn't 

 in the word "searchable." We're okay saying in a 

 searchable format. That's just not a searchable

 format. 

 MR. MASTERS: Right. But the notes and the 

 rule don't make explicit what searchable means 

 because a lot of the notes concerning the rule talk 

 about the equivalent in the hard copy world. So

 within a hard copy world, a document is searchable 

 by looking over it and reading the words and kind 

 of scanning it. I mean, that's searchable to some 

 degree. 

 JUDGE SCHEINDLIN: Electronically searchable?

 Does that help any? 

 MR. MASTERS: I think it does. I mean, I have 

 some suggestions in here as well. Yes, I believe I 

 actually use the term "electronically searchable." 

 JUDGE SCHEINDLIN: Okay. All right.

 MR. MASTERS: You used the term "electronically 

 searchable" as well. That's in the rule. So as 

 long as the note--that's already there. 

file:///C|/FEB/0212rule.txt (223 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 224 

 JUDGE SCHEINDLIN: Oh, we did use it. 

 MR. MASTERS: So as long as the notes explain 

 that. And to give an example, I would say there 

 needs to be some way of searching for if it's text

 data, if you want to search for characters within 

 the data using some, you know, reasonable common 

 program. 

 JUDGE SCHEINDLIN: Okay. 

 MR. MASTERS: And the third--the third

 scenario, which I think is the most devious, but 

 also kind of where the world is going with digital 

 rights management, is a situation where you instead 

 of producing data in a document format, in a file 

 format, you produce data in a program format. You

 wrap it up in a program. That limits your ability 

 to do it. 

 So, in other words, I could--if I were asked to 

 produce 100,000 e-mails, I could give you a program 

 that had those encrypted in the program and would

 allow you to read, say, each e-mail. You could 

 search, say, each e-mail. But you couldn't search 

 the whole e-mails. You have to go to each e-mail 

file:///C|/FEB/0212rule.txt (224 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 225 

 and search within each e-mail. 

 And then I could also make it scroll so you 

 couldn't actually kind of read it at your own rate. 

 I can make it scroll one line every 30 seconds,

 every minute. 

 JUDGE SCHEINDLIN: And your language suggestion 

 to prevent people from playing that game would be? 

 MR. MASTERS: To say you want a file format. 

 You want a file. Sorry. So it's not just

 electronically searchable form. Electronically 

 searchable file format is what I was saying. 

 JUDGE SCHEINDLIN: Yes. How are these hundreds 

 of thousands of lawyers going to know what the heck 

 that means?

 MR. MASTERS: Well, I think the notes could 

 also solve this problem as well. Explain 

 specifically you don't want this scenario. I mean, 

 my main concern is the scenario, not so much--I 

 mean, I'm sure my words are not nearly as good as,

 you know, the committee's thinking about this stuff 

 for ages, and I don't know the people who are going 

 to be applying it. So-- 

file:///C|/FEB/0212rule.txt (225 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 226 

 JUDGE SCHEINDLIN: No. I must say, personally, 

 I found your comments on numbered page 3 to 7 to be 

 critically important. So I, for one, enjoyed 

 reading them.

 MR. MASTERS: Thank you. 

 And I mean, those were my main concerns with 

 the rule. The other--those were the three 

 scenarios. 

 The only other piece of 34(b) that I was

 slightly concerned with was this one file format. 

 There is also an implication in the rule that 

 parties are only going to store--there is only one 

 original file format, and I find that not to be 

 true in my business. People store data in lots of

 different formats. 

 JUDGE ROSENTHAL: We've had several people 

 suggest that we need to make those plural. 

 MR. MASTERS: So my suggestion on that was just 

 saying a party needs to only supply one readable

 format, say, by the other party. But, again, if 

 you're going to supply a format that's really 

 difficult to read, you know, you should probably 

file:///C|/FEB/0212rule.txt (226 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 227 

 have to supply another one. 

 JUDGE SCHEINDLIN: It also wouldn't be one 

 format for different types of data, right? It 

 might be a different format for a database than it

 would be for word processing? 

 MR. MASTERS: Absolutely. Absolutely. And 

 that raises the point--I don't know what the full 

 scope of the committee notes are usually. But it 

 would very interesting for me to see examples

 like--so I deal with getting databases every day, 

 different databases, and we always ask for them to 

 be in some kind of ASCII format. So it just means 

 readable bare text. And that's what we ask from 

 all of our sources, and that's what we get.

 And that sort of explication in the committee 

 notes, I think, would be really helpful, especially 

 when you're talking about an electronically 

 searchable form. The committee probably-- 

 JUDGE SCHEINDLIN: Can I ask one question,

 though? Are we going to get outdated? Because 

 we've been hearing all day that if we put things 

 down like ASCII format, in two years, somebody will 

file:///C|/FEB/0212rule.txt (227 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 228 

 say "mimeograph." I mean, is that going to last? 

 MR. MASTERS: Well, I mean, I'm not going to 

 prognosticate here, but we've been using the term 

 "ASCII" since for, you know, 40 years.

 JUDGE SCHEINDLIN: I know, but next year-- 

 JUDGE ROSENTHAL: For how many years? 

 MR. MASTERS: Forty, I'd say. 

 JUDGE SCHEINDLIN: True. 

 MR. GIRARD: Is there a generic way of

 describing-- 

 JUDGE SCHEINDLIN: True, but what I'm worried 

 about is next year is the end of ASCII format. 

 MR. MASTERS: I would--I mean, all ASCII means 

 is bare text. And I think that if you have data

 which is text, you know, you've got a letter, 

 you've got fields in a database that are text or 

 numbers or whatever, that sentiment of just wanting 

 the-- 

 JUDGE SCHEINDLIN: You don't think ASCII format

 will be outdated is the short answer. 

 MR. MASTERS: I don't think so. No. I don't 

 think ASCII format will be outdated. It's been 

file:///C|/FEB/0212rule.txt (228 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 229 

 along a long time. 

 JUDGE HAGY: Rule 34 starts with "unless the 

 court otherwise orders." Don't you think that 

 people would be concerned about giving unusable

 formats to pro se litigants or others and then be 

 drawn back in front of the court and have to 

 explain it? 

 MR. MASTERS: I would hope so. 

 JUDGE HAGY: I mean, it really does work that

 way, generally. 

 MR. MASTERS: I mean, I would certainly hope 

 so. I mean, again, I'm coming to this, you know, 

 fairly new. But when I read it and I come from my 

 tech background, I am just instantly worried

 that--I guess from my perspective, yes, I would 

 certainly hope that was the case. But wouldn't it 

 be worth having the committee specify in notes 

 exactly what it means by these terms, just in the 

 odd instance this would happen? You know, while

 you're at this draft stage. 

 JUDGE HAGY: But then we'd take away your job. 

 So your job, you're not a techie guy anymore. Your 

file:///C|/FEB/0212rule.txt (229 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 230 

 job will be to advise the techies, "That's the most 

 ridiculous form of production I've ever seen. 

 We'll get hammered." And then you get paid big 

 bucks.

 MR. MASTERS: I appreciate your concern. So I 

 just-- 

 JUDGE SCHEINDLIN: So can I just back up one 

 more second to file format? Is that going to date 

 us, too, or is that one that will also last?

 MR. MASTERS: I think it would. I think that 

 the--there is certainly a distinction between an 

 application and a file. Or a document or something 

 like that. I mean, I don't think that those terms 

 are going away either. I mean, there is a

 fundamental difference. 

 JUDGE SCHEINDLIN: Okay. Thank you. That's 

 all I needed. Thank you. 

 JUDGE ROSENTHAL: Professor Marcus? 

 PROFESSOR MARCUS: You would say a document is

 something different from these other things you've 

 been talking about? 

 MR. MASTERS: No, I would say a file and a 

file:///C|/FEB/0212rule.txt (230 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 231 

 document, in my mind, are essentially the same 

 thing. 

 PROFESSOR MARCUS: The reason I'm asking is 

 that Rule 34(a), as proposed to be rewritten, would

 distinguish between electronically stored 

 information or data, or whatever that phrase is, 

 and document. Would you be more comfortable just 

 calling everything in the world a document, or 

 would it make more sense to have an alternative

 designation? 

 MR. MASTERS: For electronic document or 

 electronic files? 

 PROFESSOR MARCUS: Yes. Applications, all 

 those things you just mentioned.

 MR. MASTERS: I honestly don't know. I mean, I 

 don't think I have enough knowledge to give you a 

 good answer to the question. I do think that 

 there's a reason why this committee is meeting to 

 talk and promulgating specifically e-discovery

 rules. There must be some reason for making a 

 distinction between the hard copy and the 

 electronic stuff. 

file:///C|/FEB/0212rule.txt (231 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 232 

 And so, simply from my beliefs on 34(b), I 

 would say that, you know, if you're talking about 

 electronic stuff here, you want to at least make a 

 distinction between electronic files and electronic

 applications because that addresses that one 

 scenario. But I don't know in the context of 

 34(a). 

 And then, quickly, some of the comments raised 

 today I wanted to touch on briefly. In terms of

 why you might want to restore Thursday's back-up, 

 when you have Friday's back-up--I do this all the 

 time. This is very common when you've got 

 databases. Somebody makes a mistake in a database, 

 you don't catch it for a couple of days.

 So I just wanted to bring in a real-world 

 example where you, as a business, we--I keep on one 

 of our servers, keep 50 days' worth of back-ups 

 that are full back-ups. And we sometimes will have 

 to go back and find the one that was right before

 when we screwed up. 

 JUDGE ROSENTHAL: You're talking about business 

 reasons, not for litigation purposes? 

file:///C|/FEB/0212rule.txt (232 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 233 

 MR. MASTERS: Exactly. Right. It's purely 

 business reasons. 

 In terms of how retrievable is deleted data, my 

 experience, actually, is that deleted data is

 harder to retrieve than it has been represented 

 this morning. Generally speaking, what happens is 

 your file is spread across on chunks all across 

 your hard drive. When it's deleted, simply the 

 reference to those chunks in the file table is

 removed. And, you know, those chunks could be 

 overwritten. It might not be. 

 It may be that you've got an enormous hard 

 drive. Generally speaking, people tend to expand 

 to the size of their hard drives. And because that

 file could be spread out all over the system, there 

 is a decent chance that some of the chunks are 

 going to be written over. 

 So if you delete a file from your hard drive, 

 yes, immediately thereafter the entire thing is

 retrievable. But as time goes on, it becomes much 

 less likely that you'll be able to find any of it. 

 And if you delete, say, the first chunk of it, 

file:///C|/FEB/0212rule.txt (233 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 234 

 you're going to have to do very expensive forensic 

 breakdowns to try to find the rest of it and 

 reconstruct it. Because once you lose the 

 first--depending on the file system, usually first

 chunk points to the second chunk points to the 

 third chunk. So as soon as the first chunk is 

 gone, it's hard to reconstruct the file. It 

 becomes much harder. 

 And then in terms of instant messenger, I

 believe all instant messenger caches are actually 

 initially kept and then will be removed from your 

 cache. And I don't think someone had said earlier 

 that it would very expensive to log on instant 

 messenger, and I don't--I mean, it depends on your

 question of expense, and if you need an IT guy to 

 go to everyone's computer and turn something on. 

 But from a simple user functionality 

 standpoint, I wouldn't describe it as an expensive 

 process.

 JUDGE ROSENTHAL: Thank you very much. 

 MR. MASTERS: Thank you. 

 JUDGE HAGY: Did I understand--you say instant 

file:///C|/FEB/0212rule.txt (234 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 235 

 messenger matters do not disappear? That when you 

 turn it off it goes away? 

 MR. MASTERS: I believe at the very least, with 

 Yahoo! and AOL, which I have used, you have a cache

 of conversation that is stored on disk like your 

 temporary Internet files. 

 JUDGE HAGY: And it's stored for how long? 

 MR. MASTERS: Until it would be overwritten. 

 That's at least my understanding of what's going

 on. I've seen it in our organization with Yahoo! 

 at the very least. 

 JUDGE SCHEINDLIN: But couldn't it be 

 configured either way? 

 MR. MASTERS: Yes. Absolutely.

 JUDGE SCHEINDLIN: Yes, you could configure it 

 to not save it. So companies could do that? 

 MR. MASTERS: Yes. Absolutely. 

 JUDGE ROSENTHAL: Thank you very much. 

 And our final speaker, Mr. Tannenbaum, you have

 that honor. 

 MR. TANNENBAUM: So I just want to echo 

 everyone else who said thank you very much for 

file:///C|/FEB/0212rule.txt (235 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 236 

 letting us testify. I can't tell you how exciting 

 it is to be a law student, first-year law student, 

 to be able to offer our thoughts on this process. 

 I also do think we have a fairly unique

 perspective because we did grow up with this 

 technology. A number of people have worked with 

 it. 

 My particular experience comes from working on 

 updating intellectual property laws to deal with

 new technology, and a lot of the arguments that are 

 made in that arena are very similar to the 

 arguments that are made here. Namely, that the new 

 costs, supposed costs of technology require an 

 updating of the rules. And I believe very strongly

 that those arguments don't hold water in that 

 context and that they should be very seriously 

 examined in this context. 

 So I just wanted to make three main points, and 

 the first is that I think the discussion so far has

 focused not as much on human agency as it ought to. 

 And to the extent that it's focused on the human 

 agency, it's focused in some ways in the wrong 

file:///C|/FEB/0212rule.txt (236 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 237 

 place. It's focused on what people do when they're 

 responding to a discovery request or how difficult 

 it is to recover certain kinds of files. But there 

 has been very little discussion about the decisions

 that go into the design of systems. 

 And I'm concerned that some features of the 

 rules as proposed will seriously affect the 

 decisions that people make when they're deciding 

 how much data should be retained and in what format

 it should be retained and how easily it could be 

 retrieved. So let me just turn to two specific 

 parts of the rules. The first one is in 37(f), the 

 safe harbor provision. And here, I think the 

 language betrays a little bit of this lack of focus

 on the design. 

 There is language referring to the routine 

 operation of the system and also to the nature of 

 the system. The notes say that determinations 

 about culpability would be different based on the

 nature of the system. But there actually is no 

 nature of a computer system. It's everything is 

 malleable. Everything is pliable. Everything can 

file:///C|/FEB/0212rule.txt (237 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 238 

 be configured. 

 So, from my perspective, as somebody who hasn't 

 been around the law for a very long time, that sees 

 the way that software has changed over even my

 short lifetime, it doesn't seem to make sense to 

 let defendants or responding parties off the hook 

 simply because of the nature or the design of their 

 system. It seems like-- 

 JUDGE ROSENTHAL: Can I ask a question?

 MR. TANNENBAUM: Sure. 

 JUDGE ROSENTHAL: You seem to be--well, are you 

 assuming that it is something to be deplored if an 

 organization, whether it's a business or a 

 government or school or whatever, any large data

 producer, if an organization sets its computer 

 system up to routinely operate to get rid of 

 information that it does not need or find useful 

 for the purposes of that organization, and it is 

 not required to keep for regulatory or legal

 purposes, including the obligations of preservation 

 related to litigation, but they want to get rid of 

 everything else? 

file:///C|/FEB/0212rule.txt (238 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 239 

 MR. TANNENBAUM: Right. 

 JUDGE ROSENTHAL: And they want to do so on a 

 timely basis. That is, they don't want this stuff 

 sitting around. They want it out of there within

 six weeks, two weeks, whatever the appropriate time 

 is. Is that bad? 

 MR. TANNENBAUM: I don't know whether it's 

 deplorable or not. I think a different question 

 that is more interesting to me is whether or not

 the rules should provide incentives for people to 

 do that when they would not otherwise do it, or 

 that they should provide an excuse for companies-- 

 JUDGE SCHEINDLIN: But the whole premise is 

 they would otherwise do it. That's the entire

 premise is that for the business to run, they need 

 to do this every 30 days or whatever it is. 

 JUDGE ROSENTHAL: If that's their business 

 choice. 

 JUDGE SCHEINDLIN: Right. So the premise is

 that they would do it otherwise. 

 MR. TANNENBAUM: Well, I think it's important 

 to distinguish between two different cases. One 

file:///C|/FEB/0212rule.txt (239 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 240 

 where business finds it economically efficient to 

 go through the files and delete them. And the 

 other case where the business just doesn't care all 

 that much, but for the possibility of litigation.

 JUDGE ROSENTHAL: What we've heard, though, is 

 that there is a great need for businesses to care 

 because data management is an important part of 

 what businesses need to do. 

 JUDGE SCHEINDLIN: But I think there's a

 miscommunication here. You talked about deleting. 

 I think this was written for the recycle effort-- 

 JUDGE ROSENTHAL: Exactly. 

 JUDGE SCHEINDLIN: --of the disaster back-up 

 tapes that companies need to and want to recycle

 these. We're not talking about deletions. 

 JUDGE ROSENTHAL: No. We're talking about 

 erasures, to use the distinction drawn by your 

 colleague who spoke earlier perhaps. 

 JUDGE SCHEINDLIN: I wouldn't even say that. I

 would just say the recycling of the back-up 

 systems. 

 MR. TANNENBAUM: Right. Well, with regard to 

file:///C|/FEB/0212rule.txt (240 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 241 

 the back-up question in particular, I think there 

 are a few things to say about this. One is, I 

 think, that this will surely become an outdated 

 technology. Back-up tapes are very slow. As

 people point out, they're difficult to search. 

 And I think Professor Marcus asked the question 

 whether or not--I think it was Professor 

 Marcus--whether or not including this language, 

 which might be eventually outdated, will allow the

 rules to then be flexible in the future. And I 

 think that's not necessarily true. Because I 

 think, as my colleague Mr. Kleysteuber pointed out, 

 there may be lock-in because the rules specify a 

 particular kind of technology.

 So I was reading Microsoft's comment before I 

 came here today. And Microsoft says they would 

 like to keep this back-up tape language in the 

 rules because it makes it clear to them that using 

 back-up tapes is a basis on which they can claim

 that data is not readily accessible. 

 Now if I were Microsoft, and I were thinking 

 strategically and rationally, I would be very 

file:///C|/FEB/0212rule.txt (241 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 242 

 hesitant to move from a back-up tape system, even 

 if another system came along which I would 

 otherwise choose, but for this provision in the 

 rules.

 And I were a chief technology officer who 

 thinks strategically or a software company thinking 

 strategically about the kind of software I'd want 

 to sell, I would create--in response to this 37(f) 

 provision, I would create a piece of software which

 would quickly delete data which was not necessary 

 for business purposes or didn't have to be 

 preserved because of other statutory obligations. 

 I would immediately delete it from reasonably 

 accessible sources and move it onto back-up tapes.

 So that in the case of an emergency, the business 

 would have access to the information. But under 

 these rules, my company or the company I was 

 selling to could argue that the information was not 

 really accessible and that it had been routinely

 destroyed. 

 Also--and these programs already are 

 popular--under the current rule, it says that one 

file:///C|/FEB/0212rule.txt (242 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 243 

 of the things that the committee will take into 

 account is whether or not this kind of software is 

 generally applied. This might not actually be in 

 the notes. It may have been in the preparatory

 comments that accompanied the notes. 

 And again, I think this is an issue. Just, I 

 think, because a piece of software is generally 

 applied in an industry that it's not necessarily a 

 good--again, I don't mean--to the issue of

 culpability, I just think that we don't want to 

 encourage companies to quickly take up software 

 which routinely destroys data if they wouldn't 

 otherwise do it. 

 JUDGE HAGY: Do you understand that more often

 than not, or as often as not, they're destroying 

 information that would help them defend the case? 

 So they really don't--I mean, it seems to be a mind 

 set that companies think that all they have is 

 information that proves they've been hurting

 people, and they're trying to destroy that. Where 

 as often as not, it's the information that would 

 help their case. 

file:///C|/FEB/0212rule.txt (243 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 244 

 So that they're not--I think there would be 

 some balance in writing off or rewriting or 

 destroying information just naturally. 

 MR. TANNENBAUM: And I think this is the

 argument that the company's ordinary business 

 practices and concerns would lead it not to pick up 

 systems which would destroy data in an excessive 

 manner, a way which would subvert justice. And I 

 think that probably is true in some cases.

 But it seems to me that there are a large 

 majority of cases, or a large number of cases, 

 where companies are producing information that they 

 don't want to be saved. And if there is no cost to 

 them deleting the data, then that just lowers an

 obstacle to them deleting it gratuitously. That's 

 my feeling. And I understand there's a range of 

 concerns about that. 

 So my second concern with this design issue is 

 with 26(b)(2), this question of reasonably

 accessible. And here, again, I think if I were a 

 software designer or chief technology officer, I 

 would adopt technology which made data not 

file:///C|/FEB/0212rule.txt (244 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 245 

 reasonably accessible. 

 And CIGNA submitted comments in which they 

 talked about a database system that they have which 

 makes it difficult for them to extract particular

 kinds of information because the engine is running. 

 And to extract this information makes it difficult 

 for them. It slows down their system, and so it's 

 very costly. 

 And I would just say CIGNA presented this in

 their comments as something which is static, as 

 something that was a given. But actually, software 

 can be designed so that this wouldn't be the case, 

 so that their engine wouldn't be slowed down. And 

 those marketing centers might already exist, if

 CIGNA's competitors have produced software like 

 that, or someone--or they have another business 

 reason to use software which allows them to extract 

 data. 

 Those may be sufficient incentives for them to

 adopt a software which would also lead to the 

 production of more information, except that the 

 rules as written give them a counter reason not to 

file:///C|/FEB/0212rule.txt (245 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 246 

 adopt that kind of software. And I think this just 

 goes to my original point, which is that these 

 issues are dynamic, and that by creating rules that 

 give incentives to companies not to preserve data,

 you're changing the kind of technology that's 

 produced. 

 And I understand there are other constraints. 

 It just seems unnecessary to me to introduce an 

 additional constraint.

 JUDGE SCHEINDLIN: Well, I want to just say 

 that on page 7--one second--of your comments, just 

 for the record, I really liked your suggestion 

 where you said responding parties that wanted to 

 embargo data would have to show that the

 information is not reasonably accessible using 

 currently available methods of technology. I 

 thought that was a very helpful point. I just 

 wanted to say it. 

 MR. TANNENBAUM: Oh, thank you very much.

 JUDGE SCHEINDLIN: No question. Right. 

 JUDGE KEISLER: I was going to suggest the 

 calculus for this company you described is actually 

file:///C|/FEB/0212rule.txt (246 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 247 

 very complicated, though, isn't it? Because the 

 company might decide, if it's driven principally by 

 litigation concerns, that it wants to make this 

 information costly to retrieve. So it can go to a

 judge and say, "This is costly to retrieve." 

 That company also has to think, doesn't know 

 which judge it's going to be before, what his or 

 her disposition is going to be, if the good cause 

 showing is made. Then they have to spend lots of

 money to actually retrieve the data. 

 So I just wonder whether, you know, in the 

 wash, all of these different considerations, when 

 you make something more costly to do, you still 

 face the prospect that you might have to do it and

 then incur the cost, even if--I mean, it's 

 essentially unknowable how that's going to work out 

 in the end. 

 MR. TANNENBAUM: Right. And some companies may 

 be more risk averse than others. But companies

 which think they can make a good argument that good 

 cause does not exist might not be willing to invest 

 in this technology. 

file:///C|/FEB/0212rule.txt (247 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 248 

 I also think that including language like 

 specifying back-up tapes in the notes gives a 

 company good reason to believe that the burden of 

 proof will not be on them to show that there is not

 good cause. And I think limiting that kind of 

 language, which allows the calculus to bend in 

 favor of not adopting technology, which allows for 

 the ease for production of information, searching 

 information, would be a good idea.

 The second point I want to emphasize, and I've 

 touched on this a number of times, is that the 

 rules that you write do have an effect on the 

 market and the sorts of software that is developed. 

 And I think there were just some--

 PROFESSOR MARCUS: Do you have an example of 

 that? 

 MR. TANNENBAUM: Yes, there were some examples 

 in the comments. Philip Morris submitted a 

 comment, which I thought was one of the best

 comments made because it's provided detailed 

 information, about the kind of systems that they've 

 innovated to deal with these electronic discovery 

file:///C|/FEB/0212rule.txt (248 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 249 

 requests. So they've modified-- 

 PROFESSOR MARCUS: No, my question was the 

 rules. 

 MR. TANNENBAUM: I'm sorry?

 PROFESSOR MARCUS: Do you have an example of 

 where the Federal Rules of Civil Procedure have 

 influenced the design, adoption, or something like 

 that of electronic programs? 

 MR. TANNENBAUM: Well, I think this Philip

 Morris example may illuminate it. 

 PROFESSOR MARCUS: Okay. Go ahead. 

 MR. TANNENBAUM: I mean, Philip Morris, 

 presumably in response to the liberal rules of 

 discovery that are currently enshrined in the

 Federal Rules of Civil Procedure, has had to 

 provide a number--an immense number of electronic 

 documents, and they've innovated these systems 

 within their own company to deal with this problem. 

 So they've modified their Outlook Express

 program so that they can easily put documents into 

 a repository. They've created common storage 

 space. And there is no reason to believe that if 

file:///C|/FEB/0212rule.txt (249 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 250 

 companies were afraid that they would be put in the 

 same position as Philip Morris, they could buy the 

 software from Philip Morris, and there could be a 

 market created for the software.

 But if you create these safeguards that protect 

 producers of information, I just don't know that 

 the advantages of this piece of software would be 

 as strong. 

 And to answer your question about a specific

 rule, I also--you know, I can't cite a specific 

 passage, but I would point you to the comment from 

 Philip Morris in which they say the Federal Rules 

 of Civil Procedure have a profound effect on how 

 litigants determine what it is they're obligated to

 preserve. And they go on to say that it affects 

 how they preserve that information. 

 So they say by specifying what is and is not 

 presumptively discoverable, the rules will have a 

 direct impact on and provide guidance to litigants

 in developing proper, yet efficient, information 

 management systems. 

 So from the perspective of these litigants, it 

file:///C|/FEB/0212rule.txt (250 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 251 

 seems like they do make decisions based on the 

 rules. Now that might just be how I read it. I 

 don't know. But at least they say it. 

 The third and final point I wanted to make was

 just about empirical data. I've just been struck 

 by the number of anecdotes which have been put 

 before the committee. And I know that this is a 

 very complicated field. There is a lot of 

 information to pick up. I've been very impressed

 by how energetic the committee has been in trying 

 to collect information. 

 But I have to say, I have not been impressed 

 with the quality of the data that's been presented. 

 There doesn't seem to be a very good empirical

 study of what the actual costs of electronic 

 discovery are and what they will be in the near 

 future. And I have to say some of the anecdotes 

 that were presented in the comments just don't 

 pass--they just seem kind of suspicious to me.

 So just like Philip Morris saying their e-mail 

 server, now they've had to expand it perhaps by 132 

 gigs a month, and that updating their system cost 

file:///C|/FEB/0212rule.txt (251 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 252 

 them $5.5 million. I have to tell you, 132 gigs a 

 month is just not a lot of storage space, and it's 

 hard for me to understand where all those costs 

 come from.

 And maybe there are personnel costs and costs 

 that we can't see. But I would just urge the 

 committee to be suspicious of those sorts of 

 estimates. 

 JUDGE ROSENTHAL: We would welcome the

 assistance of the Yale Law School, indeed, any part 

 of Yale University that wants to conduct such a 

 study. 

 [Laughter.] 

 MR. TANNENBAUM: Right. And I think there's a

 very active technological community, which I think 

 would be interested in providing that kind of 

 information. And when I go back, I'm going to post 

 the proceedings of this meeting on the Web and 

 encourage people to submit those sorts of

 proposals. 

 But the committee might consider making a 

 specific request for empirical information on 

file:///C|/FEB/0212rule.txt (252 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 253 

 discovery costs as opposed to the legal questions, 

 which I think are intimidating to geeks and nerds 

 like myself. But we can maybe provide some 

 assistance on the technological front.

 The final point I want to make is I think it's 

 important to compare the cost of electronic 

 discovery to the cost of paper discovery, which I 

 also haven't seen very much. These costs seem very 

 astronomical. But it seems to me that the paper

 discovery cost must be pretty astronomical as well. 

 And the high cost of electronic discovery, 

 focusing on that seems counterintuitive to me 

 because my entire experience with technology has 

 been that it reduces the cost, not only of storing

 information, but also retrieving and searching 

 information. So thank you very much. 

 JUDGE ROSENTHAL: Thank you very much. We very 

 much appreciate all of your time. 

 Fifteen minutes before we gather again? This

 does end the public hearings that we have had on 

 these proceedings. The comment date will 

 end--comment period will end on February 15th. 

file:///C|/FEB/0212rule.txt (253 of 254) [3/2/05 3:01:33 PM]
file:///C|/FEB/0212rule.txt

 254 

 And thank you all, once again, for 

 participating with us and helping us learn about 

 these enormously important and interesting issues. 

 [Whereupon, at 12:48 p.m., the hearing was

 adjourned.] 

file:///C|/FEB/0212rule.txt (254 of 254) [3/2/05 3:01:33 PM]