Information Technology & The Amendments to the Federal Rules of Civil Procedure Sonya Naar - DLA Piper US LLP Doug Herman - UHY Advisors FLVS, Inc.

What are the FRCP? The Federal Rules of Civil Procedure (FRCP) govern court procedures for civil lawsuits. On December 1st, 2006 the FRCP were amended to include some directives specific to electronic discovery. The Amended FRCP contain several items that will directly affect how counsel is required to handle electronic data. In turn, counsel will rely heavily on IT for significant assistance.

The Problem From a legal perspective, electronic discovery is easier to get wrong than it is to get right Review of the current volume of data is beyond human capability, yet continues to grow exponentially Cost and disruption to normal business operations can be enormous Unfortunately, some of the responsibility for identifying, preserving, harvesting, and even “processing” large volumes of data often falls on your shoulders

Staggering Metrics Volume: 95% of all documents created and stored within a business context are done so electronically – and that doesn’t include all the historical and archived data. Your Volume: On average, each of you has between 2 and 5 GB of electronic data stored on your hard drive. By the way: 1 GB of electronic data is equivalent to 75,000 pages of paper (30 bankers boxes). Email Volume: Over 60 billion email messages are sent each day. Instant Messaging: Over 100 billion IM and Text messages are sent/received each day.

The Costs of Electronic Discovery Handling even a simple data set is a challenge in a legal context The IT context v. Legal context The need for a forensically sound process What do you think it takes to review the electronic data on a PC hard drive?

Reviewing A PC Hard Drive Collect a forensically sound image of the ENTIRE drive (allocated AND unallocated space) Filter and extract the user-created files and emails from the drive Remove duplicates and “run” search terms across the extracted data set Review the “potentially responsive” data set – document by document Produce documents that are relevant and not privileged

What does it cost to review a hard drive? Forensic image: $500 Filtering & Extraction: $500 Deduplication & Searching: $1,500 per GB (average) Document review: $300 per hour (blended) Production: $0.10 per page On average, it costs about $5,000 to collect, cull, review and produce the documents from one single hard drive – now multiply that by 50 for the typical litigation Cost for failing to preserve and produce relevant documents: TREMENDOUS

eDiscovery Related FRCP Rule Amendments Mandatory early attention to electronic discovery issues Identification and preservation of electronically stored information (ESI) Review of such information for privilege Form of production Dealing with ESI that is not reasonably accessible Safe Harbor provisions in Rule 37

Early Attention to eDiscovery – Pre-trial Conferences FRCP Rule 26(f) requires parties to discuss all electronic discovery issues prior to the scheduling conference. The universe of electronic documents What & how to preserve potentially relevant documents Form of production Identification of inaccessible data sets – Sampling Privilege issues This initial “meet and confer” must take place at least 21 days prior to the scheduling conference. Litigants don’t have a lot of time!

Early Attention to eDiscovery – Rule 26(a)(1)(B):Duty of Disclosure A party must, without awaiting a discovery request, provide to other parties a copy of, or description by category and location of, electronically stored information.

Identification & Preservation of ESI - Litigation Holds Reasonably Anticipated Lawsuit Filed This can be a long time Issue Litigation Hold Time

Identification & Preservation of ESI - The Legal Obligation Cannot destroy, materially alter evidence, or fail to preserve evidence in pending or reasonably foreseeable litigation. Silvestri v. General Motors Corp., 271 F.3d 583, 590 (4th Cir. 2001) Obligation applies when party “knows or should have known that documents would become material at some point in the future.” Lewy v. Remington Arms Co., 836 F.2d 1404 (8th Cir. 1988)

Identification & Preservation of ESI – The Preservation Trigger “The obligation to preserve evidence arises when the party has notice that the evidence is relevant to litigation or when a party should have known that the evidence may be relevant to future litigation.” Zubulake IV, infra.

Identification & Preservation of ESI – How do we figure out what data is out there? Q: How many backup tapes does your company have? A: CIO - We have 15 days worth, which equates to 15 tapes A: VP of IT - We have 15 days worth of tapes onsite and another 15 days offsite, which equates to 30 tapes A: Director of IT - We keep a total of 30 days worth of backups, but we have 27 servers, so we have 810 tapes A: Backup Technician - We keep 30 days of tapes, our Tivoli backup system requires 13 tapes to backup the entire enterprise each day, so we have 390 tapes in the storage room and with our with our offsite storage vendor – I also make a weekly copy for myself and keep it in my desk drawer…

Identification & Preservation of ESI – Data Classifications Active Data The visible text Latent Data Metadata Deleted data Computer forensics Archival Data Data backed up to secondary media Backup tapes

Identification & Preservation of ESI – The Data Landscape What data sources exist out there that may contain potentially relevant documents? What is the backup and retention period for each of those data sources? Where can we get a summary in plain English?

Accessibility - Two Tiers for ESI Discovery A party need not provide discovery of ESI that the party identifies as not reasonably accessible because of undue burden or cost – but it MUST be preserved. On motion to compel discovery, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. Court may still order discovery from such sources if the requesting party shows “good cause,” considering the limitations of Rule 26(b)(2)(c), and may specify conditions for such discovery. notes

Accessibility Accessible v. Inaccessible – The Advisory Committee notes Deleted data Legacy data from obsolete systems Backup tapes that are used for disaster recovery purposes Zubulake IV, infra.

Document Production ESI changed to a separate category. Default option for form of production: "in a form or forms that are reasonably usable by the requesting party or in which it is ordinarily maintained."

Document Production - Do You Have to Produce Metadata? “AS MAINTAINED IN ORDINARY COURSE OF BUSINESS” = “METADATA INTACT” (absent timely objection or stipulation to the contrary) Presumption that metadata produced even if not in RFP Up to producing party to object; no unilateral action Williams v. Sprint/ United Mgmt., 2005 U.S. Dist. LEXIS 21966 (D. Kan. 8/31/05)

FRCP 37(f) – Safe harbor Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide ESI deleted or lost as a result of the routine, good faith operation of the party's electronic information systems.

Thank You Sonya Naar Partner: DLA Piper US LLP sonya.naar@dlapiper.com Doug Herman Managing Director: UHY Advisors FLVS, Inc. douglash@uhy-us.com