1. 1 Records Management and Electronic Discovery Ken Sperl ken.sperl@tsibouris.com@tsibouris.com (614) 360-2023 www.tsibouris.comwww.tsibouris.com Martin Susecsusecm@nationwide.com@nationwide.com (614) 677-0593 www.nationwide.comwww.nationwide.com

2. 2 Outline of Presentation I.Terminology II.Sources of Law III.Discovery & E-Discovery IV.Nightmare Scenarios V.Solutions VI.Questions and Answers

3. 3 Electronically Stored Information or ESI Discovery Legal Holds (Litigation Holds or Record Holds) Metadata Record Records Management I. Terminology

4. 4 2006 Amendments to the Federal Rules of Civil Procedure State Counterparts – Ohio in July 2008 Case Law Federal and State Record Management Statutes and Regulations Sedona Principles II. Sources of Law

5. 5 III. Discovery & E-Discovery? Lawsuit commences Parties meet & confer Parties request information (e.g. request for production of documents) Parties produce relevant unprivileged information Failure may result in fines, sanctions, or adverse inferences

6. 6 III. Discovery & E-Discovery Discovery requires the disclosure of relevant information from all parties with exceptions: Not unreasonably cumulative or duplicative Not information available from another source that is more convenient Not when burden outweighs likely benefit

7. 7 III. Discovery & E-Discovery E-Discovery extends Discovery into the electronic world 2 tier approach: Standard discovery rules apply Relevant ESI must be produced unless unreasonably inaccessible because of undue burden or cost

8. 8 III. Discovery & E-Discovery E-Discovery differs from Discovery due to: Metadata Recovery Retention Size and amount

9. 9 IV. Nightmare Scenarios Qualcomm v. Broadcom, 2008 U.S. Dist. LEXIS 911 (S.D. Cal. Jan. 7, 2008). Attorneys did not look in the correct locations Withheld tens of thousands of emails showing that statements in Qualcomm’s defense were false. Defendant awarded $8.5 million in fees and costs

10. 10 IV. Nightmare Scenarios Board of Regents v. BASF, 2007 U.S. Dist. LEXIS 82492 (D. Neb. Nov. 5, 2007). Counsel communicated to University Professor to turn over all related documents Professor omitted all electronic data University “far from diligent” in production University ordered to pay for complete search of electronic files and forensics expert fees

11. 11 IV. Nightmare Scenarios Del Campo v. Kennedy, 2006 U.S. Dist. LEXIS 66728 (N.D. Ca. Sept. 8, 2006). Defendant call center recorded phone calls but routinely destroys them after 2 weeks Plaintiff discovered that the tapes would be destroyed Court ordered parties to meet and create a document preservation plan

12. 12 IV. Nightmare Scenarios Wingnut Films v. Katja Motion Pictures, 2007 U.S. Dist. LEXIS 72953 (C.D. Cal. Sept. 18, 2007). Attorneys did not conduct a proper search Documents were not appropriately preserved Did not suspend document destruction policy

13. 13 IV. Nightmare Scenarios Wingnut Films v. Katja Motion Pictures, 2007 U.S. Dist. LEXIS 72953 (C.D. Cal. Sept. 18, 2007). Emails purged every 30 days, backup tapes deleted Court ordered Defendant to retain outside vendor to access servers and pay $125K in attorneys fees

14. 14 IV. Nightmare Scenarios Synergy Tech & Design v. Terry, 2007 U.S. Dist. LEXIS 34463 (N.D. Cal. May 2, 2007). CEO provided 82 pages of emails without attachments Later, forensic expert uncovered 36GB of data Court ordered responses in 19 days, waives objections, and levies $4275 in costs

15. 15 IV. Nightmare Scenarios In re Seroquel Products Liability Litigation, 2007 U.S. Dist. LEXIS 61287 (M.D. Fla. Aug. 21, 2007). Pharma Co produces 3.75 million pages of document without page breaks. Pharma Co defends with vendor errors Earlier production of 10 million pages were inaccessible, unsearchable, unusable Sanctions were appropriate

16. 16 IV. Nightmare Scenarios PML North America v. ACG Enterprises of NC, 2007 U.S. Dist. LEXIS 54003 (E.D. Mich. Jul. 26, 2007). Misconduct by CEO and insolvency lead to personal liability for the CEO CEO’s hard-drive disappeared from his laptop ACG became insolvent, could not pay Plaintiff’s attorneys fees due to misconduct Court added CEO to defendant’s action and pierced the corporate veil

17. 17 IV. Nightmare Scenarios Doe v. Norwalk Community College, 2007 U.S. Dist. LEXIS 51084 (D. Conn. Jul. 16, 2007). Failure to Place Litigation Hold Resulted in Adverse Inference Plaintiff’s forensic expert found that emails were deleted, altered, or destroyed Duty to preserve arose Defendant did not create litigation holds Plaintiff was entitled to adverse inference

18. 18 IV. Nightmare Scenarios Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 424 (D.N.Y. 2004). Failure to Clearly Communicate Litigation Hold Lead to Sanctions Defendant’s personnel deleted relevant emails, some of which were recovered from backup tapes. Personnel failed to preserve emails despite adequate warning from counsel

19. 19 IV. Nightmare Scenarios Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (D.N.Y. 2004). Court ordered adverse inference for some emails, cost of depositions UBS ultimately lost the employment discrimination case and the jury awarded $29.3 million in damages

20. 20 V. Solutions Avoid Sanctions Using Appropriate Record Management Policies Records Management policies must Be Reasonable Be Defensible Be Consistently Applied Be Efficient Avoid use of Disaster Recovery as Backup Comply with applicable laws

21. 21 V. Solutions Avoid spoliation through records management and litigation hold policies. Duty to preserve arises with pending litigation or threatened litigation Satisfy the Duty with Involving Legal, Records Retention Personnel, and Information Security Personnel Clear and Timely Communication between Legal, Key players, IT, and Records Retention

22. 22 V. Solutions Take advantage of the Safe Harbor Provision within the Amended Federal Rules Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

23. 23 V. Solutions Be prepared to explain all systems of records at the Pre-trial Conference with Opposing Party During Litigation Be prepared to explain all electronic communication, records management, retention, and legal holds policies Be prepared to explain what ESI exists, what is accessible and what is not

24. 24 V. Solutions At the Pre-trial Conference with Opposing Party decide on preservation and production of ESI Decide on the format of ESI if other that in the format that the business ordinarily maintains the records Agree to use data sampling and searching where possible

25. 25 V. Solutions Regularly update any records & information management policies, procedures and schedules Conduct regular audits Document good faith efforts to maintain & destroy records per the policies

26. 26 VII. Questions & Answers