When it comes to computers and
the legal world, things are happening at warp speed. It seems that every week there is new precedent
set when it comes to e-discovery. What
must corporations keep? Who can see
what? Who are the relevant actors?
If attorneys are challenged to keep up
with case law, what’s a business owner to
do? We turned to Dyan M. House, an attorney with the Dallas law firm of Munck
Carter, P.C., to help point us in the right
direction.
“E-discovery is a hot topic right now,
and it affects everyone in business today,”
she says.
There has been a significant number of
cases dealing with e-discovery issues,
especially since the Federal Rules of Civil
Procedure were amended to address
issues with electronically stored information (ESI). Those rules went into effect on
December 1, 2006.
Smart Business talked to House to find
out what businesses need to know about
e-discovery.
What is the scope of changes in e-discovery?
In many ways, the issues we are facing
with e-discovery are not that different
from those involved in discovery of paper
documents and other tangible items.
However, given the amount of ESI that is
created on a daily basis, these issues are
compounded. Every day, billions of
e-mails are sent and numerous documents
and other files are created.
ESI can be found on a broad range of
devices and in various media, including
live e-mail systems, archive e-mail systems, computer systems (including legacy
systems), portable backup media, USB
keychain drives, network servers, home
directories, shared files, backup tapes/disaster recovery tapes, phones, PDAs and
more.
There was a New York case on employment
law that set the framework for e-discovery.
What does it say?
Zubulake v. UBS Warburg, LLC is generally considered the first definitive case on
issues in e-discovery. In 2003 and 2004, the
Southern District of New York issued a
series of opinions that addressed the
scope of a party’s duty to preserve electronic evidence during the course of litigation, a lawyer’s duty to monitor his or
her clients’ compliance with electronic
data preservation and production and
imposition of sanctions for destruction of
electronic evidence. The Zubulake court
set forth an analysis for deciding disputes
regarding the scope and cost of the discovery of ESI. The analysis includes considering the availability of evidence
sought from other sources, the extent to
which the requests are tailored to obtain
relevant information and the importance
of issues at stake in the litigation.
The Zubulake and Qualcomm cases both
addressed sanctions. What did the courts
say?
The Zubulake court noted that the
severe sanction of an adverse inference
instruction may be imposed when the
party seeking the sanction can show that:
1) the party having control over the evidence had an obligation to preserve the
evidence at the time it was destroyed;
2) that the evidence was destroyed with a
culpable state of mind; and
3) that the
destroyed evidence was relevant to the
party’s claim or defense. Because the
court determined that the employer willfully deleted e-mails, the court granted
the plaintiff’s request for sanctions, ordering the defendant to pay costs of re-deposing witnesses with respect to issues raised
by the destruction of evidence.
Qualcomm Inc. v. Broadcom Corp. is
much discussed because of the egregious
nature of the discovery violations and
severity of the sanctions. The fact that
Qualcomm’s attorneys accepted unsubstantiated assurances that prior searches
for relevant documents were sufficient
and they ignored numerous warning signs
that the document search and production
were inadequate, more than 46,000 relevant documents were not produced.
Therefore, the court imposed an $8.5 million sanction on Qualcomm and referred
the matter to the State Bar of California
for investigation.
When am I under ‘reasonable anticipation of
litigation,’ and what does this require of my
company?
‘Reasonable anticipation of litigation’ is
determined when an organization’s relevant people anticipate litigation. When a
party is under a ‘reasonable anticipation
of litigation,’ the party’s duty to preserve
evidence is triggered. This also means that
the company’s routine document retention/destruction policy should be suspended and a ‘litigation hold’ should be
issued to ensure that relevant documents
are preserved. Determining when there is
a reasonable anticipation of litigation is a
fact-dependent analysis. At the absolute
latest, a party’s notice of the filing of a lawsuit is the trigger.
DYAN M. HOUSE is a member of the Intellectual Property Section of Munck Carter, P.C. where she concentrates her practice in the
areas of trademark, copyright and licensing. House provides counsel to a variety of businesses including restaurants, retail, engineering
firms, software companies and nonprofit organizations on the transactional side as well as preparing for and handling litigation. Reach
her at (972) 628-3638 or [email protected].
