News & Updates

Litigation in the Digital Age of Discovery:  How to Ensure “Reasonable” Searching of Electronically Stored Information

September 9, 2009

We litigate in a digital age.  As a result, electronically stored information (ESI) is subject to discovery in a lawsuit.  Discovery demands that each side produce to the other side its information that is relevant to the suit.  These days, business information is commonly “filed” in computers, servers and other electronic storage medium more so than in filing cabinets.  These electronic sources are repositories of relevant ESI, which must be identified and produced in litigation.

How does a party identify all of the relevant information located in these electronic storage media?  The “rules” for how to search ESI are still being written, but recent cases are laying out some boundaries.

In Qualcomm Inc.  v. Broadcomm Corp., a district court in California found that Qualcomm’s failure to conduct basic searches on ESI prior to trial was equivalent to withholding documents.  The penalty for not producing the 46,000 relevant documents was Broadcomm’s attorney’s fees – about $10 million.  Importantly, the court believed that Qualcomm, its attorneys, or both had intentionally not searched for the highly relevant documents in order to preserve their case.

Qualcomm’s take home message:  Make sure that your company searches all ESI relevant to the litigation.  Attorneys handling your company’s litigation will need to understand your business’s structure, the various roles of your employees, and where information is kept.  Any witness for deposition or trial will also need to have his or her data searched.

In Victor Stanley, Inc. v. Creative Pipe Inc., a district court in Maryland found that Creative Pipe had waived privilege on 165 electronically stored documents it had inadvertently produced to opposing counsel.  The waiver allows opposing counsel to use the documents as evidence at trial, provided they are otherwise admissible. Importantly, the court determined that Creative Pipe “overproduced” as a result of not conducting reasonable searches, and not reviewing what they were producing.

In the digital age of litigation, companies must straddle the line between producing relevant ESI, but not “overproducing” ESI.  Is there a method for doing this?  Studies are still underway to evaluate ESI searching procedures and recommend standard processes for litigants.  In the meantime, both Qualcomm and Victor Stanley agree that companies must be able to justify the search process they use.  This includes choosing appropriate keywords; performing sophisticated searches when necessary; and “sampling” the results to assure it is yielding the expected results.  Courts suggest the ideal is that parties devise and adhere to a joint protocol for searching.

While appropriate searching may seem intimidating, it is possible to do it appropriately and cost-effectively.  Attorneys at Woodard, Emhardt, Moriarty, McNett & Henry possess the scientific and technical backgrounds necessary to ensure that a correct methodology is chosen for ESI searching.  As stated in Victor Stanley, “…doing it right the first time is always cheaper than doing it over if ordered to do so by the court.”  250 F.R.D. 251, 261 (D. Md. 2008).


The Conflict Between European Privacy Laws and U.S. Discovery Requirements

August 17, 2009

Recently adopted European data protection laws designed to protect the privacy of European employees can easily conflict with U.S. civil litigation document production requirements.  The dilemma for multinational companies can be whether to comply with U.S. court discovery obligations and risk European civil and criminal penalties or to comply with European law, and risk sanctions or default in U.S. litigation.

Under U.S. law, when a lawsuit is commenced, a company is required to preserve records relating to the issues in the lawsuit, and thereafter to produce for inspection, copies of such documents as are properly requested during the course of the litigation.  These activities may be illegal in Europe.  According to Indiana University Maurer School of Law Professor Fred Cate, the mere retention of European records containing personal data in anticipation of a U.S. discovery request would itself violate European rules.  Moreover, the mere electronic searching of the records themselves may violate the European rules.  A French high court held that an employer had no legal right to read its employees’ e-mails and other documents, even if the employer supplied the computer and expressly provided that employees were not to use their computers for personal use.  A Greek data protection authority held that an employer can not automatically scan an employee’s emails, unless the employee is informed in advance and has been given a technical means to protect the secrecy of his own communications.  The Italian Supreme Court held that an employer can only monitor employee emails if there is an agreement with the local union or approval is obtained from the local labor office.  A Texas court concluded that the Volkswagen’s printed corporate telephone directory was subject to privacy rights in Germany that prevented it from having to be disclosed in U.S. litigation.  Volkswagen, A.G. v. Valdez, 909 S.W.2d 900 (Tex. 1995).   There is no mechanism under European law that permits U.S. companies to obtain information from Europe that contains business records that contain personal information, and as to what constitutes “personal information” is very broadly construed so as to include even a corporate phone directory.

Please contact us if you would like more information on the apparent conflict between European privacy laws and U.S. discovery requirements.


Litigation in the Digital Age of Discovery: How to Ensure “Reasonable” Searching of Electronically Stored Information

July 29, 2009

We litigate in a digital age. As a result, electronically stored information (ESI) is subject to discovery in a lawsuit. Discovery demands that each side produce to the other side its information that is relevant to the suit. These days, business information is commonly “filed” in computers, servers and other electronic storage medium more so than in filing cabinets. These electronic sources are repositories of relevant ESI, which must be identified and produced in litigation.

How does a party identify all of the relevant information located in these electronic storage media? The “rules” for how to search ESI are still being written, but recent cases are laying out some boundaries.

In Qualcomm Inc. v. Broadcomm Corp., a district court in California found that Qualcomm’s failure to conduct basic searches on ESI prior to trial was equivalent to withholding documents. The penalty for not producing the 46,000 relevant documents was Broadcomm’s attorney’s fees – about $10 million. Importantly, the court believed that Qualcomm, its attorneys, or both had intentionally not searched for the highly relevant documents in order to preserve their case.

Qualcomm’s take home message: Make sure that your company searches all ESI relevant to the litigation. Attorneys handling your company’s litigation will need to understand your business’s structure, the various roles of your employees, and where information is kept. Any witness for deposition or trial will also need to have his or her data searched.

In Victor Stanley, Inc. v. Creative Pipe Inc., a district court in Maryland found that Creative Pipe had waived privilege on 165 electronically stored documents it had inadvertently produced to opposing counsel. The waiver allows opposing counsel to use the documents as evidence at trial, provided they are otherwise admissible. Importantly, the court determined that Creative Pipe “overproduced” as a result of not conducting reasonable searches, and not reviewing what they were producing.

In the digital age of litigation, companies must straddle the line between producing relevant ESI, but not “overproducing” ESI. Is there a method for doing this? Studies are still underway to evaluate ESI searching procedures and recommend standard processes for litigants. In the meantime, both Qualcomm and Victor Stanley agree that companies must be able to justify the search process they use. This includes choosing appropriate keywords; performing sophisticated searches when necessary; and “sampling” the results to assure it is yielding the expected results. Courts suggest the ideal is that parties devise and adhere to a joint protocol for searching.

While appropriate searching may seem intimidating, it is possible to do it appropriately and cost-effectively. Attorneys at Woodard, Emhardt, Moriarty, McNett & Henry possess the scientific and technical backgrounds necessary to ensure that a correct methodology is chosen for ESI searching. As stated in Victor Stanley, “…doing it right the first time is always cheaper than doing it over if ordered to do so by the court.” 250 F.R.D. 251, 261 (D. Md. 2008).

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