Renew Data Corp. Bob Robinson General Counsel Renew Data Corp. (512) Fundamental Issues Of Electronic Discovery

Renew Data Corp. Electronic Discovery I. Technical Basics and Practical Matters II. Elec. Discovery Under the Civil Rules III. Spoliation Issues IV.What to Do Now

Renew Data Corp. Fast-Changing Environment Exploding amounts of electronic data Emerging body of EE case law and rules Sarbanes-Oxley Act and USA Patriot Act Abundance of disputes where source data is primarily electronic

Renew Data Corp. Emerging Risks Information is discoverable in its native format Information is discoverable in its native format 30(b)6 deposition of SysAdmin 30(b)6 deposition of SysAdmin Process attacks are more common Process attacks are more common New emphasis on cooperation with investigators New emphasis on cooperation with investigators “Don’t Ask, Don’t Tell” is history “Don’t Ask, Don’t Tell” is history

Renew Data Corp. BEWARE THE THREE- HEADED MONSTER! PCs & Servers + system + Backup system = A de-facto data repository!

Renew Data Corp. Electronic - Better Than Paper Searchable Keyword searches are essential Keyword searches are essential More certain, costs less & saves time More certain, costs less & saves time More information than just the text More information than just the text Efficient for sharing and copying Efficient for sharing and copying Can be protected from alteration Can be protected from alteration Candid behavior Candid behavior

Renew Data Corp. Backup tapes PC (home/office), laptop hard drives Network file servers FAX servers Voic systems Palm Pilots, PDAs Mobile Internet Devices Kleiner v. Burns, 48 Fed. R. Serv.3d 644, 2000 WL (D. Kan., 2000) 31 Flavors of Elec. Data

Renew Data Corp. Deleted Files Sectors & Clusters What are deleted files? What are deleted files? What can be undeleted? What can be undeleted? Deleted files & fragments searchable Deleted files & fragments searchable History/record of deletions is important History/record of deletions is important Data constantly changes as the machine is used Take a forensically sound “image” right away to avoid data alteration and destruction Take a forensically sound “image” right away to avoid data alteration and destruction Data can be preserved at low cost Data can be preserved at low cost

Renew Data Corp. Civil Rules Electronic information clearly is discoverable Rowe Entertainment, Inc. v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) Rowe Entertainment, Inc. v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) Electronic format may be required - paper production alone may not be sufficient Anti-Monopoly Inc. v. Hasbro, Inc., 94 Civ. 2120, 1996 WL (S.D.N.Y. Jan.23, 1996) Anti-Monopoly Inc. v. Hasbro, Inc., 94 Civ. 2120, 1996 WL (S.D.N.Y. Jan.23, 1996) Storch v. IPCO Safety Products Co., 1997 U.S. Dist. LEXIS 10118, 1997 WL (E.D. Pa. July 16, 1997) Storch v. IPCO Safety Products Co., 1997 U.S. Dist. LEXIS 10118, 1997 WL (E.D. Pa. July 16, 1997)

Renew Data Corp. Civil Rules Backup tapes required if relevant See generally In re CI Host, Inc., 2001 WL (Tex. Nov. 21, 2002) See generally In re CI Host, Inc., 2001 WL (Tex. Nov. 21, 2002) Copies of files aren’t enough – need forensic images See generally Taylor v. State, 2002 WL (Tex. App. Oct. 17, 2002) See generally Taylor v. State, 2002 WL (Tex. App. Oct. 17, 2002) Deleted data requires extra relevance Rule 34 – requests extend to records “reasonably available in the ordinary course of business” Rule 34 – requests extend to records “reasonably available in the ordinary course of business” Antioch Co. v. Scrapbook Borders, 2002 WL (D. Minn. April 29, 2002) Antioch Co. v. Scrapbook Borders, 2002 WL (D. Minn. April 29, 2002)

Renew Data Corp. Time is of the essence Note for the discovering party Key – get producing party to preserve data as soon as practicable, with proper forensic techniques Gates v. Bando, 167 F.R.D. 90 (D. Colo. 1996) Gates v. Bando, 167 F.R.D. 90 (D. Colo. 1996) Taylor v. State, 2002 WL (Tex. App. Oct. 17, 2002) Taylor v. State, 2002 WL (Tex. App. Oct. 17, 2002) Crucial factors: Crucial factors: Get the forensic image of each hard drive Get the forensic image of each hard drive Get them to stop recycling backup tapes Get them to stop recycling backup tapes

Renew Data Corp. Time is of the essence Note for the discovering party Immediately send a letter to ask opposing counsel for preservation Forensic image duplicate Forensic image duplicate Stop recycling backup tapes Stop recycling backup tapes Don’t delete files Don’t delete files Don’t defragment or compress any hard drives Don’t defragment or compress any hard drives Don't add new software or operating systems Don't add new software or operating systems Don't access subject files until imaged Don't access subject files until imaged If you get one of these letters, watch out!

Renew Data Corp. After Preservation Propose a discovery plan Electronic searching - keywords Electronic searching - keywords Residual data areas - agree to search or not Residual data areas - agree to search or not Restoration of deleted files - may be important Restoration of deleted files - may be important Method for review of privileged/private docs. Method for review of privileged/private docs. Method for production (specify data and media formats) Method for production (specify data and media formats) Archival and disposal of electronic data Archival and disposal of electronic data Retention of third-party service provider - cost Retention of third-party service provider - cost

Renew Data Corp. Systems Administrator Deposition Alexander v. F.B.I., 188 F.R.D. 111 (D.D.C. 1998) Alexander v. F.B.I., 188 F.R.D. 111 (D.D.C. 1998) Things to investigate: Things to investigate: Network and backup system overview Network and backup system overview system and backup system and backup Backup system specifics (policy and hardware, software) Backup system specifics (policy and hardware, software) Records retention / litigation response (who is in control?) Records retention / litigation response (who is in control?) Web server info Web server info Voic or fax server info. Voic or fax server info. PDAs issued & used PDAs issued & used

Renew Data Corp. Responding in Discovery Don’t open files, use forensic image process Don’t open files, use forensic image process Stop recycling backup tapes Stop recycling backup tapes Try to limit search to active files Try to limit search to active files TX Rule 196.4; Rowe Entertainment, Inc. v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) TX Rule 196.4; Rowe Entertainment, Inc. v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) Describe your response plan (in detail) Describe your response plan (in detail) Seek protection from burdensome requests Seek protection from burdensome requests

Renew Data Corp. Responding in Discovery Chain of Custody Issues Was the file altered during copying process? Was the file altered during analysis? Reliability of copying process? Was a forensic image taken, or should it have been? Was a forensic image taken, or should it have been? Data preservation and security? Who handled and processed the data, and how can you prove it is “as-was”? Who handled and processed the data, and how can you prove it is “as-was”?

Renew Data Corp. Bearing the cost Cost elements. Cost elements. Imaging of hard drives and servers Imaging of hard drives and servers Restoration/retrieval of backup data Restoration/retrieval of backup data Restoration/recovery of deleted files Restoration/recovery of deleted files Searching tapes & hard drives, sorting, de-duplicating and other processing work Searching tapes & hard drives, sorting, de-duplicating and other processing work Is on-site work needed? Is on-site work needed? Costs may be allocated between the parties. Costs may be allocated between the parties. Rowe Entertainment v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002) Rowe Entertainment v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002)

Renew Data Corp. Spoliation of electronic data The Duty to Preserve The Duty to Preserve Party on notice when it reasonably foresees or anticipates litigation, even before the plaintiff manifests an intent to sue. National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) Party on notice when it reasonably foresees or anticipates litigation, even before the plaintiff manifests an intent to sue. National Tank Co. v. Brotherton, 851 S.W.2d 193 (Tex. 1993) Totality of the circumstances test will be used. Trevino v. Ortega, 969 S.W.2d 950 (Tex. 1998) Totality of the circumstances test will be used. Trevino v. Ortega, 969 S.W.2d 950 (Tex. 1998) Rule 3.04(a) of TX Disciplinary Rules: a lawyer may not unlawfully obstruct access to, delete, or alter relevant information, or counsel others to do so. Rule 3.04(a) of TX Disciplinary Rules: a lawyer may not unlawfully obstruct access to, delete, or alter relevant information, or counsel others to do so. Good article: Judge Curt B. Henderson, The Duty to Preserve Electronic Data, 66 Tex. B.J. 24 (Jan. 2003) Good article: Judge Curt B. Henderson, The Duty to Preserve Electronic Data, 66 Tex. B.J. 24 (Jan. 2003)

Renew Data Corp. Spoliation of electronic data Real Consequences Real Consequences Financial sanctions, including personal liability Financial sanctions, including personal liability Danis v. USN Communications, Inc., 2000 WL (N.D. Ill. Oct. 23, 2000) Danis v. USN Communications, Inc., 2000 WL (N.D. Ill. Oct. 23, 2000) Adverse inference instruction Adverse inference instruction Default judgment Default judgment Sarbanes-Oxley – potential criminal sanctions Sarbanes-Oxley – potential criminal sanctions PR – avoid the trust crisis spawned by Enron! PR – avoid the trust crisis spawned by Enron!

Renew Data Corp. Using an expert Retained as a neutral expert - Retained as a neutral expert - Officer of the Court Officer of the Court Assists in defining scope and process Assists in defining scope and process Creates images with proper chain of custody Creates images with proper chain of custody Performs agreed searching/filtering Performs agreed searching/filtering Provides data for privilege review Provides data for privilege review Formats and provides data to requesting party Formats and provides data to requesting party

Renew Data Corp. Using an expert Retained directly by a party - Retained directly by a party - Gives tactical & strategic advice in discovery Gives tactical & strategic advice in discovery Preserves hard drives via forensic imaging Preserves hard drives via forensic imaging Inspection agent for other party’s expert Inspection agent for other party’s expert Assists in defining scope and process Assists in defining scope and process Creates images with proper chain of custody Creates images with proper chain of custody Performs agreed searching/filtering Performs agreed searching/filtering Provides data for privilege review Provides data for privilege review

Renew Data Corp. Advising Clients about Retention D ata retention/destruction policies and practices D ata retention/destruction policies and practices Remember both! Remember both! Counsel’s role when litigation is anticipated Counsel’s role when litigation is anticipated What is reasonable for the future? What is reasonable for the future? Costs are coming down with new technology Costs are coming down with new technology Law is coalescing to give guidance for production and cost allocation Law is coalescing to give guidance for production and cost allocation Lawyers and judges are more savvy Lawyers and judges are more savvy Result: judges will require more productions Result: judges will require more productions

Renew Data Corp. Best Practices – What to do now You will have to produce data – plan for it You will have to produce data – plan for it Implement data retention policies Implement data retention policies Move quickly to preserve data to avoid spoliation/obstruction charges Move quickly to preserve data to avoid spoliation/obstruction charges Become familiar with EE solutions and providers – shop around Become familiar with EE solutions and providers – shop around Counsel’s role – remember Nancy Temple! Counsel’s role – remember Nancy Temple!