September 2007Volume 3, Number 2
Table of Contents

Ten Key Q&As About Legal Hold and the FRCP Amendments

The amendments to the Federal Rules of Civil Procedure (FRCP) and the legal hold process raise some interesting challenges and changes to key processes for business lawyers.

Deborah Johnson, VP of Discovery and Litigation for electronic communication control specialist, Orchestria, has fielded a number of questions in this area over the past weeks and here offers her opinion on some of the challenges faced.

Question 1: How can I satisfy the requirements of Rule 26(f), Conference of Parties, without dragging my entire IT department to every discovery-planning conference?

DJ: While your IT department ought to be involved in every discussion leading up to any discovery planning conference, they need not attend the conference itself. However, it’s always a good idea to keep IT involved and have an IT representative attend every discovery meeting.

The more important issues at play here are preparedness and using your electronic communication infrastructure effectively so as to streamline the data discovery and collection process. This requires a high degree of transparency and systems that allow you to see what messages may have content relevant to a particular (or potential) litigation and where those messages are stored. It also requires systems in place that allow you to quickly segregate and retrieve relevant data, wherever it may be stored.

Question 2: Do I still need an automated system to find messages containing privileged communication, even though new Rule 26(b)(5), Claims of Privilege or Protection, provides a means for recovering inadvertently produced privileged material?

DJ: This is a very risky area because once privileged information is exposed, you can ask for it back but you cannot undue the damage. Avoid the need for a “claw back” by accurately identifying and tagging all privileged messages in your electronic communication system at the very start of the process.

Question 3: Now that we must reveal the disposition of all discoverable materials during discovery planning conferences, how can any material be considered “not reasonably accessible?”

DJ: The hard truth is that it’s getting very difficult to argue successfully that any data is not reasonably accessible. The undue burden and cost argument has largely been made moot by advancing technology. The same technology that makes business data more available and usable for executives works for litigators, too. When there is a dispute regarding the accessibility of data, the argument is more likely to focus on cost-shifting, rather than admissibility. This requires claimants to be fully knowledgeable about operating capabilities and cost. The good news is systems that improve data visibility and accessibility also make it easier to comply with discovery orders.

Question 4: If arguments that there is no such thing as “not reasonably accessible data” are inevitable, how do I ensure a reasonable scope of preservation and production?

DJ: In a legal environment where there is no such thing as “not reasonably accessible data,” the best way to be prepared is to negotiate in good faith from the beginning for the most reasonable scope of preservation and production. Of course, if we assume that all discoverable data is, by definition, also accessible, then systems that accurately analyze all messages for relevancy and can tag them for easy retrieval are critically important.

Question 5: Rule 37(f), Failure to Make Disclosures, now leaves a very shallow safe harbor. How should I prepare to meet this challenge?

DJ: Rule 37(f) provides safe harbor (protection against sanctions) when discoverable data is lost and unrecoverable due to “the routine operation of an electronic information system.” That is, a matter of regular business. The most effective way to protect yourself is to have in place a documented, repeatable, transparent, and defensible, Legal Hold Process. This should include sending out Legal Hold notices and suspending your routine document destruction policies for relevant or potentially relevant custodians. It’s also important to make certain that people understand what their obligations are under a legal hold order, and sending out periodic reminders. This is very hard to do without third-party validation. So, your process should be tightly integrated with both your messaging infrastructure and the systems you use to find and collect discoverable data.

Question 6: How much does any technology today really limit my obligation to produce data that is not reasonably accessible [Rule 26(b)(2)(B), Discovery Scope and Limits]?

DJ: Practically speaking, there are really no technological limits to the obligation to produce discoverable material that includes electronically stored information (ESI). Therefore, technology actually expands your obligations under legal hold. Discoverable information stored offsite on tapes is now less likely to be deemed “not reasonably accessible” than it once was. Technology has rendered this a question of cost and burden rather than admissibility and it’s a question that can only be answered by a judge. In the end, one should never use technology as an excuse to limit the scope of discovery. Systems that make the content and intent of all your electronic messages visible and make relevant messages accessible are the best way to address this issue.

Question 7: Do the amendments to Rule 34(B), Protocols for how documents are to be produced to requesting parties, mean that I must always produce documents in native format?

DJ: This is a critical and complex question that I’m sure will become a sticking point at many meet and confer meetings. There are numerous technical and legal challenges associated with producing documents in native formats and they ought to be addressed on a case-by-case basis. For example, should documents be reviewed for privilege in their native format? Such documents can be inconsistent and confusing. Or, should documents be redacted and notated in native format and then converted to TIFF files for production? These are issues that should be agreed upon at the meet and confer. So, while you may not always need to produce documents in native format, you should make sure you know what that means if you do agree to it.

Question 8: Rule 16(b) allows the court to establish rules around disclosure, privilege, methods, and work product prior to electronic discovery commencing. What does this mean for me?

DJ: For litigants, this means that legal teams must have a complete understanding of their IT environments. For all Federal cases, that understanding must take place within 120 days. The purpose of this rule was to save both the court and attorney time by establishing rules for discovery prior to the commencement of the process. Failure in this area can cost litigants the ability to shift costs and the ability to make arguments for data being not reasonably accessible.

Question 9: Rule 37(f) provides “safe harbor” when electronic evidence is lost and unrecoverable as a matter of regular business. What’s the best way to establish good faith?

DJ: As outlined earlier, a well documented process that is repeatable and transparent, and a system that operates consistently, with clear audit trails, offers the best demonstration of good faith. Parties must make every effort to ensure that litigation holds and data destruction policies are legally defensible. This can be hard to prove without third-party validation. I believe that companies need to treat legal holds and the entire discovery process as part of the cost of doing business.

Question 10: Can I rely on one system to satisfy all of the requirements for data transparency and availability under the amended Rules?

DJ: Unfortunately no. But, if you’re not using, evaluating, or at least considering an end-to-end system for legal hold, then preparing for discovery and litigation will only become more difficult, risky, and expensive.

There are too many moving parts in litigation, from collection all the way to the production of data to opposing counsel, for any single system to address them all successfully. Orchestria provides a solution for Legal Hold, which can accelerate your entire discovery process. There are many other vendors that address the other stages of the litigation lifecycle. Our solution analyzes electronic communication for case-relevance and categorizes message for easy retrieval. This not only improves defensibility, but it can also reduce your legal review costs by as much as 80%.

Summary: Collaboration is the key
If there is a single key message to take away from this discussion of the new FRCP amendments for eDiscovery, it’s this: your most valuable partner will be your IT department. Meeting all of the requirements of the new amendments and coordinating all the many sources of information so that data is preserved, collected, and produced appropriately and in a manner consistent with your company’s best interests can only happen effectively and reliably when IT and your legal team work closely and cooperatively. The more your electronic communication control systems support that cooperation, the greater your chance of success.

If you would like to submit your own questions about legal hold and eDiscovery to Deborah, please send them to her at .

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