| The Renewed Importance of E-Discovery
March 10, 2010
Six years ago, a judge in a New York federal district court issued an opinion regarding parties' and attorneys' obligations to safeguard electronic discovery in civil litigation. That case, Zubulake V. UBS Warburg LLC ('Zubulake V'), has been considered the benchmark by which electronic discovery obligations have since been measured. This year, a new federal decision reemphasized the importance of Zubulake V and authorizes sanctions against those who do not treat their obligations seriously.
The E-Discovery Cases
New York federal district court judge and author of Zubulake V, Hon. Shira A. Scheindlin, intentionally revisited the decision in her recent ruling in The Pension Committee of The Univ. of Montreal Pension Comm. V. Banc of America Securities, LLC (S.D.N.Y. Jan. 15, 2010) 2010 U.S. Dist. LEXIS 4546. That ruling clarified that under federal discovery rules, the failure of a litigant to implement a good faith and monitored discovery hold on electronic discovery materials may constitute negligence, gross negligence, or willful misconduct by both the party and its attorneys. In cases of gross negligence or willful misconduct, the party or their counsel must be sanctioned for their acts. The Pension Committee is expected to become a bellwether for electronic discovery handling like Zubulake V before it.
Combined with recently enacted changes to California law on electronic discovery, businesses should be especially mindful of their discovery obligations regarding safeguarding electronic discovery. Based on The Pension Committee, businesses should implement immediate hold procedures as soon as they anticipate litigation. Under The Pension Committee, waiting to receive a written demand to preserve discovery by counsel or waiting for the filing of a lawsuit is not a valid excuse for failing to preserve electronic discovery.
Protecting the Company
A business anticipating litigation should identify all employees who have relevant paper and electronic data. The business should also consult with counsel and identify appropriate technology officers, supervisory employees, and counsel, who will jointly manage the hold. The business, through its counsel, should immediately issue instructions to affected employees identifying categories of information to preserve, types of electronic media containing the information, and who is managing the hold. The types of media on which relevant electronic information is stored, e.g., desktops, laptops, cell phones, PDAs, on-site servers and off-site servers, should be identified and catalogued.
Technical staff should be made readily available to employees to assist in identifying and preserving information subject to the hold. Counsel and supervisors need to be active in contacting and working with employees to identify and preserve information. Even if employees inadvertently destroy information, the business can nonetheless be found grossly negligent.
Regular written updates should also be issued to employees reminding them of their obligation to preserve information and seeking any newly-identified media or relevant electronic data. The business should also log all interactions with employees to document its reasonable efforts to prevent the destruction of relevant information. If the business has a policy for regularly deleting or destroying electronic information, such a policy should immediately be suspended. If suspending the policy is impracticable due to technical or cost issues, the business should immediately raise the issue with its counsel to determine its obligations. Allowing a regular policy of destroying information to result in the destruction of relevant electronic information may result in monetary or issue sanctions.
At the Mercy of the Judge
The recent changes to California law on electronic discovery do not explicitly adopt Zubulake V or The Pension Committee, but the extent of a party's obligation to preserve electronic discovery will continue to be the subject of judicial discretion in state court cases. California judges have been apt to adopt standards from Zubulake V and other federal district court cases in determining the obligations of California litigants. Therefore, businesses should expect the obligations imposed in The Pension Committee to be adopted by many California trial judges in determining the culpability of a party for purging electronic evidence, and should plan accordingly.
A link to The Pension Committee decision is provided here however, if you have further questions regarding your obligations to preserve electronic information, do not hesitate to contact us. Walsworth, Franklin, Bevins and McCall, LLP regularly advises clients regarding proper compliance with federal and state discovery law.
Please note that this article is informational only and does not constitute legal advice.
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