"E-DISCOVERY” – A PRIORITY NOW OR A RISK LATER
By: W. Corey Grimley
owners and managers who have had their companies involved in lawsuits know that
"the discovery process” is probably the most frustrating and expensive part of
the experience. The attorneys for both
sides send extensive written discovery requests to one another asking for voluminous
copies and pictures of everything but the kitchen sink (and in construction
litigation, sometimes the sink too … ).
steps of the discovery process, on both sides of the case, are invariably and
unfortunately very costly in terms of time and money to the clients. In response to "Requests for Production” and
court subpoenas, boxes and boxes of files must be retrieved from files rooms,
attics, and remote storage. These boxes
must then be manually reviewed to determine what documents must be produced in
response to what request from the opposing attorney. There was once a time when we only had to
worry about the paper.
to add insult to injury, we may have to also be able to put our fingers on all
of the company email (wherever it is located) and other electronically stored
information, and do the same sorting.
Where are those "electronic” documents stored? Are they only attached to emails? Are they on individual employee "flash
drives” on their key chains? Were they backed
up on the server? If we are not sure,
will the judge make me produce my home computer if I used it and my personal
email address for business purposes?!
These only touch on some of the issues addressed by "e-discovery” in
in the business world, over ninety percent of all information is created in
electronic format. Shortly after electronically stored information became
commonplace in the business world, the state and federal courts began to see
more and more requests and subpoenas between adversaries in lawsuits demanding one
another’s electronically stored information.
businesses know (or hopefully have a good idea) where all their paper documents
are located concerning a specific account, transaction, etc. But if the business is served with a subpoena
ordering the production of all "electronically stored information” on a
specific matter, including email, within fifteen to twenty days, can the
business comply? For an account that
dates back five or ten years? How have
those documents been saved and/or archived?
Have they been saved separately from other files on different matters? Can all emails addressing the issue in
any manner be easily gathered and produced?
the answer to these types of questions is "No,” then the business is probably
not prepared to respond to such a subpoena quickly, confidently and
inexpensively (or at least less-expensively).
The business is therefore at risk.
The business will then invariably be forced to hire an expensive,
third-party, information technology ("IT”) vendor to comb through possibly
years of electronic documents and emails in the hopes of isolating information
responsive to the subpoena or discovery requests. What must be done in haste may be much more
expensive than what is done without an immediate, court-ordered deadline.
nightmare does not end with the expense of data retrieval. Federal courts are now regularly sanctioning and
fining parties to lawsuits for failing to take the necessary steps to protect
the data which is responsive to the discovery requests and subpoenas. In other words, "we don’t have it anymore”
does not necessarily get the business out of the woods.
courts have held that "the obligation to preserve evidence arises when the
party has notice that the evidence is relevant to the litigation or when a
party should have known that the evidence may be relevant to future litigation
[emphasis added].” Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216 (S.D.N.Y.
2003). So parties to a not-yet-filed
lawsuit have to be sure that they are retaining discoverable documents
potentially years before the lawsuit is eventually filed, simply because they
arguably "should have known” the evidence may be relevant to the future
litigation. To be sure, the opposing
attorney will certainly be arguing that the party "should have known” that the
documents needed to be retained.
if the business deletes/destroys documents consistent with a properly
implemented "document retention policy,” the business could be in trouble with
the court. If that deletion/destruction
occurs after the business "should have known” the evidence "may be relevant to
future litigation,” the business may very well be subject to sanctions by the
court once the lawsuit gets underway for breaching the business’s obligation to
can you do now to better protect your company against prohibitively expensive,
post-lawsuit, IT costs and possibly severe discovery sanctions by the
courts? A start is to consult with your
legal counsel about how your business can develop an economical approach to
complying with the federal rules on e-discovery, to be prepared for a possible
suit and the related discovery requests.
This consultation will probably also involve the use of a third-party IT
vendor (if your business has no competent in-house IT employee). Most IT vendors will explain that the costs
of devising an appropriate document retention and archival system, prior to the
pressures of litigation, that will be a fraction of the cost of addressing the
problem in the face of a pressing federal court order.