Conning the IADC newsletters.

• Position: International Association of Defense Counsel

Recognizing that a wide range of practical and helpful material appears in the newsletters prepared by committees of the International Association of Defense Counsel, this department highlights interesting topics covered in recent newsletters and presents excerpts from them.

Discovery of E-Data in the New Millennium

Writing in the newsletter of the Advocacy, Practice and Procedure Committee, David G. Brock of Jaeckle Fleischmann & Mugel, LLP, Buffalo, New York, discusses the discovery of electronic data:

Now that the millennium bug has been shown to be little more than a "sniffle," it is appropriate to re-examine some of the issues raised by the disclosure of electronic data in litigation.

Broadening scope of disclosure

Discovery of "e-data" is not new. Over the past quarter century, courts have consistently recognized that the electronic storage of information is no different in principle from the storage of paper records. For example, in 1996 the U.S. Supreme Court denied the R.J. Reynolds Co.'s petition for certiorari from a Minnesota state court ruling requiring the tobacco manufacturer to provide a complete database of all litigation-related records compiled by its defense counsel. See R.J. Reynolds Tobacco Co. v. Minnesota, 517 U.S. 1222 (1996), denying certiorari to the Minnesota Court of Appeals.

In the face of courts' application of traditional discovery principles to electronic data, Rule 34(a) of the Federal Rules of Civil Procedure has been expanded to encompass e-data, and expressly authorizes translations, if necessary, by the respondent, through detection devices into reasonably useable form. Courts today consider it black-letter law that computerized data is discoverable if relevant. Anti-Monopoly Inc. v. Hasbro Inc., 1995 U.S. Dist. Lexis 16355, 1995 WL 649934 (S.D. N.Y. 1995). Computers have become so commonplace that most court battles now involve discovery of some type of computer-stored information. Bills v. Kennecott, 108 F.R.D. 459, 462 (D. Utah 1985).

Looking deeper and deeper

As a result, it is readily accepted in litigation that discoverable "documents" now includes computer hard drives, magnetic tapes, disks of all types, digital tapes, microfilm and the like. Crown Life Insurance Co. v. Craig, 995 F.2d 1376, 1382 (7th Cir. 1993). Moreover, purely electronic forms of communication, such as e-mail and digital voice messaging, routinely are held to be discoverable.

Courts are looking closer and closer into the workings of electronic processing systems to determine the ever-broadening scope of items required to be produced. Even though printouts generated by computer may be turned over early in discovery, it is generally held that a request for raw information in computer banks is proper and that the information is obtainable under the discovery rules. Santiago v. Miles, 121 F.R.D. 636, 640 (W.D. N.Y. 1988). Courts no longer stop at looking for what data is in the computer; they now look as well to what used to be there. It is commonly accepted that deleted or erased files are discoverable. Easley, McCaleb & Associates Inc. v. Perry, No. E-2663 (Ga. Super. Ct. July 13, 1994).

Couple this principle with the discoverability of raw data, and it is easy to see how a well-prepared plaintiff's attorney can learn more about what is in a defendant's computer than the defendant itself might know. How then to be prepared?

Issues in disclosure

Litigation is often the first opportunity for corporate management to appreciate the true importance of knowing their computer systems. The corporation and its attorney should review together how the system works. Is it a LAN? WAN? Mainframe? Stand-alone PCs? They also should understand all of the storage media available, whether it be disks (hard, floppy, zip, jaz--the possibilities are limitless), CD-ROM, tape (magnetic or digital), and exactly where each of these storage media is maintained. Nothing is more embarrassing than finding an unknown draft of a sensitive document at the bottom of a secretary's desk drawer or in an off-site back-up tape.

Counsel and client should understand and document the method used for creating, storing, locating and retrieving different types of information. This should be done before--or early in--any litigation, as it can be expected that different types of discovery demands, seeking myriad forms of data and information, will be issued at different times during the litigation. By the time the demands come flying in, defense counsel does not have the luxury of much time to figure out how to respond. It will become necessary to determine precisely where the information is stored, in what form, and how to retrieve it for production in a timely manner.

If the client has not done so, it should establish an information retention and destruction policy. Much like the traditional document retention policies, this procedure should anticipate that certain things will happen to certain types of data at predetermined times or events. This includes everything from routine "sweeping" of deleted e-mails, to the automatic backup of stored data, central or standardized storage of floppy disks and CD-ROMs, as well as individual procedures for maintaining desktop files. Often the procedures become as important in litigation as does the data, especially if certain requested information is no longer retrievable.

It is imperative that all employees in the company be aware of the data storage and retention plans, as well as the potential liability of the company for the use of electronic information, especially e-mail. All employees should be encouraged to draft documents as if they were to be read by (1) the company's competitor and/or (2) a judge and jury. They just might be.

Preparing for disclosure

Once the litigation begins in earnest or becomes imminent, defense counsel should begin preparations for the eventual production of computer records and data.

* Locate and preserve all databases, programs and computer-generated records. Establish a chart showing what information is located in which computer media and in what form. This will facilitate retrieval of requested information later in the litigation.

* Make backups of all data before reviewing them. This will create a "clean copy" for review, so that your "footprint" won't be followed. Remember, every time a document is accessed, even to be read, a record is maintained. An astute computer specialist can track what documentation was seen, by whom, when and in what sequence, thereby fairly easily developing a sense of the corporate defense strategy and which records the client deems pertinent or troublesome.

* Identify all systems that have relevant information. This process should not be limited to PCs or even mainframe computer systems. It should include separate e-mail systems, voice mail, file servers, CD-ROMs (whether individual or in server banks) and all other storage media. Don't forget that backup tape kept off-site.

* Understand the company's backup and deletion policies and procedures, and obtain copies of all logs showing how and when the process was implemented. With the expansion of discovery to encompass e-data, the courts have also expanded the concept and scope of spoliation. Now more than ever, courts are willing to accept the destruction of electronic information and documents as presumptive of bad faith. Lauren Corp. v. Century Geophysical Corp., 953 P.2d 200 (Colo. App. 1998). The precise date, manner and reason for almost any file destruction becomes critical.

* Work with the company's information services department and personnel to identify other databases, storage, retrieval, transmission or other facilities unique to their operation. Often information is requested that resides in a database in a form not readily retrievable but may require the development of additional software programs in order to locate, retrieve and produce the information required.

What is privileged?

There is no longer any doubt that the attorney-client privilege, along with the work product doctrine, as codified in Rule 23(b)(3) of the Federal Rules of Civil Procedure, apply as much to electronic data as to paper documents. These privileges should be used to their fullest extent when document production is requested. Often the requested electronic data will contain e-mails, internal memos or other documents reflecting attorney-client communications, legal strategies and work product. The capabilities of instant retrieval, however, raise justified concerns over the possible waiver of these privileges.

While many would view the ability of computers instantaneously to retrieve vast amounts of data for immediate viewing as a blessing, an attorney monitoring the production of electronic evidence must not ignore the inherent pitfalls. Tempting though it may be, the notion of "data dumping"--the production of the complete contents of a computer's memory to force opposing counsel to sift through the contents--will almost certainly include electronic data which, if reviewed ahead of time, would fall within a privilege or other protection from disclosure.

Such an inadvertent lapse could well trigger a claimed waiver of any privilege. An honest oversight, however, which lets a specific record "slip through the cracks" in a privilege review will stand a greater likelihood of preserving the privilege, even as to already-disclosed data or records.

Be prepared

Computers provide a new facet to the traditional challenges of extensive document discovery in complex litigation. Where once it was necessary to understand in which file...