Ethics and Management of E-Discovery

"Now that the key issues have been addressed and national standards are developing, parties and their counsel are fully on notice of their responsibility to preserve and produce electronically stored information." Zubulake v. UBS Warburg LLC, 2004 WL 1620866 (S.D.N.Y. July 22, 2004).

The Federal Rules of Civil Procedure were amended effective Dec. 1, 2006, to incorporate specific provisions related to the discovery of electronically stored information (ESI). There has been much commentary regarding the amendments to the Rules. With the time since the adoption and with many states, including Tennessee, adopting their own ESI rules, it is an appropriate time for Tennessee practitioners to consider what effect the discovery of ESI has on their practices and what obligations they have to clients under the Rules.

The amendments to the Federal Rules, and those proposed in most states, specifically require a greater level of cooperation and collaboration than the traditional Rules explicitly required. The amendments require addressing issues at an early stage and frequently thereafter. Permeating the electronic discovery process are requirements of good faith and reasonableness. While these standards can shift somewhat depending on the issues in a case or the scope of information sought, there are some general observations that apply across the board.

Why Is ESI a Concern?

So what's the big deal anyway? Many of the issues arise because of metadata, which is often defined as data about data. The bottom line is that there is much more to ESI than there is to a paper document. ESI can tell a whole story regarding the information that is stored. ESI can be organic, containing "fingerprints" related to the information, whether in a properties folder, edits of the document, or folder indices. A savvy reviewer might discern who used a document, who received it, who printed it, or who authored it. Sometimes information regarding what changes have been made or comments inserted within a document can be viewed. One recent example that was extremely damaging to the drug manufacturer Merck arose in one of the Vioxx suits. It came to light that Merck had edited certain negative information from a drug study before it was released.

There is also embedded data frequently stored with an ESI document such as formulas in spreadsheets. Another example of embedded data that is very common to many electronic device users is the audio file tag, which provides a user with the album name and cover image on an mp3 player. While there is likely some technical distinction between the two, I generally use the terms metadata and embedded data interchangeably.

Part of the issue is also the sheer volume of electronic documents. There are many estimates, but upwards of 95 percent of all business documents are stored electronically, many of which are never committed to paper. The number of electronic devices that are implicated by the rule amendments, including cell phones, PDA's, and voice mail, is staggering. There are forms of documents such as calendars, e-mail messages and Internet usage information that could be responsive to discovery requests in certain cases. Even text and instant messages may be admissible.1 The other concern that arises involves the uncertainty that abounds in any situation where there is an amendment or there is a change in the standard for reviewing a process.

So aside from the guidance in the amended procedure rules, are there specific electronic discovery ethics guidelines in Tennessee? Currently, there are not, but general principles still apply, just as the traditional discovery rules applied to electronic information before the 2006 amendments. Ultimately, we are tasked with knowing sufficient information to be competent and with dealing fairly with opposing parties. It is important to note that the view that we have today of our requirements is merely a snapshot. We may have much more specific guidance in the future as the methods with which we handle ESI evolve.

Who, Me?

One frequently asked question is whether all of these issues regarding ESI really affect a particular attorney's practice. Clearly, the Rules have become mandatory in Federal Court. Recent case law has answered similar questions in other contexts. For instance, cases from 2007 made clear that these principles do apply to all litigants including individuals2 and to health care and medical equipment suppliers.3 Case law has also fleshed out duties that attach to the attorney, such as the duty to search for sources of information, not just pieces of stored information,4 and the requirement to provide actual instruction to the client, not just general admonitions to preserve or store information.5 These duties are significant and cannot be forgotten, because of penalties that can attach, such as sanctions, monetary fines, adverse evidentiary rulings, presumptions, dismissal of claims, Board of Professional Responsibility reports, censure, or suspensions of licenses.

Approaches

I have heard several lawyers talk about agreeing to ignore electronic information in a given case, which I call the ostrich approach. Agreeing with the opposing party simply to ignore any potential electronic information could constitute a failure to fulfill ethical duties to the client. That approach could seriously jeopardize the proof in a case, and while it may make life easier and litigation less expensive, it likely leaves too many stones unturned.

Another approach advocated in years prior to the amendments was the piecemeal approach. Like some military invasions where there is a fight and a retreat and a fight and a retreat, there is no real plan or process related to the electronic information. The amendments require collaboration largely because electronic information can be changed or lost over time. The piecemeal approach is dangerous because of the failure to preserve unaltered discoverable information, which can cause real problems in litigation.6 Recently, there were sanctions awarded approaching 1.5 billion dollars in a Florida case;7 this case underscores the necessity of having a reasonable and defensible approach to dealing with ESI.

What Do We Do?

The E-Discovery Rule Amendments require us to be more prepared early in litigation. Previously, attorneys attended a scheduling conference, setting trial and other important litigation dates, and had generalized discussion of discovery. We could just show up with a calendar. Now, we are obligated to have preliminary investigation and discussion before the scheduling conference. We need to talk to the client and discover what type of information is stored and what devices are used. We also have to discuss and consider what information to ask for from the other side and what agreements can be had regarding the return of inadvertently disclosed information and other issues.

We can't all be computer experts. In fact, almost none of us are because we are lawyers. But we do need to know what questions to ask of our clients. Many big firms are developing ESI practice groups or have individuals who have some ESI expertise. I have seen decision matrices and checklists and ratings forms related to electronic information and electronic vendors. There are companies that work on large-scale computer forensic litigation issues. White papers set out charts and diagrams regarding the process these companies use to manage electronic information. Of course, often the issues in the case or the litigants involved do not warrant such an approach, or time and money prevent it.

It is important to have a process for dealing with ESI. This process will allow a focus on the requirements under the various rules, and also allows for later defense of steps taken during pretrial litigation. In an attempt at alliteration, I propose the following steps: question, consider, collect, cull, coordinate and provide. As the list indicates, this is a multistep process and should not be short cut.

Even with care in the process, there will be slippage. Particularly in document intensive cases, it is likely that there will be some responsive documents that are overlooked, and there will be some documents that are improperly produced. This underscores the necessity to discuss clawback agreements and how to deal with inadvertently disclosed information at the scheduling conference.

In representing a corporate client, how to manage electronic information should be discussed as a part of your general advising. Those clients with IT personnel or departments may have individuals who are highly trained in dealing with computer systems, but the tasks required by litigation are different from IT's normal function. Thus, it is good to consider management in a litigation context before there is ever the possibility or mention of a claim. A key is the policy in place regarding retention or destruction of documents. There should be routine and scheduled disposition of electronic information, which will allow for some protections under the Safe Harbor provision of the Rules.8

Once Litigation Becomes Expected

When a lawsuit is filed or litigation is reasonably expected, it is important to discuss how to proceed with your client. It is useful to establish specifically who bears responsibility for the preservation and production of ESI. The steps in the process can be handled by in-house counsel, by personnel of the client, through outsourcing, or through defense counsel. Setting up the roles will allow an estimate of costs. It also allows for determination of who will take on the supervisory obligations and who will do the "heavy lifting." This planning can limit expense and prevent duplication of efforts.

When litigation becomes imminent, a litigation hold or document hold letter should be prepared. Through this process, there is a freeze placed on the destruction or alteration of ESI. When sent to the client, it is important to ensure receipt of the litigation hold letter and to ensure that the proper individuals receive it. It is generally not sufficient to send it solely to the client's contact person who is managing the litigation. Ensuring proper receipt and dissemination will avail your client of the Safe Harbor provisions. In regard to the information of the opposing party, a preservation letter should be sent. This document specifically puts the opposing party on notice of the legal dispute and the obligation not to alter or destroy information. This letter can later give rise to a spoliation claim should the opposing party fail to preserve its information adequately.

Because it is difficult to know how to proceed without knowing what information exists, identifying the types of documents that your client has is essential after placing the litigation hold. An inventory should be made of the types of records kept, software used, persons involved in creating and using electronic information, and devices employed. Through this inventory, the attorneys should review the process established to collect and identify electronic information. Unless your client is an individual, there should be a multitier approach employed, analyzing end-users at particular computer terminals but also servers and other collection points for data. There should be follow-up to check that the process is followed. Again, the key is to have defensible practices in preserving and producing.

The multitier approach involves the interview of persons who produce and use electronic information. This is done internally with the client, but identification of those who produce and use for the opposing party is also necessary. Initial disclosures may give some information regarding the opposing party, but interrogatories and depositions may also be utilized to identify custodians of records and how information is produced and stored. One word of caution: there is a presumptive limit of ten depositions in the Federal Rules, which requires a party to be judicious in identifying whom to depose.9

Another important part of this process is to understand how it impacts the use of devices and information within the client's business. This understanding informs what information may be produced but also how to schedule production. For example, if you are representing a general-practice CPA firm, you would be ill-advised to agree to production of information in early April while your client is overwhelmed with tax season.

The process allows you to learn your client's information, whether there is one computer or multiple systems in various locations. Cooperation under the Rules requires the consideration of what is a usable form for the information whether requesting or producing. E-discovery can be an expensive and time-consuming process, but identification and organization at this stage can avoid costs. Knowing whether information must be produced in a native form or in an image file impacts the process and should be agreed upon by the parties early in the process. Also, the parties can discuss whether the information must be produced in a searchable form or whether searches will be conducted prior to production.

It is a good practice to obtain copies of all information that is identified as relevant and producible, whether that information is dumped on external drives, placed on CDs, or provided in some other manner. The attorney should also be involved in any privilege and relevance review. It may be helpful for the client to assist in that process, but it should not be delegated solely to the client. This is really no different from document review and organization under traditional discovery with paper documents.

Failure to identify and preserve electronic information may be the greatest danger under the ESI Amendments. Spoliation with its presumptions or sanctions that may attach due to the destruction of potential evidence is a very real concern.10 An attorney should direct a litigant to lock down data so that it will not be altered. Often, the presumption that could attach is worse than the reality of the information that was lost. The party need not commit an intentional act; negligence is enough to constitute spoliation.11

Once the parameters have been established and the information has been preserved, narrowing the collected information should be considered. Whether making discovery requests or coordinating information to produce, the attorney should review particular classes of documents and particular software programs. It may be that an entire class of documents, such as spreadsheets, or those from specified machines, can be ignored. Time frame should also be examined. If the case involved a two year period, it may be useless to request information going back the full life of a particular system, which could be several additional years. Also, the request for backups should be used judiciously. Good IT workers make backups of backups, so that there may be many copies or versions of particular information. The parties should discuss and may agree that duplicates and near duplicates may be culled or that only certain drafts or versions of documents will be utilized.

There is a danger in using the word all in discovery requests. Litigants may be happy to oblige a discovery request seeking "all" information.12 To limit production, it may be useful to employ search terms and either coordinate a joint search or direct one before or after production. Considering particular individuals, departments, products, or processes may be essential to narrowing requests or focusing searches. This information narrowing implicates the ethical obligations of the attorney, as the attorney should provide effective representation and ensure that proper information is both obtained and produced, while keeping the case in proportion to its issues.

Hiring Vendors

There is an entire cottage industry now in computer forensics. A key word search for computer forensics or e-discovery support or electronic litigation management or even ESI will provide numerous hits of Web pages on the Internet. There are several large-scale vendors nationally, and I receive weekly e-mails from two just from placing my name on lists at a seminar several years ago.

Hiring vendors may be a cost-effective solution and may allow for effective management of ESI in a case. However, hiring a vendor does not absolve an attorney from responsibility. The attorney retains the obligation to oversee and direct the management of the ESI. As a bottom line, the vendor operates at the direction of the attorney; thus there are ethical considerations for having ESI management outsourced.13 Having an indemnification provision in the agreement with the vendor may ultimately protect the attorney financially, but it does not supplant that responsibility.

So what do e-vendors do? E-vendors establish a process similar to the one outlined above that involves consultation, management, and preparation of ESI for production. They can, of course, review data and may serve the essential function of housing data. They can also perform forensic searches with their equipment. The important role of an e-vendor is to establish a defensible process that will ultimately be fair under the new ESI Amendments, workable for the litigation, and supportable within the case.

As with any type of expert or consultant, there are issues to consider in hiring an e-vendor. The first must be the capability of the company. We have several fairly small technology companies in our area that can perform limited collection and search of devices and equipment. The security protocol set up by the company is also important. Management of a particular assignment, as well as staffing, matters; the scope of the assignment and the timeline do, too. There should also be a review of how well the vendor can interface with the system or the files. For instance, the jargon or even the technology may be extremely different depending on the parties to a lawsuit. The health care industry has its own types of records software and record keeping as do engineering and other disciplines that may use something such as CAD. Location and accessibility of the company may come into play.

Whether testimony may be necessary by a computer expert is an issue, as are confidentiality concerns. A conflicts check should be performed prior to divulging any protected information. Also, price is a consideration and should be reviewed.

Before the New ESI Rules

Prior to the amendments, most attorneys had some occasion to deal with information stored electronically. The Rules applied to those situations, and we dealt with them largely as we would paper documents. Many of those same practices still have utility with the Amendments. For instance, layers of discovery may still be helpful. Sending written discovery requests about records custodians, electronic equipment, and the types of files stored may give a wealth of information. The second step may be to depose records custodians, corporate witnesses,14 or supervisors of those using electronic equipment. As before, there may be an agreement to provide a ghost copy of a drive. Such a request should also identify the format of the information and the software used. Obtaining a complete copy of all records does no good if the records are created and saved using rare or proprietary software. In such a case, it may be possible to obtain a limited license from the litigant to access that information.

Guidelines

While there are many open questions regarding discovery and ESI, there are some useful guidelines already in place. Formal ethics opinion 2004-F-150 of the Tennessee Board of Professional Responsibility, while not dealing specifically with electronic information, provides guidance for dealing with confidential information that is inadvertently sent or disclosed by an adverse party.15 The Board notes the importance of the attorney-client privilege, along with the obligation of an attorney to respect the client's interest while fulfilling obligations and administering justice. The Board adopted the rationale of two earlier ABA opinions16 in stating that an attorney should refrain from reviewing such materials and notify opposing counsel. Of particular note is the fact that the Tennessee Board of Professional Responsibility looked to the American Bar Association for guidance and also to other states including Florida, Texas, and California.

In federal courts in Tennessee, the Middle District has issued an Administrative Order that requires cooperation between the parties involving e-discovery.17 This Order requires a litigation hold to be placed within seven days of the Rule 26 conference. It also provides for the immediate return of any inadvertently disclosed privileged information. Of real assistance to the parties, the Order requires the identification of an e-discovery coordinator. The Order states that such person "shall be responsible for organizing each party's e-discovery efforts to ensure consistency and thoroughness and, generally, to facilitate the e-discovery process."18 In other words, this person will run searches, oversee compliance issues, coordinate receipt and distribution of disclosures, and potentially be involved in the deposition process as it relates to ESI. The Eastern District does not have a similar Administrative Order but has added additional requirements to the standard scheduling order that address issues related to ESI.

A court in California recently dealt with the inadvertent disclosure of a trial-strategy memo by counsel.19 In that case, the defense team accidentally sent the memo, which included commentary that outlined strategy and weaknesses of the case, to counsel for the plaintiff, who made copies and disseminated them to co-counsel. The court disqualified the plaintiff's entire legal team.

Prior to the amendments, courts had also made clear that spreadsheets in their electronic form are discoverable. In Williams v. Sprint, the plaintiff sought spreadsheets with their formula intact.20 The court found that the metadata that is ordinarily visible when using a spreadsheet in Excel should be treated as a part of the document and should be discoverable in litigation.

Data mining is another big issue that implicates not just e-discovery, but also transfers of documents in a legal practice. There are a variety of opinions available. Recently, the National Law Journal had an article during the second week of February 2008 that discussed the variety of opinions on the topic. Keep in mind, there is a significant distinction between client-created information and attorney-created information. Much of the client-created information will be discoverable and may be able to be reviewed by the opposing party. Many of the opinions applicable to data mining refer to the attorney-created information that would then be sent to opposing counsel via e-mail or other means. In 2006, the ABA released an opinion stating that the Model Rules have no prohibition on the review of metadata, but also suggested that an attorney scrub or send an alternate version of information to opposing counsel.21 The ethics committees for the bar associations for New York and Florida disagreed, with both findings that data mining is unethical.22 There have also been recent opinions suggesting that metadata should not be used if the attorney has actual knowledge that it was sent inadvertently,23 but one suggests that there is no obligation to check with the other side regarding whether metadata was sent inadvertently.24 There are other opinions that attempt to strike a balance but leave practitioners without clear guidance.25 Tennessee has not yet waded into the muddy water in this area.

Other issues include the need to use encryption for e-mail. The opinion has some age on it, but the ABA released a formal opinion in 1999 stating that encryption was not required but that an attorney should consider it if the information is sensitive.26 What is clear from this and other opinions is that lawyers must be aware of security issues and have measures in place to protect confidential information. With this in mind, there are several opinions that deal with data retained by a third-party vendor and the obligations that remain with the attorney.27

Many of these issues are dealt with at the trial level, as discovery and evidentiary issues often are, and appeal does not occur. Thus, despite the guidance available, it is much more useful to know how your local judge deals with such situations than to know what an opinion in some other jurisdiction has stated.

"Now that the key issues have been addressed and national standards are developing, parties and their counsel are fully on notice of their responsibility to preserve and produce electronically stored information." Zubulake v. UBS Warburg LLC, 2004 WL 1620866 (S.D.N.Y. July 22, 2004).
The Federal Rules of Civil Procedure were amended effective Dec. 1, 2006, to incorporate specific provisions related to the discovery
of electronically stored information (ESI). There has been much commentary regarding the amendments to the Rules. With the time since the adoption and with many states, including Tennessee, adopting their own ESI rules, it is an appropriate time for Tennessee practitioners to consider what effect the discovery of ESI has on their practices and what obligations they have to clients under the Rules.
The amendments to the Federal Rules, and those proposed in most states, specifically require a greater level of cooperation and collaboration than the traditional Rules explicitly required. The amendments require addressing issues at an early stage and frequently thereafter. Permeating the electronic discovery process are requirements of good faith and reasonableness. While these standards can shift somewhat depending on the issues in a case or the scope of information sought, there are some general observations that apply across the board.

Why Is ESI a Concern?
So what's the big deal anyway? Many of the issues arise because of metadata, which is often defined as data about data. The bottom line is that there is much more to ESI than there is to a paper document. ESI can tell a whole story regarding the information that is stored. ESI can be organic, containing "fingerprints" related to the information, whether in a properties folder, edits of the document, or folder indices. A savvy reviewer might discern who used a document, who received it, who printed it, or who authored it. Sometimes information regarding what changes have been made or comments inserted within a document can be viewed. One recent example that was extremely damaging to the drug manufacturer Merck arose in one of the Vioxx suits. It came to light that Merck had edited certain negative information from a drug study before it was released.
There is also embedded data frequently stored with an ESI document such as formulas in spreadsheets. Another example of embedded data that is very common to many electronic device users is the audio file tag, which provides a user with the album name and cover image on an mp3 player. While there is likely some technical distinction between the two, I generally use the terms metadata and embedded data interchangeably.
Part of the issue is also the sheer volume of electronic documents. There are many estimates, but upwards of 95 percent of all business documents are stored electronically, many of which are never committed to paper. The number of electronic devices that are implicated by the rule amendments, including cell phones, PDA's, and voice mail, is staggering. There are forms of documents such as calendars, e-mail messages and Internet usage information that could be responsive to discovery requests in certain cases. Even text and instant messages may be admissible.1 The other concern that arises involves the uncertainty that abounds in any situation where there is an amendment or there is a change in the standard for reviewing a process.
So aside from the guidance in the amended procedure rules, are there specific electronic discovery ethics guidelines in Tennessee? Currently, there are not, but general principles still apply, just as the traditional discovery rules applied to electronic information before the 2006 amendments. Ultimately, we are tasked with knowing sufficient information to be competent and with dealing fairly with opposing parties. It is important to note that the view that we have today of our requirements is merely a snapshot. We may have much more specific guidance in the future as the methods with which we handle ESI evolve.

Who, Me?
One frequently asked question is whether all of these issues regarding ESI really affect a particular attorney's practice. Clearly, the Rules have become mandatory in Federal Court. Recent case law has answered similar questions in other contexts. For instance, cases from 2007 made clear that these principles do apply to all litigants including individuals2 and to health care and medical equipment suppliers.3 Case law has also fleshed out duties that attach to the attorney, such as the duty to search for sources of information, not just pieces of stored information,4 and the requirement to provide actual instruction to the client, not just general admonitions to preserve or store information.5 These duties are significant and cannot be forgotten, because of penalties that can attach, such as sanctions, monetary fines, adverse evidentiary rulings, presumptions, dismissal of claims, Board of Professional Responsibility reports, censure, or suspensions of licenses.

Approaches
I have heard several lawyers talk about agreeing to ignore electronic information in a given case, which I call the ostrich approach. Agreeing with the opposing party simply to ignore any potential electronic information could constitute a failure to fulfill ethical duties to the client. That approach could seriously jeopardize the proof in a case, and while it may make life easier and litigation less expensive, it likely leaves too many stones unturned.
Another approach advocated in years prior to the amendments was the piecemeal approach. Like some military invasions where there is a fight and a retreat and a fight and a retreat, there is no real plan or process related to the electronic information. The amendments require collaboration largely because electronic information can be changed or lost over time. The piecemeal approach is dangerous because of the failure to preserve unaltered discoverable information, which can cause real problems in litigation.6 Recently, there were sanctions awarded approaching 1.5 billion dollars in a Florida case;7 this case underscores the necessity of having a reasonable and defensible approach to dealing with ESI.

What Do We Do?
The E-Discovery Rule Amendments require us to be more prepared early in litigation. Previously, attorneys attended a scheduling conference, setting trial and other important litigation dates, and had generalized discussion of discovery. We could just show up with a calendar. Now, we are obligated to have preliminary investigation and discussion before the scheduling conference. We need to talk to the client and discover what type of information is stored and what devices are used. We also have to discuss and consider what information to ask for from the other side and what agreements can be had regarding the return of inadvertently disclosed information and other issues.
We can't all be computer experts. In fact, almost none of us are because we are lawyers. But we do need to know what questions to ask of our clients. Many big firms are developing ESI practice groups or have individuals who have some ESI expertise. I have seen decision matrices and checklists and ratings forms related to electronic information and electronic vendors. There are companies that work on large-scale computer forensic litigation issues. White papers set out charts and diagrams regarding the process these companies use to manage electronic information. Of course, often the issues in the case or the litigants involved do not warrant such an approach, or time and money prevent it.
It is important to have a process for dealing with ESI. This process will allow a focus on the requirements under the various rules, and also allows for later defense of steps taken during pretrial litigation. In an attempt at alliteration, I propose the following steps: question, consider, collect, cull, coordinate and provide. As the list indicates, this is a multistep process and should not be short cut.
Even with care in the process, there will be slippage. Particularly in document intensive cases, it is likely that there will be some responsive documents that are overlooked, and there will be some documents that are improperly produced. This underscores the necessity to discuss clawback agreements and how to deal with inadvertently disclosed information at the scheduling conference.
In representing a corporate client, how to manage electronic information should be discussed as a part of your general advising. Those clients with IT personnel or departments may have individuals who are highly trained in dealing with computer systems, but the tasks required by litigation are different from IT's normal function. Thus, it is good to consider management in a litigation context before there is ever the possibility or mention of a claim. A key is the policy in place regarding retention or destruction of documents. There should be routine and scheduled disposition of electronic information, which will allow for some protections under the Safe Harbor provision of the Rules.8

Once Litigation Becomes Expected
When a lawsuit is filed or litigation is reasonably expected, it is important to discuss how to proceed with your client. It is useful to establish specifically who bears responsibility for the preservation and production of ESI. The steps in the process can be handled by in-house counsel, by personnel of the client, through outsourcing, or through defense counsel. Setting up the roles will allow an estimate of costs. It also allows for determination of who will take on the supervisory obligations and who will do the "heavy lifting." This planning can limit expense and prevent duplication of efforts.
When litigation becomes imminent, a litigation hold or document hold letter should be prepared. Through this process, there is a freeze placed on the destruction or alteration of ESI. When sent to the client, it is important to ensure receipt of the litigation hold letter and to ensure that the proper individuals receive it. It is generally not sufficient to send it solely to the client's contact person who is managing the litigation. Ensuring proper receipt and dissemination will avail your client of the Safe Harbor provisions. In regard to the information of the opposing party, a preservation letter should be sent. This document specifically puts the opposing party on notice of the legal dispute and the obligation not to alter or destroy information. This letter can later give rise to a spoliation claim should the opposing party fail to preserve its information adequately.
Because it is difficult to know how to proceed without knowing what information exists, identifying the types of documents that your client has is essential after placing the litigation hold. An inventory should be made of the types of records kept, software used, persons involved in creating and using electronic information, and devices employed. Through this inventory, the attorneys should review the process established to collect and identify electronic information. Unless your client is an individual, there should be a multitier approach employed, analyzing end-users at particular computer terminals but also servers and other collection points for data. There should be follow-up to check that the process is followed. Again, the key is to have defensible practices in preserving and producing.
The multitier approach involves the interview of persons who produce and use electronic information. This is done internally with the client, but identification of those who produce and use for the opposing party is also necessary. Initial disclosures may give some information regarding the opposing party, but interrogatories and depositions may also be utilized to identify custodians of records and how information is produced and stored. One word of caution: there is a presumptive limit of ten depositions in the Federal Rules, which requires a party to be judicious in identifying whom to depose.9
Another important part of this process is to understand how it impacts the use of devices and information within the client's business. This understanding informs what information may be produced but also how to schedule production. For example, if you are representing a general-practice CPA firm, you would be ill-advised to agree to production of information in early April while your client is overwhelmed with tax season.
The process allows you to learn your client's information, whether there is one computer or multiple systems in various locations. Cooperation under the Rules requires the consideration of what is a usable form for the information whether requesting or producing. E-discovery can be an expensive and time-consuming process, but identification and organization at this stage can avoid costs. Knowing whether information must be produced in a native form or in an image file impacts the process and should be agreed upon by the parties early in the process. Also, the parties can discuss whether the information must be produced in a searchable form or whether searches will be conducted prior to production.
It is a good practice to obtain copies of all information that is identified as relevant and producible, whether that information is dumped on external drives, placed on CDs, or provided in some other manner. The attorney should also be involved in any privilege and relevance review. It may be helpful for the client to assist in that process, but it should not be delegated solely to the client. This is really no different from document review and organization under traditional discovery with paper documents.
Failure to identify and preserve electronic information may be the greatest danger under the ESI Amendments. Spoliation with its presumptions or sanctions that may attach due to the destruction of potential evidence is a very real concern.10 An attorney should direct a litigant to lock down data so that it will not be altered. Often, the presumption that could attach is worse than the reality of the information that was lost. The party need not commit an intentional act; negligence is enough to constitute spoliation.11
Once the parameters have been established and the information has been preserved, narrowing the collected information should be considered. Whether making discovery requests or coordinating information to produce, the attorney should review particular classes of documents and particular software programs. It may be that an entire class of documents, such as spreadsheets, or those from specified machines, can be ignored. Time frame should also be examined. If the case involved a two year period, it may be useless to request information going back the full life of a particular system, which could be several additional years. Also, the request for backups should be used judiciously. Good IT workers make backups of backups, so that there may be many copies or versions of particular information. The parties should discuss and may agree that duplicates and near duplicates may be culled or that only certain drafts or versions of documents will be utilized.
There is a danger in using the word all in discovery requests. Litigants may be happy to oblige a discovery request seeking "all" information.12 To limit production, it may be useful to employ search terms and either coordinate a joint search or direct one before or after production. Considering particular individuals, departments, products, or processes may be essential to narrowing requests or focusing searches. This information narrowing implicates the ethical obligations of the attorney, as the attorney should provide effective representation and ensure that proper information is both obtained and produced, while keeping the case in proportion to its issues.

Hiring Vendors
There is an entire cottage industry now in computer forensics. A key word search for computer forensics or e-discovery support or electronic litigation management or even ESI will provide numerous hits of Web pages on the Internet. There are several large-scale vendors nationally, and I receive weekly e-mails from two just from placing my name on lists at a seminar several years ago.
Hiring vendors may be a cost-effective solution and may allow for effective management of ESI in a case. However, hiring a vendor does not absolve an attorney from responsibility. The attorney retains the obligation to oversee and direct the management of the ESI. As a bottom line, the vendor operates at the direction of the attorney; thus there are ethical considerations for having ESI management outsourced.13 Having an indemnification provision in the agreement with the vendor may ultimately protect the attorney financially, but it does not supplant that responsibility.
So what do e-vendors do? E-vendors establish a process similar to the one outlined above that involves consultation, management, and preparation of ESI for production. They can, of course, review data and may serve the essential function of housing data. They can also perform forensic searches with their equipment. The important role of an e-vendor is to establish a defensible process that will ultimately be fair under the new ESI Amendments, workable for the litigation, and supportable within the case.
As with any type of expert or consultant, there are issues to consider in hiring an e-vendor. The first must be the capability of the company. We have several fairly small technology companies in our area that can perform limited collection and search of devices and equipment. The security protocol set up by the company is also important. Management of a particular assignment, as well as staffing, matters; the scope of the assignment and the timeline do, too. There should also be a review of how well the vendor can interface with the system or the files. For instance, the jargon or even the technology may be extremely different depending on the parties to a lawsuit. The health care industry has its own types of records software and record keeping as do engineering and other disciplines that may use something such as CAD. Location and accessibility of the company may come into play.
Whether testimony may be necessary by a computer expert is an issue, as are confidentiality concerns. A conflicts check should be performed prior to divulging any protected information. Also, price is a consideration and should be reviewed.

Before the New ESI Rules
Prior to the amendments, most attorneys had some occasion to deal with information stored electronically. The Rules applied to those situations, and we dealt with them largely as we would paper documents. Many of those same practices still have utility with the Amendments. For instance, layers of discovery may still be helpful. Sending written discovery requests about records custodians, electronic equipment, and the types of files stored may give a wealth of information. The second step may be to depose records custodians, corporate witnesses,14 or supervisors of those using electronic equipment. As before, there may be an agreement to provide a ghost copy of a drive. Such a request should also identify the format of the information and the software used. Obtaining a complete copy of all records does no good if the records are created and saved using rare or proprietary software. In such a case, it may be possible to obtain a limited license from the litigant to access that information.

Guidelines
While there are many open questions regarding discovery and ESI, there are some useful guidelines already in place. Formal ethics opinion 2004-F-150 of the Tennessee Board of Professional Responsibility, while not dealing specifically with electronic information, provides guidance for dealing with confidential information that is inadvertently sent or disclosed by an adverse party.15 The Board notes the importance of the attorney-client privilege, along with the obligation of an attorney to respect the client's interest while fulfilling obligations and administering justice. The Board adopted the rationale of two earlier ABA opinions16 in stating that an attorney should refrain from reviewing such materials and notify opposing counsel. Of particular note is the fact that the Tennessee Board of Professional Responsibility looked to the American Bar Association for guidance and also to other states including Florida, Texas, and California.
In federal courts in Tennessee, the Middle District has issued an Administrative Order that requires cooperation between the parties involving e-discovery.17 This Order requires a litigation hold to be placed within seven days of the Rule 26 conference. It also provides for the immediate return of any inadvertently disclosed privileged information. Of real assistance to the parties, the Order requires the identification of an e-discovery coordinator. The Order states that such person "shall be responsible for organizing each party's e-discovery efforts to ensure consistency and thoroughness and, generally, to facilitate the e-discovery process."18 In other words, this person will run searches, oversee compliance issues, coordinate receipt and distribution of disclosures, and potentially be involved in the deposition process as it relates to ESI. The Eastern District does not have a similar Administrative Order but has added additional requirements to the standard scheduling order that address issues related to ESI.
A court in California recently dealt with the inadvertent disclosure of a trial-strategy memo by counsel.19 In that case, the defense team accidentally sent the memo, which included commentary that outlined strategy and weaknesses of the case, to counsel for the plaintiff, who made copies and disseminated them to co-counsel. The court disqualified the plaintiff's entire legal team.
Prior to the amendments, courts had also made clear that spreadsheets in their electronic form are discoverable. In Williams v. Sprint, the plaintiff sought spreadsheets with their formula intact.20 The court found that the metadata that is ordinarily visible when using a spreadsheet in Excel should be treated as a part of the document and should be discoverable in litigation.
Data mining is another big issue that implicates not just e-discovery, but also transfers of documents in a legal practice. There are a variety of opinions available. Recently, the National Law Journal had an article during the second week of February 2008 that discussed the variety of opinions on the topic. Keep in mind, there is a significant distinction between client-created information and attorney-created information. Much of the client-created information will be discoverable and may be able to be reviewed by the opposing party. Many of the opinions applicable to data mining refer to the attorney-created information that would then be sent to opposing counsel via e-mail or other means. In 2006, the ABA released an opinion stating that the Model Rules have no prohibition on the review of metadata, but also suggested that an attorney scrub or send an alternate version of information to opposing counsel.21 The ethics committees for the bar associations for New York and Florida disagreed, with both findings that data mining is unethical.22 There have also been recent opinions suggesting that metadata should not be used if the attorney has actual knowledge that it was sent inadvertently,23 but one suggests that there is no obligation to check with the other side regarding whether metadata was sent inadvertently.24 There are other opinions that attempt to strike a balance but leave practitioners without clear guidance.25 Tennessee has not yet waded into the muddy water in this area.
Other issues include the need to use encryption for e-mail. The opinion has some age on it, but the ABA released a formal opinion in 1999 stating that encryption was not required but that an attorney should consider it if the information is sensitive.26 What is clear from this and other opinions is that lawyers must be aware of security issues and have measures in place to protect confidential information. With this in mind, there are several opinions that deal with data retained by a third-party vendor and the obligations that remain with the attorney.27
Many of these issues are dealt with at the trial level, as discovery and evidentiary issues often are, and appeal does not occur. Thus, despite the guidance available, it is much more useful to know how your local judge deals with such situations than to know what an opinion in some other jurisdiction has stated.

Tennessee Rules of Professional Conduct
There are several of the Tennessee Rules of Professional Conduct that are implicated by the management of ESI. While the Rules do not specifically refer to e-discovery, the ethical obligations of the attorney are impacted. The Preamble to the Rules provides:

Essential characteristics of the lawyer are knowledge of the law, skill in applying the applicable law to the factual context, thoroughness of preparation, practical and prudential wisdom, ethical conduct and integrity, and dedication to justice and the public good.

As an advisor, a lawyer provides a client with an informed understanding of the client's legal rights and obligations and explains their practical implications.

In all professional functions a lawyer should be competent, prompt and diligent.28

Under Rule 1.1, the attorney has a duty of competence. Of course, this competence is not just related to legal knowledge but must necessarily include knowledge of the procedural rules and evidence rules, which in turn apply to e-discovery. Under Rule 1.6, the attorney has an obligation to protect the confidentiality of information. Also, the attorney is an advisor as set out in Rule 2.1 and must be able to inform the client of obligations during litigation and the potential impact of management of that client's information.

More broadly, the attorney also has a duty of fairness to the opposing party and counsel as set out in Rule 3.4. Subsections of the Rule state that the attorney shall not:
(a) unlawfully obstruct another party's access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value. A lawyer shall not counsel or assist another person to do any such act; or
...

(c) knowingly disobey an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists; or

(d) in pretrial procedure, make a frivolous discovery request or fail to make a reasonably diligent effort to comply with a legally proper discovery request by an opposing party ...

Rule 4.4(a) prevents an attorney from using "means that have no substantial purpose other than to embarrass, delay, or burden a third person or knowingly use methods of obtaining evidence that violate the legal rights of such a person ..."

There are ethical responsibilities regarding supervision, both of associates and non-lawyer assistants within the Rules of Professional Conduct.29 Further, there is a generalized requirement within the Federal Rules of Civil Procedure that states that the rules "shall be construed and administered to secure the just, speedy, and inexpensive determination of every action."30

Going forward, it will be important to watch Tennessee case law as it develops regarding the discovery and management of ESI. In reviewing the forthcoming Amendments to the Tennessee Rules, Advisory Commission comments may be very useful in determining their scope and intent. The Board of Professional Responsibility is another source of information regarding obligations. While there are currently no formal ethics opinions specifically dealing with ESI, an informal inquiry can be made to the Board.31

Qualcomm

The landscape is changing drastically as cases are litigated. The recent case of Qualcomm v. Broadcomm, a 2005 suit involving video compression technology, is illustrative of the potential dangers lurking in the discovery of ESI. The trial was conducted in San Diego, California, with Qualcomm losing on its patent claim. On the last day of trial, testimony indicated that there were several e-mails that were never disclosed by Qualcomm. Despite the production of thousands of documents, it became apparent that relevant pieces of information were never produced.

Magistrate Judge Barbara Major reviewed whether discovery had been conducted properly. She released a 48-page opinion in January 2008 outlining the discovery violations that she found. She filed a show cause order requiring a number of attorneys to appear in late January 2008 to justify their activities. She found that there was either assistance or deliberate ignorance from the attorneys that prevented proper disclosure.

According to the attorneys, the company gave unsubstantiated assurances that all information was disclosed. In part due to discovery violations, sanctions were awarded for Broadcomm's legal fee in the amount of 8.5 million dollars. Judge Major also reported six of the attorneys to the State Bar of California for disciplinary action.

Qualcomm illustrates the necessity of understanding how and where information is maintained, even if the client has in-house counsel. It is the litigator's responsibility to ensure that all responsive documents are disclosed. Good faith under the Rules requires the attorney to work with the client. The protocol discussed above is a step in the right direction to setting a framework within which to conduct discovery. Stated briefly, the attorney must consider the sources, ask the questions, and document the discussions with the client. As noted, the integrity of the process is as important as the result. The key, whether divulging or requesting, is to secure an adequate level of control over the information.

Final Thoughts

The Zubulake opinions, while coming before the ESI Amendments, are a very useful first place to look in seeing how to manage ESI. Judge Shira Scheindlin is a respected voice in the field of electronic discovery. She has authored various opinions on this topic. Due to her work in the Zubulake case, she headed the committee on the Federal amendments. As a side note, it is important to remember that many ESI opinions are trial court opinions. In a seminar last year, Judge Scheindlin took issue with the holding on a discovery issue in a recent, prominent ESI opinion. While some opinions may be helpful, they are ultimately persuasive authority at best.

Are there any other sources that should be considered? Basic common sense is always helpful in dealing with procedural issues. A basic tenet of pretrial litigation is to avoid gamesmanship.32 With the scope and volume of electronic information, discovery is now more ripe for abuse. However, the same parameters apply to ESI as applies to paper discovery; it is merely that the types of storage, sources of information, and nature of information are now different.

What is on the horizon? There will continue to be new e-discovery opinions both from ethics boards and courts. As some of our current questions are answered, new and different questions will arise due to the nature of ESI and the use of technology by parties to lawsuits. The expense will often be great. In dealing with that situation, the reasonableness standard of the Rules will be important and will be better defined by future opinions.

With the reports of missing and incomplete documents, sub-prime mortgage cases may surface and give guidance. Also, there may well be a spate of Qualcomm-type cases focusing on the conducting of discovery itself. In any event, Qualcomm will profoundly affect the relationship between in-house and outside counsel in the management of discovery.

Unresponsiveness as a discovery tactic should be less likely under the amendments, because of the specific requirements and the expectation of good faith and collaboration. As ESI is handled in future cases, both the courts and the attorneys will become more comfortable. There will be a period in which we are feeling our way and will deal with management of the added expense.

As other states look at this issue, they will be developing state rules of procedure that either mirror the federal amendments or in some ways mimic what the Federal amendments hope to achieve. Tennessee is in the process of adopting its own amendments. While the Tennessee Rules do not make the handling of the ESI issue mandatory in every case, it is clearly an issue that must be addressed when appropriate.


ANDREW T. WAMPLER is a shareholder at Wilson Worley Moore Gamble & Stout, PC, in Kingsport. His practice includes commercial disputes, employment matters, and medical malpractice defense. He has written and made presentations on computer issues and e-discovery. Further information is available at the firm's Web site www.wwmgs.com.