Objections to Requests for Native Format Production

My e-Discovery Team co-chair, Ed Foster, and I did a Webinar for Navigant last week entitled Emerging Standards for Metadata Production.  A few astute listeners asked for a list of the most common objections to requests for production in Native format. Of course, this is the format where you are likely to receive the most original metadata. I say “most,” and not “all,” because metadata about a particular file that resides outside of the file itself, such as metadata maintained and stored in operating system files, would not necessarily be included in a production of that file in native format, or any other format for that matter.  You would have to request production of the applicable operating files for that.  The same holds true for the metadata of the folder structure for Outlook emails in a PST file. That information is only contained in the packing file that holds all of a user’s emails, the PST file, and is not contained in the individual email file itself. I wrote about this in my Blog entry of January 13, 2007 “MSG Is Bad For You“.

Production in “native” format means production of the computer files, or ESI, in the format in which they were originally created and maintained. Williams v. Sprint/United, 2006 WL 3691604 (D.Kan. 2006) (”Williams II“) (See my Blog entry of February 5, 2007, Play It Like It Lies and No Mulligans” for more on this case). Most of the time this means files are produced in the format of the software application used to create the ESI. Thus, for example, if you produce a file created by Microsoft Word, this typically means production in the Microsoft Word format, wherein the file ends with the .DOC extension.This is not necessarily always the case, however, because you can also use Microsoft Word software to save your documents in other formats, say for instance, HTML format.  Some people might do that, say for instance to facilitate posting the document on the web.

The fundamental metadata case, Williams v. Sprint/United, 230 F.R.D. 640 (D.Kan. 2005) (Williams I), which I discuss at length in my META Page above (on metadata), mentions the four most popular objections to native file production.  The fact that these objections all failed in Williams I is testament only to their weak inapplicability to the facts and circumstances of  the particular motion presented, and the opinion of Magistrate Judge Waxse.  The arguments and objections were good, and this is where any practitioner would want to begin their analysis. These same arguments may succeed with other facts, or even in similar facts with a different judge. This is a very new and evolving area of the law.  In fact, these same defendants, Sprint/United, are still presenting these same arguments in other nearly identical cases in the same court, but with a different magistrate. Bolton v. Sprint/United, 2007 WL 756644 (D. Kan. March 8, 2007).

So, without further ado, presented in the order in which they were summarized in Bolton, here are the four basic objections to native format production (with my short comments in italics)

1.       Native production destroys metadata.  When you access native files you change their metadata. (This is true, it is also true that there are usually ways to guard against that.)

 

2.       Native production can reveal privileges hidden in metadata, both attorney-client and work product. Metadata can for instance show such work product as when files were gathered, last opened, printed, etc., as opposed to the metadata existent pre-litigation during the relevant time period of the dispute. (This could be true if counsel was not careful to preserve the original files, and again, there are usually ways to protect against this.) As another example, metadata in the form of hidden comments to a word document could reveal privileged attorney communications. (Again true, but a privilege review of the metadata would show these comments, and so allow them to be withheld.)

 

3.       The metadata in the native files is not relevant to plaintiff’s claims.  (This is the strongest argument for objection to production of metadata and is in accord with Sedona Principle 12 commentary, which states that most metadata is useless and a waste of time to review. So, if the requesting party argues for native file format on the basis that it needs the metadata, challenge the relevance of the metadata. Unlike the plaintiffs in Williams I who made a strong showing that they needed the native spreadsheets, the requesting party may be unable to show any particular need for native file production. See Williams II supra, and Wyeth v. Impax Laboratories, Inc., 2006 WL 391331 (D. Del. 2006)). 

 

4.       It is difficult to ensure that native files have not been changed after production.  (Judge Waxse destroyed that argument in Williams I when he pointed out that hash values guarantee authenticity. Williams I, Supra at 655.  See my Blog Page above HASH. Still, if hash is considered, variations of this argument may still be persuasive.)

 

In addition, by far the best objection you can make, when the facts allow it, is that you have already made production in a non-native format and new Rule 34(b)(iii) protects you from a second production. See eg. Williams II and  In re Payment Card Interchange Fee and Merchant Discount Antitrust Litigation, 2007 U.S. Dist. LEXIS 2650 (E.D. N.Y., Jan. 12, 2007).

 

Another good objection is found in new Rule 34(b)(ii), which states if format is not requested, a producing party may produce in either the form in which it is “originally maintained” (in other words, native form), or in a form that is “reasonably useable.”  Thus if native is not specified, this allows any other form that is reasonably useable.  Typically a format is reasonably usable if it is searchable, and other criteria are met, primarily related to functionality and the circumstances of the case. 

Even if native is requested, under some circumstances you can object on the basis of burdensomeness, and argue for production in another reasonably useable format that would be less expensive and time consuming for you to accomplish for some reason.  An example of this is the difficulty of partial redaction of many native files, or marking them as confidential.

You can, of course, object to the production of the ESI requested in general, at least on a category by category basis, and not just limit your objection to the format.  This is what Sprint/United did in Bolton, where they were able to obtain protection against several categories on the grounds that the ESI requested was overly broad, irrelevant and unduly burdensome. These were the grounds that were successful in Bolton, not the four native format objections.  In addition, in appropriate circumstances, you can object on the basis of the inaccessibility of the ESI requested under new Rule 26(b)(2)(B) because of undue burden or cost to restore or search.

The Admissability of Electronic Evidence

Judge Paul Grimm has written a scholarly treatise on the admissibility of ESI, which is cleverly disguised as a district court opinion denying cross motions for summary judgment. Lorraine v. Markel American Ins. Co., 2007 WL 1300739 (D. Md. May 4, 2007). Judge Grimm is the Chief Magistrate Judge for the District Court in Baltimore.  He is a well known expert in this field, and a pretty nice guy who I had a chance to chat with at length in Sedona last month.  At 101 pages, it is a long read, but I recommend you give it a try, and keep it handy for the next time you need to have ESI admitted into evidence at trial or considered with a summary judgment motion.  I predict this will be an often quoted opinion as lawyers struggle not only with discovering ESI, but getting it admitted.

The facts of Lorraine are interesting, involving a yacht named Chessie struck by lightning (and thus the graphic above), and an ambiguous arbitration agreement, but ultimately the case itself is not too important.  Suffice it to say the parties filed cross motions for summary judgment, and both attached emails to their motions without affidavits or any other type of authentication.  Judge Grimm denied both motions because they failed to lay a proper predicate for the emails.  No doubt the attorneys on both sides were feeling a bit like Chessie, as neither saw this ruling coming in a case over $21,900! 

Judge Grimm then wrote the long opinion explaining how ESI should be admitted into evidence.  Obviously this advice was intended for a larger audience than the two attorneys in Lorraine, and he has been thinking this over for a long time.  In Judge Grimm’s words:

Because neither party to this dispute complied with the requirements of Rule 56 that they support their motions with admissible evidence, I dismissed both motions without prejudice to allow resubmission with proper evidentiary support. I further observed that the unauthenticated e-mails are a form of computer generated evidence that pose evidentiary issues that are highlighted by their electronic medium. Given the pervasiveness today of electronically prepared and stored records, as opposed to the manually prepared records of the past, counsel must be prepared to recognize and appropriately deal with the evidentiary issues associated with the admissibility of electronically generated and stored evidence. Although cases abound regarding the discoverability of electronic records, research has failed to locate a comprehensive analysis of the many interrelated evidentiary issues associated with electronic evidence. Because there is a need for guidance to the bar regarding this subject, this opinion undertakes a broader and more detailed analysis of these issues than would be required simply to resolve the specific issues presented in this case. It is my hope that it will provide a helpful starting place for understanding the challenges associated with the admissibility of electronic evidence.

So now we have guidance aplenty from Judge Grimm.  He states that five evidence rules must be considered and he provides a detailed elaboration on each:

Whenever ESI is offered as evidence, either at trial or in summary judgment, the following evidence rules must be considered: (1) is the ESI relevant as determined by Rule 401 (does it have any tendency to make some fact that is of consequence to the litigation more or less probable than it otherwise would be); (2) if relevant under 401, is it authentic as required by Rule 901(a) (can the proponent show that the ESI is what it purports to be); (3) if the ESI is offered for its substantive truth, is it hearsay as defined by Rule 801, and if so, is it covered by an applicable exception (Rules 803, 804 and 807); (4) is the form of the ESI that is being offered as evidence an original or duplicate under the original writing rule, or if not, is there admissible secondary evidence to prove the content of the ESI (Rules 1001-1008); and (5) is the probative value of the ESI substantially outweighed by the danger of unfair prejudice or one of the other factors identified by Rule 403, such that it should be excluded despite its relevance.

Judge Grimm happily noted that the above rules may not apply to every exhibit offered into evidence. Still, attorneys should make sure that they have satisfied the relevant criteria prior to submitting ESI as evidence for a motion or at trial. This case will serve as a good checklist and reference to help us all to do that.

Nonchalant Review Causes Attorney Client Privilege Waiver

Legal counsel’s “nonchalant review” of electronic records acted to waive the attorney-client privilege as to four  inadvertently disclosed emails. Gragg v. International Management Group (UK) Inc., 2007 WL 1074894 (N.D. N.Y. April 2007).  The following facts were found to constitute a failure to take reasonable precautions to prevent inadvertent disclosure of privileged materials, justifying a waiver as to those documents.  Defendant’s outside counsel asked in-house counsel “to prepare and produce to him all documents relative to the proposed project.”  In-house counsel in turn delegated the task to a “non-attorney assistant.”  The assistant “then prepared and compiled in electronic format a disk containing those materials and forwarded them directly to defendant’s outside counsel who in turn, without first reviewing the documents, sent the disk to plaintiff’s attorney.” 

Defendants argued that it was reasonable for their outside counsel to rely upon in-house counsel to make the requisite privilege review, and to assume that it had been accomplished before the disk was sent to him.  The court was not inclined to accept this argument because there had been no discussions between the outside counsel and the non-attorney assistant who supposedly did the review, or the in-house counsel who supposedly supervised the assistant’s activities.  The court considered these facts and concluded:

Given the significance of the attorney-client privilege and the potential consequences associated with a waiver of that privilege, this nonchalance leads me to conclude that reasonable precautions were not taken to prevent the disclosure of privileged materials.

Id. at *6. As a secondary factor, the court noted that there were only 200 emails on the CD-ROM produced, and so the task of review prior to production “would not have been particularly onerous.”

Unfortunately for defendants, the four emails in question contained litigation strategy discussions.  The emails did not address the underlying transaction.  Defendants argued that for this reason it was especially unfair to find a waiver based on inadvertent disclosure.  The court considered fairness, but concluded that this argument was “far overshadowed by the defendant’s failure to implement reasonable measures to avoid inadvertent disclosure.”

Plaintiff argued that the waiver should be a full subject matter waiver, “opening the door to full disclosure including deposition of defendants’ litigation attorneys.”  Obviously the plaintiff was overreaching on that one, and so the Court instead accepted defendants’ argument for a “more reasoned, limited waiver” extending only to the materials at issue. 

Still, plaintiff pressed to take the deposition of defendants’ in-house counsel based on attorney-client privilege waiver.  The court rejected this request as an attempt to further probe defense counsel for information on their litigation strategy.  The court would not permit such an attorney deposition, even if limited to the four emails where the privilege had been waived, noting that such questioning would inevitably go beyond the four emails, and invade privileged attorney work product.

Adverse Inference Entered Against Plaintiff Employee

In employment litigation, spoliation sanctions are usually a tactic of the employee plaintiff against the big corporate employer.  The employer is the one with the vast collection of computer records where it is easy to mess up on the duty to preserve and produce. For this reason the employer is usually the one charged with spoliation.  That was certainly the case in the Zubulake decisions.  But lately employers have seen the value of e-discovery and their own spoliation motions.  That is exactly what happened recently in Charlotte, North Carolina, where Target Stores is defending a sex discrimination claim.  Teague v. Target Corporation, 2007 WL 1041191 (W.D.N.C. April 4, 2007).  One of Target’s affirmative defenses to the suit is “failure to mitigate.”

In deposition, Plaintiff revealed that after she was fired she engaged in an extensive job search on her home computer. This would tend to rebut Target’s defense of failure to mitigate. She also testified that she used the computer to communicate regarding her alleged discriminatory firing, and the circumstances of her discharge.  Problem is, she no longer has that computer anymore. She said her home computer crashed and that her brother, who “dabbles in computers,” was unable to get the hard drive to work.  So, she threw it away.  Big mistake! Because by that time she had already retained legal counsel to sue Target, and had already filed charges with the EEOC.  With her home computer gone, she had very few records regarding her claim. It was all pretty much a matter of her word against Target’s. Still, her deposition testimony indicated that her computer, if it were still around, would have had evidence that the court held “related directly to her law suit against Target.”

Once the employer discovered these facts, it moved for sanctions on the basis of spoliation of the computer evidence.  The court found that the plaintiff had a duty to preserve the evidence, even though suit had not yet been filed, because she had retained counsel and filed EEOC charges. The destruction of the evidence by throwing away her computer was sufficient to show she had a “culpable state of mind.” The motion was granted. Although the court did not find her conduct severe enough to warrant complete dismissal of the case, it was severe enough to warrant an adverse inference jury instruction.  Such an inference is almost always case dispositive.  

Introduction to the Problem of e-Discovery and the Team Solution

Litigation today is more expensive and risk-filled than ever before, but not because of run away juries or expensive trials. Although these possibilities remain as real threats, in fact 98% of all federal court cases are resolved without trial.  Litigation today is difficult primarily because of discovery.  In the areas of commercial and employment litigation, discovery can involve forced disclosure of massive amounts of internal, otherwise secret, business records and information.  The most burdensome discovery today is for email and other electronic documents located on a litigant’s computers, so called “electronic discovery” or “e-discovery.”  The costs associated with ”needle in the haystack” type e-discovery requests can be enormous, sometimes far exceeding the total amount in controversy. These same issues also apply to state and federal government investigations where no suit has been filed.

The problem of e-discovery reached such epidemic proportions that on December 1, 2006, the Supreme Court promulgated new Rules of Civil Procedure for all federal courts to follow to try to address these issues.  The new Rules govern what is referred to as Electronically Stored Information (”ESI”), which includes not only all computer files, but all other electronic information, such as voice mail and videos.  Although the Rules clarify certain issues, they also impose very stringent time requirements that most U.S.  businesses are ill prepared to meet.  The situation is worse for foreign companies doing business in the U.S. for a variety of reasons, including conflict of laws and the widespread dispersion of technology and ESI in different locations around the world.   

The new Rules, combined with the new email and Internet-oriented culture in both business and society, create serious information management difficulties for everyone.  For example, the Rules now require companies to preserve and produce within 100 days of the commencement of a lawsuit all potentially relevant ESI within their employees’ computers and other storage devices (such as thumb drives and cell phones), no matter where they are located.  Strict compliance is starting to be enforced as judges across the country go on record as stating that the ”pure heart, empty head” defense will no longer be tolerated in the area of e-discovery.  All litigants are now subject to severe penalties for the accidental deletion of ESI that might be relevant to a lawsuit or government investigation. Liability may accrue even if the ESI is lost before notice of the suit or investigation, if a court later determines that the proceeding should reasonably have been anticipated. Penalties will almost certainly accrue if the destruction of ESI occurs after suit is filed.   

The $1.5 Billion Dollar verdict against Morgan Stanley in the Coleman case in Florida, even though preliminarily reversed on other grounds, shows how important effective preservation procedures have become.  So too does the well known Zubulake case in New York against the Swiss bank, UBS Warburg, which resulted in a $28 Million Dollar jury verdict for sexual discrimination.  UBS Warburg lost the case in large part because of sanctions for missing emails, and not the actual merits of the case.  In a world where sixty billion emails are sent daily, and most large corporations have more information stored on their computers than the biggest libraries in the world, the accidental loss of ESI can easily occur.   The Zubulake and Coleman cases show that these mistakes can be very costly in the U.S. judicial system.

In my opinion, the only effective solution to this problem is the formation of internal, corporate e-discovery teams. The e-Discovery service team I co-lead with Ed Foster at my law firm, Akerman Senterfitt, is dedicated to assisting companies to carry out this task. Although the function of the team is primarily legal, the teams are necessarily multidisciplinary, comprised of representatives of IT, Business and Law.

The multidisciplinary team approach to e-discovery unquestionably works, but it is also true that these teams are notoriously difficult to setup, train, and function effectively. The cultures of these three groups, even within an otherwise close-knit company, are very different, and so too are their languages and gestalt. Members of the team need to be carefully chosen and rewarded for participation, and typical team building techniques employed. But the most important components for success are training and group work on a detailed, specific set of tasks. The group work establishes the common language and understanding that will eventually bring the members together and allow them to function as an effective team. Most companies do not have the necessary expertise or knowledge of the tasks to be performed, and are unfamiliar with the types of e-discovery protocols and procedures that need to be developed. That is where my services as an e-discovery team lawyer come in. It is a fascinating job; part law, part psychology and all geek. I love it!