Electronic Discovery Institute Course - Class 14 -Production Obligations and Formats

Here's a continuation of my postings about the Electronic Discovery Institute's online e-discovery certification program, that you can subscribe to for just $1. I last blogged about this program on November 4, 2017. Go to https://www.lawinstitute.org/ to sign up for it.

This course is taught by Zviad Guruli, an attorney with Wilmer Hale's Discovery Solutions; Julie Richer, the discovery manager at American Electric Power; and Allen Hsu, the Director of electronic discovery at Fannie Mae.

Guruli started by pointing out that the FRCP 34(b) addresses the format for document production. ESI must be produced in the form in which it is ordinarily maintained or a reasonably usable format, unless otherwise stipulated by the parties. Meeting the production formats may have legal and cost implications.

The production format focuses on how the production will be delivered. The availability of metadata and the abiliy to manipulate that data are the determining factors on the appropriateness of the format.

Richer said that the best way to ensure that a production goes smoothly is to ask a lot of questions at the beginning. According to Guruli, the primary goal was to be produce substantive information and withhold privileged information in a cost effective manner. If a document needs to be redacted, the image format should be considered. The image format also helps protect against the alteration of the document. Native productions are usually more cost effective.

There are four types of production formats:

1. Native production - files are produced in their native applications. The files will be accompanied with all of the available metadata, and the production won't be costly. Excel files are frequently produced in their naive format because they are hard to image correctly.

2. Near native format is often used for email files and large complex database. It is hard to capture dynamic databases at a given point in time.

3. Image format - usually tiff or pdf files. These are accompanied with extracted text. The cost of converting to image format may be high but has been steadily decreasing.

4. Hard copy production.

Hsu noted that image productions allow for Bates numbering and confidentiality captions to be added to each page. It is difficult to redact native files.

Tiff and pdf productions formats are the most static. The images cannot be easily altered. The integrity of native files can be verified with hash values.

Guruli said that nearly all production formats allow for the content to be searchable. Extracted text can be linked with the corresponding image files. Optical character recognition can be used to render text for the scanned hard copy documents.

Richer said that any electronic file can be made searchable. Parties should request that ESI be produced in a searchable format.

Hsu noted the limitations of OCR in dealing with handwritten documents and poor quality scans.

Guruli noted that native productions cannot be redacted, and that it is hard to reference the files on page level. All metadata must be screened before it is released to an opponent. Image productions can be easily redacted, and Bates number for page references, but the conversion process may be costly. Excel files are difficult to convert to the image format.

Hsu said that native productions can be made more quickly and cheaply. A native production may preserve elements such as track changes in a Word document.

Rioher said that native productions may come from systems which an opposing party doesn't have licenses for. Native documents may require the reviewing of hidden information. Excel files can have formulas, comments, and links to other spreadsheets.

The chain of custody process is designed to capture all of the information about handling the data. Hash values are alphanumeric numbers generated through hashing algorithms. The hash value is based on the content of the documents. The values can be used to reduce duplicative documents.

Guruli recommended discussing the production format at least by the time of the parties; first meet and confer. If a party agrees to produce certain information from a database, it needs to ensure that the field is appropriately preserved throughout the production process.

The requesting format should always specify a production format at the beginning of the discovery process.

Guruli said that in-house and external counsel as well as litigation support personnel and outside service providers should be involved in the discussions about the production format.

Rolling productions may help eliminate the need for further productions, if a requesting party finds information in earlier phases that help resolve their claims.

Proprietary database may present special challenges. Guruli advises generating custom reports for such databases. Non-responsive data may be difficult to segregate in proprietary databases. A database may be the back end of an application and may export the data in a text file or spreadsheet that doesn't reflect how the information is displayed in the system. The party's IT department may not be familiar with how to export information from the system.

Hsu noted that generally documents are identified with Bates numbers. Document identification numbers may be used for native files.

Redactions remove information that is confidential, privileged or otherwise restricted. After redactions are applied the documents need to be re-imaged and re-OCRed. Text extracted during the initial processing will need to be replaced. Redactions are used for documents which contain both responsive and non-responsive information.

Load files link production files to information fields associated with the files. The load file is used to import the production ESI into a review system.

Production media is dictated by the size of the produced data. Hard drives are utilized when hundreds of GBs are produced. However productions are also often posted on secure FTP sites, saving the cost of discs and shipping. FTP transfers can pose security problems.

Quality control is necessary to validate the production format. One should be certain that the complete original extracted text is not included for redaction images.

In general, when addressing the format for productions keep these factors in mind:

1. The production specifications.

2. Document the specification and confirm the parties have signed off on them.

3. Production deadlines

4. Quality control procedures should be in place to look for high risk documents.

5. There should also be a focus on cost efficiency and effectiveness.

Avoid R.O.T.

When culling ESI for production, you’ll want to exclude Redundant, Obsolete, and Trivial information -ROT.

Businesses often store redundant data and obsolete data on network shares that are not revised to hold information that has a present business value. Key custodians will often exchange emails of a personal nature that may include large graphic or text files that are only meant as entertainment.

Electronic Discovery Institute Course - Class 13 - Third Party Obligations & Procedures

Here's a continuation of my postings about the Electronic Discovery Institute's online e-discovery certification program, that you can subscribe to for just $1. I last blogged about this program on October 21, 2017. Go to https://www.lawinstitute.org/ to sign up for it.

Tonight I took the course entitled, "Third Party Obligations and Procedures". It is taught by Robert Owen, a law firm partner and the president of the Electronic Discovery Institute; Rachel Marmor, an eDiscovery counsel for Barclays; and Stacey Blaustein, an attorney specializing in eDiscovery for IBM.

Third Party Information Request

Federal Rule of Civil Procedure Rule 45 provides a way to access ESI in the hands of third parties. Blaustein noted that law firms will often have control of information that is relevant to an action that a client is a third party to. Marmor noted that in divorce cases, spouses often subpoena one another employers. Subpoenas are often served on auto insurers in cases arising from car accidents because the insurers have so much information on their customers driving habits.

Third Party Request Process

Rule 45 subpoenas should be served on the parties who have custody of the relevant data. Documents themselves, an inspection, or a deposition can all be requested under Rule 45. There is not usually any judicial scrutiny before the subpoena is served.

Blaustein said that a non-party is obligated to preserve the documents described in a subpoena, but there may be a basis to negotiate down the scope. A simple preservation letter from another entity may also give rise to an obligation to preserve data. IBM operates systems through which entities' data is transferred, and it sometimes has to freeze databases in response to subpoenas.

Determining Whether a Third Party Request is Necessary

Depositions may be taken in order to determine if a third party has information.

Legal Obligations of the Requesting Party

The requesting party must ask for things that are necessary and should not conduct a 'fishing' expedition.

Undue Burden & Cost Considerations

Blaustein said that a requesting party must ask for a reasonable scope of documents. Motions may be made to quash burdensome and oppressive requests. A subpoena must make specific requests - for example, for sales information in a particular date range on a specific product. Subpoena requests should not unnecessarily interrupt the third party's business. One must be transparent, making sure that all parties are on the same page about what is being preserved and what can be produced. Third parties usually understand that responding to subpoenas are part of doing business.

Marmor said a requesting party wouldn't always know what a third party was capable of producing. If financial analyses are requested from an advisor and they can be obtained from your client, those should not be requested from the third party. Meet and confers are a good way to make sure a subpoena does not impose an undue burden. Third parties can be invited to negotiate what is reasonable. Reasonable search terms should be proposed and there should be a limit on the number of custodians from which data is collected.

Legal Obligations of the Third Party

A Rule 45 subpoena imposes a legal obligation to respond. If the request is objectionable. Responses and objections can be made. A third party has the right to seek a protective order from a local court.

A document retention order should be distributed to an agreed upon list of individuals. The effort to preserve should be memorialized. Check to see if data needs to be segregated from a dynamic system. Data in a legacy database may be very expensive to store with a third party vendor. Proper processes must be in place to collect data and review it in order to determine what is responsive. A confidentiality order should be drafted that extends to other third parties so that trade secrets and personal information cannot be disclosed.

Third Party Preservation Obligations

The duty to preserve is triggered immediately and a hold notice should be distributed right after receiving a subpoena. The party issuing the subpoena should be engaged in discussions about limiting the costs of responding to it. Rule 45(d)(1) provides that the issuer must take steps to avoid unnecessary costs being incurred by the responding party. A proportionality analysis should be conducted in order to determine how much money should be spent on preservation. Preservation will not be treated as a priority for third parties - but a court could scrutinize an aggressive data deletion policy.

Blaustein recommended reviewing the relationship to the requesting party whether there was a contract mandating cooperation with the requests. Letters usually are exchanged between in-house counsel of the involved parties. Its prudent practice to review the claims in the case and gauge whether or not the requests are excessive. The date range and subject matter involved may be narrowed.

Proportionality Principles for Third Parties

The Rule 26(b)(1) proportionality principle carries over to Rule 45 subpoenas, and cost shifting provisions are included in 45(d)(1). A dialogue should be started about the scope of the subpoena as soon as it is received.

Proportionality, as integrated with the 2015 amendments to the FRCP, has not made a great difference in how subpoenas are responded to according to Blaustein. Blanket objections on proportionality grounds cannot be made - there must be some substance to them. Proportionality to closely tied to the concept of reasonableness.

Owen said that the Committee indicated the importance of cost allocation when amending the FRCP. Although there is no requirement that the requesting party pay the costs of production - a court should be asked to allocate at least some of the costs. A co-pay of 10-20% can be asked for. A minimal co-pay can lead to their requests being made more reasonable.

Production Format Requirements

Data should be produced in the form in which it is ordinarily maintained or in a reasonably usable format. Companies often use vendors to assist with productions

Ensuring Delivery of Necessary Data

Just issuing a subpoena duces tecum, without conducting a deposition doesn't allow the requester to confirm that all the available data is produced.

When Does the Preservation Obligation Expire? One should check with the requesting party before putting the requested ESI back on regular document retention schedules. A letter can be sent stating the production has been completed and confirming that no further production will be required. A preservation letter can institute certain practices and policies which are followed for a long periods even though further communication is not made with the requesting party.

2015 Amendments to the Federal Rules

No major change was made to Rule 45, but a reference to ESI was added in order to leave no doubt that it should be included. The amendments make clear that boilerplate language should not be used in responses and objections.

Collaboration & Conclusion

According to Marmor, Barclays receives a lot of third party subpoenas which are in effect fishing expeditions. The Sedona Principles of Cooperation and the meet & confer process should encourage parties to reach uniform agreements on what must be done to respond to subpoena instead of dealing with issues one by one.