Golf, Tiger Woods and ESI???

by Cary J. Calderone, Esquire

Even though I have been a golfer (those who know me might say golf nut) for quite a while, I never thought I would be blogging about a famous golfer here. When does golf ever have a connection to Document Retention and Electronic Discovery? Never, right? WRONG. Enter Tiger Woods and the media circus that has grown due to his recently admitted "transgressions." Of course there are many of the typical "he said, she said" stories dominating the media outlets, much like they do when Tiger is dominating a golf tournament. After all, Tiger Woods is always big news. However, what is most interesting to me is that if lawsuits are eventually filed, will Tiger be in even more trouble for attempting to destroy the evidence of his "transgressions?" Has he failed to preserve relevant Electronically Stored Information (ESI) relating to a reasonably foreseeable legal matter? If the answer is yes, then Tiger may have exacerbated his problems. Let me explain.

Tiger initially claimed the news stories of marital problems and affairs were unfounded and he issued a statement on his website www.tigerwoods.com. Did that mean litigation could be "reasonably anticipated?" Did his wife mention "divorce" in one of their private "discussions" about his "transgressions?" If the answer to either of these questions is "yes" and he then went and tried to delete any damaging text, voice or other messages that would have made him look guilty, he may be in serious trouble. Tiger may face civil and/or criminal penalties under the Federal Rules (FRCP), and many state laws, that prohibit spoliation (i.e., destroying or altering) of potential evidence.

For example, there may be an issue with the voice mail Tiger allegedly left (it sure sounds like his voice but you be the judge) for his "friend" wherein he instructed her to change her voice mail message because his wife "went through his phone" and "may be calling." On the one hand, he has publicly claimed outrage at the press: "the many false, unfounded and malicious rumors that are currently circulating about my family and me are irresponsible." Moreover, one of his alleged mistresses hired the famous attorney, Gloria Allred, and issued a statement that the rumors are not true. Sure sounds like a lawsuit is brewing if it has not already been filed! On the other hand, Tiger is trying to get rid of messages that connect him to the alleged mistress and would indicate that the stories and "rumors" are actually fact-based and true.

Attorneys under the old rules and paper documents, would almost always go public and threaten to sue the newspapers and magazines on behalf of their celebrity clients. That may have been the standard operating procedure historically, but today, that kind of public condemnation means your client shouldn't also be going through their phone, and email accounts to try to delete potentially relevant material, no matter how much they would like to do so. In the days of paper evidence, lawyers might interview their client at the outset and ask if any damaging material "could be located?" The client could honestly answer "no" to that question when they knew they were completely innocent or, they had done a fantastic job of shredding, burning and burying any damaging documents before meeting with the lawyer. Nowadays, the new rules and technology have changed the question and perhaps the best initial public course of action because it is not a matter of if, but rather, when the damaging material will be "located."

This blogger will continue watching and reporting to see if and how Tiger navigates his way out of this "hazard."

What's that up in the Cloud? Is it a bird? Is it email? Or, is it a Health Club?

by Cary J. Calderone, Esquire

Cloud computing is HOT! Hosted exchange solutions are being advertised to every small, medium, and large business. Google, Microsoft and other big players are promising their cloud solutions will provide security and hassle free email and applications without having to worry about more infrastructure and personnel investments. They may even include archiving and record retention management features to help with DRED (Document Retention and Electronic Discovery). Lower cost and more service, it sounds great, but is it?

Time for a confession here: I have been in the Cloud for years. In fact, I have been operating in the Cloud since long before it was called “the Cloud.” Years ago, I decided I wanted to be able to travel on vacation to Europe or to Hawaii, without lugging a laptop. So I hosted my business account through Yahoo. This meant I kept my email at Yahoo (while using my own domain address) and only downloaded copies of my email as backups. Therefore, wherever I was, if I had access to a computer in an internet café, or a library, or could borrow a friend’s laptop, I could access my email and attachments and work. I even started to store my “working documents” in a secure online briefcase so I could review and edit work product if I had the need and if it was not already in my email box as an attachment. Even though this was years before Blackberrys and iPhones made transportable email commonplace, I was mobile.

Chances are some of you have been Clouding too. If you have an email account with Yahoo, Hotmail or Gmail, then it is likely you have been in the Cloud. Or, as I describe it, you do not need your “personal computer” and installed applications to work with your email. Any computer with internet access will suffice. And yet, as a self-proclaimed longtime happy Cloudy, why am I not ringing the bells, extolling the virtues, and pushing companies to make the move to the Cloud? The answer is because, I workout. Or, more importantly, I have always had a membership at a health club. Non-sequitor you say? Please keep reading.

Back in the health club boom of the 1980s, many health clubs sprouted up creating an ample supply for those people who decided that a healthy and active lifestyle was desirable. However, I noticed a problem with almost all new clubs. When they first opened they had new equipment, reasonable membership deals and a few members. I remember going at 6:30 pm, jumping on the machines I needed, and in 45-60 minutes, I was out of there. But with the success of the new health club came more sales and more memberships. Over time the equipment ran down and the lines to use it grew longer. At some point it became necessary to schedule workouts for non-prime times, or just skip them. Do you still feel like this analogy is misplaced? Then check out this article by Brett Winterford, "Stress tests rain on Amazon's cloud" or the followup article, "More data released on cloud stress tests." The report following testing of three big service providers for seven months indicates that among these very big Cloud providers (Amazon, Google and Microsoft), there are already noticeable performance issues with on-demand services, especially during peak hours. And, even more distressing, the report finds these performance and accessibility issues are “regular” and that the Cloud providers do not provide performance monitoring tools so that Cloud customers may track performance. The report is enough to make this happy Clouder worry a little that the health club analogy is spot on.

There are other critical issues in considering the Cloud, like security. How secure is your company data in the Cloud? On this issue, I would need more information to know if the Cloud would decrease or increase your security risks. How experienced, well-staffed and well-funded is your IT department? Perhaps your data is actually more secure in the Cloud than it is on your old and out-dated servers. The best argument I have heard for mistrusting the Cloud is that, if a security breach occurred, would you even know it? Do we trust the Cloud providers to quickly stop any breach and report it? Do we trust them as much as we trust our internal IT and security staffs to report a breach? This is a very good question to ponder before making the move to the Cloud.

Truthfully, I feel odd writing this post. Here I am, a long-time Clouder writing about potential pitfalls with Cloud computing. I have been very happy with my Cloud experience and have had only extremely rare instances of any problems or issues and these issues would have likely occurred with even the best internal IT department running my email server. Still, happy as I have been, I have always had the option to use another email account if one Cloud account quit working. When the health club became too crowded, I just joined a different gym. Your company cannot easily just switch and join a different gym or Cloud! Yogi Berra could have been speaking about our modern Cloud solution providers when he commented on a restaurant: “Nobody goes there anymore. It’s too crowded.”

New E-Discovery Rules in California: What does this mean for you?

by Cary J. Calderone, Esquire

With no fanfare our Governor, Arnold Schwarzenegger, signed into law AB 5, the California Electronic Discovery Act ("CEDA") (Full Text). The only surprise to those of us who practice in this area was that it did not get signed into law last year. Most believe it was delayed solely due to California's pressing budget problems. California is the home of Silicon Valley and the High Tech industry so the laws in our state typically lead the way when it comes to considering their effect on technology and business. In California email correspondence has been legally enforceable as a "written instrument" since the mid 1990s. It made no sense that one state after another, except California, was adopting rules to mirror the e-discovery rules contained in the Federal Rules of Civil Procedure and thereby, acknowledging that business disputes were now dominated by Electronically Stored Information ("ESI") such as email, word-processed documents and databases etc. These states recognized the importance of having specific discovery rules around ESI and yet, California did not. Now that California has acted what does this mean for your company when it operates in, or is subject to legal proceedings in state courts in California?

First, all those stubborn attorneys who used to tell me that they did not need to worry about Legal Hold Notices, Email Procedures and Record Retention Schedules, because they never were involved in Federal disputes, no longer have that weak excuse. It was a weak excuse because under the old California discovery rules, litigants and their lawyers were affirmatively charged with the duty to protect potentially discoverable materials. In most cases, destroying "evidence" can be charged separately as a crime. There was never any exclusion for emails and ESI and in fact, emails and ESI have been critical pieces of evidence in many criminal and civil matters for at least a decade.

Second, not only is that lame excuse gone, the California rule requires that attorneys from all sides of a litigation matter will need to "meet and confer" 30 days prior to the Case Management Conference. This means they will need to discuss ESI and what/how it will be preserved and exchanged during the discovery process for state legal matters, just like they already must do for Federal matters. Do you know how much ESI you have on your network and in other places you control? Do you know where it is? Can you search it? You should be able to answer a resounding "YES" to these questions. Otherwise, it means you may end up litigating from a weakened position.

Some commentators believe the CEDA modifies the Federal Rule around "inaccessibility" of data as it may be used to defend from producing materials in a litigation matter. I believe the CEDA merely does a better job of explaining the real world arguments that occur in front of the judge. Namely, the judge will ultimately decide whether or not the information is "reasonably accessible" on a case by case basis. Judges have never been fans of an attorney conducting a cost escalating "fishing" expedition during discovery, but if there is a likelihood that important information is only available in one location, there are very few circumstances when a judge will not want that information to be retrieved and searched. The idea is that "Justice" is about finding the truth, not about being able to hide the truth from the judge.

Now it pains me to admit this, but in some ways, if your company has procrastinated and delayed having an Assessment Report and updating its ESI policies and procedures, you have benefited in that the software programs and procedures for accomplishing these tasks are better now and, in some cases, even cheaper. The bad news is that you have at least 2 more years of data to organize, review and remediate. So the longer you wait, the more likely the process will become more difficult and more costly. Will your company be like so many others out there that waited until they got tagged by losing a legal matter or got sanctioned for mishandling ESI? Or, those that had to settle a matter because they could not find their evidence to prove their case, or, they could find it but it would be cost-prohibitive to produce it in a defensible manner? Or, will your company need to feel the sting of a hefty discovery sanction to be motivated to organize their ESI? In a prior post, I mentioned performing a Google search for "million dollar discovery sanctions." There are even more now than there were the last time I mentioned it!

Kermit was right: It’s not that easy, being green

by Cary J. Calderone, Esquire

At a recent ARMA Golden Gate chapter meeting presenters gave real-life accounts of two law firms that had taken on the challenge to become “Green Certified.” Even if you do not believe Al Gore’s reasoning for going Green and that “the debate is over,” going Green may serve an unintended but very useful purpose. It is one more justification for updating the document retention practices and policies in your organization. One obvious and continuing hurdle to becoming document retention and electronic discovery (“Dred”) ready is the cost. IT, Legal, Compliance may need to make significant investments in new technology to better manage electronic data. Even if you have adequate hardware and software, employees may have to devote more time and effort to help the company achieve and maintain this goal. Even though it is less obvious, the work involved can be substantial and it may affect HR, IT, Legal, Compliance and every other department in your organization. Unless your company is currently operating with under-worked and under-utilized employees (LOL-very doubtful) the people in these departments already have full-time responsibilities and making the move towards Dred-ready means a lot of extra time involved in reviewing and updating retention schedules, policies and procedures. It would be nice to be able to dangle another reward carrot and justification for doing the work. Going Green can really help justify the cost and effort of this often arduous undertaking.

At this talk, I expected to learn of great new paperless approaches to records management but instead the “real-life” examples centered on trying to save paper by mandating duplex printing, while at the same time demanding that 100% consumer recyclable paper was being used. I was surprised to learn that this type of recycled paper can cost 3-4 times more than standard copy/printer paper. This conflicted with my stated purpose of using “greening” in connection with Dred to make it more compelling. However, from my perspective, pushing towards Dred compliant and avoiding most of the printing of electronic documents would make for a much “Greener” approach and avoids the issue of spending extra money for more expensive paper. I certainly can respect that law firms would have an awful lot of time, money and focus on paper, so firms in less paper dominated fields should find it easier to pursue Green Certification.

And, although I was hoping to learn about some new groundbreaking scanning technologies or other methods to avoid using paper, we all should recognize that paper will continue to fade away in importance as better electronic document and email management systems are adopted. These types of systems work pro-actively which is by far the best way to avoid the need to print and store information on paper. For example, the Federal Courts have used the Pacer system for electronic filing for a number of years. California law has recognized email is the equivalent of a “writing” since about 1998. California has been considering adopting rules simlar to the Federal Rules of Civial Procedure demanding that Electronically Stored Information ("ESI") is exchanged to perform litigation discovery. These changes to the law, and the practices that are modified to comply with these changes to the law, will continue to reduce the need to focus much time and investment on scanning and other paper management technologies. The obvious flip-side to this is that file and email management and archiving will continue to grow in importance.

Since this blog is focused on Dred, I will not bore or disgust you with the helpful hints about recycling and composting office waste for the achieving a rating of Green. It is always nice to avoid waste but in a word, yuck. And you thought keeping the company lunch area clean and odor-free was difficult before! Given the volume of articles written and the number of presentations scheduled at trade shows, one thing becomes certain; in this day and age going Green has become hip. In summary, I will close with more of the insightful and, as it turns out, prophetic lyrics sung by Kermit the Frog, “Green can be cool and friendly-like.” (For Kermit singing on you tube : ) .

RSA Conference 2009-Mock Hearing and Appeal re: Spoliation of Digital Evidence

by Cary J. Calderone, Esquire

This was a treat. The Mock Hearing and Appeal, presided over by the Hon. John Facciola at the trial level and the Hon. Shira Scheindlin and Hon. Richard Kramer at the Appellate level, examined a spoliation challenge, its defense, and had an interactive discussion after the decision. It is very rare to get a chance to observe and learn about the decision-making process of any active Judge, let alone have veritable "rock stars" of electronic discovery, walk you through a hypothetical case and explain the issues as they rule, but that is exactly what the Mock Trial and Mock Appeal sessions provided. For those who do not have a legal background, all active Judges are governed by strict rules of professional conduct and must avoid "even the appearance of impropriety." This, in addition to the fact that they are monumentally busy, is why we seldom hear from these brilliant and experienced people on the evening news or talk shows. We are generally limited to reading their opinions and using them as precedent to argue similar case facts follow or can be distinguished from those previous cases. However, these mock trials are hypothetical and accordingly, the judges are at liberty to point out why the lawyers and witnesses won or lost their arguments. I implore anybody who is in the Legal, IT, Compliance, Records Management or Risk departments and, is in any way responsible for or involved in Records Retention or Electronic Discovery at their companies, to seek out this type of session at an upcoming conference and attend. Short of going into real court and observing (See Federal Court for Discovery-Be a Boy Scout) this type of presentation provides the best opportunity to learn why we are dealing with Record Retention Schedules and Policies in the first place.

In brief, the hypothetical involved an airline, who had an incident allegedly occur between a disgruntled passenger and an angry flight attendant. The airline had a document retention policy where handwritten Incident Reports from flight attendants would get entered into electronic format. Then the handwritten original would be destroyed. Also, there was a court ordered Legal Hold in place and the flight attendant shockingly had no recollection of the events that happened. It is not necessary to go through all the details that were discussed but a couple of important items relevant to Document Retention and Electronic Discovery are that: 1) Check to see if your company is actually following its Policy? Judge Scheindlin commented that "if you follow a policy that allows for routine destruction of data, before a duty to preserve it on Legal Hold arises, you are safe." 2) Is your policy reasonable or will it look like it is designed to eliminate any potentially relevant and/or harmful evidence? 3) Know your facts when it comes to claiming or defending claims of spoliation. For example, the Second Circuit does not require malicious acts. Mere gross negligence will be sufficient to justify an "adverse inference instruction" from the Judge.

At the trial level Judge Facciola ruled that the airline had disobeyed the Legal Hold when it destroyed the original handwritten document. Further, he found that the electronic version did not include a signature or an attestation from the flight attendant so the electronic version was not "complete" which violated the airline's own retention policy. He ordered an adverse inference instruction be given. An adverse inference instruction means the before the jury deliberates, the Judge explains that because this evidence was destroyed they may assume that it meant it was evidence harmful to the airline. Not good for the airline! On appeal, the panel overturned the lower court and found that given it was negligence and not malicious acts, the adverse inference instructions was too harsh and monetary sanctions would be more appropriate. Better for the airline, but they did not discuss the amount of the sanctions so it might not have been that much better.

When I expressed my condolences to Judge Facciola for getting reversed by the mock Appeal panel he said that he was very confident that the Appeal would have been reversed back in his favor at the mock Supreme Court level. :)

Panelists: Honorable John Facciola, United States Magistrate Judge
United States District Court for the District of Columbia
Honorable Shira Scheindlin United States District Judge
United States District Court for the Southern District of New York
Honorable Richard Kramer San Francisco Superior Court Judge
Stephen Wu, Esq. Partner Cooke, Kobrick & Wu, LLP
Hoyt Kesterson II Consultant
Randy Sabett Attorney Sonnenschein Nath & Rosenthal
Joseph Burton Attorney/Managing Partner
Duane Morris LLP
Moderator and Counsel for Mock Plaintiff: Steven Teppler, Esq. Senior Counsel Kamber Edelson, LLC

"Reasonable" is graded on a scale

by Cary J. Calderone, Esquire

The Silicon Valley chapter of ARMA International held an ITRIM (Trim your data) one-day conference recently and I was fortunate to attend the lunch panel discussion. The panel members, Grant Law, Esquire of Shook Hardy & Bacon, Nathan Walker, Senior Technical Marketing Engineer of NetApp Corporation, Lisa Ripley, CISSP, Electronic Discovery Manager of Sun Microsystems, Inc., and Greg Lipptez, Esquire of the Jones Day law firm, gave brief presentations covering many familiar data retention and electronic discovery ("DRED") themes: 1) You will get sued therefore having a Data Map that explains what you have and where you have it is critical.. 2) Legal needs to be able to listen to IT and vice versa.
3) There is a constant struggle between lawyers who prefer to keep very little data and IT personnel who keep as much as possible. 4) Too many organizations have too many employees who are “surprised” to learn they actually have a record retention policy (and this is especially bad when their legal team learns of this fact during sworn testimony). And finally, 5) the law requiring what you need to keep, is not static, it changes. While it is nice to know that concepts that I have previously covered in this blog are out there being discussed and adopted by more data managers and professionals, I would almost have declined to write about the discussion but for one really great quote from Nathan Walker. Answering a question on "how best to avoid getting into trouble" with the production of Electronic Discovery for Meet and Confer conferences and motions to compel hearings, Nathan said: “The more you appear to know what you have and where you have it, the more your threshold for “reasonable” goes down.” This comment was cheered by the audience and maybe the best simple explanation for why Records and Information Managers, IT, Compliance and Legal departments need to make retention schedules, train people to follow them, and continually monitor them. To paraphrase the famous Billy Crystal character Nando, on Saturday Night Live, when it comes to electronic discovery, it is more important to appear to “look absolutely marvelous” than actually "feel absolutely marvelous." Bottom line-it is always best to know what you have and where you have it.

Industry Blurb Follow Up: Symantec Discovery Attorney Annie Goranson

by Cary J. Calderone, Esquire

Last summer I commended the move by Symantec Corporation to create a Discovery Attorney position in their Enterprise Vault applications group (See, Smart Move by Symantec). From my own personal experience, the often used phrase, “bridging the gap” does not adequately describe the lack of understanding between the Legal and Information Technology departments. In many organizations, the “gap” looks more like the Grand Canyon. After applauding the fact that Symantec recognized that someone with a legal perspective, Annie Goranson, could be a useful addition to a technology team, I wanted to take the opportunity to discuss some real world experiences with her. After all, she has now served in the position of Discovery Attorney for approximately eight months and indicated she was ready to describe some of her findings, both good and bad, learned from her attempts to help bridge the gap between Legal and IT.

Calderone: Why was the position of Discovery Attorney created? Goranson: It was determined that there was a need to add an electronic discovery educational resource on the sales side to better explain general legal issues around email archiving and the e-discovery process. In the past, before e-discovery was the driving force, sales was driven by IT and Legal was out of the loop. Now that has changed. Legal may be the driving force for the sale, and legal compliance is a critical component to satisfying the customer with their implementation of Enterprise Vault.

Calderone: What interested you in the position? Goranson: I thought it would be fun to help customers understand the bigger issues and the different ways they might accomplish their goals with Enterprise Vault. I also wanted to help the sales team understand some of the bigger legal issues as well.

Calderone: Any general comments on what you learned working with customers? Goranson: While they often ask about “Best Practices” around legal compliance, in reality there is a huge range of sophistication in the way technology is used and employed from customer to customer. This depends on how the legal department is structured and the frequency with which it is involved in litigation or investigatory matters.

Calderone: What surprised you the most in dealing with customers? Goranson: Many customers just think it is a good idea to keep everything forever. They are really afraid to delete something they may want to look at in the future.

Calderone: What retention or electronic discovery issue was present most often? Goranson: Customers really struggle with retention requirements questions. They would like a simple Best Practices answer but I cannot answer that for them. We try to raise issues that should be considered, but at the end of the day, every organization will have unique considerations, so we refer them to their own Legal Departments or outside counsel or e-discovery consultants to develop their processes.

Calderone: Any other issues you noticed frequently? Goranson: Having good Legal Hold processes is a big driver for email archiving, due, in large part, to the many court cases in the news recently where there were big discovery sanctions awarded. But, similarly to retention practices, customers may not realize that good Legal Hold strategy is about the tools, the processes, and the training, and not simply having a written Legal Hold policy.

I wish to thank Annie Goranson, for taking time to answer some interesting questions and to provide her perspective as a Discovery Attorney, to this Document Retention and Electronic Discovery blog. Her opinions are a welcome addition to the insights of others (not just my own) that have been published here.