IQPC eDiscovery Panel-Protecting Privileged Communication

by Cary J. Calderone, Esquire

Moderator, Mark Michels, Managing Attorney, Cisco Systems, Inc.
Craig Carpenter, Vice President and General Counsel, Recommind, Inc.
Martin T. Tulley, Partner and E-Discovery Practice Chair, Katten, Muchin, Rosenman, LLP

This panel was focused on Federal Rule of Evidence (FRE) 502 which governs attorney-client privilege and work product; limitations on waiver.  502 was drafted specifically to cover electronic discovery and inadvertent disclosures.  I have had the pleasure of listening to Mark Michels at other presentations and, as an audience member, I always appreciate that he tries to make his panel discussions interesting, lively, and a little bit fun.   After sitting in on 5 or 6 eDiscovery sessions over the two days at the IQPC eDiscovery conference, I believe anybody sitting in this audience appreciated that he made the panel discussion entertaining, as well as informative.

The first hot topic was protective orders with claw-back provisions. The panel was interested in whether people had ever had a "quick peak" (i.e., noticed that your opposition sent you privileged information and had to report it to them) and made the following points:

• Mistakes will happen.  We are dealing with an enormous volume of data.  There is fear of privilege waiver but there is also significant cost in taking precautions. 
• FRE 502- Now with 2 years of precedent it is better understood.
• 502(d) limits waivers of attorney/client privilege, promotes certainty and reduces litigation risks.
• 502(e) indicates that a Protective Order is still prudent.
• There is a big presumption against broad subject waiver.

Mark asked, "when is a disclosure not a waiver of privilege?"
Martin provided a checklist of factors:

• Privilege?-Was it privileged to begin with?
• Inadvertent?-Was the disclosure inadvertent?  Some courts not-intentional equals inadvertent. Other courts have a checklist of factors to consider.
• Reasonable?-Advisory committee notes to 502 do not define it.  Rather, the Committee notes list factors to consider such as precautions and steps taken after disclosure to attempt to rectify?
• Extent of the disclosure?-Overriding issues of fairness.  Was there a defensible Records Management program?  For example, was it 4 out of 10,000 documents?  Did the disclosing party take quick action?  Court found it reasonable and therefore there was no waiver of the privilege.  
• Best practice-Always have a protective order with a claw-back provision.
• Waivers have been found where the producing party could not describe what they did...so document your procedures.
• Perfection is not expected.

It was pointed out that whether FRE 502 would be binding in state courts, has not been tested.
Citing the Victor Stanley case and Judge Grimm be prepared to answer, "did you do enough to find the privileged documents?"
   
The panel also mentioned the Amobi v. District of Columbia case where Judge Facciola discussed "inadvertent."  The Judge's analogy was paraphrased; "while 502b would allow me to round up the animals and put them back in the barn, were reasonable steps taken to avoid letting the animals out?"
One of the precedents was clear.  When the data had been produced to the expert witness for review, privilege was waived.

The panel then examined what would be considered "reasonable" efforts to find and protect your privileged information.  Keyword search alone is usually not sufficient as it finds only 25% of documents, so you should add in sampling.  The type of vendor you are working with can make a difference.  Do they understand the methodology and work flows around it.

Craig Carpenter provided an extensive list of search features that could help.  He mentioned threading, email de-duping, visualization (being able to see who spoke with whom and when on certain topics), concept search (relate documents that are substantively similar but may not share keywords), clustering-(particular set of keywords-take first few documents that relate to the category), grouping-(more sophisticated clustering-take all documents that relate to the category) automatic categorization (the tool does it for you), amd predictive coding (form of automated review).  Not surprisingly, Recommind's impressive products are capable of helping you with all of these search techniques.   Craig was in "teaching mode" and not in sales mode and his examples and explanations were excellent.


The panel discussed an instance of dealing with 2.5 million documents and the client did not want to pay for privilege review but rather, instructed outside counsel not to turn over anything privileged. LOL!  Obviously it would cost too much.   So, with client's consent, they used automated review tools with some direction from knowledgeable people.  They were able to save 3 or 4 months of processing time and several million dollars.

Mark Michels said "hypothetically," what if he was the "impecunious client?"  "How could they be reasonable and save money too?"  The panel proposed technology search with Bayesian models and sample seed sets to help cull down the data but then made it clear that "at some point, you have to put some eyes on it."  100% automated tools or 100% manual and people-powered processes have not been favored by the courts.

The last "best practice" was to re-iterate that it was critical to define "reasonableness" or, through agreement with the other party(s), take "reasonableness" out of the equation by agreeing what both parties would do for production and what would happen in the event of any inadvertent disclosure.  They closed with one of the best lessons for those who would rely solely on FRE 502 to save you from waiving privilege during disclosure:  Crediting Judge Grimm for the analogy, 502 was "like a bungee cord.  It can save you, but it is still a terrifying experience."

IQPC eDiscovery Panel-Global Issues

by Cary J. Calderone, Esquire

David C. Shonka, Esquire-Principal Deputy General Counsel, Federal Trade Commission
Benton Armstrong - Principal, Analytic and Forensic Technology, Deloitte Financial Advisory Services LLP

David Shonka stressed from the beginning, "if there is one takeaway best practice from this session-get local advice.  European Union directives are not the last bit of advice.  Each nation has its own interpretation of it.  Local law firms in Europe and Asia are much more sophisticated now and can offer better advice."

Initial considerations for global eDiscovery:

• Who has Jurisdiction?
• Who has control of the data?(maybe a 3rd party?) (Where is that party sitting?)
• Duplicate copies in the US?
• Where does the data sit?
• If you can get it, can you move it?  Lot of restrictions on transfer (personal and sensitive data)

(Source-Sedona Conference Framework for Analysis of Cross-Border Discovery Conflicts August 2008)

Companies are employing new mobile technologies to go in with a small data center to process out personal and private data, then you can negotiate for collection/transfer from that point.  For example, data sitting on server in Eastern Europe but it is Austrian employees' data.  It was treated as though they were doing a collection in the Czech Republic.  They ultimately collected what they needed but it was a very long and difficult process-got consent from the Data Privacy officer in the Czech Republic.  Since this is a relatively new phenomenon, they are being extra cautious. Multinational organizations need to anticipate this.

There can be problems when parties do not want to cooperate but ultimately they do.  Preservation process- while the consent process is going on the data is not preserved.  Employees delay and then 5000 deletions will occur just before the data is supposed to be preserved.

We are getting better and more sensitive to private data in the US but still not equal to the EU.  Convergence going on-don't think they will ever meet-but the realities of dealing with a global economy is forcing people to cooperate.  Reminder that under the EU directive, looking at data equals "processing" and there are different stages:

• Retention
• Disclosure 
• Onward transfer 
• Secondary use

There are also international collection considerations such as:

• Who collects?  Employees?  Can cause problems
• In what form?  Native or a forensic copy? Physical or logical?  Remote or direct connect?

Best practice from Benton Armstrong-"get all stakeholders together at the outset."Records Managers, Legal, IT from many if not all different offices and locations. Get the potential roadblocks out in the open early so you can plan for some of them. It will make the process much faster.

One positive thing I learned from this panel is that, since I first started this blog, the best practices for international eDiscovery have evolved. While certainly not simple and without potential pitfalls, there are now better operating procedures and protocols for negotiating this tricky area. I suspect as more and more global companies implement policies and procedures and have better trained and more experienced practitioners involved, the potential pitfalls will continue to dissipate.

IQPC eDiscovery Panel-Roles of In-House Counsel and Outside Counsel

Vincent Miraglia, Chief Counsel - Employment Litigation & Electronic Discovery International Paper
Vickie Lee Clewes, Senior Manager, Commercial Legal Affairs, Gilead Sciences, Inc.
Moderator, Wayne C. Matus, Partner Pillsbury Law Firm

Wayne Matus started the discussion rolling by asking the panel, "What keeps you up at night?"
There were two answers:

1. For things like government subpoenas and investigations, it is very hard to have processes already in place, so managing the discovery is very challenging. 
2. For inside counsel, it is very difficult to manage many legal holds and keep mindful of when they "anticipate" new litigation. 

The panel noted it was difficult to have a cohesive company-wide plan. They still had to address the individuality of each office/department while balancing the tie between discovery and risk.

Vinnie thought that "less is more" and that he does not want all of the data, just the relevant stuff.
He gave an example of PST files.  They had established a delete policy (60 or 90 days) and used legal hold and archiving tools to move and archive necessary email. 

They referred to the Zubulake case (6) and explained that since "terminating employees" could lead to litigation, a best practice would be to freeze all data for terminations for a set period of time.


Question from Wayne-What about the fact that they may get hit with a lawsuit in a new area?   The panel believes in meeting and discussing potential new stuff often with outside counsel.  They also found that, almost always, outside counsel is conservative about when legal holds are necessary. 


What keeps Wayne up is the eDiscovery process maps he creates with his clients do not say all decisions should be documented.  For example, "this is why I did or did not issue a legal hold."

Vicki thinks they do need to document more.  Since we are shooting for "reasonableness" better to show what you considered at the time.


Question from Wayne-How important is communication between inside and outside counsel?
Vinnie's response-Keep it like a working partnership so Vinnie may respond to some discovery requests and outside counsel may respond to others.  He thought that the legal bills go down with better communication.

IQPC Judges Panel on eDiscovery

by Cary J. Calderone, Esquire



Readers of this blog know that I am always happy when we have the opportunity to learn about DRED issues directly from judges.  I had the privilege of attending the Judges Panel on eDiscovery at the IQPC eDiscovery Conference in San Francisco.  This was a very worthwhile session and attendees learned some great insights about the "Real World" of eDiscovery that occurs in actual court cases.  And, by actual court cases, I mean the majority of cases you will probably never read about because they do not involve extreme examples of eDiscovery misconduct and multi-million dollar sanctions.  Hopefully, these are the cases that your legal matter will most closely resemble.  Moderated by Craig Carpenter, V.P. and General Counsel, Recommind, Inc., U.S. Magistrate Judge Robert B. Collings, District of Massachusetts, and U.S. Magistrate Judge Elizabeth D. Laporte, Northern District of California, provided updates to the law.  I am happy to report that in the 3-plus years since I have been working almost exclusively with eDiscovery issues, there has been evolution and progress, and there are now better guidelines to help keep your business or department DRED-ready.


Some of Judge Collings recommendations included:

• Reading the article by Judge Facciola-Federal Courts Law Review on privilege review   
• Urging counsel get a court order with respect to a Section 502 waiver
• Whittle eDiscovery down the the issues you have actually have in dispute
• As an Observer to the Sedona Judicial Working Group-Courts are looking for more cooperation between counsel and less adversarial posturing during the Meet and Confer process
• Parties need to be more transparent about what, how, and where their data is located
• Don't take expensive 30(b)6 depositions unless necessary
• Bring your IT experts to the Meet and Confers
• A reasonable proposal and approach will get the Judge's support
• Settling cases for purely economic reasons has always occurred -eDiscovery is exacerbating this

Judge Laporte also provided some important insights:

• There is a wide range of parties and sophistication-She has given attorneys eDiscovery homework
• Lawyers who typically do not deal with eDiscovery now have to learn it
• Client is responsible for getting it right-Courts look to see who is really engaged in the wrong-doing (citing Qualcomm case where the court found no bad faith on the part of outside counsel)
• Standard is what is reasonable at the time
• If you agree with opposing counsel as to procedures, and reduce it to writing, you should be safe from sanctions
• Get a section 502 claw-back provision embodied in a court order
• Sanction cases-Repeated misrepresentations and a failure to be careful cause most of the sanctions, regardless of the provision the Judge may cite as authority for imposing sanctions.

The best practice comments were interrupted when Wayne C. Matus,  Partner, Pillsbury Law Firm, asked a question from the audience that caused a noticeable "pause for reflection" by the Judges before they could answer.  He asked if there was ever a situation where the standard for Legal Holds was going to be always on hold?  He gave the hypothetical of a construction company that knows there will always be litigation with a certain size development project, so from the beginning, they can "reasonably anticipate litigation."  After giving it some thought the Judges, while not answering the hypothetical directly, did point to similar industries, like pharmaceuticals, and technology development, where future litigation is always a consideration.  Since I have advised clients in this area, I commented to Wayne afterward that it was almost an "unanswerable question" and jokingly asked if he had ever been banned from participating in Q&A with Judges Panels because he asked such tough questions?  The truth is, tough questions like that are the best part of these panel discussions.


Judge Collings clarified the role of inside versus outside counsel: "What is subject to legal review is the role of outside counsel."  He recognized that making money for the corporation and keeping money for the corporation (a penny saved is a penny earned) is a major goal of inside counsel, but noted they will run into problems if Legal Hold notices are not going to the correct custodians or they are not being issued on time.

Judge Laporte referred to the Pension Committee case to remind us that Circuits have different standards for issuing Legal Holds.  She also commented on Judge Shira Scheindlin's recent dicta about always issuing a written hold.  Judge Laporte observed that "when you have a small family or small business litigant, it could be a very different situation and standard.  On the other hand, why wouldn't you issue a Legal Hold?"

Patrick Oot, a well-known eDiscovery expert and Sedona Conference participant made an interesting point from the audience about wage and hour disputes and when you may not want to issue Legal Holds in the standard fashion but might choose to separate the Legal Hold policy from the class certification.

Great point from the Judges on reviewing your own Legal Hold procedures:  "Imagine if you have to explain what you are doing to the Judge later."  For example, even an email is now a written record of what you did to issue a Legal Hold and it creates a trail.  Discussing the Quan case and text messaging, there were conflicting views on what the company policy was.  The Judges recommended audits regarding private versus company usage.  Best practice, "Have a clear cut policy" and people need to know it!

I had one what I like to call "cringe moment" when Judge Collings mentioned that lawyers are going to have to learn about technology to adequately represent their clients in court.  He mentioned the long tradition and ability of lawyers to be able to learn a great deal about a particular subject matter in order to prepare for trial.  They can study and learn an amazing amount of information in order to explain the subject to a judge and jury.  While judges are never "wrong," they are only "misinterpreted," my worry is that too many techno-deficient lawyers will believe they can learn the technology and its language in a few weeks.  They can not.  To them, in addition to offering my expert services (shameless plug), I suggest a more appropriate analogy would be like trying to learn to speak French in a few weeks.  In other words, learn what you can, but bring your expert interpreter along.  Merci beau coup...