April 2002

Navigating the Perils of Discovery in the E-Information Age 

by David H. Schultz and J. Robert Keena

On the day they are admitted to practice law, lawyers swear under oath to abide by the Rules of Professional Conduct (RPCs) in service to their clients. In Washington, RPC 1.1 requires that "A lawyer shall provide competent representation to a client. Competent representation requires the legal knowledge, skill, thoroughness and preparation reasonably necessary for the representation." Attorneys today are faced with an overwhelming array of new challenges created by the proliferation of information stored in electronic format.

Recently, the Washington Supreme Court noted increasing problems associated with electronic documents: "As governments everywhere move from paper and microfiche documentation into the age of 21st century information technology, public records are increasingly being stored — even created — in digital format, then added to virtual databases that are accessed, in streams of bits and bytes, by vast networks of governmental agencies, often across jurisdictional boundaries."1 From the investigation and pre-discovery stages of a lawsuit through trial and beyond, true zealous advocacy requires a solid understanding of electronic discovery issues.

Electronic files and e-mail are, by their very nature, fragile. While electronic files are easy and convenient to create and duplicate, they are also easy to alter or destroy. Accordingly, one of the foremost issues in electronic discovery is preservation.2 When litigation becomes imminent, corporate clients should be instructed to immediately discontinue electronic document-destruction policies with regard to any potentially relevant files at all locations of the client's and the opponent's businesses. Preservation letters should be sent to all parties and nonparties in possession of potentially relevant data. In some cases the additional step of securing a preservation order may be required. As the case moves forward, monitoring preservation compliance can be important and potentially quite fruitful.

Increasingly, parties with little or no electronic data themselves will aggressively pursue e-mail and other electronic files from their opponents. The goal is more commonly to create a spoliation problem than to actually obtain and review hundreds of thousands of pages of electronic files. Among the most common practices causing spoliation are the failure to fully discontinue document-destruction policies (both intentionally and negligently3), the improper collection and imaging of electronic data, and the modification of Web sites.

Sanctions for spoliation of evidence include adverse inferences or presumptions (at either the case level or the issue level), preclusion of evidence, monetary sanctions, and dismissal or default.4 In several jurisdictions, spoliation gives rise to a separate cause of action in tort. At the federal level, criminal penalties apply to the obstruction of justice through destruction of evidence.

Once the perils of preservation have been navigated, attorneys must address the disclosures required by Fed.R.Civ.P. 26. Rule 26(a)(1)(B) specifically requires the disclosure of "data compilations" (e.g., electronic files, databases, e-mail) following a full investigation of the case. This requires, at a minimum, locating all sources and locations of electronic data.5 Data will commonly be located on individual desktops and laptops, network hard discs, removable media (e.g., floppy discs, tapes and CDs) and, increasingly, personal digital assistants (e.g., Palm Pilots). Data may also be in the possession of third parties, such as Internet service providers, and on the computer systems of other peripherally involved entities. Determining the volume of e-mail and other electronic information is crucial, but can be difficult to do without the assistance of an experienced electronic-discovery expert. This information, however, is essential to an effective Rule 26(f) discussion regarding the timing, form, and limitations on discovery.

Fed.R.Civ.P. 26(a)(2) calls for the disclosure of any person who may be used at trial to present evidence under Fed.R.Evid. 702, 703 or 705. Counsel must make a determination as to whether to disclose any electronic-discovery experts involved in the case under this rule. Obviously, an expert who has engaged in any sort of forensic analysis of hard drives or other systems falls within the gambit of this rule. The more interesting issue is whether one must disclose an expert who handles the collection and reproduction of electronic data without conducting any sort of forensic analysis. Though electronic-discovery experts possess the kind of "scientific, technical, or other specialized knowledge" contemplated by Fed.R.Evid. 702, a parallel can be drawn between such an expert and a records custodian who simply retrieves, photocopies and certifies hard-copy documents.

A discovery expert used in the records-custodian capacity should be retained by the law firm (as opposed to the client) and should perform only duties that fall squarely within the work-product doctrine. To the extent such an expert is necessary to establish chain of custody, he becomes a foundational witness and need not be disclosed under Rule 26. The safer approach may be to err on the side of over-disclosure by including such electronic-discovery experts in the Rule 26(a)(2) disclosures.

In cases that require expert computer-forensic work, an additional expert should be retained. This expert should be provided with only the information necessary to formulate and present opinions as to the evidence and should not perform any hands-on collection or processing of electronic information.

One of the most useful electronic-discovery management tools may be the Fed.R.Civ.P. 16 pretrial conference. As with the Rule 26(f) meeting, counsel must be prepared with the salient facts regarding all electronic data involved in the case. Doing so will assist in limiting the scope of discovery required from one's client while maximizing the disclosures from opposing parties. In many situations it may be necessary to provide the court with expert testimony as to the nature, location and volume of electronic data, as well as the time and cost involved in producing it. Topics for discussion at the Rule 16 conference may include preservation of evidence (including whether backup, archival and "deleted" files will be exchanged); preliminary disclosures as to the parties' computer systems (including numbers, types and locations of computers, operating systems in use, and backup schedules); document processing; production formats; testifying experts; and anticipated evidentiary disputes.

If, for jurisdictional reasons6 or otherwise, a Rule 26 initial disclosure related to "data compilations" has not occurred, practitioners may acquire the data through a combination of interrogatories, requests for documents, and depositions. A request for "all electronic data" will likely result in an objection based on burden or expense, and courts have been inconsistent on how deeply they allow a discovering party to dig. For example, in Demelash v. Ross Stores, Inc., 20 P.3d 447 (Wash. Ct. App. 2001), the Washington Court of Appeals restricted the scope of the electronic discovery, stating: "A trial court must manage the discovery process in a fashion that promotes full disclosure of relevant information while at the same time protecting against harmful side effects. Consequently, a court may appropriately limit discovery to protect against requests that are unduly burdensome or expensive."

As such, discovery requests must be specific, and exhibit an understanding of how electronic data is created, stored and destroyed. For example, the same criteria used in disclosing client data under the Rule 26 initial-disclosure provision can be used to formulate effective interrogatories. If properly phrased, an opponent's response should provide a roadmap for a follow-up request for documents or subpoena duces tecum. If the response does not provide this roadmap, there are plenty of cases to support a motion to compel.7 

Once the data has been produced, intricate knowledge of the advantages and potential pitfalls of electronic evidence becomes more important. Often, the key difference between discovery of electronic data and hard-copy data is the sheer volume. In three-million electronic pages of data, it becomes relatively easy for a well-meaning attorney to miss an e-mail between counsel and client, inadvertently waiving the attorney-client privilege.8 

Electronic evidence also creates new and unique ways for clients to cause spoliation of evidence. When copying data for production or review, failure to make sector-by-sector images prior to viewing may result in spoliation.9 Simply booting a computer can destroy "slack" and "temporary" files. Clicking on a file rather than properly copying it can change its last access date and lead to sometimes harsh sanctions or inadmissibility. Because of this, the service of an interrogatory on an opposing corporate party as to whether they have overwritten or revised any relevant documents since the beginning of the litigation may have extraordinary consequences and significant bite. No party should avoid bringing a motion to compel to enforce the production of this data knowing that if the data is produced in an altered state, spoliation may have occurred. Just as certain, because of the inconsistency in case law, no attorney should pass on the opportunity to seek a protective order to prevent the destruction of this data.10 

Once the minefield of electronic discovery has been traversed, spoliation has been avoided, and no "smoking gun" e-mail has been discovered forcing settlement or supporting summary judgment, the issue of the admissibility and use of electronic evidence at trial remains. To be admissible, e-mail and other electronic evidence must be authenticated pursuant to Fed.R.Evid. 901(a), and the evidence must clear any hearsay hurdles. Computer records may be admitted under the business-records exception to the hearsay rule.11 However, Fed.R.Evid. 803(6) requires the proponent of a computerized record to prove it was created "at or near the time" of the transaction, act or event recorded in order to qualify as a business record exception to hearsay.12 

As technological developments simplify our daily activities, they simultaneously create trails of data complicating legal discovery. The question a litigator should ask at each stage in the process — from investigation through trial — is whether zealous advocacy can be provided without engaging in electronic discovery. With 70 percent of all data now stored in electronic form,13 the responsible practitioner knows the answer.

NOTES

1. Guillen v. Pierce County, 2001 WL 11045031, __P.3d__ (Wash. Sept. 13, 2001).

2. Linnen v. A.H. Robins Co., 1999 WL 462015 (Mass. Super. June 16, 1999).

3. In re Prudential Ins. Co. Sale Practices Litig., 169 F.R.D. 598 (D.N.J. 1997).

4. Crown Life Ins. Co. v. Craig, 995 F.2d 1376, 1382-83 (7th Cir. 1993).

5. Kleiner v. Burns, 2000 WL 1909470 (D. Kan. Dec. 15, 2000).

6. Prior to the December 1, 2000 amendments to the Federal Rules of Civil Procedure, Rule 26 contained a district-by-district opt-out clause eliminating the initial disclosure requirement.

7. National Union Elec. Corp. v. Matsushita Elec. Ind. Co., 494 F. Supp. 1257 (E.D. Pa. 1980); Milwaukee Police Assoc. v. Jones, 615 N.W.2d 190 (Wis. Ct. App. 2000).

8. United States Fidelity and Guar. Co. v. Canady, 460 S.E. 2d 677 (W. Va. 1995); In re Sealed, 877 F.2d 976, 980 (D.C. Cir. 1989).

9. Gates Rubber Co. v. Bando Chem. Ind., 167 F.R.D. 90 (D. Colo. 1996).

10. Demelash v. Ross Stores, Inc., 20 P.3d 447 (Wash. Ct. App. 2001); Van Westrienen v. Americontinental Collection Corp., 189 F.R.D. 440 (D. Or. 1999); Symantec Corp. v. McAfee Assoc., Inc., 1998 WL 740807 (N.D. Cal. Aug. 14, 1998); Strasser v. Yalamanchi, 669 So.2d 1142 (Fla. Dist. Ct. App. 1996).

11. State of Wash. v. Ben-Neth, 663 P.2d 156 (Wash. Ct. App. 1983). Computer-generated evidence is hearsay but may be admitted as a business record provided a proper foundation is laid.

12. United States v. Hutson, 821 F.2d 1015 (5th Cir. 1987); United States v. Cestnik, 36 F.3d 904 (10th Cir.1994).

13. Lori Enos, E-Commerce Times, "Digital Data Changing Legal Landscape," May 16, 2000 (visited July 6, 2001), http://www.ecommercetimes.com/perl/
story/3339.html.