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Electronic Evidence: New Challenges for Information Security Officers

Presented by:

Tom GreeneChief Assistant Attorney General, Public Rights

Division

Clark KelsoChief Information Officer, State of California

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Overview

Introduction to the recent FRCP amendments for “Electronically Stored Information” (ESI)

Implications for Information Security Officers

Resources Questions

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E-Data has been Discoverable and Admissible for Some Time

“Fed. R. Civ. P. 34(a): “document” includes “data compilations from which information can be obtained, translated, if necessary, by the respondent through detection devices into reasonably usable form”

“Today it is black letter law that computerized data is discoverable if relevant … The law is clear that data in computerized form is discoverable even if paper ‘hard copies’ of the information have been produced….” Anti-Monopoly, Inc. v. Hasbro, Inc., 94 Civ.2120, 1995 WL 649934 (S.D.N.Y. 1995)

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FRCP Amendments and E-Evidence

Amendments to the Federal Rules of Civil Procedure address “electronically stored information” (ESI)

Apply to cases brought on or after 12/1/06 and all other cases unless “would not be feasible or would work injustice.” Rule 86.

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Amended Rule 34(a): “Electronically Stored Information”

“Any party may serve…a request…to produce designated documents, electronically stored information—including writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations stored in any medium from which information can be obtained—translated, if necessary, …into reasonably useful form…”

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Four Concepts in the New Rules

Early Consideration of ESI issues

Two-Tier Approach to Back-up Media

Practical Adjustments

Shallow Safe Harbor for E-Document Destruction

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Critical Decisions Come Early!

Rule 26(f) Conference Among Counsel ASAP but not later than 16 days before Rule 16

conference or issuance of scheduling order. Rule 26(a) disclosures of ESI

At or w/in 14 days of 26(f) conference unless a different schedule per stipulation or order.

Rule 16 Conference Order ASAP but at least w/in 90 days of appearance of

defendant or 120 days from service of complaint.

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Rule 26(f) Meet and Confer Obligation

Discuss “any issues relating to preserving discoverable information”.

“changes in the timing, form or requirement for disclosures under Rule 26(a)”

“[A]ny issues” relating to ESI including the “form or forms” of production.

New Form 35 for report to court. Consider bringing a consultant/expert.

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Rule 26(a) Initial Disclosures

26(a)(1)(A)—Witnesses May need to include e-evidence custodian(s);

might well be an ISO.

26(a)(1)(B)—”a copy of, or a description by category of, all documents, electronically stored information….that the disclosing party may use to support its claims or defenses”

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Rule 26(a); Sanctions

If fail to “make a disclosure under Rule 26(a), any other party may” move to compel and for “appropriate sanctions”. Rule 37(a)(2)(A).

May not be “permitted to use” the undisclosed information “at a trial, at a hearing, or on a motion”. Rule 37(c)(1).

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Rule 16 Conference

Per Advisory Committee, Court is to start w/ 26(f) Report of Counsel.

Order is to include “provisions for disclosure or discovery of” ESI. Rule 16(b)(5).

Order may include “any agreements the parties reach for asserting claims of privilege or of protection of trial-preparation material after production.” Rule 16(b)(6).

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Local Rules

N.D. Cal. Civil Local Rule 16-9 requires a description of: “Steps taken to preserve evidence relevant to the

issues reasonably evident in the action, including interdiction of any document-destruction program and any ongoing erasures of e-mails, voice-mails, and any other electronically-stored material.”

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Duties of Litigation Counsel

Communicate discovery obligations to client Identify sources of discoverable information Speak directly with key players in litigation as well as

IT personnel Put in place a litigation hold Reiterate instructions for litigation hold and monitor

compliance Call for employees to produce copies of e-evidence Arrange for segregation and safeguarding of archival

media (backup tapes) (Zubulake V, 229 F.R.D. 422 (S.D.N.Y. 2004)

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Potential Role(s) of ISOs

Consultant (How do your systems work?) Informal Advice; Attend 26(f) session or 16(b)

conference Witness

Persons Most Knowledgeable (PMK) Depositions

Design/Implement Litigation Hold; Search for Information

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What Should You Explain to Your Lawyers?

Discuss Email System Hardware, Software, Versions, Location, etc.

Discuss File Servers Hardware, Software, Versions, Location, etc.

Discuss PCs O/S, Recent Upgrades, Applications, Versions

Discuss PDAs Blackberry, Treo, Palm, etc.

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Talking to Your Lawyers, Part 2

Backup Policy Retention Policy Destruction Policy Capable of Litigation Holds? Other considerations:

Thumb drives Working from home Personal Archives

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Special Problems with Voice Mail

Voice mail typically Not under Your Direct Control

Contact 3rd-Party Vendor ASAP

Secure hold on Voice Mails for “Key Players”

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Two-Tier Approach; Rule 26(b)(2)(C)

“A party need not provide discovery of [ESI]from sources that the party identifies as not reasonably accessible”

Committee note states that fact that archived data expensive to access does not mean don’t have to preserve back-up media.

Demanding party can motion for production if value outweighs burden taking into account amount in controversy, parties’ resources, issues in case and importance of the proposed discovery.

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States of Data: Cheap to Expensive

Active data ($) Metadata ($) System data ($) Backup tapes ($$$) Deleted and altered files ($$$$) Legacy data ($$$$$)

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Budget Issues: Costs for Managing E-Evidence

Collect data $250-500 per hard drive or backup tape $2,000-3,000 per server

Cull and Search for Relevant Data using Tech Tools $1,800 per hard drive; more for backup tapes. $450 per e-mail box

Produce Relevant Data $750 per hard drive to prepare data for production in proper format

Convert data to litigation support repository for privilege review

$4 per Megabyte plus $.10/page for Bates numbering and tiffing the images

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Practical Adjustments: Form(s) of Production

FRCP 34(b) authorizes demanding party to “specify the form or forms in which [ESI] is to be produced”; subject to challenge.

Per Advisory Note, can specify different forms for spreadsheets and documents.

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Metadata and Why It May Be Important in a Lawsuit

Classic e-mail metadata fields From, To, Subject, Date, cc, bcc, Text of email Date and time e-mail and/or attachment opened

50-60 other types of fields are available Embedded data (e.g., Excel formulas, Word

Processing prior versions) Expensive to manage and produce; relevance

depends on the nature of your case.

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Typical Forms of Production

Native Format – ESI is produced as it was maintained and used; contains metadata.

Quasi-Native – ESI is produced in a format similar to, but not the same as, the format in which it was maintained and used. Proprietary software Large databases

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Forms of Production, Part 2

Quasi-Paper – ESI is converted to image files, typically TIFF or PDF; meta data and full text are extracted.

Quasi-Paper Hybrid – Meta data and text are extracted with a link to the native file.

Paper What do you really need? Be careful what you ask for. . .

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Rule 37: “Shallow Safe Harbor”

FRCP 37(f) provides that “absent exceptional circumstances, a court may not impose sanctions…[for ESI]… lost as a result of the routine, good-faith operation of an electronic information system.”

Good faith per Committee Note includes retention under common law, etc. and existence of effective litigation hold.

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Retention Obligation: Practice Tips

Normal business destruction will not yield sanctions under FRCP.

But Improper Destruction Creates Major Risks for Your Agency.

Written Litigation Hold Policies are Highly Recommended.

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What is “spoliation”?

“the destruction or significant alteration of evidence, or the failure to preserve…evidence in pending or reasonably foreseeable litigation.” West v. Goodyear, 167 F.3d 776,779 (2nd Cir.1999)

contra spoliatorem omnia proesumuntur. Black’s Law Dictionary4th

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Sources of Duty to Preserve

Knew or should have known of possible litigation

Specific statutes, e.g. Sarbanes-Oxley; SEC Rules

Court order Agreement

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When Does Duty Attach?

Based on common law “knew or should have known” standard: When Product Designed. Carlucci, 102 F.R.D. 472

(S.D.Fl.1984) When Complaints Received. Remington, 836 F.2d 1104 (8th

Cir.1988) When litigation suspected. Zubulake IV, 220 F.R.D. 212

(S.D.N.Y.2003) When major accident occurs. Union Pac. R.R., 2004

U.S.App.LEXIS 6 (8th Cir.2004)

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Preservation of Metadata May Be Required

Relevance of metadata depends on the case.

Burden of disclosing metadata on the producing party. Williams v. Sprint, 2005 U.S. Dist. Lexis 29882 (D.Md. 11/22/05)

Discuss at 16(b) conference.

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What remedies?

“Most potent” is the adverse inference instruction. Cedars-Sinai, 18 Cal.4th 1, 11(1998)

Example: New CA standard instruction 205 reads: “You may consider whether one party intentionally concealed or destroyed evidence. If you decide that a party did so, you may decide that the evidence would have been unfavorable to that party.”

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Other Sanctions

Monetary

Evidence

Issue

Terminating

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A Few Examples

Leon v. IDX (9th Cir. 2006) 464 F.3d 951 (files deleted from laptop; dismissal)

U.S. v. Gordon (9th Cir.2004) 393 F.3d 1044 (use of “Evidence Eliminator to scrub drive; pay costs and conviction affirmed)

In re Napster (N.D.Cal. 10/25/06) 2006 WL 3050864 (deletion of e-mail; adverse inference instruction)

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More Examples

World Courier v. Barone (N.D.Cal., No. C 06-3072 THE, 4/13/07) (destruction of hard drive in IP case by non-party husband; adverse inference instruction, costs; relies on Residential Funding v. DeGeorge Fin. (2d Cir. 2002) 306 F.3d 99, 105)

People v. Hanson Building Materials (Contra Costa County, No. MSC04-00424, 5/3/07) (Failure to retain e-mail; CA state agency ordered to pay $79K in fees/costs + adverse inference instruction; writ pending)

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Litigation Hold Requirement:Policy and Implementation

Create Policy to: Determine When Hold is to be Imposed Define what is to be preserved Staff responsibilities

Implementation Issues: ID key players who are involved ID relevant records/docs/systems/computers Contact and interview all key players Will metadata be material? A forensics snapshot? Will legacy data or backup media need to be preserved? When do we need an outside expert?

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Litigation Hold Procedures:Training and Follow-up

Follow-up Meetings and regular reminders Individual Interviews Determine if staff requires further clarification

Document the process

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Resources

Sedona Guidelines (sedonaconference.com) Zubulake decisions Michael Arkfeld ,Electronic Discovery and

Evidence (All AGO libraries) BNA, Digital Discovery and E-Evidence Internet resources

Discoveryresources.org; krollontrack.com; FIOS.com; applieddiscovery.com; Note webinars.

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Take-Aways?

E-Discovery Presents Serious Risks to Your Agencies.

ISOs Will Have Important Roles in Future Litigation

Need to Partner Early with your CIO, the AG and your General Counsel’s Office.

Need for Standards and Guidelines (Which You Should Help Write).

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Thanks and Questions