The Modern Archivist

Is it Possible to hide a Document Anymore?

 In the past, when a company was sued and received onerous discovery requests for “all documents,” they might simply open up their warehouse filled with boxes of documents and tell the opposing party that they have free reign to search for relevant documents.  And as many in the legal world may recall, this could be successful in hiding documents.   However, a recent post on www.appliedediscovery.com and others makes me think that companies can no longer hide smoking gun documents.

As Toyota, BP and countless other companies know, even if they don’t produce a document to a regulatory body or an opposing counsel, some whistle blowing employees will release the document anyway. For example, see here and here.    Or, as the White House learned, a FOIA request can show some questionable activities. 

Even without whistle blowers and FOIA requests, it is important to remember that when it comes to electronic documents, there is almost always going to be a copy outside of your control.  For example:  Emails that make it outside of the organizations servers can be very difficult and sometimes impossible to find; and backups allow records to be restored even if the data was purposefully deleted from the active platform.  In addition, most of the onerous spoliation sanctions come from the evidence left behind when a party tries (or succeeds) in destroying data.  For example, see TR Investors, LLC v. Genger (an owner of the TRI business was fined $750,000 as a result of ordering his IT consultant to clean out his hard drive which resulted in the inability to produce ten relevant documents in court). 

The best way to deal with the potential of smoking gun emails is to establish appropriate retention policies and consistently delete documents. The risks involved with attempting to hide an email or electronic file are far greater than any potential reward.

Tags: Discovery, e-discovery, e-discovery software, EDRM, electronic records, litigation discovery, smoking gun documents

Departing Employees and the Importance of Saving Their ESI

Virginia Henschel of Lexis Nexis wrote an interesting piece on the perverse logic of the New Hampshire Attorney General’s Office ESI (non)retention policy.  She is right that government agencies can’t just delete their departed employees’ ESI.  Private corporations can’t hide their heads in the sand either.

Although there are too many examples of sanctions for failing to preserve departed employees’ ESI for just one blog post, I must point out that in May, FINRA fined Piper Jaffray $700,000 for email retention failures and disclosure violations. And this wasn’t Piper Jaffray’s first time through the wringer. Back in December of 2002, leading investment houses including Goldman Sachs, Morgan Stanley, Deutsche Bank, and Piper Jaffray failed to preserve e-mail and were fined a total of $8.25M . As FINRA reports on Piper Jaffray (emphasis mine):

FINRA discovered Piper Jaffray’s continuing email retention deficiencies when its investigators requested all emails sent or received by a former firm employee suspected of misconduct…When reviewing the CD-ROM’s contents, however, FINRA discovered that one particular email was not produced that investigators had already obtained in hard copy form…Only after further inquiries about that missing email did the firm finally inform FINRA of the intermittent email retention and retrieval issues it had been experiencing firmwide…

It is clear that retaining departed employees’ ESI is an essential component of any good enterprise-wide records management, compliance and eDiscovery system. Employees leaving the company present a formidable compliance challenge for companies and government agencies.  Many companies mistakenly rely on their IT departments to save the hard-drives of the departing employees as well as the departing employee’s mailbox and network drive ESI.  Not only does this waste corporate resources (do you really need all that data?  for how long?), it is also creates increased legal and compliance risk.

I believe that a robust file and e-mail archiving system is needed to ensure 100% capture and storage of this type of ESI.  This system must be customizable so that an organization can consider legal and economic factors to ensure that information is retained as long as necessary, but no longer. Just because ESI can be deleted at the click of a button does not mean you aren’t responsible for it. Many will learn this lesson the hard way, while the ones who are prepared will save significant time and money.

Tags: Discovery, e-discovery software, early case assessment, litigation software, Preservation, records management

The Oil Stopped but the Litigation Costs are Flowing

BP’s infamous oil spill has been a disaster on many levels, ranging from public relations mishaps to potential criminal negligence. Now, BP must face the discovery challenges amidst the growing pile of lawsuits and investigations (40 at last count!).  To complicate matters, BP, like most multinational corporations, must address disparate privacy laws that make the collection of vital information from their employees world-wide very costly and time-consuming.

The inevitable move towards a globalized economy makes this a pressing legal concern for businesses of all sizes and industries As Amy Miller noted several weeks ago, this will “become an increasingly important issue as more lawsuits are filed involving employees who may be located all over the world.” If a company is not prepared for these complex legal discrepancies between countries, it may face a situation, like BP, where the costs of litigation threaten the viability of the company.

But international discovery is not impossible; it is just harder and more expensive.  And the reality that most information is now electronic makes the situation more complex.  The key to an effective eDiscovery system is one that will automatically flag from employees working in the European Union and send notifications to those employees when litigation becomes a possibility.  These notifications will inform each individual of the situation and provide them with the means to disclose their business-related electronic data while keeping personal data hidden. These sorts of features are becoming vital in an environment where companies, like BP, face crippling consequences as a result of not being prepared for the demands of litigation in the information age.

Tags: Discovery, e-discovery, e-discovery search, e-discovery software, litigation discovery, records management

Government Agencies (and Everyone Else) Must Use Computer-Based Classification for Records Management

We recently gave a webinar on H.R. 1387 (the bill that requires the Federal government to institute electronic message and record preservation software) and had a few follow-up questions that deserve more discussion.

For slides from our webinar, email us at HR1387@zlti.com.

One records manager at a federal agency wanted tips on how she could train her colleagues to classify their electronic documents.  Even though she admitted to her inability classifying her 100+ emails a day, it was her belief that user classification was the only possible solution.   Steve (ZL’s VP and Head of Regulatory Technology) and I explained — as gently as we could — that user-based classification had already failed and that she and all of her colleagues cannot stop or even direct the massive flow of information.

Instead, we suggested that she look into computer-based classification systems.  If her agency embedded uniform tags into document templates and set up intelligent concept searches in an archiving system then most of her documents could be auto-classified and subject to real retention periods (instead of placed in PSTs that stay on a user’s laptop forever).  And she could use the centralized archive to search for and produce documents requested under FIOA, a subpoena or litigation as well as prove compliance to the impending Message Preservation Act.

The records manager was a bit incredulous that the technology could be defended in Court.  What do you think?  Considering the Jones v. Breman decision against custodian-based preservation, I believe that computers should be used to classify large corpuses (corpi?) of documents (I don’t believe that employees can classify each document they touch in any given day).  That is why so many analysts write about this issue and why many eDiscovery companies are focused on this Holy Grail.  But I am open to other points of view.

Tags: Discovery, e-discovery, e-discovery search, e-discovery software, EDD. Electronic data discovery, electronic records, government agency retention, HR1387, legal discovery, litigation discovery, records management, review

Gibson Dunn’s Mid-Year e-Discovery Caselaw Review

The law firm Gibson Dunn performed a survey of e-Discovery cases from the first half of 2010 and located a few trends:

• Sanctions and cooperation were dominant themes in the first half of 2010;
• Motions to compel and privilege disputes were also cited;
• There were fewer decisions regarding preservation, form of production, and accessibility of data than in past years;
• Courts have concentrated on more nuanced issues, such as iterative search terms, protective orders and the application of Federal Rule of Evidence 502; and
• Courts have begun to grapple with the burgeoning issue of social media and recognized that evidence from social networking has exploded.

None of these are completely surprising, especially the explosion of social media evidence in lawsuits.  Unlike this perspective, I believe that social media evidence (or the potential spoliation of this data) is already a big reason for dollar signs in plaintiff attorneys’ eyes.

Tags: Discovery, e-discovery, e-discovery search, e-discovery software, electronic records, FRCP, legal discovery, litigation discovery, litigation software

eDiscovery in Canada

I recently attended the IQPC e-Discovery Canada Conference and gained some interesting takeaways regarding the current state of E-Discovery in Canada. Frankly, the current situation reminds me of the U.S. e-Discovery market from four or five years ago – corporations are generally aware of the threat of large scale litigation, and the e-Discovery nightmare that it can bring, but are hesitant to act. This is true even in the face of the Montreal Pension Plan v Bank of America case.   Indeed, most of the GCs I spoke to said that it was a freak case and that “it wouldn’t happen” to them.

This attitude seems overly optimistic – with the recent class action lawsuits against Toyota and BP in the US, alarm bells should be going off in Canada.  Cases that range across the entire organization, spanning millions of electronic documents, are bound to become a reality. In general, large-scale litigation, such as class action lawsuits, is less frequent in Canada. However, the large presence of American based firms is sure to increase the likelihood of litigation.

A recent quote from Calum MacLeod, a case master for the Ontario Superior Court of Justice in Ottawa, does a great job of summing up the current state of eDiscovery in Canada. “Companies without a protocol for managing electronically stored information are in big trouble for a number of reasons, it will cost them a fortune to respond to eDiscovery requests; they’re going to have a tough time finding what they need and it will be difficult for them to raise the proportionality argument when they have no idea what’s involved in retrieving the information.”

I hope the GC’s take this issue seriously and, as an old Russian proverb says, “learn from the mistakes of others and not your own.”

Tags: Discovery, e-discovery, e-discovery software, early case assessment, EDRM, electronic records, ESI, litigation software