Identifying Internal Resources to Facilitate Electronic Discovery: “I have to what with who?”

The recent Alert Are You Ready for E-Discovery? identified five steps to evaluate and develop litigation strategy in the digital age. The first step is discussed below.

Traditionally, attorneys have worked with two distinct types of personnel when counseling clients before or during litigation. The first type of contact might be called “legal support,” such as in-house legal staff, human resources officers, upper level managers or records custodians, who work with counsel behind the scenes, drawing on their institutional knowledge. The other common contact category is “the witness,” the individual who, for better or worse, is inherently involved in one or more important aspects of the case.

Enter the new age, where expertise and historical knowledge of corporate IT infrastructure lie in the hands of a select few, who have now been elevated in importance due to recent changes in the law. New procedural rules and judicial decisions require parties to identify technical liaisons before formal discovery even commences. In most instances, either by interpretation or explicit direction from a rule, “identify” means not only for counsel’s personal reference but also requires that the person’s name (and perhaps testimony) be shared with adversaries.

The result is the blending of “legal support” and “witness” roles into one. Operating within this new framework, clients and counsel should find the internal resources that will provide IT support to litigation before litigation occurs. This proactive approach not only will afford more time for the task, but also will disclose and perhaps correct e-discovery vulnerabilities that could present far worse consequences if unearthed during a lawsuit.

Develop Reliable Resources

Consider the following examples:

Coleman Holdings v. Morgan Stanley & Co.: A $1.3 billion verdict was entered following substantial judicial sanctions arising from the inability of the investment firm to recognize substantial shortfalls in e-mail production when it represented that all responsive e-mails were produced. The court found that Morgan Stanley made misrepresentations in a court-ordered “Certificate of Compliance,” failed to properly account for “newly discovered” network backup tapes, failed to produce attachments to e-mails, and failed to properly perform electronic text searches when looking for responsive documents. The shortcomings of the IT liaison were clearly implicated, as the court noted that the manager assigned to oversee the discovery process was “placed on administrative leave” within months of providing the incorrect certification.

Zubulake v. UBS Warburg, 229 F.R.D. 422 (S.D.N.Y. 2004): In an employment discrimination suit made famous first for its groundbreaking decisional law, and later for the astonishing $29 million verdict for an individual plaintiff, the court imposed sanctions and admonished counsel and client by quoting the classic line from the movie Cool Hand Luke, “What we’ve got here is a failure to communicate.” The court spoke at length of the need for counsel to interface extensively with information technology personnel to “become fully familiar with her client’s … data retention architecture,” and emphasized that counsel and client’s failure to do so played a large role in the sanctions that ultimately led to the verdict. The court also cited another published decision where the failure of a party’s IT department to confer with counsel to preserve electronic data was labeled “a comedy of errors.” Kier v. Unum Provident Corp., 2003 U.S. Dist. LEXIS 14522 (S.D.N.Y. Aug 22, 2003).

These examples illustrate the importance of developing reliable resources to navigate the corporate infrastructure, as well as the risks associated with “going it alone” or, even worse, going with the wrong person. The same lesson is imparted by the changing rules, as federal and state rules of procedure require the identification of a contact person with extensive knowledge of IT systems to assist in coordinating discovery.

E-Discovery Liaison

Federal Rule of Civil Procedure 26 now requires parties to identify and resolve differences related to disclosure or discovery of electronically stored information (including format of production) in advance of the initial conference that results in a scheduling order. Many states have codified similar procedures within their rules, and some courts, such as the U.S. District Courts for the Districts of New Jersey and Delaware, go further by requiring parties to identify an “e-discovery liaison” to assist counsel in the preliminary stages leading up to the initial conference with the court.

Since the need to engage IT personnel is inevitable, counsel and client should embrace and manage the role before the next lawsuit arises. There are several observations likely to influence the selection and the role the liaison might play.

First, the liaison should be knowledgeable enough to present an inventory of the active corporate systems that store and manage all information, as well as obsolete (legacy) systems, backup and archive media for the time period that counsel deems relevant. In addition, there should be a discussion of network or system “settings” that affect storage and deletion of data, such as dated e-mails and attachments. The extent to which settings are changed, even if such changes increase costs, should be a dialogue with consideration of legal and other business concerns.

Second, some consideration should be given to the liaison’s effectiveness as a witness. As discovery focuses more on technology, a subject alien to many attorneys and judges, the quality and quantitative depth of the individual explaining such issues will influence the success rate of the litigation. It is worth noting here that a trend is developing where courts are suggesting that counsel be accompanied by IT professionals when meeting with adversaries and/or the court to resolve discovery disputes, even if the input from the professional is provided off the record, confidentially or in camera.

Finally, it is important to recognize that the creation of a reliable contact or network of contacts within the IT ranks is neither a distraction nor an added expense. If properly prepared and engaged, the IT litigation liaison is an investment in an enduring resource that is likely to yield substantial economic returns by reducing litigation costs and exposure. Even better, the institutionalization of electronic discovery resources and a litigation response plan will reap greater benefit with cases, as storage and processes are streamlined and data are reused (and already authenticated) when overlapping facts arise in separate suits. Perhaps the best benefit of all is that the company will be prepared, and its processes will be defensible.