In an article in this journal two years ago, I offered the modest suggestion that “e-mail [was] emerging enormously in litigation.”1 In the two years since, courts have started to shape the evolving law, guiding parties and their counsel on their obligations to preserve, search for, produce and pay for e-mail discovery.2 By now, it should be clear to any litigator that e-mail and electronic discovery are important not only in the headline-grabbing “mega cases, ” but in virtually any present-day case. In view of the common and prevalent use of e-mail, even in small, closely-held businesses, the importance of e-mail discovery and evidence cannot be overlooked or underestimated. Indeed, the recent case law shows that neglecting the significance of email could have serious repercussions.
In an important decision on the type of diligent, good faith efforts that the courts expect from parties in retrieving relevant e-mail, the Second Circuit in Residential Funding Co. v. DeGeorge Financial, 306 F.3d 99 (2d Cir. 2002) issued a wake up call to parties and their attorneys faced with requests to produce e-mail. At the heart of the dispute in DeGeorge was the sufficiency of a party’s efforts to retrieve relevant and responsive e-mail from backup tapes. The Court gave clear notice that a party’s efforts to search for and retrieve e-mail, even from complicated backup tapes, would be placed under great scrutiny. Indeed, hiring an expert to identify and retrieve responsive e-mail was not deemed sufficient if the expert did not accomplish the task requested. Thus, the Second Circuit made clear that the obligation to take effective steps to retrieve and produce responsive e-mail is a serious one, a breach of which could result in grave repercussions to the violating party, including the imposition of adverse inferences.
Going even further than DeGeorge, the court in Metropolitan Opera Association, Inc. v. Local 100, 212 F.R.D. 178 (S.D.N.Y. 2003) imposed the most severe sanction against a violating party by entering judgment on the merits against it. In Metropolitan, counsel for the defendants admitted that “he had not specifically instructed [the defendants] not to delete computer files and that no retention procedure had been put in place.” Id. at 190. The court cited defendants’ failure to produce e-mails as an example of their willful and bad faith failure to abide by their discovery obligations, finding that there was no indication that the defendants’ computers were searched, and what little search they did perform “was only superficial” at best. Id. at 225. Moreover, the president of the defendant “admitted that he failed to save documents and deleted documents from his diskette right up until his discovery compliance deposition.” Id. Once again, the court’s lengthy and thorough decision gave clear warning that a party and its counsel have significant, continuing obligations to preserve and produce discovery, including electronic documents such as e-mail.
In the past two years, there have also been significant developments on the issue of who should pay the costs for searching, retrieving and producing electronic evidence, and principally e-mail. One of the leading cases is Rowe Entertainment v. William Morris Agency, 205 F.R.D. 421 (S.D.N.Y. 2002), aff’d., 202 W.L. 975713 (S.D.N.Y. May 9, 2002). In Rowe, defendants requested a protective order to relieve them from producing e-mail. They also contended that if they were forced to produce the e-mail, the plaintiff should bear the cost. After finding that the e-mail was relevant and discoverable, the court decided who must pay for the cost of such production. Recognizing that the normal presumption is that the responding party must bear the expense of complying with discovery requests, the court analyzed the circumstances under which this burden may be shifted to the requesting party. The court gleaned from the case law eight factors that should be considered:
- The specificity of the discovery requests;
- The likelihood of discovering critical information;
- The availability of such information from other sources;
- The purposes for which the responding party maintains the requested data;
- The relative benefit to the parties of obtaining the information;
- The total cost associated with production;
- The relative ability of each party to control costs and its incentive to do so; and
- The resources available to each party.
The Rowe factors were expanded and modified in the recent decision in Zubalake v. UBS Warburg,3 a case pending in the Southern District of New York before Judge Shira Scheindlin. Judge Scheindlin modified the list of factors articulated in Rowe “to meet the legitimate concern of those commentators who have argued that ‘the factors articulated in Rowe tend to favor the responding party, and frequently result in shifting the costs of electronic discovery to the requesting party.’” The court therefore devised the following factors that “should be considered, weighted more-or-less in the following order:”
- The extent to which the request is specifically tailored to discover relevant information;
- The availability of such information from other sources;
- The total cost of production, compared to the amount in controversy;
- The total cost of production, compared to the resources available to each party;
- The relative ability of each party to control costs and its incentive to do so;
- The importance of the issues at stake in the litigation; and
- The relative benefits to the parties of obtaining the information.
In a subsequent decision in the same case, the court rendered a lengthy opinion analyzing its own factors, finding that “the cost of restoring any backup tapes are allocated between [defendant] and [plaintiff] seventy-five percent and twenty-five percent, respectively. All other costs are to be borne exclusively by [defendant]. Notwithstanding this ruling, [defendant] can potentially impose a shift of all of its costs, attorneys fees included, by making an offer to the plaintiff under Rule 68.”
The cases show that where e-mail appears to be relevant in a case, specific discovery requests, rather than outdated boilerplate forms, should be used to obtain necessary, important information. Where appropriate, interrogatories should be served to learn information regarding a party’s record retention and destruction policies and procedures, including information concerning backup files and data on computer systems, the frequency of the backups, the type of backup, the software used, how electronic documents are maintained or destroyed and the identity of all employees responsible for the foregoing. If necessary and appropriate, depositions should be taken of a party’s management information systems (MIS), technology or computer managers to obtain details of the nature of the systems used and the practices and procedures for the use of e-mail, home computers, PDA’s, the printing of e-mails, and backup tapes.
Obviously, before serving such requests on an adversary, counsel must make sure that its own client’s house is in order, lest the same requests be copied and served against it. In addition to seeking discovery of e-mail and electronic documents from an opponent, therefore, litigators should counsel clients to preserve such evidence and take reasonable steps to locate and produce relevant matter. As the cases show, anything short of diligent, aggressive attention to these issues can result in extreme adverse consequences.
With the advent of this evolving law of email discovery, computer consultants and forensic experts are proliferating. In view of the DeGeorge decision, however, a litigant must be very careful in selecting consultants to ensure that they have the proper experience and knowledge in accomplishing the tasks required. Websites addressing email and electronic discovery are also cropping up by leaps and bounds. Two particularly useful and rather well-organized sites are www.krollontrack.com and www.applieddiscovery.com. These free sites contain comprehensive case summaries and useful forms for discovery requests, motions and preservation letters to clients and adversaries.
For those litigators who would have preferred to avoid the rising tides of email in their own lives, one thing is clear from the evolving law: Email is already very much a part of everyday litigation and is here to stay.