A series of Principles Relating to the Discovery of Electronically Stored Information (“ESI”) were developed and codified in a standing order. These principles are intended to serve as supplemental procedural ediscovery guidelines for the parties in selected cases. Individual district court, magistrate, and bankruptcy judges in the Seventh Circuit have agreed to adopt the principles and implement them in selected cases during Phase I of the program, which runs through May 1, 2010.

Kenneth J. Winters, the Managing Director of the Sedona Conference®, and former Colorado Supreme Court Judge Rebecca Kourlis, the Executive Director of the Institute for Advancement of the American Legal System (“IAALS”) at the University of Denver, assisted in the development and review of these principles.

IAALS is developing questionnaires to assess the efficacy of the principles. The questionnaires will be completed by the judges and lawyers participating in Phase I of the program. The results of the IAALS’ questionnaires will be presented to the Seventh Circuit at its annual meeting in May, 2010. At that time, the program’s ediscovery principles will be reviewed and refined as needed. Phase II of the program is scheduled to proceed from June, 2010 through May, 2011. It is contemplated that in May, 2011, Phase II findings will be presented and the Seventh Circuit’s final ediscovery principles announced.

Among other things, the principles require in the event of a dispute during the meet and confer process, the appointment of an ediscovery liaison who should be prepared to participate in ediscovery dispute resolution. These principles also recognize that that Rule 26(b)(2)(C)’s proportionality principles should be applied when formulating a discovery plan; provide that sanctions can be imposed for the failure to cooperate and participate in good faith in the meet and confer process; identify categories of ESI, which are generally not discoverable in most cases; and provides that if a party intends to request the preservation or production of these categories of ESI, that such a request be discussed at the parties’ initial meet and confer session or as soon thereafter as practicable.

Some of the other noteworthy aspects of the Seventh Circuit’s principles include:

• Acknowledging Fed. R. Civ. P. 1’s forgotten role in ediscovery by providing the purpose of these principles is to assist courts in the administration of the Rule’s requirement of securing “the just, speedy, and inexpensive determination of every action and proceeding.”
• Recognizing that an attorney’s ethical duty of zealous representation is not compromised by conducting discovery in a cooperative manner.
• Specifying that Rule 26(b)(2)(C)’s proportionality standard should be applied when formulating a discovery plan, meaning that requests for production and responses thereto “should be reasonably targeted, clear and as specific as practicable.”
• Noting that ESI disputes will be resolved more efficiently if before the initial conference with opposing counsel, the attorneys for each party review and understand how their client’s data is stored and retrieved in order to determine what issues must be addressed during their initial meet and confer discussions.
• Authorizing a court to require additional discussions prior to the commencement of discovery and/or to impose sanctions where appropriate on any party or counsel that fails to cooperate and participate in good faith in the meet and confer process.
• Requiring in the event of a dispute concerning the preservation or production of ESI, the designation of an ediscovery liaison for the purposes of meeting, conferring, and attending court hearings.
• Providing the ediscovery liaison may be an in-house or outside counsel, a third-party consultant, or an employee of a party.
• Specifying the ediscovery liaison must be prepared to participate in ediscovery dispute resolution; know the parties’ ediscovery efforts; and have access to those who are familiar with the parties’ electronic systems and capabilities in order to explain those systems and answer relevant questions. The ediscovery liaison must also have reasonable access to those who are knowledgeable about technical aspects of ediscovery.
• Providing that vague and overly broad preservation orders should not be sought or entered and noting that the information sought to be preserved through a preservation letter or court order should be reasonable in scope and mindful of Rule 26(b)(2)(C)’s proportionality factors.
• Explaining that if the recipient of a preservation letter chooses to respond, the response should provide useful information regarding the preservation efforts undertaken by the responding party. Examples of useful and specific information for such a response include the information a responding party is willing to preserve, the steps taken in response to any preservation letter, any disagreements with the preservation request, and any further preservation issues that were not raised.
• Mandating that every party and its counsel are responsible for taking reasonable and proportionate steps to preserve relevant and discoverable ESI within its possession, custody, and control.
• Recognizing that discovery concerning another party’s preservation and collection efforts may be appropriate, but noting that if used inadvisably, can cause unnecessary expense, delay, and may unnecessarily implicate work product and attorney-client privilege. Requires that prior to initiating such discovery, the parties are expected to meet and confer concerning its need and the suitability of alternative means for obtaining that information. Acknowledges this requirement does not preclude deponents addressing the merits of the case from answering questions concerning the steps taken to preserve and collect ESI.
• Specifying that certain categories of ESI are considered generally “not discoverable” in most cases and requiring a party that intends to request the preservation of production of those categories of ESI, discuss that discovery request at the parties’ initial meet and confer session, or as soon as practical thereafter.
• Identifying categories of ESI that are generally not discoverable to include: (a) deleted, fragmented, unallocated data, or data found in the slack space of computer hard drives; (b) random access memory (RAM) or other ephemeral data; (c) temporary internet files, history, cache, cookies, and other forms of on-line access data; (d) data in metadata fields that are frequently updated automatically such as last-open dates; (e) backup data that is substantially duplicative of data that is more accessible elsewhere; and (f) other forms of ESI whose preservation requires extraordinary affirmative measures that are not utilized in the ordinary course of business.
• Requiring in the event of a dispute concerning the scope of a party’s preservation efforts that counsel meet and confer and fully explain their reasons for believing that additional efforts are not reasonable or appropriate.
• Encouraging parties, at their initial Rule 26(f) conference, to discuss ways to eliminate duplicative ESI, including horizontal or vertical deduplication, the filtering of data by date ranges, file types, custodians as well as the use of search terms, keyword searching, concept clustering, or other advanced methodologies.
• Providing that ESI or other tangible or hard copy documents, which are not text searchable, need not be made text searchable when produced.
• Recognizing the requesting party is responsible for the incremental cost of creating its copy of any requested information.
• Encouraging parties to discuss cost sharing for optical character recognition (OCR) or other upgrades of paper documents or other forms of non-text-searchable ESI.
• Noting that ESI stored in a database or a database management system can be produced by querying the database for discoverable information resulting in a report or a reasonably useable exportable electronic file for review by the requesting party or its counsel.

Several years ago, in an article to the members of the Illinois Association of Defense Trial Counsel, I wrote that if left unchecked, the cost of electronic discovery will prove to be the biggest single threat to our civil jury trial system. Only time will tell whether these steps will fulfill their purpose of streamlining ediscovery and reducing the cost of federal-court litigation or whether a more “radical” step such as some form of mandatory cost as under the Texas rules will be required.

Pilot photo courtesy of Flickr user UNC – CFC – USFK under this Creative Commons license.

We have attached our slide below, and if you click on the image, it will enlarge for your ease of reference. Admittedly, not every email system will have all of the various features shown on our slide, and there can be other repositories in some systems that we did not include, but our slide does provide a fairly comprehensive overview of the various “nooks and crannies” where emails can be found.

While it is not as complex as a map of New Orleans, our slide shows that the world wide web is not exactly an information superhighway. Rather, it’s more like a medieval European city where you can easily get lost if you can’t read the signs or know where you are going. Hopefully our slide will prevent you from getting lost, and will help you find what you are looking for.

[Click image to enlarge]

If you want to use this slide for any reason, just drop Steve or Evan a note.

This is another case dealing with lawyers who are practicing the ancient art of steganography through steganographic discovery responses. Hubbell involved the production of 405,367 pages of documents in an electronic format that were “loosely organized” in 202 unlabeled files with no corresponding index. After the defendant objected to the production, plaintiff asserted that the electronic documents were produced as they were kept in the “usual course of business.”

Rule 34’s Mandate
Under Rule 34(b)(2)(E)(i), a party can produce documents either “as they are kept in the usual course of business or must organize and label them to correspond to the categories in [a] production request.” Hubbell addresses what information a producing party must provide to justify its production of electronic documents as they are kept in the usual course of business.

Demonstrating How Documents are Kept in the Usual Course of Business
The district court in Hubbell, noted that a party who chooses to produce electronic documents as they are kept in the usual course of business “bears the burden of demonstrating that the documents made available were, in fact, produced consistent with that mandate.” To meet that burden, a party must do more than merely represent to the court that the data has been produced as it is ordinarily maintained. Hubbell noted that an attorney’s statement to that effect falls woefully short of meeting a party’s burden.

The court rejected plaintiff’s argument that Rule 34(b)(2) imposes no duty to provide information that reveals how a party’s records are maintained in the usual course of business. Rather, the court found “the overwhelming weight of authority counsels that more in the way of organization is required in order to make the document production meaningful, and thus, proper.” The district court in Hubbell recognized that with the “increased used of digitalized information and litigation support software, large quantities of documents can be rendered both manageable and text searchable” and, as a result, less organizational information may be required than what has historically been the case. However, the fact that the electronic data being produced may be text searchable does not mean that a producing party can dodge Rule 34’s organizational requirements.

The court also explained that “while some measure of explanation regarding the documents produced is required,” neither Rule 34(b)(2) itself nor the cases it surveyed “reveal any bright line guidance concerning the level of detail [that should be provided] when a producing party has opted to produce [electronic] documents as they are ordinarily maintained.”  It concluded that at least “some modicum of information regarding how [the electronic documents] are ordinarily kept” must be submitted in order to allow the party receiving the electronic documents to make meaningful use of them. Thus, the court ordered plaintiff to provide an index of the documents produced which reveals “the custodian, location and a general description of the filing system under which each document was maintained in the ordinary course of plaintiff’s business” and further, “an indication of whether the document is kept in digital format, hard copy or both.”

“Take Aways”
The Advisory Committee Notes to the 1980 Amendment to Rule 34 discussed steganography without calling it that when it recognized “parties deliberately mix critical documents with others in the hope of obscuring [their] significance.” Given the increased volume of electronic data now being produced, courts are actively attempting to discourage this practice and Hubbell reflects how one court addressed a steganographic discovery response. So spend a few minutes reading Hubbell. Also recognize that if the electronic data you are producing is not text searchable, more information, not less, may have to be provided with your production response than what the court in Hubbell required.

Whenever possible avoid de artificio sine secreti latentis suspicione scribendi which, unless you happen to be fluent in Italian or remember your high school Latin, is probably as meaningful or useful to you as the production of electronic data is to your opponent without the index of information that Hubbell requires. There are free translation services available on the web like BabelFish that may help you understand the meaning of the phrase included above. That is essentially what Hubbell requires whenever electronic data produced as it is maintained in the usual course of business.

Did you know that the art and science of hiding messages or information within other forms of data is called is called steganography. Wikipedia describes it as “a form of security through obscurity.” In today’s digital world, it includes the concealment of electronic information within other computer files.

Many lawyers practice steganography without knowing its name. Frequently they attempt to bury critical or key documents in a voluminous document production in response to an opponent’s discovery requests. The potential for this type of “gamesmanship” has grown with the advent of ediscovery. Collins addressed and rejected several arguments commonly used to justify this type of steganographic discovery response. The Collins decision was written by District Judge Shira Scheindlin who authored the Zubulake decisions which addressed litigation-hold requirements. So on several different levels, the decision merits your attention.

Collins involved a securities fraud case brought by the SEC. One of the defendants issued a Request for Production of Documents which contained twenty-five requests for documents that supported specific factual allegations in the complaint. In response, the SEC produced 1.7 million documents (10.6 million pages) in 36 Concordance databases, many of which used different metadata protocols. While the SEC provided the location within those databases of documents identified in its complaint, it otherwise made no attempt to identify which documents in those various databases responded to the various paragraphs of the defendant’s production request even though its attorneys had organized documents into 175 electronic file folders which purportedly correlated to the specific factual allegations of its complaint.

The defendant challenged the SEC’s discovery response as an “impermissible document dump” that buried relevant information. The SEC offered two reasons justifying it discovery response. It argued that the compilation of documents into file folders was attorney work product and that its production would reveal the mental impressions, conclusions and legal theories of its counsel. The SEC contended that the defendant could electronically search the databases it produced and find substantially the same set of documents compiled by its attorneys in their attorney’s electronic file folders without impinging on the thought process of its attorneys. The SEC also claimed that its production comported with the manner in which its documents were maintained in the usual course of business, and thus complied with Fed. R. Civ. P 34′s mandate.

The district court initially noted that the selection and compilation of documents may fall within the protection afforded by attorney work product, but explained that it is a “‘narrow exception’ aimed at preventing requests with ‘the precise goal of learning what the opposing attorney’s thinking or strategy may be.’” It noted that several decisions had found a compilation of documents subject to work-product protection where they were compiled to assist witnesses and focused on an attorney’s thought processes concerning witness preparation and strategy rather than on the broader facts of the case. The court explained that “core” work product typically involves “legal documents drafted by an attorney-her mental impressions, conclusions, opinions and legal theories.” It then concluded that the “selection of documents according to facts alleged in a pleading does not elevate the compilation to core work product” and that ” producing the compilations of documents that support the factual allegations of a complaint reveals no more than that already revealed by the filing of the complaint.”

The court then responded to the notion that the SEC’s compilation constituted work product because it “was prepared in anticipation of litigation.” Under Rule 26(b)(3), ordinarily a party cannot obtain its opponent’s work product absent a showing that “it has a substantial need for the materials” and “cannot, without undue hardship obtain their substantial equivalent by other means.” The court concluded that the “need for the material” was obvious and that the defendant had demonstrated a “substantial need for the material” as required under Rule 26(b)(3). It then turned to the Rule’s requirement that the defendant cannot obtain the substantial equivalent to the materials in question by other means without “undue hardship.” In response to the SEC’s argument that the defendant could electronically search the databases it produced and obtain substantially the same information, the court noted that such an approach would not only result in significant expense and delay, but would also likely prove to be futile because “the inaccuracy of such searches is well known.” The court cited a study which found that Boolean searching only found 57% of known relevant documents and noted that an electronic search would be further compromised by the differing metadata protocols in the SEC’s Concordance databases. The court had little difficulty concluding that a page-by-page manual review of a document production of the size involved “constitutes ‘undue hardship’ by any definition.” The court also felt that it was “patently inequitable” to require the defendant to search a voluminous set of documents already identified by the plaintiff “as supporting the allegations of the complaint.” Thus, the electronic file folders prepared by the SEC’s counsel were not protected by work product.

Judge Scheindlin then turned to the SEC’s argument that it produced the records as they were kept in the ordinary course of business. Rule 34 requires that documents be produced as they are kept in the usual course of business or organized by the subjects of the production request. The court noted that Rule 34 is based on the assumption “that records kept in the usual course of business would not be maintained in a haphazard fashion” so that whatever method of production is chosen, “the production will be useful to the requesting party, and neither choice will inject unnecessary time and cost into the litigation.” Noting that the term “usual course of business” is neither defined in Rule 34 nor explained in the accompanying advisory committee notes, the court concluded that Fed. R. Evid. 803 (6) which employs the term “regularly conducted business activity” was instructive. The district court in Collins then concluded that Rule 34′s option to produce documents “as they are kept in the usual course of business” requires the producing party meet two tests:

First the option is available to commercial enterprises or entities that function in the manner of commercial enterprises. Second, this option may also apply to records resulting from ‘regularly conducted business activity.’ Where the producing party’s activities are ‘not routine andrepetitive’ such as to require a well-organized record-keeping system-in other words when the records do not result from an ‘ordinary course of business’-the party must produce the documents according to the sole remaining option under Rule 34: ‘orgainze[d] and label[ed] … to correspond to the categories in the request.

The court concluded that “the logic of Rule 34 supports this limitation” and that it was “reasonable to require litigants who do not create records in a ‘routine and repetitive’ manner to organize the records in a useable fashion before producing them.” Because conducting an investigation which in the court’s view was not routine or repetitive, the documents generated by that investigation could not fall within the scope to Rule 34′s usual course of business exception. Thus, the SEC could not produce the documents it collected in its investigation “in large disorderly databases” and was obligated to produce them to correspond to each paragraph of the defendant’s production request.

While the district court in Collins purportedly addressed “questions concerning the Government’s discovery obligations in civil litigation,” it is doubtful that the decision will be cabined to governmental entities. The issues addressed and the points raised in the court’s opinion are encountered in all varieties of civil litigation. Whether Judge Scheindlin’s Collins opinion ultimately garners the same type of wide-spread following as her Zubulake opinions remains to be seen. However, the opinion does raise several provocative arguments against steganographic discovery responses.