Case Blurb: World Trade Ctr Disaster; Court approves Technology Expert to design and maintain Discovery Database

The Special Masters have recommended that Technology Concepts & Design, Inc. (”TCDI”) be retained to build, maintain and operate a database, to store the Core Discovery that the parties have begun to produce, and will continue to produce, pursuant to my order dated November 27, 2007 (”Core Discovery Order”). I approve the recommendation.

The Core Discovery will create a substantial amount of information: insurance data from scores of contractors and subcontractors, and basic details concerning each plaintiff’s claim. Because of the volume of information that will be produced, and the intense time pressures governing production, it is imperative that a means be developed to process and organize the information on a consistent, reliable, and accessible basis. From this information, it should be possible to align plaintiffs readily with the particular defendants against whom they may have a basis to seek recovery, categorize plaintiffs according to their types and severity of injuries, eliminate various defendants from various cases, identify the sequence in which cases should be tried, group those cases with others that appear to be similarly situated, organize and understand the insurance that might relate to particular claims and, perhaps, not to others, and, not least, create paradigms that could lead to settlements.

[...]

There is no substitute for an independently created and managed database. Without a common core of reliable information, the approximately 10,000 cases that are before me will become increasingly difficult to manage. Disputes will proliferate, and progress will be slowed. Depositions and other discovery will become necessary, as each side tries to prove facts that their separate databases treat in different ways. The cases will take years longer to progress towards trial or resolution. Expenses to each side will rise in uncontainable ways, making present complaints insignificant. Meanwhile, individual plaintiffs will incur illnesses and some may die, blaming their heroism in the aftermath of 9/11 as the cause, and criticizing government and the courts for indifference and neglect with respect to their claims.

In re World Trade Ctr. Disaster Site Litig., 2008 WL 793578 (S.D.N.Y. Mar. 24, 200

Judge: 5th amendment extends to PGP Passphrase

Question: Is a PGP passphrase like a key to a filing cabinet, or is it more like an extension of the contents of your mind? Deciding the question determines whether or not a defendant can be compelled to reveal the passphrase. A Vermont Judge, U.S. Magistrate Judge Jerome Niedermeier, has made up his mind:

A federal judge in Vermont has ruled that prosecutors can’t force a criminal defendant accused of having illegal images on his hard drive to divulge his PGP (Pretty Good Privacy) passphrase.

U.S. Magistrate Judge Jerome Niedermeier ruled that a man charged with transporting child pornography on his laptop across the Canadian border has a Fifth Amendment right not to turn over the passphrase to prosecutors. The Fifth Amendment protects the right to avoid self-incrimination.

Niedermeier tossed out a grand jury’s subpoena that directed Sebastien Boucher to provide “any passwords” used with his Alienware laptop. “Compelling Boucher to enter the password forces him to produce evidence that could be used to incriminate him,” the judge wrote in an order dated November 29 that went unnoticed until this week. “Producing the password, as if it were a key to a locked container, forces Boucher to produce the contents of his laptop.”

Under the facts of the case, as reported in the article, it is hard to feel any sympathy for the defendant. Emotions aside, however, the issue has enormous implications for DA’s trying to collect evidence in a world that is ever more “virtual” in nature. More of our actions and deeds are recorded on some form of computer-based media than ever before. While I have personally decried the recent erosion of privacy rights, I have mixed feelings on this particular issue.

The ruling can be found here (pdf).
[HT: Slashdot]

Court Blurb; Member Servs. Inc.; Court discusses basic framework for discovery requests and associated objections

The boundaries of permissive discovery in a federal action, though appreciably diminished by virtue of changes implemented in December of 2000, remain broad; by rule “[p]arties may obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party . . . . For good cause the court may order discovery of any matter relevant to the subject matter involved in the action.” Fed. R. Civ. P. 26(b)(1). It is well-established that the rules pertaining to discovery, including its permissible scope, are to be broadly interpreted. See Inmates of Unit 14 v. Rebideau, 102 F.R.D. 122, 128 (N.D.N.Y. 1984). “‘[D]iscovery is to be considered relevant where there is any possibility that the information sought may be relevant to the subject matter of the action.’” Cox v. McClellan, 174 F.R.D. 32, 34 (W.D.N.Y. 1997) (quoting United States v. Int’l Bus. Mach. Corp., 66 F.R.D. 215, 218 (S.D.N.Y 1974)) (emphasis in original). Additionally, “[g]eneral and conclusory objections as to relevance, overbreadth, or burden are insufficient to exclude discovery of requested information.” See Melendez v. Greiner, No. 01 Civ. 07888, 2003 WL 22434101, at *1 (S.D.N.Y Oct. 23, 2003).

When a party seeks to compel discovery, it is that party which bears the initial burden of demonstrating relevance of the requested materials to a claim or defense in the case. See Zanowic v. Reno, No. 97 Civ. 5292, 2000 WL 1376251, at *5 (S.D.N.Y. Sept. 25, 2000). This notwithstanding, courts place a strict burden on a party resisting discovery, as “[a]n objection to a document request must clearly set forth the specifics of the objection and how that objection relates to the documents being demanded.” Obiajulu v. City of Rochester, Dep’t of Law, 166 F.R.D. 293, 295 (W.D.N.Y. 1996) (internal citations omitted). “‘The burden is on the party resisting discovery to clarify and explain precisely why its objections are proper given the broad and liberal construction of the discovery rules found in the Federal Rules of Civil Procedure.’” See Murray v. Palmer, No. 03-CV-1010, 2006 WL 2516485, at *1 (N.D.N.Y. Aug. 29, 2006) (quoting Obiajulu, 166 F.R.D. at 295).

The rules which govern discovery also provide that despite a showing of relevance, a court may nonetheless issue a protective order precluding or limiting discovery, upon a proper showing. Fed. R. Civ. P. 26(c); see Costa v. AFGO Mech. Servs., Inc., 137 F.R.D. 21, 26 (E.D.N.Y. 2006). The burden of establishing entitlement to such a protection rests with the party seeking to invoke the court’s powers to shield, preclude or limit what would otherwise be the discovery of relevant information. See Penn Group, LLC v. Slater, 2007 WL 2020099, at *13 (S.D.N.Y. June 13, 2007) (noting that as the “proponent of a protective order”, the movant bears the burden to demonstrate good cause for its proposed limitations on discovery); see also Costa, 237 F.R.D. at 26.

Member Servs., Inc. v. Security Mut. Life Ins., 2007 WL 2907520 (N.D.N.Y. October 03, 2007)

Case Blurb: Zubulake III; Presumptions and Standards for Cost-Shifting Arguments

Although “the presumption is that the responding party must bear the expense of complying with discovery requests,” requests that run afoul of the Rule 26(b)(2) proportionality test may subject the requesting party to protective orders under Rule 26(c), “including orders conditioning discovery on the requesting party’s payment of the costs of discovery.” A court will order such a cost-shifting protective order only upon motion of the responding party to a discovery request, and “for good cause shown.” Thus, the responding party has the burden of proof on a motion for cost-shifting. Zubulake v. UBS Warburg LLC, 216 F.R.D. 280, 283 (S.D.N.Y. 2003).

In Zubulake I, I considered plaintiff’s request for information contained only on backup tapes and determined that cost-shifting might be appropriate. It is worth emphasizing again that cost-shifting is potentially appropriate only when inaccessible data is sought. When a discovery request seeks accessible data-for example, active on-line or near-line data-it is typically inappropriate to consider cost-shifting. Id.

The seven factor test from Zubulake III was posted here.

Editor’s note: Although the Zubulake decisions were foundations for current e-discovery law, and are referred to more than ever, please keep in mind that they were made before the enactments of the new amendments to the FRCP. Although many of the interpretations laid out by Judge Schindlin in the Zubulake decisions were codified in these amendments, there may be some divergence. Further, statutes numbers may have changed (or they may not have). I encourage you to do your own due diligence with respect to any case blurbs posted on our site, but especially those made before the enactment of the amendments to the FRCP. Thanks.)

Case Blurb: Zubulake I, A Hierarchy of Accessibility based on storage media

Many courts have automatically assumed that an undue burden or expense may arise simply because electronic evidence is involved. This makes no sense. Electronic evidence is frequently cheaper and easier to produce than paper evidence because it can be searched automatically, key words can be run for privilege checks, and the production can be made in electronic form obviating the need for mass photocopying. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 318 (S.D.N.Y. 2003).

In fact, whether production of documents is unduly burdensome or expensive turns primarily on whether it is kept in an accessible or inaccessible format (a distinction that corresponds closely to the expense of production). In the world of paper documents, for example, a document is accessible if it is readily available in a usable format and reasonably indexed. Examples of inaccessible paper documents could include (a) documents in storage in a difficult to reach place; (b) documents converted to microfiche and not easily readable; or (c) documents kept haphazardly, with no indexing system, in quantities that make page-by-page searches impracticable. But in the world of electronic data, thanks to search engines, any data that is retained in a machine readable format is typically accessible. Id. (citations omitted).

Whether electronic data is accessible or inaccessible turns largely on the media on which it is stored. Five categories of data, listed in order from most accessible to least accessible, are described in the literature on electronic data storage:

1. Active, online data: “On-line storage is generally provided by magnetic disk. It is used in the very active stages of an electronic records [sic] life-when it is being created or received and processed, as well as when the access frequency is high and the required speed of access is very fast, i.e., milliseconds.” Id. (citations omitted).

2. Near-line data: “This typically consists of a robotic storage device (robotic library) that houses removable media, uses robotic arms to access the media, and uses multiple read/write devices to store and retrieve records. Access speeds can range from as low as milliseconds if the media is already in a read device, up to 10-30 seconds for optical disk technology, and between 20-120 seconds for sequentially searched media, such as magnetic tape.” Id. at 319 (citations omitted).

3. Offline storage/archives: “This is removable optical disk or magnetic tape media, which can be labeled and stored in a shelf or rack. Off-line storage of electronic records is traditionally used for making disaster copies of records and also for records considered ‘archival’ in that their likelihood of retrieval is minimal. Accessibility to off-line media involves manual intervention and is much slower than on-line or near-line storage. Access speed may be minutes, hours, or even days, depending on the access-effectiveness of the storage facility.” The principled difference between nearline data and offline data is that offline data lacks “the coordinated control of an intelligent disk subsystem,” and is, in the lingo, JBOD (“Just a Bunch Of Disks”). Id. (citations omitted).

4. Backup tapes: “A device, like a tape recorder, that reads data from and writes it onto a tape. Tape drives have data capacities of anywhere from a few hundred kilobytes to several gigabytes. Their transfer speeds also vary considerably … The disadvantage of tape drives is that they are sequential-access devices, which means that to read any particular block of data, you need to read all the preceding blocks.” As a result, “[t]he data on a backup tape are not organized for retrieval of individual documents or files [because] … the organization of the data mirrors the computer’s structure, not the human records management structure.” Backup tapes also typically employ some sort of data compression, permitting more data to be stored on each tape, but also making restoration more time-consuming and expensive, especially given the lack of uniform standard governing data compression. Id. (citations omitted).

5. Erased, fragmented or damaged data: “When a file is first created and saved, it is laid down on the [storage media] in contiguous clusters … As files are erased, their clusters are made available again as free space. Eventually, some newly created files become larger than the remaining contiguous free space. These files are then broken up and randomly placed throughout the disk.” Such broken-up files are said to be “fragmented,” and along with damaged and erased data can only be accessed after significant processing. Id. (citations omitted).

Case Blurb: Zubulake I; Initial considerations of cost-shifting

Courts must remember that cost-shifting may effectively end discovery, especially when private parties are engaged in litigation with large corporations. As large companies increasingly move to entirely paper-free environments, the frequent use of cost-shifting will have the effect of crippling discovery in discrimination and retaliation cases. This will both undermine the “strong public policy favor[ing] resolving disputes on their merits,” and may ultimately deter the filing of potentially meritorious claims. Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, 317-18 (S.D.N.Y. 2003) (quoting Pecarsky v. Galaxiworld.com, Inc., 249 F.3d 167, 172 (2d Cir.2001)).

Thus, cost-shifting should be considered only when electronic discovery imposes an “undue burden or expense” on the responding party. The burden or expense of discovery is, in turn, “undue” when it “outweighs its likely benefit, taking into account the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the litigation, and the importance of the proposed discovery in resolving the issues.” Id. (citations omitted).

E-Discovery Pitfalls: The tale of the missing attachments

Today Post Process introduces a new series of posts, called “E-Discovery Pitfalls,” that will describe cases in which the e-discovery process went wrong. Today’s installment discusses a case of missing attachments, and the matter is PSEG Power New York, Inc. v. Alberici Constructors, Inc., Slip Copy 1:05-cv-00657-DNH-RFT (N.D.N.Y., Sept. 7, 2007) [pdf file]. A summary can be viewed here.

Law.com has an article which can quickly bring us to the crux:

PSEG Power New York Inc., turned over more than 3,000 e-mails and 211,000 pages of documents to a legal adversary, but a magistrate judge has found that the company still failed to comply with a discovery request.

Magistrate Judge Randolph F. Treece directed PSEG to try again to produce the materials in a coherent form as requested by Alberici Constructors Inc., its adversary in a suit in the Northern District of New York. PSEG must do so at its own expense, despite a plea from the energy company to shift some of the e-discovery costs to Alberici.

The opinion in this large construction-based action opens with the magistrate expressing his understanding of the difficulties posed in this case by electronic discovery:

For nearly six months, the parties and the Court have been grappling with an electronic discovery monstrosity with the hope that it could be corralled and definitively resolved, thereby obviating the need for motion practice. Alas, attempts to resolve the issue in lieu of briefs fell woefully beyond the parties’ grasp and, as the last straw, they have set the matter at our feet for appropriate resolution.

PSEG responded to Alberici’s first document request by producing, over a period of six months, 211,000 pages of hard copy, which Alberici then converted to electronic format (TIF images), and loaded into a litigation database at its own expense. PSEG also produced a disc of e-mails. Alberici had also produced a large amount of document to PSEG. At this point, all is straightforward. PSEG and Alberici each produced their own documents, at their own expense. Each paid for post-production conversion of the other party’s documents as well. Here’s where the tale goes astray. Judge Treece describes the problem:

In January 2007, it became evident to Alberici that PSEG had produced emails without the attachments which were referenced as being a part of the emails. Apparently a technical glitch occurred whereby numerous emails were “divorced” from their attachments caused by limitations in the downloading software. Dkt. No. 51 at p. 1, Ex. F, Pl.’s Lt., dated Feb. 20, 2007. The separation of the emails from the attachments happened at the interface between the different software used by PSEG and the vendor when reducing the documents in a form that could be reviewed by counsel. Id. It appears that the “vendor’s software was not compatible with the HTML format in which PSEG had provided its documents and that this incompatibility had resulted in the parent child link between the emails and attachments being broken.”

We’ve lost the connection between our e-mail messages and their attachments. This means that in responding to discovery requests by Alberici, PSEG failed to produce relevant material. The good news is that the required data exists, and this isn’t a case of evidence destruction. The bad news is that quite a bit of technical expertise will now have to be put to use in order to either 1) re-process the e-mails in a manner that preserves the connection to attachments; or 2) use the existing evidence to (in the court’s words) “re-marry” the two.

Judge Treece tells us what the parties did upon discovering the problem:

Throughout this ordeal, the raw data was not lost. All 750 gigabytes of unfiltered data remained intact in its original format. Dkt. Nos. 54, n.5; 57 at p. 4. Realizing that the underlying data still existed, the next proposal included PSEG sharing with Alberici’s vendor a sample of the metadata for analysis. However, the dearth of metadata related to the emails and attachments rendered this proposal fruitless. Id. In the interim, the parties’ vendors explored other ways to reverse engineer the available data and “re-marry” the attachments to their emails. This exploration was for naught inasmuch as the data necessary to complete this task was destroyed during PSEG’s collection and formatting of the emails. Id.

So, although the “raw data” is still intact, the data resulting from downstream processing is in such a state so as to render the re-connecting of parent email to child attachment impossible. At this stage, I’d like to point out something very important. Changes to data have occurred in the EDD processing (or loading, or ingestion, or whatever you want to call it) phase, rendering that data unuseable for the task at hand. However, there is a reservoir of “raw data” available because of (what one supposes is) correctly collected data. This illustrates the vital importance of a defensible collection process. The opinion here gives no description of how data was collected, because the collection isn’t being challenged. Nevertheless, without that defensible process in place, there would be no acceptable “raw data” reservoir as backup, and the issue might not be late production of attachments in an appropriate form, but destruction of data, a much more serious affair.

After the parties’ attempts to collaborate on solving the problem of the missing attachments failed to produce an accord, the magistrate got involved:

[T]he issues are several-fold: (1) is Alberici entitled to receive the emails with the related attachments together as opposed to their current state of separation, lacking coordinated identification with each other; (2) although PSEG has provided these emails and attachments in hard copy albeit not “married,” is PSEG obligated to provide these documents in their original format; and (3) if re-production is required, which party bears the cost of this production?

Alberici felt as if the e-mails and attachments should be connected in some easily identifiable way. PSEG argued that Alberici “is impermissibly seeking a “perfect” or “ideal” production, regardless of expense or benefit.” Furthermore, “[s]uch a re-do effort would be duplicative and entirely unnecessary in its view.”

PSEG offered its own alternative to solving the problem:

PSEG wants Alberici to identify a concise group of attachments that are important and necessary to Alberici and then it would consider producing said attachments, however, reserving its right to assert that it may be irrelevant or non-responsive or privileged. Dkt. No. 54 at p. 4. Or, if Alberici insists on a re-production, PSEG is willing to provide them but at Alberici’s expense. Id.

So…we’ve already produced the stuff, although not in an optimum state. If you want it produced yet again, you pay for it. How did that go over with his honor? He started off by mentioning the changes to FRCP 34(b):

(ii) if a request does not specify the form or forms for producing electronically stored information, a responding party must produce the information in a form or forms in which it is ordinarily maintained or in a form or forms that are reasonably usable; and (iii) a party need not produce the same electronically stored information in more than one form.

Obviously, the commonsensical purpose of this mandate has always been to prevent massive dumping of documents, without form or direction, thereby
alleviating an incalculable burden upon the requesting party of searching for the proverbial needle in a haystack. In this respect, notwithstanding Rule 34(b)’s amendments, (ii) and (iii), PSEG would still have to produce business records as kept in the regular course of business or in such a manner that Alberici could readily find a necessary document or two. It has also been a seminal rule that the responding party would not have to satisfy the requesting party’s whim to have the documents produced in various forms.

The Judge then cuts to the chase:

Clearly these 3000 emails and related attachments were not produced in accordance with this mandate, and, as we now know have caused considerable consternation and agony for both parties, which the revised statute was attempting to avoid. Normally, one would expect that an email and its attachment would have been kept together in the regular course of business, and the production of said documents would have followed suit. Here, the difficulty has been that there was not sufficient identifying information to match attachments with their respective email. We accept Alberici’s proffer that it has spent considerable time employing different methodologies to unearth attachments to correspond with the emails it has found to be pertinent. Attempting to reunite these documents has been nothing short of a donnybrook for Alberici. It has been frustrated if not completely hamstrung in locating these documents. Compounding Alberici’s angst is the disadvantage it has been placed in preparing for depositions. In essence, the first production of emails and attachments has been ineffectual.

The judge then takes a shot at PSEG’s vendor:

We acknowledge that discovery production is rarely perfect or ideal, yet this discovery quagmire created by PSEG’s vendor falls woefully short of comporting with the spirit of Rule 34.

Ultimately the Judge decided that PSEG must take responsibility for the consequences of its own vendor’s misadventures, by denying the request for cost-shifting, and granting Alberici’s motion to compel.

In one project in which I worked, we noticed missing attachments for some e-mails, but not for others. This is different than what happened with PSEG, in that the attachments that the e-mail message indicating should be present didn’t exist. After quite a bit of investigation, we discovered an error in collection, which had been executed by the client’s own IT staff. Remote users (with laptops) would receive e-mails logged in over the web, but woudn’t actually download the attachments unless they requested the document (by clicking on it). So if they never viewed the attachment, it didn’t exist on their system, despite the e-mail’s indication that the attachment should be present. As a result, the data had to be collected yet again. Additionally, some rather extensive data manipulation had to be done to get the originally processed data and the re-collected data to match. Never was very pretty, but at least the issue was discovered before production.

Are back-up tapes inhererently inaccessible for purposes of e-discovery?

Data may be considered not reasonably accessible by reasons of hardware limitations. In general, litigation holds do not apply to inaccessible back-up tapes. Consolidated Aluminum Corp. v. Alcoa, Inc., 2006 WL 2583308, *2 (citing Zubulake IV, 220 F.R.D. at 218). Are all back up tapes inaccessible, by definition? The opinion in Alcoa stated that “accessible” back-up tapes should probably be included in any litigation hold. Id. From this perspective, then, back up tapes are not inherently inaccessible, but are merely presumptively so. What differentiates “accessible” back up tapes from tapes that are “inaccessible?” Active and frequent use of the tapes is apparently the key. Zubulake IV, 220 F.R.D. at 218 (stating that if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold.”). Another court ruled that:

[D]ata that is accessible is stored in a readily usable format that does [not?] need to be restored or otherwise manipulated to be usable. Conversely, data that is inaccessible is not readily useable and must be restored to an accessible state before the data is usable. Backup tapes are considered an inaccessible format, and, thus, shifting the costs of producing data from backup tapes may be considered.

Quinby v. WESTLB AG, No. 04Civ.7406(WHP)(HBP), 2006 WL 2597900, at *7 (S.D.N.Y. Sep. 5, 2006) (citing Zubulake v. UBS Warburg, LLC, 217 F.R.D. 309, 320 (S.D.N.Y.2003)).

Is moving potentially relevant data to backup sanctionable?

Is it appropriate to sanction a party who converts data which may be relevant to a litigation to an “inaccessible” format? Maybe.

Court declined to sanction a plaintiff for converting data from an accessible to an inaccessible format, because a party is free to preserve electronic evidence in any format it chooses, including inaccessible formats. Thus, preservation of data, even in an inaccessible form, will not result in spoliation b/c the responding party will be able to produce the electronic evidence by restoring it from an inaccessible format, albeit at a higher cost. Quinby v. WESTLB AG, 2006 WL 2597900 (S.D.N.Y 2006).

However, another court found that “permitting the downgrading of data to a less accessible form-which systematically hinders future discovery by making the recovery of the information more costly and burdensome-is a violation of the preservation obligation. Id. (quoting Treppel v. Biovail Corp., 233 F.R.D. 363, 372 n. 4 (S.D.N.Y. 2006).

Case Blurb: Residential Funding Corp.; Finding that party acted with gross negligence or in bad faith sufficient that missing evidence harmful to movant

The district court’s finding that party acted with gross negligence or in bad faith with respect to discovery obligations is ordinarily sufficient to support finding that missing or destroyed evidence would have been harmful to the party. Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d Cir. 2002).