The Fortiva Blog

Qualcomm and Beyond: More Lawyers Sanctioned for e-Discovery Misconduct (Part 3 of a 3)

2008-09-02T09:33:42-05:00

In my previous posts I discussed two cases where lawyers were sanctioned for e-discovery misconduct and reviewed in detail some of legal counsel’s e-discovery obligations. Here are 2 more cases, each one representing another of counsel’s duties when it comes to e-discovery.

Duty to Advise Client of Preservation Duty & Consequences and Duty to Advise with Specificity

In Samsung Electronics Co., Ltd. v. Rambus, Inc. 2006, it was found that general admonitions by counsel to preserve relevant documents was insufficient and counsel should have instructed on the subject matter and kinds of documents to preserve. In its findings, the court discussed the duty of counsel to assure retention of documents relevant to litigation, and criticized counsel with respect to advice given regarding document preservation.

Duty to Supervise

In Cardenas v. Dorel Juvenile Group, Inc., 2006, the court granted monetary sanctions and emphasized counsel’s duty to adequately supervise the e-discovery process. "Trial counsel have a duty to exercise some degree of oversight over their clients' employees to ensure that they are acting competently, diligently, and ethically. This includes identifying the persons responsible for the matters that are the subject of the document requests; identifying all employees likely to have been authors, recipients or custodians of documents falling within the request; and reviewing all documents received from the client to see whether they indicate the existence of other documents not previously retrieved or produced.”

While this is by no means an exhaustive list of counsel’s obligations when it comes to e-discovery, the implications are clear; it is now considered the professional, personal, and ethical responsibility of lawyers to ensure that e-Discovery is done, and that it is done right.

It follows them, that legal counsel needs to be proactive when it comes to understanding, recommending, and implementing email archiving and e-discovery best practices for the organizations they represent.

Read more on the Qualcomm and Beyond series - Part 1 - Part 2 - Part 3 -

Qualcomm and Beyond: Legal Counsel’s Duty to be Pro-Active (Part 2 of 3)

2008-08-14T14:42:55-05:00

Posted by Fortiva Blog Editor

If you think the Qualcomm case was an isolated incident with an unusually severe judge and ruling, think again. The list of cases where lawyers have been sanctioned for e-discovery misconduct is long and distinguished. Here is a good example.

The 2006 Phoenix Four Inc v. Strategic Resources Corp., decision indicates that counsel has a duty to be proactive regarding their client’s e-discovery. In this case, SRC Corp. had ceased operations and was evicted from its offices after the legal dispute had commenced. As a result, during discovery they claimed that there were no computers or electronic records to search.

Although counsel had discussed with the defendants the need to locate and gather paper and electronic documents, it was still found that counsel had “failed in its obligation to locate and timely produce the evidence stored in the server that the Defendants had taken with them.” The court held the attorney responsible for not asking about hidden partitions in his client’s servers, where it turns out, is where most of the evidence was later found.

According to the judge in this case, counsel's obligation is not confined to a request for documents; the duty is to be proactive and search for sources of information. The expectation was that counsel would undertake a more methodical survey of the Defendants’ sources of information, and not simply accept the defendants’ representation that, because it was no longer in operation, there were no computers or electronic collections to search.

The judges expectations did not end there, however. Counsel was also expected to have asked what had happened to the computers and whether information was stored on the server that the defendants had kept. And, in the absence of a satisfactory answer to that question, counsel would have been expected to direct that a technician examine the server. According to the court, this forensic effort is no different than questioning the information technology personnel of a live enterprise about how information is stored on the organization’s computer system, and is therefore considered part of counsel’s duty.

The court found counsel's "deficiencies here to constitute gross negligence" and awarded monetary sanctions against counsel and client.

Read more on the Qualcomm and Beyond series - Part 1 - Part 2 - Part 3 -

Qualcomm and Beyond: Understanding Legal Counsel’s e-Discovery Obligations (Part 1 of 3)

2008-07-30T08:41:12-05:00

Posted by Fortiva Blog Editor

In my previous blog series entitled “FRCP Case Law Review: Is Your Company Really Prepared?” I reviewed some recent case examples illustrating what all organizations, and IT departments in particular, should be aware of when it comes to e-discovery and FRCP compliance. In my research, I came across several cases where lawyers (not the organizations they represented) were sanctioned for e-discovery misconduct, indicating that in the eyes of the court, legal counsel has very definite e-discovery obligations.

This series of blog posts will explore some of these e-discovery obligations in light of recent cases where lawyers have been sanctioned for e-discovery misconduct.

In the well-known Qualcomm Inc. v. Broadcom Corp. ruling, the court found that Qualcomm’s attorneys assisted Qualcomm in committing “Monumental Discovery Violations” by:

intentionally hiding or recklessly ignoring relevant documents
ignoring numerous warning signs that Qualcomm’s document search was inadequate
blindly accepting Qualcomm’s unsupported assurances that its document search was adequate.

The significant ruling that followed definitely made the legal community sit up and take notice. The court sanctioned Qualcomm $8,568,633, ordered certain members of their in-house and outside Counsel to participate in a "Case Review and Enforcement of Discovery Obligations" Program, and referred six of Qualcomm’s outside counsel to the State Bar for possible ethics violations.

Pretty serious stuff! And to think, an email archiving solution could have made a huge difference in this, and many other cases, by providing a central, searchable, de-duplicated, repository of email data to use for the enforcement of litigation hold orders and the execution of legal discovery requests.

Clearly, legal counsel has a duty to ensure that their client conducts a comprehensive, appropriate document search. This begs the question: what other responsibilities lie in the hands of legal counsel when it comes to e-discovery? Stay tuned for my next blog post in which I will review several more recent cases that clearly answer that question.

Read more on the Qualcomm and Beyond series - Part 1 - Part 2 - Part 3 -

FRCP Case Law Review: More FRCP Requirements You Can’t Afford Not to Meet (Part 3 of 3)

2008-07-25T10:03:42-05:00

Posted by Fortiva Blog Editor

The final three case examples in today’s post complete my series on FRCP Case Law Review. Clearly, these examples reinforce the need for organizations to centrally archive all email, enforce policies and litigation holds, perform enterprise search and easily conduct early case assessment, all of which can be accomplished by implementing an effective email archiving solution such as Fortiva.

Complete Information Expected; Relying on End Users for Policy Enforcement is not Sufficient
Intel vs AMD (April 2007) - Ordered to search back-up tapes to find user-deleted email, resulting in millions of dollars in expenses In this case, Intel claimed that it put a clear retention policy in place once it learned of AMD’s legal intentions. Employees, however, didn’t always follow the instructions. Intel was compelled to search back-up tapes to produce past email messages. In April 2007, the Wall Street Journal reported that Intel “spent $3.3-million to process computer tapes to help recover missing emails and expects to spend ‘many millions of dollars’ in the effort.”

United Medical Supply v. United States (Sept. 8, 2006)- Sanctioned for allowing deletion of email by depending on employees to follow policy In this case, the government was sanctioned for allowing email to be deleted. There was no centralized email archive, so the government depended upon employees to follow policies for keeping email. A government attorney properly notified those involved to hold email according to the policy, however, some emails were still deleted. The court ultimately ordered the government to reimburse United Medical Supply for some of their discovery costs and barred them from cross-examining United Medical Supply’s expert witness on various aspects

Litigation Hold Must be Implemented and Enforced When Litigation is Expected
Doe v. Norwalk Community College (July 16, 2007) - Failure to conduct legal hold results in adverse jury instruction, legal fees awarded In this case, the court specifically cited the defendant’s failure to “put a litigation hold in place.” The court said that Doe was entitled to an adverse instruction to the jury regarding destroyed evidence. In addition, the court awarded some legal fees and the reimbursement of expert fees.

Read more on the FRCP Case Law Review series - Part 1 - Part 2 - Part 3 -

Four Best Practices to Make the Most of Stubbing (Part 2 of 2)

2008-07-23T14:21:49-05:00

Posted by Rick Dales, VP Product Management

In my last post, I introduced the concept of stubbing and listed some of its benefits and drawbacks. This post will look at four best practices that businesses should follow if they rely on stubbing in their organization.

1. If you can train users to search for older messages, don’t stub
One of the easiest ways to address storage management challenges is to impose mailbox quotas and provide users with access to search the archive (preferably directly within Outlook). You can reduce the end-user maintenance burden by applying automated cleanup rules on users’ mailboxes (particularly the sent and deleted items folders) with the tools included in Exchange (Mailbox Manager for 2003, Managed Folders for 2007). Many companies have found that imposing clear age limits on the data that lives in Exchange (i.e. only the last 90 days of mail is in the mailbox) makes it easy for end-users to understand what to look for where.

2. Only stub attachments, not messages
Stubbing messages has a significant impact on end-user experience. In general this means message the preview window in Outlook doesn’t work unless client-side software is deployed. From an Exchange server perspective, since most attachments aren’t single instanced (due to Office’s updates on metadata) you will get most of the storage benefit without materially impacting the number of objects in the database if you focus on stubbing attachments, but leave the message itself intact.

3. Apply consistent stubbing policies across users within the same mailbox database
As described above, if a message is delivered to multiple users in the same mailbox database, but you only stub for some of them you can actually increase storage requirements. While most tools allow you to specify stubbing rules on a per-mailbox basis, you should really consider re-organizing your mailboxes to assign policies within a given mailbox database if you need to.

4. Time stubbing processes to complete before a full backup starts
Most companies perform incremental backups on a nightly basis and full backups once per week. Incremental backups of an Exchange store take less time than full backups when a small proportion of the content has changed since the last backup (assuming that you use an Exchange store-aware agent). Since stubbing can result in significant changes, you can end up with incremental backups that take as long a full backup would. As a result, it is wise to plan your stubbing window to occur in the period between the last of the incremental backups and the start of your full backup window.

To Stub or Not to Stub (Part 1 of 2)

2008-07-17T10:03:36-05:00

Posted by Rick Dales, VP Product Management

In the world of email archiving, there is an ongoing argument about the value of stubbing, a process designed to help manage the storage in Exchange by replacing messages or attachments on an email server with a link to a copy of the file in an archive. I thought I’d weigh in on this topic, first by explaining the concept and looking at the pros and cons, and then (in a second post), providing a list of four best practices that businesses should follow if they’re relying on stubbing in their organization.

With the growth of email volume outpacing the reduction in total cost of storage ownership, it comes as no surprise that IT is struggling to manage Exchange storage. The real frustration for most Exchange administrators is that the vast majority of their storage is occupied with content that people almost never read. For performance and reliability reasons, Exchange is usually implemented on the most expensive of storage platforms making this usage pattern extremely expensive. Furthermore, as a transaction system, every piece of data is open for modification. This means that every piece of data needs to be backed up on a regular basis.

Introducing Stubbing – How it works
All of these factors have led IT to investigate archiving as a means to address their storage challenges. The idea is simple – focus the Exchange server on the delivery and management of current mail, and push the older mail to another repository that can be managed on less expensive infrastructure. That repository can then use archival storage management processes that allow for incremental backup of only newly added information, rather than the entire set.

Moving the data to another location (the archive) benefits IT; however, training users to change their behavior and look for this information in a new application (often with unique user interfaces and workflows) is often too cumbersome for broad adoption. To address these concerns, archiving vendors introduced features known as stubbing or shortcutting. This involves replacing the messages or attachments in users’ mailboxes with a pointer to the copy in the archive. From an end-user’s perspective, the email data is still accessible from Outlook, and yet they don’t run into their mailbox quota less often.

Stubbing Drawbacks
Stubbing isn’t without its drawbacks, however. To understand the impact on storage, you need a solid understanding of Exchange’s single instance storage model. When a message is delivered to multiple recipients within the same mailbox database (storage group), the message body and attachments are only stored once, and the message entry in each mailbox simply references the single copy of this data.

When a user modifies a message in their mailbox, Exchange creates a unique copy of the content and points the message in the user’s mailbox to that copy. As Exchange doesn’t provide any way to access the single-instance store of content, stubbing processes behave like end-user edits -- modifying messages on a mailbox by mailbox basis. If a message was sent to multiple recipients on the same mailbox database, but you only stub content for some of them, you actually increase not decrease storage by implementing stubbing. Furthermore, even though stubs may be small (typically <2K), as the stubbing process works through each mailbox, it is creating separate items in the single-instance store.

Since many elements of Exchange and data management processes are impacted by the number of entries in the tables, not just their total size, the unwinding of single-instance storage in Exchange can be problematic. As it happens, however, Microsoft Office has a habit of updating attachment metadata when a user views the item, which in most environments means that single-instance storage is pretty much non-existent within Exchange. The more of these changes that are made in Exchange between backups, the longer an incremental backup of the mail system will take.

Microsoft’s answer to the storage management problem is to change Exchange 2007 to support dramatically larger mailboxes and to change the way backup processes work so that managing these larger mailboxes databases becomes more practical. While most firms that I’ve talked to plan to increase mailbox sizes with their conversion to Exchange 2007, few are creating the 1GB mailboxes that Microsoft touts.

Conclusion
Clearly, stubbing is not the straightforward Exchange storage management solution that some vendors would have you believe. That having been said, when implemented properly, it can be a valuable tool to manage the growth of Exchange storage with minimal impact on end-user behavior. In my next post, I’ll talk about four best practices to make the most of stubbing in your organization.

FRCP Case Law Review: Is Your Company Really Prepared? (Part 2 of 3)

2008-07-15T12:44:44-05:00

Posted by Fortiva Blog Editor

In my previous post, I reviewed a couple of FRCP related cases that clearly illustrated the notion that under the FRCP, deadlines must be met and cost is not a valid excuse. Here are some more interesting e-discovery case summaries where the stipulations of the FRCP were upheld. These law suits could have easily been avoided had the defendants been proactive and implemented effective solutions that would allow them to perform searches and retrieve relevant electronic records in a timely manner.

Need to be Prepared to Produce any Emails, Regardless of Format
Peacock v. Merrill (Jan. 17, 2008). In this litigation, the defendants sought production of electronic tax information, and the plaintiff claimed the motion was moot, arguing she had already fully produced responsive documents. The defendants sought an exact replica of a floppy disk to determine if the plaintiff fully complied with the discovery request. Relying on FRCP 34(b)(i)-(iii), the court ordered production of disk files in native electronic format to ensure access to all metadata, determining that the date stamps of many of the documents were relevant.

Mere Assertion of Burden Insufficient to Relieve Production Duties
City of Seattle v. Prof’l Basketball Club (Feb. 25, 2008). In this dispute over performance of a lease agreement, the plaintiff filed a motion to compel the defendant to search and produce responsive e-mails from six of its eight members. Having produced 150,000 e-mails from two of the members, the defendant objected to this request, claiming the search would “increase the universe exponentially” and would generally produce irrelevant documents. Finding a principal-agent relationship between the defendant and its members, the court determined sufficient cause to demand the documents from its members as the defendant was in possession, custody or control of the e-mails at issue. The court, therefore, ordered the defendant to produce e-mail from the remaining four members at issue, finding the defendant’s claim of burden to be insufficient under Fed.R.Civ.Pro. 26(b)(2)(B).

Simon Prop. Group, Inc. v. Taubman Ctr., Inc., (Jan. 24, 2008). In this suit involving securities and tort claims, the defendant contested the enforcement of third-party subpoenas. The defendant argued that compliance with the subpoenas would be unduly burdensome and expensive since the search terms provided by the plaintiffs resulted in the identification of over 250,000 files. The defendant claimed it would take three full-time employees four weeks to determine the responsiveness of those documents. The plaintiffs offered to narrow the scope of the search by time period, search terms and perhaps even limit the number of servers to be searched. The court granted the plaintiffs’ motion to enforce the subpoenas, holding the requests were not unduly burdensome as discovery of electronic files are common place in business litigation.

Read more on the FRCP Case Law Review series - Part 1 - Part 2 - Part 3 -

SLAs a must for SaaS providers

2008-07-10T10:41:09-05:00

Posted by Chris Moores, Professional Services

Salesforce has often been cited as the pioneer for the Software-as-a-Service (SaaS) industry. We use Salesforce ourselves, and have been quite happy with this decision. However, I recently requested a copy of their Service Level Agreement (SLA) for service availability and was taken aback with the reaction I got from their customer support department. The responses I got ranged from “What’s an SLA?” to “Do you mean you want to know our support ticket resolution time?” to “In the 5 years I have been working here, I’ve never had anyone ask that question.”

It doesn’t seem like Salesforce has any SLAs, which I find very odd. This prompted me to run some online searches, and the results surprised me a bit – I didn’t realize that SLAs are far from prevalent among SaaS providers. I think this could be one reason why some IT departments are still quite skeptical about using SaaS applications.

As Craig had pointed out in a previous post, we constantly hear from customers that one of the things they love about outsourcing is that they no longer have to stress about uptime and performance. At Fortiva/Proofpoint, we not only take over the stress of managing all infrastructure and archiving application issues that may arise, we also strive for unsurpassed customer service and industry leading SLAs that few providers (both outsourced or on-premise) can match.

FRCP Case Law Review: What do the Courts Expect? (Part 1 of 3)

2008-07-08T13:54:10-05:00

Posted by Fortiva Blog Editor

Since the Federal Rules of Civil Procedure (FRCP) were amended in December, 2006, much has been published on this topic. Numerous studies and papers tackled topics from how companies were responding, to whether or not they were prepared, and even whether or not they understood the amendments and their implications.

While all these surveys, studies, articles and discussions were taking place, real cases, with real organizations were being tried in real courts – with real consequences. Over the last year and a half, a multitude of court opinions on electronic discovery have been issued. While these rulings vary in their impact, they all point to the fact that the FRCP is an undeniable reality for organizations right now. All organizations, and IT departments in particular, should be aware of what’s really expected by the courts and must be prepared to comply with the FRCP.

This blog series will review the most notable recent e-discovery cases, illustrating how the courts interpret and uphold the FRCP requirements, and the consequences they dole out for non-compliance.

Deadlines must be met; Cost is not a valid Excuse
Best Buy v. Developers Diversified Realty (February 1, 2007) - Ordered to produce information within 28 days, regardless of cost. In this case, the defendants (Diversified) argued that the emails and other electronic documents that were requested by Best Buy were not “reasonably accessible” (they existed only on archived, electronic backup tapes). Diversified cited a cost of $125,000 to recover the information. The judge did not accept the argument and ordered that the information be produced within 28 days, including IT time and legal preparation.

Williams v. Taser International (June 4, 2007) - Ordered to conduct specific searches and produce results in 30 days, regardless of cost. In this case, neither party could agree on what data should be produced for discovery. In an effort to move the case forward, the judge ruled that the defendant, Taser, must run twenty-one (21) specific searches to identify a collection of "presumptively responsive documents." Taser had thirty (30) days from entry of the Order to produce all such documents in a “searchable, electronic form”.

And this is just the tip of the iceberg. Stay tuned for more case reviews in my upcoming blogs.

Read more on the FRCP Case Law Review series - Part 1 - Part 2 - Part 3 -

Preparing for FRCP - Collection Retrieval (Part 5 of 5)

2008-07-02T08:59:44-05:00

Posted by Alan Armstrong, VP Business Development

My final article in the FRCP readiness series is about Collection, Search, and Retrieval – the most expensive, tedious, and time-consuming element of the legal discovery process. To paint some context, allow me to start with a story about Dave, an Assistant General Counsel at a Fortune 500 company.

Recently I was in a meeting with 20 people, including Dave, where this company was evaluating Fortiva against an in-house competitor. Fortiva was the underdog, as this in-house competitor is considered the leader in the space for companies who want to go through the hassle of managing their own email archive.

Dave was attending the meeting mostly out of obligation to review all the vendors being considered, but his underlying goal was to find a way to do better “Early Case Assessment”, to reduce the cost of collection and processing, and to just know, going in to a “meet and confer” meeting, what data can be discovered, and at what cost.

Until this moment in the meeting, Dave was fairly nonplussed with our discussion. His eyes were not glossing over exactly, but he definitely had not been enthused. We were in the middle of a product demonstration, when our SE began to show the Fortiva search capability. All of a sudden, there was a rustling of papers at Dave’s end of the room. Remember, there were 20 other people in this room, so I didn’t have eye contact with everyone. After a bit of mumbling back and forth, the project sponsor, Andy, interrupted: “I just want everyone to know what’s going on here … when Fortiva shows you this search capability, they are executing a search against their production database, not a demo system.”

It seems that Dave was flummoxed by the response time of the search.

This is not surprising: in many cases, it can take days (or even weeks) for Legal to retrieve the results of a search request, and the request must be executed by IT. As a result, Dave was shocked and stopped the meeting to clarify what had just happened. For him, real-time search in the hands of Legal rather than just IT was a game changer.

Let’s just say Fortiva won that account over the in-house competitor who could not offer a search performance guarantee. (We challenge our competitors to offer an SLA around search).

Dave’s reaction reveals a lot about the difficulties that Legal has in meeting its objectives. Knowing what kind of data the company has and being able to search and retrieve it can be very costly and time consuming. And because a “meet and confer” must occur within 99 days of filing, counsel must know what data exists, where it exists and the cost and timeframe of retrieval. Dave and others in his situation have told me that it is quite common for legal to be unsure about what it can deliver and at what cost. This can result in over-promising and under-delivering, not to mention the possibility for fines and “negative inferences”. The search technology we showed him was exciting precisely because it would enable Dave to know what he has and make a more informed decision sooner.

Bottom line, here is some advice to prepare for e-Discovery:

Ensure you can identify sources of data and be prepared to start to collect, search and review relevant email data when notice of suit first received
Invest in real-time search technology
Ensure data is easily searchable to perform early case assessment

Hope this helps.

Alan

Read more on the Preparing for FRCP series - Part 1 - Part 2 - Part 3 - Part 4 - Part 5