An Update on Electronically Stored Information and Discovery in the Modern Era Introduction

Introduction

Technology has progressed significantly over the past twenty years, and the law has struggled to keep up. The legal landscape upon which disputes are litigated has changed along with how information is stored. In today’s legal world, parties are increasingly required to gather and disclose electronically stored information (otherwise known as “ESI”) when complying with discovery requests.

Despite civil procedure amendments seeking to clarify both the type and form of documentation that must be produced, such as Tennessee’s Rules 34 and 37, a lot of uncertainty exists regarding how to navigate this new electronic legal landscape. Recently, a federal court recognized a need for guidance and applied updated rules of civil procedure to try to provide some clarity.[1]

DR Distributors, LLC v. 21 Century Smoking, Inc.[2]

The adequate and timely production of ESI recently became the subject of a federal court’s focus in DR Distributors, LLC v. 21 Century Smoking, Inc. – a case involving a trademark dispute between two electronic cigarette companies. DR Distributors moved for sanctions against 21 Century for failure to timely produce ESI, for spoliation of ESI, and other alleged misdeeds in the context of “e-discovery.”[3] For purposes of this article, the underlying facts of the case are not as important as the court’s explanation of the standards, duties, and other requirements to comply with e-discovery obligations under the federal rules.

What is Required of Parties/Litigants When it Comes to ESI?

• First, litigants must be honest with counsel. For example, if a lawyer asks for all documentation in a client’s possession, it is not enough for the client to provide data stored on a computer if they know that relevant electronic information is stored elsewhere. Litigants must be forthcoming with counsel regardless of whether the lawyer fails to flesh out requested information, is ignorant of modern technology, or otherwise fails to follow up on other potential sources of information.[4] In short, while the lawyer is to help guide the client through the process, the burden of disclosure and production remains with the client.

• Second, a litigant must inform his or her lawyer(s) of how to access the information requested when it is clear that the lawyer does not know how to do so.[5]

• Third, a litigant must disclose and produce all electronically stored information that is relevant to the request. It is not enough that litigants hand over a large amount of information or documents that they subjectively believe are “final.”[6] It does not matter if undisclosed records are partial or incomplete. If they are relevant and responsive – a complete production includes both incomplete and partial documents

• Finally, a corporate litigant must produce ESI that is in the possession of its agents. If a person has acted for the company (even in a volunteer capacity) and has possession of relevant ESI, the litigant will be deemed to have possession, custody, and control over the ESI through the principles of agency.[7] It does not matter that the person with relevant ESI is arguably not an employee or member of the litigant’s company.

What is Required from Lawyers When it Comes to ESI?

Perfection is not the standard. Rather, courts require good faith and reasonableness. Part of complying with this requirement is keeping a working familiarity with e-discovery and developments in rules so that they are “reasonably competent” on ESI.

Lawyers must conduct a reasonable inquiry into the existence and location of relevant ESI. The reasonable inquiry requirement is aided by conducting an initial client interview that maintains a healthy skepticism about an explanation of the case. If a lawyer is concerned, he must take action to satisfy that concern. Lawyers must not ignore evidence or warning signs that make them question the adequacy of a client’s search for documents.[8]

Moreover, lawyers must speak to their clients about preserving relevant ESI, the existence of other custodians of relevant ESI, and the use of search terms to locate relevant ESI. They should not leave clients on their own to preserve and collect the information. A best practice in the e-discovery context is to send a written litigation hold and conduct a “custodian interview.”[9] The litigation hold should seek to preserve what a client reasonably ought to know is relevant. The custodian interview should include a discussion about relevant people, locations, types of ESI, and seek to understand a client’s ESI systems and storage.

Furthermore, lawyers should discuss whether a client may have relevant ESI on non-business accounts or locations – even the ones that clients believe are “personal.” Such discussions are important because the business world frequently overlaps or intersects with personal accounts.

Last, a lawyer must follow up with the client once a discovery problem arises or a client’s credibility about ESI production comes into question. Sole and blind reliance upon a client’s representations is not a “reasonable inquiry” if a lawyer suspects that a client is “less than candid.”

Conclusion

Meridian Law is a modern firm capable of litigating cases involving current technology and systems. Contact us if you have a case that may involve e-discovery. By involving Meridian early, we can ensure that the discovery process is navigated thoroughly and ethically, which can help avoid situations where the court may take an adverse action against you for failing to comply with the e-discovery rules like it did in DR Distributors.

If you have questions about the issues described in this article, or if you need assistance litigating a case involving ESI, please contact Meridian Law, PLLC at (615) 229-7499, info@meridian.law, or www.meridian.law. We are here to help you navigate today’s litigation and discovery processes.

Disclaimer: The information in this blog post (“post”) is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from Meridian Law, PLLC or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in or accessible through this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country, or other appropriate licensing jurisdiction.

[1] Tennessee courts generally look to federal decisions for guidance on how to apply the state’s rules of civil procedure, which are largely modeled after the federal rules. As such, federal decisions that explain applicable standards are helpful for lawyers and litigants when trying to understand their duties in discovery.

[2] 2021 WL 185082 (United States District Court N.D. Illinois, Western Division, No. 12 CV 50324).

[3] Discovery rules and requests related to ESI are also referred to as “e-discovery.”

[4] In DR Distributors, the client produced full copies of four computer hard drives, but he failed to inform his lawyers that scores of emails related to the case were stored on the web in cloud-based email accounts. Even though the lawyers in that case suspected additional ESI existed and chose to ignore those suspicions in reliance on the client’s assertions to the contrary, the failure to honestly inform the lawyers was a wrong that fell on the client.

[5] In DR Distributors, the litigant did not tell his lawyers that all they needed to do to obtain the requested web-based ESI was download them from a Yahoo server – an act that could have been completed with honesty and minimal instruction.

[6] In DR Distributors, the litigant only produced sales documents that it felt were the final versions, and it withheld documents that it believed were incomplete or contained “partial calculations.”

[7] In DR Distributors, the litigant disputed that a person with responsive ESI had a membership interest in the company, but the court determined that the person was a “volunteer agent” because he relayed information about a competitor to the company from a tradeshow in Las Vegas.

[8] Stated otherwise, it is not enough to eyeball a volume of documents or conclude that the client has produced more documents than his opponent.

[9] A written litigation hold should contain guidance on the identification and preservation of ESI, including instructions on disabling auto-deletion settings. Disabling auto-deletion settings will likely prevent spoliation, and the court in DR Distributors went so far as to say that “any competent counsel” will advise his clients to disable those settings. A custodian interview should document the lawyer’s efforts to identify and search accounts, emails, or other sources of relevant ESI that is in the control of the client’s agents.