Today, more than 90 percent of all business-related documents are electronic
in nature. Records such as word processing files, spreadsheets, e-mails, calendars, voice mails and photographs are digitally created and stored on computer hard
drives, servers, backup tapes, hand-held
devices and even cell phones.
Electronic discovery, also called e-discovery, is the process in which these types
of electronic records are located, preserved and examined during the discovery
stage of litigation. New federal court rules
governing the discovery of electronically
stored information went into effect last
December, but many businesses remain
unprepared. Now more than ever, companies must develop and implement detailed
policies for the retention, preservation and
destruction of their electronic records.
Failure to do so needlessly exposes these
companies to greater risk in litigation.
“Long gone are the days that a party to a
lawsuit can just print electronic records
and produce the hard copies to the other
side,” says Matt Rechner, an associate in
the litigation department of McDonald
Hopkins LLC and the chair of the firm’s
Electronic Discovery Practice Group and
Response Team. “The reason for this is that
not all electronic data is visible to the computer user. Electronic discovery captures
that invisible data that does not appear by
simply clicking the ‘print’ key.”
Smart Business spoke with Rechner
about e-discovery and why it’s so important to the present and future of business.
What makes e-discovery unique?
‘Metadata’ is an example of one of those
e-discovery buzzwords that is getting more
and more attention these days. Metadata is
essentially ‘the data behind the data.’ It is
the information that describes how, when
and by whom a particular electronic document was created, accessed, deleted,
revised, modified and/or formatted. Some
metadata is viewable by a computer user,
while other metadata is hidden or embedded. However, whether visible or invisible,
courts are now requiring parties to preserve — and, in some cases, produce this metadata in the course of e-discovery.
Companies, as well as their attorneys, must
be cognizant of the existence and content
of any underlying metadata when engaging
in e-discovery.
What’s important to consider in e-discovery?
Effective Dec. 1, 2006, the Federal Rules
of Civil Procedure were amended to govern how parties conduct e-discovery in federal litigation. Among other things, these
amended rules now direct parties to discuss and establish procedures for e-discovery early on in every lawsuit. Moreover, the
rules outline a party’s data preservation
and production obligations and provide for
possible sanctions if relevant data is
improperly deleted or destroyed. While
some businesses have prepared for these
rules, many still have not. Organizations
unprepared for these amended rules
expose themselves to greater risks in litigation but can avoid future costly mistakes
with relatively simple steps.
What problems are businesses facing?
In light of the amended federal rules and
with more and more state courts enacting
their own e-discovery rules, companies must rethink how they approach litigation.
If electronic data is potentially relevant to
an ongoing or anticipated lawsuit, proper
steps must be taken as soon as possible to
prevent the destruction of this data or the
company could be exposed to spoliation of
evidence claims.
Unfortunately, electronic data is particularly susceptible to spoliation due to the inherent and necessary characteristics of a computer’s operating system. For instance, when
data is tagged by a computer user for deletion, the operating system does not permanently erase the data. It simply ignores the
data. The data is moved and rendered ‘invisible’ to the operating system, but it remains
resident on the computer’s hard drive. When
the computer user later needs to save new
data in order to perform a function, the operating system will randomly overwrite this
‘invisible’ data that had been designated for
deletion. If this ‘deleted’ data turns out to be
potentially relevant to a lawsuit, a company
must take proper care to prevent the overwriting of that data.
How can companies prepare themselves?
Because of the unique nature of e-discovery, companies must establish, implement
and enforce formal data retention and
destruction policies for their electronic
data. These policies will reduce the volume
of retained data by clearly defining what
should be kept and what should be
destroyed. An organization’s data retention
and destruction policies must also include
protocols for the initiation of ‘litigation
holds.’ When a lawsuit is reasonably anticipated, companies are obligated to suspend
their routine retention and destruction
policies in order to prevent the destruction
of potentially relevant data. Lastly, companies should designate a point person or
response team to coordinate their internal
electronic discovery procedures.
MATT RECHNER is an associate in the litigation department of
McDonald Hopkins LLC and the chair of the firm’s Electronic
Discovery Practice Group and Response Team. Reach him at
(216) 348-5826 or [email protected].
