Video on what to do if you receive a litigation hold
Video Description
Litigation holds go by a variety of names. They can be called data preservation demand letters, data preservation notices, lit holds - lit hold demands, or even legal hold notices. Whatever title is used they are a useful part of eDiscovery or electronic discovery in modern business disputes and are regularly sent to parties and non-parties that may have data relevant to the dispute.
In this video Board Certified expert Florida business attorney David Steinfeld explains what to do when you get one of these notices. He discusses how to react and respond and explains how your business can use data preservation plans to protect itself.
In this video Board Certified expert Florida business attorney David Steinfeld explains what to do when you get one of these notices. He discusses how to react and respond and explains how your business can use data preservation plans to protect itself.
Video transcript
Hello, I'm Dave Steinfeld the owner of the Law Office of David Steinfeld in Palm Beach Gardens and a Board Certified business litigation attorney here in Florida. The video you're about to watch is part two of a presentation I gave on electronic discovery and what businesses can do today to meet the challenges of this area tomorrow. This video will focus on the process of electronic discovery and specific steps that businesses can take today to alleviate the increasing costs of electronic discovery in the future or the possibility that a court may impose sanctions against that business. This video is not intended to provide legal advice but merely to educate you on the process of electronic discovery and what businesses can do today to properly manage their electronic data. For your specific and unique legal needs please contact me for a private consultation. My contact information is on my website at DavidSteinfeld.com. Thanks for watching.
How can a business prepare for e-Discovery
In the prior video we talked about what I do, why you should be listening to me on this, and where within a business dispute this electronic discovery resides. Now we're going to drill down on what is eDiscovery as we call it and what can businesses do now to prepare for the challenges that they're going to face in eDiscovery tomorrow. So what is eDiscovery. eDiscovery or electronic discovery is merely the process of gathering up electronically stored data and putting it into a sifting mechanism that can be some software that has algorithms built into it that can search information it can be any other mechanism for identifying of this raw mass of electronic data within that what is important and relevant and then producing it and giving it to the other side as well as receiving data from the other side and interpreting it and sifting it apart and breaking it apart.
The reason why electronic discovery is unique and different from the typical paper discovery in most cases is the volume of data. It's very very easy now for a business to send tens of thousands if not hundreds of thousands of emails within any given period of time. If you look back in your own Outlook files for the past year you'll probably be shocked at the number of emails that you have sent and received. All that information is being stored somewhere and if you're not managing the storage of the information it can quickly grow out of control there can be storage costs associated with it but equally so there is information that you'll want to get in a dispute from another side so you'll want to identify through this eDiscovery mechanism what specifically you want from them and in what format because when we used to produce a paper document and you'd say give me a copy of your contract in this particular dispute people would produce the paper. Now with electronic information and what we call ESI, electronically stored information, this data carries with it other information as well called meta data that is embedded beneath the data. It’s data about the data, who opened the document who saved it, who modified it, when did they modify it that may be relevant in some of these disputes. So eDiscovery is really just the process of essentially collecting and sifting through this data and producing it or getting it from another side. But why is it important to have some kind of a plan because if a business has no plan and has no way that it manages any this data, stores data, or deletes data it can expose itself to substantial sanctions and there are several important federal cases that have come out because this eDiscovery has existed in our federal court system since about 2006. It is brand new in Florida practice as of September 1st 2012. Therefore we do not as of the making of this presentation have any Florida specific case law that can guide our judges on eDiscovery. We will in the years to come but for now our courts have to look to federal courts and have to look to other parallel state courts for some guidance in evolving Florida law in this area.
The reason why electronic discovery is unique and different from the typical paper discovery in most cases is the volume of data. It's very very easy now for a business to send tens of thousands if not hundreds of thousands of emails within any given period of time. If you look back in your own Outlook files for the past year you'll probably be shocked at the number of emails that you have sent and received. All that information is being stored somewhere and if you're not managing the storage of the information it can quickly grow out of control there can be storage costs associated with it but equally so there is information that you'll want to get in a dispute from another side so you'll want to identify through this eDiscovery mechanism what specifically you want from them and in what format because when we used to produce a paper document and you'd say give me a copy of your contract in this particular dispute people would produce the paper. Now with electronic information and what we call ESI, electronically stored information, this data carries with it other information as well called meta data that is embedded beneath the data. It’s data about the data, who opened the document who saved it, who modified it, when did they modify it that may be relevant in some of these disputes. So eDiscovery is really just the process of essentially collecting and sifting through this data and producing it or getting it from another side. But why is it important to have some kind of a plan because if a business has no plan and has no way that it manages any this data, stores data, or deletes data it can expose itself to substantial sanctions and there are several important federal cases that have come out because this eDiscovery has existed in our federal court system since about 2006. It is brand new in Florida practice as of September 1st 2012. Therefore we do not as of the making of this presentation have any Florida specific case law that can guide our judges on eDiscovery. We will in the years to come but for now our courts have to look to federal courts and have to look to other parallel state courts for some guidance in evolving Florida law in this area.
Significant e-Discovery cases
There are some very significant cases that you've heard about in passing in the news recently. There is the Samsung versus Apple litigation that occurred in California that I'm sure everyone is familiar with and in that case Samsung deleted emails that were relevant and important to Apple's case did not, could not produce them and as a consequence the judge granted an adverse jury instruction against Samsung in that case. Now I can do this in the presentation context but not before a real jury but if you were sitting on that jury and you are told at the start of the case that one of the parties, in that case Samsung, deleted emails that were important to Apple's case and that you should draw from that and take from that that this was probably stuff that was really bad for Samsung that's going to give you a feeling about the position of the parties and where do you think Samsung is starting that litigation from right off the bat. They're starting from an adverse position that may be impossible for them to overcome. So an adverse jury instruction that's awarded in eDiscovery in favor of one party can change the course of litigation even end the litigation because one party may essentially have won the case before it ever started.
Now there's another matter that's local to here that's the case involving TD Bank in Miami that was just decided in the summer of 2012. In that case the attorneys for TD Bank, it was a very large statewide law firm, produced a document in the lawsuit that was involving the Rothstein Ponzi scheme which was I believe the largest ponzi scheme to date in the country over a billion dollars and the allegations were whether the Bank had knowledge or should have known that there was something strange going on with these bank accounts. Well the Bank had a particular document that was an electronic document and it was one of their internal forms and across the top and big bold red letters it said “high risk”. When they produced it to the plaintiffs in the case the attorneys for the Bank printed that out in black and white, not in color and the black and white printing scrubbed off that colored bold high risk letters at the top. They then took that print out and converted it into a PDF form and produced it as a PDF document electronically representing that that was the native form of the document. What came out in the lawsuit was that not only had the document itself been changed to remove this very critical information from it, but the metadata that I mentioned earlier, the data beneath the data, had been scrubbed off the document when it was converted to a PDF and precisely when it was printed out into a paper form. So the plaintiffs were unable to determine from the document that was produced who looked at it in the Bank, who changed it, who knew about it, when they knew about it, and that would have made the plaintiffs case. The plaintiffs won that suit, but as a consequence of that particular document and others that were electronic discovery sanctions motions heard by the federal court in Miami, the judge required that the Bank pay the plaintiff’s attorney’s fees and also made specific post trial adverse findings of fact against the Bank to essentially preclude any chance of the bank winning on appeal.
Now there's another matter that's local to here that's the case involving TD Bank in Miami that was just decided in the summer of 2012. In that case the attorneys for TD Bank, it was a very large statewide law firm, produced a document in the lawsuit that was involving the Rothstein Ponzi scheme which was I believe the largest ponzi scheme to date in the country over a billion dollars and the allegations were whether the Bank had knowledge or should have known that there was something strange going on with these bank accounts. Well the Bank had a particular document that was an electronic document and it was one of their internal forms and across the top and big bold red letters it said “high risk”. When they produced it to the plaintiffs in the case the attorneys for the Bank printed that out in black and white, not in color and the black and white printing scrubbed off that colored bold high risk letters at the top. They then took that print out and converted it into a PDF form and produced it as a PDF document electronically representing that that was the native form of the document. What came out in the lawsuit was that not only had the document itself been changed to remove this very critical information from it, but the metadata that I mentioned earlier, the data beneath the data, had been scrubbed off the document when it was converted to a PDF and precisely when it was printed out into a paper form. So the plaintiffs were unable to determine from the document that was produced who looked at it in the Bank, who changed it, who knew about it, when they knew about it, and that would have made the plaintiffs case. The plaintiffs won that suit, but as a consequence of that particular document and others that were electronic discovery sanctions motions heard by the federal court in Miami, the judge required that the Bank pay the plaintiff’s attorney’s fees and also made specific post trial adverse findings of fact against the Bank to essentially preclude any chance of the bank winning on appeal.
The impact of e-Discovery on business litigation
So this electronic discovery has a tremendously huge impact on litigation and will have an impact on all business disputes in the future in Florida because it will be the norm. As a parallel and to bring this down to not a multimillion or multibillion dollar lawsuit but down to what most businesses deal with in terms of normal ordinary disputes between business people or between businesses there was a case that was just decided over the summer in New York State which has similar rules to our Florida eDiscovery rules whereby a plaintiff, it was a normal business dispute contract dispute, the plaintiff requested emails from the defendant and the defendant said sorry we don't have them anymore, we've deleted those emails. But the defendant in that particular case tried to claim that they were deleted in the ordinary course of their business. The court found otherwise and found that the defendant willfully and contumaciously deleted and destroyed that electronic data and what the court did in response to sanction and punish that defendant in the New York State case was to prevent the defendant from putting any information about the emails before the court in that case in its own counterclaims or in defense of the plaintiff’s claims and entered the adverse jury instruction instructing the jury that they had deleted the emails. So naturally you can determine from that who likely won the dispute.
The importance there is twofold, the finding that a party willfully or contumaciously destroys electronic data or fails to preserve it seems to be the strain running through the cases. But there is a safe harbor provision that exists in Florida's rules that that particular defendant in the New York case tried to avail itself of to say we normally delete these emails in the standard course of our business. But without any kind of a plan in place and without any proof to be able to show that to the court that may have well been true but the court found otherwise and the court determined from the evidence that there was no set plan and that the defendant wasn't being truthful and honest that this was the normal course of their business so it found that they willfully destroyed it.
The importance there is twofold, the finding that a party willfully or contumaciously destroys electronic data or fails to preserve it seems to be the strain running through the cases. But there is a safe harbor provision that exists in Florida's rules that that particular defendant in the New York case tried to avail itself of to say we normally delete these emails in the standard course of our business. But without any kind of a plan in place and without any proof to be able to show that to the court that may have well been true but the court found otherwise and the court determined from the evidence that there was no set plan and that the defendant wasn't being truthful and honest that this was the normal course of their business so it found that they willfully destroyed it.
How can a business avoid an adverse finding
So in order to avoid a finding an adverse finding by a court that you willfully and contumaciously destroyed electronic data or were negligent in not maintaining it and to avail yourself as business of the safe harbor provision there are two things that a business in Florida operating in Florida now right today can put in place.
One are ESI preservation protocols, electronically stored information preservation protocols. The other are litigation hold plans. Electronically stored information preservation protocols will deal with how your business normally maintains data. Do you delete all emails every six or eight months, do you keep things for three years, what about old software, what about other materials and documents that you would scan and store electronically where do they reside, who has access, how are you going to keep these things, it's sort of the global picture of the business’ electronic information management.
Litigation hold plans are more specific and deal with each dispute. When a dispute comes up, you may have a destruction plan and you may decide that we delete emails every six months in our business, but what if you're right at the cusp of that event and you're about to delete all the emails off of your server and you get notice from another side that there's a dispute. You have an obligation now as a business to preserve that data otherwise you can be subject to sanctions. So if you have litigation whole plans that can be activated and that are already in place then you have the ability later to demonstrate to a court through these plans that any deletion was in accordance with the plan, it was inadvertent it was not willful and contumacious and you protect yourself and avoid huge expenses and costs in future eDiscovery of having to try to prove that what you did was not willful and contumacious and you also avoid potentially the imposition of sanctions or adverse jury instructions in any kind of dispute.
One are ESI preservation protocols, electronically stored information preservation protocols. The other are litigation hold plans. Electronically stored information preservation protocols will deal with how your business normally maintains data. Do you delete all emails every six or eight months, do you keep things for three years, what about old software, what about other materials and documents that you would scan and store electronically where do they reside, who has access, how are you going to keep these things, it's sort of the global picture of the business’ electronic information management.
Litigation hold plans are more specific and deal with each dispute. When a dispute comes up, you may have a destruction plan and you may decide that we delete emails every six months in our business, but what if you're right at the cusp of that event and you're about to delete all the emails off of your server and you get notice from another side that there's a dispute. You have an obligation now as a business to preserve that data otherwise you can be subject to sanctions. So if you have litigation whole plans that can be activated and that are already in place then you have the ability later to demonstrate to a court through these plans that any deletion was in accordance with the plan, it was inadvertent it was not willful and contumacious and you protect yourself and avoid huge expenses and costs in future eDiscovery of having to try to prove that what you did was not willful and contumacious and you also avoid potentially the imposition of sanctions or adverse jury instructions in any kind of dispute.
Where to get ESI preservation protocols and litigation hold plans
Now can you just find these plans on the internet or create them yourself, ESI preservation protocols and litigation hold plans. Like any other legal document it is always best to speak to an expert in the area, to get with legal counsel, and discuss what needs to be contained in these particular plans and in these documents to understand how they can be utilized in the future to protect the business. So it falls into the old saying “an ounce of prevention is worth a pound of cure”. If you put these plans in place now you maximize the opportunity to avoid problems and costs later. If businesses don't, they run the risk of exposing themselves to tremendous electronic discovery costs later and sanctions or penalties. Thank you.
