Electronic Discovery

Covert surveillance of personal injury claimants has undergone revolutionary changes since the days of VHS videotape. Now, more than ever, defense attorneys and claims professionals must be aware of the latest technology, methodology, social implications, and legal consequences of surveillance. From the reduced size and increased power and quality of cameras to the ability to transmit images and video instantaneously to remote locations, today’s technology provides a higher quality end product and more control over the surveillance process than ever before. That increased level of control brings the increased responsibility of ensuring that surveillance is ethical, efficient, and productive.

With the ever-increasing expansion of multinational corporations and globalized business transactions, it is exceedingly likely that attorneys will, at some point, have to conduct cross-border e-discovery on behalf of their clients. In nearly all commercial disputes in U.S. courts, a substantial amount of electronically stored information ("ESI") is demanded and, if necessary, ordered to be produced. Complying with such requests poses great challenges when the information sought is located outside of the U.S. and foreign data privacy and discovery blocking statutes are involved. Being prepared for the complications and burdens associated with cross-border discovery is critical for any party to U.S. litigation with ESI located in non U.S. jurisdictions. This article provides an overview of the legal requirements and suggests guidelines and strategies to address such difficulties.

I was sitting at my desk. It was a summer morning and a client that I had advised many times in the past on contract matters sent me an email saying—"we were just served with a complaint, what should we do first?" Many attorneys are sent this type of email or receive a telephone call similar to this from their clients every day. Attorneys who find themselves in this position have to advise their clients on what the best first step is in successfully defending against a claim.

Last year U.S. District Judge Shira Scheindlin, one of the country's most influential e-discovery jurists, issued a notable opinion that many believed would reshape the landscape she helped create with her Zubulake v. UBS Warburg decisions. In Pension Committee of the University of Montreal Pension Plan v. Banc of America Securities, LLC, 685 F. Supp. 2d 456 (S.D.N.Y. 2010), Judge Scheindlin imposed sanctions on a group of plaintiffs for their negligent or grossly negligent document preservation and collection efforts.  

Numerous courts have followed the lead of Pension Committee, but others are notably not. What implications does this have in the ever-changing world of spoliation related to electronically stored information ("ESI") and the sanctions that courts impose for such conduct?

Consider the following scenario. In a commercial dispute, a plaintiff sues a subsidiary and its parent company, pleading an alter ego theory against the parent. During fact discovery, the plaintiff agrees to settle with the parent company for a nominal sum.  As a condition of the settlement, however, the plaintiff insists that the parent company agree to assume certain obligations with regard to discovery, including the preservation and production of electronically stored information ("ESI"), and proposes a settlement agreement which includes a "continuing discovery obligation" ("CDO") clause. Eager to foreclose any further liability, the parent company agrees to the arrangement. Before executing the agreement, however, the settling parent company should assess the continuing obligations the plaintiff is proposing—particularly as they relate to electronic discovery—and determine whether those obligations make the settlement unpalatable. 

A split of authority exists regarding the extent of e-discovery costs that a prevailing party may recover in federal court cases. A recent federal trial court awarded a large amount of e-discovery costs to the prevailing party; however, other courts continue to limit recovery of these costs by applying a different interpretation to the same cost recovery statute. Whether or not a broader array of e-discovery costs may be recovered will depend on several factors.

Just as in the United States, litigants in Canada have had to deal with the overwhelming prevalence of electronic documents in the discovery process in recent years. Gone are the days of our clients sending us a few boxes of paper to review for production and instead, we now receive CDs and hard drives full of thousands upon thousands of e-documents. In the common law Canadian provinces, there is generally an obligation on parties to litigation to produce all documents that are relevant to the matters in issue that are not privileged. This broad production obligation means that without guidelines to specifically address the scope of electronic production, litigants would often have to produce a volume of e-documents that would have a huge impact on the costs of and efficiencies of the already expensive and time consuming discovery process. Electronically stored information has created challenges for litigants and their counsel throughout Canada, which the bench and bar have been addressing by adopting principles and practices that are similar to those adopted in the United States.