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Exploring FRCP Rule 37(e) and Avoiding Spoliation Sanctions

In a recent eDiscovery webinar, Avoiding Spoliation Sanctions in 2017 Under New FRCP Amendments, the Honorable Xavier Rodriguez spoke with Lexbe CEO, Gene Albert regarding the intricacies of Rule 37(e). Judge Rodriguez offered insight into how courts are interpreting Rule 37(e), and how the amendment has changed the landscape for attorneys with regard to data loss and sanctions.

Prior to the FRCP’s 2015 amendments to Rule 37(e) courts were inconsistent in how they imposed sanctions due to lost data. As a result, many attorneys, fearing consequences, opted for a “save it all” approach when a preservation letter landed in their laps. With the growth of data and the high cost of storage, the “save it all” approach became prohibitively expensive.

Given the expense of managing preservation combined with the inconsistent application of sanctions, the FRCP’s 2015 amendments to Rule 37(e) aimed to address the “excessive efforts and money” spent on preservation and also provide a framework in which to evaluate actual damages resulting from lost data.

In the webinar discussion, Judge Rodriguez explained that the FRCP advisory committee suggests that courts consider “proportionality” across the entire spectrum of Rule 37(e). The committee notes for the rule suggest that courts look at the parties’ technical sophistication, their resources, and the weight of the ESI to the claim or defense when considering the appropriate and proportionate remedy.

With proportionality in mind, Judge Rodriguez suggests that a court needs to ask three questions before determining whether there is cause for prejudice (see infographic).

In making this determination, a court will seek to determine how relevant the data loss is to the case and a proportional remedy to the party experiencing prejudice. Remedies could include requiring additional depositions at the spoliating party’s expense or the preclusion of evidence (preventing the spoliating party from entering evidence).

In the webinar, Judge Rodriguez emphasized that intent to deprive must be deliberate. Negligence, even gross negligence, does not necessarily meet the strict requirement of actual intent. If, however, intent is found, the court has three options from which to choose: (A) “presume that the lost information was unfavorable to the party;” (B) “instruct the jury that it may or must presume the information was unfavorable to the party;” or (C) “dismiss the action or enter a default judgment.”

For more information, watch the recorded webinar on-demand: Avoiding Spoliation Sanctions in 2017 Under New FRCP Amendments.

Litigation Finanace: Best Practices and Emerging opportunities

Legal finance plays an increasingly common role in high-stakes commercial litigation. No longer merely a tool of necessity for cash-strapped claimants, financing is used by sophisticated lawyers and their clients as a more efficient way to manage the cost and risk of both plaintiff and defense matters while also unlocking working capital for the firm or business.

This presentation draws on Burford Capital’s experience as the world’s largest provider of commercial litigation finance and its work with nearly 75% of the AmLaw 100, and provides a broad overview of key concepts as well as emerging trends and opportunities for firms and clients to leverage legal finance in ways that enhance success and fuel growth.

Key Points

  • Defining litigation finance
  • What’s driving the growth of litigation finance?
  • Benefits of litigation finance
  • How it works
  • Case studies and trends

About the Speaker

Sarah Lieber is a Vice President of Burford Capital’s underwriting and investment arm with a particular focus on originating investments and providing strategic guidance to leading law firms and global corporations on deploying Burford’s capital in ways that address their litigation and financial needs. Prior to joining Burford, Ms. Lieber served as Deputy General Counsel for CIFG Services, a monoline bond insurer, and practiced law at Jones Day. She received her JD from Fordham University School of Law.

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Protecting eDiscovery Privilege, the Case Against File Sharing Sites

File sharing services, such as DropBox, have become increasingly used as eDiscovery repositories for incoming data and outgoing productions. With easy sharing, via a simple URL link, it’s understandable why these tools appear to offer an optimal solution for sending and receiving massive amounts of data as one does with eDiscovery litigation. Unfortunately, this “solution” can become a massive liability and we caution clients against using these services because it is simply too easy to accidentally share privileged documents. In fact, there are several cases in which information has been inadvertently shared and the results were disastrous for the offending party.

What’s the problem?

It is not that it can’t be done correctly, it is more that one is asking for problems with an open platform like this. With default settings in place, the “owner” of a file relinquishes control of the data within the file when shared with other users. Once shared, the data within the file can be copied, changed and shared without the owner’s permission. New users can be added to the file to view the data and, with seemingly unlimited “cooks in the kitchen,” it is too difficult to maintain chain of custody and ensure responsible sharing. A few specific issues with file sharing services include:

  1. Shared files and folders are not static. This is not the equivalent of sending a document attachment via email. The shared file or folder remains “live”, thus any future additions or changes can still be seen by people with the link into perpetuity.
  2. On many platforms, user groups are created and can be duplicated to other folders with a simple click. For example, if several users have access to “Case X Final Production” folder, another attorney could grant access to all users in that file to “Case X Notes”- not realizing that opposing counsel was part of the original group.
  3. The link is not automatically password protected so anyone with the link can view the file unless proper authentication measures are manually enabled. This literally means that without setting up a password, anyone on the internet could potentially access your file.

What have the courts said?

In Harleysville Ins. Co v. Holding Funeral Home, Inc., Case No. 1:15cv00057 (W. D. Va. February 9, 2017), an insurance company refused a funeral home’s fire damage claim after determining the fire was caused by arson. An investigator for the insurance company uploaded video taken at the scene to a platform sharing site, box.com. The investigator sent the link to the insurance company attorney who then shared it with the funeral home attorney in order to substantiate their arson claim. Later, however, the insurance investigator uploaded additional files to that same folder, which the funeral home attorneys still had access to. The court found that because the link and files within were not properly password protected the insurance company had, in essence, “left the files on the park bench” in a virtual sense and thus waived privilege.

From the court:

Whether a company chooses to use a new technology is a decision within that company’s control. If it chooses to use a new technology, however, it should be responsible for ensuring that its employees and agents understand how the technology works, and, more importantly, whether the technology allows unwanted access by others to its confidential information.

What does Lexbe Recommend?

We have developed the Lexbe eDiscovery Platform to include a number of checks against inadvertent disclosure of privileged docs. We create a secure encrypted link specific to each production that can then be safely shared. By insulating exports with secure production links, we help prevent user error that could result in sharing documents not meant for opposing counsel or outside parties.

Best Practices to Avoid Missing Key Evidence in Large Doc Review (Uber Index)

Nothing can be more disastrous than showing up at a depo and finding that your team missed a key piece of evidence in document review, but your opposition found it. Not finding that “smoking gun” admission, or allowing critical privileged information to slip through into a production can be avoided, but only if your search tools are fully functioning. Many attorneys assume that all eDiscovery processing approaches and search tools and techniques are basically the same, but nothing could be further from the truth. In this webinar learn crucial search functions and critical indexing differentiators that will protect you from inadvertently missing important evidence during eDiscovery.

Key Points

  • Overview Modern Search and eDiscovery Indexing Technologies
  • Basic and Advanced Search Options in Use Today
  • Search Indexing ‘Gotchas’
  • Pitfalls of Relying Solely on Image-Based OCR Indexing
  • Why Native Extraction Alone is Ineffective
  • Complexities of Working with Foreign Language and Translated Text
  • Optimal Seach with a Concatenated Indexing Approach
  • Takeaways

About the Speaker

Erin Derby is a Certified eDiscovery Specialist (ACEDS) and member of the Technical Services team with Lexbe LC. She specializes in working with clients handling eDiscovery in complex litigation and provides a high level of precision and expertise.

She provides guidance for technical discovery issues and procedures and ensures compliance with all court-ordered ESI guidelines. Prior to joining Lexbe, Ms. Derby was a Litigation Paralegal for 10 years for both plaintiff and defense law firms.

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Best Practices in Use, Authentication and Admissibility of Social Media Evidence

Social media can yield the most important evidence of your case, but only if you gather and use it properly. Social media has allowed individuals and businesses to communicate in new, unprecedented ways. Not surprisingly, it can be the most important evidence in your case. But identification, collection, authentication, admissibility and ethics rules require special consideration. Joining us for this webinar is Robert Keeling, partner at Sidley Austin and industry expert on the complex topic of social media eDiscovery.

Key Points

  • The Prevalence of Social Media
  • The Use of Social Media
  • Using Social Media as Informal Discovery
  • Applicable Ethics Rules, Guidelines, and Opinions
  • Takeaways, Tips, and Other Considerations
  • Authentication and Admissibility Considerations

About the Speaker

Robert Keeling is an experienced litigator whose practice includes a special focus on electronic discovery matters. He represents both plaintiffs and defendants in complex civil litigation throughout the nation and conducts internal investigations in the U.S. and throughout the world. Mr. Keeling has authored several articles on eDiscovery and social media and is a co-chair for his firm’s eDiscovery Task Force.

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