Just last week in another opinion United States District Court Judge Shira Scheindlin voiced skepticism regarding self-collection. In National Day Laborer Organizing Network et al. v. United States Immigration and Customs Enforcement Agency, et al. (SDNY, July 13, 2012), Scheindlin admonished that “most custodians cannot be ‘trusted’ to run effective searches because designing legally sufficient electronic searches in the discovery or FOIA (Freedom of Information Act) contexts is not part of their daily responsibilities.” She follows this by noting that conducting a Google search differs in complexity from searching for all responsive documents in an e-discovery context. While self-collection may seem like a cost-effective way to control costs, the risks of relying on employees to self-collect have been widely covered.

This opinion comes on the heel of a series of cases demonstrating why companies ought not to rely on their employees to collect data once a legal hold has been implemented. Peter Kiewit Sons’, Inc. v. Wall Street Equity Group, Inc. reveals the substantial risks caused by a discovery process riddled with “multiple misrepresentations and improper actions” and, like National Day Laborer Organizing Network, demonstrates the need for neutral third party experts, attorneys and e-discovery experts, to oversee and manage the collections efforts, respectively.

In this trademark dispute, the plaintiff sought extensive sanctions against the defendants for multiple failures in the discovery process. U.S. Magistrate Court Judge Cheryl Zwart of the District of Nebraska found fault with the entire spectrum of the defendants’ litigation-related corporate protocols, including their deficient record retention policy, destruction of a computer server during litigation, and failed search efforts. Judge Zwart sternly rebuked the Kiewit defendants and sanctioned them severely. Her opinion highlights several of the perils of self-collection in discovery.

Destruction of Electronically Stored Information (ESI). According to the court, the defendants’ document “retention” policy was more accurately a document “destruction” policy that rendered the defendants “untrustworthy” and “an unreliable source of information.” (This is also one of the key topics that enabled Apple to win “court permission to tell a jury that Samsung Electronics destroyed e-mail that the iPhone maker wanted to use as evident in a patent trial set to begin July 30.”)
What should the company have done? It is imperative that companies have an effective litigation readiness plan in place, complete with a defensible document retention policy. Not only can this policy help insulate a company against spoliation claims, but it will also allow it to defend itself against claims by ensuring relevant documents are preserved once a legal hold is instituted. Engaging the help of IT and e-discovery experts is always an effective strategy to learn about the types of ESI the organization has stored, the ESI sources and where those sources reside within the organization.

Improper search methodology. The defendants’ efforts to locate relevant ESI were “woefully inadequate” and did not constitute “a good faith search.” In carrying out the plaintiff’s discovery request for documents containing the word “Kiewit,” the defendants had “their most ‘computer literate’” employee, who was “not a computer expert” conduct a keyword search for documents containing “Kiewit” from her work station. When the defendants were asked to produce documents that contained the word “Kiewit,” they produced two. However, a subsequent forensic search revealed that the defendants actually possessed thousands of responsive documents among their electronic records.  The court granted the defendant’s motion, awarded associated costs and fee and ordered an adverse inference for spoliation of the discarded server.

What should the company have done? In Best Practices Commentary on the Use of Search and Information Retrieval Methods in E-Discovery, The Sedona Conference has advised that a manual search process like the one the company used “may be infeasible or unwarranted.” Instead, parties should view “the use of automated search methods . . . as reasonable, valuable, and even necessary.” Parties should consult with an e-discovery expert to determine the best technological tools and processes to assess and collect responsive documents from their pool of potentially responsive ESI. Experts should also be tapped to develop and test keywords for effectiveness and ensure more defensible search query results.

Companies that implement a sound discovery plan and engage a neutral third party to assist in the management and execution of the preservation, collection and search efforts for potentially responsive data are positioning themselves to  limit their risk.

Sheila Mackay is Senior Director of Xerox Litigation Services’ E-Discovery Consulting group. She regularly advises in-house legal teams and their outside counsel on best practices for implementing a repeatable and consistent litigation readiness program that consists of a defensible approach to preservation and collections.

Sheila can be reached at smackay@xls.xerox.com.

Xerox Legal Business Services (“Xerox”) is not authorized to practice law, and neither offers legal advice nor provides legal services in any jurisdiction. The services offered by Xerox are limited to the non-legal, administrative aspects of document review and discovery projects. Xerox provides such services solely at the direction and under the supervision of its clients’ authorized legal counsel. - See more at: https://www.xerox.com/en-us/services/litigation-support