06 Jan Use An Electronically-Stored Information Agreement to Avoid E-Discovery Headaches

Last week we discussed the consequences of avoiding the issue of electronically-stored information and failing to discuss the decision with opposing counsel.  The penalties for destruction of ESI or “spoliation” include monetary sanctions, contempt citations, adverse inference jury instructions and dismissal of your claims and/or defenses.  One way to avoid these penalties is to craft an agreement with opposing counsel governing how the parties should treat electronically-stored information.  Drafting an effective Electronically-Stored Information Agreement will save you and your company the time and money it might otherwise spend if it ignored ESI altogether.

What is An Electronically-Stored Information Agreement?

An Electronically-Stored Information Agreement or ESI Agreement is an agreement among the parties in litigation which sets forth the procedures and protocols the parties in the lawsuit must follow in order to meet their respective discovery obligations.  The parties typically draft the agreement and seek approval from the court in the form of a stipulated order.

An Electronically-Stored Information Agreement can be used in small and complex cases alike, in that it can help keep the parties focused on the case’s discovery needs and reduce the cost and time the parties spend on electronic discovery.  Moreover, a well-crafted ESI Agreement will demonstrate to the court the parties’ good faith in addressing future e-discovery disputes that might arise outside of the issues contemplated in the parties’ agreement.

An ideal Electronically-Stored Information Agreement will balance the needs of all parties while leaving some wiggle room for addressing unanticipated situations.

What Should Be Included In an Electronically-Stored Information Agreement?

The exact details of your Electronically-Stored Information Agreement will vary on the needs of the case, including the complexity of the case and the nature of the dispute.  This is why it is best to determine the contents of your ESI Agreement only after the parties have conducted the Rule 26 meet and confer session, where the parties are required to put together a discovery plan for the case.

Before attending the Rule 26 conference with other parties, you and your attorney should meet to conduct what is sometimes called an “early case assessment.”   During this meeting, you and your attorney should identify and narrow down which information—both electronic and hard copy—could be at issue and thus discoverable in your case.  You and your attorney should also discuss what ESI-related issues might arise in your case, if, for example, your company has not had a prior practice for properly maintaining and destroying electronically-stored information.

One way to do this is to sit down with your attorney and review the scope of your company’s electronically-stored information so that you and your attorney can get a feel for what evidence is relevant, which custodians of the information are likely to become witnesses at trial and what issues if any your company may have in producing data during the relevant time frames.

The Devil is in the Details

As stated above, the exact contents of your Electronically-Stored Information Agreement will depend on your company’s unique circumstances and the particular requirements of your case, as well as the e-discovery rules in your jurisdiction, both at the state and federal level.  With that in mind, you and your attorney may want to consider including the following categories in your ESI Agreement:

Scope and Phasing

In this section the parties will set parameters for discovery based on the “reasonable and proportionate” tests espoused by state and federal discovery rules.  Here the parties pinpoint and narrow the relevant time frame to which discovery will be limited; set forth the custodians and sources of the discoverable electronically-stored information; and determine what phasing if any will apply to production.

Electronically-Stored Information Disclosures

Under this section the parties agree to an initial disclosure and production of relevant ESI following the Rule 26 conference, detailing names and contact information for custodians in possession of electronically-stored information, third-party data sources, lists of relevant electronic data in each party’s possession and data equally-accessible to all parties.

Electronically-Stored Information Preservation

This section details important guidance and information regarding what information is and will be preserved by all parties going forward.  The parties can use this section to set forth a global agreement about the scope and manner of preservation, whether the parties agree that there is certain ESI whose preservation would not be “proportional” or necessary for the needs of the case, and which ESI is simply irrelevant to the case and does not require preservation (allowing you to “shred it” as the pictures above depicts).  This section however would typically not be used to waive or forego a party’s initial requirement to preserve potentially relevant information once litigation is reasonably anticipated.

Search Methodology

Search methodology is critical in determining how to locate and filter responsive electronically-stored information.  This section sets forth the parties’ agreement on proper search terms and/or search methodology, and may even include technology-assisted review methods if the parties can cooperatively disclose this information in the interest of saving all concerned much money and time.  The parties typically also agree to disclose terms or queries that they used to locate ESI, and will usually stipulate to continue to revise and disclose search terms and methodology as relevant throughout the discovery process.

Production Format

Agreeing on a production format is key to a smooth e-discovery process.  The rules require the parties to discuss how the parties are expected to produce data, and allow the parties to request certain forms of production, such as native files which can include valuable metadata showing who created the document, and when and how it was modified.  Regardless of which forms are requested, the rules require the parties to produce ESI in a form in which it is ordinarily maintained or in an otherwise reasonably-usable form.   Format types include native files, TIFF files, PDF files, and paper files.  The parties should put much thought here into whether they should allow conversion of emails and Excel files into PDF files because doing so removes metadata and requires additional legwork to pair metadata with documents.  Also, the parties should keep in mind here that paper or hardcopy format is rarely desirable over electronic format for the same reason.

Privilege Logs

This section sets forth an agreement to notify all parties about documents withheld from production, by identifying (by author, date, subject matter and Bates No. if available) in a log which documents were withheld and the basis for withholding the document (typically attorney client or work product).

Production Requirements

The parties will typically use this section to set forth certain requirements to allow for identification of documents.  For example, the parties might require all produced data to include Bates numbering (a method of numbering the pages of production to identify which party produced it) and/or “load files”, which are files used to load metadata and other information about the documents in a production into a review platform or other document management system.

Protective Orders

This section can be used to detail any stipulated protective orders, or clawback agreements or 502(d) orders the parties draft, which would allow the safe return of privileged data inadvertently produced during the e-discovery process.

Modifications

Lastly, every Electronically-Stored Information Agreement should include a section that allows the parties to modify the ESI Agreement, detailing when it can be modified and how, and that it require a showing of good cause.

If you and your company find yourselves in litigation and require the help of an attorney to conduct an initial case assessment and draft an Electronically-Stored Information Agreement, call Edwards Law today for a complementary consultation.