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© copyright 2002-2008
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Preserving and Producing
Electronic Evidence in Legal
Disputes
In a 2004 decision, the Wisconsin Supreme Court acknowledged that the storage and retrieval of electronic information possesses unique characteristics and, therefore, poses unique problems when a legal dispute arises. Because of the complexities of electronic data as compared to traditional physical records, courts around the country have been struggling with the proper treatment of electronic records when a legal dispute arises. A series of federal cases in New York has provided guidance on the precautions that must be taken when the preservation and disclosure of electronic data is at issue, as well as the repercussions for destroying relevant electronic information. In Zubulake v. UBS Warburg, an employee sued her employer for gender discrimination. During the discovery phase of the litigation (when parties have the opportunity to request documents from each other that they think may be relevant to the dispute), the employee requested copies of e-mail from her employer. Most of the requested e-mail had been deleted and was contained only on back-up tapes or other formats that were costly to retrieve and restore. Typically, the expense of producing documents requested during the discovery phase is borne by the party producing the requested documents. When it has been necessary to create replicas of computer hard drives or restore deleted files, the cost may be thousands of dollars, and a judge may order that the cost be split between the parties. The judge in the Zubulake case ordered that the expenses be shared by both parties. The employer, however, was required to bear the entire cost of recovering certain e-mail that it had improperly deleted. The Zubulake decisions also emphasized that a party's duty to preserve electronic evidence, including all potentially-relevant e-mail, arises when the party first has notice that the evidence may be relevant to a present or impending claim, even if a lawsuit has not yet been filed. The duty to preserve potentially-relevant electronic evidence extends beyond upper management employees. In a business context, management may wish to issue a “litigation hold” letter to all employees instructing them to retain all e-mail and other documents that may relate to the legal dispute. Furthermore, the party with potentially relevant electronic records or e-mail must suspend any routine data destruction procedures that it has in place. In Zubulake, the employer inexplicably could not locate several back-up tapes containing e-mail, including those that were deleted after the employer had been ordered to stop deleting e-mail. The judge, therefore, imposed a penalty for the employer's inability to produce the requested tapes. When the gender discrimination case went to the jury, the judge instructed the jury to assume that any e-mail on the back-up tapes that the employer wrongfully destroyed would have been damaging to the employer. This is a severe sanction, which makes it extremely difficult for an offending party to prevail. In fact, the employee in Zubulake won a $29 million verdict against the employer. In part because of the increased awareness of the complexities of electronic information, the Advisory Committee on Federal Rules of Civil Procedure has proposed amendments to the rules regarding the discovery and use of electronic information in disputes being litigated in the federal courts. The Standing Committee on Rules of Practice and Procedure has already approved the amendments, and the Judicial Conference considered the proposed amendments in September 2005. Thereafter, the United States Supreme Court will consider the amendments, and if approved, the amendments are expected to take effect by the end of 2006. One proposed amendment provides that a party responding to a discovery request “need not provide discovery of electronically stored information that the party identifies as not reasonably accessible.” If a party claims that requested information is not reasonably accessible, the party that requested the information may demand that the responding party demonstrate that the information is not reasonably accessible. If the responding party then demonstrates that the information is not reasonably accessible, the court, at its discretion, may order the production of the information anyway, and may specify terms and limitations for the production. Under the proposed amendments, the initial presumption would be that electronic data that is not reasonably accessible need not be disclosed to the other party. Furthermore, the party in possession of the information would initially determine whether the information is accessible. The proposed amendments do not explain what it means for electronic information to be “reasonably accessible,” and it is likely that if the proposed changes are adopted, the courts will be faced with the task of interpreting the meaning of “reasonably accessible.” If approved, the amendments will apply only to disputes that are litigated in the federal courts. It is common, however, for individual states to adopt any changes that are made to the federal rules, so that the state court's rules of procedure mirror those of the federal courts. Given the importance of electronic records retention, and potential litigation, it is advisable to contact legal counsel with questions about policies and procedures regarding records retention, storage, and destruction.
Junk Fax Prevention Act By:Todd J. Hepler
Without this bill, enacted on July 9, 2005 , businesses would have been essentially forbidden from sending faxes to any recipient without having previously obtained a signed consent form from the recipient. However, the Junk Fax Prevention Act allows a business to continue sending unsolicited faxes to recipients with whom the business has an Established Business Relationship (EBR). Alternatively, if the recipient has voluntarily provided the fax number to the business, or if the recipient has publicly advertised the facsimile number, such as in a business directory, the business may continue sending unsolicited faxes to the recipient. The rules do not apply to the sending and receiving of e-mails. The definition of EBR includes any “voluntary two-way communication” between the sender and recipient. No rules define how long an EBR lasts. So, if a customer makes a purchase, fills out a credit application, or calls a business to request services, an EBR may be formed. Fax recipients must be given the chance to opt-out of receiving future faxes from the sender. The sender must include a clear and conspicuous notice of the opt-out provision on the first page of the transmitted fax and provide the recipient with a cost-free method to opt-out of receiving future faxes. The opt-out provision must contain a domestic telephone contact number and a fax machine number to which the recipient can direct an opt-out request and a cost-free mechanism which allows recipients to opt-out of receiving future faxes. The opt-out mechanism must be available to receive requests 24 hours a day, 7 days a week. With increased scrutiny, it is even more important for businesses to refrain from sending unsolicited advertisements to those with whom no permission is granted and no EBR exists. An unsolicited advertisement contains “any material advertising the commercial availability or quality of any property, goods, or services which is transmitted to any person without that person's prior express invitation or permission.” While the boundaries are unclear, nearly any transmission with a company letterhead could be construed as an unsolicited advertisement. Federal fax law violations may carry up to a $500 fine per fax for unintentional infractions and three times that amount for willful violations. The law may be enforced by the Federal Communications Commission (FCC), state attorneys general, and by individual consumer lawsuits. The FCC was given the authority to limit the length of time an EBR endures. For example, the FCC could eliminate the EBR status if there has been no contact between a recipient and sender for one year. Both the FCC and Government Accounting Office have been directed to study unsolicited fax complaints and report back to Congress before April of 2006.
Notes From The Chair By: Kenneth B. Axe, Partnership Chair Recently I attended the jubilee celebration of my brother-in-law's 25th year in the priesthood. While delivering a sermon, one of his brethren stated, “There is no vacation from a vocation.” While Johnnie Cochran might be proud of this rhythm, this reflection led me to consider the nature of the vocation to which we at Lathrop & Clark devote so much of our time and energy. Lawyers are wordsmiths, and so, as is often the case, I resorted first to the dictionary. Webster's defines the term “profession” in part as, “A vocation or occupation requiring advanced education and training, and involving intellectual skills,” and a “professional” as, “A person who does something with great skill.” A “vocation” is a “call, summons, or impulsion to perform a certain function or enter a certain career.” In what field is this advanced education? Surprisingly, it is not just the law. According to the ethical rules under which we labor, a lawyer may be both a counselor and an advocate. In fulfilling these roles, we are told: In representing a client, a lawyer shall exercise independent professional judgment and render candid advice. In rendering advice, a lawyer may refer not only to a law but to other considerations such as moral, economic, social, and political factors that may be relevant to the client's situation. S.C.R. 20:2.1. Thus, in carrying out our role, we are required to rely upon our education not only in the law but also based on all of our life experiences. This education continues throughout our life. Ancient Talmudic scholars used to put honey on pages to teach students that learning and knowledge are sweet. According to John Truslow Adams, “There are two kinds of education. One teaches us how to make a living. One teaches us how to live.” As lawyers, we exist to serve our clients. Without them, we would have no livelihood and no challenge from which to derive daily satisfaction. Our work includes matters of public policy, advice to businesses, and involvement in family affairs at the heart of our clients' lives. In the course of deadlines and commitments, often we do not get an opportunity to take the time to properly thank you for your confidence in us. As my favorite great uncle used to say, in what has become my family's motto, “Send flowers to the living”—take the time to express gratitude or pay a compliment now, not later. Thus, on behalf of the firm, I want to thank you for trusting us with your legal work. It is a privilege to serve you.
New Faces
During law school, Carrie served as Director of the national Evans Constitutional Law Moot Court Competition, Vice President of the UW Law School Moot Court Board, and President of the Women Law Students Association. In addition, Carrie spent two years as Director of the Legal Information Center , a non-profit organization that provides free legal information to low-income individuals. Upon graduation from law school, Carrie received the Bruce Beilfuss Memorial Award for outstanding service to the law school. Carrie began working at Lathrop & Clark in May 2004, as a law clerk and in May 2005, as an attorney. She works with the labor and employment, school law, litigation, business, and real estate practice groups. Carrie is an avid marathon runner and downhill skier. She also enjoys bicycling, traveling, and she recently hiked across the Grand Canyon.
Client Profile: By: Frank C. Sutherland Inspire Design Group, LLC was founded in 1998 by Jim Boda and Doug Birkholz, two highly recognized and experienced product development professionals. Since its founding, Inspire Design Group has established itself as a premier product development firm on a regional as well as national level, with clients ranging from Fortune 500 companies to individuals. The company assists individuals and businesses through the product development process, from the formation of new concepts through the introduction of a product in the market. Inspire Design Group has the capability and expertise to turn a product idea or innovation into reality. While continuing to expand its core business of product development for others, in 2001, Inspire Design Group launched a spin-off company, Inspire Industries, LLC. Inspire Industries engages in its own product development. In fact, Inspire Industries has recently seen considerable success in creating and marketing one of its own ideas, the Flip Clip® storage system. The Flip Clip® system is a revolutionary product line that is designed to store household and recreational items in spaces that usually go unused. The Flip Clip® works by clamping onto exposed wooden studs and beams in garages, basements, and attics to create storage space for just about anything. The Flip Clip® clamps on with heavy-duty teeth, and securely hold up to 75 pounds. No tools are needed to install the Flip Clip®, and the Flip Clip® can be moved easily when reorganization is desired. There are presently 14 different Flip Clip® kits for a variety of uses, ranging in price from $15 to $65. The various Flip Clip® kits are designed to hold anything from tools and bicycles to rolls of carpet and camping equipment. In addition, the Flip Clip® can be used in various combinations that allow consumers to customize their use of the product to meet their individual storage needs. The entire Flip Clip® product line is on display at www.FlipClipStorage.com. In addition, the Flip Clip® product line will soon be carried by Home Depot, Ace Hardware, True Value, and other home improvement stores nationwide. Lathrop & Clark LLP has been serving Inspire Design Group's legal needs since its inception. During that time, Lathrop & Clark has been proud to witness Inspire Design Group's continued innovation, growth, and success.
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Faxing will be less taxing with the passage of the Junk Fax Prevention Act of 2005.
