Crafting Effective ESI Agreements

by Kilpatrick Townsend & Stockton LLP
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With the proliferation of workplace and personal electronically stored information (“ESI”) these days, it may be a scary proposition for any litigant to deal with the preservation, collection, review, and production of this information for a lawsuit. One must be aware of all the various types of information that may be at issue, including emails, user-created data (like word documents and excel files), structured data (like finance or CRM systems), instant messages, texts messages, and photographs. In addition, one must consider all of the different types of sources that may contain the information, including work computers, personal computers, network and shared locations, the cloud, smart phones, tablets, cameras, or other electronic devices such as GPS systems and even wearable technology. With all of these potential data types and sources, the costs associated with discovery compliance continue to increase at a rapid pace. To address what can seem a daunting and confusing task, it is helpful (and even necessary) to confer with your client early on to map out a discovery strategy.

One effective way to limit the scope of discovery, reduce confusion and ensure consistent deliverables (thereby reducing costs) is to enter into an ESI agreement with opposing parties. An ESI agreement is an agreement between the parties in litigation which lays out the protocols and procedures the parties must follow in order to satisfy their respective discovery responsibilities. Under Rule 26(f) of the Federal Rules of Civil Procedure (and comparable state court rules), parties are required to meet and confer in the beginning stages of the case in order to devise a discovery plan. Specifically, Rule 26(f)(3)(C) requires the parties to deliberate over “any issues about disclosure, discovery, or preservation of electronically stored information, including the form or forms in which it should be produced.”

All too often, parties do not take full advantage of this requirement and miss an opportunity to focus their attention and control costs by entering into an ESI agreement (which is usually filed with the court and entered as a stipulated order). As an added bonus, the agreement can demonstrate to the court that the parties are dealing with each other in good faith. Many courts have model ESI orders, so be sure to check your court’s website. This article will provide some guidelines for crafting effective ESI agreements and how best to leverage them for your benefit.

Schedule Meetings with the Client and its Information Technology Department

Before even considering putting together an ESI agreement, and especially before the meet and confer with opposing counsel, it is important that attorneys have an in-depth discussion with their client, preferably including the client’s IT department to get an overview of the ESI landscape. (Note that if the client uses an outside vendor to manage its email and other systems, the attorney will want to talk separately with them about their access and collection capabilities.) Doing so should yield  invaluable guidance regarding the locations and types of ESI which may be relevant, as well as protocols for the most efficient identification and collection of that data. Throughout the discovery period, it will be essential for communications between the legal team and the technical team to be as seamless as possible.

In addition to general conversations with the client and its IT department or outside rep, it is incredibly helpful to speak directly with the primary players from whom data will be collected. If they can explain how they manage and store relevant data, then you will likely be able to target the collection to only what is actually relevant, avoiding the pitfalls and costs associated with a burdensome over-collection.

The ESI Agreement

Each ESI agreement, including model ESI orders, can be tailored to meet the parties’ needs and the particular requirements of the case. Below are several aspects that should be considered. This is not an exhaustive list, but one that includes the most common categories.

1.  Scope of Collection and Search of ESI

The parties will need to set the discovery parameters, guided by the “reasonable and proportionate” tests detailed in state and federal discovery rules. Certain issues that need to addressed are the following:

  • Date limits: Determine whether there can be date restrictions placed on what is discoverable, and perhaps consider including language that will allow adjustment of those dates should relevant evidence be found.
  • Custodians: Determine whether the ESI agreement will contain a limited list of custodians that have relevant ESI. We typically try to limit the number to between 5 and 10, when possible. Note that many model ESI orders provide custodian limits already.
  • Locations: Determine whether there needs to be a list of specific (limited) locations where ESI can be searched (i.e., certain computer networks, servers, or hard drives) and whether mobile data, backup tapes or other data can be excluded.
  • Types of Search Methods: Determine whether specific search terms will be utilized, including whether the number of search terms can be limited) and whether machine assisted review or predictive coding will be used.
  • Reasonably Accessible Documents: Determine if the ESI agreement should have a section dealing with documents that are not reasonably accessible and are therefore not discoverable. Many model ESI orders already exclude backup tapes and mobile data, for example. Of course, language should be included to preserve the rights of the parties to be able to request excluded ESI under certain circumstances.
  • Phased Discovery: Also consider whether it makes sense to phase discovery such that email is produced after non-email has been reviewed, perhaps alleviating the need to comb through email altogether. Note that some model ESI orders, particularly those related to patent matters, will phase email for you.

2.  Production Format

There should be a section in place that sets out the format in which the ESI will be produced. This commonly includes single-page black and white TIFF files (or JPEGs when color is critical to the document), an image load file so as to facilitate the use of a document management or litigation support system (typically .OPT), agreed upon metadata for those images in the proper format (typically .DAT), and extracted text in order to assist with searching. Native files should likely be limited to those documents that don not render well in static images (such as spreadsheets), or documents whose authenticity may be in dispute. De-duplication is commonplace now but should also be mandated in the agreement.

Also, consider what metadata should be produced and note that some model ESI orders limit the metadata fields for you. This is where communications regarding collection strategy will be important because if data collection is not conducted appropriately, important metadata can be altered or lost altogether (and therefore cannot be produced). An attorney will want to know exactly how the information will be collected so as not to make any unsupported representations.  

Other items that should be discussed are how emails with attachments will be produced, how documents will be bates stamped/numbered, and also whether the volume of the information will require rolling productions.

3.  Privileged Information

There should also be a section in the ESI agreement that sets out how each of the parties intends to notify the other about which documents have been withheld from production on the basis of privilege. This section should also detail the information to be included on any privilege log so that  enough information (author, date, and subject matter) is provided to make documents identifiable without breaking privilege.

4.  Clawback Provision

A clawback provision is an integral part of any ESI agreement. Due to the large volume of data and information in some cases, there is always a possibility that privileged information will be inadvertently disclosed. Clawback provisions state  that inadvertent disclosure of privileged information will not automatically waive privilege and set out a process for the recall of privileged documents. As an alternative to the general clawback provision included in many ESI orders, consider agreeing to the terms of a separate Federal Rules of Evidence 502(d) Order (or similar order if available under state rules), which essentially provides a failsafe if you are unable to lay eyes on every document and inadvertently produce privileged information.

5.  Dispute Resolution

Discovery disputes can end up being extremely time consuming and costly. It will benefit both sides in the long run to agree to a provision that details how all ESI discovery disputes are to be resolved, short of bringing the matter before the court. The resulting process “ownership” may actually encourage discovery dispute resolution.

6.  Modifications

Finally, every ESI agreement should have a section that details the parties’ ability to make good faith modifications to the agreement, specifically noting when the ESI agreement can be modified and how it can be modified. 

Conclusion

E-discovery is getting more complicated and more costly each year. Without a good grasp and understanding of the all the pitfalls that can occur during discovery, it is all too easy to find oneself in a huge, and maybe unnecessary, mess. ESI agreements between the parties can lessen the stress of discovery by encouraging effective management of the project from the outset, which inevitably increases efficiencies and lowers costs.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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