Editor: Mr. Scordo, would you tell our readers something about your professional experience.
Scordo: I joined Pitney Hardin in 1989 following a clerkship in the New Jersey Superior Court Appellate Division, and I have been here ever since. I was made Counsel in 1999 and a Partner in 2003. My practice is primarily in commercial litigation and insurance. I also work on mass tort cases.
Editor: When you began your practice, e-discovery was just beginning to have an impact on the way we litigate. Can you give us an overview of how this has evolved over the course of your career?
Scordo: Ten or fifteen years ago e-mail was somewhat of an afterthought as far as gathering information for litigation was concerned. Over the years it has evolved to become more and more important and now, because it is at the very center of the way business communicates, it is the first place you look. About three years ago I handled my first truly "all electronic" case which, not surprisingly, involved two technology companies.
Editor: In recent years the various Zubulake decisions, and the standards they have attempted to set for electronic discovery, have received a great deal of attention. For starters, can you provide us with an overview of this series of cases and what they have meant for this emerging area of jurisprudence?
Scordo: The Zubulake decisions, together with the predecessor Rowe Entertainment decision, were out of the Southern District of New York, and were handed down by magistrates who were some of the first jurists to do a detailed analysis of these issues. The central problem is how far someone seeking discovery should be permitted to go in obtaining relevant information. Should the line be drawn to exclude everything beyond what is on the executive's desktop computer? How far beyond that line is reasonable? And who should have to bear the cost of retrieving the information? These decisions attempt to address these questions, and they have resulted in a multifactor test to try to guide the courts through a very difficult area.
These cases tend to look at the issues through very practical eyes. There is an initial presumption that what is first important to the litigation is the " active" data. I define that as the data that is accessed in the ordinary course of business, the type of information that would be readily available to a business person. In the event you seek information that does not fall into this category - what some courts have recognized as " inactive" data, which includes back-up tapes for disaster recovery, deleted data, legacy data, and so on - you must show that it has some relevancy to the litigation, and the courts will consider the time and expense of recovery, as well as the proper allocation of costs, in considering a party's information demands. It is these standards established by the Southern District of New York that have been influential across the country, and this concept is in the proposed amendments to the Federal Rules.
Editor: Where are we now? How far-reaching is the law that derives from a single federal district court on this subject?
Scordo: At the moment other federal courts and other jurisdictions, including state courts, have picked up on much of the jurisprudence emanating from the Southern District. The non-profit groups and think tanks which have studied these issues for a considerable length of time have given this development some momentum.
With respect to the Federal Rules, the proposed revisions are now out for comment. Once those revisions have been finalized, I believe the various states will use the new Rules for their own rulemaking, with probably some tweaking on the most controversial issues such as preserving evidence and cost shifting.
Editor: What are the factors that go into a company's decision to have a document management and retention program?
Scordo: The first thing is for the company to address the issue from its own viewpoint and determine what should be saved for business and regulatory reasons. This may entail bringing in expert advisors to conduct an in-depth analysis of the business and regulatory requirements. Once that is established, the company then needs to put into place a prospective response to litigation that goes into operation once litigation appears on the horizon.
Editor: When does the obligation to preserve documents in anticipation of litigation arise? Is it the threat of litigation? Service of a summons and complaint?
Scordo: The usual standard is one of reasonableness. I tend to see the obligation to preserve documents as arising at basically the same time as your right to invoke the work product protection. If you are anticipating litigation, and creating documents which relate to that, those documents constitute protected work product. At the same time, however, you now have an obligation to protect prior evidence that is relevant to the claim. In my mind, the analysis is essentially the same with respect to the timing of your obligation to preserve evidence and your right to invoke work product.
Editor: The threat of litigation almost by definition is a subjective thing. When does that arise?
Scordo: It is not always clear whether you should use a subjective or objective standard. Most courts utilize an objective standard by referring to a "reasonable" anticipation of litigation, and that entails falling back on some common sense rules. If a dispute has arisen, and it is serious - involving some personal injury, property damage, a substantial amount of money, and the like - then I think it is always prudent to anticipate litigation. To be sure, there is always a great deal of argument about when the anticipated litigation came or should have come to the company's attention. I do not see any terribly clear rules on this emerging any time soon, and this is something, unfortunately, that has to be determined on a case by case basis.
Editor: How do you determine what documentation is relevant?
Scordo: I like to make that determination from the perspective of the people involved. This entails first identifying the key players, and most of the time, at least in the beginning, this is a relatively manageable number. The next thing to consider is, which company departments are involved? This exercise tends to isolate the most recent and many times the most relevant material first. Taking steps to preserve this documentation, i.e. the "active" files of the "key players" and departments, is very important and most of the time not too burdensome.
Editor: What about "spoliation of evidence?" Does it arise if the destruction of documentation is unintentional?
Scordo: The issue of spoliation of evidence arises when evidence that a requesting party shows would have been relevant to the case is no longer available. The really controversial aspect of this has to do with whether a party should be sanctioned if its destruction was unintentional. There is plenty of case law where parties are sanctioned where they have acted either intentionally or with a reckless disregard of the fact that litigation or a preservation order is pending. There is just not that much case law relating to the unintentional destruction of electronic data involving inactive data or active data that was not immediately recognized as relevant. The Federal Rules of Civil Procedure attempt to address this but it remains an extremely murky area. Although every case is different, for now, a party certainly should immediately preserve active data from key players and at least investigate how much inactive data may be available and whether it is subject to destruction from the routine operation of the company's systems. If it is and can be easily and inexpensively preserved, then that may have to be done. If it cannot, then the company and counsel should document exactly how they went through that analysis in the event it is later challenged. Let's be honest - every plaintiff's attorney in the country is going to say after the fact that you should have saved everything. But, with respect to inactive data, there is no hard and fast rule.
Editor: If I have a system that automatically deletes e-mail after six months, and I get involved in a litigation, is that the moment I have to step in and halt deletion?
Scordo: Yes, on the assumption that that the e-mails subject to deletion were accessible in the ordinary course of business and therefore "active." You must stop the "destruction" of that kind of evidence. I think that is an accepted rule at present. The real question is whether a party was reasonable in deciding what to do with the inactive data and data from other sources not immediately recognized as relevant.
Editor: How do you protect yourself from disclosing information that is privileged?
Scordo: At the moment, it is necessary to do a full review of all the documentation prior to disclosure to the other side. This is extremely expensive because of the volume of documentation and because it does not lend itself to easy review. Think, for example, of a string of e-mails, where, for any variety of reasons, some communications in the string would be privileged and some not. The electronic discovery vendors certainly have made this easier, but it is still usually a big job. The Federal Rules are attempting to establish a sort of safe harbor, whereby the party produces the documentation and then attempts to assert the privilege a reasonable time thereafter. But this does not allow you to avoid the review, it just postpones it, and does not answer the question of whether or not the prior production was a waiver. Even though the proposed rules may allow it, they specifically are not intended to effect a substantive right. The existing rules of evidence and ethics still control.
Editor: It also gets into tremendous expense for the client, and at the end of the day I think that really is what much of the discussion is about.
Scordo: Absolutely, which is why I try to first focus the client on the data from key players and departments that is reasonably accessible in the ordinary course of business. With respect to other information, it may be up to the other side to demonstrate they need more, and that is not always the case.
Editor: What about the future? Are we getting on top of the e-discovery issues, or are there matters that have not been addressed as yet?
Scordo: I am hopeful that when the Federal Rules are finalized, probably not until 2006 though, the system is going to have some guidelines to follow in addressing these problems. If not a set of hard and fast rules, at least, I think, we will have a framework under which there are some accepted presumptions one way or the other. That would constitute a major improvement. In the meantime, I would expect the courts to pick up on the theories behind the proposed Rules and the Southern District cases and apply them going forward.
Published February 1, 2005.
