E-Discovery Insights – Clearwell Systems, Inc.

Is the Use of “Preserve in Place” a Gamble in Electronic

Discovery?
by Brandon D'Agostinoon November 30th, 2010(2 Comments)

Plenty has been written on both sides of the preserve-in-place

debate. The preservation duty in e-discovery, though,
continues to be a root cause of sanctions and other trouble for
litigants when ESI is involved. In its 7th Annual Litigation Trends
Survey, Fulbright &Jaworski reported that 55% of responding
companies still rely on custodians to identify and preserve
their own information as the method used most frequently to
preserve potentially relevant information in litigation or an
investigation. Also, 68% of respondents thought that the
scope of the preservation duty needed further clarification.

One thing that does not seem to require much clarification is

that the spoliation, whether inadvertent or intentional, can
lead to serious consequences. Leaving ESI “in the wild” is a
gamble at best, and just like Vegas, the odds are stacked
against us.

Preserving ESI in place sounds like a great idea at first, especially to the IT team – index all of
the ESI in place and then search and collect what is actually needed for review and production –
if and when that is required. It may even seem to make better sense from a budgeting
perspective given the fact that while preservation is required in all cases, the degree of
production varies widely from case to case. Frequently overlooked, however, are the many
pitfalls that can lead to the inadvertent destruction or failure to produce relevant ESI — all
resulting in serious sanctions from the court that the Legal team wants to avoid. These pitfalls
include:

the volatility of storage media and ESI

disruption to business continuity if ESI is locked down in place (preventing the end user from
modifying the files while being preserved) or if users are instructed not to modify existing
relevant documents
the expense of collecting, processing, reviewing, and producing larger datasets because the
relevant ESI was not collected using a more targeted method
overbroad preservation that could lead to irrelevant documents being preserved beyond their
useful life or scheduled destruction date and then becoming subject to a preservation obligation
in a subsequent matter

The general lack of control over the ESI as it resides on multiple systems and in multiple storage
locations complicates preservation and makes it very difficult for large corporations to
effectively and defensibly manage litigation holds. Know More On ediscovery tool

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Volatile Media

In a recent opinion out of the Southern District of New York, Judge Frank Maas held that failure
to copy relevant ESI from a portable USB flash drive constituted a violation of the duty to
preserve. In Wilson v. Thorn Energy, LLC, 2010 WL 1712236 (S.D.N.Y. 2010), the defendant
corporation identified a flash drive that contained relevant ESI, but rather than copying that
data safely to a centralized evidence repository, the defendant’s employee chose to hold on to
the drive, putting it instead into a desk drawer. When the files were requested for review and
production, the files could not be read from the drive. The defendant’s employee attempted to
repair the drive or recover the ESI contained on it, but those efforts failed. This is a classic
example of just how delicate some storage media is and how the failure to preserve relevant
ESI on more reliable and robust media can lead to findings of culpability with respect to
sanctions. The notion of preserve in place can be baffling if you consider that the systems on
which counsel or custodians would preserve their relevant ESI were not designed with e-
discovery in mind, and many of these systems were designed using a pre-determined matrix
that rates storage based on reliability, cost, and speed. These determinations were based on
business requirements, not litigation requirements, and custodians did not, at the time they
created relevant ESI, necessarily choose to save those documents or emails on the highest
quality storage system in the corporation. In fact, unstructured data is everywhere – on file
servers, on laptops, desktops, external hard drives, and mobile devices. All of these systems
vary in storage quality and redundancy, and they are subject to different risks such as theft,
user abuse, carelessness, and even brief cases of amnesia (“What litigation hold?”).

Disruption of Business Continuity

Further complicating the equation are shared data sources where many employees are storing,
editing, and collaborating on files in a shared environment. Portal technologies and even good
old file servers (the infamous “public” share) cannot effectively be put on litigation hold using a
preserve in place strategy unless all files are immediately made read-only. This would cause
chaos and put an extreme strain on the business if done on a widespread basis. Users who are
not connected to the litigation at all would effectively be shut out, and all users would be less
productive without the collaboration tools they have come to rely on. Some would suggest
instructing users to simply create a new copy of a protected document if they need to make
changes. However, this would quickly become burdensome as the universe of potentially
relevant documents would grow each day. Also, because users would not be able to clearly
identify which documents were truly responsive, even irrelevant documents would be copied,
causing an ongoing information management challenge.

Expense and Overbroad Preservation

As noted above, preserve in place strategies could lead to massive inflation of ESI, and without
a more targeted approach, greater volumes of ESI would likely need to be collected, processed,
analyzed, and reviewed. While costs are on all of our minds, expense should not be the
greatest of our fears. With preserve in place invariably comes overbroad preservation. A

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records retention policy has no effect if documents are being preserved that are profoundly
irrelevant to the litigation, and these very documents may be the relevant documents in the
next litigation. Make no mistake – preservation must be fairly broad given that the Federal
notice pleading requirement does not require plaintiffs to provide great insight into their
claims. However, a targeted collection can still be broad while defensibly limiting the scope of
preservation.

Collect to Preserve – A Safer Alternative

There is a safer, more defensible solution that combines sound litigation hold procedures (such
as written litigation hold notices with a custodian acknowledgement requirement) and
suspension of automatic data purging for relevant sources with a targeted collection of
potentially relevant ESI. This ensures that:

1. ESI is stored in a secure preservation location away from custodians, users, and the perils of
daily business activity, and
2. The scope of preservation is defensibly managed.

Collections can be updated daily to include modified versions of existing documents as well as
newly created documents within all identified sources. Also, and perhaps most importantly,
counsel is able to centrally manage the collection effort and thereby manage the preservation
effort. ESI is safe and custodians are not making decisions about what to keep and what to
destroy.

Conclusion

As courts continue to offer guidance on what passes for adequate preservation, it’s clear that
preserve in place is a gamble at best. And as we saw in Wilson, the consequences can be
disastrous when you lose. I am sure that we have not seen the last preserve-in-place-gone-
wrong story, but I am sure that for my money, I would rather take the safer bet.

Read More On: Electronic discovery litigation support

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