Author: Damien Meyer

Covid19 Blog Post Damien Meyer

ALTERNATIVE DISPUTE RESOLUTION DURING COVID-19

April 10, 2020

COVID-19 has dramatically altered our way of life both socially and professionally.  Like many other industries, the legal system has been forced to adapt to the “new normal.”  While many court proceedings have been postponed, such as in-person hearings and jury trials, other court services have continued. One issue that many clients and attorneys have found themselves facing is the current status of alternative dispute resolution (“ADR”). How are parties to address a previously scheduled settlement conference before a court-appointed Judge Pro Tempore (“JPT”) or a private mediator?

I am a JPT in Maricopa County, and I hold settlement conferences to assist parties in settling their pending lawsuits. The Alternative Dispute Resolution program for the Maricopa County Superior Court has issued a directive that JPTs may continue to hold settlement conferences either telephonically or through video conference. In fact, in February 2020, the ADR program hosted a Continuing Legal Education seminar for JPTs encouraging JPTs to hold settlement conferences via video conference. I recently conducted a telephonic settlement conference due to the concerns surrounding COVID-19. I found the process to be efficient and effective, and we settled the case in less than three hours. I wanted to share my observations from my experience and offer recommendations on how clients and attorneys can best approach telephonic or video settlement conferences.[1]

At the outset, the parties need to be prepared to modify the methodical approach of a traditional, in-person, settlement conference to the faster-paced telephonic/video settlement conference. The telephonic/video settlement conference tends to naturally move at a swift pace. Before the conference, it is critical to provide the JPT with streamlined, efficient information so the JPT can be prepared to jump-start the conference from the beginning. The settlement conference memorandum, setting forth your position to the JPT, is of utmost importance. It must be concise and include only the essential exhibits. Remember the parties and the JPT are at best sharing a screen – not a conference room where multiple exhibits can be spread out and reviewed simultaneously. The negotiations also move at a much quicker pace. Clients and their attorneys need to be prepared to adjust their strategy and to quickly make and respond to settlement offers to create and sustain the momentum that so often leads to resolution of their dispute.

During this difficult time where many aspects of our legal system have been slowed or entirely brought to halt, it is important for clients and attorneys to know they continue to have the opportunity to participate in ADR and obtain final resolution of their disputes.


[1] If you have a scheduled mediation with a private mediator, contact the mediator to discuss their particular office procedures. Some private mediators are offering to conduct mediations by video conference to continue to allow litigants the opportunity to resolve their cases.


About the Author: Damien Meyer focuses his practice on commercial litigation, assisting clients in their business matters and contractual disputes.  He counsels clients in several different industries including real estate, construction and banking.  His goal is to proactively guide businesses and individuals in the resolution of disputes to achieve and protect their business objectives and interests.  Damien also serves as a Maricopa County Judge Pro Tempore. drm@eblawyers.com | 602.222.4948

Disclaimer: This article is not legal advice and is only for general, non-specific informational purposes. It is not intended to cover all the issues related to the topic discussed. If you have a legal matter, the specific facts that apply to you may require legal knowledge not addressed by this article. If you need legal advice, consult with a lawyer.

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When Litigation is on the Horizon, Understand Your Duty to Preserve Electronically Stored Information

Every business strives to avoid a trip to court house, but at times litigation cannot be avoided.  Businesses (and individuals) are wise to have legal counsel already in place before litigation ensues.  Having an established relationship with legal counsel before facing litigation allows your business to be prepared to protect and advance its legal rights from the very beginning of the dispute.  One critical reason to have legal counsel in place is to ensure your business understands it obligations to preserve all evidence – both electronic and physical – that is relevant to the potential dispute.  In today’s electronic business environment where the great majority of data is created and stored electronically, it is critical that businesses understand their obligations to preserve their electronic data.  By properly preserving data, a business can ensure the critical evidence in support of its case can be disclosed during the litigation and ultimately presented to the finder of fact.

The Arizona Rules of Civil Procedure (ARCP) set forth the requirements of all parties to the case to preserve and disclose “electronically stored information” (ESI).  Rule 26.1(a)(9) requires all parties to any civil litigation to disclose their relevant ESI to all other parties to the litigation.  In layman’s terms, this rule requires a party to preserve and then provide the opposing party with access to all relevant ESI, such as emails, text messages, excel spreadsheets (this is by no means an exhaustive list) that are not protected from disclosure by a privilege (such as the attorney-client privilege).  A failure to preserve relevant ESI exposes the offending party to powerful sanctions.

These sanctions for failure to preserve ESI are set forth in Rule 37(g).  If ESI is lost because a party failed to take reasonable steps to preserve the data, under Rule 37(g)(2), the Court must then determine whether the party that failed to preserve the information “acted to deprive another party of the information’s use in the litigation.”  In other words, the Court must determine if the party intentionally destroyed its ESI to avoid disclosing that ESI to the other parties in the case.  If the Court determines a party did act to deprive another party of relevant ESI, the Court may impose sanctions under Rule 37(g)(2)(B) including: (1) presuming the lost ESI was unfavorable to the party that failed to preserve the data; (2) instructing the jury that it must presume the lost ESI was unfavorable to that party; or (3) dismissing the lawsuit (if the Plaintiff destroyed the ESI) or entering a default judgment (if the Defendant that destroyed the ESI).  These sanctions will inevitably lead to a poor result in the litigation for the party that failed to preserve its ESI, and likely expose that offending party to an award of attorneys’ fees in favor of the opposition.

Alternatively, if the failure to preserve data was not intentional, Rule 37(g)(2)(A) nevertheless authorizes the Court to make such orders that cure the harm caused by the loss of the ESI. While not as damaging as the sanctions for intentional destruction of ESI, no litigant wants to be in a position where a Court must make an order with the explicit purpose of helping the opposition recover from the inadvertent destruction of ESI.

In order to avoid these potential sanctions for the destruction of ESI, businesses must know when their obligations to preserve ESI begin.  Here, Rule 37 again provides guidance.  Rule 37(g)(1)(A) states that a party “has a duty to take reasonable steps to preserve ESI relevant to an action once it commences the action, once it learns that it is a party to the action, or once it reasonably anticipates the action’s commencement, whichever occurs first.  Rule 37(g)(1)(B)(i-ii) then proceeds to define “reasonable anticipation” to mean when a person “knows or reasonably should know that it will likely be a defendant in a specific action” or “seriously contemplates commencing an action or takes specific steps to do so.”  The duties to preserve evidence and the sanctions set forth in Rule 37 for the failure to preserve ESI are consistent with Arizona case law regarding the destruction of physical evidence.  See Souza v. Fred Carries Contracts, 191 Ariz. 247, 251, 955 P.2d 3 (App. 1997) (“[L]itigants have a duty to preserve evidence which they know, or reasonably should know is relevant in the action, is reasonably calculated to lead to the discovery of admissible evidence, is reasonably likely to be requested during discovery and/or is the subject of a pending discovery request.”).

Based upon the parameters set forth in Rule 37, a business’s duty to preserve ESI may arise much earlier than its leadership may realize.  As an example, a lender has a borrower that defaults on a loan payment.  The lender sends a notice of default letter to its borrower reserving all of its rights under the loan documents.  Pursuant to Rule 37, the lender’s duty to preserve ESI began at the time the decision was made to send the notice of default.  The lender has a duty to preserve all relevant ESI (such as all emails between the borrower and lender representatives). As another example, a company hires a new employee that the company did not know was subject to a non-compete provision from the employee’s previous employer.  The previous employer sends the company a letter informing the company that it has hired the employee in violation of a covenant not to compete and threatens legal action.  At that point in time, the company (and the previous employer) has a duty to preserve all relevant ESI related to that employee, including email correspondence, on-line employment applications, etc.

Experienced litigation counsel can guide their clients through ESI preservation obligations as well as the production of ESI.  Once you have retained counsel, the duty to preserve evidence – in your possession and in your opposition’s possession – is an important issue to discuss. Your legal counsel should provide you, the client, written guidance as to what relevant ESI needs to be preserved.  Additionally, your legal counsel may send a “litigation hold” letter to all opposing parties and/or their counsel advising them of their ESI preservation duties under Rules 26.1 and 37. Through a litigation hold letter, your counsel places the opposition on notice of its obligations to preserve all relevant evidence in their possession, including ESI.  This will prevent the opposition from later claiming it was unaware of its preservation obligations and insure your ability to obtain critical evidence in the opposition’s possession.

If you have any questions regarding your obligations to preserve evidence for purposes of civil litigation, contact your legal counsel to discuss and work through these issues.  These questions should be asked at the beginning of any potential dispute to ensure that all evidence – including ESI – is preserved.

About the Author: Damien Meyer is a shareholder with Engelman Berger and a member of the civil litigation practice group. Damien practices primarily in commercial litigation and business counsel. His focus is to assist businesses and individuals in resolving disputes on a proactive basis to achieve and protect their business objectives and interests.

 

Disclaimer: This blog is not legal advice and is only for general, non-specific informational purposes. It is not intended to cover all the issues related to the topic discussed. If you have a legal matter, the specific facts that apply to you may require legal knowledge not addressed by this blog. If you need legal advice, consult with a lawyer.