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Doug Austin

eDiscovery Case Law: "Untimely" Motion for Sanctions for Spoliation Denied

A recent ruling by the US District Court of Tennessee has denied a motion for sanctions for spoliation on the grounds that the motion was “untimely.”

In Am. Nat’l Prop. & Cas. Co. v. Campbell Ins., Inc., No. 3:08-cv-00604, 2011 WL 3021399 (M.D. Tenn. July 22, 2011), the plaintiff argued that the defendants’ admitted failure to preserve evidence “warrants a harsh penalty,” but the court found in favor of the defense that the motion was untimely.

  • The defendants, Tommy Campbell, Marshall C. Campbell and Campbell Insurance, Inc. were previously found to have failed to preserve email evidence from the period between April and July 2009. The plaintiff claimed that these emails contained “damning evidence” and that this discovery spoliation was deliberate.
  • This spoliation was discovered in May 2010, but the plaintiff did not file a motion for sanctions until July 16, 2011 – more than fourteen months after the spoliation was discovered and almost five months after discovery closed in February of 2011.
  • With the trial less than seven weeks way, the court considered this motion for sanctions for spoliation in the light of the summary of the law on spoliation that was provided in Goodman v. Praxair Services, Inc., 632 F.Supp.2d 494 (D.Md.2009). Among other points, the district court in Goodman v. Praxair encouraged courts to be aware of the time between the close of discovery and a motion related to spoliation, as well as cautioning against spoliation motions “made on the eve of trial.”
  • The court rejected the plaintiff’s excuse for the timing on the basis that “because the relevant emails were deleted and cannot possibly be produced, the Motion for Sanctions ‘is not a discovery motion.'”
  • Because of the “disruptive” timing of the motion, and the inability of the plaintiff to effectively explain why they delayed so long in filing a motion after this spoliation was encountered in discovery, the court ultimately ruled against the motion for sanctions, calling it “untimely”.

So, what do you think? Does spoliation of evidence “expire” or should timeliness matter at all in a case like this one? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: Same Old Story, Lawyers Struggling to “Get” eDiscovery
 

A couple of days ago, Law Technology News (LTN) published an article entitled Lawyers Struggle to Get a Grasp on E-Discovery, by Gina Passarella, via The Legal Intelligencer.  Noting that “[a]ttorneys have said e-discovery can eat up between 50 to 80 percent of a litigation budget”, the article had several good observations and quotes from various eDiscovery thought leaders, including:

  • Cozen O'Connor member David J. Walton, co-chairman of the firm's eDiscovery task force, who observed that “I'm afraid not to know [eDiscovery] because it dominates every part of a case”;
  • LDiscovery General Counsel Leonard Deutchman, who noted that the younger generation comfortable with the technology will soon be the judges and attorneys handling these matters, asked the question “what happens to those people that never change?”.  His answer: “They die.”
  • K&L Gates eDiscovery analysis and technology group Co-Chairman Thomas J. Smith noted that “A lot of the costs in e-discovery are driven by paranoia because counsel or the party themselves don't really know the rules and don't know what the case law says”.
  • Morgan Lewis & Bockius partner Stephanie A. "Tess" Blair heads up the firm's e-data practice and hopes that in five years eDiscovery will become more routine, noting “I think we're at the end of the beginning”.
  • Dechert's e-discovery practice guru Ben Barnett said, “Technology created the problem, so technology needs to solve it.”  But, David Cohen, the head of Reed Smith's eDiscovery practice, said that the increasing amount of data sources are keeping ahead of that process, saying “You have to make improvements in how you handle it just to tread water in terms of cost”.

There are several other good quotes and observations in the article, linked above.

On the heels of Jason Krause’s two part series on this blog regarding the various eDiscovery standards organizations, and the controversy regarding eDiscovery certification programs (referenced by this post regarding the certification program at The Organization of Legal Professionals), where do attorneys turn for information?  How do attorneys meet the competency requirements that the American Bar Association (ABA) Model Rules set forth, when an understanding of eDiscovery has become an increasing part of those requirements?

One common denominator of the firms quoted above is that they all have one or more individuals focused on managing the eDiscovery aspect of the cases in which they’re involved.  Having an eDiscovery specialist (or a team) can be a key component of effectively managing the discovery process.  If you’re a smaller firm and cannot devote a resource to managing eDiscovery, then find a competent provider that can assist when needed.

In addition to identifying an “expert” within or outside the firm, there are so many resources available for self-education that any attorney can investigate to boost their own eDiscovery “savvy”.  Join one of the standards organizations referenced in the two part series above.  Or, participate in a certification program.

One method for self-education that attorneys already know is case law research – while there is always variety in how some of the issues are handled by different courts, case decisions related to eDiscovery can certainly identify risks and issues that may need to be addressed or mitigated.  Subscribing to one or more resources that publish eDiscovery case law is a great way to keep abreast of developments.  And, I would be remiss if I didn’t note that eDiscovery Daily is one of those resources – in the nearly 11 month history of this blog, we have published 43 case law posts to date.  More to come, I’m sure… 😉

So, what do you think? Do you have a game plan for “getting” eDiscovery?  Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Case Law: Bankruptcy Court Denies Foreign Access to Debtor's Emails

A Southern District of New York United States Bankruptcy Court denied access to a debtor’s emails on July 22, in a foreign request involving international eDiscovery.

In re Toft, No. 11-11049 (ALG), 2011 WL 3023544 (Bankr. S.D.N.Y. July 22, 2011), the U.S. Bankruptcy Court determined that to permit a relief request from a German insolvency administrator would directly contravene the “fundamental principles” of U.S. public policy by undermining the right to privacy in electronic communications and the right of parties involved in any court order to receive notice of such proceedings and of their involvement.

  • Dr. Martin Prager, in his role as authorized insolvency administrator in a German bankruptcy proceeding, sought permission to access the mail and electronic correspondence of Dr. Jurgen Toft. Although the majority of such correspondence was located under European purview, two of the email accounts belonging to the debtor were found to be stored on servers owned by U.S. Internet Service Providers (“ISPs”).
  • The Munich District Insolvency Court had previously approved a Mail Interception Order, which had been granted recognition by the English High Court of Justice before being brought before the United States Bankruptcy Court.
  • Prager sought a U.S. court order that would grant comity to his German Mail Interception Order and compel the two American ISPs to provide him with “all of the Debtor’s e-mails currently stored on their servers and to deliver to Prager copies of all e-mails received by the Debtor in future,” without notice being provided to the debtor by either the court or the ISPs.
  • Despite the approval of the English High Court of Justice, the US Bankruptcy Court found that it could not grant relief to Prager’s request. The court determined that to grant access to emails as requested by Prager would be “banned under U.S. law, and it would seemingly result in criminal liability under the Wiretap Act and the Privacy Act for those who carried it out.”
  • In addition, the court observed that providing permission for access to emails without informing the debtor would also be contrary to U.S. law, which requires that all parties involved in any court order must receive notice.
  • As a result, the court concluded that the relief request was impossible to grant without running “manifestly contrary” to U.S. law and public policy, and did not honor Prager’s request.

So, what do you think? Was the court’s rejection of Prager’s request the only answer, or were there other routes that could have been taken in dealing with this international eDiscovery request? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: Cloud Covered by Ball
 

What is the cloud, why is it becoming so popular and why is it important to eDiscovery? These are the questions being addressed—and very ably answered—in the recent article Cloud Cover (via Law Technology News) by computer forensics and eDiscovery expert Craig Ball, a previous thought leader interviewee on this blog.

Ball believes that the fears about cloud data security are easily dismissed when considering that “neither local storage nor on-premises data centers have proved immune to failure and breach”. And as far as the cloud's importance to the law and to eDiscovery, he says, "the cloud is re-inventing electronic data discovery in marvelous new ways while most lawyers are still grappling with the old."

What kinds of marvelous new ways, and what do they mean for the future of eDiscovery?

What is the Cloud?

First we have to understand just what the cloud is.  The cloud is more than just the Internet, although it's that, too. In fact, what we call "the cloud" is made up of three on-demand services:

  • Software as a Service (SaaS) covers web-based software that performs tasks you once carried out on your computer's own hard drive, without requiring you to perform your own backups or updates. If you check your email virtually on Hotmail or Gmail or run a Google calendar, you're using SaaS.
  • Platform as a Service (PaaS) happens when companies or individuals rent virtual machines (VMs) to test software applications or to run processes that take up too much hard drive space to run on real machines.
  • Infrastructure as a Service (IaaS) encompasses the use and configuration of virtual machines or hard drive space in whatever manner you need to store, sort, or operate your electronic information.

These three models combine to make up the cloud, a virtual space where electronic storage and processing is faster, easier and more affordable.

How the Cloud Will Change eDiscovery

One reason that processing is faster is through distributed processing, which Ball calls “going wide”.  Here’s his analogy:

“Remember that scene in The Matrix where Neo and Trinity arm themselves from gun racks that appear out of nowhere? That's what it's like to go wide in the cloud. Cloud computing makes it possible to conjure up hundreds of virtual machines and make short work of complex computing tasks. Need a supercomputer-like array of VMs for a day? No problem. When the grunt work's done, those VMs pop like soap bubbles, and usage fees cease. There's no capital expenditure, no amortization, no idle capacity. Want to try the latest concept search tool? There's nothing to buy! Just throw the tool up on a VM and point it at the data.”

Because the cloud is entirely virtual, operating on servers whose locations are unknown and mostly irrelevant, it throws the rules for eDiscovery right out the metaphorical window.

Ball also believes that everything changes once discoverable information goes into the cloud. "Bringing ESI beneath one big tent narrows the gap between retention policy and practice and fosters compatible forms of ESI across web-enabled applications".

"Moving ESI to the cloud," Ball adds, "also spells an end to computer forensics." Where there are no hard drives, there can be no artifacts of deleted information—so, deleted really means deleted.

What's more, “[c]loud computing makes collection unnecessary”. Where discovery requires that information be collected to guarantee its preservation, putting a hold on ESI located in the cloud will safely keep any users from destroying it. And because cloud computing allows for faster processing than can be accomplished on a regular hard drive, the search for discovery documents will move to where they're located, in the cloud. Not only will this approach be easier, it will also save money.

Ball concludes his analysis with the statement, "That e-discovery will live primarily in the cloud isn't a question of whether but when."

So, what do you think? Is cloud computing the future of eDiscovery? Is that future already here? Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Trends: Third Party Vendors Named in McDermott eDiscovery Malpractice Case
 

You might remember eDiscovery Daily's blog post a few weeks ago about the filing of an eDiscovery malpractice lawsuit against McDermott Will & Emery by J-M Manufacturing Co., a former client of McDermott's.

This case has struck a chord in the eDiscovery community since its filing on June 1, drawing attention to the practices and standards that are at the heart of eDiscovery and outsourced review. Now, the First Amended Complaint has revealed the third party vendors involved in the eDiscovery malpractice suit.

Navigant Consulting, Stratify and Hudson Legal Named in First Amended Complaint

On July 28, J-M Manufacturing filed the amended complaint to its case against McDermott. The amended malpractice complaint describes the role of the third party vendors hired by McDermott, as follows:

  • According to J-M Manufacturing, McDermott hired both Navigant Consulting, Inc. and Stratify, Inc. to run documents through a filter intended to identify and separate materials that were covered by attorney-client privilege and any documents not responsive to subpoenas.
  • Prior to the second production of privileged documents to the federal government, Hudson Legal was also hired by McDermott, and was tasked with reviewing documents identified as potentially privileged and classifying them as either: a) responsive and privileged, b) responsive and not privileged, or c) nonresponsive.

Despite the efforts of these three companies, approximately 3,900 privileged documents were included in the 250,000 discovery documents that were turned over to the government and, in turn, given to relators for examination. The relators subsequently refused to return the privileged documents on the grounds that McDermott twice conducted privilege reviews before producing the documents.

J-M Manufacturing Claims McDermott Held Files Hostage

The new amendment also includes the assertion that McDermott held relevant case files “hostage” against payment of an outstanding invoice of $530,477 after it was replaced as J-M Manufacturing's attorney. A McDermott partner reportedly emailed the president of J-M Manufacturing and said, "I'm told that our firm policy is not to release all files until full payment is made. If you'd like all the files now, please send a check for the entire $530,477 and we'll get them out to you promptly."

In the amended complaint, J-M Manufacturing contends that McDermott’s contact (including the above referenced email) violated the California Rules of Professional Conduct, preventing J-M from recognizing the “true nature and extent of the negligent disclosure” until it was too late.

In its own filing, McDermott responded to the amended complaint by criticizing J-M Manufacturing for "scandalous and irresponsible allegations that could not have been the result of a reasonable pre-filing inquiry." McDermott indicated that they’re “willing and able to set the record straight”, but has “resisted the temptation to tell the full story without first giving J-M the opportunity to withdraw its complaint”.  McDermott also warned that “J-M’s interests could be seriously compromised” if McDermott is forced to fully disclose the facts.

So, what do you think? Has this case degenerated into "scandalous and irresponsible allegations", or are McDermott and its vendors at fault? Will we see more cases like this? Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Law: Possible Changes to the Federal Rules of Civil Procedure Affecting eDiscovery
 

As reported on Law Technology News recently, a subcommittee of the Judicial Conference of the United States is preparing to make recommendations about the possibility of changes to the Federal Rules of Civil Procedure that would improve eDiscovery procedures and rules in the United States, and affect how eDiscovery is conducted abroad.

eDiscovery Challenges up for Discussion

The subcommittee's upcoming meeting in Dallas, scheduled for September 9, 2011, is intended to cover the discussion points documented by the Advisory Committee on Civil Rules in April 2011.

Those discussion points for September currently include:

  • The scope of challenges presented by electronically stored information ("ESI"),
  • Limitations of current U.S. and overseas rules that affect discovery, and
  • The impact of ongoing technological advancements.

Although technology continues to progress, creating new situations and questions relevant to eDiscovery, the rules that govern discovery of electronic information and documents have not been changed since 2006. David Campbell, the committee chairman and District Court Judge for Arizona, says that although improvements to these rules are important, change won't happen overnight. Any official changes are not likely to come into effect until 2013 or 2014.

At this point, Campbell says, the September 9 meeting is intended as an opportunity "to learn from these folks… a due diligence effort on the part of our subcommittee."

Three Types of Rules Affecting eDiscovery

The subcommittee plans to discuss three types of rules:

  • Specific rules for electronically stored information,
  • More general rules related to eDiscovery, and
  • Rules that specifically cover sanctions.

If enough progress is made, the results of the September 9 conference will be presented as a summary and proposal in November. In turn, this proposal would likely be up for discussion in March of 2012, when the subcommittee's ideas will be open to public discussion. The end goal is for any changes to rules to be approved by December of 2012, although it could take as long as 2014 for any new rules to come into effect.

So, what do you think? Do you expect major changes to the rules regarding eDiscovery, and if so, what would you like to see changed, and why? Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Case Law: Court Upholds Sanctions for Intentional Spoliation of Unallocated Space Data

The Supreme Court of Delaware recently upheld the sanctions against the defendant for wiping the unallocated space on his company’s computer system, despite a court order prohibiting such destruction.

In Genger v. TR Investors, LLC, No. 592,2010, 2011 WL 2802832 (Del. July 18, 2011), Arie Genger, CEO of Trans-Resources, Inc., argued that sanctions against him were unreasonable and made a motion for the court to overturn its previous decision regarding spoliation of discovery materials. Instead, after due process, the court upheld its earlier decision, as follows:

  • In TR Investors, LLC v. Genger, 2009 WL 4696062 (Del. Ch. Dec. 9, 2009), the defendant was found to have intentionally spoliated electronic discovery documents by instructing an IT consultant to wipe unallocated space on his company’s computers. This action was taken in contempt of court and in contravention of a Status Quo order directing all parties to prevent alteration or destruction of any company documents.
  • Genger was penalized with an order to produce 10 documents for discovery that had previously been considered privileged, the raising of the burden of persuasion with regard to his defense, a preclusion from his testimony being permitted as factual evidence, and several sanctions.
  • The sanctions included attorney’s fees and expenses related to the sanctions motions, which totaled roughly $3.2 million. At the time, this amount was agreed upon by all parties.
  • Following this 2009 order, the defendant appealed the sanctions, arguing that because the court’s Status Quo order did not explicitly refer to unallocated hard drive space, the obligation to preserve documents and discoverable materials found there became “an impossible burden… effectively requiring the company to refrain from using its computers entirely.”
  • On July 18, the court decided in favor of upholding the sanctions against Genger. The reasoning behind this decision revolved around the fact that Genger did not unknowingly delete discoverable documents in the normal course of using his company’s computers, but instead, deliberately set out to destroy information that was included in the court’s Status Quo order.
  • The court was clear in emphasizing that this decision is meant to apply only in such a situation, “where a party is found intentionally to have taken affirmative steps to destroy or conceal information to prevent its discovery at a time that party is under an affirmative obligation to preserve that information.”
  • The court also recommended that, in the future, parties be clear in discussing unallocated space on computer hard drives and in deciding to either include or exclude such space from preservation orders like this one.

So, what do you think? Have you been involved in any cases resulting in sanctions associated with deletion of unallocated space data? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: OLP Response to LTN Article Regarding eDiscovery Certifications
 

Yesterday, Law Technology News (LTN) published an article entitled E-Discovery Certification: Sham Exams?, by Patrick Oot, which questioned the validity of several of the eDiscovery certification programs that, in their words, are “sprouting up faster than dandelions in May grass”.

As you can imagine, the article did not go over swimmingly with organizations that sponsor eDiscovery certification programs.

One of those is The Organization of Legal Professionals (OLP).  Chere Estrin is the Chairperson of the Board of Directors of the OLP.  Yesterday, I interviewed her regarding the LTN article and the OLP certification program.  Here is the interview:

What is the OLP’s response to the article published in Law Technology News characterizing eDiscovery Certifications as “Sham Exams”?

It appears as though LTN was trying hard to get some juicy August ratings by using an exaggerated title for the article.  The title of the negative article was placed right over the positive articles making it appear as though OLP fell into the sham characterization.  This layout caused many people to categorize all eDiscovery certifications as sham exams.  That is not so.

General readers would have to know details of the differences between OLP and other organizations to realize that Mr. Oot was not at all talking about OLP.  For example, he says that he is against the "for-profit" organization providing certification – OLP is a non-profit.  He says that the organization takes $995.00 for the exam.  OLP charges $695.00 for prep courses including exam and only $275.00 to take the exam without the prep course.

Further, he states that the Board is made up of unrecognizable names.  OLP has a blue ribbon panel of household and well-respected names:  Mary Mack, Herb Roitblat, Doug Mitchell, Tom O'Connor, Browning Marean, (former member), Mr. Oot's partner, Anne Kershaw (former member),  Professor Sara Hook, Steve Lief, Laura Zubulake (the plaintiff) and other well-respected professionals. Most importantly, Patrick Oot himself was a member of OLP's Board of Governors for well over a year.  He only resigned to take a position with the SEC as that entity did not allow its attorneys to sit on boards.  It is clear that Mr. Oot was not talking about OLP.

What differentiates the OLP eDiscovery Certification Program from other programs in the industry?

The Certified eDiscovery Professional (CeDP) was developed in partnership with Pearson, a $7 billion corporation with a division that specializes in testing and certification exams.  Pearson has developed well-known exams such as LSATs, GRE, GMATS, to name just a few.

OLP provided the content from over 30 top experts in the field in the US and internationally. The exam was then peer-reviewed by subject matter experts. Top experts include partners in major firms, in-house legal department counsel, well-known consultants, Ph.D.s, authors, litigation support experts, household icons in the industry and law professors.

Pearson provided 5 Ph.D.s who specialize in psychometrics and certification exams.  Pearson is also provides the technology and over 1,000 secured testing environments around the world.  The test has been in development for over 18 months.  OLP has been in no rush to market.

Certification exams differ from certificate programs because certifications include an experience component. Certificate programs, on the other hand, award certificates once a course of study has been completed. They do not require previous work experience.  Taking a course and taking a test about what you took in a course is not certification. That would be like saying you pray in church and went to Sunday school, so therefore you are a priest.  Something is definitely missing.

To be certified, the exam must meet certain standards set down by the National Association of Certifying Associations, which the CeDP does.  It is given in over 1,000 worldwide secured environments with attending proctors.

The CeDP Is a rigorous, objective, sound and knowledge-based exam without the influence of products or services.  It is not given by a vendor secretly pushing their products or services.

The science of psychometrics was applied to the exam. Psychometrics is a combination of psychology and measurement whereby measurement professionals review performance statistics for every item and make recommendations for examination improvement, ensuring that the range of item difficulty is appropriate and that problem items are identified for review.

What do you think it will take for any eDiscovery certification program to be accepted as a standard for certifying knowledge of eDiscovery best practices?

Overcoming fear.  Fear is the biggest career blocker. Generally, those who are self-taught fear that they won't be able to pass the exam.  Right now, other than OLP, there is no comprehensive eDiscovery training other than webinars, a seminar here and there or a book. Even conferences can only give overviews.   It is true that Georgetown University has a program but I believe it is only about a week long, is limited to a certain low volume number that can attend and cost something like $5,000.  While it has a reputation as a top-of-the-line program, it cannot reach the masses.  There are over 1 million licensed attorneys in the U.S., over 300,000 paralegals and an untold number of other legal professionals in the field of litigation – the vast majority of whom have not had formal training.

eDiscovery is different than any other practice area the law has ever seen in that it marries technology with the law.  Very few people are trained in both arenas.  It is not unreasonable to expect certification and formal education to be required in order to provide top of the line, expert services to clients.

Statistics bear out that those fields that turn to certification begin to produce higher paid employees – as much as 10 – 20% higher than those without certifications.   I also think money talks and with this tough market, legal professionals are going to realize that employers value the employee who takes the time and effort to get formally educated and to stand up and not be afraid to be tested on what they know.

Bear in mind, that certification does not "certify" that someone is an expert.  It is only a tool to ensure that a professional understands the core competencies.

Where can our readers go to find out more about the OLP certification program?

They can go to http://www.theolp.org/Default.aspx?pageId=401708 for more information.

About Chere: In addition to being the Chairperson of the Board of Directors of the Organization of Legal Professionals.  She is the CEO of the National Association for Freelance Legal Professionals and CEO of Estrin Education, Inc.  She is the Editor-in-Chief of KNOW Magazine and SUE for Women Litigators.  Ms. Estrin was formerly with two major law firms; a top executive in a $5 billion corporation; and President of The Estrin/Quorum Group, a division of Quorum Litigation (acquired by Kroll Ontrack).  She has written 10 books on legal careers and has been interviewed by Newsweek, The Los Angeles Times, The Chicago Tribune, National Law Journal and other prestigious publications.  She is a recipient of the Los Angeles/Century City Chamber of Commerce Women of Achievement Award, an Inc. Magazine Entrepreneur of the Year finalist and a California Lawyer Magazine LAMMIE award winner. She can be reached at chere.estrin@theolp.org.

So, what do you think? Have you been through a certification program, such as the CeDP program from the OLP?  Please share any comments you might have or if you'd like to know more about a particular topic.

eDiscovery Case Law: Court Orders Sanctions in Response to "Callous and Careless Attitude" of Defendant in Discovery

A Special Master determined that multiple discovery failures on the part of the defendant in an indemnity action were due to discovery procedures “wholly devoid of competence, yet only once motivated by guile”. Accordingly, the court ordered sanctions against the defendant and also ordered the defendant to pay all costs associated with its discovery failures, including plaintiff’s attorney fees and costs.

The defendant’s discovery efforts in PIC Group, Inc. v. LandCoast Insulation, Inc., No. 1:09-CV-662-KS-MTP, 2011 WL 2669144 (S.D. Miss. July 7, 2011) resulted in several discovery failures, including spoliation of data, mostly through carelessness and incompetence:

  • After consideration of the computer forensics experts recommended by the parties in this case, the court rejected all seven recommendations and appointed its own Special Master (Craig Ball, a previous thought leader interviewee on eDiscovery Daily) to conduct an investigation into the indemnity case, which would revolve around the collapse of scaffolding erected by the defendant.
  • The defendant’s efforts resulted in multiple discovery failures, including: 1) failure to impose “any corporate policy, procedure, or concerted effort [to] preserve electronic data”; 2) no effort to preserve or collect ESI until it was too late to protect the relevant data; 3) the theft of an employee’s laptop and subsequent loss of the backup of that hard drive; and 4) the erasure of another computer containing relevant ESI sometime two or three months after the collapse of the scaffolding at issue in this lawsuit.
  • As a result, the Special Master recommended sanctions against the defendant for its “callous and careless attitude” and sloppy measures taken in the course of discovery.
  • In response to these proposed sanctions, the defendant argued that none of its failures in the course of discovery were due to bad faith, and demonstrated that the plaintiff suffered only minimal prejudice.
  • Although the Special Master determined that the discovery failures were caused by a lack of caution while collecting and preserving evidence, rather than willful intent to alter discovery, he still recommended, and the court ordered, sanctions against the defendant.
  • Accordingly, the defendant was ordered to pay the plaintiff’s attorney fees and expenses accrued as a result of the defendant’s discovery failures, as well as pay the Special Master’s fees and expenses.  The defendant was also compelled to produce an image of the laptop that had been erased (from imaging conducted after the erasure) and the court reopened discovery in this case.  The court declined the Special Master’s recommendation for additional monetary sanctions ($50,000), though it did adopt his recommendation that the defendant “shall not seek indemnification or reimbursement from their insurance company” to pay the assessed fees.

So, what do you think? Were these sanctions merited, or should there be clear intent to deceive for such sanctions to be awarded? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Breaking News: News International to Suspend Deletion of Emails and Other Documents
 

According to The Independent, staff at Rupert Murdoch’s newspapers has been warned to stop deleting any documents that may be relevant to the current investigations, as a suspension of its usual policy about deletion of documents goes into effect.

Over the course of the 2011 investigation into illegal voicemail hacking by News International employees, there has been contention over the ongoing deletion of documents at the newspaper and its subsidiaries. But only during this past weekend did News International's parent company, News Corp, finally send an email to all of its employees instructing them to take measures preventing the deletion of documents that might be related to the investigation, including emails and other ESI.  Specifically, the email instructed employees to “Please suspend any automatic deletion or discarding of any documents, whether electronic or paper, including emails or drafts of documents… If you are uncertain whether a document is relevant… you should preserve it.”

Of course, the News Corp scandal has been not only significant eDiscovery news, but major world news as well.

  • Since January 2011, police have been investigating a list of roughly 4,000 potential targets whose voicemails may have been hacked as part of this scandal – including Hollywood celebrities, sports figures, politicians, and even members of the British Royal Family, most of whom were unaware of how easily their cell phone functions were hacked.
  • The newsroom at News of the World, the newspaper implicated in the systematic phone hacking, has been closed.
  • Sean Hoare, the whistle-blower who disclosed phone hacking at News of the World, was found dead in his home in Watford, Hertfordshire.  No cause of death has yet been identified.
  • During testimony to Parliament last week, Rupert Murdoch was attacked – by a pie wielding comedian, who was thwarted by Murdoch’s wife Wendi.

Although this email sends a positive message about News Corp's willingness to protect eDiscovery information from this point forward, the instruction arguably comes too late to protect the documents and other ESI that have potentially been destroyed in the months since the investigation into the paper's illegal phone hacking began as well as the years when News Corp faced numerous hacking claims during key periods associated with the those claims.  News International has acknowledged that some messages may be recoverable on backup disks, and the police are trying to recover that information now, said Tom Watson, a Labor Party member of Parliament.

From an eDiscovery perspective, this story may become “Enron-esque” before it’s all over.

So, what do you think? Is this instruction from News International a step toward greater openness and responsibility in this investigation, or is it simply a case of too little, too late? Please share any comments you might have or if you'd like to know more about a particular topic.