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Case Law

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Court Compels Plaintiff to Provide Social Media Account and Activity Data: eDiscovery Case Law

In Waters v. Union Pacific Railroad Co., No. 15-1287-EFM-KGG (D. Kan. June 21, 2016), Kansas Magistrate Judge Kenneth G. Gale granted the defendant’s motion to compel the plaintiff to produce account information associated with his social media accounts as well as postings from the dates he missed work in conjunction with his injury claims against the defendant.  Judge Gale also granted most of the components of the plaintiff’s motion to compel against the defendant for various discovery requests.

Case Background

In this personal injury case against the plaintiff’s former employer, both parties filed motions to compel against the other.  The defendant asked for the plaintiff to list the names/account names “associated with [his] Facebook and Twitter accounts” and also initially asked for a broad category of information relating to the plaintiff’s social media presence.  After the plaintiff objected, the parties conferred and the defendant limited the scope of its requests to “all social network postings, messages, and photographs that he sent or received” on the work dates he claims he missed as a result of his injuries.  The plaintiff argued that the defendant’s requests for social media data were overly broad, irrelevant, and not proportional to needs of the case.

The plaintiff’s motion to compel related to discovery requests regarding prior injuries suffered by the defendant’s employees, notifications regarding defects or hazards on the defendant’s locomotives, prior notification of safety hazards or injuries relating to water on walkways, statements regarding the plaintiff’s claims, photos of the locomotive in question, and inspection and maintenance reports for the subject locomotive.  The defendant logged various objections to those requests.

Judge’s Ruling

In addressing the defendant’s motion to compel, Judge Gale stated:

“The Court finds that Defendant’s requests are relevant on their face. As stated above, unless a request is improper on its face, ‘the party asserting the objection has the duty to support its objections.’  Plaintiff has failed in this regard. To the contrary, the Court finds that the requests are highly relevant on their face as they seek evidence which could be germane to the extent of Plaintiff’s injuries and damages and state of mind.

Plaintiff has also failed to establish the overbreadth of Defendant’s requests. Following attempts to confer with Plaintiff, Defendant willingly narrowed the scope of the requests at issue. The Court does not agree that the access Defendant seeks to Plaintiff’s social media postings and messages is ‘unfettered’ when Defendant has limited the temporal (i.e. days Plaintiff missed work) and/or substantive subject matter scope of the requests”.

As a result, Judge Gale granted the defendant’s motion to compel.

Not all news was bad for the plaintiff; however, as Judge Gale granted his motion to compel regarding prior injuries and notifications, statements regarding the plaintiff’s claims and inspection and maintenance reports for the subject locomotive.  Only the plaintiff’s request for photos of the locomotive in question was denied.

So, what do you think?  Was the scope of the defendant’s request appropriate or was it overbroad?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Court Assesses $3 Million Punitive Sanction to Defendant for “Bad Faith” Deletion of Emails: eDiscovery Case Law
 In GN Netcom, Inc. v. Plantronics, Inc., No. 12-1318-LPS (D. Delaware, July 12, 2016), Delaware District Judge Leonard P. Stark, finding a high degree of fault, bad-faith intent to deprive the plaintiff of responsive documents and prejudice caused to the plaintiff’s case, imposed several sanctions against the defendant, including “punitive sanctions in the amount of $3,000,000” for the “intentional and admitted deletion of emails” by the defendant’s Senior Vice President of Sales.

Case Background

In this case with claims of monopolization, attempted monopolization and common-law tortious interference with business relations against the defendant, the defendant (upon receiving a demand letter from the plaintiff in May 2012) promptly issued a litigation hold to relevant employees and provided training sessions to ensure compliance, then issued an updated litigation hold with quarterly reminders once the lawsuit was filed.

However, the defendant’s Senior Vice President of Sales (Don Houston) on several occasions after the lawsuit was filed, replied to email discussions among co-workers, requesting them to be careful about competitive statements and instructing them to delete those email chains where discussions were taking place.  Houston also deleted his own emails, deleting more than 40% of his emails from November 18, 2013 through February 19, 2014 from both his legal folder and his deleted files folder.  In addition, sales team members were instructed to use code words to refer to competitors, such as “zebra” for the plaintiff.

When the defendant’s Associate General Counsel became aware of the deletions, she contacted the IT department, which implemented an anti-email-deletion litigation hold feature and provided her with Houston’s back-up tapes going back to November 2013.  The defendant retained an eDiscovery provider to restore back-up tapes and preserve emails still available and retained another eDiscovery provider to quantify the emails that had been deleted.  The second eDiscovery provider estimated that as many as 90,000 emails were unrecoverable, with as many as 6,000 estimated to be responsive to the plaintiff’s discovery requests.  The defendant chose not to complete the project and did not disclose the analysis for almost ten months; the plaintiff, using its own expert to conduct analysis, determined as many as 15,000 deleted emails would have been responsive to discovery requests.  The plaintiff filed a Motion for Sanctions against the defendant for the deleted emails.

Judge’s Ruling

Judge Stark began the discussion portion of the ruling by stating that “It is undisputed that thousands of Mr. Houston’s emails ‘should have been preserved in the anticipation or conduct of litigation,’ were ‘lost,’ and ‘cannot be restored or replaced through additional discovery.’”  Judge Stark refuted the defendant’s arguments that it took reasonable steps to preserve ESI, that it had no intent to deprive the plaintiff of discovery (and therefore did not act in bad faith) and that the plaintiff had not demonstrated any prejudice, stating, among other things, that:

  • The defendant’s “extensive document preservation efforts do not absolve it of all responsibility for the failure of a member of its senior management to comply with his document preservation obligations”,
  • “in Plantronics’ own words, Mr. Houston instructed others to delete emails ‘for purposes of protecting the business’”, and
  • “Because the Court has found that Plantronics acted in bad faith, the burden shifts to Plantronics to show a lack [of] prejudice to GN resulting from Mr. Houston’s deletion of emails.” Judge Stark refuted the defendant’s three arguments as to lack of prejudice from the deletion of emails.

With the determination that sanctions were in order, Judge Stark rejected the idea of re-opening discovery as a possible remedy.  Instead, he noted that “[m]onetary sanctions, although unable to fully redress the prejudice to GN, are warranted.”

With that in mind, Judge Stark stated the following:

“[T]he Court finds that Plantronics’ high degree of fault, its bad-faith intent to deprive GN of responsive documents, and the prejudice it has caused to GN’s case – along with the difficulties it has created for GN in ‘getting to the bottom of the deletion story’ and its (at times) unwillingness to acknowledge wrongdoing – further merit punitive monetary sanctions.  Therefore, the Court will impose a sanction in the amount of $3,000,000 on Plantronics, payable to GN.”

In addition, Judge Stark added “monetary sanctions in the form of the reasonable fees and costs incurred by GN in connection with the disputes leading to today’s Order”, “possible evidentiary sanctions, if requested by GN and found by the Court to be warranted as this case progresses toward trial”; and “instructions to the jury that it may draw an adverse inference that emails destroyed by Plantronics would have been favorable to GN’s case and/or unfavorable to Plantronics’ defense.”

So, what do you think?  Were the sanctions excessive or were they appropriate?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Court Rules Government’s Use of Stingray to Locate Suspect Was Unwarranted: eDiscovery Case Law
 In United States v. Lambis, No. 15cr734 (S.D.N.Y. July 12, 2016), New York District Judge William H. Pauley, III granted the defendant’s motion to suppress evidence obtained by law enforcement agents in connection with a search of his apartment because the apartment was located via the use of a “Stingray” cell-site simulator to identify the location of the defendant’s phone without a warrant.

Case Background

In 2015, the US Drug Enforcement Administration (“DEA”) was conducting an investigation into an international drug-trafficking organization and sought a warrant for pen register information (record from the service provider of the telephone numbers dialed from a specific phone) and cell site location information (“CSLI”) for a target cell phone as part of that investigation. CSLI allows the target phone’s location to be approximated by providing a record of “pings” sent to cell sites by a target cell phone to approximate where the phone has been used.  Using CSLI, DEA agents were able to determine that the target cell phone was located in the general vicinity of “the Washington Heights area by 177th and Broadway.”

However, this CSLI was not precise enough to identify the specific apartment building, much less the specific unit in the building.  To isolate the location more precisely, the DEA deployed a technician with a cell site simulator (a device known as a “Stingray” that locates cell phones by mimicking the service provider’s cell tower and forcing cell phones to transmit “pings” to the simulator) to the intersection of 177th Street and Broadway.  Using the “Stingray”, the DEA technician was able to locate the building and then the unit where the defendant was located.  That same evening, DEA agents knocked on the defendant’s door and obtained consent from his father to enter the apartment, then obtained consent from the defendant to enter his bedroom where they recovered narcotics, three digital scales, empty zip lock bags, and other drug paraphernalia.  The defendant filed a motion to suppress the evidence.

Judge’s Ruling

Noting that a “Fourth Amendment search occurs when the government violates a subjective expectation of privacy that society recognizes as reasonable”, Judge Pauley referenced Kyllo v. United States, where Government agents used a thermal-imaging device to detect infrared radiation emanating from a home.  In that case, the Court held that “[w]here . . . the Government uses a device that is not in general public use, to explore details of the home that would previously have been unknowable without physical intrusion, the surveillance is a ‘search’ and is presumptively unreasonable without a warrant.”

Judge Pauley then stated “Here, as in Kyllo, the DEA’s use of the cell-site simulator to locate Lambis’s apartment was an unreasonable search because the ‘pings’ from Lambis’s cell phone to the nearest cell site were not readily available ‘to anyone who wanted to look’ without the use of a cell-site simulator.”  He also stated this:

“Absent a search warrant, the Government may not turn a citizen’s cell phone into a tracking device. Perhaps recognizing this, the Department of Justice changed its internal policies, and now requires government agents to obtain a warrant before utilizing a cellsite simulator.”

As a result, Judge Pauley granted the defendant’s motion to suppress the evidence that was obtained by the search, even though the defendant’s father and the defendant had given consent to the search and access.

So, what do you think?  Should a warrant be required for “Stingray” devices?  Please share any comments you might have or if you’d like to know more about a particular topic.

Thanks to Sharon Nelson at Ride the Lightning for the tip!

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Denies Defendant’s Motion to Overrule Plaintiff’s Objections to Discovery Requests

Cooperation in Predictive Coding Exercise Fails to Avoid Disputed Production: eDiscovery Case Law
 In Dynamo Holdings v. Commissioner of Internal Revenue, Docket Nos. 2685-11, 8393-12 (U.S. Tax Ct. July 13, 2016), Texas Tax Court Judge Ronald Buch ruled denied the respondent’s Motion to Compel Production of Documents Containing Certain Terms, finding that there is “no question that petitioners satisfied our Rules when they responded using predictive coding”.

Case Background

In this case involving various transfers from one entity to a related entity where the respondent determined that the transfers were disguised gifts to the petitioner’s owners and the petitioners asserted that the transfers were loans, the parties previously disputed the use of predictive coding for this case and, in September 2014 (covered by us here), Judge Buch ruled that “[p]etitioners may use predictive coding in responding to respondent’s discovery request. If, after reviewing the results, respondent believes that the response to the discovery request is incomplete, he may file a motion to compel at that time.”

At the outset of this ruling, Judge Buch noted that “[t]he parties are to be commended for working together to develop a predictive coding protocol from which they worked”.  As indicated by the parties’ joint status reports, the parties agreed to and followed a framework for producing the electronically stored information (ESI) using predictive coding: (1) restoring and processing backup tapes, (2) selecting and reviewing seed sets, (3) establishing and applying the predictive coding algorithm; and (4) reviewing and returning the production set

While the petitioners were restoring the first backup tape, the respondent requested that the petitioners conduct a Boolean search and provided petitioners with a list of 76 search terms for the petitioners to run against the processed data.  That search yielded over 406,000 documents, from which two 1,000 document samples were conducted and provided to the respondent for review.  After the model was run against the second 1,000 documents, the petitioners’ technical professionals reported that the model was not performing well, so the parties agreed that the petitioners would select an additional 1,000 documents that the algorithm had ranked high for likely relevancy and the respondent reviewed them as well.  The respondent declined to review one more validation sample of 1,000 documents when the petitioner’s technical professionals explained that the additional review would be unlikely to improve the model.

Ultimately, using the respondent’s selected recall rate of 95 percent, the petitioners ran the algorithm against the 406,000 documents to identify documents to produce (followed by a second algorithm to identify privileged materials) and, between January and March 2016, the petitioners delivered a production set of approximately 180,000 total documents on a portable device for the respondent to review and included a relevancy score for each document – ultimately, the respondent only found 5,796 to be responsive (barely over 3% of the production) and returned the rest.

On June 17, 2016, the respondent filed a motion to compel production of the documents identified in the Boolean search that were not produced in the production set (1,353 of 1,645 documents containing those terms they claimed were not produced), asserting that those documents were “highly likely to be relevant.”  Ten days later, the petitioner filed an objection to the respondent’s motion to compel, challenging the respondent’s calculations of documents that were incorrectly produced by noting that only 1,360 of documents actually contained those terms, that 440 of them had actually been produced and that many of the remaining documents predated or postdated the relevant time period.  They also argued that the documents were selected by the predictive coding algorithm based on selection criteria set by the respondent.

Judge’s Ruling

Judge Buch noted that “[r]espondent’s motion is predicated on two myths”: 1) the myth that “manual review by humans of large amounts of information is as accurate and complete as possible – perhaps even perfect – and constitutes the gold standard by which all searches should be measured”, and 2) the myth of a perfect response to the respondent’s discovery request, which the Tax Court Rules don’t require.  Judge Buch cited Rio Tinto where Judge Andrew Peck stated:

“One point must be stressed – it is inappropriate to hold TAR [technology assisted review] to a higher standard than keywords or manual review.  Doing so discourages parties from using TAR for fear of spending more in motion practice than the savings from using from using TAR for review.”

Stating that “[t]here is no question that petitioners satisfied our Rules when they responded using predictive coding”, Judge Buch denied the respondent’s Motion to Compel Production of Documents Containing Certain Terms.

So, what do you think?  If parties agree to the predictive coding process, should they accept the results no matter what?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Appeals Court Upholds Defendant’s Request for eDiscovery Cost Reimbursement: eDiscovery Case Law

In Deere & Co. v. Duroc, LLC et. al., No. 2014-1697 (Fed. Cir., May 26, 2016), after the defendants conceded much of the storage and hosting costs they had claimed, the Federal Circuit Court of Appeals affirmed the district court ruling to uphold cost taxation requested by the defendants, including eDiscovery costs.

Case Background

In this case where the plaintiff sued the defendants for patent infringement, the court granted summary judgment in favor of the defendants and ordered the Clerk of Court to enter judgment for both Defendants, with costs to be assessed against the plaintiff.  The defendants submitted their bills of costs, and the Clerk’s assessment was reviewed and affirmed by the district court, which stated that it had “carefully studied the parties’ submissions and held a telephonic hearing solely to address these costs issues”.

The plaintiff appealed the summary judgment of non-infringement, which was vacated on appeal and remanded for trial.  After trial, the jury found that the plaintiff’s patent was not infringed, and the district court entered judgment in favor of the defendants, who again submitted their bills of taxable costs.  The plaintiff objected to various requested costs as excessive, beyond the authority of the district court to tax, or lacking the required documentation.  The district court reviewed the assessments and upheld most of the costs, approving the taxation as “supported by 28 U.S.C. § 1920, legal authorities cited in the Defendants’ briefs, and in view of the length and complexity of the fourteen-day long patent trial.”

The plaintiff appealed, challenging the assessment of costs in three areas: (1) costs related to document copying, (2) costs related to eDiscovery, and (3) costs related to trial exemplifications.  With regard to eDiscovery, various aspects of the eDiscovery process were governed by a negotiated ESI Agreement that required various eDiscovery actions to be undertaken. The ESI Agreement required that all documents be produced electronically in a database format, product numbered, searchable, with OCR and metadata extracted and identified, and produced on suitable storage media.

Appellate Court’s Ruling

With regard to the eDiscovery costs, the defendants conceded much of the storage and hosting costs they had claimed on appeal, leaving the appellate court to address only the issue of whether e-discovery costs are taxable as a matter of law.  The appeals court noted that “The district court held that when the costs of complying with the agreement are within the obligations of the Agreement and reasonably incurred in complying with the Agreement, they are recoverable” and those costs “are within the scope of § 1920”.  As a result, the appeals court concluded that the district court acted within its discretion and upheld the remaining eDiscovery costs claimed, as well as the other costs related to document copying and trial exemplifications.

So, what do you think?  Will ESI agreements make it easier to recover eDiscovery costs?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Grants Discovery on Individual Defendants’ Personal Computers and Email: eDiscovery Case Law

In Sunderland v. Suffolk County et. al., No. 13-4838 (E.D.N.Y., June 14, 2016), New York Magistrate Judge A. Kathleen Tomlinson, determining that the plaintiff’s request for individual defendants to search for and produce certain documents from their personal computers and email accounts was not “unduly intrusive or burdensome” because the request was limited in time frame and the parties had agreed to search terms, granted the plaintiff’s motion to compel.

Case Background

In this case where a transgender prison inmate sued the defendants claiming they acted “with deliberate indifference” to serious medical needs by denying hormone therapy for gender dysphoria, the plaintiff served discovery requests on the both the county and the individual defendants seeking documents and correspondence that contained certain search terms related to gender dysphoria, gender identity, transgender status and sexual preference. The parties agreed upon the search terms, but the defendants refused to conduct searches on individual personal computers and email. The plaintiff filed a Motion to Compel, which pointed out that the plaintiff had sued the individual defendants in their individual capacities, not their official capacities as medical personnel employed by the County.

Judge’s Ruling

Noting that the information requested by the plaintiff “falls within the broad scope of relevant discovery under Federal Rule of Civil Procedure 26(b) in light of Plaintiff’s allegations against the Individual Defendants and her Monell claim against the County”, Judge Tomlinson concluded that “Plaintiff has the right to pursue emails and other correspondence the Individual Defendants may have created/saved on their personal computers or sent from their personal email accounts which reference Plaintiff or discuss issues related to gender dysphoria.”

Judge Tomlinson noted that “to the extent such documents exist on the Individual Defendants’ personal computers, they may contain information going to bias or motivation which may show why a personal computer was used for such communications, including information which may support Plaintiff’s claims of deliberate indifference against the Individual Defendants.”  She also indicated that she “does not consider the requested discovery unduly intrusive or burdensome”, noting that the request “is limited to an approximate five-year time frame running from September 8, 2009 to January 3, 2014, which the Individual Defendants have not objected to in their opposition to Plaintiff’s motion. It also appears that the parties have agreed upon the search terms to be used.”  As a result, Judge Tomlinson granted the plaintiff’s motion to compel discovery from the individual defendants’ personal computers and email accounts.

So, what do you think?  Was the plaintiff entitled to discovery from the individuals’ computers and email accounts?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Rejects Plaintiff’s Request for Fee Reimbursement in Responding to Motion: eDiscovery Case Law

In Gade v. State Farm Mutual Automobile Insurance Co., No. 14-00048 (D. Vermont, June 6, 2016), Vermont Chief District Judge Christina Reiss denied the plaintiff’s motion for an order requiring the defendant to pay expenses and fees that she incurred in opposing the defendant’s motion to compel production of an Excel spreadsheet from the plaintiff’s expert.

Case Background

In this personal injury case where the plaintiff sued after the defendant denied her uninsured and underinsured motorist benefits claims, the defendant deposed the plaintiff’s biomechanical expert (John Smith).  The defendant asked for the expert to bring his files to the deposition, but did not examine the files before or during the deposition, instead requesting a complete copy of the expert’s file afterward, including his calculations.  In response, the plaintiff produced a copy of the expert’s file, including eight pages of data and calculations in PDF format.

On three different occasions, the defendant requested the expert’s files in Excel format, to see the underlying calculations and inputs on which the expert relied. During a September 2015 telephone conference, the plaintiff advised the defendant that if the expert’s files existed in Excel format, they would be produced; however, the plaintiff failed to do so, even after three additional written requests for those files.  Finally, the plaintiff responded that she would not produce the expert’s files in Excel format because his files, including his “unredacted calculations” and “the applicable formulas” had previously been produced in PDF format, inviting the defendant to cite “some applicable rule or decision that allows a party to compel another party’s expert to produce work-product files in a particular format”.

Ultimately, the defendant filed a motion to compel, which the plaintiff opposed; however, the parties, after sharing additional information, eventually agreed that motion to compel was moot. However, the plaintiff then sought compensation from the defendant for her attorneys’ fees incurred in opposing the motion, alleging that Defendant did not properly meet and confer as required by the rules.

Judge’s Ruling

After noting that the plaintiff “complied with her duty of disclosure and Defendant properly withdrew its motion to compel”, Judge Reiss turned her attention to the question of whether the defendant complied with Local Rule 26, which requires the movant to “confer[] with opposing counsel in a good faith effort to reduce or eliminate the controversy or arrive at a mutually satisfactory resolution.”  Judge Reiss noted that the defendant “made six informal written requests for Mr. Smith’s files in Excel format from July 28, 2015 through October 13, 2015” and “also made an oral request for the information during a September 10, 2015 telephone call, after which Plaintiff initially stated that she would produce Mr. Smith’s files in Excel format, but later declined to do so.”

While admitting that “the better practice would have been for Defendant to make a formal request Mr. Smith’s files and underlying calculations prior to his deposition”, Judge Reiss ruled that “Defense counsel’s repeated attempts to obtain Mr. Smith’s files in Excel format prior to seeking court intervention, in conjunction with its affidavit supporting the motion to compel, satisfy the requirements of Local Rule 26(d)(2).”  As a result, determining that “it would be unreasonable and unfair to require” the defendant to pay fees to respond to a motion to compel that “arguably should have been unnecessary”, Judge Reiss ruled that “an award of sanctions, expenses, and fees is not warranted in this case.”

So, what do you think?  Did the Defendant go far enough to meet and confer on the issue?  Please share any comments you might have or if you’d like to know more about a particular topic.

New Time!  Just a reminder that I will be moderating a panel at The Masters Conference New York City 2016 IoT, Cybersecurity and Social Media Conference on Monday, July 11 (we covered it here) as part of a full day of educational sessions covering a wide range of topics.  CloudNine will be sponsoring that session, titled Faster, Cheaper, Better: How Automation is Revolutionizing eDiscovery at 8:30am, not 4:15pm.  The early bird catches the knowledge.  :o)  Click here to register for the conference.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Appeals Court Reverses Terminating Sanctions Against Plaintiff for Deletion of Emails: eDiscovery Case Law

In Flagship Theatres of Palm Desert, LLC v. Century Theatres, Inc. et. al., No. B257148, Consolidated  with Nos. B259552 and B261149 (Cal. App., May 24, 2016), the Court of Appeals of California, Second District determined that the trial court “abused its discretion” by “granting terminating sanctions in a case in which the prejudice to the non-offending party can be ameliorated by a more limited remedy”.  As a result, the appeals court reversed the judgment and remanded it back to the trial court with a lesser sanction, prohibiting the plaintiff “from offering evidence of acts, events, or communications occurring during the period” when one of the plaintiffs deleted emails.

Case Background

In this antitrust suit, the plaintiffs, who operated a movie theater, claimed that the defendants had conspired to keep the most popular films from being distributed to the plaintiff’s theater and filed suit in 2006.  For the next two years, the case proceeded through discovery, and each side requested and received documents from the other. Most notably, in December 2006, one defendant served a set of requests for production in which it requested numerous categories of documents from the plaintiffs.  Ultimately, the plaintiffs voluntarily dismissed movie distributor defendants from the case, but added Cinemark as a defendant following Cinemark’s acquisition of Century.

From the date of production in 2007 until the trial court granted summary judgment in July 2008, no defendant moved for further production.  That summary judgment decision was reversed by the appellate court in 2011 and remanded back to the trial court for further proceedings.

In the summer of 2012, one of the plaintiffs (Tabor) began experiencing problems sending and receiving email from the AT&T account that he used for both personal and business email.  On the advice of an AT&T customer service representative, he deleted thousands of email messages to free up space, deleting the earliest emails up to February 19, 2009.  The plaintiffs then received another discovery request from the new defendant (Cinemark) requesting emails. Upon realizing that he had deleted items he had a duty to preserve, Tabor attempted to recover the emails but was unsuccessful. When Cinemark learned that Tabor had deleted the emails, it moved for sanctions. The trial court denied the motion because it was unable to fully evaluate the extent of prejudice to Cinemark. Subsequently, Cinemark renewed its motion for sanctions. This time, the trial court granted the motion and the plaintiff appealed.

Appellate Court’s Ruling

The court noted that “Cinemark likely suffered some prejudice, and it is entitled to a remedy to compensate for this prejudice. But the potential for prejudice is limited to the period between the spring of 2007 [the time period up to which the plaintiff had previous produced relevant ESI] and February 19, 2009 because the relevant emails outside that period, with some minor exceptions, were saved. Accordingly, the trial court abused its discretion by not limiting appropriate sanctions to the period between the spring of 2007 and February 19, 2009.”

The appellate court also disagreed with the trial court opinion that the plaintiffs “must be able to establish that they actually sought to license and play enough films to generate 40% of the cumulative box office grosses”, noting that the plaintiffs might have realized that distributors were unwilling to give them certain kinds of movies and simply stopped requesting them.  Because the appellate court determined that the deletion of emails outside of the 2007-2009 time frame was “small scale and innocuous”, it determined that there was no justification for additional sanctions.

As a result, the appellate court reversed the judgment and remanded it back to the trial court with a lesser sanction, prohibiting the plaintiff “from offering evidence of acts, events, or communications occurring during the period” between spring 2007 and February 19, 2009 (unless Cinemark offered evidence during that time period that was “more than nonsubstantive, peripheral, or foundational”, in which case, the plaintiffs could present evidence and seek damages pertaining to that time period).

So, what do you think?  Was the appellate court sanction a more appropriate remedy?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Sanctions Plaintiff for Failing to Preserve Customer Communications: eDiscovery Case Law

Remember Matthew Enterprise, Inc. v. Chrysler Group, where court the granted the defendant’s motion to compel production from the plaintiff’s customer communications database?  Apparently, that production didn’t go so well…

In Matthew Enterprise, Inc. v. Chrysler Group, LLC, No. 13-cv-04236-BLF (N.D. Cal. May 23, 2016), California Magistrate Judge Paul S. Grewal, in one of his last orders before leaving the bench, determined that there was “no question that spoliation has occurred” and granted the defendant’s motion for sanctions for spoliation, “in its entirety, except for the proposed remedy”, opting for a middle ground between the parties’ proposals on what the remedy should be.

Case Background

In this price discrimination dispute between an auto manufacturer and its dealer (which does business as Stevens Creek Chrysler Jeep Dodge Ram), the defendant previously moved to compel the plaintiff to produce emails from the personal accounts of the plaintiff employees (because the plaintiff did not furnish all its employees with email accounts, many of them used their personal accounts for business purposes) and from the plaintiff’s customer communications database operated by an outside vendor.  In December 2015, the court denied the motion with respect to the personal emails but granted the motion with respect to the customer communications database, noting that the plaintiff did have control of that data, having already produced data from this source (we covered that ruling here).

After further investigation, however, the plaintiff discovered that it simply had very few documents to produce.  For example, “around June or July 2013, [the plaintiff] changed email vendors for its corporate-assigned email accounts” and “did not retain…the emails contained on the previous email system.”  In addition, because the outside vendor that maintains and operates the plaintiff’s customer communications database automatically deletes “all records of communication; inbound/outbound email, read receipt notifications and manually entered notes by a dealership representative” after 25 months, effectively all customer communications from the period at issue were lost irretrievably when the plaintiff reached out for that data in July 2015.  The parties did not dispute that the duty to preserve documents attached when the plaintiff sent a litigation threat letter in August 1, 2012.

As a result, the defendant filed an instant motion for sanctions for spoliation, seeking an order precluding the plaintiff from offering testimony or interrogatory responses relating to several topics, including those related to diversion and the effect of the defendant’s incentive program on the plaintiff’s decision to raise prices in August 2012.

Judge’s Ruling

Judge Grewal began his order with the following statement:

“The rules governing parties’ duties to preserve data do not demand perfection. Only when a party should have preserved electronically stored information ‘in the anticipation or conduct of litigation’ and when that party ‘failed to take reasonable steps to preserve it’ may a court order corrective measures.  The standard is an attainable one.”

With regard to the plaintiff’s steps to preserve the information, Judge Grewal stated “There is no question that spoliation has occurred. Stevens Creek does not dispute that it should have preserved the emails and the AVV communications. Stevens Creek took literally no action to preserve the information. And, despite Stevens Creek’s belated best efforts, these communications are lost forever.”

As for whether that spoliation prejudiced the defendant, Judge Grewal noted that “Stevens Creek’s lackadaisical attitude towards document preservation took away” the opportunity for the defendant to ask the jury to decide whether its anecdotal evidence undercut the plaintiff’s statistical evidence.  Because of that, Judge Grewal determined that “[n]ot only has spoliation occurred, but it also has prejudiced Chrysler.”

With regard to the remedy, Judge Grewal opted for a “middle ground” between what the defendant requested (noting that “precluding evidence on diversion would effectively decide the case for Chrysler”) and what the plaintiff proposed “allowing Chrysler to introduce communications, subject to the Federal Rules of Evidence, post-dating the alleged price discrimination period as if they came from that period itself.”  Judge Grewal did adopt the plaintiff’s suggestion, but also ordered that the defendant would be allowed to present evidence regarding the plaintiff’s spoliation when the plaintiff offered certain testimony, that the presiding judge would be allowed to “giv[e] the jury instructions to assist in its evaluation of such evidence or argument,” and that the defendant would be awarded “reasonable attorney’s fees” incurred in bringing the motion.

So, what do you think?  Did the court go far enough with its sanctions of the plaintiff?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.

Court Settles Dispute Between Parties on Number of Custodians to Search and Produce: eDiscovery Case Law

In Family Wireless #1, LLC et. al. v. Automotive Technologies, Inc., No. 15-01310 (D. Conn., May 19, 2016), Connecticut Magistrate Judge Sarah A. L. Merriam partially granted the plaintiff’s motion to compel the defendant to search and produce ESI from additional custodians, finding that “three of the six proposed custodians’ files are likely to include information relevant to this matter, and defendant has not met its burden of showing that inclusion of these three individuals would be unduly burdensome”.

Case Background

In this action for breach of contract, misrepresentation, unjust enrichment, and unfair trade practices between a franchisor and its franchisee, the parties met and conferred multiple times over the course of this litigation in an effort to come to a mutually agreeable list of ESI search terms and custodians.  The parties agreed to the search of the electronic files of seven custodians, but failed to agree on six additional custodians, leading to the plaintiff’s motion to compel.

The plaintiffs requested the inclusion of six additional custodians in the ESI search, arguing that, even though they were lower level employees, they “are believed to have been involved in both decision making and day to day operations relevant to the claims and defenses raised in the litigation”.  The defendants argued that a search of the emails of these individuals was duplicative and would not produce any relevant information that has not already been exchanged and that searching the files of the additional custodians would be overly burdensome, resulting in tens of thousands of additional documents and hours of costly review, partly based on a test search of two of the proposed custodians that “captured 51,583 e-mail family hits” to be reviewed for relevance.

Judge’s Ruling

Judge Merriam stated that she was “not persuaded that the addition of the six proposed custodians would be unduly burdensome for defendant. As defendant acknowledged during the conference, limitations on search parameters can be implemented so as to exclude the production of duplicative emails, addressing the concern that this production would consist of many emails that had been previously produced through the prior searches of the higher-level custodians. Using ‘de-duplication’ measures to limit the search should alleviate some of the cost and time concerns that defendant raises.”  Judge Merriam also was not swayed by the defendant’s arguments regarding relevance, indicating that “[t]he mere fact that many documents have already been produced is not sufficient to establish that there are no other relevant materials to be found.”

However, while Judge Merriam found “that plaintiffs have established good cause for expanding the ESI search to include three additional custodians”, she found that “no showing of good cause has been made by plaintiffs to search the ESI of the other three proposed custodians” during the in-person Discovery Conference the Court held to discuss the issues.  Therefore, Judge Merriam partially granted the plaintiff’s motion to compel the defendant to search and produce ESI from three additional custodians.

So, what do you think?  Should the court have ordered production from all six custodians?  Or was a partial production appropriate?  Please share any comments you might have or if you’d like to know more about a particular topic.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine. eDiscovery Daily is made available by CloudNine solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Daily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.