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How Blue Was My Valley? Not Blue Enough to Cite the Defendant for Discovery Violations: eDiscovery Case Law

In Malone v. Kantner Ingredients, 4:12CV3190 (D. Neb. Mar. 31, 2015), Nebraska Magistrate Judge Cheryl R. Zwart denied the plaintiffs’ motion to show cause, finding that the defendant “the plaintiffs have presented no evidence” that the defendant “destroyed, hid, or purposefully (or even recklessly) failed to produce responsive ESI” in the case.

Case Background

Over two years, the defendants had produced documents from various sources, including 140,000 electronic files located on a computer image of the data stored on the defendant’s file servers. Despite that, multiple conferences were held with the court regarding the parties’ discovery disputes and the plaintiffs filed five motions to compel additional documentation from the defendant.

In October of 2014, the plaintiffs claimed the defendants failed to produce all documents responsive to the plaintiffs’ discovery requests, particularly sent emails and invoices of transactions between Blue Valley Foods and the defendants. In an attempt to quell the plaintiffs’ ongoing distrust of the defendants’ discovery efforts, the defendants were ordered to locate their servers and determine if the server imaging performed by the defendants at the outset of the case was a full and complete imaging, as well as produce responsive invoices and sent mail from those servers.

In response to that order, the servers were received by defense counsel, who confirmed that the data image from the shared server data received by defense counsel at the outset of the case matched the data set and data amount on the servers. The servers were sent to the defendants’ forensic expert, who fully imaged them and provided a full copy of that imaging to the plaintiffs’ forensic expert. After receiving the server imaging, the plaintiffs’ forensic expert performed a word search of the data and located some documents containing the words “Blue Valley” that were not previously disclosed by the defendants in an electronic format. The plaintiffs presented evidence that some of those documents were responsive to production requests served by the plaintiffs, but they were not previously disclosed to the plaintiffs in an electronic format.

The plaintiffs moved for an order to show cause, alleging the defendants, their counsel, and counsel’s paralegal failed to comply with the order, “destroyed or tampered with evidence, and provided untruthful information to the court regarding the existence of discovery requested by the plaintiffs.”

Judge’s Opinion

Judge Zwart noted that, after receiving the actual servers, “the defendants did not repeat their search of the server data for responsive discovery…But the order required the defendants to determine if the server imaging performed by the defendants at the outset of the case was a full and complete imaging: It did not require the defendants to repeat their ESI review and production if the 2012 initial data imaging appeared to be full and complete.”

She continued: “By providing the full image of the servers to Plaintiffs’ expert, the defendants produced the emails, invoices, and associated metadata as required under the court’s order. While the plaintiffs incurred expense for forensic review of that data, the plaintiffs’ use of their own forensic expert was reasonable—and perhaps necessary—to bring some closure to the ongoing ESI discovery battle… The defendants allowed Plaintiffs to ‘see for themselves’ whether any additional documentation was on the Kantner servers. And the court is convinced this was the only means of convincing Plaintiffs that they had received everything. Had the parties discussed how to collect, review and produce ESI at the outset, perhaps the cost of two experts, and other discovery-related fees and costs, could have been avoided. But those discussions never occurred.”

With regard to the missed documents discovered by the plaintiff, Judge Zwart, referencing several sources for best practices for searching, indicated that “At most, the plaintiffs offered evidence of mistakes made during defense counsel’s 2012 manual review of the electronic files. Manual review is still considered by many as the ‘gold standard’ for electronic document review. But human error is common when attorneys are tasked with personally reviewing voluminous electronically stored information.” She also cited Reinsdorf v. Skechers (2013), which stated: “The discovery process relies upon the good faith and professional obligations of counsel to reasonably and diligently search for and produce responsive documents…However, while parties must impose a reasonable construction on discovery requests and conduct a reasonable search when responding to the requests, the Federal Rules do not demand perfection.”

Given that standard, Judge Zwart denied the plaintiffs’ motion to show cause.

This isn’t the first time we’ve covered rulings by Judge Zwart: click here, here, here and here to review previous rulings with eDiscovery impact that we’ve covered.

So, what do you think? Was that the right call or should the defendants have been held to a higher standard? 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. eDiscoveryDaily 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.

Discarding a Relevant Computer Results in Adverse Inference Sanctions, Not Default Judgment: eDiscovery Case Law

In Grady v. Brodersen, No. 13-cv-00752-REB-NYW (D.Colo. Mar. 23, 2015), Colorado Magistrate Judge Nina Y. Wang granted the plaintiff’s motion for sanctions against the defendant in part for failing to produce a computer that the defendant ultimately acknowledged that he discarded, but denied the plaintiff’s request for a default judgment sanction, opting for the less severe adverse inference instruction sanction.

Case Background

In this copyright infringement case filed in March 2013 due to publication of disputed images on the defendant’s web site, the District Court of Colorado entered a scheduling order on February 20, 2014, ordering Defendant to preserve all electronically stored information (ESI), including metadata, and to identify his relevant devices. A week later, on February 27, the defendant submitted his initial disclosures to the plaintiff, in which he acknowledged his computer equipment was relevant to this litigation, identified himself as custodian of the equipment, and represented that “a search through computer equipment for any discoverable material has [sic] and is ongoing. Defendant will supplement its response [sic] if necessary.”

But, on August 9, the defendant amended his initial disclosures “after discussion with lawyers regarding the whereabouts of the computer and request for additional information by Plaintiff”, stating that the computer he had owned and used during the relevant time period “died” prior to notice or anticipation of any legal action and was discarded in July 2013 (four months after the case was filed) because it was “broken”. He also stated that he had searched USB/Flash drives owned and controlled by him during the relevant time and found no relevant data. Subsequently, the defendant acknowledged in his deposition that he did not attempt to have the hard drive repaired before discarding the computer. On August 18, the plaintiff moved to compel, and the court granted the motion, ordering the defendant to produce his new computer hard drive for forensic inspection and copying.

Following the court’s order compelling the defendant to produce the new computer, the plaintiff’s forensic experts determined that the defendant began using that computer in November 2013, which was a few months after the defendant discarded the old computer and also discovered that the new computer had received a transfer of 10,091 images on January 19, 2014, nine days after the court recommended denying Defendant’s Motion to Dismiss. The experts noted that the approximately 10,000 images had a range of file modification dates reaching as far as February 2011. The plaintiff filed the motion for sanctions in November 2014.

Citing the four factor test in Ehrenhaus v. Reynolds, 965 F.2d 916, 920 (10th Cir. 1992), the plaintiff argued that:

  1. The discarded computer was the only source of evidence relating to the alteration of his Copyrighted works, so it was “severely prejudicial” to him;
  2. The defendant interfered with the judicial process when he lied under oath on his initial 26(a)(1) disclosures;
  3. The defendant was highly culpable as he discarded the equipment after the commencement of litigation; and
  4. A court-issued warning of dismissal is not necessary where the violation is severe.

Judge’s Opinion

For the most part, Judge Wang agreed with the plaintiff, stating “I find that Mr. Brodersen despoiled relevant evidence that he had an obligation to preserve. I further find that Mr. Brodersen violated Rule 26(g) by not specifying in his Rule 26(a)(1) disclosures dated February 27, 2014 which computer equipment was in his custody and control.” She also ruled that “This court finds sufficient evidence in the record before it to demonstrate that Defendant acted intentionally and with bad faith in discarding the old computer.”

As for the appropriate sanction, however, Judge Wang did not agree with the plaintiff, stating “However, in heeding the direction of the Tenth Circuit to consider the efficacy of lesser sanctions, I find that an entry of default judgment is too severe. The dual objective of protecting a litigant’s right to obtain discoverable evidence and punishing the disobedient party to deter future violative conduct is met by imposing an adverse jury instruction regarding the despoiled evidence.” So, she granted the plaintiff’s motion for sanctions in part ordering the adverse inference instruction sanction as well awarding as the plaintiff’s reasonable attorney fees and costs incurred in pursuing the motion.

So, what do you think? Was the sanction severe enough? 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 Rules that Automatically Generated Read Receipt is Not Hearsay: eDiscovery Case Law

In Fox v. Leland Volunteer Fire/Rescue Department Inc., 7:12-CV-354-FL. (E.D.N.C. Mar. 10, 2015), North Carolina District Judge Louise W. Flanagan ruled that a Read Receipt automatically sent from the defendant’s email address to the plaintiff (when the defendant opened an email sent by the plaintiff) was not hearsay.

Case Background

In this wrongful termination case, the court was considering the defendants’ motion for summary judgment, as well as the defendants’ motion to strike certain exhibits attached to plaintiff’s brief in opposition to summary judgment for failure to comply with Federal Rule of Civil Procedure 56(c) & (e). One of the items that the defendants sought to exclude was a read receipt sent from defendant Grimes email address to plaintiff, triggered when an email plaintiff sent defendant Grimes was opened, arguing that the Read Receipt was “unauthenticated hearsay”.

Judge’s Opinion

Judge Flanagan made a swift ruling on this issue when she stated “Defendants’ argument fails. The Read Receipt is not hearsay.”

Explaining her ruling, Judge Flanagan started by questioning whether a Read Receipt email was even a statement, as follows: “As noted, hearsay is a declarant’s out of court statement offered to prove the truth of the matter asserted therein… As an initial matter, it is questionable whether the Read Receipt is a ‘statement’ at all. Federal Rule of Evidence 801(a) defines ‘statement,’ and specifically notes that a ‘statement’ must be ‘intended . . . as an assertion.’ Id. Here, it is questionable that the Read Receipt was intended to be assertive.”

Giving the benefit of the doubt that the Read Receipt qualifies as a statement under Rule 801(a), Judge Flanagan still ruled that “the read receipt is still admissible against both defendants where it is excluded from Rule 801…In particular, the email was generated by defendant Grimes, thus Rule 801(d)(2)(A) allows its admission against him. Rule 801(d)(2)(D), in addition, allows its admission against defendant Leland, because the statement came from defendant Grimes official email address, and defendant Grimes was required, as a function of his job, to investigate and respond to complaints of harassment.”

With regard to the defendants’ contentions that proper authentication under Federal Rule of Evidence 901(b)(1) & (4) of the Read Receipt was “impossible, because plaintiff failed to produce information about the email’s origin, including the mechanism by which it was generated” and that “plaintiff should have submitted a technical affidavit explaining how ‘read receipt’ emails are created, to ensure reliability”, Judge Flanagan stated that “the Read Receipt may be properly authenticated under Federal Rule of Evidence 901(b)(1) & (4).” Continuing, she noted that “the reliability of defendant Grimes’ email is not at issue, because the email is being admitted as a statement of a party opponent, which does not require the court to ensure reliability” and that “no technical affidavit is required to authenticate properly the Read Receipt… Here, defendant Grimes acknowledges receipt of plaintiff January 2, 2011, email referenced in the read receipt.” So, Judge Flanagan ruled that “the Read Receipt may properly be admitted.”

Ultimately, that proved to be a hollow victory for the plaintiff as Judge Flanagan granted the defendants’ motion to strike in part and also granted the defendants’ motion for summary judgment, closing the case.

So, what do you think? Was the court right to admit the Read Receipt? 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.

Plaintiff Awarded Sanctions and Reimbursement of Some eDiscovery Costs: eDiscovery Case Law

In Engineered Abrasives, Inc. v. American Machine Products & Service, Inc. No. 13C7342 (N.D. Ill. Mar. 18, 2015), Illinois District Judge Sara L. Ellis awarded the plaintiff damages, attorneys’ fees and some requested costs, as well as granting the plaintiff’s motion for sanctions and ordering the defendants to reimburse the plaintiff $12,800 for the cost of conducting a forensic computer examination, which the plaintiff maintained was necessitated by Defendants’ evasive and incomplete responses and their failure to produce documents during discovery.

Case Background

The plaintiff sued the defendants, former employees of the plaintiff, claiming that the defendants were misrepresenting themselves as representatives of the plaintiff’s company and unfairly competing with EA. After the defendants failed to answer the complaint, they were found to be in default. “Extensive” discovery was conducted on the plaintiff’s damages and an evidentiary hearing was held in November 2014 on the plaintiff’s request for relief, which included monetary damages and reimbursement of attorneys’ fees and other costs, including eDiscovery costs. This opinion and order was based on the “evidence presented at that hearing and the parties’ other submissions”.

Judge’s Opinion

After some analysis, Judge Ellis awarded the plaintiff $207,257 in monetary damages and $499,088.80 in attorneys’ fees, which included PACER costs. Of most of the other costs that Judge Ellis considered, she allowed reimbursement of the $400 filing fee for initiating the action, $165 for service of the Complaint and $55 for one hour for service of summons or a subpoena and disallowed all other requested costs.

As for the eDiscovery costs, Judge Ellis stated that Section 1920 does “not expressly provide for the recovery of e-discovery costs, meaning that the only route to recovery of these costs must pass through the strictures of 28 U.S.C. § 1920(4), which allows for the recovery of ‘fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.’” She also noted that “this Court will follow those courts that have found compensable the costs ‘associated with the conversion of [electronically stored information] into a readable format, such as scanning or otherwise converting a paper version to an electronic version or converting native files to TIFF’ but not the ‘costs related to the `gathering, preserving, processing, searching, culling and extracting of [electronically stored information].’”

As the plaintiff requested compensation for several charges associated with eDiscovery, including for “OCR & TIFF Conversion,” “process[ing] native files through ESI utility to allow for capturing of metadata/indexing of material,” “load[ing] into Summation,” and “prepar[ing] search filters and sav[ing] shared set to database for review team,” Judge Ellis found that “[o]nly the first $48.24 charge is properly compensable, as it involves the conversion of documents into a readable format.” (emphasis added)

Judge Ellis next considered whether the defendants could be sanctioned for their “evasive and incomplete responses and their failure to produce documents during discovery” which led to the plaintiff’s computer forensic examination. With regard to that, Judge Ellis stated: “The Court agrees with EA that Defendants’ conduct during the discovery process warrants sanctions. Defendants’ actions during the discovery process cannot be said to have been done in good faith. They unnecessarily prolonged this case, necessitating the Court’s intervention on several occasions and multiplying the costs involved in the litigation.” As a result, Judge Ellis ordered the defendants to reimburse the plaintiff $12,800 for the cost of conducting the forensic computer examination.

So, what do you think? Was the court right to grant the motion for sanctions? 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.

Defendant Does Not Take the Fall for Spoliation in Slip and Fall Case: eDiscovery Case Law

In Harrell v. Pathmark et al., Civil Action No. 14-5260 (E.D.Penn. Feb. 26, 2015), Pennsylvania District Judge Gene E. K. Pratter, after a hearing to consider whether to draw an adverse inverse instruction due to the defendant’s possible spoliation of video evidence, determined that “a spoliation inference would not be appropriate here”. Finding that the plaintiff had presented no evidence that the defendant had constructive notice of a dangerous condition resulting in her slip and fall, Judge Pratter also granted the defendant’s motion for summary judgment.

Case Background

The plaintiff filed suit claiming the defendant’s negligence “resulted in her slipping on a dangerously slick surface” in the defendant’s store in May 2013. The defendant moved for summary judgment arguing that the plaintiff failed to prove that the defendant had actual or constructive notice of the wet condition of the floor.

The plaintiff’s memorandum opposing the summary judgment noted that the defendant had working security cameras in the store, but the video footage from the time and date of the accident was recorded over and not preserved. As a result, the Court sua sponte scheduled a hearing to prompt the parties to address the issue on whether the Court could or should draw an adverse spoliation inference due to the absence of video evidence.

Judge’s Opinion

Stating that “Ms. Harrell has not presented the Court with evidence from which a reasonable jury could infer that Pathmark had constructive notice of the wet condition of the floor”, Judge Pratter turned to the potential spoliation of video evidence, noting that “although Ms. Harrell does not specifically invoke the issue, one could read the concluding paragraphs of her Memorandum opposing summary judgment as contending that the Court should draw an adverse spoliation inference against Pathmark.”

Judge Pratter found that the plaintiff “has not satisfied her burden of demonstrating that the video footage would have been relevant” and also determined that the court “cannot conclude based on the evidence before it that the video evidence was actually suppressed or withheld. Nor can it conclude that litigation was reasonably foreseeable at a time when the video footage presumably still existed.” His ruling quoted Bull v. United Parcel Service, Inc., 665 F.3d 68, 77 (3d Cir. 2012) as follows:

“Ordinary negligence does not suffice to establish spoliation. The party asserting spoliation must prove that evidence was intentionally withheld, altered, or destroyed. Thus, no unfavorable inference of spoliation arises if the evidence was lost, accidentally destroyed, or where the failure to produce it is otherwise properly accounted for.”

With regard to this case, Judge Pratter remarked “Here, Ms. Harrell has not presented evidence of bad faith. Even in a highly litigious community or culture, just because a person falls in a grocery store does not mean that litigation is imminent. Here, the lawsuit was not filed until August 2014, over a year after the incident and far past the maximum of about 90 days that the video footage would have survived before being automatically re-recorded. While the incident itself did cause Mr. Lewis to create an incident report, nothing about it was so immediately dramatic to create an objectively foreseeable likelihood of litigation…Pathmark’s actions, in this context, appear to the Court to be at the very most mere inadvertent negligence.”

Therefore, Judge Pratter determined that “a spoliation inference would not be appropriate here” and with no evidence to support the plaintiff’s claim, granted the defendant’s motion for summary judgment.

Click here and here for a couple of previous slip and fall cases we’ve covered where potential spoliation of video evidence was debated.

So, what do you think? Was the court right to grant the motion for summary judgment? 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.

Image is Not Only Everything, It Is Also Legally a Copy, Appeals Court Rules: eDiscovery Case Law

In Colosi v. Jones Lang LaSalle Americas, Inc., 14-3710 (6th Cir. Ohio 2015), the Sixth Circuit Court of Appeals affirmed the District Court’s judgment to approve a $6,369.55 bill of costs which included synchronization of deposition videos and imaging of hard drives that the defendant submitted after prevailing in the case.

Case Background

The plaintiff (and appellant) lost a wrongful termination suit against the defendant (and appellee), her former employer. As the prevailing party, the defendant filed a $6,369.55 bill of costs that the court clerk approved without modification. The plaintiff objected to most of the charges and moved the district court to reduce the bill to $253.50. The district court denied the motion, finding each cost reasonable, necessary to the litigation, and properly taxable under statute. The plaintiff renewed her objections on appeal to the Sixth Circuit Court of Appeals.

The plaintiff contested, as a matter of law, the recoverability of the costs associated with the synchronization of her deposition video and transcript, costs flowing from a cancelled deposition and transcription costs for the depositions of three other witnesses she deemed as unnecessary. She also challenged the district court’s decision to tax the cost of imaging her personal computer’s hard drive, arguing that “as a matter of law, ‘most electronic discovery costs such as the imaging of hard drives are not recoverable as taxable costs.’” She referenced the narrow interpretation of taxable costs in Race Tires America, Inc. v. Hoosier Racing Tire Corp to bolster her argument.

Appellate Court’s Opinion

The appellate court stated that “The taxing statute allows the prevailing party to recover ‘[f]ees for printed or electronically recorded transcripts necessarily obtained for use in the case.’ 28 U.S.C. § 1920(2).” It also cited Sales v. Marshall, 873 F.2d 115, 120 (6th Cir. 1989), as follows: “Ordinarily, the costs of taking and transcribing depositions reasonably necessary for the litigation are allowed to the prevailing party. Necessity is determined as of the time of taking, and the fact that a deposition is not actually used at trial is not controlling.”

With regard to synchronization, the court stated “We discern no abuse of discretion in the award of synchronization costs. We previously construed § 1920(2) to embrace the cost of synchronizing a deposition video and transcript, provided the trial court finds the procedure reasonably necessary…It did here.” The appellate court also ruled that the plaintiff-appellant failed to “demonstrate that the district court abused its discretion in finding the other deposition-related costs necessary” and upheld those costs as well.

With regard to the imaging costs, the appellate court noted that “the statute includes no categorical bar to taxing electronic discovery costs. Rather, it authorizes courts to tax ‘the costs of making copies of any materials where the copies are necessarily obtained for use in the case.’ 28 U.S.C. § 1920(4). Thus, we first ask whether imaging a hard drive, or other physical storage device, falls within the ordinary meaning of ‘making copies.’”

Referencing the Oxford English Dictionary, the appellate court in upholding the imaging costs, rejecting the Third Circuit Court decision Race Tires as “overly restrictive”, stated:

“Imaging a hard drive falls squarely within the definition of ‘copy,’ which tellingly lists ‘image’ as a synonym. And the name ‘imaging’ describes the process itself. Imaging creates ‘an identical copy of the hard drive, including empty sectors.’…The image serves as a functional reproduction of the physical storage disk. From the image file, one can access any application file or electronic document on the hard drive with all that document’s original properties and metadata intact…If not actually made or formed in the image of the hard drive, we certainly regard it as such. Thus, a plain reading of the statute authorizes courts to tax the reasonable cost of imaging, provided the image file was necessarily obtained for use in the case.”

So, what do you think? Are courts ever going to apply a consistent interpretation of 28 U.S.C. § 1920(4)? 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 Rules that Australian Company’s Duty to Preserve Only Begins when US Court Has Jurisdiction: eDiscovery Case Law

In Lunkenheimer Co. v. Tyco Flow Control Pacific Party Ltd., No. 1-11-cv-824 (S.D. Ohio Feb. 12, 2015), Ohio District Judge Timothy S. Black ruled that the duty to preserve for the defendant (an Australian company with offices and facilities only in Australia) did not begin until the complaint was filed in US courts in December 2011, denying the assertion of the intervenor/counter defendant that the duty to preserve arose in 2002.

Case Background

The intervenor/counter defendant alleged that the defendant refused to fully comply with the court’s October 2014 discovery order by failing to preserve, or satisfactorily search for and produce, evidence relating to the case and requested sanctions including striking the defendant’s counterclaims and what amounted to a summary judgment in favor of the plaintiff for $24.7 million.

With regard to the duty to preserve, the intervenor/counter defendant argued that the defendant’s duty to preserve began no later than October 1, 2002, about a month after the License had been signed, when an email from an executive at the defendant company questioned ownership of the assets and intellectual property associated with the license and the intervenor/counter defendant claimed that, from at least that date, the parties were in constant dispute over the existence of, and the defendant’s compliance with, the License.

The defendant argued that any duty to preserve under U.S. law could not have arisen before August 3, 2012, the date when the defendant answered the complaint and consented to U.S. jurisdiction, and, even if it had, it was not before the defendant was served on December 8, 2011. The defendant also noted that, throughout the nine years prior to Plaintiffs’ filing of this lawsuit, the plaintiffs continued to accept regular royalty payments of over $1.6 million for the first five years, took no action for another four years while the defendant continued to use the IP and never sent a dispute notice or termination notice during that time.

Judge’s Opinion

Citing In re Uranium Antitrust Litigation, 480 F. Supp. 1138 (N.D. Ill. 1979) in a footnote, Judge Black stated the following:

“The power of a U.S. Court to require compliance with U.S. discovery obligations does not arise until and unless the Court has jurisdiction.”

Judge Black noted that the defendant “is an Australian company with offices and facilities only in Australia”, that “Australian Law governs the License and was the anticipated jurisdiction for License-related disputes” and that “[n]o significant sales of Licensed Products were made into the U.S.” While acknowledging that the defendant “is not excused from an obligation to preserve evidence simply because it is a foreign company”, Judge Black ruled that “the only place litigation might at some point have been anticipated was in New South Wales, Australia—not Ohio or anywhere else in U.S. Accordingly, notwithstanding the fact that it may not have had jurisdiction over the PFCP until 2012, and in the absence of evidence that PFCP should have reasonably anticipated litigation in the United States any earlier, the Court finds that the duty to preserve began on December 8, 2011.”

So, what do you think? Do you agree that the defendant did not have a duty to preserve any earlier than the filing of the complaint? 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 Agrees with Plaintiffs, Orders Provision for Qualitative Sampling of Disputed Search Terms: eDiscovery Case Law

In the case In Re: Lithium Ion Batteries Antitrust Litigation, No. 13-MD-02420 YGR (DMR) (N.D. Cal., Feb. 24, 2015), California Magistrate Judge Donna M. Ryu ordered the defendants to comply with the plaintiffs’ proposed qualitative sampling process for keyword search terms, citing DaSilva Moore that keywords “often are overinclusive”.

Case Background

In this multi-district litigation (MDL), the court ordered the parties to meet and confer to negotiate a protocol for the use of search terms in December 2014. The parties agreed upon an iterative process for the development and testing of search terms, summarized as follows:

  1. The producing/responding party will develop an initial list of proposed search terms and provide those terms to the requesting party;
  2. Within 30 days, the requesting party may propose modifications to the list of terms or provide additional terms (up to 125 additional terms or modifications); and
  3. Upon receipt of any additional terms or modifications, the producing/responding party will evaluate the terms, and
  4. Run all additional/modified terms upon which the parties can agree and review the results of those searches for responsiveness, privilege, and necessary redactions, or
  5. For those additional/modified terms to which the producing/responding party objects on the basis of overbreadth or identification of a disproportionate number of irrelevant documents, that party will provide the requesting party with certain quantitative metrics and meet and confer to determine whether the parties can agree on modifications to such terms. Among other things, the quantitative metrics include the number of documents returned by a search term and the nature and type of irrelevant documents that the search term returns. In the event the parties are unable to reach agreement regarding additional/modified search terms, the parties may file a joint letter regarding the dispute.

The parties requested the court’s guidance on a single remaining issue regarding their search term protocol: the steps the parties needed to take if they could not resolve a disagreement over a particular term. The plaintiff wanted the defendant to conduct a randomized qualitative sampling of documents retrieved by searching for any disputed terms, and to then allow the plaintiff to review the resulting documents following a privilege review.

The defendants objected to the proposed sampling provision “solely on the grounds that it will provide Plaintiffs with access to non-responsive, irrelevant documents that will be generated through the procedure.” They argued that the provision was unnecessary due to the detailed quantitative information that they agreed to produce regarding disputed search terms and because “there has been no showing that any Defendant’s production is incomplete.” The plaintiffs countered “that the proposed provision incorporates ESI best practices, including those embodied in materials developed by this Court” and contended that “the best way to refine searches and eliminate unhelpful search terms is to analyze a random sample of documents, including irrelevant ones, to modify the search in an effort to improve precision.”

Judge’s Opinion

With regard to the plaintiffs’ argument, Judge Ryu stated simply, “The court agrees. The point of random sampling is to eliminate irrelevant documents from the group identified by a computerized search and focus the parties’ search on relevant documents only. As the court noted in Moore v. Publicis Groupe, 287 F.R.D. 182 (S.D.N.Y. 2012), a problem with keywords ‘is that they often are overinclusive, that is, they find responsive documents but also large numbers of irrelevant documents.’”

Noting, however, that the defendants “raise a valid concern that the sampling protocol will result in the production of irrelevant information”, Judge Ryu ordered the following parameters to alleviate that concern:

  • At the hearing, the plaintiffs agreed that the defendants “may review the random qualitative sample and remove any irrelevant document(s) from the sample for any reason, provided that they replace the document(s) with an equal number of randomly generated document(s)”;
  • The parties also agreed that the defendants would conduct the qualitative sampling only after they had exhausted an agreed-upon quantitative evaluation process;
  • Judge Ryu ordered that irrelevant documents in the sample “shall be used only for the purpose of resolving disputes regarding search terms in this action, and for no other purpose in this litigation or in any other litigation” and that those irrelevant documents, as well as any attorney notes regarding the sample, “shall be destroyed within fourteen days of resolution of the search term dispute”;
  • Only one attorney from each law firm designated co-lead class counsel for Direct Purchaser Plaintiffs and Indirect Purchaser Plaintiffs (total of six attorneys) would be allowed to review the random sample;
  • The plaintiffs could invoke the random sampling process with respect to no more than five search terms per defendant group.

So, what do you think? Was the court right to order random sampling? 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.

Plaintiff’s Motion to Quash Subpoena of Text Messages Granted by Court: eDiscovery Case Law

In Burdette v. Panola County, No. 3:13CV286-MPM-SAA (N.D. Miss. February 4, 2015), Mississippi Magistrate Judge S. Allan Alexander granted the plaintiff’s Motion to Quash Subpoena where the defendant subpoenaed the plaintiff’s text messages and call log records from his mobile provider.

Case Background

In this employment case, the defendant issued a subpoena to AT&T Subpoena Compliance Center for production of “[a]ny and all calls and text messages made from and received from [the plaintiff’s phone number] in the custody and control of AT&T for the dates of April 23, 2012, beginning 1:00 p.m. through May 27, 2012.” The defendants stated that the subpoena was necessary because plaintiff had avoided producing ESI that is relevant to the claims at issue and failed to maintain either the phone upon which he recorded a conversation the day of his discharge or the computer to which he later transferred the phone recording.

The plaintiff contended that the subpoena was overly broad, harassing, irrelevant, and potentially sought information protected by the attorney client privilege, as the requested text messages would undoubtedly include texts to and from his family members and possibly to and from his attorney. The plaintiff also noted that the period of time for which the text messages and calls were sought extended twenty days after the plaintiff was terminated.

Judge’s Opinion

Judge Alexander noted that the defendants “have offered no explanation for why these text messages and phone calls are relevant and has not agreed to limit the production of them in any way”. Despite the fact that the plaintiff failed to maintain the phone and computer, Judge Alexander determined that “neither of those two facts support the request for all of plaintiff’s text messages and phone calls before and for three weeks after his termination. If defendants desire to seek a spoliation instruction, they are permitted to do so, but defendants have failed to convince the undersigned that production of text messages and phone call logs will resolve any issue relating to the recorded conversation. The court will not permit irrelevant discovery that appears to be more harassing than productive.”

“Weighing the factors set out by the Fifth Circuit for quashing a subpoena, the relevance factor clearly weighs against production of the phone records”, stated Judge Alexander, finding that “the breadth of the request is entirely too wide even if a valid reason for the request had been established.” As a result, he granted the plaintiff’s request to quash the defendant’s subpoena.

So, what do you think? Was the defendants’ request overbroad? Or did they have a valid reason for the subpoena, given that the plaintiff failed to produce relevant ESI? 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. eDiscoveryDaily 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. eDiscoveryDaily 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 Upholds Review of Taxable Costs by Clerk, Awards over $57,000: eDiscovery Case Law

In Comprehensive Addiction Treatment Center, Inc. v. Leslea, No. 11-cv-03417-CMA-MJW (D. Colo. Feb. 13, 2015), Colorado District Judge Christine M. Arguello denied the plaintiffs’ motion to review Clerk’s Taxing of Costs Under F.R.C.P. 54(D)(1), upholding the award by the Clerk of the Court of $57,873.61 in taxable costs.

Case Background

On January 31, 2013, the defendants’ Motion to Dismiss on qualified immunity and for lack of subject matter jurisdiction was granted by the court. After prevailing on summary judgment, the defendants filed a Proposed Bill of Costs seeking costs totaling $58,037.01. At a telephonic hearing, the District Court Clerk awarded $57,873.61 of the requested taxable costs. On March 5, 2014, the plaintiffs filed an instant Motion seeking a review of the Clerk’s determination concerning the taxed amount of $55,649.98 for the defendants to contract with a private consulting company, Cyopsis, to retrieve and convert ESI into a retrievable format to produce information that was requested by the plaintiffs.

The plaintiffs contended that the Court should reduce the taxing of costs entered by the Clerk from $57,873.61 to $2,387.03 because retrieving, restoring and converting data does not constitute “copying” under 28 U.S.C. § 1920(4). The defendants disagreed, arguing that “[p]roduction costs in collecting, scanning, reviewing, and preparing documents are necessary expenditures that are made for the purpose of advancing the discovery phase of the case and as such, are taxable.”

Judge’s Opinion

Judge Arguello stated that “Federal Rule of Civil Procedure 54 provides that ‘[u]nless a federal statute, these rules, or a court order provides otherwise, costs—other than attorney’s fees—should be allowed to the prevailing party.’” She also pointed out that “courts have recognized that 28 U.S.C. § 1920(4) includes e-discovery related costs”, citing three cases.

As for this case, Judge Arguello observed that “[b]ecause of the complexities and time-intensive efforts anticipated in responding to Plaintiffs’ requests for documents, the parties entered into three consecutive tolling agreements” and also that “Defendants wrote to Plaintiffs’ counsel three times describing the difficulties and complexities encountered in retrieving and restoring the ESI”. “At no time during this period did Plaintiffs initiate discussion aimed at limiting the scope of their request for information or take other measures to limit the costs of the endeavor”, she noted, indicating that based on the ESI production, “Plaintiffs filed a new Complaint including several allegations not included in the version filed in 2010”.

As a result, Judge Arguello found that the defendants’ costs related to the ESI are expenses enumerated in 28 U.S.C. § 1920(4). She found that “The ESI expenses were not merely for the convenience of the parties nor were they materials produced solely for discovery as Plaintiffs filed a new Complaint that included information gleaned from the ESI. Thus, the ESI expenses were reasonably necessary for use in the case. Indeed, Plaintiffs were aware of the monumental effort to retrieve and convert the data into a retrievable format in response to their Interrogatories and Requests for Production. The costs incurred by Defendants, the prevailing party, in responding to Plaintiffs’ requests are expenses that are shifted to Plaintiffs, the losing party. Indeed, Plaintiffs own litigation choices and aggressive course of discovery necessarily resulted in ‘heightened’ defense costs.”

Therefore, Judge Arguello denied the plaintiffs’ motion and upheld the award by the Clerk of the Court of $57,873.61 in taxable costs.

It’s not exactly a pot o’ gold, but it’s nothing to sneeze at either. 🙂 Happy St. Patrick’s Day!

So, what do you think? Is recovery of eDiscovery costs under 28 U.S.C. § 1920(4) too open to interpretation? 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. eDiscoveryDaily 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. eDiscoveryDaily should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.