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Court Rules that Stored Communications Act Applies to Former Employee Emails – eDiscovery Case Law

In Lazette v. Kulmatycki, No. 3:12CV2416, 2013 U.S. Dist. (N.D. Ohio June 5, 2013), the Stored Communications Act (SCA) applied when a supervisor reviewed his former employee’s Gmails through her company-issued smartphone; it covered emails the former employee had not yet opened but not emails she had read but not yet deleted.

When the plaintiff left her employer, she returned her company-issued Blackberry, which she believed the company would recycle and give to another employee. Over the next eighteen months, her former supervisor read 48,000 emails on the plaintiff’s personal Gmail account without her knowledge or authorization. The plaintiff also claimed her supervisor shared the contents of her emails with others. As a result, she filed a lawsuit alleging violations of the SCA, among other claims.

The SCA allows recovery where someone “(1) intentionally accesses without authorization a facility through which an electronic communication service is provided; or (2) intentionally exceeds an authorization to access that facility; and thereby obtains . . . access to a wire or electronic communication while it is in electronic storage in such system.” “Electronic storage” includes “(A) any temporary, intermediate storage of a wire or electronic communication incidental to the electronic transmission thereof; and (B) any storage of such communication by an electronic communication service for purposes of backup protection of such communication.”

The defendants claimed that Kulmatycki’s review of the plaintiff’s emails did not violate the SCA for several reasons: the SCA was aimed at “‘high-tech’ criminals, such as computer hackers,”‘ that Kulmatycki had authority to access the plaintiff’s emails, that his access “did not occur via ‘a facility through which an electronic communication service is provided’ other than the company owned Blackberry,” that “the emails were not in electronic storage when Kulmatycki read them,” and that the company was exempt because “the person or entity providing an electronic communications service is exempt from the Act, because the complaint does not make clear that plaintiff’s g-mail account was separate from her company account.”

The court rejected all but one of the defendants’ arguments. The SCA’s scope extended beyond high-tech hackers, and the Gmail server was the “facility” in question, not the plaintiff’s Blackberry. The court also found that the plaintiff’s failure to delete her Gmail account from her Blackberry did not give her supervisor her implied consent to access her emails; the plaintiff’s negligence did not amount to “approval, much less authorization. There is a difference between someone who fails to leave the door locked when going out and one who leaves it open knowing someone be stopping by.” The court also found that the former employer could be held liable through respondeat superior: the actions of the supervisor could be imputed to the company.

Where the defendants scored a minor victory is in their interpretation of “storage”: any emails that the plaintiff had opened but not deleted before the defendant saw them were not being kept “for the purposes of backup protection” and thus were not protected under the SCA.

Accordingly, the court allowed the plaintiff’s SCA claim to proceed.

So, what do you think?  Should the emails have been protected under the SCA?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Plaintiffs Take the Supreme Step in Da Silva Moore – eDiscovery Case Law

As mentioned in Law Technology News (‘Da Silva Moore’ Goes to Washington), attorneys representing lead plaintiff Monique Da Silva Moore and five other employees have filed a petition for certiorari filed with the Supreme Court arguing that New York Magistrate Judge Andrew Peck, who approved an eDiscovery protocol agreed to by the parties that included predictive coding technology, should have recused himself given his previous public statements expressing strong support of predictive coding.

Da Silva Moore and her co-plaintiffs argued in the petition that the Second Circuit Court of Appeals was too deferential to Peck when denying the plaintiff’s petition to recuse him, asking the Supreme Court to order the Second Circuit to use the less deferential “de novo” standard.  As noted in the LTN article:

“The employees also cited a circuit split in how appellate courts reviewed judicial recusals, pointing out that the Seventh Circuit reviews disqualification motions de novo. Besides resolving the circuit split, the employees asked the Supreme Court to find that the Second Circuit’s standard was incorrect under the law. Citing federal statute governing judicial recusals, the employees claimed that the law required motions for disqualification to be reviewed objectively and that a deferential standard flew in the face of statutory intent. “Rather than dispelling the appearance of a self-serving judiciary, deferential review exacerbates the appearance of impropriety that arises from judges deciding their own cases and thus undermines the purposes of [the statute],” wrote the employees in their cert petition.”

This battle over predictive coding and Judge Peck’s participation has continued for 15 months.  For a recap of the events during that time, click here.

So, what do you think?  Is this a “hail mary” for the plaintiffs and will it succeed?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Appellate Court Denies Sanctions for Routine Deletion of Text Messages – eDiscovery Case Law

In PTSI, Inc. v. Haley, No. 684 WDA 2012, 2013 Pa. Super. (Pa. Super. Ct. May 24, 2013), the appellate court denied a motion for spoliation sanctions where the defendants routinely deleted text messages and other data to “clean up” their personal electronic devices: the volume of messages and limited amount of phone storage made it difficult to retain all data and still use the phone for messaging.

Here, the plaintiff filed claims of conversion, breach of the duty of loyalty, and breach of fiduciary duty against its former at-will employees and their new competing business. The trial court dismissed all claims at summary judgment. It also denied PTSI’s motion seeking sanctions for spoliation, because the deletion of electronically stored information, including text messages, was not relevant to the summary judgment decision.

During discovery, PTSI filed a motion seeking sanctions based on its two former employees’ deletion of electronic records from their computers and phones, including text messages. The company claimed the information was “vital to the prosecution of this case” and could not be “feasibly reconstructed or retrieved without enormous time and expense to PTSI, if at all.”

Under Pennsylvania law, the court had to evaluate three factors to determine the appropriate sanction: “(1) the degree of fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party and, where the offending party is seriously at fault, will serve to deter such conduct by others in the future.”

To determine the level of fault, the court considered the extent of the duty to preserve the evidence, based on whether litigation is foreseeable and whether the evidence might be prejudicial to the opposing party, and whether the evidence was destroyed in bad faith. The court also considered proportionality in making decisions, including five factors spelled out in the comments to the Pennsylvania Rules of Civil Procedure:

  • the nature and scope of the litigation, including the importance and complexity of the issues and the amounts at stake;
  • the relevance of electronically stored information and its importance to the court’s adjudication in the given case;
  • the cost, burden and delay that may be imposed on the parties to deal with electronically stored information;
  • the ease of producing electronically stored information and whether substantially similar information is available with less burden; and
  • any other factors relevant under the circumstances.

Here, the amount in controversy and the importance of the issues involving the data did not support awarding a discovery sanction. Moreover, PTSI could not show that its former employees’ “innocent clean up of personal electronic devices to allow them to function was unusual, unreasonable or improper under the circumstances.” Because the defendants “routinely deleted text messages, often on a daily basis, so as not to unduly encumber their iPhones” and because of “the volume of text messages that are frequently exchanged by cell phone users and the limited amount of storage on cell phones, it would be very difficult, if not impossible, to save all text messages and to continue to use the phone for messaging.” Furthermore, the order of preservation was entered well after any relevant data would have already been created and deleted. In addition, similar information was available from other sources and custodians; the forensic examiner in the case unearthed more than 1,000 e-mails from the employees’ computers. Finally, any spoliation inference could not defeat the summary judgment motion.

The appellate court agreed with the trial court’s reasoning and found no abuse of discretion.

So, what do you think?  Should the sanctions have been granted?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Judge Rules Against Spoliation Sanctions when the Evidence Doesn’t Support the Case – eDiscovery Case Law

In Cottle-Banks v. Cox Commc’ns, Inc., No. 10cv2133-GPC (WVG) (S.D. Cal. May 21, 2013), California District Judge Gonzalo P. Curiel denied the plaintiff’s motion for spolation sanctions because the plaintiff was unable to show that deleted recordings of customer calls would have likely been relevant and supportive of her claim.

The defendant provides services and products such as set-top cable boxes and customers call in to order these services and products.  The plaintiff alleged a practice of charging customers for boxes without disclosing, and obtaining approval for equipment charges – a violation of the Communications Act of 1934, 47 U.S.C. § 543(f).  The plaintiff’s discovery requests included copies of recording of her own calls with the defendant, and the defendant began preserving tapes when the plaintiff notified the defendant that she would seek call recordings in discovery, not before that.  As a result, the plaintiff filed a motion for spoliation sanctions, requesting an adverse inference and requesting that the defendant be excluded from introducing evidence that it’s call recordings complied with 47 U.S.C. § 543(f).

From the call recordings still available, a sample of recordings was provided to the plaintiff – in those calls, it was evident that the defendant did, in fact, get affirmative acceptance of the additional charges as a matter of practice.

Judge Curiel ruled that the defendant “had an obligation to preserve the call recordings when the complaint was filed in September 2010” and that the defendant “had an obligation to preserve the call recording, [so] Defendant was negligent in failing to preserve the back up tapes. Thus, Defendant had a culpable state of mind.”  However, because the “Plaintiff cited only two call recordings out of 280 call recordings produced to support her position”, the judge concluded “that the deleted call recordings would not have been supportive of Plaintiff’s claim.”  Because “Plaintiff has not demonstrated all three factors to support an adverse inference sanction”, Judge Curiel denied the plaintiff’s motion as to adverse inference and preclusion.

So, what do you think?  Should the sanction request have been denied?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Spoliation of Data Can Get You Sent Up the River – eDiscovery Case Law

Sometimes, eDiscovery can literally be a fishing expedition.

I got a kick out of Ralph Losey’s article on E-Discovery Law Today (Fishing Expedition Discovers Laptop Cast into Indian River) where the defendant employee in a RICO case in Simon Property Group, Inc. v. Lauria, 2012 U.S. Dist. LEXIS 184638 (M.D. Fla. 2012) threw her laptop into a river.  Needless to say, given the intentional spoliation of evidence, the court imposed struck all of the defenses raised by the defendant and scheduled the case for trial on the issue of damages.  Magistrate Judge Karla Spaulding summarized the defendant’s actions in the ruling:

“This case has all the elements of a made-for-TV movie: A company vice president surreptitiously awards lucrative business deals to a series of entities that she and her immediate family members control. To cover up the egregious self-dealing, she fabricates multiple fictitious personas and then uses those fictitious personas to “communicate” with her employer on behalf of the entities she controls. She also cut-and-pastes her supervisor’s signature onto service agreements in an attempt to make it seem as if her activities have been approved. After several years, a whistleblower exposes the scheme to the company. The company then tells the vice president that she is being investigated and warns her not to destroy any documents or evidence. Sensing that her scheme is about to collapse around her and wanting to cover her tracks, the vice president then travels to the East Coast of Florida and throws her laptop computer containing information about these activities into a river.”

At least she didn’t deny it when deposed as noted in the ruling:

“When asked why she threw the laptop away, Lauria testified as follows:

Q: Okay. Why did you throw the laptop away?

A: Because I knew that something was coming down and I just didn’t want all the stuff around.

Q: So you were trying to get rid of documentation and e-mails and things?

A: Uh-huh, yes.

Q: That directly related to the lawsuit?

A: Yes. Now, they do, yes.”

Maybe she should have used the George Costanza excuse and state that she didn’t know it was “frowned upon”.

So, what do you think?  Was that wrong?  Just kidding.  Please share any comments you might have or if you’d like to know more about a particular topic.

BTW, Ralph is no stranger to this blog – in addition to several of his articles we’ve referenced, we’ve also conducted thought leader interviews with him at LegalTech New York the past two years.  Here’s a link if you want to check those out.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Another Case where Reimbursement of eDiscovery Costs are Denied – eDiscovery Case Law

When it comes to reimbursement of eDiscovery costs, sometimes courts feel like a nut and sometimes they don’t.  In other words, there appears to be no consistency.

In The Country Vintner of North Carolina, LLC v. E. & J. Gallo Winery, Inc., No. 12-2074, 2013 U.S. App. (4th Cir. Apr. 29, 2013), when deciding which costs are taxable, the Fourth Circuit chose to follow the Third Circuit’s reasoning in Race Tires America, Inc. v. Hoosier Racing Tire Corp.,674 F.3d 158 (3d Cir. 2012), which read 28 U.S.C. § 1920(4) narrowly. Specifically, the court approved taxation of file conversion and transferring files onto CDs as “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case” but no other tasks related to electronically stored information (ESI).

In this case, the defendant balked at the plaintiff’s discovery requests, arguing that the requests created an undue burden, rendering the documents sought inaccessible. The plaintiff filed a motion to compel, which the district court granted. The defendant then collected more than 62 gigabytes of data for review.

After prevailing on a motion to dismiss several claims and having the rest dismissed at summary judgment, the defendant filed a bill of costs seeking $111,047.75 for e-discovery-related charges, including the following:

  • “$71,910 for ‘flattening’ and ‘indexing’ ESI,”
  • “$15,660 for ‘Searching/Review Set/Data Extraction,’”
  • “$178.59 for ‘TIFF Production’ and ‘PDF Production,’”
  • “$74.16 for electronic ‘Bates Numbering,’”
  • “$40 for copying images onto a CD or DVD,” and
  • “$23,185 for ‘management of the processing of the electronic data,’ ‘quality assurance procedures,’ ‘analyzing corrupt documents and other errors,’ and ‘preparing the production of documents to opposing counsel.’”

Following the Third Circuit’s reasoning in Race Tires America, the district court found that the defendant was entitled to costs for tasks that were the equivalent of copying or duplicating files, but not for “any other ESI-related expenses.” Here, the only reimbursable tasks were converting files to TIFF and PDF format and transferring files to CDs. Therefore, the court taxed $218.59.

On appeal, the defendant claimed its ESI-related charges were taxable because “ESI has ‘unique features’: ESI is ‘more easily and thoroughly changeable than paper documents,’ it contains metadata, and it often has searchable text.” The defendant argued converting native files to PDF and TIFF formats resulted in “‘static, two-dimensional images that, by themselves, [we]re incomplete copies of dynamic, multi-dimensional ESI,’” such that other processing was required to copy the “‘all integral features of the ESI.’”

The Fourth Circuit rejected the defendant’s argument.  The court noted that “the presumption is that the responding party must bear the expense of complying with discovery requests.” Moreover, the U.S. Supreme Court has opined that “‘costs almost always amount to less than the successful litigant’s total expenses’” and that Section 1920 is “‘limited to relatively minor, incidental expenses.’” Finally, the appellate court also relied on Race Tires in finding that Section 1920(4) limited the taxable costs to file conversion and burning files onto discs. The ESI-related charges were not taxable as “fees for exemplification” under the statute because they did not involve the authentication of public records, exhibits, or demonstrative aids.

Although the court’s reasoning meant the defendant would be reimbursed for only a fraction of its costs, it did not mean its interpretation of the statute was “too grudging in an age of unforeseen innovations in litigation-support technology.” Rather, the court suggested that where parties believe costs are excessive, they can file a motion seeking a protective order.

So, what do you think?  Should the costs have been awarded?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Adverse Inference Sanction for Defendant who Failed to Stop Automatic Deletion – eDiscovery Case Law

Remember the adverse inference instructions in the Zubulake v. UBS Warburg and Apple v. Samsung cases?  This case has characteristics of both of those.

In Pillay v. Millard Refrigerated Servs., Inc., No. 09 C 5725 (N.D. Ill. May 22, 2013), Illinois District Judge Joan H. Lefkow granted the plaintiff’s motion for an adverse inference jury instruction due to the defendant’s failure to stop automatic deletion of employee productivity tracking data used as a reason for terminating a disabled employee.

Case Background

The plaintiff alleged that the defendant is liable for retaliation under the Americans with Disabilities Act (“ADA”) for terminating his employment after the plaintiff opposed the defendant’s decision to terminate another employee because of a perceived disability.  The defendant employed a labor management system (“LMS”) to track its warehouse employees’ productivity and performance.  Shortly after hiring the employee and telling him that his LMS numbers were great, the defendant fired the employee when it was determined that a prior work injury he suffered rendered him with a disability rating of 17.5 percent by the Illinois Industrial Commission, which prompted the senior vice president to send an email to the general manager stating “We have this all documented right? … Let’s get him out asap.”  The employee (and the plaintiff, for objecting to the termination) was terminated in August 2008 and the defendant contended that the employee’s termination resulted from his unacceptable LMS performance rating of 59 percent.

Deletion of LMS Data

In August 2009, the raw data used to create the employee’s LMS numbers were deleted because the LMS software automatically deleted the underlying data after a year. Before the information was deleted, the plaintiff and other terminated employee provided several notices of the duty to preserve this information, including:

  • A demand letter from the plaintiff in September 2008;
  • Preservation notices from the plaintiff and other terminated employee in December 2008 reminding the defendant of its obligations to preserve evidence;
  • Charges filed by both terminated employees with the Equal Employment Opportunity Commission (“EEOC”) in January 2009.

Also, the defendant’s 30(b)(6) witness testified that supervisors could lower an LMS performance rating by deleting the underlying data showing that an employee worked a certain number of jobs for a given period of time, which the plaintiff contended happened in this case.  As a result, the plaintiff filed a motion for the adverse inference jury instruction.

Judge’s Ruling

Noting that the defendant “relied on this information when responding to the EEOC charges, which occurred before the deletion of the underlying LMS data” and that “[i]nformation regarding the underlying LMS data would have been discoverable to challenge Millard’s explanation for Ramirez’s termination”, Judge Lefkow found that the defendant had a duty to preserve the LMS data (“A party must preserve evidence that it has notice is reasonably likely to be the subject of a discovery request, even before a request is actually received.”).

With regard to the defendant’s culpability in deleting the data, Judge Lefkow stated “[t]hat Millard knew about the pending lawsuit and that the underlying LMS data would be deleted but failed to preserve the information was objectively unreasonable. Accordingly, even without a finding of bad faith, the court may craft a proper sanction based on Millard’s failure to preserve the underlying LMS data.”

So, Judge Lefkow granted the plaintiff’s request for an adverse inference sanction with the following instruction to be given to the jury:

“Pillay contends that Millard at one time possessed data documenting Ramirez’s productivity and performance that was destroyed by Millard. Millard contends that the loss of the data was accidental. You may assume that such evidence would have been unfavorable to Millard only if you find by a preponderance of the evidence that (1) Millard intentionally or recklessly caused the evidence to be destroyed; and (2) Millard caused the evidence to be destroyed in bad faith.”

So, what do you think?  Should the adverse inference sanction have been awarded?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Appellate Court Upholds District Court Discretion for Determining the Strength of Adverse Inference Sanction – eDiscovery Case Law

In Flagg v. City of Detroit, No. 11-2501, 2013 U.S. App. (6th Cir. Apr. 25, 2013), the Sixth Circuit held that the district court did not abuse its discretion in issuing a permissive rather than mandatory adverse inference instruction for the defendant’s deletion of emails, noting that the district court has discretion in determining the strength of the inference to be applied.

In this appeal, the plaintiff children of a murder victim argued that the district court did not go far enough in issuing a permissive adverse inference instruction against the defendants for the destruction of evidence; instead, they believed a mandatory adverse inference instruction was warranted.

During discovery, the plaintiffs had filed a motion for preservation of evidence that covered emails. The court granted the motion. Later, the plaintiffs asked the defendants to produce all emails for a number of city officials, including the mayor. However, the city had deleted and purged the email of several officials when they resigned, including those of the mayor. The district court found the city had acted “culpably and in bad faith” in destroying the emails. Though it denied the plaintiffs’ request for a default judgment and a mandatory adverse inference, it did grant their request for a permissive inference. The plaintiffs appealed the district court’s choice of sanction.

The Sixth Circuit reviewed the district court’s opinion for abuse of discretion. It found that the plaintiffs met all three elements required for an adverse inference instruction: that the defendants had an obligation to preserve the evidence they destroyed, that the defendants destroyed the evidence with a culpable state of mind, and that the destroyed evidence was relevant to the plaintiffs’ claim.

Because the district court has the power to decide the strength of the inference, the Sixth Circuit upheld its decision, despite noting that “[i]f the severity of a spoliation sanction were required to be based solely on the sanctioned party’s degree of fault, this Court likely would be compelled to agree with Plaintiffs that the district court abused its discretion. After all, ‘intentionality’ is the highest degree of fault contemplated by this Court . . . and the district court found it to be present in this case.”

So, what do you think?  Should the District Court decision have been upheld?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by CloudNine Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

eDiscovery Vendors Are Not Immune to eDiscovery Sanctions – eDiscovery Case Law

In Nuance Communications Inc. v. Abbyy Software House et al., no 3:08-cv-02912 (N.D. Cal. May 22, 2013), California District Judge Jeffrey S. White refused Wednesday to dismiss Nuance Communications Inc.’s patent infringement suit against Lexmark International Inc. and Abbyy Software House, and awarded reimbursement of plaintiff’s attorneys’ fees and costs in excess of $130,000 as part of discovery abuse sanctions resulting from the late production of relevant documents from Abbyy.

In this patent infringement case, this order addressed motions for summary judgment filed by both defendants as well as a motion for attorneys’ fees and costs as part of discovery sanctions filed by the plaintiff.  Judge White found that “these matters are appropriate for disposition without oral argument” and vacated the hearing scheduled two days later to discuss them.

Despite the fact that the plaintiff “went so far as to congratulate ABBYY’s top management on the product” upon its release, “and only sued on the alleged infringement six years later, after the products were already off the market”, Judge White did not find that the “congratulatory e-mail, as a matter of law, establishes that Nuance was both aware of and acquiesced to ABBYY’s packaging, thereby entitling ABBBY to the defense of acquiescence or laches.”  As a result, he denied Abbyy’s motion for summary judgment on the trade dress claims.

With regard to the motions for summary judgment filed by both defendants regarding patent claims, Judge White found “that there remain questions of fact regarding each of the patent infringement claims which preclude the Court from granting either defendant ABBYY’s or Lexmark’s motions for summary judgment”, so those motions were also denied.

As for the plaintiff’s motion for attorneys’ fees and costs as part of discovery abuse sanctions resulting from the late production of relevant documents from Abbyy, while Abbyy claimed that the production due to “satisfaction of Nuance’s multiple other discovery requests seeking massive amounts of irrelevant information”, Judge White did not find the delay in production justified.  He also noted that Abbyy’s “late production required the extension of time for discovery and Nuance’s retaking of many depositions which had been completed prior to the original close of discovery”. Because of this, he ruled that “sanctions under Federal Rule of Civil Procedure 37 are justified for the expense Nuance incurred in the retaking of otherwise-completed depositions once the Court re-opened discovery due to the late disclosures.”

As a result, Abbyy was ordered to pay $14,544.94 in costs and $120,068.57 in fees (a total of $134,613.51) within 30 days of the order to reimburse the plaintiff for the amount incurred “after the re-opening of discovery due to the late production”.

So, what do you think?  Were the sanctions warranted?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.

Motion to Compel Dismissed after Defendant Agrees to Conditional Meet and Confer – eDiscovery Case Law

In Gordon v. Kaleida Health, No. 08-CV-378S(F) (W.D.N.Y. May 21, 2013), New York Magistrate Judge Leslie G. Foschio dismissed (without prejudice) the plaintiffs’ motion to compel the defendant to meet and confer to establish an agreed protocol for implementing the use of predictive coding software after the defendants stated that they were prepared to meet and confer with the plaintiffs and their non-disqualified ESI consultants regarding the defendants’ predictive coding process.

For over a year, the parties unsuccessfully attempted to agree on how to achieve a cost-effective review of the defendants’ 200,000 to 300,000 emails using a keyword search methodology.  Eventually, in June 2012, the court expressed dissatisfaction with the parties’ lack of progress toward resolving the issues and pointed to the availability of predictive coding, citing its approval in Da Silva Moore v. Publicis Groupe & MSL Group, No. 11 Civ. 1279 (ALC) (AJP) (S.D.N.Y. Feb. 24, 2012) (much more on that case here).

In a September 2012 email, after informing the plaintiffs that they intended to use predictive coding, the defendants objected to the plaintiffs’ ESI consultants participating in discussions with Defendants relating to the use of predictive coding and establishing a protocol.  Later that month, despite the plaintiffs’ requests for discussion of numerous search issues to ensure a successful predictive coding outcome, the defendants sent their ESI protocol to the plaintiffs and indicated they would also send a list of their email custodians to the plaintiffs.  In October 2012, the plaintiffs objected to the defendants’ proposed ESI protocol and filed the motion to compel, also citing Da Silva Moore and noting several technical issues “which should be discussed with the assistance of Plaintiffs’ ESI consultants and cooperatively resolved by the parties”.

Complaining that the defendants refused to discuss issues other than the defendants’ custodians, the plaintiffs claimed that “the defendants’ position excludes Plaintiffs’ access to important information regarding Defendants’ selection of so-called ‘seed set documents’ which are used to ‘train the computer’ in the predictive coding search method.  The defendants responded, indicating they had no objection to a meet and confer with the plaintiffs and their consultants, except for those consultants that were the subject of the defendants’ motion to disqualify (because they had previously provided services to the defendants in the case). With regard to sharing seed set document information, the defendants stated that “courts do not order parties in ESI discovery disputes to agree to specific protocols to facilitate a computer-based review of ESI based on the general rule that ESI production is within the ‘sound discretion’ of the producing party” and noted that the defendants in Da Silva Moore weren’t required to provide the plaintiffs with their seed set documents, but volunteered to do so.

Because the defendants stated that “they are prepared to meet and confer with Plaintiffs and Plaintiffs’ ESI consultants, who are not disqualified”, Judge Foschio ruled that “it is not necessary for the court to further address the merits of Plaintiffs’ motion at this time” and dismissed the motion without prejudice.  It will be interesting to see if the parties can ultimately agree on sharing the protocol or if the question regarding sharing information about seed set documents will come back before the court.

So, what do you think?  Should producing parties be required to share information regarding selection of seed set documents?  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 Discovery. eDiscoveryDaily is made available by CloudNine Discovery 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.