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Case Law

Court Rules on Status of “Functional Employee, Declines Sanctions as Premature: eDiscovery Case Law

In Digital Mentor, Inc. v. Ovivo USA, LLC, No. 2:17-cv-01935-RAJ (W.D. Wash. Feb. 4, 2020), Washington District Judge Richard A. Jones granted in part and denied in part the defendant’s motion to compel, ruling that the plaintiff had not shown that a consultant to the plaintiff met the criterion of being considered a “functional employee” for which all communications with the plaintiff could be considered privileged, but denying the defendant’s request for preclusion sanctions, determining those to be “premature”.

Case Background

In this case involving trademark and copyright infringement and breach of contract claims that the defendant created a “pirated” version of the plaintiff’s product, the parties had a discovery dispute stemming from William Chastain’s consulting role with the plaintiff.  The plaintiff claimed that Chastain was its “functional employee” and so his communications with the plaintiff were subject to attorney-client privilege or work product protection.  Chastain was purportedly involved in the negotiation, discussion and execution of the pertinent contracts and agreements at issue with the defendant, was a direct conduit of the plaintiff in the events leading up to this litigation and was never paid for his role and was never employed by the plaintiff.

The defendant disagreed, claiming that Chastain did not qualify as a “functional employee” and moved to compel the plaintiff to produce all documents relating to Chastain, including correspondence between Chastain, the plaintiff and/or its counsel; even documents identified DMI’s privilege log.  The defendant also sought to prohibit the plaintiff from relying upon any documentation including or relating to Chastain and any testimony from, or referring to, Chastain during hearings or trial and also sought reasonable fees and expenses in bringing the motion.

Judge’s Ruling

Noting that “as one district court indicates, ‘the dispositive question is the consultant’s relationship to the company and whether by virtue of that relationship [s]he possesses information about the company that would assist the company’s attorneys in rendering legal advice’”, Judge Jones stated: “When answered in the affirmative, the consultant is ‘in all relevant respects the functional equivalent of an employee’ and communications between corporate counsel and the consultant may be covered under attorney-client privilege.”

But, Judge Jones continued: “On the record presented, DMI has not shown that Chastain’s involvement meets this criterion. There is no documentation of Chastain’s duties vis-à-vis DMI or its corporate counsel, nor does the record demonstrate that Chastain had specialized knowledge such that counsel would rely on him to facilitate legal advice for the company…There is also little to indicate that communications between Chastain and DMI’s counsel were primarily of a legal, as opposed to a business, nature…Having found that DMI has not met its burden, the Court GRANTS Ovivo’s motion to the extent documents are only being withheld on this basis of privilege. Having found the ‘functional employee’ requirements not met, the Court will not analyze Ovivo’s claims of waiver.”

However, considering preclusion sanctions based on the defendant’s claim that Chastain destroyed relevant documents because (as the plaintiff stated) he “does not keep any emails and/or documentation as he has been a victim of corporate theft and hacking incidents in the past”, Judge Jones stated: “The Court cannot impose sanctions based on Ovivo’s allegations under Rule 37. Sanctions under Rule 37 are allowed only against a party that disobeys a court issued discovery order. However, the court’s inherent authority to impose sanctions for the wrongful destruction of evidence includes the power to exclude evidence that, given the spoliation, would ‘unfairly prejudice an opposing party.’…Although Chastain’s purported email practices seem particularly dubious, the Court agrees with DMI that Ovivo’s request for preclusion sanctions is premature. Ovivo has not presented any evidence in support of its spoliation theory other than Chastain’s failure to produce documents in response to its subpoena…Without evidence about what was purportedly destroyed, when it occurred, what extent DMI had any involvement, and any resulting prejudice, preclusion sanctions are inappropriate. The Court also declines to award attorney’s fees related to this motion.”

So, what do you think?  Is it premature to consider sanctions if the party acknowledges destroying relevant documents?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Special Master Declines to Order Defendant to Use TAR, Rules on Other Search Protocol Disputes: eDiscovery Case Law

In the case In re Mercedes-Benz Emissions Litig., No. 2:16-cv-881 (KM) (ESK) (D.N.J. Jan. 9, 2020), Special Master Dennis Cavanaugh (U.S.D.J., Ret.) issued an order and opinion stating that he would not compel defendants to use technology assisted review (TAR), and instead adopted the search term protocol negotiated by the parties, with three areas of dispute resolved by his ruling.

Case Background

In this emissions test class action involving an automobile manufacturer, the plaintiffs proposed that the defendants use predictive coding/TAR, asserting that TAR yields significantly better results than either traditional human “eyes on” review of the full data set or the use of search terms.  The plaintiffs also argued that if the Court were to decline to compel the defendants to adopt TAR, the Court should enter its proposed Search Term Protocol.

The defendants argued that there is no authority for imposing TAR on an objecting party and that this case presented a number of unique issues that would make developing an appropriate and effective seed set challenging, such as language and translation issues, unique acronyms and identifiers, redacted documents, and technical documents. As a result, they contended that they should be permitted to utilize their preferred custodian-and-search term approach.

Judge’s Ruling

Citing Rio Tinto Plc v. Vale S.A., Special Master Cavanaugh quoted from that case in stating: “While ‘the case law has developed to the point that it is now black letter law that where the producing party wants to utilize TAR for document review, courts will permit it’…, no court has ordered a party to engage in TAR over the objection of that party. The few courts that have considered this issue have all declined to compel predictive coding.”  Citing Hyles v. New York City (another case ruling by now retired New York Magistrate Judge Andrew J. Peck), Special Master Cavanaugh stated: “Despite the fact that it is widely recognized that ‘TAR is cheaper, more efficient and superior to keyword searching’…, courts also recognize that responding parties are best situated to evaluate the procedures, methodologies, and technologies appropriate for producing their own electronically stored information.”

As a result, Special Master Cavanaugh ruled: “While the Special Master believes TAR would likely be a more cost effective and efficient methodology for identifying responsive documents, Defendants may evaluate and decide for themselves the appropriate technology for producing their ESI. Therefore, the Special Master will not order Defendants to utilize TAR at this time. However, Defendants are cautioned that the Special Master will not look favorably on any future arguments related to burden of discovery requests, specifically cost and proportionality, when Defendants have chosen to utilize the custodian-and-search term approach despite wide acceptance that TAR is cheaper, more efficient and superior to keyword searching. Additionally, the denial of Plaintiffs’ request to compel Defendants to utilize TAR is without prejudice to revisiting this issue if Plaintiffs contend that Defendants’ actual production is deficient.”

Special Master Cavanaugh also ruled on areas of dispute regarding the proposed Search Term Protocol, as follows:

  • Validation: Special Master Cavanaugh noted that “the parties have been able to reach agreement on the terms of Defendants’ validation process, [but] the parties are at an impasse regarding the level of validation of Plaintiffs’ search term results”, observing that “Plaintiffs’ proposal does not articulate how it will perform appropriate sampling and quality control measures to achieve the appropriate level of validation.” As a result, Special Master Cavanaugh, while encouraging the parties to work together to develop a reasonable procedure for the validation of Plaintiffs’ search terms, ruled: “As no articulable alternative process has been proposed by Plaintiffs, the Special Master will adopt Defendants’ protocol to the extent that it will require the parties, at Defendants’ request, to meet and confer concerning the application of validation procedures described in paragraph 12(a) to Plaintiffs, if the parties are unable to agree to a procedure.”
  • Known Responsive Documents & Discrete Collections: The defendants objected to the plaintiffs’ protocol to require the production of all documents and ESI “known” to be responsive as “vague, exceedingly burdensome, and provides no clear standard for the court to administer or the parties to apply”. The defendants also objected to the plaintiffs’ request for “folders or collections of information that are known to contain documents likely to be responsive to a discovery request” as “overly broad and flouts the requirement that discovery be proportional to the needs of the case.”  Noting that “Defendants already agreed to produce materials that are known to be responsive at the November status conference”, Special Master Cavanaugh decided to “modify the Search Term Protocol to require production of materials that are ‘reasonably known’ to be responsive.”  He also decided to require the parties to collect folders or collections of information “to the extent it is reasonably known to the producing party”, also requiring “the parties to meet and confer if a party believes a discrete document folder or collection of information that is relevant to a claim or defense is too voluminous to make review of each document proportional to the needs of the case.”

So, what do you think?  Should a decision not to use TAR negatively impact a party’s ability to make burden of discovery arguments?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Related to this topic, Rob Robinson’s Complex Discovery site published its Predictive Coding Technologies and Protocols Spring 2020 Survey results last week, which (as always) provides results on most often used primary predictive coding platforms and technologies, as well as most-often used TAR protocols and areas where TAR is most used (among other results).  You can check it out at the link directly above.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Citing Protective Order, Court Grants Motion to Quash the Subpoena of Third Party Expert: eDiscovery Case Law

As we all wind our way back home after another Legaltech, here is a new case law post for you.  Next week, we’ll have some observations from attendees at the show (including me).

In Rhino Metals, Inc. v. Sturdy Gun Safe, Inc., No. 1:18-cv-00474-DCN (D. Idaho Jan, 22, 2020), Idaho David C. Nye granted the motion of the Defendant/Counterclaimant to Enforce the Protective Order that was related to a report prepared by defendant’s expert that was produced to the plaintiff in this case and quashed the subpoena that was issued to the Plaintiff/Counter-Defendant from a party in another case.

Case Background

In this case, the defendant produced the report of one of its experts to the plaintiff.  Pursuant to the parties’ agreed upon protective order in this case, the defendant designated the expert’s report as “Confidential”, which limited the receiving party’s ability to use and disclose the report.  Unrelatedly, that same expert produced a report on behalf of a plaintiff in a legal matter titled GDM Enterprises, LLC v. Astral Health & Beauty, Inc., a case in the Western District of Missouri.  On December 20, 2019, the plaintiff issued a subpoena to the defendant in the Missouri action requesting the expert’s report in that case. Ten days later, the defendant in the Missouri case issued a reciprocal subpoena to the plaintiff requesting the expert’s report in this case.

The defendant raised the issue to the Court informally and the plaintiff represented that it would not respond to the subpoena until the Court had an opportunity to review and rule on any motions filed in the instant case.  Concerned that this information would leak into the public sphere if turned over, the defendant moved the Court for an order enforcing the protective order in this case and prohibiting the plaintiff from responding to the subpoena and turning over the requested information.

Judge’s Ruling

Judge Nye began his analysis by stating: “As a threshold matter, the Court notes that this Court—the District of Idaho—is the correct forum to take up this matter”, noting that “Sturdy is the party ‘affected by a subpoena’ and that “the subpoena requires compliance in this District”.  Noting that “under Rule 45, the party to whom a subpoena is directed must ‘produce [the designated items] in that person’s possession, custody, or control’”, Judge Nye stated:

“Here, the items at issue are only in the temporary possession, custody, or control of Rhino pursuant to a Protective Order of this Court and thus not subject Astral’s subpoena… Sturdy is the true, rightful owner of this material. Sturdy is the correct party to whom the subpoena should have been directed. The mere fact that Rhino has the information at this time does not mean that the information is within its possession, custody, or control and subject to disclosure… Thus, the report Astral seeks via its subpoena is not within Rhino’s possession, custody, or control for purposes of discovery. Further, were Rhino to turn it over, it would be violating the terms of the protective order in this case and subject to sanctions.”

Addressing the plaintiff’s concerns that it might be required to respond to the subpoena, Judge Nye also noted that “the bottom line is that Rhino is not ‘disobeying a lawful subpoena’ by not turning over the information Astral seeks because it isn’t Rhino’s information to turn over in the first place.”  As a result, he granted the defendant’s motion and quashed the subpoena issued to the plaintiff.

So, what do you think?  Do you agree that the report wasn’t in the possession, custody and control of the plaintiff?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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 Finds Plaintiffs’ Sanction Request To Be Too Late and Too Little: eDiscovery Case Law

Tom O’Connor and I had a great webcast yesterday regarding Important eDiscovery Case Law Decisions of 2019 and Their Impact on 2020, with plenty of interaction from the audience in the form of great questions and additional information!  So, how do we follow that up?  By continuing to build on this year’s case law collection.  :o)

In Nguyen v. Costco Wholesale Corp., No. 9:19-cv-80393 (S.D. Fla. Jan. 27, 2020), Florida Magistrate Judge William Matthewman denied the plaintiffs’ motion for sanctions for alleged spoliation of a video that the plaintiffs claimed showed an alleged slip-and-fall by plaintiff Chi Nguyen, finding that the defendant “did not have an affirmative duty to preserve the allegedly spoliated video” for a nearly two year period from the date of the fall to the date of the filing of the lawsuit and that the plaintiffs “fail to cite to a shred of evidence in support” in support of the claim that the video showed the slip and fall.

Case Background

In this case, the plaintiffs had previously filed a motion to compel the defendant to produce two photos taken by one of its employees as well as in-store surveillance videos that the defendant had claimed work-product privilege over and listed on its privilege log.  The defendant failed to timely respond to the plaintiffs’ motion, and the Court ordered the defendant to show cause as to why the motion should not be granted, to which the defendant responded that it had inadvertently failed to respond to the plaintiffs’ motion and that its “intent was always” to produce the video and photographs that the plaintiffs requested. Ultimately, the plaintiffs decided their Motion to Compel was moot and the Court denied the plaintiffs’ motion to compel accordingly.

However, the plaintiffs contended that the defendant never produced the “video showing the area” where plaintiff Chi Nguyen allegedly slipped and fell, arguing that the defendant improperly erased the video, resulting in “extreme irreversible prejudice” to the plaintiffs.  The defendant maintained that “there is no such video because no cameras in the store show this area” and that the plaintiffs never made a written request to preserve video information and thus it “had no duty to preserve any videos at all, much less video from a distant camera that did not capture the accident[.]”  The defendant produced affidavits in support of its position, but the plaintiffs produced no such affidavit or other evidence.

Judge’s Ruling

In considering the plaintiffs’ motion, Judge Matthewman observed: “Plaintiff Chi Nguyen originally brought her suit against Defendant in Florida state court on January 17, 2019…Her alleged slip-and-fall occurred on January 25, 2017, nearly two years prior to the filing of the Complaint.”  As a result, he ruled that “Defendant did not have an affirmative duty to preserve the allegedly spoliated video from the date of the fall (January 25, 2017) to the date of the filing of this lawsuit (January 17, 2019), a period of nearly two years after Plaintiff Chi Nguyen’s alleged slip-and-fall. Plaintiffs have provided no evidence that Defendant was given notice prior to the filing of this suit that Plaintiffs intended to file an action against it related to the alleged slip-and-fall. Moreover, merely because Plaintiff Chi Nguyen fell at Defendant’s store, absent additional facts, does not mean that Defendant reasonably anticipated litigation on the date of the alleged fall. No duty to preserve arose until after this lawsuit was served on Defendant. Without a duty to preserve the allegedly spoliated video, Plaintiffs’ motion for sanctions necessarily fails.”

Judge Matthewman also stated in denying the plaintiffs’ motion: “Even assuming Defendant did have a duty to preserve the allegedly spoliated video (which it did not), sanctions would still not be warranted unless the allegedly spoliated ESI was lost because Defendant failed to take reasonable steps to preserve it”, finding that “Defendant did not fail to take reasonable steps to preserve the allegedly spoliated evidence because the video was not ‘unique, relevant evidence that might be useful to’ Plaintiffs.”

So, what do you think?  What should constitute “reasonable anticipation of litigation” in a slip and fall case?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Today’s Webcast Will Teach You Key Case Law for 2019 and How it Affects 2020: eDiscovery Webcasts

2019 was another notable year for eDiscovery case law with several significant rulings that stand to impact eDiscovery practices, the admissibility of evidence and the potential of sanctions for discovery violations.  How can these key case law decisions affect discovery within your organization?  Today’s webcast that will discuss key case law rulings from last year and their impact on this year – and beyond.

TODAY at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast Important eDiscovery Case Law Decisions of 2019 and Their Impact on 2020. In this one-hour webcast that’s CLE-approved in selected states, we will cover key 2019 case law decisions covered by the eDiscovery Daily blog and what the legal profession can learn from those rulings. Topics include:

  • Biometric Fingerprint Scanning and Privacy
  • Non-party ESI Requests in Litigation
  • Social Media Trends and Judge “Friending”
  • Password Provision and Fifth Amendment Protection
  • Staying Discovery while a Motion to Dismiss is Considered
  • Case Law Trends in Ephemeral Messaging App Discovery
  • Case Law Trends in Mobile Device Discovery
  • Sanctions Trends under Rule 37(e)
  • Sanctions and Case Strategy
  • Inadvertent Disclosures and Sanctions

As always, I’ll be presenting the webcast, along with Tom O’Connor.  To register for it, click here.  Even if you can’t make it, go ahead and register to get a link to the slides and to the recording of the webcast (if you want to check it out later).  If you want to learn how key case law rulings from last year can impact this year, this webcast is for you!

Just a reminder that Legaltech® is part of Legalweek and will be held from February 4 through 6 at the New York Hilton Midtown.  And, CloudNine will be once again exhibiting at the conference, at booth 3000 in America’s Hall 2.  And, we’re once again excited to be co-sponsoring the annual #DrinkswithDougandMary cocktail reception with Mary Mack, Kaylee Walstad and the rest of the EDRM team!  This is our fourth year and we’re grateful to Marc Zamsky and Compliance Discovery for co-sponsoring as well.  It will once again be at Ruth’s Chris Steak house and will happen Wednesday, February 5 from 4-6pm.  You can register to attend here.  And, as I told you on Wednesday, we will be conducting another NineForum education series of TED-talk discussions from our booth, so please check that out as well!

So, what do you think?  Are you big on case law and like to second guess judicial decisions?  If so, please join us!  And, as always, please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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 Defendant’s Production Need Not Be Lost in Translation: eDiscovery Case Law

In NY Machinery v. The Korean Cleaners Monthly, No. 2:17-12269-SDW-ESK (D.N.J. Jan. 6, 2020), New Jersey Magistrate Judge Edward S. Kiel, noting that “Rule 34 does not address which party has the obligation to translate documents into English” denied the plaintiffs’ application seeking to compel the defendants to translate documents served as part of their document production.

Case Background

In this case involving allegations unfair competition, false advertising, defamation, false light and trade libel (among other allegations), the plaintiffs wrote to the defendants in April 2019 asserting various deficiencies in the defendants’ discovery responses, including this statement:

“Defendants’ document production contains numerous documents, including emails, that appear to be written in Korean or Japanese. Plaintiffs have incurred the expense of obtaining certified English translations of documents contained in their production. We expect Defendants to promptly produce certified translations of these documents.”

The parties continued to exchange correspondence relating to discovery disputes, which included the plaintiffs’ demand that the defendants provide certified translations of documents and a dispute about a telephone-status conference on September 6, 2019 and whether a judge ordered the defendants to provide certified translations of Defendants’ document production by September 22, 2019.

Judge’s Ruling

Judge Kiel noted: “The question before the Court is: Who bears the cost of translating foreign-language documents produced in response to a request for production of documents? There is no clear answer in the Third Circuit.”

But, Judge Kiel also stated: “The Court, however, finds the analysis and decision in Nature’s Plus Nordic A/S v. Natural Organics, Inc. 274 F.R.D. 437, 439 (E.D.N.Y. 2011) to be persuasive and adopts it herein.” {emphasis added}  Judge Kiel noted that ruling “held that Rule 34 ‘d[oes] not provide the district court with any authority to direct the party producing documents to translate them and that such orders violate the well-accepted principle that each party bear the ordinary burden of financing his own suit… and that each party … is expected to bear any special attendant costs.’…Thus, absent a showing of ‘prejudice to [the requesting party for] undue delay,’ the party responding to document demands has no obligation to provide translations to foreign-language documents.”

Noting that “Plaintiffs do not claim that the documents produced by Defendants in response to Plaintiffs’ discovery demands are irrelevant” and that “to satisfy their obligation under Rule 34, Defendants produced all documents responsive to Plaintiffs’ request, including the foreign-language documents at issue”, Judge Kiel denied the plaintiffs’ request to have the defendants translate the documents or shift any of the costs for translating the documents to the defendants.

So, what do you think?  Should parties be responsible for translating foreign language documents they produce?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

Plaintiffs’ Failure to “Hurry” Leads to Denial of Motion to Compel: eDiscovery Case Law

Sorry, I couldn’t resist… ;o)

In Hurry Family Revocable Trust, et al. v. Frankel, No. 8:18-cv-2869-T-33CPT (M.D. Fla. Jan. 14, 2020), the Florida District Court judge denied the Plaintiffs’ Motion to Compel Production of Documents and Request for Sanctions, ruling the motion to be untimely, given that the extended discovery deadline had passed, and also rejected the plaintiffs’ argument that the defendant had willfully avoided producing certain emails.

Case Background

In this dispute involving a former employee of the plaintiffs and claims that he used their confidential information and trade secrets, the Court entered a Case Management and Scheduling Order (CMSO) in January 2019 establishing various deadlines, including a discovery deadline of July 26, 2019, and a trial date of February 3, 2020.  The CMSO warned the parties that “[t]he Court may deny as untimely all motions to compel filed after the discovery deadline.”  In May 2019, the plaintiffs filed a motion to modify the CMSO and the Court extended the discovery deadline to August 9, 2019, but also cautioned the parties, however, that it would “be disinclined to extend…the [discovery] deadline[ ] further.”  Nonetheless, the plaintiffs sought to modify the CMSO two more times – the second time after the discovery deadline on August 12, 2019 – but the court denied both motions, stating after the second one:

“The Court has already extended the discovery deadline in this case to August 9, 2019, at the Plaintiffs’ request. The Court has also repeatedly warned Plaintiffs that it would be disinclined to extend deadlines further. Yet Plaintiffs filed this third motion to modify the Case Management and Scheduling Order on August 12, 2019, after the extended discovery deadline had passed…..As for the documents that Plaintiffs claim Defendant has failed to produce, Plaintiffs were aware of those missing documents since August 6 and/or 7, 2019, and failed to file a motion to compel prior to the discovery deadline. As the Court advised in its Case Management and Scheduling Order, ‘[f]ailure to complete discovery within the time established by this Order shall not constitute cause for a continuance.’”

Roughly four months after the Court’s August 20 Order, the plaintiffs filed an instant motion to compel after the plaintiffs received five emails from third parties that were not produced by the plaintiff.  The plaintiff requested an order directing that: (1) the defendant’s “email accounts, cloud storage, and digital devices” be subjected to a “third party search” for responsive documents at his expense; (2) “[Frankel] be precluded from testifying or offering evidence on issues related to categories of discovery withheld by [Frankel];” and (3) “adverse inferences be made against [Frankel] related to categories of discovery withheld by [Frankel].”

Judge’s Ruling

Noting that “Hurry waited to submit the instant motion until four months after the discovery deadline and only two months before trial”, the court stated: “Hurry’s proffered excuse for this extended delay is unpersuasive. When pressed on the matter at the hearing, Hurry conceded that it knew about the Koonce and FINRA emails by no later than early August 2019. It also admitted that it elected to place the instant motion on the ‘backburner’ while it dealt with its motion for summary judgment. Hurry’s evident lack of diligence in pursuing its motion to compel alone is fatal to that request.”

Continuing, the court stated: “Even were that not the case, Hurry has not shown that it is entitled to the relief it seeks. The central premise of its motion is that Frankel willfully avoided producing the Koonce and FINRA emails. In both his response and at the hearing, however, Frankel persuasively argued that his failure to produce these emails was not purposeful, but stemmed from the fact that the emails were not detected during the search Frankel conducted in connection with Hurry’s production requests. Frankel also noted he informed Hurry of the parameters of that search in advance, and Hurry did not object to those parameters.”

So, what do you think?  Should identification of new emails from third parties justify re-opening discovery?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

The Sedona Conference Has an Updated Commentary on Rule 45 Subpoenas to Non-Parties: eDiscovery Best Practices

So many stories, so little time.  Been meaning to cover this for a few days now.  Last week, The Sedona Conference® (TSC) and its Working Group 1 on Electronic Document Retention & Production (WG1) announced the publication of the Public Comment Version of The Sedona Conference Commentary on Rule 45 Subpoenas to Non-Parties, Second Edition.

In 2008, TSC published its first edition of this Commentary, then titled Commentary on Non-Party Production & Rule 45 Subpoenas.  That was 12 years ago!  Even our blog didn’t exist back then.  As you can imagine, much has changed since then, including:

  • Federal Rule of Civil Procedure 45 was substantially revised in 2013;
  • the 2015 amendments to the Federal Rules of Civil Procedure, while not further revising Rule 45 directly, significantly affect non-party practice;
  • Federal Rule of Evidence 502 was enacted in 2008 (subsequent to the publication of the first edition of this Commentary);
  • The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production was published in 2017 (we covered it here); and
  • the rise in cloud computing has placed large amounts of party data in the hands of non-parties, leading to increased use of Rule 45 subpoenas. That in turn has led to a significant growth in the case law under Rule 45 since the first edition. Here are a few examples we’ve covered in the past couple of years: Williams v. Angie’s List, Ronnie Van Zant, Inc. v. Pyle, Apex Colors, Inc. v. Chemworld Int’l Ltd., Inc., Shenwick v. Twitter, Inc., Fair v. Commc’ns Unlimited Inc., Shamrock-Shamrock, Inc. v. Remark.

There are essentially five parts in the 49-page (PDF) Commentary (after the Introduction, Part I).  Part II covers Rule Changes and Their Impact on Non-Party Discovery.  Part III covers The Possession, Custody, and Control Framework and Its Impact on Rule 45 Obligations (which has factored in several of the cases listed above).  Part IV discusses Preservation obligations, prior to and after receipt of a subpoena and remedies for spoliation.  Part V discusses Rule 45(d) Costs, Sanctions, and Motion Practice.  And, Part VI discusses Rule 45 Practice Pointers.   There are no Appendices.

You can download a copy of the Commentary here (login required, which is free).  The Commentary is open for public comment through March 6, 2020. Questions and comments on the Commentary are welcome and may be sent to comments@sedonaconference.org.  In particular, please share your comments on Section III’s discussion of viewing non-party subpoenas through the lens of “possession, custody or control” principles as well as Section VI’s sixteen Practice Pointers. The drafting team will carefully consider all comments received, and determine what edits are appropriate for the final version.

TSC has been busy!  We’ll cover another publication that was just released a few days ago early next week.

So, what do you think?  How does your organization address subpoenas of non-parties in litigation today?  As always, please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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 Orders Defendants to Produce All ESI in Native Format: eDiscovery Case Law

In Kamuda et al. v. Sterigenics U.S., LLC et al., No. 18 L 10475 (Ill. Cir. Jan. 6, 2020), Circuit Court Judge Christopher E. Lawler ruled that “[u]nder Illinois Supreme Court Rules 201(b)(4) and 214(b), the parties should produce all ESI in the respective native formats”, agreeing that Rule 214 entitles Plaintiffs to their requested ESI format and rejecting the defendants’ offered compromise to produce some of the ESI in native format, but not all.

Case Background

In this case, the parties disputed whether the parties should produce electronic discovery materials in the “native” formats requested by the plaintiffs or the “TIFF+” formats proposed by the defendants.  The plaintiffs argue the TIFF+ format would impose unreasonable costs and create unnecessary challenges to potential witnesses and deponents. In their reply brief, the plaintiffs also contended that as the party requesting discovery, Illinois Rule 214 entitled them to their preferred ESI format.  Rule 214(b) reads as follows:

“With regard to electronically stored information as defined in Rule 201(b)(4), if a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.”

The defendants requested to produce ESI in the TIFF+ format, arguing that TIFF+ is not unreasonably expensive, represents the standard practice in electronic discovery matters, and best serves cybersecurity interests.  However, the defendants offered a compromise, proposing the parties would produce Microsoft Excel spreadsheets, PowerPoint presentations, and Word documents with tracked changes and comments in the respective native formats. All other materials, including emails, would be in the TIFF+ format.

In December 2019, the parties submitted written briefs in preparation for a case management conference. And, on December 18, the Court heard oral arguments. In support of Plaintiffs’ position, a retained consultant testified and provided a PowerPoint presentation. The defendants submitted a written response to the consultant’s presentation on December 27 and the plaintiffs submitted a written reply on January 3.

Judge’s Ruling

Judge Lawler stated: “Since December 18, the Court has considered the parties’ arguments and submitted materials. After careful review, the Court appreciates Defendants’ offer to compromise and resolve the ESI issue this early in the proceedings. Yet the parties disagree. And ‘[a]bsent agreement, ESI must be produced as ordinarily maintained or in a form reasonably usable to the requesting party.’ The Sedona Principles, Third Edition: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, 19 SEDONA CONF. J. pp. 171-72, Comment 12.b.”

Going further, Judge Lawler stated: “In addition, the Court agrees that Rule 214 entitles Plaintiffs to their requested ESI format…Plaintiffs specifically request the native format, which the Court has no reason to doubt is reasonably usable. The parties must therefore produce all ESI, including emails, in the respective native format.”

While ruling for the plaintiffs, Judge Lawler did also state: “That said, the Court recognizes the parties’ concerns about cybersecurity, minimizing costs, and eliminating unnecessary delays. The Court is therefore willing to revisit this decision if reasonable needs arise. Parties may show such reasonable needs by affidavits from their vendors or consultants.”

Here’s a new post by Craig Ball regarding plaintiffs and production formats that he just posted yesterday – hat tip to him for making me aware of this case.  After all, he was the retained consultant!  ;o)

So, what do you think?  Should courts always grant native productions if the requesting parties timely request that format?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.

2019 eDiscovery Case Law Year in Review, Part 2

As we noted yesterday, eDiscovery Daily published 66 posts related to eDiscovery case decisions and activities over the past year, covering 56 unique cases!  Yesterday, we looked back at cases related to passwords and Fifth Amendment protection, non-party discovery and mobile and messaging.  Today, let’s take a look back at cases related to cooperation, form of production, privilege and confidentiality disputes, social media related disputes and a key case regarding biometric security.

We grouped those cases into common subject themes and will review them over the next few posts.  Perhaps you missed some of these?  Now is your chance to catch up!

It’s also worth noting that Tom O’Connor and I will once again be discussing some of these cases – and what the legal profession can learn from those rulings – on our webcast on Wednesday, January 29th – Important eDiscovery Case Law Decisions of 2019 and Their Impact on 2020 at noon CT (1pm ET, 10am PT).  The webcast is CLE accredited in selected states, so come check it out!

BIOMETRIC SECURITY

When a 14-year old takes a class trip to Six Flags and his fingerprint is biometrically captured without parental approval, a lawsuit ensues.  This case might have had a different result in 47 other states as only three states (Texas and Washington, in addition to Illinois) have biometric security laws:

Illinois Court Says Biometric Fingerprint is Violation of Privacy, Even Without Injury: On January 25, the Illinois Supreme Court rejected an argument from a popular theme park that would have limited a state law that requires consent for the use of facial recognition and other biometrics.  The January ruling involved Six Flags, which allegedly fingerprinted a 14-year-old visitor without parental approval. Contesting the case, Six Flags argued it couldn’t be held liable unless the plaintiff demonstrated a tangible injury from the unauthorized collection, often a difficult task in privacy lawsuits.

COOPERATION

Technically, you could argue that all cases involve a lack of cooperation on discovery.  But, this case – where an attorney sought sanctions against another for hanging up on him – is a unique example of lack of cooperation:

Court Denies Sanction Request for Attorney Who Hung Up on Opposing Counsel One Time: In Ewing v. Aliera Healthcare, California Magistrate Judge Linda Lopez denied the plaintiff’s motion for sanctions for “rudely and unprofessionally” hanging up on the plaintiff during a call that defendant’s counsel made to the plaintiff to cancel a meet and confer appointment.

FORM OF PRODUCTION

We certainly didn’t see near as many form of production disputes as last year, where we had ten cases dealing with the issue in 2018.  Here is one such case from 2019:

Court Denies Defendant’s Motion to Compel Production of Documents and Metadata: In Washington v. GEO Group, Inc., Washington District Judge Robert J. Bryan denied the defendant’s Motion to Compel Production of Documents and Metadata, ruling that the defendant “fails to identify a specific response for production to which the State did not respond”, that the defendant “has not shown that the [metadata] is relevant and proportional to the needs of the case” and that the “the parties have not met and conferred as to this recent log as required under Fed. R. Civ. P. 37(a)(1).”

SOCIAL MEDIA RELATED CASES

There are always a handful of cases each year related to discovery of social media data.  However, this year we had two social media related cases of a different sort – involving judge “friending” of participants in litigation (one party, one attorney – that one was technically a 2018 ruling, but we covered it last year).  Oh, and a photo on social media can be discoverable simply because you’re “tagged” in it.  Here are five social media related cases:

Relying on Interpretation of the SCA, Appeals Court Reverses Subpoenas Against Facebook: In Facebook, Inc. v. Wint, the District of Columbia Court of Appeals, stating that “[t]he plain text of the SCA (Stored Communications Act) thus appears to foreclose Facebook from complying with Mr. Wint’s subpoenas”, concluded that the appellee “has not established the existence of a serious constitutional doubt that could warrant application of the doctrine of avoidance” reversing the trial court’s order holding Facebook in civil contempt for refusing to comply with subpoenas served by appellee Daron Wint.

NY Appeals Court Extends Discoverability of Social Media Photos to “Tagged” Photos: In Vasquez-Santos v. Mathew, the New York Appellate Division, First Department panel “unanimously reversed” an order by the Supreme Court, New York County last June that denied the defendant’s motion to compel access by a third-party data mining company to plaintiff’s devices, email accounts, and social media accounts, so as to obtain photographs and other evidence of plaintiff engaging in physical activities and granted the defendant’s motion.

Judge’s Facebook Friendship with Party Causes Decision to Be Reversed and Remanded to Different Judge: In the case In Re the Paternity of B.J.M., the Court of Appeals of Wisconsin, concluding that “the circuit court’s undisclosed ESM connection with a current litigant in this case {by accepting a Facebook “friend” request from the litigant} created a great risk of actual bias, resulting in the appearance of partiality”, reversed and remanded the case for further proceedings before a different judge.

Court Sanctions Plaintiff for Spoliation of Facebook Account: In Cordova v. Walmart Puerto Rico, Inc. et al., Puerto Rico District Judge Aida M. Delgado-Colon granted in part and denied in part the defendant’s motion to dismiss for fraud on the Court, denying the defendant’s request for dismissal, but imposing a sanction of adverse inference regarding the content of the plaintiff’s Facebook page and her deletion of the related account.  Judge Delgado-Colon also ordered the defendant to “submit a proposed adverse-inference jury instruction to that effect before trial.”

Another Case of Judicial “Friending”, But with a Different Result: “Should a judge be disqualified from a case based solely on a Facebook friendship with one of the attorneys?”  The Florida Supreme Court recently answered the question in the negative in Law Offices of Herssein & Herssein, P.A. v. United Servs. Auto. Ass’n, when it held that “an allegation that a trial judge is a Facebook ‘friend’ with an attorney appearing before the judge, standing alone, is not a legally sufficient basis for disqualification.”

PRIVILEGE AND CONFIDENTIALITY

We always have a handful of cases involving disputes regarding privilege and confidentiality and this year was no different.  One of those cases was certainly unique in that it involved “clawback” of an inadvertent disclosure of privileged ESI (which was granted), but the inadvertently disclosed ESI was still used to determine sanctions against that party.  Here are five cases that dealt with privilege and confidentiality disputes:

Court Rules That Privilege Assertion and Potential Fraud Don’t Mix: In Gates Corp. v. CRP Indus., Inc., Colorado Magistrate Judge Kristen L. Mix overruled the Defendant’s Objection to Report and Recommendation of Special Master on Gates Corporation’s Motion to Pierce Attorney/Client Privilege and proceeded with the Discovery Master’s recommendation, ordering the defendant to submit for in camera review readable and searchable versions of the documents identified as privileged by the defendant (along with an Excel spreadsheet of the privilege log) to the Special Master for review.

Appellate Court Vacates Order Allowing Plaintiff’s Expert Access to Defendant’s ESI Prior to Privilege Determination: In Crosmun v. Trustees of Fayetteville Technical Community College, the Court of Appeals of North Carolina, holding that the trial court abused its discretion by compelling production through a protocol that provided the plaintiffs’ expert with direct access to potentially privileged information and precluded reasonable efforts by Defendants to avoid waiving any privilege, vacated the order and remand for further proceedings not inconsistent with its opinion.

Wal-Mart is Allowed to Clawback Inadvertent Disclosures, But Still Sanctioned Over What They Revealed: In Bellamy v. Wal-Mart Stores, Texas, LLC, Texas District Judge Xavier Rodriguez ruled that the defendant was entitled to “claw back” the documents it inadvertently produced in the case, but still considered those documents in analyzing the plaintiff’s motion for sanctions and granted that motion to the extent that he ruled that the defendant could not assert any comparative negligence defense in this case, including arguing that the danger (of a pallet being left unattended in the store) was open and obvious.

Court Agrees that Emails Including Counsel Aren’t Privileged Because They Don’t Offer Legal Advice: In Guardiola v. Adams Cty. School District No. 14 et al., Colorado District Court Judge Raymond P. Moore overruled the defendants’ objection to the magistrate judge’s order compelling them to disclose three e-mails that they contended were subject to the attorney-client privilege, ruling that “[t]he disputed e-mails do not directly request or offer legal advice.”

Court Denies Motion to Redact Portions of eDiscovery Teleconference: In Pacific Biosciences of California, Inc. v. Oxford Nanopore Tech., Inc. et al., Delaware Magistrate Judge Jennifer L. Hall denied the defendants’ Motion to Redact Portions of the August 14, 2019 Discovery Teleconference and the related submissions, stating: “The public has an interest in understanding judicial proceedings, even if they have a limited interest in documents submitted in connection with discovery dispute proceedings.”

We’re only halfway done!  Tomorrow, we will cover cases related to disputes regarding proportionality vs. relevancy vs. privacy.  Stay tuned!

Want to take a look at cases we covered the previous eight years?  Here they are:

So, what do you think?  Did you miss any of these?  Please share any comments you might have or if you’d like to know more about a particular topic.

Sponsor: This blog is sponsored by CloudNine, which is a data and legal discovery technology company with proven expertise in simplifying and automating the discovery of data for audits, investigations, and litigation. Used by legal and business customers worldwide including more than 50 of the top 250 Am Law firms and many of the world’s leading corporations, CloudNine’s eDiscovery automation software and services help customers gain insight and intelligence on electronic data.

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.