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Case Law

SCOTUS Reverses and Remands Circuit Court Award of Fees for Discovery Misconduct: eDiscovery Case Law

In Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. ___ (2017), the Supreme Court of the United States, in a decision delivered by Justice Kagan reversed and remanded the decision by the US Court of Appeals, Ninth Circuit, for further proceedings, stating that “because the court here granted legal fees beyond those resulting from the litigation misconduct, its award cannot stand.”

Case Background

In this product liability case, the plaintiffs sued the defendant after their motorhome swerved off the road and flipped over, alleging the accident was caused by the failure of their Goodyear tire.  During discovery, the plaintiffs repeatedly asked the defendant to turn over internal test results related to the tire at issue, but “the company’s responses were both slow in coming and unrevealing in content.”  The parties eventually settled on the eve of trial, then, several months later, the plaintiffs’ counsel learned from a newspaper article that, in another lawsuit involving the tire at issue, it “got unusually hot” at certain speeds.  The defendant conceded withholding the information from the plaintiffs even though they had frequently requested “all testing data” related to the tire.  The plaintiffs sought sanctions for discovery fraud, in the form of payment of their “attorney’s fees and costs expended in the litigation.”

The District Court agreed to make such an award in the exercise of its inherent power to sanction litigation misconduct, and justified its authority to award a greater amount than the expenses caused by the offending behavior because the defendant’s “sanctionable conduct r[ose] to a truly egregious level.”  Ultimately, the court awarded $2.7 million to account for Plaintiffs’ legal costs “since the moment, early in the litigation, when Goodyear made its first dishonest discovery response.”  Acknowledging that the Ninth Circuit might require a link between the misconduct and the harm caused, however, the court also made a contingent award of $2 million. That smaller amount, designed to take effect if the Ninth Circuit reversed the larger award, deducted $700,000 in fees the plaintiffs incurred in developing claims against other defendants and proving their own medical damages. The Ninth Circuit affirmed the full $2.7 million award, concluding that the District Court had properly awarded the plaintiffs all the fees they incurred during the time when the defendant was acting in bad faith.

Court’s Ruling

The court noted that “Federal courts possess certain inherent powers, including ‘the ability to fashion an appropriate sanction for conduct which abuses the judicial process.’…One permissible sanction is an assessment of attorney’s fees against a party that acts in bad faith. Such a sanction must be compensatory, rather than punitive, when imposed pursuant to civil procedures.”  In this case, “[n]either court used the correct legal standard. The District Court specifically disclaimed the need for a causal link on the ground that this was a ‘truly egregious’ case…And the Ninth Circuit found that the trial court could grant all attorney’s fees incurred ‘during the time when [Goodyear was] acting in bad faith,’…—a temporal, not causal, limitation. A sanctioning court must determine which fees were incurred because of, and solely because of, the misconduct at issue, and no such finding lies behind the $2.7 million award made and affirmed below.”

In reversing and remanding the decision, the Court stated: “Although the District Court considered causation in arriving at its back-up award of $2 million, it is unclear whether its understanding of that requirement corresponds to the appropriate standard—an uncertainty pointing toward throwing out the fee award and instructing the trial court to consider the matter anew. However, the Haegers contend that Goodyear has waived any ability to challenge the contingent award since the $2 million sum reflects Goodyear’s own submission that only about $700,000 of the fees sought would have been incurred regardless of the company’s behavior. The Court of Appeals did not address that issue, and this Court declines to decide it in the first instance. The possibility of waiver should therefore be the initial order of business on remand.”

So, what do you think?  Should egregious behavior be subject to an award greater than the expenses incurred by the party affected by that behavior?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

Lack of Cooperation Leads to Court to Order Scope of Discovery for Defendant: eDiscovery Case Law

In Bird v. Wells Fargo Bank, No. 16-1130 (E.D. Cali., Mar. 31, 2017), after the parties could not agree on the parameters and scope of discovery, California Magistrate Judge Erica P. Grosjean ordered the defendant to produce several categories of documents related to the plaintiff’s former employment, disclose its discovery plan, search terms and custodians, produce its document retention policies regarding the destruction of employee emails and produce an initial privilege log.

Case Background

In this case for gender and age discrimination and breach of employment contract filed by a former employee of the defendant after termination (defendant’s claimed grounds for termination was failure to comply with its security policy), the parties initially submitted a joint FRCP 26(f) report the initial scheduling conference that stated that they did not anticipate that the case would “involve significant electronic discovery issues”.  However, discovery negotiations eventually broke down between the parties.  During a March 1, 2017 conference, the Court ordered the parties to meet and confer regarding the scope and terms of ESI discovery and requested a status report on March 15.

On the afternoon of that conference, the defendant wrote to the plaintiff to, among other things, demand a list of search terms from the plaintiff by close of business on March 3. The defendant concluded the correspondence by stating “If you breach the agreement and fail to provide the list by COB on Friday then our agreement regarding the documents discussed above is null and void ab initio and we will once against take these issues to Judge Grosjean and will move to compel Plaintiff’s deposition and seek sanction.”  Meanwhile, the plaintiff sent a meet and confer letter to the defendant on March 1 and another letter the following day, but did not receive a prompt response.

The day before the joint statement on meet and confer was due with the Court, plaintiff’s counsel wrote to defense counsel explaining that the defendant had not responded to the plaintiff’s meet and confer efforts.  The defendant finally provided its “position with regard to ESI” later that day at 4:33 pm, indicating (among other things) that it had purged the plaintiff’s emails after she was terminated, that it would take six to eight weeks to pull any requested ESI (which would still then have to be reviewed for privilege, privacy and confidentiality) and further reserved the right to shift all fees and costs incurred in the collection, review, and production of ESI to the plaintiff.

Judge’s Ruling

While acknowledging that both parties “shoulder some of the blame for this breakdown”, Judge Grosjean stated that “the Court is particularly troubled by Defendant Wells Fargo’s approach to discovery in this case. Defendant has taken the legally unsupportable position that it is not under any obligation to provide electronic discovery unless and until there is full agreement on search terms. This position has led to the predictable conclusion that discovery is completely stalled and Defendant is not close to meeting its discovery obligations. Defendant also withheld information about Plaintiff’s inbox until after the initial discovery cut-off. It both fails to provide any date certain for production and will not extend the schedule a reasonable amount of time. It continues to threaten to have Plaintiff pay its costs without any legal justification. The Court also takes issue with the tone of Defendant’s communication, such as telling Plaintiff that Defendant’s agreement to produce certain documents will be ‘null and void ab initio’ and that Defendant will request sanctions if Plaintiff did not provide certain search terms by the deadline imposed by Defendant…Such dialogue is not professional and not a good faith attempt to meet and confer.”

As a result, Judge Grosjean stated that “the Court will issue the following order under its authority in Rule 16 regarding the scope of discovery” and ordered the defendant to produce several documents related to the plaintiff’s employment, including her complete personnel file, documents regarding her termination and any disciplines or reprimands she received, documents regarding her compensation and security policy documentation (including a three year report of all employees who failed to comply with the defendant’s security policy, including age, gender and whether the employee was terminated).  Judge Grosjean also ordered the defendant to disclose its discovery plan, search terms and custodians, produce its document retention policies regarding the destruction of employee emails and produce an initial privilege log.

So, what do you think?  Should the judge have dictated the discovery parameters for the defendant or should she have worked with the parties some more to resolve the conflicts?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

Plaintiff’s Erasure of iPhone Before Forensic Examination Leads to Recommended Dismissal of Case: eDiscovery Case Law

In Coyne v. Los Alamos National Security, LLC et. al., No. 15-0054 (D. N.M., Mar. 21, 2017), New Mexico Magistrate Judge Karen B. Molzen recommended that the court grant the defendants’ motion to dismiss after the plaintiff’s erased and reset her iPhone the day before it was produced for forensic examination, the “culmination of her and her husband’s willful failure to comply with their discovery obligations in this case.”

Case Background

In this case where the plaintiff alleged wrongful termination (among other complaints) after she was terminated pursuant to a Reduction in Force policy (the plaintiff contended it was retaliation for taking leave under the Family Medical Leave Act after an alleged assault by a co-worker), the Court had already granted Motions to Compel against both Plaintiff and Defendants.  However, only the plaintiff and her husband had been sanctioned for discovery violations with various fees, including attorney’s fees, to the tune of over $11,000 (most of which was still unpaid).

The parties continued to proceed with discovery, and on September 30, 2016, the defendants served plaintiffs’ counsel with a request for a forensic inspection of the plaintiff’s iPhone, seeking text messages between the plaintiff and her husband and between the plaintiff and her treating psychiatrist.  The plaintiff not only did not object to the request, she even cooperated with the defendants’ attempts to retrieve them from her cellular carrier and from Apple before agreeing to the inspection.

On January 4, 2017, the plaintiff’s counsel called the defendants’ to report that he was ready to ship the iPhone to the forensic examiner and it was sent the next day.  The forensic examiner discovered that the phone had been erased and reset six hours before the plaintiff had turned it over to her attorney to be sent for examination. In his affidavit testimony, the forensic examiner explained that erasing and resetting an iPhone cannot happen accidentally or inadvertently, but the plaintiff claimed to have no knowledge of what had happened. As a result, the defendants moved the Court to dismiss the plaintiff’s case in its entirety with prejudice “as a sanction for Plaintiff’s intentional and permanent erasure of all the data on her iPhone the day before it was produced” for the forensic evaluation.

Judge’s Ruling

Judge Molzen considered the relevant factors necessary to determine whether dismissal was warranted.  Those factors are: (1) The degree of actual prejudice to the defendant; (2) The amount of interference with the judicial process; (3) The culpability of the litigant; (4) Whether the court warned the party in advance that dismissal of the action would be a likely sanction for noncompliance; and, (5) The efficacy of lesser sanctions.  With regard to those factors, Judge Molzen determined that all were satisfied, with the possible exception of the fourth factor, but stated that she “is not convinced such a specific warning was required in this case”.  Judge Molzen also determined that none of the available sanctions options were sufficient, noting that “almost all” of the monetary sanctions levied against the plaintiff “remain unpaid”.

Determining that “Plaintiff’s decision to erase and reset her iPhone the day before it was produced” was “but the culmination of her and her husband’s willful failure to comply with their discovery obligations in this case”, Judge Molzen recommended that the court grant the defendants’ motion to dismiss.

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

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

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

Court Tells Litigants “NO MORE WARNINGS” When It Comes to Boilerplate Discovery Objections: eDiscovery Case Law

In Liguria Foods, Inc. v. Griffith Laboratories, Inc., C 14-3041-MWB (N.D. Iowa Mar. 13, 2017), Iowa District Judge Mark W. Bennett declined to sanction the parties for issuing boilerplate objections, but strongly warned them that the use of boilerplate objections in the future would place counsel and their clients at risk for significant sanctions.

In this case related to millions of dollars’ worth of sausage that turned rancid, it became apparent to the Judge Bennett (during a review of another discovery dispute) that both parties had submitted “obstructionist discovery responses” to each other during the discovery process.  On January 27, 2017, Judge Bennett entered an Order To Show Cause Why Counsel For Both Parties Should Not Be Sanctioned For Discovery Abuses And Directions For Further Briefing, directing the parties to file, under seal, all their written responses to each other’s discovery requests by the following day. Judge Bennett also notified counsel of his intention to impose sanctions on every attorney who signed the discovery responses, if he determined that the responses were, indeed, improper or abusive

The parties filed their written responses to discovery requests, as directed, the following day.  Based on his review of the discovery responses, Judge Bennett identified numerous discovery responses, from both sides, that he identified as improper in this ruling.  According to Judge Bennett, the improper objections included:

  • “not reasonably calculated to lead to the discovery of admissible evidence”;
  • “subject to and without waiving its general and specific objections”;
  • “to the extent they seek information that is protected from discovery under the attorney-client privilege, the attorney work-product doctrine or is otherwise privileged or protected from disclosure”; and
  • “overbroad and unduly burdensome.”

In its brief in response to the Order To Show Cause, the plaintiff acknowledged that many of its objections were not stated with specificity, but asserted that it had not interposed any objection “for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation” and that some of its objections did include explanations.  The defendant, in its brief, stated that its written responses to the plaintiff’s discovery requests were not intended for any improper purposes and that the parties had conducted the litigation in a cooperative and professional manner. The defendant also noted that a magistrate judge had reviewed various defendant responses and found no fault with them, contending that that both parties relied on standard “boilerplate” language to assure that they were not waiving their rights while they met and conferred about the scope of privileges, pertinent time periods, among other issues.

Both sets of counsel ultimately admitted that the reason they used “boilerplate” objections had a lot to do with the way they were trained, the kinds of responses that they had received from opposing parties, and the “culture” that routinely involved the use of such “standardized” responses.

Judge Bennett evaluated each boilerplate objections, identifying violations of Rule 26(d), 26(b)(5)(A)(iii) and the “specificity” requirements of Rules 33(b)(4) and 34(b)(2).  However, in part because the parties “did not try to raise frivolous defenses for their conduct when called on” the use of “boilerplate” sanctions, Judge Bennett declined to sanction the parties this time.  Instead, he provided a new Supplemental Trial Management Order, advising the lawyers for the parties that “in conducting discovery, form or boilerplate objections shall not be used and, if used, may subject the party and/or its counsel to sanctions. Objections must be specific and state an adequate individualized basis.”

Judge Bennett also concluded his order with these strong words, in caps for emphasis: “NO MORE WARNINGS. IN THE FUTURE, USING “BOILERPLATE” OBJECTIONS TO DISCOVERY IN ANY CASE BEFORE ME PLACES COUNSEL AND THEIR CLIENTS AT RISK FOR SUBSTANTIAL SANCTIONS.”

Here’s another recent case where parties were warned about “boilerplate” objections.

So, what do you think?  Will we someday get past the issue of lawyers using standard, “boilerplate” objections in discovery responses?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

After Metadata Shows Agreement Documents to Be Unreliable, Defendant’s “Hans” are Tied: eDiscovery Case Law

In Ensing v. Ensing, et. al., No. 12591 (Del. Court of Chancery, Mar. 6, 2017), Vice Chancellor Slights ruled for the plaintiff in the case and concluding that the defendant “has engaged in blatant violations of court orders and bad faith litigation conduct that justify serious sanctions”, ordering him to pay two-thirds of the plaintiff’s counsel’s fees and expenses and all of the plaintiff’s computer forensic expert’s fees and expenses.

Case Background

This case arose between a divorcing husband and wife operating a winery and boutique hotel in Italy (indirectly through two Delaware limited liability companies) when the husband (Dr. Hans Ensing) tried to remove the wife (Sara Ensing) and appoint himself as manager of one of the entities, and then engage in a series of transactions intended to divest Sara of her interests in the winery and hotel.  As a result, Sara (now the plaintiff) initiated action against her husband (now the defendant) in this case in July 2016.

During the case, the defendant produced a “Pledge Agreement” and a “Trust Agreement” purportedly executed by the plaintiff and defendant, making the defendant manager of one of the entities and allowing him to appoint the management for that entity. The plaintiff denied ever signing the agreement and claimed they were “forgeries”.  In response to the plaintiff’s claims that the documents were “forgeries,” the defendant told the court that he intended to have “certified copies” of the documents “prepared at the U. S. Embassy in Rome (which never happened) and claimed during an October deposition that a lawyer and accountant had been instrumental in forming the entities (but he couldn’t provide contact information for the accountant or even his nationality).

The defendant also could not produce the originals of either of the disputed documents, but continued to argue that both documents were evidence in his favor.  The defendant also ignored the court’s order to turn over the devices on which he testified that he had created and stored the agreements, leading the court to grant the plaintiff’s motion to draw an adverse inference against the defendant, putting the burden on him to prove the two agreements were authentic.

Then, on the eve of trial, the defendant attempted to distance himself from both documents. Nonetheless, the plaintiff offered evidence that the company stamp appearing above her name on the Pledge Agreement wasn’t created until 2015, but the document was created in 2012 and had a computer forensic expert testify that the metadata from the Trust Agreement PDF file revealed that it was created on June 15, 2016, and then emailed to the plaintiff thirty minutes later.

Vice Chancellor’s Ruling

Vice Chancellor Slights stated: “After carefully reviewing the evidence, I conclude that Sara has carried her burden of proving that Hans had no authority to remove her as manager of the entities, to appoint himself as manager of the entities or to transfer membership units of one of the entities to an entity under his control.”  Vice Chancellor Slights also concluded that “Hans has engaged in blatant violations of court orders and bad faith litigation conduct that justify serious sanctions”, referencing the two agreements as “sham documents”.  As a result, Vice Chancellor Slights also ordered the defendant to pay two-thirds of the plaintiff’s counsel’s fees and expenses and all of the plaintiff’s computer forensic expert’s fees and expenses.

So, what do you think?  Does it seem like there are more cases than ever with potentially altered or forged ESI?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Should Failing to Issue a Litigation Hold Be Considered Intent to Deprive?: eDiscovery Best Practices

A lot has been discussed about the most recent changes to the Federal Rules, especially with regard to Rule 37(e) and the requirement of the intent to deprive standard to apply more serious sanctions.  But, what activities constitute intent to deprive?  Should failing to issue a litigation hold be considered intent to deprive a party of potentially responsive ESI when that ESI is not preserved?

Rule 37(e)(2) says the following:

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

{emphasis added}

Since the rules – including 37(e) – were implemented in December 1, 2015, there have been several cases where a request for sanctions were not granted because the court ruled a lack of bad faith or intent to deprive.  In one case, Nuvasive v. Madsen Medical, the court (in October 2015) had granted the defendants’ motion for adverse inference sanctions against the plaintiff for failure to preserve text messages from four employees suspected of secret coordination with the plaintiff.  However, after the 2015 Rules changes were adopted, the plaintiff sought relief under Rule 60(b) based on the amendment to Rule 37(e).  California Chief District Judge Barry Ted Moskowitz, having previously found the plaintiff did not intentionally fail to preserve the text messages, reversed the previous ruling and granted the plaintiff’s motion for an order vacating the Court’s previous order that granted the defendants’ Motion for Sanctions.  So, the ruling changed as a result of the Rules changes.

Here are four other cases since the beginning of 2016 where sanctions were denied because of a lack of bad faith or intent to deprive.  Of course, sanctions do still happen and they can still be severe — here are two cases with examples of severe sanctions.

In the Pension Committee case in 2010, New York District Court Judge Shira Scheindlin defined negligence, gross negligence, and willfulness from an eDiscovery standpoint and she stated: “[O]nce a party reasonably anticipates litigation, it must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to ensure the preservation of relevant documents.”  Judge Scheindlin also noted that by July 2004, when the final relevant Zubulake opinion was issued, “the failure to issue a written litigation hold constitutes gross negligence because that failure is likely to result in the destruction of relevant information.”

Granted, gross negligence and intent to deprive are not the same thing.  But, it’s 2017 now, not 2010 (much less 2004).  Given what most attorneys know today (or should know) about the requirement to issue a written litigation hold, should failure to do so be considered bad faith?

Not only that, but it’s possible to automate a good portion of the litigation hold issuance and tracking process, so it’s easier than ever to demonstrate due diligence in the litigation hold process.  There’s less excuse than ever to manage an effective litigation hold and meet your duty to preserve.

So, what do you think?  Should failing to issue a litigation hold be considered intent to deprive?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Court Denies Untimely Motion to Compel Production of Text Messages: eDiscovery Case Law

In Healthwerks, Inc. et. al. v. Stryker Spine, et. al., No. 14-93 (E.D. Wisc., Mar. 6, 2017), Wisconsin District Judge Pamela Pepper denied a motion to compel production of text messages issued by the plaintiffs and third party defendants against the defendant Stryker, agreeing with Stryker that filing the motion almost six months after discovery had closed was untimely.

Case Background

In April 2016, the plaintiffs and third-party defendants filed a motion, indicating that earlier in April 2016, the plaintiffs/third-party defendants had received from Stryker twenty-one text messages, all from a records custodian who had not been working for Stryker until after the filing of the lawsuit.  Several days later, Stryker informed the plaintiffs/third-party defendants that it had not searched any of its other employees’ phones for relevant text messages. The movants indicated that, while Stryker never had objected to their discovery demands that Stryker produce such text messages, Stryker now was arguing that it would not produce the texts absent a court order.

Although Stryker had produced tens of thousands of pages over the course of discovery, the movants argued that the production format did not permit them to search for text messages. The movants also indicated that when asked for more information, Stryker ignored the requests and simply demanded responses to its own discovery requests.  Finally, in April 2015, with trial looming, the movants “isolated the Stryker text issue” and Stryker first said it would look into the issue, but, according to the movants, then refused to review the texts of two key custodians to determine whether they had any responsive texts. The movants claimed that Stryker’s plan was to wait throughout the discovery period to produce the texts, then claim that the movants somehow had waived their right to expect them.

Stryker filed its response in May 2016, objecting that discovery had closed on November 16, 2015, and the movants hadn’t filed their motion to compel until five months later, and one month prior to the then-upcoming trial.  Stryker argued that the movants did not even seek to meet and confer about the texts until April 2016, months after discovery closed.

Judge’s Ruling

Judge Pepper began her analysis by stating: “So. On December 31, 2014, the movants served on Stryker discovery demands requesting any kind of document containing any kind of information about a whole bunch of stuff. Lawyers experienced in these sorts of demands – as Stryker’s counsel are – certainly would have figured out that one electronic form of communication the movants might have been seeking would have been texts.”  Judge Pepper also noted that, “[I]n response to these broad demands, Stryker – over the course of the next ten months – served tens of thousands of pages of discovery on the movants.”

As a result, Judge Pepper said the “The court will deny the motion to compel. As Stryker notes, the movants filed this motion almost six months after discovery had closed.”  Judge Pepper also noted that the “discovery period was quite extensive”, with the movants filing their discovery demands December 31, 2014 and the scheduling order having set the discovery deadline for November 16, 2015 (not to mention nearly a year before during which a discovery deadline was not set by the previous judge assigned to the case).  While she understood the movants’ explanation for why they did not file the motion until April 2016, Judge Pepper stated that “their failure to realize before the close of discovery that they could not search the discovery specifically for texts is not a basis for granting a late-filed motion to compel.”

So, what do you think?  Should the motion have been denied or should the defendant Stryker have been held accountable for lack of cooperation on text messages before the deadline?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Today is The Day to Find Out about Current Trends in eDiscovery: eDiscovery Trends

If you don’t write a daily blog like I do and don’t have a lot of time to keep up with current eDiscovery trends otherwise, you can attend our webcast today for a recap of recent key eDiscovery trends and case law to stay current with today’s trends in eDiscovery, information governance and cybersecurity.

Today at noon CST (1:00pm EST, 10:00am PST), CloudNine will conduct the webcast Key eDiscovery Trends and Case Law for 2017.  This one hour webcast will cover key events, trends, and developments that occurred over the course of last year (or so) and how they impact those in the eDiscovery community.  Examples of trends being covered include:

  • Evolution of eDiscovery Technology
  • Privacy Trends in the US and Internationally
  • Key Trends in Cybersecurity and Data Breaches
  • Continued Evolution of Artificial Intelligence in the Legal Space
  • What Happens Every Minute on the Internet
  • Proliferation of Rules Regarding Attorney Technical Competence
  • Important Cases in Technology Assisted Review
  • Key 2015 Federal Rules Changes and How They Impacted Case Law

I’ll be presenting the webcast with Julia Romero Peter, Esq., General Counsel and VP of Sales at CloudNine and we will condense over a year’s worth of key stories and trends down to a one hour presentation.  When I conducted this presentation recently at the February meeting of Houston Association of Litigation Support Managers, it was called “insightful and thought provoking”.

To register for the webcast, click here.  I write a daily blog and keep abreast of current eDiscovery trends to make it easier for you to keep up with those same trends – now, here’s an opportunity to do so in an hour.  Hope you can attend!

So, what do you think?  Are you up to date in the latest trends in eDiscovery?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

Putting Information on File Share Site without Protection Waives Privilege, Court Rules: eDiscovery Case Law

In Harleysville Insurance Co. v. Holding Funeral Home, Inc., No. 1:15cv00057 (W.D. Va. Feb. 9, 2017), Virginia Magistrate Judge Pamela Meade Sargent ruled that the plaintiff’s placement of privileged information on a file share site and distribution of the hyperlink to access that information without providing any protection for the site resulted in a failure to take reasonable steps to protect the information – as a result, the declared attorney-client privilege and work-product protections were waived.  Judge Sargent also denied the plaintiff’s motion to disqualify defense counsel for accessing the information without informing plaintiff’s counsel, but did order defense counsel to pay the plaintiff’s fees and costs in bringing the motion.

Case Background

In this dispute over a fire insurance claim by the defendants against the plaintiff insurance agent, a senior investigator for Nationwide Insurance, owner of the plaintiff company, uploaded surveillance footage to a file share service operated by Box, Inc. and sent an email containing a link to the site to an investigator at the National Insurance Crime Bureau (“NICB”) in September 2015.  The email contained a confidentiality notice indicating that the “e-mail contains information that is privileged and confidential”.  The information on Box was not password protected, but, for a while, only the video was available on the Box site.  The plaintiff conceded that any person who used the hyperlink to access the Box Site had access to the electronic information stored there as it was not password protected.

In April 2016, the Nationwide investigator placed files containing the plaintiff’s entire claims file and Nationwide’s entire investigation file for the defendants’ fire loss on the Box Site to be accessed by the plaintiff’s counsel.  Then, in May 2016, in response to a subpoena, the NICB electronically produced its files – including the email containing the link – to the defense counsel, which gave them access to the file share site containing the claims files.  Defense counsel subsequently accessed the site and reviewed and downloaded the entire claims file, but did not notify the plaintiff’s counsel that it had accessed the information until plaintiff’s counsel discovered the claims file included in materials produced by the defense in October 2016.  As a result of this discovery, the plaintiff moved to disqualify defense counsel; in response, they argued that that the motion should be denied because the plaintiff “waived any claim of privilege or confidentiality by placing the information on the Box, Inc., site where it could be accessed by anyone.”

Judge’s Ruling

In assessing the waiver of attorney-client privilege, Judge Sargent noted that “the court has no evidence before it that any precautions were taken to prevent this disclosure”, observing that the employee who uploaded the information to the site and plaintiff’s counsel both “knew – or should have known – that the information was accessible on the internet.”  As a result, Judge Sargent found that the plaintiff “has waived any claim of attorney-client privilege with regard to the information posted to the Box Site”, noting that the plaintiff “conceded that the Box Site was not password protected and that the information uploaded to this site was available for viewing by anyone, anywhere who was connected to the internet and happened upon the site by use of the hyperlink or otherwise.”

Based on the fact that the plaintiff did not claim that its agent’s posting of its claims file to the Box Site was not an intentional act and that she could not “find that Harleysville, or its counsel, took reasonable steps to prevent its disclosure or to rectify the situation”, Judge Sargent determined that “Rule 502 does not apply in this situation to prevent a waiver of the work-product doctrine”.  As a result, she also concluded that the plaintiff waived any claim of privilege or work-product protection over its claims file.

As for the plaintiff’s motion for disqualification, Judge Sargent noted that “defense counsel have admitted that they accessed the Box Site by the hyperlink provided in the email” and indicated that “[t]his court should demand better” in terms of behavior of the defense counsel.  However, she stated: “Based on the decision that the posting of the Claims File to the internet waived any attorney-client privilege or any work-product protection over the information contained in the file, I find that the disqualification of defense counsel is not warranted in this situation”, calling that “an extreme sanction”.  Instead, she found that “the more reasonable sanction is that defense counsel should bear the cost of the parties in obtaining the court’s ruling on the matter”.

So, what do you think?  Should placing files on a file share site waive privilege?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

Defendant Not Required to Modify Production After Plaintiff Fails to Demonstrate Prejudice: eDiscovery Case Law

In Excel Enterprises, LLC v. Winona PVD Coatings, LLC, No. 3:16-cv-19-WCL-MGG (N.D. Ind., Feb. 17, 2017), Indiana Magistrate Judge Michael G. Gotsch, Sr. ruled that despite the fact that the defendant failed to demonstrate that it produced documents kept in the ordinary course of business, the plaintiff failed to demonstrate any prejudice suffered from the current state of the production and granted the defendant’s motion to reconsider the court’s earlier order regarding the format of the defendant’s production.

Case Background

In this breach of contract case, the plaintiff’s counsel informed the defendant’s counsel that the documents in its original production were not searchable and identified the format for the documents it preferred. In response, the defendant converted all of its responsive documents to the plaintiff’s preferred format and delivered them to the plaintiff in the requested format on 8 days later in July 2016.

On that same day, the plaintiff filed a motion to compel alleging, among other things, that the defendant had not complied with the production requirements set forth in Fed. R. Civ. P. 34(b)(2)(E)(i), which requires parties to produce documents responsive to requests for production “as they are kept in the usual course of business” or to “organize and label them to correspond to the categories in the request.”  The plaintiff argued that the defendant’s documents were not presented as they were kept in the usual course of business and asked the Court to compel the defendant to organize and label the documents to clarify which document responded to which specific discovery request.

The Court ultimately granted this part of the plaintiff’s motion, ordering the defendant “to supplement its production to identify by Bates Numbers which documents were produced in response to which specific discovery requests by November 15, 2016” because the defendant’s assertion that it produced the requested documents as they were kept in the ordinary course of business was not sufficiently supported with appropriate evidence.  In response, the defendant filed an instant motion to reconsider, presenting additional evidence (including attaching an affidavit from its Director of Information Technology) in an attempt to show that its production complies with Rule 34(b)(2)(E)(i).  However, the plaintiff objected, arguing that the affidavit failed to explain how the documents were stripped of their metadata and converted to unsearchable .pdf and .tiff files before the initial production or maintained as unsearchable .pdf and .tiff files in its ordinary course of business.

Judge’s Ruling

Judge Gotsch noted that the defendant “had the opportunity to present evidence that it produced the 30,000 documents as they were kept in the usual course of its business”, but its “attempt to so demonstrate was determined to be deficient to such an extent that the Court ordered Winona to comply with the other option under Rule 34(b)(2)(E)(i)—organizing and labeling the 30,000 documents to correspond to the categories in Excel’s discovery requests.”  Even with the affidavit submitted with the instant motion to reconsider, Judge Gotsch noted that the affidavit “clearly describes the process Winona used to produce its responsive documents to Excel, but provides no explanation of how the responsive documents were kept in the ordinary course of Winona’s business.”

However, the defendant also argued that “Excel has yet to offer any argument or evidence that it has suffered prejudice as a result of Winona’s production.”  To that, Judge Gotsch responded, stating that “Winona is correct. Through both its second motion to compel and its objection to the instant motion to reconsider, Excel has merely asked the Court to hold Winona to the form of Rule 34(b)(2)(E)(i) with no discussion of any adverse effect on Excel should the Court deem Winona’s current production of 30,000 documents, in the format explicitly requested by Excel and with important identifying information, complete.”  Noting that Fed. R. Civ. P. 26(b)(1), gives district courts broad powers to manage discovery in their cases, Judge Gotsch stated that “Excel’s demand for strict compliance with Rule 34(b)(2)(E)(i) amounts to a form-over-substance argument. As such, the cost and time Winona would expend to organize and label the 30,000 responsive documents at this time would pose a burden that outweighs the potential benefit of the exercise to Excel.”  As a result, he granted the defendant’s motion to reconsider the court’s earlier order.

So, what do you think?  Was that the right decision or should the court have stuck with its original order?  Please share any comments you might have or if you’d like to know more about a particular topic.

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