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Sanctions Denied over Destruction of Audio Evidence in Discrimination Lawsuit – eDiscovery Case Law
 

In Sokn v. Fieldcrest Cmty. Unit School Dist. No. 8, No. 10-cv-1122 (C.D. Ill. Jan. 17, 2014), the plaintiff filed a motion for default and sanctions relating to spoliation of evidence with a federal court, after a district court issued a Report and Recommendation (R&R) to deny the motion. Illinois Senior District Judge Joe Billy McDade ultimately declined to impose sanctions, due to a lack of evidence regarding the timing of alleged spoliation, and the plaintiff’s inability to establish bad faith on the part of the defendants.

The plaintiff’s motion argued that the defendants had destroyed audio recordings of closed-session school board meetings that were relevant to the issues of this discrimination case, and that in doing so the defendants had violated Illinois common law, the Illinois Open Meetings Act (OMA), and the defendants’ own documentation retention policies. As such, the plaintiff requested spoliation sanctions.

It was acknowledged that relevant discussions appeared to have taken place at an unknown number of school board meetings “[b]etween May 1, 2007 and January 1, 2009). The policy of the school district states that audio recordings of such meetings are to be maintained for at least 18 months, and only a vote by the school board could cause them to be destroyed. It appears the policy was “designed to fulfill the requirements of the Illinois Open Meetings Act…”

However, the plaintiff argued that an “unknown number of recordings” had been destroyed without a vote, and further that the destruction had occurred at a point when litigation was “either on file [or] reasonably foreseeable, or when a reasonable person would have foreseen that the audio recordings were material to a potential civil suit.” Reasonable anticipation should have occurred on March 24, 2010, at which point the plaintiff had notified the defendants that she believed she had been discriminated against due to her gender. Additionally, the plaintiff stated she believed the relevant audio recordings may have been destroyed less than 18 months after they were created, which would again be in violation of the defendants’ own policies.

Judge McDade’s review of the issues focused first on the alleged violation of the defendants’ retention policies and the OMA, and considered whether these violations were sufficient cause to impose sanctions. With regard to the OMA and the pursuant duty to preserve, it was stated that the “existence of a general duty to preserve is not the proper prerequisite for assessing sanctions in federal court…” and that the general duty imposed by the OMA is to “preserve audio recordings of closed session meetings, not a specific duty to preserve evidence for litigation, and certainly not for this specific litigation.”

Further, Judge McDade reasoned that “bad faith is a prerequisite to imposing sanctions for the destruction of evidence.” Bad faith might have been inferred, had the destruction of the audio recordings occurred before the defendants had reasonable indication of the possibility of litigation. However, the plaintiff was unable to establish the exact time period when the tapes had been destroyed, and therefore “[i]n such a case, the Court will not infer bad faith.”

Without evidence of the timing of the destruction, which was deemed a key factor in the defendants’ “duty to preserve that arises in direct relation to the pendency of potential litigation,” Judge McDade found that sanctions were “not appropriate under these circumstances.” The matter was then referred back to the district court to resume pre-trial proceedings.

So, what do you think? Should the burden to prove timing for the destruction of evidence in order to demonstrate bad faith rest with the plaintiff? Are sanctions warranted in cases where bad faith might be inferred, save for one factor that cannot be demonstrated? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Ruling on ESI Discovery Dispute Delayed as Court Requests Specific Information – eDiscovery Case Law
 

In Worley v. Avanquest North America Inc., No. C 12-04391 WHO (LB), 2013 U.S. Dist. (N.D. Cal. Dec. 13, 2013), a putative class action involving PC security software, California Magistrate Judge Laurel Beeler required the defendant to produce further information related to discovery disputes before a ruling would be issued.

Various discovery disputes arose in this case after the parties failed to agree on a discovery period. The applicable statute of limitations for this lawsuit was five years, and the defendant offered to preserve as evidence Electronically Stored Information (ESI) created during that five-year period. However, the plaintiffs requested an additional ten years added to the discovery period, as this would preserve “all relevant and discoverable information from the time the original versions of the software were developed to the present.”

According to the legal standard set by Rule 26, subsection (b)(1), parties may “obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense…” and relevant information “need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.” Therefore, Judge Beeler sided with the plaintiffs regarding an extended discovery period, stating that relevant information “such as documents relating to the software’s design and purpose, could have pre-dated the statutory period.”

However, the defendant stated that adding ten years to the discovery period would result in an unduly burdensome obligation for preservation, and would be disproportionate to the litigation. This is also addressed in subsection (b)(2)(C) under Rule 26, which states that “the court must limit the frequency or extent of discovery otherwise allowed by these rules…” if it is determined that the discovery would be “unreasonably cumulative or duplicative,” or that “the burden or expense of the proposed discovery outweighs its likely benefit” to the case.

Judge Beeler noted that the argument could not be addressed without further information, specifically that the parties had identified neither potential custodians, nor the amount of information the defendant actually had in its possession, since the defendant’s company acquired the software at issue in 2005. These details would be required in order for the defendant’s technical expert “to specify the burdens associated with preserving relevant information (particularly of electronically-stored information).”

Therefore, the defendant was ordered to identify custodians who would be likely to hold relevant information with regard to the plaintiff’s discovery requests, and further to “consult a person with expertise (such as an IT employee) and specify any undue burden associated with preservation, and produce non-burdensome, relevant information” before a ruling would be given. If the technical expert identified any issues that would make production of documents unduly burdensome, both parties were to “comply with the court’s discovery procedures and submit a joint discovery letter that provides details about the problems and puts their dispute in context.” Meanwhile, Judge Beeler ordered the defendant to produce the agreed documents covered by the five-year statute of limitations, noting that further “discovery can be iterative.”

The final discovery dispute concerned the defendant’s request for the plaintiffs to produce mirror image copies of hard drives belonging to the plaintiffs and their experts, in order to test the software at issue. The plaintiffs argued against this, as the hard drives contained both personal and privileged information, including financial data, family photos, and private communications. They instead proposed allowing the defendant to choose a forensic expert, who would image the hard drives and provide the defendant with specifically requested data, including “recreate[d] computing environments.”

Judge Beeler deemed the proposal “not workable,” and permitted the imaging of the drives with the allowance that the plaintiffs could use a protective order to protect any private information, and would be able to review and remove any privileged information prior to remanding the images to the defendant.

So, what do you think? Should discovery periods be limited to the statute of limitations applicable to a given case? Are protective orders sufficient to protect private information when personal-use computers are involved in litigation? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Clawback Rights Upheld and Plaintiff Sanctioned for Refusal to Comply Concerning Inadvertently Produced Privileged Documents – eDiscovery Case Law
 

In RIPL Corp. v. Google Inc., No. 2:12-cv-02050-RSM, 2013 U.S. Dist. (W.D. Wash. Dec. 17, 2013), seven discovery-related motions were heard concerning this trademark infringement action. The various motions to seal, compel, enforce, and sanction were filed after the parties had entered into a stipulated protective order. Washington District Judge Ricardo S. Martinez granted in part, denied in part, and deferred in part the various motions.

The protective order in force included a clawback provision, which required inadvertently produced attorney-client privileged documents to be returned or destroyed, with certification for the deletion or destruction of the documents, provided the party invoking the provision took the steps of “promptly notifying the recipient(s) and expressly articulating the basis for the asserted privilege or immunity.”

In the filing, the defendant stated that privileged documents had been inadvertently produced to the plaintiff on July 2, 2013. However, counsel for the defendant did not realize the documents had been disclosed until August 12, 2013, while preparing for the defendant’s deposition. The defendant conducted a search the next day for other privileged documents that may have been disclosed, and communicated via email with the plaintiff to exercise the clawback provision. The plaintiff at this point refused to return or destroy the documents at issue.

When the defendant filed a motion to enforce the protective order and clawback provision, it also requested that the plaintiff be sanctioned for filing documents under seal that quoted the privileged documents at issue, and filed a request to strike, along with other motions.

In arguing the motion to enforce, the plaintiff claimed that the defendant had waived its right to claw back the documents because “prompt” and “inadvertent” had not been defined under the protective order. The plaintiff cited the balancing test of Federal Rule of Evidence 502(b) for waiving attorney-client privilege with regards to “inadvertent” and claimed that the clawback request had not been “prompt.”

Judge Martinez rejected the arguments of the plaintiff concerning the clawback request, stating that there is “no requirement that, in order to supplant Rule 502(b), an agreement provide adequate detail regarding ‘what constitutes inadvertence, what precautionary measures are required, and what the producing party’s post production responsibilities are to escape waiver.’” Simply, it was ruled that “terms like ‘inadvertence’ and ‘prompt’ need not be defined in the protective order” under Rule 502. The plaintiff was ordered to certify the deletion or destruction of all unredacted copies of the privileged documents at issue within ten days.

The defendant’s request for sanctions were denied concerning the plaintiff’s filing documents under seal that contained quotes from attorney-client privileged documents. However, Judge Martinez ordered the plaintiff to pay the defendant’s fees and costs for bringing the motion, as a sanction for refusing to comply with the clawback provision and “hold[ing] the documents hostage for roughly two months in violation of the Protective Order.”

So, what do you think? Should a time limit be imposed as the definition of “prompt” with regard to stipulated protective orders? Should parties be permitted to submit attorney-client privileged information under seal when privileged documents are received inadvertently? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Electronic Discovery Dispute Sees Court Requesting Cooperation from Both Parties to Avoid “Court-Ordered Middle Ground” – eDiscovery Case Law
 

In Fort Worth Employees’ Retirement Fund v. J.P. Morgan Chase & Co., No. 09 Civ. 3701 (JPO) (JFC), 2013 U.S. Dist. (S.D.N.Y. Dec.16, 2013), a complex discovery dispute arose during the process of this securities action lawsuit revolving around the defendants’ loan products and offerings with regards to a specific consumer class, in which the plaintiffs filed a motion to compel an expanded discovery.

Prior to the motion, the defendants had used approximately 80,000 search terms to produce discovery documents, which had yielded around 875,000 hits. The documents had not been turned over, as they were being reviewed for production. However, the plaintiffs argued that the defendants’ search terms were “woefully deficient” in filing the motion to compel. The specific request was for more search terms, more custodians, and an extended discovery time period in order to receive all relevant information.

Search terms already in use by the defendants included the names of the 9 securities offerings at issue within the lawsuit, the loan numbers for roughly 35,000 loans under review, CUSIP numbers assigned to more than 300 underlying certificates for the securities offerings, names and dates assigned to loan transactions, and the lead plaintiffs’ names, as well as their advisors. The defendants also used several abbreviations and variations for each term to uncover relevant electronically stored information (ESI) in which actual terms might have been truncated or modified.

In response to the motion to compel, the defendants stated the search terms were comprehensive. However, the plaintiffs complained that the number of documents was “‘actually minimal’ for a case of this size” and that the names and numbers used would turn up “just a few specific, narrow categories of information,” while excluding “broad categories of documents that do not specifically reference ‘a particular loan, loan pool or securitization in the text of the documentor e-mail’ but instead address general practices or concerns, such as ‘widespread abandonment of underwriting guidelines.’” The plaintiffs further cited the March 30, 2011, Order of the Honorable John G. Koeltl, U.S.D.J., claiming that “documents do not need to be specifically related to the loans and offerings at issue in this case to be relevant.”

The request by the plaintiffs asked that the defendants add a search protocol to incorporate “combinations of terms aimed at discovering relevant documents that are not loan specific,” to include terms like “the names of loan originators, due diligence firms, rating agencies, and ‘descriptors’ (such as ‘awful’ and ‘toxic’).” The defendants objected to the additional 116,000 proposed search terms as too broad and unduly burdensome, since its sampling indicated that the expanded terms would “yield an unreviewable pool of over 11 million documents.”

Magistrate Judge James C. Francis IV, after hearing the positions of both parties, found some truth in each side’s argument. While the plaintiffs had “provided sufficient justification for expanding search terms beyond numbers and names to ensure that the ESI search captures all of the relevant documents pertaining to the loans and offerings at issue,” the defendants would face “an unreasonable burden of production” using the plaintiffs’ proposed search terms, as they would be required to “sift through voluminous irrelevant documents added to the search results.”

In such disputes regarding discovery, a court-ordered middle ground is often supplied as a remedy. However, Judge Francis did not issue an order, stating that it would be “impractical and inappropriate” due to the “nature of this request and the complexities of crafting a search protocol.” Instead, the parties were urged to “reexamine their positions and work together in good faith to create a mutually acceptable ESI search regime.” Failing a cooperative agreement by both parties, a special master would be appointed to the case in order to recommend an appropriate search protocol, with the costs to be split between plaintiffs and defendants.

So, what do you think? Should defendants expect to produce a higher volume of electronic discovery documents in cases that are larger in scope? Is the possibility of general relevance to the issues before the court enough to expand the burden of eDiscovery for defendants? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Craig Ball of Craig D. Ball, P.C. – eDiscovery Trends, Part 2

This is the eleventh (and final) of the 2014 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders after LTNY this year (don’t get us started) and generally asked each of them the following questions:

  1. What significant eDiscovery trends did you see at LTNY this year and what do you see for 2014?
  2. With new amendments to discovery provisions of the Federal Rules of Civil Procedure now in the comment phase, do you see those being approved this year and what do you see as the impact of those Rules changes?
  3. It seems despite numerous resources in the industry, most attorneys still don’t know a lot about eDiscovery?  Do you agree with that and, if so, what do you think can be done to improve the situation?
  4. What are you working on that you’d like our readers to know about?

Today’s thought leader is Craig Ball.  A frequent court appointed special master in electronic evidence, Craig is a prolific contributor to continuing legal and professional education programs throughout the United States, having delivered over 1,500 presentations and papers. Craig’s articles on forensic technology and electronic discovery frequently appear in the national media, and just ended nine years writing a monthly column on computer forensics and eDiscovery for Law Technology News called Ball in your Court.  He currentlyblogs on those topics at ballinyourcourt.com.

As usual, Craig gave us so much useful information that we decided to spread it out, yesterday was Part 1 of the interview and here is the rest!

It seems despite numerous resources in the industry, most attorneys still don’t know a lot about eDiscovery?  Do you agree with that and, if so, what do you think can be done to improve the situation?

I have to marvel at the ingenuity of my colleagues who have so effectively deflected the obligation to learn much of the nuts and bolts of eDiscovery.  A mastery of buzzwords and buzz concepts is not the same thing.  You can almost see the eagerness of some to deploy certain ideas that they have picked up as though simply encanting a buzz word is the same as applying it in a practical fashion.  Lawyers focus on the work product privilege as a means to avoid transparency in essential applications.  They trot out something that they’ve distilled from Zubulake, now ten years old.  Again, they are fighting the last war.  They are still over-preserving in shocking ways and still issuing legal holds that are boilerplate.  They’re still failing to give useful information in legal hold notices (as they can’t tell people to do what they themselves don’t know how to do).  We’re seeing little creativity and a copious quantity of uninspired mimicry.  It isn’t working.

The problem I have with this is that it is that eDiscovery isn’t that hard.  We make it hard.  We sit down in a room and start talking about the moving parts and everyone starts getting very depressed.  They’re desperate to seize upon a one-dimensional solution – they want to find a hammer that they can bang against everything.  It isn’t that hard.  Though there are strategies that you need for different kinds of evidence, there are recognitions you must make that there are different users that use data in different ways.  Different levels of fragility.  But, we’re not talking about learning Chinese pictographs here, we’re talking about a small handful of common productivity file types and a tiny handful of mechanisms for communication.  In any other industry, they would be so happy to have so little complexity to deal with; but in our industry, any complexity at all seems to be overwhelming.  And, it frustrates me because, if lawyers would devote a bit of of genuine energy and time to this, and if we made more resources available to them, we could really make not just incremental strides, but great leaps in reducing the cost and anguish associated with electronic discovery.  It’s not that hard, it doesn’t have to be that expensive.  But, it does require a certain minimal fluency to understand what you’re dealing with.

We all work with digital information, all day, every day.  Right now you are taping me on a digital recorder, we’re having a conversation on digital phones where the conversation is being converted into packets and it’s moving back and forth.  I’m staring at two screens now with my email on the left screen and the internet on the right screen with my smart phone and my tablet close by.  That’s modern life.  If we don’t approach electronic discovery with the same engagement that we do with digital tools in other aspects of our lives, we’re doomed to continue to commit malpractice in both how we approach eDiscovery and how we spend our client’s money on eDiscovery.  And, it’s just sad, it remains deeply sad.

We aren’t deploying the right tools.  Soon, our opponents and courts will realize that we’re fighting the last war and that it’s very easy to step around our defenses.  We haven’t put the tools–the weapons in the hands of the infantry – the working stiff lawyer – to allow them to begin to deal with electronic discovery.

How is it going to get better?  Right now, the only path I see is going to be the enthusiast, the individual lawyer who – out of boredom, ambition or aversion unemployment – decides that they’re going to craft a new career path for themselves.  I hear from one of those lawyers nearly every day, so that means that I hear from 150-200 lawyers each year who tell me that they want to do what I do.  That’s great, but the resources for them to achieve that, to get the information they need, are still sparse in the context of law practice.  You can go out there and learn forensics and information systems and IT.  But, to integrate the parts of those disciplines that are attendant to eDiscovery, it’s difficult.  We’re still having electronic discovery taught, by and large, by people who consider it a body of law and who shun its technology aspect.

What are you working on that you’d like our readers to know about?

My mission for 2014 is wake our readers up on the issue of form of production.  That’s a little silly because your readers are among the most enlightened of consumers of electronic discovery.  But, helping requesting parties change the archaic way they ask for ESI has been a big part of what I want to accomplish in 2014.  And, helping them to make sensible choices about forms of production so that they can get complete and utile forms, That’s not always a native form, but it’s rarely static images.  I know that is something that I’ve jawed about for a long time and I imagine there are quite a few people that are tired of hearing me speak about it, but I’m finally starting to get some traction.

Judges are starting to listen and understand.  As we chip away at this absurd practice to turn everything into electronic paper, what becomes clear is that the processes that we’ve developed to produce spreadsheets and PowerPoints in native forms apply with equal force and success to Word documents, and now you realize that you’ve covered the Microsoft Office complement of data.  Those are the files that tend to make up the most common attachments to emails and, oh, by the way, emails can be provided in functional formats that are also complete.  Everyone technologist knows what’s in an email.  It has to have a certain complement of features to be called an email and traverse the internet.  Why don’t we just start providing emails in forms that function?  Helping parties to exchange forms that function is my mission for 2014.

I don’t expect that by next year that I will tell you that everyone has awakened to the fact that native and near-native productions are cheaper and better.  Let’s face it, there are a lot of people conserving very old tools and workflows who will not give them up until they are forced to give them up.  There are all sorts of changes for the greater good that decent, intelligent people resist too long, just as they did with women’s suffrage and civil rights.  I don’t mean to trivialize civil rights by comparing them to litigants’ rights, but changes must and shall come to pass.  We must evolve to become Juris Doctor Electronicus: modern, digitally-capable counsel.

Thanks, Craig, for participating in the interview!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

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

Craig Ball of Craig D. Ball, P.C. – eDiscovery Trends, Part 1

This is the eleventh (and final) of the 2014 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscoveryDaily interviewed several thought leaders after LTNY this year (don’t get us started) and generally asked each of them the following questions:

  1. What significant eDiscovery trends did you see at LTNY this year and what do you see for 2014?
  2. With new amendments to discovery provisions of the Federal Rules of Civil Procedure now in the comment phase, do you see those being approved this year and what do you see as the impact of those Rules changes?
  3. It seems despite numerous resources in the industry, most attorneys still don’t know a lot about eDiscovery?  Do you agree with that and, if so, what do you think can be done to improve the situation?
  4. What are you working on that you’d like our readers to know about?

Today’s thought leader is Craig Ball.  A frequent court appointed special master in electronic evidence, Craig is a prolific contributor to continuing legal and professional education programs throughout the United States, having delivered over 1,500 presentations and papers. Craig’s articles on forensic technology and electronic discovery frequently appear in the national media, and just ended nine years writing a monthly column on computer forensics and eDiscovery for Law Technology News called Ball in your Court.  He currentlyblogs on those topics at ballinyourcourt.com.

As usual, Craig gave us so much useful information that we decided to spread it out, so today is Part 1 of the interview and tomorrow, we will post the rest!

What significant eDiscovery trends did you see at LTNY this year and what do you see for 2014?

The most significant trend that I saw at LegalTech was the absence of a new direction.  Honestly, if you had blindfolded me and put down in LegalTech 2014, I could have not told you that it wasn’t LegalTech 2013 and I would have been challenged to have distinguished it from LegalTech 2012.  I’ve probably been to fifteen or sixteen shows and I don’t think I’ve ever seen one that was so much a clone of a prior year and failed to reveal any innovation as patently as this LegalTech.  That’s not a lack of optimism on my part, but truly a recognition that everyone was showing something that was, at best, an incremental refinement of what they had been offering.  That’s not to say that the eDiscovery tools that I looked at were not better than the eDiscovery tools that I looked at last year.  For the most part, many of them had refinements that were indicative of vendors listening to their clients.

One thing I’m surprised that I didn’t hear more about at LegalTech is BYOD (bring your own device).  When it comes to privacy, corporations tend to say “you’re on our premises, you’re using our devices…oh, wait a minute, you were using our devices, but now we’re making you bring your own device”.  We should be talking about how we will’ successfully integrate BYOD into our “we own it, so we control it, so we can look at it” mindset.  The notion that we’re going to be able to monitor people’s devices through agents – that’s ten year old technology with modest uptake.  By the time we get it in place, we’ll be way past it.

As for trends in general, I had dinner with Browning Marean the other evening.  Browning is “everyone’s favorite uncle” in eDiscovery – he’s a thoughtful and witty fellow with DLA Piper, the world’s largest law firm that no one has ever heard of.  Browning said something to me while we were discussing his time serving in the Navy in Vietnam and he used the phrase that the Navy is always “fighting the last war.”  I think “Generals always fight the last war” is the famous line.  That’s where we are in eDiscovery.  The product refinements that I’m seeing are designed to fight the last war.  That’s a serious concern.  Because when one refines their ability to do things that are increasingly less and less relevant, they aren’t preparing to fight the battle they’ve got to fight.  I’m seeing refinements to software and workflows that are geared to a type of ESI that, unbeknownst to many at LegalTech, is disappearing.  I saw almost no one that had a coherent solution for cloud collection and processing or for handheld devices.  And, if you aren’t going to be where the evidence lives, you’re not going to be of as much value.  Instead, I saw a lot of self-congratulatory back slapping from both attendees and vendors about how well they were prepared to win the last war.

The fact that there was so little evidence of genuine innovation is expressed in many ways.  We are still looking at an entrenched generation of lawyers who are persuaded that they can keep the “status quo” in place and continue to do things the way they’ve always done them, albeit with a veneer of technology.  Sadly, I’ve become convinced that where I thought we could bring them along and educate them, I’m realizing that they will simply have to “shuffle off the mortal coil” of law before we realize the efficiencies and changes that are necessary to really use electronic evidence to its highest and best purpose.  We could salvage and re-purpose their expertise but, by-and-large, they’re resolutely unwilling to re-educate themselves for a digital world.

With new amendments to discovery provisions of the Federal Rules of Civil Procedure now in the comment phase, do you see those being approved this year and what do you see as the impact of those Rules changes?

The question in my mind is whether they will receive alterations that will improve them and, if they do see changes, at what point are the changes sufficiently substantive to require them to re-initiate the public comment process on a revised set of proposals?  People being people and government being government, there will be a lot of reluctance to let the proposals be altered to an extent that they should be for fear that will trigger the need to go through a new comment period.  So, there will be a lot of ingenuity applied to avoid changes that reflect themselves too substantively in the proposed language.  That’s an impetus for the rules changes to pass with little change save that reflected in the commentary.

I see the changes being positive in many ways.  There are certainly some tweaks to the rules that are brilliant.  I remain concerned, as many do, about the change to Rule 37(e).  Certainly, the old 37(e) was a stillborn and the new rule is quite the opposite.  I wish it did not manifest such a mistrust of members of the federal judiciary in terms of their ability to regulate litigation and, when necessary, to punish malfeasance.  I believe strongly that our existing cadre of judges is very capable of restraint when it comes to sanctions, and generally manifest a rational and measured approach in terms of analyzing a state of affairs and deciding whether or not to sanction.  And before you ask, I most definitely include Judge Shira Scheindlin in that group.  The sanctions cases most discussed of late—like Sekisui—when you look at them closely, they are very measured and minor in terms of what they do.  Even the dreaded “Adverse Inference Instruction” in the latest iterations has been so weak and deferential to the opinions of the jury that it has much less tendency to have an impact comparable to those Judge Scheindlin issued ten years ago in Zubulake. People don’t look at those adverse inferences as closely as they should – if they did, I think they would realize that they are a very measured response.

I think that my greatest concern about the rules is something that has not been discussed.  We are at a juncture where we need more—not less– of the much reviled “discovery about discovery.” We must approach discovery with increased transparency and scrutiny of process–making that routine would have a significant effect on reducing the cost and complexity of eDiscovery.  Yet, we have some fairly powerful corporate lobbying efforts afoot to clamp the lid down more tightly on such things and take away the needed translucency into process that allows you to say “hey, don’t do it that way” before a lot of money goes down the drain.  I’m amazed at how many people on “the other side” (whatever side that is) are so tied up with misperceived work product privilege rights that they are arguing that they should be able to complete a defective eDiscovery effort at enormous cost to their client before the other side can say “stop, you’re doing it all wrong.”

I realize that the conversations between opponents have not been unguarded and are not always as constructive as they should be.  They’re way too combative.  People are still so afraid that they react from fear rather than from knowledge.  Nonetheless, there are certain aspects of an eDiscovery effort – the mechanisms of collection, culling, search, sources, structure of databases and, above all, forms of production (where we are finally and happily starting to make some progress) – that are so fundamental to integrity of process that they must be discussed up-front.  Those things must be hashed out before any significant money is spent on the collection, processing, review and production process.

Yet, there is a machismo out there reflective of outdated Sedona notions of “the other side is always right, no matter how wrong they are.”  The producing party is always right, even if they don’t know their butt from a hole in the ground when it comes to eDiscovery.  The consequence of that, the ego, the machismo of “you’ll see what I give you when I give it to you, and only then may you object” is such a waste of effort.  There are just some things that are so irretrievable that, unless you deal with them before they happen, they’re faits accompli to failure.  This idea that we’re going to waste months and millions of dollars to visit a broken production on an opponent and only then does the opponent  get to challenge it is just ridiculous.  It’s wasteful and shameful, and I’m frustrated that people don’t take a step away from their egos and say “this transparency thing is not a weakness, it’s a strength,” and instead seek to show off the wisdom and defensibility of their plan.  That let’s the other side can take shots at the plan while it’s still easy, fast and cheap to fix it.  But, no, they just want to do everything twice; and as long as people continue to be paid by the hour, doing everything twice is profitable for everybody but the litigants.

Stay tuned for Part 2 tomorrow!

And to the readers, as always, please share any comments you might have or if you’d like to know more about a particular topic!

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

Apple Can’t Mention Inadvertent Disclosure in Samsung Case – eDiscovery Case Law

Back in January, Quinn Emanuel Urquhart & Sullivan LLP was sanctioned for their inadvertent disclosure in the Apple vs Samsung litigation (commonly referred to as “patentgate”).  California Magistrate Judge Paul S. Grewal handed down an order on motions for sanctions against Quinn Emanuel (in essence) requiring the firm to “reimburse Apple, Nokia, and their counsel for any and all costs and fees incurred in litigating this motion and the discovery associated with it”.  Many felt that Samsung and Quinn Emanuel got off lightly.  Now, Apple can’t even mention the inadvertent disclosure in the upcoming Samsung trial.

According to a story on Law360 (subscription required), U.S. District Court Judge Lucy Koh barred Apple last Wednesday from presenting evidence that Quinn Emanuel leaked confidential information regarding an Apple license agreement, saying that such testimony could prejudice jurors.  “The court believes any evidence [on the leak] could be irrelevant and a waste of time. It would confuse the jury and is outweighed by prejudice,” Judge Koh said. “Apple says it doesn’t intend to bring in any information of that violation unless Samsung opens the door.”

Judge Koh also came close to barring Apple from introducing evidence on the total revenues Samsung earned selling its products that are alleged to infringe on Apple patents. In their damages retrial in November where Apple was awarded $290.5 million (bringing the total awarded for infringing on Apple products to almost $930 million), Samsung’s revenues became a sticking point.  Although Samsung argued last week that Apple shouldn’t be allowed to bring up any of Samsung’s revenues or profits from the accused products, Judge Koh said she wouldn’t go that far. Apple’s damages expert uses many of those numbers in his calculations, and it would be “weird” to limit his testimony on income he considered in those calculations, she said.

For our previous coverage of the case, click here, here, here, here, here and here.

So, what do you think? Is this the case that never ends?  Will there be much more to come?  Do you wish you had some of the fees from this case?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Federal Court Partially Reverses District Court’s Taxation of Electronic Discovery Costs – eDiscovery Case Law

In CBT Flint Partners, LLC v. Return Path, Inc., No. 2013-1036, 2013 U.S. App. (Fed. Circ. Dec. 13, 2013), the Federal Circuit Court of Appeals reversed in part and vacated in part an earlier decision by the Georgia district court to require the plaintiffs to pay the defendants’ costs relating to the production and duplication of electronically stored information (ESI) offered as eDiscovery, limiting taxation to only those costs which were directly related to copying.

Circuit Judges O’Malley and Taranto heard the appeals case, which was filed by the plaintiff after a district court ruled in favor of the defendants regarding the taxation of costs for eDiscovery. The initial case, a patent infringement lawsuit, was found in favor of the defendants, and the district court determined that the plaintiffs should pay the defendants’ costs, with two defendants asking for nearly $270,000 and nearly $50,000, respectively.

In filing for costs, the first defendant categorized $243,000 of the requested amount as “other” costs, stating that the fees were to cover expenses for the eDiscovery vendor that produced the ESI. The remaining $4,500 was characterized as the costs of making copies of the data. The second defendant did not identify any costs for making copies, and categorized $34,000 of the total cost as expenses for its eDiscovery vendor.

On appeal, Judges O’Malley and Taranto followed the leads of previous cases in the Third Circuit (Race Tires America, Inc. v. Hoosier Racing Tire Corp) and the Fourth Circuit (The Country Vintner of North Carolina, LLC v. E & J Gallo Winery, Inc.) with narrow interpretation of 28 U.S.C. § 1920, which is concerned with defining costs that are and are not recoverable regarding eDiscovery. The applicable law was noted as the scope of section 1920(4), which first defined as recoverable for costs “[f]ees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.” Section 1920(4), amended in order to address electronic evidence, now states that recovery costs for ESI are allowed only for “the reasonable costs of actually duplicating those documents, not for the cost of gathering those documents as a prelude to duplication.”

Observation and examination of the defendants’ discovery process found that the first stage performed by the vendor was the closest in scope to the process of making copies, and therefore was recoverable. This stage includes imaging hard drives and other source media, and then processing the resultant images to extract relevant individual documents. Judges O’Malley and Taranto noted that “the statute covers costs for steps, which commonly involve an initial reproduction, that necessarily precede the creation of a final production copy: converting electronic files to non-editable formats . . . and scanning paper documents.”

However, the taxation line was drawn at “costs incurred in preparing to copy,” such as the next stage of the vendor’s process, which involved organizing the extracted documents into a database to be “indexed, decrypted, and de-duplicated, and filtered, analyzed, searched, and reviewed to determine which were responsive to discovery requests and which contained privileged information.” The defendants asked for these costs to be subject to recovery, categorizing them as “project management, keyword searching, ‘statistical previews,’ ‘auditing and logging of files and ensuring compliance with Federal Rules,’ and ‘extraction of proprietary data,’ along with other characterizations. In addition, the defendants requested that the costs of convenience actions such as buying, installing, and configuring a data-host server be relegated to the plaintiffs. The judges dismissed these costs as unrecoverable, but did classify the costs of creating “load files” – scanned images that indicate breaks in documents – as recoverable and subject to taxation.

Finally, Judges O’Malley and Taranto limited recovery costs to only the subset of documents that was actually produced by the defendants’ eDiscovery vendor. The matter was then remanded to the district court, which will consider what format was required for ESI production, and which costs were appropriate to assign to the plaintiff.

So, what do you think? Should the entirety of eDiscovery production costs be subject to taxation and awarded to the prevailing party? Is there a broader interpretation of costs related to copying electronic documents that should be considered? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Dispute over Production Format and Search Terms for Electronic Discovery Highlights the Need for Cooperation – eDiscovery Case Law
 

In Saliga v. Chemtura Corp., No. 3:12cv832 (RNC), 2013 U.S. Dist. (D. Conn. Nov. 25, 2013), a discrimination case heard by Connecticut Magistrate Judge Donna F. Martinez, the plaintiff and the defendants had spent a year arguing over the format of production for Electronically Stored Information (ESI) to be used in discovery, as well as relevant search terms, before the plaintiff filed a motion to compel.

Prior to this motion, Judge Martinez had held a status conference and chastised both parties concerning the issue of cooperation, noting that discussions about ESI should begin early in the case under Rule 26(f), which requires that both parties confer in order to develop a discovery plan that addressed “any issues about disclosure or discovery of [ESI], including the form or forms in which it should be produced.” However, it was determined that given the current state of impasse, another meeting between parties would not reach a resolution, necessitating court intervention.

The format for production was the first matter addressed. Originally, the plaintiff had asked that the defendant produce emails for discovery in native format, which would contain application metadata and could also contain system metadata relevant to the litigation, such as file creation dates or the identity of the computer on which the email was created. The defendants’ objection stated that “standard practice is to produce ESI in searchable PDF or TIFF and there is ‘no basis or need’ to produce the emails in native format.”

However, the defendants did not claim any undue burden or expense with regards to the requested production format, nor did they offer a reason why they were unable to comply. Therefore according to Rule 34(b)(1)(c), which states that the requesting party, in this case the plaintiff, may “specify the form or forms in which electronically stored information is to be produced,” Judge Martinez ordered the defendant to produce the requested emails in native format.

The next issue addressed was a complaint by the defendant that two of the requests for production from the plaintiff were overly broad, and therefore unduly burdensome. The plaintiff listed 14 employees to search, and the defendant stated that search results for the employees’ emails yielded more than 925,000 hits. In addition, the complaint claimed this request was a duplicate of the plaintiff’s requested search terms, which caused similar problems.

Prior to the complaint, the parties had failed to agree on the search terms to be used, or how the search should proceed. The unresolved dispute necessitated Judge Martinez’s intervention, despite the fact that the court was “loath to decide the search terms to be used because the parties are far better positioned to do so.” In the discovery request, the plaintiff asked for the defendants to use 12 relevant words and phrases, variously combined with versions of the custodians’ names to create 37 search terms in total. The defendants objected to one of the 12 base search terms, “India Audit,” and claimed that inclusion of the custodians’ names would be “cumulative and unnecessary.”

Judge Martinez agreed that it would be “superfluous” to incorporate the names of the custodians into the search terms, but denied the defendants’ request to discard the contested search term “India Audit” and ordered that it be included.

Finally, the plaintiff’s request for information on the defendants’ data collection process was considered, in light of a letter the plaintiff had submitted to the defendants three months prior that contained “three pages of technical questions about the defendant’s system configuration, acquisition methods and data extraction” and told the defendant “not to produce any ESI discovery until the plaintiff was satisfied that her concerns and questions were resolved.” Judge Martinez rejected this request, stating that “the plaintiff’s questions may not impede the defendant’s production, which must take place immediately.” The plaintiff was advised to address the opposing counsel should she have any legitimate concerns about the procedures for data collection.

So, what do you think? Should the court step in to define search terms when both parties fail to agree on them? Should the plaintiff’s right to specify a production form for ESI supersede standard practices? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Bad Faith Violations in Discovery Lead to Sanctions for Defendant – eDiscovery Case Law

Regarding the case In re Pradaxa (Dabigatran Etexilate) Products Liability Litigation, MDL No. 2385, 3:12-md-02385-DRH-SCW, 2013 U.S. Dist. (S.D. III. Dec. 9, 2013), the defendants’ repeated failure to preserve and produce documents during discovery was found to be in bad faith. The defendants were ordered to produce the documents, or to explain why they couldn’t be produced, and to pay a hefty fine plus the plaintiff’s costs and fees for pursuing discovery motions. The order left room for additional future sanctions, should the bad faith behavior continue.

In the case before Chief District Judge David R. Herndon, the Plaintiffs’ Steering Committee (PSC) filed a motion to seek sanctions against the defendants due to failure to preserve evidence and a faulty discovery hold. The PSC stated four types of discovery violations outlining the defendants’ failure to: (1) identify and preserve the files of a key custodian, (2) preserve evidence or disclose and produce evidence in a timely manner, (3) preserve or produce text messages from employees in a timely manner, and (4) provide passwords for use in collecting documents, resulting in a delay for identifying and producing data.

Judge Herndon noted in addressing the motions that the defendants “have simply failed to follow the Court’s orders,” stating that the “ongoing discovery abuses” by the defendants have “plagued” the proceedings nearly since the beginning of this litigation. He went on to say that he had “never seen a litigation where the problems are just ongoing and continual, and every month or every week there’s an issue of this failure and that failure and the other failure. It is just astounding.”

Due to the egregious and continued issues brought on by the defendant’s “numerous and substantial” discovery violations, as well as the effect of prejudicing the plaintiffs and the defendants’ “contumacious disregard for [the Court’s] authority,” Judge Herndon followed Rule 37 which grants the Court the inherent authority to award sanctions and fined the defendants nearly $30,000 – an amount that is roughly equal to $20 per case in this multidistrict litigation (MDL). The defendants were also warned that Judge Herndon believes in “progressive discipline,” a clear statement that further sanctions would be imposed if the defendants’ “endless parade of excuses” continues.

Furthermore, the defendants were ordered to audit their records in an attempt to determine whether additional undiscovered material existed. While Judge Herndon expected that some deficiencies would be found, the audit uncovered a “growing number of ‘gaps’ in production” resulting from the defendants taking liberties with the company-wide litigation hold by applying a “too narrow and an incremental approach.”

Judge Herndon remarked to each of the excuses offered by the defendants with regards to various failures to preserve discovery documents and electronically stored information (ESI), stating that the defendants “do not get to pick and choose which evidence they want to produce from which sources” and that their “efforts to suggest that they and they alone decided to implement such a proportionality test to the litigation hold smacks of a post-debacle argument in desperation to salvage a failed strategy regarding production evasion.” Therefore, the defendants’ attempt to claim good faith was dismissed, as sanctions were imposed.

This case was previously covered on this blog here.

So, what do you think? Were these sanctions a strong enough deterrent to discovery violations in other cases? Or should apparent deliberate evasion and ignoring court orders lead to stiffer penalties? Please share any comments you might have or if you’d like to know more about a particular topic.

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