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Preservation

Failure to Extend Preservation Hold to Headquarters Does Not Lead To Adverse Inference Sanction: eDiscovery Case Law

In Botey v. Green, et. al., No. 12-01520 (M.D. Pa., April 4, 2016), Pennsylvania District Judge Robert D. Mariani denied the plaintiff’s request for an adverse inference sanction for the defendants’ failure to preserve trucking logs related to an accident between the plaintiff and a truck driver working for the defendant’s company, but did agree not to allow the defendants to prove the contents of the destroyed documents by other means or argue their contents in dispositive motions or at trial.

Case Background

In this lawsuit arising out of a traffic accident between the plaintiff and a truck driver (Robert Green) working for the defendant’s company in May 2011 resulting in serious injury to the plaintiff, the parties originally planned to take the driver’s deposition during the normal discovery period.  However, in February 2014, it was determined that the truck driver suffered from dementia and was therefore unable to be deposed.  As a result, the plaintiff sought expanded discovery from the defendants thirty days’ worth of the truck driver’s trip documents and logs that the trucking company maintains for each of its truck drivers, whereas the defendants argued that the plaintiff was only entitled to logs going back 34 hours before the accident.  After telephone arguments, the Court compromised and ordered the defendants to provide fifteen days of logs.

However, the defendants only produced four additional days of logs, not the full fifteen that the Court ordered.  The plaintiff then filed a Motion for Sanctions, which requested “that an adverse inference jury instruction be read against Defendants at the time of trial” as well as “an Order precluding Defendants from arguing in dispositive motions that Plaintiff lacks evidence to prove his corporate negligence claims against Defendants FFE and Conwell based on the documents destroyed.”

The defendants’ trucking logs were administered and maintained by a third party vendor, which only stored the electronic data from the trucks for a period of six months before automatically deleting them. The plaintiff sent litigation hold letters as early as October 2011, but sent them to a local office in Norman, Oklahoma rather than to the defendants’ corporate office in Dallas, Texas and the defendants acknowledged that the letters were never forwarded to the corporate office.

Judge’s Ruling

Judge Mariani noted that “[u]nder Pennsylvania law, to determine the penalty for a spoliation of evidence claim, Plaintiff must show (1) the degree of fault of Defendant in altering or destroying the evidence (2) the degree of prejudice Plaintiff has suffered, and (3) the availability of a lesser sanction that will protect Defendant’s rights and deter future similar conduct.”

Having already found that the defendants were under a legal duty to preserve the logs, Judge Mariani ruled that “Plaintiff has not shown that he is entitled to the ‘adverse inference’ sanction”, noting that “Plaintiff does not explain what ‘adverse inference’ he wants.”  Continuing, Judge Mariani stated that “It is too great a leap to conclude that, if the destroyed records were preserved, they would have shown such evidence of a loss by Green of his mental faculties that Defendants would have been placed on notice that he was suffering from dementia and was likely to cause accidents and therefore advance Plaintiff’s negligence claims against FFE and Conwell.”

As a result, Judge Mariani denied the plaintiff’s request for an adverse inference sanction, noting that failure to preserve the logs “appears to be mainly carelessness in failing to preserve documents from destruction in the ordinary course of business”.  However, Judge Mariani also noted that “while the Court will not grant Plaintiff’s request for an adverse inference, it is only logical and fair that Defendants will not be allowed to rely on the missing records in support of any dispositive motions. This is for obvious reasons: Defendants cannot claim that information in records that was destroyed would exonerate them and expect the Court to permit such an argument.”

So, what do you think?  Should the defendants have received the requested adverse inference sanction?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Defendant Sanctioned for Loss of Emails During Provider Switch, But No Sanction For Wiped Hard Drive: eDiscovery Case Law

In Core Laboratories LP v. Spectrum Tracer Services, LLC et. al., No. 11-1157 (W.D. Okla. Mar. 7, 2016), Oklahoma District Judge Vicki Miles-LaGrange granted the plaintiff’s motion for sanctions for emails that were not preserved during an email provider switch via an adverse inference instruction, but denied the plaintiff’s motion for sanctions for deleting files and for wiping the computer of one of its employees.

Case Background

The plaintiff contended that the defendants had a duty to preserve evidence in the wake of and after this litigation commenced, and identified three instances where it contended that defendants intentionally destroyed relevant evidence in this matter, including (1) lost emails relating to correspondence between the defendant and a third party (2) deleting computer files from one defendant employee’s hard drive; and (3) wiping files from another employee’s computer. The defendants contended that the plaintiff had not identified any relevant evidence that has been lost nor could it identify any prejudice it suffered by defendants’ actions.

Judge’s Ruling

Judge Miles-LaGrange began by looking at the recently amended FRCP 37, noting that, in Rule 37(e), spoliation sanctions are only proper when the accused party had a duty to preserve because it knew or should have known that litigation was imminent and if the adverse party was prejudiced.

With regard to the loss of emails between the defendant and a third party, Judge Miles-LaGrange ruled that “Core has shown it was prejudiced by not having access to Spectrum’s emails prior to June 2011. Specifically, the Court finds that this litigation was initiated on March 11, 2011, and Brown testified that relatively quickly after this lawsuit was filed, Spectrum took steps to change its email service provider to ensure every Spectrum email was captured to comply with the requirements of this lawsuit. While Brown testified that Spectrum’s previous email service provider did not have the capability to capture archive emails, the Court finds it was not unreasonable for Spectrum to have taken steps to ensure that any emails prior to switching over to its new email service provider were saved. The Court infers that because all emails prior to June 2011 were lost, emails regarding the formation of Spectrum and the manufacturing of its tracing systems would have been lost too. Since Faurot has confirmed that TPM used one of Core’s pumps as a prototype to produce Spectrum’s pumps, the Court finds that the lack of information available because of Spectrum’s email loss is prejudicial to Core.”

Judge Miles-LaGrange determined that an appropriate sanction would be an adverse inference jury instruction presuming any potential communications that were lost due to the defendant changing its email service provider would have been unfavorable to the defendant.

With regard to the deleted files from one employee’s computer, Judge Miles-LaGrange found “that defendants admitted that Morrison’s personal files were deleted from the hard drive and, further, the hard drive was turned over to Core and has been the subject of an ongoing forensic analysis, during this litigation, to recover all of Core’s proprietary software from the hard drive”.  With regard to the wiped hard drive of another employee, because the defendant testified that anything needed to be kept from his computer was exported to an external hard drive prior to the computer being wiped, Judge Miles LaGrange found the plaintiff suffered no prejudice as a result of this action ether and denied the plaintiff’s motion for sanctions for the deleted files and wiped drive.

So, what do you think?  Should the defendants have been sanctioned for the deleted files and the wiped drive?  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.

Beep, Beep! Terminating Sanctions against Defendant for Spoliation Affirmed on Appeal: eDiscovery Case Law

As Wile E. Coyote has learned, you don’t want to mess with the Roadrunner.  Especially if you’ve been found to have willfully spoliated data…  :o)

In Roadrunner Transportation Services, Inc. v. Tarwater, Nos. 15-55448 and 14-55529 (9th Cir., Mar. 18, 2016), the Ninth Circuit affirmed the district court’s entry of default judgment and award of attorneys’ fees in favor of the plaintiff, ruling that the district court did not abuse its discretion by entering default judgment as a sanction for the defendant’s deletion of data from his laptop computers .  The Ninth Circuit also affirmed the district court’s award of $325,000 in attorneys’ fees to the plaintiff and also affirmed the lower court ruling to limit the plaintiff’s compensatory damages to the four customers specifically identified in the First Amended Complaint.

In considering the defendant’s appeal of the district court’s entry of default judgment and award of attorneys’ fees in favor of his former employer and the plaintiff’s cross-appeal of the district court’s compensatory damages award, the Ninth Circuit ruled, as follows:

“1. The district court did not abuse its discretion by entering default judgment as a sanction for Tarwater’s deletion of data from his laptop computers…There was ample evidence that Tarwater deleted emails and files on his laptops after receiving multiple preservation demands from Roadrunner, and even after the court explicitly ordered Tarwater to preserve “all data” on his electronic devices. In addition to Tarwater’s own admissions, a third-party computer expert concluded that files on one of Tarwater’s devices had been deleted and overwritten during the litigation, and that the deletions likely “bypasse[d] the [computer’s] Recycle Bin” through a user-initiated process. In light of the evidence of spoliation, and the nature of Roadrunner’s claims, the district court did not clearly err in finding that Tarwater willfully destroyed the data, that Roadrunner had been deprived of its “primary evidence of Tarwater’s alleged misappropriation and related misconduct,” and that a less drastic sanction could not have adequately redressed the prejudice to Roadrunner.”

“2. The district court did not abuse its discretion by awarding Roadrunner $325,000 in attorneys’ fees…The court carefully considered the billing entries and reasonableness of the hourly rates for Roadrunner’s attorneys and reduced the award to reflect an appropriate level of staffing for the case. The district court also properly accounted for the degree of success achieved by Roadrunner, as well as the public’s interest in protecting trade secrets.”

“3. The district court properly limited Roadrunner’s compensatory damages to the four customers specifically identified in the First Amended Complaint.”

“AFFIRMED.”

So, what do you think?  Did the defendant deserve a terminating sanction?  Please share any comments you might have or if you’d like to know more about a particular topic.

We’re just one week away from the pre-conference seminars at ACEDS!  For the first time, ACEDS is offering a number of pre-conference events focused on some of the most important issues and trends in eDiscovery. These include a cybersecurity seminar addressing the recent data breaches at major law firms, a networking forum hosted by Women in E-Discovery, and the Law Student Blogger/Social Invitational pre-conference seminar with Ari Kaplan, Rob Robinson, Robin Thompson and me!  If you already have a blog or are interested in starting a blog, join us and learn about the benefits of blogging, how to get started, establishing your blogging workflow, avoiding liability and leveraging social media for professional and personal benefit.  Hope to see you in New York on Monday!

Image © Warner Bros.

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.

Even a “Luddite” Can Learn the Ins and Outs of Data Backups with this Guide: eDiscovery Best Practices

You have to love an instructional guide that begins with a picture of Milton Waddams (the sad sack employee obsessing over his red stapler in the movie Office Space) and ends with a nice consolidated list of ten practice tips for backups in discovery.

Leave it to Craig Ball to provide that and more in the Luddite Lawyer’s Guide to Backup Systems, which Craig introduces in his Ball in Your Court blog here.  As Craig notes in his blog, this guide is an update from a primer that he wrote back in 2009 for the Georgetown E-Discovery Institute.  He has updated it to reflect the state-of-art in backup techniques and media and also added some “nifty” new stuff and graphics to illustrate concepts such as the difference between a differential and an incremental backup.  Craig even puts a “Jargon Watch” on the first page to list the terms he will define during the course of the guide.

Within this 20 page guide, Craig covers topics such as the Good and Bad of Backups, the differences between Duplication, Replication and Backup, the Major Elements of Backup Systems and the types of Backup Media and characteristics of each.  Craig illustrates how restoration to tape (despite popular opinion to the contrary) could actually be the most cost-effective way of recovering ESI in a case.  And, Craig discusses the emergence of the use of the Cloud for backups (which should come as no surprise to many of you).  He concludes with his Ten Practice Tips for Backups in Civil Discovery, which is a concise, one-page reference guide to keep handy when considering backups as part of your information governance and discovery processes.

Whether you’re a Luddite lawyer or one who is more apt to embrace technology, this guide is sure to provide an essential understanding of how backups are created and used and how they can be used during the discovery process.  Backups may be the Milton Waddams of the eDiscovery world, but they’re still important – remember that, at the end of the movie, Milton was the one relaxing on the beach with all of the money.  :o)

So, what do you think?  How do backups affect your eDiscovery process?   Please share any comments you might have or if you’d like to know more about a particular topic.

Image © Twentieth Century Fox

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.

Defendants Claim of Lightning Strike and Power Surge Doesn’t Save Them from Sanctions: eDiscovery Case Law

In a recent post in Craig Ball’s excellent blog, Ball in your Court, Craig stated that “you are more likely to be hit by lightning than to be sanctioned for non-preservation of ESI”.  So, if you claim that your devices are hit by lightning, causing your relevant ESI to be lost, does that make it more or less likely that you will be sanctioned?  :o)

In InternMatch, Inc. v. Nxtbigthing, LLC, et. al., No. 14-05438 (N.D. Cali., Feb. 8, 2016), California District Judge Jon S. Tigar, finding that the defendants “consciously disregarded their obligations to preserve relevant evidence” when they discarded various electronic devices after experiencing an alleged power surge without checking to see if they could recover any files from them, granting an adverse inference instruction sanction and plaintiff’s attorneys’ fees.

Case Background

In this trademark infringement case, the plaintiff requested copies of any documents, including electronic documents, relating to the defendants’ defense that it had continually and extensively used the disputed trademark. The defendants responded (and the owner of the defendant company (Chad Batterman) stated in his deposition) that a lightning strike in 2011 and a power surge in April 2015 had destroyed responsive documents, including corporate records central to the parties’ dispute and marketing materials that allegedly established prior use of the trademark.

in November 2015, the plaintiff filed a motion for terminating sanctions, accusing Defendants of intentionally destroying the electronic versions of the documents.

Judge’s Ruling

Using the newly amended FRCP Rule 37(e) as a guideline, Judge Tigar also considered the five factors identified by the Ninth Circuit in determining whether the terminating sanction is justified:

(1) the public’s interest in expeditious resolution of litigation; (2) the court’s need to manage its dockets; (3) the risk of prejudice to the party seeking sanctions; (4) the public policy favoring disposition of cases on their merits; and (5) the availability of less drastic sanctions.

With regard to the defendant’s duty to preserve and whether that duty was upheld, Judge Tigar found “that at least by January 2015, Defendants knew about the present action and were under a duty to preserve relevant evidence.  The evidence shows that Defendants violated this duty…Prior to discarding the desktop, Batterman did not make any effort to determine whether the hard drive on the desktop was salvageable or any data could be recovered from it…As a result, the parties can only access the few existing paper copies of the relevant documents, rather than the electronic files, which would include valuable information such as the creation and modification history of the files.”

Continuing, Judge Tigar stated: “The Court finds that at the very least, Defendants consciously disregarded their obligations to preserve relevant evidence. There is no evidence that Defendants took any steps to preserve relevant information after the litigation began…After the alleged power surge, Defendants failed to identify whether data from the electronic devices might be recoverable, and instead simply discarded the devices.

The Court also finds Defendants’ evidence that the surge occurred in the first place to be unbelievable. Not only is the alleged chronology of events highly improbable, but Defendants’ story is filled with inconsistencies. The Court does not know what actually happened to the missing evidence, if it ever existed, but concludes that Defendants have failed to show that it was lost in a power surge.”

While finding that sanctions were warranted, Judge Tigar concluded “that sanctions short of entry of default are appropriate” and granted the plaintiff’s request for an adverse inference instruction sanction, as well as attorneys’ fees associated with bringing the Motion for Terminating Sanctions.

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

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

Craig Ball’s “Alexa-lent” Example of How the Internet of Things is Affecting Our Lives: eDiscovery Trends

I probably shouldn’t be writing about this as it will give my wife Paige another reason to say that we should get one of these.  Nonetheless, Craig Ball’s latest blog post illustrates how much data can be, and is being, captured these days in our everyday life.  Now, if we could just get to that data when we need it for legal purposes.

In Craig’s blog, Ball in your Court, his latest post (“Alexa. Preserve ESI.”) discusses how many cool things the Amazon Echo (with its “Alexa” voice command service) can do.  Sounding like he has gotten a little too up close and personal with the device, Craig notes that:

“Alexa streams music, and news updates.  Checks the weather and traffic.  Orders pizzas and Ubers.  Keeps up with the grocery and to do lists.  Tells jokes.  Turns on the lights.  Adjusts the temperature.  Answers questions.  Does math. Wakes me up.  Reminds me of appointments.  She also orders stuff from Amazon (big surprise there).”

Sounds pretty good.  Hopefully, my wife has stopped reading by this point.

Have you ever seen the movie Minority Report where Tom Cruise walks into his apartment and issues voice commands to turn on the lights and music?  Those days are here.

Anyway, Craig notes that, using the Alexa app on his phone or computer, he can view a list of every interaction since Alexa first came into his life, and listen to each recording of the instruction, including background sounds (even when his friends add heroin and bunny slippers to his shopping list).  Craig notes that “Never in the course of human history have we had so much precise, probative and objective evidence about human thinking and behavior.”

However, as he also notes, “what they don’t do is make it easy to preserve and collect their digital archives when a legal duty arises.  Too many apps and social networking sites fail to offer a reasonable means by which to lock down or retrieve the extensive, detailed records they hold.”  Most of them only provide an item-by-item (or screenshot by screenshot) mechanism for sifting through the data.

To paraphrase a Seinfeld analogy, they know how to take the reservation, they just don’t know how to hold the reservation (OK, it’s not completely relevant, but it’s funny).

In a call to action, Craig says that both “the user communities and the legal community need to speak out on this.  Users need an effective, self-directed means to preserve and collect their own data when legal and regulatory duties require it.”  I agree.  Some, like Google and Twitter, provide excellent mechanisms for getting to the data, but most don’t.

As Wooderson says in the movie Dazed and Confused, “it’d be a lot cooler if you did”.

So, what do you think?  Will the “Internet of Things” age eventually include a self-export feature?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Court Rules Plaintiff’s Duty to Preserve Did Not Extend to Employee’s Internet History: eDiscovery Case Law

In Marten Transport, Ltd. V. Plattform Advertising, Inc., No. 14-02464 (D. Kansas, Feb. 8, 2016), Kansas Magistrate Judge Teresa J. James denied the defendant’s Motion for Spoliation Sanctions, ruling that, although the plaintiff had a duty to preserve relevant ESI as of Fall 2013, that duty to preserve did not extend to the internet history of one of its employees until June 2015, and by then the internet history was lost.

Case Background

In this action under the Lanham Act for trademark infringement and unfair competition, the plaintiff accused the defendant of making unauthorized job postings to the defendant’s sites using the plaintiff’s trademarks and information after the plaintiff terminated its agreement with the defendant.  Plaintiff’s counsel sent a cease and desist letter in September 2013 and ultimately filed suit in September 2014.

In January 2015, the plaintiff served its Rule 26 disclosures identifying one of its employees (Jolene Vinck), as an individual “believed to have discoverable information relating to the matter.”  In June 2015, Defendant’s counsel sent a letter to the plaintiff alleging that after the defendant removed all of the plaintiff’s job postings from its website on September 17, 2013, the plaintiff logged back in and created six job postings on five separate dates.

In September 2015, as part of its first supplemental production, the plaintiff produced a December 2013 email to Vinck from a third party informing her that the relationship with the defendant had been terminated, which included Vinck’s response that she didn’t know and “had been posting on there all along”.  After the defendant requested Vinck’s internet history in its second request for production, the plaintiff advised the defendant that Vinck’s internet history was no longer available as she received a new work station in February 2015 in the ordinary course of business, and the plaintiff did not have access to any web browsing history relating to any computer assigned to her prior to February 2015.  After attempting to confer, the defendant filed a motion seeking spoliation sanctions due to the plaintiff’s failure to preserve Vinck’s internet history on the previous computer.

Judge’s Ruling

As directed by the Court during the hearing on the subject motion, the plaintiff subsequently filed Declarations regarding its unsuccessful efforts to search for and locate the previous computer and regarding whether it otherwise had the capability to retrieve Vinck’s internet history.  As a result of those efforts, Judge James indicated that “the Court is satisfied that Plaintiff has made thorough and reasonable good faith efforts to locate Computer 1, but it cannot be located”, concluding that “the internet history on Computer 1 is lost and cannot be restored or retrieved by other means”.

While finding that “Plaintiff had a duty to preserve relevant information, and that duty commenced in Fall 2013”, Judge James assessed the scope of that duty and determined that there was “nothing in this record to support a conclusion that Plaintiff knew or should have known that Vinck’s Fall 2013 internet history would be relevant in this case until Plaintiff received the June 16, 2015 letter from Defendant’s counsel.”  In denying the defendant’s motion for spoliation sanctions, Judge James stated:

“The stated reasons behind the 2015 amendments to Rule 37(e) further support the Court’s conclusions in this case. The general intent of amended Rule 37(e) was to address the excessive effort and money being spent on ESI preservation as a result of the continued exponential growth in the volume of ESI, along with the uncertainty caused by significantly differing standards among the federal circuits for imposing sanctions or curative measures on parties who failed to preserve ESI.  In revising Rule 37(e), the Advisory Committee expressly instructed that ‘reasonable steps’ to preserve ESI suffice; the Rule ‘does not call for perfection.’”

So, what do you think?  Should the plaintiff’s duty to preserve have extended to employees’ internet histories?  Please share any comments you might have or if you’d like to know more about a particular topic.

Happy St. Patrick’s Day!!

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.

Ex-Employee Sues Volkswagen Claiming He Was Fired for Refusing to Spoliate Documents: eDiscovery Trends

The troubles for Volkswagen continue into the electronic discovery arena.  According to the Courthouse News Service, an ex-employee of the company has filed suit, claiming that he was fired for refusing to take part in an alleged three-day purge of documents related to the automaker’s emissions-cheating scandal known as “Dieselgate”.

According to the article, Daniel Donovan (who worked in the Volkswagen Group of America’s Office of General Counsel as its Electronic Discovery Manager) says he had seven years under his belt at VW in Sept. 18, 2015, when the Environmental Protection Agency forced a recall of cars it found had been outfitted with “defeat-device” software that had been hoodwinking emissions inspectors for years.

Though the EPA’s case necessitated a legal hold on Volkswagen’s data, Donovan claimed in his March 8 lawsuit that VW’s “information technology department did not stop all deletion jobs until Sept. 21” (which was three days after they should have stopped).  Donovan also alleged that the company’s IT department was adamant about limiting access to Volkswagen data for the accounting firm conducting the independent investigation and knew it was violating the Justice Department hold by not preserving back-up disks.

Worried about “significant legal sanctions” Volkswagen could see for evidence spoliation and obstruction of justice, Donovan refused to take part in such actions and reported his concerns to a supervisor, according to the complaint.  “Donovan also asserts that he was fired because VWGoA [short for Volkswagen Group of America] believed that Donovan was about to report the spoliation of evidence and obstruction of justice to the EPA and/or the United States Department of Justice, the Federal Bureau of Investigation, or some other public body,” the complaint states.

Volkswagen told the Associated Press that Donovan’s claim of wrongful termination is without merit, claiming that his departure from the company was unrelated to the emissions scandal.

Facing penalties of up to $37,500 per day for Clean Air Act violations, Volkswagen is expected to face billions of dollars in fines.  The scandal, now widely known as “Dieselgate”, also led to the resignation of CEO Martin Winterkorn, hundreds of federal class actions consolidated in San Francisco, plus multiple investigations and congressional hearings.

So, what do you think?  Could Volkswagen have fired its Electronic Discovery Manager because he was “far from purgin”? (sorry, I couldn’t resist)  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.

Craig Ball of Craig D. Ball, P.C.: eDiscovery Trends

This is the fifth of the 2016 LegalTech New York (LTNY) Thought Leader Interview series.  eDiscovery Daily interviewed several thought leaders at LTNY this year to get their observations regarding trends at the show and generally within the eDiscovery industry.  Unlike previous years, some of the questions posed to each thought leader were tailored to their position in the industry, so we have dispensed with the standard questions we normally ask all thought leaders.

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 in the United States and abroad, having delivered over 1,700 presentations and papers.  Craig’s articles on forensic technology and electronic discovery frequently appear in the national media and he teaches E-Discovery and Digital Evidence at the University of Texas School of Law.  He currently blogs on eDiscovery topics at ballinyourcourt.com.

What are your general observations emerging eDiscovery trends for 2016?

{Interviewed Craig after LTNY, as he did not make it to the show this year}

I skipped LegalTech this year – first time in twenty years – because Mardi Gras was early this year, I chose the circus on the Mississippi over the one on the Hudson.  Still, I got lots of feedback from those who attended LTNY while I was catching beads at 29 parades.  I wanted to see if I’d missed anything of note.  The only trend that emerged was lack of change in the focus of the show.  LTNY is still dominated by electronic discovery as it has been for almost a decade; but, there are continued signs of consolidation within the industry as organizations fold into one another.

Not surprisingly, we don’t see outright failure in this space.  Companies don’t disappear, but instead reach a point where whatever is left is absorbed by a national brand for its equipment or core technology.  So, we’ve seen steady consolidation within the industry, and that trend continues.  As the broader economy goes, so goes litigation and discovery.

Another trend that I’ve observed is an increased focus on eDiscovery automation and considerable growth of, and investment in, eDiscovery automation providers.  What are your thoughts about that trend?

The term “automation” has gotten some play lately.  I’m trying to figure out what each usage means because it’s still in the buzzword phase as marketers deploy the term in the never-ending struggle to differentiate their products. Automated workflows are key to Cloud SaaS offerings.  Hosted systems must be capable of programmatic routines to ingest and process data, effecting ready hand-off of data across processing and review.    An automated SaaS offering should be sufficiently autonomous to facilitate workflow across multiple stages of the EDRM with little manual intervention.

Assuming “automation” means  we can put something into the hopper and it will emerge ready for review or production in forms we were expecting, then automation is a necessary precursor to growth and cost effectiveness in hosted products.  That’s positive for consumers if it means price reductions and commoditization of features of electronic discovery.  It may not be so great for the vendor community unless they can scale up the volume.

In the case Nuvasive v. Madsen Medical, the Court recently vacated an adverse inference instruction sanction previously applied against the plaintiff because of the amendment to Rule 37(e).  Do you see that as a trend for other cases and do you expect that other parties that have been sanctioned will file motions to have their sanctions re-considered?

I don’t think it signals a trend. There are relatively few cases that fall into the transition point.  I don’t expect to see a rash of sanctions being reconsidered by virtue of the latest amendments.

Nuvasive is interesting because it goes to the issue of whether it’s fundamentally fair to impose the new Rules retroactively.  The Rules speak to that issue and make it clear that they can be applied retroactively as long as they operate fairly.  The amendments to the Rules make clear that serious sanctions (such as adverse inference instructions) require proof of an intent to deprive a discovering party of the particular information.  Nuvasive involved serious sanctions, so I can see why the Court might want to weigh amended Rule 37(e).  Still, I’m not sure why the parties and the Court failed to anticipate the Rule changes, as the amendment process was pretty far along in July 2015, when sanctions were imposed.  The tenor of the Court’s opinion in reversing himself was that it was just ‘bad luck’ that the amended rules kicked in when they did.

I think that we will see judicial action once termed “sanctions” couched in less-loaded terms.  After Rule 37(e), Courts will distinguish punitive responses from remedial actions designed to rectify unwarranted failure to preserve relevant information. New Rule 37(e) won’t tie the hands of jurists determined to rectify discovery abuse.  We’re already seeing push back from jurists unwilling to surrender discretionary authority when the facts demand fairness.   As well, we’ve seen at least one case where the Court reversed himself, citing 37(e) as the basis for reconsideration.  As is apparent in Nuvasive and in Judge Francis’ recent order in Cat 3, the Rules are tools, and they can be turned this way and that in determined hands.

Sanctions aren’t going away, and that’s a good thing.  We are mired in the last century when it comes to discovery.  Lawyers need direction, and sanctions opinions supply guidance.  There is little in the way of a “carrot” for eDiscovery – all we have is the “stick.”  If courts fail to sanction incompetence and abuse, then lawyers won’t pursue competence, and parties will continue to “twiddle their thumbs” until evidence disappears.  Few lawyers maliciously hide damaging evidence; but, they’re expert at rationalizing it away or, in the case of e-discovery, content to let their ignorance serve as their armor.  “What you don’t know, can’t hurt me,” is their credo.

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

I’m going back to basics.  Last year was about trying to develop a core curriculum and re-engineer my teaching to make it an engaging foundation in information technology for lawyers.  I hope 2016 will bring an increased ability to push out more information and reach more people.  I’m doing a project for the DC Bar where I will be providing evening CLE programs by live semi-weekly webcasts.  Small groups of motivated people are my sweet spot.  As always, I’m looking forward to this year’s Georgetown University Law School eDiscovery Training Academy, during the first full week in June.  Both the faculty and the students are delightful.  I’ve come to recognize that anyone willing to work at it can learn the technology they need to be formidable in e-discovery in just three solid days.  That’s less time than most of us spend at Starbucks each year.

I’m using the California ethics decision (which we covered here when it was still a Proposed Opinion) as a jumping off point for the concept of core competencies for lawyers.  As you know, the State Bar of California issued an advisory opinion last year identifying nine areas in which lawyers must either be competent in order to accept a case involving eDiscovery or must associate competent counsel or decline representation. That courageous opinion serves as an effective touchstone for talking to lawyers– not just in California, but all over– about the skills they must embrace to be competent to accept a case involving eDiscovery.

There are virtually no cases without electronic evidence, only cases where the lawyers choose to ignore it.  And there is so much more coming!  Never in history have advocates had so much powerful evidence at their disposal, and never have they been so content to look away.  Three days per advocate could change all that—a long weekend.  But, finding the time is only half the battle.  The other half is finding the course that doesn’t give short shrift to the “e” in e-discovery.

Candidly, 2016 is also about taking some time for me.  I’ve been doing 50 to 70 presentations a year for twenty years.  I average about four flights a week; so, I’m hoping to cut all that down by half.  I’m saying “no” more and stopping to smell the roses.  That’s why I’ve gotten a second home in New Orleans, and will spend more time reading, thinking and working on fewer projects with greater focus.  Every teacher needs a sabbatical, right?

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. 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. 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.

Our Nation’s Largest City is Not Immune to eDiscovery Sanctions: eDiscovery Case Law

In Stinson v. City of New York, 10 Civ. 4228 (RWS) (S.D.N.Y. Jan. 2, 2016), New York District Judge Robert W. Sweet granted in part and denied in part the plaintiffs’ motion seeking sanctions for spoliation of evidence against the defendants for failure to issue a litigation hold, opting for a permissive inference rather than a mandatory adverse inference sanction against the defendants.

Case Background

In this civil rights class action against the City of New York, it was determined that the City did not issue any litigation hold until August 8, 2013, more than three years after the filing of the Complaint in this case and the litigation hold was not effectively communicated, and none of the officers who were named in the City’s initial disclosures acknowledged receiving it.

At the time of the litigation hold, the document destruction processes at the NYPD were governed by Operations Order 44, which specified the length of time the Department would be required to retain various categories of documents.  Order 44 authorized the destruction of most bureau chief memos after three years, police officers’ monthly performance reports after four years, and criminal court summonses after four years.  With regard to emails, the City’s 30(b)(6) witness stated that “although the NYPD did not have a specific policy with regards to the destruction of email communications, it did impose a hard size limit on officers’ inboxes, and that when officers hit that limit, ‘they delete.’”  The City also did not dispute that it had not made any effort to preserve or produce text messages between NYPD officers.

With regard to the defendants’ production, the Court noted that they produced fewer than 25 emails from key players, with no emails produced from the former Commissioner, the former Chief of the department, and three other key custodians. The defendants explained the lack of email production by contending that the “Police Department on the whole did not operate via email”, but that contention was countered by email communications with the city that the plaintiffs acquired from third parties.

Judge’s Ruling

Citing Chin v. Port Authority of New York and New Jersey, Judge Sweet stated that:

“In order to merit an adverse inference, the party seeking sanctions must establish 1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed, 2) that the records were destroyed with a culpable state of mind, and 3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.”

  • With regard to the defendants’ obligation, Judge Sweet rejected the defendants’ argument that the plaintiffs’ preservation requests were overbroad, stating “Plaintiffs’ putative overbroad demands do not excuse the City’s failure to issue a litigation hold, to properly supervise its implementation, or to suspend document retention policies that would foreseeably lead to the spoliation of evidence.”
  • With regard to the defendants’ culpable state of mind, Judge Sweet stated that “the City’s conduct shows a broad failure to take its preservation obligations seriously rather than any deliberate attempt to lie or mislead”, but noted that the “City’s conduct does, however, support a finding of gross negligence”.
  • With regard to the relevance of the destroyed documents, Judge Sweet determined that the “evidence adduced thus far indicates that at least some of the destroyed documents will be relevant to the Plaintiffs’ claims”, though he did note that the showing of relevance by the plaintiffs was “relatively limited”.

As sanctions for the defendants’ spoliation, the plaintiffs requested a set of sixteen adverse inferences touching on almost every aspect of their case, but Judge Sweet opted for a lesser level of sanctions, stating:

“Given the City’s lack of bad faith in its spoliation of evidence and the relatively limited showing of relevance made by the Plaintiffs, a permissive, rather than a mandatory adverse inference is warranted…A permissive inference will ensure that the City faces consequences for its failure to take its preservation obligations seriously, but will not result in an unwarranted windfall for the Plaintiffs. The jury will be instructed that the absence of documentary evidence does not in this case establish the absence of a summons quota policy.”

So, what do you think?  Was that a sufficient sanction for the defendants’ “gross negligence” in failing to issue a litigation hold?  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.