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Privilege Not Waived on Defendant’s Seized Computer that was Purchased by Plaintiff at Auction – eDiscovery Case Law

In Kyko Global Inc. v. Prithvi Info. Solutions Ltd., No. C13-1034 MJP (W.D. Wash. June 13, 2014), Washington Chief District Judge Marsha J. Pechman ruled that the defendants’ did not waive their attorney-client privilege on the computer of one of the defendants purchased by plaintiffs at public auction, denied the defendants’ motion to disqualify the plaintiff’s counsel for purchasing the computer and ordered the plaintiffs to provide defendants with a copy of the hard drive within three days for the defendants to review it for privilege and provide defendants with a privilege log within seven days of the transfer.

In this fraud case, after several of the named defendants settled and confessed to judgment, the plaintiffs obtained a Writ of Execution in which the King County (Washington) Sheriff seized various items of personal property, including a computer owned by one of the defendants.  The computer was sold at a public auction, and an attorney for the plaintiffs outbid a representative sent by the defendants and purchased the computer.  The plaintiffs sent the computer to a third party for analysis and requested a ruling as to the admissibility of potentially attorney-client privileged documents contained on it, while the defendants contended the actions of the plaintiffs violated ethical rules, and requested that the plaintiffs return the computer to defendants, and also requested that the plaintiff’s attorneys should be disqualified from the case.

With regard to the plaintiff’s actions, Judge Pechman ruled that plaintiffs’ acquisition of the computer was not “inherently wrongful”, noting the plaintiffs’ claim that they had not reviewed the materials on the computer at the time of the motion.  She also determined that plaintiff’s “use of a third party vendor to make a copy of the hard drive is not equivalent to metadata mining of documents produced through the normal discovery process, because whereas the hard drive might plausibly contain many documents unprotected by any privilege, metadata mining is expressly aimed at the kind of information one would expect to be protected by attorney-client privilege and/or work-product protections”.  As a result, she denied the defendants’ motion to disqualify the plaintiff’s counsel.

As for the waiver of privilege, Judge Pechman used a balancing test to determine waiver “that is similar to Rule 502(b)”, which included these factors:

  1. the reasonableness of precautions taken to prevent disclosure,
  2. the amount of time taken to remedy the error,
  3. the scope of discovery,
  4. the extent of the disclosure, and
  5. the overriding issue of fairness.

Using the analogy of where “an opposing party discovers a privileged document in the other party’s trash”, Judge Pechman considered the potential waiver of privilege.  However, because the defendant stated in a declaration that she had “someone at her office” reformat the hard drive on the computer and install a new operating system and believed her documents had been erased and were not readily accessible, she related it “to the memo torn into 16 pieces than a document simply placed in a trash can without alteration”.

As a result, Judge Pechman determined that given “Defendants’ prompt efforts to remedy the error by filing a motion with the Court and the general sense that parties should not be able to force waiver of attorneyclient privilege through investigative activities outside the discovery process and a superior understanding of the relevant technology, the Washington balancing test weighs against waiver.”  She also and ordered the plaintiffs to provide defendants with a copy of the hard drive within three days for the defendants to review it for privilege and provide defendants with a privilege log within seven days of the transfer.

So, what do you think?  Were the plaintiff’s counsel actions ethical?  Should privilege have been waived?  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.

Texas Supreme Court Reverses Spoliation Ruling, Remands Case for New Trial – eDiscovery Case Law
 

In Brookshire Bros., Ltd. v. Aldridge (Tex. July 3, 2013), the Supreme Court of Texas determined “that imposition of the severe sanction of a spoliation instruction was an abuse of discretion” in the trial court, reversed the court of appeals' judgment and remanded the case for a new trial.

In this case, the plaintiff Aldridge (who is the respondent in the appeal) slipped and fell at the defendant’s (who is the petitioner in the appeal) store and sued for damages after the defendant stopped paying for medical expenses.  The plaintiff’s fall was captured on surveillance video and the defendant preserved the video footage from the time plaintiff entered the store until shortly after he fell, but did not preserve the remainder of the video, which was “presumably recorded over” by early the next month.

To recover in a slip-and-fall case, a plaintiff must prove, inter alia, that the defendant had actual or constructive knowledge of a dangerous condition on the premises such as a slippery substance on the floor and the plaintiff argued in the trial court that the defendant’s failure to preserve additional video footage amounted to spoliation of evidence that would have been helpful to the key issue of whether the spill was on the floor long enough to give the defendant a reasonable opportunity to discover it.

As a result, the plaintiff moved for a spoliation jury instruction and the trial court: 1) allowed the jury to hear evidence bearing on whether the defendant spoliated the video, 2) submitted a spoliation instruction to the jury, and 3) permitted the jury to decide whether spoliation occurred during its deliberations on the merits of the lawsuit.  The jury ruled in favor of the plaintiff and awarded him over $1 million in damages. The court of appeals affirmed the trial court's judgment on the verdict, holding that the trial court did not abuse its discretion in admitting evidence of spoliation or charging the jury with the spoliation instruction.

After analysis of the law associated with spoliation, the Supreme Court stated that “the harsh remedy of a spoliation instruction is warranted only when the trial court finds that the spoliating party acted with the specific intent of concealing discoverable evidence” and that a “failure to preserve evidence with a negligent mental state may only underlie a spoliation instruction in the rare situation in which a nonspoliating party has been irreparably deprived of any meaningful ability to present a claim or defense”.  As a result, the Court held “that a trial court's finding of intentional spoliation pursuant to the analysis set forth above is a necessary predicate to the proper submission of a spoliation instruction to the jury.”

While issuing the caveat that “[o]n rare occasions, a situation may arise in which a party's negligent breach of its duty to reasonably preserve evidence irreparably prevents the nonspoliating party from having any meaningful opportunity to present a claim or defense”, the court determined that there was no evidence of the requisite intent to conceal or destroy relevant evidence or that plaintiff was “irreparably deprived of any meaningful ability to present his claim” and held that the trial court therefore abused its discretion in submitting a spoliation instruction, reversed the court of appeals' judgment and remanded the case for a new trial.

So, what do you think?  Was the reversal of the ruling the right decision or should the sanction for spoliation of evidence have stood?  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.

Failure to Preserve Cloud-Based Data Results in Severe Sanction for Defendant – eDiscovery Case Law
 

In Brown v. Tellermate Holdings, 2:11-cv-1122 (S.D. Ohio Jul 1, 2014), Magistrate Judge Terence Kemp granted plaintiffs’ motion for judgment and motion to strike, ruling that the defendant could not “present or rely upon evidence that it terminated the Browns' employment for performance-related reasons” and enabling the plaintiffs to use documents produced by the defendant “designated as attorneys'-eyes-only” to be used by the plaintiffs “without restriction”, due to the defendant’s failure to preserve or produce data from their Salesforce.com database.

You have to love an opinion that begins like this:

“There may have been a time in the courts of this country when building stone walls in response to discovery requests, hiding both the information sought and even the facts about its existence, was the norm (although never the proper course of action). Those days have passed. Discovery is, under the Federal Rules of Civil Procedure, intended to be a transparent process.”

That’s how this lengthy opinion began in this case where the plaintiffs, former sales agents, sued the defendant for age discrimination after they were terminated.  The defendant responded by arguing that the terminations were performance related.  To address that argument, the plaintiffs sought records from the defendant’s through salesforce.com to demonstrate that they consistently met or exceeded their quotas. In response, the defendant “with the participation of its counsel, either intentionally or inadvertently failed to fulfill certain of its discovery obligations, leading to a cascade of unproductive discovery conferences, improperly-opposed discovery motions, and significant delay and obstruction of the discovery process.”  As Judge Kemp described, the defendant’s counsel:

  • “failed to uncover even the most basic information about an electronically-stored database of information (the ‘salesforce.com’ database);
  • as a direct result of that failure, took no steps to preserve the integrity of the information in that database;
  • failed to learn of the existence of certain documents about a prior age discrimination charge (the "Frank Mecka matter") until almost a year after they were requested;
  • and, as a result of these failures, made statements to opposing counsel and in oral and written submissions to the Court which were false and misleading, and which had the effect of hampering the Browns' ability to pursue discovery in a timely and cost-efficient manner (as well as the Court's ability to resolve this case in the same way).”

One of the defendant’s attorneys went so far as to provide these reasons to the plaintiffs as to why they could not produce the information from Salesforce.com:

  • "Tellermate does not maintain salesforce.com information in hard copy format."
  • "Tellermate cannot print out accurate historical records from salesforce.com. . . ."
  • "[D]iscovery of salesforce.com information should be directed to salesforce.com, not Tellermate."

The defendant later claimed that it was “contractually prohibited from providing salesforce.com information” and that it “cannot access historical salesforce.com data” – both of which were untrue.

Ultimately, it became clear that the defendant had not exported or preserved the data from salesforce.com and had re-used the plaintiffs’ accounts, spoliating the only information that could have addressed the defendant’s claim that the terminations were performance related (the defendant claimed did not conduct performance reviews of its sales representatives).  As a result, Judge Kemp stated that the “only realistic solution to this problem is to preclude Tellermate from using any evidence which would tend to show that the Browns were terminated for performance-related reasons” and issued the following severe sanctions:

“Tellermate shall not, in connection with either the pending summary judgment motion or at trial, be entitled to present or rely upon evidence that it terminated the Browns' employment for performance-related reasons. The documents produced by Tellermate in April, 2013 and designated as attorneys'-eyes-only may be used by the Browns without restriction, subject to Tellermate's ability to redesignate particular documents as confidential under the existing protective order, provided it does so within fourteen days and has a good faith basis for so designating each particular document. Tellermate shall produce the remaining Frank Mecka documents to the Browns within fourteen days. Finally, Tellermate and its counsel shall pay, jointly, the Browns' reasonable attorneys' fees and costs incurred in the filing and prosecution of those two motions as well as in the filing of any motions to compel discovery relating to the salesforce.com and Frank Mecka documents.”

So, what do you think?  Do the sanctions fit the activities by the defendant?  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.

Court Denies Sanctions for Deletion of “Smoking Gun” Email, Grants Defendants’ Motion for Summary Judgment – eDiscovery Case Law
 

In the case In re Text Messaging Antitrust Litig., 08 C 7082, MDL No. 1997 (N.D. Ill. May 19, 2014), Illinois District Judge Matthew F. Kennelly not only denied the plaintiffs’ request for an adverse inference sanction against the defendants for destroying emails, but also granted the defendants’ motion for summary judgment, as the plaintiffs failed to provide any supporting circumstantial evidence to meet their burden of proof.

The plaintiffs filed this suit on behalf of all those who purchased text-messaging services from AT&T, Sprint, T-Mobile, and Verizon Wireless, alleging that these providers, along with defendant CTIA-The Wireless Association, conspired to fix prices for Text Messaging Services in violation of section 1 of the Sherman Act.  On September 9, 2008, shortly after the last carrier increased text messaging rates, Senator Herbert Kohl, chairman of the antitrust subcommittee of the United States Senate Committee on the Judiciary, sent a two-page letter to the chief executive officers of the four carrier defendants "to express my concern regarding what appear to be sharply rising rates your companies have charged to wireless phone customers for text messaging”. 

A day later, The Wall Street Journal published an article (Text-Messaging Rates Come Under Scrutiny) regarding Senator Kohl’s investigation.  That same day a T-Mobile employee sent the text of the article via email to several individuals, including T-Mobile employees Adrian Hurditch, then the company's vice president of services and strategic pricing, and Lisa Roddy, then the company's director of marketing planning and analysis, but the subsequent thread of emails between Hurditch and Roddy was deleted.  The plaintiffs claimed that once Senator Kohl began contacting wireless carriers, T-Mobile had a duty to preserve all relevant electronically stored information and their failure to preserve and produce the emails reflected its “willfulness, bad faith, or fault” and warranted sanctions.

Judge Kennelly “agree[d] that plaintiffs have shown that T-Mobile's employees likely deleted the e-mail(s) intentionally and that they did so for the purpose of concealing the e-mail's contents. Nonetheless, plaintiffs have not shown that the actions of the T-Mobile personnel involved concealment of information that meets the requirement of being ‘adverse’ to T-Mobile. Specifically, the record does not reflect that Hurditch, the sender of the original e-mail that was deleted and the person who called T-Mobile's price increase ‘collusive,’ was in a position to have knowledge of or participate in any collusion between the wireless carriers.”  As a result, Judge Kennelly declined to order sanctions against T-Mobile for deletion of the e-mail or e-mails.

The plaintiffs also claimed that another defendant, CTIA destroyed emails and cleared the laptop profile of CTIA’s Head of Wireless Internet Development, but, because the plaintiffs did not provide any evidence that would support an inference that the missing information was adverse, their request for sanctions was again denied.

With regard to the defendant’s motion for summary judgment, the plaintiffs argued that Hurditch’s email to Roddy on September 10, 2008, with a reference to collusion, is a “smoking gun.”  However, Judge Kennelly stated that “Hurditch's status as well informed within his company and as ‘an active mentor’ to Roddy do not qualify him as having knowledge of a conspiracy”; therefore, “there are too many unsupported steps in the logic required to permit a reasonable inference that Hurditch was aware of a conspiracy”.  With no other supporting circumstantial evidence, the plaintiffs failed to meet their burden of proof to survive the motion for summary judgment; therefore, Judge Kennelly granted the defendant’s motion for summary judgment.

So, what do you think?  Should a spoliation sanction have been issued against the defendant who “likely deleted the e-mail(s) intentionally”?  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.

Court Denies Defendant’s Request to Image Plaintiff’s PCs Three Years after Termination – eDiscovery Case Law
 

Here’s an interesting case courtesy of Virginia Lawyer’s Weekly…

In Downs v. Virginia Health Systems, Civil No. 5:13cv00083, (W.D. Va. June 2, 2014), Virginia Magistrate Judge James G. Welsh, citing proportionality and privacy concerns, denied the defendant’s motion to compel the mirror imaging of the Plaintiff’s personal computers nearly three years after she had been terminated.

The plaintiff brought an employee discrimination case against the defendant following being terminated after nearly seventeen years of employment as an executive secretary.  Among the reasons the defendant gave to justify her discharge was that that she had accessed her supervisor’s e-mail account without authority (she disputed that the access was not authorized) and that she had similarly forwarded information from that account to her personal email accounts and her home computers without permission.

The plaintiff represented that she had deleted all material she sent to her home computers following her August 2011 termination; therefore, the defendant requested to have the plaintiff’s two family computers mirror-imaged “to ensure against any further spoliation or destruction of evidence”.  The plaintiff objected to that request as “overly broad, burdensome, ‘personally intrusive,’ and ‘would necessarily invade’ the attorney-client privilege”.  She also argued that the defendants’ in-house IT experts and its own computer logs and reports would provide the same information being requested by the defendant to be mirror-imaged.

Judge Welsh stated that “On its face, the discovery issue presented by the defendants’ request for an exhaustive forensic examination of the plaintiff’s computers is also directly within the scope of ESI discovery contemplated by the inspection, copying, testing and sampling provisions of Rule 34(a)(1)(A).”  Ultimately, however, he also stated as follows:

“Consideration of the defendants’ ESI motion in a manner consistent with the forgoing discovery rules, standards and principles, compels the following findings and conclusions:

(1) nothing in the record suggests any willful failure, fault or bad faith by the plaintiff on her discovery obligations that would justify the requested computer forensics examination;

(2) the “mirror-imaging” of the plaintiff’s family computers three years after her termination raises significant issues of confidentiality and privacy;

(3) there was no duty on the part of the plaintiff to preserve her family computers as evidence,

(4) principles of proportionality direct that the requested discovery is not sufficiently important to warrant the potential burden or expense in this case; and

(5) on the current record that the defendants have failed to justify a broad, and frankly drastic, forensic computer examination of the plaintiff’s two family computers.”

As a result, “even though the defendants have demonstrated a connection between the plaintiff’s two family computers and the issues this lawsuit”, Judge Welsh stated that “the court’s consideration of the several other relevant factors, including the proportionality balance required by Rule 26(b)(2), all weigh heavily against permitting the exhaustive and intrusive computer forensic examination the defendants seek” and denied the defendant’s motion to compel.

So, what do you think?  Should the drives have been imaged or did the defendant’s request fail the proportionality test?  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.

Samsung and Quinn Emanuel Ordered to Pay Over $2 Million for “Patentgate” Disclosure – eDiscovery Case Law

Remember the “patentgate” disclosure last year (by Samsung and their outside counsel firm of Quinn Emanuel Urquhart & Sullivan LLP) of confidential agreements that Apple had with Nokia?  Did you think they were going to avoid having to pay for that disclosure?  The answer is no.

In a June 20 ruling by California Magistrate Judge Paul S. Grewal, he began by noting “With the present quiet on the docket, it is easy to forget the long tumult of this case that once reigned. The ceremonial courtroom has cleared. The fire drills of motions on shortened time have ceased. All that remains for now, at least for the undersigned, is the relatively mundane issue of what makes for reasonable fees.

The fees at issue arise from this court’s order awarding sanctions to Apple and Nokia. The sanctions followed the court’s finding that Samsung and Quinn Emanuel were responsible for the unauthorized distribution of Apple and Nokia confidential information. Samsung and QE object to certain of the fees Apple and Nokia now claim, which means the court must wade into the billing entries and make various calls. So, here goes.”

The summary of events related to the inadvertent disclosure by Quinn Emanuel are described here and the details of the sanction applied to Quinn Emanuel are described here.

The question in this order turned to the fees and costs requested by Apple and Nokia.  Section C of the order was titled “With Limited Exceptions, Apple And Nokia’s Requests Have Been Sufficiently Supported To Sustain The Requested Award” and Judge Grewal stated that “in the over four hundred pages of correspondence and billing records submitted for review, the court has identified only 19 records that it finds troubling” (those were entries where partners and senior associates block billed ten or more hours on “drafting,” “preparing” “revising” or paying “attention to” various briefs and were listed in detail, along with the reduced amount after a 20% reduction penalty).

As for the rest of the entries, Judge Grewal commented that “[t]he court notes and appreciates that both Apple and Nokia have applied a series of discounts to their requests already” and ordered that, aside from the noted exceptions “the court finds that the remaining costs and fees requested by Apple and Nokia are reasonable and shall be awarded.  No later than 30 days from this order, Samsung and QE are to pay Nokia a total of $1,145,027.95 and Apple a total of $893,825.77 in fees and costs.” (emphasis added)

So, what do you think? Were those amounts awarded excessive?  Or did Samsung and Quinn Emanual get off lightly?  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.

Plaintiff Ordered to Re-Open Social Media Account for Discovery – eDiscovery Case Law
 

In Chapman v. Hiland Operating, LLC, 2014 U.S. Dist. Case No. 1:13-cv-052 (D.N.D. May 29, 2014), while noting that he was “skeptical” that reactivating the plaintiff’s Facebook account would produce any relevant, noncumulative information, North Dakota Magistrate Judge Charles S. Miller ordered the plaintiff to “make a reasonable, good faith attempt” to reactivate her Facebook account.

The defendant’s requests for production included a request for communications in the form of, “emails, text messages, instant messages, journal updates, Facebook postings, notes, cards, and/or memorandums”.  The plaintiff objected to that request on several grounds, including that it violated the attorney client and work product privileges, was “unintelligible, improperly vague and ambiguous” and overbroad.

However, in the plaintiff’s deposition, she stated that her attorney advised her to deactivate her Facebook account, which occurred prior to the production request by the defendants. She also stated that stated that she attempted to reactivate her account to respond to discovery requests but was unable to remember her password, but had not attempted to change her password or contacted Facebook regarding reactivating her account. She claimed that she rarely used the account, and when she did it was primarily to communicate with her nieces and nephews. 

Judge Miller noted that although the court was “skeptical” that the plaintiff’s Facebook account “will contain any relevant, noncumulative information, especially given the amount of discovery already completed in this case”, he granted in part the defendant’s motion to compel and ordered the plaintiff and attorney to “make a reasonable, good faith attempt” to reactivate the Facebook account.   He instructed that the plaintiffs do not have to permit defense counsel to be present during the attempt to reactivate the account, and if the account is reactivated, plaintiffs do not have to provide defense counsel the account login and password or full access to the account.

If the Facebook account is reactivated, Judge Miller ordered the plaintiffs to produce in the form of a screen shot other similar format all information from the account referencing a co-plaintiff’s health and his relationship with the other plaintiff since October 19, 2008, and ordered the plaintiff to complete the items by June 27th (last Friday).

So, what do you think? Was the plaintiff’s attorney out of line in ordering the plaintiff to deactivate her Facebook account?  Are screen shots the best way to produce social media data?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.

Court Refuses to Dismiss Spoliation Claim Due to Defendant’s Failure to Produce Key Native File with Metadata – eDiscovery Case Law

In Raines v. College Now Greater Cleveland, Inc., 1:14-CV-00003 (N.D. Ohio June 3, 2014), Ohio District Judge James S. Gwin refused to dismiss the plaintiff’s claim of tortious spoliation of evidence due to the defendant’s failure to produce the metadata associated with a key report authored by the plaintiff.

In 2012, the defendant hired the plaintiff as Executive Director of the Higher Education Compact of Greater Cleveland. As part of her role, the plaintiff produced a Student Privacy Report, entitled Higher Education Compact of Greater Cleveland; Strategic Issues Paper: Student Information Access (the Student Privacy Report). The Student Privacy Report focused on potential violations of student privacy rights and the plaintiff identified concerns to her defendant employer that student privacy rights might be violated because the defendant allowed access to student information. The plaintiff filed a complaint after she was fired the next year by the defendant (and replaced with a substantially younger individual).

The plaintiff claimed spoliation of evidence when the defendants only produced the Student Privacy Report in physical form, without the native file and related metadata. The defendant claimed that the plaintiff could not make that claim because she was not able to show that this production disrupted the case and brought a motion to dismiss the claim of tortious spoliation of evidence (as well as the overall claim).

Judge Gwin noted that, “to state a claim for spoliation of evidence, a plaintiff must establish the following:

(1) A pending or probable litigation involving the plaintiff;

(2) Knowledge on the part of defendant that litigation exists or is probable;

(3) Willful destruction of evidence by defendant designed to disrupt the plaintiff’s case;

(4) Disruption of the plaintiff’s case; and

(5) Damages proximately caused by the defendant’s acts.”

The plaintiff alleged that the defendants knew litigation was likely, and “willfully” destroyed their electronic copy of her Student Privacy Report, claiming that the “metadata associated with the report has independent importance”.

While noting that the plaintiff’s spoliation claim “is not clear regarding damages”, Judge Gwin stated that the plaintiff “sufficiently alleges a claim to survive a motion to dismiss”. Therefore, the motion to dismiss the spoliation claim was denied and Judge Gwin stated, “We will later sort through whether any loss of metadata has caused damage”.

So, what do you think? Should metadata be required to be included in production of key documents? Or is production of a physical document sufficient? 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.

Plaintiffs Denied Motion to Depose Defendants Regarding ESI Processes Prior to Discovery Requests – eDiscovery Case Law

In Miller v. York Risk Servs. Grp., No. 2:13-cv-1419 JWS (D. Ariz. Apr. 15, 2014), Arizona Senior District Judge John W. Sedwick denied the plaintiffs’ Motion to Compel, requesting permission to conduct depositions in order to determine the defendant’s manner and methods used for storing and maintaining Electronically Stored Information (ESI) prior to submitting their discovery requests.

This action involves two claims against the defendant revolving around workers’ compensation benefits: (1) that the defendant “fraudulently denied [plaintiffs’] workers’ compensation benefits in violation of the Racketeer Influenced and Corrupt Organizations Act (“RICO”),” and (2) that the defendant aided and abetted the plaintiffs’ employer or former employer with a “breach of its duty of good faith and fair dealing” by denying the claims. In filing the Motion to Compel, the plaintiffs sought a wide ranging inquiry pursuant to Rule 30(b)(6) that would enable them to “tailor their discovery requests to avoid potential disputes over what may be discovered” by deposing the defendant regarding their process of storing and maintaining ESI.

The plaintiffs contended that other courts have “allowed discovery of the very sort they seek” for the purpose of tailoring discovery requests, and cited several appellate decisions to reinforce the contention. While most of the decisions cited by the plaintiffs were from trial courts in other circuits, two of the district court cases cited were within the Ninth Circuit—specifically, Great Am. Ins. Co. v. Vegas Constr. Co., Inc., and Starbucks Corp. v. ADTSec. Services, Inc.

In reviewing these appellate decisions, Judge Sedwick noted that the first cited Ninth Circuit case was inapplicable, as it discussed extensively “a corporation’s duty to identify and prepare a witness for a Rule 30(b)(6) deposition, but nothing in the opinion suggests that the case involved any request to conduct discovery into the manner and methods used by the defendant to store and maintain electronic data.” Regarding the second case, it was noted that the plaintiffs had in fact submitted a substantive request for discovery prior to the court ordered Rule 30(b)(6) deposition, which only attempted to conclude whether the discovery would actually be “unduly burdensome and difficult to retrieve,” as the defendants alleged.

Therefore, Judge Sedwick stated that the cited decisions were inconclusive in determining “whether starting the discovery process with a wide ranging inquiry into the manner and method by which a party stores and manages ESI is a helpful and appropriate approach to obtaining substantive information,” and therefore starting discovery with an inquiry as requested by the plaintiffs “puts the cart before the horse and likely will increase, rather than decrease, discovery disputes.” Hence, the plaintiffs’ Motion to Compel was denied.

So, what do you think? Are there circumstances under which taking depositions prior to discovery would be helpful and appropriate? Should depositions be reserved for resolving discovery disputes, rather than preventing them? 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.

Defendants – and Defendants’ Counsel – Sanctioned for Delays in Producing ESI – eDiscovery Case Law
 

In Knickerbocker v Corinthian Colleges, Case No. C12-1142JLR, (WDWA, April 7, 2014), Washington District Judge James L. Robart imposed sanctions against the defendants and the defendants’ counsel for their delays in producing Electronically Stored Information (ESI) during discovery, despite the fact that spoliation of evidence was ultimately avoided.

This workplace discrimination, harassment, and retaliation action involved three plaintiffs who were former employees of the defendants, and had been terminated from their positions. The plaintiffs filed first and second motions for sanctions, alleging in the first that the defendants had failed to preserve evidence, and in the second that the defendants had shown bad faith in their subsequent delay in producing evidence.

During discovery, the plaintiffs first expressed concern over the defendants’ “meager document production,” prompting several discovery conferences and correspondences between the counsel for the plaintiffs and the counsel for the defense. Eventually, the defendants’ counsel represented that as per the defendants’ policies, the plaintiffs’ email accounts had been deleted 30 days after their termination. Further, counsel stated regarding backup sources that the relevant ESI “could not be extracted without shutting down the servers; in other words, it was not extractable.”

Owing to the defendants’ apparent failure to preserve evidence, plaintiffs filed a motion to compel responses to particular discovery requests. In response, both parties stipulated to an order requiring that the defendant conduct a “full and complete search” at its own expense for all responsive documents, including “documents on backup servers.” The defendants complied and submitted more documents with a Verification of Compliance with Stipulation and Order Compelling Further Discovery, which stated in part that the defendants had conducted a complete search “on all available electronic sources and/or servers.”

After reviewing the defendants’ production, plaintiffs continued to allege that evidence had not been adequately preserved and collected. Further questioning revealed that although the defendants had issued litigation holds in previous litigation actions against them, they had not issued a litigation hold in this particular case. While the defendants’ previous policy had been to issue a company-wide notice to halt destruction of ESI, with respect to this case, the defendants claimed to have selected certain employees and asked them to retrieve and retain relevant documents. Yet in depositions, the employees at issue stated that they “had not searched, did not recall searching, and had not been asked to search for documents relevant to the litigation.”

At this point, the defendants’ total document production had consisted of only 1,272 pages. Defendants claimed that the document search was sufficient, alleging that the plaintiffs’ email accounts had been deleted prior to notification of pending litigation, thus before the duty to preserve had been triggered. However, the defendants admitted that the emails at issue existed on its backup tapes, but argued that they were not required to produce them because “the Stipulated Order only referred to backup ‘servers’, not backup ‘tapes’, and retrieval of information on the backup tapes would require ‘unreasonable’ cost and effort.”

Facing sanctions for spoliation, the defendants counsel changed their tune and represented that they were not only able to access the backup tapes and solve the spoliation issue, but that the total expense of producing the relevant ESI would be “a thousand dollars per day of recovery time,” and that the expenses would not be as great as previously warranted. Citing the counsel for the defendants’ representation that expenses would not be burdensome, Judge Robart deferred ruling on the plaintiffs’ most recent motion in favor of issuing an order to compel production specifically from the backup tapes.

Briefly summarized, the defendants far exceeded the time limit set for discovery production over a series of delays, difficulties, and missed deadlines, as the backup tapes were alternately reviewed and documents extracted by a third party vendor and the defendants themselves. Ultimately, an additional 3,000 emails were produced from the backup tapes, with the bulk of the production delivered 7 weeks after the final deadline.

Judge Robart found that the defendants had acted in bad faith, specifically stating that “there is clear and convincing evidence showing that [defendants] and [defendants’ counsel] have refused to participate forthrightly in the discovery process and that this refusal constitutes or is tantamount to bad faith…[t]herefore, sanctions are warranted.” The defendants were sanctioned in the amount of $25,000, and the defense counsel was sanctioned another $10,000.

So, what do you think? Does this case demonstrate clear bad faith, or simply incompetence on behalf of counsel? Should sanctions be ordered in cases where spoliation of evidence has ultimately not occurred? 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.