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For a More Complete and Accurate Review, Be Persistent: eDiscovery Best Practices

Manual document review can be prone to error.  It’s easy to miss highly relevant documents or privileged documents if you fail to spot the terms that cause them to be identified as highly relevant documents or privileged.  To help spot those terms, you have to be “persistent”.  And, there’s a new review of CloudNine that you might want to check out!

By “persistent”, I’m talking about persistent highlighting, which is the topic for this week’s eDiscovery Tech Tip of the Week (see what I did there?).  :o)  Let’s face it: Failing to spot highly relevant, hot or privilege terms during document review can lead to important documents being missed or inadvertent disclosure of privileged information.  Persistent highlighting enables these important terms to be always highlighted – regardless of search criteria – enabling them to be more easily spotted during review, which improves the quality of the review process.

When a review platform offers persistent highlighting, there is typically an area where you can identify the terms that you want to always be highlighted.  Once you build that list, those terms will then always be highlighted anytime you review a document containing them, generally in a color different than the highlight color used for highlighting retrieved search terms.

Persistent highlighting can help improve the accuracy and completeness of your review and can help reduce potential inadvertent disclosures of privileged information.  To see an example of how Persistent Highlighting is conducted using our CloudNine platform, click here (requires BrightTalk account, which is free).

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When evaluating an eDiscovery platform, it’s important to check out reviews of the platform so that you can gain from other perspectives on what those people like about a platform and where there are opportunities for improvement.  As we discussed previously, sites like Capterra, G2 Crowd and Gartner Peer Insights enable you to learn about actual client experiences with the platform.  And, earlier this month, we covered this free Buyer’s Guide, which reviews several eDiscovery solutions, including CloudNine, in a variety of product categories.

Now, here’s a new review of our CloudNine platform by industry thought leader Tom O’Connor.  As you may know, Tom is a long time consultant in the industry and also does some work with CloudNine, as well as participating on our webcasts with me (which has been great fun!) and writing articles.  Now, Tom has written a review of our platform that covers the full range of features, while also identifying some features he would like to see added.  So, I guess I can’t retire yet?  Thanks a lot, Tom!  ;o)  Anyway, here is a link to Tom’s review of CloudNine for your consideration.

So, what do you think?  Do you use persistent highlighting in your review processes?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

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

Clawback Agreement Doesn’t Save Documents Inadvertently Produced Twice from Privilege Waiver: eDiscovery Case Law

This is another case from earlier this year that we never got around to covering.  Why are we catching up on covering cases this week?  Find out tomorrow… :o)

In Irth Solutions, LLC v. Windstream Communications LLC, No. 2:16-CV-219 (S.D. Ohio Aug. 2, 2017), Ohio Magistrate Judge Kimberly A. Jolson, rejecting the idea that a clawback agreement always protects against waiver of privilege for inadvertently disclosed materials, found that privilege was waived by the defendant’s inadvertent but “completely reckless” production of privileged materials – not once, but twice.

Case Background

In this breach of contract case, the parties “agreed that a formal court order under Fed. R. Evid. 502(d) was not necessary based on the scale of the case”, but did enter into a clawback agreement that included a provision that “[i]nadvertent production of privileged documents does not operate as a waiver of that privilege.”  During discovery, the defendant produced 2,200 hundred pages which inadvertently included 43 privileged documents totaling 146 pages.  Defense counsel realized the mistake twelve days later while preparing a privilege log and immediately sought to claw the documents back, but plaintiff’s counsel refused to return or destroy the documents; however, they did represent that once the dispute arose, they sequestered the documents and refrained from discussing them with their client.

As requested by the Court, defense counsel submitted the 43 documents for in camera inspection, which revealed that nearly a third of them (14 documents) contained the word “legal” and the signature block of in-house counsel was referenced in two others.  Nonetheless, defense counsel insisted the documents had been reviewed for privilege.

Then, six weeks later, while dispute over the first production “ensued”, the defendant once again produced the 43 privileged documents to the plaintiff as part of re-producing the same 2,200 pages because the first production wasn’t text searchable.  Defense counsel indicated that they performed a “spot check” of the documents before they were produced via FTP, but did not observe that they contained the same privileged documents from the original production.

Judge’s Ruling

Judge Jolson, while noting that she did not get to hear from the “second-year associate who allegedly performed the privilege review prior to the first production and the litigation support staff member who allegedly erred during the second production”, nonetheless assumed “arguendo, that Defendant has met its burden of showing that the two productions qualify as inadvertent.”

Judge Jolson then turned to the “impact” of the parties’ clawback agreement on the question of waiver, citing three frameworks applied by other courts: “(1) if a clawback is in place, it always trumps Rule 502(b); (2) a clawback agreement trumps Rule 502(b) unless the document production itself was completely reckless; and (3) a clawback agreement trumps Rule 502(b) only if the agreement provides concrete directives regarding each prong of Rule 502(b)”.

Rejecting the first approach as it would “undermine the lawyer’s responsibility to protect the sanctity of the attorney-client privilege”, Judge Jolson then considered the second and third frameworks.  Determining that defense counsel “reviewed a limited number of documents and made critical and reckless mistakes”, Judge Jolson stated that she “need not choose” between the second and third frameworks because “when taking into account the careless privilege review, coupled with the brief and perfunctory clawback agreement, following either approach leads to the same result: Defendant has waived the privilege.”  As a result, Judge Jolson ruled that the defendant had waived privileged on the twice inadvertently produced documents.

So, what do you think?  Should clawback agreements protect parties from any inadvertent disclosure?  Would a 502(d) order have protected the defendant here?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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.

Does this Ring a Bell? Court Orders Plaintiff’s Quick Peek Over Defendant’s Objections: eDiscovery Case Law

In Fairholme Funds, Inc. v. United States, No. 13-456C, (Fed. Cl. Oct. 23, 2017), Judge Margaret M. Sweeney, despite the defendant’s strong objection, granted the plaintiffs’ motion to compel a “quick peek” production of approximately 1,500 documents withheld as privileged pursuant to the bank authorization and deliberative process privileges.

Case Background

In this case where the plaintiffs sought just compensation under the Fifth Amendment, contending that the defendant engaged in taking their property without just compensation, the defendant produced additional documents multiple times during the course of discovery when challenged.  After their most recent status report filed on June 30, the parties indicated that defendant produced an additional 3,500 documents in response to the court’s March 7 order, and as a result of that production, plaintiffs identified thirty-eight documents they contended should not be withheld for privilege.

Following its review of the thirty-eight documents, the defendant produced an additional twenty-two documents.  In response to the release of these additional documents, plaintiffs proposed that the parties use the quick peek procedure authorized by FRE 502(d).  In response, the defendant objected, quoting a note published by The Sedona Conference (in its Commentary on Protection of Privileged ESI covered by us here), as follows:

“[FRE] 502(d) does not authorize a court to require parties to engage in ‘quick peek’ … productions and should not be used directly or indirectly to do so. … Rule 502 was designed to protect producing parties, not to be used as a weapon impeding a producing parties’ right to protect privileged material. Compelled disclosure of privileged information, even with a right to later claw back the information, forces a producing party to ring a bell that cannot be un-rung.”

After the defendant did not agree to the use of the procedure, the plaintiffs filed a motion to compel.

Judge’s Ruling

Judge Sweeney began with an analysis of [FRE] 502(d) and noted that the “general purpose” of the rule was to resolve longstanding disputes regarding inadvertent production and subject matter waiver and to address complaints about the cost of protecting privileged materials, which she noted were “two issues not relevant to the current dispute.”  Judge Sweeney also indicated (as the plaintiffs pointed out in their argument) that the advisory committee note to [FRE] 502(d) specifically stated that “a confidentiality order is enforceable whether or not it memorializes an agreement among the parties to the litigation”.

As a result, Judge Sweeney, noting the defendant’s “piecemeal” production and the desire to “facilitate the speedy and efficient conclusion of jurisdictional discovery”, granted the plaintiffs’ motion, partially because she had “every reason to believe” that the plaintiffs would seek in camera review of the documents.  Judge Sweeney stated: “Given the court’s heavy caseload and limited resources, the use of the quick peek procedure is a much more viable and attractive option. Not only will the court not have to expend its time and resources on a task that should be performed by the parties, but both parties will benefit from the prompt (or at least more prompt) resolution of outstanding discovery disputes. Thus, even though defendant has already reviewed the subject material multiple times, plaintiffs will continue to seek production of these materials, which will, in turn, continue to place a burden on the court—one which could be alleviated through the parties’ use of the quick peek procedure.”

So, what do you think?  Was the court wrong in going against The Sedona Conference recommendations?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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 Chastises Parties for Turning Case into a “Discovery Slugfest”: eDiscovery Case Law

In UnitedHealthcare of Fla., Inc. et al. v. Am. Renal Assoc., Inc. et al., No. 16-cv-81180-Marra/Matthewman (S.D. Fla. Oct. 20, 2017), Florida Magistrate Judge William Matthewman granted in part and denied in part the plaintiffs’ Motion for Reconsideration or Modification of Omnibus Discovery Order, clarifying the Court’s previous order regarding custodians and search terms, while denying the remainder of the plaintiff’s motion.  Judge Matthewman also chastised both parties for their lack of cooperation on search terms.

In the Court’s August order, the Court permitted Defendants to select an additional 16 custodians and an additional 12 search terms and to request more at a later date if Defendants have a good-faith basis to do so and also ruled that the defendants had not waived any privilege and did not have to produce a privilege log.

In the current Motion, the plaintiffs argued that the Court should reconsider or modify its Order because the Court never made a finding that Plaintiffs’ production was deficient, there is no evidence that would support such a conclusion, the Court did not tailor the additional custodians or search terms to “any purported inadequacy nor to any proportionality limits”, the Court did not “provide any mechanism for ensuring that ARA’s custodians and search terms do not capture an overwhelmingly, burdensome, disproportionate amount of information”, and the Court’s Order was “patently unfair”.  The plaintiffs also argued that the Court should reconsider its decision not to compel the defendants to provide a privilege log because they “wrongfully withheld a responsive, non-privileged document, and the Court should not rely on Defendants’ counsel’s representations that they have no additional non-privileged responsive documents.”

Noting that “the only asserted new evidence submitted by Plaintiffs consists of Docket Entries 303-1 through 303-4” (which included email correspondence, a list of the additional 16 custodians, a list of additional 12 search terms and a Declaration from the Director of e-Discovery at the plaintiff company), Judge Matthewman focused on the last paragraph of the Declaration, which stated:

“In my opinion and based on my experience, if additional time is taken to reexamine the search terms to minimize some of the more obvious deficiencies and then, after the search terms are run, allow for the parties to evaluate which terms hit on an excessive number of documents and narrow them accordingly, the process could be sped up significantly as the volume of documents for the steps after collection and indexing will likely be greatly reduced.”

In response, Judge Matthewman stated: “Ironically, this type of cooperation is exactly what this Court has been expecting from the parties and their counsel throughout this case—to work together to arrive at reasonable search terms, to run those search terms and engage in sampling to see if the search terms are producing responsive documents or excessive irrelevant hits, and then to continue to refine the search terms in a cooperative, professional effort until the search terms are appropriately refined and produce relevant documents without including an excessive number of irrelevant documents. However, despite what paragraph 12 of the Declaration suggests, and despite this Court’s suggestions to the parties and their counsel as to the cooperative and professional manner in which the parties should engage in the e-discovery process in this case, there has instead been an apparent lack of cooperation and constant bickering over discovery, especially e-discovery. The alleged new evidence submitted by Plaintiffs, that is, the list of additional search terms and custodians and the Declaration, clearly show that, where, as here, parties in a large civil case do not cooperatively engage in the e-discovery process, the collection and indexing of documents and the production of relevant documents, become much more difficult.”

Indicating that “the parties and their counsel, through their many discovery disputes and their litigiousness, have unnecessarily turned this case into what can best be termed as a ‘discovery slugfest’”, Judge Matthewman noted that “the parties have filed well over 50 discovery motions, responses, replies, notices, and declarations, many of which have been filed under seal” and that the Court “has held at least six discovery hearings in 2017, most of which were lengthy and contentious.”

Judge Matthewman also referenced several resources regarding cooperation for the parties to consider, including The Sedona Conference, the Federal Judges’ Guide to Discovery, as well as comments from Supreme Court Chief Justice John Roberts regarding the 2015 Amendments to Federal Rules of Civil Procedure 1 and 26.  With that in mind, Judge William granted in part and denied in part the plaintiffs’ Motion for Reconsideration or Modification of Omnibus Discovery Order, clarifying the Court’s previous order regarding custodians and search terms, while denying the remainder of the plaintiff’s motion, including their dispute over the number of custodians and search terms and the failure to require the defendants to produce a privilege log.

So, what do you think?  What can we learn from the parties’ lack of cooperation in this case?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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.

After Objection, No Waiver of Privilege for Putting Information on File Share Site without Protection: eDiscovery Case Law

In Harleysville Insurance Co. v. Holding Funeral Home, Inc., No. 1:15cv00057 (W.D. Va. Oct. 2, 2017), Virginia District Judge James P. Jones sustained the plaintiff’s objections to the Magistrate Court ruling that the plaintiff’s placement of privileged information on a file share site and distribution of the hyperlink to access that information without providing any protection for the site resulted in a failure to take reasonable steps to protect the information.  As a result, for their “improper” conduct in failing to promptly return the materials, the defendants received an evidentiary sanction, barring their use of the inadvertently disclosed privileged materials.  Judge Jones overruled the plaintiff’s objection to the decision not to disqualify defense counsel, stating he was “not convinced that the ‘blunt remedy of disqualification is appropriate.’”

Case Background

In this dispute over a fire insurance claim by the defendants against the plaintiff insurance agent, a senior investigator for Nationwide Insurance, owner of the plaintiff company, uploaded surveillance footage to a file share service operated by Box, Inc. and sent an email containing a link to the site to an investigator at the National Insurance Crime Bureau (“NICB”) in September 2015.  The email contained a confidentiality notice indicating that the “e-mail contains information that is privileged and confidential”, but the information on Box was not password protected.  For a while, only the video was available on the Box site, but in April 2016, the Nationwide investigator placed files containing the plaintiff’s entire claims file and Nationwide’s entire investigation file for the defendants’ fire loss on the Box Site to be accessed by the plaintiff’s counsel – a month later, in response to a subpoena, the NICB electronically produced its files – including the email containing the link – to the defense counsel, which gave them access to the file share site containing the claims files.

Defense counsel subsequently accessed the site and reviewed and downloaded the entire claims file, but did not notify the plaintiff’s counsel that it had accessed the information until plaintiff’s counsel discovered the claims file included in materials produced by the defense in October 2016.  As a result of this discovery, the plaintiff moved to disqualify defense counsel; in response, they argued that that the motion should be denied because the plaintiff “waived any claim of privilege or confidentiality by placing the information on the Box, Inc., site where it could be accessed by anyone.”  Magistrate Judge ruled that Pamela Meade Sargent, determining that “Rule 502 does not apply in this situation to prevent a waiver of the work-product doctrine”, concluded that the plaintiff waived any claim of privilege or work-product protection over its Claims File.  She also declined to disqualify defense counsel, but ruled that they should bear the cost of the parties in obtaining the court’s ruling on the matter.  The plaintiff’s objected to both rulings.

Judge’s Ruling

Noting that “the magistrate judge did not have the benefit of reviewing the Claims File” and that “it is within my discretion to receive and consider additional evidence”, Judge Jones found that “the attorney-client privilege attaches to multiple documents contained in the Claims File”, calling them “the epitome of privilege.”  Judge Jones overruled the plaintiff’s objection to the magistrate court findings that the disclosure was inadvertent, leading to the consideration of three of five factors (Judge Jones agreed with the magistrate court that “Factors Three and Five have no applicability to this case”) to determine whether privilege had been waived:

(1) [T]he reasonableness of the precautions to prevent inadvertent disclosures, (2) the time taken to rectify the error and (4) the extent of the disclosure.

Noting that “the Box Folder was not searchable through Google or any other search engine, nor was it searchable on the Box, Inc. website” and that “as a practical matter, the [disclosed] URL itself functions as a password”, Judge Jones did “conclude that Nationwide, acting for Harleysville, did take reasonable precautions to prevent an inadvertent disclosure of the Claims File and that this factor weighs against a finding of waiver” and sustained the objection on reasonable precautions.  Judge Jones also observed that “Harleysville’s counsel were not notified of the disclosure until October 27, 2016” and “reached out to Insureds’ counsel to request destruction of the privileged materials on November 1, 2016” in sustaining the objection on time taken to rectify the error.  He also noted that the “disclosure in this case was not extensive” in sustaining that objection as well.

As for sanctions against defense counsel, Judge Jones found that “Insureds’ counsel had an obligation to ‘promptly return, sequester, or destroy’ the privileged materials, Fed. R. Civ. P. 45(e)(2)(B), with which they refused to comply.”  He also found that “Insureds’ counsel had a duty to uphold the integrity of the legal profession and to strive to avoid impropriety, as well as the mere appearance of impropriety” and that they “failed to do so”.  However, noting that “the mistakes by Nationwide’s employee initiated this issue”, Judge Jones declined to disqualify defense counsel, stating that “I am not convinced that the ‘blunt remedy of disqualification is appropriate.’”  Instead, Judge Jones found that “an evidentiary sanction is appropriate”, ruling that “the Insureds must not use any information contained in the privileged material, or information derived from such material, to seek additional information in discovery, through a subpoena, or in any other manner. Moreover, the Insureds must not use the information contained in or derived from the privileged material for any purpose in any filing or proceedings (including trial) in this action or any other related civil action.”

We covered the case previously here and Tom O’Connor and I also discussed it in a webcast as one of the key eDiscovery cases in the first half of 2017 here.

So, what do you think?  Was the first ruling right in waiving privilege or the second one right in determining that privilege was not waived?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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.

Rule 502(d) Orders for Non-Waiver of Privilege: eDiscovery Best Practices

Tomorrow, Tom O’Connor and I will discuss the various issues to consider and decisions to be made to help you meet your discovery obligations in an efficient and proportional manner when preparing for the Rule 26(f) conference in the webcast Holy****, The Case is Filed! What Do I Do Now? (noon CT, click here to register for the webcast or to get a link to access the slides and video afterward).  One of the topics relates to an order you can file to avoid non-waiver of privilege for inadvertent disclosures (click here and here for recent examples of cases where information was inadvertent disclosed).  If you missed it before, let’s revisit the topic now.

A couple of years ago, LegalTech New York (LTNY) had several judges’ panel sessions that included several notable judges, including Judge Andrew J. Peck.  In each of those sessions, you heard this question from Judge Peck at one point during the session.

“How many of you use Federal Rule of Evidence 502(d) non-waiver orders?  Or, if you’re inside counsel, (how many) instruct your outside counsel to do so?”

For those who don’t know, here is the text of FRCP Rule 502(d): “Controlling Effect of a Court Order. A federal court may order that the privilege or protection is not waived by disclosure connected with the litigation pending before the court — in which event the disclosure is also not a waiver in any other federal or state proceeding.”

In one of the sessions, Judge Peck discussed the significance of Rule 502(d), as follows: “it is a rule that says you don’t have to be careful, you don’t have to show that you’ve done a careful privilege screening, and it says that if the court enters a 502(d) order, it’s a non-waiver of privilege in that case and it’s a non-waiver of privilege in any subsequent state or federal case, even with different parties.”

While making it clear that “I’m never saying that you shouldn’t be as careful as possible to protect your client’s privilege”, Judge Peck related a story of one case where a firm had a potentially privileged group of documents and the associate was reviewing the documents late at night, creating two piles – one for privileged, one for not privileged – got up to get a drink, came back and got the piles mixed up, resulting in privileged documents being inadvertently produced.  Naturally, he said, the other side “didn’t just let them off the hook” about whether that waived the privilege or not and there were motions back and forth about it, which a 502(d) order would have eliminated.

With regard to any potential downsides to filing a 502(d) order, Judge Peck made it clear that “in my mind, there is no downside to having such an order”, noting that the only downside he has heard is that “if you’re before the wrong judge, the famous Neanderthal judge that everyone worries about, that judge might say that you need to produce all your documents next week and you don’t need to do a privilege review.”  But, he dismissed that as unlikely and, noted that it is “against the rules”.

Judge Peck doesn’t just advocate use of 502(d) orders, he has provided a sample order on his page in the Southern District of New York web site, noting that “it’s a simple two paragraph order – the first paragraph gives you the 502(d) protection to the fullest extent and the second paragraph essentially says that nothing in this order will serve to prevent you from doing a careful review for privilege, confidentiality or anything else.”  He acknowledged that he “stole that paragraph from a lawyer presenting at the Georgetown conference a few years ago”.

Judge Peck also mentioned The Sedona Conference Commentary on the Protection of Privileged ESI (released three years ago, it can be downloaded here), which not only includes his sample order, but another (longer) example as well.

So, what do you think?  Do you use 502(d) orders in your cases?  If not, why not?  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 Grants Lesser Sanctions Against Defendant for Various Discovery Issues: eDiscovery Case Law

In New Mexico Oncology v. Presbyterian Healthcare Servs. No. 1:12-cv-00526 MV/GBW (D.N.M. Aug. 16, 2017), New Mexico Magistrate Judge Gregory B. Wormuth, detailing numerous defendant discovery deficiencies alleged by the plaintiff, ruled that the “harsh sanctions of default judgment or an adverse jury instruction” requested by the plaintiff “are not warranted” and instead opted to require the defendant to pay plaintiff costs related to activities resulting from defendants’ over-designation of documents as privileged and recommended that the defendants be ordered to pay the plaintiff 75% of the costs associated with its Motion for Sanctions including all fees paid to expert witnesses to prepare reports and testify at the motion hearing.

Case Background

In this case, the plaintiff, detailing numerous alleged defendant discovery deficiencies, filed a Motion for Sanctions, requesting that the Court sanction the defendants by ordering default judgment against them, or, alternatively that the Court sanction the defendants by ordering an adverse jury instruction.  The allegations included:

  • Defendants failed to issue a proper litigation hold. The plaintiff alleged that the defendants’ original May 2012 litigation hold was inadequate because (1) it did not account for the “email jail,” a function which required that employees delete or archive emails when they run out of inbox space; (2) it covered only thirty-five employees and improperly excluded several key witnesses; (3) it allowed employees to determine which emails were irrelevant to the lawsuit and could be deleted; and (4) it did not apply to Defendants’ Live Exchange Server (a.k.a., the Transport Dumpster) and therefore did not preserve documents deleted by individual employees.
  • Defendants intentionally deleted discoverable emails received or sent by Dr. Dava Gerard. The two primary pillars of the plaintiff’s case for intentional deletion were: (1) the data found within the “free space” of the Gerard PST file (the PST file was 2 GB in size, but only 128 MB of materials were readable by native software when opened), and (2) data was found in the unallocated space on the hard drive on which the Gerard PST file was saved.
  • Defendants used privilege designations for the purpose of concealing documents and information. After the defendants produced their original privilege and redaction logs, the plaintiff objected to 2,831 of the 4,143 entries to which Defendants included in the logs.  The defendants conducted a re-review and produced 1,095 documents which were originally listed on the privilege log and 864 documents which were originally listed on the redaction log.  The plaintiff then objected to all 1,312 remaining listings on the privilege and redaction logs, stating that it no longer had confidence in Defendants’ privilege designations, leading to a second re-review, which led to an additional 861 documents produced.  The plaintiff then filed a Motion to Compel and for Sanctions against Defendants, which included a request “that the Court appoint a Special Master to conduct an independent in camera review” of the remaining records withheld and redacted – that review led to 197 additional documents ordered to be produced.

The plaintiff also complained that the defendants failed to produce usable billing and claims data in a timely manner, produced ESI for the wrong custodian named Mike West and did not properly collect hard copy documents in discovery.  As Frank Costanza would say at the Airing of Grievances during Festivus, “I got a lot of problems with you people”.

Judge’s Ruling

Judge Wormuth, reviewing the allegations in considerable detail, determined the following:

  • Improper litigation hold: Judge Wormuth acknowledged that “Without question, Plaintiff points out some imperfections with the litigation hold and its implementation” and he detailed several of those. However, he also explained that “Plaintiff failed to establish that these imperfections were a result of bad faith or that they resulted in the spoliation of evidence.”
  • Intentional deletion of emails: Noting that “the conclusion that data residing in the PST’s free space is only the result of deletion rests on the assumption that the export was conducted via the ‘client-side’ method, rather than the alternative ‘server-side’ method”, Judge Wormuth cited a lack of evidence that the collection specialist used a clean hard drive to conduct the collection and pointed to the presence of export logs to determine that the exports were conducted via the “server-side” method and concluded that “Plaintiff has not demonstrated by a preponderance of the evidence that Defendants intentionally deleted emails that should have been disclosed.”
  • Privilege designations: Judge Wormuth agreed with the Special Master’s report that the defendants “did not act in bad faith”. But, he did state “this does not mean that Defendants are free from blame. It is clear that Defendants over-designated documents as privileged, and that even their re-reviews were insufficient to fix their own errors. As a result, Plaintiff was required to repeatedly assert objections until the Special Master ultimately resolved the issue.”

As for the other issues, Judge Wormuth ruled that the “Plaintiff can demonstrate no prejudice resulting from any such delays” in receiving the billing and claims data, that the “collection of documents from the wrong Mike West was an inadvertent error and not done in bad faith” and that, because of the plaintiff’s failure to request that the Court allow additional depositions of the employees associated with the hard copy documents, “more severe sanctions are not warranted”.

Ultimately, Judge Wormuth ruled that the “harsh sanctions of default judgment or an adverse jury instruction” requested by the plaintiff “are not warranted” and instead opted to require the defendant to pay plaintiff costs related to activities resulting from defendants’ over-designation of documents as privileged and recommended that the defendants be ordered to pay the plaintiff 75% of the costs associated with its Motion for Sanctions including all fees paid to expert witnesses to prepare reports and testify at the motion hearing.

So, what do you think?  Was that an appropriate level of sanctions for the various discovery issues?  Please share any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

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

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

Case Background

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

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

Judge’s Ruling

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

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

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

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

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

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

2016 eDiscovery Case Law Year in Review, Part 2

As we noted yesterday, eDiscovery Daily published 74 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases!  Yesterday, we looked back at cases related to admissibility and proportionality.  Today, let’s take a look back at cases related to cooperation, disputes about discovery, eDiscovery cost reimbursement, form of production disputes, privilege disputes and (once again) the ubiquitous Apple v. Samsung case.

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

But first, if you want to learn more about what every attorney should know about eDiscovery in 2017, click here.

COOPERATION

Why can’t we all just get along?  There were several instances where parties couldn’t agree and had to kick issues up to the court for resolution, here are four such cases:

Withheld Evidence Leads to New Trial, Resignation of Senior City Attorney: In Colyer v. City of Chicago, Illinois District Judge Edmond E. Chang granted in part the plaintiff’s post trial motion, denying the plaintiffs’ request for a directed verdict, but granting their request for a new trial after it was discovered that the defendants’ attorney had “intentionally” withheld the recording of a police dispatcher’s description of a possible suspect that was key in determining whether Chicago police officers acted with excessive force in killing a suspect in a traffic stop.  The plaintiffs also were awarded their attorneys’ fees and costs expended on preparing for the first trial, conducting the trial itself, and conducting the post-trial discovery and briefing.

Dispute Over Adequacy of Defendant’s Production Leads to Court Ordered Meet and Confer: In Gardner et. al. v. Continental Casualty Company, Connecticut Magistrate Judge Joan Glazer Margolis, granting the plaintiff’s motion to compel in part, ordered the parties to meet and confer regarding “’sampling and iterative confinement’ or ‘quick peek protocol’ of the 38,000 documents ‘hit’ by the agreed upon search terms and notify the court in writing “about their progress, or lack thereof, on or before February 12, 2016.”

Plaintiff Must Cooperate on Search Terms, Says Court: In Pyle v. Selective Insurance Company of America, Pennsylvania Senior District Judge Terrence F. McVerry granted the defendant’s Motion to Compel Plaintiff to Provide ESI Search Terms “insofar as it seeks to compel Plaintiff to confer and come to an agreement on the search terms Defendant will use to cull through the additional email archives that Defendant has identified as having been retrieved.”

Court Orders Defendant to Produce Additional ESI Responsive to 78 “Unopposed” Search Terms: In Venturdyne, Ltd. d/b/a Scientific Dust Collectors v. Carbonyx, Inc., d/b/a Carbonyx Carbon Technologies, et. al., Indiana District Judge John E. Martin ordered the defendant to produce additional ESI to the plaintiff to be retrieved via 78 “unopposed” search terms that neither party objected to during negotiation over the plaintiff’s original list of 126 search terms.

DISPUTES ABOUT DISCOVERY

Here’s one case from this past year that was a general dispute about discovery:

Plaintiff’s Failure to Demonstrate Allegations Leads to Summary Judgment for Defendant: In Malibu Media, LLC v. Doe, in a case of dueling summary judgment motions, Illinois Magistrate Judge Geraldine Soat Brown denied the plaintiff’s motion for summary judgment, but granted the defendant’s summary motion in its entirety, concluding that the plaintiff had not presented sufficient evidence to prove its allegations of illegally downloading movies.

EDISCOVERY COST SHARING AND REIMBURSEMENT

This year, the two cases we covered related to eDiscovery cost reimbursement were split – sort of.  In the case where the request for eDiscovery cost reimbursement was upheld, the decision was made after the defendants conceded much of the storage and hosting costs they had claimed, leaving less costs to uphold.

Court Denies Request for Cost Reimbursement for Hosted eDiscovery Database: In Associated Electric & Gas Insurance Services, et. al. v. BendTec, Inc., Minnesota District Judge Michael J. Davis found that the decision in Race Tires America, Inc. v. Hoosier Racing Tire Corp. to deny certain eDiscovery costs to be persuasive and ruled that “the costs of creating and maintaining an electronic platform for e-discovery are not recoverable under § 1920(4)”, denying the prevailing defendant’s request for reimbursement of over $123,000 in costs to maintain their ESI database.

Appeals Court Upholds Defendant’s Request for eDiscovery Cost Reimbursement: In Deere & Co. v. Duroc, LLC et. al., after the defendants conceded much of the storage and hosting costs they had claimed, the Federal Circuit Court of Appeals affirmed the district court ruling to uphold cost taxation requested by the defendants, including eDiscovery costs.

PRODUCTION FORMAT DISPUTES

We had three cases this year involving production format disputes, including one that led to sanctions for the defendant for failing to produce native format data (among other violations):

Court Denies Plaintiff’s Request for Native ESI Format, Approves Request for Index: In Stormo v. City of Sioux Falls, et. al., South Dakota District Judge Karen E. Schreier, ruling on several motions, denied the plaintiff’s motion to compel with regard to requiring the defendants to provide electronically stored information in its native format and metadata for these documents, but granted it with regard to providing an index explaining information about the documents.

Court Orders Defendant to Re-Produce Selected Documents in Native Format: In Spring v. Board of Trustees of Cape Fear Community College et. al., North Carolina Magistrate Judge James E. Gates, in ruling on several discovery disputes between the parties, granted the plaintiff’s motion to compel in part, ordering the plaintiff to identify documents to be re-produced in native format and for the defendant to re-produce those documents or move for appropriate relief after conferring with plaintiff if it deemed the number of documents identified to be unjustifiably large.

Defendant Sanctioned for Failing to Preserve Text Messages and Failing to Produce Native Format Data: In First Financial Security, Inc. v. Freedom Equity Group, LLC, California Magistrate Judge Howard R. Lloyd issued permissive adverse inference instruction sanctions against the defendant for deleting relevant text messages “with the intent to deprive” the plaintiff of the use of those text messages and for failing to produce native-format data that it was repeatedly ordered to produce.  Judge Lloyd declined to sanction the defendant for spoliation of phone records or employment applications.

PRIVILEGE DISPUTES

As usual, there were cases where there were disputes regarding privilege designations and privilege logs.  Here are three cases:

Plaintiff Granted Documents Withheld Due to Privilege, But Denied Expanded Search of Emails: In Moore v. Lowe’s Home Ctrs., Washington District Judge Robert J. Bryan ruled in favor of the plaintiff that documents and communications dated before the defendant anticipated litigation were not privileged work product and should be produced, but he ruled against the plaintiff in her request have the defendant perform additional searches on email to identify additional relevant documents.

Court Denies Defendant’s Motion for Production of Documents for In Camera Review: In Portland Pipe Line Corp. et. al. v. City of South Portland et. al., Maine Magistrate Judge John H. Rich, III denied the defendants’ motion to compel the production of documents withheld or redacted on claims of attorney-client privilege by the plaintiff, finding that the plaintiffs “undertook a costly and labor-intensive two-step process with respect to claiming privilege as to ESI, first relying on a technologically-assisted privilege review by a hired ESI discovery vendor” and then undertaking a “painstaking manual review to verify the privileged status of every ESI document marked as privileged”.

Finding Categorical Privilege Log to Be Inadequate, Court Orders Plaintiff to Provide a Metadata Log: In Companion Property and Casualty Insurance Company v. U.S. Bank N.A., South Carolina District Judge J. Michelle Childs determined that the plaintiff’s categorical Privilege Log was inadequate and ordered the plaintiff to provide to the defendant a metadata log for all documents withheld or redacted, affidavit(s) from the person(s) with knowledge regarding the privileged third party and common interest parties and a list of anticipated litigation(s) for the documents withheld on the basis of work product protection.

APPLE V. SAMSUNG

The case that never dies.  Just when Apple finally thought it was going to get a great big check, the Supreme Court told the federal appeals court to try again when determining an award for patent infringement:

Supreme Court Gives Samsung an Early Christmas Present – For Now: As reported by Greg Stohr of Bloomberg Law (Supreme Court Orders New Look at Apple’s Award From Samsung), the Supreme Court, in a unanimous opinion (8-0) told a federal appeals court to take another look at a $399 million award won by Apple from Samsung for copying the design of the iPhone.

Tomorrow, we will cover cases related to social media discovery, technology assisted review and the first part of the cases relating to sanctions and spoliation (yes, there were that many).  Stay tuned!

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

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

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

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

Finding Categorical Privilege Log to Be Inadequate, Court Orders Plaintiff to Provide a Metadata Log: eDiscovery Case Law

In Companion Property and Casualty Insurance Company v. U.S. Bank N.A., No. 15-01300 (D. S.C., Nov. 3, 2016), South Carolina District Judge J. Michelle Childs determined that the plaintiff’s categorical Privilege Log was inadequate and ordered the plaintiff to provide to the defendant a metadata log for all documents withheld or redacted, affidavit(s) from the person(s) with knowledge regarding the privileged third party and common interest parties and a list of anticipated litigation(s) for the documents withheld on the basis of work product protection.

Case Background

In this case where the plaintiff alleged breach of contract and breach of fiduciary duty over the substantial decrease in value of trusts associated with use of the plaintiff’s insurance program, the defendant initially moved for an order compelling the plaintiff to produce a more-detailed “document-specific privilege log of redacted and withheld documents” which pre-date February 14, 2014 and also requested that “with respect to any work product claims,” the plaintiff should provide information regarding “what litigation it anticipated, when the litigation was anticipated, the facts that caused . . . [Plaintiff] to anticipate the litigation, and how that anticipation drove the creation of the withheld document.”

In responding, the plaintiff argued it submitted a categorical privilege log, which the parties “expressly” agreed was acceptable and that the parties had agreed that privilege logs did not need to identify redacted documents in which the asserted privilege was evident on the face of the document.  The defendant then changed the requested relief in its Motion to Compel to request a metadata log of each withheld document, including dates of communications, date created, document custodian, to/from/cc information, and subject lines for emails and certain specific communications from a key third party.  The plaintiff agreed to produce the metadata log, but was adamant that all communications with a key third party were protected by the attorney-client privilege.  The defendant accepted that proposal in part, but asked the court to require production of the agreed-upon information earlier than the plaintiff proposed, review certain communications from the key third party to determine if privilege had been properly withheld and require the plaintiff to attach to the list of anticipated litigations “an affidavit stating the point in time it anticipated such litigation, the facts that caused it to anticipate such litigation and describe the categories and types of documents that were created in anticipation of such litigation”.

Judge’s Ruling

Judge Childs noted that “To comply with the requirements set forth in Rule 26(b)(5)(A), a party seeking protection from producing documents must produce a privilege log that ‘identifies each document withheld, information regarding the nature of the privilege/protection claimed, the name of the person making/receiving the communication, the date and place of the communication, and the document’s general subject matter.’”  With that in mind, Judge Childs ruled:

“Upon review of the Categorical Privilege Log in the context of Defendant’s complaints, the court finds that Plaintiff’s log does not allow Defendant or the court to test the applicability of the attorney-client privilege and/or work product protection as to each document sought to be withheld. Accordingly, the court concludes that Plaintiff’s Categorical Privilege Log is inadequate.”

As a result, Judge Childs ordered the plaintiff to provide to the defendant on or before November 18, a metadata log for all documents withheld or redacted dated before February 14, 2014, affidavit(s) from the person(s) with knowledge regarding the privileged third party and common interest parties and a list of anticipated litigation(s) for the documents withheld on the basis of work product protection dated before February 14, 2014.

So, what do you think?  Are categorical privilege logs generally sufficient enough to communicate to parties what it being withheld and why?  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.