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Plaintiffs Ordered to Produce a Copy of Access Database for Forensic Analysis: eDiscovery Case Law

In Thorne Research, Inc. et. al. v. Atlantic Pro-Nutrients, Inc., No. 13-784 (D. Utah, Mar. 22, 2016), Utah Magistrate Judge Paul M. Warner determined that, because the parties had competing affidavits regarding whether a Microsoft Access database created by the plaintiffs’ co-inventor stores metadata and that metadata (if present) was clearly relevant, the defendant should be allowed the opportunity to conduct a forensic analysis as to whether or not the metadata exists in the native format of the Access database.

Case Background

In this case, the plaintiffs filed suit against the defendant for patent infringement and the defendant filed a counterclaim seeking a declaratory judgment of non-infringement and invalidity of the patent.  To bolster its effort in obtaining its declaratory judgment, the defendant moved for an order compelling the plaintiffs to provide a complete copy of the Microsoft Access database that co-inventor Donald Steele utilized to input his formulas, seeking the metadata it alleged was contained in the Access database to independently determine the legitimacy of the plaintiffs’ claim that Mr. Steele and his co-inventor were the first inventors of the patent.  The defendant claimed that the plaintiffs tampered with the Access database to create a false early conception date of the invention.

The plaintiffs argued that Access databases do not maintain metadata like word processing or spreadsheet programs do and that the database was owned and maintained by a third party that kept all of its and its customers’ formulations in the Access database, not just the plaintiffs’ formulations and that giving the defendant access to the database would also be giving it access to the third party’s proprietary information. The plaintiffs also asserted that that there was no evidence of tampering with the database.  To address the concerns over third party information, the defendant indicated that the plaintiffs could provide the electronic copy of the database under the designation of “CONFIDENTIAL INFORMATION — ATTORNEYS EYES ONLY” and argued that the plaintiffs had failed to demonstrate that providing the database with the metadata intact would present an undue hardship or expense.

Judge’s Ruling

Because the parties had competing affidavits regarding whether the Microsoft Access database stores metadata, and because evidence regarding the date of the invention was clearly relevant to the case, Judge Warner ruled that “Defendant ought to be allowed the opportunity to conduct a forensic analysis as to whether or not the metadata exists in its native format.”  Regarding the plaintiffs’ concerns regarding disclosure of proprietary or confidential information, Judge Warner indicated that “an attorneys eyes only designation pursuant to the protective order should provide a sufficient safeguard against disclosure of confidential or proprietary information.”  As a result, he ordered the plaintiffs to produce a copy of the Microsoft Access database to the defendants within ten days of the date of the order.

So, what do you think?  Should the court have allowed a forensic analysis of the Access database?  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.

Well, That Didn’t Take Long! Apple v. the US Government Gears Up for Round Two: eDiscovery Trends

When the FBI was able to access the iPhone used by one of the gunmen in the San Bernardino terrorist shooting, effectively ending the six week dispute between Apple and the FBI over privacy and security, we said the battle was over – for now.  Apparently, “for now” was the same as “not for long”.

According to re/code (Apple-FBI Encryption Battle Shifts to New York, written by Dawn Chmielewski), the U.S. Attorney’s office notified a federal judge in Brooklyn on Friday that the government plans to press forward with its request to have Apple assist in unlocking a phone seized in a Brooklyn drug case, moving the low-profile case to center stage in the ongoing debate over encryption.

“The government’s application is not moot and the government continues to require Apple’s assistance in accessing the data that it is authorized to search by warrant,” U.S. Attorney Robert Capers wrote to the court.

Apple had requested a delay in the case until it could be determined whether the FBI’s new technique for hacking an iPhone 5c used by one of the San Bernardino shooters could also unlock the device in the Brooklyn case.

Back in February, a federal judge ordered Apple to give investigators access to encrypted data on the iPhone used by one of the San Bernardino shooters, a court order that Apple has fought, accusing the federal government of an “overreach” that could potentially breach the privacy of millions of customers.  That same day, Apple CEO Tim Cook published an open letter, pledging to fight the judge’s ruling that it should give FBI investigators access to encrypted data on the device.  And, the two sides battled over the issue in court until the FBI was successfully able to access the iPhone on its own toward the end of March.

As many predicted, it was only a matter of time before another dispute with a government agency over Apple security made its way to the courtroom.  When that government agency is not able to find a way to access the Apple device and requests assistance from the court, I would expect to see a long drawn-out court battle over the issue – one that privacy and security advocates will undoubtedly continue to debate.

So, what do you think?  Is this the case where the true battle between Apple and the US government will be waged?  Please share any comments you might have with us or let us know 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 Plaintiff’s Request for Native ESI Format, Approves Request for Index: eDiscovery Case Law

In Stormo v. City of Sioux Falls, et. al., No. 12-04057 (D. S.D., Feb. 19, 2016), 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.

Case Background

In this pro se lawsuit where the plaintiff sued the defendants for violations of his civil rights with respect to his status as a landowner and landlord, the court granted the defendants’ motion for summary judgment in part. The plaintiff then filed a second amended complaint with additional claims.  As Judge Schreier noted, “Discovery is ongoing and fraught with complications. Stormo has filed numerous motions, often raising unrelated, irrelevant, or indecipherable arguments. Defendants have neither responded to all of Stormo’s discovery requests adequately nor complied with all of the court’s orders sufficiently.”

In the plaintiff’s latest motion, the plaintiff moved the court to, among other things, compel defendants to provide electronically stored information in its native format, provide metadata for these documents, and provide an index explaining information about the documents.

With regard to the metadata, the plaintiff argued that metadata would allow him to discover whether the data is “forensically sound,” specifically: when it was created, accessed, or modified.  Countering, the defendant argued that providing the metadata would be overly burdensome and stated that they have no system that tracks the metadata sought by the plaintiff and they would have to go through each document and retrieve the metadata from the program with which the document was created.  As for the request for the index, the plaintiff claimed that the defendants produced a jumbled group of documents which is not labeled or indexed in any manner, but the defendants argued that they produced documents in an organized fashion and in the form kept in the ordinary course of business.

Judge’s Ruling

Judge Schreier began her analysis by citing Federal Rule of Civil Procedure 34(b)(2)(E), which states:

“(i) A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request; (ii) If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form…”

With regard to the plaintiff’s request to compel the defendants to reproduce documents in their native format, Judge Schreier stated that “He claims that he made a general request for all electronically stored information in its native format at the time of his initial document request…He does not, however, explain what is wrong with the format in which defendants have produced the documents. Therefore, the motion to compel is denied as it concerns his request to reproduce documents in their native format.”

With regard to the request for metadata, Judge Schreier stated:

“Defendants’ response may fail to articulate how this discovery is extraordinary or unusual, but Stormo has failed to show the metadata’s relevancy to his claims. His motion to compel argues that he wants the metadata to be sure that the documents were not created for or altered in anticipation of litigation…Stormo has not explained why he thinks defendants might have done this. There is no indication that they have altered the documents. Stormo fails to convince the court that the metadata is relevant to his claims, the request falls outside of the parameters of discovery, and therefore, his motion to compel is denied as it concerns his request for metadata.”

As for the request for an index, Judge Schreier ruled on this point in favor of the plaintiff, noting that “Stormo requests only “a) the bates number or other identifier of the document; b) the name of the person who is custodian of the document; c) the original source and author of the document; and d) the document request number and request number of any requests that the document is responsive to” for each document…Supplying this information is not overly burdensome on defendants. Therefore, Stormo’s motion to compel is granted as it concerns preparation of an index that supplies the information described above.”

So, what do you think?  Was the plaintiff’s request for native format documents and metadata unreasonable?  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.

Breaking News: The BIG Battle between Apple and the FBI is Over – For Now: eDiscovery Trends

Last week, we reported that the FBI said that it might no longer need Apple’s assistance in opening an iPhone used by a gunman in the San Bernardino, Calif., rampage last year.  Looks like that was the case.

According to CNN Money (FBI says it has cracked terrorist’s iPhone without Apple’s help, written by Jackie Wattles and Laurie Segall), the Department of Justice says the FBI has accessed the iPhone used by one of the gunmen in the San Bernardino terrorist shooting, with the help of an unnamed third party.  Saying that it has successfully retrieved the data from the phone, the Justice Department is asking the court to vacate its order from last month for Apple’s assistance.

“The FBI has now successfully retrieved the data stored on the San Bernardino terrorist’s iPhone and therefore no longer requires the assistance from Apple required by this Court Order,” DOJ spokeswoman Melanie Newman said in a statement.

Government officials did not go into detail about what was found on the phone.

The two sides were due in court last week, but the judge granted a last minute request from the DOJ to postpone the hearing, saying an unidentified “outside party” came to the FBI with an alternative method for hacking into the phone.  On Monday, the DOJ said the method only works on this particular phone, which is an iPhone 5C running a version of iOS 9 software.

A law enforcement official, speaking to reporters on condition of anonymity, would not reveal how it pulled off this hack. He would not name the “third party” that helped the FBI. And he refused to say whether the FBI will disclose this hacking method to Apple so the company can protect future phones from being hacked this way.  “We can’t comment on the possibility of future disclosures at this point,” the law enforcement official said.

Last month, a federal judge ordered Apple to give investigators access to encrypted data on the iPhone used by one of the San Bernardino shooters, a court order that Apple has fought, accusing the federal government of an “overreach” that could potentially breach the privacy of millions of customers.  That same day, Apple CEO Tim Cook published an open letter, pledging to fight the judge’s ruling that it should give FBI investigators access to encrypted data on the device.  And, the two sides have battled over the issue in court over the past month.

So, who is this “outside party”?  Was Steve Jobs resurrected over the weekend?  It was Easter, after all.  :o)  Regardless, it appears that the dispute is over – at least until the next time that the DOJ and the FBI need to hack into an Apple device.

So, what do you think?  Do you think we will see more disputes like this in the future?  Please share any comments you might have with us or let us know 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.

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

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

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

Case Background

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

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

Judge’s Ruling

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

So, what do you think?  Could Volkswagen have fired its Electronic Discovery Manager because he was “far from purgin”? (sorry, I couldn’t resist)  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Plaintiff’s Failure to Demonstrate Allegations Leads to Summary Judgment for Defendant: eDiscovery Case Law

In Malibu Media, LLC v. Doe, Case No. 13-6312 (N.D. Ill., Feb. 8, 2016), 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.

Case Background

The plaintiff alleged that the defendant, identified through his Internet Protocol (“IP”) address, downloaded its copyrighted work, specifically, twenty-four adult movies from the plaintiff’s site, using BitTorrent.  In this matter, the defendant was allowed to proceed anonymously as “John Doe.”  With regard to the identification of the defendant via the IP address, the defendant claimed that, during the time in question, he had many guests at his house, and any number of people could have downloaded from his IP.

In a forensic examination of the defendant’s hard drives from his computer, the plaintiff’s expert did not find any evidence that the plaintiff’s copyrighted works, or the BitTorrent software, had been on the defendant’s computer.  However, he did find evidence that one external storage device and one internal hard drive that were capable of storing files downloaded via BitTorrent had been connected to the defendant’s computer, but they had not been produced by the defendant.  He also found several virtual machines on one of the defendant’s hard drives, but not the program “VMWare” he believed was used to create them.

The defendant retained his own expert to conduct a forensic examination of his hard drive.  The defendant expert also concluded that there was no evidence that the plaintiff’s copyrighted works, or the BitTorrent software, had been on the defendant’s computer.  With regard to the two devices identified by the plaintiff’s expert, the defendant’s expert determined that they were last used in 2012 (which was before the infringement period and before the date the plaintiff says the works at issue were created) and the virtual machines were last used no more recently than September 2010, which was the expiration timeframe for the one-year student license for VMWare that the defendant would have received as a graduate student.  The defendant also moved to strike declarations from plaintiff’s experts regarding the forensic and IP evidence, as the plaintiff never served any Rule 26(a)(2) disclosure – in response, the plaintiff characterized them as “lay witnesses — not experts”.

The plaintiff and defendant filed cross-motions for summary judgment in the case.

Judge’s Ruling

Stating that “[u]nlike other cases, Malibu has no evidence that any of its works were ever on Doe’s computer or storage device”, Judge Brown denied the plaintiff’s summary judgment motion, as follows:

“Considering all of Malibu’s evidence, including the Fieser, Patzer, and Paige declarations Doe has moved to strike, in the light most favorable to Doe, Malibu’s summary judgment motion must be denied. Even if those contested declarations are considered, Malibu has not eliminated all material questions of fact about whether there was actionable infringement and, if so, whether Doe was the infringer.”

With regard to the defendant’s motion to strike declarations from plaintiff’s experts, Judge Brown granted the motion pursuant to Fed. R. Civ. P. 26(a)(2) and 37(c)(1).  As a result, Judge Brown ruled “[w]ithout the evidence of Fieser’s and Patzer’s declarations, there is no evidence linking Doe or even his IP address to Malibu’s works. Paige’s evidence, which depends entirely on the finding of IPP using Excipio’s system, does not contain any evidence based on his personal knowledge that Doe copied or distributed any of Malibu’s works. Doe’s motion for summary judgment is, accordingly, granted.”

So, what do you think?  Should the defendant’s summary judgment motion have been granted?  Please share any comments you might have or if you’d like to know more about a particular topic.

Here are links to two previous cases we have covered regarding this plaintiff.

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

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

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

Today’s thought leader is Craig Ball.  A frequent court appointed special master in electronic evidence, Craig is a prolific contributor to continuing legal and professional education programs in the United States and abroad, having delivered over 1,700 presentations and papers.  Craig’s articles on forensic technology and electronic discovery frequently appear in the national media and he teaches E-Discovery and Digital Evidence at the University of Texas School of Law.  He currently blogs on eDiscovery topics at ballinyourcourt.com.

What are your general observations emerging eDiscovery trends for 2016?

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Thanks, Craig, for participating in the interview!

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

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

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

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

Case Background

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

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

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

Judge’s Ruling

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

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

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

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

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

So, what do you think?  Was that a sufficient sanction for the defendants’ “gross negligence” in failing to issue a litigation hold?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Alteration of Domain in Produced Emails Leads to Sanctions for Plaintiffs: eDiscovery Case Law

In CAT3, LLC v. Black Lineage, Inc., No. 14 Civ. 5511 (AT) (JCF) (S.D.N.Y. Jan. 12, 2016), New York Magistrate Judge James C. Francis IV, ruling that emails produced by the plaintiffs were “intentionally altered”, ordered that the plaintiffs would be precluded from relying on their version of those emails to demonstrate their case and that the plaintiffs would bear the “costs, including reasonable attorney’s fees, incurred by the defendants in establishing the plaintiffs’ misconduct and in securing relief.”

Case Background

One of the key issues in this case regarding trademark infringement regarded similarity between the plaintiffs’ and defendants’ trademarks and whether the defendants developed their trademark (FLASHXHYPE) mark independently or after learning of the plaintiffs’ development of their trademark (SLAMXHYPE).  In a deposition of the defendant company’s president, communication between the defendant and plaintiff companies was provided (which had been produced as PDF images) that showed the plaintiffs’ employee’s address as having the email domain “@slamxhype.com.”  However, on cross examination, the deponent testified that the email he received was identical, except that it showed the plaintiffs’ employee’s address with the email domain “@ecko.com.”

The defendants’ counsel then sought to explore the discrepancy, and in May 2015, they demanded production of the plaintiffs’ emails in native form.  The plaintiffs did not initially respond and, ultimately, their attorneys withdrew and were replaced by new counsel.  In July 2015, the Court ordered the plaintiffs to comply with the defendants’ request and the plaintiffs produced a USB drive containing a PST file, a zip file, and several separate PDFs of relevant emails.

The defendants subjected that production to a forensic analysis which determined that there were two versions of each email message: a “top” level version and, behind each email message, a “near-duplicate copy of the message containing the identical message,” but with different email domains appearing for a number of the senders and recipients.  The underlying near-duplicate versions were the original emails, which had been deleted, albeit not without leaving a digital imprint.

Relying largely on the forensic analysis, the defendants then moved for sanctions consisting of some combination of dismissal of the complaint, imposition of an adverse inference, an order of preclusion, and assessment of attorneys’ fees and costs.

Judge’s Ruling

In considering the application of the amended Rule 37(e) to the situation, Judge Francis determined that “because the amendment is in some respects more lenient as to the sanctions that can be imposed for violation of the preservation obligation, there is no inequity in applying it.”

With regard to the plaintiffs’ claim that “there has been no destruction or loss of any evidence, and there certainly has not been both (i) loss of evidence AND (ii) “such evidence cannot be restored or replaced” as required by Rule 37, Judge Francis, citing Victor Stanley (the first case ever covered by this blog), stated “the plaintiffs argue that even if they are the ‘gang that couldn’t spoliate straight,’ they cannot be sanctioned because their misdeeds were discovered and the information recovered. They are incorrect.”  Elaborating, Judge Francis said that “it cannot be said that the information lost has been ‘restored or replaced’”, noting that “as the plaintiffs themselves suggest, the fact that there are near-duplicate emails showing different addresses casts doubt on the authenticity of both”.

Regarding the plaintiffs’ contention that the manipulation of the emails was unintentional and possibly due to the migration of the plaintiffs’ emails from one system to another, Judge Francis refuted that notion, stating that the “evidence supports the defendants’ allegation that the plaintiffs intentionally altered the emails at issue”.

With regard to relief, Judge Francis, while considering dismissal of the action or imposition of an adverse inference as possible sanctions, stated “such drastic sanctions are not mandatory”.  Therefore, he ordered a “two-fold remedy”, ordering that the plaintiffs would be “precluded from relying upon their version of the emails at issue to demonstrate notice to the defendants of use of the SLAMXHYPE mark” and that the plaintiffs would bear the “costs, including reasonable attorney’s fees, incurred by the defendants in establishing the plaintiffs’ misconduct and in securing relief.”

So, what do you think?  Were those sanctions warranted?  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.