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Preservation

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

ASU-Arkfeld eDiscovery and Digital Evidence Conference – eDiscovery Trends

Apparently, next week is the week for eDiscovery conferences.

Last week, I told you about a two-day program being hosted next week in my hometown of Houston by The Sedona Conference®.  Then, on Tuesday, I told you about the Second Annual Electronic Discovery Conference for the Small and Medium Case, hosted by the Levin College of Law at the University of Florida and EDRM also next week.  Now, here is another conference alternative for next week – the Third Annual ASU-Arkfeld eDiscovery and Digital Evidence Conference, hosted by Arizona State University and noted eDiscovery expert Michael Arkfeld.

The conference will be held next week, March 12-14 at the Sandra Day O’Connor College of Law / Armstrong Hall at Arizona State University in Tempe, Arizona.  As the downloadable brochure states, the conference will be “[f]ocusing on the practical issues affecting the discovery and admission of electronic information.  Attendees will be participating with thought leaders and practitioners of eDiscovery on issues impacting legal professionals locally, nationally, and globally.”

The conference will include:

  • noted eDiscovery judges, including Shira A. Scheindlin (who will be giving the keynote address on the first morning), John Facciola, and Craig Shaffer;
  • knowledgeable in-house counsel and eDiscovery specialists, including Robert Amicone from Office Depot, Tom Morrissey from Purdue Pharma and Kit Goetz from Qualcomm;
  • distinguished outside counsel, including Robert Singleton from Squire Sanders, Mark Sidoti from Gibbons, Joy Woller from Lewis Roca Rothgerber, Maura Grossman from Wachtell, and Ariana Tadler from Milberg and;
  • dedicated litigation support professionals including Tom O’Connor, Steven Goldstein, and Anne Kershaw.

Topics run the full range of the eDiscovery life cycle – from information management strategies to dispose of “zombie data” (I like that term) to meet and confer, preservation, collection, data analytics and technology assisted review, production formats, eDiscovery for criminal cases and cross-border issues and eDiscovery project management best practices.  You can earn up to 15 hours of CLE credit for attending.

It’s too late for early bird pricing, but regular attendees can still register prior to the show for $595.  Government, non-profit and paralegal registrants can do so for $345; if you’re a student, it only costs $95 to attend.  Those rates are $695/$395/$115, respectively, if you wait until the day the show starts.  Discounted group rates are also available.  You can register for the conference online here.

So, what do you think? Do you plan to attend the program, or perhaps one of the other programs next week? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Alon Israely, Esq., CISSP of BIA – eDiscovery Trends

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

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

Today’s thought leader is Alon Israely.  Alon is the Manager of Strategic Partnerships at Business Intelligence Associates, Inc. (BIA) and currently leads the Strategic Partner Program at BIA.  Alon has over eighteen years of experience in a variety of advanced computing-related technologies and has consulted with law firms and their clients on a variety of technology issues, including expert witness services related to computer forensics, digital evidence management and data security.  Alon is an attorney and a Certified Information Systems Security Professional (CISSP).

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

Once again, I did not see much differentiation between different exhibitors.  There was nothing that stood out to me as being a groundbreaking differentiator.  That said, it seemed a lighter show, less people.  But, even though it was a lighter number of attendees, the caliber of attendees seemed a bit higher.  This is all coming from my gut as I have no real numbers or metrics to back this up, but, the conversations we had at our booth seemed, on average to be a little more substantive than in previous years.

As for trends, there seems to be more discussion about the high-tech trends, such as cloud computing and analytic technologies.  Instead of people talking about these technologies generally, it seemed as though people were talking about these technologies more specifically.  Not to say that they were differentiated, they were still non-differentiated.  But, there were more people talking about cloud technologies and there was a big CLE about it.  And, more people were talking specifically about analytics, not just saying “you can do all of this culling”, but showing specific examples, with charts, graphics and other neat elements that indicate searching/analytics results.  So, there seemed to be a bit more specificity around technology and, together with that, advanced technology.  But, to be honest with you, there was nothing at the show that really blew my mind.  Nothing that was groundbreaking, nothing that looked like it would initiate a shift in the industry.  If anything, it felt like, other than the few specifics around high-tech, similar to previous years.

I will say that some of the attendees that I talked to, some of the GCs and outside counsel firm attorneys, said they spent more time inside the educational components at LegalTech instead of the exhibit hall.  So, as an exhibitor, that doesn’t make me overly happy to see that, but, as a knowledge leader in the industry, I’m very happy to see that.  I know that ALM has always tried to do a good job with the educational components.  And, I think this year attendees took that part of it more seriously than in the past several years.  It seemed that most of the networking that my BIA colleagues and I did was at the educational sessions, not necessarily on the floor.  I think that’s a positive indicator for the people who made it to the show.

As for general trends in 2014, I think you will see corporations start to take control of their technology, not only for in-house solutions, but also for the solutions that outside counsel will be providing to them.  Today, corporations tend to trust their outside counsel firms as to the review tools and other technologies that they use, but I think that it will be much more of a coordinated effort going forward.  The level of maturity for corporations around eDiscovery is being raised.  What the means in practical terms is that they will work more closely with their trusted vendors.  I don’t believe that corporations are going to bring everything in-house and that vendors will be out of luck, though a lot of other people believe that will happen.  I believe that services business for eDiscovery will remain strong for the next decade or longer and the dynamic of obtaining those services will morph into the corporation sitting side-by-side with the law firm making those services decisions.

That trend was evident at the show: you heard it from different vendor booths and the way that they were pitching their products and you heard it from actual in-house attorneys that were attending.  I saw at least two cases where the GC and his outside counsel attorney were walking around the show together – hopefully, the GC wasn’t getting charged for that time!  You’re starting to see corporations take more control of the reins, but not in the way we always thought where they dictate to the outside counsel what vendors to use.  Instead, it’s much more of a collaborative effort and I think you’ll see much more of that over the next several years.

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

I see those being incredibly important.  The more we can get specificity around what needs to happen early in a case and the more that specificity can be codified, the better off we will all be.  If you look at all of the wasted money spent over the last few years, some of that is solved by the new rules, specifically in the area of preservation.  We’re in the business of selling preservation software, so I’m excited about the potential changes.

But, if I step out of that personal perspective, the changes still make a lot of sense because, today, you still have a lot of effort being spent by parties figuring out legal hold and preservation issues.  Who was put on hold, when were holds put in place, what data was and was not preserved.  That usually happens when a problem occurs – you have a peak of expensive lawyering and legal maneuvering with motions practice, etc and typically when it’s already too late.  So, some of these new rules which are focused on discussions early in the case with respect to preservation should nip a lot of that in the bud.  Now, instead of fighting four months later after discovery closes whether some system was preserved or not, that should get covered early-on with some of the new rules that will hopefully go into effect.  So, I’m very excited about the rules changes, not only as a vendor in the space, but also as a legal professional in general.  The more efficiency that you can create early in the matter, the more money you can save and the more you can focus on the substantive issues and on the merits of the case.

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

I do wholeheartedly agree.  Our industry is funny because the cost of goods sold for eDiscovery solutions and services is higher than for most other industries else because of the fact that we have to educate with almost every sale.  There are a lot of resources out there, including efforts by many respected thought leaders and all of the great blogs out there, and many providers have an educational component to their website.  So, you’re right that there are a lot of quality resources for attorneys at their fingertips, yet there are still so many attorneys that simply don’t understand it.  Most of the small business and solo practitioners market doesn’t understand eDiscovery and many GCs of mid-sized corporations don’t either.  And, frankly neither do many “corner office” partners at Amlaw200 firms.  They know about it at a high level and understand that it’s important, but they don’t know enough detail.  But, the good news is that with the advent of those educational resources and the fact that every eDiscovery provider and vendor teaches as they sell, those legal professionals don’t need to learn that much – even getting four or five feet “underneath the water” instead of thirty feet under would be helpful.

As to why they don’t know more, I don’t know.  Maybe attorneys are so used to having experts to rely on and because they feel they know enough about eDiscovery, that they don’t need to know any more detail or process understanding unless a problem arises.  I don’t have an explanation as to why, with all of these great resources available, that most legal professionals don’t have more knowledge.  Unless it’s just that they have a “technology block” and are still afraid of the technology aspects of that knowledge base.  To improve things, I believe that vendors will continue to have to sell in an educational manner, with one half of the sale educating the attorney and the other half focused on closing the deal.  And, hopefully more law schools will continue to incorporate eDiscovery into their curriculum.  But, I don’t see the issue of more knowledge across a wider audience of legal professionals getting a whole lot better anytime soon.

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

BIA continues to be focused on bringing the best technology and workflow that we can to the left side of the EDRM model – such as legal hold, preservation and ECA.  Legal hold activities such as notifying and tracking employees, interviewing custodians and creating questionnaires to do so, and suspending practices such as email auto deletion, and collection of ESI is what we’re all about.  We’ve been really integrating those areas of the left side of the EDRM into one another.  Today, TotalDiscovery employs much more of a circular workflow than it did even a year ago.  It used to be much more siloed – you would implement a legal hold and then do a custodian questionnaire and the collection.  Now, we’ve integrated those steps a lot more.  Hold flows into the questionnaire process, you can seed collections with data from the questionnaires, and so forth.  We’re also continuing to serve up as much intelligence on the data as possible.  You don’t have to wait until you get further down the right side of the model to understand the type of data you have or how much you have.  Obviously, you still need to be able to have a good review tool to perform real hard core research and analysis, but to the extent we can help attorneys more knowledgeable about their data before they get to review, the better it will be for them.  That’s our goal.  So, a lot of that comes from integrating different parts of the process and not focusing on just one area of the process, but gleaning intel from all of them and summarizing at a high level for the attorney.  Also, our enterprise features are really strong and not something we talk about a lot (but we probably should) – stuff like connecting to Active directory, Exchange and other systems – real simple to do as a default configuration.

Also, our flat fee pricing model is a source of pride for us and it’s been very successful.  Flat-fee pricing, unlimited use of functionality and overall budget predictability are values we offer and guarantee – which is unique in the market.  Also, one of the good things about BIA is that we’re a technology company and we’re always adding features – we’ve now moved to a tighter cycle with a new feature or function added every four to six weeks.  Sometimes it’s a small feature, at other times, it’s a large feature we’ve been working on for a while.  It keeps it very fresh and we’re able to do so because of the way we’ve built the product with the cloud and web technologies that we use  So, BIA continues to focus on what we’re good at – improving the workflow and functionality for the tasks compelled by companies on the left side of the EDRM model, leading up to review.

Thanks, Alon, for participating in the interview!

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

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

Brad Jenkins of CloudNine Discovery – eDiscovery Trends

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

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

Today’s thought leader is Brad Jenkins of CloudNine Discovery.  Brad has over 20 years of experience as an entrepreneur, as well as 15 years leading customer focused companies in the litigation support arena. Brad also writes the Litigation Support Industry Blog, which covers news about litigation support and eDiscovery companies’ funding activities, acquisitions & mergers and notable business successes. He has authored several articles on document management and litigation support issues, and has appeared as a speaker before national audiences on document management practices and solutions.  He’s also my boss!

What significant eDiscovery trends do you see for 2014?

Well, I think that technology assisted review tools will continue to gain traction and the software will continue to make the review process more intuitive.  I think predictive coding software is evolving to provide real-time predicted relevance scores for the collection as each document is reviewed.  One of our partners, Hot Neuron, announced last month that Version 4.0 of their Clustify software, is the first technology-assisted review tool to offer real-time predictive coding.  I also think that the technology associated with predictive coding will be used more in other areas of the eDiscovery life cycle, particularly Information Governance.

Another trend, one that I discussed last year, is integration of “best of breed” cloud-based applications to make the discovery process more seamless. Our alliance with BIA and the integration of their TotalDiscovery legal hold and collection tool to our review application, OnDemand®, has continued to be used by our clients to support preservation through production.  BIA has tremendous expertise and software to support the left side of the EDRM model and it’s a logical fit for the services and software we provide from collection to production.  Personally, I believe that the “best of breed” integrated applications approach is a preferable alternative to a complete solution because it’s difficult to be an expert in all phases of discovery.

I also think that it’s more difficult than ever for the small to medium sized firm to compete with the big firm that has most of the attention from the eDiscovery vendor market and has more resources in house to manage their discovery workload.  Most small to mid-sized firms lack the core competency, the infrastructure, the project management expertise and the overall personnel in house to provide the full range of services that large corporate clients are demanding, especially for litigation support and discovery services.  More than ever, these firms will need to leverage virtual resources to compete and provide the level of services their clients expect.

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

I don’t really have a prediction as to whether they will be approved this year.  I know there has been controversy with some of the proposed rules changes, especially Rule 37(e), regarding the level of culpability required to justify severe sanctions for spoliation and that Judge Scheindlin and others have criticized the rule.  I wouldn’t be surprised to see some changes to that rule before adoption.  Regardless, it seems like a lot of attorneys don’t follow the rules adopted back in 2006, so the rules will only be effective if attorneys adhere to those rules and courts hold them to those standards.

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

Yes, I agree.  We work with a lot of firms whose attorneys lack basic eDiscovery fundamentals.  In some cases, the managing partners know that and have been asking for us to provide seminars and webinars to educate them on eDiscovery best practices.  And, we have been providing more consulting than ever to attorneys to assist them with technical language in requests for production to ensure that they receive the most useful form of production such as native files with included metadata.

As for what can be done, I think it’s imperative for each provider to provide resources to educate their clients and the legal profession as a whole.  We do that with our blog, eDiscoveryDaily.  As we approach 300,000 lifetime hits and 1,000 lifetime posts, both of which we will reach later this year, I’m proud of the knowledge base that this blog has become.  This year, we are also looking to really ramp up CLE training for attorneys that want to become more comfortable with technology.  There are numerous other great blogs and resources out there too.  I think we have to keep pushing and keep finding ways to reach attorneys and give them useful resources that can simplify the discovery process, which is what we’re all about at CloudNine.

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

In addition to our continued integration success with BIA and our partnership with Clustify, we recently released a brand new version of our review application OnDemand® , called Universal OnDemand.  We called it “Universal” because we have re-designed it to work in any browser, so clients can use it whether they prefer Internet Explorer, Firefox, Google Chrome or even Safari on a Mac.  We will be working to expand the application to support use with tablets this year and, as always, working to add features requested by our clients, who are the primary drivers of our development priorities.

We have also been working on a new advanced program that we call the Virtual BIG Firm™ program.  It’s a unique package of the full range of services that we have provided for years, along with our OnDemand review platform, for mid-sized firms that want to compete with the big firms, but don’t have the personnel, infrastructure or expertise to make it happen.  We created our Virtual BIG Firm program based on our experience working with over one hundred law firms for more than eleven years.  Our Virtual BIG Firm program appeals to firms interested in growing their practice.  These firms value continuing legal education, technology advances and they feel comfortable delegating.  It’s not for everybody, so we continue to offer our basic services and software as we always have, but for the firm that has a significant litigation workload but not the resources to fully manage it effectively, it’s a program that provides those resources at a fraction of what big firms spend on personnel & technology.

Thanks, Brad, for participating in the interview!

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

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

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

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

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

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

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

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

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

This case was previously covered on this blog here.

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

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

EDRM Updates Privacy & Security Risk Reduction Model – eDiscovery Best Practices

The Electronic Discovery Reference Model (EDRM) continues to pile up the accomplishments. In addition to announcing a transition to nonprofit status by May 2014, since the May annual meeting, several EDRM projects (Metrics, Jobs, Data Set and the new Native Files project) have already announced new deliverables and/or requested feedback and EDRM also published new Collection Standards for collecting electronically stored information (ESI).  Now, EDRM is making updates to earlier accomplishments from just five months ago.

As they announced last week, EDRM announced the reintroduction and refinement of its Privacy & Security Risk Reduction Model (PSRRM). Initially introduced last September by EDRM’s Data Set group (and covered on this blog here), the model provides a process for reducing the volume of private, protected and risky data by using a series of steps applied in sequence as part of the information management, identification, preservation and collection phases of the Electronic Discovery Reference Model.

The PSRRM model is used prior to producing or exporting data containing risky information such as privileged or proprietary information. The middle steps are cyclical and are repeated until the amount of private material is reduced to a desirable amount. The private data is finally quarantined in the final step before the remaining information is produced.

Recent high profile data breaches at Target and Neiman Marcus are prime examples to illustrate that high risk data can cause significant trouble and exposure for organizations today.  As their press release notes, EDRM has revised the PSRRM to include industry feedback and real-world experiences using the model in data remediation and eDiscovery projects to help companies address this exposure in an organized and systematic manner.

The current resource page for the PSRRM model is located here.

So, what do you think?  How do you handle security of your organization’s sensitive data?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Search Process for ESI Called into Question, but Court Denies Sanctions for Plaintiff – eDiscovery Case Law
 

In Brown v. West Corp., No. 8:11CV284, 2013 U.S. Dist. (D. Neb. Dec. 4, 2013), the plaintiff filed a motion to compel, claiming the defendant had been insufficient in its handling of searching for Electronically Stored Information (ESI) relevant to discovery. The plaintiff additionally contested a prior order from a magistrate judge, requiring the defendant to explain its search processes to the defendant. Ultimately, Nebraska Senior District Judge Lyle E. Strom denied the requested sanctions and rejected the challenge to the prior order.

The most recent motion saw the plaintiff asking for sanctions under Federal Rule of Civil Procedure 37(b), stating that the defendant failed to comply with the prior order, the purpose of which was stated to “lay bare the defendant’s search process and expose any deficiencies that might be a basis for plaintiff’s motion to compel a more stringent search of potentially relevant ESI for preservation.” In addition, the plaintiff asked that additional discovery be permitted.

However, the defendant had in fact complied with the prior order and explained its search processes regarding ESI, noting that its system did not permit a “‘global search’ of all electronic information in West’s possession.” The substance of the magistrate judge’s concerns regarding the prior order had concerned preservation of ESI, and not necessarily discovery requests. Judge Strom noted that the plaintiff had misinterpreted the prior order, and that the defendants had addressed concerns by “explaining the process by which West employees were directed to identify, preserve, and search potentially relevant materials.” Therefore, “the court finds no reason to require more from the defendant by way of evidence of a proper search.”

In the same motion and combined with the efforts to seek expanded discovery, the plaintiff raised two issues of spoliation. One that the defendant had erased the data of three potential custodians who had left the company, and two, that the defendant had failed to halt the automatic deletion of e-mail which may have been relevant to discovery.

Regarding these issues, Judge Strom once again rejected the contentions, stating that the defendant had repurposed the computers of former employees in apparent good faith, and as a regular business practice, “only after making a determination that all of the relevant information stored on those computers was preserved.” Additionally, the objection to automatic email deletion was dismissed because the plaintiff had not identified relevant emails or email categories that are “not subject to defendant’s preservation process or that have been deliberately destroyed in an attempt to thwart discovery.”

Finally, the plaintiff’s request to overturn the magistrate judge’s order that limited discovery to certain custodians was denied. Regarding Federal Rule 26(b), which states in part that requests for discovery should be limited due to “relevance and the balance between likely benefit and the burden on the producing party,” the magistrate judge had found nothing that would “suggest sufficient benefit [to the plaintiff] to warrant the expansive scope of the requested discovery” as outlined by the plaintiff. Such a scope, the magistrate judge felt, would be “grasping at the periphery by reviewing thousands or tens of thousands of emails,” and further that, “a few pointed questions in a deposition [would be] less burdensome.”

So, what do you think?  Should defendants be permitted to limit responses to discovery when producing ESI due to the limitations of their technology? Please share any comments you might have or if you’d like to know more about a particular topic.

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

Sanctions Awarded when Defendant Failed to Preserve Relevant Evidence – eDiscovery Case Law

In Zest IP Holdings, LLC v. Implant Direct Manufacturing, LLC., No. 10-0541-GPC(WVG), 2013 U.S. Dist. (S.D. Cal. Nov. 25, 2013), California Magistrate Judge William V. Gallo granted the Plaintiff’s motion for sanctions because parties are “required to preserve evidence relevant to litigation and to prevent spoliation.”  Judge Gallo found that the Defendant “failed to preserve multiple documents that are relevant to Plaintiff’s claims with the requisite culpable state of mind to support a finding of spoliation of evidence”.

The plaintiffs sought sanctions for the defendants’ alleged spoliation and other discovery abuses during this patent and trademark infringement action. The defendant was notified by letter on August 8, 2008 that it was believed the defendant’s product was an unlawful replica of the plaintiff’s product. The plaintiff sent a subsequent cease and desist letter with intentions to file suit on October 22, 2008.

Despite receiving these letters, the defendants continued manufacturing their product.  It was the defendant’s belief that because the plaintiff’s did not file their complaint until March 2010 that there was no duty on behalf of the defendant to preserve any documents, especially as the plaintiffs did not request this of the defendant. The plaintiffs requested sanctions because the defendants never instituted a litigation hold, did not take steps to preserve documents, and failed to instruct employees to preserve any documents.  Furthermore, the defendants had no backup storage system in place to prevent the destruction of documents. They initially believed e-mails were “‘automatically preserved” on a server under their control, however it was discovered that this was not the case and e-mails could be deleted.

The defendants argued that these omissions did not warrant sanctions due to their company policy, which stated that “no documents are to be deleted.”  It was further believed by the defendant that their employees would never delete any company documents. However, this contention was challenged when testimony from various employees who claimed they had, in fact, deleted e-mails. The CEO of the defendant company, Implant Direct Manufacturing, LLC, claimed in his deposition he had six e-mail accounts, however not one of the messages in these accounts were ever preserved or produced. In fact, he said he did not even bother searching these accounts for any relevant documents due to a file folder on his desktop where he saved all messages relating to the plaintiffs.

Judge Gallo found that the defendants’ duty to preserve documents began when they received the October 22, 2008 letter requesting the defendant cease and desist production of the product, as well as informing them of the plaintiffs’ intent to sue. The documents they destroyed thereafter were “highly probative” of the claims in the plaintiffs’ lawsuit and therefore the plaintiffs suffered prejudice as a result of the defendant’s actions. Additionally, the defendant failed to monitor its employees’ compliance with its so-called policy of saving all e-mails.  The defendants’ conduct, however, did “not rise to the level of bad faith sufficient to warrant default judgment under the circumstances”, but Judge Gallo found an adverse inference instruction proper under the Zubulake test.  Judge Gallo also awarded monetary sanctions because the defendants’ “negligence and their denial of spoliation of evidence caused delay and unnecessary costs that could have been avoided.”

So, what do you think?  Was Judge Gallo right to award sanctions? Please share any comments you may have, or if you’d like to know more about a particular topic.

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

Quinn Emanuel Sanctioned for Inadvertent Disclosure, Samsung Escapes Sanction – eDiscovery Case Law

California Magistrate Judge Paul S. Grewal has now handed down an order on motions for sanctions against Samsung and the Quinn Emanuel law firm in the never-ending Apple v. Samsung litigation for the inadvertent disclosure of confidential agreements that Apple had with Nokia, Ericsson, Sharp and Philips – now widely referred to as “patentgate”.

After discovery on the matter, Judge Grewal ruled as follows:

“Quinn Emanuel shall reimburse Apple, Nokia, and their counsel for any and all costs and fees incurred in litigating this motion and the discovery associated with it, as required by Rule 37 in the absence of ‘substantial justification’ or other showing of ‘harmlessness,’ neither of which the court finds here. That expense, in addition to the public findings of wrongdoing, is, in the court’s opinion, sufficient both to remedy Apple and Nokia’s harm and to discourage similar conduct in the future.”

Basically, Judge Grewal determined that “what began as a chorus of loud and certain accusations had died down to aggressive suppositions and inferences, and without anything more, Quinn Emanuel and Samsung cannot reasonably be subject to more punitive sanctions”.

Apple and Nokia had proposed a number of “creative” sanctions that Quinn and Samsung ranging from an injunction against Samsung in the case to a ten-year ban from representing any party adverse to Nokia – suggestions that Judge Grewal referred to as “ludicrously overbroad”.

For a link to the order, click here.

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

So, what do you think?  Did Samsung and Quinn Emanuel get off lightly?  Or was the sanction appropriate?   Please share any comments you might have or if you’d like to know more about a particular topic.

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