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Preservation

Court Grants Motion to Compel Defendant to Produce Documents as Requested and Chronicle Approach – eDiscovery Case Law
 

In Home Instead, Inc. v. Florance, No. 8:12CV264, 2013 U.S. Dist. (D. Neb. Nov. 8, 2013), following a motion to compel discovery on behalf of the plaintiff, Nebraska Magistrate Judge Cheryl R. Zwart ordered the defendant to produce documents requested during discovery and required the defendant to produce a sworn affidavit chronicling the methods used in their search for production of the discovery documents.

During this dispute over a franchise agreement, the parties were ordered to meet for a discussion of the discovery matter but failed to resolve any issues.  The plaintiff alleged the documents were not produced due to the defendant’s destruction, deleting, selling, shredding, or otherwise discarding of the documents.  The plaintiff also alleged that their attempts at searching electronically for documents fell short of a good faith effort and was therefore inadequate.  According to testimony by both David and Michelle Florance, the defendants, there was not a thorough search of email accounts for responsive documents.  This “broad” search did not include reviewing client paper files, employee files, caregiver logs, or client care plans or service contracts. 

Additionally, the defendants were unable to explain what efforts their employees used to find information.  Furthermore, their electronic search merely consisted of looking for the words “Home Instead”, and they subsequently deleted any documents found.  The defendants did not retain a copy or forward the document to counsel.  Judge Zwart agreed with the plaintiff and felt they were entitled to a sworn affidavit, “not only to determine the extent of the defendants’ search for production of responsive discovery”, but to also assess the defendant’s culpability in failing to preserve evidence used in litigation.

As to the manner of production, the plaintiff alleged the defendants provided “one large PDF that contains no metadata, no indication of parent-document relationship, on no indication as to the beginning and end of each document.”  The motion requested Judge Zwart to compel the defendants to produce their discovery responses in compliance with the Federal Rules.

According to the parties’ Rule 26(f) report, any document maintained in electronic form during a party’s normal course of business will also be produced in electronic form as “searchable TIFF images with load files to allow images to be loaded into a document production database.”  Those documents not produced in electronic form in a party’s ordinary course of business and not scanned into electronic form prior to the date of production are allowed to be produced in the manner in which they are maintained.  In addition, Rule 34(b)(2)(e) of the FRCP states that 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.”

The defendant’s deposition testimony showed that while the defendants located electronic documents, they did not produce them in an electronic format as required under their agreement with the Plaintiff or the federal rules.  They also failed to organize and label any documents that may have existed in their usual course of business, a requirement under the Federal Rules.  Judge Zwart agreed with the plaintiff, stating that the defendants “failed to organize and label [the documents] as required under the Federal Rules,” and granted the plaintiff’s motion to compel.

So, what do you think?  Should the motion to compel have been granted?   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.

2013 eDiscovery Year in Review: eDiscovery Case Law, Part 4

As we noted on Thursday, Friday and yesterday, eDiscoveryDaily published 78 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases!  Yesterday, we looked back at cases related to proportionality and the first half of the cases related to sanctions (yes, there were that many).  Today, here are the rest of the cases related to sanctions.

We grouped those cases into common subject themes and have been reviewing them over the previous three posts.  Today is the last post in the series.  Perhaps you missed some of these cases?  Now is your chance to catch up!

SANCTIONS

Of the 62 cases we covered this past year, over 40% of them (26 total cases) related to sanctions, either due to spoliation issues or inadequate or untimely productions, many of which were granted, but some were denied.  Oh, and, apparently, having your case dismissed isn’t the worst that can happen to you for spoliation of data.  Here are the remaining 13 cases:

Judge Rules Against Spoliation Sanctions when the Evidence Doesn’t Support the Case.  In Cottle-Banks v. Cox Commc’ns, Inc., California District Judge Gonzalo P. Curiel denied the plaintiff’s motion for spolation sanctions because the plaintiff was unable to show that deleted recordings of customer calls would have likely been relevant and supportive of her claim.

Spoliation of Data Can Get You Sent Up the River.  Sometimes, eDiscovery can literally be a fishing expedition. I got a kick out of Ralph Losey’s article on E-Discovery Law Today (Fishing Expedition Discovers Laptop Cast into Indian River) where the defendant employee in a RICO case in Simon Property Group, Inc. v. Lauria threw her laptop into a river. Needless to say, given the intentional spoliation of evidence, the court imposed struck all of the defenses raised by the defendant and scheduled the case for trial on the issue of damages.

Adverse Inference Sanction for Defendant who Failed to Stop Automatic Deletion.  Remember the adverse inference instructions in the Zubulake v. UBS Warburg and Apple v. Samsung cases? This case has characteristics of both of those. In Pillay v. Millard Refrigerated Servs., Inc., Illinois District Judge Joan H. Lefkow granted the plaintiff’s motion for an adverse inference jury instruction due to the defendant’s failure to stop automatic deletion of employee productivity tracking data used as a reason for terminating a disabled employee.

Appellate Court Upholds District Court Discretion for Determining the Strength of Adverse Inference Sanction.  In Flagg v. City of Detroit, the Sixth Circuit held that the district court did not abuse its discretion in issuing a permissive rather than mandatory adverse inference instruction for the defendant’s deletion of emails, noting that the district court has discretion in determining the strength of the inference to be applied.

eDiscovery Vendors Are Not Immune to eDiscovery Sanctions.  In Nuance Communications Inc. v. Abbyy Software House et al., California District Judge Jeffrey S. White refused Wednesday to dismiss Nuance Communications Inc.’s patent infringement suit against Lexmark International Inc. and Abbyy Software House, and awarded reimbursement of plaintiff’s attorneys’ fees and costs in excess of $130,000 as part of discovery abuse sanctions resulting from the late production of relevant documents from Abbyy.

Hard Drive Turned Over to Criminal Defendant – Eight Years Later.  If you think discovery violations by the other side can cause you problems, imagine being this guy. As reported by WRAL.com in Durham, North Carolina, the defense in State of North Carolina v. Raven S. Abaroa filed a Motion to Dismiss the Case for Discovery Violations after the state produced a forensic image of a hard drive (in the middle of trial) that had been locked away in the Durham Police Department for eight years.

When Lawyers Get Sued, They Have Preservation Obligations Too.  In Distefano v. Law Offices of Barbara H. Katsos, PC., New York Magistrate Judge A. Kathleen Tomlinson found that the defendant (an attorney who was being sued by the plaintiff she previously represented for breach of contract, negligence/legal malpractice, and breach of fiduciary duty/duty of care) had a duty to preserve information from a discarded computer and ordered a hearing for the defendant to address a number of questions to determine the potential relevance of the destroyed data and whether the defendant had a sufficiently culpable state of mind.

Plaintiff Receives Adverse Inference Sanction for Deleting Facebook Profile.  In Gatto v. United Air Lines, Inc., New Jersey Magistrate Judge Steven C. Mannion issued an adverse inference sanction against the plaintiff for failing to preserve data due to the fact that he either, deactivated his Facebook account and allowed the account to be automatically deleted after fourteen days, or that he deleted the account outright. Judge Mannion denied the defendant’s request for attorney’s fees and costs for “the time and effort it was forced to expend in an effort to obtain discovery”.

The Hammer Comes Down on Losing Plaintiff for Spoliation of Data.  Apparently, having your case dismissed isn’t the worst that can happen to you for egregious spoliation of data. You can also be ordered to pay the winning party over $200,000 in fees and costs for the case. In Taylor v. Mitre Corp., Virginia District Judge Liam O’Grady partially granted the prevailing defendant’s motion for fees and costs after the court dismissed the case due to the plaintiff’s spoliation of evidence.

Defendants Sanctioned, Sort Of, for Failure to Preserve Text Messages.  In Christou v. Beatport, LLC, Colorado District Judge R. Brooke Jackson ruled that the plaintiffs could introduce evidence at trial to show the defendants failure to preserve text messages after the key defendant’s iPhone was lost. However, the judge also ruled that the defendants could present “evidence in explanation…and argue that no adverse inference should be drawn”.

JP Morgan Chase Sanctioned for a Failure to Preserve Skill Codes.  In EEOC v. JP Morgan Chase Bank, District Judge Gregory L. Frost granted the EEOC’s motion for sanctions for spoliation of data, entitling the plaintiff to “a permissive adverse jury instruction related to the spoliation if this litigation proceeds to a jury trial”, and denied the defendant’s motion for summary judgment.

EEOC Sanctioned for Failing to Comply with Motion to Compel Production.  As noted previously in this blog, the Equal Employment Opportunity Commission (EEOC) was ordered to turn over social media information related to a class action case alleging sexual harassment and retaliation. Apparently, they were less than cooperative in complying with that order. In EEOC v. Original Honeybaked Ham Co. of Georgia, Colorado Magistrate Judge Michael E. Hegarty sanctioned the EEOC for failing to provide discovery of social media content.

Blind Reliance on Vendor for Discovery Results in Sanctions.  In Peerless Indus., Inc. v. Crimson AV, LLC, Illinois Magistrate Judge Susan E. Cox sanctioned the defendant for a “hands off approach” to discovery by relying on a vendor for conducting the discovery from a closely related non-party to the suit.

That’s our eDiscovery case review for 2013.  Let’s do it again next year!

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

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

2013 eDiscovery Year in Review: eDiscovery Case Law, Part 3

As we noted on Thursday and Friday, eDiscoveryDaily published 78 posts related to eDiscovery case decisions and activities over the past year, covering 62 unique cases!  Friday, we looked back at cases related to production format disputes, search disputes and technology assisted review.  Today, let’s take a look back at cases related to proportionality and the first half of the cases related to sanctions (yes, there were that many).

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

PROPORTIONALITY / COOPERATION

There were certainly at least a handful of cases where proportionality of eDiscovery and cooperation between parties was at issue, including the most viewed post in the history of this blog.  Here are three such cases:

Is a Blended Document Review Rate of $466 Per Hour Excessive?  Remember when we raised the question as to whether it is time to ditch the per hour model for document review? One of the cases we highlighted for perceived overbilling was ruled upon last month. In the case In re Citigroup Inc. Securities Litigation, New York District Judge Sidney H. Stein rejected as unreasonable the plaintiffs’ lead counsel’s proffered blended rate of more than $400 for contract attorneys—more than the blended rate charged for associate attorneys—most of whom were tasked with routine document review work.

Court Rejects Defendants’ Claim of Undue Burden in ERISA Case.  In the case In re Coventry Healthcare, Inc.: ERISA Litigation, Maryland Magistrate Judge Jillyn K. Schulze rejected the defendants’ claim of undue burden where they failed to suggest alternatives to using the plaintiffs’ search terms and where they could enter a clawback order to eliminate the cost of reviewing the data for responsiveness and privilege.

Court Agrees with Defendant that Preserving 5 Terabytes of Data is Enough.  In United States ex rel. King v. Solvay, S.A., Texas District Judge Gray Miller granted the defendant’s request for a protective order where the plaintiffs only offered generalized, unsupported claims to support their request to extend and expand discovery.

SANCTIONS

Yes, once again, the topic with the largest number of case law decisions related to eDiscovery is those decisions related to sanctions.  Of the 62 cases we covered this past year, over 40% of them (26 total cases) related to sanctions, either due to spoliation issues or inadequate or untimely productions, many of which were granted, but some were denied.  Here are the first 13 cases:

Company Should Have Preserved Personal eMails, But No Sanctions (Yet).  In Puerto Rico Telephone Co. v. San Juan Cable LLC, Puerto Rico Magistrate Judge Bruce J. McGiverin found that “plaintiff has proffered sufficient evidence to establish that [the defendant] OneLink failed to preserve relevant emails within its control”, but denied the plaintiff’s request for sanctions at this time because of the “absence of bad faith” on the defendant’s part and the plaintiff’s failure to demonstrate prejudice.

The Ubiquitous Apple Samsung Case and “Patentgate”.  When something gets the “gate” suffix added to it, that’s not a good thing. It’s hard to believe that a case can get more intense than when a billion dollar verdict is awarded (later reduced to a measly $599 million, then increased back up to $930 million), but the Apple v. Samsung case seems to only be getting more intense, due to the disclosure of confidential agreements that Apple had with Nokia, Ericsson, Sharp and Philips – now widely referred to as “patentgate”.

Duty to Preserve Triggered When Litigation is “Imminent”, Not “Reasonably Foreseeable”.  In the case In re Pradaxa (Dabigatran Etexilate) Products Liability Litigation, Chief District Judge David R. Herndon ruled that at least in the Seventh Circuit, the duty to preserve is triggered not when litigation is “reasonably foreseeable” but when “a litigant knew or should have known that litigation was imminent.”

Leaving Your Hard Drives in a Rental House is Negligent, Court Rules.  In Net-Com Services, Inc. v. Eupen Cable USA, Inc., the plaintiff’s destruction of evidence was negligent where its principal failed to take steps to preserve evidence he had stored in a home he rented to nonaffiliated lessees.

Despite Missing and Scrambled Hard Drives, Court Denies Plaintiff’s Request for Sanctions. In Anderson v. Sullivan, a Pennsylvania court found “that no sanctions are warranted” despite the disappearance of one hard drive, “scrambling” of another hard drive and failure to produce several e-mails because the evidence was not relevant to the underlying claims and because there was no showing the defendants intentionally destroyed evidence.

Court Awards Sanctions, But Declines to Order Defendants to Retain an eDiscovery Vendor – Yet.  In Logtale, Ltd. v. IKOR, Inc., California Magistrate Judge Donna M. Ryu granted the plaintiff’s motion to compel responses to discovery and awarded partial attorney’s fees as a result of defendants’ conduct. The judge did not grant the plaintiff’s request to order Defendants to retain an eDiscovery vendor to conduct a thorough and adequate search for responsive electronic documents, but did note that the court would do so “if there are continuing problems with their document productions”.

Imagine if the Zubulake Case Turned Out Like This.  You’ve got an employee suing her ex-employer for discrimination, hostile work environment and being forced to resign. During discovery, it was determined that a key email was deleted due to the employer’s routine auto-delete policy, so the plaintiff filed a motion for sanctions. Sound familiar? Yep. Was her motion granted? Nope.

Scheindlin Reverses Magistrate Judge Ruling, Orders Sanction for Spoliation of Data.  If you’re hoping to get away with failing to preserve data in eDiscovery, you might want to think again if your case appears in the docket for the Southern District of New York with Judge Shira Scheindlin presiding.

Permissive Adverse Inference Instruction Upheld on Appeal.  In Mali v. Federal Insurance Co., the Second Circuit explained the distinctions between two types of adverse inference instructions: a sanction for misconduct versus an explanatory instruction that details the jury’s fact-finding abilities. Because the lower court opted to give a permissive adverse inference instruction, which is not a punishment, the court did not err by not requiring the defendant to show that the plaintiffs acted with a culpable state of mind.

Default Judgment Sanction Upheld on Appeal.  In Stooksbury v. Ross, the Sixth Circuit upheld the entry of default judgment as a sanction against defendants that repeatedly failed to comply with discovery obligations, including producing a “document dump” of tens of thousands of pages of nonresponsive information that prejudiced the plaintiffs.

Spoliation Sanctions Can Apply to Audio Files Too.  In Hart v. Dillon Cos., Colorado Magistrate Judge David L. West granted the plaintiff’s Motion for Sanctions for Spoliation of Evidence for failing to preserve a tape recorded interview with the plaintiff and set a hearing and oral argument as to what sanctions should be imposed for October.

Printed Copies of Documents Not Enough, Spoliation Sanctions Upheld for Discarding Computer.  On May 30, the Appellate Division of the Supreme Court of New York, First Department upheld a spoliation sanction against a plaintiff that failed to preserve electronic files and discarded his computer containing those files.

Appellate Court Denies Sanctions for Routine Deletion of Text Messages.  In PTSI, Inc. v. Haley, the appellate court denied a motion for spoliation sanctions where the defendants routinely deleted text messages and other data to “clean up” their personal electronic devices: the volume of messages and limited amount of phone storage made it difficult to retain all data and still use the phone for messaging.

Tune in tomorrow for the remaining thirteen sanctions cases in 2013!

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

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

Plaintiff Sanctioned After its "Failure to Take the Most Basic Document Preservation Steps" – eDiscovery Case Law

In SJS Distribution Systems, Inc. v. Sam’s East, Inc., No. 11 CV 1229 (WFK)(RML), 2013 U.S. Dist. (E.D.N.Y. Oct. 11, 2013), New York Magistrate Judge Robert M. Levy found the plaintiff’s failure to take “the most basic document preservation steps”, including issuing a litigation hold – “even after it discovered the packaging nonconformities and filed this action” – constituted gross negligence. As a result, an adverse inference instruction sanction was issued against the plaintiff and the defendant was awarded its costs and attorney’s fees associated with its motion to compel.

This breach of contract dispute arose out of the plaintiff’s purchase of almost $3 million worth of diapers from the defendant where the plaintiff contended that it discovered a discrepancy between the packaging of the diapers that it ordered and some of the diaper shipments defendant delivered in the fall of 2010 and claimed that it was unable to resell those diapers to the intended buyer and incurred damages as a result.

During discovery, the defendant asked for documents from the plaintiff relating to the purchase, sale, delivery, and attempts to resell the diapers. When the plaintiff certified that it had produced all responsive documents, the defendant advised the plaintiff of deficiencies in its document production, but the plaintiff reaffirmed that it had produced all responsive documents in its possession. After an additional document request, the plaintiff produced three additional pages along with amended responses and objections. The plaintiff’s president also asserted that his company “does not normally save copies of all emails sent or received, that it ‘did not anticipate’ litigation with defendant or the need to save all email communication with defendant, and that plaintiff has no internal emails since it is primarily a one-person entity”.

Judge Levy asked the parties to meet and confer in an attempt to resolve the dispute after the defendant asked for permission to file a motion to compel. Plaintiff’s counsel then announced it had discovered 181 additional hard-copy documents addressing the sale and storage of the diapers, which it turned over to the defendant, which, nonetheless, continued to claim that the plaintiff had still not produced all relevant electronically stored information (ESI).  When the defendant subsequently obtained discovery from a third-party, it included 334 pages of emails from the plaintiff to third parties that the plaintiff had not produced, leading to the defendant eventually filing a motion for spoliation sanctions.

Judge Levy used the Zubulake test to determine the applicability of sanctions, as follows:

(1) the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a culpable state of mind; and (3) 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.

Judge Levy found that all three components of the test were applicable, noting “the facts here establish that SJS’s failure to take the most basic document preservation steps, even after it discovered the packaging nonconformities and filed this action, constitutes gross negligence.”  As a result, the defendant’s motion was granted in part and denied in part, with an adverse inference sanction imposed as well as awarding the defendant its costs and attorney’s fees associated with its motion to compel.  Judge Levy refused to preclude the plaintiff from offering evidence from mid-November 2010 forward, refusing to apply such a “drastic remedy” because there was no evidence of bad faith and other evidence was still available to the defendant.

So, what do you think?  Should sanctions have been issued?   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.

Company Should Have Preserved Personal eMails, But No Sanctions (Yet) – eDiscovery Case Law
 

In Puerto Rico Telephone Co. v. San Juan Cable LLC, No. 11-2135 (GAG/BJM), 2013 U.S. Dist. (D.P.R. Oct. 7, 2013), Puerto Rico Magistrate Judge Bruce J. McGiverin found that “plaintiff has proffered sufficient evidence to establish that [the defendant] OneLink failed to preserve relevant emails within its control”, but denied the plaintiff’s request for sanctions at this time because of the “absence of bad faith” on the defendant's part and the plaintiff's failure to demonstrate prejudice.

In this antitrust lawsuit, the plaintiff sued several defendants, including OneLink Communications, for attempting to block its entry into the cable television market.  The plaintiff contended that OneLink engaged in sanctionable spoliation of evidence by failing to preserve relevant emails from the personal email accounts of three former OneLink officers. Because of this failure, the plaintiff sought an adverse inference instruction at the summary judgment stage and at trial.

Judge McGiverin stated that “when seeking an adverse inference instruction, the proponent of the inference must provide sufficient evidence to ‘show that the party who destroyed the document `knew of (a) the claim (that is, the litigation or the potential for litigation), and (b) the document's potential relevance to that claim.’…Such an instruction usually is appropriate "only where the evidence permits a finding of bad faith destruction,"…but bad faith is not required where circumstances indicate an adverse inference instruction is otherwise warranted”.

Continuing, Judge McGiverin noted “Here, plaintiff has proffered sufficient evidence to establish that OneLink failed to preserve relevant emails within its control. While the emails at issue come from the personal email accounts of OneLink's former officers, these officers had used their personal email accounts to manage the company for as long as seven years…OneLink presumably knew its managing officers used their personal email accounts to engage in company business, and thus its duty to preserve extended to those personal email accounts.”

However, Judge McGiverin found the “plaintiff's request for sanctions problematic on multiple fronts”.  First, he found that OneLink had not acted in bad faith because it had issued a litigation hold notice to employees within one month of the filing of the lawsuit. He also found that any “prejudice suffered by PRTC is currently speculative” since only three email chains could not be located, these three chains were not potentially damaging to OneLink, and the plaintiff had been able to acquire those chains from other sources.

He noted that the “plaintiff may renew its motion for sanctions if circumstances so warrant” if “more information regarding the extent of spoliation” was discovered, but, at least for now, denied the plaintiff’s motion for adverse inference instruction.

So, what do you think?  Should sanctions be issued when a party fails to preserve personal email?   Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Daily will take a break for the holidays and will return on Thursday, January 2, 2013. Happy Holidays from all of us at CloudNine Discovery and eDiscovery Daily!

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.

He Sees You When You’re Sleeping — eDiscovery Trends
 

A recent post in the Law Librarians Blog illustrates not only the different ways in which personal data can be captured, but also the continued growth of devices that might contain that data.

In He Sees You When You’re Sleeping, He Knows When You’re Awake…, the authors discuss potential tracking of mouse movements, current data tracking on smart TVs and even the possibility for data to be kept and tracked on…your toothbrush:

  • An October story from Ars Technica discusses how Facebook is working on a way to log cursor movements, beyond tracking where someone clicks on a page to determine an ad’s effectiveness.  According to the Wall Street Journal, Facebook wants to pay attention to the areas a cursor lingers over, even without a click or other interaction.  And, if you’re using a mobile device, Facebook will still be noting when, for instance, “a user’s newsfeed is visible at a given moment on the screen of his or her mobile phone.”
  • Imagine if your toothbrush could keep track of your brushing habits?  According to ZDNet, Salesforce CEO Marc Benioff sees that happening.  “Everything is on the Net. And we will be connected in phenomenal new ways," said Benioff. Benioff highlighted how his toothbrush of the future will be connected. The new Philips toothbrush is Wi-Fi based and have GPS. "When I go into the dentist he won't ask if I brushed. He will say what's your login to your Philips account. There will be a whole new level of transparency with my dentist”.
  • One device that is already capturing your personal data is the smart TV, in some cases whether you want it or not.  A blogger in the U.K. has discovered that his LG smart TV sends details about his viewing habits back to LG servers.  Those habits also include the file names of items viewed from a connected USB stick.  There is a setting in the TV that purports to turn this behavior off (it’s on by default).  It doesn’t work as data is forwarded to LG no matter what the setting.  LG’s response to the disclosure was less than reassuring – “The advice we have been given is that unfortunately as you accepted the Terms and Conditions on your TV, your concerns would be best directed to the retailer,” the representatives wrote in a response to the blogger. “We understand you feel you should have been made aware of these T’s and C’s at the point of sale, and for obvious reasons LG are unable to pass comment on their actions.”

Nice.  Imagine a case where, in addition to hard drives and smart phones, data collectors need to perform collection on flatscreen TVs and toothbrushes?  If it sounds farfetched, remember that, several years ago, cell phones didn’t store data and texts didn’t even exist.

So, what do you think?  What is the most unusual device from which you’ve ever collected 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.

Samsung Again Owes Apple Almost $1 Billion, Sanction Deadline Nears – eDiscovery Case Law

The news continues to get worse for Samsung Electronics Co. in its colossal legal battle with Apple Inc…

A California federal jury ruled on November 21 that Samsung owes Apple $290.5 million for selling mobile devices that infringed five iPhone and iPad patents, bringing the total awarded for infringing on Apple products to almost $930 million.

The jury deliberated over the course of three days before reaching its decision and awarding the amount, which was less than the $380 million Apple sought from Samsung, but far more than Samsung’s efforts to cap damages at $53 million.

In August of last year, Apple was awarded over a billion dollar verdict, but U.S. District Judge Lucy Koh later reduced those damages to a measly $599 million and ordered a retrial on 13 of Samsung’s products, saying the earlier jury’s math on those gadgets didn’t add up.

And, that may not be the worst of it for Samsung.  Due to the disclosure of confidential agreements that Apple had with Nokia, Ericsson, Sharp and Philips – now widely referred to as “patentgate” – Samsung and its outside counsel Quinn Emanuel Urquhart & Sullivan LLP are facing sanctions for that disclosure.

According to a declaration from Nokia’s Chief Intellectual Property Officer, Paul Melin, on June 4, in a meeting between Samsung and Nokia licensing executives, Dr. Seungho Ahn informed Nokia that the terms of the Apple-Nokia license were known to him. Specifically, according to Mr. Melin, Dr. Ahn stated that Apple had produced the Apple-Nokia license in its litigation with Samsung, and that Samsung’s outside counsel had provided his team with the terms of the Apple-Nokia license. Mr. Melin recounts that to prove to Nokia that he knew the confidential terms of the Apple-Nokia license, Dr. Ahn recited the terms of the license, and even went so far as to tell Nokia that “all information leaks.”

Partner John Quinn of Quinn Emanuel acknowledged the inadvertent disclosure, which was apparently due to an associate at the firm failing to obscure a footnote and two paragraphs while performing a digital redaction of a 150-page report which was posted on an FTP site that was accessible by Samsung personnel.

As a result, California Magistrate Judge Paul S. Grewal ordered an “in camera” review of documents that Samsung claimed as privileged which Apple doubted that they were legitimately withheld from its lawyers.  Then, on November 8 after the review was conducted, Judge Grewal ordered Samsung and Quinn Emanuel to show cause why they should not be sanctioned, stating that “it appears…that sanctions against Samsung and its attorneys are warranted”.  However, he gave Samsung one last chance to defend its actions ordering Samsung to file a brief by December 2 (today) to explain why it should not be sanctioned, while also allowing Apple and Nokia to file a brief to propose appropriate sanctions, with a hearing on the matter set for next Monday, December 9.

So, what do you think?  Can it get any worse for Samsung?   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.

Duty to Preserve Triggered When Litigation is "Imminent", Not "Reasonably Foreseeable" – eDiscovery Case Law
 

In the case In re Pradaxa (Dabigatran Etexilate) Products Liability Litigation, MDL No. 2385,3:12-md-02385-DRH-SCW (S.D. Ill. Sept. 25, 2013), Chief District Judge David R. Herndon ruled that at least in the Seventh Circuit, the duty to preserve is triggered not when litigation is “reasonably foreseeable” but when “a litigant knew or should have known that litigation was imminent.”

In this multidistrict pharmaceutical litigation, the plaintiffs’ steering committee (PSC) sought the production of documents from a drug company’s former employee. The company claimed it deleted the documents under its records retention policy no later than November 2011, before the first lawsuit was filed in this matter. It claimed its duty to preserve did not arise until it knew that litigation was “imminent” in February 2012, when it received the first demand letter from a plaintiff.

The PSC contended that the company’s duty to preserve arose earlier and filed a motion for sanctions. After the court held a hearing on the motion, the drug company’s counsel worked with the custodian and located 40 personal e-mails from his personal e-mail account sent after he left the company that mentioned Pradaxa, the drug in question. The PSC complained that the company’s production was deficient: it wanted the company to produce more than documents that just “referenced” Pradaxa and also complained that the production was inconsistent with the custodian’s declaration that he did not have any Pradaxa-related documents in his possession. The company then asked an outside vendor to review 200 disaster recovery tapes to determine whether it could recover the custodian’s documents.

The PSC filed a motion to compel the custodial file and asked the court for “other relief that the Court deems appropriate” if it found that the file had been destroyed. It claimed the company’s “duty to preserve arose as soon as [it] had reason to anticipate pending litigation and that imminence is not required.” Here, the PSC argued that the company’s duty was triggered because of other litigation stemming from the Pradaxa clinical trials, adverse event reports, and “internet chatter” on the websites of plaintiffs’ law firms.

Judge Herndon agreed with the company and found its duty to preserve did not arise until February 2012 when it received the demand letter and “knew or should have known that litigation was imminent.” Because there was no duty, sanctions were not appropriate. Moreover, even if the duty had arisen before the file was destroyed, the PSC had not shown the company destroyed the file in bad faith and was thus not entitled to a spoliation inference. Instead, it had followed its records retention policy.

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

Case Summary Source: Applied Discovery (free subscription required).  For eDiscovery news and best practices, check out the Applied Discovery Blog here.

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.

The Ubiquitous Apple Samsung Case and “Patentgate” – eDiscovery Case Law

When something gets the “gate” suffix added to it, that’s not a good thing.

It’s hard to believe that a case can get more intense than when a billion dollar verdict is awarded (later reduced to a measly $599 million), but the Apple v. Samsung case seems to only be getting more intense, due to the disclosure of confidential agreements that Apple had with Nokia, Ericsson, Sharp and Philips – now widely referred to as “patentgate”.

Here is a summary of events as they are described in California Magistrate Judge Paul S. Grewal’s Order from October 2 regarding Apple’s motion for sanctions (which Nokia joined):

“During the massive fact discovery in this case between August 2011 and March 2012, Apple produced copies of a number of its patent license agreements, including a June 2011 license between Apple and Nokia. Apple marked the Apple-Nokia license as “Highly Confidential —Attorney Eyes’ Only” as permitted by the court’s protective order. Apple also produced and marked as “Highly Confidential —Attorney Eyes’ Only” similar patent license agreements it has reached with Ericsson, Sharp, and Philips.”

“As fact discovery transitioned to expert discovery, on March 24, 2012, Samsung’s outside counsel sent Samsung a draft expert report by Dr. David J. Teece. Dr. Teece’s report concerned damages to be awarded for Apple’s alleged infringement of Samsung’s asserted declared-essential patents. Because it addressed highly confidential, attorneys’ eyes only information, the report should have been fully redacted of that information before it was sent. However, intentionally or inadvertently, it was not. The report as distributed included key terms of each of the four Apple license agreements.”

“Samsung’s outside counsel [Quinn Emanuel Urquhart & Sullivan LLP] posted the report on an FTP site that was accessible by Samsung personnel. An email providing instructions to access the FTP site was addressed to the regular client distribution list used by counsel to provide Samsung personnel updates regarding this case. The information was then sent, over several different occasions, to over fifty Samsung employees, including high-ranking licensing executives. Specifically, on at least four occasions between March 24, 2012 and December 21, 2012, Samsung’s outside counsel emailed a copy of some version of the report to Samsung employees, as well as various counsel representing Samsung in courts and jurisdictions outside the United States.”

“At this point, things get murky. According to a declaration from Nokia’s Chief Intellectual Property Officer, Paul Melin, on June 4, 2013, in a meeting between Samsung and Nokia licensing executives, Dr. Seungho Ahn informed Nokia that the terms of the Apple-Nokia license were known to him. Specifically, according to Mr. Melin, Dr. Ahn stated that Apple had produced the Apple-Nokia license in its litigation with Samsung, and that Samsung’s outside counsel had provided his team with the terms of the Apple-Nokia license. Mr. Melin recounts that to prove to Nokia that he knew the confidential terms of the Apple-Nokia license, Dr. Ahn recited the terms of the license, and even went so far as to tell Nokia that “all information leaks.” Mr. Melin also reports that Dr. Ahn and Samsung then proceeded to use his knowledge of the terms of the Apple-Nokia license to gain an unfair advantage in their negotiations with Nokia, by asserting that the Apple-Nokia terms should dictate terms of a Samsung-Nokia license.”

Over the next few weeks, Samsung appealed the order to District Judge Lucy Koh, who was even more critical, finding the disclosures “improper” and Samsung’s lack of cooperation “inexcusable”.  A couple weeks later, Samsung provided sworn declarations, including one by Dr. Ahn that strongly contradicted Nokia’s representation of the June meeting. At a follow up hearing, Judge Grewal said he was not yet convinced that sanctions were warranted, ordering an “in camera” review of documents that Samsung claimed as privileged which Apple doubted that they were legitimately withheld from its lawyers.

As for Quinn Emanuel, who is also facing potential sanctions, partner John Quinn acknowledged the inadvertent disclosure, which was apparently due to an associate at the firm failing to obscure a footnote and two paragraphs while performing a digital redaction of the 150-page report and announced the creation of a new document retention policy to provide a “second pair of eyes” and avoid similar errors in the future (as reported by IT-Lex)

This past Friday, Judge Grewal ordered Samsung and Quinn Emanuel to show cause why they should not be sanctioned, stating “Having finally crawled out from under the boxes, it appears to the undersigned that if anything was breached, it was this court’s protective order, and that sanctions against Samsung and its attorneys are warranted”.  However, he gave Samsung one last chance to defend its actions ordering Samsung to file a brief by December 2 to explain why it should not be sanctioned, while also allowing Apple and Nokia to file a brief to propose appropriate sanctions, with a hearing on the matter set for December 9.

It will be interesting to see what transpires from here.  There have been at least 31 court filings so far this year in this case, so it looks like they’re just getting warmed up.

So, what do you think?  Are Quinn Emanuel and Samsung in serious trouble?  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.

Are You Scared Yet? – eDiscovery Horrors!

Today is Halloween.  Every year at this time, because (after all) we’re an eDiscovery blog, we try to “scare” you with tales of eDiscovery horrors.  So, I have one question: Are you scared yet?

Did you know that there has been over 3.4 sextillion bytes created in the Digital Universe since the beginning of the year, and data in the world will grow nearly three times as much from 2012 to 2017?  How do you handle your own growing universe of data?

What about this?

The proposed blended hourly rate was $402 for firm associates and $632 for firm partners. However, the firm asked for contract attorney hourly rates as high as $550 with a blended rate of $466.

How about this?

You’ve got an employee suing her ex-employer for discrimination, hostile work environment and being forced to resign. During discovery, it was determined that a key email was deleted due to the employer’s routine auto-delete policy, so the plaintiff filed a motion for sanctions. Sound familiar? Yep. Was her motion granted? Nope.

Or maybe this?

After identifying custodians relevant to the case and collecting files from each, you’ve collected roughly 100 gigabytes (GB) of Microsoft Outlook email PST files and loose electronic files from the custodians. You identify a vendor to process the files to load into a review tool, so that you can perform review and produce the files to opposing counsel. After processing, the vendor sends you a bill – and they’ve charged you to process over 200 GB!!

Scary, huh?  If the possibility of exponential data growth, vendors holding data hostage and billable review rates of $466 per hour keep you awake at night, then the folks at eDiscovery Daily will do our best to provide useful information and best practices to enable you to relax and sleep soundly, even on Halloween!

Then again, if the expense, difficulty and risk of processing and loading up to 100 GB of data into an eDiscovery review application that you’ve never used before terrifies you, maybe you should check this out.

Of course, if you seriously want to get into the spirit of Halloween, click here.  This will really terrify you!

What do you think?  Is there a particular eDiscovery issue that scares you?  Please share your comments and let us know if you’d like more information on a particular topic.

Happy Halloween!

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.