Preservation Archives

eDiscovery Trends: Jim McGann of Index Engines

February 20, 2012

This is the third of the 2012 LegalTech New York (LTNY) Thought Leader Interview series. eDiscoveryDaily interviewed several thought leaders at LTNY this year and generally asked each of them the following questions:

What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012?
Which trend(s), if any, haven’t emerged to this point like you thought they would?
What are your general observations about LTNY this year and how it fits into emerging trends?
What are you working on that you’d like our readers to know about?

Today’s thought leader is Jim McGann. Jim is Vice President of Information Discovery at Index Engines. Jim has extensive experience with the eDiscovery and Information Management in the Fortune 2000 sector. He has worked for leading software firms, including Information Builders and the French-based engineering software provider Dassault Systemes. In recent years he has worked for technology-based start-ups that provide financial services and information management solutions.

What do you consider to be the emerging trends in eDiscovery that will have the greatest impact in 2012? And which trend(s), if any, haven’t emerged to this point like you thought they would?

I think what we're seeing is a lot of people becoming a bit more proactive. I may combine your questions together because I'm surprised that people haven’t become proactive sooner. LegalTech has included a focus on litigation readiness for how long? Ten years or so? And we're still dealing with how to react to litigation, and you're still seeing fire drills occur. There’s still not enough setting up of environments in the corporate world and in the legal world that would enable customers to respond more quickly. It surprises me how little has been developed in this regard..

I think the reason for the slow start is that there are a lot of regulations that have been evolving and people haven't really understood what they need to prepare and how to react. There’s been ten years of LegalTech and we're still struggling with how to respond to basic litigation requests because the volume has grown, accessibility arguments have changed, Federal rules have been solidified, and so forth.

What we're seeing when we go and talk to customers (and we talk to a lot of end-user customers that are facing litigation) is IT on one end of the table saying, ‘we need to solve this for the long term’, and litigation support teams on the other end of the table saying, ‘I need this today, I’ve been requesting data since July, and I still haven't received it and it's now January’. That's not good.

The evolution is from what we call “litigation support”. Litigation support, which is more on the reactive side to proactive litigation readiness, expects to be able to push a button and put a hold on John Doe's mailbox. Or, specifically find content that’s required at a moment's notice.

So, I think the trend is litigation readiness. Are people really starting to prepare for it? Every meeting that we go into, we see IT organizations, who are in the compliance security groups, rolling up their sleeves and saying I need to solve this for my company long term but we have this litigation. It's a mixed environment. In the past, we would go meet with litigation support teams, and IT wasn't involved. You're seeing buzz words like Information Governance. You're seeing big players like IBM, EMC and Symantec jumping deep into it.

What's strange is that IT organizations are getting involved in formalizing a process that hasn't been formalized in the past. It's been very much, maybe not “ad hoc”, but IT organizations did what they could to meet project needs. Now IT is looking at solving the problem long term, and there’s a struggle. Attorneys are not the best long term planners – they're doing what they need to do. They've got 60 days to do discovery, and IT is thinking five years. We need to balance this out.

What are your general observations about LTNY this year and how it fits into emerging trends?

We're talking to a lot of people that are looking at next generation solutions. The problems have changed, so solutions are evolving to address how you solve those problems.

There's also been a lot of consolidation in the eDiscovery space as well, so people are saying that their relationship has changed with their other vendors. There have been a lot of those conversations.

I'm not sure what the attendance is at this year’s show, but attendees seem to be serious about looking for new solutions. Maybe because the economy was so bad over the past year or maybe because it's a new budget year and budgets are freeing up, but people are looking at making changes, looking at new solutions. We see that a lot with service providers, as well as law firms and other end users.

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

We’ve announced the release of Octane Version 4.3, which preserves files and emails at a bit level from MS Exchange and IBM Lotus Notes, as well as indexing forensics images and evidence files at speeds reaching 1TB per hour using a single node. Bit-for-bit email processing and forensic image indexing speeds are unprecedented breakthroughs in the industry. Bit-level indexing is not only faster but also more reliable because email is stored in its original format with no need for conversion. Index Engines can also now index terabytes of network data including forensic images in hours, not weeks, like traditional tools. So, we’re excited about the new version of Octane.

We’ve also just announced a partnership with Merrill Corporation, to provide our technology to collect and process ESI from networks, desktops, forensic images and legacy backup tapes, for both reactive litigation and proactive litigation readiness. Merrill has recognized the shift in reactive to proactive litigation readiness that I mentioned earlier and we are excited to be aligned with Merrill in meeting the demands of their customers in this regard.

Thanks, Jim, 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!

eDiscovery Best Practices: Preparing Your 30(b)(6) Witnesses

February 8, 2012

When it comes to questions and potential issues that the receiving party may have about the discovery process of the producing party, one of the most common and direct methods for conducting “discovery about the discovery” is a deposition under Federal Rule 30(b)(6). This rule enables a party to serve a deposition notice on the entity involved in the litigation rather than an individual. The notice identifies the topics to be covered in the deposition, and the entity being deposed must designate one or more people qualified to answer questions on the identified topics.

While those designated to testify may not necessarily have day-to-day responsibility related to the identified topics, they must be educated enough in those issues to sufficiently address them during the testimony. Serving a deposition notice on the entity under Federal Rule 30(b)(6) saves the deposing party from having to identify specific individual(s) to depose while still enabling the topics to be fully explored in a single deposition.

Topics to be covered in a 30(b)(6) deposition can vary widely, depending on the facts and circumstances of the case. However, there are some typical topics that the deponent(s) should be prepared to address.

Legal Hold Process: Perhaps the most common area of focus in a 30(b)(6) deposition is the legal hold process as spoliation of data can occur when the legal hold process is unsound and data spoliation is the most common cause of sanctions resulting from the eDiscovery process. Issues to address include:

General description of the legal hold process including all details of that policy and specific steps that were taken in this case to effectuate a hold.
Timing of issuing the legal hold and to whom it was issued.
Substance of the legal hold communication (if the communication is not considered privileged).
Process for selecting sources for legal hold, identification of sources that were eliminated from legal hold, and a description of the rationale behind those decisions.
Tracking and follow-up with the legal hold sources to ensure understanding and compliance with the hold process.
Whether there are any processes in place in the company to automatically delete data and, if so, what steps were taken to disable them and when were those steps taken?

Collection Process: Logically, the next eDiscovery step discussed in the 30(b)(6) deposition is the process for collecting preserved data:

Method of collecting ESI for review, including whether the method preserved all relevant metadata intact.
Chain of custody tracking from origination to destination.

Searching and Culling: Once the ESI is collected, the methods for conducting searches and culling the collection down for review must be discussed:

Method used to cull the ESI prior to review, including the tools used, the search criteria for inclusion in review and how the search criteria was developed (including potential use of subject matter experts to flush out search terms).
Process for testing and refining search terms used.

Review Process: The 30(b)(6) witness(es) should be prepared to fully describe the review process, including:

Methods to conduct review of the ESI including review application(s) used and workflow associated with the review process.
Use of technology to assist with the review, such as clustering, predictive coding, duplicate and near-duplicate identification.
To the extent the process can be described, methodology for identifying and documenting privileged ESI on the privilege log (this methodology may be important if the producing party may request to “claw back” any inadvertently produced privileged ESI).
Personnel employed to conduct ESI review, including their qualifications, experience, and training.

Production Process: Information regarding the production process, including:

Methodology for organizing and verifying the production, including confirmation of file counts and spot QC checks of produced files for content.
The total volume of ESI collected, reviewed, and produced.

Depending on the specifics of the case and discovery efforts, there may be further topics to be addressed to ensure that the producing party has met its preservation and discovery obligations.

So, what do you think? Have you had to prepare 30(b)(6) witnesses for deposition? 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.

eDiscovery Case Law: KPMG Loses Another Round to Pippins

February 7, 2012

As discussed previously in eDiscovery Daily, KPMG sought a protective order in Pippins v. KPMG LLP, No. 11 Civ. 0377 (CM)(JLC), 2011 WL 4701849 (S.D.N.Y. Oct. 7, 2011) to require the preservation of only a random sample of 100 hard drives from among those it had already preserved for this and other litigation or shift the cost of any preservation beyond that requested scope. Lawyers for Pippins won a ruling last November by Magistrate Judge James Cott to use all available drives and Judge Cott encouraged the parties to continue to meet and confer to reach agreement on sampling. However, the parties were unable to agree and KPMG appealed to the District Court.

Last Friday, District Court Judge Colleen McMahon upheld the lower court ruling, noting:

"It smacks of chutzpah (no definition required) to argue that the Magistrate failed to balance the costs and benefits of preservation when KPMG refused to cooperate with that analysis by providing the very item that would, if examined, demonstrate whether there was any benefit at all to preservation.”

“KPMG could have established [that producing all the drives was unnecessary] by producing several hard drives to Plaintiffs and Magistrate Judge Cott. … But KPMG has established nothing of the sort,” McMahon added.

“Even assuming that KPMG’s preservation costs are both accurate and wholly attributable to this litigation — which I cannot verify — I cannot possibly balance the costs and benefits of preservations when I’m missing one side of the scale (the benefits).”

“I gather that KPMG takes the position that the only Audit Associates who are presently ‘parties’ are the named plaintiffs, and so only the named plaintiffs’ hard drives really need to be preserved. But that is nonsense,” she continued. “Under Zubulake IV, the duty to preserve all relevant information for ‘key players’ is triggered when a party ‘reasonably anticipates litigation.’ … At the present moment, KPMG should ‘reasonably anticipate’ that every Audit Associate who will be receiving opt-in notice is a potential plaintiff in this action,” McMahon concluded.

Outten & Golden partner Justin Swartz, representing Pippins, commented after the ruling: "All we're asking for is the chance to look at a few hard drives, find out what's on them, and negotiate a resolution." Steven Catlett, representing Sidley Austin for KPMG, did not provide a comment.

So, what do you think? Was this a ruling against proportionality in eDiscovery or is KPMG’s refusal to provide any hard drives defeating their proportionality argument? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Case Law: Burn Your Computer and the Court Will Burn You

February 3, 2012

In Evans v. Mobile Cnty. Health Dept., No. CA 10-0600-WS-C, (S.D. Ala. Jan. 24, 2012), Alabama Magistrate Judge William Cassady granted a motion for sanctions, including an adverse inference instruction, where the plaintiff had burned and destroyed her computer that she used during the time she claimed she was harassed.

Evans sued the Mobile County Health Department alleging reverse discrimination. The court entered a scheduling order that instructed Evans to preserve all relevant information. In discovery, the health department asked Evans for all documents, including electronically stored information (ESI), related to her claims.

Initially, Evans did not produce any documents in response to the defendant's request, but at her deposition, she produced a small number of documents and admitted that she had others, including e-mails. After her deposition, the defendant renewed its request for Evans to produce all ESI in her possession and asked to inspect her personal computer. When the plaintiff did not comply, the defendant filed a motion to compel.

After the motion was filed, Evans' counsel told the defendant that Evans had destroyed her computer. Evans explained that her computer crashed about eight months after her complaint was filed. When she sought help from computer experts, who told her to buy another computer, she burned her computer to destroy the personal information it contained due to the "threat of identity theft." She then bought a new computer. The defendant filed a motion for sanctions and sought dismissal of the case.

Judge Cassady granted the defendant's motion to compel, finding that the plaintiff's claims that she had produced all relevant ESI difficult to believe in light of her deposition testimony and her other discovery violations. Accordingly, Judge Cassady required Evans to produce e-mails from her gmail account and a notebook she referenced in her deposition that contained relevant evidence. The plaintiff also had to produce her new computer for inspection and pay for the defendant's fees and costs in bringing the motion.

Judge Cassady also granted defendant's request for sanctions. In determining the appropriate punishment, he looked first to Eleventh Circuit law, but the court had not set forth specific guidelines for the imposition of sanctions. Therefore, Judge Cassady applied Alabama state law, since it was consistent with general federal spoliation standards. Alabama law requires courts to consider five factors in analyzing a request for sanctions: "(1) the importance of the evidence destroyed; (2) the culpability of the offending party; (3) fundamental fairness; (4) alternative sources of the information obtainable from the evidence destroyed; and (5) the possible effectiveness of other sanctions less severe than dismissal."

Judge Cassady found that Evans had destroyed the evidence in bad faith: her culpability was "excessively high." However, the judge stopped short of dismissing the case. Since the defendant could still defend itself against Evans' allegations, the magistrate judge decided that the court would give the jury an adverse inference instruction at trial. It also awarded defendant its attorneys' fees and costs for the motion.

So, what do you think? Should the case have been dismissed or were the sanctions sufficient? 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).

Social Tech eDiscovery: Facebook Law Enforcement Policies Revisited

January 25, 2012

One of the very first posts we published on this blog, over 16 months ago, was a post regarding Facebook’s Subpoena Policy, describing and providing a link to Facebook’s Law Enforcement page to request information from Facebook. With numerous cases involving discovery of information on Facebook, (including this one, this one, this one, this one, this one and this one – all just in the past year), it seems appropriate to revisit this page to see if anything has changed.

The first thing that has changed is the link itself. The old link we published 16 months ago no longer takes you to that page – it defaults to the general Facebook help page. So, I had to “go hunting” for the new location for the law enforcement page. It took a few tries, but I did finally find it here. If you prefer your Facebook Law Enforcement information in downloadable document form, the link to the PDF is here.

The page has a lot more information than the old page. Sections include:

US Legal Process Requirements: Notes that Facebook discloses account records solely in accordance with their terms of service and applicable law, including the federal Stored Communications Act (“SCA”), 18 U.S.C. Sections 2701-2712, which requires a valid subpoena, court order or search warrant to compel disclosure of Facebook content.
International Legal Process Requirements: A Mutual Legal Assistance Treaty request or letter rogatory may be required to compel the disclosure of the contents of an account. More information found here.
Account Preservation: Link to form to request preservation of account records for up to 90 days pending receipt of formal legal requests.
Emergency Requests: Email address for a law enforcement official to obtain an emergency request form in cases “involving imminent harm”.
Child Safety Matters: What to do when requests relate to child exploitation or safety concerns.
Data Retention and Availability: Reiteration that Facebook does “not retain data for law enforcement purposes unless we receive a valid preservation request before a user has deleted that content from our service”, with links to 1) how a Facebook user can request their account to be permanently deleted (with no recovery), 2) Facebook’s Statement of Rights and Responsibilities and 3) Facebook’s Data Use Policy.
Form of Requests: Information required with requests for information, including 1) name of the issuing authority, badge/ID number of responsible agent, email address from a law-enforcement domain, and direct contact phone number; 2) email address, user ID number or username of the Facebook profile.
User Consent: Instructions for users who have consented to provide their own information to law enforcement officials using Facebook’s Download Your Information feature (previously featured on this blog here).
Notification: What to do if officials believe that notification would jeopardize an investigation.
Testimony: Facebook’s declaration that they do not provide expert testimony support, but if “a special form of certification is required”, the requestor should attach it to the records request.
Cost Reimbursement: Facebook’s statement that they “may seek reimbursement for costs in responding to requests for information as provided by law”, without specifying what those costs might be (which is different than the specific costs stated in the previous page).
Contact Information: To submit records requests via email, snail mail or fax – but only if you’re a law enforcement officer.

So, what do you think? Have you needed to request information from Facebook for litigation purposes? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: Our 2012 Predictions

January 12, 2012

Yesterday, we evaluated what others are saying and noted popular eDiscovery prediction trends for the coming year. It’s interesting to identify common trends among the prognosticators and also the unique predictions as well.

But we promised our own predictions for today, so here they are. One of the nice things about writing and editing a daily eDiscovery blog is that it forces you to stay abreast of what’s going on in the industry. Based on the numerous stories we’ve read (many of which we’ve also written about), and in David Letterman “Top 10” fashion, here are our eDiscovery predictions for 2012:

Still More ESI in the Cloud: Frankly, this is like predicting “the Sun will be hot in 2012”. Given the predictions in cloud growth by Forrester and Gartner, it seems inevitable that organizations will continue to migrate more data and applications to “the cloud”. Even if some organizations continue to resist the cloud movement, those organizations still have to address the continued growth in usage of social media sites in business (which, last I checked, are based in the cloud). It’s inevitable.
More eDiscovery Technology in the Cloud As Well: We will continue to see more cloud offerings for eDiscovery technology, ranging from information governance to preservation and collection to review and production. With the need for corporations to share potentially responsive ESI with one or more outside counsel firms, experts and even opposing counsel, cloud based Software-as-a-Service (SaaS) applications are a logical choice for sharing that information effortlessly without having to buy software, hardware and provide infrastructure to do so. Every year at LegalTech, there seems to be a few more eDiscovery cloud providers and this year should be no different.
Self-Service in the Cloud: So, organizations are seeing the benefits of the cloud not only for storing ESI, but also managing it during Discovery. It’s the cost effective alternative. But, organizations are demanding the control of a desktop application within their eDiscovery applications. The ability to load your own data, add your own users and maintain their rights, create your own data fields are just a few of the capabilities that organizations expect to be able to do themselves. And, more providers are responding to those needs. That trend will continue this year.
Technology Assisted Review: This was the most popular prediction among the pundits we reviewed. The amount of data in the world continues to explode, as there were 988 exabytes in the whole world as of 2010 and Cisco predicts that IP traffic over data networks will reach 4.8 zettabytes (each zettabyte is 1,000 exabytes) by 2015. More than five times the data in five years. Even in the smaller cases, there’s simply too much data to not use technology to get through it all. Whether it’s predictive coding, conceptual clustering or some other technology, it’s required to enable attorneys manage the review more effectively and efficiently.
Greater Adoption of eDiscovery Technology for Smaller Cases: As each gigabyte of data is between 50,000 and 100,000 pages, a “small” case of 4 GB (or two max size PST files in Outlook® 2003) can still be 300,000 pages or more. As “small” cases are no longer that small, attorneys are forced to embrace eDiscovery technology for the smaller cases as well. And, eDiscovery providers are taking note.
Continued Focus on International eDiscovery: So, cases are larger and there’s more data in the cloud, which leads to more cases where Discovery of ESI internationally becomes an issue. The Sedona Conference® just issued in December the Public Comment Version of The Sedona Conference® International Principles on Discovery, Disclosure & Data Protection: Best Practices, Recommendations & Principles for Addressing the Preservation & Discovery of Protected Data in U.S. Litigation, illustrating how important an issue this is becoming for eDiscovery.
Prevailing Parties Awarded eDiscovery Costs: Shifting to the courtroom, we have started to see more cases where the prevailing party is awarded their eDiscovery costs as part of their award. As organizations have pushed for more proportionality in the Discovery process, courts have taken it upon themselves to impose that proportionality through taxing the “losers” for reimbursement of costs, causing prevailing defendants to say: “Sue me and lose? Pay my costs!”.
Continued Efforts and Progress on Rules Changes: Speaking of proportionality, there will be continued efforts and progress on changes to the Federal Rules of Civil Procedure as organizations push for clarity on preservation and other obligations to attempt to bring spiraling eDiscovery costs under control. It will take time, but progress will be made toward that goal this year.
Greater Price/Cost Control Pressure on eDiscovery Services: In the meantime, while waiting for legislative relief, organizations will expect the cost for eDiscovery services to be more affordable and predictable. In order to accommodate larger amounts of data, eDiscovery providers will need to offer simplified and attractive pricing alternatives.
Big Player Consolidation Continues, But Plenty of Smaller Players Available: In 2011, we saw HP acquire Autonomy and Symantec acquire Clearwell, continuing a trend of acquisitions of the “big players” in the industry. This trend will continue, but there is still plenty of room for the “little guy” as smaller providers have been pooling resources to compete, creating an interesting dichotomy in the industry of few big and many small providers in eDiscovery.

So, what do you think? Care to offer your own predictions? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Trends: 2012 Predictions – By The Numbers

January 11, 2012

With a nod to Nick Bakay, “It’s all so simple when you break things down scientifically.”

The late December/early January time frame is always when various people in eDiscovery make their annual predictions as to what trends to expect in the coming year. I know what you’re thinking – “oh no, not another set of eDiscovery predictions!” However, at eDiscovery Daily, we do things a little bit differently. We like to take a look at other predictions and see if we can spot some common trends among those before offering some of our own (consider it the ultimate “cheat sheet”). So, as I did last year, I went “googling” for 2012 eDiscovery predictions, and organized the predictions into common themes. I found eDiscovery predictions here, here, here, here, here, here and Applied Discovery. Oh, and also here, here and here. Ten sets of predictions in all! Whew!

A couple of quick comments: 1) Not all of these are from the original sources, but the links above attribute the original sources when they are re-prints. If I have failed to accurately attribute the original source for a set of predictions, please feel free to comment. 2) This is probably not an exhaustive list of predictions (I have other duties in my “day job”, so I couldn’t search forever), so I apologize if I’ve left anybody’s published predictions out. Again, feel free to comment if you’re aware of other predictions.

Here are some of the common themes:

Technology Assisted Review: Nine out of ten “prognosticators” (up from 2 out of 7 last year) predicted a greater emphasis/adoption of technological approaches. While some equate technology assisted review with predictive coding, other technology approaches such as conceptual clustering are also increasing in popularity. Clearly, as the amount of data associated with the typical litigation rises dramatically, technology is playing a greater role to enable attorneys manage the review more effectively and efficiently.
eDiscovery Best Practices Combining People and Technology: Seven out of ten “augurs” also had predictions related to various themes associated with eDiscovery best practices, especially processes that combine people and technology. Some have categorized it as a “maturation” of the eDiscovery process, with corporations becoming smarter about eDiscovery and integrating it into core business practices. We’ve had numerous posts regarding to eDiscovery best practices in the past year, click here for a selection of them.
Social Media Discovery: Six “pundits” forecasted a continued growth in sources and issues related to social media discovery. Bet you didn’t see that one coming! For a look back at cases from 2011 dealing with social media issues, click here.
Information Governance: Five “soothsayers” presaged various themes related to the promotion of information governance practices and programs, ranging from a simple “no more data hoarding” to an “emergence of Information Management platforms”. For our posts related to Information Governance and management issues, click here.
Cloud Computing: Five “mediums” (but are they happy mediums?) predict that ESI and eDiscovery will continue to move to the cloud. Frankly, given the predictions in cloud growth by Forrester and Gartner, I’m surprised that there were only five predictions. Perhaps predicting growth of the cloud has become “old hat”.
Focus on eDiscovery Rules / Court Guidance: Four “prophets” (yes, I still have my thesaurus!) expect courts to provide greater guidance on eDiscovery best practices in the coming year via a combination of case law and pilot programs/model orders to establish expectations up front.
Complex Data Collection: Four “psychics” also predicted that data collection will continue to become more complex as data sources abound, the custodian-based collection model comes under stress and self-collection gives way to more automated techniques.

The “others receiving votes” category (three predicting each of these) included cost shifting and increased awards of eDiscovery costs to the prevailing party in litigation, flexible eDiscovery pricing and predictable or reduced costs, continued focus on international discovery and continued debate on potential new eDiscovery rules. Two each predicted continued consolidation of eDiscovery providers, de-emphasis on use of backup tapes, de-emphasis on use of eMail, multi-matter eDiscovery management (to leverage knowledge gained in previous cases), risk assessment /statistical analysis and more single platform solutions. And, one predicted more action on eDiscovery certifications.

Some interesting predictions. Tune in tomorrow for ours!

So, what do you think? Care to offer your own “hunches” from your crystal ball? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Year in Review: eDiscovery Case Law, Part 4

January 6, 2012

As we noted the past three days, eDiscovery Daily has published 65 posts related to eDiscovery case decisions and activities over the past year, covering 50 unique cases! Yesterday, we looked back at cases related to discovery of social media. One final set of cases to review.

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

SANCTIONS / SPOLIATION

Behold the king! I’ll bet that you won’t be surprised that the topic with the largest number of case law decisions (by far!) related to eDiscovery are those related to sanctions and spoliation issues. Late in 2010, eDiscovery Daily reported on a Duke Law Journal article that indicated back then that sanctions were at an all-time high and the number of cases with sanction awards remains high.

Of the 50 cases we covered this past year, over a third of them (17 total cases) related to sanctions and spoliation issues. Here they are. And, as you’ll see by the first case (and a few others), sanctions requested are not always granted. Then again, sometimes both sides get sanctioned!

No Sanctions for Scrubbing Computers Assumed to be Imaged. In this case, data relevant to the case was lost when computers were scrubbed and sold by the defendants with the permission of the court-appointed Receiver, based on the Receiver’s mistaken belief that all relevant computers had been imaged and instruction to the defendants to scrub all computers before selling. Because of the loss of this data, defendants filed a motion for spoliation sanctions for what they described as “the FTC’s bad-faith destruction of Defendants’ computer systems.” Was the motion granted?

Spoliate Evidence, Don’t Go to Jail, but Pay a Million Dollars. Defendant Mark Pappas, President of Creative Pipe, Inc., was ordered by Magistrate Judge Paul W. Grimm to "be imprisoned for a period not to exceed two years, unless and until he pays to Plaintiff the attorney's fees and costs". However, ruling on the defendants’ appeal, District Court Judge Marvin J. Garbis declined to adopt the order regarding incarceration, stating it was not "appropriate to Order Defendant Pappas incarcerated for future possible failure to comply with his obligation to make payment…". So, how much was he ordered to pay? Now we know. That decision was affirmed here.

Deliberately Produce Wrong Cell Phone, Get Sanctioned. In this case, the plaintiff originally resisted production of a laptop and a cell phone for examination, but ultimately produced a laptop and cell phone. The problem with that production? After examination, it was determined that neither device was in use during the relevant time period and the actual devices used during that time frame were no longer in plaintiff’s possession. When requested to explain as to why this was not disclosed initially, the plaintiff’s attorney explained that he was torn between his “competing duties” of protecting his client and candor to the court. Really?

Destroy Data, Pay $1 Million, Lose Case. A federal judge in Chicago has levied sanctions against Rosenthal Collins Group LLC and granted a default judgment to the defendant for misconduct in a patent infringement case, also ordering the Chicago-based futures broker's counsel to pay "the costs and attorneys fees incurred in litigating this motion" where plaintiff’s agent modified metadata related to relevant source code and wiped several relevant disks and devices prior to their production and where the court found counsel participated in "presenting misleading, false information, materially altered evidence and willful non-compliance with the Court’s orders."

Conclusion of Case Does Not Preclude Later Sanctions. In this products liability case that had been settled a year earlier, the plaintiff sought to re-open the case and requested sanctions alleging the defendant systematically destroyed evidence, failed to produce relevant documents and committed other discovery violations in bad faith. As Yogi Berra would say, “It ain’t over ‘til it’s over”.

Written Litigation Hold Notice Not Required. The Pension Committee case was one of the most important cases of 2010 (or any year, for that matter). So, perhaps it’s not surprising that it is starting to become frequently cited by those looking for sanction for failure to issue a written litigation hold. In this case, the defendant cited Pension Committee, arguing that plaintiff’s failure to issue a written litigation hold and subsequent failure to produce three allegedly relevant emails allowed for a presumption that relevant evidence was lost, thereby warranting spoliation sanctions. Was the court’s ruling consistent with Pension Committee?

No Sanctions Ordered for Failure to Preserve Backups. A sanctions motion has been dismissed by the U.S. District Court of Texas in a recent case involving electronic backups and email records, on the grounds that there was no duty to preserve backup tapes and no bad faith in overwriting records.

Discovery Violations Result in Sanctions Against Plaintiff and Counsel. Both the plaintiff and plaintiff's counsel have been ordered to pay sanctions for discovery abuses in a lawsuit in Washington court that was dismissed with prejudice on June 8, 2011.

Meet and Confer is Too Late for Preservation Hold. A US District court in Indiana ruled on June 28 in favor of a motion for an Order to Secure Evidence in an employment discrimination lawsuit. The defendant had given the plaintiff reason to believe that emails and other relevant documents might be destroyed prior to Rule 26(f) meeting between the parties or Rule 16(b) discovery conference with the court. As a result, the plaintiff formally requested a litigation hold on all potentially relevant documents, which was approved by US Magistrate Judge Andrew Rodovich.

Court Orders Sanctions in Response to "Callous and Careless Attitude" of Defendant in Discovery. A Special Master determined that multiple discovery failures on the part of the defendant in an indemnity action were due to discovery procedures "wholly devoid of competence, yet only once motivated by guile". Accordingly, the court ordered sanctions against the defendant and also ordered the defendant to pay all costs associated with its discovery failures, including plaintiff's attorney fees and costs.

Court Upholds Sanctions for Intentional Spoliation of Unallocated Space Data. The Supreme Court of Delaware recently upheld the sanctions against the defendant for wiping the unallocated space on his company’s computer system, despite a court order prohibiting such destruction. In this case, Arie Genger, CEO of Trans-Resources, Inc., argued that sanctions against him were unreasonable and made a motion for the court to overturn its previous decision regarding spoliation of discovery materials. Instead, after due process, the court upheld its earlier decision.

Sanctions for Spoliation, Even When Much of the Data Was Restored. A Virginia court recently ordered sanctions against the defendant in a case of deliberate spoliation of electronic discovery documents. In this case, the defendant was found to have committed spoliation "in bad faith" in a manner that constituted a "violation of duty… to the Court and the judicial process."

"Untimely" Motion for Sanctions for Spoliation Denied. A recent ruling by the US District Court of Tennessee has denied a motion for sanctions for spoliation on the grounds that the motion was "untimely." In this case, the plaintiff argued that the defendants' admitted failure to preserve evidence "warrants a harsh penalty," but the court found in favor of the defense that the motion was untimely.

Defendant Sanctioned for Abandonment and Sale of Server; Defendants' Counsel Unaware of Spoliation. An Illinois District Court ordered heavy sanctions against the defense for spoliation "willfully and in bad faith" of documents stored on a server, in a case revolving around damages sought for breach of loan agreements.

Facebook Spoliation Significantly Mitigates Plaintiff’s Win. In this case with both social media and spoliation issues, monetary sanctions were ordered against the plaintiff and his counsel for significant discovery violations. Those violations included intentional deletion of pictures on the plaintiff’s Facebook page as instructed by his Counsel as well as subsequent efforts to cover those instructions up, among others.

Lilly Fails to Meet its eDiscovery Burden, Sanctions Ordered. In this case, a Tennessee District court found that “Lilly failed to take reasonable steps to preserve, search for, and collect potentially relevant information, particularly electronic data, after its duty to preserve evidence was triggered by being served with the complaint.” As a result, the court ordered sanctions against Lilly. How far did the court go with those sanctions?

Court Grants Adverse Inference Sanctions Against BOTH Sides. Have you ever seen the video where two boxers knock each other out at the same time? That’s similar to what happened in this case. In this case, the court addressed the parties’ cross motions for sanctions, ordering an adverse inference for the defendants’ failure to preserve relevant video surveillance footage, as well as an adverse inference for the plaintiff’s failure to preserve relevant witness statements. The court also awarded defendants attorneys’ fees and costs and ordered re-deposition of several witnesses at the plaintiff’s expense due to other plaintiff spoliation findings.

Next week, we will begin looking ahead at 2012 and expected eDiscovery trends for the coming year.

So, what do you think? Of all of the cases that we have recapped over the past four days, which case do you think was the most significant? Please share any comments you might have or if you’d like to know more about a particular topic.

eDiscovery Year in Review: eDiscovery Case Law, Part 3

January 5, 2012

As we noted the past two days, eDiscovery Daily has published 65 posts related to eDiscovery case decisions and activities over the past year, covering 50 unique cases! Yesterday, we looked back at cases related to privilege & inadvertent disclosures, proportionality and eDiscovery service disputes, including the notable McDermott Will & Emery eDiscovery malpractice case. But, we still have more cases to review. So, let’s keep going!

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!

SOCIAL MEDIA

Social media affects all aspects of litigation from the discovery of data from social media web sites to social media communication during trial. You even have jurors trying to “friend” participants in the case!

Organizations now have to not only plan for preserving, collecting, reviewing and producing conventional data, but also posts, tweets, IMs and more. You know that already. What you may not know is that in nearly every case discussed in eDiscovery Daily this past year where social media data was requested, that request was granted. Oh, and if you have text messages as evidence, you may have to provide corroborating evidence to verify authorship of those text messages for them to be admissible – at least in Pennsylvania. Here are eight cases related to social media issues:

Jurors and Social Media Don’t Mix. Discovery of social media is continuing to increase as a significant issue for organizations to address, with more and more cases addressing the topic. However, when it comes to social media, courts agree on one thing: jurors and social media don’t mix. Courts have consistently rejected attempts by jurors to use social technology to research or to communicate about a case, and have increasingly provided pre-trial and post-closing jury instructions to jurors to dissuade them from engaging in this practice.

Cut and Paste Makes the Cut as Evidence. In this case, the defendant in a criminal case appealed his conviction and raised the issue of whether the prosecution properly authenticated instant messages cut-and-pasted into a Microsoft Word document.

Defendant Can’t Be Plaintiff’s Friend on Facebook. In this case, Bucks County, Pa., Common Pleas Court Judge Albert J. Cepparulo denied the motion from the defendant requesting access to the photos of plaintiff Sara Piccolo posted in her Facebook account, rejecting McMillen v. Hummingbird Speedway, Inc., in which the court ordered the plaintiff to provide his username and password to the defendant’s attorney, as a precedent.

Social Media Posts Deemed Discoverable in Personal Injury Case. A Pennsylvania court recently ordered the plaintiff in a personal injury lawsuit to disclose social media passwords and usernames to the defendant for eDiscovery. Discoverability of social media continues to be a hot topic in eDiscovery, as eDiscovery Daily has noted in summaries of prior cases that reflect varied outcomes for requests to access social media data.

A Pennsylvania Court Conducts Its Own Social Media Relevancy Review. Pennsylvania seems to be taking the lead in setting social media discovery precedents. In this case, a Pennsylvania court agreed to review a plaintiff's Facebook account in order to determine which information is subject to discovery in a case relating to the plaintiff's claim of injury in a motor vehicle accident.

Defendant Ordered to Re-Post Infringing Photograph to Facebook Profile. In this case, a New Jersey court ordered the defendant to re-post a photograph displaying infringing trade dress to his Facebook profile for a brief period of time to allow the plaintiff to print copies, in a case involving trademark infringement.

Court Rules 'Circumstantial Evidence' Must Support Authorship of Text Messages for Admissibility. When are text messages admissible in court? Which text messages qualify as evidence, and what does it take to prove authorship of a text message? A recent opinion from the Pennsylvania Superior Court addresses these very issues in an old yet new way, perhaps setting the precedent for future cases and opening what seems to be a potential Pandora's Box of obstacles to the use of text messages as legal evidence.

Facebook Content Discoverable Yet Again. It seems most, if not all, of the cases these days where discoverability of social media is at issue are being decided by courts in favor of the parties seeking to discover this information. Here’s another example.

Tune in tomorrow for more key cases of 2011 and see the topic that continues to generate more case law related to eDiscovery than any other! Yes, I know I said that yesterday, but I forgot that topic was planned for the big finish tomorrow. Stay tuned!

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.

eDiscovery Case Law: Court Grants Adverse Inference Sanctions Against BOTH Sides

December 29, 2011

Have you ever seen the video where two boxers knock each other out at the same time? That’s similar to what happened in this case.

In Patel v. Havana Bar, Restaurant & Catering, No. 10-1383, (E.D. Pa. Dec. 5, 2011), a case of dueling claims of spoliation, the court imposed sanctions against both parties for failing uphold their duty to preserve relevant evidence.

The plaintiff was attending an engagement party when he fell from a second floor loft overlooking the dance floor. Whether the plaintiff fell due to intoxication or whether he intentionally jumped was a matter in dispute. During discovery, the parties filed cross-motions seeking sanctions for discovery violations.

The bar's video system recorded the evening's events, but the bar owner failed to preserve the recording. He attempted to copy the video before the system's automatic overwriting erased it, but he did not have the right equipment to make a copy. In addition, the system allowed him to print images from the recording, but he failed to take advantage of this feature. Thus, the court found that spoliation had occurred: even though the defendant took some steps to preserve evidence, his steps were inadequate. Thus, the court imposed an adverse inference sanction against the bar.

Additionally, the defendant sought spoliation sanctions against the plaintiff for failing to preserve statements of witnesses who attended the party. In 2008, the plaintiff's sister-in-law sent a message over Facebook asking attendees to write statements supporting the plaintiff's case that he was not intoxicated and that he was merely jovial. However, in 2010, the sister-in-law again asked attendees for statements via Facebook, this time requesting confirmation that the bar recklessly served the plaintiff alcohol and explaining that she would not use statements that the plaintiff jumped from the second floor. The plaintiff did not share any of the statements with the defendant until defense counsel discovered their existence during a deposition. Then, the plaintiff's counsel turned the 2010 statements over one by one as depositions occurred. The plaintiff never produced any of the 2008 statements, and family members offered conflicting stories as to their whereabouts.

The court imposed a number of sanctions on the plaintiff, finding that his behavior "ran completely afoul of the goals of discovery." The sanctions included an adverse inference sanction for failing to provide the statements. The court also ordered the plaintiff to pay for the costs of redeposing several witnesses. Finally, the court awarded the defendants fees and costs "for the time and effort they expended in attempting to obtain discovery that they were entitled to receive."

So, what do you think? Did they both deserve what they got? Please share any comments you might have or if you’d like to know more about a particular topic.