Sanctions

Spoliation and Defensible Deletion: What’s the Difference?

Spoliation and Sanctions

Spoliation, the destruction or manipulation of ESI, has become a prevalent issue in e-discovery. As evidenced by Atalian US New England, LLC v. Navarro, spoliation is often done deliberately. In response to allegations of fraud, the defendant deleted mobile device data and replaced it with fabricated evidence. The judge sanctioned the company for intending to deprive the opposing counsel of relevant information.[1] Negligence is another cause for spoliation. In McCoy v. Transdev Svc., Inc., Transdev faced default judgment for “inadvertently” deleting cell phone data. Though the content was unknown, the Court upheld its relevance, maintaining that it could have supported the opposition’s claims.[2] Faulkner v. Aero Fulfillment Services demonstrates that spoliation can also be an accidental offense. Ms. Faulkner initially adhered to production requests and produced her LinkedIn data in the form of an Excel spreadsheet. But when the defendants asked for the evidence in a different format, Ms. Faulkner was unable to comply because she had deactivated her account. The court decided against sanctioning the plaintiff because she had followed the initial production request, and it was the counsel’s responsibility to inform her of preservation obligations.[3]

Per Rule 37(e) of the Federal Rules of Procedure, sanctions for irreversibly deleting ESI include:

  • Court involvement to remedy any prejudices suffered by the opposing counsel
  • Court and jury presumptions that the lost information was unfavorable to the responsible party if the deletion was intentional
  • Dismissal of the action or motion for default judgment[4]

 

Defining Defensible Deletion

Unlike spoliation, defensible deletion involves the ongoing elimination of unneeded data to reduce the costs of storage and retention. Deletion is permissible by the Federal Rules of Procedure when the ESI isn’t being held for a legal, statutory, or business purpose. Legal teams should carefully design a deletion strategy so that they can decide what to keep, archive, and eliminate.[5]

 

Things to Keep in Mind for Defensible Deletion

  • Prepare a retention policy and schedule. Defensible deletion is a slow, meticulous process. Take your time, especially when handling large amounts of big data.
  • Establish an inventory of legal preservation obligations. Within the inventory, identify which data types are currently under legal holds (or likely to be held). Proper documentation and classification of your data will simplify the retention process.
  • Properly staff the deletion project with a range of experts in various fields.[6]

 

[1] R. Thomas Dunn, “Intentional Deletion and Manipulation of Electronic Data Leads to Default Judgement,” JD Supra, August 12, 2021, https://www.jdsupra.com/legalnews/intentional-deletion-and-manipulation-8546367/

[2] Michael Berman, “Defendant Unsuccessfully Argued that Plaintiff Could Not Show That Data on Cell Phone That Defendant Destroyed Was Relevant,” E-Discovery LLC, August 18, 2021, http://www.ediscoveryllc.com/defendant-unsuccessfully-argued-that-plaintiff-could-not-show-that-data-on-cell-phone-that-defendant-destroyed-was-relevant/

[3] Brielle A. Basso, “In It for the Long Haul: The Duty to Preserve Social Media Accounts Is Not Terminated Upon an Initial Production,” Gibbons, June 30, 2020, https://www.gibbonslawalert.com/2020/06/30/in-it-for-the-long-haul-the-duty-to-preserve-social-media-accounts-is-not-terminated-upon-an-initial-production/

[4] “Rule 37. Failure to Make Disclosures or to Cooperate in Discovery; Sanction,” Legal Information Institute, https://www.law.cornell.edu/rules/frcp/rule_37

[5] “Defensible Deletion Strategy: Getting Rid of Your Unnecessary Data,” Special Counsel, November 16, 2019, https://blog.specialcounsel.com/ediscovery/defensible-data-deletion-strategy-basics/

[6] Andrew J. Peck, Jennifer M. Feldman, Leeanne Sara Mancari, Dennis Kiker, “Defensible deletion: The proof is in the planning,” DLA Piper, February 5, 2021, https://www.dlapiper.com/en/us/insights/publications/2021/02/defensible-deletion-the-proof-is-in-the-planning/

Did the Plaintiff Send a Letter to Confer with Defendants? It’s Anybody’s “Guess”: eDiscovery Case Law

See what I did there?  ;o)

In Simpson v. J.L. Guess et al., No. 3:18-cv-547-J-39PDB (M.D. Fla. March 20, 2020), Florida District Judge Brian A. Davis ruled on several motions from both the plaintiff and defendants, including denying the defendants’ motion for sanctions over whether the plaintiff sent a letter to confer with defense counsel about the motion to compel.

Case Background

In this case by a prisoner proceeding pro se alleging use of excessive force by six correctional officers, the Court ruled on the plaintiff’s motion to compel, the plaintiff’s motion for an extension of time to respond to the defendants’ motion for summary judgment, the plaintiff’s request to strike a declaration of defense counsel and the defendants’ request for sanctions up to dismissal of the action.

Judge’s Ruling

With regard to the plaintiff’s motion to compel and motion for an extension of time, the defendants responded that three officers had no records of discipline, and three others had no records of discipline for use of excessive force on an inmate.  But, Judge Davis stated, in granting both motions: “Contrary to the defendants’ argument, records of discipline are relevant even if the discipline was for something other than use of excessive force on an inmate…In responding to the discovery request, the defendants made no objection about proportionality, instead focusing on relevancy, inadmissibility under Federal Rule of Evidence 404(b), and confidentiality and now provide no analysis about proportionality using the pertinent factors.”

However, Judge Davis denied the plaintiff’s request to strike a declaration of defense counsel, stating: “Accepting a lawyer’s representation that his client has no responsive documents is commonplace in civil litigation absent evidence of misrepresentation beyond conjecture. Matters about discovery collection and review will not be part of the trial as matters merely collateral to the claims tried before the jury. There is no risk defense counsel will be called to testify at trial.”

With regard to the defendants’ motion for sanctions, the plaintiff declared (under penalty of perjury) he tried to confer with defense counsel about the motion to compel by letter (and included a copy of the letter), but received no response.  Conversely, defense counsel declared (under penalty of perjury) he received no letter from the plaintiff and contended the plaintiff was “a liar and a fraudster who has maligned defense counsel’s character”.  There was a dispute over whether the prison logs outgoing mail from prisoners, but Judge Davis said:

“The declarations create material issues of fact on facts immaterial to the merits of the claims and defenses: whether the plaintiff lied when he said he mailed the letter, whether defense counsel lied when he said he never received the letter, whether no one lied because the letter was sent but not received due to inadvertent misplacement or loss at the prison, the post office, or defense counsel’s office, and whether defense counsel misled the Court by suggesting the log would reflect outgoing mail. In the interest of the just, speedy, and inexpensive resolution of this action…the Court declines to conduct an evidentiary hearing on these collateral issues or otherwise divert limited resources to trying to resolve them and thus denies the defendants’ request for sanctions…But to confront an alleged but unaddressed misrepresentation by a lawyer, the Court directs defense counsel to inform the Court whether any log actually would reflect outgoing mail sent by the plaintiff…The information must be provided by April 30, 2020.”

So, what do you think?  Should the plaintiff be given the benefit of doubt under the circumstances?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Denies Southwest Airlines’ Motion for Rule 11 Sanctions Against Plaintiff: eDiscovery Case Law

In Houston v. Southwest Airlines, No. 3:17-cv-02610-N-BT (N.D. Tex. Feb. 18, 2020), Texas Magistrate Judge Rebecca Rutherford “decline[d] to impose sanctions under either Rule 11 or its inherent powers” against the plaintiff for statements she made regarding her response to the defendant’s interrogatories and requests for admission in her summary judgment response.

Case Background

The defendant served interrogatories and requests for admission on the plaintiff, and claimed that she did not respond. In her summary judgment response, however, the plaintiff asserted that she responded to the defendant’s interrogatories and requests for admission via email on April 20, 2019, and even followed up with counsel on May 1, 2019, to confirm defendant’s receipt of her answers.  The defendant objected that the plaintiff’s statements were “materially false” and contended that she made them for the improper purpose of avoiding summary judgment. As a result, the defendant sought sanctions under Fed. R. Civ. P. 11 and the Court’s inherent power in the form of an order: (1) striking the plaintiff’s summary judgment response without leave to amend; (2) granting the defendant’s Motion for Summary Judgment; and (3) requiring that the plaintiff pay the defendant $1,015.00 in attorney’s fees.  The plaintiff did not respond to the defendant’s Motion for Sanctions.

Judge’s Ruling

Judge Rutherford began her analysis by noting that “Federal Rule of Civil Procedure 11 authorizes a court to impose sanctions on a party or an attorney who files a pleading for an improper purpose, such as to harass the opposing party, delay the proceedings, or increase the cost of litigation.”  She also noted that “[c]ourts also have inherent authority to impose sanctions on attorneys when they find that an attorney has ‘acted in bad faith, vexatiously, wantonly, or for oppressive reasons’”, while also noting that “[c]ourts ‘exercise caution’ in invoking their inherent power and should ‘ordinarily’ rely on a rule or statute rather than their inherent power.”

In this case, Judge Rutherford stated: “Here, the Court declines to impose sanctions under either Rule 11 or its inherent powers. The record in this case does not clearly establish that Houston’s assertions that she responded to Southwest’s discovery requests were made for an improper purpose. Indeed, there is no evidence in the record regarding Houston’s intent. She may have honestly, but mistakenly, believed she properly answered Southwest’s discovery requests. Sanctions under the Court’s inherent authority are inappropriate for the same reason. Accordingly, Southwest’s Motion for Sanctions is DENIED.”

So, what do you think?  Should the court have expected some documentation from the plaintiff to support her claim that she responded via email to avoid Rule 11 sanctions?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Grants Plaintiff’s Motion to Compel Discovery in Loan Dispute: eDiscovery Case Law

In Grande v. U.S. Bank Nat’l Ass’n, No. C19-333 MJP (W.D. Wash. Feb. 20, 2020), Washington District Judge Marsha J. Pechman granted the plaintiffs’ motion to compel discovery, finding the policies requested were “relevant under the broad civil discovery standard” and that the defendants “ha[d] not demonstrated that the policies are confidential, proprietary, or trade secrets”.  Judge Pechman also granted the plaintiffs’ request for attorney’s fees in bringing the motion.

Case Background

In this case involving the plaintiffs’ allegations that the defendants breached a loan agreement (and violated several laws), the plaintiffs served written discovery on the defendants in July 2019 – to which the defendants responded in September 2019 with a production that the plaintiffs described as “completely deficient.”  The Parties held a discovery conference in October and the defendants served amended responses several weeks later, which the plaintiffs indexed and determined that large numbers were duplicative and the defendants’ production remained deficient.  After the plaintiffs drafted a Request for a Joint Submission to the Court pursuant to Local Rule 37, seeking assistance in resolving the discovery disputes, the defendants’ attorney declined to use the joint submission but claimed that the document provided him with “additional information” that clarified the alleged discovery deficiencies and asked for plaintiffs’ counsel to “work with him” to resolve the discovery dispute.

The plaintiffs held another discovery conference in November 2019 and the defendants agreed to supplement production with additional documents totaling 1,000 pages, voice recordings of four phone calls made by the Plaintiffs to Nationstar, a full life of loan history, and communications that had not been previously produced, all before November 28.  The defendants produced the 1,000 pages but none of the other material, with no explanation.  On January 11, 2020 the plaintiffs filed a Motion to Compel, seeking complete responses to a dozen Interrogatories and Requests for Production, as well as attorney’s fees.  Several weeks later, the defendants produced additional documents, a privilege log, and supplemental discovery responses, but still did not produce documents responsive to Request for Production No. 17.  The defendants argued that the loan modification guidelines requested in that request were not relevant and confidential, proprietary, and trade secrets.

Judge’s Ruling

With regard to the plaintiffs’ motion to compel and the defendants arguments, Judge Pechman stated: “First, the requested documents are relevant under the broad civil discovery standard, which allows litigants to ‘obtain discovery regarding any matter, not privileged, that is relevant to the claim or defense of any party.’…Here, Plaintiffs contend that documents responsive to this request provide ‘information about the policies, processes, and procedures Defendants used to make various decisions regarding the Grandes’ loan modification application.’…Where Plaintiffs allege that Defendants’ evasive, shifting explanations for denying their loan modification were bad faith attempts to avoid their obligations, comparing Defendants’ policies to their behavior is relevant to Plaintiffs’ claims.”

Continuing, Judge Pechman stated: “Second, Defendants have not demonstrated that the policies are confidential, proprietary, or trade secrets… Here, Defendants have not moved for a protective order or listed the documents on a privilege log…Nor have they explained how these policies are trade secrets that give them a competitive advantage over competitors… Further, the only two cases cited by Defendants concern a third-party subpoena where the movant failed to demonstrate relevance and a case concerning a motion for a protective order, neither of which support Defendants’ position… Because the Defendants here have not described any harm that would result from producing the guidelines and have not sought a protective order, the Court declines to find the documents so confidential that they cannot be produced. Defendants must therefore produce all documents responsive to Plaintiffs’ Request for Production No. 17 within seven days of the date of this Order.”

Judge Pechman also granted the plaintiffs’ request for attorney’s fees in bringing the motion, stating: “Here, Plaintiffs brought this Motion after several good faith attempts to obtain the requested discovery…and nothing before the Court suggests that Defendants’ delay was justified or that an award of expenses would be unjust. To the contrary, Defendants’ substantial delay in responding to the discovery requests has delayed the trial in this matter…and necessitated the present Motion”.

So, what do you think?  Was the court justified in granting the request for attorney’s fees or should it have been more patient since the defendants continued to supplement their production?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

By the way, there was some confusion about the list of EDRM Global Advisory Council members that I initially posted on Friday.  I had thought that was the entire list, but it was only a supplemental list to the list of Global Advisory Council members announced earlier this year.  I have updated my post to reflect the entire list of members — click here to view the post with the entire list this time.

Case opinion link courtesy of eDiscovery Assistant, which now is directly to the eDA site, enabling you to search within the case and see related cases (with eDA subscription).

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

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

Court Finds Plaintiffs’ Sanction Request To Be Too Late and Too Little: eDiscovery Case Law

Tom O’Connor and I had a great webcast yesterday regarding Important eDiscovery Case Law Decisions of 2019 and Their Impact on 2020, with plenty of interaction from the audience in the form of great questions and additional information!  So, how do we follow that up?  By continuing to build on this year’s case law collection.  :o)

In Nguyen v. Costco Wholesale Corp., No. 9:19-cv-80393 (S.D. Fla. Jan. 27, 2020), Florida Magistrate Judge William Matthewman denied the plaintiffs’ motion for sanctions for alleged spoliation of a video that the plaintiffs claimed showed an alleged slip-and-fall by plaintiff Chi Nguyen, finding that the defendant “did not have an affirmative duty to preserve the allegedly spoliated video” for a nearly two year period from the date of the fall to the date of the filing of the lawsuit and that the plaintiffs “fail to cite to a shred of evidence in support” in support of the claim that the video showed the slip and fall.

Case Background

In this case, the plaintiffs had previously filed a motion to compel the defendant to produce two photos taken by one of its employees as well as in-store surveillance videos that the defendant had claimed work-product privilege over and listed on its privilege log.  The defendant failed to timely respond to the plaintiffs’ motion, and the Court ordered the defendant to show cause as to why the motion should not be granted, to which the defendant responded that it had inadvertently failed to respond to the plaintiffs’ motion and that its “intent was always” to produce the video and photographs that the plaintiffs requested. Ultimately, the plaintiffs decided their Motion to Compel was moot and the Court denied the plaintiffs’ motion to compel accordingly.

However, the plaintiffs contended that the defendant never produced the “video showing the area” where plaintiff Chi Nguyen allegedly slipped and fell, arguing that the defendant improperly erased the video, resulting in “extreme irreversible prejudice” to the plaintiffs.  The defendant maintained that “there is no such video because no cameras in the store show this area” and that the plaintiffs never made a written request to preserve video information and thus it “had no duty to preserve any videos at all, much less video from a distant camera that did not capture the accident[.]”  The defendant produced affidavits in support of its position, but the plaintiffs produced no such affidavit or other evidence.

Judge’s Ruling

In considering the plaintiffs’ motion, Judge Matthewman observed: “Plaintiff Chi Nguyen originally brought her suit against Defendant in Florida state court on January 17, 2019…Her alleged slip-and-fall occurred on January 25, 2017, nearly two years prior to the filing of the Complaint.”  As a result, he ruled that “Defendant did not have an affirmative duty to preserve the allegedly spoliated video from the date of the fall (January 25, 2017) to the date of the filing of this lawsuit (January 17, 2019), a period of nearly two years after Plaintiff Chi Nguyen’s alleged slip-and-fall. Plaintiffs have provided no evidence that Defendant was given notice prior to the filing of this suit that Plaintiffs intended to file an action against it related to the alleged slip-and-fall. Moreover, merely because Plaintiff Chi Nguyen fell at Defendant’s store, absent additional facts, does not mean that Defendant reasonably anticipated litigation on the date of the alleged fall. No duty to preserve arose until after this lawsuit was served on Defendant. Without a duty to preserve the allegedly spoliated video, Plaintiffs’ motion for sanctions necessarily fails.”

Judge Matthewman also stated in denying the plaintiffs’ motion: “Even assuming Defendant did have a duty to preserve the allegedly spoliated video (which it did not), sanctions would still not be warranted unless the allegedly spoliated ESI was lost because Defendant failed to take reasonable steps to preserve it”, finding that “Defendant did not fail to take reasonable steps to preserve the allegedly spoliated evidence because the video was not ‘unique, relevant evidence that might be useful to’ Plaintiffs.”

So, what do you think?  What should constitute “reasonable anticipation of litigation” in a slip and fall case?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Orders Defendants to Produce Laptop for Forensic Examination – Again: eDiscovery Case Law

In HealthPlan Servs., Inc. v. Dixit, et al., No.: 8:18-cv-2608-T-23AAS (M.D. Fla. Dec. 19, 2019), Florida Magistrate Judge Amanda Arnold Sansone granted the plaintiff’s motion to order a group of defendants (the “Dixit defendants) to comply with the court’s previous order compelling immediate inspection of a laptop of one of the defendants.  Judge Sansone also granted the plaintiff’s motion for fees, sanctions, a jury instruction, and order to show cause why the Dixit defendants should not be held in contempt of court order to the extent that the Dixit defendants were ordered to pay the plaintiff’s reasonable expenses incurred for the meet and confers with the Dixit defendants about this issue and filing its motion.  The plaintiff’s requests for additional sanctions, a jury instruction, and an order to show cause were denied without prejudice pending the forensic examination of the laptop.

Case Background

In this case involving copyright infringement and breach of contract (among other issues), the court granted the plaintiff’s oral motion to compel immediate inspection of defendant Feron Kutsomarkos’s laptop in defendant Rakesh Dixit’s possession on October 16, 2019. The court required Mr. Dixit to turn over the hard drives from Ms. Kutsomarkos’s laptop to his attorneys by October 19, which he did.  The court also required the plaintiff to identify an expert and gave the Dixit defendants ten days to object as required by the protective order.  Counsel for the Dixit defendants responded by saying “we object to your expert designation in relation to the hard drive matter address in the Order at Doc. 200.”

The plaintiff contended that the Dixit defendants did not provide good cause for objecting to the plaintiff’s selected expert and speculated that the Dixit defendants’ refusal to turn over the hard drive to the expert may be an attempt to cover up spoliation by the Dixit defendants.  In response, the Dixit defendants argued the plaintiff’s comments at the October 16 hearing suggested the drives were only to be forensically imaged, even though the plaintiff had stated that it was “creating a forensic image so that we can evaluate the documents that were produced and ensure that they’re properly preserved and that we’ve received the entirety of the documents that we’ve requested”.  The Dixit defendants also argued a different legal standard exists for permitting a forensic examination of the hard drives rather than permitting a mere image and cited Garrett v. University of South Florida Board of Trustees, No. 8:17-cv-2874-T-23AAS, 2018 WL 4383054 (M.D. Fla. Sept. 14, 2018) to support that contention.

Judge’s Ruling

With regard to the case cited by the Dixit defendants, Judge Sansone stated: “The Dixit defendants’ reliance on Garrett for the legal standard is misplaced. In Garrett, the plaintiff produced the recording sought by the defendant, but the defendant requested a forensic examination to see if there was evidence of an attempt to tamper with the recording…Here, counsel for Ms. Kutsomarkos noted Ms. Kutsomarkos provided pdf versions of documents from the laptop…However, the pdf files scrubbed the metadata from the documents and that metadata should be available on the hard drives…Also, the computer in Garrett was a personal computer, but here the computer was Ms. Kutsomarkos’s business computer and she gave it to Mr. Dixit, her employer.”

Judge Sansone also stated: “Since Ms. Kutsomarkos did not correctly comply with prior discovery requests by producing from the laptop incorrectly formatted documents with limited information, the court determined a forensic examination of the laptop was warranted…Ms. Kutsomarkos also conducted her own search of the emails rather than having an expert or her attorney conduct the search…Also, Mr. Dixit, another defendant, searched and recovered the same files Ms. Kutsomarkos produced in the native format…HealthPlan also conveyed certain documents that should have come from a professional search of the laptop were missing…These factors satisfy exceptional circumstances to warrant a forensic examination. Noting, the cost and burden for the forensic examination is falling on HealthPlan, who wants to confirm everything was turned over to them.”

As a result, Judge Sansone granted the plaintiff’s motions as noted above and denied without prejudice the plaintiff’s additional requests pending the forensic examination of the laptop.

So, what do you think?  Did the court go far enough to address the defendant’s discovery failings?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Denies Plaintiff’s Motion for Sanction for Spoliation of Audio Recording: eDiscovery Case Law

In Montoya v. Loya Ins., No. 18-590 SCY/JFR (D.N.M. Oct. 24, 2019), New Mexico Magistrate Judge Steven C. Yarbrough denied the plaintiff’s Motion For Sanctions For Spoliation Of Audio Recording Evidence, after a jury trial in favor of the plaintiff, finding that there was minimal prejudice to the plaintiff and that “there is no dispute over the relevant contents of the telephone conversation” which was recorded.

Case Background

In this case involving a bad faith claim against the plaintiff’s insurance company for its handling of her claim under her uninsured motorist benefits, the defendant took a recorded statement from the plaintiff in the course of its investigation but lost it.  The plaintiff was forced to file suit against the defendant in state court in February 2017 and the jury rendered a verdict in favor of the plaintiff against the defendant in January 2018 in the amount of $23,742.82.  Despite that, the plaintiff sought a finding of liability against the defendant as a sanction for its failure to preserve the recorded statement the defendant took from the plaintiff during its investigation of her claim.

Judge’s Ruling

Considering the plaintiff’s claim, Judge Yarbrough stated: “The Court agrees that the loss of the recording caused Plaintiff some prejudice, as it prevented her from obtaining a full transcript of the conversation rather the parts that Ms. Boneo chose to record in her notes. This prejudice, however, is minimal.”

Continuing, Judge Yarbrough provided three reasons for this, as follows:

“First, Plaintiff herself was part of the conversation. Thus, the loss of the recording did not deny her access to the conversation. Plaintiff therefore retains the ability to testify about conversation despite the loss of the recording…Second, Plaintiff was able to depose the adjustor and thereby obtain the adjuster’s testimony about the conversation. Because Plaintiff has independent personal knowledge of this conversation that she was part of and because Plaintiff obtained the adjuster’s notes and testimony about the conversation, Plaintiff has the means to adequately prepare for trial… Third, and most importantly, there is no dispute over the relevant contents of the telephone conversation. Plaintiff testified in her deposition that she agreed with the substance of Ms. Boneo’s testimony regarding the contents of Plaintiff’s statement.”

As a result, Judge Yarbrough stated: “Any prejudice Plaintiff might suffer from not having a recording of the statement is slight and does not justify the only relief Plaintiff requests: a finding of liability against Defendant. Plaintiff’s Motion For Sanctions For Spoliation Of Audio Recording Evidence (Doc. 75) is therefore DENIED.”

So, what do you think?  Should the judge have penalized the defendant for losing the recording?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

It’s our last post of the year, so I want to thank all of you for reading our blog all year, attending our webcasts and for all of the support!  Can’t believe we are in the midst of our tenth year and your support has made it possible to keep producing blog posts daily.  In this holiday season, I’m very thankful for your support and also thankful for the love of my wife, Paige, and our kids, Kiley and Carter.  Happy holidays and see you in 2020!

:o)

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Infers Bad Faith for Plaintiffs Use of Ephemeral Messaging App: eDiscovery Case Law

We’re catching up on notable cases from earlier in the year.  Here’s one that’s notable regarding the use of ephemeral messaging and spoliation sanctions.

In Herzig v. Arkansas Foundation for Medical Care, Inc., No. 2:18-CV-02101 (W.D. Ark. July 3, 2019), Arkansas District Judge P.K. Holmes, III indicated his belief that the use and “necessity of manually configuring [the messaging app] Signal to delete text communications” on the part of the plaintiffs was “intentional and done in bad faith”.  However, Judge Holmes declined to consider appropriate sanctions, ruling that “in light of the [defendant’s] motion for summary judgment, Herzig and Martin’s case can and will be dismissed on the merits.”

Case Background

In this case where the plaintiffs alleged unlawful termination due to age discrimination, the parties conferred and agreed that the defendant might request data from the plaintiffs’ mobile phones and that the parties had taken reasonable measures to preserve potentially discoverable data from alteration or destruction.  In July 2018, the defendant served requests for production on the plaintiffs and, in September 2018, Plaintiffs Brian Herzig and Neal Martin produced screenshots of parts of text message conversations from Martin’s mobile phone, including communications between Herzig and Martin, but nothing more recent than August 20, 2018, even after a motion to compel.

After the August production, Martin installed the application Signal (which allows users to send and receive encrypted text messages accessible only to sender and recipient, and to change settings to automatically delete these messages after a short period of time) on his phone.  Herzig had done so while working at the defendant.  Herzig and Martin set the application to delete their communications and, as a result, disclosed no additional text messages to the defendant, which was unaware of their continued communication using Signal until Herzig disclosed it in his deposition near the end of the discovery period.  The defendant filed a motion for dismissal or adverse inference on the basis of spoliation.

Judge’s Ruling

In assessing the defendant’s motion, Judge Holmes stated that “Herzig and Martin had numerous responsive communications with one another and with other AFMC employees prior to responding to the requests for production on August 22, 2018 and producing only some of those responsive communications on September 4, 2018. They remained reluctant to produce additional communications, doing so only after AFMC’s motion to compel. Thereafter, Herzig and Martin did not disclose that they had switched to using a communication application designed to disguise and destroy communications until discovery was nearly complete. Based on the content of Herzig and Martin’s earlier communications, which was responsive to the requests for production, and their reluctance to produce those communications, the Court infers that the content of their later communications using Signal were responsive to AFMC’s requests for production. Based on Herzig and Martin’s familiarity with information technology, their reluctance to produce responsive communications, the initial misleading response from Martin that he had no responsive communications, their knowledge that they must retain and produce discoverable evidence, and the necessity of manually configuring Signal to delete text communications, the Court believes that the decision to withhold and destroy those likely-responsive communications was intentional and done in bad faith.”

However, Judge Holmes also stated: “This intentional, bad-faith spoliation of evidence was an abuse of the judicial process and warrants a sanction. The Court need not consider whether dismissal, an adverse inference, or some lesser sanction is the appropriate one, however, because in light of the motion for summary judgment, Herzig and Martin’s case can and will be dismissed on the merits.”  As a result, the requested sanctions were denied as moot.

So, what do you think?  Should use of an ephemeral messaging app when a duty to preserve attaches lead to significant sanctions?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Despite Email from Defendants Instructing to Destroy Evidence, Court Declines Sanctions: eDiscovery Case Law

In United States et al. v. Supervalu, Inc. et al., NO. 11-3290 (C.D. Ill. Nov. 18, 2019), Illinois District Judge Richard H. Mills, despite an email produced by the defendants with instructions to their pharmacies to destroy evidence, denied the relators’ motion for sanctions, stating: “Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.”

Case Background

In this case, the defendants produced in discovery a January 27, 2012 email from a pharmacy district manager for 33 Shop ‘n Save pharmacies, instructing those pharmacies to “throw away all your competitor’s price matching lists and get rid of all signs that say we match prices.” The email was sent seven days after the January 20, 2012 government agents’ visits to the defendants’ pharmacies, including one of the district manager’s pharmacies, five days after the manager learned of the visit by a Special Agent with the Department of Health and Human Services, Office of Inspector General (“HHS-OIG”), and three days after the defendants received a subpoena from the Government requesting documents regarding the price match program.

The relators further alleged it appeared that another district manager ordered the destruction of signage promoting the defendants’ price match program after visits by government agents and service of the HHS-OIG subpoena and also alleged the defendants waited until almost the end of discovery to produce the January 27, 2012 email.  As a result, they requested the entry of an Order imposing appropriate sanctions against the defendants for what they alleged was (1) Defendants’ failure to timely issue a litigation hold; (2) the intentional destruction of material evidence relating to defendants’ price match program; and (3) their subsequent efforts to conceal and obstruct discovery of their spoliation of evidence, including the wrongful withholding of material evidence of the spoliation until just days before the close of discovery in this case.

The defendants, in turn, claimed (1) they timely issued a litigation hold in this matter; (2) did not intentionally destroy material evidence; and (3) did not attempt to conceal and obstruct discovery of any alleged spoliation of evidence.  The Defendants claimed they issued three litigation holds: (1) one to individuals in the corporate business department on January 30, 2012; (2) one to all Pharmacy District Managers on February 20, 2012; and (3) one to the corporate marketing and advertising executives on March 15, 2012.  Alleging there were inconsistencies in both the number and timing of the litigation holds between defendant declarations, the relators asked the Court for an in camera review of the three litigation holds noted above.

Judge’s Ruling

Judge Mills, in noting that “A showing of bad faith—like destroying evidence to hide adverse information—is a prerequisite to imposing sanctions for missing evidence”, ruled as follows:

“The Court does not believe that an in camera review of the Defendants’ litigation holds is necessary at this time. At this time, the Court does not believe that sanctions are warranted based on the Defendants’ alleged failure to timely issue a litigation hold, their intentional destruction of evidence relating to the price match program, or their efforts to conceal and obstruct discovery of the spoliation of evidence. Upon reviewing the record, the Court is unable to conclude that Defendants acted in bad faith. If the evidence at trial shows otherwise and bad faith on the part of the Defendants is established, the Court can revisit the issue and consider one or both of the sanctions requested by the Relators or another appropriate sanction.

Ergo, the Relators’ motion for sanctions [d/e 205] is DENIED.”

So, what do you think?  Do the defendants’ actions seem to be in bad faith or was the Court’s ruling appropriate?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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

Court Denies Motion to Bar Plaintiff From Making Adverse Comments Regarding Defendant’s Failure to Produce Key File: eDiscovery Case Law

In Saulsberry v. Savannah River Remediation, LLC, No.: 1:16-cv-02792-JMC (D.S.C. Sep. 19, 2019), South Carolina District Court Judge J. Michelle Childs denied without prejudice the defendant’s Motion in Limine to Bar Plaintiff from Making Adverse Comments Regarding Defendant’s Failure to Produce Certain Records, finding that defendant “has not demonstrated that the contents of the missing Lash Investigative File would necessarily replicate, but not add to, the information provided in the record.”

Case Background

In this Title VII and § 1981 disparate treatment action filed by the plaintiff, she had previously made an internal EEO Complaint in 2013 which allegedly arose from her participation in the 2012 investigation of Robert Lash after which she contended that she was “targeted by her managers and treated differently”.  During discovery, the plaintiff filed a Motion to Compel the contents of the Lash Investigation, but the defendant admitted that it never produced the Lash Investigative File and also admitted that, although there was a physical Lash Investigative File, it submitted written discovery responses stating that no notes or other documentary evidence existed regarding the [Lash] investigation.

However, two deposed witnesses suggested that “documentary evidence which should be in hard copy of the [Lash] Investigative File” and the plaintiff indicated that she had provided some documents from the file to the EEO Director, as part of her internal EEO claim in September of 2013.  Nonetheless, the defendant was unable to locate the file.  The plaintiff contended that the Lash Investigative File was relevant to several of her remaining claims, while the defendant claimed that the file was no longer relevant to any remaining claim and filed a motion to have the court to bar the plaintiff’s ability to elicit testimony regarding the circumstances surrounding the disappearance of the file, contending the issue of “’why’ [Saulsberry] was included in the WFR is no longer relevant” to the claims before the court.

Judge’s Ruling

Judge Childs stated: “While the court agrees that the disappearance of the Lash Investigative File is relevant to the WFR claims which are no longer before the court, the court does not necessarily agree that the Lash Investigative File is not also relevant to the claims presently before the court.”  The plaintiff had argued that her remaining race and retaliation claims relate to her participation in the Lash investigation and also contended that evidence of her ‘protected activity’ (that prohibited her from being rehired for a position) was in the Lash File.  As a result, Judge Childs stated: “This court, therefore, shall not, at this time, prohibit Saulsberry from introducing evidence, or eliciting testimony regarding the Lash File and the circumstances surrounding its disappearance.”

With regard to the defendant’s argument that the plaintiff should be “precluded from seeking an adverse inference charge regarding the lost file”, Judge Childs stated: “The court has a similar view on this issue… SRR has not demonstrated that the contents of the missing Lash Investigative File would necessarily replicate, but not add to, the information provided in the record. Further, ‘Even if a court determines not to exclude secondary evidence, it may still permit the jury to draw unfavorable inferences against the party responsible for the loss or destruction of the original evidence.’ Vodusek, 71 F.3d at 156.  As a result, in denying the defendant’s motion, Judge Childs stated “the court declines to substantively exclude, at this time, all references to the disappearance of the Lash Investigative File or indefinitely preclude Saulsbury from making a showing that an adverse inference instruction based on its disappearance is warranted. Moreover, SRR has not addressed or demonstrated what, if any, prejudice would result if its motion is denied.”

So, what do you think?  Should parties be able to bar opposing parties for commenting about lost records in court proceedings?  Please let us know if any comments you might have or if you’d like to know more about a particular topic.

Case opinion link courtesy of eDiscovery Assistant.

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

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