Close
Enter your
text here

Sanctions

Court Grants Motion for Spoliation Sanctions Due to Data that is “Less Accessible” – eDiscovery Case Law
 

In Mazzei v. Money Store, 01cv5694 (JGK) (RLE) (S.D. N.Y. July 21, 2014), New York Magistrate Judge Ronald L. Ellis granted the plaintiff’s motion for spoliation sanctions against the defendant, ordering the defendant to bear the cost of obtaining all the relevant data in question from a third party as well as paying for plaintiff attorney fees in filing the motion.

In this class action fraud case, the plaintiff requested that the defendants be sanctioned for violating the duty to preserve information within an electronic database created by a third party, claiming that the information had been lost from the electronic database system and was now in the possession of another third party, making it more costly to retrieve.  Accordingly, the plaintiff asked the court to direct the defendants to obtain the information from the third party, as a sanction for their failure to preserve the information in its original format.

On the other hand, the defendants claimed that the information was preserved, but it was “not readable,” and stated that it would cost a minimum of $10,000 to determine if the information was even searchable. The defendants also argued that the “not readable” documents were not their responsibility to preserve and produce because the information was controlled by a third party.

Judge Ellis stated that “[a] party is in control of any documents in the possession of a third party if that third party is contractually obligated to make them available…Defendants had both the legal right and practical ability to obtain the information relating to fees in the New Invoice System after the initiation of this action”. He noted that the defendants had a Master Services Agreement with the original third party provider of the database, which gave the defendants “a contractual right to demand the information specifically identifying the fees being charged”, so the defendants “were in control of that information”.

Regarding the defendant’s contention that there is no spoliation issue because the plaintiffs have not shown that the information in the system is less accessible now than prior to the transfer of the defendants' access to the system, Judge Ellis declared “This argument has no merit. Mazzei asserts, and Defendants do not dispute, that the only remaining trace of the information in the New Invoice System is possessed by Lender Processing Services and is not presently in a readable format. Therefore, the information is less accessible than it was when Defendants had access to it.”

Finding that the information was relevant and that the defendants “acted with a culpable state of mind” when they failed to preserve the data in its original form, Judge Ellis ordered the defendants “to 1) bear the cost of determining whether the New Invoice System data currently in the possession of LPS is searchable; 2) pay Mazzei his attorneys' fees for this application.”  The plaintiff was ordered to “submit an affidavit detailing reasonable hours and rates associated with its motion by August 1”.

So, what do you think?  Was the judge right to sanction the defendant for failing to preserve the accessibility of the information?  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.

Our 1,000th Post! – eDiscovery Milestones

When we launched nearly four years ago on September 20, 2010, our goal was to be a daily resource for eDiscovery news and analysis.  Now, after doing so each business day (except for one), I’m happy to announce that today is our 1,000th post on eDiscovery Daily!

We’ve covered the gamut in eDiscovery, from case law to industry trends to best practices.  Here are some of the categories that we’ve covered and the number of posts (to date) for each:

We’ve also covered every phase of the EDRM (177) life cycle, including:

Every post we have published is still available on the site for your reference, which has made eDiscovery Daily into quite a knowledgebase!  We’re quite proud of that.

Comparing our first three months of existence to now, we have seen traffic on our site grow an amazing 474%!  Our subscriber base has more than tripled in the last three years!  We want to take this time to thank you, our readers and subcribers, for making that happen.  Thanks for making the eDiscoveryDaily blog a regular resource for your eDiscovery news and analysis!  We really appreciate the support!

We also want to thank the blogs and publications that have linked to our posts and raised our public awareness, including Pinhawk, Ride the Lightning, Litigation Support Guru, Complex Discovery, Bryan University, The Electronic Discovery Reading Room, Litigation Support Today, Alltop, ABA Journal, Litigation Support Blog.com, InfoGovernance Engagement Area, EDD Blog Online, eDiscovery Journal, e-Discovery Team ® and any other publication that has picked up at least one of our posts for reference (sorry if I missed any!).  We really appreciate it!

I also want to extend a special thanks to Jane Gennarelli, who has provided some serial topics, ranging from project management to coordinating review teams to what litigation support and discovery used to be like back in the 80’s (to which some of us “old timers” can relate).  Her contributions are always well received and appreciated by the readers – and also especially by me, since I get a day off!

We always end each post with a request: “Please share any comments you might have or if you’d like to know more about a particular topic.”  And, we mean it.  We want to cover the topics you want to hear about, so please let us know.

Tomorrow, we’ll be back with a new, original post.  In the meantime, feel free to click on any of the links above and peruse some of our 999 previous posts.  Now is your chance to catch up!  😉

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.

Court Refuses to Ban Samsung from Selling Products Found to Have Infringed on Apple Products – eDiscovery Case Law

Apple may have won several battles with Samsung, including ultimately being awarded over $1 billion in verdicts, as well as a $2 million sanction for the inadvertent disclosure of its outside counsel firm (Quinn Emanuel Urquhart & Sullivan LLP) commonly known as “patentgate”.  But, Samsung has may have won the war with the court’s refusal to ban Samsung from selling products that were found to have infringed on Apple products.

Last Wednesday, U.S. District Judge Lucy H. Koh refused to permanently ban Samsung from selling several mobile phones and tablets that a jury found infringed on Apple patents, ruling Apple hadn’t shown that it would suffer irreparable harm to its reputation.  In her order, Judge Koh stated that the plaintiff hadn’t provided sufficient evidence that it will suffer lost sales specifically due to Samsung’s infringement of the three patents at issue, nor had it demonstrated that the patented inventions drive consumer demand for Samsung’s infringing products.

In its motion for a permanent injunction, Apple had argued that the nearly $120 million in damages that was awarded in May wasn’t enough to compensate Apple for the harm caused by Samsung’s infringement. Apple stated that the ban was necessary to separate Apple’s reputation as an “amazingly innovative company” from Samsung’s reputation as a “fast follower.”

Apple argued that trial evidence demonstrated a causal nexus between the alleged sales-based harm and Samsung’s infringing behavior, but argued, however, that when reputational harm is alleged, the second prong of the irreparable harm test falls away and no separate proof of causal nexus is required.  However, Judge Koh found “no reason to depart from the Federal Circuit’s guidance that a patentee must demonstrate a causal nexus between infringement and any alleged irreparable harm – including injury to reputation.”  She also noted that “Samsung argues persuasively that Apple’s reputation has proved extremely robust … weakening Apple’s claim that it has suffered or will suffer irreparable harm to its reputation from infringement of only three patents.”

So, what do you think?  Will the Apple-Samsung litigation ever end?  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.

Circuit Court Affirms Denial of Sanctions Over Spoliation by Defendant – eDiscovery Case Law

In Automated Solutions Corp. v. Paragon Data Sys., Inc., 13-3025/3058 (6th Cir. June 25, 2014), the Sixth Circuit court affirmed the holdings of the district court, rejecting the plaintiff’s arguments that the district court abused its discretion by denying plaintiff’s motion for spoliation sanctions due to defendant’s failure to preserve information on a hard drive and server.  The circuit court also affirmed the ruling by both the magistrate and district judge that the defendant’s back-up tapes were not subject to the duty to preserve.

In a business deal that “soured” and a litigation that has been ongoing for over eight years, it all began back in 2001 when the plaintiff and defendant entered into a contract to develop and support computer software that would allow the Chicago Tribune to track newspaper subscriptions via a handheld device that communicated with a remote server.  After “tensions emerged between the two companies”, the defendant terminated the contract in 2003. The plaintiff sued the defendant in Ohio state court, and after a bench trial, the state court found in the plaintiff’s favor and declared that it was the sole owner of the software system. Soon after the state court issued its judgment, the plaintiff filed an instant action alleging, inter alia, that the defendant had infringed on its copyright and trademark in the software via its development of a new similar software program that it provided to the Cleveland Plain Dealer.  The defendant removed the new matter to federal court.

After numerous discovery disputes, the district court noted that “Paragon appears to have failed in its duty to preserve information because of pending or reasonably anticipated litigation.” Because the defendant had not produced documentary evidence of development of the new software code to the plaintiff, the court ordered the defendant to submit to a forensic expert investigation of its computer systems for evidence that the defendant copied the plaintiff’s software when creating its own.

The plaintiff moved for sanctions when it became apparent that the defendant disposed of a “Sun Server” key to the software development, and also lost information on two programmer’s hard drives.  The magistrate judge found that defendant was “at most negligent” in its failure to preserve and recommended consideration of an adverse inference only for the loss of one programmer’s information, to be imposed at trial and not at the summary judgment stage.  No sanctions were recommended for any other lost data and the magistrate judge not only concluded that back-up tapes created by the defendant were not subject to preservation, but also recommended granting partial summary judgment in favor of the defendant.  After the district court adopted the recommendations in part and dismissed plaintiff’s claims (rendering the sanctions moot), the plaintiff appealed to the circuit court.

With regard to the “Sun Server” and a programmer’s hard drive, despite the failure to preserve having been found to be negligent, the plaintiff had not shown that the devices contained evidence relevant to the litigation, so the circuit court ruled that the district court did not clearly err in its conclusion that a reasonable trier of fact could not find that the missing information would support plaintiff’s claim.  As for the back-up tapes, the circuit affirmed the earlier court rulings that cited Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003), which noted that a “litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company’s policy.”

The Sixth Circuit noted that the Second Circuit reasoned that “the better approach is to consider [the failure to adopt good preservation practices] as one factor in the determination of whether discovery sanctions should issue…that a finding of gross negligence does not mandate an adverse inference instruction…and that a case-by-case approach to the failure to produce relevant evidence, at the discretion of the district court, is appropriate”.  Noting that “[t]his case-by-case approach is the law in our circuit as well”, the court stated that “the district court did not commit a clear error of judgment” and affirmed the lower court ruling.

So, what do you think?  Did the plaintiff get a fair shake?  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.

Privilege Not Waived on Defendant’s Seized Computer that was Purchased by Plaintiff at Auction – eDiscovery Case Law

In Kyko Global Inc. v. Prithvi Info. Solutions Ltd., No. C13-1034 MJP (W.D. Wash. June 13, 2014), Washington Chief District Judge Marsha J. Pechman ruled that the defendants’ did not waive their attorney-client privilege on the computer of one of the defendants purchased by plaintiffs at public auction, denied the defendants’ motion to disqualify the plaintiff’s counsel for purchasing the computer and ordered the plaintiffs to provide defendants with a copy of the hard drive within three days for the defendants to review it for privilege and provide defendants with a privilege log within seven days of the transfer.

In this fraud case, after several of the named defendants settled and confessed to judgment, the plaintiffs obtained a Writ of Execution in which the King County (Washington) Sheriff seized various items of personal property, including a computer owned by one of the defendants.  The computer was sold at a public auction, and an attorney for the plaintiffs outbid a representative sent by the defendants and purchased the computer.  The plaintiffs sent the computer to a third party for analysis and requested a ruling as to the admissibility of potentially attorney-client privileged documents contained on it, while the defendants contended the actions of the plaintiffs violated ethical rules, and requested that the plaintiffs return the computer to defendants, and also requested that the plaintiff’s attorneys should be disqualified from the case.

With regard to the plaintiff’s actions, Judge Pechman ruled that plaintiffs’ acquisition of the computer was not “inherently wrongful”, noting the plaintiffs’ claim that they had not reviewed the materials on the computer at the time of the motion.  She also determined that plaintiff’s “use of a third party vendor to make a copy of the hard drive is not equivalent to metadata mining of documents produced through the normal discovery process, because whereas the hard drive might plausibly contain many documents unprotected by any privilege, metadata mining is expressly aimed at the kind of information one would expect to be protected by attorney-client privilege and/or work-product protections”.  As a result, she denied the defendants’ motion to disqualify the plaintiff’s counsel.

As for the waiver of privilege, Judge Pechman used a balancing test to determine waiver “that is similar to Rule 502(b)”, which included these factors:

  1. the reasonableness of precautions taken to prevent disclosure,
  2. the amount of time taken to remedy the error,
  3. the scope of discovery,
  4. the extent of the disclosure, and
  5. the overriding issue of fairness.

Using the analogy of where “an opposing party discovers a privileged document in the other party’s trash”, Judge Pechman considered the potential waiver of privilege.  However, because the defendant stated in a declaration that she had “someone at her office” reformat the hard drive on the computer and install a new operating system and believed her documents had been erased and were not readily accessible, she related it “to the memo torn into 16 pieces than a document simply placed in a trash can without alteration”.

As a result, Judge Pechman determined that given “Defendants’ prompt efforts to remedy the error by filing a motion with the Court and the general sense that parties should not be able to force waiver of attorneyclient privilege through investigative activities outside the discovery process and a superior understanding of the relevant technology, the Washington balancing test weighs against waiver.”  She also and ordered the plaintiffs to provide defendants with a copy of the hard drive within three days for the defendants to review it for privilege and provide defendants with a privilege log within seven days of the transfer.

So, what do you think?  Were the plaintiff’s counsel actions ethical?  Should privilege have been waived?  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.

Texas Supreme Court Reverses Spoliation Ruling, Remands Case for New Trial – eDiscovery Case Law
 

In Brookshire Bros., Ltd. v. Aldridge (Tex. July 3, 2013), the Supreme Court of Texas determined “that imposition of the severe sanction of a spoliation instruction was an abuse of discretion” in the trial court, reversed the court of appeals' judgment and remanded the case for a new trial.

In this case, the plaintiff Aldridge (who is the respondent in the appeal) slipped and fell at the defendant’s (who is the petitioner in the appeal) store and sued for damages after the defendant stopped paying for medical expenses.  The plaintiff’s fall was captured on surveillance video and the defendant preserved the video footage from the time plaintiff entered the store until shortly after he fell, but did not preserve the remainder of the video, which was “presumably recorded over” by early the next month.

To recover in a slip-and-fall case, a plaintiff must prove, inter alia, that the defendant had actual or constructive knowledge of a dangerous condition on the premises such as a slippery substance on the floor and the plaintiff argued in the trial court that the defendant’s failure to preserve additional video footage amounted to spoliation of evidence that would have been helpful to the key issue of whether the spill was on the floor long enough to give the defendant a reasonable opportunity to discover it.

As a result, the plaintiff moved for a spoliation jury instruction and the trial court: 1) allowed the jury to hear evidence bearing on whether the defendant spoliated the video, 2) submitted a spoliation instruction to the jury, and 3) permitted the jury to decide whether spoliation occurred during its deliberations on the merits of the lawsuit.  The jury ruled in favor of the plaintiff and awarded him over $1 million in damages. The court of appeals affirmed the trial court's judgment on the verdict, holding that the trial court did not abuse its discretion in admitting evidence of spoliation or charging the jury with the spoliation instruction.

After analysis of the law associated with spoliation, the Supreme Court stated that “the harsh remedy of a spoliation instruction is warranted only when the trial court finds that the spoliating party acted with the specific intent of concealing discoverable evidence” and that a “failure to preserve evidence with a negligent mental state may only underlie a spoliation instruction in the rare situation in which a nonspoliating party has been irreparably deprived of any meaningful ability to present a claim or defense”.  As a result, the Court held “that a trial court's finding of intentional spoliation pursuant to the analysis set forth above is a necessary predicate to the proper submission of a spoliation instruction to the jury.”

While issuing the caveat that “[o]n rare occasions, a situation may arise in which a party's negligent breach of its duty to reasonably preserve evidence irreparably prevents the nonspoliating party from having any meaningful opportunity to present a claim or defense”, the court determined that there was no evidence of the requisite intent to conceal or destroy relevant evidence or that plaintiff was “irreparably deprived of any meaningful ability to present his claim” and held that the trial court therefore abused its discretion in submitting a spoliation instruction, reversed the court of appeals' judgment and remanded the case for a new trial.

So, what do you think?  Was the reversal of the ruling the right decision or should the sanction for spoliation of evidence have stood?  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.

Failure to Preserve Cloud-Based Data Results in Severe Sanction for Defendant – eDiscovery Case Law
 

In Brown v. Tellermate Holdings, 2:11-cv-1122 (S.D. Ohio Jul 1, 2014), Magistrate Judge Terence Kemp granted plaintiffs’ motion for judgment and motion to strike, ruling that the defendant could not “present or rely upon evidence that it terminated the Browns' employment for performance-related reasons” and enabling the plaintiffs to use documents produced by the defendant “designated as attorneys'-eyes-only” to be used by the plaintiffs “without restriction”, due to the defendant’s failure to preserve or produce data from their Salesforce.com database.

You have to love an opinion that begins like this:

“There may have been a time in the courts of this country when building stone walls in response to discovery requests, hiding both the information sought and even the facts about its existence, was the norm (although never the proper course of action). Those days have passed. Discovery is, under the Federal Rules of Civil Procedure, intended to be a transparent process.”

That’s how this lengthy opinion began in this case where the plaintiffs, former sales agents, sued the defendant for age discrimination after they were terminated.  The defendant responded by arguing that the terminations were performance related.  To address that argument, the plaintiffs sought records from the defendant’s through salesforce.com to demonstrate that they consistently met or exceeded their quotas. In response, the defendant “with the participation of its counsel, either intentionally or inadvertently failed to fulfill certain of its discovery obligations, leading to a cascade of unproductive discovery conferences, improperly-opposed discovery motions, and significant delay and obstruction of the discovery process.”  As Judge Kemp described, the defendant’s counsel:

  • “failed to uncover even the most basic information about an electronically-stored database of information (the ‘salesforce.com’ database);
  • as a direct result of that failure, took no steps to preserve the integrity of the information in that database;
  • failed to learn of the existence of certain documents about a prior age discrimination charge (the "Frank Mecka matter") until almost a year after they were requested;
  • and, as a result of these failures, made statements to opposing counsel and in oral and written submissions to the Court which were false and misleading, and which had the effect of hampering the Browns' ability to pursue discovery in a timely and cost-efficient manner (as well as the Court's ability to resolve this case in the same way).”

One of the defendant’s attorneys went so far as to provide these reasons to the plaintiffs as to why they could not produce the information from Salesforce.com:

  • "Tellermate does not maintain salesforce.com information in hard copy format."
  • "Tellermate cannot print out accurate historical records from salesforce.com. . . ."
  • "[D]iscovery of salesforce.com information should be directed to salesforce.com, not Tellermate."

The defendant later claimed that it was “contractually prohibited from providing salesforce.com information” and that it “cannot access historical salesforce.com data” – both of which were untrue.

Ultimately, it became clear that the defendant had not exported or preserved the data from salesforce.com and had re-used the plaintiffs’ accounts, spoliating the only information that could have addressed the defendant’s claim that the terminations were performance related (the defendant claimed did not conduct performance reviews of its sales representatives).  As a result, Judge Kemp stated that the “only realistic solution to this problem is to preclude Tellermate from using any evidence which would tend to show that the Browns were terminated for performance-related reasons” and issued the following severe sanctions:

“Tellermate shall not, in connection with either the pending summary judgment motion or at trial, be entitled to present or rely upon evidence that it terminated the Browns' employment for performance-related reasons. The documents produced by Tellermate in April, 2013 and designated as attorneys'-eyes-only may be used by the Browns without restriction, subject to Tellermate's ability to redesignate particular documents as confidential under the existing protective order, provided it does so within fourteen days and has a good faith basis for so designating each particular document. Tellermate shall produce the remaining Frank Mecka documents to the Browns within fourteen days. Finally, Tellermate and its counsel shall pay, jointly, the Browns' reasonable attorneys' fees and costs incurred in the filing and prosecution of those two motions as well as in the filing of any motions to compel discovery relating to the salesforce.com and Frank Mecka documents.”

So, what do you think?  Do the sanctions fit the activities by the defendant?  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.

Court Denies Sanctions for Deletion of “Smoking Gun” Email, Grants Defendants’ Motion for Summary Judgment – eDiscovery Case Law
 

In the case In re Text Messaging Antitrust Litig., 08 C 7082, MDL No. 1997 (N.D. Ill. May 19, 2014), Illinois District Judge Matthew F. Kennelly not only denied the plaintiffs’ request for an adverse inference sanction against the defendants for destroying emails, but also granted the defendants’ motion for summary judgment, as the plaintiffs failed to provide any supporting circumstantial evidence to meet their burden of proof.

The plaintiffs filed this suit on behalf of all those who purchased text-messaging services from AT&T, Sprint, T-Mobile, and Verizon Wireless, alleging that these providers, along with defendant CTIA-The Wireless Association, conspired to fix prices for Text Messaging Services in violation of section 1 of the Sherman Act.  On September 9, 2008, shortly after the last carrier increased text messaging rates, Senator Herbert Kohl, chairman of the antitrust subcommittee of the United States Senate Committee on the Judiciary, sent a two-page letter to the chief executive officers of the four carrier defendants "to express my concern regarding what appear to be sharply rising rates your companies have charged to wireless phone customers for text messaging”. 

A day later, The Wall Street Journal published an article (Text-Messaging Rates Come Under Scrutiny) regarding Senator Kohl’s investigation.  That same day a T-Mobile employee sent the text of the article via email to several individuals, including T-Mobile employees Adrian Hurditch, then the company's vice president of services and strategic pricing, and Lisa Roddy, then the company's director of marketing planning and analysis, but the subsequent thread of emails between Hurditch and Roddy was deleted.  The plaintiffs claimed that once Senator Kohl began contacting wireless carriers, T-Mobile had a duty to preserve all relevant electronically stored information and their failure to preserve and produce the emails reflected its “willfulness, bad faith, or fault” and warranted sanctions.

Judge Kennelly “agree[d] that plaintiffs have shown that T-Mobile's employees likely deleted the e-mail(s) intentionally and that they did so for the purpose of concealing the e-mail's contents. Nonetheless, plaintiffs have not shown that the actions of the T-Mobile personnel involved concealment of information that meets the requirement of being ‘adverse’ to T-Mobile. Specifically, the record does not reflect that Hurditch, the sender of the original e-mail that was deleted and the person who called T-Mobile's price increase ‘collusive,’ was in a position to have knowledge of or participate in any collusion between the wireless carriers.”  As a result, Judge Kennelly declined to order sanctions against T-Mobile for deletion of the e-mail or e-mails.

The plaintiffs also claimed that another defendant, CTIA destroyed emails and cleared the laptop profile of CTIA’s Head of Wireless Internet Development, but, because the plaintiffs did not provide any evidence that would support an inference that the missing information was adverse, their request for sanctions was again denied.

With regard to the defendant’s motion for summary judgment, the plaintiffs argued that Hurditch’s email to Roddy on September 10, 2008, with a reference to collusion, is a “smoking gun.”  However, Judge Kennelly stated that “Hurditch's status as well informed within his company and as ‘an active mentor’ to Roddy do not qualify him as having knowledge of a conspiracy”; therefore, “there are too many unsupported steps in the logic required to permit a reasonable inference that Hurditch was aware of a conspiracy”.  With no other supporting circumstantial evidence, the plaintiffs failed to meet their burden of proof to survive the motion for summary judgment; therefore, Judge Kennelly granted the defendant’s motion for summary judgment.

So, what do you think?  Should a spoliation sanction have been issued against the defendant who “likely deleted the e-mail(s) intentionally”?  Please share any comments you might have or if you’d like to know more about a particular topic.

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

Samsung and Quinn Emanuel Ordered to Pay Over $2 Million for “Patentgate” Disclosure – eDiscovery Case Law

Remember the “patentgate” disclosure last year (by Samsung and their outside counsel firm of Quinn Emanuel Urquhart & Sullivan LLP) of confidential agreements that Apple had with Nokia?  Did you think they were going to avoid having to pay for that disclosure?  The answer is no.

In a June 20 ruling by California Magistrate Judge Paul S. Grewal, he began by noting “With the present quiet on the docket, it is easy to forget the long tumult of this case that once reigned. The ceremonial courtroom has cleared. The fire drills of motions on shortened time have ceased. All that remains for now, at least for the undersigned, is the relatively mundane issue of what makes for reasonable fees.

The fees at issue arise from this court’s order awarding sanctions to Apple and Nokia. The sanctions followed the court’s finding that Samsung and Quinn Emanuel were responsible for the unauthorized distribution of Apple and Nokia confidential information. Samsung and QE object to certain of the fees Apple and Nokia now claim, which means the court must wade into the billing entries and make various calls. So, here goes.”

The summary of events related to the inadvertent disclosure by Quinn Emanuel are described here and the details of the sanction applied to Quinn Emanuel are described here.

The question in this order turned to the fees and costs requested by Apple and Nokia.  Section C of the order was titled “With Limited Exceptions, Apple And Nokia’s Requests Have Been Sufficiently Supported To Sustain The Requested Award” and Judge Grewal stated that “in the over four hundred pages of correspondence and billing records submitted for review, the court has identified only 19 records that it finds troubling” (those were entries where partners and senior associates block billed ten or more hours on “drafting,” “preparing” “revising” or paying “attention to” various briefs and were listed in detail, along with the reduced amount after a 20% reduction penalty).

As for the rest of the entries, Judge Grewal commented that “[t]he court notes and appreciates that both Apple and Nokia have applied a series of discounts to their requests already” and ordered that, aside from the noted exceptions “the court finds that the remaining costs and fees requested by Apple and Nokia are reasonable and shall be awarded.  No later than 30 days from this order, Samsung and QE are to pay Nokia a total of $1,145,027.95 and Apple a total of $893,825.77 in fees and costs.” (emphasis added)

So, what do you think? Were those amounts awarded excessive?  Or did Samsung and Quinn Emanual get off lightly?  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.

Court Refuses to Dismiss Spoliation Claim Due to Defendant’s Failure to Produce Key Native File with Metadata – eDiscovery Case Law

In Raines v. College Now Greater Cleveland, Inc., 1:14-CV-00003 (N.D. Ohio June 3, 2014), Ohio District Judge James S. Gwin refused to dismiss the plaintiff’s claim of tortious spoliation of evidence due to the defendant’s failure to produce the metadata associated with a key report authored by the plaintiff.

In 2012, the defendant hired the plaintiff as Executive Director of the Higher Education Compact of Greater Cleveland. As part of her role, the plaintiff produced a Student Privacy Report, entitled Higher Education Compact of Greater Cleveland; Strategic Issues Paper: Student Information Access (the Student Privacy Report). The Student Privacy Report focused on potential violations of student privacy rights and the plaintiff identified concerns to her defendant employer that student privacy rights might be violated because the defendant allowed access to student information. The plaintiff filed a complaint after she was fired the next year by the defendant (and replaced with a substantially younger individual).

The plaintiff claimed spoliation of evidence when the defendants only produced the Student Privacy Report in physical form, without the native file and related metadata. The defendant claimed that the plaintiff could not make that claim because she was not able to show that this production disrupted the case and brought a motion to dismiss the claim of tortious spoliation of evidence (as well as the overall claim).

Judge Gwin noted that, “to state a claim for spoliation of evidence, a plaintiff must establish the following:

(1) A pending or probable litigation involving the plaintiff;

(2) Knowledge on the part of defendant that litigation exists or is probable;

(3) Willful destruction of evidence by defendant designed to disrupt the plaintiff’s case;

(4) Disruption of the plaintiff’s case; and

(5) Damages proximately caused by the defendant’s acts.”

The plaintiff alleged that the defendants knew litigation was likely, and “willfully” destroyed their electronic copy of her Student Privacy Report, claiming that the “metadata associated with the report has independent importance”.

While noting that the plaintiff’s spoliation claim “is not clear regarding damages”, Judge Gwin stated that the plaintiff “sufficiently alleges a claim to survive a motion to dismiss”. Therefore, the motion to dismiss the spoliation claim was denied and Judge Gwin stated, “We will later sort through whether any loss of metadata has caused damage”.

So, what do you think? Should metadata be required to be included in production of key documents? Or is production of a physical document sufficient? 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.