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Special Master to Review Forensic Computer Specialist’s Report on Destroyed Data

Posted in CASE SUMMARIES

In re Triton Energy Ltd. Sec. Litig., 2002 WL 32114464 (E.D. Tex. Mar. 7, 2002)

Plaintiffs complained that hundreds if not thousands of documents were produced after key depositions were taken, or on the eve of the depositions. Plaintiffs requested (1) that defendant be required to provide a log of all documents withheld from plaintiffs on any grounds; (2) that defendant produce a written certification to the court describing the efforts, if any, it has undertaken to comply with the court’s previous orders regarding the preservation and production of evidence and their obligations under the Private Securities Litigation Reform Act; and (3) that plaintiffs be given access to defendant’s computer storage systems (including servers and hard drives) and those of all present and former members of the board of directors, and allow non-destructive testing of these systems to determine what documents and emails, if any, have been deleted and what, if any, of this information bears significantly on the subject matter of the lawsuit.

In support of its request, plaintiffs submitted deposition testimony of three former directors who each stated that they had not been asked by defense counsel to retain or produce any documents, along with deposition testimony of other executives and employees to the same effect.

The court granted plaintiffs’ first request only to the extent the documents were withheld on a claim of privilege, and denied the second request.

With respect to the third request, the court stated that it has not found any authority specifically addressing the issue of whether defendant had a duty to instruct its outside directors to preserve documents. However, it opined that “it would have been prudent and within the spirit of the law for [defendant] to instruct its officers and directors to preserve and produce any documents in their possession, custody or control.” Id. at *6. Like the situation in Danis v. USN Communications, Inc., 2000 WL 1694325 (N.D. Ill. 2000), “‘it is clear that as a result of the failure to implement a suitable document preservation plan, to communicate that plan effectively to [outside directors], and to follow up to insure that the directive was being followed, there were holes in the document preservation plan through which discoverable materials may have been lost.’” Id. (quoting Danis, at *43).

The court rejected plaintiffs’ suggestion of allowing them unfettered access to defendant’s hard drives since it would potentially violate privacy interests and privileges. In an effort to alleviate such concerns, the court stated it would appoint a special master to assist. The court would also appoint a forensic computer specialist to retrieve information from defendant’s computer storage systems and those of certain present and former officers and directors. The computer specialist would conduct non-destructive testing of the systems to determine what documents and emails, if any, have been deleted. The special master would then review and determine what documents and electronic data, if any, were destroyed that bear significantly on the claims and defenses in the litigation. Based on the special master’s report, the court would then determine whether the defendant complied with its disclosure obligations and whether a sanctions hearing would be necessary.