Electronic Discovery Law

Etzion v. Etzion, 2005 WL 689468 (N.Y.Sup. Feb 17, 2005)

In this matrimonial matter, Plaintiff moved by order to show cause for an order allowing her (with the help of a sheriff) to "gain access" to Defendant's premises and impound, clone, and inspect items containing electronic data. The order was also to shift costs to Defendant and direct Defendant not to make business data inaccessible. The requests were denied, although the Appellate Division granted the part directing Defendant not to disrupt business data. Defendant opposed and cross-moved for a $15 million bond and making Plaintiff responsible for potential harm to his business interests.

Plaintiff alleged that a "preemptive strike" was necessary given Defendant's history of fraud and diversion of marital assets. The alleged diversion included moving assets from Variety, in which Plaintiff is a fifty per cent shareholder, to Defendant's father and foreign trusts. Defendant claimed that there is no basis for such extraordinary relief and that Plaintiff's history of careless handling of business data was at issue.

The court ordered the following:

Plaintiff's computer expert, Defendant's computer expert, and a court appointed referee are to meet at the locations identified by Defendant where data is maintained. The Plaintiff's expert shall clone the hard drives. Duplicate drives will be held by the referee. After all drives have been copied at all locations, the experts and the referee will meet and examine the duplicate drives. Hard copies of business records relating to foreign entities and/or Variety will be distributed to counsel for both parties. No "personal records, emails or other correspondence between Defendant and third parties and/or Defendant and his counsel" shall be distributed.

Plaintiff shall incur the costs for the discovery, although Defendant shall be responsible for the expenses of his own expert(s). Defendant's application for a bond is denied.