Archive: August 2006

1
Court Denies Motion for Sanctions Based upon Defendant’s Failure to Maintain Certain Data, Noting that Plaintiff’s Preemptive “Spoliation Letter” Cannot Make “End Run” Around FRCP
2
Court Rules that Employment of De-Duplication Technology and Use of Search Terms are Reasonable Means of Narrowing Production
3
E-Discovery Opens a New World in Drug Litigation
4
Court Holds that Former Employee’s Emails with Private Attorney, Which Were Retrieved Forensically from Employer-Provided Laptop Computer, Are Privileged
5
Upcoming Sedona Conference Event
6
Wipeout: The Dangers of Workplace Websurfing
7
E-Discovery Zero Hour Approaches
8
Second Circuit Certifies Question to N.Y. Court of Appeals: Can electronic data, computer programs, or electronic data saved in computer programs support a claim for conversion?
9
New York Court Orders Additional Searches of Restored Data and Backup Tapes, Shifting All Costs, Including Attorney Fees for Privilege Review, to Requesting Party
10
Party Seeks Preservation Order Where Phase III of Litigation Could Occur in 2009, Citing Concerns re Document Retention Policy

Court Denies Motion for Sanctions Based upon Defendant’s Failure to Maintain Certain Data, Noting that Plaintiff’s Preemptive “Spoliation Letter” Cannot Make “End Run” Around FRCP

Frey v. Gainey Transp. Servs., Inc., 2006 WL 2443787 (N.D. Ga. Aug. 22, 2006)

This personal injury litigation arose from an accident involving plaintiff’s car and a tractor-trailer driven by defendant Rogers while he was employed by defendant Gainey Transportation. Ten days after the accident occurred and before any litigation had been filed, plaintiff’s counsel sent a letter to Tim Kelly, the Safety Director at Gainey, demanding that Mr. Kelly preserve numerous and varied documents and materials fully described in a fifteen-page attachment to the letter. Plaintiff’s counsel asserted that any “destruction or alteration” of the material would be considered “spoliation of evidence.” In this decision, the court denies plaintiff’s motion for sanctions based upon Gainey’s failure to preserve any “QualComm” satellite tracking information.

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Court Rules that Employment of De-Duplication Technology and Use of Search Terms are Reasonable Means of Narrowing Production

In re CV Therapeutics, Inc. Sec. Litig., 2006 WL 2458720 (N.D. Cal. Aug. 22, 2006)

In this securities class action, the parties had previously agreed on the entry of a stipulated order governing the discovery of material restored from backup tapes maintained by the defendant. (A copy of the Backup Tape Stipulation is available here.) Subsequently, plaintiffs learned from an undisclosed source that additional backup tapes existed which had not been produced, and moved to compel. The court issued an order dated April 3, 2006, which resolved that dispute, along with several other discovery disputes. (A copy of the court’s April 3, 2006 order is available here.) With respect to the newly discovered backup tapes, the court concluded that defendants had not intentionally hid the existence of the tapes, but that they should have been subject to the terms of the parties’ Backup Tape Stipulation. It continued:

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E-Discovery Opens a New World in Drug Litigation

From the August Issue of KPMG Pharmaceutical Insider:

"As most large pharmaceutical companies face dozens of lawsuits at any given time, the rapid growth of electronic documents and e-mail has opened up the new legal frontier of electronic document discovery (EDD).

Drug companies also must take into account sanctions and other penalties. Companies are often subject to sanctions when they do not or cannot produce evidence upon demand, according to Todd Nunn, a partner in the Seattle law firm of Preston Gates & Ellis.

"Companies can really get into trouble for not having adequate policies in place for the retention of electronic documents," says Nunn. "It really affects their ability to respond effectively to litigation." "

Read the entire story here.

Court Holds that Former Employee’s Emails with Private Attorney, Which Were Retrieved Forensically from Employer-Provided Laptop Computer, Are Privileged

Nat’l Econ. Research Assocs., Inc. v. Evans, 2006 WL 2440008 (Mass. Super. Ct. Aug. 3, 2006)

In this litigation between a consulting firm and its former employee, the court considered the firm’s motion to compel the production of attorney-client privileged communications. Plaintiff sought production of emails sent and received via the employee’s personal, password-protected email account, which were saved in a temporary Internet file on the employee’s company-issued laptop and retrieved through forensic means after his departure from the firm.

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Upcoming Sedona Conference Event

The Sedona Conference®, a nonprofit law and policy think-tank, will host their first educational event in Chicago on September 15 focusing on e-discovery and the new Federal Rules of Civil Procedure.  The conference will be held on the Nortwestern University School of Law campus.  Hon. Lee Rosenthal, U.S. District Court Judge, Southern District of Texas, will keynote the session.  For more information on the conference or to register, visit www.thesedonaconference.org.

Wipeout: The Dangers of Workplace Websurfing

From NPR’s All Things Considered:

"Legal Liability: E-mails may travel from sender to receiver in a flash, but their digital trail lingers much longer — and that has landed some firms in hot water. A 2006 survey of more than 400 companies found that 15 percent have fought a lawsuit triggered by a worker’s careless correspondence. One in four firms has had a worker’s e-mail subpoenaed, and about the same number say they’ve fired a worker for misusing electronic correspondence."

More here.

E-Discovery Zero Hour Approaches

As the Dec. 1 deadline for new Federal Rules of Civil Procedure draws closer, it’s time to go tech or close shop.

""Everybody is a little terrified," said Martha Dawson, a partner with Seattle-based Preston Gates & Ellis. Dawson practices in the firm’s document analysis technology group. With some litigants in recent cases subjected to harsh sanctions for bungling e-discovery demands, clients and attorneys are worried about their ability to organize unwieldy information systems, she said. "

Creating particular anxiety is one component of the rules that requires parties to meet and address the preservation of electronic information 21 days before their first scheduling conference. New Rule 26(f) calls for parties to discuss "any issues relating to disclosure or discovery of electronically stored information, including the form or forms in which it should be produced." "

Read the entire article from Leigh Jones at National Law Journal here.

Second Circuit Certifies Question to N.Y. Court of Appeals: Can electronic data, computer programs, or electronic data saved in computer programs support a claim for conversion?

Thyroff v. Nationwide Mut. Ins. Co., 460 F.3d 400 (2d Cir. 2006)

The plaintiff in this case is an insurance agent formerly associated with the defendant insurance company. Plaintiff and defendant had executed an Agent’s Agreement, and defendant had required that plaintiff lease an agency office-automation system (“AOA”), including hardware and software, from defendant. During the 21 years he was an agent of defendant, plaintiff’s office operations were very much dependent on the AOA. Plaintiff and his staff entered business data and information onto the hard drives of the AOA system on a daily basis, and defendant then uploaded that information on a nightly basis from plaintiff’s computers onto defendant’s computers. In the process, defendant also uploaded plaintiff’s personal information.

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New York Court Orders Additional Searches of Restored Data and Backup Tapes, Shifting All Costs, Including Attorney Fees for Privilege Review, to Requesting Party

Delta Fin. Corp. v. Morrison, 2006 WL 2403437 (N.Y. Sup. Ct. Aug. 17, 2006)
This case involved breach of contract and fraud claims stemming from an exchange of assets between some of the parties, which took place in August 2001. The opinion resolves the parties’ dispute relating to three categories of electronic documents sought by one of the defendants (“LLC”) from the plaintiff (“DFC”): 1) non-email electronic documents which LLC claimed were not captured by DFC’s search process; 2) emails which LLC claimed were not captured by DFC’s ninety-day back-up tapes; and 3) emails from January 1, 1999 through July 12, 2000.

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Party Seeks Preservation Order Where Phase III of Litigation Could Occur in 2009, Citing Concerns re Document Retention Policy

United States v. Magnesium Corp. of Am., 2006 WL 2350155, (D. Utah Aug. 11, 2006)

In this decision, the court considered the government’s motion for an order requiring certain defendants "to maintain documents in their possession that are relevant to this case throughout all phases of the litigation." In making the request, the government indicated that it has no reason to believe that the defendants were destroying documents, but also noted that Phase III of the litigation could occur as late as 2009. Since the government did not know whether the defendants had a policy that limits the time that documents are retained, it wanted to ensure that relevant documents were not inadvertently destroyed as part of the defendants’ document retention policy. Read More

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