Electronic Discovery Law Firm : K&L Gates : Electronic Discovery Law

From The Red Tape Chronicles, Posted:  Friday, November 30 at 05:15 am CT by Bob Sullivan:

"It's being called the worst data leak of the information age.  Earlier this month, U.K. officials had to admit they'd lost hard drives containing personal information on almost half the country's population, including nearly all families with children.  If that's not bad enough, the databases included the worst kind of information to lose -- consumer bank account numbers.

It's a data scandal fit for tabloids.  The price tag put on the loss is already $500 million.  Prime Minister Gordon Brown had to issue a public apology, and the head of Britain's Revenue and Customs office was forced to resign.  The U.S. audience might have missed the initial news because the story broke during the Thanksgiving holiday.  But the obvious question floating across the Pond is this:  Could something that dramatic happen in the United States?

Yes, most experts say.  And the consequences here would be even worse."

Click here to read the full article. 

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U & I Corp. v. Advanced Med. Design, Inc., 2007 WL 4181900 (M.D. Fla. Nov. 26, 2007)

In this breach of contract case, plaintiff sought a protective order blocking the production of documents by a non-party in response to defendant’s subpoena.  The court found that plaintiff had not established good cause for the protective order, in part because the time frame of the requests was reasonable.  The court also noted that, because plaintiff’s 2004 emails were allegedly unavailable (discussed below), defendant had no other way to obtain some of the information.  The court thus denied the motion for protective order; it also denied the non-party’s motion to quash, which was based on general relevancy and (unsupported) undue burden arguments.

At the same time, defendant sought an order compelling plaintiff to produce the hard drives of certain employees for inspection by an independent expert, and to produce all responsive 2004 emails.  Defendant also sought various sanctions for plaintiff’s alleged failure to produce the material in accordance with the court’s prior order on the subject.

Plaintiff responded that it had produced all responsive documents in its possession.  However, it explained that, due to a computer error following a server change that occurred prior to litigation, its 2004 emails were "unloadable.”  It also claimed that it had no hard copies of any 2004 emails.  As such, plaintiff contended that it could not produce any 2004 emails.

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Parkdale Am., LLC v. Travelers Cas. and Sur. Co. of Am., Inc., 2007 WL 4165247 (W.D.N.C. Nov. 19, 2007)

In this case, Carolina corporations that manufacture and sell cotton yarn sought a declaratory judgment that, pursuant to an insurance contract, the defendant was obligated to defend and indemnify plaintiffs concerning claims in ten underlying antitrust lawsuits.  Plaintiffs also asserted state claims for breach of contract, bad faith denial of insurance claims, and unfair and deceptive trade practices.  The court in this opinion resolves a number of discovery disputes, one of which related to the production of email by plaintiffs.

Plaintiffs had raised an objection in their briefs to producing unidentified but admittedly non-privileged emails on the grounds of undue burden and expense ($20,000 to convert the emails into a searchable format).  However, at the hearing the parties' counsel explained to the court that those emails were a key player’s emails which were subsequently produced at a lesser (and shared) cost.  When defense counsel argued that there was “very little useful information in those emails,” plaintiff’s counsel renewed plaintiffs’ objection as to other emails on the grounds of relevance and the burden and cost of searching them for privileged information.

The court cited Fed. R. Civ. P. 26(b)(2)(B) and 26(b)(2)(C), and found that the disputed discovery requests sought evidence that was relevant, and in some cases, “pivotal” to the issues in the case.  It stated: “In other words, absent a valid privilege or an undue burden or expense in production sufficient to override the Defendant's right to conduct otherwise reasonable discovery, the Plaintiffs must respond fully to those discovery requests.”

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From the Wall Street Journal, November 28, 2007, Page A6, by John R. Wilke:

"The head of the federal agency investigating Karl Rove's White House political operation is facing allegations that he improperly deleted computer files during another probe, using a private computer-help company, Geeks on Call.

Scott Bloch runs the Office of Special Counsel, an agency charged with protecting government whistleblowers and enforcing a ban on federal employees engaging in partisan political activity.  Mr. Bloch's agency is looking into whether Mr. Rove and other White House officials used government agencies to help re-elect Republicans in 2006.

At the same time, Mr. Bloch has himself been under investigation since 2005.  At the direction of the White House, the federal Office of Personnel Management's inspector general is looking into claims that Mr. Bloch improperly retaliated against employees and dismissed whistleblower cases without adequate examination.

Recently, investigators learned that Mr. Bloch erased all the files on his office personal computer late last year.  They are now trying to determine whether the deletions were improper or part of a cover-up, lawyers close to the case said."

Click here to read the full article.  (Subscription may be required.)

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Smith v. Cafe Asia, 246 F.R.D. 19 (D.D.C. 2007)

Plaintiff was formerly employed as a host and waiter at Café Asia, a restaurant located in Washington, D.C.  Plaintiff claimed that he was the victim of discrimination based on his sexual orientation, and that he was the subject of assault and battery in the form of unwanted touching.  Among other things, plaintiff alleged that the kitchen staff routinely harassed him, that management tolerated and encouraged the verbal and physical harassment, and that one manager had sent him an email containing pornographic images portraying homosexual acts.  The defendant restaurant responded that all of the alleged incidents were welcomed, encouraged and instigated by plaintiff.

Defendant requested that it be permitted to inspect and make copies of images stored on plaintiff's cell phone.  Defendant alleged that the images portray plaintiff's genitalia at various states of arousal, and graphic images of other men purported to be plaintiff's sexual partners.  Defendant argued that the images were relevant to whether plaintiff invited a hostile work environment and whether he was subjectively offended by defendant's alleged conduct.

Plaintiff conceded that his cell phone contained “intimate, highly personal” and “unclothed images,” but denied having willingly shared the images with his co-workers.

Magistrate Judge John M. Facciola ruled that, balancing defendant’s need for the images against plaintiff’s valid privacy concerns, plaintiff would be required to preserve the images and permit inspection by one attorney designated by defendant only so far as necessary to fully inform its discovery and trial preparation. Continue Reading...

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Mich. First Credit Union v. Cumis Ins. Soc’y, Inc., 2007 WL 4098213 (E.D. Mich. Nov. 16, 2007)

In May 2007, the court entered an order granting plaintiff's motion to compel discovery and directing defendant to supplement its discovery responses specifically with regard to electronically stored documents.  In its initial objections to the discovery requests, defendant had objected to the request that it produce records "as they are maintained in the ordinary course of business in their 'native format,' along with the intact metadata."  Specifically, defendant objected to the request as "unduly burdensome" and "impos[ing] obligations on Cumis beyond those permissible under the Federal Rules of Civil Procedure."  When defendant served the supplemental responses required by the court’s May order, it produced the material on CD-ROMs in readable PDF form, but did not include metadata or provide the material in native format.

Plaintiff moved for sanctions, arguing that the production violated the court’s May order.

The court concluded that, because its May order did not address the issue of metadata or "native format" files, it could not be said that defendant's failure to produce that information was a violation of that order.  As such, there was no basis to sanction the defendant.  Further, after considering the submissions and arguments of the parties, the court found that defendant's objections to the production of metadata were well founded, and clarified its May order to reflect that defendant shall not be required to produce its electronically stored documents in "native format" or to produce metadata. Continue Reading...

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PSEG Power New York, Inc. v. Alberici Constructors, Inc., 2007 WL 2687670 (N.D.N.Y. Sept. 7, 2007)

Magistrate Judge Randolph F. Treece began his memorandum decision and order in this construction litigation with these introductory remarks:

With the rapid and sweeping advent of electronic discovery, the litigation landscape has been radically altered in terms of scope, mechanism, cost, and perplexity.  This landscape may be littered with more casualties than successes and the discovery imbroglio in this case is a prime example of this observation.  For nearly six months, the parties and the Court have been grappling with an electronic discovery monstrosity with the hope that it could be corralled and definitively resolved, thereby obviating the need for motion practice.  Alas, attempts to resolve the issue in lieu of briefs fell woefully beyond the parties' grasp and, as the last straw, they have set the matter at our feet for appropriate resolution.

The parties’ electronic discovery dispute arose when numerous emails being produced by PSEG were “divorced” from their attachments due to a technical glitch in the software used by PSEG’s e-discovery vendor.  (None of the raw data had been lost, and all 750 gigabytes of unfiltered data remained intact and in its original format.)  Upon discovering the problem, the parties attempted to determine whether a reasonable solution was feasible.  However, it became apparent that remarrying the emails to their attachments would be “formidable and costly.”  A number of potential solutions were attempted, none of which proved successful.

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In re Nat’l. Security Agency Telecomms. Records Litig., 2007 WL 3306579 (N.D. Cal. Nov. 6, 2007)

In this brief order, Chief Judge Vaughn R. Walker granted plaintiffs’ motion for an order prohibiting the alteration or destruction of evidence during the pendency of the action.  Among other things, the court ordered:

Counsel are directed to inquire of their respective clients if the business practices of any party involve the routine destruction, recycling, relocation, or mutation of such materials and, if so, direct the party, to the extent practicable for the pendency of this order, either to

(1) halt such business processes;

(2) sequester or remove such material from the business process; or

(3) arrange for the preservation of complete and accurate duplicates or copies of such material, suitable for later discovery if requested.

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Schmidt v. Levi Strauss & Co., 2007 WL 2688467 (N.D. Cal. Sept. 10, 2007) (Not for Citation)

Plaintiffs brought this action under the Sarbanes-Oxley Act, claiming they were terminated in retaliation for filing complaints about defendants’ alleged tax fraud and other accounting irregularities.  Among other relief requested in their motion to compel, plaintiffs asked the court to order defendants to reproduce, in native electronic format, all documents which they had produced over the course of the litigation.  The court noted that the precise documents plaintiffs were seeking, and the reasons why electronic versions were being sought, “have been somewhat of a moving target in their papers.”  The court observed that plaintiffs had originally suggested that certain (unidentified) documents had been edited or altered by defendants or by their attorneys.  However, the court found no indication in the record that defendants' documents had been altered in any way – except to the extent that defense counsel added document production numbers, confidentiality labels and, in some instances, indicated that certain information had been redacted.

In their reply papers, plaintiffs explained that they needed the electronic versions of (unidentified) emails and attachments as well as all documents which contained information that did not fit on a standard 8.5″x11″ page.  They further claimed that they were unable to track which attachments were sent with any given email, and argued that they were unable to properly analyze hard-copy spreadsheets (some of which reportedly were hundreds of pages long) that contained financial information that ran over the margins of a standard page. Continue Reading...

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Citizens for Responsibility & Ethics in Washington v. Executive Office of the President, No. 1:07-cv-01707-HHK (D.D.C. Nov. 12, 2007)

On Monday, November 12, 2007, Judge Henry H. Kennedy, Jr. adopted the Report and Recommendation of Magistrate Judge John M. Facciola and ordered the White House to:  “preserve media, no matter how described, presently in their possess[ion] or under their custody or control, that were created with the intention of preserving data in the event of its inadvertent destruction.”  Judge Kennedy further ordered:  “Defendants shall preserve the media under conditions that will permit their eventual use, if necessary, and shall not transfer said media out of their custody or control without leave of this court.” 

In this consolidated action, Citizens for Responsibility & Ethics in Washington ("CREW") and The National Security Archive are seeking to preserve for history the records of the Bush presidency.  The organizations challenge as contrary to law "the knowing failure of the defendants to recover, restore and preserve certain electronic communications created and/or received within the White House."  The plaintiffs further allege:

The e-mails at issue were improperly deleted from servers maintained by the Executive Office of the President and currently exist only on back-up tapes, if at all.  Unless relief is granted and the e-mail expeditiously restored from the back-up tapes, these federal and presidential records may be lost forever.  This action also challenges the failure of the Archivist and the head of the Office of Administration to take enforcement action to ensure adequate preservation of all federal records.

[] In addition, this lawsuit seeks an order requiring the defendants to implement an adequate electronic records management system in compliance with federal law.  The current administration abandoned the previous electronic records management system in 2002 and has failed to implement another system, creating a situation in which emails that should have been preserved as either federal or presidential records were instead improperly deleted.  Moreover, in the absence of an adequate electronic records management system, e-mails continue to be deleted improperly from the servers. . . .

Complaint, at pp. 2-3.  Defendants have stated they intend to file a motion to dismiss for lack of subject matter jurisdiction.

A copy of today’s order is available here, and a copy of Magistrate Judge Facciola’s October 19, 2007 Report and Recommendation is available here.

An article about the ruling is available here.

CREW has also moved for expedited discovery and has asked the court to compel a Rule 26(f) conference.  A copy of the memorandum in support of that motion is available here.

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Thursday, November 15, 2007
9:15 a.m. – 5:30 p.m.

Kaye Scholer LLP
425 Park Avenue
New York, NY

K&L Gates partner David R. Cohen is among the faculty who will speak at this informative program.

A copy of the agenda is available here.

Click here to register.

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E-Discovery
Friday, November 16, 2007
9 a.m. – 4:30 p.m.

Koppers Building, Ninth Floor
436 Seventh Avenue
Pittsburgh, PA

This program, sponsored by the Pennsylvania Bar Institute, will explore current and future discovery rules and their impact on e-discovery; impart techniques technologists employ to find electronic information; describe the types of information available for discovery and the formats in which one can obtain electronic documents, and describe how cost-shifting can impact expenses.

K&L Gates Partner David R. Cohen will speak at the 10:05 a.m. session on the topic of collecting and processing electronically stored information.

Click here for more information about the program.

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John B. v. Goetz, 2007 WL 3012808 (M.D. Tenn. Oct. 10, 2007)

This case is a class action on behalf of roughly 550,000 children who are entitled under federal law to medical services that include early and periodic screenings for their physical well being, including their dental and behavioral health needs, along with any necessary follow-up medical services.  Through this action, plaintiffs seek to enforce their rights to such services under various federal statutes.  Defendants in the case include Tennessee state officials who are in charge of the state programs for these services.  To assist it in providing these services, the State enters into contracts with a number of Managed Care Contractors (“MCCs”).  The MCCs are not parties in the suit.

Contemporaneous with the filing of the complaint, plaintiffs requested class certification and the parties agreed to entry of a Consent Decree to remedy plaintiff’s complaints and to certify the class.  Lengthy and complex proceedings followed, including several show cause and contempt hearings.

In the latter half of 2006 and in early 2007, the court held a series of hearings and conferences on the parties’ discovery disputes, and ordered the production of certain electronically stored information (“ESI”) from the defendants.  The court also held that the MCCs’ responsive records and ESI were within the possession, custody, and control of defendants, and required the defendants to obtain such information from the MCCs and produce it as well. Continue Reading...

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Scott v. Beth Israel Med. Center Inc., 2007 WL 3053351 (N.Y. Sup. Ct. Oct. 17, 2007)

Plaintiff is a physician who sued for breach of contract based upon his termination from defendant hospital (“BI”).  Under the contract at issue, BI agreed to pay Dr. Scott $14 million in severance pay if he was terminated without cause.  BI asserted that Dr. Scott was terminated for cause, while Dr. Scott believed he was terminated without cause and without receiving any severance pay.

In August 2005, BI’s counsel wrote Dr. Scott’s counsel stating that BI was in possession of email correspondence between Dr. Scott and his counsel pertaining to Dr. Scott’s dispute with BI, as well as emails written between Dr. Scott and another attorney regarding a separate dispute.  The letter stated that, although no one at BI had read the emails yet, BI believed that any potential privilege attached to the communications had been waived by use of BI’s email system.  Dr. Scott’s counsel responded, asserting that the emails were privileged communications for which there had been no waiver, and requesting their immediate return.  BI refused to return the emails, and the parties called the judge’s court attorney, who instructed BI to provide copies of the emails to Dr. Scott, place copies of the documents into a sealed envelope and bar anyone from reviewing the emails pending a decision by the court.  Thereafter, Dr. Scott filed a motion for a protective order seeking the return of the emails.
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Sims v. Lakeside School, 2007 WL 2745367 (W.D. Wash. Sept. 20, 2007)

In this employment discrimination case, defendant Lakeside sought an order from the court allowing the review of a hard drive image of a laptop computer furnished to plaintiff while he was employed at Lakeside.  After plaintiff’s counsel raised an objection to the imaging of the hard drive, Lakeside agreed not to review its contents, and the parties attempted to resolve the issue on their own.  When the parties were unable to reach agreement, Lakeside moved to compel the review of the image.

The court granted the motion in part, and denied it in part.  The court found that the plaintiff had no reasonable expectation of privacy in the contents of the laptop that was furnished by Lakeside, including emails he sent and received on his Lakeside email account.  However, the court ruled that web-based emails generated by plaintiff, and any material he created to communicate with his attorney and his spouse, were protected under the attorney-client privilege and the marital communications privilege.

The court explained that Lakeside’s employee manual was “unequivocally clear” in stating that user accounts were the property of Lakeside School, and that they were to be used for academic and administrative purposes only.  “Furthermore, where an employer indicates that it can inspect laptops that it furnished for use of its employees, the employee does not have a reasonable expectation of privacy over the employer-furnished laptop.”  There was no dispute that plaintiff received a copy of this policy and signed an acknowledgment that he read and reviewed the policy.  Consequently, the court held that plaintiff was on notice that he did not possess a reasonable expectation of privacy in the contents of his laptop, or in the emails he sent and received using Lakeside's accounts.

The court viewed web-based emails differently:
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Verigy US, Inc. v. Mayder, 2007 WL 3144577 (N.D. Cal. Oct. 24, 2007) (Not for Citation)

In this misappropriation of trade secrets case, plaintiff had been granted leave to conduct some expedited discovery prior to the court’s hearing on plaintiff’s motion for preliminary injunction.  In addition, defendants had been ordered to preserve all evidence, including all information contained on their computer hard drives.

In this order, the court resolved plaintiff’s expedited motion to compel certain defendants to produce “bit-for-bit copies (i.e., mirror images) of all hard drives.”  The parties disagreed about how such inspection and production should proceed, and submitted differing proposed discovery protocols for the court to consider.

The court noted that, for the most part, the parties' protocols were virtually identical, and it appeared that defendants had adopted many of plaintiff's proposed provisions verbatim.  The main point of contention was whether defendants should be permitted an opportunity to review and object to any searches that plaintiff may wish to have the third party expert conduct.  Defendants proposed a two-tier protocol which (a) would permit discovery in areas that defendants deemed presumptively relevant; and (b) would allow plaintiff to request that the expert conduct other searches, subject to an opportunity by defendant to review and object to the proposed search requests.  Defendants expressed concern that plaintiff would propound unduly burdensome or otherwise abusive searches beyond the scope of permissible discovery under Rule 26:

At the motion hearing, it was suggested, somewhat facetiously, that Verigy might attempt to request a search for all documents with the letter "A." Indeed, documents submitted on supplemental briefing indicate that Verigy apparently has previously requested a search for all documents containing the letter "V" – a request which strikes this court as being patently overbroad.

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