Archive: August 2008

1
Avoiding Question of Whether Third-Party’s Compliance with Subpoena Might Violate Stored Communications Act, Court Instructs Plaintiff to Serve Rule 34 Request for Production Instead
2
Magistrate Judge Imposes Monetary Sanctions and Recommends Adverse Inference Instruction, but not Dismissal, for “Reckless and Egregious Discovery Misconduct”
3
E-Discovery Amendments to California’s Civil Discovery Act Now Awaiting Governor’s Signature
4
Qualcomm’s Appeal and Sanctioned Attorneys’ Cross-Appeals Dismissed by Federal Circuit Court of Appeals
5
E-Discovery (Re)sources Abound
6
Indian Legal Services Company Moves to Dismiss Anti-Outsourcing Lawsuit
7
Court Denies Spoliation Sanctions for Destruction of ESI Pursuant to Document Retention Policy, Citing FRCP 37(e) Safe Harbor Provision
8
No Spoliation Found Where Expert Drafted His Report on Computer, Without Saving or Preserving Progressive Iterations
9
Magistrate Judge “Clearly Erred” by Analyzing Cost-Shifting Dispute for Paper Production under Seven-Factor Zubulake Test
10
Production of ESI in Paper Format Does Not Comply with Rule 34 Option to Produce ESI in Reasonably Usable Form; Court Orders Re-Production of Certain ESI in Native Format

Avoiding Question of Whether Third-Party’s Compliance with Subpoena Might Violate Stored Communications Act, Court Instructs Plaintiff to Serve Rule 34 Request for Production Instead

Flagg v. City of Detroit, 252 F.R.D. 346 (E.D. Mich. 2008)

In an earlier decision in this case, the court denied defendants’ motion to quash subpoenas to SkyTel for the production of text messages.  The court found that plaintiff was entitled to pursue the production of certain text messages sent or received by specified officials or employees of the City (some of whom were also named as individual defendants in the suit) during specified time frames, using text messaging devices supplied by SkyTel.  The court observed that the relevance (and hence discoverability) of the text messages necessarily turned upon the content of the communications.  Thus, it was essential to establish a procedure for the review of the content of each such communication, for determining both relevance and the application of any privilege.  The court appointed two magistrate judges to review the communications and make the initial determination as to which were discoverable.  Our post on that March 20, 2008 order is available here.

In this recent decision, the court ruled upon motions by the City and one of the individual defendants seeking to prevent the discovery from going forward.  The moving defendants argued that the federal Stored Communications Act (“SCA”), 18 U.S .C. § 2701 et seq., wholly precludes the production in civil litigation of electronic communications stored by a non-party service provider.  The court rejected this proposed reading of the SCA, observing that “[d]efendants’ position, if accepted, would dramatically alter discovery practice, in a manner clearly not contemplated by the existing rules or law, by permitting a party to defeat the production of electronically stored information created by that party and still within its control – information that plainly is subject to civil discovery, see Fed. R. Civ. P. 34(a)(1) – through the simple expedient of storing it with a third party.”  The court concluded that, because nothing in the plain language of the SCA requires this extraordinary result, and because defendants had not identified any other support for this proposition, the discovery effort contemplated in its March 20, 2008 opinion could go forward (albeit through slightly different means).

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Magistrate Judge Imposes Monetary Sanctions and Recommends Adverse Inference Instruction, but not Dismissal, for “Reckless and Egregious Discovery Misconduct”

Keithley v. Home Store.com, Inc., 2008 WL 3833384 (N.D. Cal. Aug. 12, 2008)

In this patent infringement case, plaintiffs sought terminating, evidentiary and monetary sanctions based upon defendants’ spoliation of evidence.  Plaintiffs argued that defendants had destroyed three types of evidence:  (1) source code; (2) early architectural, design and implementation documents; and (3) reports.  Plaintiffs contended that the spoliation of these materials impacted plaintiffs’ ability to meet their burden of proving infringement.

The court held several hearings and received extensive briefing on the spoliation issue, which the court observed “became a moving target because of Defendants’ belated production of evidence that it had previously stated was either nonexistent or destroyed.”  In the end, the magistrate judge imposed a monetary sanction of fees and costs associated with defendants’ discovery misconduct, and recommended that the district court give an adverse inference jury instruction to address the spoliation that occurred.  Although the magistrate judge found that the discovery misconduct by defendants in the case was "among the most egregious" the court had seen, she declined to recommend terminating sanctions because there was no evidence that defendants engaged in deliberate spoliation, and because the extreme sanction of dismissal would go beyond what was necessary to cure the prejudice to plaintiffs.

Some examples of defendants’ “reckless and egregious discovery misconduct” include the following:

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E-Discovery Amendments to California’s Civil Discovery Act Now Awaiting Governor’s Signature

Assembly Bill 926 (Evans):  Passed the Senate July 10, 2008; Passed the Assembly August 7, 2008

The amendments included in AB 926 closely track several of the 2006 e-discovery amendments to the Federal Rules of Civil Procedure.  Among other things, the amendments:

— Establish procedures for a person to obtain discovery of electronically stored information, as defined, in addition to documents, tangible things, or land or other property, in the possession of any other party to the action. 

— Provide that if a party responding to a demand for production of ESI objects to a specified form for producing the information, or if no form is specified in the demand, the responding party shall state in its response the form in which it intends to produce each type of information.  If a demand for production does not specify a form or forms for producing a type of ESI, the responding party would be required to produce the information in the form or forms in which it is ordinarily maintained or in a form that is reasonably usable, but need not produce the same ESI in more than one form.

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Qualcomm’s Appeal and Sanctioned Attorneys’ Cross-Appeals Dismissed by Federal Circuit Court of Appeals

Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B (BLM), United States District Court for the Southern District of California; No. 2008-1348, 1381 & 1382, United States Court of Appeals for the Federal Circuit

In May 2008, Qualcomm filed an appeal in the U.S. Court of Appeals for the Federal Circuit regarding Judge Rudi M. Brewster’s March 5, 2008 “Order Remanding in Part Order of Magistrate Court re Motion for Sanctions Dated 1/07/08."  On May 19, 2008, sanctioned attorneys Batchelder, Mammen, Leung and Patch filed cross appeals.  In light of these appeals, Magistrate Judge Barbara L. Major concluded that jurisdiction had been transferred to the Court of Appeals for the Federal Circuit.  In an order dated May 29, 2008, Magistrate Judge Major sua sponte vacated all pending briefing and hearing dates and stated the court would refrain from ruling on the pending motions until after the Federal Circuit had addressed the appeal and, if it found it appropriate to do so, remanded the case back to the district court.  Magistrate Judge Major later denied Broadcom’s motion for reconsideration of the May 29 order.

On June 3, Broadcom Corporation filed its Emergency Motion to Dismiss Appeal of Qualcomm Incorporated, and two days later, responding attorneys-appellees/cross appellants Batchelder, Mammen, and Leung filed their non-opposition.  Broadcom’s Motion argued that Qualcomm’s appeal should be dismissed for lack of jurisdiction because it impermissibly seeks review of an interlocutory district court order remanding for further proceedings, i.e., a non-final order.  Broadcom argued that there is still much to be done in the district court, and that the parties were in the midst of discovery when Qualcomm’s notice of appeal halted the proceedings.  In addition, Broadcom argued that the CREDO process arising out of the sanctions proceedings was still underway, and that the final CREDO protocol would necessarily be informed by the ongoing sanctions proceedings before the magistrate judge.

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E-Discovery (Re)sources Abound

By K&L Gates attorneys Todd L. Nunn and Trudy D. Tessaro

This article appears in the August 2008 edition of the King County Bar Bulletin, and begins:

Want to understand more about e-discovery, other than that the “e” stands for “excitement?”  Need a little light summer reading?  Well, you are in luck.  Never before have there been so many sources of e-discovery law.

In the old days (a few years ago), only case law dealt with the important issues that are central to e-discovery: preservation, collection, search/review, protection of privilege and production.  Now these issues are addressed by federal rules, state rules, numerous scholarly best practices and guidelines, model rules and guides for judges, not to mention (and this article really doesn’t with one exception) innumerable articles and blogs.

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Indian Legal Services Company Moves to Dismiss Anti-Outsourcing Lawsuit

Newman McIntosh & Hennessy v. Bush, Civ. No. 08-00787 (CKK) (D.D.C.)

This lawsuit seeks declaratory and injunctive relief in order to gain certainty about whether the electronic transmission of data from the United States to a foreign legal services provider waives Fourth Amendment protection with respect to the data that is electronically transmitted.  See our original post about the lawsuit here, which includes a link to the Amended Complaint.

Acumen Legal Services, the India-based legal services company named as a defendant in the case, has now filed a motion to dismiss for lack of subject matter and personal jurisdiction.  In the motion, Acumen argues:

NMH’s requested declaratory and injunctive relief, in addition to having no legal or factual justification, would reach far beyond NMH’s obviously intended target, namely, low-cost foreign legal outsourcing companies, which NMH apparently perceives as competition.  The requested relief could have a substantial adverse effect on the operations of all U.S. law firms that have foreign offices, and all U.S. corporations that need to use foreign counsel to transact business abroad.  NMH’s requested ruling that any foreign electronic transmission of data between clients and attorneys, or between attorneys, constitutes a waiver of constitutional rights and discovery privileges, would amount to an untenable and unwarranted interference with global commerce.

Moreover, NMH’s request for an order requiring all attorneys in the United States, not excluding in-house counsel, (a) to search for every instance in which they ever transmitted any kind of data to any foreign national, and (b) to send a notification regarding the same in every case, presumably to the owner of the data, would amount to one of the most onerous and unjustified burdens ever imposed by any court in a civil proceeding.

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Court Denies Spoliation Sanctions for Destruction of ESI Pursuant to Document Retention Policy, Citing FRCP 37(e) Safe Harbor Provision

Gippetti v. UPS, Inc., 2008 WL 3264483 (N.D. Cal. Aug. 6, 2008)

In this case, plaintiff alleged that UPS fired him because of his age (reportedly, he was about 44 years old at the time).  UPS contended that Gippetti’s termination had nothing to do with his age.  It maintained that he was fired for “stealing time” (i.e., sleeping on the job during periods he claimed to be working, taking excessive rest breaks and inaccurately recording meal and rest breaks) and because he did not properly complete truck safety inspections required by UPS and government regulations.

In discovery, plaintiff sought production of “tachograph records,” which were records that showed a vehicle’s speed and the length of time it is moving or stationary.  UPS produced tachographs from 2007 and 2008, and agreed to produce the records on an ongoing basis.  However, UPS stated it was not able to locate any other responsive tachographs because its practice is, and since 2002 has been, to preserve such records for only 37 days due to the large volume of the data.

Plaintiff moved for spoliation sanctions, arguing that the destroyed tachograph records “would support that Plaintiff did not drive Route SU09 any differently than employees who were under the age of 40 years old.”  UPS responded that, until recently in this litigation, it had no reason to believe that all tachographs had any bearing on plaintiff’s age discrimination claim before those records were destroyed years ago in accordance with the company’s retention policy.

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No Spoliation Found Where Expert Drafted His Report on Computer, Without Saving or Preserving Progressive Iterations

In re Teleglobe Communications Corp., 2008 WL 3198875 (Bankr. D. Del. Aug. 7, 2008)

In this lengthy opinion addressing a variety of issues, the bankruptcy judge denied defendants’ motion to exclude testimony of the plaintiff’s expert as a sanction for the alleged spoliation of information considered in forming their opinions.  The court rejected defendants’ argument that Rule 26(a)(2)(B) required that the plaintiffs’ experts produce all drafts of their reports:

The Court is not convinced that the plain language of Rule 26(a)(2)(B) imposes an obligation on a party or its experts to preserve and produce drafts of an expert’s report.  See, e.g., Berckeley Inv. Group, Ltd. v. Colkitt, 259 F.3d 135, 142 n. 7 (3d Cir. 2001) (“The Supreme Court and this Court have repeatedly held that the Federal Rules of Civil Procedure, like any other statute, should be given their plain meaning.”).  The Rule does not expressly include draft opinions in the list of what the expert must disclose.  Instead, the Rule requires that an expert’s report contain a list of the data and other information on which he relied.  Fed. R. Civ.P . 26(a)(2)(B).  It does not seem logical that the Rule would require the final report to include a list of all the drafts of that report.  Further, because most experts now draft their reports on the computer, adding to and subtracting from the document, it would be impractical to require the production of all drafts.  For example, any time an expert added or subtracted a section, a paragraph, a sentence or even a word, the Defendants’ reading of the Rules would require the expert to save the draft and preserve it for production later.  This is a completely unworkable reading of the Rules and would mire the courts in battles over each draft of an expert’s report.  The Court concludes that this interpretation comports with neither the plain meaning of the Rule nor its policy.

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Magistrate Judge “Clearly Erred” by Analyzing Cost-Shifting Dispute for Paper Production under Seven-Factor Zubulake Test

Tierno v. Rite Aid Corp., 2008 WL 3287035 (N.D. Cal. July 31, 2008)

In this wage and hour employment case, plaintiff sought documents about class members’ employment and salary history, terminations, performance evaluations, discipline, certain communications, and personnel files.  Rite Aid had demanded that plaintiff either travel to its various district office locations throughout California and copy the documents, or pay the copying expenses, which it estimated at $104,178.84.  The dispute was presented to the magistrate judge.  After weighing the factors set out in Zubulake v. UBS Warburg, L.L.C., 217 F.R.D. 309, 322 (S.D.N.Y. 2003), the magistrate judge required Rite Aid to produce the documents at its own expense.

Rite Aid objected to the magistrate’s ruling, arguing that Fed. R. Civ. Pro. 34 requires plaintiff, not Rite Aid, to bear the costs of photocopying.  The district judge agreed, concluding that the magistrate judge had “clearly erred” by analyzing the dispute under Zubulake:

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Production of ESI in Paper Format Does Not Comply with Rule 34 Option to Produce ESI in Reasonably Usable Form; Court Orders Re-Production of Certain ESI in Native Format

White v. Graceland Coll. Ctr. for Prof’l Dev. & Lifelong Learning, Inc., 2008 WL 3271924 (D. Kan. Aug. 7, 2008)

In this wrongful termination case, plaintiff moved for an order compelling defendants to, among other things, provide complete information on defendants’ document retention policy and how such policy may have affected ESI responsive to certain discovery requests, and re-produce certain electronic documents in their native format.  The court denied the former, but granted the latter request.

Information on Defendants’ Document Retention Policy

Plaintiff’s discovery requests had asked defendants to identify any computer or electronic devices used by its management or human resources department in the years 2003 or 2004, and whether the device had been search or analyzed to determine if any files, notes, or documents related to plaintiff were contained on the device.  Plaintiff also asked that defendants identify and produce any documents related to plaintiff found on the device.

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