Archive: September 2008

1
Reserving Judgment on Spoliation Pending Supplemental Briefing, Court Demands Answers to Eight Specific Questions
2
State Court Rejects Appeal of Discovery Order Requiring Production of “Broken” Computers
3
Court Orders Defendant to Re-Produce Documents Previously Produced as TIFF Images, Setting Out Three Format of Production Options
4
President Bush Signs into Law S. 2450, a Bill Adding New Rule 502 to the Federal Rules of Evidence
5
Adverse Inference Instruction Warranted Where Spoliation Claim Supported by Credible Arguments, Witnesses and Evidence
6
Briefing Schedule Set for Outstanding Discovery Motions in Qualcomm v. Broadcom Litigation
7
Adverse Inference and Other Sanctions Warranted for Plaintiff’s Failure to Produce Damaging Emails that were Eventually Produced by Third Party
8
Failure to Preserve Key Player’s Email and Interview Transcripts Warrants Adverse Inference Instruction, but not Default Judgment
9
House Passes Proposed Evidence Rule 502
10
Defendant to Make “All Possible Efforts” to Produce Email from Personal Yahoo! Account; Failure to Timely Identify Account Warrants Sanctions

Reserving Judgment on Spoliation Pending Supplemental Briefing, Court Demands Answers to Eight Specific Questions

Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., 2008 WL 4298331 (N.D. Cal. Sept. 19, 2008)

In this breach of contract litigation over allegedly non-conforming goods, Glasforms moved for sanctions against third-party defendant Taishan Fiberglass for the spoliation and destruction of documents.  Taishan had previously been ordered to produce a knowledgeable and fully prepared witness or witnesses to testify about ten topics not adequately addressed in the prior Rule 30(b)(6) deposition.  In addition, Taishan was ordered to search for and produce all documents responsive to Glasform’s requests for production, including relevant internal email communications. 

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State Court Rejects Appeal of Discovery Order Requiring Production of “Broken” Computers

Law Office of Douglas T. Harris, Esq. v. Philadelphia Waterfront Partners, LP, 957 A.2d 1223, 2008 Pa. Super. 222 (Pa. Super. Ct. 2008)

In this case involving breach of fiduciary duty and related claims, plaintiff had requested the production of certain email and documents maintained on the computers of two individual defendants.  When defendants failed to produce the requested material, plaintiff moved to compel. At the hearing on the motion, defense counsel informed the court that the two computers were inoperable and that technicians were currently working on the computers.  The court pressed defense counsel for an explanation of how the computers were broken, and observed that plaintiff was entitled to the information that had been requested.  When the court asked defense counsel what order it should enter, defense counsel responded:  “We can produce the computers.”  After the court entered its order, defendants appealed.

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Court Orders Defendant to Re-Produce Documents Previously Produced as TIFF Images, Setting Out Three Format of Production Options

Goodbys Creek, LLC v. Arch Ins. Co., 2008 WL 4279693 (M.D. Fla. Sept. 15, 2008)

In this case involving the alleged breach of a performance bond, the court considered plaintiff’s motion to compel and for sanctions.  Among other things, plaintiff requested that defendant be ordered to re-produce, in native format, documents previously produced as TIFF images.  The court granted only that portion of the motion, and gave the defendant three options for its re-production:  (1) provide any documents previously supplied as TIFF images in their native format, (2) provide the documents in another comparably searchable format, or (3) supply plaintiff with software for searching the TIFF images.

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President Bush Signs into Law S. 2450, a Bill Adding New Rule 502 to the Federal Rules of Evidence

On Friday, September 19, 2008, the President signed into law S. 2450, a bill adding new Evidence Rule 502 to the Federal Rules of Evidence.  The legislation protects against the inadvertent waiver of the attorney-client privilege or the work product protection.  S. 2450 is identical to proposed Evidence Rule 502, as approved by the Judicial Conference of the United States in September 2007.

Now that the bill has been signed by the President, it has been assigned Public Law Number 110-322 by the Office of the Federal Register.  Next, OFR editors will prepare it for publication as a Slip Law, and then include it in the next edition of the United States Statutes at Large

Public Law No. 110-322 is available here.

New Evidence Rule 502 will apply in all proceedings commenced after the date of enactment and, insofar as is just and practicable, in all proceedings pending on such date of enactment.

Additional information about the legislation may be found on the Library of Congress "Thomas" website, at http://www.govtrack.us/congress/bill.xpd?bill=s110-2450, and on the U.S. Courts’ Federal Rulemaking website.
 

Adverse Inference Instruction Warranted Where Spoliation Claim Supported by Credible Arguments, Witnesses and Evidence

Babaev v. Grossman, 2008 WL 4185703 (E.D.N.Y. Sept. 8, 2008)

In this case, plaintiffs claimed that they were fraudulently induced to invest in defendant’s catering businesses, and sought to inspect defendants’ business records.  Plaintiffs moved for an extension of time to complete their inspection, and also requested sanctions.  They claimed that defendants had engaged in spoliation of evidence and willful refusal to produce documents, and also noted defendants’ “belated” claim that their computer had been lost or misplaced and that many reports and records were unavailable for that reason.  Defendants argued that the “lost” computer had been kept at defendant’s prior place of work, and that when it was retrieved the files had been corrupted and could not be accessed.  Defendants asserted that the computer had been discarded prior to the lawsuit.

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Briefing Schedule Set for Outstanding Discovery Motions in Qualcomm v. Broadcom Litigation

Qualcomm Inc. v. Broadcom Corp., No. 05-CV-1958-B (BLM), United States District Court for the Southern District of California

On September 16, 2008, Magistrate Judge Barbara L. Major set a briefing schedule for the five pending discovery motions filed by the parties, requiring any oppositions to be filed on or before October 3, and any replies to be filed on or before October 10, 2008.  The discovery motions include Broadcom Corporation’s Motion to Compel Production of Documents by Qualcomm; three separate motions brought by the sanctioned attorneys to compel production of documents by Qualcomm, and Qualcomm’s Motion for a Protective Order.  Magistrate Judge Major will conduct a hearing on the motions on October 29, 2008 at 2:00 p.m.

Adverse Inference and Other Sanctions Warranted for Plaintiff’s Failure to Produce Damaging Emails that were Eventually Produced by Third Party

Metrokane, Inc. v. Built NY, Inc., 2008 WL 4185865 (S.D.N.Y. Sept. 3, 2008)

In this patent infringement litigation, BNY sought sanctions on the grounds that Metrokane failed to produce a series of emails said to be highly damaging to Metrokane’s case.  BNY argued that the recent discovery of the existence of these emails through production by a non-party came too late to permit BNY to pursue otherwise crucial discovery concerning these communications.  Metrokane contended that BNY failed to comply with various procedural requirements before filing the motion, and that it had not demonstrated any misconduct by Metrokane or any prejudice.  Magistrate Judge Michael H. Dolinger rejected Metrokane’s procedural defense, and concluded that BNY sufficiently demonstrated discovery misconduct by Metrokane and resulting prejudice.  Accordingly, the court granted a variety of remedies, including an adverse inference instruction.

Discovery in the case closed in June 2007, but disputes about Metrokane’s performance let to additional motion practice, including the enforcement of a deposition subpoena to the alleged designer of the infringing handbags (Mr. Kilduff).  The court granted BNY’s motion to compel the deposition of Mr. Kilduff in October 2007, and his deposition and production of documents occurred in November 2007.

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Failure to Preserve Key Player’s Email and Interview Transcripts Warrants Adverse Inference Instruction, but not Default Judgment

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 (N.D. Cal. Sept. 2, 2008)

In this class action securities litigation, plaintiffs sought sanctions based on alleged evidence spoliation by defendants.  Plaintiffs moved for terminating sanctions or, in the alternative, for lesser sanctions in the form of adverse inference instructions and an order precluding defendants from relying on spoliated evidence.  Plaintiffs submitted a long list of actions allegedly taken by defendants that led to the failure to preserve or the affirmative destruction of evidence relevant to this lawsuit.

District Judge Susan Illston declined to impose terminating sanctions because the actions alleged to have been taken by defendants did not “eclipse entirely the possibility of a just result.”  The court found that plaintiffs had not demonstrated the degree of prejudice necessary to warrant terminating sanctions, primarily because plaintiffs had received a large quantity of materials in discovery.  In addition, the court noted that public policy strongly favored deciding the case on its merits, and that less drastic sanctions could be imposed that would permit a decision on the merits while also ensuring that defendants did not benefit from any spoliation.

As to lesser sanctions, the court found that adverse inferences in plaintiffs’ favor were warranted with regard to some categories of evidence that defendants had conceded was not produced or preserved.

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House Passes Proposed Evidence Rule 502

On September 8, 2008, the House of Representatives passed without amendment S. 2450, a bill adding new Evidence Rule 502 to the Federal Rules of Evidence.  The Senate had earlier approved the bill by unanimous consent on February 27, 2008.  Having passed in identical form in both chambers, the bill now awaits the signature of the President before becoming law.  The President is expected to sign the legislation in the next several weeks.

The legislation protects against inadvertent waiver of the attorney-client privilege and work product protection and is identical to proposed Evidence Rule 502, which was approved by the Judicial Conference of the United States and transmitted to Congress for its consideration in September 2007.  The new rule will apply in all proceedings commenced after the date of enactment and, insofar as is just and practicable, in all proceedings pending on such date of enactment. 

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Defendant to Make “All Possible Efforts” to Produce Email from Personal Yahoo! Account; Failure to Timely Identify Account Warrants Sanctions

Infinite Energy, Inc. v. Thai Heng Chang, 2008 WL 4098329 (N.D. Fla. Aug. 29, 2008)

In this breach of employment agreement and misappropriation of trade secrets case, plaintiff moved to compel production of emails from defendant’s personal Yahoo! account.  Plaintiff contended that it only recently learned of the account, and that defendant should have disclosed the account in response to an earlier discovery request.  Plaintiff argued that emails from the account contained highly relevant information crucial to the issues in the case.

Although defendant claimed he could not produce the emails because they had been destroyed by Yahoo!, he offered only a copy of a generic response from Yahoo! about deactivating accounts.  The court observed that Yahoo! may have a process for obtaining emails from deactivated accounts, and declined to accept defendant’s explanation that production was “impossible,” particularly given the important evidentiary value of the emails and the “feeble offering” by defendant in support of the contention.

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