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Federal Court Defers Final Ruling on Attorneys’ Fees Motion Related to Forensic Examination

Posted in CASE SUMMARIES

Technical Sales Assocs., Inc. v. Ohio Star Forge Co., Nos. 07-11745, 08-13365 (E.D. Mich. May 1, 2009)

In ongoing litigation over sales commissions, Plaintiff Technical Sales Associates, Inc. ("TSA") claims that Defendant Ohio Star Forge Comapny ("OSF") breached two separate sales representative agreements.  After a protracted discovery dispute, TSA and OSF agreed to a forensic examination of OSF’s computers to search for a particular e-mail.  The forensic examination was performed by a company hired by TSA called Midwest Data Group LLC ("Midwest").  During the forensic examination, Midwest found evidence that certain files had been deleted by OSF. Midwest’s reporting of its findings to TSA became the subject of cross-motions for sanctions which were ruled upon by the court on March 19, 2009.  (See summary of March 19, 2009 opinion available here.)

Following the court’s March 19 ruling, Midwest moved for attorney’s fees, arguing that OSF’s motion for contempt against Midwest was an abuse of the judicial process and an attempt to "bully" Midwest for revealing that OSF had deleted electronic files.  The court ruled on the attorney’s fees motion on May 1, 2009 (“the May 1 Ruling").  The court found that Midwest "was at best naive" in the way it handled its discovery of the deleted files, noted that TSA’s advice to Midwest about the situation was "ill-advised," and said that OSF’s filing of a contempt motion against TSA and Midwest was "overblown."  May 1 Ruling at 3.  As a result, the court found that "an electronic discovery dispute has become a sideshow which eclipses the circus."

The court concluded that "Midwest has been unwittingly caught in the middle of the parties’ contentious litigation tactics."  The court then ordered Midwest to "submit its detailed billing records displaying the amount of attorney fees and cost[s] incurred," and decided to "reserve decision on the motion until the end of the case."  May 1 Ruling at 3.

Thomas J. Smith of K&L Gates represented Midwest.

A copy of the full opinion is available here.