Archive: July 2009

1
Court Orders Adverse Inference for Failure to Preserve Evidence following Notice that such Evidence May Have Been Relevant in Future Litigation
2
Previously Opened Emails Stored for Less than 181 Days in Web-Based Account May be Obtained by Trial Subpoena
3
Finding the Requested Information Relevant and Defendant’s Cost Estimates “Greatly Exaggerated,” Court Grants Plaintiffs’ Motion to Compel
4
Court Orders Adverse Inference for Spoliation of CEO’s Data but Finds No Obligation to Preserve Relevant Data of Third Party Consultants
5
“Inhibited Ability to Participate Meaningfully in Electronic Discovery” Results in Reduction of Rate of Recoverable Attorney’s Fees
6
Swiss Government Says It Would Seize UBS Data Sought by U.S.
7
Court Grants Motion for Sanctions, Precludes Defendants’ Assertion of Affirmative Defense
8
Governor Schwarzenegger Signs California’s Electronic Discovery Act, to be Effective Immediately

Court Orders Adverse Inference for Failure to Preserve Evidence following Notice that such Evidence May Have Been Relevant in Future Litigation

KCH Servs., Inc. v. Vanaire, Inc., 2009 WL 2216601 (W.D. Ky. July 22, 2009)

Plaintiff moved the court for default judgment, sanctions, or an adverse inference instruction based on defendant Vanaire’s spoliation of evidence, including the deletion of software and electronically stored information (“ESI”) from its computers.  Specifically, following a phone call from plaintiff’s president indicating his belief that Vanaire was using plaintiff’s software, defendant Guillermo Vanegas instructed Vanaire employees to delete any software “that he did not purchase or did not own.”  Additionally, even after plaintiff filed its complaint and sent an evidence-preservation letter, Vanaire failed in its duty to preserve “by continuing to delete and overwrite” ESI.

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Previously Opened Emails Stored for Less than 181 Days in Web-Based Account May be Obtained by Trial Subpoena

U.S. v. Weaver, 2009 WL 2163478 (C.D. Ill. July 15, 2009) (Not Reported)

In this case, the Government sought to discover the contents of defendant’s email sent or received at a Microsoft/MSN Hotmail account. Accordingly, the Government executed a trial subpoena seeking production of “‘the contents of electronic communications (not in ‘electronic storage’ as defined by 18 U.S.C. § 2510(7)’ and specified that the ‘[c]ontents of communications not in ‘electronic storage’ include the contents of previously opened or sent mail.’”  Microsoft declined to produce the content of previously accessed, viewed, or downloaded emails that had been stored for fewer than 181 days citing precedent from the Ninth Circuit Court of Appeals that such production would require a warrant.  Because Microsoft is located within the Ninth Circuit, it felt it must comply.  The Government sought to compel production.

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Finding the Requested Information Relevant and Defendant’s Cost Estimates “Greatly Exaggerated,” Court Grants Plaintiffs’ Motion to Compel

Spieker v. Quest Cherokee, LLC, 2009 WL 2168892 (D. Kan. July 21, 2009)

This matter was before the court on plaintiffs’ renewed motion to compel the production of electronically stored information (“ESI”).  Previously, the court denied a motion to compel without prejudice for reasons including plaintiffs’ failure to establish the relevance of the material requested and defendant’s estimated cost to comply and directed the parties to address recently enacted Fed. R. Evid. 502 in any future discussions of production and costs.  The parties were unable to reach agreement regarding production, and plaintiffs filed a renewed motion to compel.  Upon finding that plaintiffs had established the relevance of the material requested and that defendant’s estimated costs of production were “greatly exaggerated,” the court granted the motion.

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Court Orders Adverse Inference for Spoliation of CEO’s Data but Finds No Obligation to Preserve Relevant Data of Third Party Consultants

Goodman v. Praxair Servs., Inc., 632 F. Supp. 2d 494 (D. Md. 2009)

In this case arising from a claim for breach of contract, plaintiff Goodman alleged that defendant Praxair Services, Inc. (formerly Tracer) (“Tracer/PSI”) spoliated relevant data and was deserving of sanctions.  Specifically, Goodman alleged that Tracer/PSI violated is duty to preserve when it failed to implement a litigation hold resulting in a significant loss of data, including the contents of relevant hard drives and emails, and where its CEO deliberately deleted data, among other things.  Goodman also sought sanctions for the spoliation of Tracer/PSI’s third-party consultants’ files.  The court granted in part and denied in part Goodman’s motion and ordered an adverse inference against Tracer/PSI.

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“Inhibited Ability to Participate Meaningfully in Electronic Discovery” Results in Reduction of Rate of Recoverable Attorney’s Fees

Chen v. Dougherty, 2009 WL 1938961 (W.D. Wash. July 7, 2009)

Following a verdict in their favor, plaintiffs moved for attorneys’ fees as provided by law.  Finding that plaintiffs were the “prevailing parties” under the relevant fee shifting statute, the court indicated its willingness to approve the attorneys’ requested hourly rates, with one exception.  Regarding the time spent by one attorney on discovery, the court ordered the requested rate to be reduced upon finding that her “inhibited ability to participate meaningfully in electronic discovery” was indicative of “novice skills in this area” and not “experienced counsel.”

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Swiss Government Says It Would Seize UBS Data Sought by U.S.

Bloomberg.com, July 8, 2009
By David Voreacos and Mort Lucoff

July 8 (Bloomberg) — Switzerland said it would seize UBS AG data to prevent the U.S. Justice Department from pursuing a U.S. court order seeking the identities of 52,000 American account holders in a crackdown on tax evaders.

The assertion came in court papers yesterday in federal court in Miami, where the Justice Department sued UBS on Feb. 19, a day after the bank avoided U.S. prosecution for helping wealthy Americans evade taxes.  The U.S. effort to enforce a summons seeking the names would force UBS to violate Swiss laws barring disclosure of such data, the filing said.

The Swiss government “will use its legal authority to ensure that the bank cannot be pressured to transmit the information illegally, including if necessary by issuing an order taking effective control of the data at UBS that is the subject of the summons,” according to the filing.

Click here to read the full article.

Court Grants Motion for Sanctions, Precludes Defendants’ Assertion of Affirmative Defense

Arista Records, LLC v. Usenet.com, Inc., 2009 WL 1873589 (S.D.N.Y. June 30, 2009)

In this copyright infringement case, plaintiffs alleged defendants committed egregious discovery violations deserving of terminating sanctions.  The violations included wiping relevant hard drives of its employees, failing to preserve and produce relevant emails, providing misleading responses to discovery, and violating two court orders, among other things.  Finding plaintiffs’ accusations credible in light of the evidence presented, the court denied their request for terminating sanctions but precluded defendants from asserting their affirmative defense of protection under the relevant statute’s safe harbor provision.  The court then granted summary judgment in favor of the plaintiffs.

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Governor Schwarzenegger Signs California’s Electronic Discovery Act, to be Effective Immediately

After previously vetoing a prior version of the bill for budgetary reasons, Governor Schwarzenegger signed California’s Electronic Discovery Act last night, to be effective immediately. Closely tracking the 2006 amendments to the Federal Rules of Civil Procedure, the act institutes procedures to guide the discovery of electronically stored information in California.

To read the full text of the Electronic Discovery Act, click here.

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