Archive: August 2009

1
Upcoming Events – September 2009
2
9th Circuit Sets Doctrine for Electronic Searches, Finds Steroids Case Search Unlawful
3
Holistic Privilege Protection: Protecting Privilege by Taking “Reasonable Steps” Throughout the Process of Production
4
Court Orders Monetary Sanction for Failure to Preserve to be Paid by Defendant and Counsel
5
Court Articulates Analysis Under FRE 502, Finds No Waiver of Inadvertently Produced Email
6
For Discovery Violations, Court Sanctions Plaintiff and Counsel… Again
7
No Sanctions for Failure to Preserve Links to Graphics in Emails Where Plaintiff Failed to Establish Bad Faith or How the Images were Relevant or Necessary to His Claims
8
Third Parties Held in Contempt for Failure to Obey Court Order, Including Using Computer Following Instructions that “They May Not Touch the Computers Except to Turn Them Off” Prior To Production
9
Court Denies Motion for Sanctions for Failure to Suspend Automatic Overwriting of Backup Tapes Absent Showing of Bad Faith
10
Finding Defendant “May Have” Caused the Deletion of “Possibly Relevant Emails,” Court Orders Sanctions, Including Payment to Local Bar Association

Upcoming Events – September 2009

What You Need to Know About Records Management

September 2, 2009
Podcast hosted by Karl Schieneman
9:00 AM EDT

K&L Gates Partner Thomas J. Smith will speak on the topic of what every company should know about records management.

Click here to learn more.

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9th Circuit Sets Doctrine for Electronic Searches, Finds Steroids Case Search Unlawful

Law.com, August 27, 2009
By Dan Levine

The Justice Department’s aggressive steroids probe has led the 9th U.S. Circuit Court of Appeals to enunciate a new set of Fourth Amendment protections for the digital age.

In an en banc opinion Wednesday that split conservatives on the court, Chief Judge Alex Kozinski said federal agents were wrong to seize swaths of drug test results from labs in Nevada and California.  The computer files taken by the government revealed information about far more people — including professional baseball players and others — than allowed by a search warrant.

The decision reverses an earlier panel upholding the search.  It also represents the second high-profile drubbing that the U.S. Attorney’s Office for the Northern District of California has received from the 9th Circuit in as many weeks:  The appeals court just tossed former Brocade CEO Gregory Reyes’ backdating conviction because of prosecutorial misconduct.

Click here to read the full article.

Holistic Privilege Protection: Protecting Privilege by Taking “Reasonable Steps” Throughout the Process of Production

By K&L Gates partner Todd Nunn.

This article appears in the summer edition of DRI’s E-Discovery Connection, and begins:

There are now rules specifically designed to protect the attorney-client privilege during document production:  Federal Rule of Civil Procedure 26(b)(5) and Federal Rules of Evidence 502.  These rules provide a procedure for clawing back inadvertently produced attorney-client privilege and work product documents and a consistent framework for determining whether the privilege was waived.  However, protection of privilege remains one of the primary concerns, and cost drivers, of parties producing documents in discovery.

The goals of the holistic approach to privilege protection are to protect attorney-client privilege and work product documents from being produced.  Further, in the event of production, the goal is to have taken “reasonable steps” to protect the privilege from waiver under Federal Rules of Evidence 502(b).  The goal is to do this while also producing documents that are responsive to discovery requests in a timely and economical way.  This is made more challenging by the increasing volumes of electronically stored information (“ESI”) that must be screened for privilege.

Read a copy of the full article here.

Court Orders Monetary Sanction for Failure to Preserve to be Paid by Defendant and Counsel

Green v. McClendon, 262 F.R.D. 284 (S.D.N.Y. 2009)

Upon one of the defendant’s revelation that she had lost all original versions of electronic files when she transferred those files to CD and then reinstalled her operating system, plaintiff filed a motion for sanctions.  Finding that the defendant and counsel violated their duty to preserve evidence, the court authorized additional discovery and awarded plaintiff his costs, including attorney’s fees, to be paid by the defendant and her counsel.

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Court Articulates Analysis Under FRE 502, Finds No Waiver of Inadvertently Produced Email

Coburn Group, LLC v. Whitecap Advisors, LLC, 640 F. Supp. 2d 1032 (N.D. Ill. 2009)

In this case, defendant, Whitecap Advisors LLC (“Whitecap”), sought to compel the return of one privileged email and to strike deposition testimony regarding the same.  Plaintiff, Coburn Group, LLC (“Coburn”), resisted returning the email arguing that it was not protected work product, that privilege was waived by production, and that Coburn was “entitled” to the email because it revealed that Whitecap had mislead the court.  Finding that the email was protected as work product and that no waiver occurred, the court granted Whitecap’s motion.

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For Discovery Violations, Court Sanctions Plaintiff and Counsel… Again

Bray & Gillespie Mgmt. LLC v. Lexington Ins. Co., 2009 WL 2407754 (M.D. Fla. Aug. 3, 2009)

In this case, plaintiff Bray & Gillespie Management, LLC (“B&G”) sought to recover payment for, among other things, business interruption losses allegedly suffered as the result of damage from Hurricane Jeanne in 2004.  Defendant, Lexington Insurance Company (“Lexington”), refused payment for several reasons, including its belief that the damages alleged were caused by two prior hurricanes and that the hotel at issue was not open at the relevant time.  In this opinion, one of several addressing discovery issues in this ongoing litigation, the court addressed Lexington’s motion for sanctions following numerous discovery violations on the part of B&G and its counsel.  The alleged violations revolved around the untimely production of “room folios” – evidence which would have shown who, if anyone, had stayed at the hotel following Hurricane Jeanne, and thus, the extent of the business interruption losses sustained.  Finding in favor of Lexington, the court prohibited B&G from presenting evidence in support of their claim for business interruption losses, struck the portions of their expert’s report addressing that claim, and ordered B&G and counsel jointly and severally liable for Lexington’s reasonable expenses.

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No Sanctions for Failure to Preserve Links to Graphics in Emails Where Plaintiff Failed to Establish Bad Faith or How the Images were Relevant or Necessary to His Claims

Ferron v. Echostar Satellite, LLC, 2009 WL 2370623 (S.D. Ohio July 30, 2009)

Plaintiff’s 1300-page complaint alleged numerous violations of the Ohio Consumer Sales Practice Act against multiple defendants for sending email messages which conveyed a commercial advertisement and displayed the name and/or logo of “Dish Network.”  In the course of discovery, Plaintiff sought sanctions for three defendants’ alleged failure to preserve website links to images contained in those messages.  Because paper copies of the messages were preserved and available and because Plaintiff did not establish defendants’ duty to maintain certain websites, the court found Plaintiff failed to establish bad faith.  Moreover, Plaintiff failed to establish that the images at issue were necessary or relevant to his claims.  Accordingly, Plaintiff’s motion for sanctions was denied.  [Note:  Defendant E-Management Group, Inc. (“E-Management”) was the only defendant to respond to Plaintiff’s motion(s). Nonetheless, the court denied sanctions as to all three accused defendants upon analysis of E-Management’s arguments and defenses.]

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Third Parties Held in Contempt for Failure to Obey Court Order, Including Using Computer Following Instructions that “They May Not Touch the Computers Except to Turn Them Off” Prior To Production

Sonomedica, Inc. v. Mohler, 2009 WL 2371507 (E.D. Va. July 28, 2009)

In this case, the court adopted the recommendation of the magistrate judge and found third parties in contempt for violation of the court’s orders, including the spoliation of electronically stored information on hard drives they were ordered to produce, and ordered them to pay plaintiff’s attorney’s fees and costs in the amount of $108,212.15 and for the case to be referred to the United States Attorney for investigation of possible criminal sanctions.

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Court Denies Motion for Sanctions for Failure to Suspend Automatic Overwriting of Backup Tapes Absent Showing of Bad Faith

Southeastern Mech. Servs., Inc. v. Brody, 2009 WL 2242395 (M.D. Fla. July 24, 2009)

Defendant Thermal Engineering Construction Services, Inc. (“TEI”) moved for spoliation sanctions alleging that plaintiff failed to adopt a proper litigation hold procedure which resulted in the automatic deletion of email and other electronically stored information (“ESI”) from plaintiff’s backup tapes.  Specifically, plaintiff failed to preserve information from Defendant Norman Brody following his last day of employment with plaintiff.  Despite finding that plaintiff had a duty to preserve relevant evidence at the time of the loss, the court declined to impose sanctions absent a showing of bad faith and denied TEI’s motion.

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Finding Defendant “May Have” Caused the Deletion of “Possibly Relevant Emails,” Court Orders Sanctions, Including Payment to Local Bar Association

Pinstripe, Inc. v. Manpower, Inc., 2009 WL 2252131 (N.D. Okla. July 29, 2009)

In this case, defendant Manpower, Inc. (“Manpower”) failed to distribute the litigation hold notice that was provided to it by counsel and failed to monitor compliance with oral instructions to some managers.  As a result, “possibly relevant emails were destroyed.”  Despite significant efforts, the deleted data could not be recovered from the system.  Approximately 700 emails were recovered from their recipients, however, and the emails’ attachments were preserved on “another server.”  Plaintiff sought sanctions against Manpower and its counsel.  Specifically, plaintiff sought default judgment or an adverse inference instruction.  The court denied plaintiff’s motion as to counsel, but agreed that some sanctions were warranted against Manpower.  Accordingly, the court’s order allowed plaintiffs to re-open depositions to address the late production and to seek additional relief if the need arose and ordered Manpower to contribute $2500 to the local bar association to support a seminar on litigation hold orders and preservation of electronic data.

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