Archive: October 2012

1
Court Instructs Parties to Utilize Predictive Coding, Requires Show of Cause to Avoid It
2
Concluding Litigation Hold and Document Retention Policies are “Clearly Unacceptable,” Court Allows Depositions to Determine if Spoliation Occurred
3
Court Focuses on Cooperation & Proportionality to Resolve Discovery Disputes
4
International Trade Commission Proposes to Amend Rules of Practice and Procedure
5
For Spoliation, Court Holds Defendant in Contempt, Orders $600,000 to be Paid to Plaintiff, $25,000 to be Paid to the Court

Court Instructs Parties to Utilize Predictive Coding, Requires Show of Cause to Avoid It

EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012)

Following argument on partial summary judgment and a motion to dismiss in the Delaware Court of Chancery on Monday, Vice Chancellor J. Travis Laster turned to the topic of a scheduling order and, apparently without outside provocation, addressed the issue of predictive coding:

The Court: Thank you.  Why don’t you all talk about a scheduling order for the litigation on the counterclaims.  This seems to me to be an ideal non-expedited case in which the parties would benefit from using predictive coding.  I would like you all, if you do not want to use predictive coding, to show cause why this is not a case where predictive coding is the way to go.

I would like you all to talk about a single discovery provider that could be used to warehouse both sides’ documents to be your single vendor.  Pick one of these wonderful discovery super powers that is able to maintain the integrity of both side’s documents and insure that no one can access the other side’s information.  If you cannot agree on a suitable discovery vendor, you can submit names to me and I will pick one for you.

One thing I don’t want to do – one of the nice things about most of these situations is once people get to the indemnification realm, particularly if you get the business guys involved, they have some interest in working out a number and moving on.  The problem is that these types of indemnification claims can generate a huge amount of documents.  That’s why I would really encourage you all, instead of burning lots of hours with people reviewing, it seems to me this is the type of non-expedited case where we could all benefit from some new technology use.

Transcript of Motion for Partial Summary Judgment, Motion to Dismiss Counterclaim and Ruling of the Court at 66-67, EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012).

Following this exchange, counsel were asked if they had anything else they wished to discuss, to which both responded they did not.  Watch this blog for further developments in this case.

Concluding Litigation Hold and Document Retention Policies are “Clearly Unacceptable,” Court Allows Depositions to Determine if Spoliation Occurred

Scentsy Inc. v. B.R. Chase LLC, No. 1:11-cv-00249-BLW, 2012 WL 4523112 (D. Idaho Oct. 2, 2012)

In this case involving alleged trade dress and copyright infringement and related claims, the court addressed Defendants’ allegations of spoliation and focused in particular on Plaintiff’s litigation hold and document retention policies, which it concluded were “clearly unacceptable.”  Recognizing that it was “unlikely” that relevant documents were destroyed, the court nonetheless allowed depositions to be taken at Plaintiff’s expense and indicated its potential willingness to issue an adverse inference instruction or to dismiss some or all of Plaintiff’s claims if it was determined that spoliation occurred.

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Court Focuses on Cooperation & Proportionality to Resolve Discovery Disputes

Kleen Prods. LLC v. Packaging Corp. of Am., No. 10 C 5711, 2012 WL 4498465 (N.D. Ill. Sept. 28, 2012)

In this multi-defendant litigation, Plaintiffs sought additional discovery, including the identification of additional custodians and the restoration and review of Defendants’ backup tapes.  In resolving these discovery disputes, the court focused on the need for cooperation and proper consideration and application of the principle of proportionality (Fed. R. Civ. P. 26(b)(2)(C)).

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International Trade Commission Proposes to Amend Rules of Practice and Procedure

As announced in today’s edition of the Federal Register, the International Trade Commission has proposed to amend its Rules of Practice and Procedure to address “concerns that have arisen about the scope of discovery in Commission proceedings under section 337 of the Tarrif Act of 1930 (19 U.S.C. 1337) (“section 337”).”  “The intended effect of the proposed amendments is to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties.”  To that end, the proposed amendments address issues including the discovery of inaccessible information and limitations to discovery similar to those currently contemplated in Fed. R. Civ. P. 26(b)(2)(C).  The proposed amendments also seek to add new provisions addressing privileged information and work product, including by requiring the production of privilege logs and by providing procedures for addressing the inadvertent production of privileged materials.

For more information on the proposed amendments, click here to be taken to today’s edition of the Federal Register.  Please note too, the Commission invites public comment on its proposals due no later than 5:15 PM on December 4, 2012.

For Spoliation, Court Holds Defendant in Contempt, Orders $600,000 to be Paid to Plaintiff, $25,000 to be Paid to the Court

Multifeeder Tech. Inc. v. British Confectionery Co. Ltd., No. 09-1090 (JRT/TNL), 2012 WL 4128385 (D. Minn. Apr. 26, 2012); Multifeeder Tech. Inc. v. British Confectionery Co. Ltd., No. 09-1090 (JRT/TNL), 2012 WL 4135848 (D. Minn. Sept. 18, 2012)

In this case, the Magistrate Judge recommended that an adverse inference be issued, that Defendant be held in contempt and that significant monetary sanctions be imposed upon his determination that two of Defendant’s employees had intentionally spoliated evidence by deleting certain information and by failing to reveal the existence of encrypted data.  Upon the parties’ objections, the District Court adopted in part the Magistrate Judge’s recommendation, but increased the monetary sanctions imposed.

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