Electronic Discovery Law

Arizona Amends Rules of Family Law Procedure to Address Electronic Discovery

david.bowerman@klgates.com (K&L Gates) — Thu, 20 Nov 2008 11:21:39 -0800

Arizona’s Supreme Court has approved amendments to Arizona’s Rules of Family Law Procedure that will address several major e-discovery issues. The amended rules are based on Arizona’s Rules of Civil Procedure and will become effective January 1, 2009. The amendments include changes to the following rules:

Ariz. R. Family Law P. 49      Disclosure
Ariz. R. Family Law P. 51      Discovery
Ariz. R. Family Law P. 52      Subpoena
Ariz. R. Family Law P. 62      Production of Documents and Things and Entry
                                                  Upon Land for Inspection and Other Purposes
Ariz. R. Family Law P. 65      Failure to Make Disclosure or Discovery; Sanctions

To read the order and see the amendments, click here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

In Ongoing Sanctions Dispute, Protective Order Limits Access to and Uses For Production, and Clarifies No Waiver by Production Pursuant to Self-Defense Exception

david.bowerman@klgates.com (K&L Gates) — Wed, 19 Nov 2008 10:23:35 -0800

Qualcomm Inc. v. Broadcomm Corp., 2008 WL 4858685 (S.D. Cal. Nov. 7, 2008)

At trial in this case, Broadcomm made an oral motion for sanctions related to Qualcomm’s failure to disclose documents corroborating its participation in the Joint Video Team (“JVT”), a standards body related to video coding specifications. Qualcomm’s claimed lack of participation in the JVT was a core element of its claims for patent infringement against Broadcomm. Judge Brewster referred the discovery aspects of that motion to Magistrate Judge Major and then issued an Order on Remedy for Finding of Waiver based on his determination that Qualcomm’s attorneys had participated in a sequence of discovery misconduct throughout the litigation process. However, because those attorneys had not had an opportunity to be heard before the order was issued impugning their behavior and in order to afford them an opportunity to be heard on the potential imposition of attorney sanctions, the court issued an Order to Show Cause Why Sanctions Should not be Imposed.

Following briefing and hearings on the sanctions issues, the court denied the motion brought by Qualcomm outside counsel seeking an order that the self-defense exception to the attorney-client privilege applied. Shortly thereafter, Qualcomm filed four employee declarations indicating that outside counsel was to blame for the discovery failures in the case. The following week, the court heard oral argument on the Order to Show Cause.

On January 7, 2008, the court granted in part and denied in part Broadcomm’s oral motion for sanctions, and imposed sanctions on Qualcomm and six of its outside attorneys (the “Responding Attorneys”). After the sanctioned attorneys filed objections, Judge Brewster determined that the four declarations previously filed by Qualcomm “introduced accusatory adversity between Qualcomm and its retained counsel regarding the issue of assessing responsibility for the failure of discovery.” Accordingly, he found that “this accusatory adversity changed the factual basis which supported [this] court’s earlier order denying the self-defense exception to Qualcomm’s attorney-client privilege.” Judge Brewster then vacated the order regarding Broadcomm’s oral motion for sanctions and remanded the issues to Magistrate Judge Major for further proceedings.

As part of the Remand Proceedings, Broadcomm and the Responding Attorneys served documents requests on Qualcomm and on each other. Eventually, Broadcomm and the Responding Attorneys filed motions to compel Qualcomm’s production of the requested documents. The Responding Attorneys sought documents related to their contention that Qualcomm affirmatively misled them during the discovery process, that the attorneys made reasonable inquiries of Qualcomm, and that there were no “red flags” in Qualcomm’s representations to them in light of the totality of circumstances. Broadcomm sought to compel responses to similar requests.

Qualcomm objected to most of the requests and sought to limit their scope significantly. Qualcomm also sought a protective order specifying who could view the documents, that the filings in the Remand Proceedings be sealed, and for clarification that any documents produced would be pursuant to the self-defense exception and not a result of any waiver by Qualcomm.

The court rejected Qualcomm’s attempts to limit the requests, especially in light of the Responding Attorneys’ needs to defend themselves against the imposition of sanctions, although it did recognize Qualcomm’s ability to withhold privileged communications with counsel who took over the representation after trial. The court also addressed several of Qualcomm’s specific objections, but sustained only the request to exclude documents pertaining specifically to discovery procedures in other litigation.

However, recognizing the vulnerable position of Qualcomm, the court granted Qualcomm’s request for a protective order, which restricted the persons permitted to view the documents, limited the use of the documents to the Remand Proceedings and the attorneys’ defense of themselves before the State Bar, and clarified that the documents were produced subject to the court’s order and the self-defense exception to attorney-client privilege and not waived.

Regarding how best to carry out discovery, the parties agreed that Qualcomm would provide a list of custodians likely to have documents responsive to each request and that the parties would then meet and confer regarding search terms. Qualcomm also agreed to provide the responsive documents in an electronic, searchable format. The court then scheduled a telephonic hearing for Thursday, December 4th to monitor compliance and discuss deadlines and scheduling.

A full copy of the decision is available here.

New Additions to List of District Court Rules

david.bowerman@klgates.com (K&L Gates) — Tue, 11 Nov 2008 10:00:17 -0800

The following Districts have just been added to our collection of United States District Court local rules, standards, guidelines and judge-mandated forms and protocols:

Northern District of Illinois
Judge Virginia Kendall’s Case Management Procedures, Discovery
Magistrate Judge P. Michael Mahoney’s Suggested Case Management Order

District of Massachusetts
Notice of Scheduling Conference (District Judge Richard G. Stearns) (Boston)

District of Nebraska
Report of Parties' Rule 26(f) Planning Conference

The following rules, standards, guidelines and judge-mandated forms and protocols have also been added to our collection:

District of Colorado
Stipulated Scheduling and Discovery Order for Cases Assigned to Judge Kane
Senior District Judge Richard P. Matsch’s Instructions for Scheduling Conference

Southern District of New York
Order to Prepare Civil Case Management Plan (all civil cases assigned to
the WP4 docket)

For a complete listing of local federal rules and guidelines addressing electronic discovery, see our updated post here.

Miscommunication about Search Terms Leads to Defendants' Refusal to Produce Thousands of Documents, Court Declines to Compel Production without Showing of Some Benefit to Plaintiff

david.bowerman@klgates.com (K&L Gates) — Mon, 10 Nov 2008 11:00:31 -0800

Ross v. Abercrombie & Fitch Co., 2008 WL 4758678 (S.D. Ohio Oct. 27, 2008)

In this securities case, the parties reached agreement that discovery was best accomplished by allowing Abercrombie to perform keyword searches to identify relevant information for production. Plaintiff identified and provided the key words to the defendant.

The first key words list contained 120 terms. After efforts to ensure the search would be productive, including converting certain files to a different format, Abercrombie ran the search. There were many hits. To reduce the volume, plaintiffs crafted a revised list of 123 terms. Another search was run and when the results came in, the parties agreed that some data sets from among the results would be reviewed and produced. Abercrombie produced those documents. The parties also agreed that further refinements of the search would be necessary to cut down the remaining results. Accordingly, plaintiff’s counsel sent 6 additional terms to Abercrombie to be run in proximity to other specified terms.

At “some point” the parties realized that they were operating under different assumptions regarding the searching. Abercrombie ran the last search using only the 6 new terms provided. However, plaintiff had intended the 6 new terms to be added to the previously provided 123 terms, not for them to be run separately. The parties agreed to run another search using both lists which “hit” almost 100,000 documents, or what Abercrombie estimated as equating to approximately 1.3 million pages. Plaintiff requested all the documents captured by the search hits, and indicated a willingness to return any privileged documents in the event Abercrombie chose to produce them without review to reduce costs. Abercrombie was unwilling to produce the documents without review, and was unwilling to spend the time or money necessary to review the documents itself, arguing that most were irrelevant to the issues in the case.

Plaintiff argued that if Abercrombie had performed the search properly in the first place, the documents would have been produced and that it would be unfair to allow Abercrombie to withhold documents because of its mistake. Abercrombie argued, essentially, that the volume was too great and the likelihood of irrelevance too high to justify requiring review and production and that regardless of any misunderstanding, it would have resisted reviewing and producing the documents at any time for those reasons.

The court agreed with Abercrombie stating, “[a]t some point, given the large amount of time and money which has been spent so far on document production, it becomes the plaintiff’s burden to show that the cost to review and produce even more documents is outweighed by their likely relevance to the case.” The court also noted that Abercrombie had already reviewed and produced a “very large number of documents” and that it would take “a lot more” time and money to review the documents in dispute. Accordingly, the court declined to compel production without “some showing that the plaintiff is likely to get at least a moderate benefit from that process.”

Reluctant to bar the plaintiff from the requested information altogether, the court outlined the possibility that the search terms could be revised and run against a sampling of documents to determine whether the revisions resulted in “hits” to more relevant information. If they did, the court opined, it “would be reasonable” for the plaintiff to ask for the search to be run on the documents at issue in the case and for the parties to discuss how they might economically review that subset of documents. “In the meantime,” the court noted that there were a number of persons who could be deposed based on the existing documents produced and stated that if documents turned up later that might prompt additional questioning of those witnesses, “the parties ought to be able to agree on a way to get that done without incurring significant additional expense.”

A full copy of the decision is available here.

Court Holds No Expectation of Privacy on Work Computer, Even for "Personal" Information

david.bowerman@klgates.com (K&L Gates) — Mon, 10 Nov 2008 10:50:16 -0800

State v. M.A., 954 A.2d 503 (N.J. Super. Ct. App. Div. 2008)

In this case of first impression in New Jersey, defendant argued that personal information found on his work computers should be suppressed because his employer had no authority to consent to the search. Defendant argued that he, not his employer, owned the computers and that he therefore had a reasonable expectation of privacy as to the personal information stored on them. Finding that the employer, in fact, owned the computers and therefore had every right to consent to the search, the court denied defendant’s motion to suppress.

Defendant was initially hired by his employer as a part time bookkeeper but was eventually hired full time and given additional computer responsibilities because he was “an expert” and maintained a used computer sales business on the side. Upon being hired, the defendant was made aware that “the computers or anything else in the office is company property.” Eventually, the defendant sold at least ten computers to his employer. Among those were the laptop and the desktop at issue in the case. In addition to his employer’s password protection, the defendant created his own password protected areas on both computers and used them to store personal information, at least some of which indicated theft from his employer. When the employer discovered that the defendant had fraudulently raised his own salary, the defendant was immediately fired. His employer subsequently discovered evidence of additional and extensive theft and contacted the police. The employer provided police with written consent to search the two computers. On them was found additional evidence of the defendant’s illegal activities.

Defendant argued that he was the true owner of the computers and that he had a reasonable expectation of privacy on them, especially in the password protected areas. In support of his contention, the defendant argued that he had reimbursed the company for the purchase of the laptop and that he kept it at home three out of five days a week. As to the desktop, the defendant argued that it had merely been delivered to his employer’s business because no one was available at the defendant’s computer business to sign for it and that he brought it to work when a temporary intern was using the computer in his office. Rejecting his arguments as “implausible”, the court found ownership properly resided with the employer in light of several facts, including, among other things, the employer’s payment for the computers, the placing of the laptop on the depreciation schedule of the employer’s corporate tax returns and the specific instruction to defendant that all computers were company property. Accordingly, the court upheld the validity of the warrantless search and denied the defendant’s motion to suppress.

A copy of the full decision is available here.

A Busy November: K&L Gates Partners to Speak at Several E-Discovery Events

david.bowerman@klgates.com (K&L Gates) — Fri, 07 Nov 2008 14:15:22 -0800

Allegheny County Bar Association CLE - T-BOLT: The Best of Legal Technology

November 10-11, 2008
David L. Lawrence Convention Center
1000 Fort Duquesne Blvd.
Pittsburgh, PA 15222

K&L Gates partner David Cohen is co-chair of this conference and will be among the presenters along with another K&L Gates partner, Thomas Smith.

David Cohen will be one of the speakers presenting “Using Automation for Litigation Support” on Tuesday, November 10th at 1:30 p.m. This session will address issues including docket management and scheduling, document management, and case organization and discuss how technology is helping litigators save time and achieve better results.

Thomas Smith will be one of the speakers presenting “Advanced Issues in e-Discovery” on Tuesday, November 11th at 11:00 a.m. This session will provide some “advanced tips” for how to better handle e-discovery and how to optimize outcomes, control costs, and avoid sanctions.

Click here for more information or to register.

Strafford Publications Live Telephone Conference - E-Discovery Innovation: Cutting Costs with Relevant Quick Peek Agreements

November 12, 2008
Live Telephone Conference
1 – 2:30 p.m. EST

K&L Gates partner Julie Anne Halter will be among the speakers at this event. The panel will address issues including what the Federal Rules say about relevancy quick peek agreements, the implications of search terms and technology, security considerations and best practices for drafting, among other things.

Click here for more information or to register.

NBI CLE - Keeping Up With E-Discovery

November 14, 2008
Washington State Convention & Trade Center
800 Convention Place
Seattle, WA

K&L Gates partners Julie Anne Halter and Todd Nunn will speak at two presentations throughout the day. The first presentation, “The Amendments to the Federal Rules of Civil Procedure and Recent Case Law” will be held at 9:45 a.m. and will address the most recent amendments to the Federal Rules as well as recent decisions and how they affect practitioners. The second presentation, “Electronic Discovery in the States and Recent Case Law” will be held at 11:00 a.m. and will address how different states are handling a myriad of e-discovery issues and discuss some uniform rules and guidelines that have been proffered by national organizations regarding issues surrounding e-discovery.

Click here for more information or to register.

Georgetown Law CLE - E-Discovery from the Corporate Side: Challenges and Solutions

November 19, 2008
Doubletree Hotel Crystal City – National Airport
300 Army Navy Drive
Arlington, VA 22202

K&L Gates partner David Cohen is a member of the Steering Committee for this program and will be moderating “Tackling the Tough Issues: Collection, Filtering, Review and Production” beginning at 10:15 a.m. The session will include discussions of cost saving strategies, the use of technology, and navigating the federal rules, among others.

This program is specifically designed for in house lawyers, paralegals, IT professionals, and records managers. Click here for more information or to register.

Finding Defendants' Proposed Search Protocol "Fundamentally Misguided," Court Creates Own and Orders Search of "Any Depository" that May Contain the Information Sought

david.bowerman@klgates.com (K&L Gates) — Thu, 06 Nov 2008 08:51:54 -0800

D’Onofrio v. SFX Sports Group, Inc., 2008 WL 4737202 (D.D.C. Oct. 29, 2008)

In this gender discrimination case, the court held an evidentiary hearing to address plaintiff’s concerns regarding outstanding discovery. Plaintiff claimed that defendants had destroyed her former computer, which contained potentially relevant information, and had not produced all of the electronic information she requested. At the hearing, a representative of the defendants explained that plaintiff’s computer was “scrapped after he decided that it could not be used and also searched for items requested by plaintiff.” A representative also testified regarding additional searches performed to respond to plaintiff’s requests and explained the “Legato system,” a server which held a back up of plaintiff’s mailbox from 2004, made under order of the Justice Department in a separate matter. Defendants agreed to allow plaintiff’s expert to perform an in-person search of their servers, but the parties were unable to agree upon a protocol to guide that search.

Following the hearing, defendants submitted an 11 point protocol for approval. The plaintiff objected to the proposed protocol, but did not provide her own. Defendants’ protocol proposed to re-create the searches previously conducted with any additional searching to be at the discretion of defendants who reserved the right to decline if they felt the search would “jeopardize the functioning of the system, or otherwise impact normal business operations.” Defendants’ proposal also allowed them to refuse to restore any emails that were located by searching. Finding defendants’ proposal “highly technical,” “highly restrictive,” and “fundamentally misguided,” the court created the protocol itself.

a. Scope of Search

Turning first to the scope of the search, the court gave plaintiff’s expert the authority to search any depository he believed may contain relevant information and indicated its confidence that “[the expert] will take his quasi-judicial responsibility” to conduct those searches in good faith seriously. The court also noted that if the expert were wrong about whether a depository contained relevant information, “the worst that can happen is that he will have wasted whatever time it took to search that particular depository” and that it would “surely…take less time and money than more litigation about the scope of search.”

b. Time Limitations

Addressing time limitations, the court ordered the parties to agree upon dates for searching and ordered that the expert be given up to three 12 hour days to complete his searches with the option for counsel to confer with the judge by telephone in the event additional time was needed.

c. Persons Present, Credentials, Commands

Regarding the persons to be present and who would actually carry out the searches, the court ordered that defendants need not provide access credentials directly to the plaintiff but that the representative for the defendant present at the search must have full credentials for access and assist plaintiff “without qualification or obstruction.” Additionally, the court ordered that defendants’ representative would carry out any system commands with plaintiff’s expert observing and that any disputes would be resolved by the court.

f. Production

Specifically citing “trust” in plaintiff’s expert, the court ordered him to copy the results of his search onto DVD to be provided under seal to the court noting that he functioned as a “quasi-judicial officer” for that purpose. The expert was ordered to provide a second copy of the results to defendants’ counsel who would have three weeks to review them and create a privilege log for documents to be withheld. The results were not to be provided to the plaintiff until the court ordered otherwise.

g. System Overview

Defendants proposed protocol suggested that prior to beginning any searches their IT representative perform an “overview of the Legato system” and that “after this initial review of system functionality the process followed for the previous data production in this matter will be discussed.” The judge noted that plaintiff had not objected to this suggestion but admitted, “I am afraid that I do not know what an ‘initial review of system functionality’ means in this context and what is to be discussed.” Nonetheless, the court expressed its expectation that defendants would ensure plaintiff’s expert understood how the system worked, what searches it could run, and how the results would be produced, and that defendants would answer any questions the expert might have.

h. Prior Searches, New Searches

The court noted that the parties agreed to re-run any previous searches and to compare the old and new results. Regarding new searches, the court ordered that defendants could refuse any searches it believed would “jeopardize the system or have a significant negative impact on business functioning” with the knowledge that the court might assess the validity of those claims. The court further recommended consideration of performing the searches during “off-hours” to reduce any potential interference with daily business.

i. Imaging

Upon defendants objection the court agreed not to order the Legato server to be imaged but agreed that in the event that plaintiff’s expert decided it necessary, the court would resolve the matter by phone. Other servers and hard drives were to be copied and retained by the expert “pending further order.”

j. Email Restores

Over defendants’ objections, the court ordered that newly discovered information should be restored, if necessary, to a “reasonably usable” state “capable of being read on a computer using commonly available word processing software…and without the necessity of having to buy other software…” The court assumed that the search would also yield metadata that would be preserved upon restoration for later use.

k. Cost

Defendants offered to pay up to $10,000 but plaintiff argued that defendants should bear the whole cost. Noting the Federal Rules presumption that the producing party will bear the costs, the court nonetheless indicated an unwillingness to give plaintiffs a “blank check” where they had not provided an estimate of the costs associated with the requested searching and had “refused to be limited by cost.” Thus, the court ordered plaintiff’s expert to provide an estimate if he anticipated the cost at greater than $10,000, in which case the court would re-visit the issue.

Finally, addressing defendants’ request for leave to designate an additional expert, the court denied the request in light of defendants’ failure to present any doubt as to the professionalism of plaintiff’s expert.

A copy of the full opinion is available here.

K&L Gates Partner Receives E-Discovery Award at Annual Gala

david.bowerman@klgates.com (K&L Gates) — Wed, 05 Nov 2008 14:46:09 -0800

At the 2008 Vestige Annual E-Discovery Awards Gala in Cleveland, Ohio, on November 1, 2008, David Cohen, a K&L Gates Partner, received a "2008 ESI Technology Champion" award. David was 1 of 4 award winners, out of over 80 lawyers, judges and consultants nominated for the awards. He is based in the Pittsburgh office and co-chair of the firm’s e-DAT practice group.

The panel of 5 Judges included several lawyers, a forensic expert and a U.S. District Court Magistrate. The Awards Gala was a black tie event held at the Renaissance Hotel in Cleveland. The Honorable Thomas J. Moyer, Chief Judge of the Supreme Court of Ohio, served as the Keynote Speaker.

A graduate of Harvard Law School, David has over 20 years experience managing complex commercial litigation, focusing on document-intensive and technology-related issues. He has been admitted to courts directly or pro hac vice in fifteen jurisdictions. He obtained a landmark opinion in the Delta Funding case ordering 100% cost-shifting. David has authored many articles and two book chapters focusing on litigation strategy and e-discovery issues, has served on and chaired several bar association committees related to litigation technology, serves on the Advisory Committee of the Georgetown Law Center e-Discovery Institute, and is a frequent presenter at CLEs and in-house training programs nationwide. He originated the “Scenes from an E-Discovery Case” vignettes used to train lawyers, paralegals, judges and mediators. David counsels numerous Fortune 500 and other companies on records management and e-Discovery issues, and serves as special e-discovery counsel.

Magistrate Judge Recommends Default Judgment in Favor of Plaintiffs and for Defendants to Pay "All Reasonable Costs" Related to Discovery Dispute

david.bowerman@klgates.com (K&L Gates) — Wed, 05 Nov 2008 14:23:15 -0800

Gutman v. Klein, 2008 WL 4682208 (E.D.N.Y. Oct 15, 2008)

In this case arising from accusations of fraud, among other things, plaintiffs moved for spoliation sanctions against the defendants to include default judgment, reimbursement of plaintiffs’ attorney’s fees and costs incurred as a result of the discovery dispute, and punitive monetary sanctions. Specifically, plaintiffs alleged egregious spoliation of defendant Klein’s laptop. Suspicion of spoliation initially arose when Klein resisted the court’s order to allow his laptop and other computers to be copied, and was later exacerbated because when the laptop was finally produced it was “hot to the touch and a screw was missing from its hard drive enclosure.” In light of these facts, the court appointed a forensic expert to examine the evidence for spoliation and provide a detailed report.

The expert’s report identified several areas for concern, including evidence that:

• someone visited several websites related to the Windows XP operating system, data recovery and data deletion two days prior to the forensic imaging;
• someone downloaded a file deletion program from one of the visited sites (although there were no indications it was utilized);
• someone deleted “hundreds of user documents” in the days prior to the forensic imaging;
• several files that had been identified as “irrelevant,” “privileged,” or “confidential” in Klein’s privilege log had been irretrievably deleted from the laptop;
• there had been “large scale modification” of the laptop’s operating system, including reinstallation of the operating system two days prior to the forensic imaging; and
• someone deleted 313 more files following the reinstallation of the operating system

In addition to the deletion of relevant files and other tampering, the forensic expert identified several other troubling facts including evidence that the system clock had been changed at least seven times on the morning of imaging which lead to “numerous incidents of incorrect file dating” on the laptop. For example, some of the timestamps found were for dates after the forensic imaging took place. The expert also identified inconsistencies in the timing related to the creation of several user accounts. Additionally, evidence on the laptop demonstrated that someone copied “‘thousands’ of files bearing erroneous, backdated time stamps” onto the laptop, likely on the day of the forensic imaging. The expert concluded that these facts were indicative of an attempt to permanently delete files and then cover up the chronology of the system changes. The expert further concluded that the facts suggested that a “wide scale data deletion and time stamp alteration may have been conducted with a privilege review in anticipation of the production of so-called non-privileged data.” He further attested that it was “unlikely” that the changes made occurred accidentally.

Defendants conceded many of the expert’s findings but attempted to provide legitimate reasons for the activity. For example, defendants admitted to the reinstallation of the operating system but claimed it was in furtherance of larger efforts to recover lost data. Likewise, defendants claimed that the changed clock and copied files were part of the same efforts. Rejecting these explanations, the court noted the “greater than average level of computer sophistication” of one of the persons who assisted defendants in their alleged recovery efforts and reasoned that his actions “were not consistent with a computer technician’s search for hidden, old files.”

The court found that “plaintiffs have demonstrated that Klein spoliated the Klein laptop.” In support of this finding, the court relied on several things. First, the court found that the Klein was aware of his duty to preserve data at the time he and others “tampered” with the laptop. Second, the court found that the evidence strongly suggested the tampering was undertaken with a culpable state of mind. Finally, the court found that the lost evidence was relevant to plaintiffs’ case for three reasons: 1) many of the deleted files had been listed on Klein’s privilege log, 2) defendants had previously indicated that the laptop contained relevant information, and 3) the record indicated that Klein acted in bad faith to destroy the information. The court also concluded that Klein’s, and his alleged assistant’s, “vague and evasive testimony” left “little doubt that they were not telling the truth.” This conclusion was further bolstered by contradictions in their testimony.

In addition to the spoliation of the laptop, the court addressed defendant Klein’s contention that a thief had stolen another laptop containing relevant evidence. Although Klein claimed that the laptop originally requested by plaintiffs had been stolen and that the laptop produced for imaging was its replacement, he failed to disclose that fact at the time the laptop was imaged. The court expressed doubt about the veracity of the claim in light of Klein’s failure to report the theft to the police, the court or his insurer. The court also weighed the general untrustworthiness of his other testimony. Concluding that Klein did not credibly establish the existence of a missing laptop, the court held that regardless of whether he fabricated the tale altogether or simply failed to inform the court and the plaintiff that the copied laptop was not the machine originally requested, sanctions were appropriate.

Because lesser sanctions were “ill-suited” to a case where “the spoliator has, in bad-faith, irretrievably deleted computer files that likely contained important discovery information,” the magistrate judge presiding over the discovery dispute recommended default judgment in favor of the plaintiff. Justifying his recommendation, the magistrate judge explained that the harshest sanctions were warranted where lesser sanctions would not deter future misconduct, that the “most serious forms of spoliation merit the harshest sanctions,” and that the lesser sanction of adverse inference could not remedy the prejudice to the plaintiffs.

The magistrate judge also recommended that defendants pay plaintiffs the “reasonable expenses” including attorney’s fees associated with the dispute. He declined, however, to recommend punitive monetary sanctions, reasoning that the recommended sanctions were “sufficiently severe.”

A full copy of the report and recommendation is available here.

Court Orders Production of Relevant Source Code Citing Defendant's Suggestion for Mitigating Costs

david.bowerman@klgates.com (K&L Gates) — Wed, 05 Nov 2008 12:49:07 -0800

Metavante Corp. v. Emigrant Savings Bank, 2008 WL 4722336 (E.D. Wis. Oct. 24, 2008)

In this breach of contract case, Emigrant filed several motions to compel Metavante’s response to multiple discovery requests. One motion sought the production of source code from the product delivered to Emigrant under the parties’ technology outsourcing agreement. Under the agreement, Metavante was to provide Emigrant with an online direct banking product called EmigrantDirect.

Emigrant argued that access to the source code may provide information about the quality of the product and was therefore relevant and properly discoverable. Metavante argued that its production would be unduly burdensome because it would cost over $300,000 and take over 5,000 hours to produce. Metavante also argued that the code would provide little relevant information. Emigrant responded arguing that Metavante’s estimates assumed a need to sort and compile all of the information before disclosing it and suggested it could mitigate the cost to Metavante by providing the code to outside consultants for inspection and a determination regarding relevance. The court found that the source code was relevant and, citing Emigrant’s offer to use outside consultants, found that “[i]n balancing the value of the source code against the burden of producing it…the potential value outweighs the burden.” The court also noted that any confidentiality concerns were addressed by its previously issued protective order.

In a separate motion to compel, Emigrant sought court supervision of Metavante’s production of several categories of information, “an explanation” of why documents Emigrant claimed were “known to exist” had not been produced, an order requiring Metavante to produce all electronic documents in their native format, and payment of attorney’s fees and expenses in preparing the motion, among other things.

Regarding the production of electronically stored information, Emigrant sought additional documents related to Metavante’s work with other customers and information related to performance of their product. Metavante responded noting that it had already produced 70,000 “SupportTrack” tickets that were generated in response to technical support issues from its customers, among other documents. The court denied the request reasoning that Emigrant had had ample opportunity for follow up with Metavante and had never requested further information. The court also declined to compel production of documents related to modifications to Metavante’s software. Here again, Emigrant argued that Metavante’s production was insufficient and attempted to cast doubt on whether all relevant materials had been provided. The court rejected those arguments, once again pointing to Metavante’s already significant production and Emigrant’s ample opportunity to seek additional documents since that time. The court also noted that it had agreed to order the production of the requested source code “which may contain more information responsive to these requests.”

The court denied Emigrant’s request for court-supervised discovery, finding that supervised production would “pervert” the discovery goals of minimizing cost and inconvenience and pointing out that “[b]oth parties in this case are sophisticated, and have shown their ability to conduct extensive discovery without constant court supervision.” Finding that Emigrant provided “no basis” upon which the court could make the order, the court also denied Emigrant’s request that all electronic information be produced in its native format.

Addressing Emigrant’s request for an explanation regarding Metavante’s failure to produce documents “known to exist,” the court denied the motion reasoning that while Metavante’s alleged actions may be appropriate for a motion for sanctions, it found “no reason to compel further production of documents that Metavante claims it no longer has.” Likewise, the court denied Emigrant’s request for attorney’s fees.

A copy of the full decision is available here.

Recognizing Danger of Loss, Court Orders Expedited Discovery Including Copying of Defendants' Hard Drives

david.bowerman@klgates.com (K&L Gates) — Thu, 30 Oct 2008 14:44:21 -0800

Allcare Dental Mgmt., LLC v. Zrinyi, DDS, 2008 WL 4649131 (D. Idaho Oct. 20, 2008)

In this defamation case, plaintiffs sought an order allowing expedited discovery. Specifically, plaintiffs sought permission to serve a subpoena duces tecum upon Cable One, Inc., an Internet service provider and non-party to the action, for information related to the claims in the case and the potential identification of Doe Defendants. Plaintiffs also sought an order allowing them to take images of the hard drives of any computer owned or used by the named defendants for the preservation of electronically stored information related to the claims in the case and the potential identification of Doe Defendants.

Order on Motion for Expedited Third Party Discovery

Recognizing that in cases where the defendants are not identified, postponing production of defendants’ names and contact information until the normal course of discovery may not be an option, the court granted plaintiffs’ motion for permission to serve subpoenas upon Cable One. The court also noted that expedited discovery was appropriate in this case because Internet service providers typically retain user activity logs for only a limited period of time ranging from a few days to a few months.

However, the court limited the scope of the subpoena to information regarding the individuals who posted the alleged defamatory statements, not to anonymous persons who merely visited the website. The court required plaintiffs to serve Cable One with the subpoena within five days of its order. Additionally, the court required Cable One to provide notice of the subpoena to its affected subscribers, and gave those subscribers 14 days within which to file a motion to quash. If no such motions were received, Cable One was ordered to produce the subpoenaed information to plaintiffs.

Order on Motion for Expedited Forensic Images of Defendants’ Hard Drives

The court also granted plaintiffs’ motion allowing expedited forensic imaging of the named defendants’ hard drives. In support of this motion, plaintiffs argued that copying the drives was necessary to prevent loss of the information before the regular discovery process commenced. Plaintiffs suggested that the defendants had evaded service in other matters and that they believed defendants had “little respect for the legal process or the requirement to preserve electronic data.” Additionally, plaintiffs indicated their expectation that they would bear the costs associated with the request.

The court granted plaintiff’s motion, first ordering defendants to preserve any and all electronically stored information relevant to the plaintiffs’ claims. The court further ordered that any of defendants’ computers or portable or detachable hard drives at work and/or at home must be made available to plaintiffs’ forensic expert for imaging. The expert was ordered to image the drives without revealing the information to plaintiffs, and to file the information under seal with the court until such time as a stipulation between the parties was reached or until further order of the court.

A copy of the full decision is available here.

K&L Gates Lawyers Make Major Contributions to E-Discovery Publication

david.bowerman@klgates.com (K&L Gates) — Wed, 29 Oct 2008 10:06:04 -0800

Available now from PBI Press, e-Discovery provides guidance for practitioners of all levels of experience through the often complicated world of e-discovery.

Once again showcasing the depth of knowledge at the firm, four of the fifteen contributing authors to the publication are members of the K&L Gates e-Discovery Analysis and Technology Group. Those members are Tom Smith, David Cohen, Daniel Miller, and Lynn Reilly.

To learn more about this valuable resource or to purchase a copy of your own, click here.

Newly Released Securities and Exchange Commission Enforcement Manual ("Red Book") Provides Guidance on Treatment of Electronic Information

david.bowerman@klgates.com (K&L Gates) — Tue, 28 Oct 2008 16:27:55 -0800

For the first time, the SEC has released its Enforcement Manual, also known as the "Red Book” to the public. Although the manual is intended to provide guidance to members of the SEC’s Division of Enforcement, it is a valuable resource for anyone involved in a SEC investigation.

Several sections address the topic of electronic information. For example, section 3.2.6.2, “Form of Production,” provides a detailed explanation of what is expected of those responding to an SEC subpoena, including a discussion of the SEC’s preference for electronic production. Section 3.2.6.2.3, “Format for Electronic Production of Documents to the SEC,” provides even greater detail regarding the production of electronic information. The manual also provides valuable guidance on privilege logs, bates stamping, records certifications and much more.

The full text of the Enforcement Manual is available here.

Court Declines to Require Plaintiff to Designate Specifically Confidential Portions of Documents during Discovery where Entire Document does not Rise to that Level

david.bowerman@klgates.com (K&L Gates) — Tue, 28 Oct 2008 11:25:54 -0800

Containment Tech. Group, Inc. v. Am. Soc’y of Health Sys. Pharmacists, 2008 WL 4545310 (S.D. Ind. Oct. 10, 2008)

In this defamation case, the parties disagreed over the scope of a protective order sought by plaintiff prior to production of proprietary information, among other things. The parties attempted to negotiate the terms of such an order, but could not agree on several issues, including whether only portions of documents should be designated as “confidential” if the entire document did not rise to that level. Under the parties’ proposed terms, materials designated “confidential” would have automatically been sealed if filed with the court.

Defendants argued that particularized designation of confidential materials was required by the Seventh Circuit. Plaintiff disagreed and argued that the approach would be “unduly burdensome and costly.” The plaintiff also argued that the court had previously approved an order in a different matter allowing entire documents to be designated as confidential. While unpersuaded by plaintiff’s argument regarding the order in another matter, the court acknowledged the “painstaking” nature of a mandatory “document-by document (or even paragraph by paragraph)” review of materials to ensure accurate designation before production. Moreover, the court recognized that “[m]assive electronic discovery production has significantly added to this challenge.”

Turning to the merits of whether and when such painstaking designations should be made, the court discussed the necessity of such an undertaking at the discovery phase. The court noted that from its perspective, it made little difference whether a document was designated “confidential” at discovery “provided it is not permitted to be filed under seal without some separate justification for doing so.” Acknowledging that a practitioner’s perspective was different, the court nonetheless determined that the appropriate time to be concerned with the particularity of a “confidential” designation was when filing a document with the court.

In support of its ruling, the court first explained that even during discovery, counsel is charged with acting in “good faith” to designate confidential information accurately. Second, requiring counsel to scour each document in a “massive electronic discovery production” to determine which portions of each document were properly designated “confidential” “undoubtedly adds additional burdens and expense to the litigation.” The court went on to note that the “recent creation of Federal Rule of Evidence 502, which places limitations on waivers of the attorney client and work product privileges, represents a specific response to the costs involved in extensive document review necessitated by electronic discovery.”

Anticipating some disagreement in the designations of plaintiff’s production, the court advised the parties to confer regarding disputed designations to attempt to resolve the issues and again reiterated that the more appropriate time for heightened attention to designations was at the time of filing with the court.

Accordingly, the court ordered the parties to modify their proposed protective orders to remove the provisions requiring that portions of documents be designated “confidential” if the entire document was not and the provision requiring that all confidential materials would automatically be filed under seal if submitted to the court. “Rather,” the court stated, “the protective order…should simply provide that parties act good faith in designating documents as confidential, and that parties seeking to file documents under seal make a separate showing to the Court that good cause exists to do so.”

A copy of the full opinion is available here.

Western District of North Carolina Amends Local Rules, Specifies Electronic Production as Topic of Pretrial Conference

david.bowerman@klgates.com (K&L Gates) — Fri, 24 Oct 2008 10:37:12 -0800

Effective January 1, 2008, amended Local Rule 16.1 specifies appropriate topics for consideration at the Initial Pretrial Conference, including the production of electronically stored information (“ESI”).

Click on the following link to see amended rule:

Local Civil Rule 16.1 Pretrial Conferences (see subpart (G) Initial Pretrial Conference)

For a complete listing of local federal rules and guidelines addressing electronic discovery, see our updated post here.

Updated List: Local Rules, Forms and Guidelines of United States District Courts Addressing E-Discovery Issues

david.bowerman@klgates.com (K&L Gates) — Fri, 24 Oct 2008 10:36:41 -0800

At least 41 United States District Courts now require compliance with special local rules, forms or guidelines addressing the discovery of electronically stored information. In some districts where there are no local rules or court-mandated forms, individual judges have created their own forms or set out their own preferred protocols for e-discovery. Here is current collection of United States District Court local rules, standards, guidelines and judge-mandated forms and protocols that specifically address e-discovery issues, with links to the relevant materials.

Eastern and Western Districts of Arkansas
Local Rule 26.1 Outline for Fed. R. Civ. P. 26(f) Report

District of Alaska
Local Form 26(f): Scheduling and Planning Conference Report (see item 4(B))
Local Rule 16.1 Pre-Trial Procedures (requiring use of Local Form 26(f) or one substantially similar)

District of Arizona
Order Setting Rule 16 Case Management Conference (Magistrate Judge Michelle H. Burns)
Order Setting Rule 16 Case Management Conference (District Judge David G. Campbell)
Order Setting Rule 16 Case Management Conference (Magistrate Judge David K. Duncan)
Order Setting Rule 16 Case Management Conference (District Judge Mary H. Murguia)

Northern District of California
Standing Order For All Judges Of The Northern District Of California: Contents Of Joint Case Management Statement (see item 6)
Local Rule 16-9 Case Management Statement and Proposed Order (requiring parties' Joint Case Management Statement to include all topics listed in Standing Order)

District of Colorado
Appendix F: Instructions for Preparation of Scheduling Order and Form Scheduling Order
Stipulated Scheduling and Discovery Order for Cases Assigned to Judge Kane
Senior District Judge Richard P. Matsch’s Instructions for Scheduling Conference

District of Connecticut
Local Rules 16(b), 26, 37 and Form 26(F)

District of Delaware
Default Standards for Discovery of Electronic Documents

Middle District of Florida
Civil Discovery Practice Handbook (see Part VII “Technology”)

Southern District of Florida
Rule 16.1 Pretrial Procedure in Civil Actions
Rule 26.1 Discovery and Discovery Material (Civil)
Appendix A: Discovery Practices Handbook (see Part III, in particular)

Southern District of Georgia
Rule 26(f) Report

Central District of Illinois
Magistrate Judge Byron G. Cudmore's Rule 16 Scheduling Order
Magistrate Judge David G. Bernthal’s Suggested Form for Proposed Discovery Plan (Urbana Division)

Northern District of Illinois
Judge Virginia Kendall’s Case Management Procedures, Discovery
Magistrate Judge P. Michael Mahoney’s Suggested Case Management Order

Northern District of Indiana
Report of Parties' Planning Meeting

Southern District of Indiana
Uniform Case Management Plan (see Part III(K))
Rule 16.1 Pretrial Procedures (requiring use of Uniform Case Management Plan)

Northern and Southern Districts of Iowa
Scheduling Order and Discovery Plan
Instructions and Worksheet for Preparation of Scheduling Order and Discovery Plan and Order Requiring Submission of Same
Local Rule 16.1 Scheduling Order and Discovery Plan (requiring use of form)
Local Rule 26.1 Pretrial Discovery and Disclosures (requirement to submit discovery plan satisfied by submission of form Scheduling Order and Discovery Plan)

District of Kansas
Guidelines for Discovery of Electronically Stored Information
Initial Order Regarding Planning and Scheduling

District of Maryland
Suggested Protocol for Discovery of Electronically Stored Information

District of Massachusetts
Notice of Scheduling Conference (District Judge Richard G. Stearns) (Boston)

Eastern District of Missouri
Local Rule 3.01. Federal Rule of Civil Procedure 26

District of Nebraska
Report of Parties' Rule 26(f) Planning Conference

District of New Hampshire
Local Rule 26.1 Discovery Plan
Civil Form 2: Sample Discovery Plan

District of New Jersey
Local Rule 26.1 Discovery (see subpart (d))

Southern District of New York
Individual Practices of District Judge Harold Baer, Jr. (see Item 3)
Proposed Pretrial Scheduling Order (District Judge Harold Baer, Jr.)
District Judge Colleen McMahon’s Rules Governing Electronic Discovery
Civil Case Management Plan (District Judge Colleen McMahon)
Order to Prepare Civil Case Management Plan (all civil cases assigned to
the WP4 docket)

Western District of North Carolina
Local Civil Rule 16.1 Pretrial Conferences (see subpart (G) Initial Pretrial Conference)
Standing Order on Protocol for Discovery of Electronically Stored Information in Civil Cases before the Honorable Frank D. Whitney
Initial Scheduling Order (District Judge Frank D. Whitney)
Certification and Report of F.R.C.P. 26(f) Conference and Proposed Discovery Plan (District Judge Frank D. Whitney)

Northern District of Ohio
Local Rules, Appendix K: Default Standards for Discovery of Electronically Stored Information (“E-Discovery”)
Rule 16.3 Track Assignment and Case Management Conference
Case Management Conference Scheduling Order (District Judge Dan Aaron Polster)
Case Management Conference Notice (District Judge Jack Zouhary)
Case Management Conference Order (District Judge Jack Zouhary)

Southern District of Ohio
Rule 26(f) Report of Parties (Western Division at Dayton)
Joint Discovery Plan (Western Division) (District Judge Susan J. Dlott)
Rule 26(f) Report of the Parties (Eastern Division)

Eastern District of Pennsylvania
Report of Rule 26(f) Meeting
Pretrial Scheduling/Status Conference Report (Senior District Judge Norma L. Shapiro)
Standard Management Track; Order (Senior District Judge Norma L. Shapiro)
Order Governing Electronic Discovery (District Judge Timothy J. Savage)
District Judge Timothy J. Savage’s Scheduling and Motion Policies and Procedures

Middle District of Pennsylvania
Local Rule 26.1 Duty to Investigate and Disclose

Western District of Pennsylvania
Local Rule 16.1.1 Scheduling and Pretrial Conferences - Generally (see item (B), requiring use of Appendix B form)
Appendix B: Fed. R. Civ. P. 26(f) Report of the Parties (see item 11)

Eastern District of Tennessee
Form Scheduling Order (Knoxville) (Senior District Judge Leon Jordan) (see Item 4(d))
Form Scheduling Order (Knoxville) (District Judge Thomas A. Varlan) (see Item 4(d))
Form Scheduling Order (Chattanooga) (Magistrate Judge Susan K. Lee) (see Item 5(a))

Middle District of Tennessee
Administrative Order No. 74: Default Standard for Discovery of Electronically Stored Information (“E-Discovery”)
Sample Initial Case Management Order (District Judge Aleta A. Trauger) (see Item L)

Western District of Tennessee
Form Scheduling Order (Western Division) (Magistrate Judge Diane K. Vescovo)

Eastern District of Texas
Notice of Scheduling Conference, Proposed Discovery Order, and Proposed Dates for Docket Control Order (Magistrate Judge John D. Love) (see item 2(A))

Northern District of Texas
Miscellaneous Order No. 62 (Dallas Division, Patent Cases) (see item 2.1(a)(2))

Southern District of Texas
Local Rules of Practice for Patent Cases (Corpus Christi Division) (see Rule 2-1(a)(2))
Court Procedures of District Judge Nancy F. Atlas (see Item 6(C)(5) and Joint Discovery/Case Management Plan)
Court Procedures of District Judge Lee H. Rosenthal (see Joint Discovery/Case Management Plan)

District of Utah
Attorneys’ Planning Meeting Report

District of Vermont
Local Rule 26.1 Discovery
Local Form Rule 26.1(b): Stipulated Discovery Schedule/Order

Southern District of West Virginia
Report of Parties’ Planning Meeting
Local Rule 16.1 Scheduling Conferences (requiring use of court’s form)

District of Wyoming
Local Rule 26.1 Discovery and Appendix D: Rule 26 Conference Checklist (see subpart (e) of local rule)

For more information on the local rules of United States District Courts, click here to see a page with links to all the District Courts’ web pages.

Court Highlights Cooperation Requirements of Discovery under Rule 26, Rules Objections Waived for Failure to Be Specific, and Orders Meet and Confer to Resolve Remaining Disputes

david.bowerman@klgates.com (K&L Gates) — Thu, 23 Oct 2008 11:34:09 -0800

Mancia v. Mayflower Textile Servs. Co., 2008 WL 4595175 (D. Md. Oct. 15, 2008)

In this employment case, plaintiffs filed several motions to compel supplemental responses to their extensive discovery requests after defendants allegedly failed to adequately respond. The case was eventually referred to Chief United States Magistrate Judge Paul Grimm for the purpose of resolving all of the discovery disputes.

In the initial review of defendants’ objections to the requests, the court noted “an obvious violation” of Federal Rule 33(b)(4) and “facially apparent violations” of Federal Rule 33(b)(2) which require that objections to interrogatories and requests for production be laid out with specificity or else they are waived. Moreover, the court suggested that the defendants’ failure to be particular in their objections “suggested a probable violation” of Federal Rule 26(g)(1) which requires a reasonable inquiry prior to objecting to an interrogatory or document request. Accordingly, the court scheduled a hearing to address the issues.

At the hearing, the court raised concerns regarding both defendants’ inadequate objections to discovery and the breadth of plaintiffs’ requests given what was at stake in the case. Recognizing its obligation, sua sponte, to limit the reasonableness of discovery requests, the court relied on the “proportionality analysis” required under Federal Rule 26(b)(2)(C) and ordered the parties to meet and confer in good faith to determine whether the goals of discovery could be accomplished in a manner proportional to what was at stake.

In a written opinion to more fully explain his concerns, suggestions and rulings, the court wrote: “One of the most important, but apparently least understood or followed, of the discovery rules is Fed.R.Civ.P. 26(g), enacted in 1983.” The court pointed out that rule 26(g) requires that every discovery disclosure, request, response or objection must be signed by the attorney of record or the client, if unrepresented. The signature “certifies to the best of the person’s knowledge, information, and belief formed after a reasonable inquiry” that the disclosure is complete and correct and that the request, response, or objection is consistent with the rules, is not improper, and is not unreasonable, unduly burdensome or expensive.

The court then turned to the Advisory Committee Notes for Rule 26(g) to discuss several “take away points” that “ought to, but unfortunately do not, regulate the way discovery is conducted.” First, “the rule is intended to impose an ‘affirmative duty’ on counsel” to behave in a manner that is consistent with the “spirit and purposes” of the rules. Such behavior, according to the court, would require counsel to identify and fulfill the legitimate needs of discovery while avoiding seeking discovery disproportionately costly or burdensome to what is at stake in the litigation. Second, the rule is intended to curb abuse by requiring the imposition of sanctions for violations absent “substantial justification” and those sanctions “are intended to both penalize the noncompliant lawyer or unrepresented client, and to deter others from noncompliance.” Third, the rule “aspires” to eliminate both discovery requests served without consideration of cost and objections proffered without factual basis. As to the former and the common justification that broad requests are warranted where parties do not know enough to more narrowly tailor them, the court argued “this would not be so” if lawyers met before propounding discovery “and simply discussed what the amount in controversy is, and how much, what type, and in what sequence, discovery should be conducted so that its cost-to all parties-is proportional to what is at stake in the litigation.” With regard to the latter, the court stated:

It would be difficult to dispute the notion that the very act of making such boilerplate objections is prima facie evidence of a Rule 26(g) violation, because if the lawyer had paused, made a reasonable inquiry, and discovered facts that demonstrated the burdensomeness or excessive cost of the discovery request, he or she should have disclosed them in the objection, as both Rule 33 and 34 responses must state objections with particularity, on pain of waiver.

Addressing the issue of cost, the court noted that “failure to engage in discovery as required by Rule 26(g) is one reason why the cost of discovery is so widely criticized as being excessive to the point of pricing litigants out of court.”

Repudiating the argument that “the cooperation that judges expect during discovery is unrealistic because it is at odds with the demands of the adversary system”, the court stated, “there is nothing inherent in [the system] that precludes cooperation between the parties and their attorneys…to achieve orderly and cost effective discovery of the competing facts on which the system depends.” The court cited a respected professor who wrote that a lawyer’s loyalty is not to persons but to the “procedures and institutions” of government “upon which the successful functioning of our society depends.” The court noted that lawyers who sought excessive discovery or proffered boiler plate objections were, “hindering the adjudication process, and making the task of the ‘deciding tribunal not easier, but more difficult’ and violating his or her duty of loyalty to the ‘procedures and institutions’ the adversary system is intended to serve.”

Turning back to the case at hand, the court found that by failing to offer particularized objections to plaintiffs’ discovery requests, defendants waived any legitimate objection they may have had. The remaining discovery disputes, including the court’s question of whether plaintiffs’ requests were excessive or overly burdensome, were intended to be addressed by the court’s meet and confer order as outlined above.

A copy of the full decision is available here.

To "Expedite the Flow of Discovery and Facilitate Prompt Resolution of Disputes", Court Adopts Proposed Order Governing Electronic Discovery

david.bowerman@klgates.com (K&L Gates) — Thu, 23 Oct 2008 11:21:10 -0800

Star, Inc. v. QFA Royalties LLC, No. 07-cv-02223-WYD-CBS (D. Colo. Filed Oct. 10, 2007)

In this case, the court granted an unopposed motion of the defendant to enter an order governing electronic discovery. The proposed order adopted by the court was intended to “expedite the flow of discovery material and facilitate prompt resolution of disputes over production of electronic materials…” Included in the order was a provision requiring each party to identify an “e-discovery liaison” through whom all discovery requests and responses would be made as well as provisions providing instruction regarding search methodology, timing of discovery, format of production, privilege review, document retention and costs.

A copy of the motion and proposed order is available here.

A copy of the court’s order is available here.

Defendants Admit Destruction or Loss but Claim Good Faith, Court Denies Motion for Preservation Order and Spoliation Inquiry

david.bowerman@klgates.com (K&L Gates) — Tue, 21 Oct 2008 13:50:20 -0800

Almarri v. Gates, 2008 WL 4449858 (D.S.C. Oct. 2, 2008)

In this case challenging conditions of his confinement, plaintiff sought an order directing the government to preserve evidence and an inquiry into the government’s destruction and other spoliation of evidence. Specifically, the plaintiff alleged that the government had destroyed relevant materials related to his detention, including recordings, and that the government had no uniform policy for preserving detainee interrogation recordings. Therefore, a preservation order was necessary to prevent further spoliation. The government maintained that such an order was unwarranted in light of the multiple preservation directives issued to ensure that evidence related to the plaintiff was preserved.

The court denied plaintiff’s motion for a preservation order, finding that plaintiff failed to show that absent a court order there was significant risk that relevant evidence would be destroyed. The court reasoned that despite the government’s admission that relevant interrogation recordings had been lost or destroyed, its immediate action upon learning of the loss prevented the destruction of additional evidence. Specifically, the court pointed to multiple preservation directives requiring the retention and maintenance of all documents and recorded information related to the plaintiff. According to the court, “[t]hese directives evidence the defendants’ good faith efforts to develop adequate retention procedures.” The court also reasoned that to issue an order of preservation “would have no real effect” where the government had already taken steps to safeguard against further loss or destruction. Moreover, the court noted that the failure to retain certain recordings from between December 2004 and March 2005 months before the plaintiff’s claim was filed, “hardly constituted loss of evidence at the time.”

Finding that the plaintiff had “failed to demonstrate more than a suspicion of prejudice” and that “a judicial inquiry into destruction of materials is unnecessary because the defendants have presented an undisputed explanation in their response of the nature and circumstances of the prior destruction or loss,” the court also denied plaintiff’s request for an inquiry into the government’s alleged spoliation. Specifically regarding the government’s admission that certain recordings were destroyed, the court accepted the government’s explanation that “decisions not to retain the recordings about which the plaintiff complains were made by personnel in good faith months before this action was filed.”

A copy of the full decision is available here.

Finding "No Reason to Treat Websites Differently than Other Electronic Files," Court Grants Adverse Inference for Failure to Preserve Website

david.bowerman@klgates.com (K&L Gates) — Tue, 21 Oct 2008 13:27:50 -0800

Arteria Prop. Pty Ltd. v. Universal Funding V.T.O., Inc., 2008 WL 4513696 (D.N.J. Oct. 1, 2008) (Not for Publication)

In this case arising from failed negotiations for a long term development loan, the plaintiff filed a motion for spoliation sanctions and sought an adverse inference in its favor. Specifically, plaintiff alleged spoliation of the contents of the defendants’ website as it existed at the time the dispute between the parties arose, and of a particular letter from the Bank of New York.

Regarding defendants’ website, plaintiff sought “electronic snapshots or paper copies of the website” indicating the content of the website at the time of the negotiations, specifically, statements that Universal was “one of the leading lenders serving the real estate market” with more than “50 years of Commercial Mortgage Banking experience.” Defendants advised that they had requested their own copies of the site and that they would provide the same to the plaintiff. Although defendant O’Hara confirmed during his deposition testimony that statements cited by the plaintiff were indeed present on the website at the time of the negotiations, the defendant did not produce the requested snapshots.

At a hearing on January 3, 2007, the Honorable Ronald J. Hedges heard arguments and entered an order that as of December 18, 2006 defendants were “deemed to have admitted that…they do not have within their possession, custody, or control” the two categories of evidence sought by the plaintiff. Judge Hedges’s order also permitted plaintiff to file a motion for spoliation in conjunction with the final pretrial order.

In the meantime, defendants’ counsel withdrew and defendant O’Hara sought and received several extensions of time while he attempted to retain counsel. In a belated submission to the Court on September 3, 2008, defendant O’Hara’s response to the motion for spoliation was simply: “Universal-Funding VTO, Inc. disagrees on ‘The Motion for Spoliation’[.] This never happened.”

Analyzing the issue of spoliation as to Universal’s website, the court noted that there “seemed to be no dispute” that the website was in existence when the plaintiff filed suit and that defendants were therefore required to maintain the website. According to the court, the only remaining issue was the question of control:

The only question is whether or not the website was under the control of Defendants. This Court sees no reason to treat websites differently than other electronic files. Where, as here, Defendants had control over the content posted on its website, then it follows a fortiori that it had the power to delete such content. Although Defendants do not so posit, it may be argued that the website was maintained by a third party, perhaps a web design company who posted content on behalf of Defendants. But this is irrelevant, just as it'd be irrelevant if the website was maintained on a third party server rather than Defendant's own server (as is likely the case here). Despite the inevitable presence of an intermediary when posting content on the Web, the Court finds that Defendants still had the ultimate authority, and thus control, to add, delete, or modify the website's content. There is no evidence to the contrary.

Accordingly, the court found that an adverse inference was warranted where the defendants failed to produce the relevant content from the website.

A copy of the full decision is available here.