Archive: March 2017

1
Sanctions Imposed for Loss of ESI Transferred in Sale of Business
2
Privilege Waived as to Unprotected Information on File Share Site
3
Judge Peck Issues “Wake-up Call” Regarding Appropriate Responses to Discovery

Sanctions Imposed for Loss of ESI Transferred in Sale of Business

ILWU-PMA Welfare Plan Bd. of Trs. v. Connecticut Gen. Life. Ins. Co., No. C 15-02965 WHA, 2017 WL 345988 (N.D. Cal. Jan. 24, 2017)

In this case, ESI was lost when Defendant’s parent company sold another of its companies—on whose servers Defendant’s ESI was inexplicably stored—resulting in the transfer of that company’s servers and the ESI thereon to the third-party buyer. Concluding that Defendant failed to take reasonable steps to preserve the at-issue data, the court rejected Defendant’s argument that clauses in the sale agreement providing for “reasonable access to business information” including for “litigation purposes” and requiring the parties to retain information until the sixth anniversary of the agreement and not to destroy such information without notifying the other party were sufficient, particularly where despite such clauses, the information was not, in fact, available.  While the court concluded that additional information was required to proceed with a full Rule 37(e) analysis, it reopened discovery and ordered monetary sanctions to address the prejudice already established.

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Privilege Waived as to Unprotected Information on File Share Site

Harleysville Ins. Co. v. Holding Funeral Home, Inc., No. 1:15cv00057 (W.D. Va. Feb. 9, 2017)

In this case, the court found that the placement of privileged information on a file share site and dissemination of the hyperlink to access that information without additional protections (e.g, password protection) constituted a failure to take reasonable steps to protect the information and that the attorney-client privilege and work-product protections were waived.  Notably, however, because defense counsel accessed the information but failed to notify Plaintiff’s counsel of the possible production of privileged materials, they were ordered to pay Plaintiff’s fees and costs in bringing the motion to disqualify them, which was denied.

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Judge Peck Issues “Wake-up Call” Regarding Appropriate Responses to Discovery

Fischer v. Forrest, —F. Supp. 3d—, 2017 WL 773694 (S.D.N.Y. Feb. 28, 2017)

Judge Peck has “once again” issued a “discovery wake-up call,” this time regarding the effects of the 2015 amendments on the rules of discovery and in particular on Rule 34, addressing proper responses to requests for production. Specifically, the court noted that “one change that affects the daily work of every litigator is to Rule 34,” and instructed that “[m]ost lawyers who have not changed their ‘form file’ violate one or more (and often all three)” of the changes to the rule. Those changes require that “responses to discovery requests must”:

  • State grounds for objections with specificity;
  • An objection must state whether any responsive materials are being withheld on the basis of that objection; and
  • Specify the time for production and, if a rolling production, when production will begin and when it will be concluded.

In these related cases, the court concluded that Defendants’ responses to discovery violated the discovery rules, including by failing to comply with the requirements of Rule 34(b) and failing to recognize and appropriately respond to the amendments to Rule 26(b)(1).

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