Category: Case Summaries

1
Lack of “Meaningful” Communication with Opposing Counsel, Client Results in “Overly Complex” and Burdensome Agreement; Partial Costs Shifted
2
No Sanctions for Unintentional, Automatic Deletion of Web History and Related Information
3
TX Supreme Court Addresses Format of Production, Applies Proportionality
4
“Discovery can be burdensome even as it is inexpensive.”
5
“Applying TAR to the universe of electronic material before any keyword search reduces [it] is the preferred method.”
6
Court Concludes Data Is within Defendant’s Possession, Custody or Control, Declines to Shift Costs
7
U.S. Supreme Court Considers “Inherent Authority to Sanction a Litigant for Bad-faith Conduct” by Ordering Payment of Opponent’s “Legal Fees,” Reverses and Remands
8
Court Concludes Rule 37(e) Does Not Apply to “situations where, as here, a party intentionally deleted the recording”
9
Sanctions Imposed for Loss of ESI Transferred in Sale of Business
10
Privilege Waived as to Unprotected Information on File Share Site

Lack of “Meaningful” Communication with Opposing Counsel, Client Results in “Overly Complex” and Burdensome Agreement; Partial Costs Shifted

Bailey v. Brookdale Univ. Hosp. Med. Ctr., No. C 16-2195(ADS)(AKT), 2017 WL 2616957 (E.D.N.Y. June 16, 2017)

In this single-plaintiff employment litigation, Plaintiff claimed that the cost of production, equaling approximately $2,000-$3,000, was unduly burdensome in light of his personal financial situation, despite the existence of an ESI agreement between the parties, “so-ordered” by the court. Ultimately, the court concluded that although the data was not inaccessible, cost-shifting was appropriate because it appeared that the agreement proposed by the defendants was of a type “typically utilized in a more complex litigation involving multiple parties and corporate entities” and, more notably, because it appeared that Plaintiff’s counsel had not engaged in a “meaningful meet-and-confer session with opposing counsel concerning t[he] Agreement” or thoroughly reviewed the Agreement prior to signing it.  In addition to failing to properly confer with opposing counsel, the court concluded that “Plaintiff’s counsel did not engage in meaningful discussions with his client regarding the terms of the proposed agreement and what costs might be incurred . . . .”  Thus, absent any indication that Defendants would consider an alternative and less expensive form of production, the court ordered 40% of production costs shifted to Defendants and indicated that “fairness dictate[d]” that Plaintiff’s remaining costs “should be borne by Plaintiff’s counsel rather than Plaintiff himself.”

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No Sanctions for Unintentional, Automatic Deletion of Web History and Related Information

Eshelman v. Puma Biotech., Inc., No. 7:16-CV-18-D, 2017 WL 2483800 (E.D.N.C. June 7, 2017)

In this case, the court denied Plaintiff’s motion for an order permitting a jury instruction regarding Defendant’s failure to preserve web browser history and related information for persons responsible for the preparation of an allegedly defamatory presentation where Plaintiff failed to establish that the lost information could not be restored or replaced through additional discovery or that the failure to preserve was prejudicial or intentional.

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TX Supreme Court Addresses Format of Production, Applies Proportionality

In re State Farm Lloyds, Nos. 15-0903, 15-0905, 2017 WL 2323099 (Tex. Mar. 26, 2017)

Today, we elucidate the guiding principles informing the exercise of discretion over electronic-discovery disputes, emphasizing that proportionality is the polestar. In doing so, we further a guiding tenet of the Texas Rules of Civil Procedure: that litigants achieve a “just, fair, equitable and impartial adjudication . . . with as great expedition and dispatch and at the least expense . . . as may be practicable.”

In this dispute over the format of production, the Supreme Court of Texas took its opportunity to “(1) clarify that neither the requesting party nor the producing party has a unilateral right to specify the format of discovery under Rule 196.4 and (2) provide guidance regarding the application of Rule 192.4’s proportionality factors in the electronic-discovery context.” In so doing, the court denied the request for mandamus relief without prejudice “to allow the relator to seek reconsideration by the trial court in light of [the] opinion.”  The court summarized its conclusions as follows:

Under our discovery rules, neither party may dictate the form of electronic discovery. The requesting party must specify the desired form of production, but all discovery is subject to the proportionality overlay embedded in our discovery rules and inherent in the reasonableness standard to which our electronic-discovery rule is tethered. The taproot of this discovery dispute is whether production in native format is reasonable given the circumstances of this case. Reasonableness and its bedfellow, proportionality, require a case-by-case balancing of jurisprudential considerations, which is informed by factors the discovery rules identify as limiting the scope of discovery and geared toward the ultimate objective of “obtain[ing] a just, fair, equitable and impartial adjudication” for the litigants “with as great expedition and dispatch at the least expense … as may be practicable.” (Citations omitted.)

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“Discovery can be burdensome even as it is inexpensive.”

Gordon v. T.G.R. Logistics, Inc., No. 16-cv-00238-NDF, 2017 WL 1947537 (D. Wy. May 10, 2017)

In this personal injury case, Defendant requested production of Plaintiff’s entire “Facebook account history” for her two accounts (and later limited the relevant timeframe of the request to information from three years prior to the accident through the present). In response, Plaintiff produced information that referenced the at-issue auto accident or her injuries and also provided information identified by a set of keywords set forth by Defendant.  She objected to further production based on a lack of relevance, undue burden, and invasion of privacy.  The court granted Defendant’s subsequent motion to compel, but imposed significant limits on the scope of production.

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“Applying TAR to the universe of electronic material before any keyword search reduces [it] is the preferred method.”

FCA USA LLC v. Cummins, LLC, No. 16-12883 (E.D. Mich. Mar. 28, 2017)

In this case, the court was asked to rule on the parties’ dispute regarding “whether the universe of electronic material subject to TAR review should first be culled by the use of search terms.” The court, although expressly reluctant to get involved, concluded that it should not:

Be that as it may, having reviewed the letters and proposed orders together with some technical in-house assistance including a read of The Sedona Conference TAR Case Law Primer, 18 Sedona Con. J. __ (forthcoming 2017), the Court is satisfied that FCA has the better postion [sic]. Applying TAR to the universe of electronic material before any keyword search reduces the universe of electronic material is the preferred method. The TAR results can then be culled by the use of search terms or other methods.

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

Court Concludes Data Is within Defendant’s Possession, Custody or Control, Declines to Shift Costs

Williams v. Angie’s List, No. 1:16-00878-WTL-MJD, 2017 WL 1318419 (S.D. Ind. April 10, 2017)

Plaintiffs in this case—48 current and former employees of Defendant—alleged they were entitled to “substantial compensation” for hours worked without pay. Plaintiffs further alleged that Defendant’s computerized time records did not entirely reflect their hours worked because Defendant had instructed them to underreport their overtime hours and because many of those hours were worked from home.  Plaintiffs therefore sought production of “background data” automatically recorded while they were working on Defendant’s sales platform, Salesforce, in an effort to “close the gaps” in other records.  Defendant produced one year’s worth of the requested data, but refused to produce the additional two years sought by Plaintiffs arguing that the information was maintained by Salesforce, “a third-party provider of services,” and that Defendant had “no greater rights” to the data “than any other person.” Defendant also noted the $15,000 invoice it received from Salesforce related to the initial production, which it claimed supported its position that it did not have possession, custody or control of the information.  Ultimately, the court granted Plaintiffs’ motion to compel and denied Defendant’s motion to shift costs.

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U.S. Supreme Court Considers “Inherent Authority to Sanction a Litigant for Bad-faith Conduct” by Ordering Payment of Opponent’s “Legal Fees,” Reverses and Remands

Goodyear Tire & Rubber Co. v. Haeger, 581 U.S. ___ (2017)

In this rare opinion from our Supreme Court addressing discovery, the court considered “a federal court’s inherent authority to sanction a litigant for bad-faith conduct by ordering it to pay the other side’s legal fees.” The court held that “such an order is limited to the fees the innocent party incurred solely because of the misconduct—or put another way, to the fees that party would not have incurred but for the bad faith.” Because neither the trial court nor the appellate court applied the correct legal standard, the judgment of the Court of Appeals (9th Cir.) was reversed and the case remanded for further proceedings.

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Court Concludes Rule 37(e) Does Not Apply to “situations where, as here, a party intentionally deleted the recording”

Hsueh v. N.Y. State Dep’t of Fin. Servs., No. 15 Civ. 3401 (PAC), 2017 WL 1194706 (S.D.N.Y. Mar. 31, 2017)

In this case arising from claims of sexual harassment at work, the court found that an adverse inference was the appropriate remedy for Plaintiff’s deletion of a recorded conversation with an HR representative. In the course of its analysis, the court agreed with Defendants that “Rule 37(e) applies only to situations where ‘a party failed to take reasonable steps to preserve’ ESI; not to situations where, as here, a party intentionally deleted the recording” and thus relied upon inherent authority to impose sanctions.

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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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