Category: Case Summaries

1
Judge Peck Issues “Wake-up Call” Regarding Appropriate Responses to Discovery
2
Court Grants Motion to Compel Reproduction in Requested Format
3
“Troubling” Activity with No Proof of Spoliation Insufficient to Warrant Sanctions
4
Despite Failure to Employ “Best Practices,” Lack of Sufficient Prejudice Results in Lesser Sanctions
5
Citing Misconduct “As Deep as it is Wide,” Court Imposes Sanctions on Defendants and Counsel
6
Citing “Diminishing Returns,” Court Declines to Compel Additional Discovery
7
Sanctions Imposed for Failure to Preserve Call Recordings
8
“Close” Question of Intentional Spoliation Sent to the Jury
9
Court Finds Foreign Discovery “Marginally Relevant” and “Not Proportional,” Declines to Compel Search
10
Despite Intentional Spoliation, $25 Million Verdict Stands

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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Court Grants Motion to Compel Reproduction in Requested Format

Morgan Hill Concerned Parents Assoc. v. California Dept. Educ., No. 2:11-cv-3471 KJM AC, 2017 WL 445722 (E.D. Cal. Feb. 2, 2017)

In this case, the court granted Plaintiffs’ motion to compel production in native format with metadata, including the reproduction of information already produced, where Defendant failed to follow the protocol set forth in Fed. R. Civ. P. 34(b) and unilaterally produced in “’load file’ format.”

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“Troubling” Activity with No Proof of Spoliation Insufficient to Warrant Sanctions

HCC Ins. Holdings, Inc. v. Flowers, No. 1:15-cv-3262-WSD, 2017 WL 393732 (N.D. Ga. Jan. 30, 2017)

In this case, the court declined to impose spoliation sanctions, despite Defendant and her husband’s “troubling” behavior, where Plaintiff failed to “present evidence to cast significant doubt” on the explanations for the at-issue behavior and failed to establish that the at-issue information—namely Plaintiff’s trade secrets and confidential information—had ever been “resident” on Defendant’s personal computer or otherwise in her control.

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Despite Failure to Employ “Best Practices,” Lack of Sufficient Prejudice Results in Lesser Sanctions

F.T.C. v. DirecTV, Inc., Case No. 15-cv-01129-HSG (MEJ), 2016 WL 7386133 (N.D. Cal. Dec. 21, 2016)

In this case, the Court addressed Plaintiff’s motion for sanctions under Fed. R. Civ. P. 37(e)(1) but, despite acknowledging that Defendant “could have been more forthcoming in its disclosures to the FTC, and/or more proactive in its preservation efforts,” declined to grant the request to exclude evidence, including Defendant’s expert’s report, absent a showing  of sufficient prejudice.  Instead, the Court ordered Defendant to make its expert available for a 4-hour deposition, should Plaintiff find it useful.

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Citing Misconduct “As Deep as it is Wide,” Court Imposes Sanctions on Defendants and Counsel

Arrowhead Capital Fin., Ltd. v. Seven Arts Entm’t, Inc., No. 14 Civ. 6512 (KPF), 2016 WL 4991623 (S.D.N.Y. Sept. 16, 2016)

For Defendants’ egregious discovery conduct, including obstructing depositions and failing to preserve and produce relevant documents, among other things, the Court imposed sanctions, including precluding them from litigating the issue of personal jurisdiction; imposing a “spoliation instruction, as appropriate, on any claims that are ultimately submitted to the jury”; ordering payment of Plaintiff’s attorneys fees related to the misconduct; and ordering the retention of a second outside counsel to review their files for additional discoverable materials and to represent them in future discovery-related proceedings.  Defendants’ manager and sometimes CEO was also found in contempt for his behavior throughout discovery, including attempting to minimize his own responsibility for the discovery deficiencies by claiming limited involvement and blaming others.  Finally, for acting in bad faith in a manner that improperly lengthened the proceedings and for making objections in bad faith, the Court also imposed “modest” sanctions against defense counsel.

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Citing “Diminishing Returns,” Court Declines to Compel Additional Discovery

Armstrong Pump, Inc. v. Hartman, No. 10-CV-446S, 2016 WL 7208753 (W.D.N.Y. Dec. 13, 2016)

“Implicit in both the language and the spirit of the 2015 Amendments is the obligation, at any stage of a case, to prevent parties from expending increasing time and energy pursuing diminishing returns.”

In this case, despite having viewed all of the at-issue documents and printing “approximately half of the total pages” (albeit under strict protocols), Plaintiff sought to compel “formal production” of all of the documents pursuant to the parties’ protective order, arguing that the documents did not contain “actual programming.” Defendant argued that the documents were “functionally equivalent to source code” and should not be subject to production.  Ultimately, the Court reasoned that discovery had “reached the point of diminishing returns” and declined to compel production, with limited exceptions.

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Sanctions Imposed for Failure to Preserve Call Recordings

Sec. Alarm Fin. Enters., L.P. v. Alarm Protection Tech., LLC, No. 3:13-cv-00102-SLG, 2016 WL 7115911 (D. Alaska Dec. 6, 2016)

In this case, Plaintiff was sanctioned pursuant to Rule 37(e), as amended on December 1, 2015, for its failure to preserve relevant customer call recordings.

Plaintiff alleged that Defendant had “illegally ‘poached’” its customers and defamed the plaintiff. Defendant, in turn, alleged tortious interference with its contractual relationships and defamation by the plaintiff.  In the course of discovery, Plaintiff produced approximately 150 customer call recordings (out of “thousands”) that were “generally favorable” to it but, when asked, was unable to produce any others and claimed that the recordings were lost, apparently as the result of the “normal operation of a data retention policy.”  Defendant sought sanctions pursuant to amended Rule 37(e).

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“Close” Question of Intentional Spoliation Sent to the Jury

Cahill v. Dart, No. 13-cv-361, 2016 WL 7034139 (N.D. Ill. Dec. 2, 2016)

Following Plaintiff’s arrest for driving on a suspended license, an officer claimed he observed Plaintiff dropping a small package of cocaine while at a “County lockup” and charged him with felony possession.  Although defense counsel acted quickly to ensure preservation of surveillance video that Plaintiff believed would prove his innocence (because he claimed that he did not drop the package), only a portion of the video—which began after the package was on the floor—was available. After the charges were eventually dismissed, Plaintiff brought the present lawsuit and moved for sanctions.  The magistrate judge found that the failure to preserve was grossly negligent and caused substantial prejudice and recommended that Defendants be barred from making arguments or presenting evidence that the lost portion of the tape showed Plaintiff dropping the cocaine, but would allow testimony from one officer that he saw it happen.  Plaintiff objected.  Thereafter, the District Court adopted the recommendations of the magistrate judge, with modifications, concluding that the jury should be informed that the video was missing because of Defendants’ failure to fulfill their duty to preserve.  The court also ordered that Plaintiff would be allowed to argue that the destruction was intentional and that the jury would be instructed that IF they agreed, they must presume that the lost evidence was unfavorable to the defendants.

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Court Finds Foreign Discovery “Marginally Relevant” and “Not Proportional,” Declines to Compel Search

In re Bard IVC Filters Prod. Liab. Litig., —F.R.D.—, 2016 WL 4943393 (D. Ariz. Sept. 16, 2016)

In this case, the parties disagreed on the discoverability of communications between Defendants’ foreign subsidiaries and divisions and foreign regulators regarding the filters at issue in the case.  Following analysis of the effects of the December 1, 2015 amendments on Fed. R. Civ. P. 26(b)(1) and of the specific facts of the case, US District Court Judge David Campbell—Chair of the Committee on Rules of Practice and Procedure—determined that the at-issue communications were “only marginally relevant” and was persuaded that “the burden of [the] foreign discovery would be substantial.”  Thus, the court concluded that Defendants were not required to search their foreign entities for communications with foreign regulators.

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Despite Intentional Spoliation, $25 Million Verdict Stands

BMG Rights Mgmt. LLC v. Cox Commc’ns, Inc., —F. Supp. 3d—, 2016 WL 4224964 (E.D. Va. Aug. 8, 2016)

In this copyright infringement case, Plaintiff was found to have intentionally spoliated material evidence, resulting in sanctions. Specifically, Defendant was allowed to address the issue of spoliation in its opening statement and the jury was instructed that it may, but was not required to, consider “the absence” of earlier versions of source code relied upon by Plaintiff’s agent to identify and provide notice of infringement by Defendant’s customers.  Despite the sanctions, Plaintiff was awarded $25 million upon the jury’s determination that Defendant—a conduit internet service provider—was liable for willful contributory infringement of Plaintiff’s copyrighted musical works.  In a motion for a new trial, Defendant argued, among other things, that the sanctions were insufficient.  The district judge rejected that argument (and others), denied the motion, and entered final judgement in accordance with the verdict.

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