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In This Issue:
 Recent ESI Court Decisions
Court Finds Backup Tapes Not Reasonably Accessible Due to Lack of Hardware
Palgut v. City of Colorado Springs, 2007 WL 4277564 (D.Colo. Dec. 3, 2007). In this suit, the plaintiff filed a motion to reconsider discovery rulings made by the magistrate judge and to compel responses to previous discovery requests and further discovery to prove unlawful spoliation of ESI. The court made several findings: the plaintiff's requests were overbroad and unduly burdensome (affirming a prior ruling); the defendant completed an adequate search for all relevant ESI and agreed to complete and pay for an additional search; according to Rule 34 of the FRCP, the plaintiff was no more entitled to the defendant's ESI than to a warehouse storing paper documents; and the defendant's backup tapes were not reasonably accessible due to the lack of hardware to access them and the cost of restoration, which outweighed any possible return of relevant information. Based on these findings, the court denied the plaintiff's motions and ordered each party to pay their own attorney fees.
Court Grants Default Judgment as Result of Defendants' Willful Spoliation
Columbia Pictures v. Bunnell, Case No. 2:06-cv-01093 FMC-JCx (C.D.Cal. Dec. 13, 2007). In this copyright infringement suit, the plaintiffs sought default judgment sanctions based on the defendants' spoliation of evidence. The plaintiffs claimed the defendants willfully spoliated evidence by deleting and modifying user forums to remove mention of copyrighted material, deleting directory headings, destroying full IP addresses previously kept on file and falsely claiming that identifying information of moderators was not available. The court set forth five factors to consider when deciding whether to enter default judgment: 1) expeditious resolution of litigation; 2) the court's docket management; 3) risk of prejudice; 4) public policy in deciding cases on their merits; and 5) the availability of lesser sanctions. The court found the defendants engaged in efforts to destroy evidence and provided false testimony under oath. Considering lesser sanctions, the court concluded the prejudice suffered was too great to overcome with an adverse jury instruction. The court also noted past monetary sanctions imposed upon the defendants were clearly ineffective and granted the motion for a default judgment in favor of the plaintiffs.
Court Strongly Advises Sincere Cooperation in Discovery Process
Kelly v. Montgomery Lynch & Assoc., 2007 WL 4412572 (N.D.Ohio Dec. 13, 2007). In this lawsuit, the plaintiff filed a motion to compel discovery necessary to support a motion for class certification. The defendant claimed the discovery request was unduly burdensome because the filing system was not maintained in a searchable format. Finding the defendant did not make a reasonable inquiry into the discovery request apart from claiming an undue burden, the court ordered the defendant to comply with the plaintiff's narrowly tailored discovery request. Additionally, the court strongly advised the parties to make a sincere attempt at cooperation in the discovery process. The court further warned the defendant that a failure to comply will result in the consideration of sanctions.
Court Denies Request for Adverse Jury Instruction and Default Judgment Based on Lack of a Showing of Relevance, but Awards Attorneys Fees
Toussie v. County of Suffolk, 2007 WL 4565160 (E.D.N.Y. Dec. 21, 2007). In this suit, the plaintiffs claimed the defendants violated their civil rights by blocking the sale of numerous parcels of real estate. During discovery, the plaintiffs claimed the defendants failed to conduct a diligent search for responsive e-mails based on the production of a mere two e-mails. The court agreed with the plaintiffs and refused to allow the defendant to, "throw up their hands and walk away," by claiming they do not restore e-mails. The court narrowed the scope of the e-mail search by custodian, time frame and keywords and ordered the defendant to prepare a search plan estimating the time and cost to perform the search. The defendant sought the help of a third party vendor, provided the court with an estimate and began the restoration process. Thereafter, the defendant produced over two thousand pages of responsive e-mails. The plaintiff again claimed the production was inadequate and sought spoliation sanctions based on the defendant's destruction of evidence, arguing that the destruction was caused by the failure to implement a litigation hold or to alter its document retention procedures after the filing of the lawsuit. While the court agreed that the defendant was under a duty to maintain e-mails and that they acted negligently when failing to implement a litigation hold, the court was not persuaded that the missing e-mails contained evidence that would have been favorable to the plaintiff. The court therefore refused to issue adverse jury instructions or issue a default judgment against the defendant, but instead ordered the defendant to pay the costs associated with the preparation and argument of the motions.
Court Denies Motion to Compel Based on Party's Failure to Make Good Faith Effort to Resolve the Issue Before Filing the Motion
Kellogg v. Nike, Inc., 2007 WL 4570871 (D.Neb. Dec. 26, 2007). In this patent infringement suit, the plaintiff filed a motion to compel, alleging the defendants' response to production requests was "slow and evasive" in regard to electronically stored information. The plaintiff also sought documents from a privilege log allegedly created prior to the defendants' knowledge of the impending litigation. In regard to the first issue, the plaintiff argued that the defendants failed to provide information regarding document retention and preservation policies. Subsequent to the filing of the motion, the plaintiff deposed a Rule 30(b)(6) witness regarding the defendants' document retention policy. At the time of the hearing, the plaintiff did not dispute he had all the information sought with regard to information document storing. As such, the court did not compel the defendants to supplement their discovery responses. Because of the plaintiff's failure to make a good faith effort to resolve the discovery issue and the defendants' willingness to produce the requested information, the court refused to impose sanctions. In regard to the privilege log, the plaintiffs argued that privilege did not apply as the documents were generated before the threat of litigation and the underlying facts are not privileged. The court disagreed with the plaintiffs in that the document creation date controlled the privilege analysis and held that the documents were protected by the attorney-client privilege and therefore not discoverable.
Court Denies Additional Discovery Based on Plaintiffs' "Hunch"
Hubbard v. Potter, 2008 WL 43867 (D.D.C. Jan. 3, 2008). In this suit, the plaintiffs claimed they were denied an interpreter at safety meetings, preventing them from safely and properly performing their duties. The defendant filed a motion to end pre-certification discovery, arguing the plaintiff had adequate time to complete discovery. The plaintiffs argued that the defendant's production was insufficient and incomplete. The court granted the defendant's motion and found that the plaintiffs failed to show that documents produced by the defendant permitted a reasonable deduction that other documents existed and refused to rely on the plaintiffs' mere "hunch" or "speculation". The plaintiffs also claimed additional discovery was warranted due to the defendant's labeling of responsive documents as non-responsive and failing to initially produce them. Based on this argument, the court ordered an evidentiary hearing to determine whether additional production may be warranted.
Court Sanctions Six Attorneys for "Monumental" Discovery Violations
Qualcomm Inc. v. Broadcom Corp., 2008 WL 66932 (S.D.Cal. Jan. 7, 2008). In this patent infringement litigation, the court found the plaintiffs to have committed "monumental and intentional" discovery violations for failing to produce thousands of documents requested in discovery. Several plaintiffs' attorneys were ordered to show cause as to why they should not be personally sanctioned. Finding an absence of good faith participation in the discovery process, the court upheld the sanction previously issued, ordering Qualcomm to pay the defendant's attorney's fees in excess of $8.5 million. Additionally, the court sanctioned six attorneys for intentionally hiding or recklessly ignoring relevant documents and blindly accepting Qualcomm's claims that the searches were adequate. The six attorneys were ordered to forward the sanction order to the California State Bar for review and consideration of possible further disciplinary actions due to violation of their ethical duties. Additionally, the attorneys were instructed to participate in a Case Review and Enforcement of Discovery Obligations (CREDO) program. The court believed participation in this program may deter future discovery misconduct by providing a "road map" to assist in understanding ethical obligations during the discovery process as well as establish a turning point for increased ethical conduct in the practice of law.
Court Orders Defendant to Respond Thoroughly to Interrogatories
Eckhardt v. Bank of America, 2008 WL 111219 (W.D.N.C. Jan. 9, 2008). In this wrongful termination suit based on alleged disability discrimination, the plaintiff filed a motion to compel responses to several interrogatories and document requests. The defendant objected to several of the plaintiff�'s requests claiming the requests did not lead to the production or discovery of relevant evidence. Disagreeing with the defendant, the court ordered the defendant to certify that a thorough search was conducted and outlining what responsive, but not readily accessible, documents might be retained in archive form or backup media.
To view additional case summaries visit: http://www.krollontrack.com/case-summaries/
Practice Points: Dissecting Qualcomm and Bunnell
Since September 2007, the legal community has been awaiting the decision of Magistrate Judge Barbara Major regarding possible attorney sanctions in the case of Qualcomm v. Broadcom, 2008 WL 66932 (S.D.Cal. Jan. 7, 2008). It appears the final chapter in this controversial and widely recognized discovery dispute was concluded on January 7, 2008, when Magistrate Judge Barbara Major issued a lengthy order setting forth sanctions for "monumental" discovery violations.
Analyzing the element of "good faith?", Judge Major explained that attorneys and clients must work diligently to keep the good faith discovery system successful in the electronic age. Unfortunately in this case, this delicate balance was upset, with a failure to produce 46,000 highly relevant e-mails in a production totaling approximately 1.2 million pages.
The sanctions imposed by the judge left some commentators confused and disappointed. The strong language against the actions of both Qualcomm and its attorneys led many to believe heavy sanctions were warranted. However, Qualcomm did not receive any further sanctions apart from the previous order to pay Broadcom's attorney fees. Major noted that a further monetary penalty was unnecessary as it was unlikely to alter Qualcomm's future conduct significantly more than the previously imposed $8.5 million sanction.
Six Qualcomm attorneys were sanctioned but none received monetary penalties. Instead, Judge Major instructed the attorneys to forward the order to the State Bar of California for a hearing. The attorneys were also ordered to attend and adequately participate in a Case Review and Enforcement of Discovery Obligations (CREDO) program. Judge Major opined that the attorneys' involvement with this program may lead to deterrence from this conduct in further cases and provide a "road map to assist counsel and corporate clients in complying with their ethical and discovery obligations in conducting a reasonable inquiry."
Qualcomm is not the only recent news-worthy case where sanctions were imposed as a result of discovery misconduct. In the case of Columbia Pictures v. Bunnell, No. 2:06-cv-01093 (C.D. Cal. Dec. 13, 2007),the court granted the plaintiffs' motion for default judgment and terminated the case in favor of the plaintiffs due to the defendant's willful spoliation of key evidence.
The court granted the default motion upon determining the plaintiffs suffered irreparable harm as a direct result of the defendants' discovery misconduct, which included willful destruction of user forum postings, directory headings referencing copyrighted works and user IP addresses. According to the court, an adverse jury instruction would not have alleviated the harm suffered and monetary sanctions had already proved ineffective against the defendants' continued spoliation of evidence. The defendants claim to be considering an appeal but many commentators believe their egregious discovery conduct will make a reversal highly unlikely. In essence, the defendants' willful destruction and withholding of evidence allowed the plaintiffs to win the case by default with little focus on the merits.
Both of these cases highlight the critical nature of rules compliance in electronic discovery. Judges are not willing to look the other way when one party destroys or covers up relevant electronic information. Attorneys are under an ethical duty to produce discoverable information that is relevant to all claims and defenses, whether or not the information is helpful to the case. Attorneys must consider all possible repercussions, including the loss of the case by default or being ordered to appear before an ethics committee.
News & Events
Independent Survey Shows Business Leaders Face Severe Risk From Lack of Ownership of ESI Policies
A recent independent study of 402 in-house counsel — 200 from the United States and the remainder from the United Kingdom — highlights the gap between those who set electronically stored information (ESI) policies and those who bear the responsibility for those policies. The survey reported that 41% of US companies give responsibility for developing the ESI policy to the in-house legal department even though 19% hold the CEO responsible for fines, court imposed sanctions or damage to reputation as a consequence of the ESI policy. This statistic shows that ESI preparedness is not only an IT or legal issue, it is also a business issue in which executives and boards need to be involved. For more information, please visit:
http://www.krollontrack.com/news-releases/
Kroll Ontrack Offers Redesigned Certification Course for 2008
The industry's legal technology thought leader has revamped its E-Discovery Certification Course for 2008 with updated topics, additional speakers, and dual track, customizable sessions to appeal to beginner, intermediate and advanced learners. The redesigned course curriculum is ideal for legal and technical professionals of all levels, including in-house counsel, law firm attorneys, litigation support professionals, paralegals and IT staff. For more information and to register for an upcoming course, visit: http://www.krollontrack.com/certification-courses/.
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This newsletter is written by Joni Shogren, a Kroll Ontrack staff attorney with assistance from Gina Jytyla, also a Kroll Ontrack staff attorney. Ms. Shogren can be contacted by writing to jshogren@krollontrack.com.
For more information about electronic discovery and computer forensics services, contact Kroll Ontrack at 800 347 6105 or visit http://www.krollontrack.com.
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