In This Issue:

	RECENT E-DISCOVERY AND COMPUTER FORENSIC COURT DECISIONS
	PRACTICE POINTS: MAKING THE MOST OF THE MEET & CONFER
	NEWS & EVENTS

RECENT E-DISCOVERY AND COMPUTER FORENSIC COURT DECISIONS

Court Sets Forth Detailed E-Discovery Case Management Order
In re Seroquel Prods. Liab. Litig., 2007 WL 219989 (M.D. Fla. Jan. 26, 2007). In a multi-district litigation matter, the court issued a discovery order addressing several issues related to electronically stored documents. First, the court set forth the party's document collection and production obligations and ordered that all documents be produced in a TIFF format and have Bates numbering. Additionally, specific metadata fields for the documents were to be produced if practicable to the parties. The court also addressed costs and held that each party shall bear its own costs for the production of accessible data. Inaccessible data and data contained in databases were only to be produced after consultation between the parties.

Faulty Litigation Hold Results in Sanctions
In re NTL, Inc. Sec. Litig., 2007 WL 241344 (S.D.N.Y. Jan. 30, 2007).  In a class action claim involving federal securities law violations, the plaintiffs moved for sanctions against the defendant, alleging that the defendant deliberately destroyed and allowed spoliation of e-mails and other electronically stored information. The defendant’s company fell into bankruptcy before this suit and emerged from bankruptcy with two distinct subsidiaries conducting business on behalf of the defendant. Many electronically stored documents and e-mails were lost or destroyed when the company split and emerged as two new companies. The plaintiff argued one of the new entities had a duty to preserve and produce e-mails created and saved during the previous company’s existence.  The defendant argued it had no duty to preserve the information because the possibility of litigation could not have been foreseen prior to the bankruptcy of its parent company. It further argued it had no responsibility to preserve any of its electronic documents sent from the parent company prior to the current suit. The court concluded the defendant’s duty to preserve started when litigation was foreseen by the former company even though most of the documents and ESI ended up in the physical possession of the new companies. The court found the defendant’s failure to preserve relevant documents and ESI was grossly negligent and it reasonably should have known to preserve all documents from the parent company and issue a proper litigation hold spanning across the old company and the new companies. The court granted the motion for an adverse inference instruction and ordered the defendant to pay attorneys’ fees and costs. 

Court Refuses to Require Plaintiff to Re-produce Documents Natively but Recommends All Subsequent Productions be in Native Form
In re Payment Card Interchange Fee and Merchant Discount Antitrust Litig., 2007 WL 121426 (E.D.N.Y. Jan. 12, 2007). In this class action, the defendants brought a motion to compel native production of documents from the plaintiffs. During discovery, the plaintiffs made at least six productions where electronic documents were printed to paper and then scanned and converted into searchable TIFF images using optical character recognition software. This laborious process stripped all metadata references from the original files. The defendants filed a motion to compel the plaintiff to re-produce these documents natively and asked the court to order all subsequent production of electronic documents in a native format. The plaintiffs opposed the motion to compel, stating they already produced the requested documents and to produce the documents again in a native format would be burdensome and costly. The court determined the newly amended Federal Rules would apply to the parties; however, to require the plaintiffs to reproduce discovery already in possession of the defendants would place a substantial and costly burden on the plaintiffs. Yet, the court also ruled the plaintiffs are on notice of the defendants' request for native files and stated any subsequent discovery should be produced in a native format.

Failure to Produce "Smoking Gun" Documents Warrants Default Judgment
Qantum Comm. Corp. v. Star Broad., Inc., 2007 WL 445307 (S.D. Fla. Feb. 9, 2007). The plaintiff brought an action against the sellers of a radio station, alleging breach of the purchase agreement and seeking specific performance. The plaintiff filed a motion for sanctions and default judgment based on the defendant's failure to produce key "smoking-gun" documents during discovery. Specifically, the plaintiff noted an instance where the defendant produced an e-mail without the corresponding attachment. The defendant stated in deposition testimony that the attachment was withheld because it was not relevant to the suit. The plaintiff obtained the "smoking gun" e-mail and attachment, which directly contradicted the defendant's testimony, from a third-party. The defendant argued it did not delete e-mail in bad faith but rather as part of an ongoing business practice to purge e-mail due to the limited amount of computer storage space. Furthermore, the defendant claimed that he did not have the e-mail and attachment prior to his deposition to refresh his memory and all testimony was given to the best of his un-refreshed memory. The court ordered monetary sanctions and default judgment against the defendant because of the discovery misconduct and other bad faith actions. The court held the withheld e-mails prejudiced the plaintiff since it "hampered the ability of plaintiff to present its claim on the central issue of this case." A later hearing was scheduled to determine the amount of costs and specific performance damages.

Magistrate Judge Rules Sanctions Not Warranted for Failure to Produce Native Format Documents
Williams v. Sprint/United Mgmt. Co., No. 03-2200 (D. Kan. Jan. 23, 2007). On remand from the district court judge, the magistrate issued an order explaining his reasons for denying sanctions against the defendant for failure to produce documents in their native format.  In this employment discrimination claim, the plaintiffs filed a motion for sanctions against the defendant for failure to produce several spreadsheets which were originally produced in hard copy. The plaintiffs argued the Federal Rules of Civil Procedure compelled the defendant to produce documents in their native format despite an earlier agreement between the parties stating the parties could produce documents in a non-native TIFF format. The defendant argued they attempted, in good faith, to produce the spreadsheets in a native format as quickly as possible and did not delay production of the documents in order to gain a tactical advantage. The magistrate judge agreed with the defendant and held there was no evidence of bad faith on part of the defendant because it gave reasonable explanations as to any delay and impossibility of producing native format documents.  Further, the court found that the unique circumstances of the discovery disputes demonstrate there was no bad faith.  The court also held any duplicative production of documents occurred only as a result of the plaintiffs’ multiple discovery requests and not as an intentional tactic by the defendant used to confuse or frustrate the plaintiffs.  

Other new case summaries added to the Ontrack Discovery Case Law List this month:

• Court Orders Deposition of Computer Forensic Expert -
  Roberts v. Canadian Pacific R.R. Ltd., 2007 WL 118901 (D. Minn. Jan. 11, 2007).
• Defendant’s Request to Image Personal Hard Drive Denied by Court; Seen as “Fishing Expedition” -
  Hedenburg v. Aramark Am. Food Services, 2007 WL 162716 (W.D. Wash. Jan. 17, 2007).
• Court Needs More Information to Rule on Production of E-mail -
  Apsley v. Boeing Co., 2007 WL 163201 (D. Kan. Jan. 18, 2007).
• Court Denies Overly Broad Request for Production of Hard Drives -
  Balfour Beatty Rail, Inc. v. Vaccarello, 2007 WL 169628 (M.D. Fla. Jan. 18, 2007).
• Court Orders Production of Business and Personal Hard Drives -
  Frees, Inc. v. McMillian, 2007 WL 184889 (W.D. La. Jan. 22, 2007). 
• Party Does Not Have Duty to Preserve Images Found in E-mail Hyperlink -
  Phillips v. Netblue, Inc., 2007 WL 174459 (N.D. Cal. Jan. 22, 2007).
• Court Rules Production of Hard Drive Not a “Fishing Expedition” -
  G.D. v. Monarch Plastic Surgery, P.A., 2007 WL 201154 (D. Kan. Jan. 24, 2007).
• Court Orders Specific Computer Imaging and Examination Procedures -
  Cenveo Corp. v. Slater, 2007 WL 442387 (E.D. Pa. Jan. 31, 2007).
• Additional Production of Electronic Data Denied by Court Where Party Could Not Show that the Benefit Outweighed Burden -
  Self v. Equilon Enter., 2007 WL 427964 (E.D. Mo. Feb. 2, 2007).
• Court Compels Production of E-mail Between Attorney and Client -
  Bitler Investment Venture II, LLC v. Marathon Ashland Petro., LLC, 2007 WL 465444 (N.D. Ind. Feb. 7, 2007).
• Court Orders Plaintiff to Produce His Hard Drive for Inspection by Defendant -
  Thielen v. Buongiorno USA, Inc., 2007 WL 465680 (W.D. Mich. Feb. 8, 2007).
• No Sanctions for Lost Hard Drives and Destroyed Backup Tapes -
  Floeter v. City of Orlando, 2007 WL 486633 (M.D. Fla. Feb. 9, 2007).
• Judge Transfers Electronic Discovery Production Dispute to Presiding Judge -
  Stanziale v. Pepper Hamilton LLP, 2007 WL 473703 (S.D.N.Y. Feb. 9, 2007).

To view additional case summaries visit www.krollontrack.com/case-summaries/

PRACTICE POINTS: MAKING THE MOST OF THE MEET & CONFER

The adoption of the new Federal Rules of Civil Procedure (FRCP) on December 1st, 2006, makes electronic discovery a reality for all practitioners. Perhaps the most critical provision is the amendment to Rule 26(f), which now requires early conversations about Electronically Stored Information (ESI). These "early case assessment" requirements establish a timeframe for discussing ESI issues early on in the case and outline a high-level checklist of matters to be discussed, optimistically leaving room for the parties to collaboratively work out the details of their discovery plan.

As a modern lawyer, are you up to speed on the new FRCP rules so you can confidently implement these changes? Listed below are issues that counsel should be prepared to address during the meet and confer to ensure a productive and worthwhile dialog. Further, counsel should not only request this information from opposing counsel, but also gather this information relating to their own client's ESI.

• Preservation of ESI - One of the most important issues at the meet and confer should be whether relevant ESI has been and is continuing to be properly preserved for litigation. They should discuss whether litigation hold policies were implemented at the time counsel reasonably expected litigation to occur and if there are any data destruction protocols written into the computer systems and whether they have been stopped.

• Scope and Timing of Discovery - At the meet and confer, parties should begin thinking about locating, retrieving, and producing ESI. What type of computer devices may contain ESI? What file types and time range are being sought? Who are the main data custodians? What will be the timing for exchanging discoverable ESI?

• Data Accessibility - Attorneys should familiarize themselves with their client's and opponent's computer systems and storage locations to ensure that they are able to make educated decisions about data accessibility. A discussion of whether discovery will extend into inaccessible data — backup tapes, deleted records, or archived records — should be considered here.

• Privileged or Confidential Documents - There is a high possibility that privileged or confidential information may be inadvertently produced during e-discovery.  Counsel should be prepared to discuss waivers, “clawback agreements” or “quick peek” agreements. Additionally, protective orders or confidentiality agreements may be a viable option.

• Production Format - Another important issue associated with e-discovery is production format. Parties must consider how and in what format responsive documents will be exchanged in discovery. 

• Costs - Cost allocation may become an issue of contention between parties if large amounts of ESI are going to be produced. Parties may agree to share the costs or simply bear the costs of their own production.

Back To Top

NEWS & EVENTS

Attention Ontrack® Inview™ Users!
We are pleased to introduce a new quarterly newsletter for Ontrack Inview users. Ontrack Inview User News is a free e-mail newsletter dedicated to keeping the Ontrack Inview user community in touch with online review innovation and developments. Subscribers can expect useful technical tips, examples of how other customers are using Ontrack Inview, product news, and company announcements. The newsletter is a valuable resource for Ontrack Inview administrators and reviewers who want to be more productive when conducting document review or gathering data for production. Click here now to subscribe: www.krollontrack.com/newsletter-center/

Meet our representatives at the following events:

Visit www.krollontrack.com/upcoming-events for more information on these events and others.

Back To Top

WE REQUEST YOUR INPUT

This newsletter is written by Michele C.S. Lange, Ontrack Discovery staff attorney with Kroll. Ms. Lange has published numerous articles and speaks regularly on the topics of electronic discovery, computer forensics, and technology’s role in the law. She can be contacted by writing to mlange@krollontrack.com.

For more information about electronic discovery and computer forensics services, please call 800 347 6105 or www.krollontrack.com.