 |
Kroll Ontrack's Newly Redesigned Web Site
Visit www.krollontrack.com where you can now navigate better, faster and more efficiently to get the information you need. Our new resource library www.krollontrack.com/resources/ is one click away
and includes case law summaries, publications, state e-discovery rules and statutes, additional newsletters and podcasts. Upcoming events and event materials are also available at: www.krollontrack.com/events/
In This Issue:
 Recent ESI Court Decisions
Court Refuses to Impose Sanctions Based on Lack of Evidence of Relevancy
Pandora Jewelry, LLC v. Chamilia, LLC, 2008 WL 4533902 (D.Md. Sept. 30, 2008). In this dispute alleging multiple violations of the Lanham Act, the plaintiff sought sanctions, asserting the defendant engaged in discovery abuses and spoliation. The defendant claimed they were unable to provide the communications at issue, possibly due to their e-mail retention policy, but claimed that any such information was irrelevant. The defendant also argued the plaintiff was unable to establish the elements of their claims and sought summary judgment. The court agreed with the defendant and granted its motion for summary judgment, but also found the defendant abused the discovery process by failing to timely or fully respond to the plaintiff's production request and deposition notice. Unwilling to ignore the defendant's "stonewalling" of the discovery process, the court imposed monetary sanctions by awarding the plaintiff reasonable costs associated with bringing the motion at issue. However, the court was unwilling to impose spoliation sanctions as the plaintiff was unable to offer concrete proof that any lost information would have been relevant or supported its claims.
Court Upholds Order to Produce "Broken" Computers Despite Untimely Claims of Privilege
Law Office of Douglas T. Harris, Esq. v. Philadelphia Waterfront Partners, LP, 2008 WL 4291319 (Pa.Super. Sept. 22, 2008). In this breach of contract case, inter alia, the defendants appealed the trial court's order requiring the production of two of the defendants' "broken" computers. The defendants argued against production, claiming the computers may contain privileged documents. In response, the plaintiffs argued the defendants previously agreed to produce the computers at trial. Disagreeing with the defendants, the court held the privilege was waived as a result of the defendants' prior agreement to produce the computers.
Court Orders Reproduction of Documents in Electronically Searchable Form
Goodbys Creek, LLC v. Arch Ins. Co., 2008 WL 4279693 (M.D.Fla. Sept. 15, 2008). In this breach of contract litigation, the plaintiff sought production of documents that it alleged were relevant to prove its claim that the defendant violated its duty of good faith and fair dealing (the defendant was the surety for the party that previously entered into a contract with the plaintiff). The plaintiff requested: all documents and electronic documents that reflect all communications between the defendant and the third party; documents that reflect the defendant's knowledge of the third party's insolvency and inability to perform; and reproduction of documents in their native form that were previously produced in a TIFF format. The court denied the first request as overbroad, but granted the second request, finding the sought-after information to be relevant. Despite the plaintiff's failure to specify a production format, the court determined the defendant did not comply with the Advisory Committee Note to Fed.R.Civ.P. 34 when it chose to produce TIFF images. The court ordered the defendant to reproduce documents in either their native format, another comparably searchable format or to supply the plaintiff with software for searching the TIFF images.
Court Imposes Adverse Inference Sanction Based on Culpable Evidence Destruction
Babaev v. Grossman, 2008 WL 4185703 (E.D.N.Y. Sept. 8, 2008). In this litigation alleging fraudulent inducement of investments, the plaintiffs sought sanctions claiming the defendants engaged in spoliation of evidence and failed to produce other documents. The defendants argued that some documents were inadvertently corrupted and could not be produced, a "lost" computer was permissibly discarded as unusable prior to the anticipation of litigation and that bank records were not in their control. Dismissing the defendants' arguments, the court determined the relevant computer evidence should have been preserved and was destroyed with a culpable state of mind. The court also held that the defendants possessed sufficient control over their bank records to produce them. For these reasons, the court imposed an adverse inference and awarded the plaintiffs $5,000 in costs and fees.
Court Declines to Impose Default Judgment Sanction Citing Insufficient Degree of Prejudice
Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 (N.D.Cal. Sept. 2, 2008). In this securities class action, the plaintiffs sought a default judgment or, alternatively, an adverse inference sanction. To support the motion, plaintiffs alleged the defendants: engaged in inadequate preservation efforts after receiving notice of the litigation; failed to preserve backup tapes; and failed to preserve transcripts and audio files. Declining to issue default judgment, the court found that the plaintiffs had not demonstrated the degree of prejudice necessary to warrant such sanctions, noting that the alleged misconduct did not "eclipse entirely the possibility of a just result." However, the court issued an adverse inference regarding the failure to preserve and produce e-mails from one of the defendant's files, noting this failure raised questions of authenticity and uncertainty.
Court Finds Party's Preservation Failures and Concealment of E-Mails Sanctionable
Metrokane, Inc. v. Built NY, Inc., 2008 WL 4185865 (S.D.N.Y. Sept. 3, 2008). In this litigation surrounding various intellectual property rights, the defendant sought sanctions claiming the plaintiff failed to produce e-mails the defendant considered highly damaging to the plaintiff. The defendant further argued that the belated discovery hampered its ability to pursue otherwise crucial discovery related to the communications. Opposing the motion, the plaintiff vaguely asserted that the defendant failed to demonstrate any misconduct or prejudice. Additionally, the defendant pointed to its lack of an established written document retention policy, leaving the court to infer that their argument was the e-mails were no longer in its system. Unimpressed with the plaintiff's assertions, the court found the plaintiff was, at the minimum, negligent in failing to preserve and produce the e-mails. In addition, the court found the plaintiff's failure to turn over a specific portion of the e-mails to be intentional concealment. Accordingly, the court ordered an adverse jury instruction and awarded attorneys' fees incurred in bringing this motion.
Court Finds Production of Text Message Transcripts Violates Stored Communications Act and the Fourth Amendment
Quon v. Arch Wireless Operating Co., Inc., 529 F.3d 892 (9th Cir. 2008). In this case, the plaintiffs appealed the district court's ruling, claiming the defendants violated the Stored Communications Act ("SCA") and their Fourth Amendment rights by producing plaintiff's text messages to the police department. The police department claimed it sought the plaintiffs' text message transcripts to determine if the usage overages the plaintiffs incurred were due to personal messages. Categorizing the defendant service provider as an "electronic communication service" (ECS) that knowingly provided transcripts of the text messages to the defendant City who was merely a "subscriber" and not "an addressee or intended recipient of such communication," the court determined the defendant violated the SCA and remanded the case to the district court. The court also agreed with the plaintiffs that the search violated the Fourth Amendment, finding that the plaintiffs had a reasonable expectation of privacy in the text messages stored on the service provider's network and that the search was conducted unreasonably and intrusively.
Court Orders Parties to Provide Supplemental Briefs Before Considering Sanctions
Dong Ah Tire & Rubber Co., Ltd. v. Glasforms, Inc., 2008 WL 4298331 (N.D.Cal. Sept. 19, 2008). In this sales contract litigation, the defendant/third-party plaintiff moved for adverse inference and monetary sanctions, claiming the third-party defendant intentionally destroyed and refused to produce relevant documents. The third-party defendant argued sanctions were inappropriate, arguing no duty to preserve existed as litigation was not anticipated prior to the date the suit was filed. Additionally, the third party defendant claimed that any document destruction occurred in accordance with the established document destruction policy. Frustrated with the lack of information on record, the court ordered the parties to file supplemental briefs addressing several specific issues, including: what evidence was destroyed, when it was destroyed, when litigation could have been reasonably anticipated and why the document destruction policy was not followed.
Court Declines to Waive Privilege for Untimely Production of Privilege Log
Cartwright v. Viking Indus., Inc., 2008 WL 4283614 (E.D.Cal. Sept. 11, 2008). In this products liability class action, the plaintiffs filed a motion to compel production of defendants' privilege log identifying withheld documents, and the defendants' moved for a protective order. The plaintiffs argued the defendants' failure to provide a privilege log should result in a waiver of privilege. The defendants countered that production requests should be narrowly construed to not seek privileged information, and that any such production would be unduly burdensome. Disagreeing with the defendants' undue burden argument, the court ordered production of the privilege log. However, the court did not believe a waiver of privilege was appropriate, noting the delay was excusable due to a mutual misunderstanding.
Court Denies Sanctions Due to Party's Inability to Establish Relevancy
Wong v. Thomas, 2008 WL 4224923 (D.N.J. Sept. 10, 2008). In this wrongful termination litigation, the plaintiff sought sanctions for spoliation of evidence. Previously, the plaintiff sought all e-mail communications between the plaintiff and the defendants and claimed such information was integral to her ability to corroborate and establish her claims. The defendants claimed all electronic documents were destroyed as part of its routine practice of closing e-mail accounts and deleting files from the office computers of departing employees. The defendant then employed outside vendors to recover the sought after e-mail. After reviewing eighteen boxes of recovered e-mail, the defendant was unable to find any information relevant to the present litigation. The court found the defendants acted in good faith in their recovery and review efforts, but still considered whether sanctions were appropriate. Finding plaintiff's vague request for e-mails as a failure to identify the possible information contained therein, the court determined that the plaintiff did not demonstrate the relevancy and denied the plaintiff's motion.
Court Orders Production of Index to Explain How Documents Were Ordinarily Maintained
Pass & Seymour, Inc. v. Hubbell Inc., 2008 WL 4240490 (N.D.N.Y. Sept. 12, 2008). In this patent infringement litigation, the defendant moved to compel the plaintiff to organize its production of electronic documents and explain which documents corresponded to each document request. (The plaintiff previously produced 405,367 pages of electronic documents in response to seventy-two separate document requests.) The plaintiff argued the documents were produced as they were maintained in the ordinary course of business under Fed.R.Civ.P. 34(b)(2), and that further organization and an index of the materials was not required. The court determined that the plaintiff neither demonstrated that the documents were produced as they are ordinarily maintained, nor provided information regarding how they are ordinarily kept. However, the court nonetheless determined it would be unfair and unduly onerous to require the plaintiff to organize the documents to correspond to the defendant's numerous document requests. The court therefore ordered the plaintiff to produce an index of the produced documents, including a description of the filing system under which each document was ordinarily maintained, and an indication of whether the documents were hard copy, digital or both.
Court Denies Relief to Party Who Ignored Opportunity to Narrow Search
Kipperman v. Onex Corp., 2008 WL 4372005 (N.D.Ga. Sept. 19, 2008). In this litigation, the defendants sought relief from having to review and produce all results from an e-mail search on the defendants' backup tapes, arguing that the broad search terms resulted in thousands of irrelevant hits. The defendant asked to be excused from producing (1) irrelevant documents, (2) documents responsive to one specific transaction and (3) documents captured from the e-mail boxes of one specific subsidiary company. Finding the documents referred to in the second and third objections were "highly unlikely" to garner relevant information, the court granted the requested relief. Regarding the defendants' relevancy and volume objections, the court noted the defendants previously had the opportunity to narrow the search terms and provide a list of people that could help reduce the number of e-mail boxes searched, which they did not take advantage of. The court therefore refused relief stating the "defendants must now lie in the bed that they have made."
Court Declines to Impose Sanctions Citing Lack of Bad Faith and Unfair Prejudice
In re Riverside Healthcare, Inc. v. Sysco Food Serv. of San Antonio, LP, 393 B.R. 422 (M.D.La. Sept. 11, 2008). In this bankruptcy case, the plaintiff sought an adverse inference instruction based on the defendant's deletion of relevant e-mail from its servers. Stating that bad faith must be demonstrated to support an adverse inference, the court held that the plaintiff did not prove that the defendant intentionally deleted any e-mail since it was deleted in accordance with the defendant's routine practice prior to litigation. The court also noted that the plaintiff's failure to pursue this evidence from other potentially available sources undermined its claim of unfair prejudice and the demand for sanctions. Accordingly, the court denied the plaintiff's motion.
To view additional case summaries visit www.krollontrack.com/case-summaries/.
Practice Points: Social Networking Web Sites — A Growing Source of ESI
Social networking web sites, tools to foster social and professional interactions, have become extremely popular among people of every generation, making social networking web sites fertile ground for investigators. On these web sites, users may post photos, add comments, save files and report on their lives, often without considering the evidence they may be creating. Today's investigators visit social networking web sites as a matter of course when investigating an individual, whether the investigation relates to a potential employment opportunity, an college admission application, or even claims of an alleged crime.
Social Networking Popularity. Social networking web sites include popular services which target participants for a specific purpose, whether it be professional networking (such as LinkedIn) or purely social pursuits (such as Facebook and MySpace). There are also a variety of less popular services, many of which may focus on a hobby, shared experience or mutual interest. For example, www.ExperienceProject.com provides a place for people to share their experiences, providing an outlet for expression, support and encouragement.
Social Networking Evidence. Two factors contribute to social networking sites being valuable sources of evidence. First, the casual and social nature of the experience encourages free expression, largely without consideration that the information could become evidence in an investigation or legal proceeding. Second, people freely post information about others, which can result in photos, videos or comments about a key person in a case (e.g. defendant or witness) even if key person did not post the information themselves.
There have been a handful of attorneys and courts over the past year or two that have begun utilizing the information posted on social networking sites. One example is a young man who attended a Halloween party in an orange jumpsuit just days after being arrested for drunk driving. The prosecutor used the photos posted on Facebook by a friend of the defendants to demonstrate that the defendant was unrepentant and continued to party while his victim recovered in the hospital. Another prosecutor used MySpace photos of a young women holding alcohol and joking about drinking while awaiting sentencing for a drunk driving crash that killed her passenger friend.
Admissibility of Evidence. Courts' rules of evidence may present certain hurdles to admitting evidence from social networking sites. Collection of web sites requires special tools to preserve the original state of the information. Also, web site evidence is subject to admissibility rules for standard electronically stored information (ESI). Judge Grimm outlined an approach for admissibility of ESI under the Federal Rules in a fashion that could be used as a practice guide for e-discovery attorneys. See Lorraine v. Markel Am. Ins. Co., 241 F.R.D. 534, 538 (D. Md. May 2007). In this case, Judge Grimm described the rules of evidence as a collection of rules presenting themselves like a series of hurdles to be cleared by the proponent of the evidence. These hurdles include issues of relevancy, authenticity, hearsay, the "best evidence" rule and undue prejudice. The learned judge explained that while all five issues may not apply to each piece of evidence, they all must be considered when attempting to admit electronic data into evidence.
Growing Evidentiary Resource. The massive growth of ESI on social networking sites has largely gone untapped by attorneys. That is likely to change as attorneys see the evidentiary value of information available on social networking sites. In sum, social networking sites often contain a plethora of valuable information and are being used and searched with increasing frequency by subscribers and investigators alike. In investigating and valuing claims, today's litigators will likely find themselves searching various Internet sources of ESI, such as a social networking site.
News & Events
#1 E-Discovery Provider 7th Year in a Row
Kroll Ontrack has been named the #1 electronic discovery provider in the 13th Annual Am Law Tech Survey. This survey, appearing in the October issue of Law Firm Inc., marks the seventh consecutive year that Kroll Ontrack has been awarded this honor. Of the firms surveyed, 62% of the respondents identified Kroll Ontrack as their electronic discovery provider of choice. Polling CIOs and IT directors from the largest 200 law firms in America since 1995, the Am Law Tech Survey aims to reveal information about hardware, software, budgets, new developments and the latest legal trends. For the full story, please visit: http://www.krollontrack.com/news-releases/.
Corporate ESI Policies Are On the Rise, But So Are E-Discovery Risks
A recent independent study of 403 in-house counsel—203 from the United States and the remainder from the United Kingdom—reveals in-house counsel understand the value in ESI preparedness but still struggle to gain executive support. The survey reported that 70% of US companies and 53% of those in the UK now have ESI policies in place, still leaving 28% of US and 40% of UK organizations at risk for substantial reputation damage and financial loss during litigation or investigations that involve the exchange of electronic evidence. The survey points to a lack of time and resources among corporations as the most common barriers to executing ESI policies. To download your complimentary copy of the survey, please visit: http://www.krollontrack.com/esitrends/.
Last Chance to Attend Redesigned Certification Course in 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. Due to overwhelming attendance, we have decided to offer an additional course in December. For more information and to register, visit: http://www.krollontrack.com/certification-courses/.
Meet our representatives at the following
events:
Visit http://www.krollontrack.com/upcoming-events/ for more information on these events and others.
Back To
Top
WE REQUEST YOUR
INPUT
This newsletter was written by Gina Jytyla and Joni Shogren, Kroll Ontrack staff attorneys, with assistance from Kelly Kubacki and Meridith Socha, Kroll Ontrack law clerks. 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 www.krollontrack.com.
|
|
