 |
In This Issue:
 Recent E-Discovery and Computer Forensic Court Decisions
Court Imposes $1,250,000 in Sanctions for E-Discovery Violations
In re Sept. 11th Liab. Ins. Coverage Cases, 2007 WL 1739666 (S.D.N.Y. June 18, 2007). Following the terrorist attacks of September 11, 2001, numerous victims filed claims against the Port Authority of New York and New Jersey (“Port Authority”) as the owner and operator of the Twin Towers, and its lessee Westfield Corporation, which procured commercial liability insurance under the general name World Trade Center Properties LLC (“WTCP”) through Zurich American Insurance Company (“Zurich”). In the pending litigation, these parties sought indemnification and declaratory relief from Zurich. Zurich argued that neither the Port Authority nor Westfield were named insureds under the policy and refused to indemnify or pay out claims. Ultimately, Zurich changed its position, and following dismissal of the case, Port Authority and Westfield moved for sanctions, alleging Zurich’s position throughout the pleadings was objectively unreasonable in violation of Rule 11 of the Federal Rules of Civil Procedure (“FRCP”) and the discovery abuses violated FRCP 37. The court held Zurich and its counsel liable for $1,250,000 based on violation of both Rules. The lease holders were successful in meeting the burden for the court to impose sanctions since Zurich deleted the electronic version of an essential document and possessed the paper version for over three years before producing it,. The court determined the $1,250,000 was sufficient to deter repetition of such conduct or comparable conduct by others similarly situated. Court Refuses to Modify Production Format Agreement between Parties
In re ATM Fee Antitrust Litig., 2007 WL 1827635 (N.D. Cal. June 25, 2007). In a suit alleging an illegal price fixing scheme, the plaintiff motioned the court to compel the defendant to produce numerous additional documents in discovery and sought modification of the production format previously agreed upon by the parties. The plaintiff sought production of material regarding networks other than the defendants, material provided to the government or in connection with other relevant private litigation, material regarding ATM networks in foreign countries, material from the inception of the plaintiff’s network to date, materials regarding entities the defendant acquired, among other things. The defendant argued the scope of discovery sought was limitless and sought relief from complying with all of the requests. The court set forth general guidance regarding the appropriate scope of discovery, operating under the perspective that discovery is limited by the specific subject matter presented in the complaint. As for the production format, the parties originally agreed to produce in a tiff image format, subject to optical character recognition scanning. The court declined to order a different production format because the parties had reached the agreement over two years prior, well before the new Federal Rules of Civil Procedure amendments were modified in December 2006. Court Determines Keyword List and Sets Out Detailed Discovery Process
Williams v. Taser Int’l Inc. , 2007 WL 1630875 (N.D.Ga. June 4, 2007). In a wrongful death action, the plaintiffs brought three motions before the court to resolve numerous discovery disputes. The parties disagreed about the manner in which the searches for responsive documents contained within the defendants’ electronic databases were to be performed, specifically focusing on the timing of production, the specific search terms to be used and the extent to which the plaintiffs would be allowed to participate in the search process. The plaintiffs requested to participate in the search process at the defendants’ facility. The defendants opposed this request and stated if the search terms can be agreed upon in advance via e-mail, the defendant will locate the documents, conduct a privilege review and produce responsive documents. Finding both proposals deficient, the court, being frustrated with the delay and inability of the parties to reach an agreement, entered an extensive discovery protocol and ordered the defendants to use a specified list of keyword search terms. The court also ordered a protocol to be followed regarding inadvertent disclosure of privileged information and set a deadline for completion of discovery. Court Issues Evidentiary and Monetary Sanctions for Willful Indifference Toward Discovery Duties
Google Inc. v. Am. Blind & Wallpaper Factory, Inc. , 2007 WL 1848665 (N.D.Cal June 27, 2007). In this trademark case, the plaintiff sought terminating, evidentiary and monetary sanctions from the defendant based on its alleged failure to preserve, collect and produce documentary evidence. The plaintiff showed that no deposed employee recalled the existence of a preservation plan after the litigation ensued, that employees routinely deleted documents and that the defendant confined its production to communications between the two companies, which were already in the plaintiff’s possession. The defendant offered little rebuttal evidence. The court agreed with the plaintiff finding “a willful indifference” with regards to the defendant’s discovery obligations. However, the court was unwilling to impose terminating sanctions and instead ordered evidentiary sanctions in the form of several judicially established facts and also ordered monetary sanctions in the form of a $15,000 sanction against the defendant. The plaintiff also argued the founder and CEO of the defendant’s company destroyed and erased electronic data from certain computers upon his resignation. However, the court found that the weight of the evidence did not support an inference that any wholesale destruction of relevant evidence took place at that time. Court Issues Spoliation Sanctions Based on Reckless Disregard of Preservation Duties; Bad Faith Not Required
United Med. Supply Co. Inc., v. United States , 2007 WL 1952680 (Fed.Cl. June 27, 2007). In this contract dispute, the plaintiff sought spoliation sanctions based on the defendant’s failure to preserve and produce relevant evidence. The defendant argued that the court was precluded from imposing such sanctions since it acted in good faith, albeit negligently. For over four years, the defendant had neglected to contact the proper custodians to notify them of the litigation, let alone inform them of the preservation requirement. The court held that an injured party need not demonstrate bad faith in order for the court to impose spoliation sanctions, as the spoliation doctrine was not designed solely to punish those who consciously destroy documents, but also to address the manifest unfairness in the loss of relevant information. Therefore, based on the defendant’s reckless disregard of its preservation duty, the court ordered a two facet sanction. First, the defendant was prohibited from cross-examining the plaintiff’s expert regarding gaps in the record. Second, the defendant was ordered to reimburse the plaintiff for any additional discovery related costs because of the defendant’s malfeasance and misrepresentations as well as costs incurred with this motion. Court Refuses to Allow Defendant to Take Advantage of Rule 37(f) Safe Harbor Clause
Doe v. Norwalk Cmty. Coll. , 2007 WL 2066497 (D.Conn. July 16, 2007). In this suit brought under Title IX of the Education Amendments of 1972, the plaintiff, claiming sexual assault by her college professor, motioned the court to sanction the defendants for discovery misconduct and spoliation of evidence. The plaintiff claimed the defendants scrubbed or wiped the hard drives of relevant individuals and altered, destroyed or filtered relevant data. For example, one witness’s e-mail PST file contained no deleted items and only one sent item. The defendants argued that they should be protected by the safe harbor of Federal Rule of Civil Procedure 37(f) since their production was sufficient and that scrubbing their hard drives was normal business practice. The court held that in order to take advantage of the good faith exception in the new FRCP, a party needs to act affirmatively to prevent the system from destroying or altering information, even if such destruction would occur in the regular course of business. As the defendants failed to suspend their destruction process at any time and such destruction was not due to the routine operation of the information system, the court found the plaintiff was entitled to an adverse jury instruction with respect to the destroyed evidence as well as reimbursement for costs associated with filing the motion. Other New Case Summaries Added To The Ontrack Discovery Case List This Month: - Court Refuses to Impose Protective Order on Inadvertently Produced E-mail – Mugworld, Inc. v. G.G. Marck & Assoc., Inc. 2007 WL 1745606 (E.D.Tex. June 15, 2007).
- Court Defines E-mail as a Document, Therefore Subject to Inspection – Kasten v. Doral Dental USA, LLC, 2007 WL 1791226 ( Wis. June 22, 2007).
- Court Refuses to Order Litigation Hold – Valdez v. Town of Brookhaven, 2007 WL 1988792 (E.D.N.Y July 5, 2007).
- Court Orders Production of Attorney-Client Communication – Kingsway Fin. Serv. Inc. v. Pricewaterhouse-Coopers LLP, 2007 WL 1837133 (S.D.N.Y. June 27, 2007).
To view additional case summaries visit: http://www.krollontrack.com/legalresources/caselawlist.aspx Practice Points: What is “Data Downgrading” and Why Should Practitioners Be Cautious? With the changes to the Federal Rules of Civil Procedure (FRCP) on December 1, 2006, new issues are emerging as courts and attorneys attempt to understand and uniformly apply the amended rules. One of the largest issues the legal community is grappling with is data accessibility and the repercussions for failing to preserve accessible data in a continually accessible format. Once a party is reasonably aware of litigation, the duty to preserve relevant electronically stored information (ESI) attaches. However, the question remains -- in what format? Unlike paper documents, electronic documents exist in numerous formats, on numerous media types and to varying degrees of accessibility. “Data downgrading” occurs when data that is in an accessible format is modified and placed in a less accessible format. For example, taking easily accessible active data on a laptop hard drive and placing the information on a less accessible backup tape which is usually created for disaster recovery purposes. For numerous business purposes, a company is free to move accessible data to a less accessible format. However, when a preservation duty exists, this accessibility downgrade could be considered spoliation. Spoliation occurs when a party intentionally, negligently or by mistake destroys, alters or conceals data relevant to a pending or probable litigation. Sanctions can include an adverse jury instruction, monetary award, and, in extreme cases, default judgment. Magistrate Judge James Francis of the Southern District of New York was particularly attuned to this issue, even before the FRCP amendments. In Treppel v. Biovail Corporation, Judge Francis held parties that permit the downgrading of data to a less accessible form which hinders future discovery by making the process more costly and burdensome, violates their preservation obligations and may be at risk for spoliation sanctions. Within the same district, Magistrate Judge Henry Pitman asserted an opposite viewpoint in Quinby v. WestLB AG. He did not order spoliation sanctions when the responding party chose to store once accessible data in an inaccessible form, reasoning that the party was still able to produce the data, just at a higher cost. Who should bear the costs of retrieving downgraded data is another issue that must be considered. Judges have been skeptical when parties complain about the costs associated with restoring inaccessible data when they failed to preserve it in an accessible format after a preservation duty arose. In conclusion, there are no bright line rules relating to data downgrading. One thing that seems to be certain, however, is if litigation is pending or reasonably foreseeable and a party modifies its ESI to a less accessible format, it will likely end up footing the bill to restore it in discovery. News & Events Kroll Ontrack Appoints New President
Effective July 19, 2007, Kristin M. Nimsger, Esq. was appointed to the position of president of Kroll Ontrack, as Ben Allen, Kroll Ontrack’s former leader recently assumed new duties as chief operating officer of Kroll Inc. Nimsger brings extensive strategic development and business management experience to her new role. As president, Nimsger is responsible for advancing the strategic vision of Kroll Ontrack and growing the Data Recovery, Legal Technologies and Search business lines through investments in organic growth and geographic expansion. Furthermore, she will work with the broader Kroll organization to continue to enhance the cooperation and collaboration between the Kroll businesses. Among one of the nation’s most knowledgeable legal technology experts, Nimsger most recently served as the vice president of Legal Technologies for Kroll Ontrack. With the company since 2001, Nimsger oversaw the evolution of products and service offerings for the Legal Technologies business group, which primarily serves law firms, corporate counsel, government agencies, and others with electronically stored information consulting services, electronic and paper discovery, and computer forensic solutions. Nimsger earned her J.D. cum laude from William Mitchell College of Law, St. Paul, Minn., and received her B.A. in English/Communications from the University of Minnesota, Duluth. Standing Committee Approves Proposed New Federal Rule of Evidence 502
The Committee on Rules of Practice and Procedure met on June 11th and 12th and recently issued its final approval and recommendation for the addition of Federal Rule of Evidence 502. Among its provisions, the rule addresses waiver of attorney-client privilege and work product protections during civil discovery. The Advisory Committee on Evidence Rules met earlier in the year on April 12th and 13th and issued a recommendation that the Standing Committee approve the proposal and submit it to the Judicial Conference. The Standing Committee will now convey the proposed new rule to the Judicial Conference and recommend they approve and transmit the proposal to Congress and the Supreme Court for enactment. Meet our representatives at the following events: | Minnesota CLE “E-Discovery: Beyond the Basics” | Minneapolis, MN | | ILTA 30th Annual Educational Conference | Orlando, FL | | HTCIA International Training Conference & Expo | San Diego, CA | | Electronic Discovery Certification Course | Eden Prairie, MN | | Electronic Evidence Thought Leadership Series | Chicago, IL | | ASIS International 53rd Annual Seminar and Exhibits 2007 | Las Vegas, NV | | Legalworks “Electronic Discovery After the New Federal Rules” | Austin, TX | | Lorman Litigation Institute | New York, NY | | IPMA 23rd Annual Conference & Expo | Scottsdale, AZ | | Legalworks “E-Discovery Ethics & Best Practices for Counsel” | Los Angeles, CA | | American Corporate Council (ACC) Annual Meeting | Chicago, IL | | Advanced Electronic Discovery Certification Course | Eden Prairie, MN | | Legalworks “E-Discovery Ethics & Best Practices for Counsel” | Dallas, TX | | 4th Annual Paralegal SuperConference | San Francisco, CA | | Electronic Discovery Certification Course | Eden Prairie, MN | | Electronic Evidence Thought Leadership Series & Awards Reception | New York, NY |
Visit http://www.krollontrack.com/upcomingevents/ for more information on these events and others. Back To Top WE REQUEST YOUR INPUT This newsletter is written by Michele C.S. Lange, a staff attorney with Kroll Ontrack, with assistance from Joni Heikes a Kroll Ontrack staff attorney. 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 visit http://www.krollontrack.com.
| |
No comments:
Post a Comment