Mar 5, 2013 - Since the last edition of eDiscovery Advantage, three states have either adopted or proposed new rules on electronic discovery, the Western District of Washington adopted new eDiscovery Rules and a model agreement governing the discover
Sep 16, 2013 - and others addressing the same topic, courts continue to struggle with the question of what conduct and level of fault is sufficient to warrant the imposition of an adverse inference instruction. A number of decisions have addressed wh
Sep 19, 2012 - of lesser sanctions. Jude Lasnik found that the first four factors militated in favor of dispositive sanctions. With respect to the fifth factor, Judge Lasnik analyzed whether less drastic sanctions would âallow plaintiffs to adequat
Sep 19, 2012 - also contemplates cost shifting of some or all of the expenses incurred by the responding party. Florida Rule 1.280(d)(2) provides that. âthe court must limit the ..... In contrast, after the plaintiff filed its complaint, the defend
and advising clients on how best to avoid the myriad. eDiscovery pitfalls. Winston & Strawn will publish. eDiscovery .... 10, 2010), the court ignored. Pension Committee and instead applied the culpability factors from .... Inc., and from Media Templ
associated with eDiscovery and ever-changing modes of communication and data transmission. Sincerely, ... federal E-rate program on the basis that. FOIA Exemption 7(C) protects from disclosure such ârecords or ... Thus, for purposes of FOIA, corpor
The Federal Rules Advisory Committee approved amendments to the Federal. Rules of Civil Procedure, including a revised version of Rule 37(e) which limits the ability of courts to impose death penalty sanctions and adverse inferences to cases where th
Sep 16, 2013 - law judges have the ability âto determine how cost shifting should be implemented, if at all, based on the specific facts of a particular discovery dispute.â A copy of the Federal Register notice discussing the changes made after t
Since the last edition of eDiscovery Advantage, there have been a number of developments in the e-Discovery, .... to lead to the discovery of admissible evidence. All discovery is subject to the limitations imposed by Rule ...... âall time sheets a
Mar 5, 2013 - Since the last edition of eDiscovery Advantage, three states have either adopted or proposed new rules on electronic discovery, the Western District of Washington adopted new eDiscovery Rules and a model agreement governing the discover
Feb 6, 2014 - ânot take umbrageâ with the language or the scope of the hold at ..... courts in the Fifth Circuit must not impose severe sanctions ..... sand and refusing to look for answers and then saying it does not know the answer.â He also
that a failure to adopt good preservation practices is categorically sanctionable, the better approach is to consider such conduct one factor in the analysis. The ultimate determination of whether sanctions are appropriate should focus on whether som
Feb 6, 2014 - upcoming e-Discovery developments. eDiscovery Advantage. INTRODUCTION. Winter 2014. Volume ..... were; or (3) to attempt to determine whether the deleted files were in fact only related to the client's .... reasonably anticipate bladder
stock exchange rules. The defendants moved to dismiss, noting that SPG had received an e-mail confirmation from the New York Stock Exchange (âNYSEâ) staff that shareholder approval of the amendment was not required under NYSE rules. The court hel
Gordon A. Coffee. (202) 282-5741 [email protected] State of California (In re Lockyer) v. British Columbia Power Exchange. Corp. et al. Secured a decision dismissing a $190 million claim against client Allegheny. Energy Supply Company, LLC. A FERC
OFFICe: (866) 558-4465 EXT. 204 ... sent, assuming the duties of chief judge, does American Calcar II break navigation system that was allegedly withheld by the lead inventor ..... Judge Prost and Judge Wallach appear to be operating at the fringes o
Nov 6, 2013 - potential vapor migration or âencroachmentâ impacts. We also discuss EPA's proposed amendments to the all appropriate ... The definition of âmigrationâ has also been revised to include the movement of .... of data or even any ev
âthe purchase or sale of any other security in the. [United States]â20âhas resulted in three potentially inconsistent approaches. The first approach considers whether either the offer or acceptance of the off-exchange transaction occurred withi
Exchange Act.] SECTION 308 OF SOX. Under section 308 of the Sarbanes-Ox- ley Act (SOX), the SEC has the power to add disgorged funds to a disgorgement.
Nov 27, 2013 - Regulatory Enforcement. â¢ FCA imposes worldwide freezing order on suspected boiler room, First Capital Wealth Limited â On 15 November 2013, a suspected boiler room (an outbound call centre selling questionable investments by telep
information technology and business process outsourcing, global ... my entire career. It was extremely complicated, involving simultaneous negotiations over several months with multiple vendors. Then I learned. I was pregnant! I was hesitant about ..
But it is when Webb is on the brink of trial or in the midst of the ... home, âwinning wayâ with juries and judges that sets him apart from other ..... home. She sat down and cried. It wasn't really good living conditions.â Lonely in a strange
24, NO. 4. WINTER 2011. ERISA's Outer LimitsâThe Admissibility of Extrinsic Evidence in Denied Claims for Plan Benefits. James P. Baker. Cue music. Scene: Federal district court, Anywhere, USA. A young lawyer, Steve Jones, .... Congress intended co
to the .XXX TLD for hosting adult entertainment websites.â Plaintiffs' efforts were stymied by their own complaint when they alleged that Manwin's own YouPorn.com was the most popular free adult video website on the Internet. Thus, since the releva
Winter 2013 Volume 3, Number 1
Introduction Since the last edition of eDiscovery Advantage, three states have either adopted or proposed new rules on electronic discovery, the Western District of Washington adopted new eDiscovery Rules and a model agreement governing the discovery of electronically stored information (“ESI”) in civil litigation, and the Northern District of California adopted eDiscovery guidelines and an ESI Checklist which help parties prepare for and conduct discovery of ESI. On the International and Cross Border eDiscovery front, China has introduced non-binding guidelines for the handling of personal information that will likely shape how businesses collect, process and export ESI from China. In addition a number of courts have addressed the ability to obtain an opponent’s social media postings through discovery and the specific requirements that litigants must satisfy. Three courts have weighed in on the importance and operation of Federal Rule of Civil Procedure 502(d) orders, and other courts have addressed the proper mechanism by which courts should address the adequacy of parties’ search terms. Courts also continue to struggle with: (1) the level of conduct necessary for dispositive sanctions in spoliation cases; (2) how the Stored Communications Act (“SCA”), 18 U.S.C. § 2707, et seq., applies in different situations, including whether the SCA covers texts and e-mails stored on an individual’s cellular phone and (3) the extent to which counsel need to be involved in, and knowledgeable about, the eDiscovery process.
As always, we hope that the following summaries and information continue to aid your understanding of this important and rapidly evolving practice area, and we look forward to helping you stay abreast of upcoming developments.
Table of Contents Federal And State Government eDiscovery Developments.................................2 International And Cross Border eDiscovery Developments..................6 Search, Retrieval & Production........................6 Sanctions...................................................................8 Procedure ...............................................................12 Social Media........................................................... 13 Privilege................................................................... 15 Recovery Of eDiscovery Costs / Cost Shifting.......................................................... 16 Stored Communications Act And Internet Service Providers..................... 18 Upcoming Speaking Events.............................20 Recent Publications and Events ..................20 Featured Contributors ....................................20 Contact Us ...........................................................20
Winston & Strawn LLP
Federal And State Government eDiscovery Developments
...in cases where clients collect and review the data themselves “the reliability of the process is more likely to be questioned.”
Delaware and Illinois have continued the recent trend of states amending their respective rules of civil procedure to address, among other things, the challenges and advantages presented by advancements in eDiscovery technology and the propensity of entities and individuals to generate and preserve large volumes of ESI. In addition, New York has proposed changes to its Local Rules to address eDiscovery issues and concerns, and is currently seeking comments on such proposed changes. On the federal side, the Western District of Washington recently adopted new eDiscovery Rules and a Model Agreement Regarding Discovery of Electronically Stored Information in Civil Litigation, which address, among other things, proportionality and the existence and importance of ESI in civil litigations. Similarly, the Northern District of California adopted new eDiscovery guidelines, a Rule 26(f) checklist, and a model order that addresses, among other things, the need for parties to consider the concept of proportionality in electronic discovery. Each of these changes should have a beneficial impact on litigants’ approach to eDiscovery related issues. Delaware Court of Chancery Amends Rules Governing Discovery and Issues New Discovery Guidelines Effective January 1, 2013, the Delaware Court of Chancery amended Court of Chancery Rules 26, 30, 34, and 45 to address modern discovery practice, 2
including discovery of ESI. A copy of the amended Court of Chancery rules is available here. In addition, the Court of Chancery expanded its Guidelines for Practitioners (the “Guidelines”), to address a number of eDiscovery issues, including, among others: (1) the need to confer early and often regarding discovery (particularly discovery of ESI); (2) the need to implement an ESI protocol; and (3) the preferred procedures for the collection and review of discoverable material. A copy of the Guidelines is available here. The Guidelines also counsel against self-collection and review by clients, noting that in cases where clients collect and review the data themselves “the reliability of the process is more likely to be questioned.” Accordingly, the Court of Chancery prefers that “outside counsel or professionals acting under their direction … conduct document collection and review.” The Guidelines also note that the procedures for collecting and reviewing documents should “include interviews of custodians who may possess responsive documents to identify how the custodians maintain their documents,” as well as “the potential locations of responsive documents.” The Guidelines also state that “counsel should exercise care in developing appropriate collection procedures,” and “should be mindful of the obligation to take reasonable steps to preserve” ESI. Acknowledging that costs associated with electronic discovery (and discovery in general) can skyrocket, the Guidelines admonish counsel to consider “issues of burden and expense,” and note that “the costs of
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Winston & Strawn LLP the litigation must be proportionate to what is at stake.” As such, the Guidelines note that “it is essential and not optional that the parties discuss [proportionality] directly and try to reach a case-specific accord based on a candid appraisal of the information base each side has, the costs of employing various electronic discovery techniques, and the stakes at issue in the case.” New York Proposes Rules Requiring Counsel to Confer in Cases Involving ESI
New York proposes amendment to require counsel to “confer on e-discovery issues prior to the preliminary conference whenever a case is ‘reasonably likely’ to involve electronic discovery.”
On January 7, 2013, the New York Unified Court System’s E-Discovery Working Group (the “Working Group”) proposed amending 22 NYCRR § 202.12(b) of New York’s Uniform Rules of the Trial Courts to require counsel to “confer on e-discovery issues prior to the preliminary conference whenever a case is ‘reasonably likely’ to involve electronic discovery.” A similar requirement already exists in the New York State Court’s Commercial Division, and the Working Group is proposing to harmonize the Commercial Division’s practices with the proposed changes set forth in the Working Group’s proposal. The Working Group proposes adding a non-exhaustive list of considerations to Section 202.12(b) that are designed to guide both the court and counsel in determining whether a particular case is reasonably likely to involve eDiscovery. Such factors include, among others: (1) whether ESI exists; (2) whether the parties intend to seek or rely on ESI; (3) whether the cost of preserving ESI is proportionate to the amount in controversy; and (4) whether the discovery of ESI is likely to aid in the resolution of the case. 3
The Working Group has also proposed amending Section 202.12(c) to include a non-exhaustive list of issues courts can consider in determining the appropriate method and scope of eDiscovery, including, among others: (a) the potentially relevant categories of data; (b) disclosure of the applications and manner in which the data is maintained; (c) the implementation of a preservation plan; (d) the scope, extent and form of production; (e) claw-back provisions regarding privileged ESI; and (f) the scope and method of reviewing ESI. A copy of the proposed amendments is available here. The Working Group is accepting comments to the proposed amendments through March 8, 2013. Illinois Amends Rule of Evidence Regarding Inadvertent Disclosures On November 28, 2012, the Supreme Court of Illinois adopted an amendment to Illinois Rule of Evidence 201 (General Discovery Provisions), and implemented Illinois Rule of Evidence 502 (AttorneyClient Privilege and Work Product; Limitations on Waiver). Illinois Rule 502 incorporates the language and structure of Rule 502 of the Federal Rules of Evidence, including subsection (d), which prevents the use or disclosure of privileged materials in a federal proceeding from acting as a waiver in any other state or federal action. Like its federal counterpart, Illinois Rule 502(b) requires the disclosing party to demonstrate that: (1) the disclosure was inadvertent; (2) the privilege holder took reasonable steps to prevent such a disclosure; and (3) the privilege holder promptly took reasonable steps to rectify the error. Notably, Illinois Rule 502 does not
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Winston & Strawn LLP apply to arbitrations, but does apply to agency actions and proceedings. Newly amended Illinois Rule 201(p) requires that upon notification that privileged information has been inadvertently disclosed, the receiving party “must promptly return, sequester or destroy the specified information and any copies” and “must not use or disclose the information until the claim is resolved….” Importantly, the producing party must also preserve the inadvertently produced information until any claim of privilege is resolved. Copies of Rule 502 and Amended Rule 201, respectively, are available here and here.
The Model Agreement also requires that the parties attempt to reach an agreement regarding “appropriate search terms, or an appropriate computer or technology-aided methodology” before beginning any search efforts.
Editor’s note: The extraterritorial application of Illinois Rule 502 is unclear, and practitioners should be wary of relying only on Illinois Rule 502 to prevent a finding in a subsequent action in another state that the producing party in the Illinois action or proceeding waived the applicable privileges. Western District of Washington Adopts New eDiscovery Rules and Model Order The United States District Court for the Western District of Washington’s amended rules, including certain rules focusing on eDiscovery, took effect on December 1, 2012. Local Civil Rule 26, entitled “Duty to Disclose; General Provisions Concerning Discovery,” provides, among other things, that the “proportionality standards set forth in Fed. R. Civ. P. 26(b)(2)(C) must be applied in every case where the parties formulate a discovery plan and promulgate discovery requests.” In addition, Local Civil Rule 26 requires that the parties meet and confer prior 4
to submitting a joint status report, and that such meet and confer should include a discussion of, inter alia:(i) whether the case will involve ESI; (ii) the nature, location and scope of discoverable ESI; and (iii) whether the parties are “agree to adopt the Model Agreement Regarding Discovery of Electronically Stored Information in Civil Litigation” (the “Model Agreement”). Importantly, Local Civil Rule 26 requires that a motion for a protective order or to compel the production of ESI must state whether the parties agreed to an ESI agreement, like the Model Agreement, and attach any such agreement— or state that the parties met and conferred regarding to the topics set forth in Local Civil Rule 26(f)(1)(I). The Model Agreement requires, among other things, that the parties disclose the five custodians most likely to have discoverable ESI, a list of shared drives, servers, and other non-custodial sources likely to contain discoverable ESI, and a list of third-party data sources (e.g., cloud storage and third-party e-mail providers) likely to have discoverable ESI. In addition, the Model Agreement makes it clear that absent a “showing of good cause by the requesting party,” the producing party does not need to preserve certain types of ESI, including, among others: (1) deleted, slack, fragmented or other data only accessible by forensics; (2) temporary files or ephemeral data that are difficult to preserve without disabling the operating system; (3) on-line access data, such as temporary internet files; (4) back-up data that is substantially duplicative of data that is more readily accessible elsewhere; and (5) data from systems that are no
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Winston & Strawn LLP longer in use or are unintelligible on the systems currently in use.
“the proportionality standard set forth in Federal Rules of Civil Procedure 26(b) (2)(C) and 26(g)(1) (B)(iii) should be applied”
The Model Agreement also requires that the parties attempt to reach an agreement regarding “appropriate search terms, or an appropriate computer or technology-aided methodology” before beginning any search efforts. Such terms and/ or methodologies are subject to revision. In addition, the Model Agreement includes additional provisions for “more complex cases.” These additional provisions address the network architecture and data sources, format for delivery, and the metadata fields that should be produced. A copy of the Model Agreement is available here. Northern District of California Adopts eDiscovery Guidelines and ESI Checklist Effective November 27, 2013, the United States District Court for the Northern District of California adopted new guidelines for the discovery of ESI (the eDiscovery Guidelines). A copy of the eDiscovery Guidelines is available here. The eDiscovery Guidelines are “designed to establish best practices for evidence preservation in the digital age,” help ensure that “local practices regarding the discovery of ESI keep pace with rapidly evolving technology,” and are “flexible enough to be used in a wide variety of cases.”
The eDiscovery Guidelines stress early and often cooperation and education of the parties in e-discovery efforts, and note that “the proportionality standard set forth in Federal Rules of Civil Procedure 26(b)(2)(C) and 26(g) (1)(B)(iii) should be applied” to any discovery plan prepared by the parties and/or the court. The eDiscovery Guidelines address, among other things: (1) the parties’ respective preservation obligations; (2) the Rule 26(f) Meet and Confer; (3) informal discussions regarding discovery of ESI; and (4) the selection and use of eDiscovery liaisons. The Northern District of California has also introduced an ESI Checklist that the parties are encouraged to use to prepare for the Rule 26(f) Meet and Confer. A copy of the ESI Checklist is available here. The ESI Checklist sets forth a number of topics that the parties should consider, including, among others: (i) preservation; (ii) search methodology; (iii) informal discovery on the location and types of systems used; (iv) proportionality; and (v) privilege. The eDiscovery Guidelines and the ESI Checklist, together with the Northern District of California’s Model Stipulated Order Re: The Discovery of ESI and the Standing Order for all Judges (available here and here) operate as a high level roadmap for parties regarding the discovery of ESI and conduct of litigation as a whole.
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International And Cross Border eDiscovery Developments China Adopts New Guidelines for Handling of Personal Information On February 1, 2013, China’s new “Information Security Technology Guidelines for Personal Information Protection Within Public and Commercial Services Information Systems” (the “Guidelines”) took effect. The Guidelines are voluntary and lack the effect of law, but nonetheless outline key expectations for the collection, processing, transfer and deletion of personal information. The Guidelines apply to Chinese nationals and to individuals and entities that perform data collection, processing and transferring activities in China. Under the Guidelines, personal information (or “PI”) is defined as “computer data that may be processed by an information system, relevant to a certain natural person, and that may be used solely or along with other information to identify such natural person.” PI is divided into two categories: (1) personal sensitive information; and (2) personal general information. Personal sensitive information is information that would have an adverse impact on the subject if it is disclosed or altered. Personal general information is defined as all personal information not considered to be personal sensitive information. Under the Guidelines, PI may only be collected if the data subject is notified of the following: (1) purpose of collection; (2) means of collection; (3) scope of use of the PI; (4) protective 6
measures employed; (5) name, address and contact information for the persons or entities collecting the data; (6) potential risks involved for the data subject; (7) channels and processes for filing a complaint; and (8) when data needs to be transferred to another organization: (i) the purpose for such transmission, (ii) the specific PI transferred and the scope of use, and (iii) the name, address and contact information of the recipient. The Guidelines also prohibit the overseas transfer of PI to an entity absent the data subject’s consent, government consent, or other explicit legal or regulatory permission. There is no exception for intra-company transfers. However, the Guidelines do not provide any specific form for the required notifications or for obtaining consent from the data subject. Editor’s Note: Although the Guidelines do not have the force of law, practitioners should be aware of the Guidelines, as they will likely help shape China’s approach to the use of personal information going forward. In addition, certain regions within China have already enacted local regulations governing the collection and use of personal information, such as those enacted in Jiangsu Province.
Search, Retrieval & Production Litigants and courts continue to struggle with the appropriate methods of searching for and retrieving relevant and responsive material. Courts have been understandably reluctant to wade into disputes concerning the use or application of specific search terms and the determination of the appropriate number of custodians. However, courts have not displayed
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Winston & Strawn LLP the same hesitancy in determining whether an affiliated company’s documents should be included in a party’s discovery responses. For example, in Assured Guaranty Municipal Corp. v. UBS Real Estate Securities Inc., 2012 WL 5927379 (S.D.N.Y. Nov. 21, 2012), Magistrate Judge James C. Francis IV was asked to rule on motions to compel production. The defendant argued that the plaintiff’s requests were unduly burdensome, in part because in running six of the plaintiff’s eight proposed search terms, the defendant had “harvested” over 600,000 documents.
With respect to the questions concerning the plaintiff’s search terms, the court noted “the right way to resolve such a dispute is to consider the yield against the purported need.”
In finding that there was no undue burden, Magistrate Judge Francis noted that “the total number of documents ‘harvested’ [was] not a particularly compelling statistic by itself, because it says nothing about the possible significance of the documents and may in fact reflect an inefficient search protocol.” Moreover, Magistrate Judge Francis noted that the defendant had not “sampled documents from the post-transaction period to provide a realistic estimate of what might be unearthed.” The court was also asked to rule on the adequacy of the search terms the defendant proposed applying to its electronic documents. However, Magistrate Judge Francis declined to rule on this issue on the record before him, as the parties had not submitted any expert affidavits, which he believed “would be necessary for [him] to offer an opinion as to the most efficient search protocol.” Ultimately, the court offered the parties three options: (1) cooperate and agree on a set of search terms; (2) re-file the motion with appropriate 7
expert affidavits; or (3) request the appointment of a neutral consultant to design a search strategy. Similarly, in Vasudevan Software, Inc. v. Microstrategy Inc., 2012 WL 5637611 (N.D. Cal. Nov. 15, 2012), Magistrate Judge Paul S. Grewal ruled on the parties’ dueling motions to compel certain evidence. Importantly, the parties had agreed to use the Federal Circuit’s Model Order on E-Discovery in Patent Cases (the “Model Order”) as the basis for conducting discovery in the case, with two exceptions (10 custodians instead of 5, and 25 search terms instead of 10), as the basis for conducting discovery in the case. Despite agreeing to use the Model Order, the parties eventually asked the court to determine: (i) whether the plaintiff could use more than 25 search terms; and (2) whether those terms were too broadly worded to uncover specific information. In ruling on the parties’ respective requests, Magistrate Judge Grewal noted that although the Model Order “resolves several potential disputes between [the] parties, it was offered only as the beginning of a much longer conversation in the case law about how to properly scope custodial email search collection and production.” With respect to the questions concerning the plaintiff’s search terms, the court noted “the right way to resolve such a dispute is to consider the yield against the purported need.” But the court could not resolve the dispute on the record before it, as “neither party has provided particularly helpful details about the potential yield from [the plaintiff’s] search terms.” In order to obtain a basis from which to make further
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Winston & Strawn LLP decisions, Magistrate Judge Grewal ordered that the parties run the plaintiff’s proposed search terms against five (5) custodians and then meet and confer regarding the hit count for each custodian and term. If the parties were still unable to resolve their differences, the court would then allow them to provide this additional information to the court for its determination. In addition, Magistrate Judge Grewal required that the plaintiff produce a privilege log for certain communications between the plaintiff and its counsel. In doing so, the court allowed the plaintiff to “provide categorical logs, essentially grouping documents by type and indicating how each of those categories is privileged.”
“the defendants could not place the burden of compliance on an outside vendor and have no knowledge, or claim no control over, the process.”
On the contrary, in cases where a party has common ownership with an affiliated company, and the lines between the companies are blurred, courts are less hesitant to get involved in disputes over the appropriate scope of discovery. In Peerless Industries, Inc. v. Crimson AV, LLC, 2013 WL 85378 (N.D. Ill. Jan. 8, 2013), for example, Magistrate Judge Susan E. Cox sanctioned the defendant for its “hands-off approach” to its discovery obligations regarding documents maintained by an affiliated company located in China. As the court had previously ruled that the defendant and the affiliated Chinese company were controlled by the same principal, the defendant was ordered to collect documents from its Chinese affiliate. However, at the deposition of the 30(b)(6) witness, it became clear that the defendant had simply relied on an outside vendor to instruct the principal on “how to collect 8
documents,” and that the defendant “had no part in the process of obtaining the requested discovery or determining how [the Chinese affiliate] managed their documents.” Magistrate Judge Cox found this type of “hands off” approach insufficient, and ruled that the defendants could not “place the burden of compliance on an outside vendor and have no knowledge, or claim no control over, the process.” Accordingly, Magistrate Judge Cox ordered the defendants to “show that they in fact searched for the requested documents and, if those documents no longer exist or cannot be located, they must specifically verify what it is they cannot produce.”
Sanctions Like Judge Grimm in Victor Stanley, courts faced with the use of specialized software intended to forensically delete evidence from computers continue to impose stiff sanctions, including dismissal and monetary penalties. For example, in Taylor v. The Mitre Corp., 2012 WL 5473573 (E.D. Va. Nov. 8, 2012), District Judge Liam O’Grady dismissed plaintiff’s claims, finding that the plaintiff’s “deliberate use of specialized software to destroy data” on the plaintiff’s laptop was so “egregious that he has forfeited his claims against [the defendant].” The court noted that the plaintiff was on notice of his duty to preserve evidence in 2009, when he secured counsel in anticipation of bringing suit against the defendant. Sometime after his duty to preserve arose, the plaintiff “wiped” his work computer, “took a sledgehammer to it,” and disposed of it in a local landfill. The plaintiff claimed he attempted to backup those files, but he was only
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Winston & Strawn LLP partially successful. Subsequently, and after the magistrate judge ordered the plaintiff to submit his then current computer for inspection, the plaintiff downloaded and ran “Evidence Eliminator”, a program whose “express purpose is removing ‘sensitive material’ from one’s hard drive and defeating forensic software.” Judge O’Grady found it hard to believe that the plaintiff, a computer expert by trade, would not have verified that the backup of his original computer was successful before allowing the original computer to be destroyed. In addition, he found the plaintiff’s use of “Evidence Eliminator” to constitute a blatant disregard for the plaintiff’s “duties in the judicial system under which he sought relief.”
...a “spoliation sanction is not ‘one size fits all,’ but must be tailored to fit the facts of the case.”
In determining whether to impose lesser sanctions, such as adverse inference instructions, courts continue to struggle with the required culpable state of mind and the appropriate level of prejudice. For example, in Cytec Carbon Fibers, LLC v. Hopkins, 2012 WL 6050595 (D.S.C. Dec. 5, 2012), Judge Richard Mark Gergel adopted the magistrate judge’s report and recommendation granting an adverse inference instruction against one of the defendants found to have deleted text messages that the plaintiff argued were “directly related to the case.” Although Judge Gergel noted that some sanction was “necessary due to [the defendant’s] spoliation of evidence,” dismissal was too harsh a sanction. For other defendants who had refused to answer discovery demands, the court compelled responses to the demands and required those defendants to pay plaintiff’s costs associated with
their discovery efforts. The court also reserved judgment on the motion for default judgment pending the defendants’ compliance with the court’s order. Similarly, in Bozic v. City of Washington, Pennsylvania, 2012 WL 6050610 (W.D. Pa. Dec. 5, 2012), Judge Mark R. Hornak also imposed an adverse inference instruction after he found that the defendant’s employee’s intentional and conscious destruction of a key piece of evidence constituted “bad faith.” There, Judge Hornak found that the defendant should have reasonably anticipated litigation at the time the audio tape was destroyed and that any “subjective belief” to the contrary by the employee who actually overwrote the audio tape “was unreasonable.” In considering the appropriate sanction, Judge Hornak held that a “spoliation sanction is not ‘one size fits all,’ but must be tailored to fit the facts of the case.” In light of his finding of “bad faith,” Judge Hornak concluded that “no lesser sanction than at least a spoliation adverse inference would avoid substantial unfairness.” But rather than simply imposing a permissive adverse inference, Judge Hornak held that the facts of the case required that the court inform the jury that the defendant had a duty to preserve the audio tape, and that the jury could conclude that the tape “was destroyed because its contents were harmful to Defendant.” In addition, the court required that the defendant reimburse plaintiff for the costs and fees associated with a second deposition of the defendant’s employee.
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Winston & Strawn LLP In Anderson v. Otis Elevator Co., 2012 WL 5493383 (E.D. Mich. Nov. 13, 2012), Judge Paul D. Borman denied without prejudice the plaintiffs’ request for an adverse inference instruction because the plaintiffs “demonstrated only a suspicion of prejudice and have not been able to establish bad faith conduct on the part of the Defendant.” The plaintiffs claimed that the defendant’s failure to produce certain metadata that “must have” existed with respect to one spreadsheet and the lack of e-mails concerning the defendants’ plan to reduce the size of its workforce meant that defendant had spoliated relevant evidence. The plaintiffs, however, did not provide any evidence that such e-mails and/or metadata ever existed or that the defendant intentionally destroyed them. In denying the plaintiffs’ request, Judge Borman noted that in order to be entitled to an adverse inference instruction, the plaintiffs had to establish that: (1) the defendants had an obligation to preserve the evidence at the time it was destroyed; (2) the information was destroyed with a culpable state of mind; and (3) the destroyed evidence was relevant to the plaintiffs’ claims, such that the fact finder could find that such information would support the plaintiffs’ claims. Judge Borman found that the plaintiffs could not meet this test, because “absent some proof, or even a suggestion by some witness, that additional documents did exist, and that [the defendant] failed to produce them,” the plaintiffs were unable to demonstrate that the defendant “had an obligation to preserve such documents,” or that the defendant had “destroyed 10
or misplaced the documents with a culpable state of mind.” In addition, Judge Borman noted that the plaintiffs had not conducted a forensic examination of the defendant’s servers to demonstrate that such information existed. Nor had the plaintiffs offered any “forensic evidence that the metadata they [sought] in fact exist[ed] and was deleted.” Going one step further, in Day v. LSI Corporation, 2012 WL 6674434 (D. Ariz. Dec. 20, 2012), Judge Cindy K. Jorgenson granted the plaintiff’s motion for a default judgment as to one claim, and imposed an adverse inference instruction regarding the defendant’s failure to preserve relevant evidence with respect to plaintiff’s remaining claims. Judge Jorgenson concluded that the defendant’s in-house counsel had a culpable state of mind by acting willfully in failing to require that an employee known to have relevant information concerning the plaintiff’s employment to preserve such information. Judge Jorgenson also found that the defendant failed to preserve documents in accordance with its document retention policy. In doing so, Judge Jorgensen noted that because proof of the relevance of spoliated evidence is “difficult where the evidence has been destroyed, [and] the spoliation itself and surrounding circumstances in this case permit a fair inference that the evidence was highly relevant to this litigation.” In awarding the plaintiff a default judgment on one claim, the court noted that “the risk of substantial prejudice to [the plaintiff] if at least a partial default is not entered against [the defendant] is great,”
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“...the lack of policies or procedures designed to give an agency (or other entity) the ability to effectuate, on relatively short notice, a litigation hold involving a website, provides further support for a finding of spoliation.”
Winston & Strawn LLP because the defendant’s spoliation has “impair[ed the plaintiff’s] ability to go to trial and ‘threaten[ed ] to interfere with the rightful decision of the case.’” Judge Jorgenson did not enter default judgment for any other claims, as the spoliated records were not central to the plaintiff’s other claims. Instead she imposed an adverse inference instruction and ordered that the defendant pay a $10,000 fine.
the secondary evidence provided by [the GSA] in support of its claim” concerning what the plaintiff saw on the website. Noting that the court “should always impose the least harsh sanction that can provide an adequate remedy,” instead of opting for more draconian sanctions like dismissal or an adverse inference, Judge Allegra prohibited the defendant from relying on such secondary evidence.
In other contexts with less obvious prejudice to the non-spoliating party, courts have imposed a variety of sanctions. For example, in Laboratory Corp. of America v. United States, 2012 WL 6861487 (Fed Cl. January 14, 2003), Judge Francis M. Allegra held that the General Services Administration’s (“GSA”) failure to preserve website data relating to the operation of its online bid submission process constituted spoliation. Having first established that the GSA had a duty to preserve the information relating to the website, Judge Allegra then considered whether the GSA had “a culpable state of mind.” Judge Allegra noted that while the Federal Circuit in Micron Technology Inc. v. Rambus, Inc., 645 F.3d 1311 (Fed Cir. 2011) had suggested that a “showing of bad faith is ‘normally a prerequisite to the imposition of dispositive sanctions,’” it had not clarified what “level of culpability” was needed in order to impose lesser sanctions, such as an adverse inference. Examining the facts of the case at hand, Judge Allegra found that the GSA’s “failure to preserve the information from the GSA website amounts to ‘negligence’ or ‘culpable carelessness[.]’” Judge Allegra held that the GSA’s spoliation of evidence prejudiced the plaintiff, who was “unable to respond fully to
Importantly, the Court also noted that it was no defense to a finding of spoliation to claim that the GSA had in good faith adopted a document retention policy that automatically purged procurement data “the moment a procurement closes.” Judge Allegra further noted that “the lack of policies or procedures designed to give an agency (or other entity) the ability to effectuate, on relatively short notice, a litigation hold involving a website, provides further support for a finding of spoliation.”
Similarly, in Fidelity National Title Insurance Company v. Captiva Lake Investments, LLC, 2012 WL 5834050 (E.D. Mo. Nov. 16, 2012), Judge Carol E. Jacksoni also denied the defendant’s requested relief, i.e. to conduct a forensic examination of the plaintiff’s computer system. Judge Jacksoni noted that although the case presented an “extremely unflattering picture of [the plaintiff’s] document and data management practices,” the record “does not support a finding that [the plaintiff’s] conduct [rose] to the level of a willful violation of the order compelling production.” With respect to the requested forensic examination, Judge Jacksoni noted that the urgency which necessitated the defendant’s original motion had passed because the court had extended the schedule
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Winston & Strawn LLP to allow the parties to “cooperate in the appropriate resolution of their discovery disputes in order to avoid further litigation on these issues.” However, Judge Jacksoni did not give the plaintiff a free pass, instead, she ordered that the plaintiff continue to work with “e-discovery specialists to produce [the requested data] in a useful format.”
Procedure Although Magistrate Judge Paul Grimm’s decision in Mancia v. Mayflower Textile Services Co., F.R.D. 354 (D. Md. 2008) discussed the possibility of imposing sanctions under Federal Rule of Civil Procedure 26(g) (1), it took another five years until a court imposed such sanctions. In Branhaven, LCC v. Beeftek Inc., 2013 WL 388429 (D. Md. Jan. 4, 2013), Magistrate Judge Susan K. Gauvey sanctioned the plaintiff and its counsel for incorrectly certifying pursuant to Rule 26(g)(1) that the plaintiff “would make responsive documents available for inspection and copying at a mutually convenient time.” In doing so, Magistrate Judge Gauvey found that at the time the plaintiff’s counsel certified the discovery responses, it had “done little, or nothing, in terms of a reasonable inquiry and indeed had no knowledge of the number and identity of responsive documents.” The court also took issue with the fact that the plaintiff delayed for approximately five months in obtaining access to certain password-protected e-mail servers in its possession. Magistrate Judge Gauvey noted that while “a one month delay to allow an in-house effort to access the servers 12
might be seen as acceptable; a five month delay with its impact on the opposing party’s discovery is not.” Ultimately, the plaintiff produced 112,106 pages as incompletely Batesstamped PDFs a few business days before the Rule 30(b)(6) depositions of the plaintiff’s witnesses. As a result, the court found that “counsel’s failure to identify and produce [the e-mails from these servers] in an acceptable form and manner while suggesting—if not misleading defendants—that it had identified responsive documents [was] sanctionable.” In determining whether to sanction the plaintiff and its counsel pursuant to Rule 26(g)(1), the court noted that Rule 26(g)(3) mandates an award of “an appropriate sanction on the signer of the party on whose behalf the signer was acting, or both, including an order to pay the reasonable expenses, including attorneys’ fees caused by the violation.” Accordingly, because Magistrate Judge Gauvey found a violation of Rule 26(g) (1), she was required to impose, jointly and severally on the plaintiff and its counsel, an “appropriate sanction,” which she held was “the manpower and equipment costs defendants incurred as a result of the last minute and inadequate form and manner of the document production.” The court instructed the defendant to submit a bill for the “equipment and consulting costs” incurred due to the last-minute production of documents, and the court noted that it would “consider a modest award of attorneys’ fees associated with the motion for sanctions.” Editor’s Note: This groundbreaking decision imposing sanctions on both
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Winston & Strawn LLP the party and its counsel pursuant to Rule 26(g)(1) provides a strong cautionary tale for practitioners. Going forward, outside counsel should ensure that it is involved in the discovery process and is knowledgeable concerning the client’s efforts to search for and locate responsive documents.
Social Media A litigant’s ability to obtain access to social media accounts remains a hot topic, and courts facing motions to compel production of such information have come to different conclusions. For example, in Schubart v. Horizon Wind Energy, LLC, 2012 WL 6155844 (N.D. Ill. Dec. 11, 2012), Magistrate Judge Byron Cudmore found that a request seeking production of “all online profiles, postings, messages … photographs, videos and online communications” that “reveal, refer or relate to any [e]motion, feeling or mental state or reveal, refer, or relate to events that could reasonably be expected to produce a significant feeling, or mental state” was overbroad and burdensome, because there was neither a timeframe specified nor a connection drawn between the documents sought and the events of the case or the plaintiff’s damages claims. Magistrate Judge Cudmore also found it significant that the plaintiff had previously produced other documents reflecting her online postings, profiles, etc., which related to the allegations in the pleadings at issue. Conversely, in Richards v. Hertz Corp., 100 A.D.3d 728 (N.Y. App. Div. 2012), in an action by two plaintiffs to recover damages for personal injuries suffered in an automobile accident, the Second Department of the Appellate 13
Division of the New York Supreme Court reversed an order denying the defendants’ request for access to status reports, emails, photographs, and videos posted on the private side of plaintiffs’ Facebook accounts. The court did require production of photos evidencing the plaintiff “participating in a sporting activity.” Finding that the defendants had uncovered evidence on the public-facing portion of one plaintiff’s Facebook page contradicting her sworn deposition testimony regarding the extent of her injuries, the court noted that the inclusion of the photograph at issue on the plaintiff’s Facebook page suggested that additional, relevant evidence regarding her alleged injuries might exist on the private side of her Facebook account. Accordingly, the court held that the defendants were entitled to discovery of that evidence. Further, upon production of any such evidence, the court would “conduct an in camera inspection of all status reports, emails, photographs, and videos posted on [that plaintiff’s] Facebook account since the date of the accident to determine which of those materials, if any, are relevant to her alleged injuries.” The court denied the defendants’ request for production of the other plaintiff’s Facebook profile and postings, because it held that the defendants “failed to make a showing that the disclosure of such materials will result in the disclosure of relevant evidence or is reasonably calculated to lead to the discovery of information bearing on her claim.” Similarly, in Reid v. Ingerman Smith LLP, 2012 WL 6720752 (E.D.N.Y. Dec. 27, 2012), Magistrate Judge Marilyn Go ordered the production of relevant
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Winston & Strawn LLP communications and photos located in any of the plaintiff’s social media accounts, as they provided probative evidence of the plaintiff’s mental and emotional state. The plaintiff had filed an action seeking to recover for physical and emotional damages that the plaintiff allegedly suffered as a result of sexual harassment by one of the defendants. After obtaining photographs of and discussions relating to the plaintiff’s public postings on Facebook, the defendants sought to compel the plaintiff to produce photographs and information from the plaintiff’s private Facebook postings, and other social media accounts.
...an order pursuant to Rule 502(d), is “designed to allow the parties and the Court to defeat the default operation of Rule 502(b) in order to reduce costs and expedite discovery.”
Magistrate Judge Go found that the photographs and comments posted on plaintiff’s public Facebook page were relevant to her claims, and that the “plaintiff’s private postings may likewise contain relevant information that may be similarly reflective of her emotional state” and “may also provide information regarding potential witnesses with knowledge” of the plaintiff’s emotional state. But Magistrate Judge Go stopped short of ordering the plaintiff to produce the entirety of her Facebook and other social media accounts. Instead, the court required the plaintiff to produce to her counsel “all social media posts, communications and photographs made since January 2008.” The plaintiff’s counsel was then to review these posts and produce the following: (1) photographs posted by plaintiff during this period; (2) photographs posted by third parties where the plaintiff was “tagged”; and (3) posts and communications by third parties and plaintiff’s 14
responses to the extent that they contained observations of the plaintiff. Importantly, Magistrate Judge Go held that plaintiff had no justifiable expectation of privacy in her Facebook posts as there was no justifiable expectation that plaintiff’s friends would keep her profile private. Other courts have required that the requesting party make a threshold showing that relevant information exists on the requested party’s social media pages and postings. In Keller v. National Farmers Union Property & Casualty Co., 2013 WL 27731 (D. Mont. Jan. 2, 2013), Magistrate Judge Jeremiah Lynch denied the defendant’s motion to compel production of the plaintiffs’ social media account content. Magistrate Judge Lynch required that the defendants make a threshold showing that publicly available information on the plaintiffs’ social media sites undermined their claims, as such a threshold showing is necessary to guard against the “proverbial fishing expedition.” The court further found that the defendant’s argument that “because [plaintiff] ‘alleges a host of physical and emotional injuries’, information found on her social networking websites ‘may very well undermine or contradict’ those allegations,” did not reach the required threshold. Magistrate Judge Lynch found that absent evidence that the content of the plaintiff’s social media postings undermines her claims in the case, the defendant “is not entitled to delve carte blanche into the nonpublic sections of Plaintiffs’ social networking accounts.” Similarly, in Fawcett v. Altieri, 2013 WL 150247 (N.Y. Sup. Ct. Richmond County, Jan. 11, 2013), Justice Joseph
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Winston & Strawn LLP J. Maltese held that in order for a defendant in a personal injury action to obtain access to the plaintiff’s closed or private social media accounts, the requesting party “must show with some credible facts that the adversary subscriber had posted information or photographs that are relevant to the facts of the case at hand.” The court noted that in the absence of any showing that the subject party “disclosed some information about the subject matter of the pending lawsuit, granting carte blanche discovery of every litigant’s social media is tantamount to a costly, time consuming ‘fishing expedition’, which courts ought not to condone.” Nor, according to the court, should litigants ask “courts to review hundreds of transmissions ‘in camera.’”
the “decision to undertake a more efficient and less time-consuming method of document review [was] reasonable under the circumstances,” and ... “seemingly reduced the overall fees and attorney hours required by performing electronic document review at the outset.”
Judge Maltese denied the motion to compel because the defendants failed to provide sufficient support for an examination of the plaintiff’s social media postings. But the court granted the defendants leave to renew their motion after the completion of depositions.
Privilege In recent months, courts have addressed the ability of a party to obtain the return of inadvertently produced documents when the court has issued an order pursuant to Federal Rule of Evidence 502(d). For example, in Rajala v. McGuire Woods, LLP, Case No. 08-2638-CMDJW (D. Kan. Jan. 3, 2013), Magistrate Judge David Waxse allowed the plaintiff to clawback a privileged email that was inadvertently produced to the defendant. Plaintiff learned of the inadvertent production of the
privileged email when the defendant used the e-mail at a deposition, and the plaintiff immediately requested that the e-mail be returned. The defendant argued that the privilege had been waived because the plaintiff engaged in a “document dump” and did not take “reasonable steps” to preserve the privilege, as required under Rule 502(b) of the Federal Rules of Civil Procedure. Magistrate Judge Waxse rejected the Defendant’s argument that the default provisions of Rule 502(b) applied. In doing so, the court noted that it had previously granted the defendant’s motion for a clawback provision under Rule 502(d), which provided that the inadvertent production of privileged material “will not be deemed to waive a party’s claim to its privileged or protected nature or stop that party or the privilege holder from designating the information or document” as privileged at a later date. In discussing the rationale for his decision, Magistrate Judge Waxse noted that an order pursuant to Rule 502(d), is “designed to allow the parties and the Court to defeat the default operation of Rule 502(b) in order to reduce costs and expedite discovery.” Similarly, in Brookfield Asset Mgmt. Inc. v. AIG Fin. Prods. Corp., 2013 WL 142503 (S.D.N.Y. Jan. 7, 2013), Magistrate Judge Frank Maas held that the existence of a Rule 502(d) order precluded any finding that the defendant’s, or its counsel, had waived the attorney-client privilege. Although the defendants counsel produced redacted copies of certain minutes of its Board of Directors, privileged material was visible in the associated metadata. Magistrate Judge Maas
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Winston & Strawn LLP found that there was no waiver of the attorney-client privilege as there was nothing to “suggest that [the defendant or its counsel] did (or failed to do) anything that warrants a finding that [the defendant’s] attorney-client privilege ha[d] been waived.” The court did note that, as the facts of the case before him aptly demonstrated, there is a “need for counsel for a producing party to keep a watchful eye over their e-discovery vendors.” In addition, Magistrate Judge Maas, noted that the existence of a Rule 502(d) order precluded any finding that the attorney-client privilege had been waived. The Rule 502(d) order that Judge Maas had urged the parties to prepare, provided that the “Defendants’ production of any documents in this proceeding shall not, for the purposes of this proceeding or any other proceeding in any other court, constitute a waiver by Defendants of any privilege applicable to those documents, including the attorney-client privilege ….” Accordingly, Magistrate Judge Maas held that the defendant “has the right to claw back the minutes, no matter what the circumstances giving rise to the production were.” Editor’s Note: As these cases demonstrate, and other jurists have noted, there is no downside to asking for and obtaining a Rule 502(d) order, because it protects against unintended and inadvertent waivers of the attorney-client privilege.
Recovery Of eDiscovery Costs / Cost Shifting In Gabriel Technologies Corp. v. Qualcomm Inc., 2013 WL 410103 (S.D.Cal. Feb 1, 2013), Judge Anthony J. Battaglia found that the plaintiffs had pursued objectively baseless claims in bad faith, and accordingly determined that the defendants were entitled to an award of attorneys’ fees under 35 U.S.C. § 285 and Section 3426.4 of California’s Uniform Trade Secrets Act. The two statutes provide for the award of attorneys’ fees in patent and misappropriation of trade secrets claims. In calculating the total amount of the award, Judge Battaglia included the $10.2 million in attorneys’ fees billed by defendants’ counsel, $391,928.91 in fees incurred by document review attorneys, and $2,829,349.10 in fees associated with the use of “computer assisted, algorithm-driven document review.” The court noted that the “decision to undertake a more efficient and less time-consuming method of document review [was] reasonable under the circumstances,” and that the defendants’ counsel “seemingly reduced the overall fees and attorney hours required by performing electronic document review at the outset.” Editor’s Note: While the court’s recognition of the value added by the use of computer-assisted review is noteworthy, the specifics of the case at hand — namely the plaintiff’s bad faith assertion of objectively unreasonable claims — limits the ability to recover these eDiscovery costs to a very narrow range.
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Winston & Strawn LLP Moreover, courts continue to struggle to define the exact contours of 28 U.S.C. § 1920 as it applies to the recovery of eDiscovery costs by a prevailing party. In Moore v. The Weinstein Company LLC, 2012 WL 6590752 (M.D. Tenn. Dec. 18, 2012), Magistrate Judge Joe Brown awarded defendants $36,196.90 in eDiscovery costs under 28 U.S.C. § 1920. Importantly, the parties had “agreed to e-discovery procedures in the Case Management Order.” As such, Magistrate Judge Brown found that the charges incurred by the defendant’s outside vendor for processing documents into specific formats and “further processing that document for production,” e.g., “searching for specific custodians,” were necessary costs for litigation, and thus recoverable. But the court did not grant the defendant a carte blanche recovery for its in-house “Technology Services” charges. Finding that “technology services technologists have specialized expertise and training similar to a paralegal,” Magistrate Judge Brown allowed the defendant to charge $100 per hour for these services, or 33% less than its normal in-house rate. In addition, the court did not allow the defendants to recover for various eDiscovery services relating to “work on discovery budget,” “preparation of deposition transcripts for review,” “preparation of documents for hearing,” and “preparing for and attending the telephonic deposition of IT vendor,” because those tasks were either unnecessary or could have been performed by paralegals. With respect to cost shifting, parties are required to demonstrate that 17
shifting costs to the requesting party is appropriate under the circumstances. In Fleisher v. Phoenix Life Insurance Company, 2012 WL 6732905 (S.D.N.Y. Dec. 27, 2012), Magistrate Judge James Francis IV granted the plaintiffs’ motion to compel the defendant to complete production of responsive documents. The defendant argued that certain limitations with its searching software and the volume of data to be reviewed required significant additional time. Specifically, the defendant argued that even though it had already produced over 600,000 pages, it still had approximately 130,000 documents to review. Magistrate Judge Francis held that the defendant was not entitled to shift the cost of production to plaintiffs. In doing so, the court noted that the “presumption is that the responding party must bear the expense of complying with discovery requests[.]” Acknowledging that this presumption is rebuttable, Magistrate Judge Francis then analyzed whether the request was supported by the following factors, including, among others: (1) the degree to which the request is designed to discover relevant information; (2) the availability of the same information from different sources; (3) the cost of production compared to the amount in controversy; (4) the cost of production compared to the resources of each party; and the (5) the parties’ relative abilities to control discovery costs and their incentives to control costs. The court ultimately determined that the defendant had identified neither the cost of the additional discovery, nor the amount in controversy, and the
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Winston & Strawn LLP fact that the defendant had pointed to the resources of plaintiffs’ counsel was irrelevant. In addition, the court noted that it had entered a Rule 502(d) order which would allow the defendant protection against inadvertent production of privileged documents, and could help facilitate the document review process.
Stored Communications Act And Internet Service Providers
“Rule 45(c)(1) cannot properly support an award of sanctions when the cost of complying with a subpoena is minimal and there is no showing that the subpoena was facially defective or issued in bad faith.”
In Garcia v. City of Laredo, Texas, 2012 WL 6176479 (5th Cir. Dec. 12, 2012), the Fifth Circuit addressed the scope of the SCA, and specifically held that the SCA does not apply to information retrieved from an individual’s cell phone. The decision turned on the definition of “facility” in the SCA, and specifically whether - as the plaintiff alleged - a personal cell phone is a facility in which electronic communications are kept in electronic storage. The Fifth Circuit affirmed the lower court’s ruling that the SCA did not apply in this instance, holding that an individual’s cell phone does not “provide” electronic communication services as it is defined within the SCA. The court ruled that in the case before it, obtaining information stored on a cell phone does not violate the SCA, as there was no evidence that the defendant gathered information directly from the cell phone carrier’s network, as opposed to simply obtaining information stored in the phone, Similarly, in Fox v. CoxCom Inc., Slip. Op. No. CV-11-594 (D. Ariz. Dec. 3, 2012), Judge Stephen M. McNamee 18
held that the defendant did not violate the SCA when it provided e-mails and other information from the plaintiff’s e-mail accounts to the Arizona Attorney General’s Office in response to a grand jury subpoena. In doing so, Judge McNamee found that good faith reliance on a government subpoena is a complete defense to an alleged violation of the SCA. The court granted the defendant’s motion to dismiss based on this defense, finding that the plaintiff failed to present any evidence that Cox acted unreasonably in complying with the grand jury subpoena and a subsequent search warrant. Courts continue to split on whether a party is entitled to obtain the identity of internet account holders from their internet service providers (“ISPs”). In Huntington Ingalls Inc. v. Doe, 2012 WL 5897483 (N.D. Cal. Nov. 21, 2012), Magistrate Judge Donna Ryu ruled that the plaintiff was entitled to expedited discovery regarding the identity of the owner of a Gmail address to which a vendor had sent the plaintiff’s property. Google had agreed to comply with the plaintiff’s efforts to secure the return of the inadvertently e-mailed property, if the plaintiff obtained a valid subpoena for the information. After demonstrating that the plaintiff could not obtain information sufficient to identify the owner of the Gmail account, Magistrate Judge Ryu held that the plaintiff was entitled to expedited discovery and could serve a valid subpoena on Google for the registration information associated with the Gmail account in question. In doing so, Magistrate Judge Ryu agreed that the protocol for serving the
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Winston & Strawn LLP subpoena and for providing time for both Google and the account owner to object to it adequately protected the account owner’s rights. In Mount Hope Church v. Bash Back!, 2012 WL 5907498 (9th Cir. Nov. 26, 2012), the Ninth Circuit reversed a district court’s award of attorneys’ fees and costs to certain third parties after the court had denied the plaintiff’s motion to compel the disclosure of the names of several anonymous e-mail account holders. The plaintiff believed the addresses belonged to persons that should be named as defendants in its lawsuit, or at a minimum, belonged to people who knew the identities of those “John Doe” defendants. The ISP and one of the anonymous e-mail account holders (“third parties”) filed separate motions to quash the subpoena. The district court granted the motions to quash and found the third parties’ First Amendment rights outweighed the plaintiff’s discovery requests. The district court then granted the third parties’ motions for sanctions and awarded attorneys’ fees and costs under Federal Rule of Civil Procedure 45(c)(1). The Ninth Circuit reversed the sanctions award, finding that the third parties did not suffer an undue burden when the plaintiff had legitimate legal reasons for issuing the subpoena and pursuing the names of the seven e-mail account holders. The court also found that Rule 45(c)(1) cannot properly support an award of sanctions when the cost of complying with a subpoena is minimal and there is no showing that the subpoena was facially defective or issued in bad faith.
In addition, in a case of first impression the Fourth Circuit in U.S. v. Hamilton, Slip. Op. No. 11-4847 (4th Cir. Dec. 13, 2012) held that the marital privilege does not extend to e-mail communications sent and received on the employee’s work e-mail account (and over the employer’s computer system) where the employer has a computer use policy that provides that there is “no expectation of privacy in their use of the Computer System.” The defendant argued that the communications at issue were made at a time when the employer did not have a computer use policy and that accordingly those communications were privileged. The Fourth Circuit disagreed, noting that the employer’s computer use policy noted that all “information created, sent[,] received, accessed or stored in … the Computer System is subject to inspection and monitoring at any time.” In affirming the trial court’s conclusion that the e-mails were not privileged, the Fourth Circuit found it important that the defendant never took any precautions designed to protect the confidentiality of his earlier communications.
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Winston & Strawn LLP
Upcoming Speaking Events March 5, 2013 John Rosenthal, “Predictive Coding Success: A Case Study, Equivio Predictive Coding” Seminar.
Recent Publications and Events December 7, 2012 Conrad Jacoby, “Selling TAR to Opposing Counsel and the Court: How Much Disclosure is Necessary”. January 31, 2013 John Rosenthal, “Defensible Disposal; If it doesn’t exist I don’t have to review it.”, Legal Tech New York No. 13. February 1, 2013
Sheryl Falk, University of Houston, Panel on Data Privacy Law.
Featured Contributors The Editors wish to thank Michael P. Baniak, Esq., Peter J. Corcoran, III Esq., Anna Lamut, Esq., and Patty Leeper for their invaluable contributions to the content of this issue.
Contact Us If you have questions about the items in this issue of eDiscovery Advantage, would like to learn more about these cases or other eDiscovery matters, or would like to be added to the mailing list, please contact one of the following:
New York Christopher C. Costello, Esq. (Executive Editor)