Turning Rule 26(a) Initial Disclosures into Rule 26(e) Supplemental Disclosures

What happens if more responsive documents are found after the case management order setting a required disclosure deadline?

Answer: You must supplement your disclosure.

In Kutrip v. City of St. Louis, 2009 U.S. Dist. LEXIS 60199 (E.D. Mo. June 30, 2009), the deadline for discovery was November 30, 2006 and initial disclosures were set for May 8, 2006.  Discovery deadlines were extended to the summer of 2007 in a second case management order.  David Thomas Kutrip, 1-2.

In March 2009, the Plaintiff sent the Defendant a letter request for additional discovery. David Thomas Kutrip, 2-3.  The Defendant responded that if “public records are identified, [we] will provide you with an estimate of costs associated with this request prior to commencing any gathering of records. We will attempt to provide you with this information as soon as is feasible.” David Thomas Kutrip, 3.

Federal Rule of Civil Procedure Rule 26(a)(1)(A)(ii) requires a party to disclose to their opponents “…a copy–or description by category and location–of all documents, electronically stored information, and tangible things that the disclosing party has in its possession, custody, or control and may use to support its claims, unless the use would  be for impeachment.” David Thomas Kutrip, 3-4.

Rule 26(e)(1)(A) requires that a party “must supplement . . . its disclosure . . . in a timely manner if the party learns that in some material respect the disclosure . . . is incomplete . . . and if the additional . . . information has not otherwise been made known to the other parties during the discovery process or in writing[.]“David Thomas Kutrip, 4, citing Fed.R.Civ.P. 26(e)(1)(A).

The Court held that the Defendants were to produce any additional responsive documents.  The Court’s reasoned the Defendant’s letter waived the disclosure deadline when they agreed to produce additional documents.  David Thomas Kutrip, 4.  Moreover, the Defendant had a “continuing obligation” to produce responsive discovery under Federal Rule of Civil Procedure Rule 26(e)(1)(A).

Turning a Tag into a Court-Martial

A soldier was convicted for being absent without leave (AWOL) after finding out his Army unit’s deployment was extended to a year in Iraq. United States v. Scheuerman, 2009 CAAF LEXIS 812, 7-8 (C.A.A.F. 2009).  The Defendant claimed he suffered from post-traumatic stress disorder, which is why he went AWOL. 

Part of the evidence against the Defendant was testimony from platoon sergeant on the Defendant’s negative attitude on the Army. Rules for Courts-Martial 1001(B) allows for presenting evidence in aggravation of “any aggravating circumstances directly relating to or resulting from the offense of which the accused has been found guilty.” Scheuerman, 4-5.

The Court included one comment in a footnote from the Defendant’s MySpace profile, posted on the day he was supposed to be on a plane back to Kuwait.  The redacted message is posted below: 

“UNCLE [Redacted] [Redacted] [Redacted] SAM JUST EXTENDED MY UNIT IN IRAQ. . . . SO INSTEAD OF GOIN [SIC] BACK TODAY AND HAVIN [SIC] LIKE 7 OR 8 MONTHS LEFT, I HAVE A [Redacted] YEAR!!!!!!!!!!!!!!!!!!” Scheuerman, 9, fn 4.

The Defendant’s conviction was upheld.  The Court found that his many negative comments were properly admitted, because the “remarks demonstrate a lack of remorse for the offenses of which he was convicted and, as such, are relevant in fashioning an appropriate sentence.” Scheuerman, 9.

Bow Tie Thoughts

Web 2.0 actions can have real life consequences.  People should be very careful in venting about frustrations and not crossing into legal action. 

In the civilian world, speaking negatively about your company or coworkers online might result in getting fired, HR violations or a defamation lawsuit.  In the military, the consequences can be a bad conduct discharge. 

Status messages, tags and comments are appearing in litigation.  People need to be aware their actions can have consequences in cyber-space.

The Karaoke Bar of Personal Jurisdiction

The Defendant, a karaoke song provider from California, was sued in Tennessee for copyright infringement for song downloads. 

The Plaintiffs were a music publisher and claimed ownership of thousands of subject songs that were allegedly infringed on by the Defendants. 

The Defendants claimed they had no contacts with the state of Tennessee and challenged the application of personal jurisdiction.  The Court found personal jurisdiction was proper.  Sony/ATV Music Publ. LLC v. CAVS USA, Inc., 2009 U.S. Dist. LEXIS 62512 (M.D. Tenn. July 21, 2009)

The general rule for extending jurisdiction over a Defendant for a website is determining whether a party purposely availed themselves to a forum state by an interactive website.  Sony/ATV Music Publ. LLC, 12.  Courts view websites as having three levels of interactivity, which are quoted below:

(1) Passive sites that only offer information for the user to access;

(2) Active sites that clearly transact business and/or form contracts; and

(3) Hybrid or interactive sites that allow users to “exchange information with the host computer.” Sony/ATV Music Publ. LLC, 12.

The key to finding personal jurisdiction was the fact the Defendants in the present case operated an “interaction” website that provided prices and orders for download.  Sony/ATV Music Publ. LLC, 12-13. 

The Defendants sold downloadable infringing songs to over 100 customers in Tennessee.  The Court noted the test for personal jurisdiction did not focus on what percentage these customers were for the Defendant, but “…whether the absolute amount of business conducted by [Defendants in Tennessee] represents something more than ‘random, fortuitous, or attenuated contacts with the state.” Sony/ATV Music Publ. LLC, 13, citations omitted. 

The Court also justified extending jurisdiction over the California Defendants because the Defendants could not provide music downloads or accept payment from people in Tennessee without “reaching out” to Tennessee residents. 

Personal jurisdiction was found over the Defendants from their inactive website, sales of music to Tennessee residents and marketing songs through business partners. All of these factors were enough to show the Defendants figuratively “stepped up to the mike” to “purposely availed” themselves to the laws of Tennessee.  Sony/ATV Music Publ. LLC, 15-16.

When You Have Over 100 “Any and All” Requests for Production, Don’t Complain About Lots of Documents to Review

When, as here, broad discovery requests lead to relevant documents being mixed in with seemingly irrelevant documents, the fault lies just as much with the party who made the request as with the party who produced documents in response to the request.

District Court Judge Ted Stewart, Cmty. House, Inc. v. City of Boise, 2009 U.S. Dist. LEXIS 49501, 7-8 (D. Idaho June 12, 2009)

Broad discovery requests, discovery produced in the ordinary course of business, and privilege logs fill the story of Cmty. House, Inc. v. City of Boise, 2009 U.S. Dist. LEXIS 49501 (D. Idaho June 12, 2009). 

The Discovery Requests & Production

The Plaintiffs made two sets of discovery requests.  The Defendants responded to the first request without a written answer, but instead produced 5 boxes of documents and 7 CDs with scans of the documents.  Cmty. House, Inc., 1-3.  The Defendants claimed the documents were produced as they were kept in the ordinary course of business. 

Second Set of Production Requests

The Plaintiffs made an additional 66 requests for production.  The requests included broad, boilerplate language for “any and all” documents across the Defendants’ document universe.    Cmty. House, Inc., 3. 

The Defendants produced 21 boxes of documents.  The documents were Bates-stamped and written responses.  The Defendants also included an index for each box.  Cmty. House, Inc., 3. 

The Privilege Log

The Defendants produced a Privilege Log identifying nearly 300 documents.  Cmty. House, Inc., 3. 

The Privilege Log contained the following information for the claimed privilege documents:

(1) Bates number, where applicable;

(2) The box number in which it would have been contained;

(3) The number of pages in the document;

(4) The date the document was authored;

(5) The author and recipient(s) of the document;

(6) Brief description of the document; and

(7) Claimed privilege.

 Cmty. House, Inc., 3-4.

The Plaintiffs’ Attack: Failed Forms of Production & Ineffective Privilege Logs

The Plaintiffs claimed the Defendants’ form of production was not responsive to the Plaintiffs’ requests, because the “Defendants failed to organize the documents produced by either topic or request number.”  Cmty. House, Inc., 4.

The Plaintiffs also alleged unethical conduct, because the “Defendants intentionally hid relevant documents in the middle of unrelated irrelevant documents.” Cmty. House, Inc., 4.

The Plaintiffs issued a blanket claim the privilege log was insufficient and that the court review ALL of the documents in camera (which would be 26 boxes and 7 CDs).  Cmty. House, Inc., 4.

 

The Document Production: Rule 34(b)(2)

The Plaintiffs argued the production failed because the Defendants did not “organize or provide specific responses” to the requests.  Cmty. House, Inc., 5. 

The Plaintiffs based their arguments on Federal Rules of Civil Procedure Rule 34(b)(2), which “requires a party to answer a discovery request within thirty days and respond to each item or category.”  Cmty. House, Inc., 5. 

The Mechanics of Rule 34(b)

Federal Rule of Civil Procedure Rule 34(b)(2)(A) requires a producing party to respond “in writing” to a Rule 34 request.  Cmty. House, Inc., 5.  The Defendants did respond to the production request, however they did not produce a written response.  Id.

Pursuant to Federal Rule of Civil Procedure Rule 34(b)(2)(B), a producing party must state for request whether they are producing responsive documents or objecting.  Cmty. House, Inc., 5-6.

The First Request

The Court ordered the Defendants to respond in writing to the Plaintiffs’ request for production.  Simply producing 5 boxes of documents without a written response does not meet a producing party’s discovery obligations.  Cmty. House, Inc., 5-6. This arguably would not comply with Federal Rule of Civil Procedure Rule 26(g), that a production was “complete and correct as of the time it was made.” 

The Second Request

The Plaintiffs claimed the Defendants engaged in “hide the document” gamesmanship by producing an additional 21 boxes of paper.  Cmty. House, Inc.6-7. 

The Court did not agree. 

The Plaintiffs requests were a broad net that would catch relevant case documents, but were also likely non-responsive.  Cmty. House, Inc. 6-7.

Moreover, considering the Plaintiffs had over 100 broad discovery requests, 26 boxes of documents was not an unreasonable production.  Cmty. House, Inc., 7.

Were the Defendants Required to Re-Organize their Productions?

The Court did not require the Defendants to reorganize their production.  Cmty. House, Inc., 8-9.

Rule 34(b)(2)(E)(i) states:

A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

The Defendants produced the documents as they were maintained in the ordinary course of business, which is what they were required to do pursuant to Rule 34(b)(2)(E)(i).  Additionally, the 21 box production was labeled and organized enough to comply with Rule 34(b)(2)(E)(i).  Cmty. House, Inc., 8. 

The Privilege Log

Privilege Logs are defined in Fed. R. Civ. P. 26(b)(5)(A), which requires a privilege log to “describe the nature of the documents . . . in a manner that, without revealing information itself privileged or protected will enable other parties to assess the claim.” Cmty. House, Inc., 9.

A party has met their initial burden claiming a privilege once they have complied with the requirements of Fed. R. Civ. P. 26(b)(5)(A). Cmty. House, Inc., 9-10.

The Court held the Defendants’ privilege log was sufficient.  Cmty. House, Inc., 10.  The privilege log combined with the list of city employees matched with responsibilities, gave the Plaintiffs the able to access whether a privilege attached to any of the documents.

Bow Tie Thoughts

I thought it a little strange that someone would have such a large number of paper documents, given the high use of computers in generating letters, memos and email since the mid 1990s.  I can guess the City might have had blue prints or construction documents that might have been never in a digital format, but the facts of the case do not say.  Keeping ESI as electronically stored information is cheaper then printing it as paper.

Producing paper documents, such as letters or reports, as paper may drive up discovery costs, because scanning paper to paper incurs a greater cost then scanning paper to TIFF or PDF with searchable text.  

Optical Character Recognition (OCR) works only on typed documents (while ATM’s can OCR handwriting on checks, I have not heard of a litigation OCR engine reading handwriting yet).  Whether or not these documents were letters, memos or something with typed text is unknown, but OCR-ing the documents would make them “searchable,” depending on the quality of the scans.

Telling the Judge ESI is “Expensive” is not an Excuse for Failing to Produce

It is generally a bad sign when an opinion begins with a Court banning parties from filing more discovery motions without the Court’s approval.  This is one of those cases.  Textron Fin. Corp. v. Eddy’s Trailer Sales, Inc., 2009 U.S. Dist. LEXIS 60065 (E.D.N.Y. July 10, 2009).

One of the discovery motions was the Plaintiff’s motion to compel electronic discovery.  Textron, 1-2. 

The Defendants opposed the motion claiming they could not afford the ESI retrieval and production costs.  Id.

The Defendants offered no evidence on the cost to produce, other then them saying “it’s expensive.”  Textron, 1-3.

The Issue: Should the Defendant’s Pay for Producing Electronically Stored Information?

The Court had ordered earlier in the case for the Defendants to “to produce all electronic documents responsive to Plaintiff’s demands…”  Textron, 2.  The Court’s issue was whether the Producing Party was required to pay all of the costs.  Textron, 2. 

Cost Shifting and Reasonably Accessible ESI

The Federal Rules of Civil Procedure, the Advisory Notes and case law require electronically stored information to be not “reasonably accessible” for cost shifting.  Textron, 2-3.

The Court quickly held that the ESI on the Defendants’ two servers was “accessible,” as it was “stored in a readily usable format.”  Textron, 2. 

Since the electronically stored information was reasonably accessible, cost shifting was not appropriate. 

The Defendants also failed to provide any evidence of their “inability to fund” their discovery obligation.  Textron, 2. 

While a party’s resources is a factor in cost shifting, merely telling a court there is undue burden or financial hardship is not enough for a party to shift any production costs.  Textron, 2, citing Fed. R. Civ. P. 26 Advisory Committee Notes (2006). 

A court would likely want proposals from an expert or vendors on costs; statements on the party’s financial strength and other evidence beyond a lawyer’s claim ESI productions are “expensive.” 

The Court further ordered the parties to meet and confer on the ESI production.  The Court also required the Defendants to pay any vendor in advance before production began, if they decided to use a service provider.  Textron, 4.

The Court’s Costs Cap

The Court capped the Defendants’ ESI production obligations at $10,000, based on the Court’s own discretion.  Textron, 3. Anything above $10,000 would need to be carried by the Plaintiffs.  Id.

Bow Tie Thoughts

A producing party cannot dodge its production obligations by merely claiming electronically stored information is expensive to produce.  A court will require a showing the ESI is not reasonably accessible for there to be any cost shifting.  A party claiming financial hardship will likely need to show some evidence of their financial resources as well.

How to Get Kicked Out of Law School on Facebook

Activities on Facebook, YouTube or any social networking site can land you in trouble.  People do not have a blank check to do anything online.  Key v. Robertson, 2009 U.S. Dist. LEXIS 51092, (E.D. Va. June 5, 2009) is an example of this situation.

When Facebook Goes to a Law School with Standards of Personal Conduct

A second year law student took a video clip of the law school chancellor scratching the side of his head on YouTube.  When paused at the right time, it looked like the chancellor was giving the middle finger.  The student took a screen shot of the video clip and made it his profile photo on Facebook.  Key, 1-3. 

The law school found out about the student’s profile photo and asked him to remove it because it violated the “Regent Standard of Personal Conduct’s prohibition against profane or obscene behavior.” Key, 3-4

The student took the photo off his Facebook profile.  However, the student thought he could use the photo in the “appropriate academic context” because the Regent’s policy included an “academic” exception.  Key, 3-4.

The student posted the photo on the law school listserv, which was used by school staff, faculty and law students.  Key, 4.

As one can imagine, this did not go over well.  The student was given the choice of posting an apology for posting or submitting “a legal brief in support of his contention that Regent’s disciplinary actions against him violated the American Bar Association’s (“ABA”) accreditation standards for law schools.”  Key, 5.  The student chose valor over grace and decided to fight.

The case got uglier, descending into the student’s legal fight and other students filing complaints they were afraid of the student.  The facts of this case took place around the time of the Virginia Tech shootings and people were understandably concerned about their safety.  Key, 5-16.

The school wanted the student to see a mental health professional because of the complaints, which the student refused.  The student was ultimately suspended for a year for bringing a stun gun on campus.  Key, 5-16.

Failed First Amendment Arguments

The Student Plaintiff claimed his First Amendment rights were violated by the private law school. The Plaintiff claimed there was a “state action” in that the private law school chilled his speech, because the school received direct and indirect Federal and state funds.  Key, 31.

A school receiving public funds does not make a private school’s decisions a “state action.” Key, 31-32.  As such, the Plaintiff’s First Amendment and other Constitutional arguments failed.  Key, 32.

Bow Tie Thoughts

People can get into trouble for online conduct.  While the facts of this case become extreme, the initial event of posting a photo happens all the time.

Spoliation is a “Grimm” Business

Magistrate Judge Grimm is no stranger to watershed opinions…and on occasion the 100 page a law review article disguised as an opinion on the admissibility of electronically stored information.

Goodman v. Praxair Servs., 2009 U.S. Dist. LEXIS 58263 (D. Md. July 7, 2009) is Judge Grimm’s recent opinion on litigation holds, the duty to preserve and sanctions.  It is detailed and a great case study of spoliation. 

The Background Facts

The Plaintiff was a pro se litigant seeking damages for breach of contract.  The Plaintiff claimed he was critical to the success of a project, thus he was entitled to a $50,000 “success fee.”  Goodman, 1-3.  The Defendants did not agree…

The Plaintiff’s Motion for Sanctions

The Pro Se Plaintiff apparently knew his way around a keyboard and argued the following for spoliation sanctions: 

 (1) Defendants reasonably should have anticipated litigation and preserved evidence relevant to the underlying dispute after April 1999, November 1999, March 2000, or December 2000;

(2) Defendants chief executive officer Shannan Marty (“Marty”) deleted all relevant documents from her computer “while selectively preserving hard copies”;

(3) Defendants failed to issue a litigation hold to its “key players” and third-party consultants;

(4) Defendants destroyed employees’ computers after the duty to preserve was triggered;

(5) Internal communications and emails of Defendants’ employees were not preserved; and

(6) Defendants failure to search disaster recovery tapes and compact discs constitutes destruction of evidence. Goodman, 1-3.

The Defendants’ “I Don’t Think So” Arguments

The Defendants’ claimed the following:

(1) Plaintiffs’ Motion was untimely;

(2) The duty to preserve did not arise until February 19, 2001;

(3) The CEO was the sole “key player” for the Defendants, and she properly instituted a litigation hold once the duty to preserve arose;

(4) There was no duty to preserve the computers of the Defendants’ employees or files of third-party consultants; and

(5) The Plaintiff failed to provide any authority to show Defendants’ failure to search the disaster recovery tapes and compact discs constituted spoliation. Goodman, 3.

The Court’s Findings

 

In a factually detailed opinion, Judge Grimm found the following:

(1) The Plaintiff’s Spoliation Motion was timely filed;

(2) Defendants reasonably should have anticipated litigation on January 5, 2001, and its duty to preserve evidence relevant to the Plaintiff’s claim commenced on that date;

(3) The duty to preserve applied to the CEO and other key Defense players;

(4) Defendants were not obligated to issue a litigation hold to third-party consultants or preserve any documents or records prepared by third-party consultants;

(5) Defendants’ failure to search backup tapes did not constitute spoliation of evidence;

(6) Defendants did not act in bad faith in its destruction of evidence;

(7) Defendants was negligent in its failure to issue a litigation hold to key players;

(8) Defendants acted willfully in its destruction of Marty’s laptop, and knew of the relevance of the laptop to Goodman’s claim;

(9) The CEO acted willfully when she deleted emails in violation of the duty to preserve, and knew of the relevance of the emails;

(10) Plaintiff’s request for summary judgment or a series of fact-specific adverse jury instructions must be denied; and

(11) Plaintiff’s request for a general adverse jury instruction as to Defendants and the CEO’s actions was granted.

(12) Attorneys Fees & Costs for the Plaintiff.  Goodman, 5-6

The Contract & Dispute

The Plaintiff negotiated with the Defendant CEO “Marty” for compensation based on project success and services.  Goodman, 9-10. 

Things were not as productive as the Defendants wanted on the project and the Defendants brought in other third-party consultants to finish the project. 

The Plaintiff was incensed by the other consultants taking the lead on the project, which resulted in him sending letters threatening litigation.

On the Path to the Litigation Hold

The Defendant CEO would delete emails after reading them.  The CEO would print relevant emails and place in a client file if she needed to save them.  After the Plaintiff’s letter demanding payment, she sought counsel and enacted a “litigation hold.”  Goodman, 19.

The Court found no evidence the Defendants’ attorney instructed the CEO, other Defendants or third-party consultants to enact a litigation hold, because “…Marty [CEO] preserved the evidence herself.”  Goodman, 19.  The company founder, another employee and third party consultants involved in the project were never subject to a formal litigation hold.  Goodman, 19-20. 

The Defendants’ Records Retention Policies

The Defendants had seven data servers, one of which was for employees to save “work-related” files.  Goodman, 22.   The “work-related” file server, plus the Microsoft Exchange and Outlook emails systems, were backed up on a disaster recovery system.  Id.

The Defendants were acquired by a new company and the IT systems changed, including replacing 45 computers.  Data from the “old” computers was only transferred to new computers if an employee requested it.  Goodman, 22-23.  The Defendants’ email system was changed to Lotus Notes after the change in ownership.  Goodman, 24.

The record showed, “Any emails from the old email system[s] that were not deleted in the [ordinary course of business] would have been captured in the nightly back up process on the disaster recovery tapes . . . .” Goodman, 24.

The CEO’s Laptop

The CEO had her own laptop and would save files locally onto the machine.  Goodman, 23.

After the Defendants were acquired, the laptop was re-imaged and assigned to a different employee and ultimately replaced.  Goodman, 24.

Back Up Data

The Defendants’ “back up” data included 280 disaster recovery tapes and CD’s.  Even though the material was not labeled, the Defendants continued to store them. Goodman, 24-25.

Journey into Search Terms

Defense counsel had their expert run search terms over a hard drive with the archive from the Defendants’ “work-related” server.  This search returned 35,485 hits that contained at least one search term.  Goodman, 25-26.

The Defendants narrowed the search to between April 1, 1998 to April 1, 2001 which returned 309 hits.  Defense counsel determined only one “hit” was responsive to the Plaintiff’s request for production.  Goodman, 25-26. 

Defendants also produced 2,530 pages of documents to the Plaintiff.  Goodman, 26.

Spoliation Standards

“The failure to preserve electronic or other records, once the duty to do so has been triggered, raises the issue of spoliation of evidence and its consequences.”

Goodman v. Praxair Servs., 2009 U.S. Dist. LEXIS 58263, 28 (D. Md. July 7, 2009), citing Thompson v. U.S. Department of Housing & Urban Development, 219 F.R.D. 93, 100 (D. Md. 2003).

A Federal Court can sanction a party for spoliation pursuant to the Court’s inherent power or if a party has violated a Court order.  Goodman, 28-29.

Spoliation sanctions may include a dismissal, default judgment, preclusion of evidence, adverse inference instruction or attorney’s fees and costs.  Goodman, 29.

No Court Order Violated

There was no court order that the Defendants violated justifying an order for spoliation sanctions.  Goodman, 29.  As such, if there was to be any spoliation sanctions they would be based on the Court’s inherent powers because the Defendants violated the general duty to preserve.  Goodman, 29-30. 

When is a Spoliation Motion Untimely?

The Defendants claimed the Plaintiff’s spoliation motion was untimely.  The Court identified five steps in analyzing whether a spoliation motion was untimely.

(1)    How long after the close of discovery the relevant spoliation motion was filed?

(2)    The temporal proximity between a spoliation motion and motions for summary judgment.

(3)    Was the motion made on the eve of trial?

(4)    Whether there was any governing deadline for filing spoliation motions in the scheduling order issued pursuant to Fed. R. Civ. P. 16(b) or by local rule.

(5)    A moving party’s explanation as to why the motion was not filed earlier should be considered.  Goodman, 31-32.

Spoliation motions need to be filed “as reasonably possible” after facts are discovery showing the loss of evidence.  Judge Grimm explained that those motions are fact intensive that require the Court to determine “when the duty to preserve commenced, whether the party accused of spoliation properly complied with its preservation duty, the degree of culpability involved, the relevance of the lost evidence to the case, and the concomitant prejudice to the party that was deprived of access to the evidence because it was not preserved.”  Goodman, 35-36.

Untimely or Timely?

The tone of Judge Grimm’s holding made it sound like the motion was going to be untimely.  However, the Court denied the Defendants’ request to find the Spoliation motion untimely.  Goodman, 39-40.

The Plaintiff had filed his motion 5 months after discovery closed.  The Plaintiff offered no valid reasons why he was late, especially when he stated his intention to do so at an earlier status conference.  Goodman, 39.

The justification for not filing the Spoliation Motion was that the dispositive motions had not yet been ruled upon.  Additionally, the motion was not filed on the eve or trial nor would it require discovery being reopened.  Goodman, 39-40.

Spoliation Elements

The elements for spoliation are:

(1) [T]he party having control over the evidence had an obligation to preserve it when it was destroyed or altered;

(2) The destruction or loss was accompanied by a “culpable state of mind;” and

(3) The evidence that was destroyed or altered was “relevant” to the claims or defenses of the party that sought the discovery of the spoliated evidence, to the extent that a reasonable factfinder could conclude that the lost evidence would have supported the claims or defenses of the party that sought it. Goodman, 40.

Trigger Date for Duty to Preserve

 The mere existence of a dispute does not necessarily mean that parties should reasonably anticipate litigation or that the duty to preserve arises.

Goodman v. Praxair Servs., 2009 U.S. Dist. LEXIS 58263, 40 (D. Md. July 7, 2009).

The Court found that the duty to preserve was triggered when the Plaintiff sent the CEO a letter that provided constructive notice of a lawsuit was likely, because of the fee dispute and threats of seeking legal counsel.  Goodman, 40.

What is a “Relevant Document”?

The Court defined “relevant documents” as anything defined by Federal Rule of Civil Procedure 34(a) that was “likely to have discoverable information that the disclosing party may use to support its claims or defenses.” Goodman, 47.

The Duty to Preserve relevant documents included those who can be identified from email message “To” fields to anything relevant to the subject matter of the case.  Goodman, 47.

Getting the Band Back Together: Identifying the Key Players

The Duty to Preserve extends to employees likely to have relevant information, which the Court coined as the “key players.”  A “key player” is not based on the volume of ESI they generate but whether they are likely to have “information relevant to the events that underlie the litigation.” Goodman, 47.

The Court found that the Defendants’ “key players” were under a duty to preserve relevant documents and ESI beginning on January 5, 2001, the date of the Plaintiff’s letter.  Goodman, 48.  

Who Does the Duty to Preserve Apply To?

The Court found that the duty to preserve applied to the CEO and employees of the Defendants, because the Defendants had control of those documents and ESI within their possession.  Goodman, 63-64. 

The Defendants did not preserve the CEO’s laptop and computers of other employees.  The Court found that the loss of these computers violated the Defendants’ duty to preserve electronically stored information.  Goodman, 64.

Noteworthy Findings

The Court stated there was insufficient evidence to find any spoliation for documents pertaining to a draft release made after a December 2000 phone call that might have existed.  Goodman, 64-65. 

The Court held that a failure to perform a keyword search over preserved backup tapes is not the functional equivalent of spoliation.  Goodman, 64-65. 

Failure to Enact a Litigation Hold: Negligent & Willful

The Court found that the Defendants were negligent by failing to enact a litigation hold over the Defendant CEO and employees. Goodman, 81.

The Court held the Defendants acted willfully when they destroyed the computers of the CEO and employees.  However, the Court stated the Defendants likely knew only the CEO’s was relevant.  Goodman, 81.

As such, there was insufficient evidence to justify an adverse inference instruction against the two Defendant employees.  Id.  However, the CEO is another story. 

The relevance of the CEO’s laptop was “overwhelming” in the Court’s own words.  The CEO is also a case study in the dangers of a party “self-collecting” electronically stored information. 

The CEO stated, “I believed that I retained all of the documents (emails, hard copy and electronic documents) relevant to the ‘project’ of obtaining exemptions from the EPA for Tracer’s leak tracers and Mr. Goodman’s involvement in that ‘project’ in the file cabinet in my office.” Goodman, 82-83.

Things start to look grim whenever Judge Grimm states, “This is particularly troublesome.”  Goodman, 83.

The CEO saved her ESI onto her laptop, not the “work-related” drive.  As such, the failure to preserve her computer, the Defendants knew “that the only relevant documents and emails produced by Marty [CEO] detailing Goodman’s [Plaintiff] role in the project to obtain the EPA exemptions would be those she personally selected.” Goodman, 83, emphasis added.

The Court found the CEO’s willfully destroyed relevant evidence when she selected deleted emails after the litigation hold triggering event of the Plaintiff’s letter.  Goodman, 83.

The Court found the willful destruction of the CEO’s laptop and emails justified an adverse inference instruction that if the evidence had been produced, would have been unfavorable to the Defendants’ defense. Goodman, 84-5.

Swimming in the Deep End: Treading Water in e-Discovery Cases

This motion centers on electronic discovery. The proper handling of electronic discovery is a new and developing area of law practice. The Federal Rules first addressed electronic discovery in 2006 and the Local Rules of this court have yet to provide any guidance on electronic discovery. Therefore, the court appreciates that it treads in what still are largely unknown waters.  Dahl v. Bain Capital Ptnrs, LLC, 2009 U.S. Dist. LEXIS 52551 (D. Mass. June 22, 2009)

Not every judge has the experiences of Magistrate Judges Facciola, Waxse, Grimm or Peck when it comes to electronically stored information.  Some District Court judges are just now issuing their first ESI opinions, over 2.5 years since the December 2006 Amendments. And for those who have not followed the news, California state judges will now be facing these issues since California enacted its own Civil Discovery Act addressing e-Discovery.

The District Court Judge swam into the deep end of the pool in Dahl v. Bain Capital Ptnrs, LLC to address four issues regarding electronically stored information:

(1) Costs;

(2) Metadata;

(3) Excel spreadsheets; and

(4) Privilege logs.

Dahl, 4.

Cost Shifting

The general rule in discovery is the producing party pays their own costs, unless there is a showing that 1) ESI is not reasonably accessible and 2) undue burden or cost. Dahl, 4-5.

The Producing Party failed to show any reason to justify cost shifting.  There was no showing the ESI was not reasonably accessible or any showing of undue burden or costs.  Dahl, 4-5.  As such, the Court did not order costing shifting in this case. 

Form of Production: Paper & OCR

The Court did order something different with the paper documents that might cause commentators to scratch their heads: The producing party had to only produce the paper discovery in the form the paper was ordinarily maintained; any “modification” had to be paid for by the requesting party.  Dahl, 6-7.

The paper documents were to be produced as they were ordinarily maintained.  Dahl, 6.  Therefore, the Requesting party had to pay for “(1) for scanning and optical character recognition (“OCR”) for paper documents; and (2) for OCR for those electronic documents without text search capabilities.”  Dahl, 6. 

Narrowly Tailored Metadata Production

The Requesting party sought “all metadata” associated with the electronically stored information.  Dahl, 7.  The Producing Party wanted to only produce 12 metadata fields.  Id.  The Court sided with the Producing Party.

As a practical matter, “all metadata” could include 144 fields of information for certain types of ESI.  Searching could become complex and ugly.  Depending on which 12 fields the Producing Party was willing to produce, the Requesting Party might get everything they want. 

 

For more on the different types of metadata, see Production of Metadata and the Importance of the Meet & Confer Process, which includes a discussion on system metadata, substantive metadata and embedded metadata.

The Court explained its justification on that “[metadata] does not lead to admissible evidence and that it can waste parties time and money.”  Dahl, 7, citing, Wyeth v. Impax Labs., Inc., 248 F.R.D. 169, 171 (D. Del. 2006).  The Court also explained Rule 34 “militates against the broad, open disclosure of metadata…” Dahl, 8.

The Court held the following:

Rather than a sweeping request for metadata, the Shareholders should tailor their requests to specific word documents, specific emails or specific sets of email, an arrangement that, according to their memorandum, suits the PE Firms. This more focused approach will, the court hopes, reduce the parties’ costs and work. Furthermore, it reflects the general uneasiness that courts hold over metadata’s contribution in assuring prudent and efficient litigation. Dahl, 8.

Form of Production: Spreadsheets

The Court held that Excel spreadsheets were to be produced in native file format.  Dahl, 8-9.

The Court explained that Federal Rule of Civil Procedure Rule 34 requires “documents” [I presume the Court meant ESI] to be produced “as they are kept in the usual course of business.” Dahl, 9 citing Fed. R. Civ. P. 34(b)(2)(E)(i).

Since the Producing Party maintained Excel spreadsheets in native file format that was the form the spreadsheets were to be produced in.  Dahl, 9.

A Footnote on Footnote 1

The Court in Footnote 1 stated that it held a different view of metadata in Excel files verse email or Word documents.  The Court stated, “Maintaining spreadsheets in their native format is necessary to assure the integral elements of a spreadsheet remain undisturbed.”  Dahl, 9, fn 1.

Privilege Log

The Court ordered the Producing Party to produce privilege logs in native file format.  Dahl, 9-10.   The Court did not explain its reasoning, other then I can guess this was for the privilege log to be searchable. 

Bow Tie Lessons

I have a different view from the Court’s on the form of production analysis that producing paper as scanned images with OCR somehow “modified” the documents. 

 

 

I believe the Court kept paper as paper based on Federal Rule of Civil Procedure Rule 34(b)(2)(E)(i), which states:

A party must produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request;

Since these were “documents,” apparently the Court saw scanning and OCR-ing them as “modifying” the documents.

If the Court is concerned about “modifying” paper into a digital form, I challenge any cost misconceptions.  Paper documents would need to be scanned and then printed.  There is a cost with printing paper, cost to storing boxes, potentially printing working copies or a cost to scan it all over again to digital instead of more paper.  (See, Court Orders OCR of Scanned Paper Documents, or Don’t Go to Court Claiming OCR will Cost $200,000 with a different view then the present Court’s). 

Please put your seatbelt on for this shocker: It is cheaper to scan and OCR paper documents then it is to scan and print as paper.  Scanning cost for both projects is the same.  Printing costs are approximately TWICE the OCR costs.  While it might only be a .03 difference a page, as that is multiplied out across a production, a party will feel the cost acceleration. 

I think the Court’s view on “modifying” is contrary to Federal Rule of Civil Procedure Rule 1, which states, “[the FRCP] should be construed and administered to secure the just, speedy, and inexpensive determination of every action and proceeding.”  Telling a party that paper must be copied as paper and then scanned again to make the paper in a litigation support system arguably frustrates the goal of Rule 1.

As for ESI, a requesting party is not limited to the form of production being in the “ordinary course of business” with electronically stored information, but can specify the form of production in their request pursuant to Federal Rule of Civil Procedure Rule 34(b)(1)(C). 

The Producing Party can produce or object to a Requesting Party’s form of production, which then is followed by a meet and confer if the parties cannot resolve their dispute on the form of production.  Federal Rule of Civil Rule 34(b)(2)(D) specifically states:

The response may state an objection to a requested form for producing electronically stored information. If the responding party objects to a requested form–or if no form was specified in the request–the party must state the form or forms it intends to use.

Federal Rule of Civil Procedure Rule 34(b)(2)(E)(i) does not “trump” a requesting party’s right to specify a form of production 34(b)(1)(C).  Rule 34(b)(2)(E)(i) arguably pertains to how a production is organized, such as file names used in the ordinary course of business or with a control list that states which documents relate to which requests. 

The form of production is NOT limited to how the ESI is “ordinarily maintained.”  Federal Rule of Civil Procedure Rule 34(b)(2)(E)(ii) states (emphasis added):

If a request does not specify a form for producing electronically stored information, a party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms;

Rule 34(b)(2)(E)(ii) begins with the proviso, “If the request does not specify a form for producing…”  which then brings up the issue of “ordinarily maintained” OR “a reasonably useable form or forms” if there is a “form” void from a requesting party not stating a form of production.      

There is no shortage of case law where the issue is a “reasonably useable form,” which includes TIFF and PDF productions.  For example, if the “ordinary course of business” would require specialized software to review building plans, a Court’s analysis would likely focus on the production being in a reasonably useable form.

If a party wants ESI as TIFFS with associated extracted text there is plenty of case law supporting that practice.  (See, Check Please: Challenging a PDF Form of Production, Procrastination and Objecting to the Form of Production Don’t Mix, Name that Form of Production: Converting ESI to TIFF without Metadata is Not a Reasonably Useable Form, plus others on different form of production cases.) 

For those not convinced that it is more cost effective to manage scanned paper with OCR in a litigation support system over a paper production, try this little test.  Get out a stop watch.  Print everything from the P. Franc v. K. Morris demo case in CT Summation iBlaze.  Have one person with CT Summation iBlaze with the P. Franc v. K. Morris case open.  Here are the Requests for Production you must answer:           

            1.  Any and all documents PERTAINING TO the gabion wall.

            2.   Any and all documents PERTAINING TO “energy dissipater.” 

Time  how long it takes to find the responsive documents in the database verse the paper hard copies, and ask yourself which process better furthers Federal Rule of Civil Procedure Rule 1.

Keep on Trucking: Data Productions or Summaries

The Plaintiffs in Flying J, Inc. v. Pilot Travel Ctrs. LLC brought a motion to compel discovery request for data pertaining to trucker fuel card transactions and for the producing party to create a separate monthly report. Flying J, Inc. v. Pilot Travel Ctrs. LLC, 2009 U.S. Dist. LEXIS 55283, 6 (D. Utah June 25, 2009).

In prior discovery, the Plaintiffs were directed to produce similar information about their trucker fuel card business in response to the Defendant’s interrogatories.  Flying J, Inc., 6. 

Plaintiffs argued that the Defendants cannot request the same information in their discovery requests and then refuse the Plaintiffs’ requests.  Flying J, Inc., 6-7.

The Defendants’ claimed that “[w]hile a party may be under an obligation to compile data in response to interrogatories [as was the case with the interrogatories Defendants sent Plaintiffs], [Defendant] would be under no comparable obligation to [create compilations] in response to a Rule 34 request.” Flying J, Inc., 7.

The Issues: Creating Summaries & Producing Raw Data

The Court summarized the issues at bar as 1) Whether the Defendants had to create summaries of the credit card transactions and 2) Was it unreasonably burdensome for the Defendants to produce data without the Plaintiffs also producing it.  Flying J, Inc., 7-8.

One Wide Load of a Discovery Request

The Request sought ESI “sufficient to show” monthly totals, which the Court translated as data the Plaintiffs could use to determine the totals.  The Request also sought summaries that required the Defendants to “slide, dice and summarize the data.”  Flying J, Inc., 8.

The Defendant admitted that the data was relevant and would satisfy the discovery request.  Flying J, Inc., 8-9.

Rule 34 Response: Data or Summarizes  

The Court stated that Rule 34 cannot compel a party to summarize data.  However, a responding party might choose to do so if the summary would be “truly responsive to the request.”  Flying J, Inc., 9.

The Court held the Producing Party could produce the data or a summary of the data that was responsive to the request for production.  Flying J, Inc., 9.  The Court specifically stated:

 The court does not read Fed. R. Civ. P. 34 or its prior order on similar data as permitting a request for production to require a responding party to create compilations and summaries. The rule speaks of “compilations” as a type of information that may be sought. On the other hand, the rule probably does not prohibit a responding party from creating providing summaries if they are truly responsive to the request. This might be preferable for the producing party and acceptable to the requesting party. But a request for production cannot require a responding party to compile and summarize. Because the information Plaintiffs seek is relevant and derivable from Comdata’s transaction database, Comdata must produce responsive information, either in the form of the transaction database or in acceptable summaries it creates.  Flying J, Inc., 9.

No Excuse by Lack of Reciprocity

The Court shot down the Defendants’ claim that the discovery request was “unreasonably burdensome” without requiring the Plaintiffs to make a similar production.  Flying J, Inc., 9-10. 

Civil discovery rules do not allow an “excuse by lack of reciprocity.”  Flying J, Inc., 10.  The Court stated, “A party is not excused from making disclosures because ‘another party has not made its disclosures.’” Id.

What Should be the Ordinary Course of Business: Reviewing ESI in Litigation Support Software

The Defendants in Valeo Elec. Sys. v. Cleveland Die & Mfg. Co., brought a motion to compel the Plaintiffs to organize their electronically stored information production into 28 specific categories to match the Defendants’ discovery requests.  The Defense motion was denied.  Valeo Elec. Sys. v. Cleveland Die & Mfg. Co., 2009 U.S. Dist. LEXIS 51421, 1-2 ( E.D. Mich. June 17, 2009).

The Plaintiffs’ Production 

The Plaintiffs produced over 270,000 pages of documents as they were “kept in the usual course of business.”  Valeo Elec. Sys., 2, citing Federal Rule of Civil Procedure Rule 34(b)(2)(E).

The production included “emails and other electronically stored information (“ESI”) in the order that they were found on the hard drive of each document’s custodian.”  Valeo Elec. Sys., 2.  The ESI production (rightly) maintained the parent-child relation between the email messages and the corresponding attachments.  Id.

Paper documents were scanned to searchable PDFs, along with the corresponding folder tables from where the documents were stored.  Id.

The Plaintiff’s ESI and documents were produced on 15 CD’s. Id. Most CD’s can hold nearly 700MB of data, so the total size of the production must have been approximately 10GB to 10.5.

The Plaintiffs’ Indices and Spreadsheets

The Plaintiffs produced two indices to assist the Defendants in organizing the discovery production.  Valeo Elec. Sys., 2.

The first index was a 3 page table identifying the “custodian for each Bates range of documents and identifying certain specific documents.” Valeo Elec. Sys., 3.

The second was an Excel spreadsheet that identified the ESI as follows: 

1. Document Bates range;
2. Directory and, where applicable, a file name identifying where it was stored;
3. Document name or title or “re:” line for emails containing such; and
4. Estimated date the document was created or modified.  Valeo Elec. Sys., 3.

The Court further described:

The many attachments in this spreadsheet follow immediately the document or email to which they relate, and again the Bates numbers parallel those in the three page index so the source or Valeo employee from whose computer the documents were obtained can be identified for each grouping of documents. Valeo Elec. Sys., 3.

The Defendant’s Motion to Compel

The Defendants engaged in what their associate attorneys must have thought was a Death March style review of the 15 CD’s of discovery without using any litigation support software.

The Defendants complained they had to “manually open each and every electronic file on each of the [15] CDs produced.” Valeo Elec. Sys., 4. Additionally, the Defendants had to “ope[n] and revie[w] each of the thousands of individual electronic files.” Valeo Elec. Sys., 4. They also claimed the ESI was “innocuously” named to frustrate discovery review. Valeo Elec. Sys., 4.

The Defendants wanted the Plaintiffs to organize their production to match the 28 categories from the Defendants’ discovery requests. Valeo Elec. Sys., 4-5.

Form of Production under Federal Rule of Civil Procedure Rule 34

A party’s discovery obligations pursuant to Federal Rule of Civil Procedure Rule 34(b)(2)(E)(i), require them to “produce documents as they are kept in the usual course of business or must organize and label them to correspond to the categories in the request.” Valeo Elec. Sys., 6.  To put it bluntly, the producing party can produce the ESI in the “usual course of business” or label and organize them.  Id.

The Plaintiffs produced the ESI as it was kept in the usual course of business.  This was the end of their discovery production obligations.  Valeo Elec. Sys., 6-8.

The Court described the Excel spreadsheet as the closet thing to a “magic decoder ring” the Defendants were going to get from the Plaintiffs.  Valeo Elec. Sys., 6-7.

This included relevant metadata in an index, Bates stamps by custodian and in an estimated chronological order.  Valeo Elec. Sys., 6-7.

The Court held the Plaintiffs met their discovery obligations and had no further duty to “organize” the production for the Defendants. Valeo Elec. Sys., 7.

 Best Advice for a Law Firm: Invest in a Litigation Support System

These two indices may be the nearest thing approaching a “magic decoder ring” and defense counsel may consider it of no more help than the Rosetta Stone leaving him and his associates hours of work ahead to comb through what was previously undecipherable hieroglyphics on the 15 discs. Nonetheless, all ESI documents produced are searchable in Adobe and/or other commercially available litigation search programs. Following Plaintiff’s counsel’s demonstration on June 17, it is determined that this production, including the supplemental Excel spreadsheets provided on June 17 satisfies Valeo’s Rule 34 burden and the parties’ agreement following the Rule 26(f) conference. Valeo Elec. Sys., 7

The Defense attorneys in this case would serve their clients by investing in a litigation support software for reviewing electronically stored information.  A brute force review across multiple CD’s is not cost effective in 2009.

Not using a litigation support system such as CT Summation iBlaze, LexisNexis Concordance, or hosted services such as Kcura Relativity, plus many other fine products, to review electronically stored information is extremely wasteful in attorney time and money.

In the interest of full disclosure, I am an employee of D4 LLC.  We are business partners with CT Summation, LexisNexis, Kcura, and Clearwell Systems.  I also worked for CT Summation for nearly 2.5 years and have over 5 years experience with the iBlaze product.   

Search & Analyze with Technology

Attorney review should not be engulfed in a document quagmire of “opening” and “reviewing” the “thousands of individual electronic files” in a production.

Pre-Discovery tools can be used prior to document review to cull down a production to eliminate email from news agencies, email domains and other non-relevant sources.  This technology allows attorneys to focus their search terms down to responsive ESI that can then be export for review. 

Clearwell Systems Transparent Search Function

Almost all litigation support products index electronically stored information, allow for searching of native files, organizing, tagging for issues, analysis and everything else that goes into the current practice of law. 

Search Results in Kcura Relativity

Document review also becomes more productive as extracted text from the native files populates the “Author,” “Document Date” and other objective fields.  Associates and paralegals no longer need to manually enter that information when the data can be extracted in ESI processing and used to auto-populate a review database.

CT Summation iBlaze Database

An attorney using a litigation support system to review ESI can leverage a database populated by extracted text from ESI processing to search email by Sender, focus in by date range and review email messages and their attachments. 

CT Summation iBlaze Search Feature

Modern Lawyers: iPhones, Requests for Metadata & Automated Review

In the iPhone Age technology in the law firm is a fact of life. Not using litigation support system to review electronically stored information is comparable to whining about using Lexis or Westlaw for online legal research. Or worse yet, a lawyer refusing to use a word processing program because they only know how to dictate.  It might even violate an attorney’s duty of competency to their client, due to the volume of ESI driving up costs by refusing to use the tools to make review cost effective.

Few attorneys can explain with a straight face to their client that they spent 7 hours looking for 10 emails on 15 CD’s that could have been located in seconds with a name and date search in almost any litigation support software.  

For example, I remember being a young associate digging through 40 boxes for hours to find ONE certificate of completion in a construction defect case.  That time was cut off the bill to the client.  Litigation support software eliminates that wasted time and allows lawyers to focus on their case, not an ocean of documents.

Cost Analysis of Litigation Support Software

Some may claim purchasing a litigation support software is cost prohibitive.  Consider the following:

Partner Hourly Rate: $250 to $300

Associate Attorney’s Hourly rate at an insurance defense firm: $150 to $200

Paralegal Hourly Rate at insurance defense firm: $100

Cost of one CT Summation iBlaze mobile license: approximately $2800

Cost of a CT Summation iBlaze 5 node license: approximately $8000

Valeo Elec. Sys. v. Cleveland Die & Mfg. Co., had 270,000 pages of documents to review (the opinion is not clear as to the exact nature of the data).  Assuming an associate can review one document a minute, they are reviewing 60 documents an hour and at least 480 in an 8 hour work day. 

After 16 hours slogging through loose data on CD’s (or 960 documents in two days), a firm has paid for one CT Summation license.  After 5 associates have each worked 10 hours the firm has paid for a 5 node network system. 

Associate and paralegal review outside of a litigation support software can result with review notes on Word files, yellow tablets or random Excel files.  A law firm using a review software maintains all notes and issue tags in one database that is fully searchable by everyone using the program. 

The $20,000 Motion to Compel vs Using Litigation Support Software

Bringing a motion to compel in Federal Court costs anywhere from $10,000 to $30,000, depending on the nature of the dispute (form of production or search terms), attorneys’ fees, and whether experts are needed for technical knowledge.  All the costs of that motion would buy you a 10 to 20 node network system with most desktop litigation support systems.

A party can host 10.5GB of data (15 CD’s worth of ESI) in a product like Kcura Relativity for approximately $70 a Gigabyte per month and with three attorney reviewers for $375 a month (total monthly cost estimate of $1110) for 9 to 27months, depending on the data, number of reviewers and processing costs.

Document Review in Kcura Relativity

Final Thoughts

Not using a litigation support software or service to review electronically stored information is like using a typewriter instead of a computer.  While I might be “Old School” when it comes to bow ties, law firms are best served by embracing technology to help control, organize and review discovery.