If It is Lost, It’s Not in Your Possession, Custody or Control under Rule 26(a)

In a prison medical treatment case, the Plaintiff brought a motion to exclude medical records pursuant to Federal Rule of Civil Procedure Rule 37(c) after the files were not identified in the Defendants’ initial disclosures or produced in discovery.  Nance v. Wayne County, 2009 U.S. Dist. LEXIS 96279 (M.D. Tenn. Sept. 15, 2009).

The only catch: the non-identified files were lost. 

The Plaintiff claimed the Defendants failed to disclosure the Plaintiff’s medical record pursuant to Federal Rule of Civil Procedure Rule 26(a) (or supplement their discovery responses) and erroneously denied a request for admission. Nance, at * 5-6.  The fact the medical records at one time existed was not discovered until the deposition of a treating nurse.  Nance, at *6-7. 

The Plaintiff wanted 1) the Defendants not be allowed to use the medical records; 2) the facts in the medical records be taken as true according to the Plaintiff’s claims 3) jury instructions on the non-disclosure of the medical records and 4) fees and costs for the deposition.  Nance, at *11-12. 

The Plaintiff lost….because the medical file was lost.   

The Court found the Defendants did not violate Federal Rule of Civil Procedure Rule 26(a).  A party’s initial disclosures only need to include documents within its “possession, custody or control.”  Nance, at *13-14.  Since the medical file was lost, the file was not within the Defendants “possession, custody or control.” Nance, at *16.  Additionally, the Defendant was not going to use the medical file to support claims or defenses. Nance, at *16-17.

Bow Tie Lesson

The lesson of this discovery dispute is that you cannot use what is lost, nor can you disclose what does not exist.

Things to Think About for Your Rule 26(f) Meeting…

In a case management hearing, the parties were directed to consider the following electronically stored information (ESI) issues at their Rule 26(f) conference for drafting their proposed Rule 16(b) order:

With regard to any discoverable electronically stored information (ESI) the parties may have, the Court further requests that the joint discovery plan also include any issues and concerns related to the following:

a. What ESI is available and where it resides;

b. Ease/difficulty and cost of producing information;

c. Schedule and format of production;

d. Preservation of information; and

e. Agreements about privilege or work-product protection.

 Wallace v. Tindall, 2009 U.S. Dist. LEXIS 89669, *2-3 (W.D. Mo. Sept. 29, 2009).

It is good to see Courts ordering parties to consider issues such as whether ESI is reasonably accessible, the form of production, preservation and privilege concerns in case management orders.  While the above order is actually brief on the e-Discovery issues, consider the new California Rules of Court section 3.724(8), which require the following topics to be discussed at the “Meet & “Confer:”

Any issues relating to the discovery of electronically stored information, including:

(A) Issues relating to the preservation of discoverable electronically stored information;

(B) The form or forms in which information will be produced;

(C) The time within which the information will be produced;

(D) The scope of discovery of the information;

(E) The method for asserting or preserving claims of privilege or attorney work product, including whether such claims may be asserted after production;

(F) The method for asserting or preserving the confidentiality, privacy, trade secrets, or proprietary status of information relating to a party or person not a party to the civil proceedings;

(G) How the cost of production of electronically stored information is to be allocated among the parties;

(H) Any other issues relating to the discovery of electronically stored information, including developing a proposed plan relating to the discovery of the information;

Case management orders such as the above and the new California Rules of Court acknowledge the reality that every case will have electronically stored information of some kind.  Lawyers must deal with these realities early and not wait for them to become problems.

Out of the Holding Pattern: Preservation Best Practices and Recent Litigation Hold Cases with John Jablonski, Esq. and Joshua Gilliland, Esq.

Please join D4 on October 28, 2009 at 12:00 pm Pacific Time and 3:00 PM Eastern Time for the webinar “Out of the Holding Pattern.” To register, please click here.     

Recent case law has highlighted the importance of proper implementation of litigation holds.  During the summer of 2009, there were many cases that highlighted attorneys and litigants failing in their duty to preserve electronically stored information (ESI).  These failures included not enacting litigation holds when required to do so, clients not following preservation obligations, and parties simply ignoring the duty to preserve. 

Join John Jablonski, co-author of 7 Steps for Legal Holds of ESI and Other Documents (ARMA 2009), and Joshua Gilliland, D4’s Professional Development Manager and author of the Bow Tie Law Blog, for a discussion of recent case law and best practices for enacting litigation holds.  Learn about the trends from the newest cases on the pitfalls in preserving ESI and strategies for success.    Webinar attendees will learn the seven steps for an effective litigation hold.  This information is pivotal for attorneys, paralegals and corporate records managers in meeting their obligation to preserve ESI.   

About the Speakers:  

John Jablonski, Esq., is a partner at Goldberg Segalla, LLP in Buffalo, NY and concentrates his practice on commercial and business litigation, construction litigation, product liability litigation, and railroad litigation.  He has 14 years of litigation experience and has tried numerous cases to verdict in State and Federal Courts.   John consults with clients and attorneys within the firm on electronic discovery issues and legal holds. 

John is a frequent presenter and author on electronic discovery, electronic evidence investigation and preservation, best practices for corporate legal hold guidelines, and implementation of legal holds.   Follow John on Twitter @JohnJablonski  

Joshua Gilliland, Esq., is a California attorney who focuses on electronic discovery issues for D4, LLC.  Josh has conducted over 100 e-Discovery seminars, covering all of North America, from St. Thomas to Anchorage, addressing the e-Discovery issues from the Federal Rules of Civil Procedure and Federal Rules of Evidence.  Josh is the blogger for the Bow Tie Law Blog, covering issues of identifying anonymous bloggers who commit defamation, ethical standards for electronic discovery, personal jurisdiction and other timely issues. 

Josh has also been an invited speaker at bar association events and trade shows, in addition to serving as a guest lecturer on e-Discovery at several law schools.  He effectively applies his real-world knowledge to show lawyers how they can increase their efficiency and master factual issues using litigation support technology.   Follow Josh on Twitter @BowTieLaw

Speedy Delivery: Compelling Imaging & Searching of Everything

In a contract dispute regarding a shipping vendor, the Plaintiff brought a motion to compel the collection and processing of the entire contents of Defendants’ hard drives, network drives, and user files.  Unishippers Global Logistics, LLC v. DHL Express (USA), Inc., 2009 U.S. Dist. LEXIS 94844 (D. Utah Oct. 12, 2009).

In not much of a surprise, the Court said “No.”

Please Sign Here: Meet & Confer over Custodians

As the discovery dispute began, the parties agreed to provide each other a list of custodians to be searched for responsive documents.  Unishippers Global Logistics, at *4.  The Defendants identified 13 opposing custodians and the Plaintiff 36 custodians.  Id. 

The litigants agreed to produce “all emails between or among the custodians” and to perform searches on internal and external email networks.  Unishippers Global Logistics, at *4. 

The Dispute: Imagining Network Files, User Files & Hard Drives

The Plaintiff claimed the Defendant refused to “image and search the network files, user files, and the hard drives of its identified custodians for responsive documents.” Unishippers Global Logistics, at *4. 

 One can imagine the Gigabytes very quickly expanding for ESI review with 36 custodians…

The Motion to Compel

You can sense the Court was not happy with the Plaintiff.  They failed to comply with local rules on discovery disputes and brought the motion to compel without first receiving or reviewing the Defendants’ production.  Unishippers Global Logistics, at * 6.

The Plaintiff wanted the Court to order the Defendants to “conduct relevant word searches of its custodians’ user files, network drives, and individual hard drives for responsive documents.” Unishippers Global Logistics, at * 6.  Moreover, the Plaintiff took issue with the Defendant collecting and reviewing email from custodians and collecting non-duplicative ESI from other sources, and then producing accordingly.  Unishippers Global Logistics, at * 6. 

The Defendants opposed the motion as premature and that the Plaintiff wanted everything electronic searched.  Unishippers Global Logistics, at * 6.

The Court Order

The Court held the Plaintiff’s arguments were without merit. Unishippers Global Logistics, at * 7.

First, it is self-evidence that a producing party “must determine whether it possesses relevant documents that are responsive to a particular discovery request.” Unishippers Global Logistics, at * 7.  To be blunt, that is just how document review and discovery works. 

Secondly, the Court held it was unnecessary and unduly burdensome to force the Defendant to “collect and process the entire contents of the custodians’ hard drives, network drives, and user files,” that were known to be non-relevant.  Unishippers Global Logistics, at * 7.  

Third, the Defendant explained their email discovery protocols, which the Court seemed to accept as defensible.   Unishippers Global Logistics, at *8-9.   

The Court based its ruling on Federal Rule of Civil Procedure Rule 26(b)(2)(C) which states a court “must limit the frequency or extent of discovery . . . if it determines that . . . the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive.” Unishippers Global Logistics, at * 7, citing  Fed. R. Civ. P. 26(b)(2)(C)(i).  Moreover, a court must also limit discovery where “the burden or expense of the proposed discovery outweighs its likely benefit.” Unishippers Global Logistics, at * 7-8, citing Fed. R. Civ. P. 26(b)(2)(C)(iii).

Bow Tie Thoughts

This motion probably could have been dismissed as not ripe or for procedural defects.  Additionally, the Plaintiff would have been in a much stronger position if they actually had reviewed the Defendant’s production. 

The Plaintiff did not make an articulable basis that the Defendant somehow failed in their discovery production, such as a Rule 26(g)(1) violation.  However, if there are later production discrepancies, we may see a follow up to this case.

Proving Up Destroyed ESI is Favorable to Your Position is Hard to Do

In an ADA employment case, the Plaintiff sought spoliation sanctions and an adverse inference instruction for the destruction of electronically stored information (ESI). Scalera v. Electrograph Sys., 2009 U.S. Dist. LEXIS 91572 (E.D.N.Y. Sept. 29, 2009).

The Plaintiff lost.

 

 

 

 

 

 

The Discovery Requests

The Plaintiff sought the following discovery: 

1) All emails sent or received by Defendant’s employees regarding Plaintiff’s medical condition;

2) All emails sent by Defendant’s employees regarding Plaintiff’s request or need for any accommodation for her medical condition;

3) All emails sent on Defendant’s “Inter-Office email system” to and from Plaintiff from 2005 to the present, “including any emails predating Plaintiff’s employment;” and

4) All “backup and/or archive (computer) data which was generated by Defendants” and related to Plaintiff’s employment. Scalera, at *5.

Discovery Production History

In the Plaintiff’s version of the facts, the Defendant only produced a “handful” of email.  Scalera, at *5. 

The Defendant provided 16 backup tapes to an electronic discovery service provider.  Scalera, at *6.  Only two of the tapes met “the criteria for restorable data.”  Scalera, at *6.  The vendor was unable to restore the backup tapes, which the Plaintiff claimed spoliation that required an adverse inference sanction.  Scalera, at *6. 

Requirements for Adverse Inference Instructions

A party must prove the following for spoliation warranting an adverse inference instruction: 

1) “The party having control over the evidence had an obligation to preserve it at the time it was destroyed;”

2) “The records were destroyed with a ‘culpable state of mind;’” and

3) “The destroyed evidence was ‘relevant’ to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.”

Scalera, at *7, citing Toussie v. County of Suffolk, 2007 U.S. Dist. LEXIS 93988, at *6 (E.D.N.Y. Dec. 21, 2007).

The Duty to Preserve

As one can imagine, the Plaintiff argued the duty to preserve for her discrimination claim arose very early, after she fell down steps and sent a letter to the building landlord.  Scalera, at *7-11, 28.The Court disagreed and held the duty to preserve arose when the Defendants received the EEOC charge for discrimination.  Scalera, at *25.

The Court found the Plaintiff’s arguments for when the duty to preserve began pushed logic “beyond the boundary of reasonableness.”  Scalera, at *28. 

The Plaintiff argued that since the Defendants knew the Plaintiff had a “disability,” they should have known she needed a handrail at the side door to prevent injury; therefore her injury should have alerted the Defendants the Plaintiff would have sued them for discrimination.  Scalera, at *28.  The Court did not agree.

The Court also held that filing a worker’s compensation claim did not trigger a duty to preserve for a possible discrimination claim.  Scalera, at *29-30. 

The Court effectively held that the tort accident and following worker’s compensation action did not trigger the duty to preserve for a discrimination claim.  The Defendant’s duty to preserve began at the time the Defendant received the EEOC charge.

The HR Hard Drive

The Defendant’s HR manager retired at least one month, possibly two, after the Defendant had a duty to preserve evidence.  However, because of the Defendant’s policy of erasing employee hard drives after they leave, the Defendant was unable to search the HR person’s computer.   Scalera, at 36-37.  This amounted to a failure in the Defendant’s duty to preserve. 

The Defendant tried playing “preservation Twister” by dancing around the HR policy of printing all HR emails and retaining them as hard copies as “no harm, no foul” argument for erasing the HR manager’s hard drive.  Scalera, at *37.  The Court noted the Plaintiff had produced emails that the Defendant had not produced, which openly questioned whether all HR emails were printed.  Scalera, at *38.

Emails Going Rogue

The Defendant’s production included email messages with partial email strings that were “personnel or employment records.”  Scalera, at *38.  The Plaintiff also had email messages requesting reasonable accommodations that the Defendant did not produce.  These messages were required to be saved for one year under the ADA.  Scalera, at *39. 

Surprisingly enough, these failures were not a breach of the duty to preserve.  The one year retention period under the ADA would have ended prior to the EEOC action and thus before the triggering event duty to preserve.  Scalera, at *40-41.

A Culpable State of Mind

The Court found the Defendant acted negligently in preserving ESI.  Scalera, at *44.  Based on declarations, the Court found that the Defendant did not attempt to preserve ESI until two months after the EEOC complaint. 

The General Counsel for the company took action after receiving the EEOC by meeting with employees who interacted with the Plaintiff and “spoke to” employees about saving ESI. Scalera, at *42.  The attorney was confident that all the “necessary” documents had been preserved after talking with IT, learning about the backup tapes and the fact the company did not have a data destruction policy.  Scalera, at *42.

The Court was not thrilled with the Defendant’s preservation attempts.  The Court noted that searches of the key player hard drives were either not done or finished after the EEOC charge was received. Scalera, at *44.  Moreover, two of the people the Corporate Counsel spoke to never had their hard drives searched.  Scalera, at *45.  Additionally, the IT person’s declaration showed that some information on hard drives was never backed up.   Scalera, at *45.  These failures could have resulted in the loss of electronically stored information.  Scalera, at *45.

The final kicker was that Corporate Counsel “speaking to” key employees was not a formal litigation hold.  Scalera, at *45.  Case law requires a party engage in the following steps for litigation hold compliance:

1) Issue a litigation hold at the outset of litigation or whenever litigation is reasonably anticipated;

2) Clearly communicate the preservation duty to “key players;” and

3) “Instruct all employees to produce electronic copies of their relevant active files” and “separate relevant backup tapes from others.”

Scalera, at *46, citing Zubulake v. UBS Warburg LLC, 229 F.R.D. 422, 433-34 (S.D.N.Y. 2004).

The Court stated that if a proper hold had been in place, the HR manager’s hard drive would have been searched instead of erased.  Scalera, at *47.

The Court found that the Defendant’s communications directly resulted in the loss of ESI, which was negligent.  Scalera, at *47-48. 

Relevance: The Sanction Killer

Relevance can be proven by showing a party acted with gross negligence (a culpable state of mind) or offering some “…extrinsic evidence tending to demonstrate that the missing evidence would have been favorable to it.” Scalera, at *49.

In cases where a party seeks an adverse inference instruction, the moving party must show the lost evidence would have been favorable to the moving party.  Scalera, at *49.

The Plaintiff did not establish “relevance” as a matter of law because the Defendant only acted negligently, not with gross negligence.  Scalera, at *49-50. 

Putting a spin on extrinsic evidence, the Plaintiff offered email messages that were if anything FAVORABLE to the Defendant, showing that the Defendants made reasonable accommodations for the Plaintiff.  Scalera, at *51. 

Bow Tie Thoughts: A Swing and a Miss

The Defendant in this case had a poorly executed litigation hold (if you could call oral instructions a litigation hold) and botched preservation of hard drives.  However, such failures are not a “strict liability” offense for instant adverse inference instructions.  A moving party still must prove that the lost evidence would have been favorable to their position.  That did not happen here.

The Titan Killer: Mandatory Exclusion under Federal Rule of Civil Procedure Rule 37(c)(1)

Oracle and SAP are at war.  They have exchanged bayonet charges in discovery for two years in a case where Oracle has accused SAP (TomorrowNow) of “systematic and pervasive illegal downloading of Oracle software over approximately six years.”  Oracle United States v. Sap Ag, 2009 U.S. Dist. LEXIS 91432 (N.D. Cal. Sept. 17, 2009).  Production has been over 12 terabytes with 140 custodians and document review for each custodian has cost $100,000.   Oracle, 6-7.

Somewhere in the thirteen discovery conferences, the Court instructed the parties to follow the proportionality requirements of Federal Rule of Civil Procedure Rule 26(b)(2)(c), to beware of the expense of the proposed discovery outweighing its benefit.  Oracle, 7-8.  Needless to say, knowing the damages at issues when they could equal the budget of a large city would be important to know early in discovery. 

The Plaintiff took the position for two years that their lost profits damages were based on “lost support revenue for Oracle software application products from Plaintiffs’ 358 former customers that had received support from Plaintiffs, but switched to receiving support for Oracle products from TomorrowNow.”  Oracle, 8.  

And that is how discovery played out to the tune of millions of dollars for both parties for two years. 

Iceberg, Dead Ahead

The Plaintiffs switched damages arguments during the depositions of their executives in April and May of 2009.  Oracle, 38.  The Plaintiffs at that time claimed the “greater economic harm came from lost licensing revenue and price reductions to customers that never left Oracle for TomorrowNow.”  Oracle, 38.  The Plaintiffs referred to lost customers as “only the tip of the iceberg” to their damages, which were not disclosed for two years to the Defendants and the Court. Oracle, 38-39.

To Kill a Titan: Court Orders and Supplemental Disclosures

The Defendants fought a Hegemonic war to exclude the additional damages evidence for violating a Federal Rule of Civil Procedure Rule 16(f) discovery order and failure to supplement discovery under Federal Rule of Civil Procedure 26(e)(1).  Moreover, a failure under Federal Rule of Civil Procedure Rule 26(e)(1) subjects the offending party to mandatory exclusion of that information under Federal Rule of Civil Procedure Rule 37(c)(1).  Oracle, 12-15.

The Court held the Plaintiffs had a duty to disclose the “tip of the iceberg” damages known to their executives, long before their depositions two years after millions of dollars had been spent on discovery.  Oracle, 48. The Defendants’ economic damages expert witness stated it would take an additional year to analyze the new damages claims and cost $5 million ($4.4 million had already been spent and it was estimated $4 million more through trial).  Oracle, 48-49. There was no excuse for not disclosing basic damage claims in discovery. 

The Court granted the Defendants’ exclusion motion, precluding the Plaintiffs from arguing any additional damage theories other then the original damages theory. Oracle, 58-59.  Don’t feel too bad for the Plaintiff, because this evidence might be over a billion dollars.  Oracle, 59.

Bow Tie Lessons: The Hammer will Fall

The Plaintiffs were precluded from arguing additional damages theories because they did not supplement their initial and court ordered discovery.  Courts are truly laying down the law on Federal Rules of Civil Procedure Rules 26(a) and 26(e)(1) with the hammer of Federal Rule of Civil Procedure Rule 37(c)(1).

A Helicopter Parent’s Weapon of Choice: Facebook Photos

Laningham v. Carrollton-Farmers Branch Indep. Sch. Dist., 2009 U.S. Dist. LEXIS 86305 (N.D. Tex. Sept. 17, 2009) is a factual intense case of a cheerleader claiming unconstitutional gender bias on alleged cheerleader on cheerleader sexual harassment, which deprived the Plaintiff of her educational opportunities.

The Plaintiff lost at summary judgment, which was upheld on appeal. 

The facts are strange and protracted, with a mother being very involved in her daughter’s cheerleading.   There were letters, emails and meetings over perceived wrongs by the other cheerleaders on the squad, and attempts to remove the other girls from cheerleading.  Laningham, 9-13. 

One of the Plaintiff’s mother’s many complaints was an aerial bombardment with private Facebook photos of the cheerleaders at a non-school event.  Laningham, 10.  These photos did get the cheerleaders suspended from cheerleading for one week for unbecoming conduct.  Id.  Ironically, a similar disciplinary action took place over a Facebook photo with the Plaintiff, resulting in her one week suspension.  Laningham, 12.

The teenage drama of this case is not relevant to metadata, form of production battles, or other e-discovery, other than one simple fact: Someone made a Federal case with Facebook photos (for at least one part of the lawsuit). 

Social Networking evidence will continue to work its way into litigation.  There are over 1,191,373,339 monthly visits to Facebook and 810,153,536 monthly visits to MySpace.  Attorneys need to recognize these sources of evidence, consider how to preserve them and how they need to be included in initial disclosures. 

There is a more fundamental lesson: Be careful what you post.

Auto-Exclusion: Undermining Your Own Case with Failed Disclosures

Discovery Rules with Teeth

Here is a great rule with teeth: If you do not disclose ESI or documents under Federal Rule of Civil Procedure Rule 26(a), they are automatically excluded under Federal Rule of Civil Procedure Rule 37(c)(1). 

In Melczer v. Unum Life Ins. Co. of Am., 2009 U.S. Dist. LEXIS 82549 (D. Ariz. July 16, 2009), the Plaintiff successfully excluded 526 documents that were untimely disclosed under Federal Rule of Civil Procedure 37(c)(1). Melczer, 1-3.

Federal Rule of Civil Procedure Rule Rule 26(a)(1)(A)(ii)

The Defendants received the documents in May 2008.  Melczer, 3.  These documents were not disclosed to the Plaintiff, as required by Federal Rule of Civil Procedure Rule 26(a)(1)(A)(ii).  The Rules states, in relevant part:

“a copy–or a description of 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 or defenses, unless the use would be solely for impeachment.”

Put it in Writing: Federal Rules of Civil Procedure Rules 26(a)(4) and 26(g)(1)

Disclosures must be “in writing, signed, and served.”  Melczer, 2, citing Federal Rule of Civil Procedure Rule 26(a)(4).  The disclosure must be signed by an attorney.  Federal Rule of Civil Procedure Rule 26(g)(1).

To make life exciting, the Defendants orally told the Plaintiffs about the documents in October 2008….before the close of discovery that month. Melczer, 2.

Oral disclosure doesn’t count under the Federal Rules of Civil Procedure, because the Rules require disclosure to be in writing and signed.  Melczer, 3. As such, the disclosure was untimely. 

Auto-Exclusion of Untimely Disclosures

Pursuant to Federal Rule of Civil Procedure Rule 37(c)(1), untimely disclosures must be excluded, unless there is untimely disclosure was “substantially justified or harmless.”  Melczer, 2, citing Federal Rule of Civil Procedure Rule 37(c)(1).

The Defendants claimed there was substantial delay because the Plaintiffs refused to sign a stipulated protective order after the close of discovery. Melczer, 5-6. This was a self-defeating argument, since the stipulation was sought after the close of discovery. Melczer, 6.

The Court found the untimely production to not be harmless.  Melczer, 8. The Plaintiffs would have sought additional discovery on the documents, which would have required discovery to be reopened.  Melczer, 8-9.

The Court found the late production to be an untimely disclosure, which was neither justified nor harmless.  Melczer, 10.  Moreover, the remedy for an untimely disclosure is not reopening discovery, but an “automatic” exclusion under Federal Rule of Civil Procedure Rule 37(c)(1).  Melczer, 10. 

Bow Tie Lessons

The Courts are throwing down the gauntlet on Federal Rule of Civil Procedure Rule 26(a) violations.  After preserving electronically stored information, a party must disclose ESI and documents that support their claims or defense.  This could get ugly where there are thumb drives, mp3 players or any removal media.