“Stop and Think” About Skype for Depositions

Judge G.R. Smith issued a great reminder that lawyers must “stop and think” when dealing with discovery disputes. This duty is imposed by Rule 26(g) and is “an affirmative duty to engage in pretrial discovery in a responsible manner that is consistent with the spirit and purposes of Rules 26 through Rule 37, and obligates each attorney to stop and think about the legitimacy of a discovery request, a response thereto, or an objection.” Hernandez v. Hendrix Produce, Inc., 2014 U.S. Dist. LEXIS 4837 (S.D. Ga. Jan. 9, 2014) citing Bottoms v. Liberty Life Assur. Co. of Boston, 2011 U.S. Dist. LEXIS 143251, 2011 WL 6181423 at * 4 (D. Colo. Dec. 13, 2011).

Skype-IphoneThe case at issue requiring lawyers to “stop and think” involved the plaintiffs in a farmworker rights lawsuit. Three of the plaintiffs were in Mexico and unable to return to Georgia for their depositions. The Defendants wanted the depositions to be held in Georgia.

The Court, on its own, brought up the use of Skype to conduct the depositions. The Court explained that “Skype is now used to facilitate many a human interaction,” including parent-child visitation orders, marriages and depositions where travel cost is prohibitive. Hernandez, at *8-9, citing  Young v. Young, 2013 Ark. App. 707 (Ark App. 2013), Tshiani v. Tshiani, 208 Md. App. 43, 56 A.3d 311, 321-22 (Md. App. 2012) and  Yu Hui Chen v. Chen Li Zhi, 109 A.D.3d 815, 971 N.Y.S.2d 139, 140 (N.Y.A.D. Sept. 11, 2013).

The Court directed the parties to meet and confer over Skype-based depositions with translation and recordation, or the Plaintiffs contribute $1,000 to the Defendants for conducting the depositions in Mexico. Hernandez, at *9.

Bow Tie Thoughts

I am thrilled judges are ordering parties to look at using video depositions to reduce travel costs. However, I personally would not use Skype for a deposition. This is not because I do not use Skype, but would prefer a remote video deposition service instead. These services have applications designed specifically for remote depositions. They also understand the requirements for remote court reporters. Many states often require a court reporter to be with the witness for being properly sworn in. Moreover, an international setting likely would require the deponents to go to the US Embassy to be deposed.

I agree with Judge Smith’s logic, reading of the rules and solution. I would totally give him a high five for not being afraid to solve problems with technology. I just would use a different videoconference tool.

Mining for eDiscovery Sanctions

Some cases begin with such a “wow” introduction they have to be seen to be believed:

To put it lightly, there has been a severe shortcoming by Defendants in this action during the discovery process. Not only have Defendants’ resisted providing required information in initial disclosures and resisted previous discovery attempts by Plaintiff on an unfounded “we are not his employer” objection to discovery, but it has now come to light that Defendant did not even engage in a search for relevant electronically stored information (ESI) until April of this year—nearly ten months after this action was filed, and nearly two years after the EEOC investigation. And we are not talking about information that might have some tangential bearing on a lead to the discovery of admissible evidence, but emails that specifically discuss Plaintiff’s employment at the mine, his termination, and emails about Plaintiff which he has classified as “racist.” Surely these emails are relevant in an employment discrimination case alleging mistreatment based upon race, and should have been produced in response to Plaintiff’s first set of discovery requests propounded back in December of 2012. However, it is hard to produce something that Defendants have not even looked for. In fact, despite a litigation hold being placed on four email accounts—all human resource people at the mine or corporate office—in June 2011 when Plaintiff’s EEOC complaint was filed, counsel for Defendants did not request any ESI from Defendants’ IT department until April 2013. At or around that same time, Defendants placed holds on several other employees’ email accounts. Again, these were not people with some obtuse connection to the case, but included the people that actually fired Plaintiff, including the superintendent at the mine that signed the firing paper.

The logical question is: why was this not done? The only proffer by Defendants is that there was a minor miscommunication between counsel and a human resource (HR) manager, who they allege was responsible for collecting materials responsive to Plaintiff’s discovery requests. This miscommunication, as stated at the hearing on Plaintiff’s motion for sanctions, is that counsel did not specifically tell the HR manager to gather emails. Rather, counsel operated under the assumption that emails would be searched in his directive to find responsive materials. In addition to this failure to search for responsive ESI, Defendants operated a suspicious course while other discovery was playing out. For instance, during a May deposition of the aforementioned HR manager, counsel for Plaintiff asked whether there were any emails exchanged regarding Plaintiff. In response, the witness stated that there were emails but they were given to counsel. Counsel stood silent and the deposition continued. This establishes several things: first, Defendants knew there were relevant emails; second, Defendants had those emails in their possession; third, those emails were not given to Plaintiff, despite Defendants knowing they existed and having them in their possession; and finally, Defendants allowed the deposition to continue without Plaintiff having the benefit of the emails to question the witness about. This is just one instance of Defendants allowing a deposition to take place where there were, what the Court will classify as highly relevant documents, without giving those documents to Plaintiff to use at the deposition.

Clay v. Consol Pa. Coal Co., LLC, 2013 U.S. Dist. LEXIS 129809, 1-4 (N.D. W. Va. Aug. 13, 2013).

You are in trouble when the Judge makes any text bold in an opinion.

The Plaintiff brought a sanctions motion for the following:

(1) Default judgment on liability;

(2) All reasonable expenses associated with the prior depositions of six employees of Defendants;

(3) Permission to redepose these six employees at Defendants’ expense;

(4) Permission to depose seven additional employees;

(5) Exclusion of Plaintiff’s deposition at trial or in any motion;

(6) Denial of any effort to prolong this action;

(7) Precluding Defendants from conducting any further discovery; and

(8) Reasonable expenses associated with the instant motion.

Clay, at *7.

How to Go Mining for Sanctions 

MiningGearThe Federal Rules of Civil Procedure provide several options for sanctioning a party for discovery misconduct.

Pursuant to Federal Rule of Civil Procedure 37(c), a party can be sanctioned if they “fail to provide information or identify a witness as required by Rule 26(a) or (e) . . . the court, on motion and after giving an opportunity to be heard, can impose sanctions ranging from reasonable expenses, including attorney’s fees, to rendering default judgment.” Clay, at *8, citing Fed. R. Civ. P. 37(c)(1)(A)-(C).

A party must also supplement their Rule 26(a) initial disclosures or a response to a discovery request pursuant to Rule 26(e) “if the party learns that in some material respect the disclosure or response is incomplete or incorrect, and if the additional or corrective information has not otherwise been made known to the other parties during the discovery process.” Clay, at *8-9, Fed. R. Civ. P. 26(e)(1).

Demonstrating a Rule 26(g) violation is like striking gold. Or a pocket of methane if you are the producing party.

Rule 26(g) requires attorneys to make a reasonable inquiry before answering or objecting to discovery requests. Clay, at *9. If there has been an improper certification, the Court “must impose an appropriate sanction,” which “may include an order to pay the reasonable expenses, including attorney’s fees.” Clay, at *9, citing Fed. R. Civ. P. 26(g)(3).

Additionally, if a Court finds that a party “impedes, delays, or frustrates the fair examination” of a deponent during a deposition, the court “may impose an appropriate sanction,” including the reasonable expenses and attorney’s fees incurred. Clay, at *9, citing Fed. R. Civ. P. 30(d)(2).

Digging for Default 

RockofCoalCourts apply a four-part test to issue a default judgment:

 (1) whether the noncomplying party acted in bad faith;

(2) the amount of prejudice his noncompliance caused his adversary, which necessarily includes an inquiry into the materiality of the evidence he failed to produce;

(3) the need for deterrence of the particular sort of noncompliance; and

(4) the effectiveness of less drastic sanctions.

Clay, at *10-11, citing Mutual Fed. Sav. & Loan Ass’n v. Richards & Assocs., Inc., 872 F.2d 88, 92 (4th Cir. 1989).

The Court held this was not the “flagrant case where this harshest sanction should be imposed,” because the Court could not concluded that the Defendants acted in “bad faith and callous disregard for the authority of the district court and the Rules.”  Clay, at *11.

The issue with the Defendants was the fact they did not begin to search discovery until the Plaintiffs were about to file their second motion to compel. Clay, at *11-12. The motions to compel effectively compelled the party to comply with their discovery obligations. While this is not acceptable conduct, it is different than intentionally withholding unfavorable discovery or disobeying court orders. Clay, at *11.

 Striking Deposition Gold

StrikingGoldThe Court held that allowing the first six deponents to testify without providing discovery, when Defense counsel knew such discovery existed, impeded, delayed and frustrated the fair examination of the deponent. Sanctions were justified pursuant to Federal Rule of Civil Procedure 30(d)(2). Clay, at *15.

The Court ordered the re-examination of the first six deponents with all reasonable expenses to be paid by the Defendant, including five hours of attorney preparation time. Clay, at *15.

The Court also ordered the Defendants to pay all reasonable expenses from the prior depositions. Clay, at *15-16.

The Court also extended the deposition limit allowing another seven depositions, but did not allow costs, because the other deponents were either included in initial disclosures or the Plaintiff knew who were key players in the case. Id. 

The Mother load of Costs

The Court held the Plaintiff was entitled to reasonable expenses, including attorneys’ fees, for the sanctions motion. The Plaintiff had to submit an affidavit defining their costs for the Court. Clay, at *17-18.

Bow Tie Thoughts

Lawyers cannot ignore electronically stored information. I have met many attorneys who take a profoundly dangerous view that collecting ESI from their client is optional.

Here are hard truths about electronically stored information:

Your clients create ESI, whether it is a personal injury case, patent or a contract dispute;

ESI must be identified, preserved and searched to respond to discovery requests;

You cannot practice law by simply ignoring electronically stored information;

You cannot make ESI “go away” by yelling at it, intimidation or threat of Court order.

Electronically stored information will be present in virtually all civil litigation. You simply cannot get around it. Trying to ignore ethical and discovery obligations can end with anything from sanctions to violating your duty of competency to your client.

Attorneys must meet their legal obligations by understanding the interaction of the law to the technical solutions available to manage ESI. This requires learning how your client interacts with technology and the methodologies to capture relevant data for review and production.

What options are available to learn? My friend Michael Arkfeld has a solid online course and books that help. Craig Ball’s blog is an excellent resource. There are many other options. There are many industry conference as well. Regardless of what you choose, I encourage lawyers to be proactive. It is better to be in control of eDiscovery and not subject to sanctions motions that jeopardize your bar card.

Skyping with The Confrontation Clause

We also understand that in this technological age, “confrontation” at some point may take on a meaning that none of us has yet imagined or realized. Despite advances in communication technology, a defendant’s right to a fair trial with all its attendant Constitutional guarantees is our legal and moral obligation to uphold.

Judge Michael P Barnes, Indiana Court of Appeals

Few cases have the intersection of the Confrontation Clause, witness unavailability, chain of custody, and Skype.

Williams v State is one such unpublished opinion from the Indiana Court of Appeals.

The Defendant was convicted of murdering an elementary schoolteacher and sentenced to 95 years in prison. Williams v. State, 2012 Ind. App. Unpub. LEXIS 755 (Ind. Ct. App. 2012).

The Defendant appealed on multiple grounds, including whether the Skype deposition of a crime lab expert violated the Confrontation Clause and was hearsay. The crime lab witness case involvement included handling a doorknob, a key piece of evidence, with a bloodstain on it.

The State requested conducting the video deposition of the witness, because she was unavailable due to retiring and moving out-of-state to care for her “gravely ill and elderly” mother. Williams, at *5-6.

Over the Defendant’s objections, the Skype deposition was held approximately 2.5 months before trial. The witness was deposed with a Marion County deputy prosecutor, a Cuyahoga County, Ohio, deputy prosecutor, and the lead police detective physically present with her. The Judge presided over the deposition in court, with the Defendant, defense attorney, another deputy prosecutor, and IT personnel. Williams, at *6.

The Sixth Amendment requires that “out-of-court testimonial statements by a witness who does not appear at trial are inadmissible unless the witness is unavailable to testify and the defendant had a prior opportunity for cross-examination.” Williams, at *9, citing Crawford v. Washington, 541 U.S. 36, 53-54, 124 S. Ct. 1354, 1365, 158 L. Ed. 2d 177 (2004).

Indiana Evidence Rule 804(b)(1) states a deposition is admissible hearsay if the deponent is unavailable to testify as a witness at trial. Williams, at *9.

Evidence Rule 804(a) defines witness unavailability. A witness is unavailable if the witness:

(1) Is exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant’s statement; or

(2) Persists in refusing to testify concerning the subject matter of the declarant’s statement despite an order of the court to do so; or

(3) Testifies to a lack of memory of the subject matter of the declarant’s statement; or

(4) Is unable to be present or to testify at the hearing because of death or then existing physical or mental illness or infirmity; or

(5) Is absent from the hearing and the proponent of a statement has been unable to procure the declarant’s attendance by process or other reasonable means.

The Court “believed” that the witness’ “unavailability” pushed the law to “the very edge of the envelope,” because it was not the witness’ physical or mental infirmity that prevented her from testifying at trial, but her mother’s illness. Williams, at *10-11.  Moreover, the determination the witness was unavailable was two and a half months before trial. Williams, at *11.  Additionally, there was no information if the health condition of the witness’ mother changed in that time. Williams, at *11-12.

Despite the unanswered questions, the Court found that even if the State failed to demonstrate the witness was unavailable, any error was harmless, because the Confrontation Clause “does not require reversal if it can be shown beyond a reasonable doubt that the error did not contribute to the verdict.” Williams, at *12, citing Koenig v. State, 933 N.E.2d 1271, 1273 (Ind. 2010).

The Court explained that the witness’ involvement in the handling the doorknob and bloodstain evidence was “slight” because she “handled the doorknob during the course of the testing process and was involved in the chain of custody of the blood stain swabbed from it, but no more.” Williams, at *13.

Bow Tie Thoughts

Judges and attorneys in their “normal” lives use technology such as Skype to communicate with family members, friends or hold meetings. This everyday use makes adopting remote video deposition technology easier, because attorneys are comfortable using video conferencing technology.

Such an embrace of Skype is a positive thing for cutting costs for travel to remote depositions of secondary witnesses. However, there are always legal issues to consider in using a technology in a way it might not be intended.

While this Court did not outright hold Skype was acceptable for a remote deposition, there are well-established remote deposition companies whose services provide security, reliability and a synced-video transcript. Using such companies could avoid potential notice and procedural requirements in a remote deposition, such as responsibilities of the videographer and oath requirements for swearing in a remote deponent. In short, using one of these companies is a good insurance policy to avoid any procedural challenges to a remote video deposition that otherwise could be overlooked.

Judge Barnes highlighted there could be real Constitutional issues in criminal cases with remote video testimony. I expect whether a remote video deposition being used at trial will be inversely proportional to how important the witness is to the case. If the witness is very important, their reasons for being unavailable must be very compelling for them not to testify in person.

 

Santa Clara Bar Association Expert Deposition Seminar

Go “On the Record” with the Santa Clara County Bar Association Civil Practice Committee’s new expert deposition seminar on June 22 at 6:00pm. To register, click here.

“On the Record” is a seminar with Judge Gregory Ward (retired), author of California Objections (James Publishing). After the brief introductory material by Judge Ward, 10 expert witnesses will be available with sample expert reports for mock depositions by the attendees. Experienced attorney coaches will assist the attendees in their mock examinations.

Attorney participants will have the opportunity to depose an expert witness from any one of the following areas:

> Electrical Engineering
> Fires & Explosions
> Computer Forensics
> Industrial Hygiene
> e-Discovery Search Term Efficiency
> Mechanical Engineering
> Advanced Materials

Join us for the latest on deposing experts in California. Learn a judge’s perspective on expert depositions and gain hands-on practice with experienced expert witnesses.

Part 1: 

Retired Superior Court Judge Gregory Ward will give a short overview of expert witness requirements, focusing on preparing to take an expert’s deposition.

Part 2: 

Attendees will divide into small groups for a practical exercise with attendees conducting 10-15 minute questioning of experts.

The experts will be from multiple subject areas to represent several practice areas. Each attendee will be given a one-page expert’s “report” to use in the mock deposition.

Facilitating the interactive groups of Part 2 are the following: Kristine Meredith, Nora Rousso, plus other attorneys to be announced.

Pricing:

SCCBA Member: $65.00
Non-Member: $149.00
SCCBA New Admittee (0-3 years in practice): 55.00

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).

Blindfolded businessmanThe 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.

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.

Chess Pieces

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

IceBerg

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).

The Plumbing of a Motion to Compel

In a product defect case about brass plumbing fittings, the Defendants fought a motion to compel electronically stored information relevant to class certification, because of undue burden and cost.  They lost…in large part. In re Zurn Pex Plumbing Prods. Liab. Litig., 2009 U.S. Dist. LEXIS 47636, 1 (D. Minn. June 5, 2009).

Paper Clogging the Drain

The Plumbing of a Motion to CompelThe Court initially required the parties at the beginning of the litigation to only focus on hard copy documents out of the concern the electronically stored information would drive up the cost.  2.  The Court stated:

“ESI may prove to be relevant to the first stage of discovery, we cannot meaningfully make that prediction now, and require the parties to engage in what could be vastly more expensive, and yet utterly futile, discovery.” In re Zurn Pex Plumbing Prods. Liab. Litig., 2.

 

The Court further stated on electronically stored information:

“[S]hould the parties uncover voids in the information disclosed in hard copy form, they are . . . at liberty to press for further discovery including electronically stored information.” In re Zurn Pex Plumbing Prods. Liab. Litig., 2.

The Defendants’ Electronically Stored Information

Deposition testimony revealed the Defendants’ electronically stored information includes employee email folders and files on the network system.  Additionally, the ESI of former employees’ were archived on DVD.  There was also a separate network drive that contained un-segregated folders from over 600 employees.  In re Zurn Pex Plumbing Prods. Liab. Litig., 2-3.

Enter the Litigation Hold and Search Terms

The Defendants produced a list of individuals who were issued a litigation hold. In re Zurn Pex Plumbing Prods. Liab. Litig., 3.

The Plaintiffs in turn requested searches across the different databases with 26 key words.

The Defendants opposed the request as being “not necessary for class certification and that the request was overly broad and would be extremely costly.”  In re Zurn Pex Plumbing Prods. Liab. Litig., 3. 

The Defendants’ Arguments Going Down the Drain

Arguments Down the Drain

The Defendants argued that 1) the first Court Order did not allow for any ESI productions and 2) producing ESI would be unduly burdensome and costly. 

The first Court order did NOT foreclose electronic discovery.  In re Zurn Pex Plumbing Prods. Liab. Litig., 4.  The Court stated the first Order allowed for electronic discovery if there were “voids in the information disclosed in hard copy form.” Id.  The Court noted email messages showed possible gaps over fittings failures and aggressive water compared to the paper documents.  Id. 

The purpose of civil discovery is to allow parties to “obtain the factual information needed to prepare a case for trial.” In re Zurn Pex Plumbing Prods. Liab. Litig., 5.  Despite the discovery being limited to class action certification, the Court stated there was a presumption in favor of production the Defendants’ electronically stored information.  In re Zurn Pex Plumbing Prods. Liab. Litig., 4-5.

Cost Counts

The Defendants were able to stop a complete rout with their cost arguments. 

The Defendants had approximately 61 gigabytes of data, which would have totaled around 27 million pages if printed.  The Defendants estimated searching all of the databases to cost around $1,150,000 and take seventeen weeks to perform.  That did not include collection and processing. In re Zurn Pex Plumbing Prods. Liab. Litig., 6-7.

The Court Order

The Court did not buy the Defendants’ burdensome arguments, especially considering a lawyer who was not an expert on searches made the claim. In re Zurn Pex Plumbing Prods. Liab. Litig., 6.

The Court did try to limit false hits from the search terms by limiting the number of search terms to 14 specific terms.  The Defendants’s searches were limited to the network drives, custodian emails and the DVDs of the former employees.  In re Zurn Pex Plumbing Prods. Liab. Litig., 6-7. 

Bow Tie Thoughts:

The parties would have been better served addressing electronically stored information at the beginning of the lawsuit, instead of delaying it for over a year.  Both sides would have been in a better position to judge class certification or settlement options if they knew the big picture.  Moreover, the Defendants had over a 600 person company.  Using email would be a fact of life.

The collection, processing, data reduction and review of 61GB would not be cheap, but $1,150,000.00 for the searches alone over 17 weeks sounds inflated. 

The perceived cost might be inflated by thinking of electronically stored information as the same as reviewing 27 million pieces of paper.  ESI can be reduced by targeted collections, pre-discovery tools to reduce the data set that are then fully searchable in a litigation support software.  With paper review, lawyers, contract attorneys and paralegals are digging through boxes of paper only searchable by the human eye. One can see where a seventeen week estimate comes from such a brut force search. 

Processing costs, which include data reduction to cull down electronically stored information, is approximately $600 to $1000 a gigabyte, depending on the vendor’s services.  Attorney review in a litigation support software is reduced by having to review less ESI, such as not reviewing any email newsletters, spam and focusing on specific date ranges.  With that said, estimating the cost to search 61GB that also did NOT include collection and processing to be over a million dollars seems high on the facts presented.

Follow the Court Order: If You are Ordered to Produce Searchable PDF’s, Don’t Produce TIFFs without Searchable Text

Gamesmanship is the harbinger of bad lawyer reputations.  Not obeying Court orders can be the death warrant on how the judge will view you every time you appear in her courtroom.  One can imagine how things will go for a party when this is the opening line of an opinion:

This is the second needless discovery motion in this case – needless because plaintiff’s counsel simply refuses to follow the letter of court orders, and in this case, not even the spirit. Ajaxo Inc. v. Bank of Am. Tech. & Operations, Inc., 2008 U.S. Dist. LEXIS 97602, 1 (E.D. Cal. Dec. 1, 2008).

Ignoring the Form of Production in a Court Order

iStock_000005944464XSmallThe Court ordered ESI be produced in a searchable form and Plaintiffs agreed to searchable PDF’s. 

The Plaintiffs instead produced 119 static images (TIFFs) WITHOUT extracted text for searching, any pagination, or a load file for a litigation support review system.  Ajaxo Inc., 3.

The Plaintiff’s expert material was produced at first late in non-searchable format on 5 CD’s. Ajaxo Inc., 3.  A searchable production was made months later after the motion to compel was filed.  Id.

Preparing for an expert deposition with 5 CD’s worth of non-searchable material does not sound like a good time.

The Court found the Defendants were prejudiced because they could not adequately prepare for the expert’s deposition with the large volume of documents. 

Prejudice was encountered with respect to the Hampton CDs in that the Bank could not adequately prepare for Hampton’s deposition given the volume of documents. Ajaxo Inc., 3. 

The Plaintiffs were ordered to produce both productions in a searchable format and instead disregarded the Court Order.  This did not go unnoticed by the Judge.  Ajaxo Inc., 3. 

Things Judge’s Don’t Like: Excuses

iStock_000002993388XSmall

The Court was not thrilled with the Plaintiffs claiming the Federal Rules of Civil Procedure do not require ESI productions in searchable format. 

The Court bluntly stated, “[Plaintiffs’] belief that the Federal Rules may not require production in searchable format is not only wrong, but again ignores the terms of the specific order.” Ajaxo Inc., 4.

Federal Rule of Civil Procedure Rule 34 Review

The Court included the following summary on form of production protocols from the Federal Rules of Civil Procedure, the Advisory Committee notes and case law:

Fed. R. Civ. P. 34(b) permits the requesting party to specify the format of electronically produced documents, subject to objection by the producing party with a statement in the Rule 34 response specifying the form in which the documents will be produced. This objection may be sustained or overruled by a court. In the absence of a court order, and if no specific request is made, the producing party may produce the documents in native format, or in a “reasonably usable” form. Ajaxo Inc., 4, citing Rule 34(b)(2)(E).

A responding party may not change the form of production to make what was ordinarily searchable, non-searchable. Rule 34 Advisory Committee Notes 2006 amendment. Courts may order electronic documents to be produced in searchable format. Ajaxo Inc., 4-5, citing, In re Seroquel Product Liability Litigation, 244 F.R.D. 650, 654-55 (M/D. Fla. 2007); Hagenbuch v. 3B6 Sistemi etc., 2006 U.S. Dist. LEXIS 10838, 2006 WL 665005 (N.D. Ill. 2006)

Enter the Sanctions Motion

The Defendants sought the following sanctions pursuant to the Court’s inherent powers and Federal Rule of Civil Procedure Rule 37(b) (2):

(1) Order it established that Ajaxo and KCM are alter egos;

(2) Order plaintiffs precluded from relying on Hampton’s expert report to support their claims for damages;

(3) Monetary sanctions in the amount of $ 12, 592.50 for fees incurred to date. Ajaxo Inc., 5.

Perspective from the Bench: Not Happy, but Not Fatal to the Plaintiffs’ Case

The Court directly stated:

[Plaintiffs’] counsel may not pick and choose when to comply with a court order depending on counsel’s unilaterally determined excuses or justifications not to comply with the order. The order is either obeyed or appealed. Nor should courts issue orders which they are unwilling to enforce. There is importance per se in not allowing a party to ignore orders – the litigation process would otherwise descend into chaos. Thus, sanctions must be imposed here. Ajaxo Inc., 7.

The Court’s sanctions analysis focused on the Plaintiff counsel’s willful disobedience of the Court order and the prejudice the Defendants incurred. Ajaxo Inc., 7.

The Court was not ready to decimate the Plaintiffs’ case by striking their expert because of the attorney’s conduct.  The Court “barely” believed that Plaintiffs’ counsel acted in ignorance of the law and not in “contumacious disrespect” of it.  Ajaxo Inc., 8. 

The Court ordered the Plaintiffs to re-produce their expert for deposition, because the Defendants did not have adequate time to prepare for the expert’s original deposition.  Ajaxo Inc., 9.

The Court further ordered the costs of the deposition and motion.  Ajaxo Inc., 9-10.

Final Thoughts

Attorneys need to understand the procedures for requesting ESI, form of production requirements and complying with Court orders for electronic discovery to best serve their clients. The sheer volume of electronically stored information requires all lawyers to have a basic understanding of contemporary discovery.