How to Get A Judge to Say “Stern Measures Are Called For”

How do you know there is a duty to preserve?

When two managing officers involved in the termination of an employee are repeatedly asked by an attorney for their electronic calendars, including a letter threatening an EEOC complaint if there was not an amicable resolution, and then followed by formal discovery requests.

How do you get sanctions?

When after repeated statements that the Defendants did not have electronic calendars, one of the managing officers states in deposition that he kept a daily electronic calendar and routinely deleted the entries after the date has passed. Making matters more complicated, the witness admitted “he was told a week before his deposition to retain his calendars but he nonetheless continued his practice of deleting” his electronic calendars. Kirgan v. Fca Llc, 2013 U.S. Dist. LEXIS 51747, at *1-2 (C.D. Ill. Apr. 10, 2013).

Overview of Sanctions

A party must enact a litigation when it reasonably anticipates litigation, which generally requires the suspension of its document destruction policy.  Kirgan, at *3.

Courts analyze three factors in determining sanctions for the failure to preserve evidence:

(1) A breach of the duty to preserve or produce documents;

(2) The level of culpability for the breach; and

3) The prejudice that results from the breach.

Kirgan, at *3, citing Danis v USN Communications Inc., 2000 WL 1694325, at *31 (NDIL).

Case law states that sanctions must be proportionate to the offending conduct. Kirgan, at *3. A party also had to know or had reason to know that litigation was forthcoming. Kirgan, at *3 citing Morton v Motel 6 Operating L.P., 534 F3d 672, 681 (7th Cir 2008). Sanctions can be imposed on a finding of bad faith, willfulness, or fault. Kirgan, at *3 citing Brandt v Vulcan, Inc., 30 F3d 752, 756 (7th Cir 1994).

The Court’s Findings 

The Court held that the Defendants breached their duty to preserve the daily calendars and that the Plaintiff had been prejudiced by the destruction of the electronic evidence. Moreover, the Court found that the Defendants’ conduct was misleading and intentional. Kirgan, at *5.

The Court stated the following on determining sanctions:

I do not believe that the sanction of default is warranted. I do, however, believe that stern measures are called for. The Defendant’s direct and vicarious conduct was willful and intentional, and it cannot be condoned. 

Kirgan, at *7.

The Court noted that the destruction of the calendars was the only reported instance of misconduct.

However, that misconduct included untruthful statements that the calendars did not exist, with one of the parties deleting the ESI. Kirgan, at *6.

This conduct created a “clear impression that [the officer] had deliberately decided to thwart Plaintiff’s efforts to obtain them.” Id.

Based on the above, the Court entered the following sanctions order:

 

1. The jury is to be given a spoliation instruction, which permits the jury to draw a negative inference from its failure to preserve and its destruction of relevant documents.

2. Defendant may not use — at summary judgment or at trial — any evidence or argument that may have been contained in Borsdorf’s destroyed calendars, unless that evidence or argument is corroborated by other documentary evidence or by testimony of witnesses independent of the Defendant.

3. Defendant shall pay attorney’s fees to the Plaintiff for the fees his counsel incurred in preparing this motion. That amount shall be doubled, in a rough effort to compensate Plaintiff for the efforts that were made in her counsel’s attempts to obtain the calendars.

Kirgan, at *7.

Bow Tie Thoughts

Judges do not like lies. Attorneys have a duty of candor to the Court and witnesses take an oath to tell the truth. Judges get upset when anything less than the truth is told.

This is the first time I have seen a Court double an attorneys fee award as part of a sanction for the destruction of evidence (I am sure it has happened before). However, it is noteworthy, because the Court did it “in a rough effort to compensate Plaintiff for the efforts that were made in her counsel’s attempts to obtain the calendars.” 

Complying with the duty to preserve is rightly a hot topic in litigation. Attorneys must conduct detailed interviews with their clients to determine what technology is used in the ordinary course of business. Does the client text? Is there data outside the firewall in a “cloud,” such as a Google Calendar?

Attorneys must develop a preservation strategy after determining the relevant sources of information. Telling a custodian to “stop deleting” is a good first step, but the relevant data has to be collected in a defensible manner. This could range from content information management systems “locking down” the custodians’ communications, which are then exported for analysis and review. Other options include collecting data directly from the computers with computer forensic experts. Regardless of the strategy used, it is advisable to not allow custodians to self-collect their own data.

The Find a Litigation Hold App on An iPhone

In a dispute involving claims of monopolistic violations regarding booking A-list DJ’s at nightclubs, the Defendants did not take any steps to preserve or review text messages on an iPhone for relevance that was lost.  Christou v. Beatport, LLC, 2013 U.S. Dist. LEXIS 9034, 36-39 (D. Colo. Jan. 23, 2013).

While the ensuing motion practice did not have the fist-pumping energy of an A-list nightclub, the issue of spoliation sanctions is worthy of a late night freestyle eDiscovery rap battle.

Cueing Up a Litigation Hold

The Plaintiffs served a litigation hold letter on the Defendants at or about the same time as the beginning of the lawsuit in December 2010, which identified text messages as ESI to preserve. Christou, at *36-37.

The Plaintiffs sought an adverse jury instruction for the failed preservation of text messages, because 1) the Defendants took no steps to preserve the text messages on the Defendant’s iPhone; 2) Defendants did not disclose any text messages in their May 2011 discovery responses; and 3) The Defendant claimed that he lost his iPhone in August 2011, thus also loosing and any text messages saved on it. Christou, at *37.

Spinning Relevance and Review

The Defendants argued whether any relevant text messages were lost pertaining to the litigation was “sheer speculation,” because the Defendant did not use text messages to book DJ’s. Id.

The Defendants also argued that they “responded fully” to the May 19, 2011 discovery, thus “showing” that there were no responsive text messages. Id.

The Court stated that the Defendant’s claim he “did not use texting to book DJ’s is hardly proof that his text messages did not contain relevant evidence.” Id.

The Court turned up the volume on the fact that just because the Defendants stated that they “found no responsive text messages,” did not address whether defense counsel reviewed the Defendant’s text messages and determined that the text messages “contained nothing of relevance.” Christou, at *37-38.

Setting the Master Level on Sanctions 

The Court explained that spoliation sanctions are proper when “(1) a party has a duty to preserve evidence because it knew, or should have known, that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence.” Christou, at *38, citing Turner v. Public Serv. Co. of Colorado, 563 F.3d 1136, 1149 (10th Cir. 2009) (quoting Burlington N. & Santa Fe Ry. Co. v. Grant, 505 F.3d 1013, 1032 (10th Cir. 2007)).

The Court found the Defendants had a duty to preserve the text messages, which they did not do. Christou, at *38.

Moreover, the Court held, “Those text messages, few as they might have been, should have been preserved and either provided to the plaintiffs or potentially made the subject of further proceedings before the Court.” Id. 

The Court had no reason to believe the phone was not lost on accident or the failure to preserve was just negligent. Christou, at *38-39.

However, the Court had to determine an appropriate sanction. The Court explained:

A commercial party represented by experienced and highly sophisticated counsel cannot disregard the duty to preserve potentially relevant documents when a case like this is filed. However, an adverse jury instruction is too harsh and is unwarranted as a sanction for the negligent “spoliation” of evidence in the circumstances presented here.

Christou, at *39.

The Court mixed the following sanction: The Plaintiffs could introduce the litigation hold letter and that the Defendants failed to preserve the text messages. Id.  Further, the Plaintiffs could “argue whatever inference they hope the jury will draw.” Id. Additionally, the Defendants could offer admissible evidence to explain the loss and argue that no “adverse inference should be drawn.” Id. 

Bow Tie Thoughts

The duty to preserve and mobile devices can potentially give lawyers serious stress. Attorneys should discuss with clients how they use technology, how they communicate and involve consultants in ensuring the preservation of relevant ESI. Additionally, if a litigation hold letter specifies a type of data, it is advisable to conduct a reasonable investigation whether any relevant information exists on the identified media.

Litigation hold letters can be multiple page lists including every possible form of ESI known to man. While no one wants data to go missing, or to not include a possible data source, it is always a good plan for parties to meet and confer over possible data sources to narrow what data needs to be preserved and collected.

Finally, it is important to remember data can exist in multiple locations. While a smartphone such as an iPhone might be lost, the text messages might be backed-up on a computer when the iPhone was synced. It is also worth investigating whether the text messages were iMessages that possibly could be backed-up in iCloud.

Audio Recording Sanction Blues

Many eDiscovery attorneys associate Chicago with 1) the Blues Brothers and 2) Magistrate Judge Nan Nolan.

Judge Nolan granted in part and denied in part a motion to compel in an employment dispute.

The Judge found the Defendant had a duty to preserve audio recordings of calls that had been destroyed under the company’s retention policy.

The Court further held that the destruction of an audio recording to be grossly negligent or supported a finding of fault.

As such, the Defendants were to be sanctioned with a presumption at the summary judgment stage as to whether plaintiff hung up on a customer, and if the case went to trial, the court should instruct the jury with a “spoliation charge” to be determined by the District Court.   Banks v. Enova Fin., 2012 U.S. Dist. LEXIS 170000, 1-2 (N.D. Ill. Nov. 30, 2012).

The Defendants quickly found an expressway to the District Court, arguing the Magistrate Judge’s order was clearly erroneous. Id.

I Can’t Turn You Loose

The Defendant argued the Magistrate Judge did not have the authority to impose sanctions under a court’s inherent power without bad faith in the Seventh Circuit. There was no citation to any case law for this position. Banks, at *4-5.

While adverse inference instructions do require a showing of bad faith, the Court did not find any bad faith related to the destruction of the tapes. Banks, at *5. However, the District Court noted that the Magistrate Judge did not issue an adverse inference instruction and it was within the Court’s discretion to craft sanctions proportional to a case. Banks, at *6.

The Defendant also challenged the Magistrate Judge’s finding the Defendant had a duty to preserve.  The Court found the Defendants had a duty to preserve the audio recordings based on 1) the termination of the employee based on the phone calls; 2) the Plaintiff’s meeting with his supervisor over his termination; 3) the unemployment claim litigation; and 4) the EEOC charge. Banks, at *6-7.

The Seventh Circuit’s case law states that the duty to preserve arises when a party “’knew, or should have known, that litigation was imminent.” Banks, at *7, citing Viramontes v. United States Bancorp, 2011 U.S. Dist. LEXIS 7850 (N.D. Ill. Jan. 27, 2011).

The District Court noted the issues with terminating an employee alone being a triggering event for a lawsuit:

It would be too onerous a burden to place on all employers a duty to preserve any and all documents that form the basis for the termination of an employee because of the possibility that the terminated employee might sue.

Banks, at *7.

The District Court upheld the Magistrate Judge’s findings that the Defendant had a duty to preserve, because the Defendant could reasonably anticipate litigation when the Plaintiff brought his unemployment claim. Banks, at *7.

The central issue in the dispute was whether the Plaintiff hung up on a customer. The key evidence for his termination were the audio recordings, which still existed when the Defendant appealed the Plaintiff’s initial award of unemployment benefits, however were later destroyed. Banks, at *7-8.

Bow Tie Thoughts

The duty to preserve is a malpractice area for attorneys when transitioning from records information management to a litigation hold. Moreover, eDiscovery is now years beyond email messages and Excel files. Attorneys must discuss with their clients the different electronically stored information in their possession, how they communicate both internally and externally, and what ESI can be related to the subject matter of the lawsuit.

Voicemail/audio recordings is just one example of ESI that can be overlooked. Text messages and social media are already “common” in litigation. It is only a matter of time before augmented reality will start appearing in litigation.

Attorneys must be proactive in conducting client interviews and understanding the types of ESI that can be subject to a lawsuit. To not do so is to risk singing the blues at a sanctions hearing.

Believing “Missing” Emails Exist Does Not Make Adverse Inference Sanctions Real

The Plaintiff in an employment discrimination lawsuit brought a motion for adverse inference jury instructions for the alleged destruction or suppression of email over a specific date range.

The Plaintiff did not offer evidence of the email messages existence, only that he believed the email existed.   Omogbehin v. Cino, 2012 U.S. App. LEXIS 12545, at *5 (3d Cir. N.J. June 20, 2012).

The Magistrate Judge denied the Plaintiff’s motion, because the Plaintiff failed to show the messages actually were sent or received. Id.

Two of the Defendants each declared they did not send any of the purported email in the timeframe the Plaintiff claimed the messages were sent. Id. Additionally, two of the Defendants’ IT professionals declared that all of the email from the relevant timeframe had been produced. Omogbehin, at *5-6.

The Plaintiff did not offer any evidence that the alleged emails existed or proof that any intentional or un-intentional spoliation had taken place. Omogbehin, at *6.

The District Court affirmed the Magistrate Judge, finding that the Plaintiff did not establish any facts that the Court could “at least infer that the evidence existed in the first place.” Id.

The Court of Appeals upheld the District Court and Magistrate Judge’s findings.

Case law explains spoliation occurring where:

[1] The evidence was in the party’s control;

[2] The evidence is relevant to the claims or defenses in the case;

[3] There has been actual suppression or withholding of evidence; and,

[4] The duty to preserve the evidence was reasonably foreseeable to the party.

Omogbehin, at *8-9, citing Bull v. United Parcel Serv., Inc., 665 F.3d 68, 73 (3d Cir. 2012).

After spoliation is established, there is separate analysis for sanctions. Adverse inference sanctions require an appearance that “there has been an actual suppression or withholding of the evidence.” Omogbehin, at *9.

The Court of Appeals held the District Court did not abuse its discretion in finding the Plaintiff failed to prove spoliation occurred. The Court of Appeals highlighted that the Plaintiff “provided no evidence” that the emails ever existed. Id.

As the Court of Appeals explained:

The [Defendants] produced the information and documents that [Plaintiff] requested; that they did not contain what he had hoped or expected is not sufficient to satisfy his burden. He must provide some proof that what he seeks actually existed, but failed to do so. As a result, the District Court did not abuse its discretion in denying [Plaintiff’s] motion. 

Omogbehin, at *9-10.

Bow Tie Thoughts

Cases involving litigation holds and the duty to preserve fundamentally cannot require a party fighting a spoliation motion to prove the non-existence of data. That would require a party to prove a negative, which is inherently a challenge (also known as expensive).  While a producing party can prove how they enacted a litigation hold, which custodians were subject to a hold, how data was collected, and what search terms were used, it is up to the requesting party to prove some facts to show spoliation.

What must a party demonstrate to show spoliation? Showing production gaps, such as a production that has one week with 300 relevant emails, a week with zero, and then another week with 250, might be enough to raise a red flag for a judge. It also might mean the sender was on vacation for a week.

A moving party offering email messages received by a party, but not produced by the producing party, is a more direct way to show possible spoliation. While it simply may show a faulty production, it could also alert a court evidence was not preserved.

There are many ways to show ESI once existed. However, wishing email messages existed does not make them real.

The Fabric of Inadequate Search & Spoliation Allegations

In a case involving claims of copyright infringement of fabric design, the tapestry of the Plaintiff’s discovery production was challenged, including allegations the Plaintiff:

Neglected to search for and produce several categories of documents; and

Deleted relevant emails.

The Defendants sought an order permitting a forensic examination of Plaintiff’s computer files based on the allegations the Plaintiffs deleted relevant emails. Prestige Global Co. v. L.A. Printex Indus., 2012 U.S. Dist. LEXIS 63550, 6-7 (S.D.N.Y. May 3, 2012).

However, the Defendants/Counter Claimant claims did not have the abrasion resistance to withstand judicial review.

Spinning a Judicial Opinion

Judge James Francis IV is no textile apprentice when it comes to discovery disputes. The Court quickly found the Defendants failed to show the Plaintiff did not conduct an adequate search for discovery.  Prestige Global Co., at *7.

The Court explained that the Defendant relied on testimony from one witness who said she was not shown the Defendant’s discovery requests and that she was not asked to search for “many” of the documents identified in the requests. Id.

Judge Francis explained:

[T]here is no requirement that a particular witness, even one designated under Rule 30(b)(6), conduct her own search for documents. Counsel, working with whoever may be the relevant custodians, generally search for documents responsive to a discovery request, and, according to Family Dollar, that is precisely what occurred here. Furthermore, Family Dollar has identified by bates number the documents that it produced in each of the categories about which Printex complains.

Prestige Global Co., at *7-8.

The Court held the Defendant made no showing that the Plaintiffs had engaged in spoliation of evidence and could have warranted a forensic examination of a computer hard drive. Prestige Global Co., at *8-9.

Spoliation, in its simpliest terms, requires that a party violated the duty to preserve. Prestige Global Co., at *8-9. The duty arises when a party “reasonably anticipates litigation.” Prestige Global Co., at *9-10.

The Court held that there was no evidence that the emails subject to the spoliation claims were deleted when the Plaintiff could have reasonably anticipated litigation.  Prestige Global Co., at *10.

As the Court explained:

The garments containing the accused design were produced for the 2008 and 2009 seasons, and any e-mails relating to them were in all likelihood deleted by the end of 2009. Yet, Family Dollar had no preservation obligation until March 2011, when Family Dollar first learned of the claims because Printex filed suit against it in California. Therefore, no forensic examination is warranted.

Prestige Global Co., at *10-11.

Bow Tie Law

There are two interesting issues in this case: searching for responsive discovery and the duty to preserve.

On a fundamental level, the duties of competency and candor to the Court require adequate searches for relevant discovery.  However, in a company of 3,000 individuals, that does not necessarily mean that everyone in the company subject to the duty to preserve must conduct searches for responsive ESI.  Moreover, that could lead to the “fox guarding the henhouse” situation best avoided in eDiscovery.

The concept of “relevant custodians” is one that should not be forgotten by attorneys. Many companies have email and content management systems that records managers and/or ESI consultants can search for responsive ESI. This requires client interviews to determine the relevant custodians and understanding not just who was involved in the facts of the lawsuit, but any terms of art they used in communicating and what technology used in the normal course of business to communicate.

After a content management system is used to enact a litigation hold and export ESI for data reduction, there are several options for attorneys conducting review. Deploying software with data analytics that can learn from a skilled reviewer, enabling the software to “predict” other responsive ESI is one option; Early Case Data Assessment software is another to narrow a dataset to relevant ESI; at a minimum, attorneys should have the data de-duplicated and other data reduction strategies commonly used by litigation support providers before beginning traditional review.

The “triggering event” for the duty to preserve is a fact intensive exercise for many attorneys. They need to understand both their client’s data retention and destruction policies (let alone whether the client was following their policies) and when the duty to preserve began.

ESI that is destroyed as part of regular business operations without a duty to preserve is not subject to spoliation challenges. However, this requires that a party understands which of the 14,000 records retention laws in the US apply to their company; they follow their data retention/destruction policy; and that duty to preserve was triggered after data was destroyed in the regular course of business.

Conjecture is Not Spoliation

Plaintiffs unsuccessful in a trial involving hostile work environment allegations, argued they were entitled to a new trial, because the trial court did not issue a adverse inference instruction for alleged destroyed ESI.  Kullman v. New York, 2012 U.S. Dist. LEXIS 47649, 3-5 (N.D.N.Y Apr. 4, 2012).

The Court agreed with the Defendants that the Plaintiffs failed to show any spoliation of evidence. Kullman, at *2.

The Plaintiffs’ argument failed on relevancy grounds, because the Plaintiffs failed to show any evidence showing the existence, or loss, of any relevant ESI. Kullman, at *4.

The Court further rejected the “conjecture and speculation” of the Plaintiffs that “[i]t would require a leap of the imagination to think that the character of the destroyed electronic evidence would have been anything but that of the electronic evidence that was produced [at trial], which was largely supportive of Plaintiffs’ claims.” Kullman, at *4.

The Court noted that Plaintiffs did not identify any evidence supporting their argument or trial testimony that other similar documents were destroyed. Kullman, at *4-5. As the Court stated, “Such unsupported conjecture and speculation do not justify the issuance of an adverse inference instruction.”  Id.

Chief Judge Gary Sharpe further found that the Plaintiffs failed to show any bad faith by the Defendants in the preservation of evidence. As such, the Court held the Plaintiffs did not “suffer a miscarriage of justice” and denied the motion for a new trial.  Kullman, at *5.

Bow Tie Thoughts

The preservation of electronically stored information is simply more than claiming ESI is lost or destroyed; a party must offer some evidence it once existed.  “Lost” ESI may manifest in a variety of ways.

First, there could be a relevant email received by Plaintiff that the Defendant does not produce; this could show either an issue with preservation or a faulty production.

Second, there could be production gaps, such as dataset having 3,000 emails and attachments one month, zero the next, and 4,000 the following. A large production gap could be a warning light there is missing ESI, either because of inadequate preservation or a production mistake.

Third, there could be an outright admission in testimony, such as backup tapes being overwritten or custodian deleting email because they did not understanding a litigation hold.

Regardless of its form, parties must be able to prove to a judge that a form of spoliation has taken place as part of any spoliation analysis before adverse inference instructions are issued. There is still more to the analysis and issues of proportionality, but showing relevant ESI once existed is the first step to establishing spoliation.

Cross Spoliation Claims for Lost Video & Witness Statements

In Patel v. Havana Bar, 2011 U.S. Dist. LEXIS 139180  (E.D. Pa. Dec. 2, 2011), both parties were accused of spoliation. The underlining facts involved the Plaintiff attending an engagement party at the Defendant’s restaurant/bar and falling off a two-story balcony.

Defendants’ Spoliation

The allegations against the Defendant involved the preservation of security video.  The Defendants had three weeks to preserve the video, but were unable to copy or transfer the video off the security camera system. Patel, at *14-15.

The Defendants argued their video system was unable to copy video to a CD or DVD.  Moreover, they explained they contacted a video system service provider to help transfer the video.  However, despite these efforts, the video was recorded over after three weeks.  Patel, at *15-16.

The Court found the failure to preserve the video was spoliation, finding that because of the accident, a lawsuit was “reasonably likely,” thus triggering the duty to preserve the video evidence.  Patel, at *16.

The Court issued an adverse inference instruction for the loss of the video evidence.  Patel, at *25.  

An adverse inference instruction is ordered under the following circumstances:

(1) The evidence in question was within the party’s control;

(2) There appears to have been actual suppression or withholding of the evidence;

(3) The evidence in question was relevant to the claims or defenses; and

(4) It was reasonably foreseeable that the evidence would be discoverable in litigation.

Patel, at *26, citing Mosaid Techs. Inc., v. Samsung Elecs. Co., Ltd., 348 F. Supp. 2d 332, 336 (D.N.J. 2004).

Case law does not require the destruction to be intentional, stating “negligent destruction of relevant evidence can be sufficient to give rise to the spoliation inference.” Patel, at *26, citing Mosaid Techs. Inc., v. Samsung Elecs. Co., Ltd., 348 F. Supp. 2d 332, 338 (D.N.J. 2004).

The Court held the following against the Defendants:

Here, the spoliation inference is appropriate because the video footage was within Havana’s exclusive control; the video was not preserved before its destruction because Defendants failed to follow through with the steps necessary to ensure preservation; the footage of the bar and the area in which Plaintiff fell on the night of the incident is clearly relevant to Plaintiff’s claims; and Defendants knew or should have known that the footage would later be discoverable given their knowledge of Plaintiff’s injuries and the likelihood of suit. Defendants will of course be permitted to explain to the jury the steps they did take to preserve the footage.

Patel, at *26.

Plaintiffs’ Spoliation

The spoliation claim against the Plaintiff involved his sister-in-law sending two messages on Facebook in 2008 and 2010 for witness statements from party attendees.  The Defendants did not learn about these witness statements until the deposition of one of the party attendees.  Patel, at *16-18.

The Defendants claimed the Plaintiffs “spoon-fed friendly witnesses testimony that would support their case theories, and then lost or destroyed evidence that would not support their current case theory.” Patel, at *17.

The Plaintiffs claimed the witness statements collected by the sister-in-law were protected from disclosure under the work product doctrine.  Patel, at *17.

The Court stated in a footnote about the work product argument:  “We are at a loss to understand how statements provided by non-party individuals could constitute “attorney-client” material.”  Patel, at *21, footnote 4.

The Court held the loss of the 2008 witness statements were “clearly spoliation.”  Patel, at *17.  The Court explained the Plaintiff or his family had the statements in their possession and thus had a duty to preserve them. Patel, at *18.

As the Court explained:

Even if the work product privilege did somehow come into play, this privilege was belatedly raised, and documents were withheld without ever notifying Defense counsel. This type of discovery practice is directly contrary to Fed. R. Civ. P. 26(b)(5), which requires a party who withholds information based on a claim of privilege to expressly raise that privilege and describe the nature of the withheld documents in a privilege log.

Patel, at *18.

The Court also found the failure to disclose the witness statements violated the Plaintiffs’ initial disclosure obligations under Federal Rule of Civil Procedure Rule 26(a).  Patel, at *22.

Pursuant to Federal Rule of Civil Procedure 26(a)(1)(A), parties must disclosure individuals and information that supports their claims or defenses.  Patel, at *19.  This is to make discovery more effective and prohibit gamesmanship of a party not producing relevant information on the grounds the opposing party did not specifically request the information. Patel, at *19-20.

As the Court explained on the failure to produce the witness statements:

Put more directly, this is the type of “basic, substantive evidence” that should have been produced “without resort to the complications, inefficiency, and litigiousness of discovery practice.” [citation omitted]. Plaintiff should have known that the witness statements would eventually be discoverable under Rule 26(b)(3)(A), and that producing the statements piecemeal was not in any way designed to foster the fair and efficient exchange of information.

Patel, at *23.

The Court ordered an adverse inference instruction for the loss of the witness statements.  Patel, at *29.  After finding all four spoliation factors met, the Court stated:

We believe the best way to sort out Plaintiff’s discovery misconduct is to allow the jury to draw its own conclusions as to the evidentiary value of how the evidence was handled.

Patel, at *29-30.

The Court further ordered the re-deposition of five of the Plaintiff witnesses, at the cost of the Plaintiff.  Patel, at *30.

The Court also awarded attorneys’ fees and costs for the time spent to acquire discovery they were rightfully entitled to.  Patel, at *30.  The Court stated the Defendants’ itemization of $20,000 looked reasonable, but would not set a specific award until the Plaintiffs could respond to the itemization.  Patel, at *30-31.

Bow Tie Thoughts

This case is a strong reminder, with adverse inference instructions against both parties, about the importance of preservation.

The preservation of evidence is a challenge for litigants of every type, from private individuals to large companies.  Identifying ESI for preservation can often having many moving parts, frequently resembling a high-speed fan.

It is no secret from case law that electronically stored information can easily be lost.  Preserving relevant data requires having individuals trained in data collection preserve ESI after a triggering event has occurred.  While there are many ways to collect data, such as mirror images, targeted collections or remote methodologies, it is vital to engage a collection expert early to ensure relevant ESI is not lost.

Social media is only expanding where there might be responsive electronically stored information in a lawsuit.  In this case, two Facebook messages seeking witness statements were key exhibits into the spoliation claims.  There are many other examples.

This case is also a reminder that attorneys should add inquiries about social media to their discovery plans.  While social media will not be present in every case, it is an excellent topic for client interviews and Rule 26(f) conferences.

Sanctions for Back-Up Tapes & Reasonableness in Preservation

The Plaintiffs in Gaalla v. Citizens Med. Ctr., brought a sanctions motion for alleged spoliation of email stored on back-up tapes.  The parties and Court had never discussed the issue of back-up tapes until the Plaintiffs’ spoliation motion.  Gaalla v. Citizens Med. Ctr., 2011 U.S. Dist. LEXIS 57317, 2-3 (S.D. Tex. May 27, 2011).

The Plaintiffs’ motion sought everything up to the nuclear sanction of a default judgment for the alleged spoliation.  Gaalla, at *2.

The genesis of the Plaintiffs’ sanctions motion was the argument that the Defendants had a duty to preserve their “back-up” tapes, which were overwritten on a 7 or 14 day cycle after the filing of the lawsuit.  Id.

The Plaintiff elaborated that even if the deletion of the back-up tapes did not violate the duty to preserve, the alleged failure, combined with a “failure” to take snapshots of certain custodian email accounts, combined with “evidence” that some custodians deleted email messages at some point undefined point in the past, warranted harsh sanctions.  Gaalla, at *2.

The Defendants denied any violations of their duty to preserve, arguing that disaster recovery systems are “rarely” preserved after litigation begins.  Gaalla, at *3. Moreover, the Defendants had issued a litigation hold after the filing of the lawsuit and had taken “snapshots” of relevant email accounts.  Id.

The Court found it “doubtful” that the Defendants violated their duty to preserve.  As the Court explained, citing the “old” Zubulake standard:

[A] “litigation hold does not apply to inaccessible backup tapes (e.g., those typically maintained solely for the purpose of disaster recovery), which may continue to be recycled on the schedule set forth in the company’s policy. On the other hand, if backup tapes are accessible (i.e., actively used for information retrieval), then such tapes would likely be subject to the litigation hold. However, it does make sense to create one exception to this general rule. If a company can identify where particular employee documents are stored on backup tapes, then the tapes storing the documents of “key players” to the existing or threatened litigation should be preserved if the information contained on those tapes is not otherwise available. This exception applies to all backup tapes.”

Gaalla, at *4-5, citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003).

The Court further held that even if the Defendants had violated their duty to preserve, there was no evidence of “bad faith” on their part, a requirement for spoliation sanctions.  Gaalla, at *5.  As the Court explained, the Defendants did enact a litigation hold and preserved evidence, including back-up tapes that could be searched.  Gaalla, at *6.

The Court held the Defendants had taken “reasonable preservation” in the context of the litigation with their litigation hold and preservation actions.  Gaalla, at *6.  Moreover, the Plaintiffs speculation that the Defendants deleted email messages was not evidence to warrant sanctions.  Gaalla, at *6-7.

However, the Court did issue additional preservation instructions:

(1) From May 25, 2011 until the Court orders otherwise, the e-mail accounts of all persons designated by Plaintiffs shall be retained through a “journaling” process on a regular basis (as described during the hearing), such that all e-mails are retained indefinitely, and not deleted permanently;

(2) From May 25, 2011 until the Court orders otherwise, the “disaster recovery first of month” e-mail files (available from November 1, 2009 to November 1, 2010) shall be preserved in their current state. Plaintiffs’ expert shall be allowed to search those emails, during normal business hours at the expert’s convenience. The parties shall agree on the e-mail accounts to be searched on the “disaster recovery first of month” system.

(3) Defendant shall search the e-mail accounts of three specific custodians and submit the results to Plaintiffs no later than June 4, 2011.

(4) The parties shall agree on a preservation order with respect to the e-mails of CMC employees identified by Plaintiff, and submit that order to the Court.

(5) Defendant shall pay the costs of the searches described above, subject to reconsideration based upon the results of this search. Plaintiffs, however, shall pay costs associated with their own expert. 

Gaalla, at *7-8

Bow Tie Thoughts

I believe the dogmatic view that back-up tapes are automatically inaccessible is obsolete.  Technology such as Index Engines allows for the affordable searching of this once “inaccessible” technology in 2003 or 2004.  Our challenge is it takes time for such products to be used by parties and argued before a judge.

This opinion is very refreshing because the Court made it very clear it relied on the principles that preservation should be “reasonable” and “proportional.”  There is no requirement that every hard drive in a lawsuit needs a total forensic image, but “whether what was done-or not done-was proportional to [the case] and consistent with clearly established applicable standards.” Gaalla, at *6, citing Rimkus, 688 F. Supp. 2d at 613.

The issue of back-up tapes and the collection of electronically stored information is best done in the meet and confer and not in a motion battle.  It is advisable that parties develop a data map so they understand where their data is located before discussing collection with their opposing party.  Additionally, attending the meet and confer with experts who can discuss the ways to collect such data can save time and cut the cost of slugging out preservation issues before the court.

Fashionable Sanctions

When sanctions are issued in Chicago on St. Valentine’s Day, you can imagine how the losing party might feel. 

The Defendants in a sexual and racial discrimination, hostile work environment, harassment and retaliation case did not properly preserve evidence or respond to specific discovery requests.  Northington v. H&M Int’l, 2011 U.S. Dist. LEXIS 14366 (N.D. Ill. Jan. 12, 2011), hereinafter Northington 1 and Northington v. H&M Int’l, 2011 U.S. Dist. LEXIS 14378, 1-2 (N.D. Ill. Feb. 14, 2011), hereinafter Northington 2.

The failed preservation can be summarized as 1) the failure to issue a litigation hold; 2) failure to direct individuals to preserve ESI in their possession; and 3) failure to follow-up with custodians on whether they preserved ESI or other relevant documents.  Northington 1, at *43-44. 

Just as a tailor measures for a suit, the District Court fashioned the appropriate sanctions against the Defendant.  While the Court denied the Plaintiff’s request that the Defendant be “barred from asserting a defense as to liability based on its discovery misconduct,” the Court ordered the following on searching the Defendant’s ESI:

Defense counsel is ordered to search all of the defendant’s electronic media (including its email system) and hard copy files that might contain information responsive to any aspect of the plaintiff’s original Request for Production V. With respect to electronic media, defense counsel should not limit the key search terms to the three terms previously used by defendant, but must also include misspellings of plaintiff’s first name as well as other key terms reasonably related to each of the topics set forth in Request for Production V. Those searches should cover the time period of February 2006 through October 2008, inclusive. Defense counsel should complete such searches and produce any nonprivileged, responsive documents not previously produced to plaintiff, within thirty days from the date this order is entered on the court’s docket.

Northington 2, at *2-3. 

The Court further ordered an adverse inference instruction of when the Defendants’ duty to preserve triggered and that the Defendant failed to preserve emails and other electronically stored information.  Northington 2, at *3.  Additionally, the Defendant was barred from arguing the absence of any discriminatory statements was not evidence that such damaging statements were not made.  Id. 

Bow Tie Thoughts

Judges, and attorneys, are becoming more sophisticated in addressing search term issues.  In this case, the Court ordered the Defendants to 1) search within specific date ranges; 2) include the Plaintiff’s search terms; 3) and include “misspellings of plaintiff’s first name as well as other key terms reasonably related to each of the topics” in the Plaintiff’s request.   Northington 2, at *3. 

The Judge showed an admirable level of understanding that search terms should include alternative spellings of keywords.  Key players might have nicknames, or variations in spelling, that frequently need to be included in a search.  Additionally, the phrase “other key terms reasonably related to each of the topics” introduces search terms that should be discussed at a meet and confer.  While one party might be in a better position to determine more effective search terms, this area should be discussed at a meet and confer between the parties.  

Narrowing data by date helps control the volume of ESI to be search to relevant time periods.  This helps control the amount of data that ultimately has to be reviewed and proposed after keyword searches.

Nothing Says “Bad Faith” Like Throwing a Laptop off a Building

Is entering a default judgment against a party for destroying a laptop excessive and unduly harsh?  Not in Utah.  Daynight, LLC v. Mobilight, Inc., 2011 UT App 28, P2 (Utah Ct. App. 2011).

Daynight involved a destroyed laptop and what was the appropriate sanction for the destruction of evidence. 

Certainly not helping the Appellants’ cause was a video with employees discussing the destruction of “potential[ly] harmful evidence that might link [them] to any sort of lawsuit.” Daynight, at *3-4. 

Add actions including throwing a laptop off a building and running it over with a car, plus statements such as “[If] this gets us into trouble, I hope we’re prison buddies,” and you can kiss any good-faith defenses goodbye.  Daynight, at *4.

On a fundamental level, most document retention and destruction policies do not involve skeet shooting or monster trucks.

The Plaintiffs & Third-Party Defendant Appellants were sanctioned with a default judgment for the destruction of evidence, pursuant to Utah Code of Civil Procedure Rule 37(g).  The Appellants argued that the sanction was “excessive” and “unduly harsh.”  Daynight, at *1. The Court of Appeals did not agree. 

Rule 37(g), states in relevant part:

Nothing in this rule limits the inherent power of the court to take any action authorized by Subdivision (b)(2) if a party destroys, conceals, alters, tampers with or fails to preserve a document, tangible item, electronic data or other evidence in violation of a duty. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

Daynight, at *3.

Utah Rule of Civil Procedure Rule 37(g) lacked any case law interpreting the statute, so the Appellants argued the Code required a showing of “wilfulness, bad faith, fault or persistent dilatory tactics.” Daynight, at *3.

The Court of Appeals did not agree.  As the Court stated:

In our view, spoliation under rule 37(g), meaning the destruction and permanent deprivation of evidence, is on a qualitatively different level than a simple discovery abuse under rule 37(b)(2), which typically pertains only to a delay in the production of evidence. Compare Utah R. Civ. P. 37(b)(2) with id. 37(g). Contrary to KK Machinery’s assertions, rule 37(g) of the Utah Rules of Civil Procedure does not require a finding of “wilfulness, bad faith, fault or persistent dilatory tactics” or the violation of court orders before a court may sanction a party. Rule 37(g) states: Nothing in this rule limits the inherent power of the court to take any action authorized by Subdivision (b)(2) if a party destroys, conceals, alters, tampers with or fails to preserve a document, tangible item, electronic data or other evidence in violation of a duty. Absent exceptional circumstances, a court may not impose sanctions under these rules on a party for failing to provide electronically stored information lost as a result of the routine, good-faith operation of an electronic information system.

Daynight, at *2-3.

While the Court of Appeals held it was not necessary to find “wilfulness, bad faith, fault or persistent dilatory tactics,” the Court stated the skydiving laptop antics “unquestionably demonstrate bad faith and a general disregard for the judicial process.” Daynight, at *4.

Bow Tie Thoughts

Throwing a laptop off a building and running over it is probably the closest we will have to a strict liability offense for spoliation. While I doubt lawyers will issue litigation hold letters saying, “Don’t Throw Computers Off Buildings,” you never know what some people will do.