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.

2 thoughts on “Mining for eDiscovery Sanctions

  1. Pingback: Mining for eDiscovery Sanctions | eSpectable.com

  2. Pingback: Mining for eDiscovery Sanctions | Around the Corner : a sneak peek at tomorrow’s legal landscape

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s