Understanding the Scope of the Duty to Preserve

The important litigation hold cases are not the ones that issue monstrous sanction awards; The important cases are the ones that demonstrate the analytical framework to understand how the law works. These are the opinions that help us represent our clients in knowing what to do when litigation is reasonably anticipated.

Magistrate Judge Paul Grewal’s opinion in AMC Tech., LLC v. Cisco Sys., is such a case that breaks down the duty to preserve, triggering events and the timeline of facts. I think it is extremely helpful in understanding the scope of the duty to preserve.

Judge Grewal opened his opinion with the following:

Ten years after Judge Scheindlin woke up the legal world from its electronic discovery slumber in the Zubulake series, plenty of other courts now have weighed in on when the duty to preserve electronic evidence attaches. With varying degrees of sophistication, most parties have gotten the basic message: the duty begins at least no later than the day they are sued and told about it. Less understood is exactly what a party must then do and by when. For example, while a suit against a particular CEO for sexual harassment would pretty clearly require that his relevant data be locked down at least by the time the company gets wind of the complaint, what must counsel do about less obvious players in a more abstract dispute? The motion before the court presents just such a question.

AMC Tech., LLC v. Cisco Sys., 2013 U.S. Dist. LEXIS 101372, 1-2 (N.D. Cal. July 15, 2013) [Emphasis added].

Here is the basic factual scenario of the case:

Defendant had a team negotiating a contract and royalty payments;

Employee not on the team contributed sales data for lead negotiator’s royalty payment schedule;

Employee kept his sales data on his computer and email;

Employee communicated by phone and email to negotiator;

Employee retired four days before Plaintiff files lawsuit;

Employee’s computer was wiped within the 30-day policy after someone leaves the company;

Neither party listed Employee as a custodian;

Defendant sought information from Employee slightly over one year from the filing of the lawsuit.

AMC Tech., LLC at *3-4.


The Plaintiff sought adverse inference instruction against the Defendant for what it called “reckless destruction of documents created by a key decisionmaker.” AMC Tech., LLC at *5.

The Court summarized its inherent authority over spoiliation as follows:

The court has “inherent discretionary power to make appropriate evidence rulings in response to the destruction or spoiliation of relevant evidence,” which arises out of its inherent power to direct “orderly and expeditious disposition of cases.” The range of appropriate sanctions is broad, and may take form in relatively minor sanctions, such as the award of attorney’s fees, to more serious sanctions, such as dismissal of claims or instructing the jury that it may draw an adverse inference. The court’s discretion is not, however, unbounded — it must weigh a number of factors to determine whether to grant sanctions, and if so, tailor the remedy according to the conduct that triggered the sanction. To determine whether to award spoiliation sanctions, the court considers whether the moving party has established: “(1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; and (3) that the evidence was ‘relevant’ to the party’s claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.”

AMC Tech., at *6-7.

The Court had to answer the following question: Did the Defendant have an obligation to preserve the Employee’s computer/email at the time the ESI was destroyed?

The Court explained that there was “no question” that the ESI had to be preserved when the Plaintiff requested the ESI. This was not possible, since the ESI had been destroyed approximately 11 months earlier as part of the Defendant’s routine policy when an employee left the company. AMC Tech., at *7.

Had the duty to preserve already attached to the ESI prior to its deletion?

The Court explained the scope of the duty to preserve as follows:

A general duty to preserve evidence relevant to the litigation arises from the moment that litigation is reasonably anticipated. Because Cisco received notice of the complaint before McKeon’s documents were destroyed, and concedes that it had notice of the suit even before AMC filed the complaint on July 11, 2011, Cisco had a general duty to preserve evidence when it destroyed McKeon’s documents.

But the scope of this duty is not limitless. A litigant has an obligation to preserve only evidence “which it knows or reasonably should know is relevant to the action.” This duty requires a party to “identify, locate, and maintain, information that is relevant to specific, predictable, and identifiable litigation,” which includes identifying “key players” who may have relevant information and taking steps to ensure that they preserve their relevant documents. It is critical to underscore that the scope of this duty is confined to what is reasonably foreseeable to be relevant to the action. Requiring a litigant to preserve all documents, regardless of their relevance, would cripple parties who are often involved in litigation or are under the threat of litigation.

AMC Tech., at *7-9 [Emphasis added].

What did this mean for the Defendant and retired Employee? The Court explained the following:

AMC’s complaint plainly put Cisco on notice to identify and preserve documents that generally might reasonably be relevant to the AMC-Cisco Agreement, the Siebel Adapter, and the UCCX Connector. But should Cisco have known specifically that McKeon was a “key player,” such that his documents, just days before their demise, were relevant to the case? McKeon was an unlikely candidate to have documents relevant to the Agreement because he did not engage in negotiations of the Agreement in any way. Nor did he work on any internal committees deciding whether to commence the UCCX Connector project. He was merely the product manager for the underlying Cisco UCCX product. Although McKeon’s input might have informed Nijenhuis’ computation of the royalty schedule in the Agreement, which might be relevant to the issue of damages, these documents are only tangentially related to even that question because AMC does not allege that the royalty payment schedule was incorrect. Nothing in the complaint suggests that AMC would be making such a claim. Because Cisco could not reasonably have known that McKeon’s documents would be at all relevant to the litigation when those documents were destroyed, there was no duty to preserve them at that time.

AMC Tech., at *9-10.

The Court rejected the Plaintiff’s argument that the retired Employee was a “key player” that justified harsh sanctions. The Court zeroed in on the fact the Employee was just a project manager who had no role in the contract negotiations. Moreover, his data was not unique, because the Defendant produced its internal financial spreadsheets pertaining to the sales of the subject devices. Those files likely were created by the Employee. AMC Tech., at *12-13.

The Court held there was no prejudice to the Plaintiff and that the sanctions sought establishing full liability for the breach of the agreement to be “wholly inappropriate.” As such, the Court denied the Plaintiff’s motion.

Bow Tie Thoughts

Many litigation hold cases often have a theme where a party seeks to have the opposing party drawn and quartered for missing a tangential custodian. While Courts are supposed to get to the truth of a matter, they are not supposed to be a medieval battleground whenever a custodian is missed, but the relevant data still appears to have been produced. This is not the time to release the dragon to rain fire.

Litigation hold cases are fact intensive. They require asking the age old questions, “What did the President know and when did he know it?” This can require not just custodian interviews, but using ECA technology to see communication patterns to identify the key players involved in the dispute.

Judge Grewal conducted very detailed analysis on the timeline on this case and applying those facts to the law. This case is an excellent way to teach the scope of the duty to preserve. I encourage attorneys to read the full opinion.


Grocery Shopping for Spoliation of Audio Evidence

GoingShoppingA Plaintiff was fired from her job at a grocery store that she held for 21 years for allegedly adjusting her own pay.

Prior to be fired, a representative from the Defendant grocery store secretly recorded an interview with her that was used as part of the decision making process in the Plaintiff’s termination.

However, the recording was destroyed during a four month period between when the Defendants were on notice of an imminent lawsuit and issuing of a litigation hold. Hart v. Dillon Cos., 2013 U.S. Dist. LEXIS 95441, 1-5 (D. Colo. 2013).

The destruction of the recording enabled the Plaintiff to win a spoliation shopping spree at the Federal Courthouse.

To prove spoliation of evidence, a party must prove:

1. The evidence relevant to an issue at trial;

2. The party have a duty to preserve the evidence because it knew or should have known, that litigation  was imminent;

3. The other party prejudiced by the destruction of the evidence.

Hart, at *2-3, citing E.E.O.C. v. Dillon Companies, Inc., 839 F. Supp. 2d 1141 (D. Colo. 2011).

The Court found that 1) the recording was relevant, because the Defendant used the recording as part of reason for firing the Plaintiff and 2) there was a duty to preserve the recording because the Defendant knew litigation was imminent from the filing of the EEOC complaint, the demand to arbitrate and the Plaintiff had a lawyer. Hart, at *3.

Vintage Reel-to-Reel Tape Player

The Court also held the Plaintiff had been prejudiced by the destruction of the recording, because the deposition testimony of the investigator who recorded the interview and Plaintiff had 14 alleged discrepancies between the two accounts, which included a key fact on how the Plaintiff entered the pay adjustment the way she knew how. Hart, at *4.

The Court stated:

The Court finds that Plaintiff has met her burden to establish a reasonable possibility based on concrete evidence rather than a fertile imagination that access to the lost material would have produced evidence favorable to her cause.

Hart, at *4, citing McCargo v. Texas Roadhouse, Inc., Civil Action No. 09-CV-02889-WYD-KMT and Gates Rubber Co. v. Bando Chem. Indus. Ltd., 167 FRD 90, 104 (D. Colo. 1996).

The Court further held that the failure to collect the audio recording was grossly negligent or willful behavior. Hart, at *4-5. The Court set a hearing for what sanctions should be imposed on the Defendant. Id. 

Bow Tie Thoughts

Identifying electronically stored information for preservation is a challenge to many attorneys. It is extremely important to ask a client in an interview “what technology do you use? How do you use it?”

The Court hit a very good point about proving spoliation: Showing concrete evidence instead of a “fertile imagination that access to the lost material would have produced evidence favorable to her cause.” Many times claims of spoliation seem to be swinging wildly at a bad pitch because a litigation hold letter was not communicated to a party in a timely fashion. That is a sign for alarm, but not proof evidence was lost.

This case was different. The facts favored the Plaintiff and met all the elements for spoliation. It will be interesting to watch what sanctions are entered against the Defendant.

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

DigitalCalendarHow 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.

PinocchioThe 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

iPhone-LegalHold1In 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

DJ-Turntable-HandThe 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.

AudioTapeJudge 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.