Don’t Free Fall on the Duty to Preserve

The duty to preserve is a tricky beast. Determining when a party “knew or should have known that litigation was imminent” is often a free fall into analyzing the facts of when a party had notice of a lawsuit.

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There are times when it is very obvious that a party should have ejected and pulled the ripcord on not destroying any evidenced. This is one of those times.

The Plaintiff in the case was injured in a skydiving accident. The Defendant sent the parachute in the accident from Oklahoma to England prior to the Plaintiff bringing her lawsuit and propounding discovery that sought the inspection of the parachute. Wethington v. Swainson (W.D.Okla. Dec. 23, 2015, No. CIV-14-899-D) 2015 U.S. Dist. LEXIS 171126, at *2.

The Plaintiff brought a motion seeking sanctions, ranging from default judgment to adverse inference instructions. However, this case did not have a crash landing for the Defendant. The Court noted that the Defendant was pro se and should have been aware of the relevance of the parachute. Wethington, at *4. That being said, the Court found that issuing nuclear sanctions were currently inappropriate, but would award the Plaintiff’s attorney fees incurred for the discovery motion. Wethington, at *5.

The Defendant effectively had an emergency chute to avoid sanctions, because the Defendant could produce the parachute for inspection. Id. As such, the Court ordered the inspection of the parachute at the Defendant’s cost, subject to any protocols the parties agreed to, such as a licensed parachute rigger supervising the inspection. Wethington, at *5-6.

Bow Tie Thoughts

The triggering event for the duty to preserve electronically stored evidence is not always as clear as an accident. A retail store where someone has a slip and fall, or auto accident with a shipping service, are all clear lines in the sand to start preserving evidence. Threat of a lawsuit in business is another matter.

Consider situations where individuals who are producing a crowdfunded fan fiction movie are sued by the movie studio that owns the rights to the subject property. Was the triggering event when the first emails were sent discussing the production of the fan film? Was it when the producers first expressed concern they could be sued? Is there any event prior to the filing of a lawsuit that could have triggered the duty to preserve evidence?

The answer is “it depends” on the facts. Few cases are as clear-cut as a skydiving accident and require thoughtful analysis of when someone “knew or should have known that litigation was imminent.” The next steps of identifying the scope of preservation are also complicated, but necessary to ensure a party is reasonably meeting their duty to preserve relevant evidence.

Can You Ask the Court to Order a Party to Follow the Duty to Preserve?

videopresentationmanA Pro Se Plaintiff in a prison inmate case requested the Court order the Defendants not to destroy any relevant video surveillance footage from a specific date. The Court declined,  because the Defendant was already subject to the duty to preserve. Ross v. Conner, 2014 U.S. Dist. LEXIS 146887, at *17-18.

The Plaintiff [rightly] was concerned that the Defendants had a document destruction policy of one-year. However, the Court found it unnecessary to issue an order for the Defendants to preserve information that was already subject to the duty to preserve. 

The Court explained as follows:

Under the doctrine of spoliation, parties have a duty to preserve (including a duty to not destroy) evidence when litigation is filed or becomes reasonably anticipated. To fulfill the duty to preserve relevant evidence, “[o]nce a party reasonably anticipates litigation, it is obligated to suspend its routine document retention/destruction policy and implement a “litigation hold” to ensure the preservation of relevant documents.” Here, if Defendants destroy any exculpatory evidence they will be subject to sanctions. However, because they are already under a duty to preserve evidence, an order from this Court is not necessary. 

Ross, at *18.

Bow Tie Thoughts 

There are no shortage of cases where the duty to preserve has gotten attorneys and parties a like in trouble. However, it is difficult to ask a Court to order a party to “follow the rules,” because the party already has a duty to so. However, if there is evidence of wrongdoing by the party that was subject to the duty to preserve, the outcome could be different.

Plaintiffs are well served to include a “preservation letter” to the opposing party early in the case. Some attorneys include this letter with their complaint. This acts as both a shot across the bow on the importance of preserving ESI, but puts the opposing party on notice of what sources of ESI are relevant in the case.

The Duty to Preserve on Island Time

No vacation should end with people becoming Plaintiffs. Sadly, that happened on a trip to Hawaii when someone had a slip and fall in a hotel garage after exiting an elevator. Riley v. Marriott Int’l, Inc., 2014 U.S. Dist. LEXIS 135728 (W.D.N.Y.Sept. 25, 2014).

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The Defendant hotel maintained both video surveillance of the area and “sweep logs” when the area was swept. However, the Defendant lost both. Neither the Plaintiffs or Court said “Mahalo” over this loss.

Be Prepared to Explain What Happened

The Defendant’s Loss Prevention Manager responsible for preserving information for the Hotel explained that the video system records 24-hours a day, is stored on a hard drive, and those records are maintained for 30-days. Riley, at *2-3. The Manager watched the security footage after being told of the Plaintiff’s fall, her removal from the area in a wheelchair, followed by hotel employees placing wet floor signs, and then sweeping up the water. Riley, at *3. The video was turned over the hotel’s liability insurance company. Id.

The Defendant failed to explain any reason for its loss of the video evidence and opined the sweep logs were destroyed per the document retention policy. Riley, at *10-11. The Court went on to state the following on the loss of the video:

Although facing a serious motion for sanctions with potentially significant consequences, Marriott apparently did not investigate the destruction of the relevant evidence or, if it did, explain the results of the investigation. Thus, the only information that this Court has concerning the destruction of the evidence are the assertions of Marriott’s counsel made during oral argument. Even then, Marriott’s counsel was unable to provide any facts concerning the circumstances under which the video footage was destroyed. The failure to provide the Court with any sworn facts from persons with knowledge of the destruction of the challenged evidence demonstrates such a lack of diligence that it suggests bad faith destruction. In any event, Marriott’s failure to preserve the entire video footage relating to Linda’s accident and the sweep logs for the day in question despite the Hotel’s loss prevention employee’s testimony that he knew that he had a duty to preserve relevant evidence constitutes, at a minimum, gross negligence.

Riley, at *11-12.

The Court found that the lost evidence prejudiced the Plaintiffs and the Defendant’s failure to explain how the information was destroyed amounted to gross negligence, thus allowing an inference the information was unfavorable to the Defendant. Riley, at *14.

Be Precise in The Remedy You Request

The Plaintiff’s request for relief asked the Court to “remedy the injustice caused by defendants by ruling the evidence in [p]laintiffs’ favor and by granting summary judgment.” Riley, at *17.

The Court interpreted the requested relief as to strike the Defendant’s answer or an adverse inference instruction. The Court held striking the answer was “too drastic” and instead issued an adverse inference instruction to “permit, but not require, the factfinder to infer that the missing video footage would have been favorable to the [Plaintiffs] and unfavorable to [the Defendant].” Riley, at *19.

Bow Tie Thoughts

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The Duty to Preserve never goes on vacation. Moreover, no lawyer should be sent into Court armed only with a Ukulele to sing a song on not knowing what happened to relevant electronically stored information.

If a party has actual notice of a triggering event and has reviewed relevant evidence, that information absolutely has to be preserved. This requires the information to be defensibly copied, which could mean a mirror image or a targeted collection, depending on the needs of the case. What then follows are chain of custody forms that document each step of preserving the information. The data should be maintained in a secure medium, which could be an evidence locker with biometric security (again, depending on the needs of the case).

This case is interesting because despite the inability to explain what happened, the Court refused to strike the Defendant’s answer. I agree this is the right call, especially considering the fact the Court found gross negligence for the lost data.

A Measured Response to Social Media Preservation

A Plaintiff in a civil lawsuit deactivated her Facebook profile on the advice of her attorney after the duty to preserve triggered. The Plaintiff claimed she used the account to primarily communicate with her family. Chapman v. Hiland Operating, LLC, 2014 U.S. Dist. LEXIS 74248, 4-7 (D.N.D. May 29, 2014).

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The Court granted in part the Defendant’s motion to compel production of the profile, with very specific instructions:

1. Plaintiff and attorney were to make a reasonable, good faith attempt to reactivate the Facebook account. Plaintiffs did not have to permit defense counsel to be present during the attempt to reactivate the account, and if the account was reactivated, plaintiffs did not have to provide defense counsel the account login and password or full access to the account.

2. If the Facebook account was reactivated, plaintiffs had to produce in the form of a screen shot other similar format all information from the account referencing one plaintiff’s health since a specific date, his relationship with the other plaintiff, and defined activities related to the lawsuit. 

Chapman, at *6-7.

Bow Tie Thoughts

Attorneys should discuss with their clients what types of social media they use for preservation of relevant electronically stored information. No lawyer should tell a party to deactivate an account that could have relevant information for a lawsuit, but it might not be a bad idea to give instructions limiting use during a case. This would depend on the facts of the case.

There are many options for preserving social media. Screen shots and print outs are perfectly acceptable if time is of the essence. I know many attorneys in family law, DA’s who prosecute deadbeat dads, or those seeking TRO’s who have done this “low tech” approach to social media preservation.

Social media preservation technology is readily available and commercially affordable. I strongly encourage attorneys who need to preserve social media to retain an expert who can capture relevant Tweets, Instagram photos or similar social media. The reason is simple: an expert can testify to have the social media was identified and preserved for authentication. While a party can also testify to how they printed a Facebook page or took a screen shot of Instagram, no lawyer wants to turn themselves into a testifying witness for preserving social media evidence.

I agree with the Judge’s production order. The Judge was upfront in questioning if there would be any relevant social media in the case, however issued a balanced order focusing on dates and the subject matter of the case. The fact passwords did not need to be produced and the Plaintiffs could attempt to reactivate the profile without defense counsel was an excellent acknowledgement of reality that social media is not Voo Doo. Passwords should not be provided under normal circumstances, because it is the producing party’s obligation to identify responsive discovery, not the requesting party’s right to rummage through non-responsive data on a fishing expedition.

Don’t Call Discovery Over Document Retention Policies Premature After You Admit Destroying Relevant Discovery

A Defendant sought reconsideration of a Court order allowing discovery on their document retention policies and litigation hold strategy on the grounds 1) the order was premature and 2) it was irrelevant and not discoverable. Cactus Drilling Co. v. Nat’l Union Fire Ins. Co., 2014 U.S. Dist. LEXIS 45251, 11-14 (D. Okla. 2014).

The Court denied the motion.

The discovery at issue centered on a key player who left the Defendant’s company whose files were accidently destroyed. The Court stated:

Plaintiff is entitled to inquire into the circumstances of the destruction of such relevant files while this litigation is pending, whether defendants took proper precautions, and whether such precautions were actually exercised by defendants’ employees. Thus, clearly a discovery request on defendants’ document retention and litigation hold practices and policies and whether such policies were followed with respect to Ms. Valerio’s hard copy Cactus file is relevant and discoverable.

Cactus, at *13.

The Court also held that the order was not premature, as the Defendants requested a ruling on whether they had to produce the discovery and witness for deposition in their Joint Status Report. Cactus, at *12.

The parties were ordered to meet and confer over privilege and stipulation issues over the pending discovery. The Court “vented” over the parties prior cooperation in a footnote:

The Court has been disappointed with the parties’ inability to communicate in good faith and work out many discovery issues that could have been resolved between the parties. Such behavior has necessitated repeated intervention by the Court, unnecessarily and significantly depleting the Court and the parties’ valuable time and resources. Accordingly, the Court advises the parties that it will not look favorably on any party engaging in less than good faith behavior that leads to further abuse of the Court’s time and resources.

Cactus, at *14, fn 5.

Bow Tie Thoughts

Discussing the preservation of discovery, its scope and privilege is NEVER premature. These issues should be at the first meet and confer. Attorneys should be actively thinking about preservation the moment the case begins. Lawyers cannot afford to take a “let’s see how the motions go” before ensuring discovery is preserved.

Why do attorneys wait to exercise their duty of competency to ensure the preservation of discovery? Some might not know how to, others might not want to spend the money and others might think they can keep their clients happy by having the least amount of intrusion. These are all bad reasons.

An effective client interview and litigation hold strategy is less invasive then the joys of a person most knowledgeable deposition over how a litigation hold was enacted. Moreover, motion practice is not known for its low billable hours.

There are some lawyers who model their meet and confer strategies right out of Tombstone. This is not a good idea. There are issues worth fighting about, but methods of preservation, the scope of discovery, and other technical issues should stay objective. These issues are vital for moving the case forward, but are not worth brawling over. Save the fight for the merits.

No Sanctions for Following Records Retention Policy

ThinkMcFly_DocRetentionIt is not every day you see lawsuits about insurance policies from 1986 to 1987.

Add Judge  Paul Grimm’s powerhouse footnotes and you get a great lesson in document retention policies and litigation holds (plus a great footnote on the state of mind exception to hearsay for all the evidence fans).

This asbestos insurance coverage litigation was not filled until November 2012. As one could expect, there were significant gaps in documents from the passage of time. The Court stated the following regarding the destruction of documents in footnote 6:

Were there any evidence in the record to show that AC&R so much as had threatened legal action before the destruction of those documents, it might be sufficient to find that PMA acted improperly in destroying its documents and was not prejudiced by the passage of time. See Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 524 (D. Md. 2010) (“It generally is recognized that when a company or organization has a document retention or destruction policy, it ‘is obligated to suspend’ that policy and ‘implement a “litigation hold” to ensure the preservation of relevant documents’ once the preservation duty has been triggered.” (citation omitted) (emphasis added)). Because the duty to retain documents did not arise for PMA until after their destruction, it cannot be penalized for following its records retention policy.

Ac&R Insulation Co. v. Pa. Manufacturers’ Ass’n Ins. Co., 2014 U.S. Dist. LEXIS 9063, 29-30 (D. Md. 2014).

Bow Tie Thoughts

You cannot sanction a party for following its normal document retention and destruction policy if there is no duty to preserve. Correspondence that took place during the Reagan years is highly unlikely to still exist as a simple matter of a company’s document destruction policy.

What will be an interesting question is litigation in the 2030s. Will electronically stored information on 20 year old external hard drives still be reasonably accessible if they still exist? Will such “old” information be proportional to the merits of a case? I only have to look at my old laptop from law school to imagine the challenge in recovering old civil procedure outlines.

My gut instinct is the answers to these questions will be “no.” However, let’s see what the future holds.

The Empire State Strikes Back (On the Form of Production)

In an insurance dispute over coverage, a Plaintiff sought production of electronically stored information in native file AND TIFF format after the Defendant produced discovery in hard-copy format. The Defendant opposed re-producing in native file format and sought cost-shifting if required to produce natively. Mancino v Fingar Ins. Agency, 2014 N.Y. Misc. LEXIS 30 (N.Y. Misc. 2014).

EmpireStateBuildingNew York law allows the “full disclosure of all matter material and necessary” in a lawsuit. Mancino, at *3 citing CPLR §3101(a).

The Plaintiff sought the ESI in native file format with TIFF images in order to view objective metadata including the author(s), dates of creation, and dates of edits on a key file to know whether an “Activity Report” was changed after the initial creation or the start of the lawsuit.  Mancino, at *7.

The Defendant countered that issues of metadata were “not involved” in the lawsuit and such a production was unnecessary. Id. the Defendant further argued the Plaintiff should have incurred the $3,500 native production costs and that the TIFFing would be a “laborious task.” Mancino, at *8.

Judge Rakower quickly listed the Zubulake cost-shifting factors (cited in U.S. Bank Nat. Ass’n v. GreenPoint Mortgage Funding, Inc., 94 A.D. 3d 58, 63-64 [1st Dept 2012]) and held that cost-shifting was not justified and that the producing party was to pay their own production costs. The Court clearly ordered the production of the ESI in both native file format with TIFFs. Mancino, at *8-9.

Bow Tie Thoughts

State court litigation is often overlooked by eDiscovery commentators.  Mancino is a very good reminder that over 90% of litigation in this country is in state court about regular people. The Plaintiffs in this case had their home burglarized and the resulting litigation was over coverage to recover stolen property. The key discovery focused on a file over who changed what and when on an insurance document. Few examples better highlight the need for metadata.

One big difference between this case and Federal Court is that a producing party need only produce in one form. A producing party would have to produce in native file format or with TIFF and metadata, not both. That being said, a production cost of $3,500 on a case of this size might be on the high side (it is unclear how many computers were at issue, number of hours spent, cost of production media, etc). Moreover, most processing software could do such a production with a few keystrokes (and I would bet at a lower cost then argued to the Court, depending on the volume of data to be collected pertaining to one insured party and other relevant files). There are of course other factors that could drive up costs, but I would need more information to understand why there was a $3,500 production cost estimate for the specific discovery sought.

400th Bow Tie Law Post

I want to thank all of my readers who have enjoyed my blog over the years. I hope you enjoy my 400th post on eDiscovery.

I have seen amazing things in my 12 years as an attorney. I have traveled across all of North America; I have met amazing lawyers; and I have talked with judges committed to upholding justice.

I also have had a lot of fun. I recount some of my adventures and thoughts on the future in my video post. Again, thank you for reading Bow Tie Law.

Of Diapers & Litigation Hold Sanctions

Diapers. Perhaps the most effective tool for encouraging family planning. Now a messy diaper shipment case delivers a message on the importance of issuing a litigation hold.

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A Defendant brought a sanctions motion against a Plaintiff for their alleged failure to preserve evidence in a case over $3 million worth of diapers.

The Plaintiff admitted they had a duty to preserve electronically stored information. That did not happen because a formal litigation hold was not issued.

The Plaintiff’s failure to issue a litigation hold was not gross negligence per se under Chin v. Port Auth. of N.Y. & N.J., 685 F.3d 135, 162 (2d Cir. 2012) cert. denied, 133 S. Ct. 1724, 185 L. Ed. 2d 785 (U.S. 2013).

The Court stated, “the facts here establish that SJS’s failure to take the most basic document preservation steps, even after it discovered the packaging nonconformities and filed this action, constitutes gross negligence. Such failure is particularly inexcusable given that SJS is the plaintiff in this action and, as such, had full knowledge of the possibility of future litigation.” Sjs Distrib. Sys. v. Sam’s East, Inc., 2013 U.S. Dist. LEXIS 147549, at *10-17 (E.D.N.Y. Oct. 11, 2013), citing Sekisui Am. Corp. v. Hart, No. 12 CV 3479, 2013 U.S. Dist. LEXIS 115533, at *6 (S.D.N.Y. Aug. 15, 2013). This failure met the Defendant’s burden to show the Plaintiff was culpable for the loss of ESI. Id. 

Judicial Spoliation Wipes

BabyRedDiaperJudges look forward to disputes on whether lost email was relevant to case as much as changing a diaper.

The Court found that some of the Plaintiff’s lost email messages would have related to the business transaction between the parties. However, there was no extrinsic evidence of the relevance specifically. Sjs Distrib. Sys., at *11-13.

The Court had to determine a sanction that would (1) deter parties from engaging in spoliation; (2) place the risk of an erroneous judgment on the party who wrongfully created the risk; and (3) restore “the prejudiced party to the same position [it] would have been in absent the wrongful destruction of evidence by the opposing party.” Sjs Distrib. Sys., at *13-14, citing Goodyear Tire & Rubber Co., 167 F.3d at 779.

The Court refused to issue a preclusion order on the Plaintiff from using any documentary evidence after a specific date relevant to the lawsuit. The Defendant had recovered some of the Plaintiff’s communications from 3rd parties and their own records. Sjs Distrib. Sys., at *14. Preclusion was simply too drastic a sanction, given the fact there were other ways to find some of the relevant email communications.

The Court held the proper sanction was an adverse inference against plaintiff that it negligently deleted emails in the fall of 2010 that would have been relevant and favorable to defendant. The Court reasoned that such an order would restore the Defendant to the same position it would have been absent the destruction of ESI by the Plaintiff. Sjs Distrib. Sys., at *15-16. 

The Court also ordered an award of fees to be determined after reviewing the Defendant’s time billed for the motion. Id. 

Bow Tie Thoughts 

Attorneys have to take litigation holds seriously. That means having a set plan for communicating to a client’s custodians, identifying data sources and ensuring ESI is being properly preserved. The duty to preserve is not something that can be said in passing to a HR manager in the hopes it is done correctly. Have a plan and take action.

There are many tools on the market for issuing litigation holds. I have many friends at Legal Hold Pro that have a great cloud solution for issuing holds, tracking interview responses and documenting compliance. There are other options available.

The cost to use one of these tools is not prohibitive. Cloud solutions help keep fees reasonable. Moreover, the cost to a firm’s reputation because a Judge said a firm was “grossly negligent” in their duty to preserve is far more costly than properly issuing a litigation hold.

Control of Personal Email Accounts & Litigation Holds

Puerto Rico once again has issued a thought provoking eDiscovery opinion. It’s about time we hold a conference there.

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The Court found the Plaintiff had offered sufficient evidence that the Defendant had a duty to preserve the personal email accounts of its former officers. The Court explained the email accounts were within the Defendant’s control because the officers had used the accounts for as along as seven years to manage the company. P.R. Tel. Co. v. San Juan Cable Llc, 2013 U.S. Dist. LEXIS 146081, at *4-5 (D.P.R. Oct. 7, 2013). Since the Defendant likely knew its managing officers were using personal email to conduct business, the duty to preserve included those accounts. Id. 

Sending smsThe Court did not grant the Plaintiff’s motion for adverse inference instructions, because there was no bad faith nor a showing of prejudice. P.R. Tel. Co., at *5.

The Defendant had issued a litigation hold within a month of the lawsuit.

Moreover, it appeared that only three email chains were “lost.” P.R. Tel. Co., at *6. 

While the Plaintiff could show three email chains were missing, it could not offer a clear theory on how it suffered any prejudice. P.R. Tel. Co., at *7.

Judge Bruce J. McGiverin ended the opinion with this legal foreshadowing:

Upon further discovery, more information regarding the extent of spoliation may come to light. Forensic analysis of these three former employees’ personal email accounts and computers may be appropriate to determine whether critical emails have been deleted. Nacco Materials Handling Grp., Inc. v. Lilly Co., 278 F.R.D. 395, 406 (W.D. Tenn. 2011) (“The only way to determine if relevant evidence currently exists or previously existed and was lost destroyed is to conduct a forensic examination to see if such evidence exists.”). At that time, plaintiff may renew its motion for sanctions if circumstances so warrant.

P.R. Tel. Co., at *7.

Bow Tie Thoughts

This case makes me think of one big issue: BYOD.

If an employer knowingly enables an employee to use a personal device for work, there is a duty to preserve what is relevant off of the device in a lawsuit. This could get ugly fast in litigation, as attorneys and experts debate doing targeted collections off of a personal device vs a mirror image.

If a company has Bring Your Own Device policies, they better have litigation plan that includes preserving any relevant information. It might be easier to simply have a work issued smartphone.

As to the personal email account issue, this would raise interesting collection issues. Email messages with eBay alerts, online dating or kid’s soccer games are highly unlikely to be relevant to a lawsuit. A data collection strategy could include targeting messages with work topics, specific individuals, date ranges and other narrowing methodologies. Early Case Assessment or data clustering technology would be very helpful in identifying relevant ESI.

You just need to compel the employee to turn over their passwords.