The parties in Wixon v. Wyndham Resort Development Corp. reached an agreement that by a specific date, Wyndham would produce electronically stored information (“ESI”) held by specific custodians that matched specific search terms.  But what happened when, after the deadline, Wyndham revealed a stash of ESI found in a shared directory of a hard drive not allocated to a specific custodian?  Does a document not directly linked to a specific custodian automatically become “nonresponsive”?

The plaintiffs and defendant Wyndham had reached a written agreement that Wyndham would produce ESI limited to “specific search terms and custodians” and that it would “complete [its] production by no later than February 16, 2009.”  The agreement defined the scope of the ESI as that based on documents responsive to a specific set of search terms and “limited to the list of 26 [Wyndham] custodians.”  The agreement also included a built-in punishment should a party fail to complete discovery within the agreed upon period:  Hard copy and ESI documents not produced by the deadline could not be used by either party in support of or to defend the plaintiffs’ imminent motion for class certification.

Wyndham sent the plaintiffs its initial production by the February 16 deadline, but it also produced an additional 30,000 ESI documents more than two months after the agreed upon deadline had passed.  And when Wyndham announced that it intended to allow its expert witness to use some of those additional documents in its fight against class certification, the plaintiffs filed a motion to strike.

Wyndham seemed to acknowledge that the agreement required it to produce all “responsive” documents by the February 16 deadline.  But it argued that the exclusion clause of the agreement—the prohibition on using the document to defend plaintiffs class certification motion—only applied to “responsive” documents not produced by the deadline, and that “nonresponsive” documents produced after the deadline were fair game.  Wyndham then argued that documents it produced late were nonresponsive because they did not come from one of the named custodians.  It explained that the documents were located on a shared file directory that was not linked to a particular custodian.  A Special Master assigned by the court agreed with Wyndham’s argument, concluding that because the untimely ESI did not come from a named custodian, it was not “responsive” according to the agreement between the parties, and thus was not untimely.

The district court for the Northern District of California rejected the Special Master’s recommendation and reasoning.  In addressing Wyndham’s excuse that it was unaware of the existence of the shared directory as its reason for failing to timely produce the ESI, the court quickly imputed knowledge of the shared directory to Wyndham.  Referring to named custodian Scott Grey, the court explained that “Mr. Grey, and therefore Wyndham, knew about this directory.”   The court accused Wyndham’s proposed custodian-based ESI search of containing “a major flaw, namely a directory full of potentially relevant documents with no custodian.”  The court refused to allow Wyndham to use the logic that a document not specifically linked to a named custodian is nonresponsive, and concluded that it was “[not] reasonable for Wyndham to ignore the problem and rely on an overly narrow and hyper-technical reading” of the agreement.  Finding Wyndham’s decision to not timely produce documents from the shared directory unjustified, the court ordered Wyndham to pick up the tab for both the plaintiffs’ motion to strike costs and the Special Master’s fees.

Wyndham could have avoided this ruling by carefully mapping out its custodian-based production and determining early on where key players in the dispute might have squirreled away documents.  Counsel, in directing the collection of ESI, should not overlook locations such as personal and shared folders on scanners, servers, and removable drives.

In Kounellis v. Sherrer, 529 F.Supp. 2d 503 (D.N.J. 2008), plaintiff prisoner brought a Section 1983 action against correctional officers and prison officials after the officers allegedly assaulted the prisoner in retaliation for his filing of administrative complaints against the officers.  After the alleged assault, the prisoner repeatedly requested a copy of the video surveillance footage from a camera in the area of the alleged assault.  Defendants never provided the prisoner with the copy.  Nor was a copy ever preserved, thus depriving the prisoner of the only source of evidence other than his word that he was assaulted.  As a result, the defendants were subjected to sanctions including an award of attorneys’ fees and an adverse inference jury charge.

To be subject to sanctions for spoliation of evidence, the party facing sanctions must have had a duty to preserve relevant evidence in anticipation of probable litigation that if not preserved would harm the other party’s case.  In short, someone who has something that the other party needs cannot intentionally or negligently (i.e., conveniently) lose the evidence.

In Kounellis, the defendants were supposed to preserve video surveillance footage because the footage was the only evidence, other than the prisoner’s word, that an assault had taken place.  To make matters worse, the defendants also knew that charges against the prison had been filed which would require litigation.  As a result, the defendants had relevant evidence in their possession while they also knew that that evidence would be needed by the prisoner at the disciplinary hearing.  Unfortunately, that evidence was never held onto and the prisoner was deprived of the only evidence that could support his side of the story.

In sanctioning the defendants for spoliation of evidence, the judge determined that it was the defendants’ fault for losing the evidence and the prisoner’s case suffered as a result.  As a result, the defendants were subject to monetary penalties.  More importantly, the jury was instructed by the judge that they were allowed to assume that the missing surveillance footage would have been harmful to the defendants.

The ability to prevent spoliation depends on whether the spoliation was intentional or negligent. Accidents do happen and future accidents can be prevented by establishing rigid procedures for preserving evidence when that evidence may be needed in a lawsuit.

In this March 2009 case stemming from a multi-million dollar construction dispute, the project owner agreed to produce all project-related emails and ESI from its non-party construction manager.  The issue before the Court concerned the production of the construction manager’s emails from its server, and how to separate unrelated emails from project-related emails.

In planning the search, the project owner suggested keywords specific to the names of the parties and the project, which were likely to be under-inclusive.  The other parties requested  the use of generic construction project keywords such as “build” and “claim” that would have triggered production of a vast amount of unrelated emails and ESI.  The non-party construction manager, not wanting to be involved in the litigation, offered very little assistance in the development of the search terms.  The parties’ inability to establish a keyword search compromise compelled the court to develop the terms of the keyword search, with little information and guidance from the parties.

Chastising the parties and counsel for these recurring problems, the Court emphasized the need for counsel to cooperate with each other and get adequate information from email authors and document custodians in order to successfully develop a keyword search.  The Court underscored the importance of advanced planning by those qualified to develop the search methodology, along with the need for quality control to assure accuracy and completeness of the search.  The party who selects the method must be able to explain it to the Court, including reasons for using the particular method, why the method was appropriate, and how it was properly applied.

Outside Counsel must cooperate when it comes to e-discovery issues.  In formulating and conducting searches of emails and ESI, obtaining input from clients, email authors, and ESI custodians is key; and the use of quality control methods assures accuracy and completeness of the keywords and search.  Not only will these techniques make the eDiscovery process easier and more reliable, but also courts now expect counsel to employ such methods without having to be told to do so.

“It” (Stengart, the fuss, the Supreme Court of New Jersey, this post, all this blog attention) all boils down to whether this employee had a reasonable expectation of privacy in emails between the employee and her lawyer sent and received (during work hours) using the employer’s computer and IT systems.

According to the trial court, Stengart did not have a reasonable expectation of privacy and the emails were properly retrieved and used by the employer and its lawyers in defense of the lawsuit.  According to the appeals court, not only did she (have a reasonable expectation of privacy), but also the appeals court took issue with the way the company lawyers handled the situation and queried whether the lawyers acted inappropriately when they retrieved and used these emails – and whether they should be sanctioned and/or thrown off the case.  Ouch!

This case is serious stuff, my friends, for lawyers, employees, and employers alike.  For those new to the case, here are some key elements of the Stengart line of cases for you to consider as the whole world (and blogosphere) awaits a ruling by the Supreme Court of New Jersey on the issues both the trial and appeals courts addressed and ruled upon.

The Facts (in a nutshell)

Loving Care Agency (the defendant in the case) is in the business of providing home care services for children and adults. The plaintiff, Maria Stengart, was its Director of Nursing for all of Loving Care’s branches as well as the Branch Manager at Loving Care’s Fort Lee office. Ms. Stengart was also one of the first two employees when Loving Care first opened for business in 1994.

Loving Care maintains an employee handbook which is distributed to all employees and which is also available to employees electronically via Loving Care’s servers. During Ms. Stengart’s tenure as Director of Nursing and Branch Manager for Loving Care, she assisted in the creation and distribution of the employee handbook. Among other things, the handbook governs an employee’s use of Loving Care’s computers and other technology resources. Under a section entitled “Electronic Communications,” the handbook provides, among other things:

• Technology resources are considered company assets.
• Email and voicemail messages, internet use and communication, and computer files are considered part of the company’s business and client records. Such communications are not to be considered private or personal to any individual employee.
• The principal purpose of email is for company business communications. Occasional personal use is permitted; however, the system should not be used to solicit for outside business ventures.
• Certain uses of the email system are specifically prohibited, including but not limited to job searches or other employment activities outside the scope of company business.

During her employment at Loving Care, Ms. Stengart was provided with a company-issued laptop computer and assigned a Loving Care email account for business use. She also maintained a personal email account through Yahoo. Ms. Stengart occasionally accessed her password-protected Yahoo account to write emails during work hours on her company-issued laptop.

In December 2007, Ms. Stengart resigned from Loving Care. Two months later, she filed a lawsuit against Loving Care alleging that the hostile work environment had led to her constructive discharge. In April 2008, Loving Care’s attorneys in the employment lawsuit caused to have made an image of Ms. Stengart’s company laptop computer hard drive. The image preserved the electronic information contained on her employer-issued laptop. The hard drive was then sent to a company that could restore and recover deleted information located on the hard drive.

The Legal Path

eDiscovery: In October 2008, Loving Care served plaintiff its Answers to Ms. Stengart’s first set of interrogatories. In response to an interrogatory, Loving Care stated that it had obtained information contained in “email correspondence from Ms. Stengart’s office computer on December 12, 2007 at 2:25 p.m.” between plaintiff and her lawyer. This email was uncovered by the company hired to restore and recover deleted information located on the hard drive of plaintiff’s employer-issued laptop. The email in question was sent from Ms. Stengart’s password protected Yahoo account to her lawyer.

Loving Care’s answer to this interrogatory prompted Ms. Stengart to demand that all emails between her and her lawyer held by Loving Care be returned or destroyed. She claimed that the attorney-client privilege protected all such emails. Loving Care refused to return or destroy the emails, claiming that the content of the emails was not protected by the attorney-client privilege because Ms. Stengart waived the privilege by using Loving Care’s computer and server during business hours to make the communication. Ms. Stengart thereafter filed an Order to Show Cause alleging Loving Care’s attorneys breached her attorney-client privilege when Loving Care recovered and retained email correspondence made between her and her lawyer.

The trial court: The court determined that Loving Care’s policy (as detailed above) placed plaintiff on notice that all of her internet-based communications are not to be considered private or personal. In addition, Loving Care’s policy put employees on notice that the technology resources made available to employees were to be used for work-related purposes, particularly during business hours. The court found that the company’s policy adequately warns employees that there is no reasonable expectation of privacy (not outright prohibition of use) with respect to any communication made on company issued laptop computers and servers, regardless of whether the email was sent from Ms. Stengart’s work email account or her personal web-based email account. It was with Loving Care’s technology resources, laptop computer, and company time that Ms. Stengart communicated with her lawyer.

Thus, the court found that when Ms. Stengart decided to use company time, equipment, and resources to communicate with her lawyer, she did so with knowledge that such use would not be personal or private to her. Ms. Stengart’s choice of using her employer’s resources to communicate with her lawyer was her voluntary choice; and the court held that it constitutes a waiver of her attorney-client privilege.

The appeals court: The appeals court reversed the trial court and remanded the case.  The appeals court held that employees have a reasonable expectation of privacy in personal communications on a company owned computer. In sum, it held that a policy purporting to transform all private communications into company property “merely because the company owned the computer used to make private communications“ furthers no legitimate business purpose.

The appeals court concluded reversal of the trial court by addressing the issue of attorney discipline for the company’s law firm that uncovered and kept the emails. The appeals court determined that the law firm violated New Jersey Rule of Professional Conduct 4.4(b) because the lawyers failed to cease reading and examining the emails upon discovery and failed to notify plaintiff’s lawyer promptly of their discovery. The appeals court ultimately determined that whether the company’s attorneys should be disqualified is a matter for resolution upon remand to the trial court.

Where The Case Stands, Today

On July 29, 2009, the Supreme Court of New Jersey granted a motion for leave to appeal the appellate division ruling.  See 200 N.J. 204 (2009).  On December 2, 2009, the Court heard oral argument on the case.  You may view the oral argument webcast at:   http://njlegallib.rutgers.edu/supct/args/A_16_09.php (click on Video Feed )

A decision is expected any day.  Click here for immediate notification of the Supreme Court of New Jersey’s decision and other eDiscovery posts.

eLessons Learned has been following the Stengart case closely since its inception.  Read our past blog posts and coverage of this important case here.

During a Rule 26(f) discovery conference, the parties agreed that discovery would proceed and that the parties would serve their first requests for the production of documents by February 15, 2008.  There was no discussion of metadata at this conference.  On February 15, the Plaintiffs served their first request for the production of documents, but their request did not specify the form in which they sought to have electronically stored information (”ESI”) produced.  This request did not mention metadata either.

The subject of metadata first arose on March 18, 2008, when the Plaintiffs mentioned it “in passing.”  However, by this time, the Defendants had almost completed their document collection efforts.  The first formal discussion regarding metadata occurred on May 22, 2008, during a conference call to discuss the production of ESI.  The Plaintiffs requested that emails and electronic documents be produced in TIFF format with a corresponding load file containing metadata fields,  and that spreadsheets and databases be produced in native format.  Again, by this date, the Defendants had already substantially completed their document collection efforts.

The Defendants objected to producing electronic documents in the form requested by the Plaintiffs, proposing instead to produce their ESI in the form of text-searchable PDF documents.  The Defendants stated that they would provide the Plaintiff with metadata if the Plaintiffs were able to demonstrate that the metadata associated with a particular document was relevant to their claims.  After various discovery conferences, the parties were unable to agree on the production of metadata.

Metadata is electronically-stored evidence that describes the history, tracking, or management of an electronic document.  This includes the hidden text, formatting codes, formulae, and other information associated with an electronic document.  The court distinguishes between three types of metadata.

Substantive metadata is created as a function of the application software used to create the document or file and reflects modifications to a document.  System metadata is information created by the user or by the organization’s information management system.  This data may not be embedded within the file it describes, but can usually be easily retrieved from whatever operating system is in use.   Courts have commented that most system and substantive metadata lacks evidentiary value because it is not relevant.   System metadata is relevant, however, if the authenticity of a document is questioned or if establishing “who received what information and when” is important to the claims or defenses.  Embedded metadata consists of text, numbers, content, data, or other information that is directly or indirectly inputted into a native file by a user and which is not typically visible to the user viewing the screen.  This data includes spreadsheet formulas, hidden columns, externally or internally linked files, hyperlinks, references and fields, and database information.  This type of metadata is often crucial to understanding an electronic document.

Under the general rules of discovery, metadata is discoverable if it is relevant to the claim or defense of any party and is not privileged.   The relevant information need not be admissible at the trial if the discovery appears reasonably calculated to lead to the discovery of admissible evidence.  The discovery of metadata is also subject to the balancing test of Rule 26(b)(2)(C), which requires a court to weigh the probative value of proposed discovery against its potential burden.

If the party requesting discovery does not specify a form for producing ESI, the responding party must produce it in a form or forms in which it is ordinarily maintained or in a reasonably usable form or forms.  This does not mean that a responding party is free to convert ESI from the form in which it is ordinarily maintained to a different form that makes it more difficult or burdensome for the requesting party to use the information.

The Sedona Conference stated that “Absent party agreement or court order specifying the form or forms of production, production should be made in the form or forms in which the information is ordinarily maintained or in a reasonably usable form, taking into account the need to produce reasonably accessible metadata that will enable the receiving party to have the same ability to access, search, and display the information as the producing party where appropriate or necessary in light of the nature of the information and the needs of the case.”  The commentary to the Sedona Principles advises parties to consider: (i) what metadata is ordinarily maintained; (ii) the relevance of the metadata; and (iii) the importance of reasonably accessible metadata to facilitating the parties’ review, production, and use of the information.  The Sedona Conference concluded that even if native files are requested, it is sufficient to produce memoranda, emails, and electronic records in PDF or TIFF format accompanied by a load file containing searchable text and selected metadata. This satisfies the goals of Sedona Principle 12 because the production is in usable form, and paired with essential metadata.

Courts generally have ordered the production of metadata when it is sought in the initial document request and the producing party has not yet produced the documents in any form.    However, if metadata is not sought in the initial document request, and particularly if the producing party already has produced the documents in another form, courts tend to deny later requests for metadata, often concluding that the metadata is not relevant because its probative value does not outweigh the burden on the producing party.   Therefore, if a party wants metadata, it should ask for it up front, otherwise, if the party asks too late or has already received the document in another form, it may be out of luck.  At the outset of any litigation, the parties should discuss whether the production of metadata is appropriate and attempt to resolve the issue without court intervention.

By the time the Plaintiffs requested the metadata, the Defendants’ document collection efforts were largely complete and they had already produced many of their electronic documents in PDF format without accompanying metadata.  Because of this, the plaintiffs faced a heightened burden to compel the production of the metadata.

The court weighed the possible probative value of the metadata the plaintiff sought, and balanced it against the burden on the defendant to produce the data again.  Because the relevance of the emails is very low, and the burden high, the defendants did not need to reproduce the emails sought.  Next, because there is value in the metadata from the word processing and PowerPoint documents, but the burden remains high, the court directed that the costs of reproducing these documents must be paid by the requesting party.  However, the relevance of the Excel spreadsheet metadata is very low, but so is the burden to reproduce the native Excel spreadsheet.  Therefore, the spreadsheets will be produced because the burden does not outweigh the relevancy of the information.  Finally,

In the conclusion of the case, the court stresses the importance that counsel work out their discovery disputes and requests early in the case.  The court hopes that in future cases counsel will become more knowledgeable about ESI issues so that the frequency of skirmishes such as this will diminish.

Scott Paterson is a third year student at Seton Hall Law School with an interest in Tax Law.  After graduation, Scott will be working for a New Jersey Superior Court Criminal Judge.

Plaintiff had argued that the company failed to demonstrate that it had ever adopted or distributed the policy in question, that she was unaware that the policy applied to her, and even if the policy did exist, the company had not previously enforced it. The company argued that it had disseminated the policy, and that the policy did apply to the plaintiff. The appellate court determined that issues of material fact existed as to whether the policy at issue was in place and disseminated at the time of plaintiff’s employment and as to whether the policy applied to plaintiff; and that these issues could not be resolved by the trial judge without a hearing on the matter.

The appellate court held that employees have a reasonable expectation of privacy in personal communications on a company owned computer. In sum, it held that a policy purporting to transform all private communications into company property “merely because the company owned the computer used to make private communications“ furthers no legitimate business purpose.

The appellate court concluded by addressing the issue of attorney discipline for the company’s law firm who uncovered the emails. The appellate court determined that the law firm violated New Jersey Rule of Professional Conduct 4.4(b) because the lawyers failed to cease reading and examining the emails upon discovery, and failed to notify plaintiff’s attorney promptly of their discovery. The appellate court ultimately determined that whether defendant’s counsel should be disqualified is a matter for resolution upon remand to the trial court.

Click here for full article.

A litigant can be sanctioned for destroying evidence that it knew or should have known could be relevant to pending or potential litigation. Thus, the duty to preserve relevant evidence can arise even before the commencement of litigation. Furthermore, such destruction need not be in bad faith in order for sanctions to be appropriate.  There simply must be a finding of fault.

Additionally, a party that engages in the “willful spoliation” of evidence can be sanctioned if that evidence would have been relevant to litigation or potential litigation, or was reasonably calculated to lead to the discovery of admissible evidence.

A party liable for spoliation is subject to an array of sanctions.  First, a court can give an adverse inference jury instruction that allows the jury to infer that the evidence destroyed would have been unfavorable to the liable party.  Second, “a court can exclude witness testimony based upon the spoliated evidence.”  Third, a court can impose the ultimate sanction by dismissing the claim of the party that spoliated the evidence.

When deciding on which sanction is most appropriate, a court should attempt to accomplish the following objectives: “1) penalize those whose conduct may be deemed to warrant such a sanction; 2) deter parties from engaging in the sanctioned conduct; 3) place the risk of an erroneous judgment on the party who wrongfully created the risk; and 4) restore the prejudiced party to the same position he would have been in absent the wrongful destruction of evidence by the opposing party.”

In this case, the court began its analysis by determining that the defendant, Maxxam, could be liable for spoliation even though it wasn’t the party that actually destroyed the evidence.  The court found it to be irrelevant that VESTRA was the party guilty of spoliation in light of the fact that VESTRA was a consultant retained by the law firm that Maxxam had hired to represent it.

Next, the court found that while VESTA had destroyed some potentially relevant evidence, it did so unintentionally.  The court noted that the government failed to present any evidence showing that evidence was intentionally destroyed.  Rather, it found that VESTA had destroyed the evidence in question during its normal course of business while moving to a new office.

The court ultimately declined to issue any sanctions against Maxxam because the government failed to carry its burden in showing that evidence was destroyed after a duty to preserve arose.   Thus, because Maxxam was not under any duty to preserve evidence at the time the VESTA destroyed the documents in question, sanctions were not warranted.

Evan Harris is a third-year law student at Seton Hall University School of Law.  Upon graduation, Evan will serve as a Judicial Law Clark in the Chancery Division-General Equity in Essex County, New Jersey.

As you’ll see, the Plaintiff in Lake v. City of Phoenix does everything right.  After receiving a hard-copy of a document and smelling something fishy, he requests metadata of the electronic version to substantiate the document’s authenticity.  Lake is told that he can’t get the metadata.

Dead-end?  Nope.  If there’s a will there’s a way.  By requesting the emails passed between his superiors and police reports, Lake is able to access information that may explain better the shadiness (or lack thereof) behind his demotion at work.

Procedural History

After filing an Equal Employment Opportunity Complaint against “the City” (Not to be confused with the MTV show), Phoenix Police Officer David Lake submitted various requests for public records to the City.  The City failed to produce several records related to his request and delayed the production of other records.  So what does one do?  Sue. Duh!

Lake initiated a special action against the City alleging it withheld pertinent records from disclosure with an improper motive.  Why would they do such a thing?  According to Lake, the City was trying to cover up information relevant to the EEOC he filed after being demoted.  The world doesn’t revolve around you, Lake.  While you might not be on the devil’s side, we shall see the law most certainly is.  In this action, Lake seeks to compel the City to produce all relevant records requested, to cover the fees and costs associated with the special action and to cough up double damages.  The Superior Court held that it lacked jurisdiction to hear the matter and that Lake was not entitled to the relief sought.

Issue #1: Jurisdiction

The Arizona Court of Appeal reversed the Superior Court’s holding on jurisdiction because A.R.S. § 39-121.02(A) states that any person who is denied access to public records has the right to challenge that decision in the Superior Court, This means that the Superior Court did in fact have jurisdiction to hear Lake’s complaint.  Whether Lake was entitled to the relief sought for the wrongful denial of his public records requests, however, is the focus of this review.

Issue 2: Public Records Request

Request #1: Supervisory Notes

Lake contends that four of his eighteen public records requests were denied by the City.  Lake wanted all notes kept by certain lieutenants from a specific time period, which documented supervisory performance.  The City responded positively and met Lake’s request with hard copies of the electronic documents containing the notes.   Lake, do you have everything your little heart desires?  No!

Suspecting the notes made by Lieutenant Conrad were backdated, Lake requested metadata, or specific file information contained inside the file, for each document to confirm its authenticity.  Lake believed the City wrongfully denied his request for the metadata on Conrad’s notes and had provided him with a hard-copy of the notes which seemed to have preceded his demotion.  Such notes were useless in assessing whether Lake’s demotion for shady reasons.   If you’re demoted after filing an EEOC complaint against your employer, you have to wonder if this was retaliation.  Oh Lake.  You are such a smarty pants! So Lake requested the metadata associated with Conrad’s notes, which would provide him authenticating information about the electronic document’s creation date, access date, and other useful details not revealed in the hard-copy document.  The City denied Lake’s request.

The Court of Appeal noted that Arizona law broadly defines ‘public records’ and adopted a presumption in favor of disclosure to honor public records requests, but only after a document has been classified as a public record does this presumption kick in.   Metadata falls outside of the three alternative definitions of a ‘public record’ that are recognized by Arizona courts.  According to Matthews v. Pyle, 251 P. 2d 893, 895 (1952), metadata must be (1) made by the officer pursuant to a duty (2) required to be created by law or (3) a written record of the officer’s transactions.  Because Lake’s request for metadata does not fall under any one of these definitions, he would not reap the benefits of the presumption. Though federal courts have been allowing parties to discover metadata, this Court explicitly states that there isn’t “any authority suggesting that Arizona’s public records law is co-extensive with evidentiary rules in a litigation context.  Nor do we find any evidence of legislative intent to construe Arizona’s public records law so broadly as to mean that if a document is discoverable in connection with a lawsuit, then it must also necessarily be disclosed by an agency under the public records law.”  (Full Case PDF, p.12)  The Court’s message was clear: The public records law makes a distinction between metadata records and public records.

So without the metadata, Lake and everyone else would have to take the supervisory notes for face value, though the documents may have been backdated or altered.  Desperate times call for desperate measures.  How else can Lake enter the shady underworld behind his demotion?   Sue some more and hope for the best.

Request #2: Police Reports

Lake made another request to the City, which was for any aggravated assault reports or other police reports listing some Lieutenant as victim.  Lake advised the city to use the PACE system to find the records, but the City said “No.  This is not allowed under Arizona law.”  The City argued that because the PACE system was linked to databases providing criminal justice information, using PACE to conduct a public records search was against the law because it would provide information to unauthorized individuals.  One would think the Phoenix Police Department’s Records and Identification Bureau or anything that says ‘Police’ would actually know how to abide by the law, and not just claim to follow it.  Not!  The Court of Appeal held that a police report that is undoubtedly a public record cannot be withheld from production by virtue of the method employed by the City to catalogue the document.  Oh, Lake, you’re as stubborn as an ox!  You finally got a piece of the pie!

Request # 3: Police Emails

The Court of Appeals also held that the City, in part, wrongfully denied Lake’s third public records request, which was for emails between Commander Campbell, Lieutenants Soha and Conner about Lake.  Because the city retains emails for thirty days, and since Soha had transferred to another job more than thirty days ago, Soha’s emails were deleted, and so the City rightfully denied Lake’s request.  But wait Lake!  God has answered your prayers.   The Court found that the City wrongfully refused Lake’s request for Campbell’s emails because Campbell had left his job only ten days before Lake’s request.  That means that the City still had Campbell’s emails.  That also means Lake is going to get those emails.  In analyzing the issue, the Court noted that Arizona’s policy of disclosure was not outweighed by confidentiality concerns.

Request #4: Documents on an Investigation

Lake also challenged the City for denying his request for documents regarding an unfinished investigation of a shooting.   The Court held that absent concerns over confidentiality, privacy and the best interests of the state, Arizona Supreme Court precedent has made it clear that reports of ongoing police investigations are generally not exempt from Arizona’s public records law, and as such, disclosure is required.  I gotta give it to you Lake.  You are quite the hunter.

Issue 3: The City is Moving Slow

So Lake complains that the City was slow and that it violated A.R.S. § 39-121.01(E) when it failed to produce the permitted public records promptly.  Arizona courts have understood “prompt” to mean “quick to act” or “without delay.”   The Court of Appeal reviewed the Superior Court’s decision on this matter, and held that the City met its burden when it explained that given the extensive nature of Lake’s requests, the documents were produced promptly.  Sorry, Lake, but you’re fast-paced ways should be saved for NYC.  Prompt is excruciatingly slow by our standards.

Issue 4: Attorney’s Fees For Wrongful Denial

Alas, we get to the moolah.  Lake wants attorney fees and other legal costs associated with this action but he must look to A.R.S. § 39-121.02(B) which requires Lake to prove that he substantially prevailed in his public records requests.   Because the Court of Appeals reversed a portion of the Superior Court decision, it remanded the case back to the Superior Court to decide whether or not Lake substantially prevailed in his special action and thus entitled to attorney’s fees and costs incurred in connection to the special action.

It pays to investigate. If someone says “No” you have to wonder if there is more going on that you don’t see.  If you take anything away please make it this: Don’t judge a book by its cover.  You might get the short end of the stick, and “foolish” stamped on your forehead.

Noura is a 3L at Penn State-Dickinson at University Park and is a Smith College alumna.  Upon graduation, she would like to practice entertainment law or work for a legal consulting firm.

Given our recent treatment of Zubulake as the “ebook of Genesis” on the creation of ediscovery, it is important to note that sanctions for ediscovery mishaps existed even before the term was coined.

This case arose out of a class action lawsuit brought by Prudential policy holders alleging that Prudential engaged in a scheme to sell life insurance through deceptive practices. On September 15, 1995, the court entered its first Order requiring that all parties preserve all documents and other records containing information potentially relevant to the litigation. This opinion relates to the multiple instances of document destruction by Prudential employees and agents after the issuance of this Order.

In 1994, pursuant to a regulatory directive issued to most life insurance companies, Prudential undertook a sweep of its sales materials to remove any unauthorized materials. To accomplish this, the company issued a manual that outlined the procedures to be followed in order to identify and remove all unauthorized sales materials. The materials specifically called for the destruction of all materials no longer authorized by Prudential.

Subsequent to the court order directing the preservation of documents, various document retention notices were sent to various employees within Prudential. All except one of these notices were sent via email. At the time, less than half of the employees had email or access to email, and none of the notices were ever printed out in hard copy or posted for all employees to see. The management charged with notifying the employees failed to adequately ensure that all employees were made aware of the document retention policy. The management did not forward the emails to all the employees, nor did management distribute the document retention policies via hard copy to the employees. This resulted in some of the employees seeing various emails relating to document retention, however most employees did not see any.

Because of the haphazard approach to the dissemination of the emails and notices, documents continued to be destroyed. One particularly extreme situation occurred in the Prudential Cambridge office where 9000 client files were reviewed and any unauthorized materials were destroyed. Most employees from the Cambridge office denied ever seeing any of the emails relating to document retention. In compliance with the existing document destruction policies, Prudential made unannounced compliance audits to the field offices to ensure that the offices were destroying the appropriate materials. At these audits, the auditors would destroy any unapproved sales materials, and issue fines and sanctions to employees that were not complying with the destruction policy.

The Federal Rules of Civil Procedure provide for sanctions when a party to litigation fails to obey a pre-trial order. The Court must “let the punishment fit the crime.” The Third Circuit provides a two-part test with concomitant factors to determine whether and which sanctions are appropriate. First, the Court must consider the conduct at issue and must explain why the conduct warrants sanctions. A pattern of wrongdoing may require stiffer sanctions than an isolated incident. Second, after evaluating the conduct at issue, the Court must consider the range of permissible sanctions and must explain why less severe sanctions are inadequate or inappropriate. After making its findings of fact and law, the Court was satisfied that the conduct of Prudential explicitly violated the mandate to preserve documents.

Although there is no proof that Prudential, through its employees, engaged in conduct intended to thwart discovery through the purposeful destruction of documents, its haphazard and uncoordinated approach to document retention denied its opponents potential evidence to establish facts in dispute. Because the destroyed records in Cambridge are permanently lost, the Court will draw the inference that the destroyed materials are relevant and if available would lead to the proof of a claim. When the September 15, 1995 Court Order to preserve documents was entered, it became the obligation of senior management to initiate a comprehensive document preservation plan and to distribute it to all employees. The senior management needed to advise its employees of the pending litigation, provide them with a copy of the Court’s Order, and to acquaint its employees with the possible sanctions that the Court could issue for noncompliance with this Court’s Order. When senior management fails to establish and distribute a comprehensive document retention policy, it cannot shield itself from responsibility because of field office actions. The obligation to preserve documents that are potentially discoverable materials is an affirmative one that rests squarely on the shoulders of senior corporate officers.

Here, Prudential violated the Order of the Court to preserve documents and failed to advise its field offices of the pending litigation and the Court-ordered requirement to preserve documents. While e-mail is an appropriate means for a corporation to disseminate its policy, the internal orders directed to the field by Prudential lacked coordination and represented a haphazard response. Further, because documents have been destroyed, they can never be retrieved and the resultant harm is incalculable. Thus, the Court concluded that there existed more than enough to warrant sanction. The sanctions issued to Prudential for its conduct are listed below:

Sanctions Issued:

1. Within ten days after the opinion, Prudential shall mail to every employee a copy of the Court’s September 15, 1995 Order, together with a full explanation of the pending litigation and the civil and criminal sanctions that apply to the failure to follow an Order of the Court.
2. Within thirty days, Prudential shall submit to the Court a written manual that embodies Prudential’s document preservation policy.
3. During the pendency of the litigation, Prudential shall dedicate a telephone “hotline” to facilitate reports of document destruction, if any.
4. During the pendency of the litigation, Prudential shall establish a certification process wherein each field manager shall certify that his/her office is in compliance with the document retention manual and has not engaged in document destruction contrary to Prudential’s established policy.
5. Within ten days after the opinion, Prudential shall pay to the Clerk of the United States District Court for the District of New Jersey, the sum of $1,000,000. This sanction recognizes the unnecessary consumption of the Court’s time and resources in regard to the issue of document destruction.
6. Prudential shall promptly reimburse plaintiffs’ counsel for all fees and costs associated with the motion for sanctions, the order to show cause, the depositions and discovery in preparation for the depositions, and the preparation and distribution of the Report of Investigation to the Court and counsel.
7. The sanctions contained herein are without prejudice to the subsequent imposition of additional sanctions as may be fair and appropriate to remedy unknown harm to individual party opponents caused by document destruction.

Scott Paterson is a third year student at Seton Hall Law School with an interest in Tax Law. After graduation, Scott will be working for a New Jersey Superior Court Criminal Judge.

Often times, the posts on this blog talk about a specific lesson to be learned related specifically to e-discovery rules, practice, and procedure. It can be easy to forget that in many cases, the e-discovery part of the litigation is not the end all and be all of the case, but it rather is interrelated with other substantive areas of law. This was especially true in the Zubulake v. UBS Warburg LLC opinion cited above, one of the many in the seminal Zubulake case.

In this 2003 Zubulake v. UBS Warburg LLC opinion, the plaintiff, Laura Zubulake, moved for an order permitting her to release the transcript of Christopher Behny’s deposition to securities regulators. Behny was the Manager of Global Messaging for UBS. The Southern District of New York had previously ordered UBS to produce an individual knowledgeable about UBS’s email retention and retrieval policies. After UBS produced Behny for a deposition, Behny testified on the structure of UBS’s backup system, its backup tape destruction/retention policy, and the feasibility and estimated cost of restoring the data that Zubulake requested.

Upon review of the deposition, Zubulake concluded that UBS was in violation of Section 17(a) of the Securities Exchange Act of 1934 and SEC Rule 17a-4 promulgated thereunder. (These combine to require certain document retention requirements on brokerage firms.) Zubulake thus requested the court allow her to release the transcript of the deposition so that should could comply with her ethical obligations under various securities laws to report knowledge of rule violations to the appropriate authorities.

In denying Zubulake’s motion, the court determined that Zubulake failed to proffer any reason for disclosing the contents of Behny’s deposition. The court ruled that Zubulake had no clear duty to disclose the information contained within the deposition, and it thus denied her motion.

At first glance, it would seem that this case has little, if anything, to do with e-discovery. However, if one digs a little deeper, we see that there is one important e-discovery lesson to be learned. Namely, e-discovery issues often are interrelated to other areas of law. Thus, it is important to keep in mind the interplay between e-discovery and other legal theories when seeking to compel disclosure of electronic information. In this specific opinion, the e-discovery issues played out in the context of securities law. In other cases that have been discussed on this blog, e-discovery issues played out in the context of internet law, employment law, intellectual property, and construction law, to name a few.

The point here is that e-discovery issues can arise in all types of litigation. It is thus imperative for attorneys (and future attorneys) to be familiar with e-discovery concepts so that at the very least, they will know when to seek the advice of an e-discovery expert.

Tim Cedrone is a third year student at Seton Hall Law School.