e-Lessons Learned

In Newman v. Borders, Inc., the United States District Court for the District of Columbia held that because plaintiff failed to notify defendant in a deposition notice that questions in a deposition would pertain to the defendant book’s email policies (or any electronically stored information (ESI) in general), plaintiff was not entitled to take further depositions despite the designated witness’s lack of knowledge regarding that subject matter.  However, the Court further held that due to both parties’ failures to try hard enough to resolve the dispute and because discovery regarding document retention policies is a legitimate request, defendant was nonetheless ordered to answer specific questions posed by the Court regarding its email retention policies.

The lesson here is twofold:  If you are going to depose witnesses regarding ESI, you must put the other party on notice of the scope of the deposition testimony being sought, or risk losing the opportunity to conduct further depositions.  But regardless of whether you are the party who asks or the party who answers, you must be sure to make every reasonable effort to resolve discovery disputes. Continue reading »

Just because e-discovery is involved does not mean we can disregard the rules applied to traditional discovery.   While we must adapt the way we approach discovery because of advancing technology and the decline of the paper-based world, we must not forget that the spirit behind the rules of discovery apply to all discovery, including e-discovery.

In High Voltage, the plaintiff filed a motion to compel the defendant to search for alternative sources beyond the initial production of documents for the selection of the VAULT mark.  This would involve having the defendant review an additional 1.5 million pages of documents (17 gigabytes) beyond the 1.7 million pages already produced to the plaintiff. Continue reading »

Suppose you’ve got a business.  Not just any business, however, but a state-of-the-art business.  Not necessarily a business that sells state-of-the-art products or services, but a business that you run in a state-of-the-art manner.  Instead of carrying briefcases full of notes, you’ve got compact flash cards full of data.  You don’t even remember the cost of a first-class stamp because all of your correspondence is done by email.  You don’t have boxes and drawers full of hard files around the office because you’ve got everything stored and backed-up on hard drives and servers.  You don’t have a calendar on your desk because you’ve got your daily schedule synched to the Smartphone that never leaves your side.  You use every possible gadget to make sure that you are doing everything in the most technologically advanced and efficient way possible.

Now, think to yourself: What happens one day when your company winds up on the wrong end of a lawsuit?  Perhaps even a completely bogus, frivolous lawsuit.  Even if you know that you’ll end up victorious in the end, you might find yourself bogged down in an eDiscovery quagmire once you have to turn over all of your “documents” during discovery.   Continue reading »

Tech-savvy business owner Dmitri Nikitin received a judicial tongue-lashing  and an adverse inference instruction  after he destroyed emails potentially relevant to a pending lawsuit brought by a Korean corporation. Not buying Nikitin’s “hackers” defense, the Court said that Plaintiff Optowave was entitled to an adverse jury instruction at trial against Nikitin’s company Precision Technology Group. “This sanction,” the Judge wrote, “will serve to cure the unacceptable actions of Nikitin, while allowing the case to be decided on the merits.”

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Pay close attention to the rules!  Failure to understand the purpose of the rules, as well as failure to comply with motion timelines, could cost your client the opportunity to be relieved of undue discovery costs.  This is what happened to the defendant in Cason-Merenda v. Detroit Medical Center.

In Cason-Merenda v. Detroit Medical Center, defendant filed a Motion for Protective Order in an attempt to require the plaintiff to pay 50% of its third-party vendor electronic discovery costs.  The defendant relied on Fed.R.Civ.P. 26(b)(2)(B),  which states that “[o]n motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.”  After the producing party shows that the information is not reasonably accessible, a court then has the ability to apportion costs between the two parties.

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Fool me once, shame on you.  Fool me twice, more shame on you.  Fool me three times and you are in some hot water!  Regardless of whether you are (or represent) the plaintiff or the defendant, your discovery obligations are the same: Absent a valid, court-sanctioned objection, you must comply with your adversary’s discovery demands.

While electronically stored information (ESI) may be a rather esoteric concept for many of us (perhaps most), in the eyes of the law and the court, ESI is just as real as traditional paper documents; and one’s failure to search for and disclose ESI in a timely manner could lead to big problems for an attorney and the client.  In one case, it may have cost one company $25 million.

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The old adage: “measure twice, cut once” applies to carpentry and very well should apply to the legal profession.  Both a carpenter and an attorney will save time and money by adhering to this maxim.

Take for example Preferred Care Partners Holding v. Humana.  In that case, Humana produced an additional 10,000 documents two months after the completion of discovery, and suffered sanctions because of it.  Humana discovered the existence of these newly produced documents during a deposition of an employee who found residual copies of documents that he believed had been deleted from his computer.  As a consequence, Humana conducted a subsequent search which led to the discovery of a vast number of residual files on other computers.  Because of the need to sort through all of the documents to determine which ones were responsive and privileged, the files were not produced until well after discovery concluded, and only a short time before trial.

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In this recent opinion, one Texas Court applied the Zubulake cost-shifting factors to a shampoo company’s unsupported argument that the opposing party should have to share the costs of performing OCR… and booted their argument to the curb.

At the pre-trial Case Management Conference, the Court ordered the parties to submit estimates of the costs involved in the production of documents in searchable Tagged Image File Format (“TIFF”) with Optical Character Recognition (“OCR”) before it made a ruling on the format of electronic discovery.   Continue reading »

R & R sails sued the insurer when, after the 2001 Australian wildfires ravaged their manufacturing facility, they believed the insurer did not pay the amount due under their contract. The suit was removed to Federal Court for the Southern District of California in June 2007, marking the beginning of a discovery period rife with evasion that ultimately led to sanctions under FRCP Rules 26 and 37.

From the outset, R & R knew that the Insurance Company’s adjustors’ claim logs and notes would be a key source of evidence in proving that they were undercompensated. They initially requested all documents pertaining to the Insurance Company’s underwriting and their own coverage and fire claim. They did not get everything they were looking for, so they sent letters clarifying that they wanted all “electronic or handwritten daily activity records/logs which are generally kept with an adjuster’s notes and telephone call records.” 251 F.R.D. at 522.

Again, R & R’s counsel did not receive what they were looking for. Continue reading »

In this contract dispute, the prevailing defendant, ChoicePoint, moved for attorneys’ fees, including fees for document review and production.

The plaintiff, Corinthian Mortgage Corporation, d/b/a, SouthBanc Mortgage (”SouthBanc”), and Defendant ChoicePoint Precision Marketing, LLC (”ChoicePoint ”), a mailing list broker, entered into an agreement (the “Service Agreement”) wherein ChoicePoint  agreed to assist in developing a methodology for creating lists of names and individuals to whom SouthBanc could mail targeted promotional materials. Soon after, Theresa Ritter (”Ms. Ritter”), Vice President at SouthBanc, was terminated. Ms. Ritter formed a competing company in Virginia, Summit Financial LLC (”Summit”). Subsequently, Summit requested names from ChoicePoint, using name selection criteria similar to SouthBanc’s. ChoicePoint  provided the requested information to Summit and continued to supply names. Of course SouthBanc was not happy and sued ChoicePoint, alleging that ChoicePoint violated the covenant of good faith and fair dealing (Count I), violated Massachusetts’ Unfair Trade Practices Act (Count II), and breached the Contract between the parties (Count III).
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