e-Lessons Learned

E-discovery is a constantly developing topic in the legal world, and the word, “world,” should be taken literally.  Across the globe, different nations and their legal system are formulating new rules to tackle new discovery issues that can arise almost as quickly as new technology and means of communication can develop.  The only problem with this, however, is that different nations are addressing their e-discovery issues with different solutions.  This problem usually rears its ugly head when one of the parties in a lawsuit is a multinational company.  What is a British company supposed to do when it’s sued in an American because of a foul-up by its French Subsidiary?  Do they supply all of the e-discovery materials required by American courts?  What if e-discovery that the American court requires no longer exists because it never needed to be stored in the first place by   French or British?

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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 »

Dead men tell no tales, but their bodies provide enough evidence to paint a graphic picture.  The same is true of deleted files on a computer.  Missing files can carry the inference that the evidence was only destroyed because it would have been damaging to the party responsible.

In Paris Business Products, Inc. v. Genisis Technologies, LLC (“Paris”), Genisis Technologies, LLC, (“Genisis”) was subject to a discovery order requiring it to preserve all relevant data on company-owned computer hard drives.  Despite this order, Genisis’ executive officers allegedly were responsible for: (1) deleting the company hard drives by reformatting them; and (2) physically removing and destroying some hard drives. 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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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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Imagine you are an executive of a computer company that keeps experiencing defects in what is known as a floppy disk controller (FDC), a part in most personal computers.  You decide that a technology needs to be developed to detect and resolve these defects.  But someone else has already developed similar technology.  However, even more alarming is that the computer company has a limited information management and data retention policy.

Dr. Philip Adams found himself in this precarious situation when he brought a patent infringement action against ASUSTEK Computer, Inc. and ASUS Computer International (collectively hereinafter “ASUS”) alleging spoliation of relevant evidence.  Adams claimed that ASUS should be sanctioned due to the spoliation claims.

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In their neverending quest to alienate every single music listener on the face of the earth, Arista Records and several other recording industry heavyweights filed an action against Usenet.com and its operator, Gary Reynolds, for copyright infringement. As a commercial Usenet provider, Usenet.com allowed its subscribers to upload content to its servers by posting it one of its newsgroups and to download content posted in the newsgroups by other subscribers. In so doing, the plaintiffs claimed Reynolds had stored, and continued to store, vast amounts of digital music files on his Usenet.com servers for distribution in violation of the plaintiffs’ copyrights.

Upon filing its complaint, the plaintiffs requested that Reynolds produce all data  on the Usenet.com servers concerning digital music files (“Music Files”) and requests by his subscribers to download and upload Music Files through his service (“Usage Data”). Instead, the plaintiffs claimed, Reynolds took affirmative steps to destroy large quantities of  Music Files and Usage Data on his servers. Because Reynolds failed to provide any useful data requested by the plaintiffs, the plaintiffs filed a motion to sanction the defendants for despoiling evidence.

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This case arose from allegations of securities fraud against Collins & Aikman Corp made by the SEC.  Notably, during the course of discovery, several disputes arose regarding the SEC’s production of documents and its failure to perform sufficiently thorough searches for the requested information.

First, the SEC produced massive amounts of documents. Specifically, the SEC produced 1.7 million documents (approximately 10.6 million pages), in response to defendant’s request for documents.  Moreover, these documents were in fifty-four separate categories maintained in different databases and containing different metadata protocols. Defendants were none too pleased about this and argued that the SEC failed to identify documents in response to its request for documents supporting particular factual allegations and instead dumped an unreasonable volume of documents.

In response, the SEC claimed that it did not “maintain a document collection relating specifically to the subject addressed” and thus its production reflected the documents as they were “kept in the regular course of business.”

However, during the course of discovery, information surfaced about the existence of approximately 175 file folders maintained by the SEC concerning the specific factual allegations of the complaint and maintained in the regular course of agency business. Continue reading »

Defendant Maxxam was accused of willfully destroying evidence that the government claimed would have aided its case.  The government alleged that Maxxam, a lumber company, fraudulently prepared a report that overstated the minimum amount of trees it could safely cut down while remaining economically viable.  The government further alleged that VESTRA, a consultant retained by Maxxam’s law firm, willful destroyed key data used in this report.

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