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In cases involving a large amount of e-discovery, it is common for a litigant to be accused of misplacing or destroying relevant evidence. When evidence is lost, the court must evaluate whether sanctions are appropriate, and if so, what type of sanctions should be imposed. In making this determination, the court will consider the following factors: (1) the degree of fault of the spoliation party, (2) the degree of prejudice to the adverse party, and (3) whether there is a less severe punishment that would avoid substantial unfairness to the adverse party while still serving to deter similar spoliation by others in the future. In Micron Technology, Inc. v. Rambus Inc., the parties sued and countersued for claims relating to patent infringement. During discovery, the court determined that Rambus destroyed a significant amount of documents relevant to the lawsuit. Specifically, Rambus engaged in three “shred days” (also known within the company as a “shredding parties”) where evidence was destroyed pursuant to the company’s document retention policy. Much of this evidence, however, was lost after a litigation hold was in place. In order to determine if sanctions were appropriate, the court first analyzed whether there was any bad faith on the part of Rambus. The court explained that bad faith requires a showing that the “spoliating party intended to impair the ability of the potential defendant to defend itself.” The court found that during the shred days, employees were instructed to be selective about which documents they destroyed. Employees were told to “expunge documents questioning the patentability of Rambus inventions,” while at the same time to “look for things to keep that would help establish that Rambus had intellectual property.” Further, Rambus employees testified that they were destroying documents in preparation for the “upcoming battle” of litigation. Ultimately, the court determined that Rambus destroyed documents in bad faith. Next, the court examined whether Rambus’s bad faith shredding parties caused prejudice to its adversary. Prejudice “requires a showing that the spoliation materially affects the substantial rights of the adverse party and is prejudicial to the presentation of its case.” The court explained that when bad faith exists, the spoliating party bears the “heavy burden” of showing a lack of prejudice. The court explained that Rambus failed to meet this heavy burden and enumerated multiple claims and defenses that were prejudiced by Rambus’s bad faith destruction of evidence. Finally, the court considered whether a dispositive sanction is an appropriate sanction under these circumstances. The court explained that when there is “clear and convincing evidence that the spoliation was done in bad faith and was prejudicial to the opposing party, then dismissal may be an appropriate sanction” as long as a lesser sanction would serve as an adequate deterrent. The court considered whether an award of attorney’s fees or other monetary sanctions would be appropriate, but ultimately rejected these “relatively mild sanctions [that were] disproportionate to the degree of fault and prejudice at hand.” Next, the court analyzed whether an adverse jury instruction would be a proper sanction. The court rejected this sanction as being inadequate punishment and deterrence in light of Rambus’s extensive bad faith spoliation. Lastly, the court considered whether an evidentiary sanction would be an adequate remedy. This sanction would foreclose Rambus from offering any evidence related to the subject matter of the destroyed documents. Once again, the court found this sanction to be unsatisfactory due to Rambus’s extensive destruction of evidence. Therefore, after considering the extraordinary circumstances of this case, along with the lesser sanctions available, the court found that the only appropriate sanction was to hold Rambus’s patent-in-suit claims unenforceable against its adversary. In sum, the court held that a dispositive sanction is appropriate when a party destroys evidence in bad faith, the destruction is prejudicial to the adversary, and no lesser sanction would be appropriate to punish and deter similar action. It should be noted that dispositive sanctions are rare, but nonetheless are warranted when “destruction of evidence is of the worst type: intentional, widespread, advantage-seeking, and concealed.” E-DiscoParty, a Seton Hall University School of Law graduate (class of 2014), served on the executive board of the Seton Hall Law Review and is a member of the Interscholastic Moot Court Board. E-DiscoParty currently clerks for a Justice on the Supreme Court of New Jersey.
The plaintiff, Torrington Co., sought to challenge a final determination made by the International Trade Administration of the United States Department of Commerce. The case centered upon the discovery requests made by the plaintiff. The plaintiff argued that it was entitled to three things: 1) a computer tape of computer instructions, 2) a computer tape of SAS data sets, and 3) a hard copy for each file transmitted by tape. The plaintiff maintained that it was entitled to this discovery because it was part of the administrative record. The court disagreed. The court found that the computer tape of computer instructions, computer tape of the SAS data sets, and the hard copies were not a part of the administrative record because not only were they not “obtained by” or “presented to” the administrative agency (the International Trade Administration), but they did not even exist. If the materials did not exist (and never existed) they are clearly not part of the administrative record. In fact, the computer tapes and hard copies could only be created after the determination by the agency; they could not possibly be part of the administrative record at all. The defendant agreed to give the plaintiff microfilmed computer printouts which contained both the computer programming instructions and the SAS data sets. Note that these microfilmed computer printouts were not the same as computer tapes (which were requested by the plaintiff.) The court cited previous cases that established two principles. First, the court was not obliged to force a defendant to produce data in a format that was most convenient for a plaintiff. Second, the court should balance the plaintiff’s need for the specific type of information with the hardship placed upon the defendant. The court held that not only had plaintiff failed to show its need for the computer tapes, but that the defendant had shown that it would suffer “extreme hardship” if it were forced to produce the computer tapes. The plaintiff attempted to bolster its position by citing Daewoo v. United States, 10 CIT 754, 650 F. Supp. 1003, in which the court ordered that all computerized data be produced including “all further refined forms of electronic storage of the data involved.” However the court distinguished the case at hand from the facts in Daewoo by pointing out that in that case, the government did not demonstrate any kind of hardship. In the present case, the requested computer tapes did not exist and requiring the defendant to produce them would have been burdensome and expensive. The court notes that according to one source it would take 7,500 hours to create a computer tape containing 15,000 pages of the printout that was already created. By the account of one affidavit, it was estimated that it would take defendant’s department staff no less than a full two weeks to produce the computer tapes. Administrative agencies have many tasks and aim for efficiency – such a discovery request would doubtless be taxing on the agency’s resources. The plaintiff also claims that it would be equally burdened if it had to produce the tapes.] The court held that when the cost, burden, and time of creating the tapes is equal on both parties, then the burden of producing the tapes falls on the party making the request. Accordingly, the court held that the defendant did not have to make the computer tapes and that the parties were obliged to use the “more convenient, less expensive or less burdensome” computer printouts that were already in existence. What should have the plaintiff done in this scenario? It is unclear why the printouts were insufficient such that computer tapes were necessary. The plaintiff should have come prepared to show why production of the computer tapes would be more taxing on itself than on the defendant-agency. Rocco Seminerio is a Seton Hall University School of Law graduate (Class of 2014). Mr. Seminerio focused his studies in the areas of Estate Planning, Elder Law, and Health Law. He graduated from Seton Hall University in 2011 with a degree in Philosophy.
“Follow the document policy!” Those were the words repeated many a time by Arthur Anderson to Enron’s employees during the pending SEC investigation. Those simple words led to a jury’s finding Anderson guilty of witness tampering through the act of persuading his employees to destroy relevant documents. The jury found Anderson guilty of violating 18 U.S.C. §§ 1512(b)(2)(A) and (B), which makes it a crime to “knowingly us[e] intimidation or physical force, threate[n], or corruptly persuad[e] another person . . . with intent to . . . cause . . . ” that person to “withhold” documents from, or “alter” documents for use in, an “official proceeding.” The Fifth Circuit Court of Appeals upheld this decision. However, the Supreme Court reversed this decision determining that the jury instructions were improper. The Court focused on “what it means to ‘knowingly . . . corruptly persuad[e]’ another person ‘with intent to ... cause’ that person to ‘withhold’ documents from, or ‘alter’ documents for use in, an ‘official proceeding.’” The Court held that this language required a proof of consciousness of wrongdoing. The Court additionally found that the jury instructions provided by the district court did not adequately outline the requirement for the consciousness of wrongdoing. Besides not including the proper intent, the district court also misapplied the “corruptly” definition by leaving out the word “dishonestly” and inputting “impede” in place of “subvert or undermine.” “These changes were significant. No longer was any type of “dishonest[y]” necessary to a finding of guilt, and it was enough for petitioner to have simply “impede[d] the Government's fact-finding ability.” In addition, the Court noted that jury instructions did not require any finding of a nexus between the “‘persua[sion]’ to destroy documents and any particular proceeding.” Even though it is illegal to directly persuade someone to destroy documents in the face of a pending litigation, the Court wanted to emphasize that there is a requirement of knowledge about both a pending proceeding and the materiality of the documents to be found guilty of violating the witness tampering statute. Overall, because of the inaccurate jury instructions, the Court here reversed the decision so another jury could hear the evidence along with proper instructions in making their decision. Though this decision seems to make some room to get out of the witness tampering statute, it is always best to have a proper document retention policy and to not persuade any form of destruction.
In Brown v. Tellermate Holdings Ltd., Tellermate Holdings, the defendant company, terminated two employees for allegedly failing to meet sales targets over several years. The employees, feeling that they were wrongfully terminated due to their age, filed an employment discrimination action against the company as well as other entities and individuals associated with Tellermate. Throughout pre-trial proceedings, the case was plagued with numerous discovery mishaps. The plaintiffs requested from the defendant company data stored and maintained by Salesforce.com, which would, in theory, evidence plaintiffs’ sales records over the last few years in addition to allowing the plaintiffs to compare their sales figures with other (younger) employees. However, even though numerous discovery conferences were held, numerous discovery motions filed with the court, and several discovery orders issued by the court, the defendant corporation failed to produce the requested data and documents. Ultimately, the plaintiffs filed for judgment and sanctions under Federal Rule 37(b)(2); the court held a three-day evidentiary hearing on the matter. The presiding judge, United States Magistrate Judge Terence P. Kemp, identified three areas in which the defendant company or its counsel failed in its obligations to the plaintiffs and the court in relation to production of documents and data: Defendant’s counsel failed to understand how Tellermate’s data stored with Salesforce.com could be obtained and produced to plaintiffs, which resulted in counsel making false statements to the plaintiffs’ counsel and the court; By failing to understand how the defendant’s data was stored and maintained, defendant’s counsel took no steps to preserve the integrity of the information in Tellermate’s database located with Salesforce.com; Defendant’s counsel failed to learn of the existence of documents relating to a prior age discrimination charge until almost a year after plaintiffs requested the documents; Defendant’s counsel produced a “document dump” resulting from counsel’s use of an overly-broad keyword search that yielded around 50,000 irrelevant documents, which plaintiffs’ counsel could not review within the time period ordered by the court. The Salesforce.com Data Judge Kemp found that Tellermate’s failure to preserve and produce the data logged on Salesforce.com’s website irreparably deprived the plaintiffs of reliable information necessary in supporting their claims. Although defendant’s counsel initially stated that Tellermate “does not maintain salesforce.com information in hard copy format,” “cannot print out accurate historical records from salesforce.com,” and that “discovery of salesforce.com information should be directed at salesforce.com, not Tellermate,” the court found such statements to be on their face false. In fact, Tellermate did have access to the information sought by the plaintiffs as one, and sometimes two, of Tellermate's employees enjoyed the highest level of access to the Salesforce.com information. The court determined that the information eventually produced by the defendants could not be trusted as “even a forensic computer expert has no way to detect hat changes, deletions[,] or additions were made to the database on an historical basis.” Because of Tellermate’s failure to preserve the Salesforce.com data, Judge Kamp precluded Tellermate from providing evidence showing that the plaintiff-employees were terminated for their alleged underperformance. Counsel’s Obligations With Respect to ESI The court found that the defense’s counsel fell short of their well-established obligations to critically examine the documents and data Tellermate provided to them. Tellermate made false representations to its counsel about the data’s availability and therefore caused undue delay in document production as well as false and misleading arguments to be made to plaintiffs’ counsel and to the court. Subsequently, the plaintiffs were forced to file discovery motions before the court to address these discovery issues which produced the Salesforce.com data that was never properly preserved albeit its significance to the plaintiffs’ case. Judge Kemp ultimately determined that counsel for the defendant conducted an inadequate investigation of Tellermate’s electronic data while simultaneously failing to understand the most basic concepts of cloud computing and cloud storage, which led to counsel’s failing to preserve key electronic data. Control of Data Stored in the Cloud As mentioned above, Tellermate and its counsel repeatedly represented to the plaintiffs and to the court that it did not possess and could not produce any of the Salesforce.com data requested by plaintiffs. Additionally, the defendants asserted that in light of those facts, the defendants could not preserve the data stored on Salesforce.com’s databases at any point prior to litigation. Judge Kemp dismissed these claims. The court concluded that, without any factual basis whatsoever, no substantive argument could be made that Tellermate was prohibited from accessing the information stored on the Salesforce.com databases or that Salesforce.com was responsible for preserving Tellermate’s information and data as it was the entity that maintained possession and control of the data. In reality, Tellermate was the custodian of the data stored on the Salesforce.com databases. While information can be stored in locations outside the immediate control of the corporate entity by third party providers, it can still be under the legal control of the owner of the data and therefore must be produced by the owner under Federal Rule 34(a)(1)(A). Additionally, had Tellermate’s counsel critically examined the agreement between Tellermate and Salesforce.com, it would have realized that Tellermate was the owner of all data created by its employees and that Tellermate could, at any time, download the data stored on the Salesforce.com databases for preservation and production purposes. Limitations on Document Production to Avoid “Document Dumps” Tellermate produced to the plaintiffs 50,000 pages of irrelevant documents, classified by Judge Kemp as a “document dump.” Tellermate’s counsel refused to disclose which search terms it used in deciding which documents to produce to the plaintiffs, claiming that the search terms were privileged. In actuality, the court discovered, Tellermate’s counsel only used the full names and nicknames of employees as its search terms, which obviously yielded irrelevant documents. Without reviewing the returned documents, and because the court’s deadline for producing relevant documents was rapidly approaching, Tellermate’s counsel produced to the plaintiffs the documents as “Attorney’s Eyes Only.” The court recognized that a protective order was permitted only when counsel held a good faith belief that such information constituted a “trade secret or other confidential research, development, or proprietary business information, and that such material was entitled to a higher level of protection than otherwise provided in the protective order.” Tellermate could not demonstrate entitlement to this level of protection with respect to the search terms used in procuring documentation for discovery: The alleged burden imposed by a high volume production does not provide the producing party or its counsel free reign to choose a given designation and ignore the Court’s order pertaining to that designation. First, the court looked to whether competitive harm would result from the disclosure of the types of documents produced by Tellermate to a competitor; however, Tellermate’s memorandum on the issue did not contain any evidence about the harm which might result if the plaintiffs were permitted to review any particular document that was labeled “Attorney’s Eyes Only.” Second, Tellermate’s argument as to the harm it would experience was entirely conclusory and was not supported by evidence: Apart from the general concept that disclosure of some types of sensitive information to a competitor may result in harm, it contains no particularized argument which is specific to [the plaintiff], the way in which he was competing with Tellermate, and how the disclosure of any one of the 50,000 pages marked as attorneys-eyes-only would harm Tellermate’s interests. The court was astounded that Tellermate continually failed to meet the burden required to designate the documents as “Attorney’s Eyes Only” and, up until the hearing date, made no effort the redesignate a single page of the 50,000 produced in order to permit the plaintiffs from viewing the documents. Sanctions The court had absolutely no qualms with an award of attorneys’ fees for all motion practice connected to the preservation and production of the Salesforce.com data. “Had Tellermate and its counsel simply fulfilled their basic discovery obligations, neither of these matters would have come before the Court, or at least not in the posture they did.” The court took great concern to the extraordinary lengths the plaintiffs had to go to in order to obtain the documents maintained by the defendant and, even after several rounds of motions, were not able to obtain all of them. The “Attorney’s Eyes Only” designation on the 50,000 documents produced was also unfounded, the court held, and unduly precluded plaintiffs from necessary evidence that supported their case, which warranted fees under Federal Rule 37(a)(5)(A). Conclusion Tellermate provides a warning to all attorneys that the realm of technology in which their clients are constantly interact with is always changing. Therefore, so does the practice of electronic discovery. Counsel must always meet its duties with respect to ESI by engaging in discussions with its clients and opposing counsel about ESI; being aware, and perhaps even knowledgeable, of new and emerging technologies; and investigating and assessing with its clients the sources and status of potentially relevant ESI. By forgoing these practices, counsel opens itself and its clients to easily avoided and costly sanctions. Daniel is the Editor-in-Chief of eLessions Learned and a third-year law student at Duquesne University. To read more about him, click here.  Salesforce.com is a cloud-based customer relationship management system with more than 100,000 corporate customers around the world. Tellermate and its employees used Salesforce.com to track their sales and other interaction with customers. The court recognized that each sales person using the Salesforce.com management system could add, remove, or otherwise change data on their sales account.  See Zubulake v. UBS Warburg LLC, 382 F.Supp.2d 536 (S.D.N.Y. 2005) (counsel had an affirmative duty to monitor preservation an d ensure all sources of discovery information were identified).
The plaintiff, Country Vintner, had an agreement with a winery (Esmeralda, who was not named a party to the action) to be the exclusive wholesaler of Alamos, which is an Argentinean wine, in North Carolina. A few years later, the defendant, Gallo, started supplying the wine to a variety of other wholesalers, but not to Country Vintner. The plaintiff sued Gallo for violations of the North Carolina Wine Distribution Agreements Act and for violations of the N.C. Unfair and Deceptive Trade Practices Act. Inevitably, there were disagreements over discovery of Electronically Stored Information (ESI). The plaintiff wanted emails and other ESI that would establish that there had been some sort of collusion between Esmeralda and Gallo that ended up excluding Country from the distribution of Alamos. The parties agreed to narrow the discovery request to certain key words, date restrictions, employees, etc., in order to accommodate Gallo’s complaints of an undue burden and expense to produce the requested information. After much deliberation, and accompanying motions, the district court decided to adopt Country’s proposal, ordering several search-narrowing guidelines. Gallo then collected more than 62 gigabytes of data and gave the data to their lawyers to process and review. The lawyers processed the data into a) searchable data, b) removed system files and exact duplicates, c) and ran several variations of the 19 proposed search terms and phrases. The district court eventually granted Gallo a motion to dismiss the complaint regarding the Unfair and Deceptive Trade Practices Act, and also granted them summary judgment for the remaining Wine Act complaint. Then, perhaps getting a little ahead of itself, Gallo sought to recover $111,047.75 for their eDiscovery work. They broke down the costs as follows: $71,910.00 – for “flattening” and “indexing,” basically making the files searchable and removing duplicate content; $15,660.00 – for extracting the metadata, facilitating data review and other such things; $178.59 – for the conversion from native format to a .tif or .pdf format; $74.16 – for electronically Bates stamping the information; $40.00 – for copying the data onto a disc; $23,185.00 – for ensuring the “quality” of the data and ensure proper preparation of the documents for opposing counsel. The court granted a drastically reduced ESI-related recovery in the amount of $218.59. This covered the costs for copying or duplicating the files but not for their preparation or anything else. The court relied on a 2012 Third Circuit decision (Race Tires Am., Inc. v. Hoosier Racing Tire Corp.) and interpreted the applicable statute (28 U.S.C. § 1920(4), a.k.a. the “taxation of costs” statute) to exclude ESI processing costs. When Gallo appealed this decision, the Fourth Circuit affirmed the lower court’s decision. The court proceeded to go through the history of taxation of costs, which hadn’t existed prior to 1853, and has been slowly added to our law over the years. The latest version of section 1920 was amended in 2008, and allowed for fees for “printed or electronically recorded transcripts necessarily obtained for use in the case;” and “fees for exemplification and the costs of making copies of any materials where the copies are necessarily obtained for use in the case.” The court cited a Supreme Court decision that discussed the purpose of section 1920, and said that taxable costs should be a small fraction of the overall costs in litigation, and therefore should be interpreted narrowly to include only what is written in the law. Therefore, “making copies” was interpreted quite literally to include only the costs of actually making the copies, which in this case meant conversion to PDF and TIFF formats, and copying them onto a CD/DVD. Interestingly, the court also responded to the claim that the current e-technology requires more extensive preparation and therefore greater costs, by saying that preparation of discovery documents was always a big cost, yet were not authorized by Congress to be “taxable.” Gallo also tried to argue that when the statute provided for “exemplification” to be included in taxable costs, that it would include the costs in this case, since they had to load the information onto a review platform. The court said that exemplification does not apply here, since it means “an official transcript of a public record, authenticated as a true copy for use as evidence.” In our case, the charges didn’t include either any public records to be authenticated, or any exhibits. So the costs did not qualify as exemplification. What can be learned from this case is that although there are many things that go into the preparation of any type of discovery, including ESI, the costs of that preparation are not always carried by the requesting party. Undoubtedly, the charges that the defendant was trying to tax onto the plaintiff were legitimate. However, the history of the taxable charges laws has shown that the costs of production of discovery have been greatly limited to the copying stage, and not to the production. I would suggest, therefore, that before a party actually goes through the production and incurs its costs, perhaps they should include the costs into their discovery agreement. Akiva Shepard received his J.D. from Seton Hall University School of Law in 2014. Akiva has worked for a New York State Supreme Court Judge in Kings County and for a NJ real estate firm.
Throughout the oft-covered Apple v. Samsung patent litigation there has been a multitude of pretrial motions. Last August, United States Magistrate Judge Grewal ruled on Samsung’s motion to compel additional financial documents from Apple. Samsung sought to discover documents from Apple regarding: (1) units sold, gross and net revenue, gross and net margin, and gross and net profits for each Apple product… (2) reports and projections ofU.S.sales, profitability margins, and financial performance for each version of the iPhone and iPad…and (3) all costs comprising costs of goods sold and all costs other than standard costs for each of the accused products. In response to this request, Apple produced documents that Samsung believed to be deficient, which was the basis of Samsung’s instant motion. Samsung believed that Apple’s production of worldwide sales figures (as opposed to the requested U.S. figures) were not sufficiently responsive to their request of US-specific data. Furthermore, to aid in their damages calculation, Samsung requested model level sales figures (e.g., iPhone 4, iPhone 5, etc.) but Apple only produced of sales figures at the product line level (e.g., iPad, iPhone, etc.). Samsung contended that these productions were not detailed enough to enable Samsung to accurately calculate damages. In response, Apple argued that producing the figures Samsung requested would be unduly burdensome because it would require the coordination of “multiple financial groups” that could take “several months” of effort. While the court was admittedly “dubious” of Apple’s claims, Judge Grewal found another, more persuasive reason to limit Apple’s production, writing, “the court is required to limit discovery if ‘the burden or expense of the proposed discovery outweighs its likely benefit. This is the essence of proportionality – an all-to-often [sic] ignored discovery principle.” Highlighting that each parties’ damages experts had already submitted their reports, the Court held that requiring Apple to produce additional financial documents would be of little benefit.’ Thus, the court denied Samsung’s motion to compel. However, the court also noted that because the instant motion was struck down, Apple was precluded from challenging Samsung’s damages experts for failing to “allocate geographically or by product model in any way that could have been supported by the reports disputed here.” Judge Grewal concluded that “[t]his is enough to protect Samsung from any undue prejudice arising from Apple’s reporting limitations.” If you make a burdensome request for documents that would have little benefit, your motion is going to be denied. Matthew Miller, a Seton Hall University School of Law student (Class of 2014), focuses his studies in the area of Intellectual Property. Matt holds his degree in Chemistry from the University of Chicago. Currently, Matt works as a legal intern at Myers Wolin, LLC.
Whoever thinks that the legal world does not involve math is proven wrong through the Special Master’s analysis in Dornoch Holdings Int’l, LLC v. Conagra Foods, Lamb Weston, Inc. The heart of the opinion involves a percentage breakdown of search terms and their correlation of precision in regard to privileged documents. In Dornoch, the defendants objected to the privilege log of documents for three reasons: 1) the documents on the privilege log, except for communications between the plaintiffs and their outside litigation counsel dated after March 22, 2010, have not been established by the plaintiffs to be privileged; 2) The privilege log was created using overly broad search terms and has not been substantively reviewed, thus, the log contains numerous non-privileged documents; and 3) Non-correspondence documents listed on the privilege log are not privileged. In response to this objection, the court allowed the Special Master to make a recommendation on these objections, specifically allowing the Special Master to review “a statistically significant number of randomly selected documents to confirm the accuracy of the screening method.” The privilege documents log was assembled using search terms created and limited by plaintiff’s counsels and an eDiscovery technology consulting firm. And so, the Special Master did as the Court requested and took a sampling from the log to determine the effectiveness of the screen’s search terms. The consulting firm determined that “1,740 documents would need to be human reviewed” to determine whether the log was effectively precise. The Special Master decided to review 1,813 documents just to ensure it was an effective review. After explaining that Idaho law regarding attorney-client privilege and work product doctrine apply, the Special Master reviewed the documents and determined that 1,249 were not privileged documents and 564 were privileged. The Special Master also went into much detail about the effectiveness of the specific search terms that were used. Specifically, the Special Master determined that 73 percent of the search terms were highly correlated to actual privileged documents. Additionally, the Special Master determined that “those terms which identified a correlation with actual privilege of 59 percent or greater, showed a strong correlation with privilege.” Once the Special Master completed this analysis, the Special Master recommended that the documents that fall below that 59 percent correlation should be released and not kept private. Then, the plaintiffs could also decide to conduct another review of the remaining privileged documents to figure out if more should be released. Finally, the Special Master noted that it does not matter whether documents are listed as “correspondence” or “non-correspondence” for them to be determined to be privilege or not. These documents should be reviewed just as the others. Overall, the Special Master recommended that the court sustain the first objection, and overrule the third objection. As to the second objection, the court recommended the following: “(1) Concur with the selection of a 59% or greater correlation of search term precision for a document to remain withheld as privileged; (2) Allow Defendants the opportunity to further challenge the assertion of privilege above that 59% threshold, if they so choose, by requesting that the Special Master conduct a further targeted review for privilege and release any non-privileged documents discovered. The Defendants will be responsible for cost of this further analysis, if requested; (3) Release the documents associated with the less precise terms that fall beneath the 59% correlation threshold and remove them from the privilege log; (4) Prior to that release, allow Plaintiffs the opportunity to conduct a privilege review of all or a portion of the population to be released and create a supplemental privilege log. The Plaintiffs will be responsible for cost of this further analysis, if Plaintiffs chose to conduct it.”
In 2007, John Lemanski was employed as a purchasing Manager for Barrette Outdoor. His responsibilities included purchasing resin for the production of siding at the lowest possible cost. Unfortunately, in 2011, the company began to downsize and Lemanski’s position was dissolved. After Lemanski’s termination, it was discovered that Lemanski was not purchasing resin at the lowest market price per his job description, but rather at almost full cost due to his interest in Michigan Resin Representatives (MRR). Upon his termination, Barrette alleged Lemanski destroyed over 270,000 digital documents and severely hindered Barrette’s ability to prove their case. While Lemanski had a duty to preserve these documents, his intentional disregard and willful destruction of evidence was enough to warrant sanctions. On his last day of employment, Lemanski was presented with a Separation and Release Agreement; however, when Barrette learned of Lemanski’s financial interest in MRR, the agreement was revoked. Shortly after, Lemanski received an e-mail with an attached Notice to Preserve Electronically Stored Information. While Lemanksi claimed he did not read the e-mail until later, evidence suggests the contrary—including the fact that he installed and executed data wiping software on his company computer. A party seeking a sanction for the destruction of evidence must show: 1) “‘that the party having control over the evidence had an obligation to preserve it at the time it was destroyed;” 2) that the evidence was destroyed with a “‘culpable state of mind’”; and 3) “‘that the destroyed evidence was relevant to the party's claim or defense such that a reasonable trier of fact could find that it would support that claim or defense.’” See Adkins v. Wolever (Adkins III ), 692 F.3d 499, 503-04 (6th Cir. 2012). After examining Lemanski’s conduct, the court concluded that a sanction for spoliation was warranted based on two instances of conduct. While the deletion of files from his work computer may not have been done in anticipation of litigation, Lemanski was soon thereafter served with a Notice to Preserve. At that time, he disposed of his personal cell phone and made no effort to retrieve it the next day after receiving said the aforementioned Notice. Secondly, Lemanski continued to disregard his duty when he erased 270,000 files from his personal laptop after Barratte sought a motion to compel Lemanski to produce this very same laptop for imaging. Lemanski was simply in too deep and attempted to cover his wrongdoing. He should have abided by the Notice to Preserve and simply handed over the requisite files for production. Due to his actions, the court held ordered Lemanski to pay Barrette $25,000.00 in compensation regarding fees and costs incurred by brining a spoliation motion, to pay Barrette $10,000.00 for Barrette's increased expenses in conducting discovery and proceeding with litigation absent evidence, and an adverse inference presented at trial that Lemanski’s cell phone and personal laptop contained information unfavorable to Lemanski and that Lemanski was involved with MMR.
In the summer of 2013, the Northern District of California conducted a hearing over a motion to compel discovery responses which stemmed from e-discovery disagreements. The plaintiff was a corporate investor in the defendant pharmaceutical company developing bovine-derived oxygen therapeutics. A corporate officer of the pharmaceutical company was also named a defendant. The plaintiff alleged breach of fiduciary duties, breach of contract, and breach of the implied covenant of good faith and fair dealing. In its reply, the defendants counterclaimed breach of a licensing agreement, theft of intellectual property, and interference with prospective economic advantage. Discovery began when the plaintiff served interrogatories, requests for production, and requests for admission. The defendant corporation submitted its responses two months past the deadline, failed to completely respond to the interrogatories, and submitted incomplete document production. The plaintiff moved to compel full and complete responses, after which the defendants’ counsel failed to appear at the hearing. The court granted the plaintiff’s motion and awarded the plaintiff $1,400.00 in sanctions. Additionally, the plaintiff complained that the defendant officer’s responses were also incomplete and filed two weeks late. These disputes are governed by the discovery rules in the Federal Rules of Civil Procedure. Rules 33 and 34 establish a 30-day response period for a party to serve its answers and applicable objections. Additionally, Rule 33(b)(2) states that failure to timely respond to discovery requests generally constitutes a waiver of any objections to those requests. Under Rule 37, a party may move to compel discover and if the court grants it the responding party must pay the moving party’s reasonable expenses incurred in making the motion. At oral argument, the plaintiff asserted the defendants only produced 121 emails, 109 of which were communications with the the Plaintiff. The plaintiff alleged this lack of production raised the possibility of spoliation and boded ill for the document preservation efforts of the defendants. The defendants’ counsel testified he gave instructions to his clients to produce the related documents; however, the court was not convinced. The court cited Rule 26(g) which places an affirmative obligation on an attorney to ensure a client’s search for responsive documents and information is complete. The previous submissions were clearly incomplete and it was the attorney’s responsibility to remedy them. Furthermore, since the responses were late, all of the defendants’ objections were denied even though the court admitted the claims might be vague and overly-broad. The court used its discretion to modify the sanctions placed upon the defendants. It set a new date for all remaining responsive documents to be submitted and if the new deadline was missed the Defendants would be forced to hire an e-discovery vendor. Vendors can be very costly. Furthermore, since the defendants’ failure to timely and fully respond was not justified, the court awarded $5,200.00 in additional attorney’s fees to the plaintiff. While the defendants’ counsel was still held responsible, the court recognized that the defendants were also responsible for the delay and ordered the parties to split the cost of the sanction. This illustrates the point that when discovery efforts are not taken seriously, both the client and the attorney can be on the hook for big expenses. George is a student at Seton Hall University School of Law (Class of 2014). He is pursuing both the Health and Intellectual Property Concentrations and is especially interested in patent law. He received both a B.E. and M.E. at Stevens Institute of Technology in Biomedical and Systems Engineering, respectively. Presently, George works as a law clerk at Stone Law in Colts Neck, NJ, where he assists in the drafting of litigation documents and Office Actions with the United States Patent and Trademark Office.
The plaintiff, Tony B. Clay, brought claims for employment discrimination and retaliation based on race under Title VII against Consol Pennsylvania Coal Company (“Consol”).Continue Reading