Authored By: Chrissy Caputo

Citation: Kenney, Becker LLP v. Kenney et. al, 34 A.D.3d 315 (N.Y. 1st Dept. 2006)

Employee/Employer Implicated: In-house Counsel, Kenney Becker employee, upper-level management

e-Lesson Learned: Communications via e-mail between attorneys and their client’s employees are not automatically protected.

Tweet This: Think twice before e-mailing what you don’t want disclosed.

The brief order by the First Department Appellate Division doesn’t delve into much background (or really any background at all) as to the facts of the present case, however, it does shed some light on discovery matters. The prior order had directed the plaintiff to turn over a certain e-mail as part of the discovery, and moved the deposition of the defendant to New York instead of Florida.

Authored By: Catherine Kiernan

Employee/Employer Implicated: Executives, In-House counsel, document custodians, all levels of employees

e-Lesson Learned: Electronic communications between employees that make a mockery of company policies and practices exposed through even the preliminary phases of e-discovery can quickly erode the legitimacy of a company and expose it to serious litigation.

Tweet This: Intra-Office E-mails: What used to be unreported office gossip now potentially exposes companies to liability

Serious problems can arise when what used to be office gossip around the water cooler instead manifests in discoverable intra office e-mails.

Authored By: Catherine Kiernan

Citation: Haskins v. First American Title Insurance Co., Civil No. 10-5044 (D.N.J. 2012)

Employee/Employer Implicated: Company executives, in-house counsel, independent agents, document custodians

e-Lesson Learned: The definition of “possession, custody, or control” under FRCP 34(a) will be construed broadly and a party is not required to have physical possession of the documents to be in control of them. Therefore, companies that use independent agencies should be conscious of the requirements and provisions they place in agency contracts because they can be inferred to give rise to discovery obligations.

Tweet This: Court's broad definition of "control" requires that litigation hold include independent agents

For discovery purposes, “control” over documents does not necessarily require actual physical possession.  In fact, certain agency contracts can designate that a company has “control” over documents held by its independent agents.  In Haskins v. First American Title Insurance Company, the United States District Court for the District of New Jersey held that First American Title Insurance (defendant) had to assert a litigation hold on its present and former independent title agents.

Authored By: Kathy Trawinski

Citation: United States v. Suarez, 2010 WL 4226524 (D.N.J. Oct. 21, 2010)

Employee/Employer Implicated: Government Official, Document Custodian, In-House Counsel, Outside Counsel, Owner & Executive, Upper Management

e-Lesson Learned: A governmental party conducting a criminal investigation must issue a litigation hold at the onset of the investigation in order to instruct its personnel to preserve electronic data, like text messages and emails. Such a government party will not be excused from failing to issue a litigation hold to its agents or officers. The onset of an investigation specifically aimed at prosecution constitutes reasonable anticipation of litigation.

Tweet This: Court orders sanctions against US gov’t for failing to preserve text messages from FBI investigation.

In United States v. Suarez, the United States District Court for the District of New Jersey held that the government violated its duty to preserve relevant data during an ongoing investigation aimed at prosecution of certain individuals.

Tweet This: EXCLUSIVE: eLessons Learned’s Exclusive Interview with the Honorable Ronald J. Hedges

Interviewed by Catherine Kiernan, Co-Editor in Chief, eLLblog.com Thank you, Judge Hedges, for taking the time to provide eLLblog’s readers with some of your valuable insights about electronic discovery.

Authored By: Suzanne Janusz

Citation: Arteria Property Pty Ltd. v. Universal Funding V.T.O., Inc., No. 05-4896 (PGS), 2008 WL 4513696, (D.N.J. Oct. 1, 2008).

Employee/Employer Implicated: Owner/Executive, Outside Counsel

e-Lesson Learned: Website content can be discoverable like other types of electronic files. A court may order an adverse inference instruction when a party fails to produce and denies the existence of documents that it once disclosed to have possessed.

Tweet This: Past Website Content Is Discoverable and Failure to Produce Can Lead to Sanctions

Anything you post on your website can be used against you in later litigation.  Deleting content is not a solution.  Like other electronic files, snapshots or copies of a website as it existed on a certain date are discoverable in litigation.  And for all types of documents, trying to cover tracks by denying their existence after previously disclosing possession of them gives a judge good reason for ordering spoliation sanctions like an adverse inference instruction.

Authored By: Jennifer A. Connelly

Citation: Joseph Oats Holdings, Inc. v. RCM Digesters, Inc., 409 Fed. Appx. 498 (3d Cir. 2010)

Employee/Employer Implicated: Owner/Executive, Information Technology Manager, Misc. Employee.

e-Lesson Learned: After litigation was initiated, plaintiff, a joint venture company, downloaded and copied files from a VPN with defendant pursuant to a litigation hold initiated by co-plaintiffs. The Third Circuit held that this behavior is not a clear-cut case of violations of the anti-hacking statutes.

Tweet This: Parties to a Joint Venture May be Able to Copy Files After Dissolution

In Joseph Oats Holdings, Inc. v. RCM Digesters, Inc., the United States Court of Appeals for the Third Circuit vacated a District Court decision which held that plaintiffs had wrongfully copied defendants electronic information in violation of the California Unfair Competition Law. The dispute stemmed from a joint venture agreement between the parties which was repudiated by defendants shortly after its inception. In September 2006, the plaintiffs commenced an action alleging trademark infringement, unfair competition, breach of contract, etc. In October 2006, plaintiffs attorney sent a litigation hold letter to defendants, demanding the preservation of (among others) electronic documents related to the litigation.

Authored By: Catherine Kiernan

Citation: Managing Discovery of Electronic Information: A Pocket Guide for Judges (Second Edition)

Tweet This: Just Released! “Managing Discovery of Electronic Information: Pocket Guide for Judges” Review! (Part 1)

Very recently the second edition of the eDiscovery pocket guide for federal judges was released by the Federal Judicial Center.  The new edition is key to understanding how judges view eDiscovery requests and how attorneys can avoid costly sanctions and unnecessary and damaging production.  The Guide is comprehensive and expands on many of the fundamental issues surrounding electronic discovery that have further developed since the first edition. e-Lessons Learned will be posting a three-part series summarizing the Guide to help highlight the key issues that judges consider when dealing with electronic discovery.  Part One will focus on Rule 16 conferences and the scope of electronic discovery under Rule 26. Part Two will focus on cost-shifting, subpoenas and implicated third parties, and form of production (stay tuned) Finally, Part Three will focus on privilege and waiver, preservation, spoliation, and sanctions (stay tuned)

Authored By: Catherine Kiernan

Citation: Watchtel v. Health Net, Inc., 482 F.3d 225 (3rd Cir. 2007)

Employee/Employer Implicated: District Court Judges, document custodian, in-house counsel, outside counsel, upper management, owners/executives

e-Lesson Learned: The fiduciary exception to the attorney client discovery privilege does not apply to certain ERISA fiduciaries when “the plaintiff-beneficiaries are not the ‘real’ clients obtaining legal representation.” Therefore, courts should be careful when applying the exception for discovery purposes, even when the company has been extremely disrespectful and unresponsive to the discovery process.

Tweet This: Courts Have to Be Careful In Applying the Fiduciary Exception to Attorney-Client Privilege

While sanctions against the defendant for severe lack of candor to the court and evasive responses to plaintiffs’ discovery requests were properly ordered by the district court, the third circuit noted that the defendant did not have to produce all documents ordered.

Authored By: Kathy Trawinski

Citation: Wachtel v. Health Net, Inc., 2006 U.S. Dist. LEXIS 88563 (D.N.J. 2006).

Employee/Employer Implicated: Document Custodian, In-House Counsel, Outside Counsel, Owner & Executive, Upper Management

e-Lesson Learned: Litigants should never ignore a discovery order. A litigant who persistently evades discovery will face harsh sanctions, such as the preclusion of evidence, monetary sanctions, the striking of privilege assertions, etc. The severest of sanctions will be warranted in the face of such bad faith conduct and flagrant disregard of court orders.

Tweet This: Court finds extensive discovery violations and flagrant disregard of discovery orders warrant severe sanctions

This post has been updated to reflect subsequent appellate action.  Scroll down to the bottom to see the update. In Wachtel v. Health Net, Inc., Judge Faith S. Hochberg of the United States District Court for the District of New Jersey imposed severe sanctions on Health Net Inc., a health insurance provider, and its subsidiaries for what the court term its “flagrant disregard” of discovery orders and its “lengthy pattern of repeated and gross noncompliance with discovery.”  These sanctions arose in a case in which the plaintiff beneficiaries, Zev and Linda Wachtel, had filed an ERISA action against the Health Net defendants for breach of fiduciary duty and other wrongs regarding the manner in which the defendants reimbursed out-of-network claims.