eDiscovery

What Happens When the Smoking Gun is Thrown in the Recycling Bin?

In January 2014, the Hon. Lawrence E. Kahn in the U.S. District Court for the Northern District of New York granted plaintiff Dataflow, Inc.’s motion for sanctions in a case regarding deleted email correspondence.  Sanctions took the form of the often-case-ending adverse inference, with the judge reserving on the specific language of the adverse inference jury instruction until trial.  Defendant Peerless Insurance Co. might not wait that long, as even the neophyte lawyer can tell when blood is in the water. Dataflow’s claim arose out of a discovery request for production of documents that “targeted, inter alia internal communications and investigations regarding Plaintiffs’ claim.” Dataflow, Inc., v. Peerless Ins. Co., No. 3:11-cv-1127 (LEK/DEP), 2014 WL 148685, *2 (N.D.N.Y. Jan. 13, 2014).   When the defendant failed to produce any internal communications responsive to the document request, the plaintiffs tried again.  After the plaintiffs submitted an even narrower request for production, the defendants still didn’t produce anything responsive. Perhaps smelling something fishy, Dataflow started taking depositions and asking questions about the internal communications at Peerless.  The plaintiffs quickly learned that email was routinely used to communicate about claims.  The emails that Dataflow already asked for.  The emails that Dataflow was told didn’t exist.  The plot thickens. Hon. David E. Peebles, the Magistrate Judge handling discovery in this matter filed a Report and Recommendation urging sanctions be granted and fees shifted.  The District Court, reviewing Judge Peebles’s ruling de novo determined that the Magistrate got it right—and that sanctions are appropriate. The court analyzed the facts of the case under the spoliation framework set forth in Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002): On a motion for sanctions due to spoliation, the moving party must show that: (1) the party having control of the evidence had an obligation to preserve it at the time it was destroyed; (2) that party had a culpable state of mind; and (3) the destroyed evidence was of a nature that a reasonable trier of fact could find that it would support the moving party’s claim or defense. Dataflow, at *2 (citing Residential Funding Corp, at 107). Here, the duty to preserve for an insurance party was triggered when a claim was submitted.  As such, any internal communication regarding that claim is obviously supposed to be preserved.  The culpable state of mind can be inferred by the gross negligence displayed by email deletion resulting from a “system change.”  A “system change” that also conveniently “changed” the methods of preservation of documents related to paid and unpaid claims.  Finally, since the plaintiff was able to prove that the contents of the internal email conversations likely would have supported the plaintiffs’ theory of the case, sanctions in the form of an adverse inference just make sense. Perhaps it’s time for Peerless to have a “system change” with regards to their general counsel. Kevin received a B.S. in Political Science from the University of Scranton (2009), and will receive his J.D. from Seton Hall University School of Law in 2015.  Prior to joining the Seton Hall community, Kevin worked as an eDiscovery professional at two large “white-shoe” law firms in Manhattan. Want to read more articles like this?  Sign up for our post notification newsletter, here.

Recycling—Helps the Earth, Saves Lives, and Destroys Electronic Evidence

“Recycle,” “conserve,” “waste,” and “pollution” are terms that were implanted into the minds of each of us at a young age and are now they are being instilled into companies worldwide as a measure to reduce operational costs. Companies such as JPC Equestrian, Inc. have begun recycling and reusing “cleaned” electronic devices from former employees, which would normally not be an issue if companies had a company-wide server or cloud-based software that held all of the information stored within the device. However, since JPC Equestrian, Inc. does not have a company-wide server, once an employee leaves, the company has a procedure in place to “scub” the computer and reassign it to another without care for the electronic information within the device. In Kearney v. JPC Equestrian, Inc., Mark Kearney, a former employee, sued JPC Equestrian, Inc. (“JPC”) for the failure to produce emails relevant to the claim he is asserting. Kearney commenced this lawsuit against JPC when they wrongfully terminated his employment, and breached his sales agreements by either failing to pay him sales commissions or by paying reduced commissions that did not satisfy contractual obligations. Kearney through the discovery process received email documentation from numerous employees and executives dating back to 2005. The discovery submission included JPS turning over 250 pages of documents relevant to the parties and situations involved. However, Kearney requested information for "all relevant emails," which in his original discovery requests, were defined as "[a]ll emails that mention, or refer to the Plaintiff, however, marginally, in any way shape or form from 2002 through 2010." Kearney v. JPC Equestrian, Inc., 2014 U.S. Dist. LEXIS 153975, *5 (M.D. Pa. Oct. 30, 2014). Kearney was missing three years of discovery. Kearney only received documentation dating back to 2005 because the information dating back to 2002 did not exist or does not exist anymore and cannot be recovered. JPS claims that the information cannot be recovered because the computers that would have held that data were wiped clean and erased before the device was transitioned to another employee. JPS has found loopholes around document retention and the court agreed. The court held that JPS’ procedure of document retention was acceptable and the court has, “no basis to conclude that the defendants have withheld responsive documents, or that there is any basis to compel a further response regarding potentially relevant email communication.” Id. at *7. Unfortunately, this holding allows companies an avenue to discard potential and relevant information pertaining to potential litigation that otherwise would have been saved if not for the guise of recycling and employee cost saving. This holding should be reversed and JPS should be penalized for its failure to maintain adequate records for an appropriate period of time. The court should not excuse a company, no matter the size or market capitalization, for not maintaining the electronic information of employees who work within the company. Not only is that bad preservation practice, its poor business practice. Recycling and the protection of our planet is important but those ideals should not give rise to loopholes of common electronic document preservation practices, which are becoming as worldwide and important as protecting the planet itself. Timothy received his B.A. from Rutgers University in 2011. He began his post-college life working in Trenton, New Jersey, at a lobbying and non-profit management organization before attending law school in the fall of 2012. He will receive his J.D. from Seton Hall University School of Law in 2015. Timothy has had a diverse set of experiences during his time in law school and has found his calling in Tax Law. Want to read more articles like this?  Sign up for our post notification newsletter, here.

When Will There Be a Presumption that ESI Is Inaccessible?

Parties requesting e-discovery speak up or forever be subject to possible cost-shifting.  Generally, the responding party bears its own costs of complying with discovery requests; however, the rules of discovery allow a trial judge to shift the cost to the requesting party in certain circumstances.  Cost-shifting does not even become a possibility unless there is first a showing that the electronically stored information (“ESI”) is inaccessible.  However, if neither party submits to the Court that the ESI is accessible, then courts can presume it to be inaccessible.  This should be especially concerning to the requesting party, who typically does not bear the burden to pay for such costs. In Zeller v. South Central Emergency Medical Services, Inc., Richard Zeller (“Employee”) filed an action against his former employer, South Central Emergency Medical Services (“Employer”) alleging an unlawful and retaliatory discharge under the Family Medical Leave Act (“FMLA”).  The Employee was out of work pursuant to the FMLA for approximately a month.  He alleged that, upon his return to work, the Employer did not restore him to his previous position and retaliated against him for using the FMLA.  The Employer claimed that the Employee was fired for excessive absenteeism. The e-discovery issue in this case involved the allocation of costs to recover e-mails between the Employee and his doctors.  In this matter, there was no formal motion for a cost-shifting protective order, rather the issue was raised by both parties in their submissions to the court on outstanding discovery issues.  Typically, the rule is for cost-shifting to be possible, there must first be a showing of inaccessibility.  Here, the court presumed that the parties agreed the information sought was inaccessible because neither party submitted that the ESI was accessible.  Once the court presumed that the ESI was inaccessible, the court then analyzed whether discovery costs should be shifted by applying the seven-factor test from the Zubulake Court.  In Zeller, the court held that some cost-shifting to the Employer, the requesting party, was appropriate. Although the ESI in Zeller was most likely inaccessible, parties requesting e-discovery can still learn a valuable lesson from this case.  The requesting party should submit to the court that the ESI sought is accessible to avoid both a presumption of inaccessibility and the possibility of cost-shifting.  Requesting parties should not leave it up to the producing party to bear the burden of showing that the ESI is inaccessible because the courts are now willing to presume this finding if neither party contends otherwise.         Gary Discovery received a B.S. in Business Administration, with a concentration in Finance from the Bartley School of Business at Villanova University.  He will receive his J.D. from Seton Hall University School of Law in 2015.  After graduation, Gary will clerk for a presiding civil judge in the Superior Court of New Jersey. Want to read more articles like this?  Sign up for our post notification newsletter, here.

eLessons Learned EXCLUSIVE: Laura Zubulake Interview & Book Signing During Seton Hall Law School eDiscovery Course Zubulake’s eDiscovery: The Untold Story of My Quest for Justice

Following the recent ten year anniversary of the verdict in the Zubulake case (and the series of published court opinions preceding the verdict) that laid the groundwork for future eDiscovery cases, Ms. Zubulake took time from her busy schedule to meet with Seton Hall Law students.  Ms. Zubulake discussed her book that presents a first-hand account of her harrowing experience that culminated in a historic outcome—and in the process forever changed the United States litigation landscape. Ms. Zubulake imparted her knowledge and experience from her three year lawsuit with a group of Seton Hall Law School students enrolled in Adjunct Law Professor Fernando M. Pinguelo’s eDiscovery: Where Technology Meets the Law course. Each student asked thoughtful and pointed questions concerning many of the experiences Ms. Zubulake revealed in her book. One of the central points Ms. Zubulake focused on was the importance of organization. She described the daunting task of reviewing, organizing, and searching through massive amounts of data, including emails and other evidence produced to her and her legal team as searching for the proverbial “needle in the haystack.”  This was during a time when technology assisted review and other advancements in data review platforms were virtually nonexistent. To overcome this challenge, Ms. Zubulake believed organizing the evidence, including paper and electronic documents, was critical to preparing for depositions, drafting motion papers, preparing for trial, and presenting a clear timeline and sequence of events to the jury. Ms. Zubulake shared both her experiences that led to her decision to file suit alleging gender discrimination and retaliation and the fallout of her litigation, which carried over to her personal life. Ms. Zubulake confessed that she had been aware of allegations of gender discrimination in the financial industry early on in her career and acknowledged that she often felt that she had to work twice as hard as her male counterparts.  However, that position never bothered Ms. Zubulake until the situation became uniquely personal, leading her to conclude that something needed to be done. Once she felt her personal career was being compromised, Ms. Zubulake admited that she “couldn’t in good faith walk away from it.” While her decision to act was not an easy one to make at the time, she thought it was the right one—particularly because she raised her concerns through internal corporate channels that she had been led to believe were designed to address delicate, intra-personnel matters discretely and effectively. Ms. Zubulake’s book is a personal account of a long, grueling litigation process that resulted in her finally getting vindication and justice. She speaks of the process and admits that it was not easy. Ms. Zubulake knew that she served as a good, strong candidate to not only take a stand against what had happened to her personally, but also to challenge what had been in many respects an institutional problem. Ms. Zubulake’s case did not serve merely to right a perceived wrong in the context of gender discrimination in the work place, but it also sparked the establishment of several groundbreaking precedents regarding electronic discovery. Her book is not only an account of her determination, but also her acknowledgement that she never imagined her case would have had such an impact on a legal process that was virtually nonexistent at the time. Ten years later, we continue to see the impact and the relevancy of the Zubulake decisions. To learn more about Laura Zubulake and Zubulake’s eDiscovery: The Untold Story of My Quest for Justice, visit: http://www.laurazubulake.com/. Fernando M. Pinguelo, Esq., is a U.S.-based trial lawyer and devotes his practice to complex lawsuits with an emphasis on business disputes, cyber security, media and employment matters. Kristen Tierney, a Chief Blog Correspondent for eLessons Learned, is a History and Political Science double-major at at Rutgers University in New Brunswick (Class of 2016). Do you have any feedback, thoughts, reactions or comments concerning this topic? Feel free to leave a comment below and follow the twitter accounts @ellblog_dot_com, @CyberPinguelo, and @eWHW_Blog. To learn more about electronic discovery and technology’s impact on lawsuits and corporate governance, visit eLessons Learned – Where Law, Technology, and Human Error Collide and register to receive timely updates.  If you’re also interested in data privacy and security, visit eLLblog’s companion blog – eWhiteHouse Watch – Where Technology, Politics, and Privacy Collide (http://ewhwblog.com).

When Is An Employer Permitted To Monitor and Review An Employee’s Internet Activity and Usage?

On March 10, 20108, Marc Liebeskind began working at Rutgers Facilities Business Administration Department.  By March 28 of that year, Liebeskind was terminated for lacking the basic skill set needed to perform his job in addition to having a poor attitude while on the job. Liebeskind’s supervisors had suspected he was spending an unreasonable amount of time on non-work related activities on his work computer. Having doubts about Liebeskind’s work performance, his supervisors reviewed the browsing history on Liebeskind’s computer by using an application called IEHistoryView. It is important to note that this search only entailed browsing history, and there is no evidence that Liebeskind’s supervisors were granted any access to his personal or password-protected information and accounts. After his termination, Liebeskind filed suit against Rutgers University and his supervisors, claiming invasion of privacy, among other claims. On appeal, the New Jersey Superior Court Appellate Division affirmed the lower court’s ruling, which ruling struck down all claims that Liebeskind’s privacy was violated as a result of his supervisors’ investigating the browser history on his computer. The appellate court referenced the New Jersey Supreme Court’s Stengart ruling, which had set the precedent for an employer’s right to monitor employee Internet activity and usage. Closely followed in previous eLessons Learned posts, the 2010 Stengart ruling held that an employee’s email communication with her attorney, using a company-issued computer, but via a personal, password-protected email account was held to be protected by the attorney-client privilege. However, the court’s decision to uphold Stengart’s privacy was not intended to forbid employers from monitoring employees’ actions on company-issued computers or devices in the future. In Stengart, New Jersey’s highest court stated: “Companies can adopt lawful policies relating to computer use to protect the assets, reputation, and productivity of a business and to ensure compliance with legitimate corporate policies.” As noted in Liebeskind, Rutgers’ “Acceptable Use Policy for Computing and Information Technology Resources” was in effect during the time of Liebeskind’s employment. This policy expressly stated that an employee’s privacy “may be superseded by the University’s requirement to protect the integrity of information technology resources, the rights of all users and the property of the University.” Additionally, Rutgers University “[r]eserve[d] the right to examine material stored on or transmitted through its facilities.” Unlike the findings in Stengart, the court established that Liebeskind did not have a “reasonable expectation of privacy.” In addition, the court agreed that Rutgers had a “legitimate interest in monitoring and regulating plaintiff’s workplace computer.” All companies can learn from this case and the policies in place at Rutgers that protected its right to monitor and search an employee’s computer. One of the most important lessons to be learned here is the need for a written internet usage policy. At the very least, these written policies should mandate that employees are expected to use the Internet and their work issued computers for work related activities only. Additionally, the possible disciplinary actions for any violation of this policy should be made available to employees. As seen in in this case, the existence of an internet usage policy and the reserved right of a company to monitor its employee’s Internet activity is the key to eliminate an employee’s reasonable expectation of privacy.

How Are Electronic Materials Slipping Through the Cracks? The Scope of eDiscovery Is Limited to Discovery Requests, Not search Terms

We have entered the age of information!  Every conversation, e-mail, text message, attachment, voicemail, and other electronic data are being stored all day, every day.  These types of electronically stored information (a.k.a. “ESI”) are regularly used during litigation.  So why is there a problem collecting information for trial?  Lawyers need to search through these massive amounts of ESI in order to provide the materials to the opposing party before trial.  This process is known as eDiscovery, or electronic discovery, and it has raised a number of issues regarding who, what, where, when, why, and how ESI is produced. The issue discussed here is what defines the scope of eDiscovery.  In ChenOster v. Goldman, Sachs & Co., the court made it clear that the scope of discovery, whether electronic or not, is still defined by traditional discovery requests and demands.  However, what brought forward this conclusion? Traditionally, the process of discovery is the period when lawyers exchange requests and demands for information, documents, and other materials that may be used in the case.  Generally, this can be broken down into three steps: (1) Requesting party will make a discovery request; (2) the opposing party will use any means she deems appropriate to find the materials; and (3) the opposing party will respond to the request in the form of producing the materials or an objection. However, in Chen-Oster, the parties deviated slightly from this traditional process.  Here, the requesting party, the plaintiffs, made traditional discovery requests for ESI.  Then the plaintiffs negotiated with the opposing party, the defendants, in order to determine what search terms would be used to filter through the enormous amounts of ESI available. Now, why is this different from a traditional discovery process?  This is different because both parties collaborated to determine how the ESI requested would be located. The issue presented in Chen-Oster begins upon production of the ESI by the defendants.  The defendants only produced the ESI they deemed to be relevant to the discovery requests set forth by the plaintiffs.  However, the plaintiffs intended to collect all ESI produced by the search terms they agreed upon. This brings us back to the main question:  what defines the scope of eDiscovery?  It is either all ESI located under the agreed upon search terms; or it is only ESI located under the search terms that are relevant to the original discovery request. According to Chen-Oster, an agreement to use specific search terms or discovery protocol does not override discovery demands and requests.  In other words, search terms used to filter through electronic data do not define the scope of discovery.  The scope of discovery is determined by the discovery requests rendered.    Victoria O’Connor Blazeski received her B.S. form Stevens Institute of Technology, and she will receive her J.D. from Seton Hall University School of Law in 2015.  Prior to law school, she worked as an account manager in the Corporate Tax Provision department of Thomson Reuters, Tax & Accounting.  Victoria is a former D3 college basketball player, and she has an interest in tax law and civil litigation.  After graduating, she will clerk for the Hon. Joseph M. Andresini, J.T.C. in the Tax Courts of New Jersey.   Want to read more articles like this?  Sign up for our post notification newsletter, here.

Cornell Law and Business Grad Gets Spanked By Judge for Violating Basic Ethics and Evidence Rules

If you are involved in a lawsuit you may not destroy relevant evidence, inadvertently or purposefully, without facing consequences. In this lawsuit, the defendant, who is the owner of the company and a lawyer, destroyed possibly more than 10,000 relevant e-mails after receiving notice of a copyright infringement suit against him. The court found the defendant’s efforts to “remedy” the error disingenuous; the destruction of evidence was found to have been done maliciously and purposefully. When the litigation commenced, the plaintiffs sent the defendant a document request and repeatedly asked for any and all electronic files, e-mails included, that the defendant had created or sent to others. About a year after the suit had commenced, defendant’s counsel, who later withdrew from the case, notified the plaintiffs that the defendant had ended his account with a third-party web supplier and thus defendant’s website and e-mails were all destroyed. This was done two months before the account was set to expire even though it was already fully paid for. The defendant also admitted to deleting sent e-mails as part of his ordinary practice and did not change that practice after the lawsuit was filed. Furthermore, he also admitted to manually deleting e-mails after and in response to a cease and desist demand, after his deposition, and multiple times during the course of litigation. The court found that he had acted in such a manner to prevent plaintiffs from accessing the e-mails, which were an integral part to the litigation. The defendant’s actions were a clear violation of ethics and evidence rules. The court found particularly egregious that the defendant, a Cornell law and business graduate, claimed to not know that there was an obligation to maintain all documents. He claimed this even though he had passed the New York State Bar exam and received a document request from the plaintiffs stating which documents were needed for the litigation.  Moreover, the third party web supplier testified that when the defendant originally closed the account, the defendant then called to ensure that the e-mails had been deleted. It was only after the defendant received a deposition notice on the spoliation (the destruction of evidence) that he then called the web supplier to ask if there was any way to retrieve the e-mails. This was nearly a month after he had called to ensure they were fully removed from the systems. The defendant then reactivated the account only to set it to automatically terminate in less than a month. The third party supplier testified that once the account was terminated there was no way to recover any e-mails…so why did defendant reactivate his account? The court determined that this was done to show a “selective repopulation” of e-mails from the first termination. The defendant conceded that he had manually repopulated the account with e-mails that he was able to obtain from one of his recipients. These e-mails that were now “found” in the reactivated account were merely the ones manually selected for repopulation by the defendant. The court was also thoroughly displeased with the defendant because after the second termination of the account, the defendant repeatedly called the third party supplier in an attempt to create a false record that the supplier had terminated the account and not he himself. Due to the defendant’s actions, the court not only found that spoliation of evidence had occurred and that the defendant had acted intentionally, but also that the plaintiff was clearly prejudiced by the defendant’s intentional destruction of evidence.  The court thus imposed the harshest sentence allowed against the defendant: a terminating sanction. This sanction is the harshest penalty as it is a punishment for grossly improper litigation behavior that ends the offending party’s participation in suit, usually then dismissing or finding for the opposite side. In this case, judgment was granted to the plaintiff due to the defendant’s intentional destruction of evidence and attempt to create a false record. What the defendant should have done was save all the e-mails and turn them over to the plaintiffs. Instead, by intentionally destroying evidence and attempting to improperly lay blame, the court imposed the harshest punishment on the defendant. Knowing the risks and punishment involved with intentionally destroying evidence it is unclear why the defendant did what he did. Ms. Mansour is a Seton Hall University School of Law Student (Class of 2015). She has taken a sampling of courses across various disciplinary areas and participated in a variety of externship programs in addition to being on Legislative Journal. She graduated from Rutgers University with a concentration in Psychology and has her M.A. in Translation and Translation Studies from UNC – Charlotte. She currently is a legal intern for the King’s County District Attorney’s Office. Want to read more articles like this?  Sign up for our post notification newsletter, here.

Does Forwarding Emails To An Opposing Party Qualify As A Sufficient Method of Transfer for Discovery Purposes?

The employee in this case was not an inexperienced layperson, but rather a seasoned and accomplished trial attorney. Yet even with her wealth of knowledge regarding discovery, she was nearly cited for contempt of court as a result of her unfamiliarity with electronic discovery obligations. When obligated to turn over emails to your opposing party during discovery, it is not enough to simply forward the email. Courts require the emails to be in their native form, which means containing the crucial metadata contained within the original email. In Sexton v. Lecavalier, the plaintiff, Byron Sexton, subpoenaed all documents in the defendant’s possession regarding several business entities. The subpoena provided that if these documents were in electronic form, the copies produced must be in their “native” format. In response to the subpoena, the defense attorney produced numerous documents including eleven emails that had been forwarded to her from her client’s Gmail account. The defense attorney claimed that she could not access the emails in their original format and even had an IT expert testify that the emails could not be accessed in their native format because the infrastructure for the email is controlled by Google, who does not allow its users to copy emails in native format. The issue in this case is that the emails were located in the “cloud,” and thus stored with a third party. However, even though a third party held the emails, the plaintiff argues that there are two ways to preserve the crucial metadata. (1) Emails can be downloaded to an email client such as Microsoft Outlook and then saved onto a computer in the format used by the client; and (2) Gmail emails that have been displayed in their “original” format by clicking “show original” and then saved as a PDF. The court held that even though the plaintiff currently lacked access to the files in their native format, this fact does not absolve counsel of her discovery obligations. A growing number of attorneys and courts are realizing the evidentiary value to metadata and as this trend continues, it is becoming crucial for parties to preserve all relevant electronic data. There is currently electronic discovery software in existence, which makes preservation of data a whole lot easier (http://www.ediscovery.com/solutions/collect/ is merely one example of such software). The presiding judge went on to scold both parties for even bringing this discovery disagreement in front of the court. The judge stated that the parties should have resolved this matter outside of court and that the defendant could have provided the emails in a correct format with minimal cost. However, the judge believed that the defense attorney had a good faith belief that the emails could not be provided in their native format and refused to hold her in contempt. It seems that ignorance was the defense attorney’s saving grace. Any practitioners reading this will not have the luxury of such a defense. In order to avoid charges of contempt being levied against you in the future, it would be wise to invest in electronic discovery software. At the very least, you should download Microsoft Outlook and save all of your emails in a format that preserves metadata such as .eml or .msg. As less paper copies of documents are being utilized, and as electronic storage is becoming more prevalent, native documents are going to become an issue increasingly seen by courts. Additionally, resolve any such discovery issues with your opponent. No judge wants his or her time wasted with similar motions compelling discovery. Daniel received a B.A. in Criminology and Criminal Justice from The University of Maryland. He will receive his J.D. from Seton Hall University School of Law in 2015. Presently, Daniel is serving as a legal intern in the Juvenile Justice Clinic. After graduation Daniel will clerk for a trial judge in the Superior Court of New Jersey. Want to read more articles like this?  Sign up for our post notification newsletter, here

Erasing Videotapes Can Be Dangerous for Everyone, Not Just Politicians!

In McCann v. Kennedy Univ. Hosp., Inc., the plaintiff Robert McCann sued Kennedy University Hospital, asking the court to sanction the hospital for intentionally or inadvertently destroying necessary videotapes.  The plaintiff contended that the videotapes contained an account of the defendant’s emergency room lobby on the night the plaintiff claims to have been mistreated by the defendant’s staff. The plaintiff argued that the defendant knew or should have known that the video tapes were discoverable material and that there was actual withholding or suppression of the videotapes, which constituted spoliation. On December 21, 2011, the plaintiff was transported to the hospital after suffering extreme rectal pain and trouble breathing. The Plaintiff claims to have been in excruciating pain while he was waiting to be seen by the hospital staff. He states that he was ignored and neglected for at least seven hours. During the time that he was at the hospital, the plaintiff claimed to have collapsed on the floor and was left lying on the floor for over ten minutes, while staff walked over him without offering assistance. McCann also claimed that when he was eventually seen by the hospital staff, they treated him in ways that made him feel humiliated and uncomfortable. The hospital allegedly refused to treat McCann because he did not have insurance. On December 23, 2011, the plaintiff sent an e-mail to Renae Alesczk, the assistant to the Senior Vice President of the Kennedy Health System, complaining about his experience at the hospital while also threatening to sue. A few hours after the email was received, Aron Berman, formerly employed as the defendant’s Director of Guest Relations and Service Improvement, forwarded the McCann’s e-mail to Kim Hoffman, the Corporate Director of Patient Safety. The defendant claimed to have conducted an internal investigation of the complaints at that time, and notified the plaintiff that his complaints were being addressed. The hospital staff then stated that the investigation showed that the hospital staff acted appropriately and managed the patient’s clinical care in a professional manner. So far, so good. However, the plaintiff’s attorneys requested videotapes of the emergency room lobby, which showed the plaintiff waiting without being treated by staff. The defendants claimed that there was no videotape footage because they did not have enough disc drive space to keep all their video footage and had already erased the footage from the night in question. The plaintiff argued that the defendants knew or should have known that the videotapes would be requested in discovery, and that the defendants should not have destroyed the videotapes. The plaintiff claimed such activity as obstruction of justice and an intentional spoliation of evidence. The defendants argued that the tapes only show the time period during which the patient was in the waiting room, and are irrelevant to the plaintiff’s complaints about the treatment by staff when he was seen in the hospital. The Third Circuit has adopted a four-factor test for evaluating spoliation claims, finding that spoliation occurs where: “(1) the evidence was in the party's control; (2) the evidence is relevant to the claims or defenses in the case; (3) there has been actual suppression or withholding of evidence; and (4) the duty to preserve the evidence was reasonably foreseeable to the party.” Here, there is no argument that the tapes were in the party’s control. The court found that the tapes were not relevant to the plaintiff’s claims and that the defendant did not have a duty to preserve the video tapes at issue.  Therefore, there had not been actual suppression or withholding of the evidence. The takeaway from this case is that the court found it was reasonable for the hospital to destroy the videotapes because the plaintiff’s claim was specifically in regard to his being treated while at the facility, NOT his experience while waiting in the lobby. However, to be safe, videotapes of the night in question should be preserved to avoid this kind of confusion. Rebecca Hsu, a Seton Hall University School of Law student (Class of 2015), focuses her studies in the area of patent law, with a concentration in Intellectual Property. She is also certified in Healthcare Compliance, and has worked in Compliance at Otsuka America Pharmaceuticals, Inc.  Prior to law school, she graduated, cum laude, from UCLA and completed graduate work in biomedical science. She has co-authored two medical science research articles, as well as completed fellowships through UCLA Medicine and the Medical College of Wisconsin. In addition to awards for her academic achievements, Rebecca has been honored by awards for her community service with disadvantaged communities. In her spare time, Rebecca regularly practices outdoor rock climbing, and can be found camping in the Adirondacks. Want to read more articles like this?  Sign up for our post notification newsletter, here

Should I Obstruct Discovery?—A Classic Pyrrhic Victory Problem

A pyrrhic victory is defined by winning an early battle but eventually losing the war because of the costs and expenses of that earlier battle. Everyone has heard the phase, “you may have won this battle but I will win the war.” Victory in life, business, and litigation is achieved by obtaining a favorable outcome in the end, and not defined by winning an early battle over discovery where you exhaust resources by attempting to try to obstruct your opponent. Individuals who fail to comply and purposely try to hide or destroy a document can trigger serious legal consequences and significantly hurt their chances for long term success in the litigation. In Klipsch Group, Inc. v. Big Box Store Ltd., Klipsch Group, Inc. sued Big Box Store (“BBS”) for the spoliation of relevant documents as well as other discovery misdeeds. Klipsch commenced a lawsuit against BBS for infringement of their trademark on a particular headphone in 2012. BBS conceded that they sold some counterfeit headphones but claimed that the sales were innocent and yielded almost no profit. Klipsch’s main claim against BBS is that they failed to hold or preserve relevant documents pertaining to the pending lawsuit when they became aware of the litigation in August 2012 (a requirement by law).    Every litigant has an obligation to take reasonable measures to preserve all potentially relevant documents once it has noticed that a lawsuit has been filed. Specifically, that obligation may arise even prior to litigation being formally filed if "the party 'should have known that the evidence may be relevant to future litigation.'" MASTR Adjustable Rate Mortgages Trust 2006-OA2 v. UBS Real Estate Secs., Inc., 295 F.R.D. 77, 82 (S.D.N.Y. 2013) (quoting Kronisch v. United States, 150 F.3d 112, 126 (2d Cir. 1998)). Here, BBS should have known about the possibility of future litigations since they were knowingly infringing onto Klipsch’s patent by selling counterfeit headphones. Klipsch suspected that BBS’ actions warranted, at a minimum, a forensic investigation into their company for documents that could reveal if a larger quantity of counterfeit headphones were sold. Klipsch, correctly believed, that based on the information they received through discovery it seemed that large quantities of documents (emails, transactional documents, sales reports) were missing or altered. This belief was verified during subsequent depositions of BBS employees. The depositions revealed that BBS employees produced contradicting stories than the information revealed in discovery. In deciding Klipsch Group, Inc. v. Big Box Store Ltd., the court refused to levy a severe punishment against BBS although it was discovered that they had broken numerous discovery laws. Instead, the court took a passive approach and applied “the mildest of available remedies” that allowed the parties leave to pursue additional discovery, except this time with an experienced forensic computer expert. However, the court could have imposed stricter penalties onto BBS, such as, termination, preclusion of testimony, or a mandatory adverse-inference charge after it discovered BBS’s possible attempt to destroy evidence. Instead, the court chose a more cautious route and tabled those actions until the forensic discovery was completed. This ponders the question, if the aim of any remedy is to deter the parties from engaging in spoliation and restore the aggrieved party to the same position then why not have automatic forensic discovery? The answer? Costs. Klipsch suggested that the imposition of costs, including fees should be shifted to BBS. The court disagreed and held that the costs would first be borne by Klipsch and could be reallocated or apportioned based on the findings of the expert’s report. The court could better deter abuse of discovery by always imposing costs for forensic experts onto defendants who are found to have wrongfully withheld information requested in discovery. This action and precedent would cause all parties to become forthcoming with unaltered information due to the fear of additional costs levied in litigation. Ultimately, the expert’s report will produce the information needed for Klipsch to move forward in their litigation against BBS, or it will prove unfruitful and Klipsch will drop their litigation. This entire matter could have been avoided if BBS did not attempt to hide information during discovery. BBS could have avoided a pyrrhic problem by not exhausting valuable resources into possibly altering evidence of the sale of counterfeit headphones. However, this case could be used as future precedent to prevent future companies from pursuing this option as a method of strategy if they automatically shift the costs of forensic experts to the litigant in situations where inaccuracies of discovery occur. Timothy received his B.A. from Rutgers University in 2011. He began his post-college life working in Trenton, New Jersey at a lobbying and non-profit management organization before attending law school in the fall of 2012. He will receive his J.D. from Seton Hall University School of Law in 2015. Timothy has had a diverse set of experiences during his time in law school and has found his calling in Tax Law. Want to read more articles like this?  Sign up for our post notification newsletter, here.

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