eDiscovery

Class Action Lawsuits—Who Pays the Price in Compiling the List?

How many readers are familiar with a class action suit? Do class actions suits seem to be never ending and broad? What is the scope of such suits? In Oppenheimer Fund v. Sanders, the United States Supreme Court addressed the issue of a class action lawsuit in regards to compiling the names and addresses of the members of the class. A class action was brought against Oppenheimer Fund, an open-end diversified investment fund that sells shares to the public at their net asset value plus a sales charge. The respondents bought shares at various times and filed complaints that the shares in the Fund were artificially inflated as they had been overvalued on the Fund’s books. As a result a class action suit was filed. The respondents sought to require the Fund to help compile a list of the names and addresses of the members of the plaintiff class from records kept by using a transfer agent so that individual notices could be sent. The respondents essentially were seeking information about 121,000 people. Of this large number, 103,000 individuals still had shares in the Fund, while 18,000 others had sold their shares. Gathering this information would be time-consuming, as the transfer agent would have to manually sort through paper files. The Second Circuit held that the discovery rules authorized the district court to order the petitioners to assist the respondents in compiling this list of members of the respondent class and to bear the expenses of compilation. The issue was brought before the Supreme Court, which reversed the lower court’s holding, finding that it was an abuse of discretion of the court to require petitioners to bear the expenses of compilation. Here, the respondents could easily hire the transfer agent as a third party to compile the list by paying the agent the same amount that petitioners would have to pay. The Court reasoned that this information must be obtained to comply with the obligation of the respondents’ to prove notice to their class. Additionally, no special circumstances were presented to warrant requiring petitioners to bear the expense. The Court noted that a mere allegation of wrongdoing is an insufficient reason to require the Fund to undertake the financial burdens and risks in compiling the list. Overall, the lesson to be learned here is that in class action lawsuits, where the information sought can be obtained at the same cost to either party, it is the respondents who will bear these expenses to identify members of their own class. Jennifer Whritenour received her B.S. in Political Science and History in 2011 from the University of Scranton. In 2014, Ms. Whritenour graduated from Seton Hall University School of Law.

DESI VI Workshop on Using Machine Learning and Other Advanced Techniques to Address Legal Problems in E-Discovery and Information Governance

From June 8–12, 2015, the International Association for Artificial Intelligence and Law (IAAIL) will be holdings its 15th International Conference on Artificial Intelligence & Law (ICAIL).  The conference will be held at the University of San Diego School of Law in San Diego, California. During that conference, on June 8, esteemed eDiscovery attorney Jason R. Baron, from Drinker Biddle & Reath LLP, will be hosting the DESI VI Workshop.  The Workshop aims to bring together researchers and practitioners to explore innovation and the development of best practices for application of search, classification, language processing, data management, visualization, and related techniques to institutional and organizational records in e-discovery, information governance, public records access, and other legal settings. Questions addressed include: What combinations of machine learning and other techniques can best categorize information in accordance with existing records management policies? Do effective methods exist for performing sentiment analysis and personal information identification in a legally useful way in e-mail and other records of interpersonal communication? How well can we estimate the end-to-end costs of workflows that combine artificial intelligence and human coding to accomplish legal tasks on a broad range of content types? Can proactive insider threat detection leverage information already being collected for records management purposes, and what would be the ethical and legal fallout of such approaches? Are approaches available to reduce the perceived conflicts between privilege and transparency in labeling data for Technology-Assisted Review (TAR) in e-discovery and public records access applications? What technical, procedural, and legal issues arise from recent proposals to shift the focus of e-discovery from relevance to materiality? Where do recent legal cases point to the need for new research to better inform the decision of courts and the practices of parties? What lessons can we draw from recent shared-task evaluations such as TREC and EDI, and how can future shared-task evaluations best be structured? How can current techniques for issue coding be applied to compliance tasks (e.g., in regulatory, enforcement, and investigations settings), and what capability gaps exist that call for new research? What implications do emerging technologies such as deep learning and fine-grained access to behavioral traces have for e-discovery, business intelligence, and records and information management purposes? Baron invites those interested in electronic discovery to submit a refereed or unrefereed paper to the Workshop; however, paper submission is not required to participate.  More information about the DESI VI Workshop can be found here.

What Conduct is Necessary for the Court to Impose a Dispositive Sanction?

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. 

Does the Government Need a Warrant to Access Cell Phone Tracking Information? Third Circuit Says “No.”

Big Brother is always watching and listening.  If there’s one lesson to take away from the recent NSA scandals it’s that the government is not only capable of tracking your every digital move, but also acting on that capability.  Now, according to the Third Circuit, the government can use the broad language of the Stored Communications Act to force cell phone providers to turn over a criminal suspect’s phone’s historical location data. In a lengthy and drawn-out criminal investigation, the Third Circuit became the first federal court of appeals to decide a crucial issue that required balancing a cell phone user's privacy rights with a law enforcement agency’s needs to acquire potentially vital information.  The government attempted to use the Stored Communications Act to force a suspect's cell phone company to turnover cell site location information or CSLI.  Hoping to prevent an unjust and unwarranted intrusion or breach of a citizen's privacy expectations, the Electronic Frontier Foundation (EFF) filed a response in opposition to the government’s efforts.  The Third Circuit was then forced to determine whether or not the government could obtain this information without first establishing probable cause or acquiring a warrant. The information at issue in the matter is commonly kept by all phone companies and service providers as part of their routine business operations.  Every time a call is made via a cell phone, signals are transmitted via nearby cell phone towers.  These towers then collect and store data that can later be used to establish the general area where the individual was located when making the call at issue.  The information would not provide the exact location of the cell phone at the time of the call, but would instead allow the government to infer as to where the party where was located.  Even though this would seem like a minor distinction, in the eyes of the court it is incredibly important because it weakens any argument that the cell phone acts as a tracking device which would raise significant Fourth Amendment concerns under Supreme Court precedent. According to the exact language of the Stored Communications Act, a court can order the disclosure of this information if the government “offers specific and articulable facts showing that there are reasonable grounds to believe that the contents of a wire or electronic communication, or other records or other information sought, are relevant and material to an ongoing criminal investigation.”  18 U.S.C. § 2703.  The government argued that it met this burden because the information it was seeking was relevant and material to an investigation of narcotics trafficking and other violent crimes.  The EFF attempted to combat these claims by arguing that to obtain the information the government must obtain a warrant by establishing probable cause. Ultimately, however, the court held that the information was in fact obtainable by the government without a warrant or probable cause under the language of the Stored Communications Act.  According to the court, the Act’s language provided a specific test to determine whether an order granting the discovery of such information should be granted.  If Congress wanted to implement a warrant requirement, it could have specifically done so.  Instead, Congress chose the lesser standard of specific and articulable facts. The court, however, also went on to hold that the Act’s language actually granted a magistrate judge discretion as to whether or not to require a warrant showing probable cause.  Because the Act states that an order “may be issued” rather than requiring it, a judge deciding whether or not to allow access to such information could require a showing of probable cause. Additionally, the court established that a cell phone customer does not voluntarily share his or her location information with a service provider because the customer is probably unaware that their providers are in fact collecting and storing this historical information.     Although the Third Circuit’s holding is strictly limited to the collecting of historical cell phone location information, the decision ultimately has far-reaching consequences.  In the field of electronic discovery, privacy is an ongoing topic of debate, especially with the recent revelations of the massive amounts of data the government is in fact already collecting.  Because electronically stored information can provide a bevy of potentially vital information in easily manipulated formats, law enforcement agencies will continue to access it wherever possible.  Courts will continually be asked to balance individual privacy concerns with the broad policies of discovery. Jeffrey, a Seton Hall University School of Law graduate (Class of 2014), focused his studies primarily in the area of civil practice but has also completed significant coursework concerning the interplay between technology and the legal profession.  He was a cum laude graduate of the University of Connecticut in 2011, where he received a B.S. in Business Administration with a concentration in Entrepreneurial Management. 

Throwback to 1986: Court of International Trade Gets Discovery Rules Right

It seems that courts were ruling on the intersection of new technology and discovery practice back in the day. In 1986, the United States Court of International Trade decided motions to compel discovery regarding new technologies in Daewoo Electronics Co., Ltd. v. U.S. The court even noted that “[t]his controversy is a good example of how the development of new technology for using, storing and transmitting information allows parties to test the rules of disclosure or discovery.” There, the court grappled with whether the Department of Commerce met their burden of producing certain documents. The Department of Commerce was accused of committing three faux pas: (1) the tapes provided to the plaintiff was recorded at a much greater density than was stated, (2) data regarding the sale of two separate companies was requested, but not provided, and (3) the government failed to provide material known as an SAS data set. The government argued that they were in strict compliance with an earlier order mandating that they turn over certain evidence. However, the court expressed that it was troubled “by indications that [the government] took an inordinately restrictive view of its obligations under the order.” The government, when ordered to turn over certain tapes, turned over the tapes themselves (which the plaintiff was unable to read), as opposed to the data contained on the tapes. “To say that the data sets into which the computer tapes were transferred are not governed by an order speaking of computer tapes is as if someone has said at the dawn of the era of typewriters that types documents are not governed by a court order speaking of ‘writings.’” Further, the court noted that if the government was acting in earnest, then they had “taken unfair advantage of the court’s lack of familiarity with the variety of further electronic refinements and embodiments of taped information.” Thus, the court granted the plaintiff’s Motion to Compel, setting a precedent for reasonable interpretation of words surrounding new technologies. Matthew G. Miller, a Seton Hall University School of Law graduate (Class of 2014), focuses his practice in the area of Intellectual Property. Matt holds his degree in Chemistry from the University of Chicago. During law school, Matt worked as a legal intern at Gearhart Law, LLC.

Mutual Motions to Compel

“Although not unlimited, relevance, for purposes of discovery, is an extremely broad concept.” See Condit v. Dunne, 225 F.R.D. 100, 105 (S.D.N.Y. 2004). The discovery process is essentially a fact-finding mission. In theory, opposing parties are supposed to work together to make the litigation process more efficient. When both sides refuse to comply, additional motions are required result in additional costs. In the case above, Assured Guaranty Municipal Corp. (“Assured”) wrote financial guaranty policies on three residential mortgage-backed securities (“RMBS”) sponsored by UBS Real Estate Securities Inc. (“UBS”). Id. Assured claimed that UBS breached their contractual obligations by providing false information in regards to credit. Assured filed a motion to compel the production of documents that were generated shortly after the transactions mentioned above. UBS claimed that the documents were irrelevant to the case at hand, and furthermore, such production would be unduly burdensome. The court mentioned that so long as the discovery appears reasonably calculated to lead to the discovery of admissible evidence, it will likely be permissible. The court also stated that only when the burden or expense of the proposed discovery outweighs its likely benefit will the court limit discovery.  The court considered: the needs of the case; the amount in controversy; the parties' resources; the importance of the issues at stake in the action; and the importance of the discovery in resolving the issues, will the court limit discovery. The court granted Assured’s motion to compel against UBS. Conversely, UBS claimed that Assured also failed to comply with discovery demands. Assured allegedly failed to provide three categories of documents they claim are not related to the transaction at issue. The documents sought were thought to contain information about Assured's knowledge of the originator's underwriting policies and its knowledge of the practices of the rating agencies. Assured wanted documents to be provided to them; however, Assured has refused to cooperate in return. The court held that the documents requested by UBS could contain information very relevant to the initial contract dispute. This being the case, the motion to compel discovery against Assured was granted. Finally, the parties seemed to have disagreement about the search terms that will be used to search various sources for relevant information. In this regard, the court declined to step in as no expert opinions were provided and the court did not have “technical expertise.” The court left the parties with three options: The parties could learn to cooperate and agree on certain criteria, the parties could re-file a motion to compel with expert affidavits, or the parties could seek the assistance of a neutral independent consultant. The court ultimately left this decision to the parties. In summation, this case demonstrates that failing to cooperate with discovery is essentially a huge waste of time. As we see here, in the end, the court granted both motions to compel. The documents the parties attempted to hide were eventually exchanged. In a profession where time is money, attorneys cannot afford to stall and prolong the very process that makes our system function efficiently.

Who Should Pay the Cost of Producing eDiscovery?

This case involves a contractual dispute worth $41 million between Juster and North Hudson Sewerage Authority (NHSA). Juster issued a request for production of documents that included 49 requests for documents and a list of 67 proposed search terms. Some of these terms included words such as “fee,” “debt,” “tax,” and “SEC.” NHSA argues that the court should grant a protective order because it already produced 8,000 pages of documents and felt these search terms were too vague. Additionally, NHSA stated that if the court did not grant its protective order, the cost for producing these documents and running the searches should be shifted to Juster. The court did not agree with NHSA’s claims. Not only was there a lack of evidence that the data requested here was inaccessible, the court also applied the seven-factor test set forth in Zubulake v. UBS Warburg. This case has been adopted by the Third Circuit in cases that involve fee shifting. The Zubulake factors include: The extent to which the request is specifically tailored to discover relevant information; The availability of such information from other sources; The total cost of production, compared to the amount in controversy; The total cost of production; The relative ability of each party to control costs and its incentive to do so; The importance of the issues at stake in the litigation; and The relative benefits to the parties of obtaining the information In applying the Zubulake factors to this case, the court held that fee shifting is not warranted. The requests for electronically stored information (ESI) were tailored, as the searches were restricted to a specific time period (2011-2012). Second, it is unknown if this information is available from other sources. The third, fourth, and fifth factors are concerned with the costs associated with the request for ESI. Here, the court found that given the amount of damages at stake, NHSA’s ability to absorb the costs of the ESI requests, and the projected costs are not substantial enough to justify fee shifting. The fact that the litigation had $41 million at issue and the cost of running the keyword searches was approximately between $6,000 and $16,000, the court felt fee shifting would be inappropriate. The final factors are not relevant to this litigation as this is a private contractual dispute between two parties and no public policy is implicated. Overall, these factors weigh heavily in favor of Juster. As a result, this case illustrates that courts are reluctant to sway from the idea that it is the responding party that bears the costs in complying with discovery requests. Only when there is an undue burden on the responding party, or inaccessibility of information, will the court consider fee shifting. Yet, given today’s society, most information is accessible. Additionally, when both parties have comparable discovery requests and both agree to pay their own costs in producing discovery, fee shifting is even less likely to occur. Jennifer Whritenour received her B.S. in Political Science and History in 2011 from the University of Scranton. In May 2014, she received her J.D. from Seton Hall University School of Law.

Facebook Fails: Can I Delete my Facebook while a Lawsuit is Pending?

The defendant in personal injury litigation commonly requests discovery concerning a plaintiff’s Facebook account.  The reason such requests are made is that pictures on Facebook may reveal the “injured” plaintiff dancing on top of a bar table, skiing, traveling, etc.  These damaging photos may prove that the plaintiff’s injury is not as severe as he or she claims and could result in dismissal of the case.  Therefore, it is not uncommon for a plaintiff to delete his or her Facebook account in order to conceal any damaging pictures.  The deletion of a Facebook account, however, may result in sanctions such as an adverse inference jury instruction.[1] In Gato v. United Airlines, Inc., the plaintiff was injured while working for the defendant.  During the litigation, the plaintiff permanently deleted his Facebook account.  The defendant motioned for an adverse inference jury instruction claiming that the deletion of the Facebook account destroyed relevant evidence, thereby prejudicing the defendant. In granting the sanction, the district of New Jersey adopted a very low standard as to what a litigant must show in order to obtain an adverse inference jury instruction.  The court held that “so long as evidence is relevant, the offending party’s culpability is largely irrelevant, as it cannot be denied that the opposing party has been prejudiced.”  This seemingly simple sentence has enormous implications for litigants in the district of New Jersey for two reasons. First, it means that as long as the destroyed evidence was relevant, a litigant need not prove that the adversary intentionally (or even negligently) destroyed evidence.  The lack of state of mind requirement eliminates what is often the most difficult element to prove when seeking spoliation sanctions.  Without the need to prove a litigant’s culpability in destroying the evidence, the court seems to impose a form of strict liability upon the destroying party.  The only requirement imposed by the court is that the party seeking sanctions prove that the destroyed evidence was relevant.  This is a significant deviation from the traditional method employed by courts which requires proof that a party was at least negligent in destroying the evidence. Second, the court indicates that as long as the evidence is relevant, it will presume that the destruction of the evidence was prejudicial to the opposing party.  This eliminates the need for the party seeking sanctions to prove that it was prejudiced by the missing evidence.  Instead, the party only needs to prove that the evidence was relevant. Notably, the court explained that the defendants in Gato were “prejudiced because they have lost access to evidence that is potentially relevant to Plaintiff’s damages and credibility.”  In other words, the defendant in Gato did not have to even prove that the destroyed evidence was undoubtedly relevant—the defendant only had to prove that the evidence was potentially relevant. In sum, the District of New Jersey imposed an adverse inference jury instruction simply because the destroyed evidence was potentially relevant to the litigation.  The court did not require the defendant to show that it was prejudiced by the destruction, nor did the court require any showing as to the Plaintiff’s state of mind in destroying the evidence.  Moving forward, litigants must be extra careful in their efforts to preserve evidence relevant to litigation. 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.  Currently, E-DiscoParty clerks for a Justice on the Supreme Court of New Jersey.  [1] An adverse inference jury instruction is a powerful sanction where the court advises the jury to presume that any destroyed or missing evidence contained detrimental information about the party that destroyed or lost the evidence.

Defendant’s “Hands-Off” Approach Insufficient; Sanctions Ordered

In this case, Peerless Industries, Inc.  sued defendants Crimson AV, LLC claiming patent infringement and design patent infringement arising out of defendant’s manufacture and sale of certain TV mounts. While not a defending party, Sycamore Manufacturing Co., Ltd. (“Sycamore”) is plaintiff's former supplier of these TV mounts and played a vital role in the alleged infringement. Sycamore is located in China, while Peerless and Crimson are both located in the United States. Plaintiffs filed two motions: (1) a motion to compel the deposition of the Sycamore’s president, Tony Jin, and (2) a renewed motion for sanctions, both of which were granted. It was also determined in a previous case that Jin exercised managerial control over both Sycamore and Crimson. Therefore, plaintiff satisfied that Mr. Jin is a managing agent of Crimson. The court stated, “Plaintiff must simply show ‘that there is at least a close question as to whether the witness is a managing agent.’ We already found this to be the case. Furthermore, Mr. Jin clearly satisfies the ‘paramount test,’ which is whether the individual identifies with the corporation's interests as opposed to an adversary's.” The court further ordered that without any showing of hardship, Jin’s deposition would have to take place in the United States and not in China. As for the plaintiff’s renewed motion for sanctions, this motion marked the third time the plaintiff filed a motion regarding the same set of documents. The plaintiff argued that at the deposition of Crimson’s managing director, “it became clear that defendant did not conduct a reasonable investigation regarding Sycamore’s document production or Sycamore’s document retention for purposes of this litigation.” The plaintiff then filed a renewed motion for sanctions. The defendant and Sycamore asserted that certain documents in Sycamore’s possession had been produced. The plaintiff noted, that defendants did not represent that all requested documents were produced or that they were searched for but no longer existed. The plaintiff argued that the defendant wanted to rely on the same declarations as opposed to issuing more specific responses. The court stated that since it had determined Jin was principal of both Crimson and Sycamore and that he exercised a considerable amount of control over both corporations, that he was able to obtain all relevant documents from Sycamore. However, the court found that defendant took a “back seat” approach and instead used a third-party vendor to collect the documents. Finding that neither Crimson nor Jin had apart in the process of obtaining the requested discovery, the court granted the plaintiff’s motion for sanctions. The court held that this “hands-off’ approach is insufficient. “Defendants cannot place the burden of compliance on an outside vendor and have no knowledge, or claim no control, over the process. Finally, the court held that defendants must show that they in fact searched for the requested documents and, if those documents no longer exist or cannot be located, they must specifically verify that it is they who cannot produce. Salim received his B.A. in Applied Communications, with a minor in Legal Studies, from Monmouth University. He received his J.D. from Seton Hall University School of Law in 2014. Salim’s past experiences include interning for a personal injury law firm prior to attending law school, as well as judicial internships in the Civil and Family Divisions. Currently, Salim is taking part in the Immigrants’ Rights/International Human Rights Clinic at Seton Hall Law.

Does a Litigation Hold Require the Preservation of Employee Text Messages? Big Problems in Little Packages: Lost Cell Phone Leads to Spoliation Sanctions

Big things can often come in small packages, especially in the field of eDiscovery.  In Christou v. Beatport, LLC, the defendants learned that something as small as a text message on a lost cell phone can lead to a bevy of headache-inducing preservation issues, even without proof that the lost texts actually contained relevant information. Originally, the two parties worked together to create Beatport, an online marketplace dedicated to promoting and selling electronic dance music.  When that relationship eventually fell apart, the plaintiff, a prominent nightclub owner, brought suit against Beatport and his former employee who, as a “talent buyer,” was responsible for attracting DJs to perform at the plaintiff’s venues.  The plaintiff claimed that since the falling-out, the former talent broker had been strong-arming DJs against performing at the plaintiff’s nightclubs by threatening to drop them from his now high-profile website. Soon after the case was filed, the plaintiff issued a litigation hold letter to the defendants seeking the preservation of electronically stored information.  Despite the fact that this letter specifically referenced text messages, the defendants made no effort whatsoever to preserve the text messages on the former employee’s cell phone.  Of course the phone was then lost, about a year and a half after the hold should have been instituted. The plaintiff sought spoliation sanctions in the form of an adverse jury instruction.  The defendants attempted to shelter themselves from punishment behind testimony that the former talent broker did not use texts to contact clients and no proof was offered that there was relevant evidence anywhere in the phone.  Thus, the defendants felt the plaintiff’s motion was entirely speculative. Given the disappearance of the phone, the court recognized that there was simply no way to know whether it contained any relevant evidence.  There was also no evidence that the defense had done their due diligence by reviewing the text messages to determine whether any were responsive to the plaintiff’s discovery requests. The court explained that spoliation sanctions are appropriate when “(1) a party has a duty to preserve evidence because it knew, or should have known that litigation was imminent, and (2) the adverse party was prejudiced by the destruction of the evidence.”  Here, there was no question that the defendants neglected their duties by failing to make any effort whatsoever to preserve the text messages. Because the loss of the phone was an accident, or at the most the result of negligence, an adverse jury instruction was unwarranted because it would be too harsh a punishment.   Instead, the court permitted the plaintiffs to present evidence at trial about the litigation hold and the defendant’s failure to abide by it.  Despite finding no foul play by the defendants, sanctions were necessary because “[a] commercial party represented by experienced and highly sophisticated counsel cannot disregard the duty to preserve potentially relevant documents when a case like this is filed.” The previous sentence best sums up the defendants’ actions.  They completely shirked all responsibility by failing to turn over the requested text messages or securing the phone itself.  Even though the phone was lost accidentally, spoliation sanctions were warranted because of the defendants’ complete disregard of their preservation duties.  The time and money spent belaboring this eDiscovery dispute could have  been completely avoided if the defendants simply preserved all of its electronically stored information, especially those documents specifically mentioned in a litigation hold.  Instead, the defendants suffered what probably turned out to be significant financial consequences fighting the motion and were left to combat incredibly damaging evidence at trial. Jeffrey, a Seton Hall University School of Law graduate (Class of 2014), focused his studies primarily in the area of civil practice but has also completed significant coursework concerning the interplay between technology and the legal profession.  He was a cum laude graduate of the University of Connecticut in 2011, where he received a B.S. in Business Administration with a concentration in Entrepreneurial Management.