Good Faith

What Should Related Foreign Entities Do When Facing Spoliation Sanctions After Providing The SEC With A Complete Image Of Its Corporate Servers? Comply With Court Orders.

Regulatory leviathan incompetency may lead to preclusion sanctions. But this doesn’t matter if the sanctions preclude two directors of alleged foreign shell entities from “offering testimony, affidavits or declarations in connection with a dispositive motion or trial,” and the sanctions are partially based on the very same two directors’ refusals to offer such testimony, affidavits or declarations in connection with depositions. In other words, the defendants have no interest in testifying, are being reprimanded for not testifying, and their punishment is to preclude them from testifying. (“Continue Reading…”) Here, the SEC froze the assets of more than a half-dozen entities which conduct business from Hong Kong based on pyramid scheme allegations. Prior to the freeze, at least a few of the defendant entities used third-party vendors to control their IT departments and these defendants were no longer capable of paying the outside vendors, post-freeze. During the course of discovery, the defendants, now without an IT department, provided the SEC with a “complete image of all information maintained on the corporate server”. Next, the defendants, fearful of adverse action by authorities in their own nation, refused to attend depositions and instead offered to attend remote videoconference depositions. Soon thereafter, the leviathan sought sanctions for spoliation, which were later recommended. Months later, the incompetent SEC figured out how to read the original hard drive provided during discovery, which had been in the SEC’s possession the entire time. The preclusion sanction still stands because the defendants did not comply with the court order to attend the depositions. In the future, if you’re a foreign businessman who finds yourself under the SEC’s radar, remember to formally request depositions to be electronically conducted, formally request asset freezes to be lifted so your third party vendor can assist the incompetent SEC to understand the information you provided in discovery, or ignore the laws of your home state, put your entire family in jeopardy, and attend the deposition. Law Suit Exposer, a Seton Hall University School of Law student (Class of 2016), focuses his studies in the area of NJ foreclosure defense.  Want to read more articles like this?  Sign up for our post notification newsletter, here.

Document Refinement and its Apparent Prejudices

On December 16, 2015, the Honorable Susan D. Wingenton granted GDC’s Motion to Quash Defendants William Baroni and Bridget Kelly’s subpoena duces tecum, which asked the GDC to produce “Any and all handwritten or typed notes, stenographic transcripts and audio and/or video recordings of witness interviews conducted by Gibson Dunn during its representation of the Office of the Governor of New Jersey from on or about January 16, 2014 to the present.”  Defendants also included a request to produce any and all metadata and document properties for all typed notes and interviews as well.  In her Opinion, Judge Wingeton took certain issue with the ethically questionable document preparation methods of the GDC, yet ultimately decided to grant the Motion to Quash.  The GDC had a somewhat perplexing response to Defendant’s first requests as to notes, transcripts and recordings of witness interviews conducted by the GDC during its representation of the OGNJ.  They claimed that no such materials currently existed.  Here, the GDC deviated from normative interview information collecting techniques; here witness interviews were summarized electronically by one attorney while the interviews were being conducted and then edited electronically into a single, final version.  This differed greatly from their former methods of practice, where contemporaneous notes were taken by GDC interviewers and that those notes were preserved after the summaries were completed.  By contrast, the GDC clearly intended that contemporaneous notes of the witness interviews and draft summaries would not be preserved, as they were overwritten during revisions and in preparing the final summary.  The Court found this to be “unorthodox” at the least, and noted its disapproval of their actions, likening them to have the same effect as deleting or shredding documents.  Unfortunately, however, the Court had no reason to doubt the GDC’s honesty with respect to their methods or their responses to Defendant’s request for documents.  The Court did sympathize with the both Baroni and Kelly, but granted the motion anyway. It is clear to see that the GDC’s actions, though ultimately condoned by the Court, were not done with the intent to deliver a full and honest discovery of the requested materials.  While the Court may have deemed such actions as legal, GDC’s document preparation methods raise many ethical implications, and could have clearly been used to destroy important information that Defendants here were entitled to.  Indeed, this method of refining interview summaries and information could have easily omitted details the defense may have found useful.  Doing so did not provide the defense with the transparent information they should have received by request; instead they had to make due with the GDC’s white-washing of the information.  In all, the GDC should have been more responsible and fair with the way it conducted and kept record of it’s interviews. This method of refining information can only seek to unfairly hurt their opposing counsel.  Garrett Keating received his Bachelor’s degree from Trinity College (2011) and majored in both Political Science and Public Policy and Law; he will receive his J.D. from Seton Hall University School of Law in 2016.  He has worked primarily in the legal fields of Medical Malpractice, Personal Injury, and Class Action law

What Should a Litigant Do When Discovering from a Small-Time Adversary?

United States Magistrate Judge Kathleen Tomlinson of the Eastern District of New York recently denied a defendant law firm’s motion to impose sanctions and an adverse inference against its former client. At the evidentiary hearing, the court heard testimony from two of the plaintiff’s employees, who recounted a series of unfortunate events and office Google-ing that lead to the destruction of all documents regarding the plaintiff’s financial condition in 2009. The present issue arises from a terminated construction contract nearing its 20th anniversary.  In May of 1996, Abcon Associates, Inc. was retained by the USPS for a construction project in Queens, New York.  Within the year, USPS terminated its contract and eventually Abcon and its president, Michael Zenobia, Jr. and his wife were ordered to pay a $2 million judgment to the United States Fidelity and Guaranty Company (USF&G).  To pay this, Abcon and the Zenobias borrowed $2 million from New York Community Bancorp, Inc. (NYCB). In April of 1998, Abcon retained Haas & Najarian LLP (H&N) to sue USPS.  Abcon and H&N entered into a legal services agreement agreeing that would retain a lien in any amounts recovered from USPS, subordinate to any funds owed to NYCB. After protracted litigation (10 years!) Abcon received a $2.4 million judgment, and then effectively lost it due to various judgments and claims against it.  In 2008, a court order directed distribution of money to H&N (resulting in a final payment of $463,000 for its legal fees). Another creditor appealed that order, and Abcon argued that H&N should return the money paid to it.  H&N, apparently seeing the writing on the wall that it was now or never to get paid, refused to return the payment. On June 30, 2009, Abcon’s creditors settled among each other.  Abcon objected to the distribution of money, claiming again that H&N should not have been paid before NYCB. Abcon filed a complaint against H&N on February 27, 2012, alleging breach of contract of the parties’ legal services agreement.  During discovery, H&N requested: “All documents concerning Abcon's outstanding liabilities as of June 30, 2009 in excess of the sum of $5,000 owed to Persons other than [the previous litigation’s creditors]” and “Documents concerning Abcon's financial condition of June 30, 2009, including by way of specification but not limitation, a balance sheet and an accounts payable ledger.”  Essentially, H&N wanted to be able to show that even if they were wrongfully paid in 2009, returning the money would benefit Abcon’s creditors, not Abcon. Abcon contended that they had absolutely no documents that were responsive to those two requests, due to an office move resulting in extreme downsizing of files and power outages that totally corrupted any possibly responsive electronically stored data.  They were responsible prior to when Abcon “became inactive” and moved offices to a smaller location in September 2009, Patricia Van Dusen’s, a long-term Abcon employee and “Director of Information Services,” job was to sort the files and keep items that needed to be saved, and destroy the rest.  In order to determine what needed to be saved, Van Dusen conducted internet research on what should be kept, maintained, etc. and threw out those documents before June 30, 2009. Next, Abcon’s Director of Marketing and Sales (and apparently also its “de facto IT person”) Eros Adragna, did not protect the company’s electronic data during the office move.  As one might expect, this ended poorly: multiple power outages occurred at the new location and, big surprise, Abcon’s server was outdated and vulnerable to viruses.  Adragna tried to back up the data but it was too late: nothing that he saved was responsive to H&N’s discovery request. Both Van Dusen and Adragna testified before the magistrate that they did not think or know there was a “litigation hold” on Abcon’s financial records, even though Abcon was the party who eventually filed suit.  In the end, Abcon lucked out. While the court found that Abcon had a duty to preserve potential evidence, the scope of that duty did not necessarily extend to the 2009 financial documents because H&N’s legal argument that it didn’t breach the contract was so unexpected that Abcon could not have reasonably anticipated that the documents would have been relevant to its breach of contract case. Abcon’s employees breached their duty to preserve documents, but as the court says, “at most” acted negligently as to documents that were not clearly relevant to H&N’s defense.  Therefore, the court declined to issue sanctions and an adverse inference against Abcon. Business owners, especially small business owners should learn from Abcon—don’t trust the determination of destruction of files to a couple of internet searches run by a non-attorney, and don’t entrust the preservation of data to someone also in charge of running the company’s marketing and sales. Van Dusen should have consulted with an attorney, and Abcon or Adragna should have contacted an IT specialist to preserve the data as soon as they realized there were problems with the server.  When preserving data is a side-hobby, possibly important documents that you have a duty to preserve will inevitably fall through the cracks. Angela Raleigh is a third year law student at Seton Hall University School of Law.  She attended Montclair State University, graduating summa cum laude, and owes her interest in law to her late great-uncle, Michael Mastrangelo, who let her “work” in his law firm at age four.

When is Paper Proof Proper Preservation?

In April 2014, the Honorable Dominic J. Squatrito from the District Court for the District of Connecticut handed down a decision that dismissed all but one of plaintiff Ray Tedeschi’s claims against defendant Kason Credit Corporation (“KCC”), a collections agency that wrongfully targeted Tedeschi based on a telephone mix-up.  On Both parties moved for summary judgment on claims of invasion of privacy and intentional infliction of emotional distress.  Tedeschi’s claims were largely unsupportable – not the least of which being his assertion that Kason Credit Corporation should face an evidentiary adverse inference instruction based on spoliation of electronic evidence. In sum and substance, Tedeschi claimed that KCC was harassing Tedeschi with nearly twenty phone calls over the course of a yearlong period, seeking to collect a debt from a consumer who listed Tedeschi’s new home phone number as a means of contact.  Tedeschi continually informed KCC that he was not the debtor, and asked that KCC stop calling.  Tedeschi v. Kason Credit Corp., No. 3:10CV00612 DJS, 2014 WL 1491173 *2-3 (D. Conn. Apr. 15, 2014). KCC, on the other hand, denied the volume of calls asserted by the plaintiff, and instead asserted that only two phone calls took place over that same period of time.  Id.  KCC further alleged that the behavior met the standards of the Fair Debt Collection Practices Act, 15. U.S.C. § 1692, and was not actionable. Recognizing a dispute of fact, the Court left this claim intact.  However, it’s unlikely that Tedeschi’s claim will pass muster with any jury.  Here’s why: When deposing the CEO of KCC, Karl Dudek, plaintiff learned that a “fact sheet” was generated for Tedeschi’s matter that tracked calls from KCC employees to Tedeschi’s phone number.  In response to an inquiry, Dudek indicated that the fact sheet “has probably been printed out 20 times.” Id. at *16.  Tedeschi argued that the print-out produced at the time of the deposition did not satisfy discovery requirements, since the print-out was dated December 2010, and that the original print-out must have been destroyed. KCC was able to demonstrate that the print-out was unchanged in substance or form from the first request date in June 2010 to the produced copy in December 2010.  Relying on Residential Funding Corp. v. DeGeorge Financial Corp., 306 F.3d 99 (2d Cir. 2002), the court outlined the criteria for an adverse inference: the moving party must demonstrate that the party having control over the evidence had a duty to preserve it at the time of destruction, that the evidence was destroyed with a culpable state of mind, and that the destroyed evidence would support the moving party’s claim or defense.  Judge Squatrito found that KCC did not have a duty to preserve print-outs, since the print-outs “merely duplicate ‘original evidence.’” Id. at *17.  Since Tedeschi was unable to support a claim that the electronic data was destroyed with any culpable state of mind, the claim necessarily fails.  See Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003) (“A party . . . must retain all relevant documents[,] but not multiple identical copies[,] in existence at the time the duty to preserve attaches, and any relevant documents created thereafter.”). Plaintiff’s claims against KCC were doomed from the start, and Tedeschi would have been smart to see the writing on the wall – if not the words on the print-outs. 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.

Deleted Documents? Improper Withholding of Evidence?

Larry Klayman sued six separate journalist defendants for defamation. This case is about Klayman wanting more discovery from the defendants. Specifically, Klayman’s motion is to compel the production of documents and to hire a computer expert. In this case, Klayman has conceded the fact that he is a public figure. So, in order to win in a defamation suit, he must prove by clear and convincing evidence that the journalists published the statements about him with actual malice. Thus, Klayman made this discovery motion to try to obtain “any and all documents, discussions and/or publications that refer or relate in any way to Plaintiff Larry Klayman within the past five years,” as well as several other document requests. Klayman contends this information is relevant to state of mind of the journalists. However, the defendants represent that they have already provided Klayman with all relevant information. Based on this representation, the court denied Klayman’s request to compel document production. Klayman also petitioned for a computer retrieval expert to be hired to go through each defendant’s computer files. Klayman claimed that the defendants had improperly withheld documents. However, the court ruled that the plaintiff must show good cause in order to compel a forensic expert, and here he has failed to do so. The court further stated that his assertions were “conclusory and unpersuasive.” Jessie is a third year student at Seton Hall University School of Law (Class of 2015). She graduated from Rutgers University, New Brunswick in 2012 with a B.A. in philosophy and political science.    Want to read more articles like this?  Sign up for our post notification newsletter, here.

What Sanctions May a Court Impose On a Party That Fails to Comply With a Discovery Order?

The plaintiff and the defendants both sold Belly Bands, the plaintiff alleged that both Belly Bands were maternity band used to hold up pants. The plaintiff previously filed cases against the defendants for trademark infringement, patent infringement and unfair competition in 2006 and 2008, but those cases were later resolved by settlement agreements. In 2013, the plaintiff filed the recent action alleging that the defendants breached both settlement agreements by selling and advertising Belly Bands. During discovery, the defendants produced some electronically stored information (ESI). The parties contested the sufficiency of the defendants’ ESI production. On December 20, 2013, the court ordered the the defendant to produce all documents referring to customer comments or complaints regarding the defendants’ Belly Band and disclose its search methods within thirty days. On January 21, 2014, the defendants issued a declaration stating that they were in Europe when the court issued this order, and could not immediately comply. They also stated that they would need a computer expert to help them retrieve deleted customer e-mails. On January 3, 2014, the defendants retained a computer expert. On February 4, 2014, the defendant told the plaintiff that they found additional ESI, but did not produce the ESI at that time. The plaintiff filed a motion on February 10, 2014, for sanctions against the defendants for failure to comply with the court order within the thirty day timeframe, seeking: attorneys fees and costs associated with the defendants failure to comply; an order that the defendants disclose all hard drives and provide the plaintiff with access to all email accounts; and an order precluding the defendants “from opposing the plaintiff’s claim that the defendants’ Belly Bands were used to hold up [pants,] from opposing the plaintiff’s damage calculations, and from introducing any opposing evidence wit respect to the damages calculation.” At the time the motion was filed, the defendants still had not produced any additional ESI. Within two weeks after the motion was filed, the defendants produced over 1,000 new electronic documents. The court began its analysis by noting that courts may sanction a party for discovery abuses pursuant to the Federal Rules of Civil Procedure and the court’s inherent powers. Rule 37(b)(2)(C) states a court must order a party who failed to comply with a discovery order to pay the opposing party’s reasonable expenses associated with failure to comply, including attorney’s fees, “unless the failure was substantially justified or other circumstances make an award of expenses unjust.” Sanctions are permissible regardless of the reason for the party’s noncompliance. Moreover, willfulness, fault, or bad faith are not required to impose Rule 37 sanctions, unless the sanction is dismissal. “However, in order for the sanction to comport with due process, the sanction imposed under Rule 37 must be specifically related to the particular claim which was at issue in the order to provide discovery.” Rule 37 sanctions should only be imposed when the party’s failure to comply prejudiced the nonoffending party. Furthermore, the court may impose three types of sanctions pursuant to its inherent powers specifically when there has been spoliation of evidence, including: “1) the court may instruct the jury that it may infer that evidence made unavailable by a party was unfavorable to that party; 2) a court can exclude witness testimony based on the spoliated evidence; and 3) the court can dismiss the claim of the party responsible for the spoliation.” “In determining what sanctions are appropriate in cases of spoliation, courts consider: 1) the degree of fault of the party who altered or destroyed the evidence; 2) the degree of prejudice suffered by the opposing party; and 3) whether there is a lesser sanction that will avoid substantial unfairness to the opposing party.” The chosen sanction should be “determined on a case-by-case- basis, and . . .commensurate to the spoliating party’s motive or degree of fault in destroying the evidence. First, the court held that the plaintiff was entitled to an award of monetary sanctions under Rule 37. the defendants failed to substantially justify why they couldn’t produce all responsive documents within the court ordered thirty day timeframe. The fact that the defendants were in Europe when the court issued the Order did constitute substantial justification to excuse their noncompliance. the defendant did not alert the court of their travel plans, request an extension, instruct their office manager to comply with the Order, or offer a reason as to why they did not immediately retain a computer expert to assist them in complying with the Order. Further, even once additional ESI was discovered, the defendants failed to produce said ESI for almost a month. Thus, the defendants’ actions prejudiced the plaintiff by forcing the plaintiffs to subpoena third parties for responsive documents, by preventing the completion of necessary depositions, and by having to file the instant motion. Moreover, the court held that the defendant must disclose its hard drives and provide the plaintiff with access to all its email accounts, subject to the defendants’ privileges or privacy interests. The court found that there was real danger that evidence on the the defendants’ hard drive had been destroyed. Further, the defendants made an array of false statements, such as claiming they produced all responsive documents when they in fact had not, and claiming that no documents had been deleted during the time of litigation when overwhelming evidence indicated otherwise. The court found that the plaintiff needed access to the defendants hard drive to prevent any more documents from being destroyed and ensure all responsive documents were produced. Additionally, based upon the same reasoning, the court granted the plaintiff access to all of the defendants’ email accounts, including Amazon, Facebook, Twitter and eBay accounts. However, the court held that the plaintiff failed to prove that the court should prohibit the defendants “from opposing the plaintiff’s claim that the defendants’ Belly Bands were used to hold up [pants,] from opposing the plaintiff’s damage calculations, and from introducing any opposing evidence wit respect to the damages calculation.” The court stated “preclusion remedies are a harsh remedy that should be imposed only in extreme circumstances.” Here, given that the plaintiff obtained documents from third parties and that the plaintiff may recover additional responsive ESI from the defendants’ harddrives and email accounts, the plaintiff cannot—at this time—demonstrate that the defendants’ conduct “impaired the plaintiff’s ability to go to trial or threatened to interfere with the rightful decision of the case.” However, the court denied the plaintiff’s request for preclusion sanctions without prejudice, thereby allowing the plaintiff to request preclusion sanctions should the plaintiff’s search of the defendants’ harddrives and email accounts reveal that the defendants knowingly destroyed evidence and that destruction threatened the plaintiff’s ability to secure a just outcome. Thus, when a court orders ESI production, parties would be wise to immediately comply with the order, or immediately inform the court of substantial reasons as to why compliance will be delayed.   Aaron Cohen, a Seton Hall University School of Law student (Class of 2015), focused his studies in the area of Family Law. He participated in the Seton Hall Center for Social Justice’s Family Law Clinic. After graduation, he will clerk for a judge in the Superior Court of New Jersey, Family Division. Prior to law school, he was a 2011 cum laude graduate of The George Washington University Columbian College of Arts and Sciences, where he earned a B.A. in Psychology. Want to read more articles like this?  Sign up for our post notification newsletter, here.

What Should a Party Not Do When Compelled to Turn Over Computers after Having Already Admitted How Much Activity Took Place on Those Computers? Turn Over Computers That Show No Record of Activity

It is never a good idea to raise the suspicions of the court. If a party is going to try to cover its tracks, it has to do so subtly and discretely. It certainly has to do a better job than Dr. O did in the above case. She revealed too much information about herself in the early stages of the case, and it came back to hurt her when it was time to produce discovery. MetLife has brought suit against Dr. O, after the doctor tried to make an insurance claim based on an alleged disability. First of all, Dr. O delayed her responses to initial discovery requests, which is just never a good idea! But not only that, it was subsequently discovered that she had email accounts containing relevant documents that she had not even previously disclosed! Needless to say, Dr. O has already lost all benefit of the doubt in this case. Dr. O was ordered to turn over the computers she used during the relevant period so that MetLife could perform a key word search. Instead of turning over all computers that she used, she turned over only the two computers that she owned. She claimed that she did not have access to all the computers she used anymore, because some were in Internet cafes she used while traveling. OK, fine, but even still, the computers she did turn over, the two computers she owned and presumably used most often, reflected very little activity! Her hard drives showed no evidence of her sending or receiving any emails during a five-year period. In addition, the hard drives reflected a minimal amount of Web browsing. Well that certainly piques the Court’s interest, especially in light of Dr. O’s earlier testimony in which she admitted to searching the Internet on a daily basis! So she searches the Web every single day, and yet there is no record of it on either of her personal computers? Suspicions have been officially raised! But it does not end there. Dr. O specifically testified at her deposition that she used her personal computer (one of the two she handed over) to type up a twenty two-page letter complaining about MetLife. Well, lo and behold, there is no record of this letter reflected in the personal documents on the computers she turned over. So now Dr. O has been caught in a direct lie! But wait, there’s more! Dr. O testified that she engaged in online banking…but the computers show no record of that, either. She also admitted to doing a lot of online shopping as a symptom of her depression and PTSD. And yet, there is nothing on her computers that is consistent with even a single purchase! Dr. O was not subtle and discrete in covering her tracks, and the court saw right through it. It explained that in light of earlier testimony that the doctor is an avid computer user, the lack of use on the computers she turned over demonstrates that she did not provide all of her principal computers. The court found that Dr. O willfully failed to comply with the court’s orders compelling production, and that this refusal was done in bad faith, prejudicing MetLife’s ability to present its case. Therefore, due to the extent and continued nature of non-compliance on the part of Dr. O, the court imposed an adverse inference instruction against the doctor. Again, this just goes to show that a party has to be more careful than Dr. O was in this case. It cannot claim to use computers all day, every day, and then respond to an order of production of these computers by turning over computers that reflect very little, if any, use. Dr. O was too obvious about what she was doing, and the court sanctioned her for it. Do not be like Dr. O! Logan Teisch received his B.A. in Government and Politics from the University of Maryland, College Park in 2012. He is now a student at Seton Hall University School of Law (Class of 2015), focusing his studies in the area of criminal law. Logan’s prior experiences include interning with the Honorable Verna G. Leath in Essex County Superior Court as well as interning with the Essex County Prosecutor’s Office. Want to read more articles like this?  Sign up for our post notification newsletter, here.

What Should A Party Do When It Receives A Confusing Discovery Response?

Were the defendants at fault for providing to the plaintiffs a CD containing information confusing to the plaintiffs? A court found that, no, the parties should have communicated with each other in order to facilitate the discovery process. The issue arose when the defendants provided a CD to the plaintiffs containing information the plaintiffs had requested. However, the plaintiffs did not know how the defendants collected the information on the CD, nor did the plaintiffs know how the contents were responsive to their discovery requests. Based on this incident, the plaintiffs filed this motion to appoint a neutral discovery master to oversee the discovery process. The plaintiffs also argued that the defendants had not been timely with their discovery submissions. However, as the court pointed out, the plaintiffs had not been timely. Ultimately, the court found that if the parties had merely taken the time to communicate with each other that this motion likely could have been avoided. The court further stated that the parties must, “meet and confer in good faith in order to communicate about issues of untimely or confusing production and resolve them without judicial intervention.” Thus, the court dismissed the motion. Jessie is a third-year student at Seton Hall University School of Law (Class of 2015). She graduated from Rutgers University, New Brunswick in 2012 with a B.A. in philosophy and Political Science.  Want to read more articles like this?  Sign up for our post notification newsletter, here.

Changing Horses Midstream? Court Says “Yes” to plaintiff Switching From Manual Document Review to Predictive Coding

The court entered its usual case management order setting forth a timeline of how this case was going to proceed. One of the first phases of litigation is the discovery phase. This means that both sides get to ask each other for documents and information regarding the issue in the case. The rules are fairly straightforward in this phase and each side will likely be obligated to provide much of what the opposing side asks for. In the instant case, after doing some manual searching, the plaintiff, Bridgestone, requested to use predictive coding to help sort through over two million documents. Predictive coding, to put it simply, is akin to a smarter keyword search. Keywords are put in and the program searches for those words as well as for other relevant words that it has “learned” to associate with the keywords in order to determine if a document is relevant or not. The defendant, International Business Machines Corporation, objected to Bridgestone’s use of predictive coding. The objection being that it would be an unwarranted change in the case management order. However, the court ruled that predictive coding could be used because under the rules discovery should be efficient and as cost-effective as possible. Thus, predictive coding, which is a smart search, was allowed in this case in order to expedite the discovery phase and save money on manual or other document review techniques. Moral of the story: Predictive coding may be implemented as an efficient discovery technique even if a case management order is already in place. Jessie is a third year student at Seton Hall University School of Law (Class of 2015). She graduated from Rutgers University, New Brunswick, in 2012 with a B.A. in Philosophy and Political Science.  Want to read more articles like this?  Sign up for our post notification newsletter, here.

Adding Insult to Injury: Court Criticizes Plaintiff’s Improper Pleading in Process of Largely Denying Motion to Compel

The court began its opinion by reciting the quote that “[d]iscovery relevance is minimal relevance,” leading most readers to presume the court was going to rule in favor of Plaintiff’s motion to compel.  However, after learning that Plaintiff sought “the entire claims file” of Defendant, that presumption slowly dissipates. The motion before the court involved Plaintiff’s request for an order compelling Defendant to produce documents that are responsive to certain of Plaintiff’s second, third and fourth sets of Requests for Production of Documents.  The Plaintiff alleged that Defendant’s objections are premised on unsupported claims of privilege and that the documents Defendant did turn over were excessively redacted.  After a back and forth regarding the concept of “privileged” the court rules that the real crux of the issue is the “point at which Defendant was reasonably anticipating litigation.” It is at this point that a privilege is created for the documents at issue based on the work product doctrine as outlined in Fed. R. Civ. P. 26(b)(3)(A) at which point a privilege for the documents at issue based on the work product doctrine. Because insurance claims are of such sensitive and proprietary nature, the court holds that the question of whether insurer documents were created in anticipation of litigation “depends on whether the party seeking protection can point to a definite shift made by the insurer from acting in its ordinary course of business to acting in anticipating of litigation.”  Colloquially known as a “trigger” for document preservation, the burden is on the Defendant to establish the existence of such privilege in the face of litigation.  The court ultimately held that the relevant date was December 28, 2012, when Defendant sent a letter regarding a settlement check.  Thus, the court ordered that any information withheld on the basis of work product doctrine after that time must be produced. After serving its second set of discovery requests, the Plaintiff subsequently asked for the documents to be produced in native electronic format.  However, the Defendant had already produced documents in paper and PDF form, which Plaintiff alleged was not the form maintained by the Defendant “or in any reasonably usable form.”  Citing Fed. R. Civ. P. 34(b)(2)(D) and (E), the court noted that the rule allows, but does not require, the requesting party to specify the form in which it is requesting electronic data.  The court also noted there is nothing in the rule that prohibits a party from requesting different formats from one set of discovery requests to the next. Ruling in favor of the objecting Defendant, however, the court considered the “proprietary nature of certain software used by Defendant” and “Defendant’s right to withhold privileged information” as well as the “added costs of re-producing information already submitted to Plaintiff.”  Because the Defendant endured the time, effort, and expense of producing documents in PDF form as initially requested by Plaintiff, the court denied Plaintiff’s request to compel the native electronic forms of such documents. The Plaintiff’s motion to compel also sought all files containing “similar” claims.  While disregarding the Plaintiff’s motivations for requesting such documents, the court opined that the effect of requiring this production would be to “subject [Defendant] to undue burden in light of topics which, at best, have limited evidentiary value in this case given the broadly worded nature of the information requested.” Adding insult to injury, the court makes it a point to criticize Plaintiff’s complaint.  The cause of action was premised on a breach of the covenant of good faith and fair dealing yet Plaintiff’s motion “continually” refers to this as a claim for “bad faith.”  Succinctly and sharply, the court imparts some legal education by bluntly stating that the two are not interchangeable.  After making its criticism of Plaintiff’s mischaracterization, the court writes that “even if such information were to be considered relevant, the requests, as written, are facially over broad.” The court broadly cites a “lack of specificity” before denying more than 25 of Plaintiff’s discovery requests.  Because Plaintiff “failed to provide a sufficient, substantive limitation,” the court ruled that these “generalized discovery requests” were “facially over broad as well as irrelevant.” Lastly, seemingly as a concession to the largely defeated Plaintiff, the court partially grants Plaintiff’s final discovery request.  Plaintiff sought the “complete personnel files” for certain claims handling supervising personnel involved in the claim.  As with the other requests, Defendant objected citing the “personal, confidential, private information” that these files held.  Significantly, the court recited that “‘confidential’ does not equate to ‘nondiscoverable’ or privileged.”  Thus, the court granted Plaintiff’s motion to compel such personnel files, although it concluded this grant by limiting it to information from the files that specifically pertains to the employees’ “background, qualifications, training and job performance” and explicitly excluded any “sensitive personal or medical information” regarding these individuals. By the end of its succinct seven-page opinion, the District Court for the District of Kansas handed down many valuable lessons for future parties engaged in discovery-based litigation.  Among them:  (1) The work product doctrine will not prevent production if litigation is reasonably anticipated; (2) Request documents in the form desired or risk a landslide of “unusable” documents; (3) Be careful, diligent, and precise in your word choice – both in your pleadings and your document requests; (4) Private/Confidential does not mean Privileged/Nondiscoverable. Nicole was a 2010 magna cum laude graduate of Northeastern University located in Boston, Massachusetts where she earned her B.A. in English and Political Science.  She will receive her J.D. from Seton Hall University School of Law in 2015.  After graduation, Nicole will serve as a clerk to a trial judge of the Superior court of New Jersey in the Morris-Sussex Vicinage. 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