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In AJ Holdings Grp., LLC v. IP Holdings, LLC, a licensee's failure to ensure that “key players” preserved their e-mails on various accounts, coupled with his failure to implement any uniform or centralized plan to preserve data or even the various devices, demonstrated gross negligence with regard to the deletion of the e-mails. Furthermore, the inference of gross negligence gave rise to the rebuttable presumption that the spoliated documents were relevant to the breach of contract claim at issue.Continue Reading
Three requirements must be met to receive a mandatory adverse-inference instruction for spoliation: 1) the targeted litigant destroyed evidence at a time when he had a duty to preserve said evidence, 2) the targeted litigant acted with intent or gross negligence, and 3) the destroyed evidence was relevant to the movant’s claims. The finding of relevance turns on whether a reasonable trier of fact could infer that the destroyed or unavailable evidence would have been of the nature alleged by the party affected by its destruction. If the three requirements are met, the trier of fact may receive a mandatory adverse-inference instruction, meaning they must infer that the evidence was unfavorable to the discovered party. Courts are often reluctant to grant a dispositive motion based solely on spoliation unless the discovered party acted with bad faith and willfulness, and there is no other effective remedy.Continue Reading
In this case, the Plaintiff Ms. Veronica Painter is suing her employer, Defendant Aaron Atwood, D.D.S. Painter claimed that while she was at work, the dentist climbed on top of her with his pants down and held her down. Painter suffered extreme emotional distress as a result. The defendant argues that he merely tickled her and that they had a consensual sexual relationship. The discovery issue in this case arises because the defendants asserts that the plaintiff and her two main witnesses intentionally destroyed text messages and Facebook posts that contradict the plaintiff's claims and deposition testimony. Specifically, the defendants allege that while the plaintiff was employed at Urgent Dental, she posted Facebook comments and pictures regarding Urgent Dental and the Atwood’s, including comments about how much she enjoyed her job, how Urgent Dental was a great place to work, and how Dr. Atwood was a great boss and she enjoyed working with him. The defendants assert that they know these posts existed because Dr. Atwood's wife, Kelly Atwood, was friends with the plaintiff on Facebook at the time.Continue Reading
Deciding what should be preserved and who should preserve it can be difficult when litigation first begins. However, do not be fooled. A party can feel the wrath of the Courts if an interested non-party fails to preserve information leading up to trial. In the case of Pettit v. Smith, the court found that a state agency had a duty to preserve evidence even though the agency was not a party to the case. This case involved a claim of excessive force by an inmate against the alleged attacking officer, supervising officers, and the state of Arizona. However, it did not include the agency that oversaw the state prison, which is referred to as ADC. The plaintiff claimed that the defendants and ADC should have taken measures to preserve evidence once they had notice of the litigation. On the other hand, the defendants claimed that ADC had control over the missing evidence, and the defendants should not be held responsible for the disappearance of evidence they did not control.Continue Reading
When Robocast saw the new UI (user interface) for the Microsoft Xbox 360 “Video” and “Home” channels, Windows 8 Xbox Music Box software, Bing.com, MSNBC.com, and MSN.com, all which utilized a video playlist or a changing tile function, they thought “hey, we have the patent on that UI.” While there are many nuances contained within this case as to the characteristics of each company’s UI, the important point to take away from this is that Robocast saw something in the Microsoft UI that they believed fell under a patent they had filed in 2006. Basically, Robocast saw that the new Microsoft UI operated in the same form and function as that which Robocast had previously patented. Therefore, Robocast brought suit for patent infringement against Microsoft. This case is fraught with technical jargon and in depth explanations of the video playlist and changing tile functions employed by each company’s UI. However, this is an electronic discovery blog so I will give you what you came for. The electronic discovery issue presented itself in this case in the form of an expert report. Robocast had retained Professor James T. Berger to gather information and prepare reports regarding relevant information so that he would be able to form an opinion and testify as to the amount of damages owed to Robocast by Microsoft.Continue Reading
In the mood for a judicial tongue-lashing? All you have to do is disobey a court order, destroy evidence and lie under oath. By means of factual background, Plaintiff Pacific Packaging is a distributor of packaging products. Defendants James Barenboim, Andrew Slater, Steven Slater, and David Guild were salesmen at Pacific Packaging until they each resigned on October 15, 2009. After leaving Pacific Packaging, the defendants formed Packaging Partners and began operating the very next day, October 16, 2009. Sandra Zeraschi was a sales correspondent at Pacific Packaging until she resigned and went to work with Defendants at Packaging Partners the day they began operating. On November 4, 2009, Pacific Packaging filed a complaint and sought an order for expedited discovery and for the preservation of evidence, sensing something fishy about their new competitor. Judge Inge allowed the plaintiff’s motion for expedited discovery and ordered the production of several documents, certain depositions, preservation of relevant ESI, and within five days, the provision of any and all computers, laptops, removable storage and other devices used in connection with the Defendant’s businesses to plaintiff’s counsel and experts for examination and copying.Continue Reading
Court will grant sanctions for discovery transgressions. In this action, convenience store franchisees sued their franchisor for breach of franchise agreements because the franchisor attempted to end franchises. Some of the stores filed to have to 7-Eleven sanctioned for discovery transgressions and moved to strike 7-Eleven’s answer. Regarding discovery, the Magistrate Judge held an appropriate sanction against the franchisor for violation of the rule governing signing disclosures and discovery requests, requests, responses, and objections was admonition regarding the violation and that similar conduct would be addressed more harshly in the future. The Court found that 7-Eleven’s conduct caused “substantial case management and discovery problems”, but the Court did not hold 7-Eleven to “harsher” sanctions because the Court recognized that the Plaintiffs conferred with 7-Eleven to resolve their disputes, rather than going to court, which should be a last resort. Also, the Court did not think that 7-Eleven meant to hold onto relevant discovery, showing good faith on 7-Eleven’s behalf. Consequently, the Court ordered an appropriate sanction for 7-Eleven’s failure to comply with the court order, which was the reimbursement of franchises for fees and costs incurred to obtain discovery, as their “resources were strained by unnecessary and incessant discovery disputes.” This shows that being perhaps too aggressive during discovery could land you in the land of sanctions. Amanda, a Seton Hall University School of Law student (Class of 2016), focuses her studies in the area of family law. She is the Secretary of the Family Law Society and headed Seton Hall Law’s first involvement with National Adoption Day in November 2015. After graduation, Amanda will be clerking for a Superior Court Judge in the Family Division in New Jersey. Before law school, Amanda earned a B.A. from Penn State with a major in Communication Arts & Sciences and a Minor in Dispute Management and Resolution. In her spare time, Amanda enjoys participating in 5k and 10k races.
Should negligent destruction of evidence and intentional destruction of evidence be punished the same? That is one of the issues brought up in Alter v. Rocky Point School District. This case involves Lisa Alter (“Plaintiff”), a former second grade teacher and Principal, suing her former employer, Rocky Point School District (“Defendant”), for workplace discrimination. The first discovery dispute arose when the Plaintiff filed its first motion to compel discovery on October 1, 2013. Plaintiff sought to compel discovery of ESI, specifically emails between employees of Defendant. The Court granted Plaintiff’s motion. Subsequently, Plaintiff filed a second motion to compel discovery and for sanctions. Plaintiff alleged that Defendant did not comply with the Court’s instructions. Plaintiff argued that sanctions should be imposed against Defendant for: (1) failing to properly institute a litigation hold; (2) failing to complete a good faith search of ESI; (3) failing to sufficiently oversee ESI searches; (4) and for spoliation of evidence. The main issue in this case was whether the Court would impose sanctions on Defendant for spoliation of evidence. A party seeking sanctions for spoliation of evidence has the burden of establishing: (1) that the party having control over the evidence had an obligation to preserve it at the time it was destroyed; (2) that the records were destroyed with a culpable state of mind; (3) that the destroyed evidence was relevant to the party’s claim or defense such that a reasonable trier of fact could find that it would support the claim or defense. In Alter, the Plaintiff clearly established the first element. It was clear that Defendant had an obligation to preserve the evidence at the time it was lost. The Plaintiff was seeking emails between Defendant’s employees. Defendant, however, failed to institute a litigation hold until nearly two and a half years after the Plaintiff filed her Notice of Claim in November 2010. As to the second element, however, the Court was not convinced that the Plaintiff established that the records were destroyed with a culpable state of mind. The Court did find it “especially troubling” that the Defendant did not institute a litigation hold until nearly two and a half years after the initiation of Plaintiff’s lawsuit. The Court was clear that the Defendant was negligent in failing to preserve discoverable information. That being said, the Court was also clear that negligence is not enough to prove a culpable state of mind. The Court found that the Defendants’ actions, while negligent, were not intentional. As a result, the Court concluded that there was no intent to spoliate material evidence. Plaintiff also failed to establish the third element of her spoliation claim. The third element requires that the lost information be relevant to the party’s claim. Plaintiff failed to set forth, with any degree of specificity, that the lost materials would have been relevant or helpful to her claim. Relevance cannot be established solely on the basis of conjecture. Here, Plaintiff failed to meet her burden to set forth specific facts to support her claim. The Court here found that there was no spoliation of evidence. Despite the finding of no spoliation, the Court was still troubled by the actions of the Defendant and the actions of Defendant’s counsel. As a result, the Court imposed a monetary sanction of $1,500 to be borne equally by Defendant and the law firm that represented Defendant at the initiation of the lawsuit. Kevin received a B.A. in History from Princeton University in 2012. He will receive his J.D. from Seton Hall University School of Law in 2016.
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.
We often hear about the use of forensic evidence in murder mysteries pertaining to DNA testing or finding fingerprints at the murder scene. As technology continues to advance, however, forensic evidence has made its way into civil cases. In the technological world, even if you delete an email or a text message, the information can easily be restored. Furthermore, evidence that you blatantly tried to delete a particular document or text can be used to draw a negative inference regarding your culpability. Before considering “hiding” or “deleting” information on a computer or smartphone device, always remember that forensic evidence will come back and bite you. In a May 2015 case, HMS Holdings Corp. v. Arendt, two former HMS employees learned the hard way that human beings cannot outsmart technology. To assist their new employer, Public Consulting Group, Inc. (PCG), compete against their former employer, Health Management Systems (HMS), defendants Sean Curtin and Danielle Lange violated their post-employment covenants and used confidential HMS documents to the benefit of PCG. In response to the litigation, PCG circulated a Litigation Hold Notice to particular employees, including Curtin and Lange, which advised the employees of their obligation to preserve all electronically stored information (ESI) “on computers, removable or portable storage media, office computers, cellphones and personal computers.” About a month later, the parties to this case entered into a Stipulation Regarding Expedited Discovery. Under the Stipulation, the defendants needed to forensically image their personal computers, phones, zip drives, and other electronic devices to be searched. Although defendants handed over certain devices, not all devices were handed over and in some cases the defendants were not honest about what information these devices really contained or, more accurately, what they no longer contained. This case mentions four devices in particular: (1) Curtin’s Macbook Pro; (2) Curtin’s external Toshiba hard drive; (3) Lange’s PCG laptop; and (4) Lange’s iPhone. Ultimately, the court found spoliation of evidence on all four devices and sanctioned the defendants accordingly. In order to prove spoliation of evidence, the party seeking sanctions, here HMS, must show that: (1) the party with control over the evidence was under an obligation to preserve it at the time of alleged destruction, which begins when a party reasonably anticipates litigation; (2) the party destroyed the records with a culpable state of mind; and (3) the destroyed evidence was relevant to the party’s claim or defense. Relevancy of the third element is presumed upon intentional, willful or grossly negligent destruction of evidence. First the court analyzes Curtin’s Macbook Pro, which forensic evidence revealed had run a “Secure Erase Free Space” function six times after the Litigation Hold Notice. Forensic evidence also showed that Curtin did not use this function prior to these six times. Curtin alleged that he ran this program to help increase his laptop’s operating speed. Despite his explanation, Curtin failed to provide evidence as to why he failed to use a different version of the software that would increase operating speed without permanently deleting files. With a showing of willful destruction, a presumption of relevance attaches. Unlike his Macbook, Curtin was unable to provide any forensic imaging of his Toshiba external hard drive, despite the fact that considerable evidence showed that had copied volumes of confidential HMS materials to it the day before he left. Upon review, the court finds that Curtin intentionally and willfully failed to produce the hard drive despite his legal obligation to do so. Again, a presumption of relevance attaches to the hard drive ESI. Lange has the same fate as Curtin before the court. Shadow Copies, partial snapshots in time of a computer’s content made by the Microsoft Windows system, revealed that her PCG laptop contained HMS files before the pending litigation that no longer existed after the filing of the suit. Evidence shows that not a couple, but rather 5,300 files, were deleted from her laptop during a month-long period of time. Lange, also an attorney, claimed that these were pertinent files but were deleted to protect client confidences. Despite her explanation, the court found spoliation and a presumption of relevance attached. Finally, Lange’s text messages caused her some problems as well. Lange claimed to have replaced her iPhone 4 for a new iPhone 5, something many could relate to in 2014 when the new and improved Apple device hit the market. However, unlike many other customers, Lange’s old iPhone 4 had important text messages pertaining to the case and was replaced after the issuance of a Litigation Hold Notice. Lange claims that she had dropped her iPhone 4 so badly that even those at the AT&T store could not restore her messages. Despite this explanation, forensic evidence revealed that messages were actually uploaded to her laptop computer one week after her upgrade. In light of this evidence, the court again found spoliation of evidence and a negative presumption of relevance. With all four electronic devices being used to destroy evidence, the court now is tasked with determining the proper sanctions. The court has wide discretion in determining appropriate sanctions. Due to the egregious misconduct of both Curtin and Lange, the court allows the jury to draw a mandatory adverse inference regarding the destroyed evidence. Since there is no way to determine the contents of the evidence destroyed, the court finds this to be the most fair to HMS. In addition to the mandatory inference, the court also requires defendants to pay HMS’s reasonable attorney’s fees, costs, and expenses incurred as a result of their misconduct, with no reimbursement or indemnification from PCG. Also, since Lange is an attorney, the court will forward this information to the appropriate ethics board regarding her fitness to practice law. Hopefully the defendants in this case learned that forensic evidence does not lie and as technology increases, it is increasingly more difficult for us to cover our own tracks by simply clicking a “Delete” button. Laura Cicirelli, a Seton Hall University School of Law student (Class of 2016), has served as an Associate Editor and is currently serving as the Editor-in-Chief of the Seton Hall Law Review. Following graduation, Laura will be joining the firm of Debevoise & Plimpton as a corporate associate in its New York City office. Prior to law school, Laura attended the University of Scranton (Class of 2013) where she majored in marketing and double minored in operation and information management and philosophy.