- eLessons Learned
- Press and Publicity
- About Our Team
- Contact eLL Blog
In this technological age, people have gotten very lazy. Jobs once done by hand evolved to being done with tools. Jobs once done with tools evolved to being done by machines. Jobs once done by machines evolved to being automatically done by machine. The same is true with electronic discovery. It is no longer sufficient for me to present you with the files you requested and the entire database from which they are derived. Now, I must present them to you in a manner in which you deem acceptable or I must present them to you again. Sorry, I forgot I was supposed to do your job for you too. In FDIC v. Appleton, defendants moved to compel the FDIC to respond to their requests for production of documents claiming that the FDIC did not produce documents in conformity with Federal Rule of Civil Procedure 34, stating that FDIC failed to produce documents organized and labeled to conform with defendants' discovery requests or as they are kept in the ordinary course of business. The FDIC, in response to this motion, claims that it gathered the documents in Relativity from a larger database of ESI based upon search terms mutually agreed to by the defendants and also made the larger database available to search. Here, the defendants have all of the information they requested, both the specific files and the database from which the files were pulled. However, the court held that this was not sufficient. The FDIC believed that it produced the necessary documentation as required by the discovery requests and is not required to organize them according to the defenses specific wishes due to the Relativity software and how it sorts documents. Ultimately, the court granted defendants' Motion to Compel as to the ESI in Relativity requiring the FDIC to search for all documents in its possession responsive to defendants requests, to create a file in Relativity for each of defendants' discovery requests and then to put each document of each request in the corresponding file. This California case creates horrible precedent and should be overruled. The ruling itself creates latent and infinite costs that shift upon the person receiving the discovery request. This ruling also forces any plaintiff, here the FDIC, to neatly wrap the defendant’s requests into a box with Christmas wrapping paper and present the information to the defense with a little bow on top. Long gone are the days and legal strategy of “burying someone in documents” (a strategy used to often pursue a settlement instead of a costly and lengthy trial). Now, a quick search of a hard drive through a folders search bar specified to the defendants’ requests instead of the software’s default settings can determine exactly where the leverage to be used against you in litigation can be found, if there is any at all. Furthermore, the FDIC did completely comply with the discovery requests but not sufficiently enough for the defendants. The defendants filed a motion to compel because they were not happy in which the documentation that they requested was presented by Relativity so they went to a court of law to force the FDIC to present the information in another form. The cost associated with having to comply with a discovery request can be massive but the cost associated with having to do a discovery request over because the first discovery request was unorganized is absurd. Sorry, I forgot I am supposed to do your job for you as well as comply with the discovery request. FDIC gave you the information and it gave you the database upon which the data was derived, FDIC fulfilled its duty per discovery request. Timothy received his B.A. from Rutgers University in 2011. He began his post-college life working in Trenton, New Jersey at a lobbying and non-profit management organization before attending law school in the fall of 2012. He will receive his J.D. from Seton Hall University School of Law in 2015. Timothy has had a diverse set of experiences during his time in law school and has found his calling in Tax Law. Want to read more articles like this? Sign up for our post notification newsletter, here.
This case provides an important lesson for any person involved in a lawsuit involving text messages as evidence. Here, a group of employees was suing their employer for discrimination under Title VII. When the discovery process began, the defendants requested a number of text messages relating to the conduct of the employees during the relevant time period of the discrimination. These text messages were permitted to be discoverable by the defendant and the plaintiff was ordered to turn over the relevant text messages. The plaintiffs’ lawyer then gave the plaintiffs instructions to preserve all data relevant to the case; otherwise they could face sanctions by the court, which could negatively impact their suit. Spoliation is the legal term for deleting or destroying information sought by the opposing party. This is precisely what occurred here. Apparently the plaintiffs felt that if they simply deleted a portion of the requested text messages that the defendant would have no way to access that information and thus the problem would be solved; if there even was a problem to begin with. When the defendant discovered that these texts had not been turned over with the rest of the discovery they inquired about their whereabouts. The plaintiffs responded that the texts had been deleted. Obviously perturbed, the defendant then subpoenaed the mobile carrier, T-Mobile, and recovered the deleted texts. However, now the plaintiffs had a problem; they had deliberately attempted to conceal and destroy relevant information. The defendant then filed a motion to dismiss based on the actions of the plaintiff. The court granted the motion in part but denied the dismissal of all charges. Though, the court did impose sanctions upon the plaintiff, which carried the potential to seriously harm their case even if everything else went well. The simple lesson here is that you should never conceal, delete, or destroy any relevant information sought by the opposing party. Ultimately the content of the text messages remains unimportant in light of the plaintiffs’ spoliation. The plaintiffs should have followed their lawyer’s instruction to preserve the information. Had they turned over the information, their lawyer would have been able to combat the text messages in court in front of the jury. However, due to their actions, they were sanctioned and essentially handcuffed their counselor from undercutting any information contained within the text messages. Spoliation is never the answer even if you are required to turn over information that does not weigh in your favor. These plaintiffs learned the hard way; do not make the same mistake and follow your lawyer’s instructions. A.S. Mitchell received his B.A. in Political Science from the University of Central Florida (2008). He will receive his J.D. from Seton Hall University School of Law in 2015. Want to read more articles like this? Sign up for our post notification newsletter, here.
In this case, the Plaintiff Nicole Baker sues Bayer Healthcare Pharmaceutical Inc., complaining that the Bayer product Mirena was not adequately accompanied by warnings of its side effects. She asks Bayer to produce databases that contains sales calls made by the marketing and sales department to physician’s offices. The sales calls notes also contain conversations between sales representatives and healthcare providers. Bayer argues that only the sales calls notes concerning Baker’s treating physician are relevant. Bayer also argues that producing all the sales calls notes are unduly burdensome and excessive in light of the needs of the case. Ultimately, the court finds in favor of the Plaintiff, and finds that the databases containing all sales calls must be produced due to their relevance to the current case. Federal Rule of Civil Procedure 26(b)(1) permits “discovery regarding any nonprivileged matter that is relevant to any party's claim or defense.” The information sought “need not be admissible at the trial” so long as it “appears reasonably calculated to lead to the discovery of admissible evidence.” The crux of the Plaintiff’s argument is that all the sales call notes, not just limited to those related to her physician, are relevant to her case because they would ascertain whether the pharmaceutical company is overpromoting the product Mirena. Overproduction would mean that there could be dilution or nullification of any warnings, thereby rendering the warnings inadequate. The Plaintiff argues that the volume and substance of the sales calls notes can establish whether there was a vigorous, aggressive sales campaign to the medical profession, leading to failure to heed written warnings. While this argument appears to be attenuated, it does fall under the standard of being reasonably calculated to lead to the discovery of admissible evidence. The takeaway message is that the court thought although it was a burden to the Defendant, all of the sales calls notes are relevant to establishing if Bayer’s Mirena campaign was so pervasive that any doctor, including the Plaintiff’s, would fail to pay attention to warnings about the product’s side effects. Rebecca Hsu, a Seton Hall University School of Law student (Class of 2015), focuses her studies in the area of Patent Law, with a concentration in Intellectual Property. She is also certified in Healthcare Compliance, and has worked in Compliance at Otsuka America Pharmaceuticals, Inc. Prior to law school, she graduated cum laude from UCLA and completed graduate work in biomedical science. She has co-authored two medical science research articles, as well as completed fellowships through UCLA Medicine and the Medical College of Wisconsin. In addition to awards for her academic achievements, Rebecca has been honored by awards for her community service with disadvantaged communities. In her spare time, Rebecca regularly practices outdoor rock climbing, and can be found camping in the Adirondacks. Want to read more articles like this? Sign up for our post notification newsletter, here
It cannot be said enough: preservation of vital, relevant evidence should be handled with due care and diligence. This is not an obligation to take lightly or to be messed around with. When a party becomes aware of the relevance of certain evidence, it shall take all reasonable precautions to make sure nothing happens to it! In Clemons v. Correction Corporation of America, Inc., a pregnant prisoner in a private prison was complaining one night of severe pain. She was told by prison officials that she would be fine. Later the next day, Clemons’s symptoms only continued to grow worse, while the other prisoners desperately tried to get prison officials to help her, but to no avail. Finally, after a day of severe pain, bleeding, and vomiting, Clemons was transported to a hospital. While Clemons came out of this incident just fine, the same cannot be said of her baby, who did not survive premature labor. Clemons then brought a suit against the prison officials for failing to act promptly when she complained of severe pain the first time, leading to the death of her child. Being as this took place in a prison, there was surveillance video footage that would have shown the various movements of prison personnel and would have helped to establish a timeline of events. It should be obvious to everyone how relevant this video would be, and yet it was not preserved for trial! Now, prison officials did take steps to attempt to copy the footage before it was automatically overwritten. The assistant warden assigned a part-time maintenance worker the task of copying the video. When he was completed with this task, this maintenance worker reported to the assistant warden that he had successfully made the copies. However, no one checked the copy the maintenance worker had made until the original footage had already been destroyed. And, as luck would have it, the maintenance worker copied footage from the wrong day! Well now it was too late to get the original footage back, and the parties in this case were without the benefit of seeing what actually happened in the prison during the time in question. The judge remarked that sanctions would be warranted in this case if the prison officials who were responsible for spoliation acted with a culpable state of mind. Proof of intent to breach a duty to preserve is not necessary to satisfy this requirement, so while the prison officials did not intentionally destroy the video footage, they are not off the hook. The judge determined that there was an undisputed duty to preserve, Clemons did not delay in requesting that the video be preserved, the assistant warden knew how important the video was, and the prison officials exercised significantly less care than is required when tasked with preserving such important evidence. The judge ultimately imposed the sanction of an adverse inference jury instruction against the prison officials, because they had a duty to preserve the video, the video was clearly relevant to Clemons’s claims, and the failure to preserve the video was done with gross negligence. The prison officials argued that if any sanction must be imposed, it should be a permissive adverse inference jury instruction, rather than a mandatory one. Nevertheless, they lost this argument as well, because when a judge decides whether an adverse inference is permissive or mandatory, he must take account of the party’s degree of fault. Obviously, the prison officials’ degree of fault here was through the roof, so the inference was deemed mandatory. Let this serve as a lesson to all: do not place important legal obligations in the hands of part-time maintenance workers without even checking their work. This whole ordeal could have been avoided had the assistant warden taken a few minutes out of his day to make sure the correct footage was copied. Do not slack on the duty to preserve, or else sanctions will be waiting! 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.
In May 2014, Hon. Janet Bond Arterton, U.S.D.J. for the District of Connecticut ruled that sanctions were not appropriate in a case involving the conversion of a security video’s native format. Plaintiff Robert Crawford brought a motion for spoliation sanctions—including an adverse-inference instruction and monetary sanctions—against the Defendant City of New London for an alleged failure to preserve a hard drive containing video of Crawford’s arrest. Plaintiff, whose underlying claim involves excessive force issues, suggested that the original format of a security video may have been capable of being enhanced, and as such, Defendants had a duty to preserve that original version, and turn it over for discovery. Judge Arterton disagreed. In examining whether sanctions were appropriate, the court first set about defining the parameters of spoliation. The court noted “[s]poliation is the destruction or significant alteration of evidence, or the failure to preserve property for another’s use as evidence in pending or reasonably foreseeable litigation.” Crawford v. City of New London, 2014 WL 2168430, *2 (D. Conn. May 23, 2014) (quoting West v. Goodyear Tire & Rubber, Co., 167 F.3d 776, 779 (2d Cir. 1999)). Later, the court analyzed the adverse-inference charge, and articulated “[a] party seeking an adverse inference instruction based on the destruction of evidence must establish (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; and (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 that claim or defense.” Id. (quoting Chin v. Port. Auth. of N.Y. & N.J., 685 F.3d 135, 162 (2d Cir. 2012)). Here, the court noted that Defendants’ duty to preserve stemmed from a hold letter received pursuant to the Freedom of Information Act on June 24—nearly five months after the incident took place, and more than four months after New London’s retention policy allows for transferring of data to portable storage. As such, while the Defendants certainly had a duty to preserve, there was no specific need for multiple copies of duplicative information. New London hadn’t breached the preservation duty. But what about “Significant Alteration?” Spoliation isn’t just about destruction. Plaintiffs argued that in converting the video evidence from the format present on the hard drive to the portable storage versions on DVD, Defendants sacrificed the integrity of metadata, or of the files themselves such that they could no longer be enhanced for use in trial presentation. This novel argument suggested that were enhanced versions of the video available, perhaps the jury could see that Crawford’s arrest on February 4, 2010, was enacted using excessive force. The court was not persuaded by this argument. Testimony from the City of New London’s Chief Information Officer indicated that the conversion to DVD was lossless, in that the new format preserved the video in every material way. Absent proof to the alternative, the moving party was unable to demonstrate “that the destroyed [or significantly altered] evidence was relevant . . . ” under the standards set forth in Federal Rule of Evidence 401. Defendants were prepared for litigation, and they reasonably preserved all necessary data responsive to discovery request. Defendants’ retention policy for the original hard drive housing security footage is acceptable, and preserving the data on portable media after formatting the drive is an added precaution going well-beyond the standard of care. Crawford is fortunate that Judge Arterton didn’t force Plaintiffs to cover the costs of responding to the motion—if this author was on the bench, he might have. 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.
Have you ever wondered what happens to electronic files when you press the delete button? Or what happens when you put them in the “e-trash?” You may be surprised to find out that getting rid of electronic material is not as easy as it may seem. And in many cases, actually deleting or tampering with electronic files or data can cause a great big legal headache. The case of First Sr. Fin. Group LLC v. Watchdog explores and explains the issues that can arise when a person tries to permanently delete or tamper with electronic material that should have been protected and preserved for trial. Here, Defendant was asked to preserve the computer she used to make allegedly disparaging and defamatory remarks under her pseudonym, “watchdog.” The problem is that the computer was some how wiped clean of all electronic data after she was asked to it turn over to the experts. Now, let’s back track for a moment. Why is it such a big deal that data was deleted? Don’t people delete files all the time? The key to this problem is that electronic files and data can’t just be deleted unless very deliberate actions are taken. When a file is technically “deleted,” it is simply hidden in the background of the computer and marked as, what we will call, disposable data. Then, when the computer runs out of room to store more data, the disposable data is overwritten. Now, this doesn’t mean there is absolutely no way to wipe the data from a computer. As the saying goes, if there is a will, there is a way! (Even is the way is frowned upon and could present major legal repercussions.) In this case, someone used two programs called Erase Pro and CCleaner to effectively wipe MOST of the data from the computer involved in the case. In legal speak, this is called spoliation of evidence, and if proven, it can mean serious repercussions. Proving a person intentionally tampered with or destroyed evidence requires proof that a person: (1) had control over the evidence; (2) the evidence had relevance to the claim; (3) actually suppressed or withheld the evidence; and (4) that person had a duty to preserve the evidence. In this case, the judge held Defendant was liable for the spoliation of the evidence because Defendant met all of the above factors. However, factors 2 and 3 are particularly relevant to eDiscovery. In regards to the second element (whether the computer data was relevant to the claim), the judge turned to the data fragments recovered by the expert. When a computer is wiped clean with Erase Pro and CCleaner, it still leaves behind fragments of data, which are like pieces of a ripped up letter. In this case, the Judge determined that the data fragments provided enough information to show that the computer data was relevant to the case. As such, the second element was satisfied. In regards to element 3 (whether the data was actually suppressed or withheld), the Judge’s main inquiry revolved around whether the use of CCleaner and Erase Pro is considered intentional. As you might imagine, it was pretty obvious that the use of two separate types of software with the distinct purpose to clear the computer of data is an intentional act. As such, the third element was satisfied. The Defendant got lucky with a minor sanction of a fine, paying for the computer expert, and paying the other parties attorney’s fees related to the investigation of the computer. However, this was nothing compared to those available for spoliation charges. In more serious cases, the judge could hold that an adverse inference be drawn from the missing evidence, or the party could pay all fees related to the case. In the most extreme cases, the Judge could choose to dismiss the case or find the case in favor of opposing party. Overall, when it comes to electronic data there is one thing to remember. Electronic data is extremely difficult to get rid of, and actually getting rid of it can mean serious legal consequences. Victoria O’Connor Blazeski (formerly Victoria L. O’Connor) received her B.S. form Stevens Institute of Technology, and she will receive her J.D. from Seton Hall University School of Law in 2015. Prior to law school, she worked as an account manager in the Corporate Tax Provision department of Thomson Reuters, Tax & Accounting. Victoria is a former D3 college basketball player, and she has an interest in tax law and civil litigation. After graduating, she will clerk for the Hon. Joseph M. Andresini, J.T.C. in the Tax Courts of New Jersey. Want to read more articles like this? Sign up for our post notification newsletter, here.
The Philadelphia Police Commissioner and two police officers were accused of spoliation of evidence in an excessive force case. “Spoliation is the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence.” Kinsler v. City of Philadelphia, No. CIV.A. 13-6412, 2014 WL 3964925, at *1 (E.D. Pa. Aug. 11, 2014) (internal citations omitted). In this case, there was an incident that led Jeffrey Kinsler to file a lawsuit against the City of Philadelphia for use of excessive force. Subsequently, a witness submitted a 15-to-30-second-long video to the police department of the events that occurred prior to the arrival of the police officers on scene that day. The police department lost the video. Kinsler argues spoliation and asks for a specific jury instruction stating such, as well as sanctions. The court found however, that there was no spoliation. It determined that the video was not relevant to the case because it only showed events that occurred before the officers arrived on scene. Further, a video was in existence that showed the incident at the time the officers were involved. Also, Kinsler never claimed that the accused officers were ever in possession of the lost video. Therefore, there was no spoliation and plaintiff’s motion for sanctions was denied. Moral of the story: If evidence is at all potentially relevant in pending or foreseeable litigation, preserve it, or risk sanctions. 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.
The most important sentence of the court’s opinion in Armstrong Pump, Inc. v. Hartman, contained one word: “Enough.” After more than four years since the lawsuit was filed, discovery is far from complete, the case is far from ready for trial and the Court made a point to note “its frustration with the continual and growing animosity between the parties” which has “slowed the progress of the case” and “required repeated judicial intervention.” In February 2005, the parties’ relationship began when defendant Hartman/Optimum entered into a License Agreement with plaintiff Armstrong concerning three patents that defendant owned. The License Agreement contained several restrictions, including that Armstrong had no rights to “field implementation” of the patented product. At its essence, the dispute arose when Armstrong allegedly breached the License Agreement by utilizing the “field implementation” when the Agreement explicitly prohibited such use. Defendant accused Armstrong of exceeding the limited scope of its license rights and therefore breached or threatened to breach the License Agreement. What began as a somewhat typical breach of contract case quickly devolved into a flurry of document production disputes. Optimum initially served Armstrong with two sets of discovery requests seeking for “all documents” pertaining to the License Agreement, communications between Hartman and Armstrong and the alleged “field implementations.” Over Armstrong’s protest, Optimum filed a motion to compel, which the court granted. The court, however, cautioned Armstrong “not to engage in piecemeal production of materials it has located” that are, in fact, responsive. Because Armstrong never filed a motion for a protective order, Optimum served a second set of discovery requests pertaining to marketing efforts and customers that might provide relevant information regarding the use of “field implementation” technologies. Again Armstrong protested and again, the court granted a motion to compel. The most recent discovery dispute contains allegations of delays, omissions, and misrepresentations, and “threatens to make this case more about document production than about breach of a contract. After the second motion to compel, Armstrong made at least nine separate document productions and produced over 34,000 documents before the first deposition was even taken. In that first deposition, Optimum deposed Thomsen, who was an Armstrong Director, and he revealed to Optimum for the first time that any Armstrong product using the relevant patents went through a five-step development process. This deposition led Optimum to accuse Armstrong of withholding documents and information related to the development process. Optimum now argues that information recently acquired should have been provided years earlier and that Thomsen and other pertinent employees need to undergo further deposition to reflect the newly acquired information. Optimum believes that Armstrong is hiding or delaying information about unauthorized sales that violate the License Agreement and that therefore, Armstrong should be sanctioned and ordered to compel further responses. Armstrong counters that it has been sufficiently responding to the discovery requests and accuses Optimum of demanding more information and documentation without reviewing what has already been handed over. Armstrong also argues that Optimum did not follow Rule 37 of the Federal Rules of Civil Procedure by meeting with Armstrong to discuss its concerns prior to filing the current motion. After taking the time and effort to express its frustration at this exceedingly adversarial case, the court goes on to write that certain requests have “wasted the court’s time.” The court further notes that “no one, in this history of the case, has objected to any discovery requests enough to make a motion for a protective order” under Rule 26(c). The court goes as far as to accuse the bickering parties as preferring that “the Court forget what the actual claims are in this case and start obsessing over [frivolous] details.” After explaining the foundational premise of Rule 37, helping to enforce proper conduct, the court hands down an order finalizing once and for all what documents Armstrong must produce. The court utilizes a refined keyword list, based on certain phrases that appear repeatedly in previous motions, to rule that Armstrong must “search ALL corporate documents, files, communications, and recordings for EACH of the above phrases.” When the search is complete, a representative of Armstrong along with Armstrong’s counsel must file a sworn statement confirming that Armstrong made a good-faith effort to comply with the court’s order of production. The court concludes by warning that failure to comply will lead to sanctions under Rule 37(b)(2)(A) and puts Optimum on notice that “the Court will not hesitate to apply to the same approach to its document production.” 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. Want to read more articles like this? Sign up for our post notification newsletter, here.
In January 2014, the Hon. Lawrence E. Kahn in the U.S. District Court for the Northern District of New York granted plaintiff Dataflow, Inc.’s motion for sanctions in a case regarding deleted email correspondence. Sanctions took the form of the often-case-ending adverse inference, with the judge reserving on the specific language of the adverse inference jury instruction until trial. Defendant Peerless Insurance Co. might not wait that long, as even the neophyte lawyer can tell when blood is in the water. Dataflow’s claim arose out of a discovery request for production of documents that “targeted, inter alia internal communications and investigations regarding Plaintiffs’ claim.” Dataflow, Inc., v. Peerless Ins. Co., No. 3:11-cv-1127 (LEK/DEP), 2014 WL 148685, *2 (N.D.N.Y. Jan. 13, 2014). When the defendant failed to produce any internal communications responsive to the document request, the plaintiffs tried again. After the plaintiffs submitted an even narrower request for production, the defendants still didn’t produce anything responsive. Perhaps smelling something fishy, Dataflow started taking depositions and asking questions about the internal communications at Peerless. The plaintiffs quickly learned that email was routinely used to communicate about claims. The emails that Dataflow already asked for. The emails that Dataflow was told didn’t exist. The plot thickens. Hon. David E. Peebles, the Magistrate Judge handling discovery in this matter filed a Report and Recommendation urging sanctions be granted and fees shifted. The District Court, reviewing Judge Peebles’s ruling de novo determined that the Magistrate got it right—and that sanctions are appropriate. The court analyzed the facts of the case under the spoliation framework set forth in Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99, 107 (2d Cir. 2002): On a motion for sanctions due to spoliation, the moving party must show that: (1) the party having control of the evidence had an obligation to preserve it at the time it was destroyed; (2) that party had a culpable state of mind; and (3) the destroyed evidence was of a nature that a reasonable trier of fact could find that it would support the moving party’s claim or defense. Dataflow, at *2 (citing Residential Funding Corp, at 107). Here, the duty to preserve for an insurance party was triggered when a claim was submitted. As such, any internal communication regarding that claim is obviously supposed to be preserved. The culpable state of mind can be inferred by the gross negligence displayed by email deletion resulting from a “system change.” A “system change” that also conveniently “changed” the methods of preservation of documents related to paid and unpaid claims. Finally, since the plaintiff was able to prove that the contents of the internal email conversations likely would have supported the plaintiffs’ theory of the case, sanctions in the form of an adverse inference just make sense. Perhaps it’s time for Peerless to have a “system change” with regards to their general counsel. Kevin received a B.S. in Political Science from the University of Scranton (2009), and will receive his J.D. from Seton Hall University School of Law in 2015. Prior to joining the Seton Hall community, Kevin worked as an eDiscovery professional at two large “white-shoe” law firms in Manhattan. Want to read more articles like this? Sign up for our post notification newsletter, here.
When a party’s violation of discovery rules causes added legal expenses to its adversarial, courts appear to be very generous in approving fee applications. An application only needs to provide itemized ledger entries of attorney/paralegal hours with simple explanation of the relation of the corresponding work to the discovery violation. Courts are going to exercise broad discretion and place the burden on the violating party to show with particularity why each logged hour is unreasonable. It appears that courts will only disprove hours that are obviously excessive or clearly redundant on the face of the ledger. In Tangible Value v. Town Sports International, Inc., Tangible Value (“TV”) sued the defendants for not paying for services provided according to an oral contract, which the defendants denied. The bulk of its claim was reflected in an invoice stating an unpaid balance of about $800,000. Upon discovery request by the defendant, TV, refused to produce metadata and other documents related to the invoice. The court then ordered such production. During the course of the discovery, TV repeatedly provided insufficient documentation as requested and the defendant had to examine the documents and determine their sufficiency, converse with counsels of TV, and initiate court conferences multiple times to compel additional documents. It was later discovered that the invoice was not real but was created by TV after the fact to justify a damage claim. At that point, the defendant filed a motion for contempt and sanction. The court granted the motion. The defendants then filed their fee application seeking to recoup legal expenses as a result of TV’s discovery violation, which totaled 423.2 hours at rates varying between $180-$562 for attorneys (associates and partners) and $95-$153 for paralegals. The Magistrate Judge of the District Court for the District of New Jersey generously awarded the defendants 384 hours. Several observations can be made on how the court dealt with various legal charges. First, court deemed all charging rates reasonable by comparing the proposed rates to the rates approved previously by the court in other matters. Second, the court automatically approved any hours that were not objected to by TV. Third, once specific objections of hours were made, the court used a great deal of discretion and required particular showing why the hours objected were unreasonable. Fourth, the court approved internal attorney conferences without much hesitation. Fifth, hours logged for preparation for court conference were approved 100%. Sixth, the court was only willing to consider obviously excessive or unnecessarily redundant work as unreasonable. Seventh and most astonishingly, the court was extremely generous in allowing hours associated with legal research and drafting of Motion for Sanction and Fee application, approving a whopping 250 hours, or over 6 weeks’ worth of work for a single attorney! For my fellow law students, that is half of one entire law school semester. Thus, for executives and legal counsels in similar situations, make a good faith effort to obey the discovery request. Otherwise, the other side will surely take full advantage of the generosity of the court and obtain a humongous reimbursement in legal fees. For easy reference, the table below summarizes the court’s disposition of all hours included in defendants’ fee application in the Tangible Value case. Note: DP stands for Document Production. Fee Items Hours Applied Court Comments Reduction of Hours by Court Assessment of deficiencies in initial DP 8.3 none Communications with TV Re deficiencies in initial DP 9.8 2 Court conference/preparation Re deficiencies in initial DP 1.8 none Communications with TV Re deficiencies in its 2nd DP 5.8 none Court conference/preparation Re deficiencies in 2nd DP 3.1 none Investigation of the invoice and assessment of documents related to the derivation of the invoice 19.2 Multiple paralegals on same task. 4.9 Communications with TV Re deficiencies in its DP concerning the invoice 10.7 Two entries on similar work. 4.4 Court conference Re the deficiencies in DP concerning the invoice 0.8 none Assessment of deficiencies in the 3rd DP 2.2 none Communications with TV Re the deficiencies in 3rd DP 2.4 none Assessment of the 4th DP 1.5 none Assessment of the 5th DP 7 Ledger is unclear. 0.5 Communications with TV Re deficiencies in the 5th DP 1 none Assessment of 6th DP and accuracy of TV certifications 5.9 none Communications Re deficiencies in 6th DP and accuracy of certifications 7.7 none Communication with TV Re deficiencies in 7th DP 1.3 none Communication with TV Re deficiencies in 8th DP 0.5 none Letter to Court summarizing DP deficiencies and seeking permission to move to compel 3.9 none Motion to Compel, including drafting, legal research. 23.5 none Oral argument Re Motion to Compel and Status Conference with court. 4.4 none Revision of Scheduling Orders throughout litigation due to discovery delays 4.2 none Letter request for permission to move for sanction, including review and legal research 9.8 Two attorneys repeated same task. 2 Review of TV response to the letter above 8.2 none Motion for Sanction, including legal research and drafting 80.8 none Review of TV response for the Motion for Sanction, preparation of reply, and review of Magistrate Report and Recommendations. 28.1 The 4 hours for reviewing Court Report excessive. 1 Fee application including review of records and case law research 89.9 Excessive only by 12.2 hours 12.2 Review of TV’s opposition to the Fee Application and draft reply 77.7 Excessive only by 12.2 hours 12.2 Gang Chen is a Senior Segment Manager in the Intellectual Property Business Group of Alcatel-Lucent, and a4th year evening student at Seton Hall University School of Law focusing on patent law. Want to read more articles like this? Sign up for our post notification newsletter, here.