Clearly, the field of eDiscovery has become an important sub-category of the practice of law. As the volume of eDiscovery increases, so do the number of cases that are filed regarding how eDiscovery should be undertaken and the responsibilities and obligations that the courts expect lawyers to be familiar with. Judges are demanding increasing diligence from all parties in litigation (plaintiffs, defendants AND their respective counsel), and they are not shy to issue sanctions when they feel that parties have not fulfilled their legal obligations. Therefore it is important to keep track of some of these rulings as they are issued. While not an exhaustive list, the following recent cases certainly rank among the most important in the industry.
Wilson v. Thorn Energy, LLC (S.D.N.Y 2010)
In an action regarding a promissory note, a key witness for the defendants described in her deposition a series of events regarding a flash drive. She stated that the flash drive contained all the defendant’s records pertaining to the handling of funds that were at the heart of the case. When the flash drive could no longer be read, she informed counsel and the company accountants and asked a person who was “very good with computers” to examine the drive. Only a very limited amount of data could be immediately recovered from the drive and it was then discarded several months later.
The judge ruled that the defendants’ failure to preserve and then produce documents in a timely manner constituted “gross negligence or willfulness”, emphasizing the importance of issuing and enforcing litigation holds. The defendant failed to make a copy of the flash drive before it failed and after they had been notified of the potential litigation. The court further noted that the "safe harbor" provision of Fed. R. Civ. P. 37(e) did not apply because "the data on the flash drive was not overridden or erased as part of a standard protocol; rather, it was lost because the Defendants failed to make a copy."
Mt. Hawley Insurance Company v. Felman Prod. Inc. (S.D. W. Va., 2010)
This case focuses on the importance of designing a rigorous set of keyword searches, including the need for vetting, sampling and providing quality control of search results. Mt. Hawley points to the professionalization of search technology and the need to employ scientific methodology in eDiscovery. Ultimately, this case produced 377 privileged documents that might have been attributed to a software indexing issue. The judge determined that the error was more directly related to the plaintiff’s failure to “perform critical quality control sampling”. Since they did not employ rigorous sampling and QC procedures, the judge allowed damaging attorney-client privileged information to remain as evidence and not be returned.
Pension Committee of the University of Montreal Pension Plan, et. al., v. Banc of America Securities, LLC, et. al. (S.D.N.Y. 2010).
Judge Scheindlin again addressed the issue of spoliation (as she did extensively in Zubalake), ruling against 13 plaintiffs for incorrectly handling preservation, collection and production of ESI. In this case, the overriding issues were that the plaintiffs did not properly issue litigation hold notices, identify and preserve sources of potential responsive evidence or properly identify and collect responsive documents.
While the judge did not find any “egregious examples of litigants purposefully destroying evidence,” she did find that the plaintiffs had conducted discovery in an “ignorant” and indifferent fashion”. It was also noted that the declarations filed by plaintiffs with regard to these issues contained false and misleading statements, the deposition witnesses were not properly prepared at the time of deposition and notably had little or no personal knowledge about the facts to which they had declared.
Rimkus Consulting, 2010 WL 645253
Rimkus Consulting, from the Southern District of Texas, involved allegations of intentional destruction of evidence, but Judge Rosenthal expanded her discussion to include the topics of the duty to preserve evidence, conduct that breaches that duty, the level of culpability necessary to impose sanctions, and the standard that must be satisfied to justify a spoliation instruction. The defendants essentially admitted they had not taken steps to preserve relevant e-mails when they first recognized the likelihood of litigation concerning their competing business, even after filing they filed a pre-emptive suit themselves.
The defendants offered contradictory stories about the reasons that certain emails were deleted, one having to do with st9orage capacity, another having to do with destruction policy. Judge Rosenthal found that the defendants not only failed to take the proper steps to preserve relevant documents but also proactively deleted emails. When some of these emails were later recovered from other sources, the judge ruled that they contained potentially relevant evidence and concluded that a reasonable jury could find that the deletions were intentional and in bad faith.
Rather than trying to create absolute rules, Judge Rosenthal relied on the traditional negligence language involving “reasonableness and proportionality”. She concluded that "[i]t can be difficult to draw bright-line distinctions between acceptable and unacceptable conduct in preserving information and in conducting discovery, either prospectively or with the benefit (and distortion) of hindsight."
What are the Conclusions?
1. The judiciary is working hard to define eDiscovery guidelines. As these guidelines become stricter, attorneys need to pay close attention to the current climate and utilize the expertise of inside and outside experts to design the most defensible processes possible.
2. The law of eDiscovery remains unsettled, but is quickly evolving Attorneys need to keep abreast of important rulings and employ the best practices available, documenting procedures to defend themselves in court if required.
3. There is no universal absolute set of rules that can be relied on by all parties at all times. As Scheindlin noted in Pension Committee, "[e]ach case will turn on its own facts and the varieties of efforts and failures is infinite." Each judge must necessary make judgment calls based on the facts and conditions of the case in front of them.
4. Some specific steps that should be woven into the eDiscovery processes
1. Address preservation duties as soon as a litigation trigger event occurs. Issue written litigation hold letters as early as possible and enforce them to avoid the destruction of possibly relevant data.
2. Identify key custodians (both past and present employees) and preserve their data. Use an existing internal process to guide the development of a procedure for a specific litigation.
3. Make sure to provide litigation supervision and instructions in the event that employees are scheduled for depositions.
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