Category: E-Discovery: Legal Decisions and Court Rules

“It Wasn’t My Fault”: Court Rejects Attempts by Client and Attorney to Duck Responsibility and Sanctions Both Jointly

This blog has previously discussed the importance of cooperation among parties in a litigation to effectuate a comprehensive discovery framework; however, a recent decision from the District Court for the Northern District of California exemplifies the importance of joint responsibility and collaboration between attorneys and their clients when dealing with e-discovery matters, including preservation, collection, and production of electronically stored information (ESI). In a case that ultimately settled and involved both foreign and domestic parties, the court granted a motion for monetary sanctions pursuant to its inherent authority and Rule 37, after finding that the plaintiff’s discovery misconduct “not only forced [defendant] to incur additional attorneys’ fees but … also forced the court to expend considerable resources beyond what was necessary.” Because both the plaintiff and its former counsel “failed in their responsibilities,” the court imposed sanctions jointly and severally against them. In Optrics Inc. v. Barracuda Networks Inc., the plaintiff, a Canadian engineering firm, filed suit in August 2017 against the defendant, an American company, “bringing trademark, contract, and other claims stemming from allegedly unfair and deceptive business practices by [defendant] during the parties’ thirteen-year business relationship.” Beginning in June 2019, discovery disputes and “discovery violations” by the plaintiff plagued the litigation. In February 2020, “with discovery still mired in disputes,” the parties stipulated...

Motion for Sanctions Sunk: The Southern District of Florida Refuses to Impose Rule 37(e) Sanctions Where Carnival Was Not on Notice of Potential Relevance of CCTV Footage From Passenger’s Slip and Fall

In Easterwood v. Carnival Corporation, the plaintiff filed suit against the defendant, Carnival Corporation, for personal injuries she sustained after she slipped and fell while onboard the defendant’s cruise ship. The plaintiff filed a motion for sanctions, arguing that the defendant spoliated critical evidence – closed-circuit television (CCTV) footage of another passenger on the defendant’s cruise ship who had fallen an hour before in the same spot as the plaintiff did. The plaintiff requested that an adverse inference be drawn against the defendant. The defendant submitted the declaration of a company representative stating that, because the other passenger’s incident involved a minor injury, the defendant did not preserve the CCTV footage of the incident, as it had no reason to anticipate litigation would ensue from that incident and such footage was automatically overwritten after 14 days. In determining whether to impose spoliation sanctions pursuant to Rule 37(e), the Southern District Court of Florida analyzed whether the CCTV footage (1) constitutes electronically stored information (ESI); (2) should have been preserved in anticipation of litigation; (3) was lost because the defendant failed to take reasonable steps to preserve it; and (4) cannot be restored or replaced through additional discovery. While we have previously blogged on the question of whether a court may impose sanctions pursuant to the...

Litigating at the Intersection of Cooperation and Sedona Principle 6

The terms “cooperation” and “transparency” continue to gain traction in the context of litigation discovery, and the emergence of these concepts has been accompanied by a gradual erosion of a party’s ability to respond to discovery with autonomy. Litigants are often forced to make a decision as the expectation of cooperation in discovery intersects with the understanding that it is the responding party who will be in the best position to formulate a comprehensive discovery plan to search for, gather, and ultimately produce its own electronically stored information (ESI). This is based on the premise that the responding party is best situated to understand its own systems, the formats of communication used by employees, and the lingo used to discuss the subject matter of the dispute. The Sedona Conference Principle 6 recognizes that a responding party is in the best position to select relevant technology to appropriately gather and produce relevant information. On the other hand, the Sedona Conference Cooperation Proclamation, the 2016 Amendments to the Federal Rules of Civil Procedure, and countless judicial decisions extoll the benefits of cooperation. The intersection of Sedona Conference Principle 6 with the concepts of “cooperation” and “transparency” has been on full display in several recent decisions involving attempts by a requesting party to force a responding party to...

Planning Ahead: The Critical Importance of Early Agreement on the Proportional Scope of Preservation

In M.A. v. Wyndham Hotels & Resorts, Inc., and H.H. v. G6 Hospitality LLC, the United States District Court for the Southern District of Ohio, Eastern Division, rejected plaintiffs’ objections to the Magistrate Judge’s decision excluding certain types of electronically stored information (ESI) from defendants’ duty to preserve. In doing so, the District Court emphasized the fact that the parties had spent a considerable amount of time addressing issues related to ESI and that plaintiffs had consented to the exclusions during a status conference with the Magistrate Judge. In adopting the Magistrate Judge’s recommendation, the District Court based its decision on “guiding principles of proportionality, default standards in other jurisdictions, and current trends in ESI discovery.” Plaintiffs filed related complaints against several hotel locations and parent companies pursuant to the Trafficking Victims Protection Reauthorization Act (TVPRA). In April 2019, plaintiffs sent letters to defendants reminding them of their duty to preserve potentially discoverable ESI. A number of discovery disputes ensued related to proposed confidentiality and ESI orders. While this decision also addresses issues related to confidentiality, the primary focus of this post is the dispute regarding defendants’ obligation to preserve certain types of ESI. In particular, plaintiffs objected to an oral decision rendered by the Magistrate Judge finding that defendants were not obligated to preserve:...

Federal Court Sanctions Defense Attorney Under § 1927 for Unreasonably Vexatious Conduct During Discovery

A Minnesota federal court recently issued a stern warning to attorneys and litigants who ignore court orders and fail to make any effort to engage in meet and confers during the discovery process. In Management Registry, Inc. v. A.W. Companies, et al., the District Court for the District of Minnesota ordered a defense attorney to pay $25,000 in attorney’s fees, pursuant to 28 U.S.C. § 1927, in addition to other forms of sanctions for the attorney’s “pervasive discovery misconduct.” This case arose from plaintiff’s claims against defendants “after a corporation acquisition went wrong.” The litigation has a tortured procedural history during which the parties fought for almost two years over various discovery disputes, a number of which involved the format of production of certain documents. The parties had participated in a telephonic conference in late 2018, during which time the court ordered defendants to produce ESI in the same manner that plaintiff was required to produce ESI. Following that conference, a number of issues arose with respect to defendants’ production, and counsel for the defendants (at that time) agreed to make a supplemental production to resolve the technical issues. Defendants then obtained new counsel, and the new counsel proceeded to file a motion to compel without: (1) first reviewing the status of documents that had...

Non-Consensual “Quick Peek” Revisited: FRE 502(d) Cannot Be Used to Compel Production of Potentially Privileged Information Without a Privilege Review

The District Court for the District of Columbia recently confirmed that FRE 502(d) orders cannot be used to force a responding party to produce potentially privileged documents without the opportunity to first review them. In doing so, the court found that such an order would not only violate the producing parties’ right to determine in the first instance how it reviews and produces, but would potentially compel the production of privileged information and thus would constitute “an abuse of discretion.” In Equal Employment Opportunity Commission v. George Washington University, the EEOC filed a discrimination action on behalf of a former executive assistant against defendant, George Washington University, alleging that defendant’s former athletic director treated the former executive assistant less favorably compared to her male co-worker, a former special assistant. The discovery dispute concerned four requests for production of documents served by plaintiff: three seeking thousands of emails from the work accounts of defendant’s former athletic director and his two assistants; and one seeking information related to workplace complaints against the former athletic director. Defendant argued that plaintiff’s requests were overbroad and unduly burdensome—that is, that compliance with the requests would impose costs that were “not proportional to the needs of the case,” under the proportionality dictates of FRCP 26. By its decision, the court resolved...

Rule 37(e) and a Court’s Inherent Authority to Sanction Parties for Spoliation of ESI; The District of Arizona Reminds Litigants that When Rule 37(e) is Up to the Task, It is the Controlling Source of Sanctions

The United States District Court for the District of Arizona recently addressed the issue of whether the court’s inherent authority can be used to analyze the failure to preserve ESI after amended Rule 37(e) became effective on December 6, 2015. Following the well-publicized amendments to Rule 37(e), the question of whether the court’s “inherent authority” to sanction a party for the spoliation of ESI survived the amendments has received disparate treatment from courts despite what many opine to be unambiguous language in the amended rule. In Alsadi v. Intel Corporation, District Judge David Campbell, who chaired the Advisory Committee on the Federal Rules of Civil Procedure from 2011 to 2015, weighed in on this controversy, in pronouncing that a court cannot impose negative (adverse) inference sanctions pursuant to inherent authority when Rule 37(e) is up to the task of addressing ESI spoliation and the intent requirement of that rule is not satisfied. In this case involving claims for negligence and loss of consortium related to the emission of hazardous gases from an industrial wastewater system, plaintiffs (a plant employee and his wife) alleged that defendant’s negligence caused the plant employee to become permanently disabled after being exposed to hydrogen sulfide and possibly other toxic gases. Plaintiffs sought data from defendant regarding measurements of ambient gas...

Do Not Treat Rule 26(g) Certifications as a Mere Formality: Southern District of Florida Cautions Against Client ‘Self-Collection’ of ESI Without Adequate Attorney Oversight

In a recent decision reprimanding defense counsel’s lack of oversight of a client’s collection of data during discovery, the District Court for the Southern District of Florida issued a cautionary opinion that should serve as yet another reminder to counsel of the perils associated with allowing a client to self-collect ESI. Similar to a recent decision we addressed from the District Court of the Northern District of California, Equal Employment Opportunity Commission v. M1 5100 Corp., d/b/a Jumbo Supermarket, Inc. is a strong reminder that Federal Rule of Civil Procedure 26 should serve as a guide for the action and oversight required of counsel in the search, collection, and production of documents in response to discovery demands. In this age discrimination case, the District Court addressed plaintiff’s motion to compel. Plaintiff sought more specific discovery responses to two requests, attorney’s fees and costs in addition to the “opportunity to inspect Defendant’s ESI because, by Defendant’s counsel’s own admission, Defendant ‘self-collected’ responsive documents and information to the discovery requests without the oversight of counsel.” Cautioning against the “perils of self-collection of ESI by a party or interested person,” the District Court reminded counsel of its obligation to “have knowledge of, supervise, or counsel the client’s discovery search, collection and production” pursuant to Rule 26(g)(1). The District...

Raising the Specter of Discovery Abuse: The Importance of Developing a Discovery Record Before Filing a Motion to Compel

Two recent decisions highlight the importance of establishing a record of discovery abuse before filing a motion to compel based upon the commonly held suspicion that a responding party is withholding information and/or has failed to adequately preserve or search for information. Even in situations where a party is convinced that an adversary has failed to produce discoverable information, a litigant will face an uphill climb in pursuing a motion to compel in the absence of concrete evidence as to an adversary’s discovery shortfalls, including evidence of data deletion, untimely or absent preservation efforts, and/or the failure to produce information produced by other parties or third-parties that clearly should be in the possession of the responding party. Winn-Dixie Stores, Inc. v. Eastern Mushroom Marketing Cooperative (E.D. Pa.) In a recent decision from the Eastern District of Pennsylvania, Judge Schiller denied plaintiffs’ motion to compel in a case where plaintiffs insisted that “there simply must be responsive documents,” but plaintiffs were unable to provide any specific evidence to support their speculation. In this antitrust litigation involving allegations that defendants colluded to raise the price of fresh agarics mushrooms, plaintiffs sought all documents from defendants regarding the sale of mushrooms to plaintiffs. In particular, numerous discovery disputes ensued after the court entered an order requiring defendants to...

Disappearing Act: Northern District of California Issues Rare Terminating Sanctions for Spoliation on a Massive Scale

In WeRide Corp. v. Kun Huang, the Northern District of California addressed an egregious case of discovery abuses and spoliation by defendants in a business litigation involving the alleged theft of autonomous vehicle technology. Applying Federal Rules of Civil Procedure 37(b) and 37(e), the court issued rare terminating sanctions against several defendants who willfully and intentionally deleted various forms of ESI, including relevant emails, status reports, and source code, well after the commencement of litigation and after a preservation order issued by the court requiring the preservation of such information. Defendants compounded these abuses by adopting the use of “DingTalk,” an ephemeral communication technology, after the court had issued the preservation order. WeRide, a technology company engaged in the business of developing autonomous cars, employed defendant Jing Wang as CEO in January 2018. WeRide alleged that Wang went on to form his own company, AllRide, as a direct competitor. WeRide also alleged that former employee defendant Kun Huang was recruited by Wang to work for AllRide while still employed by WeRide. WeRide alleged that Huang downloaded various forms of data during this time period and transferred this data onto several USB devices from two WeRide-issued computers, then proceeded to delete files from the devices. WeRide further alleged that AllRide and Huang stole WeRide’s source code,...