Gibbons Law Alert

Gibbons Law Alert

Category: E-Discovery: Legal Decisions and Court Rules

Of All People…: DC District Court Hits Experienced Litigator Defendant With Terminating Sanctions for Failure to Preserve

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Posted in E-Discovery: Legal Decisions and Court Rules / General Litigation / Litigation Preparedness and Strategies

On October 5, 2023

In yet another cautionary tale displaying how seriously attorneys and clients must take discovery obligations, United States District Court Judge Beryl A. Howell entered a very rarely imposed default judgement against famed former U.S. Attorney and Mayor Rudy Giuliani for failure to preserve discovery in a defamation suit. Judge Howell’s opinion in Freeman, et al. v. Giuliani represents a blunt condemnation of discovery gamesmanship that is part of a growing number of cases that impose the most severe sanctions for failure to comply with preserving electronic evidence. In 2021, plaintiffs Ruby Freeman and Wandrea’ ArShaye Moss brought suit against defendant Giuliani for defamation, intentional infliction of emotional distress, civil conspiracy, and punitive damage claims. In response to the plaintiffs’ first set of discovery requests, Giuliani – an attorney for over 50 years – served an “initial production of 193 documents [that was] largely a single page of communications, blobs of indecipherable data, a sliver of the financial documents.” After the plaintiffs’ repeated inquiries into his preservation efforts and the court’s intervention, Giuliani issued a sworn declaration providing that his only preservation effort was turning off the auto-delete function on a nondescript list of devices and social media and email accounts. Given Giuliani’s admitted “preference to concede plaintiffs’ claims rather than produce discovery in this case,”...

Court Sends a Strong “Signal”: Defendants Sanctioned Over Their Failure to Preserve Ephemeral Communications and Surreptitious Use of Encrypted Email

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Posted in E-Discovery: Legal Decisions and Court Rules

On September 1, 2023

“The Individual Defendants’ systematic efforts to conceal and destroy evidence are deeply troubling and have cast a pall over this action.” These are some of the harsh words used by the Honorable Dominic W. Lanza, District Judge for the United States District Court for the District of Arizona, in Federal Trade Commission v. Noland, in lambasting the defendants for their deliberate deletion of cellphone messages sent via the Signal app and their suspension/clearing of email messages sent through ProtonMail (an encrypted email platform). One day after individual defendant James Noland became aware that the FTC was investigating him and his business Success by Health (SBH), he required the other individual defendants – who are all part of SBH’s leadership team – to start using a pair of encryption communications platforms: the Signal app for their cellphones and ProtonMail for email messaging relating to SBH’s business. After doing so, the individual defendants stopped using their previous messaging platforms for work-related communications and turned on Signal’s auto-delete function. After the FTC filed the action, it obtained a restraining order appointing a receiver to assume control over SBH and required the individual defendants to produce their electronic communications and turn over the mobile devices used to operate the business. In his deposition, Noland failed to disclose the Signal...

Unintentional Consequences? The District Court of Maryland Holds Evidence Failed Rule 37(e)’s “Intent to Deprive” Requirement

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Posted in E-Discovery: Legal Decisions and Court Rules

On July 10, 2023

A recent opinion from the District Court of Maryland highlights the challenges litigants face proving intent to deprive under Rule 37(e)(2) when seeking sanctions for spoliation of electronically stored information (ESI). In Gov’t Emps. Health Ass’n v. Actelion Pharm. LTD., et al., Magistrate Judge Mark Coulson set forth the requirements to prove entitlement to remedial measures or sanctions under Rule 37(e)(1) and (2) and then applied these requirements to decide the ESI spoliation claims before the court. This blog has written extensively on what is required to trigger Rule 37(e) and resulting sanctions. In June 2017, defendant Actelion (“defendant”) was purchased by Johnson & Johnson (“J&J”). Following the acquisition, Actelion migrated its data to J&J, which managed the data of both companies. On November 19, 2018, the plaintiff filed this antitrust litigation against Actelion alleging the plaintiff was forced to pay higher prices for one of Actelion’s drugs because of the unavailability of a cheaper generic version caused by the defendant’s blocking of competition. Soon after, J&J issued a legal hold to preserve relevant information for the antitrust litigation. The defendant’s custodians included in the legal hold were determined by the defendant’s then in-house counsel (“Thompson”). Absent from the legal hold were five former defendant employees (“at-issue custodians”) with documents relevant to the antitrust litigation....

A Dangerous Game of Hide the Ball: District Court Grants Sanctions and Reopens Discovery for Failure to Disclose Photographs and Videos of Accident Scene

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Posted in E-Discovery: Legal Decisions and Court Rules

On July 6, 2023

A recent decision from the District of New Jersey reminded attorneys and litigants of the importance of complying with discovery obligations under Federal Rule of Civil Procedure 26. Indeed, the court imposed sanctions, just short of dismissal, on the plaintiff and his counsel for failure to produce nearly 100 photographs and videos of the accident scene at the center of the litigation. In Reilly v. The Home Depot U.S.A., Inc., a product liability action, the defendants sought dismissal of the complaint as a discovery sanction for the plaintiff’s late production of 81 photos and three videos that the plaintiff’s counsel took in July 2020 of the house where the plaintiff fell and the ladder that was the subject of the lawsuit. Throughout discovery, the plaintiff did not produce the photos and videos and he did not include any reference to them in a privilege log. Moreover, the plaintiff implicitly represented in discovery responses that no such additional photos or videos even existed. The defendants did not learn of the photos and videos until the plaintiff’s counsel took the deposition of a fact witness and presented the witness with a photo – one that was not produced in discovery – of the interior of the home where the accident occurred, and the witness testified that the...

A Poor Substitute: The Eastern District of Texas Holds That Facebook Screenshots Are Not Sufficient to Avoid Sanctions Under Rule 37

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Posted in E-Discovery: Legal Decisions and Court Rules

On July 7, 2021

In Edwards v. Junior State of America Foundation, the Eastern District of Texas determined that screenshots of social media messages are not sufficient evidentiary substitutes for spoliated native files. As a result of the plaintiffs’ discovery misconduct and spoliation of relevant electronically stored information (ESI), the court imposed sanctions under Rule 37(c) and (e) against the plaintiffs for failing to preserve Facebook messages in native format, including its metadata, which prevented the defendant from authenticating the messages. The plaintiffs filed a complaint against the defendant alleging that a student member of the defendant, a youth organization, sent “racist and homophobic Facebook messages” to one of the plaintiffs (the “Messages”). After the alleged Messages were sent, the student’s father filed a complaint with the youth organization which included .jpeg “snapshot” images of the Messages. During the litigation, the defendant served written discovery requests on the plaintiffs, seeking production of ESI from the plaintiff’s Facebook Messenger account to authenticate the alleged Messages, including the production of the Messages in HTML or JSON format. The native format of Facebook messages can typically be retrieved and produced in HTML or JSON format and contain metadata that can be used for authenticity purposes. The defendant’s request for native format would have allowed the defendant to authenticate the Messages. The plaintiffs never...

Don’t Jump the Gun: The Northern District of California Compels the Production of Litigation Hold Letters, Holding Duty to Preserve Not Terminated When Related Lawsuits Were Resolved

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Posted in E-Discovery: Legal Decisions and Court Rules

On May 13, 2021

In Thomas v. Cricket Wireless, LLC (“Thomas II”), Judge Tse of the Northern District of California compelled the production of defendant Cricket Wireless LLC’s litigation hold letters, despite the defendant’s privilege and relevance objections. The court compelled the production of such letters to allow the plaintiffs to investigate and possibly prove whether the defendant had engaged in spoliation of evidence in Thomas II and two similar class actions that were brought against the defendant. While the duty to preserve potentially relevant documents is generally terminated at the conclusion of a litigation, Thomas II reminds us that this duty may continue even after a related litigation is dismissed. The plaintiffs in Thomas II filed a putative class action alleging the defendant engaged in false advertisement related to its 4G/LTE coverage services. The defendant had already been sued in two prior lawsuits. In May 2015, different plaintiffs filed suit against the defendant on nearly identical claims in Barraza v. Cricket Wireless, LLC (“Barraza”) before Judge Alsup. Barraza was resolved when both named plaintiffs accepted the defendant’s offer of judgment for the full value of their claims. At a hearing before the dismissal, Judge Alsup asked whether there was “any scenario under which the merits of the case could come back to life” and whether there was “any kind...

Blowing Things Out of Proportion: S.D.N.Y. Finds Hyperlinked Documents Are Not Necessarily Attachments and Rejects a Revamping of Production Protocols

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Posted in E-Discovery: Legal Decisions and Court Rules

On April 28, 2021

The Southern District of New York recently held that hyperlinked documents should not necessarily be considered “attachments” and declined to require a responding party to utilize a collection tool proposed by the requesting party, which would have collected all hyperlinked documents and maintained their familial relationship with the parent document. This is a novel and important issue that has not received such thorough treatment by other courts. With the COVID-19 pandemic forcing many employees to work from home and increasing the use of cloud-storage apps for documents, the issues related to the treatment of hyperlinked documents and litigants’ obligations in collecting and producing these documents are unlikely to disappear anytime soon. In Nichols v. Noom Inc., the plaintiffs initiated a class action suit against Noom for a litany of allegations centered around false advertising. Prior to commencing discovery, Noom agreed to collect and search relevant data from multiple Google App sources (i.e., Gmail, G-chat, Google Drive). The parties agreed to utilize Google Vault to collect the relevant documents from Google Drive, despite the fact that Google Vault would not be able to collect file path metadata for each document. Additionally, the parties never agreed to the method of collection for emails stored on Gmail. While Noom wanted to use Google Vault to collect the relevant emails,...

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On April 6, 2021

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On March 10, 2021

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On February 9, 2021

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...

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