Gibbons Law Alert

Gibbons Law Alert

Tagged: ESI

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On January 21, 2021

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:...

District Court Denies Protective Order in Putative Class Action: Production of Relevant ESI May Be Time Consuming and Expensive, But Not Unduly Burdensome

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Posted in General Litigation

On December 17, 2020

The District Court for the Eastern District of California recently denied a defendant’s motion for a protective order in a putative class action, finding that the information requested by plaintiff was relevant and subject to pre-certification discovery, and that defendant did not show that the electronically stored information (ESI) was inaccessible due to undue burden or cost, pursuant to Rule 26(b)(2)(C). Additionally, the court determined that even if defendant could show that the ESI was “inaccessible,” plaintiff demonstrated “good cause” to order production of the ESI notwithstanding the potential burden and cost. In Sung Gon Kang v. Credit Bureau Connection Inc., plaintiff, a consumer, filed a putative class action alleging that defendant provided businesses with inaccurate consumer credit information, including that plaintiff and the proposed class of consumers were included on the United States Treasury Department’s Office of Foreign Assets Control (OFAC) list. A consumer is ineligible for credit in the United States if he or she is included on the list. Plaintiff sought to “represent classes consisting of individuals ‘about whom Defendant … sold a consumer report to a third party’ that included an OFAC Hit.” The discovery dispute centered on defendant’s objections to plaintiff’s first set of written discovery requests. Specifically, defendant objected to requests seeking the identities of individuals who had an...

Cooperation Is Key: E.D.N.Y. Decision Illustrates the Risk of Refusing to Cooperate in Discovery

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Posted in General Litigation

On December 11, 2020

While litigation is inherently adversarial, counsel and litigants would be well-served to recognize that “zealous advocacy” and cooperation need not be mutually exclusive, especially in cases with significant amounts of electronically stored information (ESI). A recent decision from the District Court for the Eastern District of New York illustrates the risk a party and/or counsel takes in refusing to engage in the meet and confer process. This decision also reaffirms the fact that, when parties are working on crafting ESI search terms, it is the parties, not the court, who are in the best position to resolve such discovery disputes through the meet and confer process required under FRCP 26. Cooperation during the discovery process is not only economical in avoiding potential costly disputes, but also required by the Federal Rules of Civil Procedure. In particular, Rule 1 instructs the parties must help the court to “secure the just, speedy, and inexpensive determination of every action and proceeding.” To effectuate that goal, Rule 26(f) requires cooperation by the parties in formulating a discovery plan and meaningfully meeting and conferring in the event a discovery dispute arises. In the event the parties fail to cooperate, Rule 37 provides the court the ability to sanction a party for failing “to cooperate in discovery.” Additionally, many times, the...

More Than $750,000 Awarded in TAR Fees Serves as Both Warning and Guidance to E-Discovery Practitioners

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Posted in General Litigation

On December 1, 2020

Last month, we discussed a recent decision from the United States District Court for the District of Kansas, Lawson v. Spirit AeroSystems, Inc.,  in which the court granted defendant’s motion to shift costs for electronically stored information (ESI) related to expenses incurred undertaking Technology Assisted Review (TAR) for approximately 322,000 documents, at plaintiff’s insistence. The court reasoned that there was good cause warranting cost-shifting because plaintiff insisted on pursuing TAR after it became disproportionate to the needs of the case. Recently, the court entertained defendant’s fee application, in which defendant sought $791,700.21 in expenses incurred in connection with TAR and $83,000 in costs and fees incurred conferring with plaintiff and related motion practice. Plaintiff objected to the amount sought, arguing that reasonable TAR expenses did not exceed $330,000. The court ultimately awarded defendant $754,029.46 in TAR-related expenses and a yet-to-be determined amount of expenses in connection with the fee application. In reviewing the fee application, the court noted that its finding of disproportionality was only reinforced by the parties’ intervening cross-motions for summary judgment, in which only one of the almost 100 exhibits submitted by plaintiff originated from defendant’s TAR production. This lone exhibit was submitted “to support an unremarkable factual contention.” In determining the amount of expenses to allocate to plaintiff, the court examined...

The Destruction of a “Startling Amount of Discovery”: District Court Imposes Severe, Case-Ending Sanctions Pursuant to Rule 37(e)(2)

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Posted in General Litigation

On November 18, 2020

The United States District Court for the Eastern District of Washington recently entered a default judgment order of terminating sanctions against defendants pursuant to Rule 37(e)(2), as a result of defendants’ wholesale destruction of a “startling amount of discovery” as part of defendants’ adoption of a document disposition program during the course of the litigation. The district court found that the defendants “purposefully destroyed” relevant electronically stored information (ESI) “to avoid their litigation obligations.” This decision highlights the importance of extreme caution in the adoption of a document disposition or information governance program, which necessarily eliminates typically large quantities of ESI, during the time period when the duty to preserve relevant ESI has been triggered. In Moreno v. Correctional Healthcare Companies, Inc., plaintiffs filed constitutional claims against defendants–providers of healthcare services to inmates–after plaintiffs’ eighteen-year-old son died while in defendants’ custody. In January 2018, prior to filing the lawsuit, plaintiffs sent a letter to defendants notifying defendants of their plan to file a lawsuit and advising defendants to “preserve all paper and electronic records that may be relevant to our clients’ claims” including “all e-mails and other electronic and paper records regardless of where they are maintained.” Plaintiffs filed the lawsuit in October 2018 and, in December 2018, served discovery requests on defendants, seeking certain categories...

Situational Awareness Matters: Two Courts Evaluate Whether TAR Processes Are Warranted and Reach Very Different Conclusions

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Posted in General Litigation

On October 27, 2020

Two recent decisions from the United States District Court for the District of Kansas (Lawson v. Spirit AeroSystems, Inc.) and the Northern District of Illinois, Eastern Division (Livingston v. City of Chicago), highlight the increasing prevalence of Technology Assisted Review (TAR) as an e-discovery tool and its role as an emerging source of discovery disputes. We have previously addressed courts that have “endorsed” the use of predictive coding and/or TAR and have recommended that litigants consider such technologies to promote efficiency in the discovery process. We have also noted that courts have been extremely hesitant to impose affirmative requirements upon litigants to use these technologies. As discussed below, these two recent decisions provide a useful analysis of situations – with vastly different outcomes – where a party has introduced TAR procedures into the discovery process. In Lawson v. Spirit AeroSystems, Inc., plaintiff, the former CEO of defendant Spirit AeroSystems, Inc., filed suit based on his claim that the defendant failed to properly disburse his retirement compensation. Defendant claimed that plaintiff violated a non-compete agreement by engaging in consulting services with one of its competitors during the two-year period subject to the restrictive covenant. Plaintiff refuted these allegations, claiming that the companies he serviced did not engage in the same business as defendant. Though the business...

The Risks of “Failed” Spoliation Efforts: The Southern District of New York Finds Severe Sanctions Available Under Rule 37(b)(2) and Inherent Authority for “Incompetent Spoliators”

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Posted in Litigation Preparedness and Strategies

On October 6, 2020

We have previously blogged on the controversy regarding whether a court may still sanction a party for spoliation of ESI pursuant to its inherent authority following the amendments to Rule 37(e). But what happens when the attempted spoliation ultimately fails because the discovery is located and produced often after much unnecessary effort and expense by the requesting party? Abbott Laboratories v. Adelphia Supply USA involved just such a situation. The court’s decision reinforced that even when spoliation efforts are ultimately unsuccessful, and therefore Rule 37(e) does not apply because information is not “lost,” sanctions remain available under Rule 37(b)(2) and the court’s inherent authority to address litigant misconduct, including outright fraud on the court. This decision confirms that where improperly withheld documents are ultimately produced courts can “nevertheless exercise inherent authority to remedy spoliation under the circumstances presented.” CAT3, LLC v. Black Lineage, Inc., No. 14 Civ. 5511, 2016 WL 154116 (S.D.N.Y. Jan. 12, 2016). Plaintiffs Abbott Laboratories, Abbott Diabetes Care Inc., and Abbott Diabetes Care Sales Corp. (collectively “Plaintiffs”) filed a motion for case-ending sanctions against Defendants H&H Wholesale Services, Inc. (“H&H”), Howard Goldman, and Lori Goldman (collectively the “H&H Defendants”) based on electronic discovery-related violations of Federal Rule of Civil Procedure 37. The court referred Plaintiffs’ motion to the Honorable Magistrate Judge Lois...

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On October 1, 2020

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...

District Court Rejects the Concept of Unilateral “Relevance Redactions” but Stresses the Importance of Discovery Confidentiality Orders to Address Commercially-Sensitive Information

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Posted in General Litigation

On September 22, 2020

In a recent decision, a Washington District Court illustrated the challenges parties face when they are in possession of responsive documents also containing highly confidential irrelevant information. The court stressed that, as a general rule, a party is not permitted to unilaterally redact information solely on the basis of relevance, and parties should consider seeking to enter into comprehensive ESI discovery protocols and discovery confidentiality orders allowing for the redaction of irrelevant information included in otherwise responsive documents, particularly where the parties will be exchanging highly confidential information in discovery. In Corker v. Costco Wholesale, plaintiffs initiated a class action suit against a number of coffee wholesalers, distributors and retailers under the Latham Act for false designation of origin. In discovery, plaintiffs sought the sale volume and pricing for the particular blend of coffee at issue sold by the defendants. Instead of producing the spreadsheet containing this information in the native excel format, one defendant first produced documents summarizing the contents of the spreadsheet and then, after plaintiffs objected to this disclosure, a 2,269-page static PDF of the spreadsheet redacting information related to coffee blends not at issue in the litigation that the defendant considered highly confidential. Plaintiffs moved to compel the production of the spreadsheet in the native form as kept in the ordinary...

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

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Posted in E-Discovery: Legal Decisions and Court Rules

On September 15, 2020

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...

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