Gibbons Law Alert

Gibbons Law Alert

Tagged: Litigation Hold

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

by

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....

Let’s Not Just Chat About It: District Court Sanctions Google for Failing to Preserve Chat Messages in Antitrust Suit

by

Posted in General Litigation / Legal Decisions & Court Rules / Litigation Preparedness and Strategies

On May 1, 2023

In a highly anticipated opinion addressing allegations that Google failed to preserve relevant internal chat messages – despite assuring the court in a case management conference that it had – United States District Court Judge James Donato of the Northern District of California ordered Google to cover the plaintiffs’ legal costs in pursuing a Rule 37 motion and left open the possibility of the plaintiffs later pursuing nonmonetary sanctions. Judge Donato’s scathing opinion in In re Google Play Consumer Antitrust Litigation represents yet another cautionary tale for attorneys certifying that a client has taken appropriate steps to preserve all pertinent electronic discovery without providing meaningful oversight. While Judge Donato chose to focus his criticism (and ultimate sanction) on Google, he clearly was concerned with the lack of oversight and misleading representation by both Google and its attorneys. The Google cases arise from a highly publicized multidistrict litigation (MDL) involving allegations that Google Play Store’s practices were anticompetitive in violation of antitrust laws. The plaintiffs include several gaming companies, Attorneys Generals of 38 states (and the District of Columbia), and numerous consumer plaintiffs. The plaintiffs alleged that Google engaged in exclusionary conduct leading to Google monopolizing the Android app distribution market. After a long and tortured procedural history that included extensive discovery and motion practice, the...

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

by

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

by

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...

Negligent Deletion of Meeting Notes Does Not Warrant Adverse Inference Sanctions

by

Posted in Litigation Preparedness and Strategies

On April 15, 2021

Recently, in the District Court for the Southern District of California, Magistrate Judge Karen Crawford declined to impose adverse inference sanctions against the defendants, despite the defendants’ negligent destruction of relevant evidence. Instead, the court found that the plaintiffs were not severely prejudiced by the defendants’ spoliation of relevant handwritten notes from meetings pertaining to the subject matter of the litigation. Therefore, the court opted for the “least burdensome sanction” and recommended that the defendants be precluded from offering testimony or other evidence about the discussions at the meetings, during which the handwritten notes at issue were taken, in support of their defenses during the trial. In Al Otro Lado, Inc., et al. v. Chad v. Wolf, Acting Secretary, U.S. Department of Homeland Security, et al., the plaintiffs claimed that the U.S. Department of Homeland Security (the “Department”) implemented a policy, known as the “Turnback Policy,” at the U.S.-Mexico border that discouraged individuals from seeking asylum in the U.S.. The plaintiffs requested that adverse-inference sanctions be imposed against the Department due to the admitted destruction of handwritten notes by two senior officials within the U.S. Customs and Border Protection (CBP) made during the Department’s daily operation meetings where the Turnback Policy would be discussed. Essentially, the plaintiffs sought an adverse inference finding (to be adopted...

Opening Pandora’s Box: A Preliminary Showing of Spoliation May Result in the Compelled Production of a Litigation Hold Notice

by

Posted in General Litigation

On January 28, 2021

In Radiation Oncology Servs. of Cent. N.Y., P.C. v. Our Lady of Lourdes Mem’l Hosp., Inc., the New York Supreme Court reminded litigants that while litigation holds are generally protected by the attorney-client privilege or under the attorney work product doctrine, a preliminary showing of spoliation of evidence may compel the production of an offending party’s litigation hold documentation. In this litigation involving clinical privileges related to an exclusive radiation oncology services agreement, the plaintiffs identified seven specific instances of spoliation by the defendants. These included certain emails that the defendants produced in hard copy form, but for which they were unable to produce the corresponding electronic version and the related metadata – which the court seemed to globally refer to as the “electronically stored information,” or ESI, relating to the emails – because they had been deleted. The plaintiffs successfully argued that the failure to produce the ESI constituted spoliation because it deprived them of the ability to understand whether there were follow-up discussions with other individuals about the content of the communications, including those who may have been copied on the communications or follow-up emails. The court granted the plaintiffs’ motion to compel the production of the defendants’ litigation hold notice because it found that the permanent deletion of the ESI “potentially deprived...

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

by

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:...

End of the Road: GN Netcom Inc. and Plantronics Settle Eight-Year Litigation Saga Beset by E-Discovery Sanctions

by

Posted in General Litigation

On September 8, 2020

On July 12, 2020, United States District Judge Leonard P. Stark of the District Court for the District of Delaware (“District Court”) approved a joint stipulation of settlement filed by GN Netcom Inc., parent of Jabra headphones, and Plantronics. This settlement will end the eight-year old litigation saga between GN Netcom and Plantronics involving allegations that Plantronics had monopolized the relevant market via exclusive distribution deals which required its distributors to only sells Plantronics’ headsets and not those of its rivals. This case is noteworthy as to e-discovery because of the severe sanctions of $3,000,000 and an adverse inference jury instruction entered by the District Court against Plantronics in 2016 pursuant to then recently amended Federal Rule of Civil Procedure 37(e). This blog post will not recount the full panoply of discovery abuses addressed in the District Court’s July 12, 2016 Order, but, in broad strokes, Plantronics was found to have acted in bad faith in failing to take reasonable steps to preserve ESI which could not be restored or replaced. The District Court’s sanctions order was entered because Don Houston, a former executive of the company, “double-deleted” thousands of his own relevant emails despite the existence of a legal hold. Mr. Houston also directed other employees of the company to delete relevant emails. While...

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

by

Posted in E-Discovery: Legal Decisions and Court Rules / Technology Developments and Issues

On July 17, 2020

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,...

SDNY Expands Interpretation of “Possession, Custody, or Control” – Orders Adverse Inference Against Company for Spoliation of Text Messages by Non-Party, Independent Contractor on Personal Phone

by

Posted in General Litigation

On April 2, 2018

In Van Zant, Inc. v. Pyle, et al., 270 F. Supp. 3d 656 (S.D.N.Y. 2017), the Southern District of New York ordered an adverse inference against Los Angeles-based Cleopatra Entertainment LLC (“Cleopatra”), based on the conduct of its independent contractor and non-party to the case, Jared Cohn (“Cohn”). Cohn had been hired by Cleopatra to write and direct a motion picture about the 1977 plane crash that killed two members of the Southern rock band Lynyrd Skynyrd. During the film’s production, Cleopatra and Cohn enlisted the aid of Lynyrd Skynyrd drummer Artimus Pyle (“Pyle”), who, along with other surviving band members (and the estates of deceased members), was party to a 1988 Consent Order that set limits on the permissible use of the Lynyrd Skynyrd name; the likenesses, names, and biographical material of its members; the band’s history; and related items. The Consent Order also detailed the respective parties’ rights to royalties from Lynyrd Skynyrd music, merchandise, and other proceeds, and prohibited the parties from “implicitly or through inaction authoriz[ing] the violation of the terms [of the agreement] by any third party.” Pyle initially did not make Cleopatra aware of the Consent Order, but plaintiffs (also parties to the 1988 Consent Order) sent Cleopatra a copy, along with a cease and desist letter, after learning...

Connect:

About Gibbons

With 200 attorneys, Gibbons is a leading law firm in New Jersey, New York, Pennsylvania, Delaware, Washington, DC, and Florida, ranked among the nation’s top 200 by The American Lawyer. More…

Subscribe

Archived Blog Posts

Categories