Federal Court Decisions Involving Electronic Discovery ... · Christopher R. Maloney, Zahava Moedler, Matthew Mulder, and Mukai S. Shumba, whose work is included in this annotated

Copyright © 2011 The Sedona Conference®

www.thesedonaconference.org

Federal Court Decisions Involving Electronic Discovery

January 1, 2011 – September 30, 2011

Kenneth J. Withers, Editor1 The Sedona Conference®

October 26, 2011 Abu Dhabi Commercial Bank v. Morgan Stanley & Co, Inc., 2011 WL 3738979 (S.D.N.Y. Aug. 18, 2011). The defendant alleged that the plaintiff’s email production was deficient in a many respects, chiefly because attachments references in some 126 emails were not included in the production nor logged as privileged. The plaintiff objected on relevance grounds to being compelled to produce all the referenced attachments. The Special Master appointed to resolve discovery disputes in this case noted the tension between the standard of relevance, the “sine qua non of discovery,” and the standard of completeness expressed in Fed. R. of Evid. 106. He recommended, and the court subsequently ordered, 2011 WL 3734236 (S.D.N.Y. Aug. 24, 2011), that the plaintiff produce the missing non-privileged and reasonably accessible attachments, log missing attachments to emails reviewed for relevance within the same “family,” and provide an explanation for any attachment referenced in an email that cannot now be found or is not reasonably accessible. The defendants will be allowed to move for the production of any attachments not already produced, and the parties are to meet and confer on the format of the logs and any further production.

Adams v. Allianceone, Inc., 2011 WL 2066617 (S.D. Cal. May 25, 2011). The plaintiff requested monetary sanctions against the defendant for failing to produce requested discovery data in native format and for producing an unprepared witness in response to Plaintiff’s Rule 30(b)(6) deposition notice. The plaintiff did not specify a format in its discovery request. The defendant had previously provided data in a searchable comma separated value (“CSV”) format, but had provided the data in response to this particular discovery request in PDF format. The court denied the plaintiff’s request for monetary sanctions, reasoning that Rule 34 does not require a party to produce electronically stored information in the form in which it is ordinarily maintained, as long as it is produced in a reasonably usable form. The court agreed with the defense counsel’s explanation that the

1 The Editor is indebted to contributors David Degnan, Simi Dhaliwal, Ronald J. Hedges, Cecil A. Lynn III, Christopher R. Maloney, Zahava Moedler, Matthew Mulder, and Mukai S. Shumba, whose work is included in this annotated bibliography.

Federal E-Discovery Decisions, January 1, 2011 – September 30, 2011

Copyright © 2011, The Sedona Conference® 2 www.thesedonaconference.org

raw data did not come out of its native system in a searchable format and that the PDF could be converted into a searchable format using third party software.

American Nat’l Prop. & Cas. Co. v. Campbell Ins., Inc., 2011 WL 2197643 (M.D. Tenn. June 6, 2011). In an acrimonious lawsuit alleging breach insurance sales agency and non-competition agreements, the plaintiff insurance company moved to compel the defendant insurance agents to produce all insurance cancellations notices sent by the defendants to the plaintiff in the ordinary course of business. The defendants objected, stating that the plaintiff would already have all such notices, and they had already granted the plaintiff access to their electronic records, which would contain all such notices. The Magistrate Judge denied the motion to compel, stating that the request was duplicative and that the plaintiff was under an independent obligation to have kept all such notices it had received. Separately, the court considered the plaintiff’s request for production of emails exchanged between attorneys for the defendants, as there was no joint defense agreement that would serve to protect these under the work product doctrine. The Magistrate Judge ordered that the emails be produced to the court in camera for a decision as to whether they are discoverable. In a subsequent decision, American Nat’l Prop. and Cas. Co. v. Campbell Ins., Inc., 2011 WL 3021399 (M.D. Tenn. July 22, 2011), the District Judge considered the plaintiff’s motion for entry of default judgment or, in the alternative, an adverse inference jury instruction, for the loss of certain emails by the defendants. Citing Goodman v. Praxair Services, 632 F. Supp. 2d 494 (D. Md. 2009), the court held that the plaintiff’s motion was untimely, coming 14 months after the alleged acts of spoliation, four months after the close of discovery, less than two months before trial, and past the deadline for all “discovery-related” motions.

Annex Books, Inc., et. al. v. City of Indianapolis, 2011 U.S. Dist. Lexis 84963 (S.D. Ind. Aug. 1, 2011). In a suit by an adult bookstore against the city for lost profits caused by the city’s enforcement of regulated hours of operation, the court granted the city’s motion to compel the plaintiffs to produce their electronically stored bookkeeping records, including daily electronic sales reports. The plaintiffs had objected on grounds of cost and burden, but the court found that the bookkeeping data was reasonably accessible and relevant to litigation.

B & B Hardware, Inc. v. Fastental Company, 2011 WL 2115546 (E.D. Ark. May 25, 2011). The plaintiff in this commercial lawsuit argued that the defendant was under an obligation to forensically image computer hard drives and retrieve and search 1,182 backup tapes. The defendant’s IT expert submitted an affidavit asserting that the cost and burden of forensic imaging was not justified by the issues in dispute in this case, and that retrieving and reviewing the information on the backup tapes would cost the defendant $84,854,704.90. While not accepting the figures offered by the expert, the court held that the defendant established that the sources of discovery requested by the plaintiff were “not reasonably accessible,” that the defendant had properly and repeatedly objected to the plaintiff’s requests the ground that the requests were “overly broad and unduly burdensome,” and that the objections were not waived by the defendant’s failure to explicitly assert “not reasonably accessible” and “no forensic imaging” as objections.

Baez-Eliza v. Instituto Psicoterapeutico De Puerto Rico, 2011 WL 2413051 (D. P. R. June 16, 2011). Discovery in this employment discrimination suit had been contentious



and the court had previously imposed $500 in sanctions against both parties. The plaintiff asked the court to determine whether ten documents containing email communications between the defendant’s employees and the defendant’s attorneys were protected under attorney-client privilege. The defendant claimed that the documents were privileged because they disclosed the fact that the defendant was consulting with its attorneys. The court determined that the defendant's position showed "an ill-advised stubbornness" and "a poor understanding of the privilege's reach." Though the court determined that some of the defendant's documents were privileged, others simply mentioned legal matters or representation but were devoid of legal content. In line with its threat to sanction further discovery misdeeds, the court sanctioned the defendant $1,000 for failing its duty of candor to the court. In an extended conclusion, the court admonished both parties for showing "reprehensible gamesmanship" instead of civility, urging responsible practitioners to adopt the latter.

Bellinger v. Astrue, 2009 WL 2496476 (E.D.N.Y. Aug. 14, 2009). In an individual employment discrimination lawsuit against the Social Security Administration involving allegations of gender discrimination, the plaintiff sought broad discovery regarding all similarly situated employees of the New York Regional Office over a ten-year period. Citing FRCP 26(b)(2)(C), the court denied the requests as burdensome and unlikely to lead to the discovery of admissible evidence, as the complaint concerned the treatment of the plaintiff as an individual, and did not allege a widespread pattern of discrimination. The plaintiff also sought detailed discovery of the defendant’s computer system, litigation hold procedures, and procedures for collecting ESI responsive to prior discovery requests in this action. The court held that the discovery sought was overbroad and not relevant to any genuinely contested issue, and that the plaintiff had not demonstrated any significant, unexplained, or prejudicial failure in the defendant’s production of documents or ESI to warrant compelling further discovery. Finally, in reviewing the docket on this action and finding many instances of counsel failing to “work together productively and treat each other civilly,” the court urged counsel not to use “zealous advocacy” as a shield for “discourteous or combative litigation tactics.” Subsequently, in Bellinger v. Astrue, 2011 WL 317836 (E.D.N.Y. Jan. 31, 2011), the plaintiff moved to compel production of emails between her supervisor and defense counsel, who instructed the supervisor in the emails how to search for responsive electronic documents. Although defense counsel asserted such emails were protected by the work-product doctrine, the plaintiff argued that work product protection was waived when defense counsel permitted the supervisor to answer questions about how she searched for responsive documents during her deposition. Based on the supervisor’s deposition testimony, the court denied the plaintiff’s motion and held the supervisor did not reveal “in any detailed or meaningful way” the substance of any communications protected by the work-product doctrine.

Benefitvision v. Gentiva Health Srvcs., Inc., 2011 WL 3796324 (E.D.N.Y. May 23, 2011). The plaintiff filed a motion to compel the defendants to produce email communications that the defendants were withholding based on claims of confidentiality or privilege. The plaintiff alleged that the emails withheld were either not privileged or that the privilege log entries did not provide sufficient information. The defendants stated that the withheld emails were subject to privilege, but they were willing to produce a more complete privilege log. The court, noting that there is no legal basis on which the



defendants are permitted to completely withhold documents from discovery based on assertions that they contain proprietary or confidential information, ordered the parties to meet in good faith and enter into a proposed confidentiality order. The court also held that if parts of an email chain contain privileged information, that information must be redacted and the remaining email should be produced. Additionally, the court noted that the format of the information in the privilege log rendered it illegible and the information provided in the log was not detailed enough to analyze the validity of the defendant’s claims that the information was privileged. The court ordered the defendant to produce an amended privilege log and to produce redacted email chains.

Benson v. Sanford Health, 2011 WL 1135379 (D.S.D. March 25, 2011). The plaintiff demanded the defendants produce an email that the plaintiff sent over the defendants’ email system. The plaintiff argued that the defendants did not adequately search for the email because, inter alia, the defendants did not search the hard drives of the computer that the plaintiff sent the email from and the proper person never received notice of the plaintiff’s request. The defendant contended that the email was irretrievable because it was destroyed per the defendants’ document destruction policies. The court denied the plaintiff’s request, finding that the defendant conducted its search in a reasonable manner. The court noted that the plaintiff did not suggest what more the defendants could have done, nor did it provide precedent informing the court on the legal standard by which it should evaluate the defendants’ search. Furthermore, the laptop that the plaintiff sent the email from was stolen, and no print copies of the email existed.

Booth v. Davis, No. 2011 WL 1627004 (D. Kan., Apr. 28, 2011). The plaintiff filed a motion to compel in a legal malpractice case in which the defendant had represented approximately eighty plaintiffs, including the plaintiff in this case. The plaintiff’s motion lacked detail about the nature of their efforts to confer with the defendant before filing the motion to compel. The court considered the merits of the plaintiff’s motion, but asked the parties in future to submit detailed statement of their attempts to confer.

Bower v. Bower, 2011 WL 1326643 (D. Mass. April 5, 2011). The plaintiff brought a motion against non-parties Yahoo and Google to enforce a subpoena and to compel the defendant to consent to the production of email. Applying the Stored Communications Act, 18 U.S.C. §2701, the court held that the Act prohibited an electronic communication service provider from divulging the contents of a communication while in electronic storage to unauthorized private parties. The act did not provide any exceptions for responding to a civil subpoena. Because the defendant had not appeared in this action and had not responded to the complaint, the plaintiff asked the court to order that the defendant had constructively granted consent to authorize production of emails. The court concluded that the defendant had not elected to participate in the litigation and there was no contractual or legal basis for concluding that by using her email accounts the defendant had consented to the disclosure of its contents. The plaintiff’s motion to compel was denied.

Bryden v. Boys & Girls Club of Rockford, 2011 WL 843907 (N.D. Ill. Mar. 8, 2011). After the defendant failed to produce specifically identifiable and allegedly incriminating emails in this wrongful termination action, the plaintiff moved to compel production of the missing emails. The defendant argued that the missing emails had been inadvertently



deleted by the third-party company that maintained its domain and email accounts when it upgraded its servers without notifying the defendant. The court denied the plaintiff’s motion without prejudice, holding that because the defendant had not explained its preservation efforts since it first anticipated litigation and based on the “speculative allegations on the part of [the plaintiff]”, the court could not “perform an adequate balancing of the parties’ interests in order to determine an appropriate outcome.”

Cacace v. Meyer Marketing (Macau Commercial Offshore) Co., 2011 WL 1833338 (S.D.N.Y. May 12, 2011). In this patent infringement action, the plaintiffs moved for spoliation sanctions against the defendants, claiming that the defendants’ duty of preservation arose at the outset of the licensing arrangement between the parties, as that license was entered into to forestall litigation over the sale of an allegedly infringing product. The court held that the original licensing agreement extinguished the threat of litigation, and that the duty of preservation did not arise again until two years later, at which point the defendants initiated a company-wide litigation hold and took further steps to preserve and collect relevant information which they possessed or had control over. The plaintiffs alleged that documents were not collected from one Hong-Kong-based nonparty, that one file containing duplicate documents held on a shared server was accidentally deleted prior to production, and that a high-level executive continued his routine document destruction procedure after the litigation hold had issued. However, the court denied the plaintiffs’ motion, finding that the defendants imposed a litigation hold when the duty to preserve arose; the defendants were not negligent, nor did they act in bad faith; and the plaintiffs did not identify any relevant documents – aside from the one file – that had been lost by the defendants.

Carlock v. Williamson, 2011 WL 308608 (C.D. Ill. Jan 27, 2011). The plaintiff suspected the defendant had failed to preserve ESI subject to discovery and filed a motion for sanctions for spoliation of evidence. In support of its motion, the plaintiff attached various documents which the defendant alleged had been inadvertently disclosed. The defendant asserted attorney-client privilege and work product protection and asked the court to temporarily seal the documents. One of the documents obtained by the plaintiff as part of discovery included a litigation hold spreadsheet. The defendant argued that the spreadsheet was privileged under the work product doctrine and even if the spreadsheet was not privileged, it was not discoverable because it was not relevant. The court ruled that the spreadsheet was created by a systems administrator as an internal organizational tool. It was an ordinary business record and therefore, the work product privilege did not apply to it. The plaintiff also alleged that absence of ESI produced by the defendant in discovery indicated that ESI relevant to this case must have been destroyed in an automatic process. The court agreed with the plaintiff and ruled that the essential relevant content of the spreadsheet can be used in subsequent proceedings. The plaintiff also argued that by disclosing a privileged email between the defendant and one of its attorneys, the defendant had waived privilege. The court found that the defendant inadvertently disclosed the email, it took reasonable steps to prevent and rectify disclosure of the email and therefore the defendant did not waive privilege.



Centrifugal Force, Inc. v. Softnet Communication, Inc., 2011 WL 1792047 (S.D.N.Y. May 11, 2011). In this software copyright infringement action, the plaintiff moved for spoliation sanctions, alleging that the defendants destroyed the computer program in question, email evidence, and hard drives. The defendants countered that the deletion of a single email was unintentional, that the hard drives were not relevant to the issues, and that they provided enough files related to the computer program to the plaintiff. The court denied the plaintiff’s motion, finding that the plaintiff failed to prove that spoliation occurred. The court reasoned that although the defendants had a duty to preserve the evidence when served with the complaint, they adequately implemented a litigation hold when defendants’ counsel informed the defendants of the duty to preserve, which the defendants in turn communicated to their employees. To the court, the deletion of one lone email did not provide evidence of a culpable state of mind, nor did the defendants’ failure to produce installation files that reflected each and every change to the program. The court also concluded that the plaintiff failed to prove that the deleted email would have provided evidence favorable to its claims.

Christou v. Beaport, LLC, 2011 WL 650377 (D. Colo. February 10, 2011). The plaintiffs brought antitrust, RICO, theft of trade secrets, and conspiracy claims against the defendant. The defendant filed a motion to dismiss that included an order to stay all discovery pending a ruling on dismissal. In opposition, the plaintiffs asserted that staying discovery could result in loss or destruction of evidence because the evidence would not be subject to a litigation hold. The plaintiffs also argued that they would incur increased costs to retrieve evidence archived because of the stay. The defendant countered that it would suffer financial harm if the court denied its motion, and that refusing the stay would harm the court and the public interest. The court denied the defendant’s motion for a stay, observing that the defendant did not demonstrate how discovery would be unduly expensive or how the court would be inconvenienced by allowing discovery to proceed. Moreover, the court found that the public interest disfavored the stay.

Clean Harbor Environmental Services, Inc. v. ESIS, Inc., 2011 WL 1897213 (N.D. Ill. May 17, 2011). In a suit for negligence, breach of contract, and breach of fiduciary duty, the plaintiff filed a motion for a protective order in which it sought to shift costs of responding to the defendants’ electronic discovery request. The plaintiff argued that the information the defendants sought was inaccessible because there was no litigation hold in place during the time period from which the defendants demanded the information, and because the plaintiff had to pay a third party nearly $91,000 to search for the information. The plaintiff further alleged that there was no reason for it to preserve electronic information other than in the form it used in the ordinary course of business, and that the defendants failed to limit the search, which increased the cost. The defendants argued that they should not be required to share costs with the plaintiff, as the information was not inaccessible and the plaintiff did not object to the scope of the search. Citing the plaintiff’s attempts to work with the defendants to create the search, the court granted the plaintiff’s motion in part, ordering the parties to share in the cost of discovery: 50% to be covered by the plaintiff, and 50% to be divided equally between the two defendants.

Coleman v. Sterling, 2011 WL 1099793 (S.D. Cal. Mar. 24, 2011). The plaintiffs were terminated for poor job performance based on the findings in reports prepared by the



defendant’s attorneys. The plaintiffs filed a motion to obtain un-redacted copies of the reports, asserting that the reports were not privileged communication because their primary purpose was to gather facts. The court disagreed and determined that the reports primarily contained legal analysis, advice, and recommendations, and therefore fell under the purview of attorney-client privilege. The court also found that a report prepared by a non-attorney was protected under the work-product doctrine because it was prepared in anticipation of litigation. However, because the defendant had voluntarily disclosed parts of the privileged and work product communications, the court, relying of Fed. R. Evid. 502(a), held that the defendant had waived privilege and work product protection and must produce the redacted portions of the non-attorney reports.

Corbello v. Devito, 2011 WL 1466605 (D.Nev. April 15, 2011). In a discovery dispute over the appropriate form of production, the court ruled that although the defendants did not provide the plaintiff with files in their native format as requested, the files provided were still in a reasonably useful format. The plaintiff filed a motion for reconsideration. The court granted the plaintiff’s motion, finding its prior ruling erroneous in light of its additional judicial training in discovery of ESI, research, and better appreciation of factual and legal implications of discovery of ESI. Citing Sedona Principle 12, Comment 12a, and the Advisory Committee Notes to the 2006 Amendment of Rule 34(b), the court concluded that the defendants’ conversion of the files from their native format caused them to no longer be reasonably usable.

Couch v. Wan, 2011 WL 2551546 (E.D. Cal. June 24, 2011). The plaintiff corrections officers sued the state department of corrections for violation of their free speech rights and the RICO Act. The plaintiffs requested a master file which contained information about incarcerated inmates. The defendants argued that the file was not discoverable because the requests were overbroad and sought irrelevant information, and the requests were unduly burdensome and should result in cost sharing. The court ordered the plaintiffs to share with the defendants the cost of producing the requested electronic data, finding that the plaintiffs’ requests did not describe with particularity what they were looking for that related to this case and that the defendant had been required to hire an outside contractor to provide the plaintiffs with the voluminous data that they requested.

Datel Holdings, Ltd. v. Microsoft Corp., 2011 WL 866993 (N.D. Cal. Mar. 11, 2011). During a deposition in this trademark infringement action, the defendant became aware that an email chain created at the direction of defense counsel had been inadvertently produced as separate emails. The defendant objected to its use on the record, and after the deposition, the defendant reviewed its production of documents and determined the inadvertent production was caused was a “glitch” in its litigation software. The plaintiff then moved to compel production of the email chain arguing that privilege was waived when the defendant produced the separate emails. The court granted the motion in part and denied it in part, holding that “[m]istaken production due to an unexpected software glitch that occurred despite the use of standard discovery software falls squarely on the inadvertent side of the divide between intentional disclosure under [FRE] 502(a) and unintentional disclosure under Rule 502(b).” To the extent that the email chain contained privileged communications, the court found that privilege had not been waived, but ordered the defendant to produce the non-privileged portions of the email chain as the



plaintiff had a substantial need for the information contained in it and could not obtain that information by alternate means without undue hardship.

In re Delta/Airtran Baggage Fee Antitrust Litig., 2011 WL 915322 (N.D. Ga. Feb. 22, 2011). The plaintiffs in this putative class action against two major airlines regarding baggage fees moved for spoliation sanctions for the defendants’ failure to preserve backup tapes. The plaintiffs argued that the defendants failed to implement an adequate legal hold when the airlines had been served two years prior with a civil investigative demand by the U.S. Department of Justice in connection with their baggage fee policies. Citing The Sedona Conference® Commentary on Legal Holds: The Trigger & The Process, the court denied the motion and held the defendants had no duty to preserve the backup tapes for the putative class plaintiffs upon receipt of the civil investigative demand because the airlines had received numerous demands in the past from the Department Justice that never resulted in litigation.

Diesel Machinery, Inc. v. Manitowoc Crane Group, 2011 WL 677458 (D.S.D. Feb. 16, 2011). The parties in this breach of contract action agreed in a Form 52 Report that each party would produce documents in native format. In a preliminary production, the defendant offered to produce documents in PDF form in order to expedite the production, to which the plaintiff consented. The plaintiff then moved to compel production of the same documents in native format after the defendant refused. The defendant argued that because it relied on the plaintiff’s agreement to accept PDF documents for the first production, all subsequent productions would be in PDF rather than in native format, and producing the same documents again in native format would be cumulative and an unduly burdensome. The court agreed and denied the plaintiff’s motion, holding that although the parties had not modified in writing the terms of their original Form 52 Report, the plaintiff had “ample opportunity to review discovery of the information contained in [the first PDF production]”, and therefore it would not require the defendant to produce in native format any documents already produced in PDF.

DL v. District of Columbia, 2011 WL 1770468 (D.D.C. May 9, 2011). The plaintiffs brought an action against the defendants for injunctive and declaratory relief related to the defendants’ violation of the Individuals with Disabilities and Education Act by failing to provide free accessible education. The defendants filed a Motion for Reconsideration when the trial court ordered that they produce emails within one week of the close of the trial and ruled that the defendants waived privilege and objections. The plaintiffs’ counsel contended that without justification, the defendants flooded his office with thousands of emails right before trial and would continue producing thousands of emails afterwards. However, the defendants countered that they made a good-faith effort to produce all responsive emails before trial, the plaintiffs were not prejudiced by the post-trial production of responsive emails, and the plaintiffs also committed discovery violations. The court denied the defendants’ Motion for Reconsideration because of the defendants’ failure to comply with court orders, and because the defendants knew its discovery obligations and how to file a motion for extension of time.

Dubler v. Hangsterfer’s Laboratories, 2011 WL 90244 (D.N.J. Jan. 11, 2011). The plaintiff, who was part of the defendant’s management team, was fired by the defendant and subsequently brought suit. The defendant moved for a protective order regarding



certain privileged emails the defendant’s president showed the plaintiff several years before his termination, in connection with a then-pending lawsuit involving the defendant. The defendant argued that the plaintiff should be barred from using the same two emails during discovery in the new action, both of which were relevant to the plaintiff’s case. The court denied the defendant’s motion, holding that because the plaintiff was part of the management team when the contents of the emails were disclosed to him, the attorney-client privileged was waived with respect to the plaintiff. The defendant also sought to bar the plaintiff from using other privileged emails which had been inadvertently produced during discovery. The court again denied the defendant’s request, holding that it did not satisfy the requirements of FRE 502(b) when it failed to show what steps had been taken to avoid the inadvertent production and had not even asked the plaintiff to return the inadvertently produced emails. Finally, because the inadvertently produced emails during discovery contained the same privileged communications as the first two emails disclosed to the plaintiff during his employment, the defendant could not bar the plaintiff from using the emails during discovery.

E.I. Du Pont De Nemours and Co. v. Kolon Indus., 2011 WL 1597528 (E.D. Va. April 27, 2011). In this action for misappropriation of trade secrets, a litigation hold was put in place by the defendant, but the defendant was instructed by the federal government to keep its investigation of the matter as limited and confidential as possible. Later, the plaintiff moved for sanctions against the defendant for spoliation of relevant evidence, alleging that the defendant failed to “cast a wider net” with its hold order and that the government’s directive to keep the investigation confidential was not an adequate reason for not including four former employees in the litigation hold order. The court denied the motion, finding that the plaintiff failed to establish that the defendant acted in bad faith or that the defendant’s actions significantly prejudiced the plaintiff. In a later decision, 2011 WL 2966862 (E.D. Va. July 21, 2011), the plaintiff moved for sanctions for spoliation of evidence, alleging that key employees of the defendant deleted relevant information from their computers and email accounts. The deletions were discovered only after the defendant produced several screenshots with notes that appeared to identify certain files for deletion. Many of the deleted files were not recoverable. The court determined that the defendant’s key employees willfully and intentionally deleted relevant documents and emails from their computers and therefore, the plaintiff was entitled to a presumption that the unrecoverable files were relevant. The defendant attempted to rebut this presumption by arguing that many of the files and emails were of little importance. The court disagreed and noted that the circumstances of the deletions pointed to strongly to a guilty state of mind and the materiality of the deleted files. The court rejected Defendant’s argument that Defendant should not be held liable for its employees’ actions because their actions were unauthorized and outside the scope of their employment. The court determined that while there was not a company-wide conspiracy to delete files, there was intentional and bad faith deletion of relevant files and emails by key employees and imposed an adverse inference instruction and further sanctions in the form of attorneys’ fees, expenses and costs related to the motion.

Eon-Net LP v. Flagstar Bancorp, 653 F.3d 1314 (Fed. Cir. 2011). The Federal Circuit Court of Appeals upheld the district court’s finding that this patent infringement action represented an “exceptional case,” allowing the prevailing defendant to collect attorney’s



fees under 35 U.S.C. § 285. The court found, inter alia, that the plaintiff ignored its duty to preserve documents, recounting that the defendants’ principal testified with regard to document retention, collection, and production that “I don’t save anything so I don’t have to look” and that his companies “have adopted a document retention policy which is that we don’t retain any documents.” The district court also found that the plaintiff acted in bad faith by exploiting the high cost of defending complex litigation to extract a nuisance value settlement from the defendant, specifically citing the high cost of discovery, which would have been disproportionate to the settlement value of the case.

Equal Employment Opportunity Comm’n v. Kronos Inc., 2011 U.S. Dist LEXIS 47350 (W.D. Pa. May 3, 2011). The EEOC brought a suit against a non-party to enforce production of documents in an employment matter. The defendant objected that internal and external costs of complying with the subpoena would be exorbitant. The court ordered a fifty-fifty split of the costs between the EEOC and the defendant, given the magnitude of the production ordered by the court. Although Fed. R. Civ. P. 45 regarding nonparty compliance with a subpoena in civil litigation was not applicable to the EEOC’s subpoena, it was instructive on the need to protect non-parties from significant production expenses. The court thus ordered equal cost-sharing in order to balance the plaintiff’s need for the requested information and the non-party’s financial burden.

In re Facebook PPC Adver. Litig., 2011 WL 1324516 (N.D. Cal. April 6, 2011). The plaintiffs alleged that the defendant misrepresented the quality of its click filters and sought an order to compel the defendant to agree to an Electronically Stored Information (“ESI”) protocol and produce documents in native and searchable format. The defendant argued that imposing a rigid up-front requirement would not address all issues relating to electronic production and would slow down the discovery process. The defendant also contended that the documents being requested were highly sensitive and therefore it would upload the documents to a secure website rather than produce copies. The court, citing to “The Case for Cooperation,” 10 Sedona Conf. J. 339, 344-45 (2009) and “Conducting E-discovery After the Amendments: The Second Wave,” 10 Sedona Conf. J. 215, 216 (2009) held that electronic discovery is a party-driven process and therefore an ESI protocol is needed. The court noted that the defendant’s use of secure website made the discovery process less efficient and sensitive information could be produced as “Highly Confidential – Attorney’s Eyes Only.” Accordingly, defendant was ordered to provide the information in native and searchable format.

Fed. Trade Comm’n v. Asia Pacific Telecom, Inc., 2011 U.S. Dist. Lexis 56238 (N.D. Ill. May 25, 2011). The FTC sought a contempt order against the defendant for deleting an email account after the defendant had been served with a temporary restraining order and the day after being asked to provide access to the account. The defendant denied responsibility for deactivating the email account. The FTC’s expert testified that the email account was accessed from an overseas internet protocol address in order to achieve internet anonymity. The court determined that the defendant was in contempt and ordered an adverse inference in the underlying substantive litigation to minimize any prejudice to the FTC from the loss of the email.

Fed. Trade Comm’n v. First Univ. Lending, LLC, 2011 WL 673879 (S.D. Fla. Feb. 17, 2011). The Federal Trade Commission (“FTC”) launched an investigation into the



defendant’s mortgage modification practices, and a temporary receiver was appointed to take control of the defendant’s business assets. With the Receiver’s permission, the FTC entered the defendant’s premises and imaged all of the computer hard drives likely to contain data relevant to its investigation although the defendant failed to disclose the existence of all of its computers. Based on the FTC’s report that it had imaged all the hard drives, the receiver then allowed the defendant to scrub all the computers before selling them to a third party, thereby resulting in the loss of relevant data not imaged by the FTC. The defendant moved for dismissal of the FTC’s case against the defendants, on the theory that the FTC’s report to the Receiver that every hard drive had been imaged, and the Receiver’s subsequent grant of permission to the defendants to wipe and sell the computers, resulted in sanctionable spoliation. The court found that the FTC did not act in bad faith, nor did the defendant make the requisite showing that the FTC was the spoliator, but rather it was the defendant—not the FTC—who scrubbed every computer. The court held that “even assuming arguendo that defendant[] decimated [its] hard drives solely because the Receiver’s agent directed them to do so, such a circumstance would not change the fact that neither the Receiver nor any of her agents is the FTC.” Moreover, because the court found that the FTC had no obligation to image all of the computers and that the receiver’s mistaken belief that all of the defendant’s computers had been imaged could not have been construed as willful, the court held that sanctions were not warranted and denied the defendant’s motion.

Flagg v. City of Detroit, 2008 WL 787061 (E.D. Mich. Mar. 20, 2008). In a suit against the City of Detroit and several city officials for failure to investigate a murder case, the plaintiff sought text messages sent between 34 named defendants over a 5-year period. He issued subpoenas to the text messaging service, Bell Industries (d/b/a SkyTel). The court enforced the subpoenas, requesting the plaintiff to limit the number of persons involved and the relevant time period. It ordered the defendants to cooperate by providing necessary information, including PIN numbers, to access accounts, and appointed two magistrate judges to review the messages under seal before disclosing them to the plaintiff. In a subsequent opinion, 2011 WL 4634249 (E.D. Mich. Aug. 3, 2011), extensive testimony was reviewed establishing that the city systematically purged the email accounts of the Mayor, the Chief of Police, the Mayor’s Chief of Staff, the Corporation Counsel, and other officials after a preservation order had been entered. The magistrate judge denied the plaintiffs’ motion for spoliation sanctions in the form of default judgment, but granted their request for an adverse inference instruction because although the plaintiffs suffered prejudice, that prejudice did not justify the “extreme sanction of a default judgment.” The magistrate judge found the adverse inference proper because of the city’s malfeasance. In 2011 WL 4634245 (E.D. Mich. Oct. 5, 2011), the chief judge of the district court affirmed the magistrate judge’s report and recommendation in its entirety.

In re Fountainbleau Las Vegas Contract Litig., 2011 WL 65760 (S.D. Fla. Jan. 7, 2011). A lender subpoenaed documents relating to the financing of the construction of a resort from the resort’s third-party parent company (“Fountainbleau”). Fountainbleau alleged that it maintained several servers containing responsive documents, but that production would be delayed because it shared the servers with other business entities. The court voiced concern that Fountainbleau could not explain why it shared servers with



other business entities and that Fountainbleau would not confirm whether the entities were affiliated with Fountainbleau. After several discovery motions and failing to produce the servers containing responsive documents, Fountainbleau filed an “eleventh hour” motion when it was unable to produce all of its servers by the court-ordered discovery deadline. Fountainbleau argued that “it would be too onerous to conduct an adequate privilege review within the time period provided by the court.” The court rejected Fountainbleau’s argument but offered it the opportunity to file future motions with respect to inadvertently produced documents and for an extension to produce a privilege log. Without conducting a privilege review, Fountainbleau produced a “documents server” and an “accounting server,” at least one of which had been previously produced to a bank in connection with the pending litigation. It also produced a third “email server” and privilege log, although the privilege log was served on the lender well after the court-ordered deadline. The court held that Fountainbleau waived privilege with regard to the documents and accounting servers because it did not specifically identify any privileged materials contained on them, there was a delay in production and failure to seek a protective order, and after several months, Fountainbleau still had not confirmed whether the other business entities sharing its servers were affiliated with Fountainbleau. However, the court held that privilege was not waived with regard to the email server, as Fountainbleau had produced a privilege log, although late.

Furminator, Inc. v. Petvac Group LLC., 2011 WL 3439309 (E.D. Texas, Aug. 5, 2011). In this patent lawsuit, the plaintiff moved to strike pleadings and for sanctions for a pattern of discovery failures. The plaintiff argued that the defendant misled the court by claiming that it sent an email to the plaintiff regarding its discovery production obligations. The court found that the defendant willfully violated the court’s discovery orders and that the defendant’s email to the plaintiff was fraudulent. Invoking its powers under Rule 37, the court struck the defendant’s answer and counterclaims, ordered entry of default judgment, and awarded the plaintiff attorneys’ fees and expenses relating to its effort of proving-up the fraudulent email.

Gaalla v. Citizens Med. Ctr., 2011 WL 2115670 (S.D. Tex. May 27, 2011). The plaintiffs sought severe sanctions against the defendants, claiming that the defendants’ failure to preserve disaster recovery backup tapes constituted spoliation. The court, citing Zubulake v. UBS Warburg LLC, noted that no general duty to preserve or restore disaster recovery backup media exists, absent a showing that the backup media is the only source of relevant ESI associated with “key players” in the litigation. The court also noted, citing Rimkus Consulting Group, Inc. v. Cammarata, that the defendants’ preservation efforts had been reasonable and proportionate, and that the plaintiffs failed to demonstrate the defendants acted in bad faith, which is necessary for the imposition of sanctions under established 5th Circuit law. Nevertheless, the court ordered that the defendants preserve emails and monthly backup tapes on a going-forward basis and reach agreement on a stipulated preservation order.

G.D. v. Monarch Plastic Surgery, P.A., 239 F.R.D. 641 (D. Kan. January 24, 2007). Patients filed suit against the defendants alleging wrongful disclosure of medical information stored on computer hard drive. The defendants placed the computer on curb for trash disposal and confidential information was retrieved and aired on a local



television station. The plaintiffs filed a motion to compel the defendants to produce the hard drive for inspection, testing, and evaluation of the data. The defendants claimed that the plaintiffs’ true reason for requesting the computer was to “simply troll” the “electronic pond.” The court held that the plaintiffs were permitted to generally inspect, test, and evaluate the computer; but the plaintiffs were not entitled to copy confidential information related to patients who were not plaintiffs, and a request for production of all records stored on computer, redacted solely to exclude personal identifiers regarding non-party patients, was overbroad on its face.

Gen. Steel Domestic Sales, LLC v. Chumley, 2011 WL 2415715 (D. Colo. June 15, 2011). The defendants sought to compel production of all audio recordings of any telephone calls between the plaintiff’s employees and the plaintiff’s customers or potential customers between January 2009 and June 2011. The audio recording data, which contained both sales and non-sales calls, was approximately 300 gigabytes and not searchable. Applying Fed. R. Civ. P. 26(2)(B), the court denied the defendants’ motion. The court ruled that the audio recordings were not reasonably accessible because of undue burden and cost, and alternate means of obtaining the information being sought may be available.

Green v. Blitz U.S.A., Inc., 2011 WL 806011 (E.D. Tex. Mar. 1, 2011). After the jury returned a verdict in favor of the plaintiff in this product liability action, the plaintiff’s lawyer discovered that the defendant had ordered its employees to destroy emails relevant to the plaintiff’s case and withheld others. The court denied the plaintiff’s motion to reopen the case but allowed its motion for sanctions. The court held the defendant in civil contempt and ordered it to pay the plaintiff an additional $250,000, representing the minimum settlement amount had the defendant produced the destroyed documents. The court also ordered a “civil purging sanction” of $500,000 against the defendant, which it could avoid by showing that it provided a copy of the court’s opinion to every plaintiff in a lawsuit against the defendant over the past two years. Moreover, the court ordered the defendant to provide a copy of the court’s opinion to every future plaintiff over the next five years as a sanction to encourage future compliance of discovery obligations.

Greene v. Netsmart Techonologies, Inc., 2011 WL 2225004 (E.D.N.Y., Feb. 28, 2011). The defendant employer brought this action under Fed. R. Civ. P. 37(b) and 41(b) to dismiss the plaintiff employees’s complaint and for sanctions and costs. Before initiating a race discrimination lawsuit against his employer, the plaintiff had been secretly recording conversations he had with coworkers in the workplace. He also took handwritten notes of happenings in the workplace. The defendant alleged that the plaintiff destroyed the handwritten notes, failed to produce all relevant non-privileged files, deleted audio recordings from the recording device, and retained and deleted the defendant’s proprietary information. The judge applied the five-factor test under Fed. R, Civ. P. 41(b): (1) the duration of the plaintiff’s failure to comply with court orders or failure to prosecute; (2) notice to the plaintiff that failure to comply or continued delay would result in dismissal; (3) possible prejudice to the defendant; (4) the balance between the interest of managing the court’s docket and the plaintiff’s right to be heard; and (5) consideration of lesser sanction. The court determined that the first four factors favored the plaintiff, but under the fifth factor imposed sanctions on plaintiff and his attorney in



the form of reimbursing the defendant for costs and attorney’s fees incurred relating to the plaintiff’s delay in producing the documents. The court also found that the plaintiff and his counsel acted in a manner that met the “ordinary negligence” standard and imposed monetary sanctions.

Haraburda v. Arcelor Mittal USA, Inc., 2011 WL 2600756 (N.D. Ind. June 28, 2011). The plaintiff sought an order directing the defendant to preserve evidence that might be requested during discovery. The defendant argued that the plaintiff’s request was premature because pursuant to Fed. R. Civ. P. 16(b), a discovery conference had not yet taken place. The court granted the plaintiff’s motion, reasoning that the plaintiff was requesting a preservation order and not asking the defendant to produce any documents. Defendant had an obligation to place a litigation hold since first learning of the threat of litigation.

Heraeus Kulzer, GmbH v. Biomet, Inc., 2011 WL 198117 (7th Cir. Jan. 24, 2011). The plaintiff, a German company, applied pursuant to 28 U.S.C. §1782 to compel discovery from the Indiana-based defendant in connection with a German lawsuit alleging misappropriation of trade secrets. After the district court denied the plaintiff’s application, the Seventh Circuit Court of Appeals reversed and remanded the matter, holding that the plaintiff presented a “textbook predicate for a successful §1782 petition.” In support of its ruling, the appeals court reasoned that the plaintiff was not able to obtain the same discovery under German law, that the discovery requested by the plaintiff was not improper under the statute, and that the defendant had refused to negotiate a discovery plan that would have relieved it of the undue burden it alleged would result if it were compelled to produce discovery. The circuit court concluded that by granting the §1782 petition, the district court would be empowered to order the parties to proceed under FRCP 26 and to apply the recommendations of the Seventh Circuit Pilot Electronic Discovery Pilot Program that the parties cooperate in developing a discovery plan with appropriate limitations on scope.

IWOI, LLC v. Monaco Coach Corporation, 2011 WL 2038714 (N.D. Ill. May 24, 2011). The plaintiff brought suit alleging that the defendants’ motor homes were defective. The plaintiff moved for sanctions, contending that the defendants deliberately excluded from discovery production of an email where employees of the defendants discussed problems with the defendants’ motor homes. It also argued that the court should shift the cost of forensic examination of the defendants’ computers to the defendants. The defendants countered that the documents had already been produced to the extent that the defendants could produce them, and that the plaintiff did not identify the parameters of the discovery it sought. The defendants further argued that the document discussing the problems with the motor homes was the only one of the missing documents of significance, and that the access to the email did not require forensic examination. The court granted the plaintiff’s motion in part and denied it in part, and it shifted half of the cost of electronic discovery to the defendants. The court found that the plaintiff’s discovery request fairly encompassed the email message because the defendants were on notice that the plaintiff sought the email and failed to do anything about it. However, the court concluded that the plaintiff did not prove that the defendants’ conduct was intentional.



Jacobeit v. Rich Township High School District, 2011 WL 2039588 (N.D. Ill. May 25, 2011). The plaintiff brought this employment litigation action alleging he was discriminated on the basis of race, age, and disability, and brought a motion for spoliation sanctions against the defendant for the destruction of potentially relevant audio tapes. The defendant argued that the tapes were not relevant and were protected from disclosure by the attorney-client privilege, deliberative process privilege, and by state statute. The court rejected the defendant’s assertion that the tapes, if they existed, would be barred from discovery. The court noted that a spoliation finding in the Seventh Circuit required a showing of: (1) a breach of the duty to preserve or produce documents, (2) culpability in the acts or omissions leading to the breach, and (3) prejudice resulting from the breach. In addition, sanctions are only called for where willfulness, bad faith, or fault is shown. The court agreed that defendant had a duty to preserve the tape, but ruled that plaintiff failed to demonstrate bad faith, willfulness, or fault. The tapes had been destroyed according to the defendant’s normal records destruction policy. After the close of discovery and an order of the court directing the defendant to conduct further searches for electronically stored information, the defendant produced additional email. The court determined that Defendant’s failure to produce the email originally did not amount to willfulness or bad faith, and any prejudice suffered by Plaintiff was minimal. The court awarded Plaintiff attorneys’ fees and costs, but denied evidentiary sanctions.

Kermode v. Univ. of Miss. Med. Ctr., 2011 WL 2619096 (S.D. Miss. July 1, 2011). In this wrongful termination action brought by a professor, the plaintiff moved for spoliation sanctions for the defendant’s failure to preserve emails. In denying the motion, the court noted that the plaintiff failed to move to compel the production of the emails before bringing the motion for sanctions, failed to demonstrate that the emails in question ever existed, and failed to demonstrate any bad faith on the part of the defendant.

Larkin v. Trinity Lighting, Inc., 2011 WL 1496248 (S.D. Miss. April 20, 2011). The plaintiff, former employee of the defendant, filed suit because he alleged that the defendant did not make bonus payments due to him. However, the plaintiff deleted relevant computer files before he returned his work computers to the defendant. The defendant moved to compel the cost of restoring the data deleted by the plaintiff. The plaintiff argued that he did not delete the files in anticipation of litigation and that the deleted files were already in the defendant’s possession. Further, the plaintiff contended that he had no duty to preserve the files, nor did he delete the files in bad faith. The defendant countered that the plaintiff did delete the files in anticipation of litigation and that it would be prejudiced without the files. The court denied the defendant’s Motion to Compel Costs Associated with Restoration of Evidence. The court analogized to the law of spoliation to conclude that the defendant did not meet its burden to prove that cost-shifting sanctions were justified.

Lee v. Max International, LLC, 638 F.3d 1318 (10th Cir. 2011). The plaintiffs brought a breach of contract action against the defendants. The plaintiffs failed to produce requested documents despite the district court’s numerous orders to produce them, and the district court granted the defendants’ motion for sanctions seeking dismissal of the case. On appeal, the plaintiffs argued that although they did not comply with the district court’s initial order, they did comply with the second order. They also contended that the



district court did not give adequate reason for its dismissal order. The circuit court upheld the district court’s decision to grant the defendants’ motion for sanctions seeking dismissal of the case. The court reasoned that the plaintiffs had three chances to meet their discovery obligations: when the defendants requested the documents and the two instances when the district court issued orders compelling discovery. The circuit court found the plaintiffs violated both orders, not just one as they argued. he circuit court also concluded that the district court did not need to find every factor suggested by Ehrenhaus v. Reynolds, 965 F.2d 916, 921 (10th Cir.1992) to impose a case-terminating sanction, and that the factors were merely illustrative.

Liberty Media Holdings, LLC v. Does 1—59, 2011 WL 845070 (S.D. Cal. Mar. 8, 2011). The plaintiff sued the defendant for copyright infringement and moved the court for leave to take immediate discovery in order to determine the identities of the unknown defendants. After the defendant made a showing that an Internet Service Provider (“ISP”) hosted the IP addresses of several of the defendants, the court granted the motion by allowing the plaintiff to serve an expedited subpoena on the ISP. The court further ordered the ISP to advise its subscribers (the potential defendants) that their identities were being sought so that they could contest the subpoena and directed the ISP to “preserve the information sought by [p]laintiff in the subpoena pending resolution” of any motion. Limone v. United States, 2011 WL 2489965 (D. Mass. June 20, 2011). After winning a substantial jury award at trial for their wrongful murder convictions, the plaintiffs sought attorney’s fees under the Federal Tort Claims Act for the government's alleged bad faith discovery conduct. The court found that the government provided over 7,000 documents that were redacted to an "incomprehensible" extent due to the government's claim that they contained information which could reveal the identities of confidential informants. The court found that during the government's two-year-long discovery stonewalling effort, the FBI had not allowed the government lawyers handling the case to see the unredacted versions of the documents in question. Citing this circumstance as a direct violation of the reasonable inquiry requirement under Fed. R. Civ. P. 26(g), the court found the government's actions constituted bad faith and warranted sanctions. The court scheduled a hearing to determine costs reasonably related to the bad faith conduct.

Kaufman v. Am. Express Travel Related Servs. Co., 07-cv-01707 (N.D. Ill. Jan. 14, 2011). The intervenors in this class action requested documents relating to gift cards and the identities of class members in preparation for the deposition of the defendant’s corporate designee. Although the defendant objected to the requests, citing attorney-client privilege and work-product protection, it failed to produce a privilege log more than three months after it had produced its witness for the deposition. The intervenors moved to compel production of the requested documents, and the defendant argued that the information it had already provided would be sufficient for the intervenors to determine the identities of the class members. The court granted the motion, holding that the defendant waived its right to assert privilege claims and work-product protection because (1) it failed to provide a privilege log, even after the intervenors moved to compel; (2) its objections in response to the intervenors’ initial request were not valid; and (3) that the defendant could not “unilaterally determine how much discovery is sufficient.”



Liberty Media Holdings, LLC v. Does 1—59, 2011 WL 845070 (S.D. Cal. Mar. 8, 2011). The plaintiff sued the defendant for copyright infringement and moved the court for leave to take immediate discovery in order to determine the identities of the unknown defendants. After the defendant made a showing that an Internet Service Provider (“ISP”) hosted the IP addresses of several of the defendants, the court granted the motion by allowing the plaintiff to serve an expedited subpoena on the ISP. The court further ordered the ISP to advise its subscribers (the potential defendants) that their identities were being sought so that they could contest the subpoena and directed the ISP to “preserve the information sought by [p]laintiff in the subpoena pending resolution” of any motion.

Long v. Fairbank Farms, Inc., 2011 WL 722767 (D. Me. Feb. 17, 2011). The defendant in this product liability action moved for sanctions and to reopen discovery after it discovered that the imaged hard drives produced by a third-party defendant had been copied from new computers and that employees of the third-party defendant had viewed and transmitted documents marked “attorneys eyes only” using their personal email accounts and mobile devices. The court denied the motion, holding that the computers produced for imaging were replacements made before the court’s order to make them available for imaging, and that a reliable migration tool had been used to transfer data from the hard drives to the new computers. However, the court ordered the third-party defendant to show cause why it should not be held in contempt with respect to the documents marked “attorneys eyes only” allegedly viewed and transmitted by its employees.

U.S. ex rel. McBride v. Halliburton Co., 2011 WL 208301 (D.D.C. Jan. 24, 2011). The relator in this qui tam action sued the defendant, alleging it had overcharged the federal government for services performed for the U.S. military in Iraq. Although the defendant had already produced over 500,000 emails and over 2 million other documents at a cost of $650,000 excluding attorneys’ fees, the relator moved to compel the production of email from 35 additional custodians of the defendant. The court denied the relator’s motion to compel, finding the relator had not shown that the discovery of additional emails was critical to her case. The court also found that the additional custodians had originally been copied on emails bearing attachments that contained previously produced reports created by the defendant in connection with its services provided to the government. In support of its ruling and pursuant to FRCP 26(b)(2)(C), the court held that to balance the utility of additional discovery against its cost, the additional production of emails requested by the relator “seem[ed] to be hopelessly insignificant.”

McCargo v. Texas Roadhouse, Inc., 2011 WL 1638992 (D. Colo. May 2, 2011). The plaintiff brought an employment discrimination case against the defendant and moved for sanctions for the spoliation of video recordings. The plaintiff argued that the videos contained evidence that would support his case and that he was prejudiced by the spoliation. The defendant countered that it could not have reasonably anticipated litigation, and, even if the tapes were produced, they would be insufficient to prove a hostile work environment. The court granted the plaintiff’s motion for sanctions, reasoning that the defendant was on notice that the plaintiff intended to initiate legal action when the plaintiff filed a formal internal complaint. The court found that the



defendant’s conduct was willful and in bad faith, and concluded that the plaintiff was prejudiced by the loss of the videotapes. The court determined that the appropriate sanctions against the defendant included the exclusion of certain evidence favorable to the defendant that would have been supported by the missing videotapes, a permissive adverse inference jury instruction, and an award of attorney’s fees to the plaintiff reasonably related to the defendant’s spoliation.

McDonald v. Kellogg Co., 2011 WL 484191 (D. Kan. Feb. 7, 2011). Current and former employees at the defendant’s bakery facility brought this wage-and-hour suit and moved to compel access to the facility in order to gather information about the time spent by employees going back and forth to their workstations through the use of “radio frequency identification technology”. The plaintiffs argued that they should be allowed to install electronic readers in the facility and issue employees “credit-card-sized cards” to carry with them in order to determine the approximate travel time between workstations. The court held that FRCP 34(a)(2) governed the inspection of the facility, the discovery sought was relevant, the defendant had not shown entry in the facility would be an undue burden, and that “[d]efendant [was] not at liberty to dictate how plaintiffs should gather information to support their case.” The court granted the motion, but ruled that entry into the facility was subject to certain conditions. However, the court held that unwilling employees would not be required to carry an electronic tracking card, and noted that an existing protective order would protect the defendant’s trade secrets while the plaintiffs’ expert gathered the electronic data in the facility.

McNulty v. Reddy Ice Holdings, Inc., 2011 WL 116892 (E.D. Mich. Jan. 13, 2011). After only one of the plaintiff’s claims survived a motion to dismiss, the defendant moved for a protective order to limit discovery to the surviving count because over four terabytes of ESI (approximately 880 million pages) were potentially discoverable. Although at first the plaintiff expressed a willingness to work with the defendant, which the court lauded, negotiations between the parties broke down and an agreement could not be reached. The court instead ordered the parties to meet and confer in order to “develop search terms or objective search criteria for use in identifying responsive and non-privileged documents within [the defendant’s] reasonably accessible ESI material.”

Medeva Pharma Suisse A.G. v. Roxane Laboratories, Inc., 2011 WL 310697 (D.N.J. Jan. 28, 2011). The plaintiff sued the defendant, alleging it had infringed on the plaintiff’s patent when it developed a generic version of the plaintiff’s drug. The plaintiff moved for spoliation sanctions, arguing that the defendant destroyed relevant documents prior to instituting a litigation hold and after it should have reasonably anticipated litigation. The defendant asserted that it had not spoliated evidence but rather acted pursuant to its document retention policy. The court held that sanctions were not appropriate, but stated it could not “fathom” why the defendant failed to implement a litigation hold when its duty to preserve relevant information should have been apparent. In support of its decision to not impose sanctions, the court held that the record established that the documents concerning the drug were indeed preserved and that the quantity and quality of the documents produced by the defendant demonstrated that the defendant “diligently preserved” information about its generic drug.



In re Application of Michael Wilson and Partners, Ltd. for Judicial Assistance Pursuant to 28 U.S.C. § 1782, 2011 U.S. Dist. LEXIS 90954 (D. Colo. Aug. 15, 2011). The court ordered the applicant to post a $500,000 bond as a condition for granting judicial assistance in discovery for proceedings in England and Australia, due to the freezing of the applicant's assets, voluminous document production by non-parties, and an order for cost-sharing in the case.

Micron Tech., Inc. v. Rambus Inc., 645 F.3d 1311 (Fed. Cir. 2011); Hynix Semiconductor v. Rambus Inc., 645 F.3d 1336 (Fed. Cir. 2011). In a pair of decisions arising out of a famous set of common facts in a long-standing series of patent infringement actions, the Federal Circuit Court of Appeals held that “reasonable anticipation of litigation,” giving rise to a duty of preservation, arises when a party starts on a course of conduct that is reasonably anticipated to lead to litigation, even though there may be a variety of contingencies that need to be met before litigation can be filed. However, the destruction of discoverable evidence after the duty of preservation attaches is sanctionable in the Federal Circuit if “bad faith” is found. Intentional acts of destruction are not necessarily evidence of bad faith.

Monsanto Company v. E.I. Dupont de Nemours and Company, 2011 WL 1004852 (E.D. Mo. Mar. 18, 2011). The defendant filed a Second Motion to Compel asking the court to order the plaintiff to produce responsive documents. The defendant contended that the discovery requests targeted relevant matters that fall within FRCP 26(b), the plaintiff did not make a timely production, and that the plaintiff instituted a “custodial-only” preservation and collection protocol as opposed to the “custodial-based” protocol that the defendants adopted. The plaintiff argued that it satisfied its discovery obligations by interviewing custodians about shared data locations. The court decided that before it could decide whether to grant the defendant’s Second Motion to Compel, the parties must “meet and confer” about the custodians of the electronic documents and what electronic documents the plaintiff should produce. The court found that the plaintiff had the most convincing argument regarding “custodial-only” protocol, but the plaintiff failed to comply with its own procedures.

Morris v. Metals USA, 2011 WL 94559 (D.S.C. Jan. 11, 2011). The plaintiff brought negligence and gross negligence claims against the defendant. The plaintiff moved for sanctions under FRCP 37(c)(1). The plaintiff argued the court should exclude the defendant’s videotape evidence showing the plaintiff engaging in routine daily activities because the defendant did not disclose the tape until a week before the discovery deadline. The defendant rebutted that the tape was only for impeachment purposes and that the plaintiff did not make a specific discovery request for the tape. The court granted the plaintiff’s motion to prohibit the defendant’s use of the tape, but it denied the plaintiff’s motion for additional sanctions. The court found that the tape could be used for substantive purposes and that the defendant waited until the last minute to produce the tape.

Muniz v. United Parcel Service, Inc., 2011 WL 311374 (N.D. Cal. January 28, 2011). The plaintiff brought negligence and gender discrimination claims against the defendant. At the end of the litigation, each party sought attorney’s fees from the other because each believed that it was the prevailing party. In discovery on the motions for fees, the



defendant issued a subpoena demanded postings on listservs and social media networks that described the “works” and “efforts” of the plaintiff’s counsel, arguing that the electronic postings of plaintiff’s counsel would provide relevant evidence of the time he spent on the plaintiff’s case, his rate, and level of skill. The court granted the plaintiff’s motion to quash the defendant’s subpoena because the defendant failed to show that plaintiff’s counsel’s electronic postings were relevant. The court added that even if the defendant were able to show that the postings on listservs and social media websites were relevant, the court was still within its discretion to limit discovery requests that were not precise.

Nat’l Day Laborer Organizing Network v. U.S. Immigration & Customs Enforcement Agency, 2011 WL 381625 (S.D.N.Y. Feb. 7, 2011) (Opinion and Order withdrawn per order dated June 17, 2011). The plaintiff in this FOIA action moved to compel production of documents from four government agencies in connection with Secure Communities, a program established by the federal government that enlists states and municipalities in the enforcement of federal immigration law. Specifically, the plaintiff alleged the electronic documents produced pursuant to its FOIA request were “stripped of all metadata” and thus such metadata should have been produced in the original production. The court noted that FOIA provides that “[i]n making a record available … an agency shall provide the record in any form or format requested by the person if the record is readily reproducible by the agency in that form or format.” In light of its FOIA analysis and relying heavily on The Sedona Principles (2d ed. 2007) and Aguilar v. Immigration and Customs Enforcement of the U.S. Dept. of Homeland Sec., 255 F.R.D. 350 (S.D.N.Y. 2008), the court held that “certain metadata is an integral or intrinsic part of an electronic record … [and is presumptively] ‘readily reproducible’ in the FOIA context … unless the [producing] agency demonstrates [otherwise].” Citing the definition of “metadata” from The Sedona Conference® Glossary: E-Discovery & Digital Information Management (3d ed.), the court elaborated on which types of metadata are an intrinsic part of an electronic record and therefore subject to FOIA a request. Because the government had stripped all metadata from the electronic records produced to the plaintiff, the court ordered it to produce specified fields of metadata in load files which should have accompanied the original production. The court also noted that such a dispute could have been avoided had the parties “had the good sense to ‘meet and confer,’ ‘cooperate,’ and generally [made] every effort to ‘communicate’ as to the form in which ESI would be produced.” This Opinion and Order was withdrawn per order from the court dated June 17, 2011. Noting the parties had resolved their production format dispute, Judge Scheindlin declared that the earlier opinion "was not based on a full and developed record," and that it would be prudent to withdraw the decision "[i]n the interests of justice." Further, Judge Scheindlin declared that the withdrawn opinion "shall have no precedential value in this lawsuit or in any other lawsuit."

Neverson-Young v. Blackrock, Inc., 2011 WL 3585961 (S.D.N.Y. August 11, 2011). The plaintiff brought an employment discrimination and wrongful termination suit. The defendants moved for discovery sanctions based on alleged spoliation and failure to produce electronic documents. The defendants contended that the plaintiff discarded a computer that may have contained documents relevant to the lawsuit and did not produce certain emails from her Yahoo account. The plaintiff acknowledged that she donated the



computer, possibly after the start of litigation, and assumed that the emails were either privileged or not relevant. The court did not grant the severe sanctions of dismissal or adverse inference, stating that although the plaintiff committed spoliation, she was only negligent and not grossly negligent or willful in her actions, and the defendant had not demonstrated prejudice. However, the court did acknowledge that the plaintiff should be responsible for the defendants’ reasonable costs and fees for searching her hard drive and for her emails.

Nissan N. Am., Inc. v. Johnson Electric N. Am., Inc., 2011 WL 1002835 (E.D. Mich. Feb. 17, 2011). After it produced nearly 2 million pages of documents, the plaintiff in this product liability action moved for a protective order barring the defendant’s informal requests to supplement the plaintiff’s discovery responses to identify sources of ESI that had not been produced and were not reasonably accessible. Although the court declined to issue a protective order, it refused to compel the plaintiff to answer the defendant’s informal request, which was served by letter. In support of its ruling, the court held that while the plaintiff would not be required to respond to the defendant’s informal requests, the plaintiff had already asserted that it had searched the ESI of its key custodians and that it had produced all responsive documents from all reasonably accessible sources, and therefore it would not be burdensome for the plaintiff to determine the sources from which ESI had not been produced.

Northington v. H&M Int’l, 2011 WL 663055 (N.D. Ill. Jan. 12, 2011). The plaintiff in this employment discrimination action moved for sanctions against her former employer, alleging the defendant destroyed email that would have demonstrated discriminatory motives and actions. The court found that the defendant did not act willfully or in bad faith because it deleted the electronic documents pursuant to its informal data management procedures. However, the court held that the record “overwhelmingly demonstrate[d]” that the defendant was “grossly negligent in its attempts to secure relevant documents” by relying on employees to collect responsive documents without instruction or supervision, seeking documents from only three employees when the initial complaint was served, and failing to implement a legal hold until one year after the action was filed. The court denied the plaintiff’s request for a sanction barring the defendant from asserting a defense as to liability. Instead, the magistrate judge recommended a jury instruction that the defendant had a duty to preserve the spoliated evidence and should be precluded from arguing that a lack of discriminatory statements was evidence that no discriminatory statements were made by the defendant. The defendant was also ordered to search for additional ESI and to pay the plaintiff’s costs in bringing this motion.

O’Brien v. Ed Donnelly Enterprises, Inc., 2010 WL 3860522 (S.D. Ohio Sept. 27, 2010). The plaintiffs, employees of the defendant, moved for sanctions in this Fair Labor Standards Act (“FLSA”) action, alleging the defendant lost or destroyed employment records. After the district court denied the motion, the plaintiffs appealed, and the Sixth Circuit remanded in O’Brien v. Ed Donnelly Enterprises, Inc., 575 F.3d 567 (6th Cir. 2009) for further consideration of whether the defendant engaged in spoliation and whether it was reasonably foreseeable that the missing reports would be needed in future litigation. On remand, the magistrate judge concluded that litigation was not reasonably foreseeable at the time the records were lost or destroyed and recommended that the court



deny the plaintiffs’ renewed motion for sanctions under FRCP 37. The district judge adopted the magistrate judge’s report and recommendation and denied the plaintiffs’ motion, agreeing with the magistrate judge that neither the earlier litigation of the defendant’s previous owner nor the alteration of certain employee records by several managers put the defendant on notice of the likelihood of future litigation. The district judge also agreed with the magistrate judge that even assuming the defendant had a duty to preserve the records at issue under the FLSA, the evidence did not demonstrate a sufficiently culpable state of mind to justify an adverse inference or the other sanctions the plaintiffs sought.

Océ N. Am., Inc. v. MCS Servs., Inc., 2011 WL 197976 (D. Md. Jan. 20, 2011). The plaintiff brought this action for misappropriation of trade secrets alleging the defendant, a competing business, used the plaintiff’s proprietary software without permission. The plaintiff filed a notice of inspection, pursuant to FRCP 34, seeking access to 22 laptop computers and 15 thumb drives which allegedly contained the plaintiff’s proprietary software. The defendant subsequently made available to the plaintiff’s expert the requested laptops and thumb drives for forensic imaging during the work week, but objected to any further imaging when the defendant closed its office on Friday. The defendant then imaged each thumb drive to preserve its contents and destroyed the original thumb drives pursuant to a stipulation between the parties. The plaintiff then moved to compel production of the thumb drive images, over the defendant’s objection that the plaintiff originally requested the thumb drives—not the images—in its Rule 34 request and that such production would be prohibitively expensive. The court ordered the defendant to produce the images, holding that it was likely that the defendant’s refusal to allow additional imaging by the plaintiff’s expert after hours on Friday was at least in part due to the expense of having its own expert supervise the plaintiff expert’s activities. Moreover, the court held that the ordered production would not burden the defendant, citing that the alleged financial harm to the plaintiff was “considerable” and that the defendant was “no small outfit,” considering its $15 million in annual revenue from the previous year.

Offenback v. L.M. Bowman, Inc., 2011 WL 2491371 (M.D. Pa. June 22, 2011). This case arose from a vehicle accident after which the plaintiff claimed, inter alia, that he was fearful around other vehicles. The defendant requested information from the plaintiff’s Facebook account that contradicted the plaintiff’s claims of damages. The court ordered the plaintiff to provide it with access to its Facebook account, and after an in camera review, ordered that certain information relevant to the plaintiff’s damage claims, e.g., photographs of the plaintiff riding a motorcycle, be produced.

Pacific Coast Steel v. Leany, 2011 WL 4573243 (D. Nev. Sept. 30, 2011). In this employment contract dispute, one of the defendants, a former employee of the plaintiff, filed a motion for protective order and for the return of privileged documents acquired by plaintiff from the defendant’s work computer. He alleged that the plaintiff employer had no policies covering the personal use of work computers and that he did not waive his privileges when using a work computer because he had a reasonable expectation of privacy. The plaintiffs challenged the privilege claims and argued that even if the documents were privileged, the employee waived the privileges because the employee



failed to preserve the confidentiality and because the employee was aware of the personal use policy, citing the fact that the defendant himself recommended that the employer adopt the manual that included that policy. The court denied the defendants’ renewed motion for protective order and for return of privileged documents, finding that the employee could not have a reasonable expectation to privacy to documents and he failed to take reasonable steps to protect the confidentiality of those documents.

Parrish v. Manatt, Phelps & Phillips, LLP, 2011 U.S. Dist. LEXIS 41021 (N.D. Cal. Apr. 11, 2011). In this motion to tax costs in a legal malpractice action, the plaintiffs alleged that defendant’s fees were not necessary under 28 U.S.C. §1920(4), because the documents had not been produced. The court found that “[t]he reproduction Costs [that the] defendants incurred in collecting, reviewing, and preparing client documents for production were necessary expenditures made for the purpose of advancing the investigation and discovery phases of the action. As such, they [were] properly taxable.” The court reasoned that the documents may be taxed even if they were not produced, given that the discovery cutoff date had not yet arrived. The court observed that the expenditures “suggest[ed] that defendants were warming up their electronic discovery engine so that timely document productions could be made.”

Perez v. First Am. Title Ins. Co., 2010 WL 3419715 (D. Ariz. Aug. 27, 2010). The plaintiff sued the defendant, alleging unfair title insurance practices, and sought class certification. Although the defendant produced a substantial amount of electronic data in response the plaintiff’s discovery requests, the plaintiff contended the production was inadequate. The plaintiff moved to compel the defendant to allow the plaintiff to search additional databases, arguing that an additional search of such databases by the plaintiff would yield the identities of other potential class members. The defendant argued that it would cost more than $2 million and take months to create new electronic databases for the plaintiff to review. The court held that the plaintiff was entitled to a limited, but reasonable, opportunity to discover the identities of potential class members by searching the defendant’s databases. The court ordered the defendant to provide the plaintiff with reasonable access to its databases at the defendant’s offices, and that the defendant may supervise, but not interfere with, the plaintiff’s use of the databases. The court further conditioned its ruling on the parties’ strict adherence to their protective agreement containing a clawback provision. Subsequently, in Perez v. First Am. Title Ins. Co., 2011 WL 814719 (D. Ariz. Mar. 2, 2011), the plaintiff moved for additional discovery and the defendant moved to decertify the class, arguing that the plaintiff’s failure “to conduct diligent discovery has prejudiced the class and is indicative of [the plaintiff’s] inability to vigorously represent the interests of the absent class members.” Noting that that plaintiff had been allowed “ample time” by the court to obtain additional electronic data from the defendant, the court denied the plaintiff’s motion, holding that the plaintiff had not shown good cause to extend the discovery deadline. The court also denied the defendant’s motion based on the plaintiff’s assertion that despite the denial to extend discovery, the plaintiff had sufficient evidence to proceed on behalf of the class.

Pham v. ComUnity Lending Inc. (In re ComUnity Lending, Inc.), 2011 U.S. Dist. LEXIS 49527 (N.D. Cal. May 9, 2011). In this bankruptcy case, the trustee claimed that the cost to search and retrieve the requested information was unduly burdensome and



would cost $2 million to complete. The court disagreed and found that the trustee took less than adequate steps to search through the computer database and produce relevant documents. As a result, the court ordered the trustee “(1) turn over to plaintiffs mirror images of the ESI in his possession, custody, or control; or (2) run plaintiffs’ choice of up to 15 search terms on all ESI except the backup tapes and produce the results to plaintiffs” with the trustee bearing 2/3 of the costs and the plaintiff bearing 1/3 the costs. The court also noted that trial was only a few weeks away, and if the presiding judge did not allow additional time for discovery, then the magistrate would recommend sanctions, up to and including a presumption that the bank was not insolvent at the time it says it was.

Philips Electronics North America Corp v. BC Technical, 773 F. Supp. 2d 1149 (D. Utah 2011). In this copyright and trade secrets case, the defendant argued that the spoliation by the five key employees did not merit dismissal. The court disagreed. The court, finding found, in an exhaustive opinion, that the defendant intentionally wiped relevant information and that the five employees lied under oath. The court reasoned found that the defendants disregard discovery orders, deleted and wiped of several thousand potentially relevant files (some with the defendant’s name on them), and attempted to cover up the deletion. As a result, the court found that the defendants acted in bad faith and a lesser sanction was not appropriate. The court referred this matter to the DOJ for criminal prosecution.

PIC Group, Inc. v. LandCoast Insulation, Inc., 2011 WL 711581 (S.D. Miss. Feb. 18, 2011). The court had entered a detailed order to compel discovery, and the defendant failed to comply. The plaintiff brought a motion to appoint an expert for the forensic recovery of electronically stored information and for sanctions. The defendant claimed that it had retained a new computer expert and the court’s appointment if an expert would be unnecessary. However, the court ruled that the defendant’s efforts were too little, too late. The court granted the plaintiff’s motion and noted that a lackadaisical approach to preservation and production of electronic documentation is unacceptable in today’s litigation world. Subsequently, in adopting the report and recommendations of the Special Master, 2011 WL 2669144 (S.D. Miss. July 7, 2011), the court found that the ESI in dispute was reasonably accessible, that there was “no evidence of any corporate policy, procedure or concerted effort on LandCoast's part to preserve electronic evidence,” and that immediately prior to the court-ordered forensic examination, the defendant – an attorney and former litigator – intentionally destroyed data on his computer. The court imposed monetary sanctions in the form of attorneys’ fees and expert costs, estimated in excess of half a million dollars, and barred defendant from resorting to insurance to pay these costs, but declined to issue an adverse inference instruction, accepting the Special Master’s conclusion that the plaintiff’s ability to pursue its claims was not materially damaged.

Pippins v. KPMG, LLP, 2011 U.S. Dist. Lexis 116427 (S.D.N.Y. Oct. 7, 2011). In this putative Fair Labor Standards Act class action, the plaintiffs requested that defendant KPMG preserve the hard drives of present and former employees who were potential class members. KPMG moved for a protective order that would either shift the cost of hard drive preservation or limit the scope of preservation to a random sample of 100 hard



drives from the more than 2,500 hard drives KPMG had already collected at a cost of more than $1.5 million, against which the plaintiffs would be allowed to run keyword searches. The court, applying FRCP 26(c), balanced KPMG’s interest in avoiding the undue burden or expense that would result from its obligation to preserve the hard drives with its duty to preserve. KPMG argued that it had met this burden and advocated the proportionality principles of FRCP 26(B)(2). However, the court, citing Orbit One Comm., Inc. v. Numerex Corp., 271 F.R.D. 429, 436, n.10 (S.D.N.Y. 2010), cautioned that ‘[p]roportionality is particularly tricky in the context of preservation. It seems unlikely, for example, that a court would excuse the destruction of evidence merely because the monetary value of anticipated litigation was low.’ Citing The Sedona Conference, “The Sedona Conference Commentary on Proportionality in Electronic Discovery,” 11 Sedona Conf. J. 289, 291 (2010) (Principle No. 1), the court ruled that even though the expense of hard drive preservation could eclipse the stake of the litigation, KPMG failed to able to establish "conclusively" that the materials contained on the hard drives were either of ‘little value’ or ‘not unique.’ (. Instead, the court applied a three-part test to determine the scope of KPMG’s preservation obligations: (1) the potential relevance of the information to be preserved; (2) whether the information to be preserved related to key players and (3) the extent to which the information was duplicative or cumulative of that which has already been preserved. The court held KPMG had failed to provide information as to why the information contained on its employees’ hard drives would not be relevant to the litigation. The court further found that until plaintiffs’ motion to certify was resolved all of the potential class members could be found to be “key players”. The court noted that even if the court denied plaintiff’s motion, KPMG would still be obligation to preserve the hard drives as it would be on notice of potential future litigation brought by the individual class members.

Play Visions v. Dollar Tree Stores, Inc., 2011 WL 2292326 (W.D. Wash. 2011). In this copyright and patent case, the plaintiff argued that a voluntary dismissal cured any liability for discovery violations. The court disagreed and found that the violation of Rule 26(g) merited a $137,168.41 sanction for attorneys’ fees. The court reasoned that the plaintiff failed to provide a proper investigation by producing 360 unorganized boxes; by declaring that the document production was complete, then producing another 2,000 documents; and by violating the protective order.

Point Blank Solutions, Inc. v. Toyobo America, 2011 WL 1456029 (S.D. Fla. Apr. 5, 2011). In a product defect case in which a bullet penetrated a purportedly bullet-proof vest, the plaintiff argued that the court should review the productions in other parallel proceedings to see if there were any gaps in this production. The court declined the plaintiff’s invitation and noted that without a showing of bad faith, the Eleventh Circuit precedent does not allow for an adverse inference sanction. The court reasoned that using an oral litigation hold and finding missing evidence elsewhere does not prove that the defendants intentionally destroyed relevant evidence. The court also found that attorney’s fees were not appropriate because the alleged deficient conduct occurred years before the suit was filed.

Process Controls International, Inc. v. Emerson Process Management, 2011 U.S. Dist. LEXIS 49876 (E.D. Mo. May 10, 2011). In this false advertising and tortuous



interference case, the plaintiff requested that the court issue a discovery management order because discovery would be so voluminous. The court declined to do so, because the parties had not met and conferred. The court reasoned that “[i]n the absence of any actual discovery dispute, I cannot see any benefit from my creating an Electronic Discovery Order for the parties from whole cloth, when they know better than I what information they have and what information they need.” The court granted a protective order and allowed the parties to distinguish sensitive and highly sensitive information, which would determine who could view certain documents.

Promote Innovation LLC v. Roche Diagnostics Corp., 2011 U.S. Dist. LEXIS 87995 (S.D. Ind. Aug. 9, 2011). In this dismissed qui tam action, the defendant sought to tax costs for e-discovery under 28 U.S.C. §1920. The plaintiff argued the e-discovery costs were not necessary because it was not consulted on the defendant’s search term methodology. The court disagreed with the plaintiffs and noted that e-discovery was not done for the defendant’s convenience. The court reasoned that the defendants crafted date restrictions, defined custodian filters, and enabled the de-duplication of the database to reduce the volume of litigation. The court also noted that “had not used the more efficient electronic processes above, the cost to manually find and produce the information could have been far greater.”

Race Tires America v. Hoosier Racing Tire Corp., 2011 WL 1748620 (W.D. Pa. May 6, 2011). The plaintiff moved that the court appoint a special master to address cost and information retrieval issues. The court denied this request and articulated that it “is familiar with the costs associated with e-discovery and the techniques used by the parties to capture relevant information,” that it is unnecessary to appoint a special master to perform a retrospective analysis of fees and costs. Next, the court surveyed the legal landscape regarding whether e-discovery costs were taxable under 28 U.S.C. §1920(4). The court noted that “the requirements and expertise necessary to retrieve and prepare these e-discovery documents for production were an indispensable part of the discovery process.” Thus, the court allowed the prevailing party to tax e-discovery costs.

In re Refco Sec. Litig., 2011 WL 497411 (S.D.N.Y. Feb. 14, 2011). In this multi-district securities litigation, the plaintiffs alleged a law firm committed malpractice by representing multiple clients despite a conflict of interest, and that a privileged email between partners of the firm should be produced. The law firm inadvertently produced the privileged email concerning its representation of the two clients in conflict and notified the plaintiffs of the error. The plaintiffs certified that they destroyed all copies of the email and then moved to compel production of the email, arguing its relevance to the multi-district securities litigation. The court held that the email was not discoverable because it was irrelevant in the pending matter before the court. In support of its ruling, the court explained that a lawyer has an ethical duty to turn over privileged documents to a client in a legal malpractice action, but because the malpractice claim was in arbitration and not before the court in the present action, the email was not discoverable.

In re the Reserve Fund Securities and Derivative Litigation, 2011 WL 2039758 (May 23, 2011). The plaintiff sought an order compelling the defendants to produce emails between the defendant’s vice president and his wife, which were transmitted using the defendant corporation’s computer and stored on its server. The plaintiff argued that the



defendant vice president had no reasonable expectation of privacy and that he waived the marital privilege by inadvertently producing some of the emails. The defendants contended that the marital communications privilege covered the emails and that the defendant vice president did not waive the privilege. The court, applying the four-part test from Asia Global Crossing, 322 B .R. 247, 258–59 (Bankr. S.D.N.Y.2005), concluded that since the defendant corporation’s email policy banned personal use of the email system, the defendant vice president could not have any reasonable expectation to privacy to find for the plaintiff, and granted the plaintiff’s request for the order compelling the defendants to produce emails.

Rosenthal Collins Grp. v. Trading Tech. Int’l, Inc., 2011 WL 722467 (N.D. Ill. Feb. 23, 2011). After a programming consultant hired by the plaintiff testified that he intentionally wiped disks that the court previously ordered to be preserved and produced to the defendant in this patent infringement action, the defendant moved for sanctions. Although the plaintiff argued that it did not have actual knowledge of the consultant’s misconduct, the court found that the consultant wiped the disks in the plaintiff’s lawyers’ office, and held that actual knowledge was not necessary to impose sanctions for grossly negligent or reckless conduct when a party should have known of the misconduct. In light of the court’s findings and considering prior monetary sanctions against the plaintiff, the court entered a default judgment in favor of the defendant, fined the plaintiff $1 million, and ordered plaintiff’s counsel to pay the defendant attorneys’ fees in bringing the motion.

In re Royce Homes, LP, 2011 WL 873428 (Bankr. S.D. Tex. Mar. 11, 2011). A bankruptcy trustee moved to compel production of thousands of emails designated as attorney-client privilege on the debtor’s privilege log. The court found that the debtor failed to meet its burden of proving that each email was protected by the attorney-client privilege because its privilege log did not contain any detailed description as to why each email was privileged. The court ordered the debtor to produce the emails to the trustee and held “[j]otting down ‘e-mail’ next to ‘attorney-client privilege’—which is basically what [the debtor] did for every single entry—is devoid of any real evidentiary substance.”

Sara Lee Corp. v. Kraft Foods Inc., 273 F.R.D. 416 (N.D. Ill. 2011). In this unfair trade practices case alleging deceptive advertising of hot dogs, the plaintiff moved to compel the defendant’s expert to answer questions and produce electronic communications about his work as a consultant for a similar ad campaign for the defendants’ hot dog company. The court held that Plaintiff’s “requests are subject to the protections for non-testifying consultants, which Plaintiff cannot overcome.” The court reasoned that his role as a consultant was separate from the litigation and that the communications were “generated ‘uniquely in the expert’s role as a consultant.’” The court also noted that the plaintiff failed to show a special need for the expert’s consulting work. The court ended its opinion by noting that “The season is long and a win or loss on opening day does not decide the pennant, or this case. We will have to wait to see whose hot dog tastes best. Batter up!!”

Seven Seas Cruises S. DE R.L. v. V.Ships Leisure SAM, 2010 WL 4982810 (S.D. Fla. Dec. 2, 2010). The plaintiff alleged that the defendant failed to properly maintain several cruise ships owned by the plaintiff, and moved to compel the defendant to produce



electronically stored information. After conducting depositions and reviewing documents and other ESI produced by the defendant, the plaintiff determined that the defendant had not conducted its initial ESI search using search terms previously agreed upon by the parties. In its motion to compel, the plaintiff argued that the defendant should be ordered to conduct another search of its ESI and produce all responsive documents. In the alternative, the plaintiff asked the court to appoint a third party vendor to perform the searches. Because the defendant did not file and serve an opposing memorandum of law within the required time period, the court granted the plaintiff’s motion by default and ordered the defendant to conduct another ESI search and produce all relevant documents to the plaintiff within two weeks. The court further ordered the defendant that should it not be able to perform the search, it must notify the court and the court would appoint a third party electronic discovery vendor to conduct the search. Subsequently, in Seven Seas Cruises S. DE R.L. v. V.Ships Leisure SAM, 2011 WL 181439 (S.D. Fla. Jan. 19, 2011), the plaintiff filed a renewed motion to compel the defendant to produce additional electronic documents in native format, alleging that despite the parties’ agreed-upon search terms, the defendant had not produced the full universe of responsive documents. The defendant argued that it searched using the single term “navigator“ because its computer system was not capable of performing Boolean searches using additional terms and connectors. Despite the defendant’s assertion, the plaintiff countered that even if the defendant had been able to use additional search terms and connectors, it failed to produce an email between the parties containing the term “navigator.” The court ruled that the dispute resulted from the parties’ “mutual failure to communicate and work together in a good faith effort to resolve the areas of dispute” and held that it would not allow the renewed motion to compel until the parties attempted to resolve their dispute without court intervention.

Seyler v. T-Systems of N. Am., Inc., 2011 WL 196920 (S.D.N.Y. Jan. 21, 2011). After an employment action was removed to federal court, the plaintiff produced an email exchange between herself and her sister, who practiced patent law with a New York law firm. The defendant then served a subpoena on the sister’s law firm, requesting all communications between the plaintiff and her sister. After the firm objected to the subpoena, the defendant moved to compel the firm to produce the documents requested in the subpoena. The court denied the motion, holding that New York’s codified state law on privilege controlled and that the communications were subject to the attorney-client privilege, despite the sister being a family member and the communications being made before any action had been filed. The court also rejected the defendant’s argument that production of the one email exchange waived privilege because there was no evidence of any intentional waiver under FRE 502(a) and that FRE 502(b) did not apply.

Siani v. State University of New York at Farmingdale, 2011 WL 2580361 (E.D.N.Y. June 28, 2011). In this age discrimination case, the plaintiff moved for reconsideration of the court’s denial of its motion for an adverse inference due to the defendant’s alleged spoliation. The plaintiff argued that the defendant failed to issue a litigation hold for eight months after litigation became reasonably anticipated, and this act was grossly negligent. The magistrate judge found, and the district court confirmed, that the failure to issue a litigation hold was merely negligent and the defendant failed to show that any relevant



information was lost. As a result, the court upheld the magistrate’s ruling to deny the spoliation motion.

Specht v. Google, Inc., 2011 U.S. Dist. Lexis 68968 (N.D. Ill. June 27, 2011). The defendant sought to recover costs under 28 U.S.C. §1920(4) for processing electronic documents, including imaging and conversion of Quickbooks files into useable formats. The court refused to allow these costs unless the parties had expressly agreed to produce documents beforehand in an electronic format.

Star Direct Telecom, Inc. v. Global Crossing Bandwidth, Inc., 272 F.R.D. 350 (W.D. N.Y. 2011). In this breach of contract case, the plaintiff alleged that the defendant failed to produce relevant emails. The defendant countered that the motion was untimely and the relevant emails were not reasonably accessible. Finding that the duty to supplement disclosure extends beyond the discovery deadline, the court held that the motion to compel production of the emails was not untimely. The court acknowledged that it would cost the defendant $13,000 to produce emails, however, the court found that the defendant failed to object to the original document request, so it waived its objection of undue burden.

State Compensation Insurance Fund v. Wachovia Bank, No. C-09-2959 JSW (EDL) (N.D. Ca. July 18, 2011). The defendant filed a motion to compel the plaintiff to provide a FRCP 30(b)(6) witness for the issues of document preservation, collection, and production, arguing that the plaintiff’s discovery compliance efforts were inadequate. The defendant also contended that four additional depositions were necessary, that the requested discovery was within the proportionality requirements of FRCP 26(b)(2)(C), and that it did not have the opportunity to obtain the information by other means. The plaintiff countered that its counsel primarily handled its document collection and production, and that in-house counsel managed internal searches, reviewed documents, and made decisions about redactions. The district court granted the defendant’s motion in part, finding that there was question as to the adequacy of the plaintiff’s preservation of documents. However, it ordered the parties to meet and confer. The court relied on The Sedona Conference® Cooperation Proclamation to support its position that before resorting to a Rule (30)(b)(6) deposition, the parties should informally exchange information about their data sources, retention policies, and proposed collection and search methods in order to be “just, speedy, and inexpensive.”

Steuben Foods, Inc. v. Country Gourmet Foods, LLC, 2011 WL 1549450 (W.D.N.Y. Apr. 21, 2011 ). In this contract dispute, the defendants, citing Pension Committee, alleged that the plaintiff’s failure to issue a written litigation hold was grossly negligent. Citing Orbit One, the court noted that for sanctions to be appropriate, it is a necessary, but insufficient, condition that the sought-after evidence actually existed and was destroyed[.]” The court continued, noting that “in a small enterprise, issuing a written litigation hold may not only be unnecessary, but it could be counter productive ... [i]ndeed, under some circumstances, a formal litigation hold may not be necessary.” The court allowed the oral litigation hold and held the moving party’s identification of three emails that were overlooked in production did not prove that relevant emails were destroyed. As a result, the court found that a spoliation sanction was not warranted.



Surowiec v. Capital Title Agency, Inc., 2011 WL 1671925 (D. Ariz. May 4, 2011). In this real estate dispute, the defendant failed to issue a litigation hold letter and used only two search terms to retrieve relevant information. The court noted that the defendant’s failure to issue a litigation hold warranted an adverse inference instruction. The court found that the defendant knew litigation was imminent; the defendant failed to suspend its document retention program, which constituted gross negligence; and the defendant deleted relevant emails, which prejudiced the plaintiff. The court also noted that the defendant’s two generic search terms were “not calculated to capture communications . . . as sought in the document requests,” resulting in the court awarding monetary sanctions to the pro se litigant.

Techsavies, LLC v. WDFA Marketing, 2011 WL 723983 (N.D. Cal. Feb. 23, 2011). The plaintiff moved for sanctions against the defendant as a result of the defendant’s repeated failure to provide the plaintiff with emails requested by the plaintiff. The court granted the plaintiff’s motion in part and denied it in part. The court found that the defendant failed to correct its incomplete production in violation of FRCP 26(e). However, the court concluded that the sanctions the plaintiff sought were too broad because the plaintiff was aware of the defendant’s failure to produce the emails yet did not notify the court until the defendant sought a protective order.

Thermal Design, Inc., v. Guardian Building Products, Inc., 2011 WL 1527025 (E.D. Wis. Apr. 20, 2011). The plaintiff moved to compel further discovery of ESI from the defendants, arguing that it was entitled to more ESI and that the defendants would not be unduly burdened because they had large resources. The defendants countered that the process of providing the additional requested ESI would cost $1.9 million and take several months. The court denied the plaintiff’s motion to compel, reasoning that the defendants met their burden of proving that the ESI was not reasonably accessible, and the plaintiff did not demonstrate that the cost was justifiable under the circumstances.

Thorncreek Apartments III, LLC v. Village of Park Forest, 2011 WL 3489828 (N.D. Ill. August 9, 2011). The plaintiff filed a motion seeking an order finding that the documents in question did not fall within the attorney-client privilege or that the privilege has been waived by the defendant’s production of the documents. The defendant contended that disclosure of privileged documents was inadvertent and that it did not waive privilege. Applying Fed. R. Evid. 502(b), the court granted the plaintiff’s motion and reasoned that although the production was inadvertent, the privilege was waived because the defendant failed to take reasonable steps to prevent the disclosure or timely steps to rectify it once it was discovered. Although the disputed production involved only 159 out of more than 250,000 documents reviewed and produced, the defendant inadvertently produced every one of the documents its reviewing attorney had identified as privileged, and did not assert privilege for nine months after producing them to the plaintiff.

In re Toft, 2011 WL 3023544 (Bkrtcy. S.D.N.Y. July 22, 2011). In this international bankruptcy proceeding, the administrator initiated a German action in which the court entered an order authorizing the administrator to intercept the debtor’s e-mail. The administrator also initiated a proceeding in England where the English High Court of Justice granted the recognition and enforcement of the German order. The administrator



filed a Chapter 15 proceeding and requested that the U.S. court grant comity to the German and English orders, which would allow the administrator to secretly intercept the emails and to go forward with the proceedings without notice to the debtor. The court denied the administrator’s motion for relief because the powers that the administrator sought went beyond powers traditionally afforded to U.S. estate representatives. Furthermore, despite the fact that procedures could be imposed to prevent disclosure of privileged communication, those procedures still would not justify the relief that the administrator sought. The court ultimately concluded that the relief that the administrator sought went against U.S. public policy.

Tomlinson v. El Paso Corp., 2011WL 2297661 (D. Col. June 9, 2011). The defendants moved under to 28 U.S.C. § 1920 for taxation of costs, arguing that they should be reimbursed for costs related to videotaping depositions, creating a secure website to give the plaintiffs access to a software program, and conversion of documents to electronic form. The court explained that costs were not recoverable “when there is no explanation regarding the use made of such materials and therefore no showing of the nature or necessity of the copied documents.” The court also concluded that the defendants did not demonstrate that the court had the authority to award costs related to creating the website.

Trustees of the Local 464A United Food & Commercial Workers Union Pension Fund v. Wachovia Bank, N.A., 2011 WL 677461 (D.N.J. Feb. 15, 2011). The pension fund trustees in this ERISA action moved for leave to amend their complaint in order to include additional theories of relief because the defendant delayed its production of electronic documents in native format, although it had produced the same documents in another format. The magistrate judge denied the motion and the district court affirmed. In denying the motion, the court held that “[t]he fact that it took [p]laintiffs a while to get the [documents] in the format they preferred does not give them a free pass to delay amending the complaint for months beyond the deadline that had been agreed to in the Scheduling Order.”

Uhlig LLC v. Shirley, 2011 WL 2746261 (D. South Carolina July 14, 2011). The defendants moved for sanctions when the plaintiff produced emails sixteen months after receiving the defendants’ discovery request. The defendants argued that they were prejudiced by the delay. The court denied the defendants’ request for sanctions because the plaintiff’s failure to timely produce the emails was “inadvertent or negligent, at best.”

Union Pump Co. v. Centrifugal Technology, Inc., 404 Fed. Appx. 899 (5th Cir. Dec. 16, 2010). On appeal in this suit for misappropriation of trade secrets and unfair competition, the defendants argued that one witness should not have been allowed to testify about evidence found on three computer hard drives that he learned about through conversations with others. The defendants further contended that the district court improperly limited the testimony of their expert who examined the hard drives that the defendants allegedly wiped clean. The Fifth Circuit held that admission of hearsay testimony about the hard drives that was harmless error. The appellate court also found that the district court did not err in limiting the expert witness’s testimony, and that the district court allowed the expert to convey the information that the defendants claimed was excluded. For its part, the plaintiff appealed the district court’s decision not to award attorney’s fees as a sanction for the defendant’s spoliation. The Fifth Circuit found that



the district court had not abused its discretion when it declined to award the plaintiff attorney’s fees. The appellate court acknowledged that while spoliation was a serious offense, sanctions should be used sparingly.

United Central Bank v. Kanan Fashions, Inc., 2011 WL 4396912 (N.D. Ill. Mar. 31, 2011); aff’d in part, 2011 WL 4396856 (N.D. Ill. Sept. 21, 2011). This suit arose from the defendants’ breach of loan agreements. The plaintiff moved for spoliation sanctions, contending that the defendants did not secure a computer server, despite the plaintiff’s repeated reminders to, when the plaintiffs evicted them from the warehouse that held the server. The plaintiff alleged that this failure was willful and intentional, and that the defendants should not have been allowed to introduce evidence related to the data on the server. The defendants countered that they took proper actions to preserve the ESI and that the plaintiff should have obtained a court order or subpoena for the server. The court granted the plaintiff’s motion in part and denied it in part. It agreed with the plaintiff that the defendants acted willfully and intentionally in failing to preserve the ESI because they ignored instructions to remove the server from the warehouse. The court also agreed that the defendants should be barred from introducing evidence related to the server, and that jury would be given an adverse inference instruction. The court denied the plaintiff’s motion to the extent that it sought sanctions against the defendants’ former attorneys, who were named as respondents, as the court found that the attorneys acted in good faith and were deliberately misled by their client, stating that “although Respondents certainly could have done more, the ultimate responsibility for the spoliation of the warehouse server rests with Defendants.”

United States v. Universal Health Services, Inc., 2011 U.S. Dist. LEXIS 86566 (W.D. Va. Aug. 5, 2011). In this False Claims Act case, the Commonwealth of Virginia failed to implement a litigation hold for two years after it received notice of the pending litigation. It later objected to the production of email, which was now only available from backup media, as unduly burdensome. The court ordered Virginia to produce the backup tapes to the defendants so that a commercial vendor, whose costs estimates were lower than Virginia’s, could retrieve the files. The court ordered the defendants to pay the outside vendor, subject to reimbursement by Virginia, given that the burden was caused by Virginia's two-year delay in issuing a litigation hold.

United States v. Carell, 2011 WL 2078023 (M.D. Tenn. May 26, 2011). In this Medicare reimbursement case, the defendants argued that a litigation hold over ESI was unnecessary because the relevant documents predated the home healthcare entity’s computer system, which did not go online until the latter part of 2003. The court held that the plaintiff must still search, review, and produce information responsive to the government’s document requests from the time the system went online until December 31, 2005. The court also noted that the litigation hold issue was not properly before it, as the government merely asked for an order requiring the plaintiff to search and produce certain information.

Velazquez-Perez v. Dev. Diversified Realty Corp., 10-cv-01002 (D.P.R. Jan. 28, 2011). The plaintiff sued his employer for adverse employment actions taken against him and subsequently filed two motions to compel the production of certain emails. The court denied the plaintiff’s motions and ordered the plaintiff to show cause why the defendant



should not be entitled to attorneys’ fees in defending the motions, reminding the plaintiff that he was required to certify to the court that he had made a good faith effort to resolve the dispute before bringing the motions to compel. In support of its order, the court held that the record showed that “the defendant was willing to meet with plaintiff in order to solve the discovery dispute but that plaintiff never acceded to that simple request.” In addition, the court noted that although the defendant’s index of produced documents did not individually list the emails sought by the plaintiff, defense counsel explained to the plaintiff’s lawyer that the requested emails had been included in the production.

Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497 (D. Md. Sept. 9, 2010). The plaintiff sued the defendant for copyright infringement. The magistrate judge found that the defendant and its president, Mark Pappas, intentionally spoliated evidence. In his Report and Recommendations the magistrate judge found that: (1) Pappas instructed a business contact to destroy all emails related to the plaintiff; (2) Pappas kept an external hard drive secret even to their ESI expert; (3) Pappas “stored” relevant email in a “deleted items” folder that were not transferred to a new server; (4) between the first court order to preserve relevant ESI and a discovery hearing six weeks later, 9,282 files were deleted from Pappas’ work computer; (5) following the first discovery hearing and a second preservation order, Pappas deleted almost 4,000 files using a software program designed to erase files that could not be recovered; and (6) two years after the action was filed, the defendant ran a disk cleanup program that scrubbed data and eliminated Internet history files. Based his finding of willful, bad faith conduct on the part of the defendant and Pappas, the magistrate judge recommended a default judgment against the defendant. The magistrate judge also ruled that Pappas personally be found in civil contempt and ordered that he be imprisoned for a period not to exceed two years “unless and until” he paid the significant fees and costs that the magistrate judge awarded the plaintiff. By Memorandum and Order dated June 14, 2011, the court affirmed the findings of Magistrate Judge and ordered defendant to pay $571,440.12, representing the balance due on total monetary sanction of $1,049,850.04. However, the court declined to consider the civil contempt sanction before Pappas had an opportunity to pay the monetary sanctions. In the final judgment, dated September 30, 2011, the court again cited the “massive degree of spoliation of evidence” by the defendant. The judge found the defendant liable for copyright infringement and entered a permanent injunction and inter alia judgment for lost profits of $1,150,750 plus $228,804 interest; $500,000 in punitive damages, $575,375 in enhanced damages under the Lanham Act, $35,000 in design patent damages, and costs and attorneys’ fees to be determined.

Vieste, LLC v. Hill Redwood Development, Ltd., 2011 U.S. Dist. LEXIS 59831 (N.D. Cal. June 6, 2011). Although no spoliation was shown, defendants were ordered to pay plaintiffs' attorney fees and costs in seeking sanctions for spoliation because defendants' declarations inadequately responded to a court order requiring disclosure of information on preservation of documents.

Viramontes v. U.S. Bancorp, 2011 WL 291077 (N.D. Ill. Jan. 27, 2011). The plaintiff sent a letter to the defendant’s human resources department complaining of her new supervisor’s derogatory comments to female employees. Seven months later, the plaintiff was terminated and subsequently sued for discrimination. After the defendant failed to



produce emails during the time period beginning on the date of the plaintiff’s letter to human resources until her date of termination, the plaintiff moved for spoliation sanctions pursuant to FRCP 37. The defendant argued that its company policy mandated the routine destruction of emails every six months unless it reasonably anticipated litigation, and that the plaintiff’s letter to human resources was insufficient to put the company on notice of a potential lawsuit and a duty to preserve email. Citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212 (S.D.N.Y. 2003) and FRCP 37(e), the court held that the defendant did not engage in spoliation because: (1) the plaintiff’s letter to human resources did not assert that she would take legal action, (2) it was not reasonably foreseeable that an employment discrimination suit would be filed in the future based on the testimony given by plaintiff, and that (3) the defendant did not act in bad faith because it acted pursuant to its neutral document destruction policy. The court accordingly denied the plaintiff’s motion and also denied the defendant’s request for fees and costs pursuant to Rule 37(a)(5)(B) in responding to the plaintiff’s motion.

White v. New Jersey, 2011 U.S. Dist. LEXIS 67771 (D.N.J. June 22, 2011). A request for production of incoming and outgoing email of two youth correctional facility officers for a year was considered overbroad. The court ordered production limited to email relating to allegations in plaintiff's complaint as determined through a Department of Corrections officer's search of available email.

Williams v. District of Columbia, 2011 WL 3659308 (D.D.C. Aug. 17, 2011). The court denied the defendant’s motion to exclude an inadvertently produced email where the defendant failed to satisfy the burden of establishing that reasonable steps were taken to prevent disclosure or rectify the error. In so holding, the court rejected the defendant’s argument that its actions pursuant to Rule 26(b)(5)(B) (i.e. sending a written request for the return of the email) were sufficient to discharge its obligations under FRE 502(b)(3).

Wood v. Capital One Services, LLC, 2011 WL 2154279 (N.D.N.Y. April 15, 2011). In this fraud case, the plaintiff filed a motion to compel discovery, and the defendants moved for a protective order. One defendant alleged that meeting the plaintiff’s discovery demands would cost $5 million. The plaintiff argued, and the defendants conceded, that the ESI that he requested was relevant to his claims. The court denied the plaintiff’s motion with one exception, and it granted the defendants’ motions for a protective order. The court used Rule 26(b)(2)(c)(iii), the “rule of proportionality” and found that not all of the relevant factors favored the plaintiff. The court also found that the plaintiff made an overbroad request for ESI that was not likely to be an important factor in deciding the case.

Yu Chen, et. al. v. LW Restaurant, Inc., et. al., 2011 U.S. Dist., Lexis 85403 (E.D.N.Y. Aug. 3, 2011). Restaurant workers filed a Fair Labor Standards Act claim seeking damages for the defendants’ failure to pay overtime and minimum wages. In discovery, the defendants produced payroll records that contained no names and instead, listed the employees with designations, such as "Waiter A" or "Waiter B" and "Fry Cook" or "Wok Cook." The plaintiffs, alleging the records were either altered or created solely for the purposes of litigation, requested the original electronically stored records. Defendants objected and the court ordered them to produce the original data. Defendants failed to comply and the court subsequently ordered defendants to produce the entire



computer or hard drive that contained the records for plaintiffs’ inspection. The defendants again failed to comply, and when the court considered the plaintiffs’ motion for terminating sanctions, the defendants revealed the original data could not be produced because defendants had lost the hard drive. The court granted the plaintiffs’ motion for sanctions after the court determined that the defendants lost a portable hard disk subsequent to the court’s order to produce it. The court found the spoliation to be grossly negligent, and possibly intentional. The court also found plaintiffs had been prejudiced by the loss of the hard drive as it was the only way to determine the validity of the payroll information provided by defendants. In determining the appropriate sanction, the court looked not only to the defendants’ failure to produce the hard drive, but also defendants’ entire history of discovery misconduct. The court imposed (1) an order precluding the defendants from presenting witness testimony at trial; (2) an order prohibiting defendants from presenting any payroll records or employment records at trial; (3) an adverse inference that the defendants willfully fabricated electronic employment records; and (4) attorneys’ fees and costs.

York v. Tropic Air, Ltd., 2011 U.S. Dist. LEXIS 46249 (S.D. Tex. Apr. 28, 2011). Plaintiffs' request for a "neutral third party electronic discovery person" to perform a search of defendant’s email and computer system during jurisdictional discovery was denied. The court was satisfied that defendant had produced responsive documents after a search of its computer and email systems, and it concluded the burden and expense to the defendant of hiring a forensic examiner outweighed any likely benefit.

Zhi Chen v. District of Columbia, 2011 WL 3966155 (D.D.C. Sept. 9, 2011). In this damages case arising from unlawful search and detention, the plaintiff moved for an adverse inference instruction against the defendant hotel, alleging that the defendant willfully, recklessly, or negligently failed to preserve a relevant security camera recording by failing to override the DVR’s default setting, resulting in deletion of recordings that were two weeks old, and by throwing away a disc that was supposed to contain the recording but was apparently blank. The defendant denied having a culpable state of mind. The district court granted the plaintiff’s motion in part and denied it in part. It reasoned that spoliation of evidence did not need to be purposeful to result in sanctions. The district court found, applying the doctrine of res ipsa loquitur, that the defendant was grossly negligent when it failed to preserve the recording. It would not issue the precise adverse inference instruction requested by the plaintiff, which would have directed the jury to reach a conclusion of law regarding liability. Instead, the court did grant the plaintiff the opportunity to introduce evidence of the defendant’s spoliation to the jury and granted a permissive adverse inference jury instruction.



Supplement

Selected Recent State Court E-Discovery Decisions

Chevron Phillips Chemical Co. LP v. Kingwood Crossroads, L.P., 2011 Tex. App. LEXIS 3969 (Tex. App. Houston 14th Dist. May 26, 2011). The appellate court affirmed the trial court’s sanction of $637,612.50 against a party for restricting an independent expert appointed to search the party’s email backup tapes to observing the party’s own search using its own protocol and search terms. Daylight, LLC v. Mobilight, Inc., 2011 WL 241084 (Utah Ct. App. Jan. 27, 2011). The Utah Court of Appeals affirmed the entry of a default judgment in this misappropriation of trade secrets action against the plaintiff, who destroyed a laptop containing relevant data after the action was filed. The court held that a terminating sanction was appropriate because the plaintiff “chose to willfully and in bad faith destroy [it],” and that a video produced by the plaintiff showed its employees speaking of the destroyed laptop as “potentially harmful evidence that might link them to any sort of lawsuit.” Specifically, the court remarked that the video “unquestionably demonstrate[d] bad faith and a general disregard for the judicial process and showed the plaintiff’s employees throwing the laptop off a building, running over it, and stating “[i]f this gets us into trouble, I hope we’re prison buddies.” Genger v. TR Investors, LLC, 2011 WL 2802832 (Del. Supr. July 18, 2011). The plaintiff appealed a lower court’s judgment, contending that the lower court erroneously concluded that he destroyed evidence stored on his work computer in violation of a Status Quo Order. The plaintiff had directed an employee to use special software that wiped the unallocated free space on both his computer’s hard drive and on a company server. That made it impossible to retrieve files even by using computer forensic techniques. The lower court awarded the defendants $750,000 in attorneys’ fees. In his appeal, the plaintiff argued that the Status Quo Order did not specifically address his computer’s unallocated free space and therefore, the trial court erred when it held him in contempt. The appeals court upheld the lower court’s ruling. The court did not read the lower court’s opinion to hold that a computer’s hard drive’s unallocated free space should be preserved as a matter of routine document retention procedures, but the plaintiff took affirmative action to destroy several relevant documents on his work computer. Therefore, when a party is found intentionally to have taken affirmative steps to destroy or conceal information to prevent its discovery at a time that party is under an affirmative obligation to preserve that information, the party has violated the court’s order. Holmes v. Petrovich Development Company, LLC, 191 Cal. App. 4th 1047 (Jan. 13, 2011). The plaintiff filed suit for sexual harassment, retaliation, wrongful termination, violation of the right to privacy, and intentional infliction of emotional distress. She appealed the trial court’s decision to grant the defendants’ motion for summary judgment



for the discrimination, retaliation, and wrongful termination causes of action, as well as the jury’s verdicts on the remaining causes of action in favor of the defendants. The plaintiff argued that her employer inappropriately forwarded her emails that contained private information, the court erred in denying her motion for discovery sanctions, and that the emails she sent to her attorney using the company’s computer should be returned to her because she had a reasonable expectation to privacy. The defendants countered that the plaintiff waived any attorney-client privilege. The court of appeals upheld the trial court’s grant of the defendant’s motion for summary judgment and the jury’s verdict. The court concluded that the emails showed nothing more than critical comments by the employer. The court reasoned that the plaintiff waived attorney-client privilege because she used her employer’s computer and that her belief that the correspondence was private was unreasonable. Moreno v. Ostly, 2011 WL 598931 (Cal. Ct. App. Feb. 22, 2011). In this appeal from the trial court’s imposition of spoliation sanctions, the appellant argued that sanctions were not appropriate because she preserved the computers and cell phones that she had in her possession at the time. The court disagreed with this logic and reasoned that “[l]ike the trial court, we are mystified, at the very least, that counsel did not disclose to opposing counsel and the court that at least the cell phones used by Moreno during the relevant time period were not any longer in her possession.” As a result, the court upheld the $13,500 monetary sanction against the appellants SPM Resorts v. Diamond Resorts Mgmt., Inc., 65 So. 3d 146 (Fla. App. 5th Dist. July 8, 2011). The plaintiff-appellant argued that it was unduly burdensome for it to be required to pay $20,000 to search through its own database to comply with the defendant’s discovery request. The court agreed and noted that a party should not be required to fund its adversary’s litigation. The court reasoned that requiring the plaintiffs “to pay up to $20,000 in costs and potentially more for the inspection of its own computers is unreasonable and unduly oppressive and is a departure from the essential requirements of law.” Tener v. Cremer, 2011 WL 4389170 (N.Y. Sup. Ct. App. Div. 1 Sept. 22, 2011). In this defamation case, a non-party argued that it did not “possess the technological capability or software, if such exists, to retrieve a text file created more than a year ago and written over at least 12 times." The plaintiff expert disagreed and claimed that “the information was retrievable by using ’X-Rays Forensic’ or ’Sleuth Kit’ to retrieve the information from unallocated space.” Using the Federal Rules of Civil Procedure and other sources as persuasive authority on how to proceed in electronic discovery disputes, the court noted that the information sought by the plaintiff was only available on the non-party’s computer cache. As a result, it held that plaintiff had demonstrated "good cause" under Fed. R. Civ. P. 45(d)(1)(D), requiring the court to undertake a cost/benefit analysis to determine whether the otherwise inaccessible data should be produced.

Documents

Federal Court Decisions Involving Electronic Discovery ... · Christopher R. Maloney, Zahava Moedler, Matthew Mulder, and Mukai S. Shumba, whose work is included in this annotated