Birmingham Bar Center, Birmingham, AL
June 15, 2012
11:00 AM – 1:30 PM

Background:

CLE Seminar – Admitting Electronic and Computer Evidence
Source: original article
Author: d4admin
Categories: Electronic discovery, e-discovery, ediscovery

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It is fortunately becoming clearer that organizations do not need to preserve information until litigation is “reasonably anticipated.” In Brigham Young University v. Pfizer (D. Utah Apr. 16, 2012), the court denied the plaintiff university’s fourth motion for discovery sanctions against Pfizer, likely ending its chance to obtain a “game-ending” eDiscovery sanction. The case, which involves disputed claims over the discovery and development of prominent anti-inflammatory drugs, is set for trial on May 29, 2012.

In Brigham Young, the university pressed its case for sanctions against Pfizer based on a vastly expanded concept of a litigant’s preservation duty. Relying principally on the controversial Phillip M. Adams & Associates v. Dell case, the university argued that Pfizer’s “duty to preserve runs to the legal system generally.” The university reasoned that just as the defendant in the Adams case was “sensitized” by earlier industry lawsuits to the real possibility of plaintiff’s lawsuit, Pfizer was likewise put on notice of the university’s claims due to related industry litigation.

The court rejected such a sweeping characterization of the duty to preserve, opining that it was “simply too broad.” Echoing the concerns articulated by the Advisory Committee when it framed the 2006 amendments to the Federal Rules of Civil Procedure (FRCP), the court took pains to emphasize the unreasonable burdens that parties such as Pfizer would face if such a duty were imposed:

“It is difficult for the Court to imagine how a party could ever dispose of information under such a broad duty because of the potential for some distantly related litigation that may arise years into the future.”

The court also rejected the university’s argument because such a position failed to appreciate the basic workings of corporate records retention policies. As the court reasoned, “[e]vidence may simply be discarded as a result of good faith business procedures.” When those procedures operate to inadvertently destroy evidence before the duty to preserve is triggered, the court held that sanctions should not issue: “The Federal Rules protect from sanctions those who lack control over the requested materials or who have discarded them as a result of good faith business procedures.”

The Brigham Young case is significant for a number of reasons. First, it reiterates that organizations need not keep electronically stored information (ESI) for legal or regulatory purposes until the duty to preserve is reasonably anticipated. As American courts have almost uniformly held since the 1997 case of Concord Boat Corp. v. Brunswick Corp., organizations are not required to keep every piece of paper, every email, every electronic document and every back up tape.

Second, Brigham Young emphasizes that organizations can and should use document retention protocols to rid themselves of data stockpiles. Absent a preservation duty or other exceptional circumstances, paring back ESI pursuant to “good faith business procedures” (such as a neutral retention policy) will be protected under the law.

Finally, Brigham Young narrows the holding of the Adams case to its particular facts. The Adams case has been particularly troublesome to organizations as it arguably expanded their preservation duty in certain circumstances. However, Brigham Young clarified that this expansion was unwarranted in the instant case, particularly given that Pfizer documents were destroyed pursuant to “good faith business procedures.”

In summary, Brigham Young teaches that organizations will be protected from eDiscovery sanctions to the extent they destroy ESI in good faith pursuant to a reasonable records retention policy. This will likely bring a sigh of relief to enterprises struggling with the information explosion since it encourages confident deletion of data when the coast is clear of a discrete litigation event.

Background:

Breaking News: Court Clarifies Duty to Preserve Evidence, Denies eDiscovery Sanctions Motion Against Pfizer
Source: original article
Author: Philip Favro
Categories: Electronic discovery, e-discovery, ediscovery

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I remember when I was in law school, a close friend wanted to be a criminal defense attorney. When he would mention this at the cafeteria lunch table, the reaction was always the same: “Really, you want to represent criminals?”  “Sure they deserve a defense, but……”

“Innocent until proven guilty” is widely accepted as a principle (and of course is emphasized in our Constitution), but is it being practiced?  Many believe that it is not– at least in regards to the disclosure of exculpatory evidence.

In October of 2011, Michael Morton was released from prison after 25 years detention for a murder conviction after being exonerated of all charges.  The court found that the Prosecutor (now a Judge) purposefully withheld exculpatory evidence that the defense could have used to prove his innocence.  Unfortunately, it cost Morton 25 years of his life before his innocence was revealed.

Shortly thereafter, it was determined that the Prosecutors in Senator Ted Steven’s trial also acted unethically by withholding exculpatory disclosure to the defense.  Though some argue it would not have changed the outcome of the case, it prevented Senator Stevens from a fair trial.

These two cases have received SOME media attention, but they are undoubtedly not alone. In response, Senator Lisa Murkowski (AK) introduced the Fairness in Disclosure of Evidence Act of 2012; ironically on the same day as the release of the report of prosecutorial misconduct in the Ted Stevens trial.

The Fairness in Disclosure of Evidence of 2012 would establish a uniform disclosure process and specifically require the government to produce exculpatory evidence to the defense. In summary, it would codify Brady and its progeny.

Supporters, including the American Bar Association, believe the bill will institute fairness into the criminal justice system.  As President of the ABA, Wm. T. (Bill) Robinson III commented:  “A clearly defined and codified disclosure standard would help eliminate the pitfalls of the current system where there is a multiplicity of disparate interpretations of the Brady obligation by both state and federal prosecutors.”

The general purpose of this bill is to require Prosecutors to hand over exculpatory evidence. Though Brady already seems to impose these obligations in court proceedings, this bill would introduce immediate consequences for the failure to do so. It would also assist in creating a uniform standard in disclosure requirements, instead of 96 disparate rules and policies.

As stated by Senator Lisa Murkowski in the Anchorage news:

“It is the solemn responsibility of federal prosecutors to secure justice — not simply convictions. It is the responsibility of the government to prove an individual’s guilt beyond a reasonable doubt, and if the government cannot, it is expected to voluntarily abandon the case. To keep Americans’ faith in the system we must raise the standards for government prosecutors and cut the chances that we will see the same “hide the ball” tactics Sen. Stevens faced.

The Stevens case was not unique.”

I strongly support the idea of this bill. However, I do not want this to be an excuse for the prosecution to overwhelm the defense with a tremendous amount of irrelevant data, which has also been an ongoing problem.

Hopefully, the bill will be able to accomplish the following:

1. Mandatory disclosure of exculpatory and prejudicial evidence. (We don’t want any surprises at Court either!)
2. A systematic approach to disclosing evidence. Data dumps to conceal exculpatory evidence should not be permitted.
3. A consistent and stringent approach for sanctioning Prosecutors who do not adhere.
4. Reasonable time allotted for the Defense to review large data sets.
5. Consistent and manageable production procedures to reduce cost and increase efficiency.

In a perfect world, the Prosecutors would hand over all evidence in an organized manner, ready for legal review and presentation. Don’t get me wrong—I do not believe that we should move to a civil law system, but this bill, if enacted properly, would avail some structure to the current chaotic system of disclosure.

Background:

Criminal Law: The Fairness in Disclosure of Evidence of 2012
Source: original article
Author: Brooke Oppenheimer
Categories: Electronic discovery, e-discovery, ediscovery

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Birmingham Bar Center, Birmingham, AL
June 15, 2012
11:00 AM – 1:30 PM

Background:

CLE Seminar – Admitting Electronic and Computer Evidence
Source: original article
Author: d4admin
Categories: Electronic discovery, e-discovery, ediscovery

This e-discovery news is syndicated from e-discovery websites and blogs that make their feed available via RSS. Contact us to have your RSS feed added or removed.

Though some practitioners might be in denial, the follow-up sanctions orders in Lester v. Allied Concrete Co. et al. dated May 27, 2011 and September 23, 2011 should leave no room for doubt that preservation of social media is as important as any other electronic data or discovery. Similarly, the penalty for intentionally destroying such evidence may reach beyond the purse strings.

As reported late last year in a blog posting regarding Lester Part I, defense counsel moved for sanctions against plaintiff Isaiah Lester and his attorney, Matthew B. Murray, for spoliation of Facebook evidence. Ultimately, although defense counsel’s request for a new trial was denied after the jury had reached a $ 10.6 million verdict related to the tragic death of Lester’s wife in an automobile accident, Lester and Murray were ordered to pay defense counsel respectively, $ 180,000 and $ 542,000. But the sanctions did not end there; Murray’s misconduct was referred to the Virginia State Bar and allegations of Lester’s perjury were referred to the local prosecutor.

During discovery, defendants sought production of the contents of Lester’s account because they believed it would help their case on the issue of damages. Defendants were inspired to pursue this evidence after discovering a photo on Facebook depicting “Lester clutching a beer can, wearing a T-shirt emblazoned with ‘I [heart] hot moms.’” Specifically, they served discovery requests that sought information relating to Lester’s Facebook account including screen-prints and attached the compromising picture.

After reviewing Lester’s Facebook page in conjunction with the discovery requests, Murray’s paralegal (at Murray’s direction) advised Lester via e-mail to “clean up” the Facebook page because “we do NOT want blow ups of other pics at trial so please, please clean up your facebook and myspace.” She also advised there were “other pics that should be deleted.” Thereafter, Murray concocted a scheme to deactivate Lester’s Facebook account and to advise defense counsel that on the date the answer to the discovery was signed that Lester had no Facebook page.

Shortly thereafter, Lester deleted 16 photos (which were ultimately available at trial) to ensure he complied with Murray’s initial “clean up” request, although Murray denied knowledge of deletion of these photos in discovery responses. Thereafter, Murray and Lester attempted — unsuccessfully — to cover up these communications and related acts. (Defendants’ internet technology expert was ultimately able to confirm deletion of the photos).

The amount and scope of sanctions in Lester make clear that social media evidence is as important as other electronic discovery, and that the penalties for its spoliation can be as severe as those for destroying other evidence. While the egregious malfeasance of Lester and Murray (and Murray’s paralegal, who was under his supervision) did not result in an overturned verdict (though it was reduced by around $ 4 million for other reasons), both counsel and client paid a high price for their cavalier treatment and destruction of Facebook evidence.

Mara E. Zazzali-Hogan is a Director on the Gibbons E-Discovery Task Force.

Background:

Lester v. Allied Part 2: “Clean Up” of Compromising Social Media Evidence Can Result in Severe Sanctions
Source: original article
Author: Mara E. Zazzali-Hogan
Categories: Electronic discovery, e-discovery, ediscovery

This e-discovery news is syndicated from e-discovery websites and blogs that make their feed available via RSS. Contact us to have your RSS feed added or removed.

A defendant in an employment action discovers through Facebook that a plaintiff has lied about her discrimination claim. The information essentially undermines plaintiff’s entire claim. However, such information does not make it to a factfinder at trial unless the evidentiary foundations can be established — proof of authorship and timeliness. These evidentiary foundations are not easy to establish in the ever-changing medium of social media. The anonymity offered by some social networking sites may be what makes them attractive to users, but it also makes establishing authorship of content difficult. Similarly, social media sites are constantly changing, as users can add, remove or edit content at any time. As a result, recreating a post or a profile from a particular moment in time can be difficult, if not impossible, depending on how a partciluar site functions.

In discovery, not only should litigants work to identify relevant social media, counsel should also seek to discover the facts that will be necessary to introduce social media evidence at trial. This includes information that may establish authorship, such as nicknames used by a party which may mirror an online profile, the identity of users who have viewed or commented on social media content and information relating to the inner-workings of a social media site. This information will whether electronic evidence, including social media, is admissible. In the federal courts, Federal Rule of Evidence 901 controls authentication of evidence. Rule 901 clearly places the burden of authentication on the proponent of the evidence. To satisfy Rule 901’s requirement that a document is what its proponent says it is, authorship and timeliness of social media content must be confirmed. Authorship may be established by testimony from the author or recipient, or other evidence which helps to confirm authorship, such as testimony that an individual’s commonly used nickname matches the name asociated with the online profile which authored the content. To confirm timeliness, data from a social media site may be available to confirm when information was posted and/or viewed. If data is not available from a site, witness testimony may be sufficient to confirm the time when social media content was published or viewed, although establishing timeliness may prove difficult.

As use of social media proliferates, courts will increasingly need to resolve challenges to the admissibility of social media. While the use of certain social media, like Facebook and MySpace, may already be familiar to courts, the ever-evolving nature of social media sites and applications make it difficult (if not impossible) to promulgate hard and fast evidentiary rules. Rather, the application of evidentiary rules to social media must remain flexible and fluid to ensure that relevant and critical information is available to the factfinder.

Stephen J. Finley, Jr. is an Associate on the Gibbons E-Discovery Task Force.

Background:

Show Me The Evidence – Use of Social Media Information at Trial
Source: original article
Author: Stephen J. Finley, Jr.
Categories: Electronic discovery, e-discovery, ediscovery

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Magistrate Judge Paul W. Grimm, a renowned authority on e-discovery, recently published an article in the Richmond Journal of Law and Technology discussing Federal Rule of Evidence 502. Judge Grimm’s article, “Federal Rule of Evidence 502: Has It Lived Up To Its Potential?,” provides a comprehensive analysis of Rule 502, offers frank criticism of court decisions interpreting the rule and outlines do’s and don’ts for practitioners.

Judge Grimm lauds the goals of Rule 502 but laments that “to date it has not lived up to its promise.” As explained in the Advisory Committee notes, Rule 502 has two main purposes: (1) to resolve disputes regarding inadvertent disclosures and subject matter waiver of privileged information and (2) to address complaints that litigation costs to protect against subject matter waiver have become prohibitive. While the goals of the rule are clear, Judge Grimm notes that they cannot be achieved if the courts do not interpret the rule correctly:

It cannot function as intended if some courts interpret it in a manner that is not in concert with its purposes, because without uniform application, there can be no predictability. Absent this predictability, the rule is robbed of its primary justification.

The article examines each section of Rule 502. Rule 502(a) limits the circumstances under which a subject matter waiver will be found. Subject matter waiver occurs only when: (1) the waiver is intentional; (2) the disclosed and undisclosed communications concern the same subject matter; and (3) the communications ought in fairness be considered together. Judge Grimm first explains that “intentional” means that while no showing of intent to waive the privilege is required, the disclosure must be voluntary (i.e., not inadvertent). Second, he notes that neither Rule 502(a) nor the accompanying Advisory Committee notes make a distinction between fact work product and opinion work product for purposes of subject matter waiver. He explains, however, that courts have declined on fairness grounds to require production of opinion work product under Rule 502(a) and, indeed, emphasizes that fairness is the touchstone of Rule 502(a). Noting “a party cannot have its cake and eat it too,” Judge Grimm explains that the rule was principally designed to prevent a party from producing protected information in a selective manner.

Rule 502(b) addresses inadvertent disclosure and identifies the circumstances in which disclosure of protected information will operate as a waiver. According to the rule, there is no waiver so long as: (1) the disclosure was inadvertent; (2) reasonable steps were taken to prevent disclosure; and (3) prompt, reasonable steps were taken to rectify the error once it was discovered. Judge Grimm notes there has been “a surprising amount of disagreement” among courts regarding the inadvertence requirement, and he criticizes courts for injecting reasonableness into the determination of inadvertence, thereby conflating the first and second requirements. He strongly rejects this approach, commenting that production is either inadvertent or it is not. Judge Grimm also criticizes courts that have demanded extraordinary measures to satisfy the reasonableness requirement of Rule 502(b)(2). In this regard, he explains that the Rule is designed to encourage the use of cost effective computer-based analytical methods to conduct pre-production reviews for privilege and warns that requiring extraordinary measures defeats the purpose:

Rule 502 will never reach its intended goal of reducing the cost of ESI discovery and encouraging the use of computer analytical review methodology if courts demand near-perfection in pre-production precautions.

Judge Grimm concludes his article with a discussion of Rule 502(e), which allows parties to enter into binding agreements regarding the effect of disclosure of protected information. Through such agreements, parties can establish criteria for non-waiver and the claw back of documents that may be different (broader or more restrictive) than the criteria set forth in Rule 502. For example, parties can agree that documents may be clawed back regardless of whether they were intentionally or inadvertently produced and regardless of whether any precautions, reasonable or otherwise, were taken to avoid disclosure. As Judge Grimm points out, however, some courts have refused to fully enforce such agreements. Such decisions thwart the purpose of the rule and present a “sober lesson” for lawyers. Judge Grimm advises lawyers to be careful in preparing agreements under Rule 502(e), warning:

When drafting a non-waiver agreement under Rule 502(e) and Rule 26(b)(5)(B), painstaking care should be taken to ensure that the agreement clearly addresses both pre-production and post-production obligations. Otherwise, the parties run the risk that the court will make its waiver determinations in accordance with Rule 502(b)(2) and (3) instead of the non-waiver agreement.

Judge Grimm concludes his article by noting that Rule 502 is clearly written and should be sufficient to fulfill its purposes of clarifying and limiting the effect of disclosure of protected information and reducing the costs associated with pre-production review. The rule, however, “has not fulfilled it purpose, mainly because parties have overlooked it and courts have not construed it consistently with its purpose . . . .” Perhaps if courts and lawyers carefully digest Judge Grimm’s thorough exposition of the issues involved in application of Rule 502, the rule’s fundamental purpose may yet be fulfilled.

Daryn E. Rush is a Director on the Gibbons E-Discovery Task Force.

Background:

Judge Grimm Authors Tutorial on Federal Rule of Evidence 502
Source: original article
Author: Daryn E. Rush
Categories: Electronic discovery, e-discovery, ediscovery

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Haraburda v. Arcelor Mittal USA, Inc., No. 2:11 cv 93, 2011 WL 2600756 (N.D. Ind. June 28, 2011)

In this case, plaintiff came to believe, based on defendant’s comments and refusal to issue a litigation hold, that relevant evidence would be destroyed.  Accordingly, plaintiff moved for an Order to Preserve Evidence.  Following consideration of the relevant factors and upon rejecting defendant’s arguments that plaintiff’s motion was improper prior to the parties’ Rule 26(f) conference, the court granted the motion and ordered defendant to implement a litigation hold on information that may reasonably be related to the pending litigation.

After filing her employment discrimination complaint, plaintiff became alarmed that relevant evidence could be lost when, in response to her inquiry about emails that were deleted without her consent during the EEOC investigation, defendant responded that “files stored on company computers are company property and can be assessed and/or deleted as the company views appropriate.”  Similarly, upon plaintiff’s request for assurance that potentially relevant evidence would be preserved (approximately one month after filing her complaint), defendant responded that “it refused to implement a litigation hold or other process to preserve evidence until after the Rule 26(f) conference” and explained that plaintiff’s request was “premature.”  Accordingly, plaintiff moved for an Order to Preserve Evidence.

Taking up the motion, the court established that the duty to preserve arises when “[a party] knows, or should have known, that litigation was imminent” and that upon the trigger of such a duty, “the party should implement a plan to find and preserve relevant evidence.”  “In fact,” the court went on, “a large corporation only can discharge its duty by: 1) creating a ‘comprehensive’ document retention policy that will ensure that all relevant documents are retained, … and 2) disseminating that policy to its employees.”  The court went on to establish the relevant law regarding preservation orders and the relevant factors to be considered before ordering one, including whether plaintiff could demonstrate that necessary evidence would be destroyed absent an order, whether plaintiff would suffer irreparable harm absent an order, and the burden imposed on the parties by granting a preservation order.  The court also rejected defendant’s assertion that such an order was premature prior to the parties’ Rule 26(f) conference.

Citing defendant’s statements regarding preservation, the absence of any evidence that defendant had taken steps to preserve evidence, the potential difficulty for plaintiff if relevant evidence was not preserved, and the fact that an order of preservation would not increase the burden of defendant’s preexisting duty to preserve, the court granted plaintiff’s motion and ordered defendant to “place a litigation hold on any and all documents and information that may reasonably be related to the pending litigation.”

A full copy of the order is available here.

Background:

Court Rejects Refusal to Issue Litigation Hold Before 26(f) Conference, Orders Litigation Hold on All Evidence Reasonably Related to Pending Litigation
Source: original article
Author: K&L Gates
Categories: Electronic discovery, e-discovery, ediscovery

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The duty to preserve electronic evidence is triggered once a party “reasonably anticipates” litigation. Silvestri v. GMC, 271 F.3d 583, 591 (4th Cir. 2001);  Pension Committee of the Univ. of Montreal Pension Plan v. Banc of Am. Securities, LLC, 685 F. Supp. 2d 456, 466 (S.D.N.Y. 2010). At that point, parties have an obligation to suspend their routine document retention and destruction policies and implement a “litigation hold” to safeguard all relevant evidence.  The United States Court of Appeals for the Federal Circuit recently reaffirmed the “reasonably foreseeable” standard in Micron Tech., Inc. v. Rambus, Inc., No. 09-1263, 2011 WL 1815975 (Fed. Cir. May 13, 2011). The Court of Appeals explained that the standard is an objective one, “asking not whether the party in fact reasonably foresaw litigation, but whether a reasonable party in the same factual circumstances would have reasonably foreseen litigation.” Id. at *6.  Significantly, the Court in Micron rejected the argument that “litigation be ‘imminent, or probable without significant contingencies’” in order to trigger the duty to preserve. Id. According to the Court, this argument is based on “an overly generous reading of several cases” and is at odds with the flexible reasonably foreseeable standard.  Id. 

The “reasonable anticipation” principle is now well-established but not easily applied as it is necessarily shaped by the factual nuances of the parties’ dispute. Thus, although it is easy to conclude that a defendant has a duty to preserve electronic evidence once it is served with a summons and complaint, the duty to preserve is often triggered in the pre-litigation stage. This is because the duty to preserve is triggered once the defendant is aware of a credible threat of litigation, which is often before a complaint is filed. Determining the date that the party knew or should have known that litigation is reasonably foreseeable is often a subject of dispute. Viramontes v. U.S. Bancorp, No. 10-761, 2011 WL 291077 (N.D. Ill. Jan. 27, 2011).

Some guiding principles, however, are clear. For large organizations, it is clear that more than one or two employees must reasonably anticipate litigation in order to trigger the duty. Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 217 (S.D.N.Y. 2003). Thus, in Toussie v. County of Suffolk, No. 01-6716, 2007 U.S. Dist. LEXIS 93988 (E.D.N.Y. Dec. 21, 2007), the Court reasoned that the duty to preserve electronic evidence did not arise until the complaint was filed. The Court reasoned that, although a “handful” of employees expected the plaintiffs’ lawsuit, “there was no evidence to suggest that a substantial number of key personnel anticipated litigation prior” to such time. In Viramontes, the fact that the plaintiff’s supervisor suspected that the plaintiff might sue, based on a pre-litigation letter written by the plaintiff complaining about the supervisor’s allegedly rude behavior, was not enough to find that the defendant-company should have reasonably anticipated future employment discrimination litigation. 2011 WL 291077 at *4. The court reasoned that the letter did not assert that the plaintiff might bring employment discrimination claims and, in fact, it suggested a “non-litigious resolution” to the plaintiff’s complaints regarding her supervisor’s behavior. Id. Furthermore, the plaintiff’s claims under the Americans with Disabilities Act and the Family and Medical Leave Act were not filed until ten months later. 

The indications that litigation may be forthcoming must be more than “vague” statements and the “mere existence of a dispute does not necessarily mean that parties should reasonably anticipate litigation[.]” Goodman v. Praxair Servs., 632 F. Supp. 2d 494, 510 (D. Md. 2009).  Thus, a demand letter may be a sufficient warning that litigation is on the horizon and a letter advising that an attorney has been retained will certainly trigger the duty to preserve. Id. at 511. Conversely, letters written in the midst of the parties’ dispute do not necessarily trigger the duty. In Cache La Pourdre Feeds, LLC v. Land O’Lakes Farmland Feed, LLC, 244 F.R.D. 614, 622 (D. Colo. 2007), a letter stating that its purpose was to put the defendant on notice of the plaintiff’s trademark rights and “determine whether this situation can be resolved without litigation” did not trigger a duty to preserve. These cases demonstrate that the determination of the trigger date on the duty to preserve is a fact-intensive inquiry.

Also of note is the inter-relationship between the timing of the duty to preserve and application of the work product privilege. In Siani v. State Univ. of New York at Farmingdale, No 09-407, 2010 WL 3170664 (E.D.N.Y. Aug. 10, 2010), for example, the plaintiff argued the defendant had a duty to preserve evidence a full year prior to the filing of the complaint because the defendant retained a law firm at that point to represent it in connection with the plaintiff’s allegations of ongoing discrimination. The defendant was hard-pressed to argue to the contrary given that it had marked documents as protected by the work-product privilege around that same time. Id. at *5. The Court reasoned that the “commonsense conclusion” dictated that if “litigation was reasonably foreseeable for one purpose in January 2008, it was reasonably foreseeable for all purposes.” Id. 

In conclusion, whether and when a party reasonably anticipates litigation, thereby, triggering the duty to preserve electronic evidence depends on many factors, including but not limited to, who within the defendant organization anticipates the litigation, the clarity of the threat, and when privileged documents are created and labeled as such. A reasoned evaluation of all factors is needed and the organization is under a duty to re-evaluate should new information present itself.

Background:

When Does the Duty to Preserve Electronic Evidence Arise?
Source: original article
Author: Catherine Hamilton
Categories: Electronic discovery, e-discovery, ediscovery

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Two recent decisions in the same case illustrate that, when it comes to imposing sanctions for spoliation of evidence, what matters is not simply whether you’ve intentionally deleted relevant evidence, but how you go about deleting it, and what the record reflects about your intentions. Although both the plaintiff and the defendant in E.I. du Pont De Nemours and Co. v. Kolon Industries, Inc., Civil Action No. 3:09cv58, demonstrated that the other intentionally destroyed relevant evidence, as is detailed below, the Court sanctioned only defendant Kolon Industries, Inc. (“Kolon”) based on its manifest bad faith (read the decision here). As is discussed in an earlier post on Gibbons’ E-Discovery Law Alert (which you can read here), plaintiff E.I. du Pont de Nemours and Company (“DuPont”) escaped a similar fate based on its demonstrable good faith. In short, this case teaches that the intentional deletion of relevant evidence does not per se lead to sanctions. Rather, the parties’ conduct — or misconduct, as the case may be — must be judged contextually.

Dupont filed a Complaint against Kolon on February 3, 2009, alleging trade secret misappropriation, theft of confidential business information, and conspiracy based on Kolon’s efforts to recruit former DuPont employees and otherwise unlawfully obtain DuPont’s proprietary information. When Kolon produced in discovery screenshots of key employees’ computers taken after they had notice of the Complaint that appeared to show that they marked emails with instructions such as “Delete,” “Need to Delete,” “Remove All” and “Get Rid Of,” DuPont moved for sanctions for spoliation of evidence.

Before deciding DuPont’s spoliation motion, the Court ordered targeted discovery concerning the apparent spoliation, including forensic analysis. In addition to Kolon’s “overall obfuscatory conduct,” the targeted discovery specifically revealed that:

• On February 6, 2009, two days after it learned of the DuPont Complaint, Kolon’s legal department issued its first legal hold to only select upper-level employees, who were advised only that they “might want to provide the order to other personnel,” though nothing in the record demonstrated that the hold order was, in fact, communicated to any other employees at that time.
• On February 10, 2009, Kolon issued its second litigation hold, this time sending it to all employees. However, most of them were South Korean and did not speak English, and the hold was in English. • Shortly after learning of the DuPont Complaint but likely prior to the issuance of the litigation hold, a senior Kolon manager gathered several other employees to discuss “identifying documents on their computers that they may want to consider deleting at a later date.”
• It was not until February 23, 2009 that Kolon issued a third litigation hold to its IT department instructing them to “safeguard documents stored on Kolon’s server by backing up material on tapes and suspending the routine, good faith operation of Kolon’s document retention practices . . . .” Thereafter, Kolon imaged the hard drives of key employees.
• According to DuPont’s forensic analyst, who performed deletion analyses of the computers of thirteen Kolon employees, after February 1, 2009, Kolon’s employees deleted at least 17,811 files and emails (and perhaps hundreds more), many of which were deemed relevant to the case based on keyword searches and a review of recoverable data as well as analyses of file names and metadata (e.g., files with “last written” dates many years before they were deleted).

Based on these facts, the Court found that “key employees . . . intentionally deleted relevant files and email items . . . after Kolon’s duty to preserve had been triggered and with knowledge of the filing of DuPont’s Complaint” — i.e., that Kolon spoliated evidence. Citing “[s]tandard principles of agency law,” the Court rejected Kolon’s argument that its employees’ conduct should not be attributed to it since their actions were “unauthorized,” “outside the scope of their employment,” “not taken . . . to aid Kolon” and “directly contradicted corporate directives.” And although some of the deleted data was recoverable, the Court summarily rejected Kolon’s argument that this mitigated its spoliation, noting that “[t]he fact of deletion has evidentiary significance.”

Notwithstanding the bad faith conduct of its employees, because Kolon attempted to put two litigation holds in place and also implemented a widespread effort to preserve files, and given that many deleted items were recoverable because Kolon preserved certain back-up tapes (thereby minimizing the prejudice to DuPont), the Court declined to enter a default judgment against Kolon. Instead, the Court imposed a “permissive” adverse inference jury instruction and awarded DuPont its attorneys’ fees, expenses and costs related to the motion.

There are several key takeaways from this decision:

• First, written litigation hold notices, which of course should be issued promptly after learning of litigation or when litigation is anticipated, must be issued to all employees who may have documents and information that are reasonably likely to be requested during discovery, and the record should reflect that these key employees received hold notices.
• Second, the litigation hold notice must explain the importance of preserving relevant data and, if any employees do not speak English, the litigation hold notice should be translated.
• Third, in-house IT professionals should be among the first recipients of the hold notice, as they are best positioned to act as guardians of potentially relevant evidence and, as such, they may be able to safeguard data on behalf of the company, insulating the company from any rogue employees who might otherwise spoliate evidence.
• Lastly, both counsel and corporate executives should closely monitor compliance with the litigation hold, particularly if the target of the hold is a foreign company unfamiliar with the preservation obligations imposed by the U.S. legal system.

Taking note of Kolon’s mistakes, and DuPont’s good example (as detailed in this post), will go a long way in insulating your company from spoliation sanctions.

Suzanne Herrmann Brock is an Associate on the Gibbons E-Discovery Task Force.

Background:

DuPont v. Kolon: A Lesson In How To Avoid Sanctions For Spoliation Of Evidence
Source: original article
Author: Suzanne Herrmann Brock
Categories: Electronic discovery, e-discovery, ediscovery

This e-discovery news is syndicated from e-discovery websites and blogs that make their feed available via RSS. Contact us to have your RSS feed added or removed.