I find myself using the search feature of this blog more and more these days. It is the fifth box down on the right, and only searches the contents of this blog. It works very well. I need this search feature, not only because my memory is limited, but because the content of this blog has become quite large. I was surprised to notice that I have somehow written and posted over 100 essays in the past year and a half. They cover most of the important e-discovery cases and trends since I started this blog in the Fall of 2006. Some of the major cases like Qualcomm end up with multiple blogs. The search box helps me to find them all fast, and it has become a useful research tool for my daily legal practice.
So I got to thinking what I might do to make this blog a more useful research tool for everyone? The answer was to post my collection of favorite e-discovery cases, most of which have not been previously included in the blog because they preceded it in time. So my blog for this week is my list of favorite cases, along with a brief summary of each case. I include this case digest in my CLE handouts anyway, so I thought it might be helpful to make them available in electronic, searchable form.
I start off with a few particularly interesting cases, some of which you may not have seen before, but most of which are classics. Then, I switch to an alphabetical list of the better known e-discovery cases. You are welcome to copy and paste this into your own private case lists. If you redistribute, please just mention that I wrote the case descriptions. If you want to send me additional cases with short descriptions following this style, I will go back and include them in this blog, but I cannot preserve your copyrights, since it may end up in my next book. I will, however, mention you as a contributor to the case list. If you have any other ideas to make this blog a more useful reference, please let me know.
My website FloridaLawFirm.com is also a good reference, especially the Links Page. These links are all e-discovery related and are a good source of information. I just updated this list and included several new sites that friends suggested. Send me an email if you have suggestions.
You will also want to try out the Google Custom Search Engine at the beginning of each page of FloridaLawFirm.com. This specialized search tool not only includes all of my webs, but that of several other e-discovery webs. The Google powered search is limited to the specified webs, including, among others, the excellent reference webs by Kroll, Applied Discovery, KL Gates, EDRM.net and Law.com. I also include a few general law sites from West and Cornell University, and even Wikipedia, Webopedia and others should you have tech-related questions. The specialized search function set up at FloridaLawFirm.com is a good way to find e-discovery information, including hundreds of e-discovery cases, without wading through the entire Internet. It tends to find what you want without too many false positives, thus saving valuable time.
Finally, after filling your head with so much law, you may want to check out the new comic relief added last month to FloridaLawFirm.com. There is now a YouTube video at the bottom of every page, including my official attorney resume page, where I include a link to my own YouTube video. No doubt another first of dubious distinction. Sorry, but I had to delete the music from my webs after Sonific.com closed down, but look for a new music service coming soon.
RCL’s Favorite e-Discovery Cases
Ignorance of computers is no longer a viable excuse. See: Martin v. Northwestern Mutual Life Insurance Company, 2006 WL 148991 (M.D Fla. Jan. 19, 2006). Plaintiff, a trial lawyer, and his counsel, are sanctioned for failure to produce only paper records, and plead “computer illiteracy” as to the voluminous additional electronic records that were eventually found on the plaintiff’s office computers. The District Court held that the attorney’s “claim that he is so computer illiterate that he could not comply with production is frankly ludicrous.”
My favorite “war–story” case, which we call the Case of the Midnight Hacker. Optowave Co. Ltd. v. Nitikin, 2006 WL 3231422 (M.D. Fla. November 7, 2006). The Akerman case, where Jim Foster was the trial lawyer, shows how e-discovery can be used as a case-winning tool in commercial litigation. Here defendant Nikitin, a citizen of Russia living and doing business in central Florida, produced very few emails. Our client, Optowave, a Korean corporation, moved to compel. Defendant tried to explain the missing emails by claiming that a computer hacker broke into his network at night and deleted everything. We challenged the veracity of that story and moved for sanctions for spoliation. There was then a full day evidentiary hearing on our motion where we offered forensic evidence and other proof of spoliation by intentional, bad faith destruction of evidence. Magistrate Judge Baker did not believe defendant’s midnight-hacker story. Our motion for sanctions was granted, fees were awarded, and an all-important adverse inference was granted that the missing emails would have contradicted defendant’s version of the communications. In the ensuing bench trial, this became a near conclusive presumption on a key fact establishing liability. Proof of liability in this case without the spoliation sanctions would have been very difficult, if not impossible, since our clients spoke little or no English. In fact, Optowave did prevail after a one week trial and a money judgment was entered against Nikitin, which was ultimately paid.
The most famous and important e-discovery case of all, Zubulake:
Zubulake I, Zubulake v. UBS Warburg LLC, 217 F.R.D. 309, (S.D.N.Y. 2003). This first opinion addresses the legal standard for determining the cost allocation for producing e-mails contained on backup tapes. Basic facts of this case: the plaintiff, Laura Zubulake, 44, was the director of the bank’s Asian shares sales desk in New York with an annual salary of $500,000. She sued the Swiss financial giant for gender discrimination and illegal retaliation. In her words, noted in her personal comment to this blog below (which caused me to revise this case description), she complained of: “denial and removal from professional responsibilities, exclusion from business outings, being belitted and generally treated different from my male colleagues.” During e-discovery she found emails from her employer confirming these allegations. The supervisor, and many of his colleagues, tried to cover up by deleting emails and denying everything. Judge Scheindlin and the jury did not buy it, and ultimately Zubulake was awarded Ten Million Dollars in pay, and Nineteen Million in Punitive Damages, for a total award of $29,000,000.00.
Zubulake III, Zubulake v. UBS Warburg LLC, 216 F.R.D. 280 (S.D.N.Y. 2003) This decision allocates the backup tape restoration costs between Zubulake and UBS with a detailed explanation of the appropriate criteria and weighting.
Zubulake IV, Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 218 (S.D.N.Y. 2003) This decision ordered sanctions against UBS for violating its duty to preserve evidence and in the process established a scope of duty to preserve back up tapes, but only in special circumstances.
Zubulake V, Zubulake v. UBS Warburg LLC, 229 F.R.D. 422 (S.D.N.Y. 2004) Zubulake V requires outside counsel to make certain that all potentially relevant information is identified and placed “on hold”. In the words of Judge Scheindlin:
To do this, counsel must become fully familiar with her client’s document retention policies, as well as the client’s data retention architecture. This will invariably involve speaking with information technology personnel, who can explain system-wide backup procedures and the actual (as opposed to theoretical) implementation of the firm’s recycling policy. It will also involve communicating with the “key players” in the litigation, in order to understand how they stored information.
Judges are upset by all of the mistakes:
Danis v. USN Communications, Inc., 2000 WL 1694325 (N.D. Ill. 2000). $10,000 personal fine of the CEO as part of spoliation sanctions for failing to take reasonable steps to preserve ESI; $1.5 Million in Fees incurred to try and protect the CEO from this personal liability. Court held that the Board was not personally liable.
Phoenix Four, Inc. v. Strategic Resources Corporation, 2006 WL 1409413 (S.D.N.Y. May 23, 2006). Plaintiff obtained sanctions in the form of a fee award against both the defendant and its attorney for the late production of electronic records caused by dereliction of investigation duties set forth in Zubulake. The court also applied future Rule 26(b)(2) and required disclosure of the sources of inaccessible data. In this case, the data was not inaccessible at all, it was just hidden by defendants in a partitioned section of the hard drive. The attorney did not understand this and personally paid for his ignorance. Cases like this cause many attorneys to bring in experts to assist in e-discovery.
Keir v. UNUMProvident Corporation, 2003 WL 21997747 (S.D.N.Y. 2003). A series of total mess-ups and miscommunications by defense counsel, IT staff, IBM, and others concerning backup tapes and data retention lead to unintentional spoliation and violation of a preservation order.
Plasse v. Tyco Elec. Corp., 2006 WL 2623441, (D.Ma. Sept. 7, 2006). Employee/Plaintiff’s case is dismissed because of e-discovery abuses and attempt to fabricate computer files and defraud the court; the case is won by good computer forensics.
Coleman (Parent) Holdings, Inc. v. Morgan Stanley & Co., Inc., 2005 WL 674885 (Fla.Cir.Ct.. 2005). 1.45 BILLION DOLLAR ($1,450,000,000.00) Jury Verdict entered against defendant brokerage after numerous sanctioned e-discovery abuses and adverse inference instructions. Note the Plaintiff, Ron Perlman’s, initial settlement demand was purportedly “only” Two Hundred Million dollars. Defense counsel certified all records had been produced, but later many more backup tapes were discovered. The case demonstrates a series of technological blunders that look like spoliation. Reversed on appeal for grounds having nothing to do with discovery sanctions.
Carlucci v. Piper Aircraft, et al, 102 F.R.D. 472 (S.D. Fla. 1984). A horror story of e-discovery abuses and errors by defendant, involving a special master appointed by the court and an angry district court judge who enters the extreme sanction of default, plus fees and costs.
More cases of interest:
3M Innovative Props. Co. v. Tomar Elecs., 2006 WL 2670038 (D. Minn. Sept. 18, 2006). Patent infringement case where an adverse inference sanction is imposed against defendant because of failure to initiate a litigation hold, resulting spoliation and other improper discovery conduct, such as the president’s coaching of witnesses at depositions. The president is also banned from attending any more depositions.
Applied Telematics, Inc. v. Sprint Communications Co. L.P., 1996 WL 33405972 (E.D.Pa. 1996). Patent infringement case where plaintiff granted an adverse inference instruction, fees and costs as sanctions for spoliation because some backup tapes that were later determined to have relevant evidence were not preserved, but were instead allowed to be written over as part of routine procedure.
Bills v. Kennecott Corp., 108 F.R.D. 459 (D.Ut. 1985). Age discrimination suit where court considers the costs of computer production and requires employer defendant to bear the costs, rather than shift the burden to the plaintiffs.
Bob Barker Co., Inc. v. Ferguson Safety Products, Inc., 2006 WL 648674 (N.D.Ca. March 9, 2006). Lanham Act case where court rejects request for production or inspection of software based financial databases, noting that it is unclear how a dynamic collection of data which changes over time could be produced. Court noted the plaintiff could later request expert examination of defendant’s computers to run database reports upon a showing of good cause.
Dodge Warren & Peters Insurance Services, Inc. v. Riley, 105 Cal.App.4th 1414 (4th Div. 2003). In an action against former employees who left to start their own competing business, the California appeals court affirmed the trial court’s entry of a preliminary injunction requiring the preservation of electronic evidence, and allowing a court appointed expert to image and search defendant’s computers.
In re Carbon Dioxide Industry Antitrust Litigation, 155 F.R.D. 209 (M.D. Fl. 1993). Depositions under 30(b)(6) to “identify how data is maintained and to determine what hardware and software is necessary to access the information are preliminary depositions necessary to proceed with merits discovery.”
In re Ford Motor Co., 345 F.3d 1315 (11th Cir.2003). Ford obtained a writ of mandamus directing the district court judge to vacate a discovery order requiring Ford to provide plaintiffs with direct access of its computer databases to search for similar seat belt incidents. There is no right to directly access another’s computer systems. Instead, only the reports and data output of the computer systems must be produced. Must show prior noncompliance to justify direct access, and even then it should be restricted and other safeguards provided.
In re Prudential Insurance Company of America Sales Practice Litigation, 169 F.R.D. 598 (D. New Jersey 1997). Records were not preserved as a result of an ineffective litigation hold notice and enforcement. A $1,000,000 fine was imposed as a sanction, plus fees. The court severely criticized Prudential for not having “a comprehensive document retention policy with informative guidelines and lacks a protocol that promptly notifies senior management of document destruction.”
Leon, M.D. v. IDX Systems Corp., 2006 WL 2684512 (9th Cir. Sept. 20, 2006). Doctor employee case dismissed with prejudice and defendant awarded $65,000 in fees as spoliation sanctions. The defendant employer proved that the doctor had erased 2200 files from his employer owned-laptop during case pendency, including some pornographic files. District Court took this action even though the DOL determined during the case pendency that the doctor had been wrongfully discharged as his complaint alleged. Ninth Circuit affirmed, finding that no privacy rights had been violated.
Playboy Enterprises, Inc. v. Welles, 60 F.Supp.2d 1050 (S.D.Ca. 1999). Playboy sued a former playmate of the year for trademark infringement who counter-sued for emotional distress. A discovery dispute arose and Playboy asked the court to allow it to access the playmate’s hard drive to create a mirror image of the whole thing so as to search for deleted emails. The playmate testified it has always been her practice to delete emails the same day she reads them, and then to delete her trash. The Magistrate allowed the hard drive inspection, but only through a court appointed expert, who would act as an officer of the court, and protect the defendant’s privacy and attorney client privilege. Data recovered by the expert, along with the mirror image of her hard drive, would be turned over to defense counsel, not the plaintiff. Defense counsel would then review and produce any recovered emails or other materials deemed relevant and create a privilege log.
Pueblo of Laguna v. United States, 60 Fed.Ct. 133 (2004). The Pueblo Tribe sought an order requiring the government to preserve certain electronic records pertaining to their claims. The government argued unsuccessfully that the U.S. Court of Federal Claims did not have the authority to enter such an order tantamount to an injunction. The Court held that it was part of its inherent powers to order the preservation of evidence. A record retention preservation order was entered that not only prohibited the deletion of records, but provided the Plaintiff with inspection rights to inactive records. The Plaintiff’s requests to inspect active records or limit records transfers were denied. The order includes lengthy definitions of documents and preservation.
Quinby v. WestLB AG, 2006 WL 2597900 (S.D.N.Y. Sept. 5, 2006). Cost shifting case where defendant succeeded in having the plaintiffs pay for 30% of their $226,000 backup tape restoration and search expenses with Kroll.
Residential Funding Corp. v. DeGeorge Fin. Corp., 306 F.3d 99 (2d Cir. 2002). District court denied defendant an adverse inference instruction because the email production was delayed due to negligence, not gross negligence or bad faith. Appeals court reverses; simple negligence alone is sufficient to justify this sanction, especially where plaintiff’s counsel was “purposely sluggish” in not producing the emails until after the trial had started.
Silvestri v. General Motors Corp., 271 F.3d 583 (4th Cir. 2001). Dismissal of Plaintiff’s case was upheld because of spoliation; he did not preserve his allegedly defective car for defendant to inspect. The court rejected arguments that it was not his fault, it was his attorney’s, and he had no duty to preserve the car because he did not own it, his parents did. The Court articulates its inherent powers to impose sanctions, including the ultimate sanction of dismissal, where critical evidence is not preserved, even if the loss was merely the result of negligence, and not bad faith.
Simon Property Group LLP v. mySimon, Inc., 194 F.R.D. 639 (S.D.In. 2000). Plaintiff moved to compel defendant to make computers available for inspection to attempt to recover deleted files. The court held that deleted computer records are discoverable documents and allowed the inspection at the plaintiff’s own expense, following the guidelines set forth in the Playboy case; imaging, outside expert review, followed by review by plaintiff’s counsel.
Stevenson v. Union Pacific Railroad Co., 354 F.3d 739 (8th Cir. 2004). Audio tapes concerning an accident were destroyed as part of the railroad’s usual records retention policy; still an adverse inference instruction was justified as a spoliation sanction because it was not reasonable to follow the policy under these circumstances, and because the railroad had departed from this practice in the past when the voice tapes were helpful to the defense. Appeals court did, however, reverse on the trial court’s refusal to allow the railroad to present evidence to try to rebut the inference by providing testimony that the tape destruction was in accord with its records management policy. The case was remanded for a new trial.
Tessera Inc. v. Micron Technology, Inc., 2006 WL 733498 (N.D.Ca. March 22, 2006). Third party subpoena of electronic database records where a key dispute was the parties’ inability to agree on search terms to harvest the data. The court decided what search terms should be used. The third party was ordered to produce certain other databases in their entirety on DVDs because the third party claimed that they could not be searched for screening. The third party’s request for an award of costs incurred, over $70,000, was granted.
Wiginton v. CB Richard Ellis, Inc., 229 F.R.D. 568 (N.D. Ill. 2004). Sex harassment class action where the plaintiffs were looking for pornographic materials on defendant’s computers to prove hostile work environment. Kroll Ontrack was hired by plaintiffs to search the email server backup tapes in eleven offices. Pornography was found in 8,860 emails and the plaintiffs sought to have defendant pay Kroll’s entire $249,000 bill. The Kroll search system and deduplication is explained in some detail. Sampling was used, along with competing search terms. The parties debated how much porn was found on a percentage basis of total emails with plaintiffs claiming 21.3% and defendant claiming only 1.64%, and the overall value and utility of the search. A modified Zubulake II test was employed to determine who should pay for the e-discovery. The decision itself is a compromise; the plaintiffs were ordered to pay 75%, and the defendant 25%.
Williams v. Sprint/United Management Co., 230 F.R.D. 640 (D.Kan. 2005). This is an important case discussing native files, metadata, and the hashing of electronic evidence. This was an age discrimination class action where defendant at first produced Excel spreadsheets in TIFF format. Plaintiffs complained, stating they needed active files so they could see the formulas and run the files for analysis. Defendant agreed to produce the active Excel files, and after several delays finally did so. Plaintiffs then discovered that the Excel files had all been scrubbed of all metadata and certain cells locked so they could not be accessed. The Court had ordered defendant to produce the Excel records as active files “in the same manner as they were maintained” and so ordered Sprint to show cause why sanctions should not be entered for its unauthorized metadata scrubbing. Defendants argued that there was an emerging standard against the production of metadata. The court discusses metadata at length, what it is, and why it can be important and what the commentaries, primarily Sedona, and case law suggest is the emerging trend as to metadata scrubbing or production. The Court in its lengthy opinion disagrees with defendant, holding that metadata must be produced absent agreement or court order, and so ordered Sprint to produce the Excel files again, but this time with metadata intact and cells unlocked. Sanctions were not, however, imposed since metadata had not previously been specifically discussed or ordered.