Top Twenty-Two e-Discovery Opinions of 2016 – 20th and 19th

This is the second in a twelve-part installment on the twenty-two cases that were the most interesting in 2016. This installment covers the twentieth and nineteenth most interesting, Noble Roman’s, Inc. v. Hattenhauer Distrib. Co., No. 1:14-cv-01734-WTL-DML, 2016 WL 1162553 (S.D. Ind. Mar. 24, 2016) and In re Eisenstein, 2016 BL 107979, Mo., No. SC95331, (4/5/16).

TWENTIETH – Noble Roman’s, Inc. v. Hattenhauer Distrib. Co

judge_lynchThis is a helpful case on Proportionality under new rule 26(b)(1) and 45 and thus very interesting to attorneys like me who have been beating the drum of proportionality for over a decade. Noble Roman’s, Inc. v. Hattenhauer Distrib. Co., No. 1:14-cv-01734-WTL-DML, 2016 WL 1162553 (S.D. Ind. Mar. 24, 2016). The opinion was issued by Debra McVicker Lynch, United States Magistrate Judge, Southern District of Indiana.

beat-the-drum-logoThe Defendant served a third party subpoena on a “major shareholder” of the Plaintiff in franchise litigation. In response to Plaintiff’s motion, Defendant “beat the drum of ‘relevancy’” but “never attempt[ed] to demonstrate that the discovery [wa]s in any way proportional to the needs of the case.” That, the court determined, was “not good enough.”

The court granted Plaintiff’s motion for a protective order and prohibited the Defendant from obtaining the discovery sought from Plaintiff’s subpoenas. The court concluded concluded that Defendant’s subpoenas constituted “discovery run amok” and “fail[ed] the proportionality test under Rule 26(b).”

This is a nice scholarly opinion on Rules history in addition to the colorful language at pg. 9:

In response, Hattenhauer beats the drum of “relevancy.” It asserts that all of its deposition topics and document requests are “relevant.” That’s not good enough. Hattenhauer never attempts to demonstrate that the discovery is in any way proportional to the needs of this case, considering such things as the amount in controversy, the importance of the information in resolving contested issues, whether the burden of the discovery outweighs its likely benefits, whether the information can be obtained from other and more convenient sources, or whether the information is cumulative to other discovery Hattenhauer has obtained. See Rule 26(b). Two examples help illustrate the abject disproportionality of the discovery Hattenhauer wants from Privet Fund. …

The court finds that Hattenhauer’s documents and deposition subpoenas to Privet Fund constitute discovery run amok. Asking Privet Fund to provide every document and every piece of information it has—including information it may have obtained orally from Noble Roman’s personnel— about every aspect of Noble Roman’s business operations, finances, marketing plans, and management structure is discovery too far afield from the contested issues in this case. Hattenhauer’s subpoenas to Privet Fund fail the proportionality test under Rule 26(b). Therefore, the court GRANTS Noble Roman’s motion for a protective order.


NINETEENTH – In Re Eisenstein

The nineteenth most interesting e-discovery case in 2016 is In re Eisenstein, 2016 BL 107979, Mo., No. SC95331, (4/5/16). It is indeed a fascinating case because it is a decision by a state supreme court and deals with e-discovery ethics. A Missouri attorney was charged and found guilty of ethical violations and suspended from the practice of law for six months. The majority en banc opinion by the Supreme Court of Missouri (shown below) was written by Justice Richard B. Teitelman. Two dissenting opinions were also written.


Joel Eisentein is an attorney well known to the Missouri Supreme Court from five prior disciplinary proceedings. Why they allow a person like this to continue practicing law is beyond me. In this latest incident Eisentein was caught using email that his client, the husband in a divorce, had hacked and stolen from his wife’s private email account. The stolen email included confidential payroll information, but, even worse, it included the privileged communications between the wife and her lawyer.

Eisentein had the gall to argue that he did not use improper means to obtain the evidence because it was his client, the husband, who obtained the information, not him. Oh brother. Eisentein knew full well it was stolen, hacked and, as he put it, was “verboten.” He should have disclosed the theft and disclosure or privileged information immediately, instead he used it at trial.  Opposing counsel for the wife recognized a list of trial questions that she had prepared in a trial exhibit that Eisentein prepared. Only when opposing counsel saw this, and challenged Eisentein, did he admit what happened. I cannot tell you how bad that is, which is why I think the court let him off too easily here with just a six month suspension. One of the dissenting opinions agrees with me and would have imposed a more severe penalty.

s_crt-missouri_judge_teitelmanHere are excerpts from Justice Teitelman’s majority opinion summarizing the standard ABA model Rules of Professional Responsibility that were violated by the concealment and use of electronic evidence improperly obtained by a client.

Rule 4-4.4(a) prohibits a lawyer from using “methods of obtaining evidence that violate the legal rights” of a third party. Comment 1 to Rule 4-4.4(a) specifically notes that the rule is intended to prevent “unwarranted intrusions into privileged relationships, such as the client-lawyer relationship.” … The comment accompanying Rule 4-4.4(a) recognizes that lawyers “sometimes receive documents that were mistakenly sent or procured by opposing parties or lawyers.” However, when a lawyer knows that he or she has improperly received information, “Rule 4-4.4 requires the lawyer to promptly notify the sender in order to permit that person to take protective measures.” In this case, Rule 4-4.4 required Mr. Eisenstein to promptly disclose his receipt of the information to Ms. Jones so that appropriate protective measures could be undertaken. Mr. Eisenstein did not do so.

Rule 4-8.4(c) prohibits a lawyer from engaging “in conduct involving dishonesty, fraud, deceit, or misrepresentation.” Mr. Eisenstein’s violation of Rule 4-4.4(a) by obtaining evidence procured through improper means and failing to immediately disclose the same to opposing counsel demonstrates a violation of Rule 4-8.4(c) .

Rule 4-3.4(a) provides, in part, that a lawyer shall not “unlawfully [**4] obstruct another party’s access to evidence or unlawfully alter, destroy, or conceal a document or other material having potential evidentiary value.” Mr. Eisenstein violated Rule 4-3.4(a) by concealing his possession of Wife’s payroll information and Ms. Jones’ direct examination questions until the second day of trial. …

ABA Standard 6.12 provides that “suspension is generally appropriate when a lawyer knows that material information is improperly being withheld, and takes no remedial action, and causes injury or potential injury to the legal proceeding, or causes an adverse or potentially adverse effect on the legal proceeding.” ABA Standards 6.1 and 6.12 provide that suspension is appropriate when the case involves “conduct that is prejudicial to the administration of justice or that involves dishonesty, fraud, deceit, or misrepresentation to the court.” In re Madison, 282 S.W.3d 350 , 361 (Mo. banc 2009).

According to the ABA Standards, “knowledge” is the conscious awareness of the nature or attendant circumstances of the conduct but without the conscious objective or purpose to accomplish a particular result. ABA Standards Definitions, p. 17.  Mr. Eisenstein admitted that he reviewed the information and concluded that it was “verboten.” Yet Mr. Eisenstein did not disclose his discovery of the improper evidence to Ms. Jones. Mr. Eisenstein’s recognition that he should not have possession [*764] of the information and his decision to not disclose his receipt of that information demonstrate that he acted knowingly. Mr. Eisenstein’s retention and use of the improperly obtained evidence warrants a suspension.

sanctionsThis opinion serves as a warning to all attorneys. In re Eisenstein, 2016 BL 107979, Mo., No. SC95331, (4/5/16). If you rely on your clients to help with investigations, you must carefully look all gift horses in the mouth. If the client comes up with emails by the other side, or any other information, you must investigate the providence, the chain of custody. If it was stolen, especially if it contains attorney client information, you must disclose this fact immediately. This can get tricky if a crime was committed by your client. You may have to withdraw in the process. But you certainly cannot hide and use the stolen evidence.


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