Litigation

Court Orders Monetary Sanction of $250,000, that Defendant Provide the Court's Order to Plaintiffs in All Cases, and that Defendant File the Order in Every Case for 5 Years

Posted on March 29, 2011
Green v. Blitz U.S.A., No. 2:07-CV-372 (TJW), 2011 WL 806011 (E.D. Tex. Mar. 1, 2011) Plaintiff sought to re-open her lawsuit or for the court to sanction defendant, despite prior settlement, upon learning that defendant had failed to produce highly relevant documents...

Agent's Spoliation Results in Serious Sanctions

Posted on March 22, 2011
Rosenthal Collins Group, LLC v. Trading Techs. Int'l, No. 05 C 4088, 2011 WL 722467 (N.D. Ill. Feb. 23, 2011) In this case, the court ordered default judgment, ordered plaintiff to pay $1,000,000 in monetary sanctions, and ordered counsel to pay 'the costs and attorneys fees incurred in litigating this motion' where plaintiff's agent modified metadata related to relevant source code and wiped several relevant disks and devices prior to their production and where the court found counsel participated in 'presenting misleading, false information, materially altered evidence and willful non-compliance with the Court's orders...

"Bad Faith or Culpability 'May Not Mean Evil Intent, but May Simply Signify Responsibility and Control.'"

Posted on March 18, 2011
Philips Elecs. N. Am. Corp. v. BC Tech., No. 2:08-CV-639-CW-SA, 2010 WL 5838993 (D. Utah July 28, 2010);  Philips Elecs. N. Am. Corp. v. BC Tech., No. 2:08-CV-639-CW-SA, 2011 WL 677462 (D. Utah Feb. 16, 2011) In this case, the court imposed terminating sanctions against defendant after finding that five employees had destroyed 'thousands of computer files' in bad faith prior to the production of their laptops for examination and that defendant had attempted to hide those deletions from plaintiffs and the court...

No Sanctions for Destruction of Data Resulting from Mistaken Belief that Computers had been Imaged

Posted on March 03, 2011
Fed. Trade Comm'n v. First Univ. Lending, LLC, No. 09-82322-CIV, 2011 WL 673879 (S.D. Fla. Feb. 17, 2011) Relevant data was lost when a group of computers was scrubbed and sold by defendants with the permission of the court-appointed Receiver.  The permission was given, on the condition that the computers were scrubbed, because of the Receiver's mistaken belief that all relevant computers had been imaged...

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Court Sanctions Plaintiff and Counsel for Misuse of Discovery Process, Including Failing to Reveal That Relevant Cell Phones were Discarded

Posted on March 02, 2011
Moreno v. Ostly, No. A127780, 2011 WL 598931 (Cal. Ct. App. Feb. 22, 2011) After initially resisting discovery, plaintiff produced a laptop and cellular phone for examination.  Upon inspection, it was discovered that neither device was in use during the relevant time period...

"[T]hrowing the Laptop Off a Building; Running Over the Laptop with a Vehicle; and Stating 'If This Gets Us into Trouble, I Hope We're Prison Buddies,' Unquestionably Demonstrate Bad Faith."

Posted on February 24, 2011
Daynight, LLC v. Mobilight, Inc., 2011 WL 241084 (Utah Ct. App. Jan. 27, 2011) Appellants appealed the district court's decision to enter default judgment against a third-party defendant for the destruction of evidence.  Appellants argued that the sanction was excessive and unduly harsh and that the Utah Rules of Civil Procedure require a finding of willfulness, bad faith or persistent dilatory tactics in order to impose sanctions...

Upcoming Events - Spring 2011

Posted on February 18, 2011
The Knowledge Congress - Is Your Head in the Clouds? Best Policies, Practices, and Risk Management for Cloud Computing and ASP Services (Live Webcast) March 15, 2011 3 PM - 5 PM EST K&L Gates Partner David Cohen will present at this in-depth discussion of the rise of cloud computing and its impact on records retention compliance, e-discovery, and other business considerations and the steps companies can take to manage the risks of cloud computing and ASP services...

"[M]etadata Maintained by the Agency as a Part of an Electronic Record is Presumptively Producible under FOIA, Unless the Agency Demonstrates that such Metadata is Not 'Readily Reproducible.'"

Posted on February 10, 2011
Nat. Day Laborer Org. Network v. United States Immigration and Customs Enforcement Agency, 2011 WL 381625 (S.D.N.Y. Feb. 7, 2011) In this Freedom of Information Act ('FOIA') action, a dispute arose regarding the proper format of production and, in particular, whether metadata was subject to production pursuant to plaintiffs' FOIA requests...

Court Rejects Distinction between "Original Thumb Drives" and Forensic Images of the Same, Orders Production

Posted on February 08, 2011
Océ N. Am., Inc. v. MCS Servs., Inc., 2011 WL 197976 (D. Md. Jan. 20, 2011) In this case, plaintiff sought to compel the production of forensic images of certain 'flash' or 'thumb' drives.  The images were created by a neutral third-party expert upon agreement of the parties following defendant's refusal to produce the drives for inspection...

U.S. Court Holds Litigant In Non-U.S. Suit Subject to American Discovery Rules

Posted on February 04, 2011
The U.S. Court of Appeals for the Seventh Circuit recently ruled that a party in a lawsuit pending in Germany could be subjected to American discovery rules, even though the Court assumed that the discovery sought would not be allowed by the German court in which the case was pending...

Court Awards $1,049,850.04 in Attorney's Fees and Costs as Sanction for Discovery Abuse in "Victor Stanley II"

Posted on January 26, 2011
Victor Stanley, Inc. v. Creative Pipe, Inc., No. MJG-06-2662 (D. Md. Jan. 24, 2011) On January 24, 2011, Magistrate Judge Grimm entered an order awarding $1,049,850.04 in attorney's fees and costs as a sanction for discovery abuse, as discussed in Victor Stanley II...

Delaware Court of Chancery Issues Guidelines for Preservation of Electronically Stored Information

Posted on January 25, 2011
Last week the Delaware Court of Chancery issued new guidelines addressing the preservation of electronically stored information.  The guidelines are intended to 'remind all counsel … of their common law duty to their clients and the court with respect to the preservation of electronically stored information...

Employee's Use of a Work Computer to Communicate with Attorney "Akin to Consulting her Lawyer in her Employer's Conference Room, in a Loud Voice, with the Door Open..."

Posted on January 24, 2011
Holmes v. Petrovich Dev. Co., LLC, 2011 WL 117230 (Cal. Ct. App. Jan. 13, 2011) Where plaintiff used her company's computer to communicate with her attorney despite knowledge of policies prohibiting such use and establishing that employees had no right of privacy as to such materials, the court found that the emails 'did not constitute ‘confidential communication between client and lawyer' within the meaning of Evidence Code section 952' and thus were not privileged and affirmed the holdings of the trial court...

Production of Servers without Review Waives Privilege and so Might Storage of Privileged Materials on Servers Shared with Other Entities

Posted on January 18, 2011
In re Fontainebleau Las Vegas Contract Litig., 2011 WL 65760 (S.D. Fla. Jan 7, 2011) In this case, the court found that privilege had been waived as a result of a third party's voluntary production of servers believed to contain privileged materials without review...

K&L Gates, EDRM Collaborate to Enhance E-Discovery Database

Posted on January 12, 2011
As a way of continuing to enhance the value of Electronic Discovery Law, we recently embarked on a project with the e-Discovery Reference Model (EDRM) to classify the more than 1,800 cases in our case database according to the EDRM standards.  These cases will retain their existing searchable tags in addition to the new EDRM classification...

Jury to Determine Question of Bad Faith and Whether to Draw Adverse Inference as Sanction for Loss of Video Pursuant to Document Retention Policy

Posted on January 07, 2011
Rattray v. Woodbury County, 2010 WL 5437255 (N.D. Iowa Dec. 27, 2010) In this case, the court imposed sanctions for defendants' failure to preserve relevant video footage and ordered an instruction allowing the jury to determine whether the recording was destroyed in bad faith and, if so, to infer that it would have been unfavorable to the defendants...

Welcome Wisconsin! E-Discovery Amendments Become Effective January 1, 2011

Posted on December 31, 2010
On January 1, 2011, the e-discovery amendments to Wisconsin's rules of civil procedure become effective.  The amendments, affecting Wis. Stat. §§ 802.10, 804.01, 804.08, 804.09, 804.12, and 805.07, address for the first time the discovery of electronically stored information ('ESI')...

Upcoming Event: Is Your Head in the Clouds? Best Policies, Practices, and Risk Management for Cloud Computing and ASP Services

Posted on December 31, 2010
Presented By: The Knowledge Congress Live Webcast March 15, 2011 3-5PM EST K&L Gates Partner David Cohen will present at this in depth discussion of the rise of cloud computing and its impact on records retention compliance, e-discovery, and other business considerations and the steps companies can take to manage the risks of cloud computing and ASP services...

Discovery of Social Networking Sites

Posted on December 29, 2010
By: Martha Dawson, Michael Goodfried, K&L Gates This article appeared in DRI's E-Discovery Connection, Volume 5 Issue 3, on December 23, 2010 Consider how you, or someone you know, uses social networking sites; and consider how valuable this could be in litigation...

Kids' Access to Mom's Email Account Waives Attorney-Client Privilege

Posted on December 28, 2010
Willis v. Willis, 2010 WL 5186606 (N.Y. App. Div. Dec. 21, 2010) Plaintiff filed suit against her former husband and his current wife alleging defamation.  Specifically, plaintiff alleged that defamatory statements had been made in an email addressed to her and sent to her account - an account which was also regularly used by the former couple's children...

Court Orders Sharing of Non-Party's Discovery Costs, Cites Lack of "Spirit of Cooperation or Efficiency" as "Controlling Factor"

Posted on December 22, 2010
DeGeer v. Gillis, 2010 WL 5096563 (N.D. Ill. Dec. 8, 2010) Defendants and non-party Huron Consulting Services, LLC could not agree on the proper course of discovery.  After protracted communications consisting of accusations and demands, defendants sought to compel Huron to conduct additional searches for responsive ESI...

Must-haves for your e-discovery toolkit

Posted on December 20, 2010
By: Julie Anne Halter, K&L Gates, Seattle This article appeared in the Puget Sound Business Journal the week of December 10-16. In 2007, according to a report from the International Data Corporation, the 'digital universe' contained 281 billion gigabytes of data...

Court Holds there is a Reasonable Expectation of Privacy in the Contents of Emails

Posted on December 17, 2010
United States v. Warshak, 2010 WL 5071766 (6th Cir. Dec. 14, 2010) In this lengthy opinion, the court considered the question of whether an account holder has an expectation of privacy as to the contents of his emails.  Answering in the affirmative, the court held that 'a subscriber enjoys a reasonable expectation privacy in the contents of his emails ‘that are stored with, or sent or received through, a commercial ISP'' and that 'the government may not compel a commercial ISP to turn over the contents of a subscriber's emails without first obtaining a warrant based on probable cause...

UK Introduces Practice Direction 31B Addressing the Disclosure of Electronic Documents

Posted on December 16, 2010
Effective October 1, 2010, the UK has introduced Practice Direction 31B addressing in detail the disclosure of electronic documents.  According to the Ministry of Justice, this new Practice Direction 'aims to focus the parties on the sources of electronic material and give guidance to those with less experience of dealing which such issues...

Court Orders Production of Backup Tapes Pursuant to Order of Non-Waiver Under Rule 502(d)

Posted on December 13, 2010
Radian Asset Assurance, Inc. v. Coll. of the Christian Bros. of New Mexico, 2010 WL 4928866 (D.N.M. Oct. 22, 2010) Plaintiff opposed the court's proposal to order defendant's production of backup tapes pursuant to an order of non-waiver and argued that defendant should have to search and produce its own electronically stored information ('ESI') and that the burden and cost of doing so should not be shifted to plaintiff...

Court Enforces Agreement to Delete Defendants' Confidential Materials Despite Cost

Posted on December 08, 2010
Oxxford Info. Tech., Ltd. v. Novantas, LLC, 910 N.Y.S.2d 77 (N.Y. App. Div. 2010) In this case, the parties stipulated to a Confidentiality Order requiring that business information exchanged during the course of discovery would be returned or destroyed at the end of litigation...

Dissent to Order Adopting Mandatory Meet and Confer Rule Highlights Tension in Addressing Cost and Efficiency in E-Discovery

Posted on December 02, 2010
In the matter of amendment of Wis. Stat. §§ 802.10, 804.01, 804.08, 804.09, 804.12, and 805.07, No. 09-01A (Wis. Nov. 10, 2010) On November 10, 2010, despite the opinion of the Judicial Council Evidence and Civil Procedure Committee that Wisconsin did not need a mandatory confer rule, the Wisconsin Supreme Court entered an order adopting an amendment to Wis...

District Court Declines to Order Incarceration for Defendant's Bad Faith Spoliation but Orders Monetary Sanction of $337,796.37

Posted on November 30, 2010
Victor Stanley, Inc. v. Creative Pipe, Inc. ("Victor Stanley II") As previously summarized on this blog, defendant Mark Pappas, President of Creative Pipe, Inc., was ordered to 'be imprisoned for a period not to exceed two (2) years, unless and until he [paid] to Plaintiff the attorney's fees and costs that will be awarded…' as a sanction for willful, bad faith discovery violations which the Magistrate Judge ruled would be treated as contempt of the Court...

Finding No Duty To Preserve, Court Denies Motion for Sanctions

Posted on November 19, 2010
Huggins v. Prince George's Cnty, 2010 WL 4484180 (D. Md. Nov. 9, 2010) In this litigation arising from a dispute between plaintiff, a landowner, and the County regarding the plaintiff's use of her land, the court found that the defendant was not subject to sanctions for the destruction of a former employee's email pursuant to County policy where no duty to preserve existed at the time of their destruction...

"No Matter How Inadequate a Party's Preservation Efforts May Be ... Sanctions are Not Warranted Unless there is Proof that Some Information of Significance has Actually Been Lost"

Posted on November 19, 2010
Orbit One Commc'ns, Inc. v. Numerex Corp., 2010 WL 4615547 (S.D.N.Y. Oct. 26, 2010) Addressing defendant's motion for sanctions, the court found that although 'plaintiffs did not engage in model preservation of electronically stored information in this case,' they were not subject to sanctions absent evidence that any relevant information had actually been destroyed...

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