Court Declines to Issue Advisory Opinion as to What Actions State Must Take to Properly Preserve Documents for Potential Suit
Texas v. City of Frisco, 2008 WL 828055 (E.D. Tex. Mar. 27, 2008)
In this case, the State of Texas sought a declaratory judgment and the court’s protection from a general litigation hold request, initiated by a letter sent by the City of Frisco. The letter asked the Texas Department of Transportation to generally preserve all electronic data associated with a particular highway toll project, and referred to potential litigation regarding the environmental evaluation of the toll project. The State speculated that the City would likely bring suit pursuant to the National Environmental Policy Act and the Administrative Procedures Act; however, at the time the complaint was filed, no claims had been brought. Thus, the State asked the court to enter a declaratory judgment ruling that the City’s preservation letter "violates the Federal Rules of Civil Procedure and is contrary to rules governing a NEPA/APA claim in federal court." The request for declaratory relief was the sole count made against the City of Frisco in the complaint.
The City of Frisco moved to dismiss, arguing that the State failed to plead the elements of any viable claim and was essentially asking the court for an advisory opinion concerning what action it must take to properly preserve those documents subject to the litigation hold. The court agreed, and dismissed the complaint. The court’s analysis is set out below:
Avoiding E-Discovery Pitfalls
By K&L Gates partner David R. Cohen
This article appears in the March 2008 edition of BizTech Magazine, and begins:
If you’re not currently involved in litigation or an investigation and won’t be in the future, then e-discovery isn’t something your business needs to concern itself with. The rub is that it’s often impossible to predict whether your business will be involved in a lawsuit or investigatory action.
Fortunately, the recent amendments to the Federal Rules of Civil Procedure do not impose any requirements on companies outside of the litigation process. And because small and midsize businesses are less likely to be involved in litigation, they are at less risk. However, if your business and IT departments aren’t prepared and you suddenly find yourself involved in a lawsuit, it may be too late to take the appropriate action. Here are three best-practice steps that IT departments should keep in mind with regard to e-discovery and electronically stored information . . .
View the full article online, or as a .pdf here.
Court Sets Protocol for Production and Review of Text Messages
Flagg v. City of Detroit, 2008 WL 787061 (E.D. Mich. Mar. 20, 2008)
Plaintiff in this case is the minor son of a murder victim, whose murder remains unsolved. The complaint alleges that the defendants engaged in a laxity in investigation, deliberately ignored and actively concealed material evidence, and deprived the plaintiff of an opportunity to bring a wrongful death suit against the murderer.
In a separate order on March 20, 2008, the court denied defendants’ motion to quash subpoenas to SkyTel for the production of certain text messages. The court found that the plaintiff was entitled to pursue the production of certain text messages sent or received by specified officials or employees of the City of Detroit (some of whom were also named as individual defendants in the suit) during specified time frames, using text messaging devices supplied by SkyTel. The court observed that the relevance (and hence discoverability) of the text messages necessarily turned upon the content of the communications. Thus, it was essential to establish a procedure for the review of the content of each such communication. Moreover, because a communication might be relevant, but not subject to discovery, e.g., protected by a privilege, the court stated that the procedure must be capable of addressing such issues and objections to production.
Accordingly, the court issued this order establishing a protocol for review and production of text messages, and assigning two magistrate judges to perform the review.
Court Approves Retention of Independent Technology Expert to Build, Maintain and Operate Discovery Database to Ensure Consistency, Reliability and Accessibility of Information
In re World Trade Ctr. Disaster Site Litig., 2008 WL 793578 (S.D.N.Y. Mar. 24, 2008)
This litigation concerns claims relating to respiratory injuries suffered by rescue and clean-up workers as a result of exposure to toxins and other contaminants in the aftermath of the September 11, 2001 terrorist attacks. Approximately 10,000 cases are before the court.
In this decision, the court approved the Special Masters’ recommendation that Technology Concepts & Design, Inc. ("TCDI") be retained to build, maintain and operate a database, to store the “Core Discovery” that the parties had begun to produce, and will continue to produce, pursuant to the court’s “Core Discovery Order" of November 27, 2007. The court explained that the “Core Discovery” will create a substantial amount of information, including insurance data from scores of contractors and subcontractors, and basic details concerning each plaintiff’s claim. The court continued:
4th Annual Life Sciences Counsel Guide to Document Management, E-Discovery, and Litigation Readiness
Monday & Tuesday, March 31 & April 1, 2008
Doubletree Metropolitan Hotel
569 Lexington Avenue
New York, NY 10022
K&L Gates partner David R. Cohen is a co-chair of this informative two-day conference. He and K&L Gates partner Martha J. Dawson will be among those presenting and participating on panels, offering practical advice on records management, e-discovery and litigation readiness issues relevant to the life sciences industry. Click here for additional information, or to register.
Program Overview:
The life sciences industry is particularly vulnerable to the inherent risk that arises out of improper management of electronic documents and e-discovery. Taking into consideration the numerous regulatory and compliance requirements of the industry, the voluminous amount of electronic information that is consistently created and stored, and the pervasive litigation that surrounds the life sciences industry, companies must adopt proactive document management and e-discovery policies they can strategically implement and effectively enforce across the company.
Federal Court Allows Plaintiff to Amend Complaint to Assert State Law Spoliation Cause of Action Based on Defendant’s Failure to Implement Litigation Hold
Ed Schmidt Pontiac-GMC Truck, Inc. v. DaimlerChrysler Motors Co., LLC, 538 F. Supp. 2d 1032 (N.D. Ohio 2008)
In this case, an automobile dealer brought suit alleging that DaimlerChrysler had breached a settlement agreement when it refused to grant the dealer a Chrysler franchise. During the two years of discovery that followed, Schmidt alleged that DaimlerChrysler knowingly and intentionally destroyed relevant evidence. Specifically, Schmidt alleged that DaimlerChrysler failed to implement a litigation hold to prevent the destruction of evidence after the complaint was filed in October 2004, and replaced or altered certain employees’ hard drives days before Schmidt made forensic images of the drives as part of its discovery process. Further, Schmidt alleged that DaimlerChrysler attempted to hide the extent and significance of its misconduct. As a result, Schmidt sought to add a spoliation of evidence claim to the litigation.
The court observed that, under Ohio law, the elements for a spoliation of evidence cause of action are:
1) … pending or probable litigation involving the plaintiff; 2) knowledge on the part of the defendant that the litigation exists or is probable; 3) willful destruction of the evidence by the defendant designed to disrupt the plaintiff’s case; 4) disruption of the plaintiff’s case; and 5) damages proximately caused by the defendant’s actions.
Magistrate Judge Orders Expedited Forensic Imaging of Defendants’ Computers
Xpel Techs. Corp. v. Am. Filter Film Distribs., 2008 WL 744837 (W.D. Tex. Mar. 17, 2008)
In this brief order, the magistrate judge granted plaintiff’s motion for expedited computer forensic imaging, finding that good cause had been established. The magistrate judge ruled that the costs of the forensic imaging would be borne by the plaintiff, and articulated a number of protocols for the parties to follow:
- Computer forensic analysis will be performed by Digitalworks, located at 13333 N. Central Expy., Ste. 201, Dallas, Texas 75243 (the "Forensic Examiner").
- All Forensic Examiners utilized must agree in writing to be bound by the terms of this Order prior to the commencement of their services.
- Within two days of this Order or at such other time agreed to by the parties, defendants shall make its Computer(s), Server(s), and any other electronic storage devices located at Defendants’ place of business at 1385 Westpark Way, Euless, Texas, including but not limited to Brett Wassell’s laptop, which may be located at a different location, available to the Forensic Examiner to make mirror images of those devices as set out below:
District Court Modifies Magistrate Judge’s Order Requiring Production of Forensically Sound Copies of Defendant’s Servers to Allow for Pre-Production Privilege Review
Bro-Tech Corp. v. Thermax, Inc., 2008 WL 724627 (E.D. Pa. Mar. 17, 2008)
In this case involving claims of misappropriation of trade secrets, defendants objected to an order of a magistrate judge requiring them to disclose "forensically sound" images of certain data storage devices (Thermax’s India and Michigan servers) to plaintiffs’ counsel without any limitation as to the scope of the disclosure or prior filtering for privileged or work-product materials that the images might hold. The production was required to permit a determination of whether defendants had violated an earlier stipulation and order that had imposed an ongoing obligation on defendants to return to plaintiffs any of plaintiffs’ files in their possession, and then to purge such files from their possession, custody and/or control.
The magistrate judge’s order had issued in the context of a dispute around the deposition of Stephen Wolfe, an employee of Huron Consulting Group, a computer forensic services firm relied on by defendants for both testifying and consultative expert work. Wolfe testified that, at Thermax’s direction, he had performed two distinct tasks. The first was to produce an expert report regarding whether an array of plaintiff’s information identified by plaintiff’s expert was located on a discrete set of data storage devices, after performing all necessary searches of images of the devices. This set of devices did not include the India or Michigan servers. The second task was to conduct electronic searches of images of Thermax’s India and Michigan servers for evidence of plaintiff’s files therein (which, in accordance with the parties’ earlier stipulation and order, already should have been disclosed to plaintiffs and purged). The two tasks were different in several ways, as each task involved searches of different devices, with the searches involved in the former task providing the exclusive basis of Wolfe’s expert report, and the searches of the India and Michigan servers not informing his report in any respect. In other words, Wolfe performed the former task in his capacity as a testifying expert, and performed the latter task in his capacity as a consulting expert.
No Sanctions Warranted for Failure to Produce “Smoking Gun” Email, Where Email System Did Not Retain Any Sent Emails
Clearone Communications, Inc. v. Chiang, 2008 WL 704228 (D. Utah Mar. 10, 2008)
In this case involving claims of misappropriation of trade secrets, breach of contract and conversion, plaintiff sought sanctions for two claimed wrongs: (1) defendants’ belated production of, and misrepresentations about, source code complete with developer comments; and (2) defendants’ failure to produce “smoking gun” email, which was produced by another party who was the recipient of the email.
The so-called “smoking gun” email was written by defendant Lonny Bowers on September 5, 2005. Bowers was one of the founders and principals of defendant WideBand. The email was only discovered in documents produced by defendant Biamp, the recipient of the email, not in any discovery from the WideBand defendants. The WideBand defendants explained that the computer system used by Bowers did not retain copies of email sent by Bowers. On this point, the court observed:
For any business this is a significant irregularity; almost unimaginable for a technology company; and even more unlikely for a person of Bowers’ importance in such a company. Nonetheless, it does not appear that the September 5, 2005, email was withheld by WideBand Defendants — they did not have any copies of emails sent by Bowers.