2009 – Page 38 – Electronic Discovery Law

Iowa Supreme Court Adopts New Evidence Rule 5.502 Addressing the Disclosure of Information Subject to the Attorney-Client Privilege and Work Product

Jun 18 2009

On April 2, 2009, the Iowa Supreme Court approved the adoption of Evidence Rule 5.502 addressing the disclosure of information covered by the attorney-client privilege and work product. Substantially similar to recently enacted Federal Rule of Evidence 502, the new rule outlines the effects of disclosure with regard to waiver, including the effect of inadvertent disclosure. The rule became effective on June 1, 2009.

Click here to view the full text of the Supreme Court’s report.

Appellate Court Finds Trial Court Abused its Discretion by Failing to Impose Terminating Sanctions for Discovery Abuses, Directs Entry of Default Judgment

Jun 17 2009

Doppes v. Bentley Motors, Inc., 94 Cal. Rptr. 3d 802 (Cal. Ct. App. 2009)

In this case arising from plaintiff’s claims of a foul odor in his new car and defendant’s failure to repair it, plaintiff repeatedly sought terminating sanctions from the trial court for defendant’s repeated and egregious discovery abuses. Instead, the trial court ordered the jury would be instructed regarding defendant’s discovery failures and allowed to draw an adverse inference. Even when presented with additional evidence of defendant’s failures during trial, the trial court refused to award terminating sanctions. On appeal, the appellate court found that the trial court abused its discretion in failing to impose terminating sanctions and remanded the case with instructions to strike defendant’s answer and enter default judgment, among other things.

Upcoming Events

Jun 17 2009

E-Discovery Workshop via HP Halo Telepresence Collaboration Studios – “E-Discovery in a Down Economy: Achieving Litigation Readiness While Cutting Costs and Improving Outcomes”

July 16, 2009
HP Halo Studio Locations:
     New York, NY – 2 Penn Plaza, 8th Floor
     Marlborough, MA – 200 Forest St.
     Alpharetta, GA – 5555 Windward Parkway
9:30 – 12:30 PM

K&L Gates Partner, David Cohen, will co-facilitate this timely discussion covering a range of topics, including e-discovery readiness, identifying and addressing the risks of e-discovery, best practices of successful organizations, and how your business can achieve the balance of cutting costs, protecting your business, and preparing for the future, among others.

Click here to learn more.

Finding Plaintiffs’ Ex-Employee and his New Employers Culpable for the Spoliation of Ex-Employee’s Laptop, Court Orders Adverse Inference and Monetary Sanctions

Jun 15 2009

Beard Research, Inc. v. Kates, 981 A.2d 1175 (Del. Ch. 2009)

In this case, arising from plaintiffs’ claims that defendants interfered with business relationships and misappropriated trade secrets, plaintiffs sought sanctions against defendants for the destruction of information on a laptop computer which belonged to defendant Michael Kates, a former employee of plaintiffs. The court refused to award default judgment, as requested, but ordered an adverse inference against Kates and ordered monetary sanctions against Kates and defendants Advanced Synthesis Group (“ASG”) and ASDI, Inc. (“ASDI”) resulting from Kates’s destruction of a relevant hard drive and ASG’s and ASDI’s failure to take reasonable steps to prevent that destruction.

Dr. Michael Kates was employed by plaintiffs between 1997 and February 2004. In mid-2003, while still employed by plaintiffs, Kates purchased a Gateway laptop for business purposes. Between 2003 and early 2004, Kates’s relationship with plaintiffs deteriorated. In December 2003, Kates resigned from plaintiff C&B Research & Development, Inc. (“CB”) and on February 13, 2004, Kates also resigned from plaintiff Beard Research, Inc. (“BR”). Kates began working at ASG three days later and eventually went to work for ASDI; he continued to use the Gateway laptop. ASDI provided management services for ASG and both plaintiffs and defendants were involved in the sale of chemical compounds through a catalog, among other things. On May 4, 2005, CB and BR filed suit against Kates, ASDI, ASG and others.

Finding Defendants’ Behavior “a Textbook Case of Discovery Abuse,” Court Orders $1,022,700 in Monetary Sanctions

Jun 04 2009

Kipperman v. Onex Corp., 2009 WL 1473708 (N.D. Ga. May 27, 2009)

In this constructive transfer and fraud case arising out of the 2003 bankruptcy of Magnatrax Corporation, plaintiff alleged numerous discovery abuses on the part of defendants and sought sanctions accordingly. Among the abuses described were several allegations related to defendants’ failure to produce information stored on backup tapes, even upon being ordered to do so, and other various and related misdeeds. Calling defendants actions a “textbook case of discovery abuse,” the court found in favor of plaintiff but declined to strike defendants’ answer, as requested, and ordered defendants to pay plaintiff $1,022,700 in monetary sanctions.

Court Declines to Compel Production of Documents from Foreign Jurisdiction upon Finding a Lack of Personal Jurisdiction and where Certain Documents are Protected from Production by Israeli Law

Jun 04 2009

Linde v. Arab Bank, PLC, 2009 WL 1456573 (E.D.N.Y. May 22, 2009)

In this case, defendant Arab Bank moved to compel production of documents, pursuant to subpoena, by non-parties Israel Discount Bank, Ltd. (“IDB”), its indirect, wholly –owned subsidiary, Israel Discount Bank of New York (“IDBNY”), and Bank Hapoalim (“Hapoalim”). Arab Bank served its first subpoena on IDBNY seeking, among other things, the production of IDB documents located in Israel. Arab Bank also served a second subpoena on IDBNY seeking “the production of identical information from its parent, IDB.” Hapoalim was also served with a subpoena seeking the production of documents located in Israel. IDBNY generally complied with the first subpoena but objected to the production of IDB documents located in Israel. As to the second subpoena, IDBNY accepted service on behalf of itself, but not IDB, and IDB resisted the production of the documents sought based on the court’s lack of personal jurisdiction. Hapoalim also resisted production arguing that much of the information sought was protected from discovery by Israeli law. The court denied Arab Bank’s motion as to IDB documents located in Israel upon finding that IDBNY lacked sufficient control of such documents and because the court lacked personal jurisdiction over IDB. The court also denied Arab Bank’s motion as to those documents protected by Israeli law, but indicated its willingness to require production of the other documents requested.

Update: Supreme Court of Louisiana Vacates Court of Appeal’s Judgment to Vacate Preliminary Injunction of District Court, Remands for Further Proceedings

Jun 01 2009

Council of the City of New Orleans v. Washington, 9 So.3d 854 (La. 2009)

In this case, attorney Tracie Washington and others appealed a preliminary injunction from the District Court preventing the dissemination of emails received in response to a public records request. The injunction was issued in light of the City’s failure to properly review the documents for privileged information before production. Upon Washington’s appeal, the court of appeal determined the injunction violated the First Amendment and thus vacated the order of the District Court. The City Council of the City of New Orleans appealed.

On appeal, the Supreme Court of Louisiana vacated the judgment of the court of appeal upon finding that the First Amendment arguments upon which the court relied were presented for the first time on appeal and were therefore improperly considered. Accordingly, the matter was remanded for further proceeding.

A summary of the court of appeal’s opinion is available here.

Court Rules Office of Administration Not Covered by Freedom of Information Act, Records Related to White House Email Management Systems Need not be Produced

May 27 2009

Citizens for Responsibility and Ethics in Washington v. Office of Admin., 566 F.3d 219 (D.C. Cir. 2009)

Citizens for Responsibility and Ethics in Washington (“CREW”) alleged that “entities in the Office of Administration (OA) discovered in October 2005 that entities in the Executive Office of the President (EOP) had lost millions of White House emails.” In April 2007, CREW filed a Freedom of Information Act (“FOIA”) request seeking OA’s production of “records related to the EOP’s email management system, reports analyzing problems with the system, records of retained e-mails and possibly missing ones, documents discussing plans to fine the missing e-mails, and proposals to instate a new e-mail records system.” The OA initially agreed to produce the records but asked for an extended deadline to do so. Upon missing the extended deadline, OA argued for the first time that it was not covered by FOIA “because it provides administrative support and services directly to the President and the staff in the EOP, putting it outside of FOIA’s definition of ‘agency.’” Despite its resistance, the OA produced some records as a matter of “administrative discretion.”

Court Finds Delay in Objecting to a Failure to Produce in Native Format Was “Patently Unreasonable” and Denies Defendant’s Motion to Compel Production; Court Also Denies Motion to Confirm Adequacy of Defendant’s Manual Search

May 27 2009

Ford Motor Co. v. Edgewood Props., Inc., 257 F.R.D. 418 (D.N.J. 2009)

In this case, arising from allegations surrounding contaminated concrete following the demolition of a Ford plant in New Jersey, defendant Edgewood Properties (“Edgewood”) brought several motions before the court, including a motion to compel production of documents in their native format (or documents containing metadata) and a motion for an order granting Edgewood the right to confirm the adequacy of Ford’s manual collection process by searching the electronic systems of certain custodians. Finding Edgewood had waived its objection to the format of Ford’s production by failing to object within a reasonable time period, the court denied Edgewood’s motion to compel. The court also denied Edgewood’s motion to allow access to certain of Ford’s electronically-stored records citing inter alia the burden to Ford and Edgewood’s failure to make a showing of Ford’s purposeful or negligent withholding of documents.

Preliminary Injunction against Publication and Dissemination of Documents Received in Public Records Request Violates First Amendment

May 20 2009

Council of the City of New Orleans v. Washington, 13 So.3d 662 (La. Ct. App. 2009)

In this case, Relator Tracie Washington, a Louisiana attorney, and others, appealed the trial court’s issuance of a preliminary injunction which prevented them from publishing or disseminating documents received in response to a public records request and required that all documents be returned, among other restrictions. The request at issue sought email records from a number of City Council members from 2006 to the present. The documents produced were not reviewed for privilege prior to production. Accordingly, the City Council sought and received a preliminary injunction to prevent their dissemination and require their return. Relators appealed and the trial court was reversed upon the appellate court’s finding that the trial court’s injunction violated the Relators’ First Amendment rights.

Archive - 2009