Archive - 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.  Finding that defendant had committed discovery abuses, including failing to disclose relevant evidence and failing to issue a litigation hold, the court ordered defendant to pay plaintiff $250,000, to provide a copy of the court’s order to plaintiffs “in every lawsuit proceeding against it” for the past two years and to file the court’s order in every case that defendant is involved in for the next 5 years.

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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.”

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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.

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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.  As a result of the loss of data, defendants filed a motion for spoliation sanctions for what they described as “the FTC’s bad-faith destruction of Defendants’ computer systems.”  For the reasons discussed below, defendants’ motion was denied.

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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.  Moreover, the relevant devices were no longer in plaintiff’s possession.  When challenged as to why this was not disclosed initially, counsel explained that he was torn between his “competing duties” of protecting his client and candor to the court.  Rejecting plaintiff’s and her counsel’s explanations, the court entered monetary sanctions against them.  On appeal, the sanctions were affirmed.

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Daynight, LLC v. Mobilight, Inc., 248 P.3d 1010 (Utah Ct. App. 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.  Rejecting appellants’ reliance on Utah R. Civ. P. 37(b)(2), a rule “which typically pertains only to a delay in the production of evidence,” the Court of Appeals established that the appropriately applied rule, Utah R. Civ. P. 37(g), did “not require a showing of ‘willfulness, bad faith, or dilatory tactics’ or the violation of court order before a court may sanction a party” – including by ordering default judgment.  Moreover, the court noted that even if such a showing were necessary, the district court concluded that the third-party “chose to willfully and in bad faith destroy the laptop” as evidenced by employees’ recorded comments about “their destruction of ‘potential[ly] harmful evidence that might link [them] to any sort of lawsuit.’”  The Court of Appeals further concluded that the there could be no reliance on Rule 37(g)’s good faith exception (which is identical to the safe harbor provision in Fed. R. Civ. P. 37(e)) in light of certain “actions and words attributable to the third-party defendant after it filed suit, including throwing the laptop off the building; running over the laptop with a vehicle; and stating ‘[I]f this gets us into trouble, I hope we’re prison buddies’” – activities which “unquestionably demonstrate bad faith and a general disregard for the judicial process.”  Acknowledging that an order of default judgment was an “extreme” sanction, the court nonetheless found no abuse of discretion in light of the third-party defendant’s behavior and affirmed the order of the district court.

Nat’l 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.  Following substantial analysis of the issue, the court held that “certain metadata is an integral or intrinsic part of an electronic record” and, as such, is “‘readily reproducible’ in the FOIA context.”  (FOIA provides that “[i]n making any record available to a person under this paragraph, an agency shall provide the record in any form or format requested by the person if the record is readily reproducible by the agency in that form or format.”  (Emphasis added.))  Addressing the question of which types of metadata are an intrinsic part of an electronic record, the court acknowledged that the answer “depends, in part, on the type of electronic record at issue . . . and on how the agency maintains its records” and determined that “the best way I can answer the question is that metadata maintained by an agency as part of an electronic record is presumptively producible under FOIA, unless the agency demonstrates that such metadata is not ‘readily reproducible.’”

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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.  The original drives were then destroyed.  Defendant objected to production, arguing that plaintiff had previously requested access to the thumb drives, but not the forensic images, thus attempting to draw a distinction between the two.  The court rejected defendant’s argument reasoning that “if the original thumb drives were discoverable, Capsicum’s forensic images of the thumb drives must also be discoverable, and Océ need not propound a new discovery request for what amounts to the exact same information.”

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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.

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