2012 – Page 24 – Electronic Discovery Law

Court Instructs Parties to Utilize Predictive Coding, Requires Show of Cause to Avoid It

Oct 26 2012

EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012)

Following argument on partial summary judgment and a motion to dismiss in the Delaware Court of Chancery on Monday, Vice Chancellor J. Travis Laster turned to the topic of a scheduling order and, apparently without outside provocation, addressed the issue of predictive coding:

The Court: Thank you. Why don’t you all talk about a scheduling order for the litigation on the counterclaims. This seems to me to be an ideal non-expedited case in which the parties would benefit from using predictive coding. I would like you all, if you do not want to use predictive coding, to show cause why this is not a case where predictive coding is the way to go.

I would like you all to talk about a single discovery provider that could be used to warehouse both sides’ documents to be your single vendor. Pick one of these wonderful discovery super powers that is able to maintain the integrity of both side’s documents and insure that no one can access the other side’s information. If you cannot agree on a suitable discovery vendor, you can submit names to me and I will pick one for you.

One thing I don’t want to do – one of the nice things about most of these situations is once people get to the indemnification realm, particularly if you get the business guys involved, they have some interest in working out a number and moving on. The problem is that these types of indemnification claims can generate a huge amount of documents. That’s why I would really encourage you all, instead of burning lots of hours with people reviewing, it seems to me this is the type of non-expedited case where we could all benefit from some new technology use.

Transcript of Motion for Partial Summary Judgment, Motion to Dismiss Counterclaim and Ruling of the Court at 66-67, EORHB, Inc. v. HOA Holdings, LLC, No. 7409-VCL (Del. Ch. Oct. 15, 2012).

Following this exchange, counsel were asked if they had anything else they wished to discuss, to which both responded they did not. Watch this blog for further developments in this case.

Concluding Litigation Hold and Document Retention Policies are “Clearly Unacceptable,” Court Allows Depositions to Determine if Spoliation Occurred

Oct 16 2012

Scentsy Inc. v. B.R. Chase LLC, No. 1:11-cv-00249-BLW, 2012 WL 4523112 (D. Idaho Oct. 2, 2012)

In this case involving alleged trade dress and copyright infringement and related claims, the court addressed Defendants’ allegations of spoliation and focused in particular on Plaintiff’s litigation hold and document retention policies, which it concluded were “clearly unacceptable.” Recognizing that it was “unlikely” that relevant documents were destroyed, the court nonetheless allowed depositions to be taken at Plaintiff’s expense and indicated its potential willingness to issue an adverse inference instruction or to dismiss some or all of Plaintiff’s claims if it was determined that spoliation occurred.

Court Focuses on Cooperation & Proportionality to Resolve Discovery Disputes

Oct 12 2012

Kleen Prods. LLC v. Packaging Corp. of Am., No. 10 C 5711, 2012 WL 4498465 (N.D. Ill. Sept. 28, 2012)

In this multi-defendant litigation, Plaintiffs sought additional discovery, including the identification of additional custodians and the restoration and review of Defendants’ backup tapes. In resolving these discovery disputes, the court focused on the need for cooperation and proper consideration and application of the principle of proportionality (Fed. R. Civ. P. 26(b)(2)(C)).

International Trade Commission Proposes to Amend Rules of Practice and Procedure

Oct 05 2012

As announced in today’s edition of the Federal Register, the International Trade Commission has proposed to amend its Rules of Practice and Procedure to address “concerns that have arisen about the scope of discovery in Commission proceedings under section 337 of the Tarrif Act of 1930 (19 U.S.C. 1337) (“section 337”).” “The intended effect of the proposed amendments is to reduce expensive, inefficient, unjustified, or unnecessary discovery practices in agency proceedings while preserving the opportunity for fair and efficient discovery for all parties.” To that end, the proposed amendments address issues including the discovery of inaccessible information and limitations to discovery similar to those currently contemplated in Fed. R. Civ. P. 26(b)(2)(C). The proposed amendments also seek to add new provisions addressing privileged information and work product, including by requiring the production of privilege logs and by providing procedures for addressing the inadvertent production of privileged materials.

For more information on the proposed amendments, click here to be taken to today’s edition of the Federal Register. Please note too, the Commission invites public comment on its proposals due no later than 5:15 PM on December 4, 2012.

For Spoliation, Court Holds Defendant in Contempt, Orders $600,000 to be Paid to Plaintiff, $25,000 to be Paid to the Court

Oct 03 2012

Multifeeder Tech. Inc. v. British Confectionery Co. Ltd., No. 09-1090 (JRT/TNL), 2012 WL 4128385 (D. Minn. Apr. 26, 2012); Multifeeder Tech. Inc. v. British Confectionery Co. Ltd., No. 09-1090 (JRT/TNL), 2012 WL 4135848 (D. Minn. Sept. 18, 2012)

In this case, the Magistrate Judge recommended that an adverse inference be issued, that Defendant be held in contempt and that significant monetary sanctions be imposed upon his determination that two of Defendant’s employees had intentionally spoliated evidence by deleting certain information and by failing to reveal the existence of encrypted data. Upon the parties’ objections, the District Court adopted in part the Magistrate Judge’s recommendation, but increased the monetary sanctions imposed.

On Remand, Court Finds Rambus Committed Spoliation, Will Adjust Royalty Rate as Sanction

Sep 27 2012

Hynix Semiconductor, Inc. v. Rambus, Inc., No. C-00-20905 RMW (N.D. Cal. Sept. 21, 2012)

As has been previously discussed on this blog (here), two federal courts analyzing nearly identical facts came to differing conclusions regarding whether a party to both litigations had committed spoliation by destroying documents pursuant to a newly adopted document retention policy. In Hynix Semiconductor, Inc. v. Rambus, Inc. (N.D. Cal.), the court determined that Rambus did not spoliate documents and the case was resolved in favor of Rambus (i.e., its patents were found to be enforceable and Hynix was ordered to pay damages and future royalties). In Micron Tech., Inc. v. Rambus, Inc. (D. Del.), the court found that Rambus did spoliate documents and, as a sanction, ordered that the at-issue patents were unenforceable as to Micron. Both cases were appealed to the Federal Circuit, which clarified the proper standard for determining when the duty to preserve arose—the crux of the spoliation question and an issue about which the two lower courts disagreed. The Federal Circuit court concluded that the district court in the Northern District of California had “applied too narrow a standard of forseeability” with regard to the question of when litigation was reasonably anticipated and remanded the case for further consideration.

Federal Trade Commission Issues Final Changes to Agency Procedure

Sep 21 2012

Yesterday, the Federal Trade Commission (“FTC”) announced that it has issued “final changes to agency procedure that will streamline the FTC’s investigatory process, make updates to keep pace with electronic evidence discovery, and provide more detail on how the agency evaluates allegations of misconduct by attorneys practicing before the Commission.” Among the changes highlighted in the agency’s announcement is a new requirement that parties "meet and confer with FTC staff within 14 days (with certain exceptions) to resolve electronic discovery issues relating to subpoenas and civil investigative demands (CIDs), as well as any other issues” and a change which will relieve “parties of their obligations to preserve documents related to an FTC investigation after a year passes with no written communication from Commission staff.” Other changes include, among other things, express references to electronically stored information throughout the rules and specific amendments addressing “the manner and form of production of ESI” (§2.7(j)) and inadvertent production and waiver (§2.11(d)). The rules become effective on November 9, 2012.

To read the agency’s press release, which includes a link to the adopted amendments, click here.

Facing Fines for Contempt, Twitter Produces Defendant’s Tweets

Sep 20 2012

People v. Harris, No. 2011NY080152 (N.Y. Crim. Ct. 2012)

As was previously discussed on this blog (here, here, and here), Twitter, Inc. was recently ordered by New York Judge Matthew Sciarrino to produce both “content” and “non-content” information (including the text of Tweets) associated with the account of criminal defendant Malcolm Harris. Mr. Harris and others were arrested during an “Occupy Wall Street” protest after marching onto the Brooklyn Bridge. Thereafter, the District Attorney sent a subpoena to Twitter seeking Mr. Harris’ user information and Tweets in an apparent effort to disprove his claims that he and other protesters were led onto the roadway by the police. Initially, Mr. Harris sought to quash the subpoena, but his motion was denied by the court for lack of standing—the court found that he had no proprietary interest in the information sought and that his claimed privacy interest was “understandable” but “without merit.” Twitter then sought to quash the subpoena itself, but that motion was also denied. Twitter had argued that Mr. Harris (like all Twitter users) had standing to quash the subpoena and that the court’s decision to deny that standing placed an undue burden on Twitter where it would be forced to either respond to all subpoenas or to vindicate its users’ rights by moving to quash.

Court Finds Broad Requests for Social Media Content Fail to Uphold Rule 34(b)(1)(A)’s “Reasonable Particularity” Requirement, Denies Motion to Compel (in part)

Sep 18 2012

Mailhoit v. Home Depot U.S.A., Inc., —F.R.D.—, 2012 WL 3939063 (C.D. Cal. Sept. 7, 2012)

In this case the court addressed Defendant’s request for broad discovery of the content of Plaintiff’s social networking sites for the purpose of “test[ing] Plaintiff’s claims about her emotional and mental state.” Because three of the four categories of information sought by Defendant failed Rule 34(b)(1)(A)’s “reasonable particularity” requirement, the court largely denied Defendant’s motion to compel.

Inadvertent Production Results in Waiver of Attorney-Client Privilege as to 347 Pages of Emails

Sep 12 2012

Inhalation Plastics, Inc. v. Medex Cardio-Pulmonary, Inc., No. 2:07-CV-116, 2012 WL 3731483 (S.D. Ohio Aug. 28, 2012)

In this case, the court held that privilege had been waived as to 347 pages of inadvertently produced emails where, among other things, Defendant failed to establish the reasonableness of the precautions taken to prevent the disclosure and “failed to take adequate measures to rectify or mitigate the damage of the disclosure.”

Archive - 2012