Catagory:Case Summaries

Nursing Home Pension Fund v. Oracle Corp., 2008 WL 4093497 (N.D. Cal. Sept. 2, 2008)

In this class action securities litigation, plaintiffs sought sanctions based on alleged evidence spoliation by defendants.  Plaintiffs moved for terminating sanctions or, in the alternative, for lesser sanctions in the form of adverse inference instructions and an order precluding defendants from relying on spoliated evidence.  Plaintiffs submitted a long list of actions allegedly taken by defendants that led to the failure to preserve or the affirmative destruction of evidence relevant to this lawsuit.

District Judge Susan Illston declined to impose terminating sanctions because the actions alleged to have been taken by defendants did not “eclipse entirely the possibility of a just result.”  The court found that plaintiffs had not demonstrated the degree of prejudice necessary to warrant terminating sanctions, primarily because plaintiffs had received a large quantity of materials in discovery.  In addition, the court noted that public policy strongly favored deciding the case on its merits, and that less drastic sanctions could be imposed that would permit a decision on the merits while also ensuring that defendants did not benefit from any spoliation.

As to lesser sanctions, the court found that adverse inferences in plaintiffs’ favor were warranted with regard to some categories of evidence that defendants had conceded was not produced or preserved.

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Infinite Energy, Inc. v. Thai Heng Chang, 2008 WL 4098329 (N.D. Fla. Aug. 29, 2008)

In this breach of employment agreement and misappropriation of trade secrets case, plaintiff moved to compel production of emails from defendant’s personal Yahoo! account.  Plaintiff contended that it only recently learned of the account, and that defendant should have disclosed the account in response to an earlier discovery request.  Plaintiff argued that emails from the account contained highly relevant information crucial to the issues in the case.

Although defendant claimed he could not produce the emails because they had been destroyed by Yahoo!, he offered only a copy of a generic response from Yahoo! about deactivating accounts.  The court observed that Yahoo! may have a process for obtaining emails from deactivated accounts, and declined to accept defendant’s explanation that production was “impossible,” particularly given the important evidentiary value of the emails and the “feeble offering” by defendant in support of the contention.

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Atlantic Recording Corp. v. Howell, 2008 WL 4080008 (D. Ariz. Aug. 29, 2008)

In this copyright infringement litigation, seven major recording companies alleged that defendant Howell had used the KaZaA file-sharing program to download their sound recordings and distribute them to other users of the network.  Howell had previously resisted plaintiffs’ efforts to conduct a forensic examination of his computer hard drive, and the court had granted plaintiffs’ motion to compel and granted leave to take additional discovery.  With the benefit of this additional discovery, plaintiffs moved for terminating sanctions based on Howell’s willful spoliation of material evidence.

Based on the evidence presented, the court found that:

•  Defendant removed the KaZaA program from his computer and deleted the contents of the shared folder shortly after receiving notice of the lawsuit

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Flagg v. City of Detroit, 252 F.R.D. 346 (E.D. Mich. 2008)

In an earlier decision in this case, the court denied defendants’ motion to quash subpoenas to SkyTel for the production of text messages.  The court found that plaintiff was entitled to pursue the production of certain text messages sent or received by specified officials or employees of the City (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, for determining both relevance and the application of any privilege.  The court appointed two magistrate judges to review the communications and make the initial determination as to which were discoverable.  Our post on that March 20, 2008 order is available here.

In this recent decision, the court ruled upon motions by the City and one of the individual defendants seeking to prevent the discovery from going forward.  The moving defendants argued that the federal Stored Communications Act (“SCA”), 18 U.S .C. § 2701 et seq., wholly precludes the production in civil litigation of electronic communications stored by a non-party service provider.  The court rejected this proposed reading of the SCA, observing that “[d]efendants’ position, if accepted, would dramatically alter discovery practice, in a manner clearly not contemplated by the existing rules or law, by permitting a party to defeat the production of electronically stored information created by that party and still within its control – information that plainly is subject to civil discovery, see Fed. R. Civ. P. 34(a)(1) – through the simple expedient of storing it with a third party.”  The court concluded that, because nothing in the plain language of the SCA requires this extraordinary result, and because defendants had not identified any other support for this proposition, the discovery effort contemplated in its March 20, 2008 opinion could go forward (albeit through slightly different means).

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Keithley v. Home Store.com, Inc., 2008 WL 3833384 (N.D. Cal. Aug. 12, 2008)

In this patent infringement case, plaintiffs sought terminating, evidentiary and monetary sanctions based upon defendants’ spoliation of evidence.  Plaintiffs argued that defendants had destroyed three types of evidence:  (1) source code; (2) early architectural, design and implementation documents; and (3) reports.  Plaintiffs contended that the spoliation of these materials impacted plaintiffs’ ability to meet their burden of proving infringement.

The court held several hearings and received extensive briefing on the spoliation issue, which the court observed “became a moving target because of Defendants’ belated production of evidence that it had previously stated was either nonexistent or destroyed.”  In the end, the magistrate judge imposed a monetary sanction of fees and costs associated with defendants’ discovery misconduct, and recommended that the district court give an adverse inference jury instruction to address the spoliation that occurred.  Although the magistrate judge found that the discovery misconduct by defendants in the case was "among the most egregious" the court had seen, she declined to recommend terminating sanctions because there was no evidence that defendants engaged in deliberate spoliation, and because the extreme sanction of dismissal would go beyond what was necessary to cure the prejudice to plaintiffs.

Some examples of defendants’ “reckless and egregious discovery misconduct” include the following:

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Gippetti v. UPS, Inc., 2008 WL 3264483 (N.D. Cal. Aug. 6, 2008)

In this case, plaintiff alleged that UPS fired him because of his age (reportedly, he was about 44 years old at the time).  UPS contended that Gippetti’s termination had nothing to do with his age.  It maintained that he was fired for “stealing time” (i.e., sleeping on the job during periods he claimed to be working, taking excessive rest breaks and inaccurately recording meal and rest breaks) and because he did not properly complete truck safety inspections required by UPS and government regulations.

In discovery, plaintiff sought production of “tachograph records,” which were records that showed a vehicle’s speed and the length of time it is moving or stationary.  UPS produced tachographs from 2007 and 2008, and agreed to produce the records on an ongoing basis.  However, UPS stated it was not able to locate any other responsive tachographs because its practice is, and since 2002 has been, to preserve such records for only 37 days due to the large volume of the data.

Plaintiff moved for spoliation sanctions, arguing that the destroyed tachograph records “would support that Plaintiff did not drive Route SU09 any differently than employees who were under the age of 40 years old.”  UPS responded that, until recently in this litigation, it had no reason to believe that all tachographs had any bearing on plaintiff’s age discrimination claim before those records were destroyed years ago in accordance with the company’s retention policy.

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In re Teleglobe Communications Corp., 2008 WL 3198875 (Bankr. D. Del. Aug. 7, 2008)

In this lengthy opinion addressing a variety of issues, the bankruptcy judge denied defendants’ motion to exclude testimony of the plaintiff’s expert as a sanction for the alleged spoliation of information considered in forming their opinions.  The court rejected defendants’ argument that Rule 26(a)(2)(B) required that the plaintiffs’ experts produce all drafts of their reports:

The Court is not convinced that the plain language of Rule 26(a)(2)(B) imposes an obligation on a party or its experts to preserve and produce drafts of an expert’s report.  See, e.g., Berckeley Inv. Group, Ltd. v. Colkitt, 259 F.3d 135, 142 n. 7 (3d Cir. 2001) (“The Supreme Court and this Court have repeatedly held that the Federal Rules of Civil Procedure, like any other statute, should be given their plain meaning.”).  The Rule does not expressly include draft opinions in the list of what the expert must disclose.  Instead, the Rule requires that an expert’s report contain a list of the data and other information on which he relied.  Fed. R. Civ.P . 26(a)(2)(B).  It does not seem logical that the Rule would require the final report to include a list of all the drafts of that report.  Further, because most experts now draft their reports on the computer, adding to and subtracting from the document, it would be impractical to require the production of all drafts.  For example, any time an expert added or subtracted a section, a paragraph, a sentence or even a word, the Defendants’ reading of the Rules would require the expert to save the draft and preserve it for production later.  This is a completely unworkable reading of the Rules and would mire the courts in battles over each draft of an expert’s report.  The Court concludes that this interpretation comports with neither the plain meaning of the Rule nor its policy.

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Tierno v. Rite Aid Corp., 2008 WL 3287035 (N.D. Cal. July 31, 2008)

In this wage and hour employment case, plaintiff sought documents about class members’ employment and salary history, terminations, performance evaluations, discipline, certain communications, and personnel files.  Rite Aid had demanded that plaintiff either travel to its various district office locations throughout California and copy the documents, or pay the copying expenses, which it estimated at $104,178.84.  The dispute was presented to the magistrate judge.  After weighing the factors set out in Zubulake v. UBS Warburg, L.L.C., 217 F.R.D. 309, 322 (S.D.N.Y. 2003), the magistrate judge required Rite Aid to produce the documents at its own expense.

Rite Aid objected to the magistrate’s ruling, arguing that Fed. R. Civ. Pro. 34 requires plaintiff, not Rite Aid, to bear the costs of photocopying.  The district judge agreed, concluding that the magistrate judge had “clearly erred” by analyzing the dispute under Zubulake:

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White v. Graceland Coll. Ctr. for Prof’l Dev. & Lifelong Learning, Inc., 2008 WL 3271924 (D. Kan. Aug. 7, 2008)

In this wrongful termination case, plaintiff moved for an order compelling defendants to, among other things, provide complete information on defendants’ document retention policy and how such policy may have affected ESI responsive to certain discovery requests, and re-produce certain electronic documents in their native format.  The court denied the former, but granted the latter request.

Information on Defendants’ Document Retention Policy

Plaintiff’s discovery requests had asked defendants to identify any computer or electronic devices used by its management or human resources department in the years 2003 or 2004, and whether the device had been search or analyzed to determine if any files, notes, or documents related to plaintiff were contained on the device.  Plaintiff also asked that defendants identify and produce any documents related to plaintiff found on the device.

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Bright v. United Corp., 2008 WL 2971769 (V.I. July 22, 2008)

In this case, plaintiff alleged that she slipped on drops of "a thick, pink liquid" while shopping at defendant supermarket, sustaining injuries to her left leg and ankle.  She sued for negligence, bodily injury, medical expenses, lost income and lost future earning capacity.  Defendant moved for summary judgment contending that it did not have notice of the spill which may have caused plaintiff’s injuries.  The trial court granted the motion, holding that, because plaintiff failed to provide any evidence that defendant knew or should have known about the substance on the floor, no reasonable jury could find that defendant had breached its duty to plaintiff as a matter of law.  Plaintiff appealed, and the Supreme Court of the Virgin Islands reversed and remanded, finding that there was a genuine issue of material fact as to constructive notice.

Plaintiff’s fall was captured on defendant’s closed-circuit video surveillance system, which was comprised of both a digital hard drive that records only a finite amount of data before reusing itself and a video recorder.  The digital footage was automatically recorded over every few weeks unless it is manually copied from the digital hard drive to the video recorder.  The supermarket’s manager testified that he examined the footage of plaintiff’s fall immediately after being notified of her fall, and the video failed to show anything visible on the floor at the time of the fall.  Concluding that plaintiff "probably tripped on herself," the manager testified that he elected not to review or copy any of the footage prior to or after the fall.  He also testified that the store had no set procedure for retaining video footage of slip and fall accidents and that the store simply retained the footage of the actual fall in plaintiff’s particular circumstance.

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