Electronic Discovery Law – Page 313 – Legal issues, news and best practices relating to the discovery of electronically stored information.

Rejecting Arguments Regarding “Transitory Nature” of Data and Server Limitations, Court Finds Defendants Failed to Preserve Evidence in Bad Faith, Orders Adverse Inference and other Sanctions

Feb 05 2009

Arista Records, LLC v. Usenet.com Inc., 2009 WL 185992 (S.D.N.Y. Jan. 26, 2009)

Upon finding that defendants acted in bad faith to deliberately destroy relevant evidence despite a duty to preserve, the court imposed severe sanctions.

Defendant Usenet.com, operated by defendant Gerald Reynolds, is a commercial Usenet provider. Usenet is a “network of loosely connected computer servers that share message traffic for discussions.” Users are able to upload content to the system and download content from other users’ postings. Postings to Usenet are known as “articles.” “Articles” are organized into “newsgroups” – including Music Groups. In this case, “Plaintiffs contend that Defendants provided their subscribers access to hundreds of music piracy newsgroups containing vast amounts of infringing digital music files copyrighted by Plaintiffs.”

Despite Protection of Marital Privilege from Email’s Admission “in Judicial or Grand Jury Proceedings,” Court Finds Email may be Admitted for Other Purposes and Denies Motion to Suppress

Feb 03 2009

U.S. v. Nicholas, 594 F. Supp. 2d 1116 (C.D. Cal. 2008)

In this case, the United States District Court in the Central District of California denied defendant Henry Nicholas’s motion to block the production of an incriminating email and for an order preventing the use of the email for cross examination or impeachment should Nicholas testify. Rejecting Nicholas’s argument that the email was protected from disclosure by marital privilege, the district court held that a Ninth Circuit ruling that the email was subject to some protection by the marital privilege did not preclude all potential use of the email. Accordingly the district court held that because the email could constitute the admission of a co-conspirator and be admissible at trial under other limited circumstances, it must be disclosed to Nicholas’s co-defendant.

“Like any Ordinary Litigant, the Government Must Abide by the Federal Rules of Civil Procedure”

Jan 28 2009

S.E.C. v. Collins & Aikman Corp., 2009 WL 94311 (S.D.N.Y. Jan. 13, 2009)

In this case, arising from claims of securities fraud, the court addressed questions concerning the government’s discovery obligations in civil discovery. Throughout discovery in the case, several disputes arose regarding the SEC’s production of documents and its failure to perform sufficiently thorough searches for the requested information. Following extensive analysis of the individual issues, the court ultimately concluded that “[w]hen a government agency initiates litigation, it must be prepared to follow the same discovery rules that govern private parties…”

Finding Metadata is Not a Public Record Pursuant to Arizona Public Records Law, Court Declines to Compel Production

Jan 26 2009

Lake v. City of Phoenix, 207 P.3d 725 (Ariz. Ct. App. 2009)

In this case, the Arizona Court of Appeals upheld a superior court ruling denying plaintiff’s motion to compel production of metadata associated with documents previously produced pursuant to Arizona’s Public Records Law.

In late 2006, after filing an Equal Employment Opportunity Complaint against the city, plaintiff submitted a series of public records requests. The city’s subsequent production contained hard copy versions of electronic documents responsive to his request for all notes “documenting supervisory performance” within the relevant time frame. Plaintiff suspected the notes had been backdated and requested production of the metadata associated with each document. The city refused arguing that the requested metadata was “not maintained by the city and was not available,” and that metadata was not a public record. In response, plaintiff brought a special action before the district court. Finding it lacked jurisdiction to hear the matter, the superior court denied plaintiff’s motion to compel. Plaintiff appealed, and the appellate court affirmed the superior court’s ruling denying the production of metadata.

Court Enforces Agreement Regarding Search Terms and Production of Disaster-Recovery Backup Tapes; Holds Third-Party in Contempt Despite $6 Million In “Extensive Efforts to Comply”

Jan 26 2009

In re Fannie Mae Sec. Litig., 552 F.3d 814 (D.C. Cir. 2009)

In this case, the district court held defendants had sole authority to dictates search terms, per stipulated order, and sanctioned a third-party for failure to timely produce documents, despite significant efforts to comply with the deadline. The Court of Appeals affirmed.

Individual defendants served a third-party subpoena on The Office of Federal Housing Enterprise Oversight (“OFHEO”), requesting production of over 30 categories of documents. The court denied OFHEO’s subsequent motion to quash, and entered an order directing compliance.

The defendants then agreed to limit the requests for electronically stored information to emails stored on OFHEO’s network and backup tapes. After the court granted several requests for an extension of time to comply, OFHEO finally produced what it represented were “all” relevant materials. However, defendants later discovered that OFHEO failed to search all of its off-site disaster-recovery backup tapes.

Despite OFHEO’s voluntary agreement to conduct a search of these tapes, defendants moved to hold OFHEO in contempt. Following a day of hearings on the issue, the parties entered into a stipulated order holding the contempt motions in abeyance and requiring OFHEO to conduct searches of its disaster-recovery back-up tapes and to produce those documents, as well as a privilege log, by a date certain. Thereafter, a dispute arose requiring the court’s clarification that the stipulated order gave sole discretion to specify search terms to the defendants. Despite OFHEO’s attempts to comply with the order, it indicated its inability to timely produce the required privilege logs. Accordingly, defendants renewed their contempt motion. The motion was granted and, as a sanction, OFHEO was ordered to produce a category of privileged material to defendants’ counsel for review, with the specific instruction that such production would not waive privilege. OFHEO appealed.

Michigan Amends Court Rules to Address E-Discovery

Jan 22 2009

On December 16, 2008, the Michigan Supreme Court adopted amendments to Michigan’s Court Rules to address discovery of electronically stored information in civil litigation. The new rules became effective January 1, 2009.

The adopted amendments affect the following rules:

2.302 General Rules Governing Discovery
2.310 Requests for Production of Documents and Other Things; Entry on Land
for Inspection and Other Purposes
2.313 Failure to Provide or Permit Discovery; Sanctions
2.506 Subpoena; Order to Attend

The order approving the amendments is available here.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

Destruction of Documents Pursuant to Document Retention Policy Results in Dispositive Sanctions Where Policy was Created as Part of Litigation Strategy and Thus Litigation was Reasonably Foreseeable

Jan 16 2009

Micron Tech., Inc. v. Rambus, Inc., 255 F.R.D. 135 (D. Del. 2009)

In this case arising from Micron’s alleged infringement of Rambus’ patents, a bench trial was held on the issue of Rambus’ alleged spoliation of relevant documents pursuant to a document retention policy it had recently implemented. The court ruled that Rambus had intentionally spoliated documents in bad faith. As a sanction, the court declared the patents in suit unenforceable against Micron.

Louisiana Amends Three More Rules to Address Treatment of Electronically Stored Information

Jan 13 2009

Effective January 1, 2009, Louisiana has adopted amendments to several civil rules to specifically address the treatment of electronically stored information.

CCP 1354 Subpoena deuces tecum – was amended to govern the form of electronically stored information produced in response to a subpoena duces tecum and specifically addresses the format of production and production of documents not reasonably accessible, among other things.

CCP 1471 Failure to comply with order compelling discovery; sanctions – was amended to establish that where electronically stored information is lost as the result of a routine, good-faith operation of an electronic information system, a court may not impose sanctions pursuant to this rule.

CCP 1551 Pretrial and scheduling conference; order – was amended to specifically direct consideration of discovery of electronically stored information in the pre-trial order.

For a current list of all states that have enacted special e-discovery rules, see our updated post here.

“Since Both Parties Went Through the Same Stop Sign…They Both Should Pay for the Crash”: Court Orders Parties to Split Cost of Privilege Review

Jan 09 2009

Covad Comm. Co. v. Revonet, Inc., 254 F.R.D. 147 (D.D.C. 2008)

In this case arising from claims of misappropriation and conversion of trade secret information, plaintiff filed a motion to compel following a disagreement regarding the proper format of production of electronically stored information. The defendant argued that because the plaintiff failed to specify a format of production, hard copy or .TIFF images were appropriate. The plaintiff insisted on production in native format. The court, indicating its displeasure with both parties, ordered production of the documents in their native format, but ordered the parties to split the cost of the necessary privilege review.

Despite Document Retention Policy Allowing Individual Determination for Need to Preserve, Court Orders Board to Bear Recovery Cost of Deleted Emails in Response To Records Request

Jan 09 2009

State ex rel. Toledo Blade Co. v. Seneca County Bd. Of Comm’rs, 899 N.E.2d 961 (Ohio 2008)

This case arose from plaintiff’s request to review “all outgoing and incoming emails” of several Seneca County Commissioners following the board’s approval of plan that called for the demolition of the courthouse. Plaintiff alleged that the county’s production was deficient and cited a lack of emails from a particular time frame as well as alleged admissions by particular commissioners that they had deleted relevant messages.

Following these allegations, the board discovered additional emails for production and subsequently undertook a search in “every single folder in the hard drives of the computers of every person from whom emails were requested” and produced all responsive documents. The board did not undertake efforts to recover deleted messages, however, arguing that “while it may be possible to retrieve additional information from a hard drive with very expensive forensic tools, that information would be considered deleted by the user and would not be available to the user.” At all relevant times, the board maintained a schedule for records retention that allowed for the deletion of email deemed to have “no significant value.” The determination of “value” was left to each individual “computer user” pursuant to that policy.