Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, 2007 WL 2085358 (E.D. Pa. July 20, 2007)

Healthcare Advocates was the plaintiff in an earlier lawsuit that asserted claims for trademark infringement and misappropriation of trade secrets against a competitor.  The Harding firm represented the defendants in that lawsuit, which was dismissed on summary judgment.  This civil action arose out of events that occurred in the pre-discovery phase of the underlying litigation.

After receiving the complaint, the Harding firm investigated the facts behind the allegations.  Employees of the Harding firm accessed a website operated by the Internet Archive (www.archive.org), and viewed archived screenshots of Healthcare Advocates’ website via a tool contained on Internet Archive’s website called the Wayback Machine.  The Wayback Machine allowed the Harding firm to see what Healthcare Advocates’ public website looked like prior to the date the complaint was filed in the underlying litigation.  Viewing the content that Healthcare Advocates had included on its public website in the past was very useful to the Harding firm in assessing the merits of the claims brought against their clients.  The Harding firm printed copies of each archived screenshot of Healthcare Advocates’ public website that they viewed via the Wayback Machine, and used the images used during the course of the underlying litigation.  However, the Harding firm did not actively save any of the screenshots they viewed onto their computer hard drives.

Healthcare Advocates later sued the Harding firm, claiming among other things that the firm had infringed on its copyright rights by viewing and printing copies of the archived images of the Healthcare Advocates’ web pages, by unknowingly saving copies of these web pages in temporary files known as caches, and by distributing the images to their co-counsel in the underlying litigation.  It further alleged that the Harding firm was guilty of “hacking.”

In this opinion, the court granted defendant’s motion for summary judgment, finding that the Harding firm’s infringing use was excusable under the fair use doctrine.  The court further rejected Healthcare Advocates’ request for spoliation sanctions based on defendant’s failure to preserve the temporary cache files.

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Doe v. Norwalk Community College, 2007 WL 2066497 (D. Conn. July 16, 2007)

In this case, plaintiff Jane Doe sued Norwalk Community College ("NCC") and Ronald Masi claiming she was sexually assaulted by Masi, a former professor at the college.  Doe filed her complaint in November 2004, and in March 2006, Doe moved to compel the inspection of certain electronic records possessed by NCC.  The court granted the motion in July 2006, and permitted plaintiff’s expert to inspect certain NCC computers.  Based upon her expert’s findings, Doe moved for sanctions, seeking an adverse inference with regard to electronic files which she claimed the defendants destroyed.

Specifically, Doe claimed that the hard drives of key witnesses had been scrubbed or completely wiped of data.  Further, her expert found inconsistencies in the mailboxes of four individuals that suggested to him that data had been altered, destroyed or filtered.  For example, one witness’s PST file contained no Deleted Items and only one Sent Item and the Inbox and Sent Items contained data starting August 2004, even though other activity was present starting in 2002.  In addition, Doe presented evidence that the retention policy issued by the State Library, which provided for a two-year retention with respect to electronic correspondence, governed NCC, and that this policy was not followed with respect to the hard drives of the computers of faculty members who left the college. Read More

Pipefitters Local No. 636 Pension Fund v. Mercer Human Res. Consulting, Inc., 2007 WL 2080365 (E.D. Mich. July 19, 2007)

In this brief order on plaintiffs’ objections to an amended scheduling order entered by the magistrate judge, the district court struck that portion of the amended scheduling order shifting the costs of electronic discovery to plaintiffs:

Without a motion pending, the Magistrate Judge ordered that plaintiffs would be required to pay for restoring electronic data, if such was sought by them from defendant.  Under the electronically stored information amendment to Fed.R.Civ.P. 26(b)(2)(B), the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost.  The court may order discovery if the requesting party shows good cause, but may specify conditions for the discovery.  Due to the lack of a record it is not apparent that the Magistrate Judge engaged in the proper analysis before shifting the cost of discovery to plaintiffs.

Plaintiffs’ motion to strike the Magistrate’s order as it pertains to the costs of electronically stored information is GRANTED.  If the same issue is raised by motion, the analysis set forth in Fed.R.Civ.P. 26(b)(2)(B) will control the outcome.

Kingsway Fin. Servs., Inc. v. Pricewaterhouse-Coopers LLP, 2007 WL 1837133 (S.D.N.Y. June 27, 2007)

In this securities case, the parties had entered into a protective order which provided, among other things, that the inadvertent production of purportedly privileged documents would not operate as a waiver of any applicable privilege.  In August 2006, plaintiff produced an April 25, 2003 email and attached memorandum sent from an executive of plaintiff Kingsway to Kingsway’s counsel as part of a production of electronic documents.  In November 2006, defendant John Dore attached a copy of the April 25, 2003 email to a motion for reconsideration of a decision denying summary judgment in a related action pending in Illinois state court.  Four days later, plaintiff submitted a letter to the District Court for the Southern District of New York requesting the return of all copies of the April 25, 2003 email on the ground that it was protected by the attorney-client privilege and had been produced inadvertently.  Plaintiff filed the December 4, 2006 letter to the court under seal.  However, plaintiff attached a copy of the April 25, 2003 email to the service copies of the December 4, 2006 letter, thereby disclosing the contents of the email and the attachment to the defendants once again.

The court thereafter directed all defendants, including Dore, to return all copies of the disputed email, to destroy any documents disclosing its contents, to use best efforts to retrieve any such documents filed with any court, and to make no use of the email pending further order of the court. Read More

United Med. Supply Co., Inc. v. United States, 77 Fed. Cl. 257 (2007)

In this decision, the United States Court of Federal Claims imposed sanctions against the United States based upon its “reckless disregard of its duty to preserve relevant evidence.”  The court opened its lengthy opinion and order with the following passage:

“One man’s trash is another man’s treasure.”

Aside perhaps from perjury, no act serves to threaten the integrity of the judicial process more than the spoliation of evidence.  Our adversarial process is designed to tolerate human failings – erring judges can be reversed, uncooperative counsel can be shepherded, and recalcitrant witnesses compelled to testify.  But, when critical documents go missing, judges and litigants alike descend into a world of ad hocery and half measures – and our civil justice system suffers.

To guard against this, each party in litigation is solemnly bound to preserve potentially relevant evidence.  In this government contract case, defendant violated that duty not once or twice—but repeatedly, over many years, and in sundry ways, leading to the destruction of many admittedly relevant documents.  Most disturbingly, some of these documents were destroyed even after the court conducted its first spoliation hearing.  While defendant apologizes profusely for what it claims is the “negligence” of some of its employees and for making repeated misstatements to the court as to the steps that were being taken to prevent spoliation, it, nonetheless, asseverates that the court should not—indeed, cannot—impose spoliation sanctions because defendant did not proceed in bad faith.  While defendant may be wrong in asserting that it acted in good faith, it most certainly is wrong in thinking that it can recklessly disregard its obligations to preserve evidence without legal consequence.

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