In D'Onofrio v. SFX Sports Group, Inc., 2008 WL 4737202 (D.D.C. Oct. 29, 2008), U.S. Magistrate Judge John Facciola denied defendants' motion for leave to designate a computer search expert and its motion for leave to file supplemental briefing on spoliation.  The court, rejecting both parties' highly technical search protocol proposals, created a protocol on its own.

The issue before the court in this sex discrimination case related to an evidentiary hearing held in early 2008.  The purpose of the hearing was to determine the basis of plaintiff's expert's representations that email and other electronically stored information ("ESI") had not been produced and the circumstances concerning defendants' destruction of plaintiff's work computer after its obligation to preserve had attached. (See 247 F.R.D. 43, 44-45 (D.D.C. 2008)) Also at the earlier hearing, plaintiff testified that there were several types of ESI and paper documents that she had requested, but defendants did not produce, including physical files and items from plaintiff's office.

Plaintiff's expert testified that he might be able to locate ESI on the defendants' servers using forensic techniques.  The parties were subsequently unable to agree upon an adequate protocol to guide the search.  The court heard testimony from a defense witness, one of the defendants' security officers, who testified to what ESI searches he performed in response to plaintiff's requests and explained defendants' computer system. In addition, the court heard testimony from SFX Basketball's VP of Finance who called himself the "de facto I.T. person". He testified that he "scrapped" plaintiff's computer after deciding that it could not be used.

After the parties' respective technology experts failed to come up with a mutually agreeable search protocol to retrieve potentially relevant ESI, Judge Facciola created his own protocol to specify the search terms. The court's protocol provided that plaintiff's expert could search for ESI from: (1) emails to or from plaintiff to include emails in which her name appears in the "cc" or "bcc" lines; (2) email in which her name is mentioned; (3) ESI created by her; (4) ESI sent to her directly or as one of other recipients; and (5) ESI in which her name appears, whether her full name, her first or last name, or initials. The court limited the search to 12 hours a day and ordered that the defendants' representative had full credentials to access the relevant systems and to assist plaintiff's access to the system without qualification or obstruction.  Defendants' IT representative was given the right to monitor the searches and object if the searches would compromise defendants' system or have a significant negative impact on business functioning.

The court denied defendants' motion for leave to designate a forensic expert, whose role would essentially be to look over the shoulder of plaintiff's expert.  Judge Facciola noted that defendants had no reason to believe plaintiff's expert is anything other than an unbiased professional and had the ability to run the searches at anytime without court intervention.

Plaintiff's expert was permitted to mirror defendants' drives and retain copies pending further direction from the court.  If ESI was newly discovered by plaintiff's expert's search, defendants were obligated to restore the items during the search, if such restoration was necessary to render the ESI "reasonably usable" under F.R.C.P. Rule 34.

The defendants agreed to pay for the cost of the search up to $10,000.  The court directed plaintiff's counsel to provide an estimate and reserved the issue of further cost shifting in the event the estimate was greater than $10,000.

In Metavante Corp. v. Emigrant Savings Bank, 2008 U.S. Dist. LEXIS, 89584 (E.D. Wisc. Oct. 24, 2008), the court, upon hearing several motions to compel by both parties, ordered plaintiff to produce certain software source codes used by plaintiff, but denied defendant's request that plaintiff produce all electronically stored information ("ESI") in its native format.

Defendant's first motion to compel sought disclosure of the source code from the product plaintiff delivered to defendant under the parties' technology outsourcing agreement.  Defendant contended that it must have access to the information to adequately defend against plaintiff's breach of  contract claims as well as to prosecute its counterclaims of fraud and breach of contract. Specifically, defendant believed that the software code may provide information about the quality of the product plaintiff delivered under the agreement.  Defendant further argued that since it provided its source code to plaintiff, it was entitled to review the source code to compare the two. In response, plaintiff argued that the source code was irrelevant and would be unduly burdensome to produce, claiming isolation of the source code would cost more than $300,000 and take over 5,000 hours. The court held that the code was relevant and that the relative value of the information outweighed the burden of production.  The court also recognized that the defendant offered to    mitigate the cost by using defendant's outside consultants to review the code and parse out any relevant information.

Defendant also sought court supervision in the production of several requested documents by plaintiff as well as a court order that plaintiff provide all requested ESI in its native format. The court held "[defendant's] request for supervision would pervert these goals and unnecessarily increase costs and delay resolution of this case."  The court noted that both parties were sophisticated and had the ability to conduct extensive discovery without relying on the court to  "micro-manage" discovery in this case.  The court also held that defendant had not provided the court with a sufficient basis to justify a native production of electronic information.

In El-Amin v. George Washington University, 2008 U.S. Dist. LEXIS 85009 (D. D.C. Oct. 22, 2008), Magistrate Judge Facciola, having reviewed the Sedona Conference's Best Practices for the Selection of Electronic Discovery Vendors:  Navigating the Vendor Proposal Process created a work plan for a system where all existing documents are hyper-linked to fields in a database that will permit the instantaneous retrieval from within the database of the information alleged in the complaint and all facts in support.  The system must be capable of being easily used by both counsel and the court and the requisite software must be made available to the court so the judge can run searches and operate independently.  The system must also be self-contained so it can be used without reference to any other information to resolve questions related to a particular claim or defense.  For example, the plaintiff could hyperlink documents and other evidence in the database and the defendant could state its objections and, if need be, refer to hyper-linked evidence to contradict or impeach.

In Oldenkamp v. United American Ins. Co., 2008 U.S. Dist. LEXIS 84784 (N.D. Okla. Oct. 21, 2008), the court denied plaintiffs' request for spoliation sanctions, including an adverse inference instruction for defendant's failure to preserve recorded telephone conversation tapes and emails relevant to plaintiffs' breach of contract and bad faith claims.

The case involves the denial of benefits under plaintiffs' health insurance policy which defendant contends was due to a preexisting condition of plaintiffs' minor son.  In discovery, defendant produced one email and denied the existence of any additional relevant emails.  Defendant also produced several telephone conversation recordings. Plaintiffs argued that more emails and tapes existed that were not produced in litigation.  Plaintiffs cite to defendant's "Policies and Procedures Regarding Security and Use of Computer Equipment" which encourages defendant's employees to delete emails from their computers as soon as possible.  Plaintiffs also noted that the defendant initially denied the existence of an audio recording between plaintiffs and one of defendant's customer service representatives.  Ultimately, defendant located and produced the tape.

The court held plaintiffs failed to provide any evidence, circumstantial or otherwise, that defendant destroyed or failed to preserve email or telephone recordings.  The court found plaintiffs' argument was essentially: (1) defendant had a document destruction policy; (2) only one email was produced in discovery; and therefore, (3) defendant destroyed relevant email and tape recordings.  The court held the argument was without merit and that plaintiffs must offer some proof that relevant emails existed and the defendant destroyed them intentionally.

In Allcare Dental Mgmt., LLC v. Zrinyi, 2008 WL 4649131 (D. Idaho Oct. 20, 2008), the court granted plaintiffs' request for an order permitting expedited discovery prior to the Rule 26(f) conference plaintiffs could, among other things, take images of defendants' hard drives to ensure preservation of all potentially relevant evidence.

Plaintiffs contended that they needed to copy defendants' computers because defendants evaded service in other matters, "leading them to believe Defendants have little respect for the legal process or the requirement to preserve electronic data."  Plaintiffs had agreed to bear all costs associated with the request and were amenable to court-imposed requirements to prevent prejudice to defendants which included an order that the resulting collection must be done in a manner that provided limited interruption to defendants' place of business and all materials had to be submitted to the court under seal for the "court's eyes only."  The defendant was furthered ordered to preserve all electronically stored information pending collection and deposit with the court.

In Spieker v. Quest Cherokee, LLC, 2008 U.S. Dist. LEXIS 88103 (D. Kan. Oct. 20, 2008), the court denied, without prejudice, the plaintiffs' motion to compel the production of electronically stored information ("ESI") after defendant estimated that such discovery would cost nearly $375,000.  The court ordered the parties to meet and confer and determine whether the scope and cost of discovery could be tailored to effectively meet the needs of both parties.

Plaintiffs were current and/or former owners of mineral interests in lands burdened by petroleum leases owned by defendant.  Plaintiffs alleged, among other things, that defendant had failed to pay the proper amount of royalties by paying royalties based on reduced volumes rather than on the volume of gas measured at the well-head and improperly allocating expenses associated with marketing costs and the production of the effluent stream.

Once plaintiffs served defendant with several document production requests, the defendant agreed to make the materials available for inspection and copying, but refused to produce certain email messages. The defendant permitted plaintiffs to unilaterally determine what ESI to search and to develop and propose their own search terms.  Defendant's vendor then applied the search terms to the email data set but deemed the resulting volume of ESI unmanageable.  Defendant suggested modified search terms which generated a total of approximately 32 gigabytes of data "comprised of 31,000 documents and 1,400,000 pages.  Defendant's vendor estimated that it would cost  approximately $120,000 to process and convert the images to static images.  Defendant estimated that it would cost an additional $250,000 to review the documents.

The court ordered the parties to further meet and confer to determine whether the search terms could be narrowly tailored to reduce the number of responsive emails.  The court further held that defendant could not avoid its obligation to produce documents due to the cost of its privilege review.  The court ordered the parties to meet and confer and discuss the newly enacted FRE 502 to reduce the costs of an exhaustive privilege review.  The court also rejected defendant's argument that the emails were not reasonably accessible under FRCP 26(b)(2)(B).  Upon analyzing the  proportionality requirement of FRCP 26(b)(2)(C), the court also rejected defendant's argument that the "amount in controversy" is limited to the named plaintiffs' claims and ruled that plaintiffs were entitled to conduct some discovery concerning class certification issues.  The court denied the motion to compel the emails and refused to order defendant to incur such costs absent a showing of relevance on the part of the plaintiffs.

In Mancia v. Mayflower Textile Servs. Co., 1:08-CV-00273-CCB (D. Md. Oct. 15, 2008), Magistrate Judge Paul Grimm underscores the need for counsel to meet and confer in good faith and otherwise cooperate to advance their mutually respective discovery goals and comply with their obligations under FRCP 26(g).

Six plaintiffs seeking declaratory and monetary relief brought the action under the Fair Labor Standards Act alleging that defendants knowingly failed to compensate plaintiffs for overtime worked and illegally deducted wages from plaintiffs' pay.  During the course of discovery, plaintiffs filed a motion to compel production related to more than 50 document requests and two sets of supplemental interrogatory responses.  The court initially advised the defendants that several of its objections violated FRCP 33(b)(4) which requires that the grounds for objecting to an interrogatory must be stated with specificity, or else it is waived.  Defendants' objections to the document requests were equally deficient pursuant to FRCP 34(b)(2).

During the hearing on the motions, the court raised concerns regarding the defendants' objections as well as the breadth of plaintiffs' discovery responses and the possibility that they were excessively broad and costly.  The court advised counsel for all parties that they should meet and confer in good faith, as the discovery dispute appeared to be one that could be resolved, or substantially minimized, by greater communication and cooperation between counsel and the parties.  The court also reiterated counsels' obligations under Rule 26(g) which requires that every discovery disclosure, request, response or objection must be signed by at least one attorney of record, or the client, if unrepresented, certifying that the disclosure is complete and correct to the best of the person's knowledge, information and belief, "formed after a reasonably inquiry."

The court found the failure to engage in discovery required by Rule 26(g) is one reason why the cost of discovery is so widely criticized as being excessive and cited The Sedona Conference® Cooperation Proclamation 1 (2008) which states "[t]he costs associated with adversarial conduct in pre-trial discovery have become a serious burden to the American judicial system.  This burden rises significantly in discovery of electronically stored information ("ESI").  In addition to rising monetary costs, courts have seen escalating motion practice, overreaching, obstruction, and extensive, but unproductive discovery disputes - in some cases precluding adjudication on the merits altogether . . ."

The court, citing the proportionality requirement of Rule 26(b)(2)(C), ruled that the record lacked facts to enable the determination of overbreadth or burden. Accordingly, the court ordered counsel to meet and confer in good faith to do the following:  (1) estimate the likely range of provable damages that foreseeably could be awarded if plaintiffs prevail; (2) discuss the amount and type of discovery already provided, and then discuss additional discovery still sought by plaintiffs in order to evaluate the Rule 26(b)(2)(C) factors; (3) attempt to reach an agreement, in full or at least partially, about what additional discovery (and from what sources) should be provided by defendants to plaintiffs, and in doing so consider a "phased discovery" approach; and (4) provide a status report to the court identifying any unresolved issues.

In Gutman v. Klein, 2008 WL 4682208 (E.D. N.Y. Oct. 15, 2008), plaintiffs contended that one of the defendants, Zalman Klein, intentionally destroyed his laptop after the commencement of litigation.  Plaintiffs sought terminating sanctions against the defendants, punitive damages and reimbursement of plaintiffs' attorneys' fees and costs incurred in the litigation. The court agreed and recommended a default judgment and an award of attorneys' fees.  The court declined to award punitive damages.

During the five year discovery period, the court ordered Klein to advise plaintiffs' counsel of the location of all desktop and laptop computers under his care and control.  The court further ordered him to provide the computers to plaintiffs' counsel and retained experts to examine the hard drives.  When it came time to inspect the computers, Klein only produced the desktop computer and refused to produce the laptop until nearly two hours later.  While inspecting the laptop, the expert noted that it was hot to the touch and that a screw was missing from the hard drive enclosure.  The court then appointed a forensic expert to analyze the hard drive for evidence that Klein altered or manipulated the hard drive or its contents.

The court appointed expert found that a user named "M" had visited websites related to the Windows XP operating system, data recover and deletion just two days before the forensic examination was to take place.  One of the websites described, in detail, how to securely wipe a hard drive and provided a link for free trial software to effectuate this purpose.  That same day, the user "M" downloaded the "Active@ Boot Disk tool suite" which purports to securely erase data through the use of one of its tools entitled the "KillDisk program."  User "M" then selectively deleted files on the laptop, although the user did not use the "KillDisk" program.

The user deleted hundreds of user documents prior to the court-ordered forensic imaging and made other "large-scale modifications" to the hard drive's operating system just days before the inspection, including the re-installation of the Windows XP operating system.

Upon reinstallation, the user "M" account was deleted and replaced by another user account.  The forensic expert also found that registry dates on the laptop had been manipulated so that it would appear that user "M" made changes several years ago, instead of immediately preceding the court-ordered inspection.  The expert held that the computer's virtual overnight transformation could not have happened accidentally and was evidence of a person's specific will to destroy information within the hard drive.  Defendants' offered no meaningful challenge to the expert's testimony.  Rather, Klein admitted that he gave his computer to two computer technicians in order to remove certain personal and potentially embarrassing information.

According to the court, the evidence showed that Klein tampered with the laptops with a culpable state of mind.  At a minimum, he was negligent when he sought to remove certain potentially embarrassing files from the laptop without notifying the technicians that his computer was subject to preservation in ongoing litigation.

The court noted that use of the harshest sanctions is limited to cases involving "willfulness, bad faith or any fault of the disobedient party" and that a lesser sanction is "ill-suited" for a case where the spoliator has, in bad faith, irretrievably deleted computer files that likely contained important discovery information.

The court, therefore, recommended a default judgment and ordered that defendants pay for plaintiffs' attorneys' fees. The court denied the plaintiffs' requested punitive damages.

Tuesday October 14, 2008 01:00 PM ET (60 minutes)

Recent developments in 4th Amendment law, 6th Amendment protection and privilege waiver underscore the need for practitioners to keep up. Two leading members of The Sedona Conference's Working Group 1 tackle the problems of e-discovery in corporate investigations and white collar criminal cases. In this webcast, they will explore how The Sedona Principles and the Working Group's Commentaries apply to more than just civil litigation.

Register Now

In Advanced Cable Ties, Inc. v. Hewes, 2008 Mass. Super. Lexis 350 (Sup. Ct. Mass. Oct. 7, 2008), the court, underscoring plaintiff's failure to demonstrate the relevance of its requests, denied plaintiff's motion seeking the production of defendant Hewes' personal emails and for the inspection of his personal computers.

This case involved an action to enforce a non-compete between plaintiff, its former employee and the former employee's subsequent employer.  Plaintiff moved to compel various email communications from 2005 and 2006 and to inspect any computers the former employee owned during that period.  The court held that plaintiff's request was vague and failed to identify any of the 16 email correspondents identified in the motion or describe their potential relevance.  The court explained, "The court will not sift through every pleading in the case to try to discern which e-mail address belongs with which witness, nor will it fill in the blanks in [plaintiff's] brief to forecast a reason for each request."  The plaintiff did not offer any reason for the inspection of defendant Hewes' personal computers.  The court held that unless plaintiff could present a convincing argument that the personal computers may contain relevant information that cannot be obtained by less intrusive means, it would not be permitted to inspect them.