2008-07-23 Negligent Destruction of Evidence Tort Makes "Appearance" in NY
In the July 16, 2008 decision in Newton v. City of New York 2008 WL 2775646 (S.D.N.Y. 2008), Judge Scheindlin states that while "New York does not recognize the tort of “third-party negligent spoliation of evidence...” [t]he courts appear to permit an action for the negligent destruction of evidence so long as the plaintiff can meet the requirements of a standard negligence action."
What this portends for negligent destruction of computer generated information claims remains to be seen. It is relatively clear that an independent cause of action for spoliation may not be brought in the 2d Circuit. That said, a negligent destruction of evidence claim, brought against a third party, involves fewer pleading elements than a spoliation claim. The most onerous pleading element in a spoliation claim is a showing that what was spoliated would have either supported the non-spoliator's claims or disproved the spoliating party's claims. Porivng that negative presents a very imposing barrier to a successful spoliation claim, although there are some decisions that support an approach that permits the actions of the spoliating party to support an inference that the spoliated evidence was supporting/damaging.
Another unanswered question is whether a negligent destruction of evidence claim can be asserted as an independent claim by a party against a party (independent of a District Court's inherent powers to sanction, or Fed. R. Civ. P. 37).
Wednesday, July 23, 2008
Friday, July 18, 2008
2008-07-18 Cost-Shifting Relief Requests are Preventive
Failure to Raise Cost Shifting Issue in Timely Fashion Results in Denial of Motion
In a decision from the Eastern District of Michigan [Cason-Merenda v. Detroit Medical Center, 2008 WL 2714239 (E.D.Mich. 2008)] defendant Detroit Medical Center moved the court for an order requiring the plaintiff to pay for third party vendor costs in connection with ESI production. Magistrate Judge Scheer issued this decision, denying the motion to shift costs, and in a rather strongly worded opinion, puts out the message that requests to shift costs must be made in a timely fashion, or be denied.
Relevant Rule:
The Court began with a recitation of relevant excerpts from Fed. R. Civ. P. 26:
"Fed. R. Civ. P. 26(b)2(B) provides as follows: A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)2(C). The court may specify conditions for the discovery.
"The federal rules contemplate that discovery will proceed without judicial intervention unless a party moves for a protective order or an order compelling discovery. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). Ordinarily, a party must bear the expense of complying with discovery requests, although he may invoke the district court's discretion to grant orders protecting him from undue burden or expense, including orders conditioning discovery upon cost shifting. Id., at 358. There is authority that “[a] court should consider cost shifting only when electronic data is relatively inaccessible, such as in back up tapes.” Zubulake v. U.B.S. Warburg LLC, 217 F.R.D. 309, 324 (S.D.N.Y.2003). Thus, to the extent that DMC maintains that the information produced by it in discovery was accessible, court ordered cost shifting is inappropriate."
The Court also noted that by not acting in a timely fashion, the defendant actually deprived the Court of the ability to decide a priori, from a variety of relief options it might have imposed:
"The clear import of the language employed is that the court has wide discretion to prevent undue burden or expense. But for Defendant's delay, the court would have been in a position to select from a range of alternative actions:
In [the Court's], the provisions of that rule simply underscore the untimeliness of the instant motion. The rule provides, in pertinent part, that “[t]he court may, for good cause, issue an order to protect a party or person from ... undue burden or expense, including one or more of the following:
(A) Forbidding the disclosure or discovery;
(B) Specifying terms, including time and place, for the disclosure or discovery;
(C) Prescribing a discovery method other than the one selected by the party seeking discovery;
(D) Forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters;Fed.R.Civ.P. 26(c)(1)."
In addition, had the court determined to impose conditions upon DMC's production, Plaintiffs presumably would have been in a position to elect either (a) to accept the conditions or (b) to forego the discovery and save DMC the burden and expense of producing it. Unfortunately, DMC's tardy filing has deprived this court of its most valuable prerogatives. Having elected to martyr itself rather than to seek relief in a timely fashion, DMC seeks an order imposing the cost of its choice upon its opponents. I find neither substantive merit nor equity in its request."
Failure to Raise Cost Shifting Issue in Timely Fashion Results in Denial of Motion
In a decision from the Eastern District of Michigan [Cason-Merenda v. Detroit Medical Center, 2008 WL 2714239 (E.D.Mich. 2008)] defendant Detroit Medical Center moved the court for an order requiring the plaintiff to pay for third party vendor costs in connection with ESI production. Magistrate Judge Scheer issued this decision, denying the motion to shift costs, and in a rather strongly worded opinion, puts out the message that requests to shift costs must be made in a timely fashion, or be denied.
Relevant Rule:
The Court began with a recitation of relevant excerpts from Fed. R. Civ. P. 26:
"Fed. R. Civ. P. 26(b)2(B) provides as follows: A party need not provide discovery of electronically stored information from sources that the party identifies as not reasonably accessible because of undue burden or cost. On motion to compel discovery or for a protective order, the party from whom discovery is sought must show that the information is not reasonably accessible because of undue burden or cost. If that showing is made, the court may nonetheless order discovery from such sources if the requesting party shows good cause, considering the limitations of Rule 26(b)2(C). The court may specify conditions for the discovery.
The parties did undertake a Rule 26(f) meet and confer, issue a proposed joint ESI Order, and that Order was in fact signed by the Court:
"In this action, the parties entered a Stipulated Order for Discovery of Electronically Stored Information, which was adopted by the court on June 20, 2007. The Order notes that the parties held several discussions regarding the possibility of limiting the scope and extent of discovery and that future agreements might be reached. They also reserved the right to petition the court to limit the scope and burden of discovery and to request that the opposing party share the costs."
The issue raised before the Court involved the reservation of rights provision, permitting either party to petition the court to limit the scope and burden of discovery, and request cost sharing presented the issue to the court.
So how did defendant run afoul of both the Rule 26 and their discovery Order, and in effect waive their rights to request cost shifting to plaintiff? Defendants Motion failed for two reasons; the first relating to the discovery order itself, and the second having its basis in Fed. R. Civ. P. Rule 26(b)2(b) and 26(c):
Here, the defendant apparently engaged a third party ESI vendor to produce the relevant requested ESI, paid for same, and then decided to seek costs. It did not object to the request, nor did it file a motion for a protective order seeking relief by way of cost shifting or cost sharing.
The Court determined that the procedure for asserting a cost shifting or sharing claim is identical to the assertion of any other objection to a request for production. In other words, a disagreement about cost shifting is a discovery dispute, and should have been handled in the same way as any other discovery dispute. The ESI discovery Order in this case specifically provided that any all motions to compel discovery were required to be discovery be filed within 14 days of a party's "receipt of notice of such disputed discovery" Defendant here failed to so file, and the Court deemed the filing of the motion to shift costs untimely as a first basis for denial of that motion.
The second basis for the Court's denial of the motion for cost shifting focused on an interpretation of Fed. R. Civ. P. Rule 26 and relevant decisional authority on cost-shifting that in essence requires an assertion of cost-shifting to be made prior to the what the Court termed defendant's choice at "self-martyr[dom], i.e., the undertaking of, and incurring costs of production first, and seeking redress for costs after such undertaking.
"[Defendant] DMC surely was, or should have been, aware of the substantial cost of responding to Plaintiffs' discovery requests before it undertook to do so. Rather than raising the issue of undue burden and cost before they were incurred, when there would have been an opportunity for the court to demand a showing of good cause by the requesting party, explore alternatives, impose conditions or otherwise encourage compromise, DMC elected to suffer the expense and only then seek contribution from the Plaintiffs."
The relevant decisional authority supporting the proposition that a motion for cost-shifting or sharing be made (by way of a motion for protective order, etc.) before the discovery is undertaken will be familiar to eDiscovery aficionados:
"The federal rules contemplate that discovery will proceed without judicial intervention unless a party moves for a protective order or an order compelling discovery. Oppenheimer Fund, Inc. v. Sanders, 437 U.S. 340, 98 S.Ct. 2380, 57 L.Ed.2d 253 (1978). Ordinarily, a party must bear the expense of complying with discovery requests, although he may invoke the district court's discretion to grant orders protecting him from undue burden or expense, including orders conditioning discovery upon cost shifting. Id., at 358. There is authority that “[a] court should consider cost shifting only when electronic data is relatively inaccessible, such as in back up tapes.” Zubulake v. U.B.S. Warburg LLC, 217 F.R.D. 309, 324 (S.D.N.Y.2003). Thus, to the extent that DMC maintains that the information produced by it in discovery was accessible, court ordered cost shifting is inappropriate."
The Court also noted that by not acting in a timely fashion, the defendant actually deprived the Court of the ability to decide a priori, from a variety of relief options it might have imposed:
"The clear import of the language employed is that the court has wide discretion to prevent undue burden or expense. But for Defendant's delay, the court would have been in a position to select from a range of alternative actions:
In [the Court's], the provisions of that rule simply underscore the untimeliness of the instant motion. The rule provides, in pertinent part, that “[t]he court may, for good cause, issue an order to protect a party or person from ... undue burden or expense, including one or more of the following:
(A) Forbidding the disclosure or discovery;
(B) Specifying terms, including time and place, for the disclosure or discovery;
(C) Prescribing a discovery method other than the one selected by the party seeking discovery;
(D) Forbidding inquiry into certain matters, or limiting the scope of disclosure or discovery to certain matters;Fed.R.Civ.P. 26(c)(1)."
In addition, had the court determined to impose conditions upon DMC's production, Plaintiffs presumably would have been in a position to elect either (a) to accept the conditions or (b) to forego the discovery and save DMC the burden and expense of producing it. Unfortunately, DMC's tardy filing has deprived this court of its most valuable prerogatives. Having elected to martyr itself rather than to seek relief in a timely fashion, DMC seeks an order imposing the cost of its choice upon its opponents. I find neither substantive merit nor equity in its request."
Takeaway: Cost-shifting or cost-sharing are by definition discovery disputes, and accordingly, requests relief must be by way of appropriate preventive (perhaps even preemptive) procedure (i.e., a motion for a protective order, or a response to a motion to compel). Oh, and don't be a martyr.
Monday, July 07, 2008
2008-07-07 Peskoff v Faber III: eDiscovery Cost Allocation - Chipping Away at Cost Sharing
In this third eDiscovery decision in Peskoff v Faber 04-526 (HHK/JMF), Magistrate Judge Facciola revisits eDiscovery costs allocation issues. Here, a $33,000 forensic email recovery was held reasonable (especially in light of the $2.5 million in underlying claims at issue).
The Court first noted that the ESI sought by Plainiff Peskoff from Defedant Faber could not be obtained without the aid of a forensic examination. The Court then states that "[e]ven though the forensic examination necessarily involves the search of sources “not reasonably accessible because of undue burden or cost" such discovery could be compelled with a showing of "good cause," and notes that the "[The Court] has already conducted much of this analysis and has held that the Rule 26(b)(2)(C) factors weigh strongly in favor of the discovery."
The Court finds here that good cause exists, citing Peskoff v. Faber I: "requested discovery is supported by the needs of the case, the sophistication of the parties, the amount in controversy, the importance of the issues at stake, and the importance of the requested discovery to the issues in the litigation "
Cost Allocation
The second issue addressed by the Court was cost allocation. The Court summarizes its rationale in stating:
"The question presented can thus be summarized as follows: does the cost of the forensic examination represent to Mr. Faber, the responding party, a burden or expense so undue as to justify an exercise of the Court's discretion to break from the traditional presumption and shift some or all of that cost to Mr. Peskoff, the requesting party?"
In seemingly neutral sounding wind-up, the Court takes a "reap what you sow" approach to the actions of defendant Faber in his ESI management:
"As has already been explained in prior opinions and will be summarized below, the need here for a forensic examination is directly attributable to what was and was not done by Mr. Faber to preserve electronically stored information. Peskoff, No. 04-cv-526, 2006 WL 1933483, at *4-6 (D.D.C. July 11, 2006); Peskoff, 240 F.R.D. 26, 29-31 (D.D.C. 2007); Peskoff, 244 F.R.D. at 56-66.
What follows is a sharply worded:
"Taken together, those acts and omissions shatter any argument that the burden or expense of that forensic examination, if incurred by Mr. Faber, would be "undue.'"
The Court then reprises defendant Faber's actions (and inaction) in connection with the pendency of the litigation:
"First, Mr. Faber’s efforts to search for responsive electronically stored information can, at best, be described as inadequate. As was stated in the Court’s Memorandum Opinion of February 21, 2007:
It doesn't stop there. The Court then takes defendant Faber to task for not taking his discovery obligations seriously:
"Mr. Faber’s unwillingness to take his discovery obligations seriously have contributed to the need for a forensic examination."
"Second, Mr. Faber failed to deactivate network maintenance tools that automatically delete electronically stored information. On February 6, 2004, the day Mr. Peskoff threatened suit, Mr. Faber had an obligation to make a conscientious effort to preserve electronically stored information that would be relevant to this dispute. "
We can see where this is headed, and the Court sums it up in one tidy sentence:
"That this deleted information can only be recovered by a forensic examination, if it can be recovered at all, is directly attributable to Mr. Faber’s inaction."
Finding that this "a problem of Mr. Faber’s own making" the Court then determined that "consequently, the expense and burden of the forensic examination can hardly be described as 'undue.'" and found no reason to depart from tradition (producing party pays).
Result: Defendant Faber was ordered to bear costs of forensic examination.
In this third eDiscovery decision in Peskoff v Faber 04-526 (HHK/JMF), Magistrate Judge Facciola revisits eDiscovery costs allocation issues. Here, a $33,000 forensic email recovery was held reasonable (especially in light of the $2.5 million in underlying claims at issue).
The Court first noted that the ESI sought by Plainiff Peskoff from Defedant Faber could not be obtained without the aid of a forensic examination. The Court then states that "[e]ven though the forensic examination necessarily involves the search of sources “not reasonably accessible because of undue burden or cost" such discovery could be compelled with a showing of "good cause," and notes that the "[The Court] has already conducted much of this analysis and has held that the Rule 26(b)(2)(C) factors weigh strongly in favor of the discovery."
The Court finds here that good cause exists, citing Peskoff v. Faber I: "requested discovery is supported by the needs of the case, the sophistication of the parties, the amount in controversy, the importance of the issues at stake, and the importance of the requested discovery to the issues in the litigation "
Cost Allocation
The second issue addressed by the Court was cost allocation. The Court summarizes its rationale in stating:
"The question presented can thus be summarized as follows: does the cost of the forensic examination represent to Mr. Faber, the responding party, a burden or expense so undue as to justify an exercise of the Court's discretion to break from the traditional presumption and shift some or all of that cost to Mr. Peskoff, the requesting party?"
In seemingly neutral sounding wind-up, the Court takes a "reap what you sow" approach to the actions of defendant Faber in his ESI management:
"As has already been explained in prior opinions and will be summarized below, the need here for a forensic examination is directly attributable to what was and was not done by Mr. Faber to preserve electronically stored information. Peskoff, No. 04-cv-526, 2006 WL 1933483, at *4-6 (D.D.C. July 11, 2006); Peskoff, 240 F.R.D. 26, 29-31 (D.D.C. 2007); Peskoff, 244 F.R.D. at 56-66.
What follows is a sharply worded:
"Taken together, those acts and omissions shatter any argument that the burden or expense of that forensic examination, if incurred by Mr. Faber, would be "undue.'"
The Court then reprises defendant Faber's actions (and inaction) in connection with the pendency of the litigation:
"First, Mr. Faber’s efforts to search for responsive electronically stored information can, at best, be described as inadequate. As was stated in the Court’s Memorandum Opinion of February 21, 2007:
'In this case, a hard drive, never searched, was produced and the plaintiff’s sent and received emails were produced, but (1) there are significant and unexplained gaps in what was produced, and (2) other searches of electronic data that I specifically suggested could be done were not. Furthermore, all of the unopened emails in the Inbox—a total of fourteen—are dated the same day, a date following plaintiff’s departure from NextPoint. The 10,436 emails in the "Old Mail" subfolder are all unopened. The emails in the "Old Mail" subfolder are for the period June 25, 2003, to April 14, 2004, but the emails in the 65 other subfolders are all dated for the period June 2000 to June 2001. Thus, there are gaps of several years among the various subfolders with no emails whatsoever during these time periods. While there may be reasons why this is so, on this record all one can say is that this phenomenon is inexplicable.' "
It doesn't stop there. The Court then takes defendant Faber to task for not taking his discovery obligations seriously:
"Mr. Faber’s unwillingness to take his discovery obligations seriously have contributed to the need for a forensic examination."
"Second, Mr. Faber failed to deactivate network maintenance tools that automatically delete electronically stored information. On February 6, 2004, the day Mr. Peskoff threatened suit, Mr. Faber had an obligation to make a conscientious effort to preserve electronically stored information that would be relevant to this dispute. "
We can see where this is headed, and the Court sums it up in one tidy sentence:
"That this deleted information can only be recovered by a forensic examination, if it can be recovered at all, is directly attributable to Mr. Faber’s inaction."
Finding that this "a problem of Mr. Faber’s own making" the Court then determined that "consequently, the expense and burden of the forensic examination can hardly be described as 'undue.'" and found no reason to depart from tradition (producing party pays).
Result: Defendant Faber was ordered to bear costs of forensic examination.
Saturday, July 05, 2008
2008-07-05 Independence Weekend Musings - How Good is That Search Tool?
Well, if you haven't invested 1,000 "person-years of work" in development it might not be good enough. In the Viacom et. al. v Google, Inc. et. al. 1:07-cv-02103-LLS (SDNY 2008), Google was ordered to turn over contributor and viewer records to determine potential copyright infringement. Google's search code was also requested, but that relief was denied. Plaintiffs asserted that Google's search code was modified to facilitate the search for copyrighted material. Defendant Google/YouTube countered by asserting that no code in existence can distinguish between infringing and non-infringing video clips, especially without some action by the rights holder.
Another surprise: At issue is 12 terabytes of data. Ok, a terabyte is 1000 gigabytes. This seems to support a growing decisional perspective that mere volume of data searched is really no longer at issue in eDiscovery cases, as plaintiffs assert: "While the Logging database is large, all of its contents can be copied onto a few “over-the-shelf” four-terabyte harddrives"
As for privacy concerns, Google provided an affidavit stating in part that "'YouTube does not guarantee any confidentiality with respect to any User Submissions.'"
Well, if you haven't invested 1,000 "person-years of work" in development it might not be good enough. In the Viacom et. al. v Google, Inc. et. al. 1:07-cv-02103-LLS (SDNY 2008), Google was ordered to turn over contributor and viewer records to determine potential copyright infringement. Google's search code was also requested, but that relief was denied. Plaintiffs asserted that Google's search code was modified to facilitate the search for copyrighted material. Defendant Google/YouTube countered by asserting that no code in existence can distinguish between infringing and non-infringing video clips, especially without some action by the rights holder.
Another surprise: At issue is 12 terabytes of data. Ok, a terabyte is 1000 gigabytes. This seems to support a growing decisional perspective that mere volume of data searched is really no longer at issue in eDiscovery cases, as plaintiffs assert: "While the Logging database is large, all of its contents can be copied onto a few “over-the-shelf” four-terabyte harddrives"
As for privacy concerns, Google provided an affidavit stating in part that "'YouTube does not guarantee any confidentiality with respect to any User Submissions.'"
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