2009-03-27 Southern District of New York Sounds Clarion Call for Cooperation and Transparency, Spoliation, and the Shift in Judicial Approach to Imaging: Still Not Routine, But Now, Not Extraordinary

Three cases this week, including, of course, another spoliation decision. The first case, from the Southern District of New York, mandates cooperation and transparency in conducting eDiscovery. The second decision, from the District of Kansas, shows a trend to a (somewhat) relaxed standard for granting requests for drive imaging, and provides and interesting discourse on time based ESI discrepancy analysis. The third decision is (yet another) sanctions-imposing ESI spoliation decision, this time from the Eastern District of Michigan.

Thanks to Dave Isom of Greenberg Traurig, who pointed out the Graceland decision.

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Decisions:

William A. Gross Const. Associates, Inc. v. American Mfrs. Mut. Ins., --- F.R.D. --- 2009 WL 724954 (S.D.N.Y. 2009)
White v. Graceland College Center for Professional Development, 2009 WL 722056 (D.Kan. 2009)
Technical Sales Associates, Inc. v. Ohio Star Forge Co., 2009 WL 728520 (E.D.Mich. 2009)

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Case: William A. Gross Const. Associates, Inc. v. American Mfrs. Mut. Ins.
Cite: --- F.R.D. --- 2009 WL 724954
Date: 2009-03-19
Topics: Cooperation, transparency, attorney competency, search terms, quality control and testing, non-party email production and separation of relevant from non-relevant emails.

Let's start by pointing out that it’s never a good sign for at least one of the parties when a decision from a United States Magistrate Judge begins with:

“This Opinion should serve as a wake-up call to the Bar in this District about the need for careful thought, quality control, testing, and cooperation with opposing counsel in designing search terms or “keywords” to be used to produce emails or other electronically stored information (“ESI”). While this message has appeared in several cases from outside this Circuit, it appears that the message has not reached many members of our Bar.”

This decision from the Southern District of New York involved a multi-million dollar dispute over the contract for construction of the Bronx County Hall of Justice. What was sought in discovery were project-related emails stored on a non-party’s server.

United State Magistrate Judge Andrew Peck first notes that non-party Hill’s “only contribution” to the search term discussion consisted of remarking that (1) one party’s search terms were overbroad, (2) that the other party’s search terms were too narrow, and (3) that non-party Hill did not want to produce non-project related emails. In an apparent aside, Magistrate Judge Peck also remarks that non-party Hill never used a “Re: [Project]” naming convention, which complicated the search:

“This problem would have been avoided, of course, if Hill used a standard “Re” line in its Bronx Courthouse emails to distinguish that project from its other work. It did not do so, however. Moreover, while Hill was in the best position to explain to the parties and the Court what nomenclature its employees used in emails, Hill did not do so-perhaps because, as a non-party, it wanted to have as little involvement in the case as possible. “

With this level of cooperation (or lack thereof), the Court took it upon itself to craft search terms for the parties, a role it clearly did not relish:

“”That left the Court in the uncomfortable position of having to craft a keyword search methodology for the parties, without adequate information from the parties (and Hill).

The Court’s opinion of the parties’ cooperation (and a rather unsubtle jab at either the energy level or competency of counsel) speaks volumes:

“This case is just the latest example of lawyers designing keyword searches in the dark, by the seat of the pants, without adequate (indeed, here, apparently without any) discussion with those who wrote the emails.”

Warnings from The Beltway

Magistrate Judge Peck relies on (or is it invokes) on the line of decisional authority from Magistrate Judge Facciola (DCDC), and Chief Magistrate Judge Paul Grimm (D. Md.) in warning attorneys about this problem. The cases will be familiar to eDiscovery fans:

"Prior decisions from Magistrate Judges in the Baltimore-Washington Beltway have warned counsel of this problem, but the message has not gotten through to the Bar in this District. As Magistrate Judge Paul Grimm has stated:

“While keyword searches have long been recognized as appropriate and helpful for ESI search and retrieval, there are well-know limitations and risks associated with them, and proper selection and implementation obviously involves technical, if not scientific knowledge....Selection of the appropriate search and information retrieval technique requires careful advance planning by persons qualified to design effective search methodology. The implementation of the methodology selected should be tested for quality assurance; and the party selecting the methodology must be prepared to explain the rationale for the method chosen to the court, demonstrate that it is appropriate for the task, and show that it was properly implemented. Victor Stanley, Inc. v. Creative Pipe, Inc., 250 F.R.D. 251, 260, 262 (D.Md. May 29, 2008) (Grimm, M.J.).”

“Magistrate Judge Facciola has taken the warning even further:

"Whether search terms or “keywords” will yield the information sought is a complicated question involving the interplay, at least, of the sciences of computer technology, statistics and linguistics. Given this complexity, for lawyers and judges to dare opine that a certain search term or terms would be more likely to produce information than the terms that were used is truly to go where angels fear to tread. This topic is clearly beyond the ken of a layman and requires that any such conclusion be based on evidence that, for example, meets the criteria of Rule 702 of the Federal Rules of Evidence. United States v. O'Keefe, 537 F.Supp.2d 14, 24 (D.D.C.2008) (Facciola, M.J.); accord, Equity Analytics, LLC v. Lundin, 248 F .R.D. 331, 333 (D.D.C.2008) (Facciola, M.J.); FN3 see also, e.g., In re Seroquel Products Liability Litig., 244 F.R.D. 650, 662 (M.D.Fla.2007) (Baker, M.J.) (“[W]hile key word searching is a recognized method to winnow relevant documents from large repositories, use of this technique must be a cooperative and informed process.... Common sense dictates that sampling and other quality assurance techniques must be employed to meet requirements of completeness.”); Jay Grenig, Browning Marean & Mary Pat Poteet, Electronic Discovery & Records Management Guide: Rules, Checklists & Forms (2009 ed.), § 15:15 (“[K]eyword searches do not reflect context. They can also miss documents containing a word that has the same meaning as the term used in the query but is not specified. Misspelled words may be missed in a keyword search.”).”

Attorney “Guesses” Inadequate

Opinion footnotes frequently contain good nuggets, and Footnote 3 to this decision is no exception:

“FN3. This Court need not now decide whether expert testimony is required; what is required is something other than a lawyer's guesses, without client input, and without any quality control testing to see if the search terms produce reasonably all the responsive ESI and limited ‘false positives.’”

Takeaway: Courts are increasingly unlikely to accept an attorney's “guesses” when it comes to technology (presumably even when cloaked in a properly stentorian tone).

The Court then broadly adopts cooperation between counsel as the underlying approach when commencing eDiscovery:

“Of course, the best solution in the entire area of electronic discovery is cooperation among counsel. This Court strongly endorses The Sedona Conference Cooperation Proclamation (available at www.TheSedonaConference.org).”

The Warning to Attorneys (and Parties) in The Southern District: Competency, Cooperation and Transparency

Magistrate Judge Peck joins other judges, including Facciola, Grimm, Baker, and others in making a clarion call (and warning) for those engaging in electronic discovery:

“Electronic discovery requires cooperation between opposing counsel and transparency in all aspects of preservation and production of ESI. Moreover, where counsel are using keyword searches for retrieval of ESI, they at a minimum must carefully craft the appropriate keywords, with input from the ESI's custodians as to the words and abbreviations they use, and the proposed methodology must be quality control tested to assure accuracy in retrieval and elimination of “false positives.” It is time that the Bar-even those lawyers who did not come of age in the computer era-understand this.”


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Case: White v. Graceland College Center for Professional Development
Citation: 2009 WL 722056 (D.Kan. 2009)
Date: 2009-03-18
Topics: Time discrepancies in email and attachments justify reproduction of ESI in native data format, failure to meet and confer waived in renewed motion to compel, computer system clock investigation, time based ESI discrepancies

This decision from the District of Kansas involves both a motion to compel ESI requested, as well as for production of ESI previously ordered to be produced. Plaintiff had sought Outlook .pst and .ost files, and now also seeks hard drive images as well as expert analysis of the computer clock relied upon to create defendant’s emails, apparently suspecting that there was a creation/preparation time conflict.

Here, plaintiff sought native data format of emails previously produced in paper form.
This case has some interesting twist. Plaintiff was allegedly terminated from employment by defendant after it was discovered that plaintiff had been falsifying records. During discovery, it was plaintiff who claimed that ESI had been somehow manipulated or altered:

“Plaintiff sought the electronic and native copies to confirm or contradict when the emails and attachment documents were prepared.”

Plaintiff retained an expert to examine the native format ESI, and the Court notes that time-based data discrepancies did exist:

“Plaintiff thereafter retained a computer expert to analyze three emails between her supervisors and their associated attachments to determine the creation dates of these materials. The expert found discrepancies between the creation and sent dates of the emails and attachments, but could not make any definitive conclusions without more information. This motion to compel followed.”

Duty to Meet and Confer

Despite these accusations by plaintiff, no attempt-to-resolve was made by way of meet and confer pursuant to Fed. R. Civ. P. Rule 37 took place. Magistrate Judge Waxse, waives these requirements, noting that such a meeting would in all likelihood be futile, and that on a motion to renew, the requirement to meet and confer may be waived:

“Here, the Court declines to further delay resolution of the matter to allow Plaintiff an opportunity to satisfy her duty to confer. The Court will instead waive Plaintiff's non-compliance with the duty to confer and will consider the merits of her re-filed motion.”

The Court also finds that extenuating circumstances exist (discrepancies in email and attachment creation dates) and requires a re-production of ESI, even though the Court finds that defendants “have satisfied their obligation” with respect to the prior discovery order:

This is one of the first cases in a later-discovered time-based data discrepancy substantiated a re-production of native format data:

“As previously noted, Plaintiff's computer expert has identified discrepancies with the creation dates of Email # 1 and the attachments to Emails # 2 and # 3. Plaintiff now requests that the Court order Defendants to produce the Outlook PST and OST files of the mailboxes that sent or received the emails at issue so that her computer expert can make more definitive conclusions about when the emails and attachments were created, when they were modified or edited, and what modifications and edits were made to the documents after they were created. The Court is persuaded that the Outlook PST and OST files would likely assist the expert in determining when the emails and attachments were created.”

Drive Imaging – A Shift Toward Becoming More Routine

The Court provides a good analysis of the standard for obtaining an image of a hard drive. The last sentence in the following paragraph is a tee-up to the Court’s noting that the requirement to produce a drive image is becoming more routine:

“Requests for physical inspection of another party's hard drives or requests for forensic and mirror imaging of hard drives are generally governed by Fed.R.Civ.P. 34(a), which allows a party to request that another party “produce and permit the requesting party ... to inspect, copy, test, or sample ... electronically stored information.” FN8 The advisory committee notes to the 2006 amendment to Rule 34(a) suggest that direct inspection of an opponent's hard drive is not routine, but may be justified in some circumstances:”

The Court then notes decisions where in civil cases drive imaging has been ordered:

“At least three decisions in the District of Kansas have considered and permitted the inspection and forensic or mirror imaging of computer hard drives in the context of civil discovery.FN10 In G.D. v. Monarch Plastic Surgery,FN11 the court granted the plaintiffs' request to compel production of computer for forensic testing or mirror imaging, but denied the request as to files or records related to non-parties and the defendants' employees. In another case, Balboa Threadworks, Inc. v. Stucky,FN12 the court commented that “[i]t is not unusual for a court to enter an order requiring the mirror imaging of the hard drives of any computers that contain documents responsive to an opposing party's request for production of documents.” In Jacobson v. Starbucks Coffee Co.,FN13 the court, noting that production of a computer for inspection is unusual, was persuaded that the circumstances of the case, including a history of incomplete and inconsistent responses to production requests, warranted production of the computer or a mirror image of the hard drive for the plaintiff's inspection.

“FN10. See G.D. v. Monarch Plastic Surgery, P.A., 239 F.R.D. 641, 648 (D.Kan.2007); Balboa Threadworks, Inc. v. Stucky, No. 05-1157-JTM-DWB, 2006 WL 763668, at *3 (D.Kan. Mar. 24, 2006); Jacobson v. Starbucks Coffee Co., No. 05-1338-JTM, 2006 WL 3146349, at *6-7 (D.Kan. Oct. 31, 2006)”.

Imaging – Not Routine, But No Longer Extraordinary

It’s official (at least in the District of Kansas) --- while imaging is still not considered “routine” it also is no longer considered “extraordinary.” The survey of case law is a bit lengthy, but instructive:

“While still cautious, many courts now consider requests for inspection or requests for forensic or mirror imaging of computers to be neither routine nor extraordinary.FN16 Apart from compelling production and inspection of computer hard drives and forensic imaging where trade secrets and electronic evidence are involved, courts have also compelled production based upon discrepancies or inconsistencies in a response to a discovery request or the responding party's unwillingness or failure to produce relevant information. FN17

“FN16. John B. v. Goetz, 531 F.3d 448, 459 (6th Cir.2008) (“To be sure, forensic imaging is not uncommon in the course of civil discovery.”); Clearone Commc'ns, Inc. v. Chiang, Civ. No. 2:07cv00037TC, 2007 WL 3275300, at *1 (D.Utah Nov. 5, 2007) (imaging of opposing parties' computers is neither viewed as routine, nor completely extraordinary).”

“FN17. See, e.g., Koosharem Corp. v. Spec Personnel, LLC, Civ. A. No. 6:08-583-HFF-WMC, 2008 WL 4458864, at *2 (D.S.C. Sept. 29, 2008) (allowing forensic analysis on defendants' computers based upon failure to produce documents and due to the relevance of electronic information stored on the computers); Ferron v. Search Cactus, L.L. C., No. 2:06-CV-327, 2008 WL 1902499, at *2 (S.D. Ohio April 28, 2008) (allowing plaintiff's forensic computer expert to mirror image plaintiff's computer systems' hard drives based upon plaintiff's failure to place sufficient litigation hold and failure to otherwise produce the relevant information); P.J. ex rel. Jensen v. Utah, 247 F.R.D. 664, 672 (D.Utah 2007) (allowing defendants limited access to the relevant documents on the plaintiffs' crashed hard drive and computer because the plaintiffs provided only relevant research documents that they saved or printed); Orrell v. Motorcarparts of Am., Inc., No. Civ. 3:06CV418-R, 2007 WL 4287750, at *7 (W.D.N.C., Dec. 5, 2007) (allowing the employer defendant to conduct forensic examination of the plaintiffs' home computer where plaintiffs had wiped the hard drive of her work-issued laptop computer and had testified that she forwarded email to her home computer); Ameriwood Indus., Inc. v. Liberman, No. 4:06CV524-DJS, 2006 WL 3825291 (E.D.Mo. Dec. 27, 2006), as amended, 2007 WL 685623 (E.D.Mo. Feb. 23, 2007) (allowing independent expert to obtain and search a mirror image of defendants' computer equipment upon plaintiff presenting evidence suggesting that defendants failed to produce responsive email).”

Magistrate Judge Waxse orders the imaging of the subject drives finding that the plaintiff had raised sufficient issues relating to (1) ESI creation dates, (2) defendants had not provided an adequate explanation for these discrepancies, and (3) plaintiff had shown that the image would permit “more definitive” conclusion (based presumably on access to previously unavailable metadata) as to the time discrepancies:

“In this case, the Court is persuaded that Plaintiff has shown sufficient circumstances to allow some type of direct access to the computer hard drives that created or modified the documents attached to Emails # 2 and # 3. Plaintiff has established that her expert noted discrepancies as to the creation date of the email attachment “CC Basic Form 06092004.doc” and Defendants have not adequately explained the discrepancies. She has further established that more information is needed to make more definitive conclusions as to the creation dates of the documents and when they were modified or edited, and what modifications and edits were made to the documents after they were created.”

Computer System Clock

The plaintiff also requested that the Court permit review of the defendants computer to “verify the accuracy” of the system clocks. Plaintiff’s expert asserted that he needed both drive images and the system clock to “make definitive” conclusions about the time based data discrepancies:

“[Plaintiff's] computer expert concluded in his report that, without being able to verify the system clock of the computer and without having mirror images of the hard drives that created the documents at issue, it is not possible for him to make definitive conclusions about when the documents were created, when the documents were created, when they were modified or edited, and what modifications or edits were made to the documents after they were created.”

The Court picks up an interesting point about computer clocks in the defendant’s computer, but this really applies in a general way to nearly all of today’s computing environments:

“Defendants argue that allowing Plaintiff's expert to review the system clocks would be futile. They point out that a computer's system clock is part of a computer's motherboard. As such, they have no way of determining whether the current motherboard in the computers is the same motherboard that was present in 2004. Plaintiff's alleged expert does not suggest that he has the ability to determine how a system clock was set in 2004.”

The Court agreed with Defendant, and denied plaintiff’s request, deeming the proposed action “futile.”

[Blognote and opinion: While it is true that a system clock is typically installed on a motherboard, and that replacing the motherboard necessarily implies replacing the system clock, that issue is really a red herring. The real issue is that there is no robust time anchor to ESI in current computing systems, and no simple way to tell now, whether a system clock was correct in the past, or whether it had been falsely set or re-set, and later re-set again to the “correct” time. It should be noted here that accuracy, while helpful, generally means the extent to which a clock does not drift away from the time originally set. That time may, or may not have been the correct time, and so a clock may be accurate, but based on a false initial setting or resetting. In short, a very accurate clock set to a wrong time is a clock that keeps very accurate, but incorrect, time. Imo, discovery disputes on time based data discrepancies may well see an increase as a result.

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Case: Technical Sales Associates, Inc. v. Ohio Star Forge Co.
Citation: 2009 WL 728520 (E.D.Mich. 2009)
Date: 2009-03-19
Topics: Sixth Circuit preservation obligation standards, Sixth Circuit spoliation standards (federal common law), sanctions for spoliation predicated on court’s inherent powers, failure to produce ESI, post litigation commencement deletion of ESI, imposition of attorneys fees and costs, deferral of adverse inference decision determined at trial.

This decision arises out of a dispute over sales commissions. It’s never a good sign when a court (here, District Judge Cohn) first notes some post-litigation (and post-discovery) commencement data destruction activity:

“[Non-party]Midwest, in preparing to perform the required searches on the mirror image of the hard drive on Billups' first computer, detected that approximately 70,000 files had been deleted in April 2008 (during the discovery period in this litigation) using a tool known as “Eraser.” Midwest also determined that files on the hard drive on the computer Billups currently uses, had been moved into the recycle bin of his email folder. Specifically, folders called “Pat's Personal Folder Mailbox” and “Pat's Mailbox” were moved to the recycle bin, beginning at 2:08 a.m. Friday, October 24, 2008, the day after the Stipulated Order was entered and days before the scheduled examination.”

The fact pattern in this decision is not especially easy to follow, but what appears to be the gist of defendant’s defense against plaintiff’s spoliation assertion underscores out the difficulty in proving the negative; in this instance, the defendant claimed existence and later destruction of emails could not be deduced from the mere non-existence of emails:

“OSF says that the fact that Midwest did not find the Marado email means it never existed or Midwest performed an incomplete search. OSF also says that it performed a “more extensive” search of its computers than Midwest and did not discover the Marado email. OSF also says that 70,000 files which were deleted on Billups' old workstation were done in the ordinary course of business because that computer had “severe operational issues” and that “all of the necessary files” were transferred to Billups' new computer workstation. OSF also says that the files in Billups' email folders moved to the recycle bin and are not lost. OSF further says that the Marado email is immaterial and TSA has not been prejudiced by any of OSF's actions.”

Sixth Circuit Duty to Preserve, Sanctions Imposition Analysis

The Court then provides an analysis of ESI preservation obligations under Sixth Circuit decisional authority, which by the way, adopts the Second Circuit and Sedona Principles approach:

“The Court of Appeals for the Sixth Circuit has recently stated that “[a]s a general matter, it is beyond question that a party to civil litigation has a duty to preserve relevant information, including [electronically stored information], when that party ‘has notice that the evidence is relevant to litigation or ... should have known that the evidence may be relevant to future litigation.’ ” John B. v. Goetz, 531 F.3d 448, 459 (6th Cir.2008) (quoting Fujitsu Ltd. v. Fed. Express Corp., 247 F.3d 423, 436 (2d Cir.2001) and citing Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 216-18 (S.D.N.Y.2003); The Sedona Principles: Best Practices, Recommendations & Principles for Addressing Electronic Document Production, Second Edition 11, 28 (The Sedona Conference Working Group Series, 2007), available at http:// www.thesedonaconferen ce.org/content/miscFiles/TSC_PRINCP_2nd_ed_607.pdf.)).

“The Sixth Circuit goes on to say that ‘[i]It is the responsibility of the parties to ensure that relevant [electronically stored information] is preserved, and when that duty is breached, a district court may exercise its authority to impose appropriate discovery sanctions. Id. (citing Fed.R.Civ.P. 37(b), (e) see also The Sedona Principles, supra, at 70 (noting that sanctions should be considered only if the court finds a clear duty to preserve, a culpable failure to preserve and produce relevant ESI, and a reasonable probability of material prejudice to the adverse party).’”

Despite the rather intricately set-out timeline (which I have not included), the Court cuts to the chase:

“Here, TSA is correct that the issue is not whether the Marado email exists or whether Midwest conducted an inadequate search, a contention it vigorously denies. Rather, the issue is whether the fact that OSF deleted 70,000 files on Billups' old computer in April 2008 during the pendency of the litigation and whether the deletion of email folders from Billups' present computer just days before the examination, constitutes the destruction of electronic evidence.”

Ok, here's the Cliffs Notes timeline and event-posture:

(1) plaintiff’s document request specifying the production of emails generated between two individuals during an articulated time period,
(2) defendant’s failure to produce same,
(3) letters from plaintiff’s counsel to defendant’s counsel in connection with the failure to produce,
(4) depositions and attendant document requests,
(5) objections to documents requested
(6) additional counsel-to-counsel letters,
(7) additional production that still failed to produce documents requested by plaintiff,
(8) the completion of a Fed. R. Civ. P.30(b)(6) deposition,
(9) a letter from plaintiff’s counsel requesting the 30b6 deposition of defendant’s IT person,
(10) numerous drafts of a stipulated order regarding forensic examination, and
(11) an examination of defendant’s computer by a forensic expert retained by plaintiff

The forensic examintation described in event 11 showed that a large number of emails had been deleted and that a wiping utility had been used on the examined computers, and at an apparently unpropitious time:

“Among other things, the examination revealed that a file wiping program had been installed on the older computer, and that somebody had deleted or altered nearly 70,000 emails to prevent them from being read. This file wiping apparently occurred in April 2008, long after TSA had requested the emails which Mr. Billups sent to or received from Ms. Marado. With regard to Mr. Billups' current computer, the examination revealed that on October 24, 2008, just days before the forensic examination, somebody had deleted “Pat's Personal folder Mailbox” and “Pat's Mailbox”.”

Mayhaps the wiping program on the older computer was purchased from "Ye Olde Wipe Shoppe"?

With the results and opinion of the forensic examiner in hand, the Court provides a rather unsubltle hint as to what will ultimately ensue:

“As the [forensic examiner] report's conclusion indicates, the deletion of the files was clearly intentional:

"In conclusion, my analysis revealed the presence of a file wiping program on the older system used by Pat Billups (Dell PC2). Analysis on the Dell PC2 system (old system) revealed nearly 70,000 files, which were deleted/wiped to prevent recovery. Furthermore, my analysis uncovered on the Dell PC1 system (new system), the deletion of Pat's Mailbox, which occurred on 10/24/08.The presence of nearly 70,000 altered files, installation of a file wiping utility, deletion of Pat's Mailbox clearly indicates to this examiner a willful intent to hide or destroy electronic evidence.”

The Court’s observations:

“Based on the above, it is difficult to find that OSF did not intentionally destroy electronic information on both of Billups' computers after such information was requested. OSF knew that TSA was seeking emails between Marado and Billups, and was particularly interested in emails around the time of the dinner meeting, including the Marado email. Yet, OSF allowed filed on both of Billups' computers to be deleted.”

Additional Observations and Midnight Data Manipulation

The Court notes that defendant provided no explanation for the timing (or the time) of the ESI destruction:

"Moreover, the timing of the destruction appears more than coincidental. The 70,000 files on Billups' old computer were erased in April 2008 at about the same time TSA informed OSF that it wished to conduct a forensic examination. The email folders on Billups' new computer were moved to the recycle bin at 2:00 am on Friday, October 24, 2008, the day before the examination.FN6 Under the circumstances, the Court finds that OSF's actions with respect to Billups' computer violated its obligation to preserve electronic evidence.

“FN6. There is no explanation as to the reason that the move of the emails folders to the recycle bin occurred during the middle of the night. It is odd to say the least."

Odd indeed.

Fed.R. Civ. P. Rule 37(e) Safe Harbor Does Not Protect Intentional ESI Deletion

The Court found that under these circumstances, defendant’s ESI destruction was not sheltered by the safe harbor provisions of Fed. R. Civ. P. Rule 37(e):

“This rule is intended to protect a party from sanctions where the routine operation of a computer system inadvertently overwrites potentially relevant evidence, not when the party intentionally deletes electronic evidence. See, e.g., 8A Fed. Prac. & Proc. Civ.2d § 2284.1.”

Spoliation Sanctions Under Court’s Inherent Powers

District Judge Cohn then notes the appropriateness of plaintiff’s request for spoliation sanctions pursuant to the court’s inherent powers:

“…TSA is seeking sanctions under the court's inherent authority which is appropriate. The authority to impose sanctions for spoliated evidence arises not from substantive law but, rather, ‘from a court's inherent power to control the judicial process.’ Chambers v. NASCO, Inc., 501 U.S. 32, 45-46, 111 S.Ct. 2123, 115 L.Ed.2d 27 (1991).”

Sixth Circuit Spoliation Sanctions Governed By Federal Common Law

This decision follows the Sixth Circuit authority stating that the determination of spoliation sanctions are to be determined in accordance with federal law.

[Blognote: It is important to keep in mind (my migraine is returning) that while spoliation sanctions are governed by federal law, a determination of spoliation in the Sixth Circuit is made pursuant to state law: “State law governs the issue of spoliation of evidence in both federal question and diversity cases. See Beck v. Haik, 377 F.3d 624, 641 (6th Cir.2004). Under Michigan law, “[e]ven when an action has not been commenced and there is only a potential for litigation, the litigant is under a duty to preserve evidence that it knows or reasonably should know is relevant to the action.” Brenner v. Kolk, 226 Mich.App. 149, 162, 573 N.W.2d 65 (1997).” Fox v Riverdeep, 2008 WL 52444297 (E.D. Mich 2008).

Ok, back to the instant decision and the Sixth Circuit’s standard for determination of spoliation sanctions:

“The Sixth Circuit has recently made clear that the determination of spoliation [sic] sanctions is governed by federal law and subject to the court's discretion. Adkins v. Wolever, 554 F.3d 650, 2009 WL 248682 (6th Cir. Feb.4, 2009) (en banc). The Sixth Circuit also explained that [a]s our sister circuits have recognized, a proper spoliation sanction should serve both fairness and punitive functions. See Vodusek v. Bayliner Marine Corp., 71 F.3d 148, 156 (4th Cir.1995) (observing that a proper sanction will serve the “purpose[s] of leveling the evidentiary playing field and ... sanctioning the improper conduct”). Because failures to produce relevant evidence fall “along a continuum of fault-ranging from innocence through the degrees of negligence to intentionality,” Welsh, 844 F.2d at 1246, the severity of a sanction may, depending on the circumstances of the case, correspond to the party's fault."

"Thus, a district court could impose many different kinds of sanctions for spoliated evidence, including dismissing a case, granting summary judgment, or instructing a jury that it may infer a fact based on lost or destroyed evidence. Vodusek, 71 F.3d at 156.” *9 Adkins, 554 F.3d 650, 2009 WL 248682 at *2.”

The Court determined that defendant had failed to preserve ESI and that it had also spoliated ESI. In accordance with these findings, the Court imposed attorneys fees and costs, but deferred imposition of more severe sanctions until trial:

“Here, OSF had an obligation to preserve electronic data, particularly emails on Billups' computers. It did not. Emails and files were deleted at a time when the parties were in litigation and OSF was aware that TSA was seeking a forensic examination. While it may never be known whether the Marado emails ever existed,FN7 OSF's conduct merits a sanction. While the Court finds that a monetary sanction in the amount of the cost of the forensic examination appears to be appropriate, i.e. $17,786.25, the actual amount of the sanction as well TSA's entitlement to an adverse jury instruction will be determined at trial once the substantive harm caused by OSF's actions is known.”

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SWT